Enriching
lives through
infrastructure
HICL Annual
Report 2025
Contents
For definitions of our financial terms used
throughout this report, please see our
Glossary on pages 151 and 152
STRATEGIC REPORT
2025 Highlights 1
Chair’s Statement 2
HICL at a Glance 4
The Infrastructure Market 8
HICL’s Business Model 10
Key Performance and Quality Indicators 14
Investment Manager’s Report 16
Top 10 Assets 22
Our Sustainability Strategy 32
Financial Review 36
Valuation of the Portfolio 42
Risk and Risk Management 49
Viability Statement 58
Strategic Report Disclosures 59
TCFD 61
GOVERNANCE
Board and Governance 68
Board of Directors 69
The Investment Manager 71
Corporate Governance Statement 72
Management Engagement Committee (MEC) 78
Market Disclosure Committee 78
Nomination Committee 79
Risk Committee Report 80
Audit Committee Report 82
Directors’ Remuneration Report 88
Report of the Directors 92
Statement of Directors’ Responsibilities 95
FINANCIALS
KPMG LLP’s Independent Auditor’s Report 97
Income statement 109
Statement of financial position 110
Statement of changes in shareholders’ equity 111
Cash flow statement 112
Notes to the financial statements 113
Appendix 1: SFDR Disclosures 143
Appendix 2: Valuation Policy 149
Appendix 3: Infrastructure Market – Sources 150
Glossary 151
Directors and advisers 153
1HICL Annual Report 2025
Strategic Report FinancialsGovernance
2025 Highlights
118
12
19
25
32
39
46
53
60
68
75
83
91
100
108
116
124
98
6
120
107 107
110
113
116
123
135
140
147
148
155
150 150
161
163
IPO
Cumulative Dividends (p)
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
NAV per share (p)
FY24 FY25
133
156
141
153
Delivering sustainable income and capital growth
from a diversified core infrastructure portfolio
153.1p 8.50p 8.4% p.a.
NAV
1
per share
2024: 158.2p
New dividend guidance
2
for 2027
Reaffirmed dividend guidance
8.35p for 2026
Total Shareholder
Return since IPO
3
0.7x £244m 1.56x/1.07x
Inflation correlation
4
2024: 0.7x
Transactions completed
inthe year
Dividend cash cover including/excluding
profits on disposal
5
2024: 1.37x / 1.05x
Total return of 8.4% p.a. since IPO
The chart below shows how the combination of dividend and Net Asset Value (“NAV”)
growth has delivered a total return of 8.4% p.a. from IPO to 31 March 2025.
References are made throughout to certain Alternative Performance Measures (“APMs”). These APMs, which include the Investment Basis, are provided alongside International Financial Reporting
Standards (“IFRS”) to provide additional information to shareholders.
A full reconciliation of the APMs used is disclosed on page 39
1 NAV, including the dividend of 2.07p declared on 14 May 2025
2 Expressed in pence per Ordinary Share for the financial year ending 31 March. This is a target only and not a profit forecast. There can be no assurance that this target will be met
3 Based on interim dividends paid plus change in NAV per share in the year
4 If outturn inflation was 1% p.a. higher than the valuation assumption in each and every forecast period, the expected return from the portfolio (before Corporate Group expenses)
would increase by 0.7%
5 Stated on an Investment Basis, including profits on disposal versus original acquisition cost of £82.7m (2024: £53.4m). Excluding this, dividend cash cover is 1.07x (2024: 1.05x)
2 HICL Annual Report 2025
Your Board recognises and shares dissatisfaction
with the Company’s share price which continues to
suffer from macroeconomic, political and financial
market volatility. The share price does not reflect HICL’s
solid underlying performance; nor does it capture the
true value of the Company’s portfolio. Alongside the
Investment Manager, InfraRed
2
, we are acutely focused
on addressing this value dislocation through further
strategic disposals, share buybacks, and enhanced
dividend guidance.
The Board has also agreed a reduced management fee
incorporating market capitalisation and based on NAV from
the previous Gross Asset Value (“GAV”) based calculation.
The revised fee will be calculated on the average of the
Company’s most recently published NAV and its daily
average closing market capitalisation
3
. This 50:50 fee
basis strengthens alignment between the Investment
Manager and shareholders. Based on the current share
price, the management fee will reduce by 17% and the pro
forma Ongoing Charges Ratio will fall to 0.95% (1.10%for
31 March 2025). Subject to finalisation of contractual
arrangements, the new fee will apply from 1 July 2025.
Proactive Capital Allocation
Effective capital allocation and accretive portfolio rotation
remained important areas of focus for the Board during
the year. HICL successfully completed the previously
announced disposals amounting to £244m, paid down
the Revolving Credit Facility (“RCF”) and completed the
Company’s initial £50m share buyback programme, which
provided 0.7p of NAV accretion.
In March 2025, the Board took the decision to increase
the pace of share buyback activity and expanded the
programme by a further £100m running to the end of
the calendar year 2025. The return currently implied on
buybacks is 11.1%
4
, which is compelling compared to
alternative uses of capital.
Building on its successful track record of over
£1bn in asset sales for HICL since its IPO, the
Investment Manager is now targeting at least £200m
of further strategic disposals during the coming
financial year, enhancing portfolio construction and
funding the expanded buyback programme and
investment commitments.
A key enabler of effective capital allocation is the
underlying performance of the portfolio. The portfolio
delivered a solid operational performance in the year,
demonstrating the resilient nature of the underlying
assets and the increasing contribution of the Company’s
growth investments. Higher cash flow generation from
the portfolio underpins the Board’s decision to reiterate
dividend guidance of 8.35pps for the year to 31 March
2026 and issue new dividend guidance of 8.50pps for
the year to 31 March 2027. For more information on
operational performance please refer to the Investment
Manager’s Report on pages 16 to 21.
1 HICL Infrastructure PLC and its subsidiaries are defined as either HICL or the Group throughout the Report. HICL Infrastructure PLC, the Company only, is defined as the Company
throughoutthereport
2 The Investment Manager of HICL Infrastructure Plc, InfraRed Capital Partners Limited (“InfraRed”)
3 The base fee payable under the new arrangements will be capped such that the base fee payable will be no higher than under the existing GAV-based arrangements
4 Based on discount rate, adjusted to reflect the share price discount to the NAV as at 31 March 2025, using published discount rate sensitivities as at 31 March 2025
Chair’s Statement
I am pleased to present another solid
set of operating results despite the
Company’s unsatisfactory share price
performance. In the year, your Board
and Investment Manager prioritised the
completion of significant asset sales and
the implementation of the Company’s
share buyback programme. Further asset
sales and an expanded share buyback
programme have also been announced.
These actions enhance shareholder returns
and demonstrate the inherent value of
H I C L’s
1
investment portfolio.
The Board is pleased to issue new
dividend guidance of 8.50pps
for the year to 31 March 2027,
reflecting higher cash flow
generation from the portfolio.
3HICL Annual Report 2025
Strategic Report FinancialsGovernance
153.1p
NAV per share
at 31 March 2025
8.50pps
New dividend
guidance
for FY 2027
£150m
Announced
share buyback
programme
>
£200m
Strategic
disposals
targeted
HICL benefits from a strong balance sheet and solid
operational performance; fundamentals that we expect
to be recognised in the share price as the Company
executes its strategy.
