REG - Aquila Eur Renwables Aquila Euro Rnw-AERI - Final Results
25/04/2025 07:00
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RNS Number : 1383G Aquila European Renewables PLC 25 April 2025
AQUILA EUROPEAN RENEWABLES PLC
(the "Company", the "Fund" or "AER")
LEI Number: 213800UKH1TZIC9ZRP41
Final Results
We are pleased to present the results for the year ended 31 December 2024.
STRATEGIC REPORT
INVESTMENT OBJECTIVE
At a General Meeting held on 30 September 2024, Shareholders approved a change
in Aquila European Renewables Plc's ("the Company" or "AER") Investment
Objective and Investment Policy. The new Investment Objective is set out
below:
The Company's Investment Objective is to realise all existing assets in the
Company's portfolio in an orderly manner.
The previous Investment Objective was:
The Company seeks to generate stable returns, principally in the form of
income distributions, by investing in a diversified portfolio of renewable
energy infrastructure investments.
HIGHLIGHTS FOR THE YEAR
FINANCIAL INFORMATION
as at 31 December 2024
Net assets (EUR million)
320.2
2023: 372.5
NAV per Ordinary Share (cents)(1
) 84.7
2023: 98.5
Total NAV return per Ordinary Share(1,2
) (8.2%)
2023: (6.0%)
Dividends per Ordinary Share (cents)(3
) 5.1
2023: 5.5
Ordinary Share price (cents)
66.0
2023: 78.5
Dividend yield
7.8%
2023: 7.4%
Ordinary Share price discount to NAV(1
) (22.1%)
2023: (20.3%)
Ongoing charges(1,4
) 1.1%
2023: 1.1%
1. This disclosure is considered to represent the Company's alternative
performance measures ("APMs"). Definitions of these APMs and other performance
measures used, together with how these measures have been calculated, can be
found on in the Annual Report. All references to cents are in euros, unless
stated otherwise.
2. Calculation based on NAV per Ordinary Share in euros, includes
dividends and assumes no reinvestment of dividends.
3. Dividends paid/payable and declared relating to the period.
4. Calculation based on average NAV over the period and regular
recurring annual operating costs of the Company, further details can be found
on in the Annual Report.
HIGHLIGHTS
On 8 January 2024, the Company announced that it has entered into a five-year The Investment Adviser announced a strategic partnership with Commerzbank AG On 27 September 2024, the Company announced the completion of the sale of its
non-recourse ("Commerzbank") on 18 January 2024 aimed at significantly accelerating the 25.9% interest in Tesla to Sunnhordland Kraftlag AS for EUR 27.0 million,
EUR 50 million debt facility secured against its Spanish solar PV portfolio. Investment Adviser's growth into one of the leading asset managers for representing a premium of EUR 2.6 million above the prevailing valuation
sustainable investment strategies in Europe. As part of this partnership, reflected in the Company's Q2 2024 NAV.
Commerzbank acquired a 74.9% stake in the Investment Adviser, whilst ensuring
the continued managerial independence of the Investment Adviser, which will
remain autonomous in terms of operations, investment decisions, product
development and brand representation. The transaction was completed following
the receipt of the required regulatory approvals on 3 June 2024.
At a General Meeting held on 30 September 2024, shareholders approved the The Revolving Credit Facility ("RCF") of Tesseract Holdings Limited ("THL") On 24 October 2024, the Company announced the appointment of N.M. Rothschild
Managed Wind-Down of the Company and a new Investment Objective and Policy to was downsized from EUR 50 million to EUR 20 million in recognition that AER is & Sons Limited ("Rothschild" or "Rothschild & Co") to support the
facilitate the Managed Wind-Down process. in a Managed Wind Down process and has amended its investment policy Company's Managed Wind-Down process.
accordingly in 2024. In September 2024 the RCF was repaid following the sale
of the wind asset Tesla.
On 23 December 2024, the Company announced the outcome of the appraisal case
regarding The Rock. The Court ruled that the Project company should pay
compensation to the Sami reindeer herding district of approximately NOK 4.3
million, of which the Company's share amounted to NOK 590,000 (EUR 50,000).
The developer of The Rock remains responsible for handling the economic impact
on the Project company associated with the outcome of the appraisal case.
CHAIRMAN'S STATEMENT
2024 witnessed a convergence of challenging economic conditions, including
higher inflation and interest rates, combined with lower electricity prices
and particularly volatile weather which impacted our asset performance.
Unsurprisingly, investor sentiment in the listed renewable energy investment
trust sector continues to be subdued, as reflected in the Company's share
price which traded at a discount of 22.1% to its Net Asset Value ("NAV") as at
31 December 2024 (discount of 20.3% as at 31 December 2023), a problem shared
by our peer group.
MANAGED WIND DOWN
On 30 September 2024, shareholders approved resolutions in relation to the
discontinuation of Aquila European Renewables Plc (the "Company") and
amendment of the Company's Investment Policy to enter a Managed Wind-Down. On
24October 2024, the Company announced that the Board has appointed Rothschild
& Co as the financial advisor in relation to the Managed Wind-Down
process. The process to sell unquoted assets, especially complicated energy
infrastructure assets, requires extensive and careful preparation - including
vendor commissioned technical due diligence reports - if it is to produce
optimal results. Thereafter, discussions with possible buyers are of course
commercially sensitive meaning that value for shareholders could be prejudiced
if information about their progress leaks out beyond the small group of
professional advisers and Board members who are involved. The Board is
therefore reluctant to provide commentary as to the status of discussions.
However, shareholders should be assured that the objective - very clearly and
unambiguously - is to complete the sale process as quickly as possible
providing liquidity to shareholders at a premium to the share price, through
realising assets at prices as close as possible to their contribution to the
reported Net Asset Value.
The Board will immediately update shareholders in the event that any incoming
bid is accepted. The Board will communicate in due course how it proposes to
distribute the capital sale proceeds which are received. In parallel, the
Board and its advisers have also undertaken other initiatives in recognition
of the Managed Wind-Down process, including reviewing the Company's cost
structure and identifying potential opportunities for savings, reviewing and
amending the Company's dividend policy and streamlining external reporting
obligations.
PORTFOLIO DEVELOPMENTS
In September 2024, the Company sold its 25.9% interest in Tesla to
Sunnhordland Kraftlag AS ("SKL") for a consideration of approximately EUR 27.0
million, representing a 10.8% premium to the Company's fair value of Tesla as
at 30 June 2024. Tesla is a 150 MW operating onshore wind farm located in
Southern Norway, which was acquired by the Company in 2019. Proceeds were
primarily used to fully repay the Revolving Credit Facility ("RCF").
We were also pleased to announce the long-awaited ruling with respect to the
Sami appraisal case. On 20 December 2024, the Helgeland District Court
announced its decision on the Sami appraisal case, ruling in favour of The
Rock project company and affirming the validity of its license. The Company's
share of the NOK 4.3m compensation payment awarded to the reindeer herding
stakeholders is NOK 590k (EUR 50k). However, as anticipated, the Jillen-
Njaarke Reindeer Herding District has appealed the judgement from the
Helgeland District Court in the appraisal case. The Investment Adviser
estimates that a decision in relation to the appeal will take place in 2026.
DIVIDEND
As announced on 13 February 2025, the Board implemented a change in the
Company's future dividend policy. Following the shareholder vote to approve
the Managed Wind-Down of the Company, it is the Board's intention to continue
paying dividends covered by earnings and taking into account the Company's
liquidity position, in order to maintain the Company's investment trust
status. However, the Board will no longer be able to provide forward guidance
as to the level of dividend for the year ahead. Shareholders should also note
that the Board will no longer seek to smooth the level of dividend over a
financial year to reduce the impact of the seasonality of earnings and that,
in addition the level of dividend payments are expected to decline as assets
are realised (such as Tesla), gearing is reduced and capital is returned to
shareholders.
PERFORMANCE
The Company's NAV per Ordinary Share was 84.7 cents as at 31 December 2024,
resulting in a NAV total return per Ordinary Share of -8.2%, including
dividends during the year. Movement in the NAV was primarily driven by a
decrease in short-term power price forecasts across the majority of the
portfolio, reflecting lower commodity prices (notably gas and coal) and a
decrease in the price of Guarantees of Origin ("GoOs") as a result of lower
demand due to lower than expected industrial activity.
In 2024, the Company has paid or declared dividends of 5.13 cents per Ordinary
Share, slightly below our target set at the beginning of the year of 5.79
cents due to a reduction in the Q4 dividend, as a result of the sale of Tesla,
combined with lower operating performance across the portfolio. Since the IPO
in June 2019, the Company has returned EUR 116.5 million to shareholders in
the form of dividends and share buybacks, equivalent to 27.9% of total raised
capital.(1)
Over the reporting year, total revenue was 14.8% below budget due to
persistently lower short-term electricity spot market prices across most
portfolio markets. This reflects the continued decline in commodity prices
compared to the previous year, subdued power demand from a mild winter across
Europe, and further downward pressure on GoOs prices. Additionally, high gas
storage levels throughout 2024 sustained lower power prices, particularly
impacting merchant exposures. Production was 6.8% below budget during the
12-month period, primarily due to lower irradiation for the solar portfolio,
curtailment of the Iberian solar PV assets during periods of negative power
prices and lower than forecast average wind resource in the Nordics. This in
turn was partially offset by continued strong performance from the hydropower
portfolio due to higher-than-forecast water availability, sustaining a strong
positive trend for the hydropower portfolio since June 2023.
ESG
The portfolio continues to contribute towards the UN Sustainable Development
Goals to ensure access to affordable, reliable, sustainable and modern energy
for all. Full details of the Company's approach to combatting climate change,
enhancing biodiversity, boosting regional and local community engagement,
ensuring sustainable supply chain management and best-practice labour
standards, as well as other environmental and social topics, can be found in
this report.
OUTLOOK
The recent change in the US administration post-year end and the introduction
of the "America first" policy risks heightening geopolitical tensions and
increasing uncertainty and volatility. In particular it is thought likely to
impact international supply chains, inflation, and interest rates which could
impact the complex macroeconomic environment in the renewable assets sector.
Management continues to closely monitor and evaluate the direct and indirect
effects of global events, and proactively address any business disruptions or
other risks arising from them.
The Board remains optimistic on the long-term outlook for the listed renewable
energy sector, driven by the urgent need to decarbonise the world's energy
supply and a favourable European regulatory environment. This positive outlook
is further supported by expectations of increasing power demand from a
recovery in European industrial activity, combined with the electrification of
industry, heat and transport and the rising energy needs of data centres and
artificial intelligence ("AI"). AI in particular is expected to be a key
driver of future power demand, noting the European Commission recently
announced a pledge of EUR 200 billion investment in AI in Europe.
However, as the Company has now entered the process of Managed Wind-Down, your
Board remains committed to ensuring the sale process is completed as quickly
as possible, without prejudicing value and to returning capital to
shareholders in an expeditious and efficient manner.
IAN NOLAN
Chairman
24 April 2025
1. Raised capital including shares issued to the Investment Adviser as
payment of the management fee.
INVESTMENT ADVISER'S REPORT
Leader in Investment and Asset Management in European Renewables
Overall CO(2)e emissions avoided(2
) 3.4 million tonnes
Green energy produced(3
) 11.8 TWh
Households supplied(3
) 3.3 million
INVESTMENT ADVISER BACKGROUND(1
) The Company's Alternative Investment Fund Manager ("AIFM"), FundRock
Management Company (Guernsey) Limited, has appointed Aquila Capital
Investmentgesellschaft mbH ("Aquila Capital") as its Investment Adviser for
the Company. Aquila Capital's key responsibilities are to originate, analyse
and assess suitable renewable energy infrastructure investments and advise the
AIFM accordingly, as well as to provide Asset Management services.
Aquila Capital is an asset manager specialising in sustainable real asset
investments. Since 2007, Aquila Capital has been providing compelling
investment opportunities focused on driving the energy transition and
sustainable infrastructure. The Investment Adviser's goal is to deliver
resilient returns while supporting clean energy initiatives and contributing
to the decarbonisation of global infrastructure.
Aquila Capital provides tailored solutions designed to meet the needs of both
institutional and retail clients. As a one-stop-shop for equity and private
debt investments, Aquila Capital is dedicated to making sustainable real asset
investments accessible and straightforward.
The Investment Adviser announced a strategic partnership with Commerzbank AG
("Commerzbank") on 18 January 2024 aimed at significantly accelerating the
Investment Adviser's growth into one of the leading asset managers for
sustainable investment strategies in Europe. Commerzbank is a major listed
European banking institution serving a diverse client base of around 26,000
corporate client groups and nearly 11 million private and corporate clients,
with a global presence in more than 40 countries. As part of this partnership,
Commerzbank acquired a 74.9% stake in the Investment Adviser, whilst ensuring
the continued managerial independence of the Investment Adviser, which will
remain autonomous in terms of operations, investment decisions, product
development and brand representation. The transaction was completed following
the receipt of the required regulatory approvals on 3 June 2024.
1. Figures presented in this section refer to Aquila Group.
2. Data as at 31 December 2024, based on current portfolio of the Aquila
Group. For details on the methodology for avoided emissions, refer to:
https://www.aquila-capital.de/fileadmin/user_upload/PDF_Files_Whitepaper-Insights/20231121_LAE_White_paper_EN.pdf
(https://www.aquila-capital.de/fileadmin/user_upload/PDF_Files_Whitepaper-Insights/20231121_LAE_White_paper_EN.pdf)
3. Data as at 31 December 2024, including historical divestments.
CURRENT RENEWABLES PORTFOLIO OF AQUILA GROUP(1):
Portfolio Capacity(2)
Wind energy
4,702 MW
1,010 WTGs
Solar PV
15,733 MWp
370 PV parks
Hydropower
1,050 MW
295 plants
Energy storage systems
4,190 MW
15 projects
19 Offices
1. Map is shown for illustrative purposes only. Exact locations of
offices and assets might deviate. Points indicate one or more assets and are
not indicative of size.
2. Data as at 31 December 2024, including historical divestments.
INVESTMENT PORTFOLIO
Project Technology Country Capacity(1) Status Asset Life Equipment Energy Offtaker Ownership Leverage(4) Acquisition
COD(2)
from COD
Manufacturer
Offtaker(3)
in Asset
Date
Sagres Hydropower Portugal 107.6 MW Operational 1951-2006 n.a.(5) Various FiT EDP/Renta 18.0%(6) 23.3% July 2019
Holmen II Wind energy Denmark 18.0 MW Operational 2018 25y Vestas FiP Energie.dk 100.0% 29.7% July 2019
Olhava Wind energy Finland 34.6 MW Operational 2013-2015 30y Vestas FiT Finnish Energy 100.0% 29.4% September 2019
Svindbaek Wind energy Denmark 32.0 MW Operational 2018 29y Siemens FiP Energie.dk 99.9% 16.3% December 2019 &
March 2020
The Rock Wind energy Norway 400.0 MW Operational 2022 30y Nordex PPA Alcoa 13.7%(6) 54.7% June 2020
Benfica III Solar PV Portugal 19.7 MW Operational 2017, 2020 40y AstroNova PPA Axpo 100.0% 0.0% October 2020
Albeniz Solar PV Spain 50.0 MW Operational 2022 40y Canadian Solar PPA Statkraft 100.0% 23.8% December 2020
Desfina Wind energy Greece 40.0 MW Operational 2020 25y Enercon FiP DAPEEP 89.0%(6,7) 54.1%(8) December 2020
Ourique Solar PV Portugal 62.1 MW Operational 2019 40y Suntec CfD ENI 50.0%(6) 0.0% June 2021
Greco Solar PV Spain 100.0 MW Operational 2013 40y Jinko PPA Statkraft 100.0% 29.6% March 2022
Tiza Solar PV Spain 30.0 MW Operational 2022 40y Canadian Solar PPA Axpo 100.0% 32.1% June 2022
---------------
Total (AER Share) 424.9 MW
=========
1. Installed capacity at 100% ownership.
2. COD = Commissioning date.
3. PPA = Power Purchase Agreement, FiT = Feed-in tariff. FiP = Feed-in
premium, CfD = Contract for Difference. Further information on the contracted
revenue position can be found on in the Annual Report.
4. Leverage level calculated as a percent of debt plus fair value as at
31 December 2024.
5. 21 individual assets. Approximately 8 years remaining asset life when
calculated using net full load years.
6. Majority of remaining shares are held by entities managed and/or
advised by Aquila Capital.
7. Represents voting interest. Economic interest is approximately 90.0%.
8. Calculation based on voting interest.
PORTFOLIO UPDATES AS AT 31 DECEMBER 2024
The Rock
Country: Norway
Technology: Onshore Wind
Date acquired: June 2020
Status: Operational
Capacity: 400.0 MW
Interest: 13.7%
=========
The Rock, Norway
The Sami appraisal case was heard before the Helgeland District Court between
27 May and 13 June 2024.
The Helgeland District Court announced its decision on the Sami appraisal case
on 20 December 2024, ruling in favour of The Rock project company and
confirming the validity of the license. AER's share of the NOK 4.3m
compensation awarded to reindeer herding stakeholders is NOK 590k (EUR 50k).
The Sami have appealed the judgement from the Helgeland District Court in the
appraisal case.
The Investment Adviser estimates that a decision in relation to the appeal
will take place in 2026.
As communicated with shareholders previously, Eolus, the developer of The
Rock, remains responsible for handling the appraisal case and for the economic
impact on the project company associated with the outcome of that case, as
well as the economic impact associated with the mitigation measures noted
above. The Company will continue to keep shareholders updated regarding any
key developments.
Tesla
Country: Norway
Technology: Onshore Wind
Date acquired: July 2019
Status: Operational
Capacity: 150.0 MW
Interest: 25.9%
=========
In September 2024, the Company entered into a sale and purchase agreement with
Sunnhordland Kraftlag AS ("SKL") to sell its 25.9% interest in Tesla for a
consideration of approximately EUR 27.0 million.
The sale price represents a 10.8% premium to the investment's fair value as at
30 June 2024. The sale proceeds were used to fully repay the RCF. As of 31
December 2024 the RCF remains undrawn (excluding bank guarantees of EUR 2.8
million, which will remain in place).
