Bluefield asset value contracts as downward power price curve bites

Bluefield Solar Income Fund (BSIF) has seen its net asset value (NAV) fall despite recent acquisitions to its portfolio as wholesale power prices continue to slide.

A statement to the market this morning revealed Bluefield’s NAV to have dropped 1.6% to £310 million during the three months to 31 March 2016, despite the company adding nine new projects to its portfolio.

BSIF said that the change in NAV was largely attributed to the adoption of a new power curve from its independent forecaster, issued in April.

Bluefield has revised its power curve down six times since April 2014 with price forecasts collapsing by an average of 32% year-on-year.

But despite the revision the company insisted that it still intends to meet or exceed its target dividend for the financial year, and chairman John Rennocks praised the company’s management for offsetting the price volatility.

“The board is pleased that sound acquisitions and effective operations of our plants have enabled us to sustain the company’s dividend targets in the face of some market headwinds due to declining power prices,” Rennocks said.

In February this year Bluefield lauded its strategy to seek long-term power purchase agreements for the majority of its operational portfolio after it helped offset wholesale price volatility and lower than forecasted irradiance.

Meanwhile the company also revealed that it is still being advised by Royal Bank of Scotland and Investec over the potential refinancing of its credit facility.

Bluefield is considering introducing long-term structural debt, however such a move would require an amendment to its existing investment policy which would therefore be subject to Financial Conduct Authority and shareholder approval.

Last month Foresight Solar Fund concluded a major refinancing through Macquarie Infrastructure Debt Investment Solutions and the Santander-owned Abbey National Treasury Services as it switches to a longer-term debt structure.