Final Results

LEI: 2138004JUQUL9VKQWD21

14 April 2023

Ecofin U.S. Renewables Infrastructure Trust PLC

Annual Financial Report for the year ended 31 December 2022

Ecofin U.S. Renewables Infrastructure Trust plc ("RNEW" or the "Company") is pleased to announce its audited results for the year ended 31 December 2022 ("Year").

Objective

The Company's investment objective is to provide Shareholders with an attractive level of current distributions by investing in a diversified portfolio of mixed renewable energy and sustainable infrastructure assets predominantly located in the U.S. with prospects for modest capital appreciation over the long term.

Highlights

Financial

Figures reported either as at the referenced date or over the year ended 31 December 2022. All references to cents and dollars ($) are to the currency of the U.S., unless stated otherwise.

1. 31 December 2022 exchange rate of £0.8273 = $1.00

2. RNEW & RNEP LSE closing price as at 31 December 2022

3. Calculated based on Gross Asset Value ("GAV") and aggregate debt. Additional information can be found in the financing section of the Investment Manager's Report in the Annual Financial Report.

4. These are alternative performance measures. ("APMs"). Definitions of how these APMs and other performance measures used by the Company have been calculated can be found in the Annual Financial Report.

5. Includes all construction-stage and committed assets.

6. Represents the Company's share of portfolio generating capacity (including assets under construction).

7. CO2e based on the Company's proportionate ownership interest in the assets. CO2e calculations are derived using the U.S. Environmental Protection Agency's ("EPA") Emissions & Generation Resources Integrated Database.

Portfolio

1. Capacity reflects RNEW's proportionate ownership interest in the assets.

2. Cash equity ownership.

3. Membership Interest Purchase Agreement ("MIPA") for remainder of Echo Solar Portfolio (VA/DE) comprising five projects was terminated in December 2022 and an 18-month Right of First Offer agreement was executed for these five projects that were not closed and are not included in the table above.

4. Average remaining revenue contract term (years).

Our Business Model

Investment Objective

The Company's investment objective is to provide Shareholders with an attractive level of current distributions by investing in a diversified portfolio of Renewable Assets predominantly located in the U.S. with prospects for modest capital appreciation over the long term.

Structure

The Company's business model follows that of an externally managed investment trust. As such, the Company does not have any employees and outsources its activities to third party service providers, including the Investment Manager and Administrator who are the principal service providers.

The Company makes its investments through a wholly-owned U.S. holding company, RNEW Holdco LLC ("Holdco"), other intermediate holding companies and underlying special purpose vehicles ("SPVs", organised as U.S. limited liability companies or LLCs) that hold the Renewable Assets. The Company has the ability to use short and long-term debt at the Company, Holdco and SPV levels subject to limits defined in its gearing policy. On 19 October 2021, the Company, through a wholly-owned U.S. subsidiary, RNEW Capital, LLC, entered into a $65 million secured Revolving Credit Facility ("RCF") with KeyBank, one of the premier lenders to the U.S. renewable energy industry. The RCF comprises a $50 million, two-year tranche priced at London Interbank Offered Rate ("LIBOR") plus 1.75% and a $15 million, three-year tranche priced at LIBOR plus 2.00%. The RCF also includes an accordion option for an additional $20 million of capital which can be accessed subject to certain conditions. The RCF has been structured to provide RNEW with operational flexibility and liquidity to advance its pipeline and continue to grow. As a result of active discussions with KeyBank, it is anticipated that the RCF will be renewed or extended on substantially similar terms in second half of 2023, at which time the Secured Overnight Financing Rate ("SOFR") will replace LIBOR. Additionally, through the Company's acquisition of a 49.5% stake in the Beacon 2 and 5 operating solar assets, it assumed its share of non-recourse amortising project term loans secured on those projects that totalled $45.8 million as at 31 December 2022.

Management of the Company

The Company has an independent board of four non-executive Directors (details of whom can be found in the Directors' Experience and Contribution section of the Corporate Governance Statement). The Board's role is to manage the governance of the Company in the interests of Shareholders and other stakeholders. In particular, the Board monitors adherence to the Investment Policy and gearing policy limits, determines the risk appetite, sets Company policies and monitors the performance of the Investment Manager and other key service providers. The Board meets a minimum of four times a year for regular Board meetings, with additional ad hoc meetings taking place dependent upon the requirements of the business. The Board reviews the performance of all key service providers on an annual basis through its Management Engagement Committee.

The Company has appointed Ecofin as its AIFM and Investment Manager to provide portfolio and risk management services to the Company. The Board takes advice from the Investment Manager on matters concerning the market, the portfolio and new investment opportunities. Day-to-day management of the Company's portfolio is delegated to the Investment Manager, with investment decisions in line with the Company's Investment Policy delegated to an Investment Committee consisting of senior members of the Investment Manager. Further information on the Investment Manager is provided in the Investment Manager's Report.

As an investment trust, the Company does not have any employees and is reliant on third party service providers for its operational requirements. Likewise, the SPVs which hold the portfolio assets do not have any employees and services are provided through third party providers. The Board has delegated administration, fund accounting and company secretarial services to Apex Listed Companies Services (UK) Limited (formerly Sanne Fund Services (UK) Limited). Each service provider has an established track record and has in place suitable policies and procedures to ensure it maintains high standards of business conduct and corporate governance.

Investment Manager

· Manages the portfolio of Renewable Assets to achieve the Company's Investment Objective

· Sources, evaluates and implements the pipeline of new investments

· Monitors financial performance against Company targets and forecasts

· Advises the Board on investment strategy and portfolio composition to achieve the desired target returns within the agreed risk appetite

· Manages the process and analysis for semi-annual valuations (March/September) and coordinates the process with the independent valuer (June/December)

· Ensures good financial and cash management of the Company and its assets having regard to accounting, tax and debt usage and covenants

· Manages the Company's investor reporting and investor relations activities

Chair's Statement

Introduction

On behalf of the Board, I am pleased to present the annual report for Ecofin U.S. Renewables Infrastructure Trust PLC for the year ended 31 December 2022 ("Annual Report").

The Company has made sound progress during the Year:

· In May, the Company raised $13.1 million in new equity (before costs) at a share price of 101.5 cents per share through a placing and retail offer. The net proceeds were deployed into new investments and used to pay down debt drawn on the Company's RCF;

· In June, the Company closed on the acquisition of two ground-mounted solar projects at the construction stage in Virginia ("VA") totalling 6.9MWdc, forming part of the Echo Solar Portfolio;

· In August, the Company closed on three further ground-mounted solar projects at the construction stage in VA and Delaware ("DE") totalling 15.3MWdc, which also form part of the Echo Solar Portfolio;

· In October, the Company successfully entered into a $17.7 million tax equity commitment which will be used to fund the Echo Solar Portfolio; and

· In December, two of the projects in the Echo Solar portfolio came into commercial operation following construction. The remaining four projects in this sub-portfolio currently under construction are expected to reach commercial operation in Q2 2023.

Investment Manager

On 24 October 2022, the Company announced that the Investment Manager had appointed Eileen Fargis as group lead and portfolio manager for RNEW. Eileen has over 20 years' industry experience, most recently as Head of Investments for InterEnergy Holdings (UK) Limited, an independent developer, owner and operator of 2.1GW of energy generation assets and a utility in the Caribbean and Latin America. Eileen is also the former Co-Head of the $1 billion International Finance Corporation ("IFC") African, Latin American and Caribbean Fund LP, a private equity fund investing on behalf of IFC.

The appointment of Eileen followed the resignations in July, of portfolio managers Jerry Polacek, Matthew Ordway and Prashanth Prakash, who decided to leave their roles at Ecofin in order to pursue a new venture. The Board was very disappointed by these resignations, particularly as the short notice periods in the U.S. meant that there was no opportunity to effect an immediate hand-over to a new team.

Following the resignations, the Board asked Ecofin to concentrate on two priorities: recruitment of a new leadership team and portfolio management.

The Board welcomed Eileen's appointment and believes she and the wider Ecofin team have the ability and credentials to keep growing RNEW's asset base and to deliver value on behalf of Shareholders. Since joining, Eileen has spent a significant part of her time visiting a number of RNEW's assets and meeting investors and analysts.

The Board has engaged regularly with the wider Ecofin team to ensure continued focus on portfolio management.

Portfolio management

As at 31 December 2022, RNEW continued to benefit from a high-quality portfolio of 65 solar and wind assets with a combined capacity of 177MW across eight states: California, Connecticut, DE, Massachusetts, Minnesota, New Jersey, Texas and VA.

The assets all benefit from long term contracted revenues with investment grade quality off-takers and an overall weighted average remaining contract term of 14.6 years. Entering into long-term contracts means that revenue streams from RNEW's investments are insulated from short term volatility in power and/or gas prices (the latter tending to drive power prices in most U.S. power markets) and are therefore that much more predictable and reliable.

As at 31 December 2022, 61 assets were in operation and four assets were under construction, with operating assets making up 89% of the portfolio valuation. Total generation during the year was 335 GWh (2021: 169 GWh), 5.5% below budget. Overall, output from solar assets was 3.7% below budget while our wind asset delivered output 7.0% below budget. This was due to a combination of circumstances including construction delays, inverter outages, and the impact of storms in late 2022. This is described further in the Portfolio Production Update section of the Investment Manager's Report.

The clean electricity generated by the Company's assets in 2022 avoided the emission of approximately 203,500 tonnes of CO2e.

Details of each asset and its performance are set out in the Investment Manager's Report.

Results

NAV as at 31 December 2022 was 94.3 cents per Share (31 December 2021: 98.9 cents per Share). Over the Year, NAV per share decreased by 4.7% due to a number of factors as described further in the Portfolio Valuation section of the Investment Manager's Report.

The Directors' valuation of the portfolio as at 31 December 2022 was supported by an independent valuation carried out by Marshall & Stevens. In the valuation, projected cash flows were discounted at an underlying weighted average pre-tax discount rate of 7.5% (31 December 2021: 7.2%). Discount rates were increased by 25 basis points as at 30 June 2022 against a background of interest rate increases and rising bond yields, but as at 31 December 2022, the view of the Company's independent valuer was that no further change was required.

RNEW's profit before tax for the Year ended 31 December 2022 was $1.2 million (31 December 2021: $3.4 million). Earnings per Share were 0.9 cents (31 December 2021: 3.7 cents per Share).

The Company's total gearing at 31 December 2022 was 33.3% (31 December 2021: 30.2%) based on a GAV of $193.4 million and aggregate debt of $64.4 million. The Company had non-recourse debt at project level ($45.8 million secured on the two Beacon solar projects in California) and debt at group level, consisting of $18.6 million drawn under the Company's RCF.

Dividends

During the Year, the Company paid four interim quarterly dividends each of 1.4 cents per Share, which included one in respect of the previous financial period ended 31 December 2021. On 31 January 2023, after the year end, the Board declared a fourth interim dividend of 1.4 cents per Share for the quarter ended 31 December 2022. Together the four dividends declared and paid for FY 2022 totalled 5.6 cents, meeting the Company's stated annual target1 dividend range of 5.25 to 5.75 cents.