Financial Performance
The Company’s NAV per share at 31 March 2025 was
153.1p (March 2024: 158.2p). This result reflects solid
operational performance offset by an increase in the
weighted average discount rate of the portfolio driven by
macroeconomic conditions.
The portfolio delivered an underlying return of 7.7%
(March 2024: 9.0%), close to the expected performance
of 8.0% (the weighted average discount rate at 31 March
2024). Affinity Water and the growth assets outperformed
expectations, substantially offsetting the negative
impacts of lower real inflation in the UK and Europe and
the recognition of increased forecast cost risk across
a subset of UK PPP assets, as disclosed in HICL’s
30 September 2024 Interim Report.
The weighted average discount rate used to value
the portfolio increased to 8.4% (March 2024: 8.0%),
a 40bps average increase in the year. This largely
reflects significant increases in government bond yields
across HICL’s geographies, balanced against relevant
transaction data, including the announced acquisition of
BBGI Global Infrastructure S.A. and HICL’s own current
disposal activity. These all provide evidence of consistent
and robust valuations for core infrastructure assets.
The total movement in NAV for the year to 31 March 2025
was (5.1)p, with (6.9)p relating to the change in discount
rates. Total Shareholder Return for the year was 2.0%
(March 2024: 1.0%)
5
and earnings per share was 2.3p
(March 2024: 1.5p). More detailed explanations of the
portfolio’s valuation and the discount rate can be found in
the Valuation of the Portfolio section, starting on page 42.
The Board and Investment Manager appreciate the
importance of enhanced disclosure of operational
metrics such as cash generation and earnings, both for
current and future shareholders. Further details can be
found in the accompanying Investor Presentation for the
Annual Results.
Governance
In line with the UK Corporate Governance code, the Board
maintains the policy that Directors serve for no more
than nine years, other than in exceptional circumstances.
The Board and I extend our thanks to Simon Holden and
Kenneth Reid who will complete their full nine-year terms
on the Board in the coming year. They have both made
exceptional contributions to the HICL Board. After a period
of transition, Liz Barber assumed Simon’s responsibilities as
Chair of the Risk Committee in February 2025 and Frances
Davies will take over Ken’s role as Senior Independent
Director and Chair of the Management Engagement
Committee as he approaches retirement. I wish Liz and
Frances all the best in their new responsibilities.
The Board continues to be proactive in succession
planning to ensure it has a mix of appropriate skills and
experience. Towards the end of last year, an independent
external recruitment process was started with the aim
of finding a new Director with a profile and skillset that
would best complement that of the remaining Directors.
This process concluded recently with the appointment
of Graham Sutherland as a non-executive Director.
Graham is currently the Chief Executive Officer of First
Group plc, and will bring considerable infrastructure and
listed market experience to the Board. I am delighted to
welcome him to the Board and to HICL.
The Board and Audit Committee have conducted a
review of external audit provision. To manage the risk
around the longevity of auditor engagement with the
current auditors KPMG LLP, the Board intends to appoint
Deloitte LLP as HICL’s auditor for the financial year
starting 1 April 2025, subject to shareholder approval at
the 2025 Annual General Meeting (“AGM”).
Outlook
The Board has continued to prioritise proactive capital
allocation for the benefit of shareholders and to address
the current share price. The Investment Manager has
repeatedly demonstrated the intrinsic value and solid
performance of HICL’s investments by completing over
£500m of accretive disposals over the last two years.
We expect this to continue with at least £200m of further
sales targeted and with proceeds recycled into accretive
opportunities – including share buybacks and selective
investments offering compelling risk-adjusted returns.
Looking ahead, we expect distributions from the Group’s
investments to increase as HICL’s growth assets mature
and PPP assets begin to return capital. Reinvestment of
these cash flows is critical to the ability of the Company
to maintain and grow its portfolio valuation and long-term
earnings base. Appropriately balancing the portfolio
between growth assets and higher yielding investments
is a key strategic priority for the Board and InfraRed.
In this context, the outlook for infrastructure investment
is arguably more compelling than for any other asset
class. The increasing importance of private investment
in infrastructure globally is in sharp focus as nations,
including the UK, look increasingly inwards, renewing
legacy infrastructure, responding to global infrastructure
megatrends, and aspiring to fulfil ambitious growth
agendas. The Investment Manager continues to selectively
review investment opportunities for HICL that improve
portfolio composition, including captive opportunities from
existing investments
HICL remains a highly diversified, long-term investor
in critical infrastructure projects, positioned at the
forefront of structural market tailwinds. Global demand
for infrastructure investment is estimated to reach $68tn
by 2040
6
. As a global investor with a recognised track
record and a resilient balance sheet, your Company is
well positioned to benefit from these opportunities over
the coming years.
Mike Bane
Chair
20 May 2025
5 Based on interim dividends paid plus change in NAV per share in the year
6 Global Infrastructure Hub (gihub.org), Deloitte. Infrastructure needs defined as new investment, replacement investment and spending on maintenance where the investment will substantially
extend the lifetime of an asset but excluding land purchases. Needs determined on the basis that countries match the performance of their best performing peers in terms of the resources they
dedicate to infrastructure investment. Investment need calculated from 2024-2040
Underpinned by a commitment to sustainability
4 HICL Annual Report 2025
HICL at a Glance
As a prominent long-term
investor incore infrastructure,
HICL creates lasting value for
shareholders andsocieties.
HICL’s ability to create value for shareholders
over the long-term is intrinsically linked to
delivering positive outcomes for the communities
served by its essential infrastructure assets.
Operating in a sustainable and responsible
manner is therefore central to the Company’s
business model.
Mike Bane
Chair of the Board of Directors
Our vision is to enrich lives through infrastructure
Strong social
foundations
44%
of portfolio
Assets that constitute the
foundation of our societies,
such as:
– Health
– Education
– Fire, Law and Order
– Accommodation
Connecting
communities
36%
of portfolio
Assets that link people to
the economy and each other,
suchas:
– Availability or toll roads
– Rail and rolling stock
– Fibre networks
– Mobile towers
Sustainable modern
economies
20%
of portfolio
Assets supporting the energy
transition and continued
resource security, such as:
– Water
– OFTOs
– Electricity transmission
Read more about our Top 10 investments on page 22
Read more about HICL’s sustainability highlights and the
alignment of its portfolio with the UN SDGs on page 32
Our purpose is for HICL to be the pre-eminent
investor in essential core infrastructure in our
chosenmarkets
Investing in assets with strong social foundations such as healthcare and education; assets
thatconnect communities from rail and road to communications; and assets that support
thetransition to a low-carbon modern economy.
5HICL Annual Report 2025
Strategic Report FinancialsGovernance
A strong investment proposition
HICL’s Investment Proposition is to deliver sustainable income and capital
growth from a diversified portfolio of investments in core infrastructure.
