Foresight Environmental Infrastructure – Pushing on despite regulatory upheaval
- 17 December 2025
- QuotedData
- Richard Williams
Pushing on despite regulatory upheaval
The renewable energy infrastructure sector was dealt a blow last month as the government outlined plans to change the inflation link in existing clean energy incentives from the traditionally-higher RPI to CPI from next year – four years ahead of the planned changeover. The impact on Foresight Environmental Infrastructure (FGEN) would be marginal under this option (0.5% reduction in NAV), due to the diversified nature of its portfolio. However, a more radical second proposal was also put forward that would freeze uplifts until the perceived overpayments are clawed back. This move calls into question the UK government’s reputation as a sound investment partner for private capital and has the potential to damage long-term investment in UK infrastructure.
Meanwhile, FGEN’s portfolio continues to produce robust revenue streams – more than covering its progressive dividend, which currently yields almost 12% – and it will soon benefit as its growth assets become fully operational.
Progressive dividend from investment in environmental infrastructure assets
FGEN aims to provide its shareholders with a sustainable, progressive dividend, and to preserve capital values. It invests in a diversified portfolio of environmental infrastructure technologies, targeting projects characterised by long-term stable cash flows, secured revenues, and inflation linkage. Investment in these assets is driven by the need to address climate change and societal demand for sustainability.
| 12 months ending | Share price TR (%) | NAV total return (%) | Earnings per share (pence) | Adjusted EPS (pence) | Dividend per share (pence) |
|---|---|---|---|---|---|
| 31/03/2021 | 6.9 | 1.5 | 1.5 | 6.7 | 6.76 |
| 31/03/2022 | 7.3 | 34.1 | 30.6 | 7.0 | 6.80 |
| 31/03/2023 | 12.2 | 13.1 | 14.9 | 6.7 | 7.14 |
| 31/03/2024 | (15.8) | (1.8) | (2.1) | 7.5 | 7.57 |
| 31/03/2025 | (15.9) | 0.6 | (0.4) | 8.6 | 7.80 |
Source: Bloomberg, Marten & Co
Market backdrop
UK government proposes change to inflation measure in existing incentives
Government proposals to change the inflation measure used in existing clean energy incentives have hit share prices across the renewable energy infrastructure sector. The Department of Net Zero and Energy Security launched a consultation in October on changing the inflation indexation calculation used in the renewables obligation (RO) and feed-in-tariffs (FIT) schemes from RPI to CPI.
Two options have been put forward to the industry. Option one is for a simple switch to take effect in 2026; four years before the planned 2030 changeover. Option two is more radical and would involve freezing the subsidy until 2035 to claw back what the government views as historic overpayments to renewable operators.
The impact on FGEN and the wider sector’s NAV of the two proposed outcomes is shown in Figure 1. FGEN’s diversified portfolio means that a lower percentage of its portfolio revenue (around 29%) is subject to RO and FIT incentives than its pure-play renewable peers, and as such, it should be the least impacted.
Figure 1: Estimated NAV impact of proposed change to RO and FIT inflation measure
| Company | Option 1 (%) | Option 2 (%) |
|---|---|---|
| FGEN | (0.5) | (6.3) |
| Bluefield Solar | (2.0) | (10.0) |
| Foresight Solar | (1.6) | (10.2) |
| Greencoat UK Wind | (1.7) | (7.5) |
| NextEnergy Solar | (2.0) | (9.0) |
| Octopus Renewables Infrastructure | (1.1) | (4.0) |
| The Renewables Infrastructure Group | (0.5) | (2.2) |
Source: Company announcements
Option one impact FGEN the least among peers
The manager estimates that option one would reduce FGEN’s NAV by 0.5p per share or 0.5%, while option two would knock 6.6p, or 6.3%, off the NAV. In both scenarios, the manager adds, dividend cover would not be materially impacted in the near-term.