CONTRACTED REVENUE POSITION
Revenue Mix - Existing Contracts
Present Value of Revenues
(Five Years)
FINANCIAL PERFORMANCE¹
Performance(2
) Electricity Production (GWh)
Technology Region 2024 2023 Variance (%) Variance 2024
against
P50(3) Budget
Wind energy Denmark, Finland, Norway, Greece 461.3 508.5 -9.3% -6.7%
Solar PV Portugal, Spain 384.8 402.6 -4.4% -11.1%
Hydropower Portugal 71.2 60.8 17.1% 25.4%
--------------- --------------- --------------- ---------------
Total 917.3 971.9 -5.6% -6.8%
========= ========= ========= =========
Load Factors(4)
Technology 2024 2023
Wind energy 32.4% 26.3%
Solar PV 18.8% 20.7%
Hydropower 42.0% 35.8%
--------------- ---------------
Total 29.6% 25.9%
========= =========
Technical Availability(5)
Technology 2024 2023
Wind energy 93.6% 94.0%
Solar PV 99.8% 99.8%
Hydropower 97.5% 98.3%
--------------- ---------------
Total 97.3% 97.0%
========= =========
Revenues(6) (EUR million)
Technology 2024 2023 Variance (%)
Wind energy 28.7 32.0 -10.3%
Solar PV 19.4 23.7 -17.9%
Hydropower 6.5 6.1 5.3%
--------------- --------------- ---------------
Total 54.6 61.8 -11.6%
========= ========= =========
1. KPI's of the underlying SPVs of the Tesseract Holdings Limited
("HoldCo").
2. Desfina data based on economic share (FY24: 90.0%, FY23: 91.5%).
3. Financial model forecasts are based on P50 production (the estimated
annual amount of electricity generation that has a 50% probability of being
exceeded - both in any single year and over the long term - and a 50%
probability of being underachieved).
4. The load factor of a renewable energy asset (such as wind or solar)
is the ratio of its actual energy output over a given period to its maximum
possible output if it operated at full capacity continuously during that
period. It is typically expressed as a percentage and provides insight into
the efficiency and utilization of the asset.
5. Technical availability refers to the proportion of time a system,
service, or infrastructure is fully functional and accessible for use, with
minimal downtime. Average technical availability based on weighted installed
capacity (AER share).
6. Includes merchant revenue, contracted revenue and other revenue (e.g.
Guarantees of Origin, Electricity Certificates).
2024 Monthly Production Performance vs. Budget (AER Share)
The portfolio's production was 6.8% below budget over the reporting year,
primarily due to lower irradiation for the solar portfolio, curtailment of the
Iberian solar PV assets in times of negative power prices and lower than
forecast average wind resource in the Nordics. Total weighted average
technical availability over the reporting period remained stable at 97.3%
(2023: 97.0%).
Gearing(1)
EUR million As at As at Variance
31 December
31 December
(%)
2024
2023
NAV 320.2 372.5 (14.0%)
Debt(2) 152.0 194.8 (22.0%)
GAV 472.2 567.4 (16.8%)
Debt (% of GAV)(3) 32.2 34.3 (215bps)
Project debt weighted average maturity (years) 10.7 13.9 (3.2) years
Project debt weighted average interest rate (%)(4) 3.2 2.6 55bps
RCF interest rate (%)(5) 5.2 5.7 (50bps)
========= ========= =========
Debt Summary as at 31 December 2024(6)
Project AER share Drawn debt Currency Bullet/amortising Maturity Hedged Type
(EUR million)
proportion
Sagres 18.0% 5.0 EUR Fully amortising Jun-33 70.0% Bank Debt
Olhava 100.0% 9.6 EUR Fully amortising Dec-30/Sep-31 100.0% Bank Debt
Holmen II 100.0% 9.9 DKK Fully amortising Dec-37 100.0% Bank Debt
Svindbaek 99.9% 6.3 DKK Fully amortising Dec-37 100.0% Bank Debt
The Rock: USPP Bond 13.7% 30.7 EUR Fully amortising Sep-45 100.0% Debt Capital Markets
The Rock: Green Bond 13.7% 11.0 EUR Bullet Sep-26 100.0% Debt Capital Markets
Desfina 89.0% 30.6 EUR Fully amortising Dec-39 100.0% Bank Debt
Albeniz 100.0% 10.8 EUR Partly amortising Dec-28 90.0% Bank Debt
Jaén 100.0% 12.0 EUR Partly amortising Dec-28 90.0% Bank Debt
Guillena 100.0% 16.7 EUR Partly amortising Dec-28 90.0% Bank Debt
Tiza 100.0% 9.6 EUR Partly amortising Dec-28 90.0% Bank Debt
--------------- ---------------
Subtotal 152.0 95.8%
========= =========
RCF 100.0% - EUR Bullet Apr-25 0.0% Bank Debt
--------------- ---------------
Total 152.0 95.8%
========= =========
1. Foreign currency values converted to EUR as at 31 December 2024. Data
represents AER's share of debt. AER's share of Desfina debt is based on voting
interest.
2. Debt corresponds to senior debt secured at project level and RCF at
HoldCo level.
3. This disclosure is considered to represent the Company's alternative
performance measures ("APMs"). Definitions of these APMs and other performance
measures used, together with how these measures have been calculated, can be
found in the Annual Report.. All references to cents are in euros, unless
stated otherwise.
4. Weighted average all in interest rate for EUR denominated debt (excl.
RCF). DKK denominated debt has an average weighted interest rate of 2.7% (31
December 2023: 2.7%).
5. Consists of 1M EURIBOR plus a margin of 1.85%.
6. Foreign currency values converted to EUR as of 31 December 2024. Data
represents AER's share of debt. AER share of Desfina's debt based on voting
interest.
Valuation Methodology
The Company owns 100.0% of its subsidiary Tesseract Holdings Limited ("HoldCo"
or "THL"). The Company meets the definition of an investment entity as
described by IFRS 10. As such, the Company's investment in the HoldCo is
valued at fair value.
The Company has acquired underlying investments in SPVs through its investment
in the HoldCo. The Investment Adviser has carried out fair market valuations
of the SPV investments as at 31 December 2024 and the Directors are satisfied
with the methodology, the discount rates and key assumptions applied, and the
valuations.
All SPV investments are reported at fair value through profit or loss and are
valued using the IFRS 13 framework for fair value measurement. The economic
assumptions shown on the following below were used in the valuation of the
SPVs.
Valuation Assumptions
As at 31 December 2024
Discount rates The discount rate used in the valuations is calculated according to
internationally recognised methods. Typical components of the discount rate
are risk free rates, country-specific and asset- specific risk premia.
Power price Power prices are based on power price forecasts from leading market analysts.
The forecasts are independently sourced from providers with coverage in almost
all European markets as well as providers with regional expertise. The
approach applied to all asset classes (wind, solar PV and hydropower) remains
unchanged with the first two using a blend of two power price curve providers
and the third using a blend of three power price curve providers.
Energy yield/load factors Estimates are based on third party energy yield assessments, which consider
historic production data (where applicable) and other relevant factors.
Inflation rates Long-term inflation is based on the monetary policy of the European Central
Bank.
Asset life In general, an operating life of 25 to 30 years for onshore wind and 40 years
for solar PV is assumed. The operating lives of hydropower assets are
estimated in accordance with their expected concession terms.
Operating expenses Operating expenses are primarily based on respective contracts and, where not
contracted, on the assessment of a technical adviser.
Taxation rates Underlying country-specific tax rates are derived from due diligence reports
from leading tax consulting firms.
Portfolio Valuation - Key Assumptions
Metric As at As at
31 December 2024
31 December 2023
Discount rate Weighted average 7.3% 7.2%
Long-term inflation Weighted average 2.0% 2.0%
Remaining asset life(1) Wind energy (years) 23 22
Solar PV (years) 35 36
Hydropower (years) 8 9
Operating life assumption(2) Wind energy (years) 28 28
Solar PV (years) 40 40
Hydropower (years) n/a n/a
========= =========
There were no significant changes in the key valuation assumptions compared to
the previous reporting period.
1. Remaining asset life based on net full load years. Does not consider
any potential asset life extensions.
2. Asset life assumption from date of commissioning.
MARKET COMMENTARY AND OUTLOOK
Electricity Price Forecasts - All Assets (Weighted Average)(1)
Valuation Sensitivities
1. Data reflects pricing forecasts as at 31 December 2024. All power
prices are in real terms as at 31 December 2024 and reflect the weighted
average captured price. Weighting is based on P50 production sold at the
market price.
Market Power Prices
2024 was marked by a decrease in short-term power price forecasts across the
majority of the portfolio, reflecting lower commodity prices (notably gas and
coal) relative to the same period last year, mainly caused by the elevated
filling levels of gas storage reservoirs. Gas prices have seen a recent uptick
in light of the volatile geo-political environment and increased competition
with Asia for liquefied natural gas, despite still trading within a markedly
lower range than the record highs experienced in the past few years. 2024 has
seen some recovery in electricity demand at a transmission system level, with
base demand up 1.5% across major markets relative to 2023, partially due to
the introduction of demand reduction measures across several European
jurisdictions in the first quarter of 2023. Elevated hydropower production has
been a trend across the continent in 2024, particularly in Iberia and the
Nordics during the first half of the year.
2024 Average Daily Power Price Chart(1)
Nordics
During 2024, power prices in the Nordics traded at an average of EUR 36.1 per
MWh (2023: EUR 56.4 per MWh). The decrease in power prices was driven mainly
by the continued fall and normalisation of commodity prices in 2024, together
with stable hydropower output in the region. Power demand in the Nordics has
shown signs of recovery in 2024. However, the greater interconnection levels
of the region's southern price zones (SE4, NO1, NO2, DK1) with continental
Europe meant that those zones were more affected by volatile price drops in
the continent's commodity and power prices, as opposed to the less
interconnected northern price zones (NO3 and NO4). As at 31 December 2024, AER
has exposure to the NO4 price zone in Norway via its interests in The Rock.
Iberia
Power prices in Iberia traded at an average of EUR 63.0 per MWh in 2024 (2023:
EUR 87.2 per MWh) . The significant decrease in power prices was driven by i)
lower commodity prices, ii) depressed demand, despite demand being above 2023
levels it was still below 2022 levels, iii) elevated hydropower output (up 32%
year-on- year) due to heavy rainfall, and iv) higher solar output as a result
of solar PV capacity growth. Both Spain and Portugal recorded their first
negative prices, especially in the spring, due to a convergence of low demand
and significant renewable output.
1. Source: European Network of Transmission System Operators for
Electricity ("ENTSO-E"), 'Nordics' reflects the Nord Pool system price.
Greece
Power prices in Greece were more elevated than other European countries due to
the higher proportion of hours in which gas-fired generation sets the marginal
price in the country's wholesale market. However, the downward trajectory in
commodity prices still resulted in a substantial decrease in the average power
price for 2024 to 100.1 per MWh (2023: EUR 119.2 per MWh).
Outlook
The current market environment presents a compelling opportunity for long-term
investment in renewable energy assets, despite recent geopolitical
uncertainty. While recent macroeconomic challenges, including inflation,
rising interest rates and supply chain disruptions, have impacted asset
valuations, these pressures are now easing. Inflation has moderated and
interest rates are stabilizing, reducing financing costs and improving the
profitability of renewable energy projects. Additionally, declining capital
expenditure costs, particularly in photovoltaic modules and battery energy
storage systems, enhance the economic case for further expansion. These
cyclical tailwinds, combined with continued political support for
decarbonization and energy security, reinforce the resilience and
attractiveness of renewable energy investments.
Looking ahead, structural trends such as the growing electrification of
industries, the increasing adoption of energy storage solutions and rising
carbon pricing will continue to drive demand for clean energy. While
electricity price volatility remains a factor, it also reinforces the merits
of portfolio diversification and active energy management, both of which have
been key elements of Aquila European Renewables' investment strategy since its
formation in 2019. Notwithstanding the Managed Wind-Down process, as energy
markets evolve, the Company's portfolio remains well-positioned to capitalize
on these dynamics whilst contributing to the sustainable energy transition.
AQUILA CAPITAL INVESTMENTGESELLSCHAFT MBH
24 April 2025
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
1. ENVIRONMENTAL
Aquila Group focuses on the investment in, and development of, essential
assets. This includes clean energy (wind energy, solar PV, hydropower and
battery storage), sustainable infrastructure and specialty asset classes, such
as carbon forestry and energy efficiency.
In 2022, Aquila Group formalised a mission to become one of the world's
leading sustainable investment and development companies for essential assets
by 2030. To show commitment to the mission, Aquila Group set a goal to avoid
1.5 billion tonnes of CO2e by 2035 during its portfolio's lifetime.
UN Sustainable Development Goals for Europe
40.0%
At least a 40.0% decline from 1990 levels in greenhouse gas emissions
32.0%
A 32.0% share for renewables in the energy system
32.5%
A 32.5% improvement in energy efficiency
Albeniz, Spain
Using the appropriate tools, due-diligence procedures and experts, Aquila
Group ensures it identifies, assesses and mitigates all material ESG factors,
to protect investors from potential financial downside, while considering
their impact on society and the environment. In this context, Aquila Group
manages all relevant ESG elements using dedicated subject-matter experts.
Together, we are committed to the UN Sustainable Development Goals,
particularly climate action (SDG #13), clean energy (SDG #7), industry
innovation, and infrastructure
(SDG #9).
AER's Contribution to the UN Sustainable Development Goals
Goal Overview Contribution
towards
UN Sustainable
Development Goals
Ensure access to affordable, reliable, sustainable and modern energy for all. - AER's portfolio produces renewable energy which contributes 7 Affordable and clean energy
towards Europe's electricity mix.
- Renewable energy is a cost-effective source of energy compared
to other options.
- AER's investments in renewable assets help support and
encourage further investment in the industry.
Build resilient infrastructure, promote inclusive and sustainable - AER targets renewable investments that are supported by high 9 Industry, innovation and infrastructure
industrialisation and foster innovation. quality components and infrastructure to optimise the energy yield and
subsequent return to investors.
- AER's investments help support the construction of shared
infrastructure (e.g. substations) which enables the further expansion of
renewable energy sources.
- AER's Investment Adviser is responsible for monitoring and
optimising the Company's day-to-day asset performance. This process also
involves actively exploring how new technologies and other forms of innovation
can be utilised to enhance asset performance and sustainability (energy yield,
O&M, asset life).
Take urgent action to combat climate change and its impacts. - The Company's 424.9 MW portfolio powered approximately 227.0 13 Climate action
thousand households and avoided approximately 225.6 thousand tonnes of CO(2)
emissions over the reporting year¹.
- As a signatory to the UN Principles for Responsible
Investments ("UN PRI"), the Company's Investment Adviser has integrated ESG
criteria all along its investment process for real assets, which includes
considerations of climate change.
1. Actual AER contributions as at 31 December 2024. The CO2 equivalent
avoidance, the average European households supplied and household emissions
are approximations and do not necessarily reflect the exact impact of the
renewable energy projects. The cited sources of information are believed to be
reliable and accurate, however, the completeness, accuracy, validity and
timeliness of the information provided cannot be guaranteed and Aquila Capital
accepts no liability for any damages that may arise directly or indirectly
from the use of this information.
Environmental Initiatives
The natural environment around some of the Company's solar PV parks is the
Desierto de Tabernas National Park, situated to the south east of Spain and
representing the only desert in the entire European continent. This
constitutes a rich biodiversity of environmental resources that is of
particular geological interest. Specialist advisers have been commissioned to
implement environmental measures to mitigate the impact of the solar PV plants
on the environment and create habitats for flora and fauna.
Several visits per month are made to implement the measures, monitor their
evolution and make necessary adjustments. Below is a selection of closely
monitored measures implemented across some of the Company's solar PV parks for
local flora and fauna.
Flora
· Translocation of rain-fed olive trees.
· Planting of broom and palmetto trees to promote landscape
integration and the creation of biotopes appropriate for local species.
· Clearing of vegetation through sheep grazing.
· Regular maintenance measures and monitoring.
Albeniz, Translocated olive trees
Fauna
· Drinking troughs, feeding troughs and perches were installed in
order to suit the local fauna.
· A hunting fence was installed to protect wildlife.
· Bird nest boxes were installed, specifically for the nesting of
the lesser kestrel, common kestrel, barn owl and little owl species.
· A study commissioned to analyse the degree of adaptation of bird
species to the study commissioned to analyse the degree of adaptation of bird
species to the presence of the solar PV parks, with special emphasis on the
lesser kestrel and Montagu's harrier species.
· Stands for wild rabbits built to help the breeding and survival
of this species.
Greco, European Owl
Albeniz, Short-toed Snake-eagle
Parnassos National Park, Greece
2. SOCIAL
Renewable energy projects can have an inherent major positive impact on the
environment with their ability to decarbonise the energy sector, aiding the
Company in the transition to a low-carbon economy. In light of the European
Green Deal boosting renewable energy projects, investment into clean-energy
assets has accelerated over recent years. As renewable energy deployment
increases, pressure on land is growing. The need to protect biodiversity may
result in conflicts over agricultural and renewable energy land usage.
Conflicts can arise when new renewable projects compete against other types of
land usage, such as residential housing, recreational areas, agriculture and
nature conservation, or when they cause landscape disruptions. Engagement with
local communities is an integral part of the Company's investment philosophy.
The assets continue to support communities by contracting local service
providers, paying local taxes, and lease payments for use of the land.
Jaén, Spain
The Rock, Norway
3. GOVERNANCE
Independent Board of Directors
The independent Board of Directors is responsible for AERʼs governance and
sustainability policy and its implementation, with the daily operations being
delegated to its independent AIFM, FundRock Management Company (Guernsey)
Limited ("FundRock"). FundRock monitors environmental, social and governance
risks, which are fully integrated across every single stage of its investment
process. The Aquila Group publishes its own Sustainability Report, describing
the Investment Adviser's approach to sustainability within the investment
process. Aquila Capital regards integrity and diversity as key pillars in its
governance and it has been vital for the growth and success of the Company.
The Investment Adviser is fully regulated and supervised by the Federal
Financial Supervisory Authority in Germany.
Board and Employee Diversity
The Board of Directors is appointed based on expertise and merit, being
mindful of the benefits generated by diversity. The Board comprises members
with different skills and experiences, while endeavouring to comply with the
Listing Rules on diversity. The current Board comprises three men and two
women, all non-executive Directors who have a significant number of years of
experience in their relevant fields. Additionally, the Investment Adviser is
also mindful of the benefits provided by diversification, both in culture
(some 60 nationalities are represented among its employees), and in gender
(its gender ratio is 62% male and 38% female).
