REG - Aquila Eur Renwables Aquila Euro Rnw-AERI - Final Results
28/04/2026 07:00
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RNS Number : 1026C Aquila European Renewables PLC 28 April 2026
AQUILA EUROPEAN RENEWABLES PLC
Annual Report and Accounts for the year ended 31 December 2025
Final Results
We are pleased to present the results for the year ended 31 December 2025.
STRATEGIC REPORT
investment objective
The Company's Investment Objective is to realise all existing assets in the
Company's portfolio in an orderly manner.
Financial Information as at 31 December 2025
Net assets (EUR million)
214.3 (2024: 320.2)
NAV per Ordinary Share (cents)(1)
56.7 (2024: 84.7)
Total NAV return per Ordinary Share(1,2)
(29.5%) (2024: (8.2%))
Dividends per Ordinary Share (cents)(3)
2.2 (2024: 5.1)
Ordinary Share price (cents)
36.5 (2024: 66.0)
Dividend yield
6.1% (2024: 7.8%)
Ordinary Share price discount to NAV(1)
(35.6%) (2024: (22.1%))
Ongoing charges(1,4)
1.2% (2024: 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 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
in the notes to financial statements.
Chronology of Events
On 28 July 2025, the Company announced the completion of the sale of its 18%
interest in the Portuguese hydropower asset referred to as Sagres for a cash
consideration of EUR 14.7 million.
On 11 September 2025 the Company announced the cancellation of the amount
standing to the credit of its share premium account (the "Share Premium
Cancellation"), as approved by Shareholders at the Annual General Meeting of
the Company held on 19 June 2025 (the "AGM"). Accordingly, the amount of EUR
255.6 million previously held in the share premium account of the Company was
cancelled and the distributable reserves resulting from the Share Premium
Cancellation have been treated as profits available for distribution by the
Company.
On 28 November 2025, the Company announced the appointment of Robert Naylor as
Non-Executive Chair with effect from 28 November 2025. Mr Ian Nolan resigned
from Board on 27 November 2025.
On 15 December 2025, the Company announced that the sale of the Danish wind
assets (Holmen II and Svindbaek) had completed and that the Company is in
receipt of sales proceeds of EUR 36.6 million. The Board continues to progress
the divestment of the remainder of the Company's portfolio in accordance with
its investment policy to effect a managed wind-down of its assets.
On 15 December 2025, the Board proposed using the majority of the net cash
proceeds to make a first capital distribution to Shareholders and recommended
adoption of B share scheme amounting to EUR 34.0 million to allow for the
return of capital to Shareholders. This amount represented approximately 15
per cent of the Company's Net Asset Value ("NAV") as at 30 September 2025.
The Company completed the first capital distribution through B shares
redemption on 29 January 2026.
On 24 December 2025, the Company announced that Dr Patricia Rodrigues would
resign from the Board with effect from 31 December 2025. The resignation was
part of the Company's planned reduction in size of the Board to reflect the
Company's wind-down strategy.
On 13 March 2026 the Company completed the sale of its 89% interest in
Desfina, the Greek wind power investment, which resulted in the receipt of
cash proceeds of EUR 26.0 million. On the same day the Company announced a
second capital distribution to Shareholders under the approved B share scheme
totaling approximately EUR 20.4 million, which was completed on 1 April 2026.
AT A GLANCE
PORTFOLIO BREAKDOWN(5)
By Technology
Wind energy - 37.4%
Solar PV - 62.6%
By Country
Portugal - 17.0%
Norway - 13.4%
Finland - 8.7%
Spain - 45.7%
Greece - 15.3%
By Status
Operating - 100%
WIND ENERGY - 125.0 MW
OLHAVA 34.6 MW
Ownership: 100.0%
THE ROCK 400.0 MW
Ownership: 13.7%
DESFINA 40.0 MW
Ownership: 89.0%(6)
SOLAR PV - 230.7 MWp
BENFICA III 19.7 MWp
Ownership: 100.0%
ALBENIZ 50.0 MWp
Ownership: 100.0%
OURIQUE 62.1 MWp
Ownership: 50.0%
GRECO 100.0 MWp
Ownership: 100.0%
TIZA 30.0 MWp
Ownership: 100.0%
5. Based on fair values as at 31 December 2025. Totals may not add up to
100.0% due to rounding differences.
6. Voting interest. Economic interest: 92.6%. Sale completed on 13 March 2026.
Chairman's statEment
2025 has been a challenging year and profoundly disappointing for our
shareholders. Even after applying a more aggressive discount rate as at 30
June 2025, some assets have subsequently been realised below net asset value.
The secondary market in these assets has been limited, with the Investment
Adviser being the only buyer. The Board's priority remains to complete the
managed wind-down in a disciplined way and to return capital to shareholders
as efficiently as possible.
I was appointed non-executive chairman on 28 November 2025.
Managed wind-down
Aquila European Renewables plc was placed into a managed wind-down process
following a shareholder vote and a change to its investment policy in late
September 2024. Progress was made during 2025 in executing the managed
wind-down, with the sale of the Company's Portuguese hydropower investment and
its two Danish wind power investments. This followed the sale in 2024 of the
Tesla wind power investment in Norway. In addition, on 13 March 2026, the
Company completed the sale of its Greek wind power investment, following
receipt of regulatory and other customary approvals.
These investments were sold to funds advised by Aquila Capital, the Company's
investment adviser. As a result of these disposals, the Company now has two
wind power investments, the 100% owned Olhava wind farm in Finland and a 13.7%
shareholding in The Rock wind farm in Norway, and five solar PV investments in
Iberia, comprising three 100% owned solar PV parks in Spain and two in
Portugal, one 100% owned and the other 50% owned.
As referred to above, the factors impacting investment valuations in the year,
including, amongst other things, the balancing mechanism in Finland and the
outages on the Spanish grid, have reduced the 31 December 2025 NAV. The
Company, together with its advisers, continues to explore the sale of its
remaining investments. As discussed with shareholders through the year, the
Board has undertaken an extensive sale process and, as a result of being in a
managed wind-down, notes the disparity between indicative pricing received and
the Company's NAV. Accordingly, the Board notes that there are a range of
prices at which future sales could occur, and so disposals may not be achieved
at NAV.
On 23 January 2026, the Company completed the first B share scheme
distribution, returning EUR 34.0 million to Shareholders following receipt of
proceeds from the sale of the Danish wind power investments. This represented
approximately 15% of the Company's NAV as at 30 September 2025, being the
latest published NAV at the time of the return of capital. An additional
return of capital of EUR 20.4 million was completed on 26 March 2026 following
receipt of proceeds from the sale of the Greek wind power investment.
Reflecting the managed wind down and the reducing scale of the Company, the
Directors do not propose to prepare quarterly NAVs and fact sheets but rather
will prepare semi-annual NAVs which will be announced to the market with any
accompanying relevant commentary.
Performance
NAV reduced from EUR 320.2 million as at 31 December 2024 to EUR 214.3 million
as at 31 December 2025, or from EUR 0.85 per share to EUR 0.57 per share, a
decline of 32.9%. Dividends of EUR 0.03 per share were paid in 2025.
The sale of the Portuguese hydropower investment was completed in June 2025 at
a price equal to its NAV as at 31 December 2024 plus interest at 6.75% p.a.
from that date until completion, as adjusted for distributions received from
the investment. The subsequent agreements to sell the Danish wind power
investments and the Greek wind power investment were at values approximately
17% below their respective NAVs as at 30 June 2025.
The share price reduced from EUR 0.66 as at 31 December 2024 to EUR 0.37 as at
31 December 2025, with the discount to NAV widening from 22.1% to 35.6%.
Post year end the Directors distributed, by the Company's B share mechanism,
approximately €34 million, being 9 cents per Ordinary Share, on 23 January
2026 and approximately €26 million, 5.4 cents per Ordinary Share, on 26
March 2026.
The valuation of the remaining investments reduced from EUR 218.8 million as
at 31 December 2024 to EUR 142.5 million as at 31 December 2025, driven by a
combination of factors, including: (i) an increase in the overall portfolio
discount rate from 7.3% per annum as at 31 December 2024 to 10.0% per annum as
at 31 December 2025 reflecting the poor performance in 2025 against forecast;
and (ii) significant reductions in forecast power prices.
Over the course of the year, forecast power prices were revised down
significantly across most European markets. In the short term, this decline
was driven by lower commodity prices in all relevant countries. In Iberia,
solar PV price forecasts were revised down materially due to higher expected
capture effects, particularly in the near term, resulting from increased solar
build-out and generation.
Total portfolio production for the Company's remaining investments in the year
ended 31 December 2025 was 23.0% below budget. Solar PV production was 28.5%
below budget, attributable in particular to curtailment of the Iberian solar
PV assets due to several hours of negative electricity market prices, which
prompted solar PV parks such as Albeniz, Tiza and Greco to shut down,
resulting in lower production. Wind power production was 16.9% below forecast
in 2025. Olhava underperformed by 29.4% in 2025, mainly due to extensive
commercial curtailments, while technical losses remained low and wind
conditions were normal.
