Foresight Solar (FSFL ) faces a continuation vote at its annual general meeting (AGM) in June after the shares traded well below the investment company’s minimum average discount target of 10% below net asset value (NAV) last year.

Reviewing the fund’s fourth quarter update, Peel Hunt analyst Markuz Jaffe said, ‘we calculate Foresight’s average discount during full-year 2023 to have been 16%.

‘This is despite the company having been active with share buybacks on a near-daily basis since May 2023, and leaves us wondering if we should expect to see further proposals from the board that might appease shareholders in the run-up to the continuation vote,’ he said.

At 86.7p this afternoon, the £519m renewable infrastructure fund, which invests in solar farms and battery storage in the UK, Spain and Australia, has seen the discount widen to 27%. This is in line with its rivals, Bluefield Solar (BSIF ) and NextEnergy Solar (NESF ), stand on discounts of around 24% and 30%.

In the three months to 31 December, NAV per share rose just 3p, or 0.3%, to 118.4p as the good price the fund received in November selling half its stake in its Luca portfolio in Spain was offset by declines in power prices and inflation.

With the dividend included, the total return in the quarter was 1.9%.

The 8.6%-yielder said it was on target to deliver an annual dividend of 7.55p per share comfortably covered 1.6 times by earnings.

Although the shares rallied 12.5% in the fourth quarter, they are still down 25% over the past year.

While Foresight has yet to confirm whether a continuation vote will take place, its prospectus outlines that if the shares trade at more than a 10% discount for the financial year the board will propose a special resolution on continuation at the next AGM.

In the update, the fund said the sale of the Lorca assets to pay down borrowing was a ‘clear example’ of its ‘approach to capital recycling and its commitment to reduce variable interest rate debt’.

The fund, which is managed by Ricardo Pineiro and Ross Driver, is aware that near term power prices continued to trend downwards but there has been a ‘slight increase in medium to long-term estimates’ across all geographics.

‘When considered against the company’s well-hedged near-term position and reduced electricity generator levy payments, the overall impact was negligible,’ said the board of the trust.