Diversification Sustainability Total return
We provide shareholders
withimmediate access to
a portfolio of
Over 35 million people have access
to the essential services facilitated
by our infrastructure
Since IPO we have delivered
a Total Shareholder Return
1
of
100+ 35m 8.4% p.a.
assets people
Yield Inflation correlation Asset life
We deliver a
sustainable dividend
We deliver a return
that correlates to
long-term inflation
2
We offer cash flow
visibility from long-life
infrastructure assets
8.25p 0.7x 30.4 yr
per share 2025 weighted average asset life
Read more on page 8
InfraRed is the Investment Manager, operating
the investment portfolio and responsible for
delivering HICL’s purposeand vision
US$13bn+
Equity under
management
240+
Investments
100+
Infrastructure
professionals
25+ yr
Track record
Read more at www.ircp.com
160+
Employees in five international offices
1 Return based on NAV growth and dividends paid per share since IPO
2 If outturn inflation was 1% p.a. higher than the valuation assumption in each and every forecast period, the expected return from the portfolio (before Corporate Group expenses) would
increase by 0.7%
Geography
1
2
3
4
Sector
1
2
3
4
5
6
7
1
2
8
9
10
51.1%
1
2
3
4
5
6
7
8
9
10
R
e
m
a
i
n
i
n
g
I
n
v
e
s
t
m
e
n
t
s
HICL at a Glance continued
A diverse portfolio
with over 100 assets
1
Read more about out Top 10 investments on page 22
A diverse portfolio of over 100 assets
1 By value, at 31 March 2025, using Directors’ Valuation
1
Affinity Water
Sector: Electricity & Water
Location: UK
% of portfolio: 10.8%
HICL holding: 33.2%
5
London St. Pancras
Highspeed
Sector: Transport
Location: UK
% of portfolio: 4.9%
HICL holding: 21.8%
8
Royal School of
Military Engineering
Sector: Accommodation
Location: UK
% of portfolio: 3.3%
HICL holding: 100.0%
1 UK 66%
2 EU 21%
3 North America 7%
4 Australia/New Zealand 6%
1 Transport 26%
2 Health 22%
3 Electricity & Water 20%
4 Education 10%
5 Communications 9%
6 Accommodation 8%
7 Fire, Law & Order 5%
6 HICL Annual Report 2025
4
Texas Nevada
Transmission
Sector: Electricity & Water
Location: USA
% of portfolio: 5.1%
HICL holding: 45.8%
7
Pinderfields &
Pontefract Hospitals
Sector: Health
Location: UK
% of portfolio: 3.4%
HICL holding: 100.0%
3
Fortysouth
Sector: Communications
Location: New Zealand
% of portfolio: 6.3%
HICL holding: 40.0%
2
A63 Motorway
Sector: Transport
Location: France
% of portfolio: 7.6%
HICL holding: 24.0%
9
Home Office
Sector: Accommodation
Location: UK
% of portfolio: 2.9%
HICL holding: 100.0%
10
Altitude Infra
Sector: Communications
Location: France
% of portfolio: 2.9%
HICL holding: 5.9%
6
Southmead
Hospital
Sector: Health
Location: UK
% of portfolio: 3.9%
HICL holding: 62.5%
7HICL Annual Report 2025
Strategic Report FinancialsGovernance
8 HICL Annual Report 2025
The infrastructure market
HICL invests in core infrastructure, the segment of the
infrastructure market at the lower end of the risk spectrum,
as described by HICL’s core infrastructure framework (see
page 10). Core infrastructure captures those critical assets
that underpin the functioning of economies and societies,
and therefore represents the most pressing investment
need. Across the OECD, the core infrastructure sectors
in need of investment include transport, healthcare,
electricity grid infrastructure and digitalisation.
Driven bythe policy updates described in this section,
along with broader global megatrends, the Company
expects to benefit from attractive opportunities to invest
in various core infrastructure assets which support
government ambitions and underpin sustainable
long-term economic growth.
A snapshot of key infrastructure market developments
isprovided below.
Policy landscape
– The UK’s Infrastructure and Projects Authority (IPA) was
merged with the National Infrastructure Commission
(“NIC”) to form the new National Infrastructure and Service
Transformation Authority (“NISTA”). NISTA will focus on
accelerating the delivery of major projects to support the
UK’s national 10 Year Infrastructure Strategy, which is due to
be published in June 2025.
– The UK Infrastructure Bank (“UKIB”) was rebranded as the
National Wealth Fund (“NWF”). This vehicle, which now has a
broader remit and greater capacity for risk, is capitalised with
£27.8bn and will make private sector investments in areas
which support the UK’s clean energy and growth ambitions.
– The new government has identified infrastructure investment,
delivered in partnership with the private sector, as a key
catalyst of economic growth. In March 2025, the National
Audit Office (“NAO”) published a summary of lessons
learned from previous private finance initiatives. In its report,
the NAO identified that a new PPP model in the UK could
play an important role in boosting private investment in
UK infrastructure.
– In the year, prominent figures in the NHS called on the UK
government to consider the expansion of private sector
involvement in the delivery of healthcare infrastructure.
A range of new private finance schemes are now being
considered as part of work to develop the government’s
10-year plan for the NHS.
– The Government confirmed it would mobilise over £35bn
of investment into economic infrastructure between 2025
and 2026. This is expected to be deployed through both
public and private capital with a focus on revenue-generating
projects in the energy, utilities and transport sectors.
The Government also announced its ambition to leverage
AIto drive economic growth, acknowledging the importance
of the digital infrastructure needed to support this.
– In May 2025 17 of the UK’s largest pension funds pledged to
invest at least 10% of their assets in private markets by 2030,
of which at least half will be focused on the UK.
Policy landscape
– In Europe, infrastructure investment is being supported by
governments seeking to bolster energy independence and
overall security in response to new geopolitical dynamics.
– In March 2025, German lawmakers voted to exempt
spending on defence and security from the country’s
strict debt rules and create a €500bn infrastructure
fund. The initiative aims to support the modernisation
of infrastructure related to the energy, transport, digital
and social sectors. (See InfraRed insight: Germany’s
€1 Trillion ‘whatever it takes’ moment: Implications for
infrastructure investors).
– The European Commission has selected 134 transport
projects to receive over €7bn in EU grants from the
Connecting Europe Facility (“CEF”), the EU’s instrument for
strategic investment in infrastructure. This represents the
largest call under the current CEF Transport programme.
Around 83% of the funding will support projects that deliver
on the EU’s climate objectives, improving and modernising
the EU network of railways, inland waterways and maritime
routes along the Trans-European Transport (TEN-T) Network.
– French President Emmanuel Macron announced a €109bn
AI investment package to be delivered in the country over
the coming years. This will focus on developing infrastructure
such as data centres and computing clusters.
– The European Commission noted that in 2021, district
heating (networks for distributing heat locally) accounted for
approximately 12% of the EU’s final energy consumption for
space and water heating. It is anticipated that this capacity
will expand by at least 80% by 2030.
EuropeUK
20
25
20
24
20
23
35
64
65
No. of core infrastructure transactions observed
74
96
133
20
25
20
24
20
23
No. of core infrastructure transactions observed
9HICL Annual Report 2025
Strategic Report FinancialsGovernance
Policy landscape
– The US government issued an executive order in April 2025
that focuses on strengthening the reliability and security of
the nation’s electricity grid in response to increasing electricity
demand, capacity constraints and the growth of technology-
driven sectors (notably AI).