Dividends
Dividends were paid in respect of the first three quarters of 2025, totalling
EUR 11.4 million, or EUR 0.03 per share. Cash generated by the Company's
investments and available for upstreaming to the Company came under
significant pressure in the second half of 2025 due to Olhava's lender
prohibiting payments to Shareholders and challenging market conditions in
Spain and Portugal, which are expected to continue. Capital is therefore being
retained to cover foreseeable operating costs and potential calls on the
Company's capital to support investments, including possible equity cures for
the Olhava investment.
Costs
Additional costs have been incurred, particularly in relation to the Company's
corporate finance and legal advisers, in order to execute the managed
wind-down, both for the disposal of the Company's investments and for the B
share scheme redemption. As the Company's asset base reduces, costs will
increase as a percentage of NAV.
Outlook
2025 was a challenging year for the renewable energy industry in Europe and
for the Company's investments. There has been a focus on discount rates which
is an oversimplification of a complex, often esoteric, asset class. The value
of these long-life assets depends on a wide range of assumptions, including
power prices, curtailment, asset life, subsidy regimes, grid outages and
balancing markets. In many cases those assumptions have proved aggressive,
contributing to an over-distribution of capital. The consequences are now
evident. Companies are struggling to sell assets, realised values are falling
below historic NAVs, and dividends are being cut.
The war in the middle-east has led to increases in commodity prices and, in
particular, to wholesale gas prices, which are themselves leading to higher
wholesale market prices for electricity in Europe. The Company's investments
are expected to benefit from these increases to the extent that revenues are
exposed to market prices (see Investment Adviser's Report for details).
However, the factors in the first paragraph above are expected to continue
carrying more weight in the near future.
Against this backdrop, and as the managed wind-down progresses, the Board's
priority is to complete the asset sale programme efficiently, while
safeguarding value and returning capital to shareholders in a timely and
cost-effective manner. This may involve realising assets at prices below their
contribution to 31 December 2025 net asset value.
Robert Naylor
Chairman
27 April 2026
INVESTMENT ADVISER'S REPORT
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.
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. On 24 April
2026 Commerzbank increased its shareholding in the Investment Adviser to 100%.
1 Figures presented in this section refer to Aquila Group.
Investment Portfolio
Project Tech-nology Country Capacity(7) Status COD(8) Asset Life Equip-ment Energy Offtaker Owner-ship Lever-age(10) Acquisi-tion
from COD
Manu-facturer Offtaker(9) in Asset Date
Olhava Wind energy Finland 34.6 MW Operational 2013-2015 30y Vestas Market Finnish Energy 100.0% 23.7% September 2019
The Rock Wind energy Norway 400.0 MW Operational 2022 30y Nordex PPA Alcoa 13.7% 61.7% June 2020
Benfica III Solar PV Portugal 19.7 MW Operational 2017, 2020 40y AstroNova Market Axpo 100.0% 0.0% October 2020
Albeniz Solar PV Spain 50.0 MW Operational 2022 40y Canadian Solar PPA Statkraft 100.0% 34.9% December 2020
Desfina Wind energy Greece 40.0 MW Operational 2020 25y Enercon FiP DAPEEP 89.0%(11) 45.2%(12) December 2020
Ourique Solar PV Portugal 62.1 MW Operational 2019 40y Suntec Market ENI 50.0% 0.0% June 2021
Greco Solar PV Spain 100.0 MW Operational 2023 40y Jinko PPA Statkraft 100.0% 34.8% March 2022
Tiza Solar PV Spain 30.0 MW Operational 2022 40y Canadian Solar PPA Axpo 100.0% 43.1% June 2022
Total (AER Share) 355.7 MW
7. Installed capacity at 100% ownership.
8. COD = Commissioning date.
9. PPA = Power Purchase Agreement, FiP = Feed-in premium. Further
information on the contracted revenue position can be found in the Annual
Report.
10. Leverage level calculated as a percent of third party debt less cash
versus enterprise value, i.e. equity value plus third party debt less cash as
at 31 December 2025. Benfica III and Ourique have no third party debt.
11. Represents voting interest. Economic interest is approximately 92.6%.
This investment was sold on 13 March 2026.
12. Calculation based on voting interest.
PORTFOLIO UPDATES as at 31 December 2025
As reported in the Chairman's statement, the Company disposed of its interests
in the Sagres hydropower plant in Portugal and the two Danish wind power
investments, Holmen II and Svindbaek during the year. In addition, the Company
entered into an agreement to sell its interests in the Desfina wind power
investment in Greece during the year. This transaction was completed on 13
March 2026.
Olhava
Olhava is in lock-up following debt covenant breaches driven by a combination
of factors including lower than forecast realised power prices and production,
elevated grid balancing costs and high debt repayment obligations, which are
expected to ease during 2026. It has been necessary to make equity cure
payments from the resources of the company which owns Olhava and agree that
payments under the shareholder loan and dividends are suspended until the end
of June 2026. In September 2025 an additional equity cure of EUR 508k was paid
from the Company's resources. While asset liquidity remains stable although
revenue and cost risks persist from the expiry of the feed-in tariff and
elevated grid balancing reserves, constructive discussions with the bank
continue in order to modify the terms of the loan, which are likely to result
in the lock up period being extended. The Board and Investment Adviser
continue to monitor the asset's performance closely against a background of
difficult market trading conditions.
The Rock
The Rock has appointed the investment bank, that arranged the EUR 80.0 million
Green Bond in 2021, to advise it further on the refinancing of this Green
Bond, which matures in September 2026. Until this refinancing is resolved it
is unlikely that the Company will receive cash flow from this investment.
Solar PV investments in Spain
The Company's three Solar PV investments in Spain underwent challenging market
conditions in 2025. There were significant curtailments of power production at
all sites, both enforced by the grid, which at times was unable to cope with
peak electricity production, and voluntary due to the impact of negative
wholesale power prices. These conditions are expected to continue until grid
infrastructure, including investment in batteries, is improved and demand for
power has increased, e.g. from data centre investments. These investments have
bank debt facilities, which are non-recourse to the Company but are
cross-collateralised by each of the three investments. The debt repayment
obligations are a small percentage of the principal amount outstanding until
the maturity date in December 2028. Nevertheless, the Albeniz/Argeo investment
breached its DSCR covenant in the period ended 31 December 2025 as a result of
which interest was not paid on shareholder loans provided by the Company in
December 2025. The other investments achieved DSCR well in excess of the
minimum level required of 1.05x and the Albeniz covenant breach is expected to
be able to be rectified through an equity cure funded by the other two
investments. However, the ability of the investments to make payments to the
Company is less secure than in previous years.
Solar PV investments in Portugal
The Company's two Solar PV investments in Portugal experienced similar, but
less acute, market conditions as in Spain. These investments do not have bank
indebtedness. However, their revenues from power purchase agreements expired
in December 2025 and are currently exposed to wholesale market power prices,
which reduced significantly over the last year. Accordingly, these investments
are conserving cash in order to ensure security of operations and therefore
the ability of the investments to make payments to the Company is less secure
than in previous years.
CONTRACTED REVENUE POSITION
Revenue Mix - Existing Contracts
Present Value of Revenues
(Five Years)
Financial Performance
Electricity Production (GWh)
2025 2024 Variance (%) Variance 2025
against
P50(16) Budget
Technology Region
Wind energy Finland, Norway, Greece 298.0 461.3 -11.8% -16.9%
Solar PV Portugal, Spain 307.1 385.1 -20.3% -28.1%
----------- ----------- ----------- -----------
Total 605.1 722.8 -16.3% -23.0%
====== ====== ====== ======
Load Factors(17)
Technology 2025 2024
Wind energy 27.2% 30.9%
Solar PV 15.2% 19.1%
----------- -----------
Total 19.4% 23.2%
====== ======
Technical Availability(18)
Technology 2025 2024
Wind energy 93.3% 93.6%
Solar PV 93.6% 99.8%
----------- -----------
Total 93.5% 96.7%
====== ======
Revenues(19) (EUR million)
Technology 2025 2024 Variance (%)
Wind energy 11.5 18.1 -36.7%
Solar PV 13.8 19.5 -29.1%
----------- ----------- -----------
Total 25.3 37.6 -32.8%
====== ====== ======
Note: 2025 and 2024 information is for the remaining investments as at 31
December 2025.
15. KPI's of the underlying SPVs of the HoldCo
16. 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).
17. 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.
18. Technical availability refers to the proportion of
time a system, service, or infrastructure is fully functional and accessible
for use. Average technical availability based on weighted installed capacity
(AER share).
19. Includes merchant revenue, contracted revenue and
other revenue (e.g. Guarantees of Origin, Electricity Certificates).