The dividend was supported by net cash flow from the Company's assets and dividend cover2 at both RNEW and Holdco level for the year ended 31 December 2022 was 1.0 times2. The Board and Ecofin are particularly focused on dividend cover at both the RNEW and Holdco level and expect it to be broadly maintained during 2023 as a result of a focus on cost reductions and, as referred to above, as assets currently under construction from the Echo Solar portfolio become operational.

Share price

At 31 December 2022, the share price was 83.25 cents per Share, representing an 11.7% discount to NAV of 94.3 cents per Share at the same date. The share price has traded at a discount to NAV since the Ecofin management resignations in July noted above, and this has prevented the Company from issuing further equity to support the growth of the asset base.

The current discount to NAV is obviously disappointing. Both the Board and the Investment Manager believe that the strong fundamentals of the Company and its portfolio, together with continued confidence in the target1 dividend yield into 2023, provide a positive platform for the share price to increase from its current level.

Board

There are four members of the Board (two women and two men) who together have a good balance of sector and financial knowledge, accounting, investment trust experience, and other relevant experience, including the benefit of geographic market knowledge from U.S. residency and citizenship. Appointments to the Board will always be made on merit. In due course, the Board would like to appoint a further director with an ethnic minority background, recognising the benefits of having greater diversity on the Board. At present, given the Company's size, cost base and the early stage of its development, the Directors do not feel it is currently appropriate to increase the size of the Board.

I would like to thank my fellow Directors, the Ecofin team and all our advisers for the significant contribution they have made during 2022.

Annual General Meeting

We look forward to welcoming Shareholders at the Company's Annual General Meeting ("AGM") to be held on 1 June 2023 at the offices of the Company Secretary located at 6th Floor, 125 London Wall, EC2Y 5AS, London. For more information, please see the enclosed AGM Notice.

1. The target returns and dividends set out above are targets only and are not profit forecasts. There can be no assurance that these targets can or will be met and they should not be seen as an indication of the Company's expected or actual results or returns. The Company's ability to distribute dividends will be determined by the existence of sufficient distributable reserves, legislative requirements and available cash reserves. Accordingly, investors should not place any reliance on these targets in deciding whether to invest in the Shares or assume that the Company will make any distributions at all.

2. Calculated based on portfolio net cash distributions divided by dividends paid in respect of the quarters ended 31 March 2022, 30 June 2022 and 30 September 2022 and the dividend declared in respect of the quarter ended 31 December 2022.

Outlook

The U.S. renewable energy sector continues to offer strong prospects for investment and growth.

The passage of the Inflation Reduction Act ("IRA") in August 2022 represents an unprecedented long-term policy boost for U.S. renewable energy with some $369 billion allocated to climate infrastructure and energy security. The IRA includes provisions for extending tax credits for solar and wind energy until 2035 and also introduced a new tax credit for standalone battery storage. As solar panel manufacturing is increasingly onshored in the U.S. in response to the IRA's green subsidies, solar installation timelines are expected to benefit. In addition, as set out in more detail in the Investment Manager's report, the IRA coincides with two other significant pieces of U.S. legislation, the intent of which is to allocate billions of U.S. dollars into, inter alia, zero-carbon businesses, clean energy research and grid modernisation. These additional pieces of legislation will also benefit renewable energy expansion in the U.S., for which there is strong support at both federal and individual state level.

RNEW continues to play an important role in the global drive for a more sustainable future, as an owner and operator of existing Renewable Assets and in bringing new assets from construction into operation.

While the Company's investment pipeline remains strong, Ecofin is at present primarily focused on managing RNEW's portfolio and on overseeing assets currently under construction to ensure they move successfully into operation.

As stated above, the Board was pleased to see the appointment of Eileen Fargis as group lead and portfolio manager for RNEW. Eileen has strong credentials in the sector and has quickly familiarised herself with the portfolio and the business. As a Board, we are strong believers in the opportunities within the U.S. renewable energy sector and in the Company's investment strategy. Against this background, we believe that Ecofin has the capability and bandwidth to deliver growth for the Company. Together, these provide strong fundamentals for the share price to trade above NAV and for RNEW to raise new funds to take advantage of the growth opportunities available. However, as stated in our half-year report, we are also very conscious of our duties to Shareholders and remain open to exploring all options for the future of RNEW consistent with good governance.

Patrick O'D Bourke

Chair of the Board

13 April 2023

Investment Manager's Report

About Ecofin

Ecofin Investments, LLC, the parent company of the Investment Manager, is a sustainable investment firm with roots dating to the 1990s and an international footprint with offices in the U.S. and UK. As at 31 December 2022, Ecofin Investments, LLC had assets under management of $2.2 billion across several listed U.S. and UK funds, private funds, and separately managed accounts.

Eileen Fargis joined Ecofin as the Group Lead for Ecofin's Private Equity Sustainable Infrastructure team in October 2022 and was appointed as the Ecofin group lead and portfolio manager for the Company. In her role, Eileen works closely with Ecofin's team of experienced professionals, originating and managing the firm's U.S. Renewable Assets. Eileen has over 20 years' industry experience, most recently as Head of Investments for InterEnergy Holdings (UK) Ltd, an independent developer, owner, and operator of 2.2 GW of energy generation assets and a utility in the Caribbean and Latin America. Working closely with Eileen is Jason Benson, who has been heavily involved with RNEW since IPO. Jason also oversees portfolio management and funding activities for the Company.

The Finance and Asset Management team, led by Nancy Johnson, has over 45 years of combined experience in the energy industry. The team works with Eileen and Jason to onboard new assets seamlessly and strives to attain operational excellence for each of the Renewable Assets in order to maximise profitability for Shareholders. The team interfaces with engineers and plant operators to ensure plant optimisation. Strong relationships and constant communication with our outsourced asset management and O&M service providers are key to smooth operations and have remained unchanged since the IPO. Continuous process improvement is at the forefront for the team to steadily advance the effectiveness of data analytics. Additionally, the team is focused on keeping current with new accounting guidance and reporting requirements that impact the portfolio.

While the status of the near-term new project pipeline remains strong, Ecofin is currently maintaining its focus on managing RNEW's existing assets and near-term funding obligations until opportunities for new capital and deployment become available.

Senior Management Team

Eileen Fargis

Eileen has over 20 years' industry experience, most recently as Head of Investments for InterEnergy Holdings (UK) Ltd, an independent developer, owner, and operator of 2.2 GW of energy generation assets and a utility in the Caribbean and Latin America. She is the former Co-Head of the $1 billion IFC African, Latin American and Caribbean Fund LP, a private equity fund investing alongside the International Finance Corporation on behalf of the Company's investors. Eileen started her career in energy and infrastructure with Skadden Arps and spent nine years at GE Capital Markets, GE Energy Financial Services and GE Structured Finance with a focus on global energy and infrastructure assets. She has previously served on the boards of InterEnergy Holdings, CityExpress Hotels and SURA Asset Management. Eileen is a graduate of Hamilton College and the John Hopkins School of Advanced International Studies.

Jason Benson

Jason is a member of Ecofin's Private Equity Sustainable Infrastructure investment team focused on construction-ready and operating, commercial and utility-scale solar and wind assets, supporting origination, valuation & underwriting and financing. Jason started his career as an investment banker with Greentech Capital Advisors (now Nomura Greentech) where he focused on M&A advisory in the renewable energy, energy storage and energy efficiency sectors. He also held similar positions with Cowen and Company and Murray Devine, focusing on broad industrials sectors. Jason earned a Master of Science degree in finance from Villanova University and a Bachelor of Science degree with a concentration in finance and a minor in economics from Seton Hall University.

Nancy Johnson, CPA

Nancy manages the accounting, financial reporting and analysis and asset management for the RNEW portfolio. She has over 12 years experience in the industry. Prior to Ecofin, Nancy was at NextEra Energy where her primary focus was on Energy Trading Accounting and Process Improvements. Nancy is a graduate of the University of Florida and earned her Master of Accounting degree from Florida Atlantic University. She is also a certified public accountant.

Investments - Summary of the year

During the Year, the Investment Manager continued to focus on maximising operating activity of the portfolio and meeting dividend targets, while optimising the Company's financing structure. The portfolio delivered 335 GWh of clean electricity to its offtakers. While this was 5.5% below budget, net cash flow generated was able to cover $7.7 million of dividends, or 5.6 cents per Share, meeting the Company's stated annual target1 dividend range of 5.25% to 5.75%.

While the majority of IPO proceeds were deployed in the 12 months following the Company's launch, there was significant funding activity during the Year, relating primarily to construction projects and tax equity financings. The Investment Manager closed on two tax equity partnerships, providing financing for the Skillman Solar project as well as the Echo Solar Portfolio. Coinciding with these financings, the Investment Manager brought three new projects to commercial operation, including Skillman Solar, Echo Solar - MN and Echo Solar - VA 1.

The Company successfully closed on a placing and retail offer of new Shares in May 2022, raising $13.1 million (before costs), the proceeds of which were used to repay the drawn balance on the RCF as well as fund the June and August 2022 acquisitions of projects within the Echo Solar Portfolio.

Investment Activity

2022

7 January 2022 - the Company obtained a $15.9 million non-recourse construction loan from Seminole Financial Services, LLC, a U.S. specialist renewable lender, for the construction of the Echo Solar - MN project.

28 January 2022 - the Company closed a tax equity partnership for the Skillman Solar project.

23 March 2022 - the Company finalised a negotiation for a buyout wherein the Company sold one 41 kWdc asset within the SED Solar Portfolio, as per the terms of the PPA, reducing the total number of assets remaining in the SED Solar Portfolio to 52 (11.3 MWdc) and the Company's total assets to 60 at the time.

25 March 2022 - the Company declared mechanical completion of the Skillman Solar project and completed a major milestone tax equity funding.

28 June 2022 - the Company closed on the acquisition of two ground mount solar projects in VA at construction stage in the Echo Solar Portfolio, comprising the 2.7 MWdc Monroe Solar Partners, LLC project (Echo Solar - VA 1) and the 4.2 MWdc Randolf Solar Partners, LLC project (Echo Solar - VA 2) with an aggregate closing value of $2.6 million, bringing the Company's total assets to 62 at the time. Future fundings of these projects would be sourced from tax equity commitments and the Company's RCF.

29 July 2022 - the Company declared mechanical completion of the Echo Solar - MN project.

22 August 2022 - the Company closed on the acquisitions of three additional ground mount solar projects at construction stage in the Echo Solar Portfolio, comprising the 6.5 MWdc Hemings Solar Partners, LLC project in VA (Echo Solar - VA 3), the 2.9 MWdc Small Mouth Bass Solar Partners, LLC project in Virginia (i.e., Echo Solar - VA 4), and the 5.9 MWdc Heimlich Solar Partners, LLC project in DE (Echo Solar - DE 1) and with an aggregate closing value of approximately $5.5 million, bringing the Company's total assets to 65. This deployed the balance of the $12.9 million net proceeds from the placing and retail share offer completed in May 2022. Future fundings of these projects are expected to be sourced from tax equity commitments and the Company's RCF.