The government is seeking to reduce energy bills and estimates that the changes under option one would see the average household bill for 2026-27 fall by just £4. This increases to £13 under the second option (before any costs such as an increase in the cost of capital).
The proposal follows the Office for National Statistics’s call for RPI to be dropped in favour of its preferred measure of CPIH, which includes housing costs, because RPI has tended to over-estimate inflation, thereby inflating contractual payments linked to it. The government has not commented on why it is not proposing a change to CPIH.
The government said that using CPI to annually adjust the RO and FIT buyout price (which were withdrawn in 2017-2019 but will continue until 2037 for renewable energy operators that built wind and solar farms under the schemes) was “proportionate and fair”, ensuring a stable and predictable return for generators and savings for consumers. It added that this would also prevent the risk of overpayment, as occurred when energy prices and inflation soared after Russia’s invasion of Ukraine in 2022.
QuotedData view
Move could erode investor confidence in UK government
To unilaterally change the terms of its contract with the renewables industry would not only undermine confidence in the sector and create an unwelcome precedent, but would also erode investor confidence in the UK government as a business partner – at a time when private investment in UK infrastructure is critically needed. The short-term saving on consumer bills is very likely to be overshadowed in the long term by a higher return demanded by infrastructure investors and developers to compensate for an unreliable partner. The UK government’s actions echoes a similar move by the Spanish government in the mid-2010s, which retrospectively altered the terms of existing renewable energy projects, replaced FITs with new schemes and levied a tax on electricity producers. Investor confidence was irreparably damaged and led to a wave of legal challenges that is still rumbling on today.
Interim results
FGEN reported a NAV of £652.7m or 104.7p per share at 30 September 2025 – a 1.7% fall over the six-month period. Factoring in dividends of 3.94p, this equated to a 2.0% NAV total return in the period.
Distributions received from projects over the six months was £39.7m (six months to September 2024: £46.6m). This underpinned the dividend with a coverage of 1.22x, and helped fund further share buybacks. The value of the portfolio fell £13.8m over the period, as shown in Figure 2.
Figure 2: FGEN portfolio valuation in £m, as at 30 September 2025
Source: FGEN, Marten & Co
Drivers of portfolio returns
Several factors impacted FGEN’s NAV. We detail these factors and their sensitivities below, beginning with inflation.
Inflation
Short-term RPI inflation assumptions raised 50bps
Inflation assumptions used to value FGEN’s portfolio (based on actual data and independent forecasts) were raised 50bps to 4.0% RPI inflation for 2025 and 3.5% for 2026 and then falling to 3% until 2030 and 2.25% thereafter. This resulted in a £6.1m uplift in NAV.
As mentioned earlier, it is likely that the inflation measure used on RO and FIT contracts will revert to CPI next year. FGEN’s CPI inflation assumptions are 2.75% in 2025 and 2.25% thereafter. CPI was at 3.6% at the end of October 2025. Figure 3 shows RPI and CPI inflation over the past five years.
Figure 3: UK RPI and CPI year-on-year (%)
Source: ONS, Marten & Co
Power prices
Power prices have fallen slightly over the six months, as shown in Figure 4, and a marginal change in forecasts for future electricity and gas prices compared to forecasts at 31 March 2025 resulted in a £6.5m reduction in FGEN’s NAV.
Figure 4: UK power prices
Source: Bloomberg – UK baseload
Fixed prices secured on the majority of portfolio
FGEN looks to fix the prices for most of its output, in an attempt to de-risk its exposure to volatile market prices. At 30 September 2025, the portfolio had price fixes secured at 63% for the Winter 2025/26 season, 24% for Summer 2026 season, and 25% for Winter 2026/27.
Over the life of the asset, an increase in electricity and gas prices of 10% would add £33.8m (or 5.4p) to NAV and a 10% fall in power prices would take off £33.1m (or 5.3p).
FGEN’s manager states that in the event that electricity prices fall to £40/MWh (they are currently at around £70/MWh) and gas prices fall by a corresponding amount, the company would maintain a resilient dividend cover for the next three financial years.