2025 Monthly Production Performance vs. Budget (AER Share)
The portfolio's production was 23.0% below budget over the reporting period,
primarily due to lower irradiation for the solar portfolio, curtailment of the
Iberian solar PV assets due to periods of negative market prices (c. 33% below
forecast) and a combination of low irradiation and a failure of a transformer
in Portugal, which resulted in 2 months of reduced capacity (now resolved) at
the Ourique plant (c. 25% below forecast). The production of the portfolio was
also affected from poor wind conditions in Greece (17.5% below forecast) and
technical availability issues such as icing in Norway & Finland (c. 14%
below forecast). Due to these factors, the portfolio weighted average
technical availability over the reporting period stood at 93.5% (2024: 96.7%).
If the technical availability of a plant falls below the guaranteed level, the
compensation is contractually defined in the respective EPC or O&M
agreement in the form of liquidated damages. However, for certain assets, this
compensation is calculated based on the annual technical availability. As long
as the year-end value remains above the guaranteed threshold, no liquidated
damages are payable.
In Spain, technical curtailments may be compensated (real-time at spot price),
while day-ahead curtailments are not. Commercial curtailments due to negative
prices are not covered by PPAs and excluded from revenues. For wind assets
with baseload PPAs, curtailed volumes must be bought back on the spot market,
usually without compensation. By contrast, Iberian PV assets are generally
contracted under pay-as-produce PPAs, which avoid market buy-back obligations
in case of curtailments or low production.
Leverage(20)
As at As at Variance
31 December
31 December
(%)
2025
2024
EUR million
NAV 214.3 320.2 -33.1%
Net Debt(21) 101.5 130.5 -22.2%
GAV (NAV + Net Debt) 315.8 450.7 -29.9%
Net Debt (% of GAV)(22) 32.1 29.0 10.7%
Project debt weighted average maturity (years) 5.2 10.8 -51.9%
Project Debt weighted average interest rate (%)(23) 3.3 3.2 10bps
====== ====== ======
20. Foreign currency values converted to EUR as at 31 December
2025. Data represents AER's share of debt. AER share of Desfina debt based on
voting interest.
21. Debt corresponds to third party debt secured at project
level less cash.
22. 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.
23. Weighted average all in interest rate for EUR
denominated debt.
Debt Summary as at 31 December 2025
Project AER share Net Debt Currency Bullet/amortising Maturity Hedged Type
proportion
(EUR million)
Olhava 100.0% 4.5 EUR Fully amortising Dec-30/Sep-31 100% Bank Debt
The Rock: USPP Bond (net of cash) 13.7% 24.2 EUR Fully amortising Sep-45 100% Debt Capital Markets
The Rock: Green Bond 13.7% 11.0 EUR Bullet Sep-26 100% Debt Capital Markets
The Rock: Lease liabilities 13.7% 1.1 EUR Fully amortising Nov-45 100% Leasing
Desfina 89.0% 21.2 EUR Fully amortising Dec-39 100% Bank Debt
Albeniz 100.0% 9.9 EUR Partly amortising Dec-28 90% Bank Debt
Jaén 100.0% 9.9 EUR Partly amortising Dec-28 90% Bank Debt
Guillena 100.0% 14.5 EUR Partly amortising Dec-28 90% Bank Debt
Tiza 100.0% 7.6 EUR Partly amortising Dec-28 90% Bank Debt
Benfica III 100.0% -1.1 N/A N/A N/A N/A N/A
Ourique 50.0% -1.3 N/A N/A N/A N/A N/A
----------- -----------
Total 101.5 95.8%
====== ======
The Company's NAV as at 31 December 2025 was EUR 214.3 million or 56.7 cents
per Ordinary Share (31 December 2024: EUR 320.2 million or 84.7 cents per
Ordinary Share). This represents a NAV total return of -29.5% per Ordinary
Share (2024:-8.2%) including dividends.
Dividends of EUR 11.4 million (3.0 cents per Ordinary Share) were paid during
the reporting year.
The main drivers of NAV movement throughout the reporting year include:
- increase in discount rates such that average portfolio discount
rate increased from 7.3% p.a. to 10.0% p.a.;
- significant reductions in forecast power prices across all
relevant markets, particularly in the next five to ten years;
- actual performance in 2025 was substantially below the forecast;
and
- agreements to sell Holmen II and Svindbaek investments in December
2025 at discounts to their NAV as at 31 December 2024.
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 2025 and the Directors are satisfied
with the methodology, the discount rates and key assumptions applied, and the
valuations.
All SPV investments are at fair value through profit or loss and are valued
using the IFRS 13 framework for fair value measurement. The economic
assumptions shown in the Annual Report were used in the valuation of the SPVs
Valuation Assumptions
As at 31 December 2025
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 both asset classes (wind and solar PV) remains unchanged
using a blend of two power price curve providers. One of the power price curve
providers was replaced following a review by the Investment Adviser due to
inconsistencies and differences in key long-term assumptions over the recent
forecast periods.
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. In individual cases, a longer operating life is
assumed where the contractual arrangement (i.e. O&M agreement with
availability guarantee) supports such an assumption.
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
As at As at
31 December 2025
31 December 2024
Metric
Discount rate Weighted average 10.0% 7.3%
Long-term inflation Weighted average 2.0% 2.0%
Remaining asset life(24) Wind energy (years) 22 23
Solar PV (years) 33 35
Operating life assumption(25) Wind energy (years) 28 28
Solar PV (years) 40 40
====== ======
24. Remaining asset life based on net full load years.
Does not consider any potential asset life extensions.
25. Asset life assumption from date of commissioning.
There were significant changes in the discount rate and power price forecast
assumptions compared to the previous reporting period.
- Significant reduction in power price forecasts across all relevant
markets due lower demand expectations, updated renewable deployment
assumptions and downward revisions to commodity prices (-8.8 cents)
- Increase in discount rate due to higher interest rate level driven
by high volatility and uncertainty in the markets as well as increased risk
premia applied to renewables in general (-6.9 cents)
- Higher operating costs driven by increased balancing costs across
all relevant markets and negative performance compared to budget throughout
the year (-3.8 cents)
- Loss from the sale of four assets throughout the year (-3.3 cents)
MARKET COMMENTARY AND OUTLOOK
Electricity Price Forecasts - All Assets (Weighted Average)(26)
Valuation Sensitivities
26. Data reflects pricing forecasts as at 31 December
2025. All power prices are in real terms as at 31 December 2025 and reflect
the weighted average captured price, weighting is based on production sold at
the market price
Market Power Prices
Finland power price forecasts have declined significantly over the past year,
driven by more optimistic assumptions on installed capacity particularly
increased wind investments and slightly weaker demand expectations. As a
result, wind capture prices have fallen by 16% over the next five years and 6%
over the next ten years.
In Iberia, mid and long-term power price forecasts remain broadly stable;
however, short-term solar capture prices have seen a sharp decline. Spain and
Portugal are experiencing solar oversupply, while demand growth has
underperformed prior expectations. Although additional demand from BESS, data
centres, and hydrogen is expected later in the decade, these developments are
being delayed. Consequently, solar capture prices have decreased by 12% over
the next five years and 4% over the next ten years.
In Norway, with a particular focus on the NO4 bidding zone, power price
forecasts are materially weaker than a year ago. This is driven by (i)
slower-than-expected demand growth due to significant delays in power-to-X
projects (including hydrogen, heat, and data centres), and (ii) above-average
hydrological conditions relative to P50 levels, leading to increased hydro
generation, particularly in northern regions of Norway and Sweden.
Over the past twelve months, European power markets have become increasingly
bifurcated. Continued renewable build-out has structurally reduced average
wholesale prices and weakened the marginal role of gas in many hours. However,
this same dynamic is driving higher intraday volatility, more frequent
negative pricing and growing pressure on capture prices, particularly in
markets where flexibility, storage and demand growth have lagged capacity
additions.
Spain illustrates these dynamics most clearly in solar PV. Rapid capacity
expansion has led to a sharp increase in cannibalisation effects, with
generation heavily concentrated in midday hours. As a result, capture prices
have declined materially, and zero- or negative-price periods have become
increasingly frequent. While Spain remains one of Europe's lowest-cost power
markets from a system perspective, the revenue outlook for standalone solar
assets has become more challenging. In this environment, value is shifting
towards hybridisation, storage integration and more sophisticated offtake
structures.
A similar trend is emerging in Finland's wind sector. Strong capacity growth
has positioned wind as a core pillar of the generation mix but has also
introduced greater revenue volatility. Increasing occurrences of negative
pricing, combined with regional grid constraints and limited demand-side
flexibility, are weighing on realized prices. At the same time, periods of low
wind continue to highlight structural supply tightness, underscoring the need
for a more balanced system with dispatchable capacity and storage solutions.
More recently, geopolitical developments in the Middle East have reintroduced
an additional layer of uncertainty. Disruptions to LNG supply and logistics
have driven a sharp increase in European gas prices, which continues to
influence power pricing during non-renewable hours. While Europe's growing
renewable base has reduced overall exposure to gas, these events demonstrate
that power markets remain sensitive to external shocks, particularly through
fuel-linked marginal pricing.