26 September 2022 - the Company declared substantial completion of the Skillman Solar project and closed the final tax equity funding, completing the financing of the project, after having achieved commercial operation on 15 August 2022.

7 October 2022 - the Company closed a tax equity commitment of $17.7 million for the Echo Solar Portfolio, which will be funded upon the achievement of sequential construction milestones at each project within the portfolio.

5 December 2022 - the Company negotiated a partial termination of the MIPA for the five remaining unclosed Echo Solar Portfolio projects, which included an 18-month Right of First Offer on the unclosed projects.

16 December 2022 - the Company declared commercial operation at the Echo Solar - MN project, after receiving permission to operate from the utility on 13 December 2022. The system was fully energised and delivering power immediately.

30 December 2022 - the Company declared commercial operation at the Echo Solar - VA 1 project, after receiving permission to operate from the utility on 16 November 2022. The system was fully energised and delivering power immediately.

As at 31 December 2022, the portfolio was heavily weighted towards operating assets with 89% of NAV invested in operating assets held at fair market value ("FMV"). The portfolio benefits from geographic diversification spanning eight U.S. states to provide risk mitigation against regulatory and resource exposures. Furthermore, RNEW's portfolio reflects diversification across three renewable energy sectors: utility scale solar (18%) commercial solar (49.5%) and wind (33%), to mitigate resource, regulatory, technology and market risks.

Portfolio Summary1

FMV by asset name

FMV by sector

FMV by operating/construction status

Operating - 89%

Construction - 11%

1. Includes closed and committed assets based on equity exposure at FMV.

Summary of Investments

1. SED Solar Portfolio

The SED Solar Portfolio consists of 51 predominantly rooftop commercial solar projects in Massachusetts and 1 rooftop commercial solar project in Connecticut, totalling 11.3 MW. The projects' output is fully contracted to a variety of investment grade quality schools, universities, municipalities and corporations under long term fixed price PPAs. This investment demonstrates many of the most favourable aspects of Ecofin as a highly experienced manager specialising in the middle market. The transaction came about through a bilateral negotiation with a vendor who was considering monetising its interest in the portfolio which it had successfully developed and operated for several years. The Investment Manager represented an acquirer who had the expertise to efficiently underwrite and reliably execute an acquisition spanning 52 assets and dozens of revenue counterparties. Ecofin closed the acquisition just days after completing RNEW's IPO in December 2020. Following the transaction, Ecofin secured a fixed price revenue contract with an investment grade rated electric power company to hedge the price risk for 100% of SED Solar Portfolio's Solar Renewable Energy Credit ("SREC") through 2027.

2. Ellis Road Solar

Ellis Road Solar is a 7.1 MW ground mount solar project in Massachusetts that commenced operations in 2021. This project sells 100% of its output to an investment grade utility on a fixed price basis for 20 years through the state of Massachusetts's renewable incentive program, Solar Massachusetts Renewable Target (SMART). Ellis Road was initially sourced bilaterally by Ecofin through its relationship with a commercial solar developer focused on Northeastern U.S. markets and became one of the four seed assets identified as part of RNEW's IPO. Following the closing of the acquisition in December 2020, Ecofin actively monitored the remaining construction process through to its successful completion and secured a tax equity investment on customary terms from a large U.S. corporate with which Ecofin has previously transacted.

3. Oliver Solar

Oliver Solar is a 4.8 MW commercial solar project in San Joaquin County, California that commenced operations in 2021. The project is strategically located on a major logistics and distribution centre owned by the world's largest global e-commerce company that also serves as the power purchaser under a long-term fixed price PPA. The project experienced construction delays due to Covid-19 related impacts and inspection delays. Shortly after energisation, the offtake/ building owner requested that the project be de-energised for further testing/ recommissioning, after they had experienced an arch event and fire on another one of their facilities, instigating extreme scrutiny and oversight on their entire fleet of rooftop projects including Oliver Solar. Re-energisation has been delayed until a second inspection occurs; this inspection has been delayed due to a requirement for sub-contractors to obtain a specific safety compliance certificate in order to be allowed on the offtaker's roof. Since closing the acquisition, Ecofin has secured a tax equity investment on customary terms from a large U.S. corporate with which it has previously transacted. Despite delays, Ecofin has continued with billing and collecting revenue from the offtaker under the contract on modelled P50 production.

4. Beacon Solar 2

Beacon Solar 2 is a 59.6 MW utility scale solar project in Kern County, California that has been operating since December 2017. The project's location in the Mojave desert of Southern California contributes to its strong solar resource. In addition, the project has in place a fixed price PPA with an investment grade rated utility for 100% of its output on an as generated basis to provide a long-term stable source of revenues. Ecofin secured this acquisition bilaterally from a leading infrastructure investor where there existed a longstanding relationship and the vendor valued reliable execution to close in 2020 over achieving the best price. RNEW obtained a 49.5% ownership interest to align with the structuring objectives of the vendor. An equivalent 49.5% ownership interest was sold to an international infrastructure company. Since closing in December 2020, Ecofin has established a strong operating relationship with its new partner through monthly operations meetings and quarterly Board meetings. Both parties share a mutual objective of optimising operations and cash flow. Of note, we have expanded the use of NextTracker's TrueCapture technology designed to increase project output through real-time tracker adjustments to reduce row-to-row shading that occurs at different points of the day. We have also collaborated with the operator to assess the level of equipment spares and procure an increased level of solar module spares to reduce downtime over the coming year.

5. Beacon Solar 5

Beacon Solar 5 is a 48.2 MW utility scale solar project in Kern County, California that has been operating since December 2017. The project was developed in parallel with Beacon Solar 2 and shares an almost identical project contractual structure including a PPA with the same offtaker. The project is located in close proximity to Beacon Solar 2 which provides operating and maintenance synergies. Beacon Solar 5 was acquired in parallel with Beacon Solar 2 from the same vendor and has the same ownership structure in place. For additional information, see the summary above on Beacon Solar 2.

6. Skillman Solar

Skillman Solar is a 2.6 MW commercial solar project in New Jersey that completed construction in Q1 2022 and achieved its Commercial Operations Date ("COD") on 25 March 2022. The project provides power under a long-term fixed-price PPA to a corporate campus of a privately held financial, software, data, and media corporation that is a global leader in its respective segments. The project also generates substantial revenues through the state of New Jersey's fixed-price feed-in-tariff style renewable incentive program for a 15-year period. This project was originated bilaterally through a longstanding relationship with a commercial solar developer with which Ecofin has transacted in the past. While this project did experience some construction delays, Ecofin actively managed the process with the construction firm through its contractual rights to ensure RNEW was not adversely impacted. Due to the investment structure, no negative impact has occurred to the investment valuation as a result of these delays.

7. Echo Solar Portfolio

As at 31 December 2022, the Company had closed on six solar projects in Minnesota, Virginia and Delaware totalling 35.9 MW within the Echo Solar Portfolio. As at 31 December 2022, two of these projects declared commercial operation. The remaining four projects are expected to complete construction and begin operations during Q2 2023. The Echo Solar Portfolio sells 100% of its output to two investment grade rated utilities under long term fixed price PPAs. This portfolio was originated through a leading global renewable energy company with which Ecofin has a longstanding relationship and has transacted with in the past, which provided the vendor with confidence in Ecofin's reliable execution. Ecofin is actively managing the construction process through weekly calls with the construction firm to approve milestone-based payments and address any issues as they arise.

8. Delran Solar

Delran Solar is a 2.0 MW commercial rooftop solar project in New Jersey that commenced operations in 2020. The project provides power under a long-term fixed-price PPA to a logistics centre owned by a large publicly traded U.S. media corporation. The project also generates substantial revenues through the state of New Jersey's fixed-price feed-in-tariff style renewable incentive program for a remaining 12.5-year period. This project was originated bilaterally through a longstanding relationship with a commercial solar developer with whom Ecofin had transacted in the past.

9. Whirlwind

Whirlwind is a proven operating wind asset, placed in service in December 2007, using 26 Siemens 2.3 MW wind turbine generators by Siemens Gamesa under a long-term O&M agreement. It benefits from a fixed-price PPA with an investment grade electric utility with approximately five years remaining on the initial contract term, providing predictable cash flow. Whirlwind is located in Texas, which is experiencing sustained growth in electricity demand due to population growth and corporations migrating to this business-friendly state. With electricity prices linked to natural gas prices, which have been rising, these factors provide a good backdrop for recontracting in the future and potential for inflation protection. Whirlwind demonstrates Ecofin's sourcing network breadth beyond solar and was originated bilaterally with the vendor. We believe this type of bilateral negotiation generates increased value for RNEW's investors. As part of our portfolio management strategy, Ecofin will continue to evaluate the potential to repower this asset at the appropriate time and/or develop co-located battery storage as battery costs decline and/or tax credits are expanded for batteries. Given the deregulated nature of the Texas powermarket, it represents one of the most attractive for siting battery storage and offers the potential for enhancing Whirlwind's offering of dispatchable power under medium term recontracting scenarios.

Portfolio Production Update

During the twelve months ended 31 December 2022, the portfolio generated 335 GWh of clean energy, 5.5% below budget. Of the total, solar assets generated 150.0 GWh, 3.7% below budget (see project variances and explanations below) and wind assets generated 184.6 GWh, 7.0% below budget principally due to low wind resource and curtailments caused by Winter Storm Elliott, which impacted large parts of the U.S. including Texas, in Q4 2022.

The performance of the underlying operating portfolio combined with its 100% contracted revenue structure generated revenues of $13.4 million for the Company. Overall, cash flows were below budget by 11.4%. While Echo Solar - MN and Echo Solar - VA 1 achieved commercial operation in Q4 2022, both experienced construction delays. There were also lower than expected cash distributions from Beacon 2 & 5 due to overheating fuse holders throughout the year. Ellis Road also experienced inverter outages in Q3 2022 and inverter replacements in Q4 2022, while Winter Storm Elliott caused a utility shutdown at Skillman in December 2022. This was partially offset by higher than expected cash flows from the SED Solar Portfolio and Skillman during the summer due to high insolation and a strong Q2 2022 from Whirlwind due to increased wind resource.

Net Production Variance vs. Budget (GWh)

Values and totals have been rounded to the nearest decimal.

1. Reflects RNEW's pro forma share of production based on ownership.

2. Oliver Solar reached COD on 29 November 2021 and has been accruing PPA revenue based on P50 modelled production since that date. However, due to some commissioning and testing delays with the offtaker, the world's largest e-commerce company, the system had not been energised as at 31 December 2022.

Production variance summary:

a, b Underperformance due to overheating fuse holders. Corrective actions ongoing.

c Outperformance primarily due to higher than expected insolation.

d Underperformance due to inverter faults in Q3 and early Q4; replacements have been completed.

e Underperformance due to construction delays in the first half of the year and Winter Storm Elliott which resulted in utility shutdown for a 10‑day period in Q4.

f Variances due to construction delays and timing of obtaining commercial operation.

g Underperformance due to lower wind resource in Q1, Q3 and Q4 and curtailments caused by Winter Storm Elliott in Q4.