– The US government announced a private sector investment
of up to $500bn to fund infrastructure for AI. The new
company, called the Stargate Project will focus on building
data centres, with the first already under construction in
Texas. Between 2024 and 2030, electricity demand for data
centres in the United States is expected to increase at a
compound annual rate of 23%.
– Through the Investing in Canada Plan, launched in 2016, the
Canadian government committed to delivering over $180bn
of infrastructure spending over 12 years. To date, $157bn
of funding under the plan has been put towards vital public
transit systems, clean water and wastewater systems, and
social infrastructure. This leaves c.$23bn to be deployed over
the next c. three years.
Policy landscape
– In March 2025, at the New Zealand government’s Infrastructure
Investment Summit, ministers emphasised that the nation
was seeking to open its economy to foreign investment.
New Zealand’s infrastructure minister acknowledged an
“infrastructure deficit” inthe country that may be as large as
NZ$200bn and the need for foreign investment to close this.
– The mandate of Future Fund, Australia’s A$230bn sovereign
wealth fund, was updated by the Australian government to focus
more on domestic infrastructure, residential housing and the
energy transition. This marks the first time that the Future Fund
has been directed by the Australian government to consider
specific asset types and sectors in its portfolio construction.
– In New Zealand, a framework encouraging greater usage of
PPPs to develop large-scale infrastructure projects was released
by the government, with support from the opposition.
– Energy sector leaders in New Zealand launched the Energy
Transition Framework, under which they commit to collaborative
efforts to ensure the security and reliability of the nation’s
energy system.
North America Australia & New Zealand
Relevant transaction datapoints
56.8%
5.1%
6.3%
Transaction snapshots
In February 2025, the Board of BBGI Global Infrastructure S.A. recommended the cash
acquisition of the company by British Columbia Investment Management (“BCI”), a large
Canadian pension fund. Given BBGI’s positioning as the owner of availability-style assets with
public sector-backed revenues in mature jurisdictions, this transaction is highly relevant to
HICL’s PPP assets, which accounts for 56.8% of its total portfolio by value. BCI’s offer price
represented a 3.4% premium to BBGI’s estimated net asset value as at 31 December 2024.
The implied pricing underscores the strength of institutional demand at attractive valuations
for PPP assets and provides a highly relevant and supportive transaction datapoint for HICL’s
PPP portfolio.
American Electric Power agreed to sell a 19.9% minority stake in two US electric power transmission
companies to KKR and Public Sector Pension Investment Board for $2.8bn. The 2.3x regulated
asset base multiple understood to be implied by this sale price is supportive of HICL’s 31 March 25
valuation of Cross Texas Transmission (“CTT”), which is one of the two systems that make up HICL’s
US electricity transmission portfolio company TNT.
Canadian investment group Caisse de dépôt et placement du Québec (“CDPQ”) completed the
acquisition of a 50% (co-controlling) stake in Connexa for NZ$ 909m. Connexa is one of only two
telecommunications tower companies in New Zealand, the other being Fortysouth which is 40%
owned by HICL. The transaction EBITDA multiple was disclosed as being in line with previous towers
transactions in the New Zealand market, notably Fortysouth, reflecting the attractiveness of the New
Zealand towers and telecoms market structure for investment.
Relevant asset(s)
All PPP projects
TNT
Fortysouth
% of
portfolio
No. of core infrastructure transactions observed
94
103
112
20
25
20
24
20
23
21
21
24
20
25
20
24
20
23
No. of core infrastructure transactions observed
10 HICL Annual Report 2025
Business model
How we create value
1.
Core infrastructure
characteristics we look for…
InfraRed evaluates the infrastructure
marketsystematically using
HICL’s coreinfrastructure framework:
Developed by the Board and
Investment Manager to ensure we
deliver on our Investment Proposition
2.
to deliver on
our strategy…
Cash flow quality
– Low volatility in a range
of macro environments
– Suitable / diverse counterparties
– Inflation protection
– High capital cost
– Low operational complexity
Market positioning
– Monopolistic characteristics
– Regulated in some circumstances
– Capital intensive business model
– Structural protections
Criticality
– Strong social licence and public benefit
– Real assets supporting essential
services or facilitating important
social function
Deliver a sustainabledividend
An annual distribution of at least that
achieved in the prior year, fully cash
coveredand supported by long-term
portfolio earnings.
Grow Net Asset Value
Preserve and grow the capital value
of the investment portfolio over the
long term.
Build a diversified portfolio
tomanage risk
Spanning high-quality assets across
the core infrastructure market.
Provide a compelling
cost proposition
Evidenced through a competitive
Ongoing Charges Ratio.
Accretive
Investment
Value
Preservation
Value
Enhancement
11HICL Annual Report 2025
Strategic Report FinancialsGovernance
See next page for more detail on the three
pillars of HICL’s business model
3.
through our sustainable
approach to value creation…
4.
for the benefit of our
key stakeholders
Our communities
and end users
We invest in essential assets which have
a social purpose and will have a beneficial
impact on the quality of life for the
communities where they are located.
8m+ 500km+
people with
direct access
to healthcare
facilities
of road and
high-speed
railways
120,000
student places
across schools,
colleges and
university facilities
Our clients
We work together with corporate partners
and public sector clients, including the
UK’s National Health Service (“NHS”), local
councils, National Highways, and various
government departments.
18
NHS Trusts in
the portfolio
Our shareholders
A long-term sustainable mindset is
imperative to achieve outperformance
for shareholders. We offer long-term real
returns from core infrastructure assets.
8.4% p.a. 153.1p
Total Shareholder
Return since IPO
NAV per share
12 HICL Annual Report 2025
3
2
1
The three pillars of
our business model
1
Accretive
Investment
HICL has a clearly defined Investment
Policy. This sets the overarching
framework within which HICL
seeks to construct a resilient core
infrastructure portfolio that delivers
the Investment Proposition and is
consistent with HICL’s overall risk
appetite.
Fundamentally it does this through:
– A structured asset quality evaluation
framework focusing on cash flow
quality, market positioning and criticality
– Careful and deliberate portfolio
construction to limit exposure to any
one factor, and in so doing improve
portfolio resilience
– An overarching focus on sustainability
that is built into the investment process
(see HICL’s 2025 Sustainability Report
and HICL’s Sustainability Policy)
– An objective that acquisitions
are generally accretive to key
portfolio metrics
Working within investment parameters
approved by the HICL Board, InfraRed is
responsible for the selection and pricing
of new investments and, from time to
time, disposals. The Acquisition Strategy
is periodically reviewed by the Board and
agreed with InfraRed.
InfraRed’s Investments team, in
coordination with the Fund Management
team, uses a variety of channels to source
accretive transactions for HICL.