Overall, the investment case for renewable energy remains underpinned by
strong structural drivers, including electrification, decarbonisation targets
and energy security considerations. However, the revenue environment is
becoming more complex. Markets such as Spain and Finland highlight the
importance of flexibility, portfolio diversification and active commercial
management. Assets that combine high-quality resources with storage, hybrid
configurations and robust offtake strategies are increasingly well positioned
to navigate this evolving landscape.
Aquila Capital Investmentgesellschaft mbH
27 April 2026
27. Source: European Network of Transmission System
Operators for Electricity ("ENTSO-E"), 'Nordics' reflects the Nord Pool system
price.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
1. Environmental
Aquila Capital, the Investment Adviser of the Company, 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, it set a Group-wide goal to avoid
1.5 billion tonnes of CO(2)e by 2035 in its portfolio's lifetime.
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, a
regulated entity, 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 aims to invest in a diversified portfolio of renewable energy
infrastructure investments, such as hydropower plants, wind and solar parks,
across continental Europe and Ireland. With the objective of providing
investors with a diversified portfolio of renewable assets, AER is able to
deliver on its investment objectives as well as contribute towards the green
economy.
AER's Contribution to the UN Sustainable Development Goals
Goal Overview
Ensure access to affordable, reliable, sustainable and modern energy for all. - AER's portfolio produces renewable energy which contributes 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 quality
industrialisation and foster innovation. 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 355.7 MW remaining portfolio powered
approximately 168 thousand households and avoided approximately 139 thousand
tonnes of CO(2) emissions over the reporting year.(28)
- 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.
28. Actual AER contributions as at 31 December 2025. The CO(2) 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.
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.
-
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.
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 one
woman, 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 29 nationalities are represented among its employees), and in gender
(its gender ratio is 64% male and 36% female).
investment policy and key performance indicators
At a General meeting held on 30 September 2024, Aquila European Renewables PLC
("AER" or "Company") adopted the following 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 realisable value as part
of the orderly realisation 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% 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% 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. In this context, the realisation of Holmen II, Svindbaek and
Sagres had a significant impact on the cash generation from the Company's
investment, as 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)
(34.9%) 2025
2024: (8.4%)
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 share price return since IPO¹ (June 2019) to 31
December 2025 was -13.0% and -34.9% (2024: +12.6% and -8.4%) respectively. The
Company's NAV total return¹ and share price total return¹ for the year to
31 December 2025 was -29.5% and -40.1% (2024: -8.2% and -8.6%) respectively.
On an annualised basis, the NAV total return¹ per Ordinary Share is -2.1%
(2024: +2.2%) since IPO.
The Chairman's Statement incorporates a review of the highlights during the
year. The Investment Adviser's Report highlights investments made and the
Company's performance during the year.
(ii) Maintenance of a Reasonable Level of Premium or Discount of Share Price
to NAV(1)
(35.6%) 2025
2024: (22.1%)
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 35.6% discount to the NAV as at 31 December 2025
(2024: 22.1% 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.
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)
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 2025, the
Company's ongoing charges figure was 1.2% (2024: 1.1%) calculated in
accordance with the Association of Investment Companies ("AIC") methodology.
(iv) To Meet its Target Total Dividend in each Financial Year (cents per
share)
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.
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 EuronextGrowth Dublin Exchange on 2 October 2023.
On 16 January 2026, the Company cancelled the listing of its ordinary shares
on Euronext Growth Dublin. The delisting does not affect the Company's listing
on the Official List of the Financial Conduct Authority trading on the Main
Market of the London Stock Exchange.
At the General Meeting held on 30 September 2024 Shareholders voted in favour
of a change in Investment policy in order to facilitate a managed wind-down.
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").
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 discharges 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 that 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 UK 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 UK 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.
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. 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 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. 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 it being presented to the Board. In addition to the
reports the Board receives 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 considers 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 that the Company has entered Managed Wind-Down and the Company is
reducing its debt.
Liquidity Considerations
Additionally at its quarterly meetings, the Board considers the liquidity of
the Company and the HoldCo. As at 31 December 2025, the Company and the HoldCo
had EUR 50.0 million of liquidity consisting of EUR 47.2 million in cash on
hand. EUR 2.8 million of cash is held as collateral for guarantees issued to
support dismantling obligations of the Spanish SPVs.
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 the Company's website at
https://www.aquila-european-renewables.com.
Key Decisions made During the Year
Decisions Relating to the Company's Portfolio of Assets
On 28 July 2025, the Company announced the completion of the sale of its 18%
interest in the Portuguese hydropower asset referred to as Sagres for a cash
consideration of EUR 14.7 million.
On 15 December 2025, the Company announced the completion of the sale of its
Danish assets (Holmen II and Svindbaek) and the Company is in receipt of sales
proceeds of EUR 36.6 million.
On 13 March 2026, the Company completed the sale of Desfina, its Greek wind
power investment, following receipt of regulatory and other customary
approvals for a total consideration of approximately EUR 26 million.
The Board continues to progress the divestment of the remainder of the
Company's portfolio in accordance with the Company's managed wind-down
investment policy.
Decisions Relating to the Managed Wind-Down Process
On 11 September 2025 the Company announced the cancellation of the amount
standing to the credit of its share premium account (the "Share Premium
Cancellation"), approved by Shareholders at the AGM of the Company held on
19 June 2025. Accordingly, the amount of EUR 255,642,627.68 previously held
in the share premium account of the Company has been cancelled and the
distributable reserves resulting from the Share Premium Cancellation can be
treated as profits available for distribution by the Company.
Following completion of the Sagres disposal in July 2025 for EUR 14.7 million
and the Holmen II and Svindbaek disposals for EUR 36.6 million in December
2025, the Board announced a first capital distribution to Shareholders under
the approved B Share Scheme totaling approximately EUR 34 million (the
"Initial Return of Capital"). The Initial Return of Capital represented
approximately 15% of the Company's Net Asset Value as at 30 September 2025.
Dividend
The cash generated by the Company's investments, available for upstreaming was
under significant pressure in the second half of 2025. This was due to
Olhava's lender prohibiting payments to Shareholders and challenging market
conditions in Spain and Portugal.
Now that the Company has entered Managed Wind-Down, the Board has 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.
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 mix of investments that benefit from government subsidies
Electricity Prices changes in the market price of electricity. as well as long-term fixed price PPAs. Following the sale of the Desfinas
investment on 13 March 2026 the Company no longer benefits from revenues based
While some of the revenues of the Company's investments benefit from fixed on government subsidies.
prices, they are also partly dependent on the wholesale market price of
electricity, which is volatile and is affected by a variety of factors, The Investment Adviser retains the services of market leading energy
including: consultants to assist with determining future power pricing for the respective
regions.
- market demand;
The underlying SPV companies may use derivative instruments such as futures,
- generation mix of power plants; options, futures contracts and swaps to protect from fluctuations in future
electricity prices.
- government support for various forms of power generation;
The Investment Adviser models and monitors power price curves on an ongoing
- fluctuations in the market price of commodities; and basis and will recommend appropriate action. In addition, the Investment
Adviser has a dedicated team which is responsible for the originating,
- foreign exchange. negotiating and executing of all PPAs.
There is a risk that the actual prices received vary significantly from the The Investment Adviser reviews the hedging strategy on an ongoing basis.
model assumptions, leading to a shortfall in anticipated revenues by the Should changes be required to the hedging strategy, these will be recommended
Company. 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 globally 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 9 offices in 8 countries,
Change in Political Sentiment the Company targets investment could lead to changes, reductions, caps or 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 by the counterparty or its subcontractors. Failure to properly operate and counterparty who is responsible for ensuring effective continuing operation
Risk 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/Ukraine conflict and wars in the security concept.
Middle East, have increased IT security concerns and threats being posed to
the Company and operating structure by hackers that may lead to loss of The Investment Adviser's in-house Asset Management team has reviewed the
information or even a cash loss. 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.
Risks Potential Impact/Description Mitigation
7. 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.
wildfires, heatwaves, pandemics, droughts and floods; or longer-term (chronic)
shifts in climate patterns, such as sustained higher temperatures with melting Insurance is usually in place in the event of acute climate risks such as
of glaciers and ice sheets causing sea-level rise, permafrost melting, chronic physical damage due to floods, or wildfires resulting in production losses.
heatwaves and desertification, extreme variability in precipitation, land
degradation and changes in air quality. Financial model forecasts are based on P50 production (the estimated annual
amount of electricity generation that has a 50% probability of being exceeded
Transitional risks are those that arise as economies move towards - both in any single year and over the long term - and a 50% probability of
less-polluting, greener solutions. These include externally imposed risks such being underachieved) data sourced from energy yield assessments provided by
as the effect of legal and regulatory requirements or policy changes, changes external service providers. The Company also mitigates the frequency of both
in societal demands, advances in technologies, market changes and the physical and transitional risks through extensive geographical diversification
consequent business decisions taken to respond to such changes. Transitional of its portfolio.
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.