Revenues

As at 31 December 2022, RNEW's portfolio had 100% of its revenue contracted with a weighted average remaining term of 14.6 years; this includes all construction and committed assets. Approximately 99% of the portfolio benefits from fixed-price revenues, many with annual escalators of 1-2%, through PPAs, contracted SREC, and fixed rents under leases. These fixed price contracts mitigate market price risk for the term of the contracts.

Less than 1% of the portfolio has a variable form of revenue contract. These contracts are set at a discount to a defined Massachusetts utility electricity rate, which provides an ongoing economic benefit to the customer (i.e., the offtaker/rooftop owner), as opposed to receiving the higher utility electric rate when consuming electricity from the grid. While the variable rate contract introduces an element of price volatility, it also offers the potential to hedge inflation risk as utility rates in Massachusetts have appreciated 3.0% on average per annum from 1990-2022.

The revenue profile below3,4 represents a projection of RNEW's existing revenue contracts as at 31 December 2022 and does not assume any replacement revenue contracts following the expiry of these contracts. With increased adoption of renewable energy in the U.S. and rising natural gas prices (which tend to result in higher power prices in U.S. markets where natural gas is the marginal fuel), Ecofin is confident that RNEW's prospects for re-contracting at the end of revenue contract terms are positive.

RNEW Portfolio Revenue Breakdown

3. The increase in uncontracted market revenue from 2028 onwards is due to the maturity of the Whirlwind PPA.

4. The decrease in uncontracted market revenue from 2038 onwards is due to Whirlwind reaching the conclusion of its technical useful life.

Active Management

Ecofin maintains an active approach to managing RNEW's portfolio and is in the process of bringing certain previously outsourced asset management functions in-house. For operating assets, Ecofin's process involves actively monitoring production through direct, real-time system access, review of monthly O&M and asset management reports, and meeting at least monthly with project operators and asset managers to review and enhance performance. For construction stage assets, the process is appropriately structured for more frequent engagement with the relevant EPC contractor to review project milestones and troubleshooting issues, review and approve payments in accordance with contracts.

Financing

As at 31 December 2022, the Company's U.S. subsidiaries at a project level had debt balance of $45.8 million, with an additional $18.6 million drawn down under the RCF. This total debt balance corresponds to approximately 33.3% of GAV and compares to the maximum limit of 65% in the Company's Investment Policy, as further detailed in the table below. Given that the Company's portfolio primarily comprises operating assets that have long-term fixed-price revenue contracts with investment grade counterparties, construction and term loan financing opportunities at both a project and group level are widely available on attractive terms. With that in mind, the Company's Investment Manager and Board favour a measured approach to using leverage to mitigate interest rate and default risk. The Company has proactively and successfully put in place both an RCF and non-recourse construction loan at its U.S. subsidiaries as described below:

· On 19 October 2021, RNEW Capital, LLC, entered into a $65.0 million secured RCF with KeyBank, one of the premier lenders to the U.S. renewable energy industry. The RCF comprises a $50.0 million, two-year tranche priced at LIBOR plus 1.75% and a $15.0 million, three-year tranche priced at LIBOR plus 2.00%. The RCF is secured upon certain of the Company's investment assets and offers the ability to substitute reference assets. The RCF also includes an accordion option which provides access to an additional $20.0 million of capital which can be accessed subject to certain conditions. This substantial commitment with attractive pricing and terms reflects the high quality of RNEW's portfolio. As at 31 December 2022, this RCF was drawn at $18.6 million. Ecofin is in dialogue with KeyBank on extending and refinancing the RCF, as well as gauging the market for alternative lenders. Ecofin anticipates being able to renew or extend the RCF on similar terms, coinciding with a switch in reference rate from LIBOR to SOFR.

· On 7 January 2022, a wholly-owned U.S. subsidiary of RNEW, Westside Solar Partners, LLC ("Echo Solar - MN"), entered into a $15.9 million non-recourse construction loan related to and secured by the 13.7 MW Minnesota commercial solar asset (Echo Solar - MN) within the Echo Solar Portfolio. The outstanding balance on the facility was repaid on 21 September 2022 and the facility was retired.

Through the 49.5% acquisition of the Beacon 2 and 5 operating solar assets, the Company assumed its share of amortising project term loans secured on those projects that totalled $45.8 million at 31 December 2022, as referred to above.

On 31 December 2022, the Company had GAV of $193.4 million, and total recourse and non-recourse debt of $64.4 million, resulting in total leverage of 33.3%. The borrowing facilities available to the Company and its subsidiaries at 31 December 2022 are as set out in the table below:

5. As at 31 December 2022.

6. Includes security interests in the borrower and several of its direct and indirect subsidiaries.

Portfolio Valuation

Valuation of the Company's portfolio is performed on a quarterly basis. A discounted cash flow ("DCF") valuation methodology is applied which is customary for valuing privately owned operating Renewable Assets. The valuation is performed by Ecofin at 31 March and 30 September, and by an independent third‑party valuation firm at 30 June and 31 December.

Fair value for each investment is derived from the present value of the investment's expected future cash flows, using reasonable assumptions and forecasts for revenues and operating costs, and an appropriate discount rate. More specifically, such assumptions include annual energy production, curtailment, merchant power prices, useful life of the assets, and various operating expenses and associated annual escalation rates often tied to inflation, including O&M, asset management, balance of plant, land leases, insurance, property and other taxes, and decommissioning bonds, among other items.

At IPO on 22 December 2020, the Company raised $125.0 million (before costs) by issuing 125,000,000 Shares. Subsequently, on 10 May 2022, the Company announced a placing and retail offer of new ordinary shares ("New Ordinary Shares") of $0.01 each at an issue price of $1.015 per New Ordinary Share. The Company raised $13.1 million (before costs) by issuing a total of 12,927,617 New Ordinary Shares. Admission of these New Ordinary Shares to the LSE became effective on 24 May 2022.

2022 NAV Bridge ($MM)

Capital raised: Represents proceeds raised from the May 2022 placing and retail offer net of commissions retained by brokers, fees to intermediaries and other transaction expenses.

Change in project company DCF: Represents the impact on RNEW NAV from changes to DCF depreciation and quarterly cashflow roll-forward and change in project-level debt outstanding balances, including principal amortisation.

Change in project company DCF Discount Rates: Represents the impact on RNEW NAV from an increase to the discount rates applied to the DCF models of each project company. As at 31 December 2022, the weighted average unlevered pre-tax discount rate was 7.5% (31 December 2021: 7.2%), which was increased by 25 basis points principally due to the rise in inflation and interest rates.

Change in project company DCF merchant curves: Represents the impact on RNEW NAV from changes to the forward merchant price curves used in the DCF models of each project company. The increase was principally due to the update of the DCF models with the most recently published regional market forward power prices by the U.S. Energy Information Administration ("EIA").

Distributions from project companies to RNEW: Represents cash generated by project companies, which was distributed up to RNEW during the Year.

Dividends to shareholders: Dividends for Q4 2021, Q1 2022, Q2 2022, and Q3 2022 of $7.5 million (5.6 cents per Share) were paid during the Year. After the Year end, the Company declared a further dividend of 1.4 cents per Share in respect of the quarter ended 31 December 2022. Over the twelve-month period ended 31 December 2022, the portfolio generated net revenue sufficient to cover the dividend approximately 1.0 times.

Expenses paid: Represents the impact on RNEW NAV due to management fees and expenses paid during the Year.

Change in financial assets: Represents the impact on RNEW NAV due to increases or decreases in cash, receivables, payables and other net working capital account balances.

Deferred tax liability: Represents the impact on RNEW NAV due to accruals arising from operations in the Year and from a project level prior period adjustment at RNEW Holdco, LLC, the Company's wholly-owned U.S. subsidiary, which is subject to U.S. income taxes.

Portfolio Valuation Sensitivities

The figure below shows the impact on the portfolio valuation of changes to the key input valuation assumptions ("sensitivities") with the horizontal x-axis reflecting the impact on NAV per Share. The valuation sensitivities are based on the portfolio of assets as at 31 December 2022. For each sensitivity illustrated, it is assumed that potential changes occur independently with no effect on any other assumption. It should be noted that the relatively moderate impact of a change in forecast merchant power prices reflects the long-term fixed price contracted revenues of the Company's portfolio, with a weighted average remaining contracted term of 14.6 years as at 31 December 2022. Similarly, the moderate impacts due to variations in operational expenses reflect a number of the Company's assets having fixed price, long-term operating expenses including O&M, property leases and payments in lieu of taxes.

Market Outlook

The U.S. renewables industry's prospects for growth are more encouraging than ever. Predicted highlights for 2023‑24 include a steady rise in energy demand and increased private investment, backed by strong long-term incentives creating powerful tailwinds. For some time to come, renewable energy is projected to be one of the more promising investment themes in the U.S. Not only does it support sustainability and preserve the environment for future generations, but investments in the sector are also well-positioned to outperform most other sectors. This is as a result of relevant U.S. legislation which is discussed in more detail below. Clean energy of the kind owned and operated by RNEW is a safe, smart, potentially recession-resistant, government-supported asset class for investors seeking attractive risk-adjusted yields.

The enactment of the IRA in summer 2022 was positively received by U.S. renewables producers, investors, and workers, as was emphasised in our half-year report. The IRA combines the dual objectives of reducing domestic inflation (brought on in part by rising global energy prices) while addressing climate change issues. It is significant in many important ways. This is the first time the U.S. renewables sector has seen 10-year incentives (versus 2-5 years previously) which provides certainty for and de-risks long term projects. The legislation is also historic in size. A total of $369 billion has been committed to renewables and related sectors dedicated to improving energy security and achieving emission reduction goals. This includes funding for carbon capture, utilisation and storage projects, battery storage, electric vehicles and related infrastructure, as well as traditional (solar/wind) renewables, representing incentives that are more widely spread than previous incentives. Further important aspects of the IRA are production tax credits (PTCs), investment tax credits (ITCs), credit transferability and flexibility in how the incentives are used.

We concur with many analysts that the $369 billion figure anticipated to be spent under the IRA significantly understates the amount of investment this legislation could ultimately spur in the U.S. renewable energy sector. Several of the IRA's most significant measures, such as its incentives for zero-carbon electricity and electric vehicles, are "uncapped" tax credits, i.e. so long as you abide by the conditions they will be awarded.

As such, the amount of money that the federal government can spend under this legislation is not constrained by a budget or other legal provisions. The amount that the IRA is expected to commit toward combating climate change is largely based on the U.S. government's projection of how much these tax credits will be utilised. But the IRA's ultimate spending could far exceed this projection, and during the next decade, total climate spending could reach well over $1.5 trillion, with federal spending stimulating further state, local and private investment.