AER Board: Investment Adviser:
Men Women Men Women 5 Gender equality
3 2 62% 38%
60
Different nationalities
INVESTMENT POLICY AND KEY PERFORMANCE INDICATORS
At a General meeting held on 30 September 2024 shareholders approved the
following New Investment Policy:
INVESTMENT POLICY
The Company will pursue its investment objective by effecting an orderly
realisation of its assets in a manner that seeks to achieve a balance for
Shareholders between maximising the value received from those assets and
making timely returns of capital to Shareholders.
This process might include a sale of all of the assets, groups of assets (such
as specific geographic or technological portfolios), individual assets of the
Company or a combination thereof.
The Company will cease to make any new Renewable Energy Infrastructure
Investments. Capital expenditure will be permitted where it is deemed
necessary or desirable by the Board in connection with the realisation,
primarily where such expenditure is necessary to protect or enhance an
investment's realisable value.
INVESTMENT RESTRICTIONS
The net proceeds from realisations will be used to repay borrowings and make
timely returns of capital to Shareholders (net of provisions for the Company's
costs and expenses) in such manner as the Board considers appropriate.
CHANGES TO THE INVESTMENT POLICY
The Directors do not currently intend to propose any material changes to the
Company's Investment Policy. Any material changes to the Company's Investment
Policy set out above will only be made with the approval of the Financial
Conduct Authority and the Shareholders by way of an ordinary resolution.
HEDGING
The Company does not intend to use hedging or derivatives for investment
purposes but may from time to time use derivative instruments such as futures,
options, futures contracts and swaps (collectively 'Derivatives') to protect
the Company from fluctuations of interest rates or electricity prices. The
Derivatives must be traded on a regulated market or by private agreement
entered into with financial institutions or reputable entities specialising in
this type of transaction.
LIQUIDITY MANAGEMENT
The AIFM will ensure a liquidity management system is employed for monitoring
the Company's or its subsidiary, Tesseract Holdings Limited's (the "Group")
liquidity risks. The AIFM will ensure, on behalf of the Group, that the
Group's liquidity position is consistent at all times with its investment
policy, liquidity profile and distribution policy.
Any cash received by the Group as part of the realisation process (net of any
transaction costs and repayment of borrowings) will be held by the Group as
cash on deposit and/or will be invested in cash equivalents, near cash
instruments, bearer bonds and money market instruments pending its return to
Shareholders.
BORROWING LIMITS
It is not anticipated that the Company will take on any new borrowings, but
may do so for the efficient management of the Company where such borrowings
are necessary to protect or enhance an investment's realizable value as part
of the orderly realization of the Company's assets.
At the time of entering into (or acquiring) any new long-term structural debt
(including limited recourse debt), total long- term structural debt will not
exceed 50 per cent of the prevailing Gross Asset Value. For the avoidance of
doubt, in calculating gearing, no account will be taken of any Renewable
Energy Infrastructure Investments that are made by the Company by way of a
debt or a mezzanine investment.
In addition, total short-term debt will be subject to a separate gearing limit
so as not to exceed 25 per cent of the Gross Asset Value at the time of
entering into (or acquiring) any such short-term debt.
In circumstances where these aforementioned limits are exceeded as a result of
gearing of one or more Renewable Energy Infrastructure Investments the Company
has a non-controlling interest in, the borrowing restrictions will not be
deemed to be breached. However, in such circumstances, the matter will be
brought to the attention of the Board who will determine the appropriate
course of action.
DIVIDEND POLICY
As announced on 13 February 2025, the Board implemented a change in the
Company's future dividend policy. Following the shareholder vote to approve a
Managed Wind -Down of the Company, it is the Board's intention to continue
paying dividends covered by earnings and taking into account the Company's
liquidity position, in order to maintain the Company's investment trust
status. As such, the Board will no longer be able to provide forward guidance
as to the level of dividend for the year ahead. Shareholders should also note
that the Board will no longer seek to smooth the level of dividend over a
financial year to reduce the impact of the seasonality of earnings and that,
in addition the level of dividend payments are expected to decline as assets
are realised (such as Tesla), gearing is reduced and capital is returned to
shareholders.
The Company will declare dividends in euros and shareholders will, by default,
receive dividend payments in euros. Shareholders may, by completing a dividend
election form, elect to receive dividend payments in sterling (at their own
exchange- rate risk). The date the exchange rate between euro and sterling is
set will be announced when the dividend is declared. A further announcement
will be made once the exchange rate has been set. Dividend election forms will
be available from the Registrar, Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol BS99 6ZY or by telephone 0370 707 1346.
KEY PERFORMANCE INDICATORS ("KPIS")
The Board measures the Company's success in achieving its investment objective
by reference to the following KPIs:
(i) Achievement of NAV and Share Price Growth since IPO(1) (June 2019)
(8.4%) 2024
2023: (20.8%)
(ii) Maintenance of a Reasonable Level of Premium or Discount of Share Price
to NAV(1)
(22.1%) 2024
2023: (20.3%)
The Board monitors both the NAV and share price performance and compares with
other similar investment trusts. A review of performance is undertaken at each
quarterly Board meeting and the reasons for relative under and
over-performance against various comparators is discussed. The Company's NAV
total return¹ and total shareholder return since IPO¹ (June 2019) to 31
December 2024 was 12.5% and -8.4% (2023: 20.8% and -1.6%) respectively. The
Company's NAV total return¹ and share price total return¹ for the year to 31
December 2024 was -8.2% and -8.6% (2023: -6.0% and -9.0%) respectively. On an
annualised basis, the NAV total return¹ per Ordinary Share has achieved 2.2%
since IPO.
The Chairman's Statement in the Annual Report incorporates a review of the
highlights during the year. The Investment Adviser's Report in the Annual
Report highlights investments made and the Company's performance during the
year.
The Company's Broker monitors the premium or discount on an ongoing basis and
keeps the Board updated as and when appropriate. At quarterly Board meetings,
the Board reviews the premium or discount in the year since the previous
meeting, in comparison with other investment trusts with a similar mandate.
The share price closed at a 22.1% discount to the NAV as at 31 December 2024
(2023: 20.3% discount).
Now that the Company has entered Managed Wind-Down, the Board has paused the
buyback program as it is no longer considered appropriate and is continuing to
explore options to return capital to shareholders as and when necessary.
1. This disclosure is considered to represent the Company's alternative
performance measures ("APMs"). Definitions of these APMs and other performance
measures used, together with how these measures have been calculated, can be
found in the Annual Report. All references to cents are in euros, unless
stated otherwise.
(iii) Maintenance of a Reasonable Level of Ongoing Charges(1
) 1.1% 2024
2023: 1.1%
(iv) To Meet its Target Total Dividend in each Financial Year (cents per
share)
The Board receives management accounts containing an analysis of expenditure
which it reviews at its quarterly Board meetings. The Board reviews the
ongoing charges¹ quarterly and considers these to be reasonable in comparison
with its peers.
Based on the Company's average net assets during the year ended 2024, the
Company's ongoing charges figure was 1.1% (2023: 1.1%) calculated in
accordance with the Association of Investment Companies ("AIC") methodology.
The Board approved a target dividend of 5.79 cents per Ordinary Share ('2024
Target Dividend') in relation to the year ended 31 December 2024. Following
the shareholder vote to approve a Managed Wind-Down of the Company, it is the
Board's intention to continue paying dividends covered by earnings and taking
into account the Company's liquidity position, in order to maintain the
Company's investment trust status. The fourth quarterly dividend was therefore
lower than anticipated in the 2024 Target Dividend amounting to 0.79 cents per
share, as opposed to 1.4475 cents planned quarterly instalment. The actual
total dividend declared for 2024 was 5.1325 cents.
1. This disclosure is considered to represent the Company's alternative
performance measures (APMs). Definitions of these APMs and other performance
measures used, together with how these measures have been calculated, can be
found in the Annual Report. All references to cents are in euros, unless
stated otherwise.
SECTION 172
Section 172(1) of the Companies Act 2006 requires the Board to act in a way it
considers would most likely promote the success of the Company for the benefit
of all stakeholders, taking into account the interests of stakeholders and the
environment in its decision-making, and to share how this duty has been
discharged.
The Board's values - integrity, accountability and transparency - mean that
the Board has always worked hard to communicate effectively with the Company's
stakeholders.
This is a two-way process and the feedback received from the Company's
stakeholders is highly valued and factored into the Board's decision-making
process. The Company has a range of stakeholders, and this section maps out
who they are, what the Board believes their key interests to be, how the
Company enables engagement with stakeholders and highlights the key results
that have consequently arisen during the year.
COMPANY SUSTAINABILITY AND STAKEHOLDERS
As an externally managed investment company, the Company does not have any
employees. Its main stakeholders are as set out in the diagram below, which
explains the relationship between the Company and each of its stakeholders.
COMPANY'S OPERATING MODEL
The Company was listed on the main market of the London Stock Exchange on 5
June 2019 and listed on the Euronext Growth Dublin Exchange on 2 October 2023.
The Company's investments are held via its sole subsidiary, Tesseract Holdings
Limited, which, in turn, holds the investment portfolio via a number of
Special Purpose Vehicles ("SPVs").
Shareholders
Investment
Service Providers and Company Advisers The Company Alternative Fund Manager Investment Adviser
(Company Secretary, Lawyers, Brokers, Administrators, Registrars) FundRock Investment Management Company (Guernsey) Limited
Aquila Capital Investmentgesellschaft mbH
Subsidiary Investment
Tesseract Holdings Limited
(Portfolio Holding Company)
SPVs
ENGAGEMENT WITH STAKEHOLDERS
The Board is aware of the need to foster the Company's business relationships
with suppliers, customers and other key stakeholders through its stakeholder
engagement activities. These activities include meetings, annual reviews,
presentations and publications and enable the Board to ensure it fulfils its
strategies and discharge its duties under section 172(1) of the Act.
The Board carried out an annual review of its key service providers, including
the Investment Adviser, to understand the culture of its service providers,
and to ensure they and the Company can maintain high standards of business
conduct. The annual review process involves assessing the service providers'
policies and control environments to ensure their continued competitiveness
and effectiveness.
SHAREHOLDER - MONITORING
As a public company listed on the London Stock Exchange, the Company is
subject to the Listing Rules and the Disclosure Guidance and Transparency
Rules. It is a regulatory requirement, for the Board to act fairly between
shareholders. The Board ensures the Company complies with the Listing Rules at
all times and seeks the advice of the Company Secretary, lawyers and corporate
broker in its dealings.
At its quarterly Board meetings, the Board reviews and discusses detailed
reports from the Company's broker and media PR consultants in relation to the
Company's share performance, trading and liquidity as well as the composition
of, and changes to, the register of shareholders. Shareholders' views are also
considered by the Board at those meetings to assist the Board's
decision-making process and to ensure expected returns are achieved and
sufficient capital is available to invest in appropriate renewable energy
infrastructure investments, and to grow the business in line with strategy and
expectation.
Details of the decisions taken by the Board during the year can be found below
under 'Key Decisions made During the Year'.
SHAREHOLDER - COMMUNICATION
To help the Board in its aim to act fairly between the Company's members, it
seeks to ensure effective communication is provided to all shareholders. The
Board encourages shareholders to attend the Annual General Meeting or General
Meetings, where Directors and representatives of the Investment Adviser are
available to meet shareholders in person and answer questions. The Annual
Report and half-yearly financial statements are distributed to the Company's
shareholders and made available on the Company's website. The quarterly
factsheet is also available on the Company's website.
The Company's website - www.aquila-european-renewables.com is considered an
essential communication channel and information hub for Shareholders. As such,
it includes full details of the investment objective, supporting philosophy
and investment process and performance along with news, opinions, disclosures,
results and key information documents. It also presents information about the
Board, its committees and other governance matters and Shareholders are
encouraged to view the website in order to better understand the Company.
With the support of the Company's brokers, the Chairman and key Board members
met many of the Company's key investors to gauge their views on the Company's
progress since IPO and since the Board announced that it was considering the
broader options for the future of the Company.
Separately, the Investment Adviser participated in a roadshow to meet with the
Company's key investors. The Board discussed the outcome of these meetings
and, as a consequence of these meetings, and to better align the Company with
its shareholders, a number of initiatives were undertaken as detailed in the
Key Decisions section in the Annual Report.
Following extensive discussions with the Company's shareholders and advisers
and having explored options open to the Company, the Board proposed that the
Company enter Managed Wind - Down and that the Company adopt revised
Investment Object and Policy to facilitate this which was approved by
shareholders at a General Meeting held on 30 September 2024, together with the
discontinuation of the Company.
SERVICE PROVIDERS
As an externally managed investment trust, the Company conducts all its
business through its key service providers. The Board believes that
maintaining positive relationships with each of the Company's service
providers is important to support the Company's long-term success.
In order to ensure strong working relationships, the Company's key service
providers (the Investment Adviser, AIFM, Company Secretary, Administrator) are
invited to attend quarterly Board meetings to present their respective
reports. This enables the Board to exercise effective oversight of the
Company's activities. During the year, the Board spent a considerable amount
of time between Board meetings engaging with the Company's key service
providers to continue to develop strong working relationships and to determine
good working practices to ensure the smooth operational function of the
Company. The Board and its advisers seek to maintain constructive
relationships with the Company's key service providers on behalf of the
Company through the annual review process, regular communications, meetings
and the provision of relevant information.
ALTERNATIVE INVESTMENT FUND MANAGER ("AIFM")
The AIFM (FundRock Investment Management Company (Guernsey) Limited) is an
important service provider for the Company's long-term success. The AIFM has
engaged Aquila Capital Investmentgesellschaft mbH ("Aquila Capital") to act as
the Company's Investment Adviser for the purpose of providing investment
advisory services to the Company. The AIFM is responsible for reviewing each
investment opportunity prior to being presented to the Board. In addition to
the reports the Board receive from the Investment Adviser, it also receives
quarterly reports from the AIFM. The Board maintains regular contact with the
AIFM in order to foster a constructive working relationship. Additionally, the
AIFM is responsible for monitoring the risks faced by the Company and these
are regularly discussed at meetings of the Audit and Risk Committee.
INVESTMENT ADVISER
The Investment Adviser is the most significant service provider to the Company
and a description of its role can be found in the Annual Report.. The
performance of the Investment Adviser is determined by the quality of the
Investment Adviser's management team and their ability to source high quality
assets at attractive prices.
The Board closely monitors the Company's investment performance in relation to
its objectives, investment policy and strategy. To assist the Board, the
Investment Adviser provides monthly reports. Additionally, the Investment
Adviser presents its quarterly production and operational update reports at
each quarterly Board meeting. The Board maintains constructive dialogue with
the Investment Adviser between meetings.
On a periodic basis, the Board visits the Investment Adviser at its Hamburg
office, the site of one of the portfolio assets or one of its other offices,
so it can gain a better understanding of the Investment Adviser, to meet key
members of the team and gain further insight into the operation of each asset.
The Investment Adviser's remuneration is based on the NAV of the Company. From
IPO until 30 June 2023 the Investment Adviser's fees were paid in shares,
which aligned the Investment Adviser's interests with those of the Company's
shareholders. Since that date, the Investment Adviser's fees have been paid in
cash.
PORTFOLIO INVESTMENTS
At its quarterly board meetings, the Board consider the performance of the
Company's portfolio of assets. In its deliberations it considers:
· potential revenue generated by each asset for each quarter
against the forecasted amount;
· any community and environmental issues associated with each
asset;
· geopolitical risk;
· the length of tenure of each asset;
· hedging aspects to limit risk; and
· funding requirements, including the use of gearing, which has
been limited now the Company has entered Managed Wind-Down and the Company
turned to reducing debt.
LIQUIDITY CONSIDERATIONS
Additionally at its quarterly board meetings, the Board considers liquidity
considerations of the Company and the HoldCo. As at 31 December 2024, the
Company and the HoldCo had EUR 21.91 million of liquidity consisting of EUR
4.75 million in cash on hand plus EUR 17.16 million in an undrawn revolving
credit facility ("RCF"). The Board recently decided to let the RCF expire on
18 April 2025 given the Company's focus on the Managed Wind-Down process and
subsequent change in investment policy, whilst also minimising fees and
expenses.
PORTFOLIO SALE
Prior to being presented to the Board of HoldCo, the Company's wholly owned
subsidiary, the Company's Board is presented with potential transactions that
have been identified by Rothschild or the Investment Adviser and which have
undergone a process of analysis and challenge by the AIFM.
The Board considers each proposal against the Company's investment objective,
investment policy and strategy as disclosed in the Annual Report.In
considering each potential transaction, the Board considers each offer to
ensure it represents the best sales price achievable in the market.
SOCIETY AND THE ENVIRONMENT
The Company is an investor in renewable energy assets and is acutely aware of
its impact on the environment. The Company has an ESG policy and climate risk
strategy which ensure that society and the environment are considered when
implementing its investment strategy. The ESG policy is available on request
from the Company Secretary. Further details of matters relating to ESG can be
found in the Annual Report or on its website at
https://www.aquila-european-renewables.com
(https://www.aquila-european-renewables.com) .
KEY DECISIONS MADE DURING THE YEAR
Decisions Relating to the Company's Portfolio of Assets
On 27 September 2024, the Company announced the completion of the sale of its
25.9% interest in Tesla to Sunnhordland Kraftlag AS for EUR 27.0 million,
representing a premium of EUR 2.6 million above the prevailing valuation
reflected in the Company's Q2 2024 NAV.
During the year the Company, via its wholly owned subsidiary, entered into a
five-year non -recourse debt facility with ING Bank N.V. Sucursal en España
on 8 January 2024. The debt facility was sought in order to secure financing
at attractive terms, the proceeds of which were used to repay the RCF.
There had been no changes to PPA arrangements during the year.
DECISIONS RELATING TO THE MANAGED WIND-DOWN PROCESS
Following extensive discussions with the Company's shareholders and advisers
and having explored options open to the Company, the Board proposed that the
Company enter Managed Wind - Down and that the Company adopt revised
Investment Object and Policy to facilitate this which was approved by
shareholders at a General Meeting held on 30 September 2024, together with the
discontinuation of the Company.