Discount rates
Figure 5: Long-term (10-year and 30-year) UK gilt yields
Source: Bloomberg, Marten & Co
The weighted average discount rate now sits at 10.1%
Despite a slight fall over recent months, UK gilt yields remain at elevated levels, as shown in Figure 5. The discount rates used to value FGEN’s portfolio remained unchanged. However, FGEN’s weighted average discount rate moved out slightly to 10.1% (from 9.7%), primarily due to ongoing investment into growth assets and increases in their values. There was no change to NAV resulting from changes to the discount rate.
A reduction in the discount rate of 0.5% would result in an uplift in value of £19.4m (or 3.1p per share), while a downward movement in the portfolio valuation of £18.2m (2.9p per share) would occur if discount rates were increased by the same amount.
Asset allocation
FGEN has one of the most diversified portfolios among its renewable energy infrastructure peers, with it currently invested in 10 sectors across 39 projects. The manager splits the portfolio into three key environmental infrastructure pillars: renewable energy generation (71% of the portfolio – wind, solar, AD, biomass, energy from waste, and hydropower); other energy infrastructure (11% – battery energy storage and low carbon transport assets); and sustainable resource management (18% – waste and water management assets and controlled environment assets).
Figure 6: Portfolio value split by sector, as at 30 September 2025
Figure 7: Portfolio split by remaining asset life as at 30 September 2025
Source: FGEN, Marten & Co
Source: FGEN, Marten & Co
Figure 6 displays FGEN’s portfolio by project type, as at 30 September 2025. The weighted average remaining asset life of the portfolio was 16.2 years, although the manager feels it is being conservative in this area, especially in its AD portfolio.
Potential Life extensions for AD assets could result in a substantial valuation uplift
These are currently conservatively valued over the life of the renewable heat incentive subsidy (RHI) that they receive. The manager says that there is growing evidence, including several market transactions, pointing to valuing these AD facilities beyond the end of the tariffs and possibly into perpetuity. It has modelled extension scenarios for its AD portfolio, including revenues being derived from corporate offtakes, green certificates and/or a lower level of government support mechanisms. It has modelled that this would result in a substantial valuation uplift of between £10m and £20m (1.6p to 3.2p) and significantly extend the weighted average life of the portfolio.
Some clarity is required on the position that biomethane will take in the wider net zero and energy transition plans in the UK, with the government currently developing a biomethane policy framework, which the manager expects to be released next year.
The majority of its portfolio (88%) is located in the UK, with the 12% outside the UK accounted for by FGEN’s Italian and Norwegian investments.
Figure 8: Portfolio split by operational status as at 30 September 2025
Figure 9: Net present value of future revenues by type as at 30 September 2025
Source: FGEN, Marten & Co
Source: FGEN, Marten & Co
FGEN’s construction exposure has reduced to 3%, with the Rjukan asset transferring to early-stage operations (detailed below).
The top 10 largest assets make up 54% of the total portfolio value. Figure 10 details the assets in FGEN’s portfolio, at 30 September 2025. The company has low exposure to individual assets, with no asset accounting for more than 10% of the portfolio.