The Biden Administration has also passed two additional significant pieces of legislation. A further $280 billion under the CHIPS and Science Act, which was passed around the same time as the IRA, will be used to revive the U.S. semiconductor industry. Of this, $67 billion (or around 25%) has been set aside to promote the expansion of zero‑carbon businesses (such as renewable energy) and climate-related research. The Infrastructure Investment and Jobs Act (IIJA)1, also referred to as the Bipartisan Infrastructure Law, which was passed in November 2021, provides $1.2 trillion to support, among other things, grid modernisation and clean energy research and deployment. Of that amount, $65 billion has been allocated for the transmission of clean energy and improvements to the nation's electrical infrastructure. In the U.S., utility-scale clean power is expected to increase by 525 to 550 GW by 2030, according to projections.

There are numerous other drivers of significant growth worth noting, including:

· The desire for greater energy security and energy independence in the U.S. - this involves both national security concerns and economic motivations such as reducing volatility from exposure to energy price fluctuations and creating jobs in the U.S. renewables sector. It also reflects the desire to re-domesticate the production of energy equipment and reduce the dual vulnerabilities the country faces to Russian and Middle Eastern oil and gas and Chinese production of most of the world's polysilicon and PV solar panels. Building domestic manufacturing capacity for renewable energy equipment would ensure the security of industrial supply chains, reduce dependency on China for critical products and materials, and enhance job opportunities and living standards for working class Americans.

· Increasing demand for energy overall - especially as the U.S. seeks to decarbonise industry and electrify transportation and other sectors of the economy. Rising energy demand over the next few years could compound already existing supply chain limitations and interconnection bottlenecks, which may cause prices to rise and could extend project timelines on average, but these are short-term problems that are already sorting themselves out.

· Societal concerns about climate change - concerns about more frequent and increasingly severe natural disasters, and the desire to save the planet for future generations, spurred the Biden Administration to rejoin the Paris Climate Accord and reinforced global commitments to achieve net-zero by 2050.

· Steadily declining costs of installing solar and onshore wind generation - which on a combined basis, have decreased by over 70% in the last decade (even before the recent trio of relevant legislation was passed), despite supply chain and import tariff issues of recent years, have led to greater cost competitiveness for renewables. While supply chain challenges may lead to higher renewable energy costs in the short term, renewable generation like solar and wind will likely persist as the cheapest energy sources. With inflation high and the war in Ukraine continuing, fuel costs for conventional generation have been rising faster than renewable costs. Meanwhile, a virtuous cycle of increased investment in solar and other technologies is driving more innovation, which in turn further drives down costs and attracts more investment.

· The size and relative under-penetration of the U.S. renewables market versus its peers in the UK and Europe ‑ the U.S. power market is 12 times the size of the UK power market and 1.3 times the size of the European power market. This creates abundant opportunities for RNEW. The U.S. needs to install at least 40‑60 GW (estimates vary) of wind and solar capacity each year to achieve its carbon reduction goals by 2050.

It should be noted that these structural forces are not political in nature and should prevail irrespective of the political administration in the U.S. Twenty-two states and the District of Columbia are aiming towards carbon-free power or 100% renewable energy by the year 2050, frequently through mandates and incentives for clean and renewable energy. State incentives tend to cross party lines. In the race to construct more renewable capacity, so-called "red" or conservative states are among the front-runners, with Texas exceeding New York and California combined in terms of onshore wind and solar capacity. States like Texas, Wyoming, and Montana stand to gain significantly from IRA spending, and create many new jobs.

Despite all these growth drivers and incentives, there are still problems preventing the U.S. renewables market from expanding more quickly. Three of the largest market obstacles at the moment are trade policy issues, permitting complications and delays, and transmission and interconnection constraints. According to estimates, the U.S. must build 60% more transmission lines by 2050 in order to achieve its carbon reduction targets. Furthermore, in order for the nation to swiftly construct enough power lines and sustainable energy infrastructure, permitting bottlenecks must be resolved. Regarding customs and tariff issues, a ruling in an important trade case in early December 2022 reinvigorated fears that trade policy could disrupt the U.S. solar industry. Tariffs on solar modules manufactured by certain Chinese companies may resume in 2024 and it is unlikely that U.S. manufacturing capacity will be sufficient by that time to totally satisfy U.S. demand for solar modules. Other negative forces include a) higher interest rates making financing more expensive and harder to secure and b) IRA standards like worker training, competitive wages and domestic component requirements, which may slow progress toward building a new supply chain in the short term.

However, the net effect of all of these drivers, positive and negative, is that RNEW should benefit from significant, long-term, structural tailwinds that are poised to supercharge the U.S. renewables market in the coming decade and beyond. The market opportunity and addressable pipeline for RNEW in the U.S. renewables sector significantly exceeds the current size of the Company. RNEW has a large and attractive pipeline of investment opportunities and will continue for the foreseeable future. Furthermore, Ecofin has the industry relationships and experience to identify and pursue the most attractive of these projects for RNEW.

[1] The IIJA includes:

• $90 billion in new infrastructure funding and reauthorisations

• $65 billion in funding for clean energy transmission and power infrastructure upgrades

• $66 billion in funding for Amtrak maintenance and development

• $40 billion in new funding for bridge repair, replacement, and rehabilitation

• $55 billion in funding for clean drinking water

• $65 billion in funding to create universal access to reliable high-speed internet

Impact Report

ESG Integration and Impact

The Company's and Ecofin's strategy is to allocate capital using an ESG integrated investment process to build and operate a diversified portfolio of Renewable Assets that achieves RNEW's investment objective.

RNEW is focused on allocating capital using an investment process which fully integrates ESG considerations and analysis to build and operate a diversified portfolio of Renewable Assets consistent with RNEW's investment objective.

Ecofin, through its parent company, is a signatory to the Principles for Responsible Investment (PRI) and incorporates ESG analysis into its investment and reporting process. All of Ecofin's investment strategies for renewables infrastructure are designed to provide investors with attractive long-term returns and a level of impact that aligns with United Nations Sustainable Development Goals:

This strategy seeks to achieve positive impacts that align with the following UN Sustainable Development Goals

· 7 Affordable and clean energy

· 8 Decent work and economic growth

· 9 Industry, innovation and infrastructure

· 11 Sustainable cities and communities

· 13 Climate action

The Investment Manager's sustainability and impact policy is further described in the Sustainability & Impact section of its website ecofininvest.com/sustainability-impact.

ESG integration

The Company has been established to offer investors direct exposure to renewable energy and sustainable infrastructure assets including solar, wind, and battery storage that reduce greenhouse gas ("GHG") emissions and promote a positive environmental impact. The Investment Manager integrates analysis of ESG issues throughout the lifecycle of its investment activities spanning due diligence, investment approval, and ongoing portfolio management. Environmental criteria analysis considers how an investment performs as a steward of nature; social criteria analysis examines its impact and relationships with employees, suppliers, customers and the communities in which it operates; and governance criteria analysis examines internal controls, business ethics, compliance and regulatory status associated with each investment.

Ecofin has developed a proprietary ESG due diligence risk assessment framework ("ESG Risk Assessment") that combines both qualitative and quantitative data. This ESG Risk Assessment is embedded in Ecofin's investment memoranda and systematically applied by the investment team to all opportunities prior to investment authorisation by Ecofin's Investment Committee. Each of the Company's eight closed and committed investments spanning 65 assets was analysed through Ecofin's ESG Risk Assessment prior to investment commitment. Ecofin believes this approach to assessing ESG issues serves to mitigate risk and enhance RNEW's impact. Environmental factors affecting climate risk are reviewed to determine an investment's impact and ability to reduce GHG emissions, air pollution and water consumption.

Analysis of environmental issues also considers the impact that the investment will have on land use and considers mitigation plans when issues are identified. Analysis of social issues may encompass an investment's impact on the local community and consider health and safety together with the counterparties to be engaged to construct and operate the assets. Governance is reviewed in partnership with qualified third-party legal counsel to ensure compliance with all laws and regulations, strong ongoing corporate governance through strict reporting protocols with qualified operators, project asset managers and annual independent financial statement audits.

Ecofin applies a systematic approach to ESG monitoring once acquisitions are closed. Through Ecofin's engagement with third party O&M and asset management service providers, Ecofin reviews asset level reporting on health and safety metrics, environmental matters and compliance. Issues identified are reviewed and addressed with service providers through periodic meetings such as monthly operations meetings.

Importantly, ESG factors are analysed then reported in a transparent manner so that investors and key stakeholders can measure their impact.

Impact

RNEW's portfolio produced approximately 335 GWh of clean electricity during 2022, enough to power approximately 31,400 homes, offsetting approximately 203,500 tonnes of CO2e and avoiding the consumption of approximately 42,300 million litres of water. RNEW focuses on investments that have a positive environmental impact by reducing GHG emissions, air pollution and water consumption. Ecofin seeks to analyse and report on ESG factors on a consistent basis to maximise the impact of its investment activities. To assess environmental impact, Ecofin goes beyond measuring CO2 emissions avoided and quantifies other GHG emissions, such as methane and nitrous oxide, and also measures the contribution that investments make to save water consumption. Water is consumed by thermoelectric (i.e. coal and gas) power plants in the cooling process associated with steam turbine generators. Water savings occur in the same way that renewable energy generation offsets CO2 emissions from thermoelectric generators. Ecofin calculates estimated water savings by reference to the EIA thermoelectric cooling water data by location and applying it to the production from RNEW's portfolio.

Ecofin's methodology for calculating the environmental impact of investments relies on trusted data sources including the U.S. EPA and the EIA.

Task Force on Climate-related Financial Disclosures

Investment in renewables is considered an important component of climate change mitigation as replacing fossil fuel‑based forms of electrical generation is key in helping the global energy sector transition to a lower carbon economy. While investment in renewables helps mitigate the effects of climate change, renewable investments are not exempt from the potential impacts of climate change. RNEW routinely identifies climate-related risks and opportunities that may have a material financial impact on the performance of its investments.

The Task Force on Climate-Related Financial Disclosures ("TCFD") was established to develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The TCFD recommends that all organisations provide climate-related disclosures in their annual reports and accounts, providing a framework to help companies assess the risks and opportunities associated with climate change.

The FCA issued a proposal at the start of 2020 that required all premium listed commercial companies with a financial year end from December 2021 to align their reporting to the TCFD framework. While RNEW, as a UK Investment Trust, is currently exempt from this reporting requirement, RNEW has decided to make specific disclosures on opportunities and risks the Company faces relating to climate change. An outline of RNEW's current approach to the recommendations suggested by TCFD is included below.

Investment Objective and Investment Policy

The Company's investment objective and investment policy (including defined terms) are as set out in its 2020 IPO prospectus.

Investment objective

The Company's investment objective is to provide Shareholders with an attractive level of current distributions by investing in a diversified portfolio of mixed renewable energy and sustainable infrastructure assets ("Renewable Assets") predominantly located in the United States with prospects for modest capital appreciation over the long term.

Investment policy and strategy

The Company intends to execute its investment objective by investing in a diversified portfolio of Renewable Assets predominantly in the United States, but it may also invest in other OECD countries.

Whilst the principal focus of the Company will be on investment in Renewable Assets that are solar and wind energy assets ("Solar Assets" and "Wind Assets" respectively), sectors eligible for investment by the Company will also include different types of renewable energy (including battery storage, biomass, hydroelectric and microgrids) as well as other sustainable infrastructure assets such as water and waste water.