The following summarises
HICL’s Acquisition Strategy:
Geography
Located in mature infrastructure markets
Segmentation
Core infrastructure market positioning
Asset quality
Defined by:
– Cash flow quality
– Market positioning
– Criticality
Active Management
Accretive to HICL’s
Investment Proposition
2
Value
Enhancement
InfraRed’s Asset Management
and Portfolio Management teams
pursue opportunities to deliver
outperformance from the existing
portfolio through a systematic,
strategic programme of value
enhancement. This upside is often
shared between HICL’s shareholders
and public sector clients for PPP
projects, or with the customers of
regulated assets through periodic
regulatory price reviews.
Fundamentally it does this through:
– Sponsoring the implementation of
initiatives within portfolio companies to
optimise asset business plans, pursue
growth initiatives or enhance capital
structures (for example, refinancing
existing senior debt facilities)
– Developing and implementing
procurement efficiencies across HICL’s
large and diverse portfolio, in particular
by leveraging economies of scale (for
example, management services and
insurances for PPP projects)
– Exploring opportunities to add to or
upgrade asset level facilities to improve
stakeholder outcomes whilst supporting
long-term shareholder returns (for
example, undertaking contract
variations on PPP projects that add to
the scope of services)
– Driving efficient financial and treasury
management of HICL, seeking
opportunities to reduce ongoing costs
– Considering where value can be
improved, or portfolio risk profile
improved, through selective disposals
3
Value
Preservation
InfraRed’s Asset Management and
Portfolio Management teams work
closely together, in partnership with
the management teams in HICL’s
portfolio companies, to deliver
HICL’s Investment Proposition by
preserving the value of investments
for shareholders and stakeholders.
The objective is to ensure portfolio
companies continue to operate
with the endorsement of their key
stakeholders, including through the
delivery of contractual and regulatory
requirements, in order to deliver the
base-case investment return.
Fundamentally it does this through:
– Providing effective governance of
portfolio companies, usually through
board representation
– Building relationships with key portfolio
company counterparties, in particular,
public sector clients/regulators
– Facilitating and / or driving resolution of
operational issues, including disputes
and critical issues
– Delivering HICL’s sustainability strategy
at the asset level by promoting greater
awareness within portfolio company
management teams and driving the
pursuit of specific initiatives to support
sustainable, responsible business
operations (See our sustainability
strategy and key highlights on
pages32and 33)
– Oversight of financial performance
against HICL’s forecasts
– Optimising cash efficiency by managing
cash flow from HICL investments and
minimising cash drag on returns
– Managing the process and analysis
required for valuations of HICL’s portfolio
– Following prudent financial management
practices (e.g. accounting and tax
policies, treasury processes)
13HICL Annual Report 2025
Strategic Report FinancialsGovernance
Engaging with
our stakeholders
As a responsible owner of essential public assets,
HICL’s ability to deliver its Investment Proposition over the
long term is inextricably linked to the delivery of positive
stakeholder outcomes for the broader community.
Stakeholder expectations Our approach and touchpoints
Our communities and the end users of our assets
We invest in infrastructure projects that provide
essential services to local communities.
In some instances, we deliver those services
directly, such as the provision of clean energy
or water, and in other instances these services
are performed by our public sector clients
such as healthcare services.
Communities expect seamless
access to essential services like
water, transport, and energy.
– We support community engagement
initiatives at the company level
– At the portfolio level, we facilitate the sharing
of best practice for engagement and design
of scalable solutions
– At the Manager level, InfraRed forms
dedicated groups to drive key initiatives
Our clients
We work together with corporate partners
and public sector clients, including the UK’s
NHS, local councils, National Highways,
and various international government
departments to deliver many of our essential
infrastructure services.
Infrastructure assets are built and
maintained in line with contractual
requirements, so that clients can offer
critical services to their communities.
– Direct and proactive client engagement at
the portfolio company level
– Client surveys to understand the needs of
our clients and their communities
– This is a fundamental driver of InfraRed’s
Portfolio Impact Strategy
– We engage in public-private working
groups to identify solutions to industry
challenges such as net zero and
handback requirements
Our people
HICL portfolio companies employ over 2,300
people, and thousands more through each
asset’s supply chain. InfraRed has a talented,
diverse team of over 160 people worldwide
which comprises over 20 nationalities
speaking 20 different languages.
Make a positive impact on the
environment and society while
growing personally and professionally.
– Through our governance rights, we ensure
portfolio companies who employ staff
directly have current and appropriate
policies in place, such as diversity and
inclusion and modern slavery
– At the Manager level, InfraRed implements
initiatives around the principles of attracting,
developing and retaining a team with varied
perspectives and backgrounds to enhance
decision-making and cultivate a working
environment that people want to be a part of
Our delivery and other partners
To enable high-quality infrastructure assets,
we partner with many specialist organisations
which include management service
providers, construction companies, facilities
management companies, financiers,
co-shareholders and advisers.
Collaborate with each company to
fulfil their own business objectives
while enabling the sustainable
delivery of high-quality services to
infrastructure assets.
– Targeted engagement with business
partners at the asset and portfolio levels
– Quarterly and annual monitoring
– Manager-led annual ESG summits with all
portfolio companies invited
Our shareholders
We invest in infrastructure assets using
the capital provided by our investors.
Our shareholders range from individuals
to substantial international institutions, and
pension funds which have a long-term
investment horizon.
Maximise long-term sustainable
financial returns for a given level of
risk. Accessible and transparent
reporting on the Company
and portfolio.
– Investor presentations targeted at both
institutional and retail investors
– Responding to investor information requests
– Transparent sustainability reporting
AGM
2pm,
23 July 2025
Brewers Hall, Aldermanbury Square,
Barbican, London EC2V 7HR
14 HICL Annual Report 2025
Key Performance
and Quality Indicators
The Board has identified metrics to measure
HICL’sperformance against its strategic objectives.
Theresults for the year ended 31 March 2025
aresetout below.
Key Performance Indicators
Dividends
8.25p
2024: 8.25p
Measure
Aggregate interim dividends declared
pershare for the year.
Objective
An annual distribution of at least that
achieved in the prior year.
Performance
2023 8.25p
2024 8.25p
2025 8.25p
Link to strategy
Positive inflation correlation
0.7x
2024: 0.7x
Measure
Changes in the expected portfolio return
for 1% p.a. inflation change for each and
every future period.
Objective
Maintain positive correlation with a
correlation of at least 0.5x.
Performance
2023 0.8x
2024 0.7x
2025 0.7x
Link to strategy
Total Shareholder Return
1
8.4% p.a.
2024: 8.7% p.a.
Measure
NAV growth and dividends paid per
share since IPO.
Objective
A long-term IRR target of 7% to 8%
asset out at IPO
2
.
Performance
2023 8.9%
2024 8.7%
2025 8.4%
Link to strategy
Competitive cost proposition
1.10%
2024: 1.14%
Measure
Annualised ongoing charges / average
undiluted NAV
6
.
Objective
Efficient gross (portfolio level) to net
(investor level) returns, with the intention
to reduce ongoing charges where
possible. Maintain within the range for
FTSE 250 listed infrastructure peers.
Performance
2023 1.09%
2024 1.14%
2025 1.10%
Link to strategy
Cash-covered dividends
3
1.56x / 1.07x
4
Including / excluding
profits on disposal
2024: 1.37x / 1.05x
5
Measure
Operational cash flow/dividends paid
to shareholders.