8. As evidenced with the ongoing war in Ukraine, the various restrictions The Investment Adviser, using its extensive experience, constantly monitors
Global Conflict imposed, as well as the conflict in Gaza and the conflicts in the Middle East, geopolitical and macro-economic developments. Where required, it undertakes
acts of war and resulting sanctions can lead to O&M supply delays, external geopolitical and risk analysis.
volatile energy markets and general uncertainty.
The Company does not have any direct exposure to Ukraine, Russia, Israel, Gaza
This can also lead to short-term price increases and more focus on renewable or the Middle East. There are also no direct business relations with
energy infrastructure and increased competition for assets. counterparties from 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 monitor and inform the
administration. Board as soon as they are aware of any developments that may impact the
Company or its business.
Financial
Risks Potential Impact/Description Mitigation
9. 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 is 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 Company's private markets.
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.
10. 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. reviewed and 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.
11. 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 2025, 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 32.1% 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 on 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
12. 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 could be 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.
13. 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.
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 viability period (the 'Period').
Although the Company is in a Managed Wind-Down, the Board believes that the
Period, being 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 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 32.1% as at 31 December 2025 of the
Company's Gross Asset Value,comprised of non-recourse debt net of cash, at the
asset level of EUR 101.5 million. The Board recently decided to allow
Tesseract Holdings Limited's RCF to 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. As part of their analysis, the
Board was 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, the ongoing conflict involving Iran and broader
geopolitical tensions across the Middle East, 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 and Investment
Adviser's Report in the Annual Report.
The Board has 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 will 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 expect there will be a material increase in the expenses of
the Company over the Period in relation to Company's corporate finance and
legal advisers in order to execute the managed wind-down, both for the
disposal of the Company's investments and for B share scheme redemption.
Outlook
The outlook for the Company, including the future development and performance
of the Company, is discussed in the Chairman's Statement and the Investment
Adviser's Report.
Strategic Report
The Strategic Report was approved by the Board of Directors on 27 April 2026.
For and on behalf of the Board,
Robert Naylor
Chairman of the Board
27 April 2026
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
27 April 2026
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
For the year ended 31 December 2025 For the year ended 31 December 2024
Notes Revenue Capital Total Revenue Capital (EUR '000) Total
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
(EUR '000)
Losses on investments 4 - (101,224) (101,224) - (39,443) (39,443)
Net foreign exchange gains/(losses) - 13 13 - (29) (29)
Income 5 15,250 - 15,250 13,679 - 13,679
Investment Advisory fees 6 (1,929) - (1,929) (2,331) - (2,331)
Other expenses 7 (1,268) (5,300) (6,568) (1,615) - (1,615)
----------- ----------- ----------- ----------- ----------- -----------
Profit/(loss) on ordinary activities before finance costs and taxation 12,053 (106,511) (94,458) 9,733 (39,472) (29,739)
----------- ----------- ----------- ----------- ----------- -----------
Finance costs 8 (2) - (2) (2) - (2)
Profit/(loss) on ordinary activities before taxation 12,051 (106,511) (94,460) 9,731 (39,472) (29,741)
Taxation 9 - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
Profit/(loss) on ordinary activities after taxation 12,051 (106,511) (94,460) 9,731 (39,472) (29,741)
======= ======= ======= ======= ======= =======
Return per Ordinary Share - Diluted and Undiluted (cents) 10 3.19 (28.17) (24.98) 2.57 (10.44) (7.87)
======= ======= ======= ======= ======= =======
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.
Profit/(loss) on ordinary activities after taxation is also the "Total
comprehensive income for the year".
The notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
Notes As at 31 December 2025 (EUR '000) As at 31 December 2024 (EUR '000)
Non-current assets
Investments at fair value through profit or loss 4 208,676 320,432
Current assets
Trade and other receivables 11 54 29
Cash and cash equivalents 9,721 1,168
----------- -----------
Total current assets 9,775 1,197
----------- -----------
Total Assets 218,451 321,629
====== ======
Current liabilities
Trade and other payables 12 (4,118) (1,397)
----------- -----------
Total Liabilities (4,118) (1,397)
====== ======
Net assets 214,333 320,232
Capital and reserves: equity
Share capital 13 4,082 4,082
Share premium account - 255,643
Special reserve 14 327,749 75,087
Capital reserve (122,064) (15,553)
Revenue reserve 4,566 973
----------- -----------
Total Shareholders' funds 214,333 320,232
====== ======
Net assets per Ordinary Share (cents) 15 56.68 84.69
====== ======
The financial statements were approved by the Board of Directors on 27 April
2026 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 2025
Notes Share capital (EUR '000) Share premium account (EUR '000) Special reserve (EUR '000) Capital reserve (EUR '000) Revenue reserve (EUR '000) Total (EUR '000)
Opening equity as at 1 January 2025 4,082 255,643 75,087 (15,553) 973 320,232
Strategic review costs - - - - -
Profit/(loss) for the year - - - (106,511) 12,051 (94,460)
Share premium cancellation - (255,643) 255,643 - - -
Dividends paid 16 - - (2,981) - (8,458) (11,439)
----------- ----------- ----------- ----------- ----------- -----------
Closing equity as at 31 December 2025 4,082 - 327,749 (122,064) 4,566 214,333
====== ====== ====== ====== ====== ======
Notes Share capital (EUR '000) Share premium account (EUR '000) Special reserve (EUR '000) Capital reserve (EUR '000) Revenue reserve (EUR '000) Total (EUR '000)
Opening equity as at 1 January 2024 4,082 255,643 87,717 23,919 1,180 372,334
Strategic review costs - - (928) - - (928)
Profit/(loss) for the year - - - (39,472) 9,731 (29,741)
Share premium cancellation - - - - - -
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
====== ====== ====== ====== ====== ======
The notes are an integral part of these financial statements.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
Notes Year ended 31 December 2025 (EUR '000) Year ended 31 December 2024 (EUR '000)
Operating activities
Loss on ordinary activities before finance costs and taxation (94,458) (29,739)
Adjustment for:
Unrealised losses on investments 98,160 39,443
Finance costs paid 8 (2) (2)
Strategic review costs - (928)
(Increase)/decrease in trade and other receivables (25) 67
Increase/(decrease) in trade and other payables 2,721 (93)
----------- -----------
Net cash flow from operating activities 6,396 8,748
====== ======
Investing activities
Loan principal repayment received 4 13,596 12,528
----------- -----------
Net cash flow from investing activities 13,596 12,528
====== ======
Financing activities
Dividends paid 16 (11,439) (21,640)
----------- -----------
Net cash flow used in financing activities (11,439) (21,640)
----------- -----------
Increase/(decrease) in cash 8,553 (364)
----------- -----------
Cash and cash equivalents at start of year 1,168 1,532
----------- -----------
Cash and cash equivalents at end of year 9,721 1,168
====== ======
The notes are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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 have also been prepared as far as is relevant and
applicable to the Company in accordance with the Statement of Recommended
Practice with the latest applicable version for the financial year in question
issued by the AIC in July 2022. 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
2025 was 0.8724 (2024: 0.8267).
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 amended its investment policy to realise all existing assets
in the Company's portfolio in an orderly manner, thus continues to be
committed to generating returns from capital appreciation and in the meantime,
investment income with the renewable energy infrastructure investments
expected to generate renewable energy output over their life. The Directors
believe the Company is able to generate returns to the investors during the
Company's managed run off 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. 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 2025 valuation was 10.0% (2024:
7.3%). 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.
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.
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. 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%
(2024: 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 2025
A number of new standards and amendments to standards are effective for the
annual periods beginning after 1 January 2025. 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 as follows.
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:
• Foreign exchange differences currently aggregated in the line item
'Net foreign exchange gains/(losses)' 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.
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.
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 2025 As at 31 December 2024
(EUR '000) (EUR '000)
(a) Summary of valuation
Analysis of closing balance:
Investments held at fair value through profit or loss 208,676 320,432
------------ ------------
Total investments 208,676 320,432
======= =======
(b) Movements during the year
Opening balance of investments, at cost 335,887 348,415
Repayments during the year (13,596) (12,528)
------------ -----------
Cost of investments 322,291 335,887
======= =======
Revaluation of investments to fair value:
Unrealised movements in fair value of investments (113,615) (15,455)
Balance of capital reserve - investments held (113,615) (15,455)
Fair value of investments 208,676 320,432
Movement in unrealised revaluation of investments held (98,160) (39,443)
Losses on disposals (3,064) (39,443)
------------ -----------
Losses on investments (101,224) -
======= =======
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 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 that is significant to the
fair value measurement. Financial assets and financial liabilities are
classified in their entirety into only one of the following 3 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 2025 As at 31 December 2024
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 - - 208,676 208,676 - - 320,432 320,432
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
- - 208,676 208,676 - - 320,432 320,432
======= ======= ======= ======= ======= ======= ======= =======
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
period ended 31 December 2025 (31 December 2024: none).