The Company will seek to invest primarily through privately-negotiated middle market acquisitions of long-life Renewable Assets which are construction-ready, in-construction and/or currently in operation with long-term PPAs or comparable offtake contracts with investment grade quality counterparties, including utilities, municipalities, universities, schools, hospitals, foundations, corporations and others. Long-life Renewable Assets are those which are typically expected by Ecofin to generate revenue from inception for at least 10 years.

The Company intends to hold the Portfolio over the long term, provided that it may dispose of individual Renewable Assets from time to time.

Investment restrictions

The Company will invest in a diversified portfolio of Renewable Asset subject to the following investment limitations which, other than as specified below shall be measured at the time of the investment:

· once the Net Initial Proceeds are substantially fully invested, a minimum of 20 per cent. of Gross Assets will be invested in Solar Assets;

· once the Net Initial Proceeds are substantially fully invested, a minimum of 20 per cent. of Gross Assets will be invested in Wind Assets;

· a maximum of 10 per cent. of Gross Assets will be invested in Renewable Assets that are not Wind Assets or Solar Assets;

· exposure to any single Renewable Asset will not exceed 25 per cent. of Gross Assets;

· exposure to any single Offtaker will not exceed 25 per cent. of Gross Assets;

· once the Net Initial Proceeds are substantially fully invested, investment in Renewable Assets that are in the construction phase will not exceed 50 per cent. of Gross Assets, but prior to such time investment in such Renewable Assets will not exceed 75 per cent. of Gross Assets. The Company expects that construction will be primarily focused on Solar Assets in the shorter term until the Portfolio is more substantially invested and may thereafter include Wind Assets in the construction phase;

· exposure to Renewable Assets that are in the development (namely pre-construction) phase will not exceed 5 per cent. of Gross Assets;

· exposure to any single developer in the development phase will not exceed 2.5 per cent. of Gross Assets;

· the Company will not typically provide Forward Funding for development projects. Such Forward Funding will, in any event, not exceed 5 per cent. of Gross Assets in aggregate and 2.5 per cent. of Gross Assets per development project and would only be undertaken when supported by customary security;

· Future Commitments and Developer Liquidity Payments, when aggregated with Forward Funding (if any), will not exceed 25 per cent. of Gross Assets;

· once the Net Initial Proceeds are substantially fully invested, Renewable Assets in the United States will represent at least 85 per cent. of Gross Assets; and

· any Renewable Assets that are located outside of the United States will only be located in other OECD countries. Such Renewable Assets will represent not more than 15 per cent. of Gross Assets. References in the investment restrictions detailed above to "investments in" or "exposure to" shall relate to the Company's interests held through its Investment Interests.

For the purposes of the 2020 IPO Prospectus, the Net Initial Proceeds will be deemed to have been substantially fully invested when at least 75 per cent. of the Net Initial Proceeds have been invested in (or have been committed in accordance with binding agreements to investments in) Renewable Assets.

The Company will not be required to dispose of any investment or to rebalance the Portfolio as a result of a change in the respective valuations of its assets. The investment limits detailed above will apply to the Group as a whole on a look-through basis, namely, where assets are held through a Project SPV or other intermediate holding entities or special purpose vehicles, and the Company will look through the holding vehicle to the underlying assets when applying the investment limits.

Gearing policy

The Group primarily intends to use long-term debt to provide leverage for investment in Renewable Assets and may utilise short-term debt, including, but not limited to, a revolving credit facility, to assist with the acquisition of investments.

Long-term debt shall not exceed 50 per cent. of Gross Assets and short-term debt shall not exceed 25 per cent. of Gross Assets, provided that total debt of the Group shall not exceed 65 per cent. of Gross Assets, in each case, measured at the point of entry into or acquiring such debt.

The Company may employ gearing either at the level of the relevant Project SPV or at the level of any intermediate subsidiary of the Company. Gearing may also be employed at the Company level, and any limits set out in this Prospectus shall apply on a consolidated basis across the Company, the Project SPVs and any such intermediate holding entities (but will not count any intra-Group debt). The Company expects debt to be denominated primarily in U.S. Dollars.

For the avoidance of doubt, financing provided by tax equity investors and any investments by the Company in its Project SPVs or intermediate holding companies which are structured as debt are not considered gearing for this purpose and are not subject to the restrictions in the Company's gearing policy.

Currency and hedging policy

The Group may use derivatives for the purposes of hedging, partially or fully:

· electricity price risk relating to any electricity or other benefit including renewable energy credits or incentives, generated from Renewable Assets not sold under a PPA, as further described below;

· currency risk in relation to any Sterling (or other non-U.S. Dollar) denominated operational expenses of the Company;

· other project risks that can be cost-effectively managed through derivatives (including, without limitation, weather risk); and

· interest rate risk associated with the Company's debt facilities.

In order to hedge electricity price risk, the Company may enter into specialised derivatives, such as contracts for difference or other hedging arrangements, which may be part of a tripartite or other PPA arrangement in certain wholesale markets where such arrangements are required to provide an effective fixed price under the PPA.

Members of the Group will only enter into hedging or other derivative contracts when they reasonably expect to have an exposure to a price or rate risk that is the subject of the hedge.

Cash management policy

Until the Company is fully invested the Company will invest in cash, cash equivalents, near cash instruments and money market instruments and treasury notes ("Near Cash Instruments"). Pending re-investment or distribution of cash receipts, the Company may also invest in Near Cash Instruments as well as Investment Grade Bonds and exchange traded funds or similar ("Liquid Securities"), provided that the Company's aggregate holding in Liquid Securities shall not exceed 10 per cent. of Gross Assets measured at the point of time of acquiring such securities.

Amendments to the investment objective, policy and investment restrictions

In the event that the Board considers it appropriate to amend materially the investment objective, investment policy or investment restrictions of the Company, Shareholder approval to any such amendment will be sought by way of an ordinary resolution proposed at an annual or other general meeting of the Company.

Risk Management

Principal Risks

The Board is responsible for the ongoing identification, evaluation and management of the principal risks faced by the Company. On behalf of the Board, the Risk Committee has established a process for the regular review of these risks and their mitigation. This process principally involves a semi-annual review of the Company's risk matrix and accords with the UK Corporate Governance Code (the "UK Code") and the Financial Reporting Council's ("FRC") Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. The Directors have carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. The following sections detail the risks the Board considers to be the most significant to the Company:

Risks are managed and mitigated by the Board through continual review, policy setting, and regular reviews of the Company's risk matrix by the Risk Committee to ensure that procedures are in place with the intention of minimising the impact of the above-mentioned risks.

Members of the Risk Committee bring external knowledge of the renewable energy, investment trust (and financial services generally) marketplace, trends, threats etc. as well as macro/ strategic insight. The Risk Committee carried out a formal risk assessment at its meetings held on 27 July 2022 and 25 January 2023.

The Investment Manager advises the Board at quarterly Board meetings on industry trends, providing insight on the political and regulatory environment in which the Company's assets operate, and future challenges in these markets. The Company's Brokers regularly report to the Board on markets, the investment company sector and the Company's peer group. The Investment Manager works with reputable EPC firms to reduce the risk that any materials sourced from vendors employing the use of forced labour end up in the Company's projects and actively monitors developments on this issue. The Company is not aware of any such materials having been used in the Company's projects.

The Company Secretary briefs the Board on forthcoming legislation/regulatory change in the UK that might impact the Company. The Auditor also provides an annual update on regulatory changes relevant to the Company.

The Company is a member of the Association of Investment Companies ("AIC"), which provides regular technical updates as well as drawing members' attention to forthcoming industry/ regulatory issues and advising on compliance obligations.

When required, experts are employed to provide information and technical advice, including legal and tax.

Key Performance Indicators

The Company's Board of Directors meets regularly and at each meeting reviews performance against a number of key performance indicators which include the following:

· Performance;

· Dividends;

· Premium/discount of share price to NAV per Share; and

· Ongoing charges ratio.

Performance

As the Company's objective is to seek to provide Shareholders with an attractive level of distributions with prospects of modest capital growth over the long term, performance is best measured in terms of total return. The Company's NAV and share price total returns for the Year were 1.1% and (10.8)% respectively. There is no single index against which the Company's performance may be meaningfully assessed. Therefore, the Board refers to a variety of relevant data and this is reflected in both the Chair's Statement and the Investment Manager's Report contained in the Annual Financial Report.

As explained in the Chair's Statement, the Board has reviewed the performance in the Year and is satisfied with the longer term prospects of the portfolio.

The Company's NAV per Share is shown on the Statement of Financial Position in the Annual Financial Report.

Dividends

Dividends form a key component of the Company's investment objective. The Company declared four interim dividends in respect of the Year (total of 5.6 cents per Share), in line with the Company's dividend target.

The Board's Dividend Payment Policy is to pay dividends on a quarterly basis in May, August, November and February in respect of each accounting year. The timing of these regular three-monthly payments means that Shareholders do not have an opportunity to vote on a final dividend. Recognising the importance of shareholder engagement, although not required by any regulation, Shareholders will be given an opportunity to vote on this policy at the forthcoming AGM.

Premium/discount of share price to NAV per Share

The Board monitors the price of the Company's Shares in relation to NAV and the premium/discount at which the Shares trade. The Company has Shareholder authority to issue and buy back Shares, which could assist short term management of premium and discount respectively. However, the level of discount or premium is mostly a function of investor sentiment and associated demand for the Shares, over which the Board may have limited influence. The share price stood at a 11.7% discount to NAV as at 31 December 2022.

Ongoing charges ratio

The expenses of managing the Company are carefully monitored by the Board. The standard performance measure of these is the ongoing charges ratio ("OCR"), which is calculated by dividing the sum of such expenses over the course of the year, including those charged to capital, by the average NAV over the year. This ratio provides a guide to the effect on performance of annual operating costs. The Company's OCR for the year to 31 December 2022 was 1.8% (IPO to 31 December 2021: 1.5%).

Business Review

The Strategic Report in the Annual Financial Report has been prepared to provide information to Shareholders to assess how the Directors have performed their duty to promote the success of the Company.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

The Company is an alternative investment fund ("AIF") under the European Union's alternative investment fund managers' directive ("AIFMD") and has appointed Ecofin Advisors, LLC as its AIFM.

The Directors are responsible for managing the business affairs of the Company in accordance with the Articles and have overall responsibility for the Company's activities including the review of investment activity and performance and the overall supervision of the Company. The Directors may delegate certain functions to other parties such as the Investment Manager, the Administrator and the Registrar. In particular, the Directors have delegated responsibility for managing the portfolio to the Investment Manager.

All the Directors are non-executive. All the Directors were considered by the Board to be independent of the Investment Manager upon and since appointment.

A description of the role of the Board can be found in the Corporate Governance Statement.

Statement of Directors' Responsibilities in Respect of the Financial Statements

Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 (the "Act") and applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year and the 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 the profit or loss for the Company for that period. The Directors are also required to prepare financial statements in accordance with UK adopted international accounting standards.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Act, subject to any material departures disclosed and explained in the financial statements

· 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;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and

· prepare a Directors' Report, a Strategic Report and Directors' Remuneration Report which comply with the requirements of the Act.