Objective
Dividend payments are covered by cash
received from the portfolio.
Performance
2023 1.31x
2024 1.37x
2025 1.56x
Link to strategy
1 Return based on NAV growth and dividends paid per share
since IPO
2 Set by reference to the issue price of 100p/share, at the
time of HICL’s IPO in February 2006
3 Further details on this APM are provided in the Financial
Review on page 36
4 Including profits on disposals versus original acquisition
cost of £82.7m (2024: £53.4m). Excluding this, dividend
cash cover would have been 1.07x (2024: 1.05x)
5 Including profits on disposals versus original acquisition
cost of £53.4m. Excluding this, dividend cash cover would
have been 1.05x
6 Calculated in accordance with Association of Investment
Companies guidelines. Ongoing charges excluding non-
recurring items such as acquisition costs
15HICL Annual Report 2025
Strategic Report FinancialsGovernance
Key Quality Indicators
Investment concentration risk
51.1%
1
, 10.8%
2
2024: 49.5%, 8.3%
Measure
Percentage of portfolio value represented
by the ten largest investments
3
.
Percentage of portfolio value represented
by the single largest investment
3
.
Objective
Maintain a diversified portfolio of
investments (thereby mitigating
concentration risk) and, at all times,
remain compliant with HICL’s Investment
Policy. Single asset concentration <15%.
Performance
2023 49%
2024 49.5%
2025 51.1%
Link to strategy
Refinancing risk
2.4%
6
2024: 2.5%
6
Measure
Portfolio debt with refinancing risk within
24 months as a percentage oftotal
portfolio debt
7
.
Objective
Manage exposure to refinancing risk
to20% of portfolio value.
Performance
2023 0.6%
2024 2.5%
2025 2.4%
Link to strategy
Risk / reward characteristics
14.0%
2024: 17.1%
Measure
Percentage of portfolio value represented
by the aggregate value of projects
with construction and / or demand-
based risk
4
.
Objective
Compliance with HICL’s Investment
Policy, to be lower than the aggregate
limit of 35% for such investment.
Performance
2023 22%
2024 17.1%
2025 14.0%
Link to strategy
Sustainability stewardship
95%
2024: 98%
Measure
Percentage of the portfolio that is rated
‘high’ for ESG performance
8
.
Objective
> 75% of the portfolio rated high in
ESG performance.
Performance
2023 97%
2024 98%
2025 95%
Link to strategy
Weighted average asset life
30.4 years
5
2024: 29.4 years
Measure
Portfolio’s weighted average unexpired
concession length
5
.
Objective
Seek where possible investments
that maintain or extend the portfolio
concession life such that it remains
above 20 years.
Performance
2023 32.2 yrs
2024 29.4 yrs
2025 30.4 yrs
Link to strategy
1 51.1% is the sum of the Top 10 assets in HICL’s portfolio
by value
2 10.8% is the size of the largest asset in HICL’s portfolio,
Affinity Water, by value
3 HICL’s Investment Policy stipulates that any single
investment (being, for this purpose, the sum of all
incremental interests acquired by HICL in the same project)
must be less than 20% (by value) of the gross assets of
HICL, such assessment to be made immediately post-
acquisition of any interest in a project
4 More diverse infrastructure investments which are made
with the intention ‘to enhance returns for shareholders’ as
permitted under the terms of HICL’s Investment Policy –
namely pre-operational projects, demand-based assets
and / or other vehicles making infrastructure investments.
Further details are set out in the Investment Policy,
available from HICL’s website
5 Investments with indefinite life such as Affinity Water,
Fortysouth and Altitude are attributed a life of 100 years for
the purpose of calculating the portfolio’s weighted average
asset life
6 Refinancing required on Texas Nevada Transmission,
Fortysouth, Altitude Infra
7 Calculated as required asset refinancings within 24
months: lower of: (i) HICL’s share of debt to be refinanced;
and (ii) the valuation of HICL’s equity investment; divided by
HICL’s total Directors’ Valuation at 31 March
8 ‘High’ rating in ESG performance means scoring 4/5 stars
in the HICL Sustainability Survey or subsequent metrics as
ESG reporting evolves
Link to strategy
Deliver a
sustainabledividend
Grow Net Asset Value
Build a diversified
portfolioto manage risk
Provide a compelling
cost proposition
16 HICL Annual Report 2025
Operational highlights
HICL’s portfolio delivered a solid annualised underlying
return of 7.7% for the year ended 31 March 2025 (31 March
2024: 9.0%) before the impact of changes to reference
discount rates and macroeconomic assumptions. This was
broadly in line with expectations, with outperformance from
HICL’s growth assets (notably Affinity Water as described
below) offset by specific adjustments applied to a subset of
UK PPP assets, as set out in HICL’s 2024 Interim Report.
Further details can be found in the Valuation of the
Portfolio section of this report starting on page 42.
Operational performance overview
The operational performance of the portfolio, which
spans a diverse range of sectors and geographies,
was generally in line with the Investment Manager’s
expectations during the year.
The performance of HICL’s growth assets exceeded
expectations over the course of the year, demonstrating
the importance of InfraRed’s active management of
both portfolio composition and of the individual assets.
Affinity Water’s (“Affinity”) final determination for AMP8 (2025-
2030) resulted in a modest valuation uplift and is expected
to lead to the resumption of equity distributions during the
financial year ending 31 March 2026. Over the past five
years, InfraRed has worked extensively with co-shareholders
to reposition the business, notably by building a new
executive management team led by CEO Keith Haslett. As a
result, Affinity has improved its capital structure, enhanced
operational performance, and created a constructive
working relationship with key stakeholders, including Ofwat.
This is reflected in the positive outcome of the regulatory
process, which in turn will enable Affinity to make a
meaningful contribution to HICL’s portfolio through a stable
yield and a growing capital base. As previously disclosed,
the Group has formally committed to support future growth
in the business with a c.£50m equity investment expected to
be made in this financial year.
HICL’s diversified portfolio continues to demonstrate solid operational performance and is intentionally
positioned to withstand the current macroeconomic volatility. The quality and diversity of the underlying
assets, combined with InfraRed’s track record in rotating and enhancing the portfolio, underpin the
Company’s proactive approach to capital allocation and long-term value creation.
Right:
Edward Hunt
Head of Core
Infrastructure
Funds,
InfraRed
Edward leads the
InfraRed team that
manages HICL
Left:
Mark Tiner
CFO, HICL
Mark is responsible
for managing the
financial activities
carried out by
InfraRed for HICL
– Development and execution of HICL’s strategy
– Stewardship of portfolio assets through
proactive asset and portfolio management,
andthe resolution of critical issues
– Stakeholder engagement across both public
andprivate sectors
– Investment origination, due diligence
and execution
– Capital raising, investor relations and
preparation of key external communications
InfraRed acts as the Investment
Manager to HICL with day-to-day
responsibility for the following activities:
Investment Manager’s Report
1 Calculated based on total unitary charge revenue received (i.e. less all
deductions) as a proportion of total contractual revenue
17HICL Annual Report 2025
Strategic Report FinancialsGovernance
Highlights
7.7%
Underlying
portfolio
return
in FY25
10.8%
Largest
single asset
concentration
(Affinity Water)
London St. Pancras Highspeed (“LSPH”, formerly
known as High Speed 1) received a positive regulatory
determination from the Office of Road and Rail (“ORR”) in
January which, while value neutral to LSPH, allows both
lower maintenance costs over the next five years and
lower track access charges payable by train operators.