Figure 10: FGEN portfolio1 of projects by type, as at 30 September 2025
| Asset | Location | Type | Ownership | Capacity(MW) | Commercial operations date |
|---|---|---|---|---|---|
| Renewable energy generation | |||||
| Bilsthorpe | UK (Eng) | Wind | 100% | 10.2 | Mar 2013 |
| Burton Wold Extension | UK (Eng) | Wind | 100% | 14.4 | Sep 2014 |
| Carscreugh | UK (Scot) | Wind | 100% | 15.3 | Jun 2014 |
| Castle Pill | UK (Wal) | Wind | 100% | 3.2 | Oct 2009 |
| Dungavel | UK (Scot) | Wind | 100% | 26.0 | Oct 2015 |
| Ferndale | UK (Wal) | Wind | 100% | 6.4 | Sep 2011 |
| Hall Farm | UK (Eng) | Wind | 100% | 24.6 | Apr 2013 |
| Llynfi Afan | UK (Wal) | Wind | 100% | 24.0 | Mar 2017 |
| Moel Moelogan | UK (Wal) | Wind | 100% | 14.3 | Jan 2003 & Sep 2008 |
| New Albion | UK (Eng) | Wind | 100% | 14.4 | Jan 2016 |
| Wear Point | UK (Wal) | Wind | 100% | 8.2 | Jun 2014 |
| Biogas Meden | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Mar 2016 |
| Egmere Energy | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Nov 2014 |
| Grange Farm | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Sep 2014 |
| Icknield Farm | UK (Eng) | Anaerobic digestion | 53% | 5.0 | Dec 2014 |
| Merlin Renewables | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Dec 2013 |
| Peacehill Farm | UK (Scot) | Anaerobic digestion | 49% | 5.0 | Dec 2015 |
| Rainworth Energy | UK (Eng) | Anaerobic digestion | 100% | 5.0 | Sep 2016 |
| Vulcan Renewables | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Oct 2013 |
| Warren Energy | UK (Eng) | Anaerobic digestion | 49% | 5.0 | Dec 2015 |
| Amber | UK (Eng) | Solar | 100% | 9.8 | Jul 2012 |
| Branden | UK (Eng) | Solar | 100% | 14.7 | Jul 2013 |
| CSGH | UK (Eng) | Solar | 100% | 33.5 | Mar 2014 & Mar 2015 |
| Monksham | UK (Eng) | Solar | 100% | 10.7 | Mar 2014 |
| Pylle Southern | UK (Eng) | Solar | 100% | 5.0 | Dec 2015 |
| Codford Biogas | UK (Eng) | Waste anaerobic digestion | 100% | 3.8 | 2014 |
| Bio Collectors | UK (Eng) | Waste anaerobic digestion | 100% | 11.7 | Dec 2013 |
| Cramlington Renewable Energy Developments | UK (Eng) | Biomass combined heat and power | 100% | 32.0 | 2018 |
| Energie Tecnologie Ambiente (ETA) | Italy | Energy-from-waste | 45% | 16.8 | 2012 |
| Northern Hydropower | UK (Eng) | Hydropower | 100% | 2.0 | Oct 2011 & Oct 2017 |
| Yorkshire Hydropower | UK (Eng) | Hydropower | 100% | 1.8 | Oct 2015 & Nov 2016 |
| Other energy infrastructure | |||||
| West Gourdie | UK (Scot) | Battery storage | 100% | n/a | May 2023 |
| Clayfords | UK (Scot) | Battery storage | 50% | n/a | Pre-construction |
| Sandridge | UK (Eng) | Battery storage | 50% | n/a | Under construction |
| Asset | Location | Type | Ownership | Capacity(MW) | Commercial operations date |
| CNG Fuels | UK (Eng) | Low carbon transport | Minority2 | n/a | Various |
| Sustainable resource management | |||||
| Glasshouse | UK (Eng) | Controlled environment | 10% | n/a | Mar 2025 |
| Rjukan | Norway | Controlled environment | 25% | n/a | Early stage operations |
| ELWA | UK (Eng) | Waste management | 80% | n/a | 2006 |
| Tay | UK (Scot) | Wastewater treatment | 33% | n/a | Nov 2001 |
Source: FGEN, Marten & Co. Note 1) excludes projects in FEIP’s portfolio. Note 2) FGEN holds 25% of CNG Foresight Holdings Ltd, which owns 60% of the shares in CNG Fuels Ltd (FGEN look-through interest 15%) and holds £150.15m in 10% preferred return investments issued by CNG Fuels (FGEN interest £37.5m).