On 24 October 2024 the Company announced the appointment of Rothschild &
Co to support the Company's Managed Wind-Down process.
DIVIDEND
The Company announced a target dividend of 5.79 cents per Ordinary Share
('2024 Target Dividend') in relation to the year ending 31 December 2024,
subject to the portfolio performing in line with expectations.
Now that the Company has entered Managed Wind-Down, the Board have proposed
that the dividends are paid in order to maintain investment trust status which
require the Company to pay out 85% of qualifying revenue every year. The
fourth quarterly dividend was therefore lower than anticipated in the 2024
Target Dividend amounting to 0.79 cents per share, as opposed to 1.4475 cents
planned quarterly instalment. The actual total dividend declared for 2024 was
5.1325 cents.
The Board considered the interests of the Company's shareholders and other
relevant stakeholders as part of its decision - making process prior to
concluding on the above mentioned items of business. Where deemed appropriate
and where not considered commercially sensitive the Board sought the views of
the Company's key shareholders in advance of any decision.
RISK AND RISK MANAGEMENT
PRINCIPAL RISKS AND UNCERTAINTIES
During the year the Company has carried out a rigorous assessment of its
principal and emerging risks, and the procedures in place to identify any
emerging risks are described below.
PROCEDURES TO IDENTIFY PRINCIPAL OR EMERGING RISKS
The Board regularly reviews the Company's risk matrix, with a focus on
ensuring that the appropriate controls are in place to mitigate each risk. The
experience and knowledge of the Board is important, as is advice received from
the Board's service providers, specifically the AIFM, who is responsible for
the risk and portfolio management services and outsources the portfolio
management to the Investment Adviser.
1. Investment Adviser: the Investment Adviser provides a report to
the Board quarterly, or periodically as required, on industry trends, insight
to future challenges in the renewable sector including the regulatory,
political and economic changes likely to affect the renewables sector;
2. Alternative Investment Fund Manager: following advice from the
Investment Adviser and other service providers, the AIFM maintains a register
of identified risks including emerging risks likely to affect the Company;
3. Broker: provides advice periodically, specific to the Company, on
the Company's sector, competitors and the investment company market, while
working with the Board and Investment Adviser to communicate with
shareholders;
4. Company Secretary: briefs the Board on forthcoming governance
changes that might affect the Company; and
5. Financial Adviser: Rothschild & Co provide advice on the
Managed Wind-Down process and highlight any risks associated with the process
in advance to provide the Board with an opportunity to take appropriate
action.
PROCEDURE FOR OVERSIGHT
The Audit and Risk Committee undertakes a regular review of the Company's risk
matrix, and a formal review of the risk procedures and controls in place at
the AIFM and other key service providers, to ensure emerging (as well as
known) risks are adequately identified and, so far as is practicable,
mitigated.
PRINCIPAL RISKS
The Board considers the following to be the principal risks faced by the
Company along with the potential impact of these risks and the steps taken to
mitigate them.
Economic, Political and Market
Risks Potential Impact/Description Mitigation
1. The income and value of the Company's investments may be affected by future The Company holds a balanced mix of investments that benefit from government
Electricity Prices changes in the market price of electricity. subsidies as well as long-term fixed price PPAs. Of AER's forecast revenue for
the next five years (on a present value basis), approximately 51% will be
While some of the revenues of the Company's investments benefit from fixed generated via government tariffs or fixed price PPAs, protecting the Company's
prices, they are also partly dependent on the wholesale market price of revenue from volatile electricity prices.
electricity, which is volatile and is affected by a variety of factors,
including: The Investment Adviser retains the services of market leading energy
consultants to assist with determining future power pricing for the respective
· market demand; regions.
· generation mix of power plants; The underlying SPV companies may use derivative instruments such as futures,
options, futures contracts and swaps to protect from fluctuations in future
· government support for various forms of power generation; electricity prices.
· fluctuations in the market price of commodities; and The Investment Adviser models and monitors power price curves on an ongoing
basis and will recommend appropriate action. In addition, the Investment
· foreign exchange. Adviser has a dedicated team which is responsible for the originating,
negotiating and executing of all PPAs.
There is a risk that the actual prices received vary significantly from the
model assumptions, leading to a shortfall in anticipated revenues by the The Investment Adviser reviews the hedging strategy on an ongoing basis.
Company. Should changes be required to the hedging strategy, these will be recommended
to the AIFM and Board.
Increased EU goals to push green economies will lead to a ramp up of
renewables and capacities, with potential to lead to grid oversupply issues
resulting in pricing pressures.
The current energy geopolitical situation in Europe is continuing to lead to
uncertainty and potential volatility in energy prices, which in turn may have
an impact on performance.
2. Volatility can allow significant equity positions to be built and the risk Shareholder analysis is obtained regularly enabling monitoring of the
Equity Market Volatility and Shareholder Pressure that a sole shareholder increases its ownership to such an extent that they Company's largest shareholders. The views of the larger shareholders can be
are able to exert significant influence over the Company and decisions made by monitored by the Company and any concerns managed appropriately.
the Board.
3. A change in political direction or regulation in one of the countries in which The AIFM, advised by the Investment Adviser with its 17 offices in 16
Change in Political Sentiment the Company targets investment could lead to changes, reductions, caps or countries, continuously monitors all jurisdictions the Company invests.
withdrawals of government support arrangements, a windfall tax or potentially
the nationalisation of investments. This could have a material impact on the The Investment Adviser has significant experience in these assets and performs
valuation of the investments and the Company's net asset value. ongoing monitoring of these risks. Regulatory changes at the SPV level are
monitored by the Investment Adviser and reported to the Board/AIFM on an
Environmental groups may put pressure on the government in relation to its ongoing basis.
renewables ambitions and permits due to environmental concerns and impact on
the projects.
Operational
Risks Potential Impact/Description Mitigation
4. The majority of the operational risk in the Company's investments is retained Operation and maintenance ("O&M") of assets are subcontracted to a
Counterparty Risk by the counterparty or its subcontractors. Failure to properly operate and counterparty who is responsible for ensuring effective continuing operation
maintain assets may result in reduction of revenues and value of assets. and maintenance of that asset. The Investment Adviser ensures each such
However, some risks will remain within the investment. counterparty has the experience and resources to comply with its obligations
and monitors compliance on an ongoing basis.
Poor performance by a subcontractor may lead to the need for a replacement,
which could have cost implications, impacting the performance of the Constant monitoring of the investments and the counterparties or service
investment and potentially distributions to the Company until the issue is providers allows the Investment Adviser to identify and address risks early.
resolved. Diversification of counterparties and service providers ensures any impact is
limited.
The value of the Company's investments and the income they generate may be
affected by the failure of counterparties to comply with their obligations The Investment Adviser assesses the credit risk of companies by defined
under a PPA. criteria before they become counterparties to PPAs, EPCs and TSA providers.
5. Aquila Group manages over EUR 15.4 billion for clients worldwide. There is a The strength and depth of the Investment Adviser's resources mitigate the risk
Performance of the Investment Adviser risk that sufficient resources and personnel are not allocated to the Company. of a key person's departure. Service level reviews are carried out by the
Board to ensure they are satisfied with the performance of Investment Adviser
The Investment Adviser employs experienced executives to manage the Company's resources.
investments. There is a risk that a key person leaves the Investment Adviser.
6. A hacker or third party could obtain access to the Investment Adviser or any Service providers have been carefully selected for their expertise and
IT Security other service provider and destroy data or use it for malicious purposes. Data reputation in the sector. Each service provider has provided assurances to the
records could be destroyed, resulting in an inability to make investment AIFM and the Company on their cyber policies and business-continuity plans,
decisions and monitor investments. along with external audit reviews of their procedures where applicable.
Risk that the emergence of increasingly advanced AI will lead to new risks to The Investment Adviser and key service providers have information-security
the Company, including, but not limited to, decline in human autonomy, policies in place, and have appointed IT security officers whose tasks are to
increased cybersecurity vulnerabilities, data loss, impersonation for the provide support for emergency events and crises, the monitoring of the
purposes of extracting information or money. resumption, and repair of the IT security measures after completion of a
disturbance or incident, and the ongoing development of improvements to the IT
The pandemic and, more recently the Russian and Ukraine war, has increased IT security concept.
security concerns and threats being posed to the Company and operating
structure by hackers that may lead to loss of information or even a cash loss. The Investment Adviser's in-house Asset Management team has reviewed the
protective measures taken by the counterparties and has further increased the
vigilance against cyber-attacks that could affect the performance and
infrastructure of the investments. Insurance is in place to cover potential
losses from direct attacks. For indirect attacks (e.g. against grid operation
or transmission system) the various administrators, operation and maintenance
providers are required to maintain sufficient insurance coverage to mitigate
possible damages.
Financial
Risks Potential Impact/Description Mitigation
7. There is a risk the Company's asset valuations and underlying assumptions, The principal component of the Company's balance sheet is its portfolio of
Portfolio Valuation such as future electricity prices and discount rates, are not a fair renewable investments. Each quarter, the AIFM is responsible for preparing a
reflection of the market, meaning the investment portfolio could be over or fair market value of the investments, with input and guidance from the
under-valued which could impact the Managed Wind- down process and the Investment Adviser. These valuations and the key underlying assumptions are
Company's need to achieve the best price possible for the Company's assets. interrogated by the Board before being approved.
The Investment Adviser has a strong track record of undertaking valuations of
renewable assets built up over the years since it was founded in 2001.
The Investment Adviser and broker monitor market competitors and provide
feedback on valuation methodologies and assumptions to the valuation team.
8. There are several risks associated with the Company's Managed Wind-down The Board engaged Rothschild & Co as the Company's financial adviser to
Risks associated with the Managed Wind-down process process as follows: help with the sales process. Rothschild are one of the most experienced
advisors in the sector, with deep credentials in selling renewables in the
1. The Board may not be able to achieve the best price for the private markets.
Company's assets.
2. The Managed Wind-Down process may take longer than expected
which could prove detrimental to the sales price achievable if the market were
to take a downturn.
3. An orderly Wind-Down is reliant on a willingness to transact from
potential buyers, confirmation that they have funding sources available and
the completion of due diligence/relevant legal documentation.
9. The use of leverage creates risks including: Now that the Company is in Managed Wind-Down, it is not anticipated that the
Leverage Risk/ Interest Risk
Company will take on any new borrowings, but may do so for the efficient
- exposure to interest rates, which can fluctuate; management of the Company. The Company's investment policy restricts the use
of leverage to:
- covenant breaches;
- short-term debt: 25% of the prevailing GAV; and
- liquidity risks;
- long-term structural debt: 50% of the prevailing GAV.
- enhanced loss on underperforming investments; and
As at 31 December 2024, the Company's subsidiary, Tesseract Holdings Limited,
- the ability to refinance assets impacts asset returns and cash had 0% of short-term debt and at SPV level there was 32.2% of long-term
flows. structured debt as a percentage of GAV. The AIFM monitors all debt levels to
these policy restrictions and reports them to the Board quarterly.
Fluctuations in interest rates may affect discount rates applied to the
portfolio valuations, as well as affecting cost of debt in both the underlying The Investment Adviser provides updates of the covenant compliance to the AIFM
SPVs and the Company. and to the Board periodically, and looks at refinancing as early as possible.
Interest rate risk on bank debt at the asset level is mitigated by the use of
hedging instruments.
Liquidity and forward looking cash flow management is monitored by the
Investment Adviser and AIFM. The majority of the Company's long-term
structural debt is non-recourse, largely fixed interest rates and fully
amortising.
Compliance, Tax and Legal
Risks Potential Impact/Description Mitigation
10. Changes in tax legislation, base erosion and profit shifting rules, substance, The corporate structure of the Company is reviewed periodically by the Company
Changes to Tax Legislation or Rates withholding tax rules and rates, could result in tax increases, resulting in a and its advisers. The Board has been kept informed on a timely basis of the
decrease in income received from the Company's investments. recent introduction of the windfall (and other tax arrangements) taxes
introduced across Europe to curb profits of energy providers, and has
A windfall tax on profits from an investment levied by government. carefully considered the impact on the Company's portfolio, which is further
discussed in the Investment Adviser's Report.
The Investment Adviser works closely with tax and industry experts before
providing structuring recommendations to the Company prior to investment and
on an ongoing basis.
11. The Company fails to comply with section 1158 of the Corporation Tax Act to The Board has sought guidance from its advisors on the Board's obligation to
Regulatory and Compliance Changes ensure maintenance of investment trust status, UK Listing Authority ensure the Company complies with Section 1158 of the Corporate Tax Act,
regulations including Listing Rules, Foreign Account Tax Compliance Act and particularly during the Managed Wind-down process.
Alternative Investment Fund Managers Directive ("AIFMD").
All service providers, including the broker, Company Secretary, Administrator,
The Company fails to comply with relevant ESG rules and regulations and fails Investment Adviser and AIFM, are experienced in these areas and provide
to monitor those such as the SFDR, changing disclosure requirements and comprehensive reporting to the Board and on compliance with these regulations.
greenwashing risks.
The AIFM is experienced in compliance with the AIFMD reporting obligations and
Failure to comply with the relevant rules and obligations may result in reports at least quarterly to the Board.
reputational damage to the Company or have a negative financial impact.
Possible uncertainty remains with post-Brexit negotiations and eventual trade The Investment Adviser monitors changes in regulation across the markets the
deals agreed. Company operates.
Additionally, the Company operates in multiple markets throughout Europe, and The Company complies with article 8 of the SFDR and, as noted under "ESG",
some have shown signs of changes or potential changes in regulation as a looks to comply with local requirements, to mitigate potential risks.
response to high power prices.
Emerging Risks
Risks Potential Impact/Description Mitigation
12. Climate-related risks can be categorised as physical or transitional risks. The Company should be sufficiently protected through hedging of price risks in
Climate-related risks Physical risks are those associated with the physical effects of climate the event of unforeseen changes in regulatory requirements related to climate
change. They can be event-based (acute), such as cyclones, hurricanes, change. Insurance is usually in place in the event of acute climate risks such
wildfires, heatwaves, pandemics, droughts and floods; or longer-term (chronic) as physical damage due to floods, or wildfires resulting in production losses.
shifts in climate patterns, such as sustained higher temperatures with melting
of glaciers and ice sheets causing sea-level rise, permafrost melting, chronic Financial model forecasts are based on P50 production (the estimated annual
heatwaves and desertification, extreme variability in precipitation, land amount of electricity generation that has a 50% probability of being exceeded
degradation and changes in air quality. - both in any single year and over the long term - and a 50% probability of
being underachieved) data sourced from energy yield assessments provided by
Transitional risks are those that arise as economies move towards external service providers. The Company also mitigates the frequency of both
less-polluting, greener solutions. These include externally imposed risks such physical and transitional risks through extensive geographical diversification
as the effect of legal and regulatory requirements or policy changes, changes of its portfolio.
in societal demands, advances in technologies, market changes and the
consequent business decisions taken to respond to such changes. Transitional
risks have the potential to crystallise suddenly, for example as a result of
policy changes. Physical or transitional climate-related risks could affect
the operation of the Company's assets and hence the production or revenue
generated by the portfolio assets.
13. As evidenced with the ongoing war in Ukraine and the various restrictions The Investment Adviser, using its extensive experience, is constantly
Global Conflict imposed, as well as the conflict in Gaza, acts of war and resulting sanctions monitoring geopolitical and macro -economic developments. Where required, it
can lead to O&M supply delays, volatile energy markets and general undertakes external geopolitical and risk analysis.
uncertainty.
The Company does not have any direct exposure to Ukraine, Russia, Israel or
This can also lead to short-term price increases and more focus on renewable Gaza. There are also no direct business relations with counterparties from
energy infrastructure and increased competition for assets. these countries.
In addition, there is the increased possibility of a trade war following the The Company has limited exposure to supply chain risk.
implementation of tariffs imposed by the US administration, and other
implications of changes and, particularly the foreign policy of the US The Broker, Administrator, AIFM and Company advisers all monitor and inform
administration. the Board as soon as they are aware of any developments that may impact the
Company or its business.
Viability Statement
In accordance with the UK Corporate Governance Code and the Listing Rules, the
Directors are required to assess the prospects of the Company over a longer
period than the 12 months required by the 'Going Concern' provision.
Following the change in investment policy approved by Shareholders at the
General Meeting held on 30 September 2024, the Company entered a managed
wind-down, meaning that it is not making any new investments and its investing
activity is solely in respect of funding legal commitments to existing
investments (the "Managed Wind-Down"). The Board will continue to review
strategic options in respect of the Company's assets to realise the maximum
value for Shareholders in the shortest possible time, recognising the inherent
difficulties in the construction of the portfolio, including the number of
investments, multiple geographies and long tenors. While the Company is
continuing to explore strategic options there remains no certainty that any of
these options will materialise and be put to Shareholders for consideration.
Accordingly, the Directors recognise that these conditions indicate the
existence of material uncertainty which may cast significant doubt about the
Company's viability over the Period.
Although the Company is in a Managed Wind-Down, the Board believes that the
Period, being approximately two years, is an appropriate time horizon over
which to assess the viability of the Company. In considering the prospects of
the Company, the Directors looked at the key risks facing the Company, HoldCo
and the SPVs, focusing on the likelihood and impact of each risk as well as
any key contracts, future events or timescales that may be assigned to each
key risk outlined on in the Annual Report.
The Directors have a reasonable expectation that the Company has adequate
resources to: continue in operation; realise the Company's assets in an
orderly manner; and meet its liabilities as they fall due, over the Period.
The Company's subsidiary, Tesseract Holdings Limited, and its SPVs have a
modest gearing level representing 32.2% as at 31 December 2024 of the
Company's Gross Asset Value, comprised of non -recourse debt at the asset
level of EUR 152.0 million. The Board recently decided to let Tesseract
Holdings Limited's RCF expire on 18 April 2025, given the Company's focus on
the Managed Wind-Down process and subsequent change in investment policy,
whilst also minimising fees and expenses. The revolving credit facility had a
drawn balance of zero, whilst approximately EUR 2.8 million had been utilised
to issue bank guarantees in relation to the Company's Spanish solar PV
portfolio. To accommodate the expiry of the RCF and maintain compliance with
the facility agreement, Tesseract Holdings Limited committed approximately EUR
2.8 million to cash cover the bank guarantees.