Shortly after the year end, the ORR formally confirmed
depot capacity is sufficient for a second international
operator and LSPH launched a growth incentive package
to encourage new international train paths. Each of
these factors support the viability for new international
operators, which remains a key strategy priority for the
growth of the asset and increasing equity cash flow
to HICL.
Fortysouth, Texas Nevada Transmission and Altitude
Infra continued to perform well in the year, with all
three companies investing extensively to grow the size
and earnings potential of their respective networks.
HICL’s growth portfolio expects to deploy over £450m
in capital expenditure in the next five years, materially
increasing the asset base from which more revenues can
be earned.
HICL’s PPP assets, which make up 57% of the Directors’
Valuation, benefit from availability-based contracted
revenues and fixed-rate debt. The adjustments made
in respect of a subset of HICL’s UK PPP assets in
September 2024, which reflected increased forecast cost
risk associated with facility condition, remain appropriate
and day-to-day service delivery has been strong,
as reflected by over 99%
1
asset availability achieved
over FY25.
Further details on the operational performance of HICL’s
ten largest assets can be found starting on page 22.
HICL’s business model
deliveringvalue
The proactive management of portfolio composition is
central to HICL’s business model and as always has been
a key area of focus for InfraRed during the year.
As the ongoing macroeconomic backdrop continues
to weigh on the Company’s share price, InfraRed has
prioritised actions that seek to address the share price
discount to NAV.
London St. Pancras Highspeed
Portfolio construction
The Investment Manager completed the disposals of
Northwest Parkway and half of the Group’s investment
in the Hornsea II OFTO, both announced in the previous
financial year and together generating proceeds of
£244m. Sold at a premium to carrying value, these
transactions support the portfolio’s valuation and enabled
the recycling of proceeds into share buybacks.
The £509m of divestments undertaken over the past
20 months reflect InfraRed’s long-standing approach
to accretive asset recycling and strategic portfolio
construction. Disposal candidates are derived from
thorough and regular screening of the portfolio, with each
asset assessed on its contribution to four key portfolio
metrics (total return, yield, inflation correlation and
weighted average asset life). This quantitative analysis is
then refined to account for the impact on geographical
or sector diversification and the portfolio risk profile.
Generally, assets with lower than average returns, low
inflation correlation, and shorter asset lives, which
often includes mature PPPs, are selected as potential
disposal candidates. Through its multidisciplinary global
investments team, the Investment Manager will identify
potential bidders for specific asset types or classes and
run disposal processes tailored to each opportunity.
InfraRed will also consider more opportunistic asset
disposals in special situations where outsized returns are
available and the economic case for sale is compelling.
This was the case with HICL’s sale of Northwest Parkway
in February 2024 to a strategic buyer, alongside co-
shareholders, where the sale price represented a 30%
premium to valuation and generated over 2p per share of
portfolio outperformance.
This value-driven framework will continue to underpin
InfraRed’s approach as we seek to execute the £200m
disposal programme announced by the Company in
March 2025. Significant progress has been made already
and the Manager continues to advance negotiations.
In line with the Investment Manager’s active portfolio
management strategy, we continue to see opportunities
for new investment. InfraRed considers that opportunities
provided within the portfolio from existing assets present
compelling risk-adjusted returns, including organic
growth capex deployment, bolt-on acquisitions and
strategic expansion. The current market backdrop also
provides the opportunity to capitalise on third-party
transactions, where these represent special situations.
The Investment Manager’s global presence, deep
relationships and active transaction pipeline across
different strategies ensure that, where attractive situations
arise, HICL has the capacity to make high-quality
additions to its portfolio. Investment decisions continue
to be benchmarked to the risk and return proposition
available from alternative uses of capital, including
share buybacks.
18 HICL Annual Report 2025
Investment Manager’s Report
continued
Highlights
£244m
Divestments
completed in
the year
Specialist asset management
The Company’s strong operational performance is
underpinned by InfraRed’s team of over 30 expert asset
managers focused on maximising long-term asset value
throughout the investment lifecycle. Based in London,
New York, and Sydney, the team is supported by
specialist operating partners in key sectors and markets.
This substantial asset management capability continues
to develop alongside InfraRed’s broader investment
activities across core and value-add strategies.
Across HICL’s growth investments, InfraRed’s asset
managers work closely with asset-level management
teams to execute business plans, explore expansion
opportunities and enhance capital structures. This was
evidenced in the year across several of HICL’s large
investments: securing a successful price review on
Affinity Water; developing the conditions to support a
second international operator on LSPH; construction
of a new rate case for Texas Nevada Transmission’s
regulated business; exploration of international
expansion for Altitude Infra; and EBITDA enhancement
initiatives at Fortysouth. This hands-on management
approach supports long-term earnings growth for
these investments and strengthens HICL’s investment
proposition for sustainable income and capital growth.
In a significant milestone for the Company, Blankenburg
Tunnel successfully reached its availability date during
the year in line with the original construction timescales.
The project consists of two three-lane motorways,
incorporating below-river and land-based tunnels, and
was opened to the public in December 2024. InfraRed’s
specialist asset managers worked closely with the
client and construction contractors to navigate the
challenges caused by Covid-19 and subsequent supply
chain disruption, exacerbated by the conflict in Ukraine.
The successful delivery of this construction programme
adds to InfraRed’s extensive track record, having now
managed 18 construction assets on behalf of HICL which
have generated over 5.0p of NAV outperformance since
the Company’s IPO in 2006.
As long-term investors in critical infrastructure, InfraRed
employs an active asset management approach
focused on maintaining quality, safety, and service for
HICL’s clients and end users. For the Company’s PPP
investments, a focus on long-term facility condition
remains key to long-term investment performance.
This includes a proactive approach to handback,
effective and timely delivery of lifecycle works, and
appropriate management of construction defects as and
when they arise. Significant progress was made in the
period on the delivery of capital works to improve facility
condition at Southmead Hospital and Pinderfields and
Pontefract Hospital, as set out on page 28 and 29.
InfraRed utilises in-house expertise alongside industry
partners to coordinate capital works programmes
with responsible contractors for specific sectors and
geographies. By collaborating proactively with partners,
the Investment Manager ensures service continuity for
the communities served by HICL’s assets while protecting
and enhancing long-term shareholder value.
Additional information on asset management initiatives
which help to preserve and enhance value across HICL’s
largest investments is set out starting on page 22.
Buyback programme
As of 31 March 2025, HICL had bought back 51.8m
shares under the buyback programme. The weighted
average return on shares repurchased to date was
33%, and has resulted in 0.9p of NAV accretion
for shareholders.
At the current depressed share price levels, share
buybacks represent an attractive risk and return
proposition versus alternative uses of capital.
The Investment Manager continues to assess this
regularly against the risk-adjusted returns available
from new investment opportunities, including follow-
on investments in existing assets, and will continue to
provide market insights to the Board in support of future
capital allocation decisions.
