Information Memorandum - Foresight Group

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EXPECTED TIMETABLE AND STATISTICS Fund Name Foresight Solar EIS Fund 3 Fund Structure Unapproved EIS Fund Target Size £20 million* Sector Focus Unquoted companies which derive their revenues from generating solar electricity, primarily in the UK Fund Manager Foresight Target Portfolio Size 4 Solar Power Plants with assets capable of generating c. 20MW of electricity, or significantly more depending on refinancing opportunities** Minimum Investment £10,000 Closing Date 31 October 2013 *** * Foresight may, at its discretion, increase the target size of the Fund ** Depending on the funds raised and the investment opportunities secured *** The Closing Date may be brought forward if the Fund is fully subscribed or extended to a later date, in each case at Foresight’s discretion. FORESIGHT’S BRIDGWATER SOLAR PLANT SOMERSET 2MW OPERATIONAL JULY 2011 02 FORESIGHT SOLAR EIS FUND 3
LETTER OF INTRODUCTION MAY 2013 DEAR INVESTOR The solar sector in the UK has been transformed by financial incentives initiated by the Government which have accelerated the pace of development. Over the past three years installed capacity has increased from 27MW in 2009 to over 2 GW today. The introduction of revenue support schemes in other countries has led to a huge expansion in the number of solar generation plants there and Foresight believes there is still substantial capacity for growth in the size of the UK market. In addition solar benefits from the highest degree of public support for an energy technology with 82% in favour, compared to 66% for onshore wind farms and 74% for wave and tidal (DECC Public Attitudes Survey). The Department of Energy and Climate Change (DECC) has recently included Solar PV as a “key technology” in its Renewable Energy Roadmap, highlighting the recognition by government that solar has a significant role to play in enabling the UK to meet its renewable energy targets. Their analysis suggests a capacity of between 7GW and 20GW in 2020. This change is due to the progress that Solar PV has made in the UK in the last 18 months, in particular the cost of Solar Power Plants, which reduced by over 50% during the period. Solar Power Plants are particularly attractive for investors because the government supported revenue streams from projects under the Renewable Obligation (RO) scheme offer enhanced returns for 20 years and the technology involved is well-proven and reliable. Demand for Foresight Solar EIS Fund 2 which opened in February 2013 exceeded the target size of £20m and was therefore extended and closed at a total of £30m. We are now launching Foresight Solar EIS Fund 3 to give investors access to our strong flow of solar power investment opportunities with the tax benefits of an EIS investment. We expect 2013/14 to be the busiest yet in the UK solar market, following a strong Q1 which saw capacity increase by 350MW, with a large number of attractive projects in development and due to come on line over the next year (NPD Solar Buzz). This year’s offer follows the first wave of fundraising for Foresight’s Solar VCT and Foresight Solar EIS in 2010 and 2011 respectively, which surpassed expectations. These funds bought four UK Solar Power Plants at a combined cost of circa £50m. After more than a year’s operation of above base case performance, these assets have recently been refinanced with an innovative bond issuance which has crystallised a 20% uplift in valuation and consequent increase in the funds’ NAV (NAV announcement by Foresight Solar VCT on 3 May 2013, which has a near identical holding as Foresight Solar EIS in the same four Solar Power Plants). As a result of this uplift both Foresight Solar VCT and Foresight Solar EIS investments are tracking well ahead of their target returns (correct at time of writing). Since establishing our solar power team in 2007, we have invested in Solar Power Plants with a total transaction value of more than £310 million and forecast generating capacity of 86 MW. This extensive in-house experience of sourcing opportunities, arranging bank finance and completing solar power investments means Foresight is well placed to capitalise on opportunities in the sector and provide access to attractive returns for investors. Recently the Feed-in Tariffs (FIT) that have supported utility scale Solar Power Plants have been reduced, making the Renewable Obligation scheme more attractive. Solar PV installations were historically small scale and expensive compared to other technologies and as such were supported by the Government’s FIT regime which was designed to support small scale low carbon electricity technologies. However, as the cost of solar reduced and the size of installations increased the government felt that the level of FIT support was overly generous for utility scale sites. As the solar sector has matured the Government has ended support for new utility scale Solar Power Plants under the FIT regime, which continues to support small scale solar installations. Utility scale Solar Power Plants are now better supported under the RO Scheme, which is the Government’s main financial mechanism to incentivise the deployment of large scale renewable energy generation. Foresight Solar EIS Fund 3 aims to enable individuals to invest in this maturing sector and to benefit from the enhanced revenue streams possible under the RO Scheme. In addition to income derived from selling the generated electricity, generation plants accredited under the RO Scheme receive 20 years of income from the sale of Renewable Obligation Certificates, which substantially increases the Solar Power Plants’ returns. The Enterprise Investment Scheme is one of a very small number of tax-efficient investment schemes officially sanctioned by HM Revenue and Customs. Subject to your personal circumstances, you should be able to reclaim 30% of sums invested from your Portfolio against your tax bill and your investment should be outside the scope of Inheritance Tax after two years. The EIS benefits are principally available on sums invested of up to £1,000,000 per individual in any one tax year. Further details of the tax benefits are described on page 25. It is our intention that all of the monies invested by the Fund will be in UK EIS Qualifying Companies. I hope that you find this Information Memorandum clear and easy to understand. You can call us on 01732 471812 for more detail at any time. You must seek financial advice before you invest in the Fund. When you are ready to invest, you will find the Application Forms from page 39 onwards. Jamie Richards Head of Infrastructure FORESIGHT SOLAR EIS FUND 3 03
Page 1 and 2: INFORMATION MEMORANDUM WITH APPLICA
Page 3: CONTENTS PAGE n EXPECTED TIMETABLE
Page 7 and 8: INVESTMENT OPPORTUNITY In order to
Page 9 and 10: DEALFLOW Foresight has developed an
Page 11 and 12: LIQUIDITY If Investors need to real
Page 13 and 14: INTRODUCTION TO SOLAR POWER INVESTI
Page 15 and 16: Is the equipment reliable? Solar Po
Page 17 and 18: • Feed-in Tariffs (FIT) with Cont
Page 19 and 20: AN INTRODUCTION TO SOLAR POWER INVE
Page 21 and 22: Federico Giannandrea Partner Federi
Page 23 and 24: RISK FACTORS INVESTMENT IN SMALLER,
Page 25 and 26: Changes in legislation concerning E
Page 27 and 28: Qualifying Companies and an Investo
Page 29 and 30: 2.14 The Fund Manager will comply w
Page 31 and 32: Investor shall be entitled, as a ma
Page 33 and 34: to the Investor for any profit, com
Page 35 and 36: 18.3 The Fund Manager is covered by
Page 37 and 38: Foresight will bear any legal, acco
Page 39 and 40: “Investee Companies” companies
Page 41 and 42: APPLICATION FORM PRIVATE INVESTORS
Page 43 and 44: APPLICATION FORM AUTHORISED INTERME
Page 45 and 46: APPLICATION FORM ADVISER CERTIFICAT
Page 47 and 48: DIRECTORY FUND MANAGER & PROMOTER F

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