The Company (via its subsidiaries, where applicable) complies with its
covenants related to the non-recourse debt. The Finnish wind asset Olhava
continues to be in lock-up as a result of debt covenant breaches due to the
combined impact of lower production, lower realized power prices and high debt
repayment obligations. Tesseract Holdings Limited recently entered into a side
letter with the lender to rectify the breach, which included certain
conditions, including (but not limited to) a small equity cure of EUR 198k,
funded from existing cash at the project company level, as well no dividends
being payable from the project company before 30 December 2025. In January
2024, the Company, via its wholly owned subsidiaries, entered into a bank debt
financing at its Spanish solar PV portfolio for EUR 50.0 million, the proceeds
of which were primarily used to repay the RCF of Tesseract Holdings Limited.
As part of their analysis, the Board were mindful that the Company's portfolio
of assets, held via its subsidiary, Tesseract Holdings Limited, are
predominantly fully constructed and operating renewable electricity generating
facilities with asset lives significantly in excess of the period under
consideration.
This assessment also included a detailed review of the issues arising
following the war in Ukraine and conflict between Israel and Hamas in
Palestine, tariffs in USA, potential trade war, high volatility in commodity
prices, the windfall revenue clawback on inframarginal technologies (e.g.
solar PV, wind, nuclear, hydro) and other taxes that currently face the
Company's assets as disclosed in the Principal Risk section in the Annual
Report and in the Investment Adviser's Report in the Annual Report •. The
Board have also considered the impact of climate related events on the
Company's assets and on its ability to continue to produce electricity.
In considering the prospects of the Company, the Directors looked at the key
risks facing the Company, HoldCo and the SPVs, focusing on the likelihood and
impact of each risk as well as any key contracts, future events or timescales
that may be assigned to each key risk. The Directors are satisfied that the
Company would continue to remain viable under downside scenarios, including a
decline in long-term production and power price forecasts, taking into account
tax implications and regulatory changes imposed on renewables and on those in
the electricity generation market in certain jurisdictions across Europe.
These risks, together with the mitigating factors of each, are shown in the
Principal Risk section in the Annual Report.
The internal control framework of the Company is subject to a formal review on
at least an annual basis. On a regular basis, the Board reviews the risk
report prepared by the AIFM.
The Directors do not expect there to be any material increase in the expenses
of the Company over the Period. The Company's income from investments provides
substantial cover to the Company's operating expenses and any other costs
likely to be faced by the Company over the Period of the assessment.
Outlook
The outlook for the Company, including the future development and performance
of the Company, is discussed in the Chairman's Statement in the Annual Report
and the Investment Adviser's Report in the Annual Report.
Strategic Report
The Strategic Report of this Annual Report was approved by the Board of
Directors on 24 April 2025.
FOR AND ON BEHALF OF THE BOARD,
IAN NOLAN
Chairman of the Board
24 April 2025
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL
STATEMENTS
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors have prepared the financial
statements in accordance with UK-adopted international accounting standards
and the requirements of the Company's Act 2006, as applicable to companies
reporting under these standards. Under company law, Directors must not approve
the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of its profit or loss for
that period.
In preparing the financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· state whether they have been prepared in accordance with
UK-adopted international accounting standards, subject to any material
departures disclosed and explained in the financial statements;
· make judgements and accounting estimates that are reasonable and
prudent; and
· prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Company will continue in
business.
The Directors are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps to prevent and detect fraud and other
irregularities.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose, with
reasonable accuracy at any time, the financial position of the Company. The
accounting records should also enable them to ensure the financial statements
and the Directors' Remuneration Report comply with the Companies Act 2006 and
Article 4 of the IAS Regulation.
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Directors' Confirmations
Each of the Directors, whose names and functions are listed in the Corporate
Governance section, confirm that, to the best of their knowledge:
· the Company financial statements, which have been properly
prepared in accordance with UK-adopted international accounting standards,
give a true and fair view of the assets, liabilities, financial position, and
profit or loss of the Company; and
· the Directors' Report includes a fair review of the development
and performance of the business and the position of the Company, together with
a description of the principal risks and uncertainties it faces.
FOR AND ON BEHALF OF THE BOARD
DAVID MACLELLAN
Director
24 April 2025
Financials
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024
For the year ended 31 December 2024 For the year ended 31 December 2023
Notes Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Unrealised losses on investments 4 - (39,443) (39,443) - (41,675) (41,675)
Net foreign exchange losses - (29) (29) - (24) (24)
Interest income 5 13,665 - 13,665 15,312 - 15,312
Dividend income 5 - - - 1,200 - 1,200
Other income 5 14 - 14 - - -
Investment advisory fees 6 (2,331) - (2,331) (2,896) - (2,896)
Other operating expenses 7 (1,615) - (1,615) (1,814) - (1,814)
--------------- --------------- --------------- --------------- --------------- ---------------
Profit/(Loss) on ordinary activities before finance costs and taxation 9,733 (39,472) (29,739) 11,802 (41,699) (29,897)
Finance costs 8 (2) - (2) (1) - (1)
--------------- --------------- --------------- --------------- --------------- ---------------
Profit/(Loss) on ordinary activities before taxation 9,731 (39,472) (29,741) 11,801 (41,699) (29,898)
Taxation 9 - - - - - -
--------------- --------------- --------------- --------------- --------------- ---------------
Profit/(Loss) on ordinary activities after taxation 9,731 (39,472) (29,741) 11,801 (41,699) (29,898)
========= ========= ========= ========= ========= =========
Return per Ordinary Share - Diluted and Undiluted (cents) 10 2.57 (10.44) (7.87) 3.03 (10.72) (7.69)
========= ========= ========= ========= ========= =========
The total column of the Statement of Comprehensive Income is the profit and
loss account of the Company.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the year.
Return on ordinary activities after taxation is also the 'Total comprehensive
income/(loss) for the year'.
The notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
Notes As at As at
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Non-current assets
Investments at fair value through profit or loss 4 320,432 372,403
--------------- ---------------
Total non-current assets 320,432 372,403
========= =========
Current assets
Trade and other receivables 11 29 96
Cash and cash equivalents 1,168 1,532
--------------- ---------------
Total current assets 1,197 1,628
========= =========
Total Assets 321,629 374,031
========= =========
Current liabilities
Trade and other payables 12 (1,397) (1,490)
--------------- ---------------
Total current liabilities (1,397) (1,490)
========= =========
Total Liabilities (1,397) (1,490)
========= =========
Net assets 320,232 372,541
========= =========
Capital and reserves: equity
Share capital 13 4,082 4,082
Share premium account 255,643 255,643
Special reserve 14 75,087 87,717
Capital reserve (15,553) 23,919
Revenue reserve 973 1,180
--------------- ---------------
Total Shareholders' funds 320,232 372,541
========= =========
Net assets per Ordinary Share (cents) 15 84.69c 98.52c
========= =========
The financial statements were approved by the Board of Directors on 24 April
2025 and signed on its behalf by:
DAVID MACLELLAN
Director
Company number 11932433
The notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
Notes Share Share Special Capital Revenue Total
capital
premium
reserve
reserve
reserve
(EUR '000)
(EUR '000)
account
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Opening equity as at 1 January 2024 4,082 255,643 87,717 23,919 1,180 372,541
Strategic review costs - - (928) - - (928)
Profit/(loss) for the year - - - (39,472) 9,731 (29,741)
Dividends paid 16 - - (11,702) - (9,938) (21,640)
--------------- --------------- --------------- --------------- --------------- ---------------
Closing equity as at 31 December 2024 4,082 255,643 75,087 (15,553) 973 320,232
========= ========= ========= ========= ========= =========
Notes Share Share Special Capital Revenue Total
capital
premium
reserve
reserve
reserve
(EUR '000)
(EUR '000)
account
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Opening equity as at 1 January 2023 4,082 255,643 125,082 65,618 1,225 451,650
Strategic review costs 13 - - (27,964) - - (27,964)
Profit/(loss) for the year - - - (41,699) 11,801 (29,898)
Dividends paid 16 - - (9,401) - (11,846) (21,247)
--------------- --------------- --------------- --------------- --------------- ---------------
Closing equity as at 31 December 2023 4,082 255,643 87,717 23,919 1,180 372,541
========= ========= ========= ========= ========= =========
The notes are an integral part of these financial statements.
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
Notes Year Year
ended
ended
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Operating activities
Loss on ordinary activities before finance costs and taxation (29,739) (29,897)
Adjustment for:
Unrealised losses on investments 39,443 41,675
Finance costs paid 8 (2) (1)
Strategic review cost (928) -
Decrease in trade and other receivables 67 5,534
Decrease in trade and other payables (93) (1,024)
--------------- ---------------
Net cash flow from operating activities 8,748 16,288
========= =========
Investing activities
Loan principal repayment received 4 12,528 14,563
--------------- ---------------
Net cash flow from investing activities 12,528 14,563
========= =========
Financing activities
Share buybacks - (27,964)
Dividends paid 16 (21,640) (21,247)
--------------- ---------------
Net cash flow used in financing activities (21,640) (49,212)
========= =========
Decrease in cash (364) (18,361)
Cash and cash equivalents at start of year 1,532 19,893
Cash and cash equivalents at end of year 1,168 1,532
========= =========
The notes are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
1. General Information
Aquila European Renewables Plc ("AER", 'the Company') is a public company
limited by shares, incorporated in England and Wales on 8 April 2019 with
registered number 11932433. The Company is domiciled in England and Wales. The
Company is a closed-ended investment company with an indefinite life. The
Company commenced its operations on 5 June 2019 when the Company's Ordinary
Shares were admitted to trading on the London Stock Exchange. The Directors
intend, at all times, to conduct the affairs of the Company so as to enable it
to qualify as an investment trust for the purposes of section 1158 of the
Corporation Tax Act 2010, as amended.
The registered office and principal place of business of the Company is 4th
Floor, 140 Aldersgate St, London, EC1A 4HY.
At a General Meeting held on 30 September 2024, shareholders approved a change
in the Company's Investment Objective and Investment Policy. The new
Investment Objective is to realise all existing assets in the Company's
Portfolio in an orderly manner. The previous Investment Objective was to
generate stable returns, principally in the form of income distributions, by
investing in a diversified portfolio of renewable energy infrastructure
investments.
The Company's Investment Adviser is Aquila Capital Investmentgesellschaft mbH,
authorised and regulated by the German Federal Financial Supervisory
Authority.
FundRock Management Company (Guernsey) Limited acts as the Company's
Alternative Investment Fund Manager for the purposes of Directive 2011/61/EU
of the Alternative Investment Fund Managers Directive.
Apex Listed Companies Services (UK) Limited provides administrative and
company secretarial services to the Company under the terms of an
administration agreement between the Company and the Administrator.
2. Basis of Preparation
The financial statements have been prepared in accordance with UK-adopted
international accounting standards and the requirements of the Companies Act
2006, as applicable to companies reporting under those standards. The
financial statements are prepared on the historical cost basis, except for the
revaluation of certain financial instruments at fair value through profit or
loss. The principal accounting policies adopted are set out below. These
policies are consistently applied.
The functional currency of the Company is euros as this is the currency of the
primary economic environment in which the Company operates. Accordingly, the
financial statements are presented in euros, rounded to the nearest thousand
euros, unless otherwise stated. The EUR/GBP exchange rate as of 31 December
2024 was 0.8267 (2023: 0.8669).
Accounting for Subsidiary
The Company owns 100.0% of its subsidiary Tesseract Holdings Limited ("THL" or
"HoldCo"), whose registered office and principal place of business is Leaf B,
20th Floor, Tower 42, Old Broad Street, London, England, EC2N 1HQ. The Company
has acquired Renewable Energy Infrastructure Investments (the SPVs) through
its investment in the HoldCo. The Company finances the HoldCo through a mix of
loan investments and equity. The loan investment finance represents
Shareholder loans (the "Shareholder loans" or "SHL") provided by the Company
to HoldCo. The Company meets the definition of an investment entity as
described by IFRS 10. Under IFRS 10, an investment entity is required to hold
subsidiaries at fair value through profit or loss and therefore does not
consolidate the subsidiary. The HoldCo is an investment entity, and as
described under IFRS 10, values its SPV investments at fair value through
profit or loss. SPV investments are investments held at Holdco. Further
details of the HoldCo and SPV structure and investment can be found in note
20.
Characteristics of an Investment Entity
Under the definition of an investment entity, the Company should satisfy all
three of the following tests:
I. Company obtains funds from one or more investors for the
purpose of providing those investors with investment management services;
II. Company commits to its investors that its business purpose is
to invest funds solely for returns from capital appreciation, investment
income, or both; and
III. Company measures and evaluates the performance of substantially
all its investments on a fair value basis.
In assessing whether the Company meets the definition of an investment entity
set out in IFRS 10 the Directors note that:
I. the Company has multiple investors and obtains funds from a
diverse group of Shareholders who would otherwise not have access individually
to investing in renewable energy infrastructure investments due to high
barriers to entry and capital requirements;
II. the Company intends to hold these renewable energy
infrastructure investments, via the HoldCo, for the remainder of their useful
life for the purpose of capital appreciation and investment income. The
renewable energy infrastructure investments are expected to generate renewable
energy output for 25 to 30 years from their relevant commercial operation
date; the Directors believe the Company is able to generate returns to the
investors during that period; and
III. the Company measures and evaluates the performance of all its
investments, held via HoldCo, on a fair value basis which is the most relevant
for investors in the Company. Management use fair value information as a
primary measurement to evaluate the performance of all the investments and in
decision-making.
The Directors are of the opinion that the Company meets all the typical
characteristics of an investment entity and therefore meets the definition set
out in IFRS 10. The Directors are satisfied that investment entity accounting
treatment appropriately reflects the Company's activities as an investment
trust.
The Directors have also satisfied themselves that Tesseract Holdings Limited
meets the characteristic of an investment entity. Tesseract Holdings Limited
has one investor, Aquila European Renewables Plc; however, in substance
Tesseract Holdings Limited is investing the funds of the investors of Aquila
European Renewables Plc on its behalf and is effectively performing investment
management services on behalf of many unrelated beneficiary investors.
The Directors believe the treatment outlined above provides the most relevant
information to investors.
Going Concern
As at the date of this report the Directors are required to consider whether
they have a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future and for a period
of twelve-months from the date of the signing of these financial statements
(the "going concern period"). Following the General Meeting held on 30
September 2024 at which shareholders unanimously voted in favour of the
discontinuation of the Company and a change in the Company's Objective and
Investment Policy in order to facilitate the Managed Wind-Down of the Company,
the process for an orderly realisation of the Company's assets and a return of
capital to shareholders has begun and is expected to conclude over a number of
years. As a result, the Company is preparing its financial statements on a
going concern basis, although it is recognised that there is material
uncertainty over whether the Company will be in existence in its current form
twelve-months from the date of signing of these financial statements, based on
whether the Managed Wind-Down process were to conclude during the going
concern period. These events therefore indicate the existence of a material
uncertainty which may cast significant doubt about the Company's ability to
continue as a going concern. The financial statements do not include the
adjustments that would result if the Company were unable to continue as a
going concern.
The Board will seek to realise all of the Company's assets in a manner that
achieves a balance between maximising the proceeds received by the Company
from the sale of those and making timely returns to Shareholders.
The Directors are satisfied that the Company has adequate resources to
continue in operation throughout the Managed Wind-Down period and to meet all
liabilities as they fall due. No material adjustments to accounting policies
or the valuation methodology have arisen as a result of entering Managed
Wind-Down.
Critical Accounting Judgements, Estimates and Assumptions
The preparation of financial statements in accordance with UK-adopted
international accounting standards requires management to make judgements,
estimates and assumptions in certain circumstances that affect reported
amounts. These are judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities.
Key Judgements
As disclosed above, the Directors have concluded that the Company and HoldCo
meet the definition of an investment entity as defined in IFRS 10. This
conclusion involved a degree of judgement and assessment as to whether the
Company and Holdco met the criteria outlined in IFRS 10.
The Company classifies its investments (held via the Holdco) based on its
business model for managing those financial assets and the contractual cash
flow characteristics of the financial assets. The portfolio of assets is
managed, and performance is evaluated on a fair value basis.
The Holdco is primarily focused on fair value information and uses that
information to assess the assets' performance and to make decisions. The
contractual cash flows of the Holdco's Shareholder loans are solely principal
and interest, however, these securities are not held for the purpose of
collecting contractual cash flows. The collection of contractual cash flows is
only incidental to achieving the Holdco's business models objective.
Consequently, all investments are measured at fair value through profit or
loss. The Holdco considers the equity and Shareholder loan investments to
share the same investment characteristics and risks and they are therefore
treated as a single unit of account for fair value purposes (IFRS 13) and a
single class for financial instrument disclosure purposes (IFRS 9).
As a result, the evaluation of the performance of the Holdco's investments is
done for the entire portfolio on a fair value basis, as is the reporting to
the key management personnel and to the investors. In this case, all equity
and Shareholder loan investments form part of the same portfolio for which the
performance is evaluated on a fair value basis together and reported to the
key management personnel in its entirety.
Estimates: Investments at Fair Value Through Profit or Loss
The key assumptions that have a significant impact on the carrying value of
the Company's underlying investments in SPVs through Holdco are the discount
rates, useful lives of the assets, the rate of inflation, the price at which
the power and associated benefits can be sold, the amount of electricity the
assets are expected to produce and operating costs of the SPVs.
The discount rates are subjective and therefore it is feasible that a
reasonable alternative assumption may be used resulting in a different value.
The discount rates applied to the cash flows are reviewed annually by the
Investment Adviser to ensure they are at the appropriate level. The Investment
Adviser will take into consideration market transactions, which are of similar
nature, when considering changes to the discount rates used. The weighted
average discount rate applied in the December 2024 valuation was 7.3% (2023:
7.2%).
Useful lives are based on the Investment Adviser's estimates of the period
over which the assets will generate revenue, which are periodically reviewed
for continued appropriateness. The assumption used for the useful life of the
wind assets is 25 to 30 years and solar PV is 40 years. The actual useful life
may be a shorter or longer period depending on the actual operating conditions
experienced by the asset. The operating lives of hydropower assets are
estimated in accordance with their expected concession terms.