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 and enable them to ensure that the financial statements comply with the Act and, as regards the financial statements, Article 4 of the IAS Regulation.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report and financial statements, taken as a whole, are fair, balanced, and understandable and provide the information necessary for Shareholders to assess the Company's performance, business model and strategy.

Website publication

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Investment Manager and the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

· The financial statements have been prepared in accordance with the applicable set of accounting standards and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company; and

· The Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal risks and uncertainties that it faces.

Patrick O'D Bourke

Chair of the Board

13 April 2023

Statement of Comprehensive Income

For the year ended 31 December 2022

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 on ordinary activities after taxation is also the total comprehensive profit for the Year. The notes contained in the Annual Financial Report form part of these financial statements.

Statement of Financial Position

As at 31 December 2022

Approved and authorised by the Board of directors for issue on 13 April 2023.

Patrick O'D Bourke

Chair of the Board

Statement of Changes in Equity

For the year ended 31 December 2022

Statement of Changes in Equity

For the year ended 31 December 2022

The Company's distributable reserves consist of the Special distributable reserve, the Capital reserve attributable to realised gains and losses and the Revenue reserve. Total distributable reserves as of 31 December 2022 were $123.2 million (31 December 2021: $123.2 million).

The Company may use its distributable reserves to fund dividends, redemptions of Shares and share buy backs.

Statement of Cash Flows

For the year ended 31 December 2022

* The net proceeds from share issues and the share issue costs are being shown net after the money due to the underwriter of $259,000 (2021: $2,023,000) which related to their commission was retained.

The notes below form part of these financial statements.

Notes to the Financial Statements

For the year ended 31 December 2022

1. General Information

Ecofin U.S. Renewables Infrastructure Trust PLC ("RNEW" or the "Company") is a public company limited by shares incorporated in England and Wales on 12 August 2020 with registered number 12809472. The Company is a closed ended‑ investment company with an indefinite life. The Company commenced operations on 22 December 2020 when its Shares were admitted to trading on the LSE. 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 6th Floor, 125 London Wall, London, EC2Y 5AS.

The Company's investment objective is to provide Shareholders with an attractive level of current distributions, by investing in a diversified portfolio of mixed renewable energy and sustainable infrastructure assets predominantly located in the U.S. with prospects for modest capital appreciation over the long term.

The financial statements comprise only the results of the Company, as its investment in RNEW Holdco, LLC ("Holdco") is included at fair value through profit or loss ("FVTPL") as detailed in the key accounting policies below.

The Company's AIFM and Investment Manager is Ecofin Advisors, LLC.

Apex Listed Companies Services (UK) Limited (formerly Sanne Fund 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 applicable law and the UK-adopted international accounting standards. The financial statements have been prepared on the historical cost basis, as modified for the measurement of certain financial instruments at FVTPL.

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 ("SORP") issued by the AIC in July 2022.

The functional currency of the Company is U.S. Dollars as this is the currency of the primary economic environment in which the Company operates and where its investments are located. The Company's investment in Holdco is denominated in U.S. Dollars and a substantial majority of its income is receivable, and of its expenses is payable, in U.S. Dollars. Also, a majority of the Company's cash and cash equivalent balances is retained in U.S. Dollars. Accordingly, the financial statements are presented in U.S. Dollars rounded to the nearest thousand dollars.

Comparative financial information is at 31 December 2021 and for the period from the Company's Incorporation on 12 August 2020 to 31 December 2021 ("Period"), being the Company's first accounting period.

Basis of consolidation

The Company has adopted the amendments to IFRS 10 which state that investment entities should measure all of their subsidiaries that are themselves investment entities at fair value.

The Company owns 100% of its subsidiary Holdco and invests in SPVs through its investment in Holdco. The Company and Holdco meet the definition of an investment entity as described by IFRS 10. Under IFRS 10, investment entities measure subsidiaries at fair value rather than consolidate them on a line-by-line basis, meaning Holdco's cash, debt and working capital balances are included in investments held at fair value rather than in the Company's current assets and liabilities. Holdco has one investor, which is the Company. In substance, Holdco is investing the funds of the investors in the Company on its behalf and is effectively performing investment management services on behalf of such unrelated beneficiary investors.

Characteristics of an investment entity

Under the definition of an investment entity, the Company should satisfy all three of the following tests:

· Company obtains funds from one or more investors for the purpose of providing those investors with investment management services;

· Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

· Company measures and evaluates the performance of substantially all of 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:

· 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 and sustainable infrastructure investments ("Renewable Assets") due to high barriers to entry and capital requirements;

· the Company intends to hold its Renewable Assets for the remainder of their useful lives for the purpose of investment income. The Renewable Assets are expected to generate renewable energy output for 25 to 30 years from their relevant COD and the Directors believe the Company is able to generate returns to investors during that period; and

· the Company measures and evaluates the performance of all of its investments on a fair value basis which is the most relevant for investors in the Company. Management uses fair value information as a primary measurement to evaluate the performance of all of the Company's investments and in decision making.

The Directors are of the opinion that the Company meets all the 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.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements. In reaching their conclusion, the Directors considered the Company's cash flow forecasts, cash and net debt position, and the financial covenants in its borrowing facilities. The Company's net assets at 31 December 2022 were $130.2 million (31 December 2021: $123.7 million). As at 31 December 2022, the Company held $3.4 million in cash (31 December 2021: $5.4 million) and had borrowings of $64.4 million (31 December 2021: $52.1 million) and $46 million headroom on its RCF (31 December 2021: $60 million). The Directors are confident that the Company's RCF, which is currently due to expire in October 2023, will be extended or renewed during the second half of 2023. Active discussions are currently taking place to agree specific terms.

The Company's holds 100% of the share capital of Holdco which in turn holds investments in renewable energy project companies through SPVs. Underlying SPV revenues are derived from the sale of electricity by project companies under PPAs in place with creditworthy utilities, municipalities, and corporations. Most of these PPAs are contracted over a long period with a weighted average remaining life as at 31 December 2022 of 14.6 years (31 December 2021: 16.7 years).

The Company continues to meet its day-to-day liquidity needs through its cash resources. Total expenses for the year ended 31 December 2022 were $2.3 million Period from incorporation to 31 December 2021: $2.0 million), which represented approximately 1.8% of average net assets during the Year (Period from incorporation to 31 December 2021: 1.6%). At the date of approval of this Annual Report, based on the aggregate of investments and cash held, the Company had substantial cover for its operating expenses.

The major cash outflows of the Company are the acquisition of new investments and the payment of dividends. The Directors review financial reporting and forecasts at each quarterly Audit Committee meeting, which includes reporting related to indebtedness, compliance with borrowing covenants and fund investment limits. The Directors are confident that the Company has sufficient cash balances, borrowing headroom and anticipated tax equity arrangements in order to fund the commitments detailed in note 19 to the financial statements, should they become payable.

As a result of the macro-economic situation brought about by the Russian invasion of Ukraine and the recovery from the COVID-19 pandemic, the Directors have fully considered each of the Company's investments. The Directors do not foresee any immediate material risk to the Company's investment portfolio and/or the income it receives from underlying SPVs. A prolonged and deep market decline could lead to falling values in the underlying investments or interruptions to cashflow, however the Company currently has sufficient liquidity available to meet its future obligations. The Directors are also satisfied that the Company would continue to remain viable under downside scenarios, including decreasing U.S. government regulated tax credits and a decline in long term power price forecasts.

The Company's ability to continue as a going concern has been assessed by the Directors for a period of at least 12 months from the date the financial statements were authorised for publication.

Critical accounting judgements, estimates and assumptions

Preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates are, by their nature, based on judgement and available information, hence actual results may differ from these judgements, estimates and assumptions. 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.

Key judgements

As disclosed above, the Directors have concluded that both 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 met the criteria outlined in IFRS 10.

Key estimation and uncertainty: Investments at fair value through profit or loss

The Company's investments in unquoted investments are valued by reference to valuation techniques approved by the Directors and in accordance with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines.

The Company uses discounted cash flow ("DCF") models to determine the fair value of the underlying assets in Holdco. The value of Holdco includes any working capital not accounted for in the DCF models (deferred tax liabilities, cash plus any receivables or payables at the entity and not at the asset level). The fair value of each asset is derived by projecting its future cash flows, based on a range of operating assumptions for revenues and expenses, and discounting those future cash flows to the present using a discount rate appropriately calibrated to the risk profile of the asset and market dynamics. The key estimates and assumptions used within the DCF include discount rates, annual energy production, curtailment, merchant power prices, useful life of the assets, and various operating expenses and associated annual escalation rates often tied to inflation, including O&M, asset management, balance of plant, land leases, insurance, property and other taxes and decommissioning bonds, among other items. An increase/(decrease) in the key valuation assumptions would lead to a corresponding decrease/(increase) in the fair value of the investments as described in note 4 to the financial statements. The Company's investments at fair value are not traded in active markets.

The estimates and assumptions used to determine the fair value of investments are disclosed in note 4 to the financial statements.

Segmental reporting

The Chief Operating Decision Maker, 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 Chief Operating Decision Maker to manage the Company presents the business as a single segment.

All of the Company's income is generated within the U.S. All of the Group's non-current assets are located in the U.S.

New Standards, Interpretations and Amendments adopted from 1 January 2022

A number of new standards, amendments to standards are effective for annual periods beginning after 1 January 2022. None of these have a significant effect on the measurement of the amounts recognised in the financial statements of the Company.

New Standards and Amendments issued but not yet Effective

The relevant new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. These standards are not expected to have a material impact on the entity in future reporting periods and on foreseeable future transactions.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2023. This amendment is not yet endorsed in the UK.

Definition of Accounting Estimates - Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduced a definition of 'accounting estimates'. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements. The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023.

3. Significant Accounting Policies

Financial Instruments

Financial assets

The Company's financial assets principally comprise an investment held at FVTPL (investment in Holdco) and trade and other receivables.

The Company's investment in Holdco, being classified as an investment entity under IFRS 10, is held at FVTPL in accordance with IFRS 9. Gains or losses resulting from movements in fair value are recognised in the Company's Statement of Comprehensive Income at each valuation point.

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 FVTPL) 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 FVTPL are recognised immediately in profit or loss.

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.

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Gains and losses resulting from movements 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

The following accounting policies for taxation and deferred tax are in respect of UK tax and deferred 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 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.

Income

Income includes investment income from financial assets at FVTPL and finance income.

Dividend income is recognised when received and is reflected in the Statement of Comprehensive Income as Investment Income. Bank deposit interest income is earned on bank deposits on an accruals basis.

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, including the Investment Management fee, are presented in the revenue column of the Statement of Comprehensive income as they are directly attributable to the operations of the Company with the exception of costs incurred in the acquisition of the seed assets in the Period ended 31 December 2021, which were charged as a capital item in the Statement of Comprehensive Income.

Details of the Company's fee payments to the Investment Manager are disclosed in note 6 to the financial statements.