As part of FGEN’s re-focus on core environmental assets, its three growth assets – the two controlled environment projects (the Glasshouse and Rjukan) and the CNG portfolio – will be sold over the medium term once operations have ramped up and their valuation uplifts booked. We profiled all three in our previous note, a link to which can be found on page 16.
The valuation of Rjukan asset rose as it transitions from construction to operational
All three assets have progressed in line with the manager’s expectations. The value of the Rjukan land-based trout farm in Norway rose as it transitioned from construction to early-stage operational, with the first harvest and sales in the summer. As such, it moved from being valued at cost to DCF method, and increased in value by £2.9m over six months. FGEN’s manager says the valuation will increase further as operations are ramped up.
Operations at CNG Fuels also grew, with volumes of gas dispensed (+15%), truck numbers (+18%) and pricing (+21%) all up significantly over the year. This contributed to a £2.2m uplift in value for the asset.
Meanwhile, the Glasshouse secured further sales and market penetration, with customers now including six of the eight largest clinics in the UK. The business target is being cash flow break-even in the new year, ahead of a full ramp-up by 2026/27.
Portfolio activity
FGEN sold its stake in a BESS project and is considering options on another BESS asset
There has been very little activity in the way of acquisitions and disposals since our last note in July. However, FGEN did sell its 50% stake in its Lunanhead battery energy storage (BESS) project for £1.25m, in line with book value, in August. The sale was made in preference to making a follow-on investment in the project. The manager says that it is continuing to explore options for the Clayfords BESS asset, in which it owns a 50% stake.
The company made several follow-on investments over the six months totalling £7.9m, including into the CNG platform and into Vulcan Renewables.
FGEN’s solar assets exceeded generation targets by 6.2% in the period, but was offset by disappointing performance of its wind assets, which was 6.5% below target. FGEN’s largest asset, the Cramlington biomass scheme (which accounts for 9% of portfolio value), generated 44.3% below target in the six months to the end of September, due to a six-week extension of a planned outage in July. FGEN’s manager has advanced a liquidated damages claim with the O&M contractor and expects the shortfall to reduce to 9.5% once the minimum expected compensations are received.
Performance
FGEN’s NAV returns over the past three years have been flat, despite substantial headwinds that it and the renewable energy infrastructure sector have faced over the period contributing to portfolio valuation declines. Robust portfolio revenues have allowed for a progressive dividend distribution, which has offset the fall in asset value.
Figure 11: FGEN NAV TR over five years to 30 September 2025
Source: Bloomberg, Marten & Co
Figure 12: FGEN cumulative performance to 30 September 2025
| 3 months (%) | 6 months (%) | 1 year (%) | 3 years (%) | 5 years (%) | |
|---|---|---|---|---|---|
| FGEN NAV total return | 2.0 | 2.1 | 2.7 | 1.9 | 52.4 |
| FGEN share price total return | (10.5) | 2.7 | (14.6) | (24.8) | (14.8) |
Source: Bloomberg, Marten & Co
Peer group
Figure 13: AIC renewable energy infrastructure sector comparison table, as at 15 December 2025
| Market cap (£m) | Premium/(discount) (%) | Yield(%) | Ongoing charge (%) | |
|---|---|---|---|---|
| FGEN | 422 | (35.3) | 11.8 | 1.24 |
| Aquila Energy Efficiency | 20 | (46.1) | 0.0 | 3.80 |
| Aquila European Renewables Income | 121 | (38.3) | 14.1 | 1.10 |
| Bluefield Solar Income | 401 | (41.1) | 13.2 | 1.02 |
| Ecofin US Renewables Infrastructure | 21 | (50.3) | 2.3 | 2.30 |
| Foresight Solar | 358 | (38.7) | 12.5 | 1.17 |
| Gore Street Energy Storage Fund | 272 | (40.2) | 13.0 | 1.38 |
| Greencoat Renewables | 683 | (30.4) | 9.7 | 1.18 |
| Greencoat UK Wind | 2,106 | (31.5) | 10.6 | 0.95 |
| Gresham House Energy Storage | 461 | (30.4) | 6.8 | 1.29 |
| Hydrogen Capital Growth | 19 | (59.0) | 0.0 | 2.53 |
| NextEnergy Solar | 291 | (42.9) | 16.7 | 1.18 |
| Octopus Renewables Infrastructure | 314 | (39.8) | 10.4 | 1.21 |
| SDCL Efficiency Income | 572 | (40.9) | 12.0 | 1.16 |
| The Renewables Infrastructure Group | 1,651 | (36.9) | 10.8 | 1.04 |
| US Solar Fund | 79 | (45.2) | 10.1 | 1.54 |
| VH Global Energy Infrastructure | 249 | (41.4) | 9.2 | 1.50 |
| Peer group median | 314 | (40.2) | 10.6 | 1.21 |
| FGEN rank | 6/17 | 4/17 | 7/17 | 10/17 |
Source: QuotedData website
You can access up-to-date information on FGEN and its peers on the QuotedData website.
