Foresight Solar Fund has increased its exposure to solar power purchase agreements (PPAs) to reduce cash flow volatility, the company has said.
This morning the company, one of the top three holders of operational UK solar assets, issued a Net Asset Value (NAV) and dividend update, but otherwise provided an update on the UK solar portfolio it only added to less than a fortnight ago.
But perhaps most interesting is Foresight’s intent to shift an increasing amount of its portfolio to PPAs in a bid to take advantage of forward electricity prices which it feels are currently attractive.
It’s the latest move in a trend of Foresight’s towards more significant PPA that started in earnest toward the end of last year.
Having ensured that just under one-third (29%) of its portfolio sold power under fixed price arrangements as of 31 December 2017, the share is now closer to one half. As of today, 44% of Foresight’s operational solar facilities sell power under PPA.
The weighted average price for these arrangements stands at £48.1/MWh and stand to reduce cash flow volatility in the short term, Foresight said.
Additional details on the strategy are to be made available within the company’s forthcoming interim report.
Meanwhile Foresight reported a slight contraction in its NAV, from £481.3 million on 31 December 2017 to £477 million today, as a result of cash flow movements, dividend payments and debt capital repayments during the quarter.