Foreign currency

Transactions denominated in foreign currencies are translated into U.S. Dollars at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Year end are reported at the rates of exchange prevailing at the Year 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 include deposits held at call with banks and other short-term deposits with original maturities of three months or less.

Share capital and share premium

Shares are classified as equity. Costs directly attributable to the issue of new Shares (that would have been avoided if there had not been an issue of new Shares) are recognised against the value of the 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.

Nature and purpose of equity and reserves:

Share capital represents the nominal value (1 cent per share) of the issued share capital. The Share premium account arose from the net proceeds of new Shares.

The Special distributable reserve, which can be utilised to fund distributions to the Company's Shareholders, was created following confirmation of the Court, through the cancellation and transfer of $121,250,000 in January 2021 from the Share premium account.

The capital reserve reflects any:

· gains or losses on the disposal of investments;

· exchange movements of a capital nature;

· the increases and decreases in the fair value of investments which have been recognised in the capital column of the Statement of Comprehensive Income; and

· expenses which are capital in nature.

The revenue reserve reflects all income and expenditure recognised in the revenue column of the Statement of Comprehensive Income and is distributable by way of dividend.

The Company's distributable reserves consists of the Special distributable reserve, the Capital reserve attributable to realised profits and the Revenue reserve.

Dividend payable

Dividends payable are recognised as distributions in the financial statements when the Company's obligation to make payment has been established.

4. Investment Held at Fair Value Through Profit or Loss

As at 31 December 2022, the Company had one investment, being Holdco. The cost of the investment in Holdco was US$ 134,065,052 (31 December 2021: US$119,203,824).

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 three levels:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2

Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

Due to the nature of the underlying investments held by Holdco, the Company's investment in Holdco is always expected to be classified as Level 3. There have been no transfers between levels during the Year/Period.

The movement on the Level 3 unquoted investment during the Year/Period is shown below:

Valuation methodology

The Company owns 100% of its subsidiary Holdco through which the Company has acquired all its underlying investments in SPVs.

As discussed in Note 2, the Company meets the definition of an investment entity as described by IFRS 10, and as such the Company's investment in Holdco is valued at fair value. In accordance with Company policy, the Investment Manager has engaged an independent valuation firm, Marshall & Stevens, to carry out fair market valuations of the underlying investments as at 31 December 2022.

Fair value of operating assets is derived using a DCF methodology, which follows International Private Equity Valuation and Venture Capital Valuation Guidelines. DCF is deemed the most appropriate methodology when a detailed projection of future cash flows is possible. The fair value of each asset is derived by projecting the future cash flows of an asset, based on a range of operating assumptions for revenues and expenses, and discounting those future cash flows to the present day with a pre-tax discount rate appropriately calibrated to the risk profile of the asset and market dynamics. Due to the asset class and available market data over the forecast horizon, a DCF valuation is typically the basis upon which renewable assets are traded in the market. Assets that are not yet operational and still under construction at the time of the valuation are held at cost as an estimate of fair value, provided no significant changes to key underlying economic considerations (such as major construction impediments or natural disasters) have arisen.

The Company measures the total fair value of Holdco by its net asset value, which is made up of cash, working capital balances and the aforementioned fair value of the underlying investments as determined using the DCF methodology.

The Directors have satisfied themselves as to the methodology, the discount rates used and key assumptions applied and the valuation.

Valuation Sensitivities

A sensitivity analysis is carried out to show the impact on NAV of changes to key assumptions. For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other key assumption, and that the number of investments in the portfolio remains static throughout the modelled life. The resulting NAV per share impacts are discussed below.

(i) Discount rates

Pre-tax discount rates applied in the DCF valuations are determined by Marshall & Stevens using a multitude of factors, including pre-tax discount rates disclosed by the Company's global peers and comparable infrastructure asset classes as well as the internal rate of return inherent in the original purchase price when underwriting the asset. The DCF valuations utilize two classes of pre-tax discount rates:

a) contracted discount rate applied to the contracted cash flows of each asset and b) uncontracted discount rate (higher) applied to the uncontracted (or "merchant") cash flows of each investment which will occur after the initial PPA and/or other contract term.

The pre-tax discount rates used in the DCF valuation of the investments are considered the most significant observable input through which an increase or decrease would have a material impact on the fair value of the investments at FVTPL. As of 31 December 2022, the blended pre-tax discount rates (i.e., the implied discount rate of both the contracted and uncontracted discount rates of each investment) applied to the portfolio ranged from 6.7% to 8.0% (2021: 6.5% to 7.8%) with an overall weighted average of 7.5% (2021: 7.2%).

An increase or decrease of 0.5% in the discount rates would have the following impact on NAV:

(ii) Energy Production

Solar and wind assets are subject to variation in energy production over time. An assumed "P75" level of energy yield (i.e. a level of energy production that is below "P50", with a 75% probability of being exceeded) would cause a decrease in the total portfolio valuation, while an assumed "P25" level of power output (i.e. a level of energy production that is above "P50", with a 25% probability of being achieved) would cause an increase in the total portfolio valuation.

Energy production, as measured in MWh per annum, assumed in the DCF valuations is based on a "P50" energy yield profile, representing a 50% probability that the energy production estimate will be met or exceeded over time. An independent engineer has derived this energy yield estimate for each asset by taking into account a range of irradiation, weather data, ground-based measurements and design/site-specific loss factors including module performance, module mismatch, inverter losses, and transformer losses, among others. The "P50" energy yield case includes a 0.5% annual degradation for solar assets and 1.0% annual degradation for wind assets through the entirety of the useful life. In addition, the P50 energy yield case includes an assumption of availability, which ranges from 98.5% to 99% for solar assets and 96.0% for wind assets, as determined reasonable by an independent engineer at the time of underwriting the asset.

The application of a P75 and a P25 energy yield case would have the following impact on NAV:

(iii) Curtailment

Curtailment is the deliberate reduction (by the transmission operator) in energy output of an asset below what could have been produced in order to balance energy supply and demand or due to transmission constraints. Due to the contracted nature of energy production of its renewable energy investments held by Holdco and with a substantial share of its solar assets being behind-the-meter and directly connected to the energy consumer, the Company's NAV is subject to a low overall level of curtailment, which has been factored into NAV.

An increase or decrease of 50% from the assumed level of curtailment would have the following impact on NAV:

(iv) Merchant Power Prices

All of the Company's assets have long-term PPAs and incentive contracts in place with creditworthy energy purchasers, and thus are not impacted by fluctuations in regional market energy prices during the contract period. Future power price forecasts used in the DCF valu-ations are derived from regional market forward prices provided by the EIA, with a 10-50% discount applied based on the characteristics of the asset as reasonably determined by Marshall & Stevens. Inflationary pressures over the long-term could present a circumstance of variability and increase merchant power prices from previous forecasts.

An increase or decrease of 10% in future merchant power price assumptions would have the following impact on NAV:

(v) Operating Expenses

Operating expenses include O&M, balance of plant, asset management, site leases and easements, insurance, property taxes, equip-ment reserves, decommissioning bonds and other costs. Most operating expenses for solar and wind assets are contracted with annual escalation rates, which typically range from 2-3% to account for normalised inflation. As such, there is typically little variation in annual operating expenses. However, there may be incidents when certain expenses may be recontracted. Inflationary pressures over the long-term could also affect future operating expenses.

An increase or decrease of 10% in operating expenses would have the following impact on NAV:

5. Income

6. Investment Management Fees

The Investment Management Agreement ("IMA") dated 11 November 2020 between the Company and Ecofin Advisors, LLC, appointed the AIFM to act as the Company's Investment Manager for the purposes of the AIFM Directive. Accordingly, the AIFM is responsible for providing portfolio management and risk management services to the Company.

Under the IMA, the Investment Manager receives a management fee of 1.00% per annum of NAV up to and including $500 million; 0.90% per annum of NAV in excess of $500 million up to and including $1 billion; and 0.80% per annum of NAV in excess of $1 billion, invoiced quarterly in arrears. Until such time as 90% of the Net Initial Proceeds of the Company's IPO was committed to investments, the Investment Manager fee was only charged on the committed capital of the Company. No performance fee or asset level fees are payable to the AIFM under the IMA.

The Investment Manager reinvests 15% of its annual management fee in Shares (the "Management Fee Shares"), subject to a rolling lock-up of up to two years, subject to certain limited exceptions. The Management Fee Shares are issued on a quarterly basis. Where the Shares are trading at a premium to NAV, the Company will issue new Shares to the Manager equivalent in value to the management fee reinvested. Where the Shares are trading at a discount to NAV, the Management Fee Shares will be purchased by the Company's Brokers at the prevailing market price.

The calculation of the number of Management Fee Shares to be issued is based upon the NAV as at the relevant quarter-end concerned. The Investment Manager is also entitled to be reimbursed for out-of-pocket expenses reasonably and properly incurred in respect of the performance of its obligations under the IMA.

Unless otherwise agreed by the Company and the Investment Manager, the IMA may be terminated by the Company or the Investment Manager on not less than 12 months' notice to the other party, such notice not to expire earlier than 36 months from the Effective Date of the IMA (11 November 2020). The IMA may be terminated by the Company with immediate effect from the time at which notice of termination is given or, if later, the time at which such notice is expressed to take effect in accordance with the conditions set out in the IMA.

The Company has issued or the Company's Broker has purchased the following Shares to settle investment management fees in respect of the year under review:

7. Other Expenses

The Auditor's fee for the statutory audit of the Year is $160,000 including VAT of $26,800 (2021: $123,000 including VAT of $20,500).

8. Earnings Per Share

Earnings per Share is based on the profit for the year ended 31 December 2022 of $1,181,000 (2021: $3,443,000) attributable to the weighted average number of Shares in issue of 132,933,277 in the year to 31 December 2022 (2021: 92,475,686). Revenue and capital profit/(loss) are $7,545,000 and ($6,364,000) respectively (2021: $4,202,000 and ($759,000).

9. Taxation

(a) Analysis of charge in the Year/Period

(b) Factors affecting total tax charge for the Year/Period:

The UK corporation tax rate applicable to the Company for the Period is 19.00%. The actual tax charge differs from the charge resulting from applying the standard rate of UK corporation tax.

The differences are explained below:

Investment companies which have been approved by HMRC under section 1158 of the Corporation Tax Act 2010 are exempt from tax on UK 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.

As at 31 December 2022, a deferred tax liability of $3,149,000 (2021: $1,884,000) representing U.S. Federal income taxes deferred had been accrued and reflected in the valuation of the Company's subsidiary, Holdco.

The Company has excess management expenses of $4,186,000 (2021: $1,853,000) that are available for offset against future profits. A deferred tax asset of $1,046,500 (2021: $462,250) has not been recognised in respect of these losses as they will be recoverable only to the extent that the Company has sufficient future taxable profits.

The March 2021 Budget announced an increase to the main rate of UK corporation tax to 25% effective from 1 April 2023. This increase in the standard rate of corporation tax was enacted on 24 May 2021.

10. Trade and Other Receivables

11. Trade and Other Payables

12. Share Capital