The movement on the Level 3 unquoted investments during the year is shown
below:
Year ended 31 December 2025 (EUR '000) Year ended 31 December 2024 (EUR '000)
Opening balance 320,432 372,403
Repayments during the year (13,596) (12,528)
Unrealised losses on investments adjustments (98,160) (39,443)
------------ ------------
Closing balance 208,676 320,432
======= =======
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 2025 and the Directors are satisfied
with the methodology, the discount rates and key assumptions applied, and the
valuations.
All SPV investments are 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 2025
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 both asset classes (wind and solar PV) remains unchanged
using a blend of two power price curve providers. One of the power price curve
providers was replaced following a review by the Investment Adviser due to
inconsistencies and differences in key long-term assumptions over the recent
forecast periods.
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. In individual cases, a longer operating life is
assumed where the contractual arrangement (i.e. O&M agreement with
availability guarantee) supports such an assumption.
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 changes in key assumptions adopted
to arrive at the SPV valuation.
In light of the uncertainty over the direction of power prices as a result of
continue global unrest and disruption in commodity markets, and the impact on
ongoing curtailments driven by factors such as changing subsidy regimes (as
referenced in the notes to the accounts under Post Balance Sheet Events), the
spread of values for the key assumptions below indicate that there is a wider
range of reasonable inputs that could be used in generating a fair value of
the investment at 31 December 2025.
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 NAV per share impacts from each sensitivity is shown below.
(i) Discount Rates
The weighted average valuation discount rate applied to calculate the SPV
valuation is 10.0% at 31 December 2025 (31 December 2024: 7.3%). Discount
rates are inherently judgemental, and as seen in the movement within the year,
there is a wide range of discount rates that could reflect a reasonable
estimate of fair value at 31 December 2025. An increase or decrease in this
rate by 2.0% at project level has the following effect on valuation.
Negative impact Positive impact
Discount rate NAV per share impact in NAV Impact (EUR '000) Total NAV value (EUR '000) NAV Impact (EUR '000) NAV per share impact in
(EUR cents)
(EUR cents)
Valuation as of 31 December 2025 (+/-2%) (6.3) 190,549 214,334 247,209 8.7
======= ======= ======= ======= =======
(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.
A change in the forecast electricity price assumptions by plus or minus 10%
has the following effect on valuation, as shown below:
-10% Change +10% Change
Power price NAV per share impact NAV Impact (EUR '000) Total NAV value (EUR '000) NAV Impact (EUR '000) NAV per share impact in
(EUR cents)
(EUR cents)
Valuation as of 31 December 2025 (6.4) 190,241 214,334 237,370 6.1
======= ======= ======= ======= =======
(iii) Energy Yield
The base case assumes a "P50" level of output. The P50 output is the estimated
annual amount of electricity generation (in MWh) 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 10 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 10 year period. This means that the SPV aggregate production
outcome for any given 10 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 10 years.
Technical curtailment assumptions have been incorporated into the valuation
process on a project-specific basis. For the available nodes, forecasts have
been sourced from third-party advisors; for uncovered nodes, assumptions have
been developed by the internal power markets team. Curtailments driven by low
or negative prices (market or economic curtailment) are excluded, as their
impact is already reflected in the forecast power prices provided by market
advisors.
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 share impact P90 10 years (EUR '000) Total NAV value (EUR '000) P10 10 years (EUR '000) NAV per share impact in
(EUR cents)
(EUR cents)
Valuation as of 31 December 2025 (4.9) 195,958 214,334 231,971 4.7
======= ======= ======= ======= =======
(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 share impact -0.5% Total NAV value (EUR '000) +0.5% NAV per share impact in
(EUR cents)
(EUR '000)
(EUR '000)
(EUR cents)
Valuation as of 31 December 2025 (2.1) 206,469 214,334 222,427 2.1
======= ======= ======= ======= =======
(v) Asset Life
In general, an operating life of 25 years for onshore wind and 40 years for
Solar PV is assumed. In individual cases a longer operating life is assumed
where the contractual set-up (i.e. O&M agreement with availability
guarantee) supports such an assumption.
The sensitivity below shows the valuation impact from a one year adjustment to
the asset life across the portfolio.
Asset life NAV per share impact -1 year Total NAV value (EUR '000) +1 year NAV per share impact in
(EUR cents)
(EUR '000)
(EUR '000)
(EUR cents)
Valuation as of 31 December 2025 (0.4) 212,959 214,334 215,633 0.3
======= ======= ======= ======= =======
(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.
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 share impact -10.0% Total NAV value (EUR '000) +10.0% NAV per share impact in
(EUR cents)
(EUR '000)
(EUR '000)
(EUR cents)
Valuation as of 31 December 2025 (2.9) 203,359 214,334 225,113 2.9
======= ======= ======= ======= =======
5. Income
Income from investments For the year ended 31 December 2025 (EUR '000) For the year ended 31 December 2024
(EUR '000)
Interest income from Shareholder loans 15,186 13,647
Bank and deposit interest income 45 18
Other income 19 14
------------ ------------
Total Income 15,250 13,679
======= =======
6. Investment Advisory Fees
For the year ended 31 December 2025 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)
Investment advisory fees 1,929 - 1,929 2,331 - 2,331
======= ======= ======= ======= ======= =======
Under the Investment Advisory Agreement, the following fee is payable to the
Investment Adviser:
0.75% per annum of NAV (plus VAT) of the Company up to €300 million;
0.65% per annum of NAV (plus VAT) of the Company between €300 million and
€500 million; and
0.55% per annum of NAV (plus VAT) of the Company above €500 million.
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.
7. Other Expenses
For the year ended 31 December 2025 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)
Expenses charged to revenue:
AIC fees and other regulatory fees 25 - 25 33 - 33
AIFM fees 135 - 135 149 - 149
Auditor's fees:
- statutory audit of the Company(1,2) 475 - 475 341 - 341
- statutory audit of Holdco(2) 29 - 29 27 - 27
Broker retainer 85 - 85 57 - 57
Directors' fees 185 - 185 192 - 192
Directors' other employment costs 55 - 55 66 - 66
FCA and listing fees 40 - 40 115 - 115
Legal fees 1 - 1 190 - 190
Marketing fees 67 - 67 116 - 116
Registrar's fees 19 - 19 29 - 29
Secretary and administrator fees 181 - 181 198 - 198
Tax compliance 25 - 25 21 - 21
Sundry expenses(3) (54) - (54) 81 - 81
------------ ------------ ------------ ------------ ------------ ------------
Total revenue expenses 1,268 - 1,268 1,615 - 1,615
======= ======= ======= ======= ======= =======
Expenses charged to capital:
Managed Wind-Down costs - 5,300 5,300 - - -
------------ ------------ ------------ ------------ ------------ ------------
Total Other expenses 1,268 5,300 6,568 1,615 - 1,615
======= ======= ======= ======= ======= =======
1. There are no non-audit services in relation to the current year or
prior year.
2. Fees payable for the audit of Holdco are borne by the Company. The
GBP equivalent of the statutory audit fees was GBP 402,120 (2024: GBP 304,025)
including VAT of GBP 67,020 (2024: GBP 50,671). For the year to 31 December
2025, the statutory audit fees payable to the Company's auditors for the audit
of the Company and Holdco were £285,500 (2024: £326,600) excluding VAT.
Included in the above audit fees are overruns relating to the previous year's
audit.
3. Sundry expenses include printing fee, publication fee, subscription
costs, website fee, other miscellaneous expenses and prior year over accrual
of intercompany payable written off.
Other operating expenses have been analysed and presented by nature.
8. Finance Costs
For the year ended 31 December 2025 For the year ended 31 December 2024
Revenue (EUR '000) Capital (EUR '000) Total (EUR '000) Revenue (EUR '000) Capital (EUR '000) Total (EUR '000)
Bank charges 2 - 2 2 - 2
------------ ------------ ------------ ------------ ------------ ------------
Total 2 - 2 2 - 2
======= ======= ======= ======= ======= =======
9. Taxation
(a) Analysis of Tax Charge in the Year
For the year ended 31 December 2025 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)
Corporation tax - - - - - -
------------ ------------ ------------ ------------ ------------ ------------
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% (2024: 25.0%). 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 2025 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)
Profit/(loss) on ordinary activities before taxation 12,051 (106,511) (94,460) 9,731 (39,472) (29,741)
Corporation tax at 25.0% (2024: 25.0%) 3,013 (26,628) (23,615) 2,433 (9,868) (7,435)
Effects of:
(Gains)/losses on investments held at fair value not (taxable)/allowable - 25,306 25,306 - 9,861 9,861
Foreign exchange (gains)/losses not (taxable)/allowable - (3) (3) 7 7
Expenditure not deductable for tax purposes - 1,325 1,325 48 - 48
Movement in management expenses that no deferred tax asset is recognised on (336) - (336) 18 - 18
Impact of tax deductible interest distributions (2,677) - (2,677) (2,499) - (2,499)
------------ ------------ ------------ ------------ ------------ ------------
Total tax charge for the year - - - - - -
======= ======= ======= ======= ======= =======
Investment companies which have been approved by the 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 no unrelieved excess management expenses for the year ended 31
December 2025 (2024: EUR 1,345,619). 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% (2024: 25%) amounts to
EUR Nil (2024: EUR 336,405).