Climate risks can also impact the carrying value of the Company's underlying
investments. The Company relies (via the HoldCo or relevant SPVs) on third
party technical advisers to consider the impact of climate risks when
assessing P50 production forecasts. For example, the impact of increasing
temperatures on precipitation, evapotranspiration and its subsequent impact on
P50 production was recently considered by a third party technical adviser as
part of due diligence related to a refinancing for the Company's hydropower
asset, Sagres.
The price at which the output from the generating assets is sold is a factor
of both wholesale electricity prices and the revenue received from the
government support regime. Future power prices are estimated using external
third -party forecasts which take the form of specialist consultancy reports.
The future power price assumptions are reviewed as and when these forecasts
are updated. There is an inherent uncertainty in future wholesale electricity
price projection. Long-term power price forecasts are provided by a leading
market consultant, updated quarterly, and may be adjusted by the Investment
Adviser where more conservative assumptions are considered appropriate.
Specifically commissioned external reports are used to estimate the expected
electrical output from the wind and hydropower farm and solar PV assets,
taking into account the expected average wind speed at each location and
generation data from historical operation. The actual electrical output may
differ considerably from that estimated in such a report mainly due to the
variability of actual wind to that modelled in any one period. Assumptions
around electrical output will be reviewed only if there is good reason to
suggest there has been a material change in this expectation.
The P50 level of output is the estimated annual amount of electricity
generation (in MW) that has a 50.0% probability of being exceeded both in any
single year and over the long term and a 50.0% probability of being under
achieved.
The operating costs of the SPV companies are frequently partly or wholly
subject to inflation and an assumption is made that inflation will increase at
a long- term rate. The SPV's valuation assumes long-term inflation of 2.0%
(2023: 2.0%). The impact of physical and transition risks associated with
climate change is assessed on a project by project basis and factored into the
underlying cash flows as appropriate.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying value of assets and liabilities are those
used to determine the fair value of the investments as disclosed in note 4 to
the financial statements under sensitivities.
New Standards, Interpretations and Amendments Adopted from 1 January 2024
A number of new standards and amendments to standards are effective for the
annual periods beginning after 1 January 2024. None of these have a
significant effect on the measurement of the amounts recognised in the
financial statements of the Company.
New Standards and Amendments Issued but not yet Effective
The relevant new and amended standards and interpretations that are issued,
but not yet effective, up to the date of issuance of the Company's financial
statements are disclosed below.
Amendments to IAS 21 - Lack of Exchangeability (effective for annual periods
beginning on or after 1 January 2025)
In August 2023, the IASB amended IAS 21 to help entities to determine whether
a currency is exchangeable into another currency, and which spot exchange rate
to use when it is not. The Company does not expect these amendments to have a
material impact on its operations or financial statements.
Amendments to the Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or
after 1 January 2026)
On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to
respond to recent questions arising in practice, and to include new
requirements not only for financial institutions but also for corporate
entities. These amendments:
· clarify the date of recognition and derecognition of some
financial assets and liabilities, with a new exception for some financial
liabilities settled through an electronic cash transfer system;
· clarify and add further guidance for assessing whether a
financial asset meets the solely payments of principal and interest (SPPI)
criterion;
· add new disclosures for certain instruments with contractual
terms that can change cash flows (such as some financial instruments with
features linked to the achievement of environment, social and governance
targets); and
· update the disclosures for equity instruments designated at
fair value through other comprehensive income ('FVOCI').
The Company does not expect these amendments to have a material impact on its
operations or financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for
annual periods beginning on or after 1 January 2027)
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing
new requirements that will help to achieve comparability of the financial
performance of similar entities and provide more relevant information and
transparency to users. Even though IFRS 18 will not impact the recognition or
measurement of items in the financial statements, its impacts on presentation
and disclosure are expected to be pervasive, in particular those related to
the statement of comprehensive income and providing management-defined
performance measures within the financial statements.
Management is currently assessing the detailed implications of applying the
new standard on the Company's financial statements. From the high- level
preliminary assessment performed, the following potential impacts have been
identified:
· Although the adoption of IFRS 18 will have no impact on the
Company's net profit, the Company expects that grouping items of income and
expenses in the statement of comprehensive income into the new categories will
impact how operating profit is calculated and reported. From the high-level
impact assessment that the Company has performed, the following might
potentially impact operating profit:
o Foreign exchange differences currently aggregated in the line
item 'Net foreign exchange loss/gain' in operating profit might need to be
disaggregated, with some foreign exchange gains or losses presented below
operating profit.
· The line items presented on the primary financial statements
might change as a result of the application of the concept of 'useful
structured summary' and the enhanced principles on aggregation and
disaggregation.
· The Company does not expect there to be a significant change
in the information that is currently disclosed in the notes because the
requirement to disclose material information remains unchanged; however, the
way in which the information is grouped might change as a result of the
aggregation/disaggregation principles. In addition, there will be significant
new disclosures required for:
o management-defined performance measures;
o a break-down of the nature of expenses for line items presented
by function in the operating category of the statement of comprehensive income
- this break-down is only required for certain nature expenses; and
o for the first annual period of application of IFRS 18, a
reconciliation for each line item in the statement of comprehensive income
between the restated amounts presented by applying IFRS 18 and the amounts
previously presented applying IAS 1.
· From a cash flow statement perspective, there will be changes
to how interest received and interest paid are presented. Interest paid will
be presented as financing cash flows and interest received as investing cash
flows, which is a change from current presentation as part of operating cash
flows.
The Company will apply the new standard from its mandatory effective date of 1
January 2027. Retrospective application is required, and so the comparative
information for the financial year ending 31 December 2026 will be restated in
accordance with IFRS 18.
3. Material Accounting Policies
Financial Instruments
Financial Assets
The Company's financial assets principally comprise of investments held at
fair value through profit (Shareholder loan and equity investments) and trade
and other receivables.
The Company's Shareholder loan and equity investments in HoldCo are held at
fair value through profit or loss. Gains or losses resulting from the
movements in fair value are recognised in the Company's Statement of
Comprehensive Income at each measurement point. Where there is sufficient
value within HoldCo, the Company's Shareholder loans are fair valued at their
redeemable amounts and the residual fair value reflected within the Company's
equity investments.
Trade and other receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest rate
method.
Financial Liabilities
The Company's financial liabilities include trade and other payables, and
other short-term monetary liabilities which are initially recognised at fair
value and subsequently measured at amortised cost using the effective interest
rate method.
Recognition, Derecognition and Measurement
Financial assets and financial liabilities are recognised in the Company's
Statement of Financial Position when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and financial
liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
A financial liability (in whole or in part) is derecognised when the Company
has extinguished its contractual obligations, it expires or is cancelled.
Financial assets are derecognised when the rights to receive cash flows from
the investments have expired or the Company has transferred substantially all
risks and rewards of ownership.
Subsequent to initial recognition, financial assets at fair value through
profit or loss are measured at fair value. Gains and losses resulting from the
movement in fair value are recognised in the Statement of Comprehensive
Income. Financial liabilities are subsequently measured at amortised cost
using the effective interest rate method.
Taxation
Investment trusts which have approval under section 1158 of the Corporation
Tax Act 2010 are not liable for taxation on capital gains. Shortly after
listing, the Company received an approval as an investment trust by HMRC.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates that have been enacted or substantively enacted at the date of
the Statement of Financial Position.
Deferred Taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset is realised. Deferred tax
is charged or credited to the Statement of Comprehensive Income except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off tax assets against tax liabilities and when they
relate to income taxes levied by the same taxation authority and the Company
intends to settle its current tax assets and liabilities on a net basis.
Segmental Reporting
The Chief Operating Decision Maker ("CODM"), which is the Board, is of the
opinion that the Company is engaged in a single segment of business, being
investment in renewable energy infrastructure assets to generate investment
returns whilst preserving capital. The financial information used by the CODM
to manage the Company presents the business as a single segment.
Income
Income includes investment income from financial assets at fair value through
profit or loss and bank interest income.
Investment income from financial assets at fair value through profit or loss
is recognised in the Statement of Comprehensive Income within investment
income when the Company's right to receive income is established.
Interest earned on shareholder loans is recognised on an accruals basis.
Dividend income is recognised when the right to receive it is established.
Expenses
All expenses are accounted for on an accruals basis. In respect of the
analysis between revenue and capital items presented within the Statement of
Comprehensive Income, all expenses are presented as revenue as it is directly
attributable to the operations of the Company.
Payment of Investment Advisory Fees in Shares
The Company issued its shares to the Investment Adviser in exchange for
receiving investment advisory services during the first two years of its
appointment following the initial public offering of the Company, which was
subsequently extended to 30 June 2023. The fair value of the investment
advisory services received in exchange for shares is recognised as an expense
at the time at which the investment advisory fees are earned, with a
corresponding increase in equity. The fair value of the investment advisory
services is calculated by reference to the definition of investment advisory
fees in the Investment Advisory Agreement. The Board has decided not to extend
this agreement further. Thus, no share-based payments occurred for the year to
31 December 2024.
Further details on the Company's share issues to the Investment Adviser are
disclosed in note 6 to the financial statements.
Foreign Currency
Transactions denominated in foreign currencies are translated into euros at
actual exchange rates as at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the period end are reported
at the rates of exchange prevailing at the period end. Any gain or loss
arising from a change in exchange rates subsequent to the date of the
transaction is included as an exchange gain or loss to capital or revenue in
the Statement of Comprehensive Income as appropriate. Foreign exchange
movements on investments are included in the Statement of Comprehensive Income
within gains on investments.
Cash and Cash Equivalents
Cash and cash equivalents includes deposits held at call with banks and other
short-term deposits with original maturities of three months or less.
Share Capital, Special Reserve and Share Premium Account
Ordinary Shares are classified as equity. Costs directly attributable to the
issue of new shares (that would have been avoided if there had not been a new
issue of new shares) are recognised against the value of the Ordinary Share
premium account.
Repurchases of the Company's own shares are recognised and deducted directly
in equity. No gain or loss is recognised in profit or loss on the purchase,
sale, issue or cancellation of the Company's own equity instruments. Any
expenses in relation to these repurchases are recognised directly in equity.
4. Investments Held at Fair Value Through Profit or Loss
As at 31 December 2024 As at 31 December 2023
(EUR '000)
(EUR '000)
(a) Summary of valuation
Analysis of closing balance:
Investments held at fair value through profit or loss 320,432 372,403
--------------- ---------------
Total investments 320,432 372,403
========= =========
(b) Movements during the year
Opening balance of investments, at cost 348,415 362,978
Repayments during the year (12,528) (14,563)
Cost of investments 335,887 348,415
Revaluation of investments to fair value:
Unrealised movement in fair value of investments (15,455) 23,988
Balance of capital reserve - investments held (15,455) 23,988
Fair value of investments 320,432 372,403
c) Losses on investments in year (per Statement of Comprehensive Income)
Movement in unrealised revaluation of investments held (39,443) (41,675)
--------------- ---------------
Losses on investments (39,443) (41,675)
========= =========
The fair value of the Companyʼs equity and the Shareholder loans investment
in HoldCo are determined by the underlying fair values of the SPV investments,
which are not traded and contain unobservable inputs. As explained in Note 2,
the Company has made a judgement to fair value of both the equity and
shareholder loan investments together. As such, the Companyʼs equity and the
Shareholder loans investments in HoldCo have been classified as Level 3 in the
fair value hierarchy.
Fair Value Measurements
IFRS 13 requires disclosure of fair value measurement by level. The level of
fair value hierarchy within the financial assets or financial liabilities is
determined on the basis of the lowest level input significant to the fair
value measurement. Financial assets and financial liabilities are classified
in their entirety into only one of the following three levels:
Level 1
The unadjusted quoted price in an active market for identical assets or
liabilities that the entity can access at the measurement date.
Level 2
Inputs other than quoted prices included within Level 1 that are observable
(i.e. developed using market data) for the asset or liability, either directly
or indirectly.
Level 3
Inputs are unobservable (i.e. for which market data is unavailable) for the
asset or liability.
The classification of the Company's investments held at fair value is detailed
in the table below:
As at 31 December 2024 As at 31 December 2023
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Investments at fair value through profit and loss - - 320,432 320,432 - - 372,403 372,403
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
- - 320,432 320,432 - - 372,403 372,403
========= ========= ========= ========= ========= ========= ========= =========
Due to the nature of the investments, they are always expected to be
classified as level 3. There have been no transfers between levels during the
year ended 31 December 2024 (2023: none).
The movement on the Level 3 unquoted investments during the year is shown
below:
Year ended Year ended
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Opening balance 372,403 428,641
Additions during the year - -
Repayments during the year (12,528) (14,563)
Unrealised losses on investments adjustments (39,443) (41,675)
--------------- ---------------
Closing balance 320,432 372,403
========= =========
Valuation Methodology
The Company owns 100% of its subsidiary Tesseract Holdings Limited. The
Company meets the definition of an investment entity as described by IFRS 10;
as such, the Company's investment in the HoldCo is valued at fair value.
HoldCo's cash, working capital balances and fair value of investments are
included in calculating fair value of the HoldCo.
The Company acquired underlying investments in SPVs through its investment in
the HoldCo.
The Investment Adviser has carried out fair market valuations of the SPV
investments as at 31 December 2024 and the Directors have satisfied themselves
as to the methodology used, the discount rates and key assumptions applied,
and the valuation.
All SPV investments are held at fair value through profit or loss and are
valued using the IFRS 13 framework for fair value measurement. The following
economic assumptions were used in the valuation of the SPVs.
Valuation Assumptions
As at 31 December 2024
Discount rates The discount rate used in the valuations is calculated according to
internationally recognised methods.
Typical components of the discount rate are risk-free rates, country-specific
and asset-specific risk premia.
Power price Power prices are based on captured power price forecasts from leading market
analysts. The forecasts are independently sourced from providers with coverage
in almost all European markets as well as providers with regional expertise.
The approach applied to all asset classes (wind energy, solar PV and
hydropower) remains unchanged with the first two using a blend of two power
price curve providers and the third using a blend of three power price curve
providers.
Energy yield/load factors Estimates are based on third-party energy yield assessments, which consider
historic production data (where applicable) and other relevant factors.
Inflation rates Long-term inflation is based on the monetary policy of the European Central
Bank.
Asset life In general, an operating life of 25 to 30 years for onshore wind energy and 40
years for solar PV is assumed. The operating lives of hydropower assets are
estimated in accordance with their expected concession terms.
Operating expenses Operating expenses are primarily based on respective contracts and, where not
contracted, on the assessment of a technical adviser.
Taxation rates Underlying country-specific tax rates are derived from due diligence reports
from leading tax consulting firms.
Valuation Sensitivities
The fair value of the Company's investment in HoldCo is ultimately determined
by the underlying fair values of the SPV investments. As such, sensitivity
analysis is produced to show the impact of reasonable changes in key
assumptions adopted to arrive at the SPV valuation.
For each of the sensitivities, it is assumed that potential changes occur
independently of each other with no effect on any other base case assumption,
and that the number of investments in the SPVs remains static throughout the
modelled life. The determination of what qualifies as 'observable' data
requires significant judgement. Observable data is defined as market
information that is readily available, regularly updated, reliable,
verifiable, non-proprietary, and sourced from independent entities actively
participating in the relevant market.
The investments fall under Level 3 classification, as they are not publicly
traded and rely on inputs that cannot be directly observed. The discount rate,
power price curve, inflation, and economic lifetime of assets are the key
unobservable inputs that significantly influence the fair value of
investments. Any increase or decrease in these factors would have a material
impact on valuation.
The NAV per share impacts from each sensitivity are shown below.
Note the sensitivity ranges presented below have been applied consistently
with prior audited accounts prepared by the Company. In light of the
uncertainty surrounding inflation and the trajectory of global interest rates
(as referenced in the notes to the accounts under Post Balance Sheet Events),
a wider range of +1% or -1% could be considered appropriate for the Discount
rate and Inflation sensitivities.
(i) Discount Rates
The discount rate is considered the most significant unobservable input
through which an increase or decrease would have a material impact on the fair
value of the investments at fair value through profit or loss.
The DCF valuation of the SPV investments represents the largest component of
the NAV of the Company and the key sensitivity are considered to be the
discount rate used in the DCF valuation assumptions.
The weighted average valuation discount rate applied to calculate the SPV
valuation is 7.3% at 31 December 2024 (2023: 7.2%). An increase or decrease in
this rate by 0.5% at project level has the following effect on valuation:
-0.5% Change +0.5% Change
Discount rate NAV per NAV Impact Total NAV NAV Impact NAV per
share impact
(EUR '000)
value
(EUR '000)
share impact
in (EUR cents)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 4.5 337,338 320,232 304,752 (4.1)
========= ========= ========= ========= =========
(ii) Power Price
Long-term power price forecasts are provided by leading market consultants and
are updated quarterly. The sensitivity below assumes a 10% increase or
decrease in merchant power prices relative to the base case for every year of
the asset life.
The sensitivity considers a flat 10% movement in power prices for all years,
i.e. the effect of adjusting the forecast electricity price assumptions in
each of the jurisdictions applicable to the SPV down by 10% and up by 10% from
the base case assumptions for each year throughout the operating life of the
SPV.
Note the Company intends to renew power price hedges (e.g. in the form of PPAs
or other mechanisms) before the existing contracts (PPAs and government
regulated tariffs) expire. This rolling hedge strategy is not reflected in the
sensitivities illustrated above. When renewing the existing hedges, the
Company's power price exposure and, therefore, its sensitivity towards power
prices, decreases.
A change in the forecast electricity price assumptions by plus or minus 10%
has the following effect on valuation, as shown below.
-0.5% Change +0.5% Change
Power price NAV per NAV Impact Total NAV NAV Impact NAV per
share impact
(EUR '000)
value
(EUR '000)
share impact
in (EUR cents)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 (10.5) 280,529 320,232 359,563 10.4
========= ========= ========= ========= =========
(iii) Energy Yield
The base case assumes a "P50" level of output. The P50 output is the estimated
annual amount of electricity generation (in MW) that has a 50% probability of
being exceeded both in any single year and over the long term and a 50%
probability of being under achieved. Hence the P50 is the expected level of
generation over the long term. The sensitivity illustrates the effect of
assuming "P90 10 years" (a downside case) and "P10 10 years" (an upside case)
energy production scenarios. A P90 10 years downside case assumes the average
annual level of electricity generation that has a 90% probability of being
exceeded over a ten-year period. A P10 10 years upside case assumes the
average annual level of electricity generation that has a 10% probability of
being exceeded over a ten-year period. This means that the SPV aggregate
production outcome for any given ten-year period would be expected to fall
somewhere between these P90 and P10 levels with an 80% confidence level, with
a 10% probability of it falling below that range of outcomes and a 10%
probability of it exceeding that range. The sensitivity does not include the
portfolio effect which would reduce the variability because of the
geographical diversification. The sensitivity is applied throughout the next
ten years.
