REG - Aquila Energy Effcn. - Trading Update

Aquila Energy Efficiency TrustAnnouncement

20/12/2022 07:00

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RNS Number : 2406K  Aquila Energy Efficiency Trust PLC  20 December 2022

20 December 2022

Aquila Energy Efficiency Trust PLC

(the "Company")

Trading Update

Material Commitment and Deployment Progress

The Company is pleased to announce an update on the continued progress in the
commitment and deployment of capital since the last update published on 15
September 2022.

Commitments increased materially to £87.3m as at 19 December 2022 (31 August
2022: £55.5m).  Total income-generating, deployed capital has increased to
£54.4m (31 August 2022: £32.1m). The Company is expected to achieve an
average gross unlevered project yield of 8.0% over all investments made to
date.

The Board has approved commitments totalling a further £8.7m, which are
awaiting financial close.  These commitments would be in addition to the
£87.3m commitments made.  The Investment Adviser currently expects that by
the end of Q1 2023 approximately 80% of the capital available for investment
will have been deployed.  Further deployment from existing and new
commitments will be made in the course of 2023.

The Company's portfolio now comprises 30 diverse investments in Germany,
Italy, Spain and the United Kingdom with 19 different ESCO partners, across a
wide range of technologies including Solar PV, Combined Heat & Power,
Biogas, Sub-metering, Wind and Water Management together with the suite of
building energy efficiency technologies deployed in Italian Superbonus
projects.  It is noteworthy that there has been a significant increase in
investments in Germany with the completion of two large investments with
commitments of £18.7m and deployment to date of £15.0m with £3.7m remaining
to be deployed.

Investments since 31 August 2022 include:

·      £10.7m investment to acquire receivables due under water
management service agreements for condominiums and multi-family homes in
Germany, mainly managed by large property managers.

·      £8.0m commitment to fund the acquisition of a biogas plant and
investment in liquefaction equipment by one of Germany's leading biogas
development companies with more than 20 years' experience in the sector.

·      £5.8m commitment to fund the refurbishment of condominiums in
Spain under the "Programa de Rehabilitacion Energetica de Edificios" ("PREE")
incentive scheme. The investment is based on the purchase of receivables
generated by energy saving contracts.

·      £3.5m commitment to fund Solar PV plants in self-consumption for
residential properties located around Madrid, Barcelona and Valencia
originated by Solarnub, a fast-growing trading management platform for solar
companies; this is the second investment with Solarnub.

·      £0.9m commitment to fund a Solar PV project for self-consumption
for a leading Spanish ceramic tiles manufacturer, developed by a Valencia
based ESCO.

·      £0.8m commitment to fund a Solar PV project for self-consumption
for an Italian manufacturing business.

·      £0.6m commitment to invest in a cluster of Solar PV projects in
self-consumption located in Cordoba and Granada marking the start of a new
relationship with a Spanish developer based in Córdoba

·      £0.5m of other commitments including the fourth Solar PV project
with an Italian developer and a second Solar PV project with another Spanish
developer based in Barcelona; and

·      £0.4m investment in operational small wind farms in the UK which
benefit from feed-in and export tariffs and provide onsite power for
self-consumption.

 

 

The CHP project being developed by Ega Energy for Vale of Mowbray Limited,
referred to in the Half Yearly Financial Report for the six months ended 30
June 2022, is on hold due to this company having entered into administration.
The amount of £0.9m has been invested in the project with the majority of the
capital applied to acquire the CHP equipment, which is not yet onsite. Ega
Energy is identifying other clients who may use the equipment if the Vale of
Mowbray site is not acquired by a business with a sufficiently strong credit
rating. The Investment Adviser believes that its contractual arrangements with
Ega Energy protect the value of the investment made to date and so no
impairment has been made at this point.

The Board and the Investment Adviser believe that the market outlook for
energy efficiency investments remains positive and that energy savings should
be considered the "first fuel". Investments to reduce primary energy
consumption and to generate on-site energy, the focus of the Company's
investment strategy, address critical concerns for businesses seeking to
reduce their exposure to high energy prices and transition to "net zero".
Notwithstanding this environment, the Investment Adviser has experienced
delays to decision making by corporates, which it attributes to significant
volatility in wholesale electricity prices and uncertainties over the impact
of new energy policies designed to address this issue, for example, energy
price caps. Nevertheless, energy policies have become clearer, including in
the United Kingdom, and the Board and Investment Adviser expect opportunities
for long term energy efficiency contracts will continue to accelerate and that
it is well placed to secure attractive investment opportunities through the
growing number of partnerships that have been forged with European energy
services companies.

The next semi-annual NAV, as at 31 December 2022, will be published in early
February 2023.

 

For further information please contact:

Aquila Capital (Investment Adviser)  Via Buchanan

Buchanan (Financial PR)  020 7466 5000

Charles Ryland, Henry Wilson, George Beale

Peel Hunt (Broker) 020 7418 8900

Luke Simpson, Huw Jeremy (Investment Banking)

 

 

LEI: 213800AJ3TY3OJCQQC53

 

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