10. Return per Ordinary Share
For the year ended 31 December 2025 For the year ended 31 December 2024
Revenue return after taxation (EUR '000) 12,051 9,731
Capital return after taxation (EUR '000) (106,511) (39,472)
Total net return (EUR '000) (94,460) (29,741)
Weighted average number of Ordinary Shares 378,122,130 378,122,130
======= =======
11. Trade and Other Receivables
As at 31 December 2025 (EUR '000) As at 31 December 2024 (EUR '000)
Interest due from deposits 3 -
Prepaid expenses 51 29
------------- --------------
Total 54 29
======= =======
12. Trade and Other Payables
As at 31 December 2025 (EUR '000) As at 31 December 2024 (EUR '000)
Accrued expenses 4,118 1,290
Deferred consideration payable - 107
------------- --------------
Total 4,118 1,397
======= =======
13. Share Capital
As at 31 December 2025 As at 31 December 2024
No. of Ordinary Shares No. of Treasury Shares Total no. of Shares in issue (EUR '000) No. of Ordinary Shares No. of Treasury Shares Total no. of Shares in issue (EUR '000)
Allotted, issued and fully paid:
Redeemable Ordinary Shares of 1 cent 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
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 Ordinary Shares issued or buybacks during the year to 31
December 2025 (2024: none).
At the year end, the Company's issued share capital comprised 408,225,705
Ordinary Shares (2024: 408,225,705), of which 30,103,575 Ordinary Shares were
held in Treasury and there were 378,122,130 Ordinary Shares in circulation.
Each Ordinary Share held entitles the holder to one vote. All Ordinary Shares
carry equal voting rights and there are no restrictions on those voting
rights. Voting deadlines are stated in the Notice of Meeting and Form of Proxy
and are in accordance with the Companies Act 2006.
14. Special Distributable 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 a special distributable reserve was EUR 149,675,608.
On 11 September 2025, the Company announced the cancellation of the amount
standing to the credit of its share premium account (the "Share Premium
Cancellation"), approved by shareholders at the AGM of the Company held on 19
June 2025. Accordingly, the amount of EUR 255,642,627.68 previously held in
the share premium account of the Company was cancelled and the distributable
reserves resulting from the Share Premium Cancellation have been treated as
profits available for distribution by the Company.
As at 31 December 2025, the balance of Special Distributable Reserve was EUR
327,749,000 (2024: EUR 75,087,000).
15. Net Assets per Ordinary Share
Net assets per Ordinary Share as at 31 December 2025, is based on EUR
214,333,000 (31 December 2024: EUR 320,231,508) of net assets of the Company
attributable to the 378,122,130 (31 December 2024: 378,122,130) Ordinary
Shares in issue as at 31 December 2025.
16. Dividend
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 2025
31 December 2024
Total dividends paid in the year Cents per Ordinary Share Total Cents per Ordinary Share Total
(EUR '000)
(EUR '000)
31 December 2024 interim - Paid 18 March 2025 (2024: 18 March 2024) 0.7900c 2,981 1.3775c 5,211
31 March 2025 interim - Paid 13 June 2025 (2024: 14 June 2024 ) 0.7900c 2,988 1.4475c 5,479
30 June 2025 interim - Paid 5 September 2025 (2024: 6 September 2024) 0.7934c 3,007 1.4475c 5,475
30 September 2025 interim - Paid 12 December 2025 (2024: 9 December 2024) 0.6500c 2,463 1.4475c 5,475
------------- ------------- ------------- -------------
Total 3.0234c 11,439 5.7200c 21,640
======== ======== ======== ========
The dividend relating to the year ended 31 December 2025, 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 2025
31 December 2024
Total dividends declared in the year Cents per Ordinary Share Total Cents per Ordinary Share Total
(EUR '000)
(EUR '000)
31 March 2025 interim - Paid 13 June 2025 (2024: 14 June 2024 ) 0.7900c 2,988 1.4475c 5,479
30 June 2025 interim - Paid 5 September 2025 (2024: 6 September 2024) 0.7934c 3,007 1.4475c 5,475
30 September 2025 interim - Paid 12 December 2025 (2024: 9 December 2024) 0.6500c 2,463 1.4475c 5,475
31 December 2025 interim - No dividend paid (2024: 18 March 2025) -(1) -(1) 0.7900c 2,987
------------- ------------- ------------- -------------
Total 2.2334c 8,458 5.1325c 19,416
======== ======== ======== ========
(1) In order to retain Investment Trust status it may be necessary to declare
and pay an additional dividend in respect of 2025 earnings of approximately
EUR 1.3 million. The Company as at the date of signing these accounts has
sufficient cash to make such a payment.
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
foreign currency risk, interest rate risk and price 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 2025 are summarised below:
Assets Interest bearing (EUR '000) Non-interest bearing Total
(EUR '000)
(EUR '000)
Cash and cash equivalents 18 9,703 9,721
Trade and other receivables - 54 54
Investments at fair value through profit or loss 207,764 912 208,676
-------------- -------------- --------------
Total assets 207,782 10,669 218,451
======== ======== ========
Liabilities
Trade and other payables - (4,118) (4,118)
-------------- -------------- --------------
Total liabilities - (4,118) (4,118)
======== ======== ========
The Company's interest and non-interest bearing assets and liabilities as at
31 December 2024 are summarised below:
Assets Interest bearing (EUR '000) Non-interest bearing Total
(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
Trade and other payables - (1,397) (1,397)
-------------- -------------- --------------
Total liabilities - (1,397) (1,397)
======== ======== ========
(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 2025, the Company held
investments with an aggregate fair value of EUR 208,500,000 (2024: EUR
320,432,000). All other things being equal, the effect of a 10% increase or
decrease in the valuation of the investments held at the year end would have
been an increase or decrease of EUR 20,850,000 (2024: EUR 32,043,200) in the
loss after taxation for the year ended 31 December 2025 and the Company's net
assets at 31 December 2025. 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 31 December 2025 (EUR '000) As at 31 December 2024 (EUR '000)
Trade and other receivables 54 29
Cash and cash equivalents 9,721 1,168
-------------- --------------
Total 9,775 1,196
======== ========
The table below shows the cash balances of the Company and the credit rating
for each counterparty:
S&P Rating Fitch Rating As at 31 December 2025 (EUR '000) As at 31 December 2024 (EUR '000)
Royal Bank of Scotland BBB/A-2 AA-/F1+ 425 132
EFG International AG - Daily liquidity fund N/a A 9,278 1,032
Royal Bank of Scotland International BBB/A-2 AA-/F1+ 18 4
-------------- --------------
Total 9,721 1,168
======== ========
(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 2025 are shown below. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Liabilities Less than 1 year (EUR '000) 1-5 years 5+ years Total
(EUR '000)
(EUR '000)
(EUR '000)
Trade and other payables (4,118) - - (4,118)
-------------- -------------- -------------- --------------
Total (4,118) - - (4,118)
======== ======== ======== ========
Financial liabilities by maturity as at 31 December 2024 are shown below. The
amounts disclosed in the table are the contractual undiscounted cash flows.
Liabilities Less than 1 year (EUR '000) 1-5 years 5+ years Total
(EUR '000)
(EUR '000)
(EUR '000)
Trade and other payables (1,397) - - (1,397)
-------------- -------------- -------------- --------------
Total (1,397) - - (1,397)
======== ======== ======== ========
(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
214,333,000 (2024: EUR 320,232,000).
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 2025 amount to EUR 135,000 (2024: EUR
149,000). As at 31 December 2025, the fee outstanding to the AIFM was EUR nil
(2024: EUR 26,000). The AIFM, Company Secretary and Administrator are part of
Apex Group.
The Company Secretary and Administrator fees for the year ended 31 December
2025 amount to EUR 181,000 (2024: EUR 198,000) and the total fees paid to Apex
Group amount to EUR 316,000 (2024: EUR 347,000).
Fees payable to the Investment Adviser are shown in the Statement of
Comprehensive Income. As at 31 December 2025, the fee outstanding to the
Investment Adviser was EUR 405,000 (2024: EUR 600,269).
During the year, the Company received repayments of its Shareholder loans to
HoldCo of EUR 13,596,000 (2024: EUR 12,528,000). The Shareholder loans,
including accrued interest outstanding at year end were EUR 207,764,000 (2024:
EUR 221,360,000).
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
135,450 to the other Directors. Directors' fees paid during the year were EUR
263,970 (2024: EUR 262,950).
On 28 July 2025, the Company announced the completion of the sale of its 18%
interest in the Portuguese hydropower asset referred to as Sagres for a cash
consideration of EUR 14.7 million. On 15 December 2025, the Company announced
that the sale of the Danish wind assets (Holmen II and Svindbaek) had
completed and that the Company is in receipt of sales proceeds of EUR 36.6
million. These sales were made to funds managed and/or advised by the
Investment Adviser.