FGEN has one of the broadest remits of the 17 companies that comprise the members of the AIC’s renewable energy sector. Most of these funds are focused on solar or wind or some combination of the two. Two of these funds are focused solely on energy storage. There is variation of geographic exposure within the peer group too, with a number of funds that are heavily exposed to the North American market (which has a different risk/reward structure).
The sector has been shrinking over the past 12 months through a combination of private acquisitions (taking advantage of the wide discounts in the sector) or through managed wind-downs. We have lost Downing Renewables & Infrastructure since our last note, while Aquila Energy Efficiency and Hydrogen Capital Growth are in a managed wind-down. Meanwhile, Bluefield Solar Income put itself up for sale in November after shareholders voted against a proposal for it to merge with its manager, Bluefield Partners.
The proposed merger of The Renewables Infrastructure Group (TRIG) and infrastructure trust HICL Infrastructure (which are both managed by InfraRed Capital) was abandoned in early December after a HICL shareholder revolt. TRIG is facing a continuation vote in 2026.
FGEN is one of the larger funds within this peer group. Whilst its discount is narrower than most, the whole sector derated following the government proposals on bringing forward a change in the inflation measure on ROs and FITs. Wide discounts have distorted yields across the sector. Nevertheless, FGEN’s yield is highly attractive, with coverage of 1.22x. Its ongoing charges ratio ranks middle of the pack, but is expected to fall when the impact of a reduction in the management fee is felt.
Figure 14: AIC renewable energy infrastructure sector NAV total return performance comparison table, as at 1 December 2025
| 1 year(%) | 3 years(%) | 5 years(%) | 10 years(%) | |
|---|---|---|---|---|
| FGEN | 2.7 | 0.6 | 8.8 | 7.3 |
| Aquila Energy Efficiency | (19.3) | (7.1) | – | – |
| Aquila European Renewables Income | (28.3) | (14.5) | (5.7) | – |
| Bluefield Solar Income | (2.8) | (0.5) | 6.8 | 7.8 |
| Ecofin US Renewables Infrastructure | (39.9) | (25.1) | – | – |
| Foresight Solar | (2.4) | (0.5) | 8.3 | 7.1 |
| Gore Street Energy Storage Fund | (6.0) | (0.7) | 4.7 | – |
| Greencoat Renewables | 3.6 | 4.2 | 5.9 | – |
| Greencoat UK Wind | (5.0) | 9.3 | 9.7 | 9.4 |
| Gresham House Energy Storage | 6.1 | (6.7) | 6.7 | – |
| Hydrogen Capital Growth | (59.1) | (24.4) | – | – |
| NextEnergy Solar | (0.7) | (2.9) | 5.3 | 5.6 |
| Octopus Renewables Infrastructure | 0.8 | 1.8 | 5.5 | – |
| SDCL Efficiency Income | 1.9 | (0.4) | 2.8 | – |
| The Renewables Infrastructure Group | (3.7) | (0.9) | 5.4 | 7.4 |
| US Solar Fund | (16.5) | (11.2) | (3.0) | – |
| VH Global Energy Infrastructure | 1.5 | 3.5 | – | – |
| Peer group median | (2.8) | (0.7) | 5.5 | 7.3 |
| FGEN rank | 3/17 | 5/17 | 2/13 | 4/6 |
Source: QuotedData website
Premium/(discount)
FGEN’s discount had been narrowing from all-time lows at the start of this year; however, the government proposals to bring forward the change in the inflation measure for incentives saw the discount widen (along with the wider peer group).