The table below shows the sensitivity of the SPV value to changes in the
energy yield applied to cash flows from project companies in the SPV as per
the terms P90, P50 and P10 explained above.
Energy yield NAV per P90 Total NAV P10 NAV per
share impact
10 years
value
10 years
share impact
(EUR cents)
(EUR '000)
(EUR '000)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 (5.4) 299,629 320,232 341,664 5.7
========= ========= ========= ========= =========
(iv) Inflation Rates
The projects' income streams are principally a mix of government regulated
tariffs, fixed-price PPAs and merchant revenues. Government regulated tariffs
and fixed -price PPAs tend not to be inflation linked, whilst merchant
revenues are generally subject to inflation. The current contractual life of
government regulated tariffs and fixed-price PPAs are shorter than their
respective asset lives, meaning, from a valuation perspective, the assets are
more exposed to merchant revenues in the late asset life. As described
earlier, the Company intends to renew power price hedges (e.g. in the form of
PPAs or other mechanisms) before the existing contracts (PPAs and
government-regulated tariffs) expire. This rolling hedge strategy is not
reflected in the sensitivities illustrated above. The projects' management and
maintenance expenses typically move with inflation; however, debt payments are
fixed. This results in the SPV returns and valuation being positively
correlated to inflation. The SPVs valuation assumes long-term inflation of
2.0% p.a.
The sensitivity illustrates the effect of a 0.5% decrease and a 0.5% increase
from the assumed annual inflation rates in the financial model for each year
throughout the operating life of the SPV.
Inflation rates NAV per -0.5% Total NAV +0.5% NAV per
share impact
(EUR '000)
value
(EUR '000)
share impact
(EUR cents)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 (2.9) 309,168 320,232 331,811 3.1
========= ========= ========= ========= =========
(v) Asset Life
In general, an operating life of 25 to 30 years for onshore wind energy and 40
years for solar PV is assumed. In individual cases, a longer operating life is
assumed where the contractual set-up supports such an assumption. The
operating lives of hydropower assets are estimated in accordance with their
concession term.
The sensitivity below shows the valuation impact from a one-year adjustment to
the asset life across the portfolio.
Asset life NAV per -1 year Total NAV +1 year NAV per
share impact
(EUR '000)
value
(EUR '000)
share impact
(EUR cents)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 (1.4) 315,074 320,232 324,403 1.1
========= ========= ========= ========= =========
(vi) Operating Expenses
The sensitivity shows the effect of a 10.0% decrease and a 10.0% increase to
the base case for annual operating costs for the SPV, in each case assuming
that the change to the base case for operating costs occurs with effect from 1
January 2025 and that change is applied for the remaining life of the assets.
An increase or decrease in operating expenses by 10% at SPV level has the
following effect on valuation, as shown below.
Operating expenses NAV per -10.0% Total NAV +10.0% NAV per
share impact
(EUR '000)
value
(EUR '000)
share impact
(EUR cents)
(EUR '000)
in (EUR cents)
Valuation as of 31 December 2024 4.3 336,464 320,232 303,657 (4.4)
========= ========= ========= ========= =========
5. Income
Income from investments For the year ended For the year ended
31 December 2024
31 December 2023
(EUR '000)
(EUR '000)
Interest income from shareholder loans 13,647 15,257
Dividend income - 1,200
Bank interest income 18 55
Other income 14 -
--------------- ---------------
Total Income 13,679 16,512
========= =========
6. Investment Advisory Fees
For the year ended 31 December 2024 For the year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Investment advisory fees 2,331 - 2,331 2,896 - 2,896
========= ========= ========= ========= ========= =========
Under the Investment Advisory Agreement, the following fee is payable to the
Investment Adviser:
a) 0.75% per annum of NAV (plus VAT) of the Company up to EUR 300
million;
b) 0.65% per annum of NAV (plus VAT) of the Company between EUR 300
million and EUR 500 million; and
c) 0.55% per annum of NAV (plus VAT) of the Company above EUR 500
million.
Share-Based Payments
During the first two years of its appointment, the Investment Adviser has
undertaken to apply its fee (net of any applicable tax) in subscribing for, or
acquiring, the Company's Ordinary Shares. If the Ordinary Shares are trading
at a premium to the prevailing NAV, the Company will issue new Ordinary Shares
to the Investment Adviser. If, however, the Ordinary Shares are trading at a
discount to the prevailing NAV at the relevant time, no new Ordinary Shares
will be issued by the Company and instead the Company will instruct its broker
to acquire Ordinary Shares to the value of fee due in the relevant period. The
current Investment Adviser fee arrangement with Aquila Capital
Investmentgesellschaft mbH was extended whereby the Investment Adviser fee is
fully paid in the shares of the Company for an additional two years until 30
June 2023.
The Investment Adviser is also entitled to be reimbursed for certain expenses
under the Investment Advisory Agreement. These include out-of-pocket expenses
properly incurred by the Investment Adviser in providing services, including
transactional, organisational, operating and/or travel expenses.
The Company settled investment advisory fees by issuing Ordinary Shares and
purchasing Ordinary Shares in the market during the period to 30 June 2023. No
share-based payments occurred during the year to 31 December 2024. The Company
has issued and purchased the following shares to settle investment advisory
fees for the period under review:
In respect of the year ended 31 December 2024 Investment Fair value Number of Date of Issued/
advisory fees
of issue/
shares
transaction
Purchased
(EUR)
purchase price
(cents)
1 January to 31 December 2024 n/a n/a n/a n/a n/a
========= ========= ========= ========= =========
In respect of the year ended 31 December 2023 Investment Fair value Number of Date of Issued/
advisory fees
of issue/
shares
transaction
Purchased
(EUR)
purchase price
(cents)
31 March 2023 767,841 98.86 771,695 18 May 2023 Purchased
30 June 2023 728,290 87.00 831,701 07 August 2023 Purchased
========= ========= =========
7. Other Expenses
For the year ended 31 December 2024 For the year ended 31 December 2024
Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Secretary and administrator fees 198 - 198 218 - 218
Tax compliance 21 - 21 10 - 10
Directors' fees 192 - 192 181 - 181
Directors' other employment costs 66 - 66 35 - 35
Broker retainer 57 - 57 68 - 68
Audit fees - statutory(1, 2) 368 - 368 385 - 385
AIFM fees 149 - 149 122 - 122
Registrar's fees 29 - 29 16 - 16
Marketing fees 116 - 116 106 - 106
FCA and listing fees 115 - 115 215 - 215
Legal fees 190 - 190 202 - 202
ESG rating fees - - - 38 - 38
AIC and other regulatory fees 33 - 33 44 - 44
Other expenses(3) 81 - 81 174 - 174
--------------- --------------- --------------- --------------- --------------- ---------------
Total expenses 1,615 - 1,615 1,814 - 1,814
========= ========= ========= ========= ========= =========
1. There are no non-audit services in relation to the current year
or prior year.
2. The GBP equivalent of the statutory audit fees was GBP 304,025
(2023: GBP 333,700) including VAT of GBP 50,671 (2023: GBP 55,600).
3. Other expenses include printing fee, publication fee,
subscription costs, website fee and other miscellaneous expenses.
Other operating expenses have been analysed and presented by nature.
8. Finance Costs
For the year ended 31 December 2024 For the year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Bank charges 2 - 2 1 - 1
--------------- --------------- --------------- --------------- --------------- ---------------
Total 2 - 2 1 - 1
========= ========= ========= ========= ========= =========
9. TAXATION
(a) Analysis of Tax Charge in the Year
For the year ended 31 December 2024 For the year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Total tax charge for the year (see note 9(b)) - - - - - -
========= ========= ========= ========= ========= =========
(b) Factors Affecting Total Tax Charge for the Year
The effective UK corporation tax rate applicable to the Company for the year
is 25.0% (2023:23.5%). The tax charge differs from the charge resulting from
applying the standard rate of UK corporation tax for an investment trust
company.
The differences are explained below:
For the year ended 31 December 2024 For the year ended 31 December 2023
Revenue Capital Total Revenue Capital Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Profit/(loss) on ordinary activities before taxation 9,731 (39,472) (29,741) 11,801 (41,699) (29,898)
Corporation tax at 25.0% (2023: 23.52%) 2,433 (9,868) (7,435)
Effects of: 2,776 (9,808) (7,032)
Loss on investments held at fair value not allowable - 9,861 9,861 - 9,802 9,802
Foreign exchange loss not allowable - 7 7 - 6 6
Dividend income not taxable - - - (282) - (282)
Expenditure not deductible for tax purposes 48 - 48 66 - 66
Movement in management expenses not utilised/deferred tax not recognised 18 - 18 (28) - (28)
Impact of tax-deductible interest distributions (2,499) - (2,499) (2,532) - (2,532)
Total tax charge for the year - - - - - -
========= ========= ========= ========= ========= =========
Investment companies that have been approved by HM Revenue & Customs under
section 1158 of the Corporation Tax Act 2010 are exempt from tax on capital
gains. Due to the Company's status as an investment trust, and the intention
to continue meeting the conditions required to obtain approval in the
foreseeable future, the Company has not provided for deferred tax on any
capital gains or losses arising on the revaluation of investments.
The Company has unrelieved excess management expenses of EUR 1,345,619 (2023:
EUR 1,157,548). It is unlikely that the Company will generate sufficient
taxable profits in the future to utilise these expenses and therefore no
deferred tax asset has been recognised. The unrecognised deferred tax asset
calculated using a tax rate of 25.0% (2023: 25.0%) amounts to EUR 336,405
(2023: EUR 289,387).
10. Return per Ordinary Share
For the For the
year ended
year ended
31 December
31 December
2024
2023
Revenue return after taxation (EUR '000) 9,731 11,801
Capital return after taxation (EUR '000) (39,472) (41,699)
Total return (EUR '000) (29,741) (29,898)
Weighted average number of Ordinary Shares 378,122,130 388,998,468
========= =========
Number of shares
Weighted average number of shares used as the denominator For the For the
year ended
year ended
31 December
31 December
2024
2023
Weighted average number of Ordinary Shares used as the denominator in 378,122,130 388,998,468
calculating earnings per share
========= =========
11. Trade and Other Receivables
As at As at
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Prepaid expenses 29 96
--------------- ---------------
Total 29 96
========= =========
12. Trade and Other Payables
As at As at
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Accrued expenses 1,290 1,383
Deferred consideration payable 107 107
--------------- ---------------
Total 1,397 1,490
========= =========
13. Share Capital
As at 31 December 2024 As at 31 December 2023
No. of No. of Total no. (EUR No. of No. of Total no. (EUR
Ordinary
Treasury
of Shares
'000)
Ordinary
Treasury
of Shares
'000)
Shares
Shares
in issue
Shares
Shares
in issue
Allotted, issued and fully paid:
Redeemable Ordinary Shares of 1p each ('Ordinary Shares') 378,122,130 30,103,575 408,225,705 4,082 378,122,130 30,103,575 408,225,705 4,082
Share buybacks - - - - - - - -
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Total 378,122,130 30,103,575 408,225,705 4,082 378,122,130 30,103,575 408,225,705 4,082
========= ========= ========= ========= ========= ========= ========= =========
The Ordinary Shares shall carry the right to receive the profits of the
Company available for distribution and determined to be distributed by way of
interim or final dividends at such times as the Directors may determine in
accordance with the Articles of the Company. The holders of Ordinary Shares
have the right to receive notice of, and to attend and vote at, General
Meetings of the Company.
There were no shares issued during the year to 31 December 2024 (2023: none).
There were no shares purchased for treasury during the year to 31 December
2024 (2023: purchased for treasury a total of 30,103,575 Ordinary Shares at an
aggregate cost of EUR 27,964,000, including stamp duty and other fees).
14. Special Reserve
As indicated in the Company's prospectus dated 10 May 2019, following
admission of the Company's Ordinary Shares to trading on the London Stock
Exchange, the Directors applied to the Court and obtained a judgement on 30
July 2019 to cancel the amount standing to the credit of the share premium
account of the Company. The amount of the share premium account cancelled and
credited to the special reserve was EUR 149,675,608.
As at 31 December 2024, the Special Reserve was EUR 75,087,000 (2023: EUR
87,717,000).
15. Net Assets per Ordinary Share
Net assets per Ordinary Share as at 31 December 2024 is based on EUR
320,231,508 (2023: EUR 372,541,000) of net assets of the Company attributable
to the 378,122,130 (2023: 378,122,130) Ordinary Shares in issue as at 31
December 2024.
16. DividendS Paid
The Company has paid the following interim dividends in respect of the year
under review:
For the year ended For the year ended
31 December 2024
31 December 2023
Total dividends paid in the year Cents per Total Cents per Total
Ordinary Share
(EUR '000)
Ordinary Share
(EUR '000)
31 December 2023 interim - Paid 18 Mar 2024 (2023: 17 March 2023) 1.3775c 5,211 1.3125c 5,334
31 March 2024 interim - Paid 14 June 2024 (2023: 26 May 2023) 1.4475c 5,479 1.3775c 5,376
30 June 2024 interim - Paid 6 September 2024 (2023: 18 August 2023) 1.4475c 5,475 1.3775c 5,310
30 September 2024 interim - Paid 9 December 2024 (2023: 17 November 2023) 1.4475c 5,475 1.3775c 5,227
--------------- --------------- --------------- ---------------
Total 5.7200c 21,640 5.4450c 21,247
========= ========= ========= =========
The dividend relating to the year ended 31 December 2024, which is the basis
on which the requirements of Section 1159 of the Corporation Tax Act 2010 are
considered is detailed below:
For the year ended For the year ended
31 December 2024
31 December 2023
Total dividends declared in the year Cents per Total Cents per Total
Ordinary Share
(EUR '000)
Ordinary Share
(EUR '000)
31 March 2024 interim - Paid 14 June 2024 (2023: 26 May 2023) 1.4475c 5,479 1.3775c 5,376
30 June 2024 interim - Paid 6 September 2024 (2023: 18 August 2023) 1.4475c 5,475 1.3775c 5,310
30 September 2024 interim - Paid 9 December 2024 (2023: 17 November 2023) 1.4475c 5,475 1.3775c 5,227
31 December 2024 interim - Paid 18 Mar 2025 (2023: 18 March 2024)(1) 0.7900c 2,987 1.3775c 5,211
--------------- --------------- --------------- ---------------
Total 5.1325c 19,416 5.5100c 21,124
========= ========= ========= =========
17. Financial Risk Management
The Investment Adviser, AIFM and the Administrator report to the Board on a
quarterly basis and provide information to the Board which allows it to
monitor and manage financial risks relating to its operations. The Company's
activities expose it to a variety of financial risks: market risk (including
price risk, interest rate risk and foreign currency risk), credit risk and
liquidity risk. These risks are monitored by the AIFM. Each risk and its
management is summarised below.
Market Risk
The value of the investments will be a function of the discounted value of
their expected future cash flows, and as such will vary with, inter alia,
movements in interest rates, market prices and the competition for such
assets. The Investment Adviser carries out a full valuation on a quarterly
basis, which takes into account market risks. The sensitivity of the
investment valuation due to market risk is shown in note 4.
(i) Currency Risk
Foreign currency risk is defined as the risk that the fair values of future
cash flows will fluctuate because of changes in foreign exchange rates. The
Company's financial assets and liabilities are denominated in Euro and
substantially all of its revenues and expenses are in Euro. The Company is not
considered to be materially exposed to foreign currency risk.
(ii) Interest Rate Risk
The Company's interest rate risk on interest bearing financial assets is
limited to interest earned on shareholder loans. The Board considers that, as
shareholder loans investments bear interest at a fixed rate, they do not carry
any interest rate risk.
The Company's interest and non-interest-bearing assets and liabilities as at
31 December 2024 are summarised below:
Assets Interest Non-interest Total
bearing
bearing
(EUR '000)
(EUR '000)
(EUR '000)
Cash and cash equivalents 4 1,164 1,168
Trade and other receivables - 29 29
Investments at fair value through profit or loss 221,360 99,072 320,432
--------------- --------------- ---------------
Total assets 221,364 100,264 321,629
========= ========= =========
Liabilities
Creditors - (1,397) (1,397)
--------------- --------------- ---------------
Total liabilities - (1,397) (1,397)
========= ========= =========
1. Not included as a liability in the year ended 31 December 2024
financial statements.
The Company's interest and non-interest-bearing assets and liabilities as at
31 December 2023 are summarised below:
Assets Interest Non-interest Total
bearing
bearing
(EUR '000)
(EUR '000)
(EUR '000)
Cash and cash equivalents - 1,532 1,532
Trade and other receivables - 96 96
Investments at fair value through profit or loss 233,888 138,515 372,403
--------------- --------------- ---------------
Total assets 233,888 140,143 374,031
========= ========= =========
Liabilities
Creditors - (1,490) (1,490)
--------------- --------------- ---------------
Total liabilities - (1,490) (1,490)
========= ========= =========
(iii) Price Risk
Price risk is defined as the risk that the fair value of a financial
instrument held by the Company will fluctuate. Investments are measured at
fair value through profit or loss. As of 31 December 2024, the Company held
investments with an aggregate fair value of EUR 320,432,000 (2023: EUR
372,403,000). All other things being equal, the effect of a 10% increase or
decrease in the share prices of the investments held at the year end would
have been an increase or decrease of EUR 32,043,200 (2023: EUR 37,240,000) in
the loss after taxation for the year ended 31 December 2024 and the Company's
net assets at 31 December 2024. The sensitivity of the investment valuation
due to price risk is shown further in note 4.
(iv) Credit Risk
Credit risk is the risk of loss due to the failure of a borrower or
counterparty to fulfil its contractual obligations. The Company is exposed to
credit risk in respect of trade and other receivables and cash at bank. The
Company's credit risk exposure is minimised by dealing with financial
institutions with investment grade credit ratings and making Shareholder loan
investments which are equity in nature. The Company's Shareholder loan
investments in HoldCo are secured by underlying renewal investments and as
such these Shareholder loans are not exposed to credit risk. No balances are
past due or impaired.