For the year ended 31 December 2025 (EUR) For the year ended 31 December 2024 (EUR)
Ian Nolan(1) 69,480 75,000
Robert Naylor(2) 6,540 n/a
David MacLellan 52,500 52,500
Kenneth MacRitchie 45,150 45,150
Patricia Rodrigues(3) 45,150 45,150
Myrtle Dawes 45,150 45,150
======== ========
1. Resigned on 27 November 2025.
2. Appointed on 28 November 2025.
3. Resigned on 31 December 2025.
The Directors had the following shareholdings in the Company, all of which
were beneficially owned.
Ordinary Shares At 31 December 2025 Ordinary Shares At 31 December 2024
Ian Nolan(1) 150,000 150,000
Robert Naylor(2) 5,110,000 n/a
David MacLellan 125,000 125,000
Kenneth MacRitchie 50,000 50,000
Patricia Rodrigues 50,000 50,000
Myrtle Dawes Nil Nil
======== ========
1. The holdings are shown as at the date of resignation on 27 November 2025.
2. Ordinary Shares held indirectly through Achilles Investment Company
Limited.
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 4,566,000 as at 31 December
2025 (2024: EUR 973,000).
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 Name and registered address Effective ownership % Investment Country of incorporation Profit/(loss) for the year ended 31 December 2025 (EUR million) Profit/(loss) for the year ended 31 December 2024 (EUR million) Total assets balances as at 31 December 2025 (EUR million) Total assets balances as at 31 December 2024 (EUR million)
Tesseract Holdings Limited Leaf B, 20th Floor, Tower 42, Old Broad Street 100.0 HoldCo subsidiary entity, owns underlying SPV investments United Kingdom (98.2) (39.4) 208.7 320.8
London EC2N 1HQ
======== ======== ======== ======== ========
The following table shows the investments held via SPVs which are held by
Tesseract Holdings Limited, the Company's wholly owned subsidiary.
Subsidiary entity Name and registered address Effective ownership % Investment Country of incorporation Profit/(loss) for the year ended 31 December 2025 (EUR million) Profit/(loss) for the year ended 31 December 2024 (EUR million) Total assets balances as at 31 December 2025 (EUR million) Total assets balances as at 31 December 2024 (EUR million)
Aalto Wind No 2 Ltd. Oy c/o Intertrust (Finland) Oy Bulevardi 1, 6th floor 100.0 Subsidiary entity, owns investment in Olhava Finland 0.9 0.9 36.7 41.6
FI-00100 Helsinki, Finland
Prettysource Lda 100.0 Subsidiary entity, owns investment in Benfica III Portugal (0.2) (0.1) 4.1 4.1
Avenida Fontes Pereira de Melo, n.º 14
11.º floor, 1050 121 Lisbon
Astros Irreverentes Unipessoal Lda 100.0 Subsidiary entity, owns investment in Benfica III Portugal (0.2) (0.1) 4.1 4.1
Avenida Fontes Pereira de Melo, n.º 14
11.º floor, 1050 121 Lisbon
Contrate o Sol Unipessoal Lda 100.0 Subsidiary entity, owns investment in Benfica III Portugal (0.1) 0.1 2.0 1.9
Rua Filipe Folque
no. 10J, 2 Dto, 1050-113
Lisbon
Argeo Solar S.L. 100.0 Subsidiary entity, owns investment in Albeniz Spain (4.0) (2.7) 34.5 36.1
Paseo de la Castellana
259D, 14S-15, Madrid
Spain
Vector Aioliki Desfinas S.A. 89.0 Subsidiary entity, owns equity investment in Desfina Greece 1.4 3.1 48.3 50.6
Salaminos Str. 20
15124 Maroussi
Attica, Greece
Ega Suria S.L. 100.0 Subsidiary entity, owns investment in Tiza Spain (0.1) (0.2) 28.9 31.0
Paseo de la Castellana 259D
Floors 14 and 15
28046 Madrid
Azalent Investment SL 100.0 Subsidiary entity, owns investment in Greco Spain 0.1 (0.4) 72.5 77.9
Paseo de la Castellana 259D
Floors 14 and 15
28046 Madrid
======== ======== ======== ======== ========
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 Name and registered address Effective ownership % Investment Country of incorporation Profit/(loss) for the year ended 31 December 2025 (EUR million) Profit/(loss) for the year ended 31 December 2024 (EUR million) Total assets balances as at 31 December 2025 (EUR million) Total assets balances as at 31 December 2024 (EUR million)
Palea Solar Farm Ourique S.A. Avenida Fontes Pereira de Melo, no. 14, 11. 50.0 Joint venture entity, owns equity investment in Ourique Portugal (3.0) (0.9) 39.9 42.1
Andar 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
B Share Scheme First Distribution
On 13 January 2026, the Company announced its B Share Scheme First
Distribution. The B Shares of one cent each has been paid up from the
Company's special distributable reserve and issued to all Shareholders by way
of a bonus issue on the basis of 9 B Shares for every one Ordinary Share held
at the Record Date of 21 January 2026. The Ex-Date was 20 January 2026. The B
Shares was issued on 23 January 2026 and immediately redeemed at one cent per
B Share.
B Share Scheme Second Distribution
On 13 March 2026, the Company announced its B Share Scheme Second
Distribution. The B Shares of one cent each has been paid up from the
Company's special distributable reserve and issued to all Shareholders by way
of a bonus issue on the basis of 54 B Shares for every 10 Ordinary Share held
at the Record Date of 24 March 2026. The Ex-Date was 23 March 2026. The B
Shares was issued on 26 March 2026 immediately redeemed at one cent per B
Share.
Update on disposal of Greek wind asset
On 13 March 2026, the Company completed the sale of its Greek asset, Desfina,
for a total consideration of approximately €26 million, following receipt of
regulatory and other customary approvals in February 2026.
Geopolitical events
Uncertainty over the direction of power prices as a result of continue global
unrest, disruption in commodity markets, and the impact on ongoing
curtailments driven by factors such as changing subsidy regimes continues to
influence corporate strategies and financial markets. These challenges are
further compounded by growing geopolitical tensions, particularly the ongoing
war in Ukraine, the Israel-Hamas conflict in the Middle East and the conflict
in Iran.
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
judgements about the economic and financial market conditions that may evolve
over time.
Update on 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. The Board has
undertaken an extensive sale process and, as a result of being in a managed
wind-down, notes the disparity between indicative pricing received and the
Company's NAV. Accordingly, the Board notes that there are a range of prices
at which future sales could occur, and so disposals may not be achieved at
NAV.
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 less than
the Net Asset Value per Ordinary Share.
As at 31 December 2025 As at 31 December 2024
NAV per Ordinary Share (cents) a 56.7 84.7
Share price (cents) b 36.5 66.0
Discount (b÷a)-1 35.6% 22.1%
======== ========
Gearing
The Company's gearing is calculated as total debt as a percentage of the gross
asset value.
As at 31 December 2025 As at 31 December 2024
Gross asset value (EUR '000) a 315,850 472,219
Net Debt at the SPV level (EUR '000) b 101,517 151,988
Gearing ratio (b÷a) 32.1% 32.2%
======== ========
Gross Asset Value
The Company's gross assets comprise the net asset values of the Company's
Ordinary Shares, the Net Debt and net of cash at the underlying SPV level,
with the breakdown as follows.
As at 31 December 2025 As at 31 December 2024
Net Asset Value (EUR '000) a 214,333 320,232
Debt at the SPV level (EUR '000) b 101,517 151,988
-------------- --------------
Gross asset value (EUR '000) a+b 315,850 472,219
======== ========
Ongoing Charges
A measure, expressed as a percentage of average net assets, of the regular,
recurring annual costs of running an investment company.
Year ended 31 December 2025 Year ended 31 December 2024
Average NAV (EUR '000) a 258,162 337,705
Annualised expenses (EUR '000) b 3,103 3,548
Ongoing charges (b÷a) 1.2% 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.
Year ended 31 December 2025 Share price NAV
Opening at 1 January 2025 (cents) a 66.0 84.7
Dividend adjustment (cents) b 3.0234 3.0234
Closing at 31 December 2025 (cents) c 36.5 56.7
Total return ((c+b)÷a)-1 -40.1% -29.5%
======== ========
Year ended 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%
======== ========
Year ended 31 December 2025 Share price NAV
Opening at IPO a 100.0 98.0
Dividend adjustments (cents) b 28.6 28.6
Closing at 31 December 2025 (cents) c 36.5 56.7
Total return since IPO ((c+b)÷a)-1 -34.9% -13.0%
======== ========
Year ended 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%
======== ========
n/a = not applicable.
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 1:00 p.m. on 17 June
2026 at the
offices of Harwood Capital Management Ltd 6 Stratton St, London W1J 8LD.
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 2025 will be filed with the Registrar of Companies.
The figures shown above for the year to 31 December 2024 was derived from the
2024 statutory accounts which was approved on 24 April 2024 and delivered to
the Registrar of Companies. The auditors reported on the 2024 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 2025 was approved on 27 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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