Over the year to 30 September 2025, FGEN’s shares traded in range of a 17.4% and a 38.8% discount to NAV, and averaged a discount of 28.6%. FGEN’s discount at 15 December 2025 was wider than its 12-month average at 35.3%.
Figure 15: FGEN premium/(discount) (%) over five years to 30 September 2025
Source: Bloomberg, Marten & Co
Fund profile
Further information can be found at FGEN.com
FGEN invests in a diversified portfolio of private infrastructure assets that deliver stable returns, long-term predictable income, and opportunities for growth while supporting the drive towards decarbonisation and sustainable resource management.
FGEN invests in three core areas of environmental infrastructure: renewable energy generation, other energy infrastructure, and sustainable resource management. Renewable energy generation investments include wind, solar, AD, biomass, energy from waste, and hydropower. Other energy infrastructure assets include battery energy storage and low carbon transport. Sustainable resource management includes wastewater, waste processing, and sustainable solutions for food production such as agri- and aquaculture-controlled environment projects.
FGEN’s portfolio is diversified across complementary sectors, technologies and geographies which substantially de-risks it from exposure to fluctuations in weather patterns and helps differentiate the company from its peers.
FGEN’s mandate allows it to invest in emerging areas of environmental infrastructure, provided that they are sufficiently mature and display strong infrastructure characteristics.
FGEN’s AIFM is Foresight Group LLP (Foresight). Foresight is one of the best-resourced investors in renewable infrastructure assets, with £13.6bn of AUM at 30 September 2025. This includes Foresight Solar Fund, which sits in FGEN’s peer group. Foresight has a highly experienced and well-resourced global infrastructure team with 185 infrastructure professionals managing around 5.0GW of energy infrastructure. It is a global business, with offices in seven countries. The co-lead managers for FGEN are Chris Tanner, Edward Mountney and Charlie Wright.
SWOT analysis and bull vs bear case
Figure 16: SWOT analysis for FGEN
| Strengths | Weaknesses |
|---|---|
| Continued robust revenues from core portfolio | Sensitive to market sentiment and interest rate volatility |
| Progressive dividends, with comfortable coverage by income | |
| Opportunities | Threats |
| Valuation uplifts from growth assets moving to fully operational | Potential discount widening with Option 2 of government proposal |
| 35%+ discount to NAV could narrow if sentiment improves and interest rates fall |
Source: Marten & Co
Figure 17: Bull vs bear case for FGEN
| Aspect | Bull case | Bear case |
|---|---|---|
| Performance | Capital appreciation of growth assets as operations ramp up. Core portfolio continues to produce strong cash flows | Growth assets take longer than anticipated to become fully operational. Energy prices dive, impacting income streams |
| Dividends | Strong track record of increases, which the board are committed to continuing | Increases potentially not sustainable if conditions change |
| Outlook | Structural increase in renewable energy demand looks set to continue | Government scales back climate commitments |
| Discount | FGEN’s wide discount could narrow as interest rates subside and sentiment towards the sector turns positive | The discount could widen further due to detrimental government proposals |
Source: Marten & Co
IMPORTANT INFORMATION
This marketing communication has been prepared for Foresight Environmental Infrastructure Plc by Marten & Co (which is authorised and regulated by the Financial Conduct Authority) and is non-independent research as defined under Article 36 of the Commission Delegated Regulation (EU) 2017/565 of 25 April 2016
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