As at As at
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Trade and other receivables 29 96
Cash and cash equivalents 1,168 1,532
--------------- ---------------
Total 1,196 1,628
========= =========
In the table above, the value for investments at fair value through profit or
loss relates to the face value of the shareholder loan investments.
The table below shows the cash balances of the Company and the credit rating
for each counterparty:
Rating As at As at
31 December
31 December
2024
2023
(EUR '000)
(EUR '000)
Royal Bank of Scotland A-1 /A+ (S&P Rating) 132 1,414
EFG International AG-Daily liquid fund A (Fitch Rating) 1,032 115
Royal Bank of Scotland International A-1 /A+ (S&P Rating) 4 3
--------------- ---------------
Total 1,168 1,532
========= =========
(v) Liquidity Risk
Liquidity risk is the risk that the Company may not be able to meet a demand
for cash or fund an obligation when due. The Investment Adviser, AIFM and the
Board continuously monitor forecast and actual cash flows from operating,
financing and investing activities to consider payment of dividends, repayment
of the Company's shareholder loans or further investing activities.
Financial liabilities by maturity as at 31 December 2024 are shown below. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Less than 1-5 years 5+ years Total
1 year
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Trade and other payables (1,397) - - (1,397)
--------------- --------------- --------------- ---------------
Total (1,397) - - (1,397)
========= ========= ========= =========
Financial liabilities by maturity as at 31 December 2023 are shown below:
Less than 1-5 years 5+ years Total
1 year
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Trade and other payables (1,490) - - (1,490)
--------------- --------------- --------------- ---------------
Total (1,490) - - (1,490)
========= ========= ========= =========
As at 31 December 2024, across the Company's investment portfolio there is
approximately EUR 152 million (2023: EUR 120.1 million) of non-recourse,
project debt (on a proportional basis) at the SPV level.
(vi) Capital and Risk Management
The Company's capital management objectives are to ensure that the Company
will be able to continue as a going concern while maximising the return to
equity Shareholders.
The Company considers its capital to comprise Ordinary Share capital,
distributable reserves and retained earnings. The Company is not subject to
any externally imposed capital requirements. The Company's share capital and
reserves that are shown in the Statement of Financial Position total EUR
320,232,000 (2023: EUR 372,541,000).
The Board, with the assistance of the Investment Adviser, monitors and reviews
the Company's capital on an ongoing basis. Use of distributable reserves is
disclosed in note 19.
Share capital represents the 1 cent nominal value of the issued share capital.
The share premium account arose from the net proceeds of new shares.
The capital reserve reflects any increases and decreases in the fair value of
investments which have been recognised in the capital column of the Statement
of Comprehensive Income.
18. Transactions with the Investment Adviser and Related Party Transactions
AIFM fees for the year ended 31 December 2024 amount to EUR 149,000 (2023: EUR
122,000). As at 31 December 2024, the fee outstanding to the AIFM was EUR
26,000 (2023: EUR 8,794).
The Company Secretary and Administrator fees for the year ended 31 December
2024 amount to EUR 198,000 (2023: EUR 218,000) and the total fees paid to Apex
Group amount to EUR 347,000 (2023: EUR 340,000).
Fees payable to the Investment Adviser are shown in the Statement of
Comprehensive Income. As at 31 December 2024, the fee outstanding to the
Investment Adviser was EUR 600,269 (2023: EUR 685,971).
Fees are payable to the Directors at an annual rate of EUR 75,000 to the
Chairman, EUR 52,500 to the Chair of the Audit and Risk Committee and EUR
45,150 to the other Directors. Directors' fees paid during the year were EUR
192,000 (2023: EUR 181,000).
For the For the
year ended
year ended
31 December
31 December
2024
2023
(EUR)
(EUR)
Ian Nolan 75,000 75,000
David MacLellan 52,500 52,500
Kenneth MacRitchie 45,150 45,150
Patricia Rodrigues 45,150 45,150
Myrtle Dawes 45,150 15,040*
========= =========
During the year, the Company received repayments of its Shareholder loans to
HoldCo of EUR 12,527,000 (2023: EUR 14,562,000). The Shareholder loans,
including accrued interest outstanding at year end were EUR 221,360,000 (2023:
EUR 233,888,000).
The Directors had the following shareholdings in the Company, all of which
were beneficially owned.
Ordinary Shares Ordinary Shares
At 31 December
At 31 December
2024
2023
Ian Nolan 150,000 150,000
David MacLellan 125,000 125,000
Kenneth MacRitchie 50,000 50,000
Patricia Rodrigues 50,000 50,000
Myrtle Dawes - -
========= =========
19. Distributable Reserves
The Company's distributable reserves consists of the special reserve and
revenue reserve. Capital reserve represents unrealised investments and as such
is not distributable.
The revenue reserve is distributable. The amount of the revenue reserve that
is distributable may not necessarily be the full amount of the reserve as
disclosed within these financial statements of EUR 973,000 as at 31 December
2024 (2023: EUR 1,180,000).
20. Unconsolidated Subsidiaries, Joint Venture and Associate
The following tables show subsidiaries, the joint venture and the associate of
the Company. As the Company is regarded as an investment entity, as referred
to in note 2, these subsidiaries have not been consolidated in the preparation
of the financial statements.
Subsidiary entity Effective Investment Country of Profit/(loss) Profit/(loss) Total assets Total assets
Name and registered address
ownership
incorporation
for the year
for the year
balances as at
balances as at
%
ended
ended
31 December
31 December
31 December
31 December
2024
2023
2024
2023
(EUR million)
(EUR million)
(EUR million)
(EUR million)
Tesseract Holdings Limited Leaf 100.0 HoldCo subsidiary entity, owns underlying SPV investments United Kingdom (39.4) (40.5) 320.8 425.9
B, 20th Floor
Tower 42
Old Broad Street London EC2N
1HQ
* appointed on the 1st of September 2023.
The following table shows the investments held via SPVs which are held by
Tesseract Holdings Limited, the Company's wholly owned subsidiary.
Subsidiary entity Effective Investment Country of Profit/(loss) Profit/(loss) Total assets Total assets
Name and registered address
ownership
incorporation
for the year
for the year
balances as at
balances as at
%
ended
ended
31 December
31 December
31 December
31 December
2024
2023
2024
2023
(EUR million)
(EUR million)
(EUR million)
(EUR million)
Holmen II Wind Park ApS 100.0 Subsidiary Denmark 1.6 1.5 22.1 23.6
entity, owns
Københavnsvej 81
investment
in Holmen II
4000 Roskilde
Denmark
Aalto Wind No 2 Ltd. Oy c/o 100.0 Subsidiary Finland 0.9 (0.0) 41.6 45.4
entity, owns
Intertrust (Finland) Oy
investment in
Olhava
Bulevardi 1, 6th floor
FI-00100 Helsinki, Finland
Prettysource Lda 100.0 Subsidiary Portugal (0.1) 0.0 4.1 4.1
entity, owns
Avenida Fontes Pereira
investment in
Benfica III
de Melo, n.º 14
11.º floor, 1050 121 Lisbon
Astros Irreverentes Unipessoal 100.0 Subsidiary Portugal (0.1) 0.0 4.1 4.1
entity, owns
Lda
investment in
Benfica III
Avenida Fontes Pereira
de Melo, n.º 14
11.º floor, 1050 121 Lisbon
Contrate o Sol Unipessoal Lda 100.0 Subsidiary Portugal 0.1 0.0 1.9 2.1
entity, owns
Rua Filipe Folque
investment in
Benfica III
no. 10J, 2 Dto, 1050-113
Lisbon
Argeo Solar S.L. 100.0 Subsidiary Spain (2.7) (2.2) 36.1 37.2
entity, owns
Paseo de la Castellana
investment in
Albeniz
259D, 14S-15, Madrid
Spain
Vector Aioliki Desfinas S.A. 89.0 Subsidiary Greece 3.1 2.5 50.6 53.3
entity, owns
Salaminos Str. 20
equity
investment in
15124 Maroussi
Desfina
Attica, Greece
Ega Suria S.L. 100.0 Subsidiary Spain (0.2) (0.6) 31.0 33.0
entity, owns
Paseo de la Castellana 259D
investment in
Tiza
Floors 14 and 15
28046 Madrid
Azalent Investment SL 100.0 Subsidiary Spain (0.4) 0.6 77.9 97.4
entity, owns
Paseo de la Castellana 259D
investment in
Greco
Floors 14 and 15
28046 Madrid
Svindbaek Vindkraft HoldCo ApS 100.0 Subsidiary Denmark (1.3) (1.4) 30.4 35.9
entity, owns
Gyngemose Parkvej 50
investment in
Svindbaek
2860 Søborg
Denmark
Svindbaek Vindkraft GP ApS 100.0 Subsidiary Denmark (0.0) (0.0) 0.0 0.0
entity,
Gyngemose Parkvej 50
General
partner to
2860 Søborg
Svindbaek
Vindkraft
Denmark
HoldCo ApS
The following table shows the joint venture and the associate of the Company.
The Company's investments in associates are held through HoldCo.
Subsidiary entity Effective Investment Country of Profit/(loss) Profit/(loss) Total assets Total assets
Name and registered address
ownership
incorporation
for the year
for the year
balances as at
balances as at
%
ended
ended
31 December
31 December
31 December
31 December
2024
2023
2024
2023
(EUR million)
(EUR million)
(EUR million)
(EUR million)
Palea Solar Farm Ourique S.A. 50.0 Joint venture Portugal (0.9) (0.0) 42.1 42.8
entity, owns
Avenida Fontes Pereira de Melo,
equity
investment in
no. 14, 11. Andar
Ourique
1050-121 Lisbon Portugal
As disclosed in note 4, the Company finances the HoldCo through a mix of
Shareholder loans and equity. In 2023 a new Master Shareholder Loan was agreed
between the Company and its subsidiary with the interest rate of 7.0%.
HoldCo finances its SPV investments through a mix of shareholder loans and
equity. The shareholder loans accrue at an interest rate range of 2.5% to
9.75%.
There are no restrictions on the ability of the Company's subsidiaries and
associate's entities to transfer funds in the form of interest and dividends.
21. Post Balance Sheet Events
Revolving Credit Facility
The Board recently decided to let Tesseract Holdings Limited's revolving
credit facility expire on 18 April 2025, given the Company's focus on the
Managed Wind-Down process and subsequent change in investment policy, whilst
also minimising fees and expenses. The revolving credit facility had a drawn
balance of zero, whilst approximately EUR 2.8 million had been utilised to
issue bank guarantees in relation to the Company's Spanish solar PV portfolio.
To accommodate the expiry of the revolving credit facility and maintain
compliance with the facility agreement, Tesseract Holdings Limited committed
approximately EUR 2.8 million to cash cover the bank guarantees.
Geopolitical events
Uncertainty surrounding inflation rates and the trajectory of global interest
rates continues to influence corporate strategies and financial markets. These
challenges are further compounded by growing geopolitical tensions,
particularly the ongoing war in Ukraine and the escalation of the Israel-Hamas
conflict in the Middle East. While the disruptions caused by the COVID-19
pandemic have largely subsided, the potential impacts of these geopolitical
events on global trade and supply chains remain uncertain.
In addition, the policies of the new administration in the United States,
particularly regarding tariffs and trade relations, introduce additional
layers of uncertainty. Changes in tariff structures, trade agreements, or
regulatory frameworks could significantly alter market dynamics, impacting
both international supply chains, inflation, and interest rates. The direction
of these policies remains fluid, creating further unpredictability for
businesses and investors.
Geopolitical risks, inflation, trade policy shifts, and fluctuations in
interest rates are all factors whose long-term effects on financial markets
and companies are unpredictable. The scale and scope of potential impacts on
the Company's activities, as well as its investment valuations, remain
uncertain. The estimates and assumptions underlying these financial statements
are based on data available as of the date of signing of the financial
statements, as relevant to conditions that existed at the balance sheet date,
including judgments about the economic and financial market conditions that
may evolve over time. Management continues to closely monitor and evaluate the
direct and indirect effects of global events, and proactively address any
business disruptions or other risks arising from them.
Managed Wind-Down
On 24 October 2024, the Company announced that the Board has appointed
Rothschild & Co as the financial advisor in relation to the Managed
Wind-Down process. This process to identify buyers has continued post year
end. The objective - very clearly and unambiguously - is to complete the sale
process as quickly as possible, providing liquidity to shareholders at a
premium to the share price, through realising assets at prices as close as
possible to their contribution to the reported Net Asset Value.
Other Information
ALTERNATIVE PERFORMANCE MEASURES
In reporting financial information, the Company presents alternative
performance measures ("APMs"), which are not defined or specified under the
requirements of IFRS. The Company believes that these APMs, which are not
considered to be a substitute for or superior to IFRS measures, provide
stakeholders with additional helpful information on the performance of the
Company. The APMs presented in this report are shown below:
Discount
The amount, expressed as a percentage, by which the share price is more than
the NAV per Ordinary Share.
As at As at
31 December
31 December
2024
2023
NAV per Ordinary Share (cents) a 84.7 98.5
Share price (cents) b 66.0 78.5
--------------- --------------- ---------------
Discount (b÷a)-1 (22.1%) (20.3%)
========= ========= =========
ONGOING CHARGES
A measure, expressed as a percentage of average net assets (quarterly net
assets averaged over the year), of the regular, recurring annual costs of
running an investment company.
Year ended Year ended
31 December
31 December
2024
2023
Average NAV (EUR '000) a 337,705 399,571
Annualised expenses (EUR '000) b 3,548 4,220
--------------- --------------- ---------------
Ongoing charges (b÷a) 1.1% 1.1%
========= ========= =========
Total Return
A measure of performance that includes both income and capital returns. This
takes into account capital gains and reinvestment of dividends paid out by the
Company into the Ordinary Shares of the Company on the ex-dividend date.
As at 31 December 2024 Share price NAV
Opening at 1 January 2024 (cents) a 78.5 98.5
Dividend adjustment (cents) b 5.7 5.7
Closing at 31 December 2024 (cents) c 66.0 84.7
--------------- --------------- ---------------
Total return ((c+b)÷a)-1 (8.6%) (8.2%)
========= ========= =========
As at 31 December 2023 Share price NAV
Opening at 1 January 2023 (cents) a 92.3 110.6
Dividend adjustment (cents) b 5.4 5.4
Closing at 31 December 2023 (cents) c 78.5 98.5
--------------- --------------- ---------------
Total return ((c+b)÷a)-1 (9.0%) (6.0%)
========= ========= =========
As at 31 December 2024 Share price NAV
Opening at IPO a 100.0 98.0
Dividend adjustment (cents) b 25.6 25.6
Closing at 31 December 2024 (cents) c 66.0 84.7
--------------- --------------- ---------------
Total return since IPO ((c+b)÷a)-1 (8.4%) 12.6%
========= ========= =========
As at 31 December 2023 Share price NAV
Opening at IPO a 100.0 98.0
Dividend adjustment (cents) b 19.9 19.9
Closing at 31 December 2023 (cents) c 78.5 98.5
--------------- --------------- ---------------
Total return since IPO ((c+b)÷a)-1 (1.6%) 20.8%
========= ========= =========
As at 31 December 2024 Share price NAV
Opening at IPO a 100.0 98.0
Closing at 31 December 2024 b 66.0 84.7
Dividend adjustment (cents) c 25.6 25.6
--------------- --------------- ---------------
Annualised total return since IPO (((b+c)/a)^(1/years since IPO))-1¹ (1.6%) 2.2%
========= ========= =========
As at 31 December 2023 Share price NAV
Opening at IPO a 100.0 98.0
Closing at 31 December 2023 b 78.5 98.5
Dividend adjustment (cents) c 19.9 19.9
--------------- --------------- ---------------
Annualised total return since IPO (((b+c)/a)^(1/years since IPO))-1¹ (0.4%) 4.3%
========= ========= =========
1. Years since IPO: 5.5 in 2024 and 4.5 in 2023.
Gross Asset Value
The Company's gross assets comprise the net asset values of the Company's
Ordinary Shares and the debt at the underlying SPV level, with the breakdown
as follows.
Year ended Year ended
31 December
31 December
2024
2023
Net Asset Value (EUR '000) a 320,232 372,541
Debt at the SPV level (EUR '000) b 151,988 120,126
RCF drawn (EUR '000)(1) c - 74,716
--------------- --------------- ---------------
Gross Asset Value (EUR '000) a+b+c 472,219 567,383
========= ========= =========
Gearing
The Company's gearing is calculated as total debt as a percentage of the gross
asset value.
Year ended Year ended
31 December
31 December
2024
2023
Gross Asset Value (EUR '000) a 472,219 567,383
Debt at the SPV level (EUR '000) b 151,988 120,126
RCF drawn (EUR '000) c - 74,716
--------------- --------------- ---------------
Gearing ratio (b+c)÷a 32.2% 34.3%
========= ========= =========
ANNUAL GENERAL MEETING
In line with the requirements of the Companies Act 2006, the Company will hold
an Annual General Meeting of Shareholders to consider the resolutions laid out
in the Notice of Meeting. Notice is hereby given that the Annual General
Meeting of Aquila European Renewables Plc will be held at the offices of CMS
Cameron McKenna Nabarro Olswang LLP, Cannon Place, 78 Cannon Street, London
EC4N 6AF on 19 June 2025.
PUBLICATION OF ANNUAL REPORT AND FINANCIAL STATEMENTS
This announcement does not constitute the Company's statutory accounts as
defined in the Companies Act 2006. The financial information for the year to
31 December 2024 will be filed with the Registrar of Companies.
The figures shown above for the year to 31 December 2023 was derived from the
2023 statutory accounts which was approved on 24 April 2024 and delivered to
the Registrar of Companies. The auditors reported on the 2023 statutory
accounts; their reports were unqualified and did not include a statement under
Section 498(2) or (3) of the Companies Act 2006.
The Annual Report for the year ended 31 December 2024 was approved on 24 April
2025. It will be made available on the Company's website at
https://www.aquila-european-renewables.com/.
The Annual Report will be submitted to the National Storage Mechanism and will
shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
This announcement contains regulated information under the Disclosure Guidance
and Transparency Rules of the FCA.
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