Buybacks to date have been funded through a
combination of proceeds from asset disposals and
modest use of the Revolving Credit Facility (“RCF”).
The Board and InfraRed intend to utilise up to £50m of
the RCF as a bridge to proceeds from further targeted
disposals, where the share price discount to NAV is in
excess of 15% at the time of drawing.
Financial highlights
HICL’s NAV per share decreased by 5.1p over the year
to 153.1p at 31 March 2025 (March 2024: 158.2p).
The key driver of this move alongside payment of 8.25p
of dividends per share, was an increase in discount
rates which, together with adverse FX movements, more
than offset the portfolio’s solid operating performance,
including returns from HICL’s growth assets, with Affinity
Water providing the largest positive NAV contribution in
the year.
Blankenburg
19HICL Annual Report 2025
Strategic Report FinancialsGovernance
Highlights
66%
Portfolio
company gearing
The weighted average discount rate used to value the
portfolio was increased by 40bps over the year to 8.4%,
of which 10bps relates to the previously highlighted
increased forecast cost risk across a subset of UK
PPP assets. The balance largely reflects significant
increases in government bond yields across HICL’s key
geographies, most significantly in early 2025. In the year,
the portfolio’s weighted average risk-free rate increased
by 80bps, reflecting higher government bond yields
in all of HICL’s geographies. These macroeconomic
changes were balanced against relevant transaction
data, including the announced acquisition of BBGI
Global Infrastructure and HICL’s own live transaction
data, which suggest highly robust valuations for core
infrastructure assets.
HICL’s weighted average discount rate of 8.4% implies
a weighted average equity risk premium of 3.5% which
InfraRed believes to be appropriate for HICL’s high-
quality portfolio of core infrastructure assets. In line with
HICL’s well-established processes, InfraRed’s proposed
valuation is reviewed by a third-party external valuation
expert and is one of the primary areas of focus during the
year-end reporting process.
Recognising the value of buybacks at the current share
price, combined with confidence in the Investment
Manager’s ability to deliver further disposals, the Group’s
RCF was drawn down by £10m in March 2025 to fund
ongoing share repurchases. The Company will use
up to £50m of the facility to bridge to the receipt of
targeted disposal proceeds. In May 2025, the Company
successfully extended the facility for 12 months on the
same terms.
To provide greater insight into the quality and growth
potential of the portfolio, the Investment Manager
has provided expanded disclosure regarding HICL’s
key growth assets and overall portfolio metrics.
This disclosure provides increased visibility on operating
metrics such as cash flow and capex deployment and
is intended to assist shareholders and analysts in their
standalone assessment of the Group and comparison
against a wider range of listed infrastructure peers.
Further information on HICL’s financial performance can
be found in the Financial Review section starting on p36.
Governance
The Investment Manager has agreed to alter its
fee structure, subject to finalisation of contractual
arrangements, to incorporate market capitalisation into
the fee basis such that the fees payable will be based on
an equal weighting of (i) the Company’s average closing
daily market capitalisation, and (ii) the most recently
published semi-annual NAV. The fee will be capped at the
amount that would have been paid under the GAV-based
regime, if the fee basis had not been amended.
This evolution of the fee structure is the Company’s
sixth since IPO and further enhances alignment with
shareholders. On behalf of HICL, InfraRed manages
assets in eight countries, spanning seven sectors, utilising
InfraRed’s international platform and benefitting from over
60 InfraRed staff across specialist investment, portfolio,
asset and central management teams. Individuals typically
receive HICL shares as part of compensation awards,
further strengthening alignment. Not least, strong manager
alignment has been substantively demonstrated through
the execution of over £500m of accretive asset sales in
the last 20 months, enhancing portfolio construction while
substantially reducing management fees.
Ensuring a consistent and specialist service to the Company
is of critical importance to the Investment Manager.
Mark Tiner joined InfraRed as CFO for HICL, effective in
February 2025. Mark was previously CFO of Cordiant Digital
Infrastructure Limited and brings a wealth of experience
and expertise to the firm. Mark leads all financial activities
undertaken by InfraRed on behalf of HICL, supported by
dedicated portfolio management and finance teams, and he
also joins HICL’s Investment Committee.
Sustainability
The Investment Manager remains committed to ensuring
high levels of governance around HICL’s sustainability
strategy, which is embedded throughout InfraRed’s
investment and asset management processes and is
central to HICL’s long-term business model. During the
year, the Board appointed a specialist consultant to
independently assess the adherence of the InfraRed’s data
management and reporting approach to compliance with
the International Auditing and Assurance Standards Board
(“IAASB”) criteria in respect of HICL’s sustainability-related
performance metrics. This independent review confirmed
that InfraRed’s Basis of Preparation document, which sets
out the Investment Manager’s approach to producing these
metrics, met the characteristics of suitable criteria required
for an independent third-party assurance engagement.
This year, amidst a backdrop of heightened political
focus on UK infrastructure, the Investment Manager
assessed its infrastructure delivery at a subset of HICL’s
hospital assets using data from the NHS Estates Returns
Information Collection (“ERIC”). InfraRed found that
HICL’s acute hospital assets outperformed the average
acute hospital in England and Wales across various
metrics indicative of infrastructure quality.
Further information on HICL’s sustainability ambitions and
the Group and Investment Managers’ progress towards
them can be found in HICL’s standalone Sustainability
Report, available on the Company’s website under
‘Investors Reports and publications’. The highlights can
be found on page 32 of this report.
Download the
HICL Sustainability
Report online
www.HICL.com
Sustainability Report 2025
Enriching
lives through
infrastructure
Affinity Water
20 HICL Annual Report 2025
Investment Manager’s Report
continued
Highlights
35m
people worldwide
use and depend
on HICL-owned
infrastructure in
their day-to-day
lives
>2,300
people employed
directly by HICL’s
underlying assets
Risk management
HICL’s key risk appetite statement, approach to risk
management and governance structure are set out in the
Risk and Risk Management section, starting on page 49.
Commentary relating to the Group’s principal risks is set
out below.
Political and regulatory risk
Geopolitics
Geopolitical risk remained elevated during the year, with
conflicts in the Middle East and Ukraine continuing to
contribute to volatility in public markets. HICL has no
direct exposure to either region, and the portfolio remains
well insulated from secondary effects such as supply
chain disruption.
Equity and bond markets were also affected by global
political events in some of HICL’s core jurisdictions,
including changes of government in France and Germany
and in the US, contributing to higher government bond
yields across HICL’s jurisdictions, feeding into discount
rates. To date, there has been limited direct impact on the
performance of the Group’s assets, with the Company’s
core infrastructure investments inherently insulated from
changes in trade policy or deglobalisation.
The announcement of general and specific tariffs from
the US government and retaliatory measures from
other nations have increased economic uncertainty.
HICL has no direct exposure to the first order effects
of tariffs. Given the nature and geographic footprint
of the Company’s assets, we do not currently expect
any material impact on the performance of the Group’s
investments but there remains the risk of secondary
order effects such as increased supply chain costs.
UK infrastructure policy
During the year, the UK Government launched several
initiatives aimed at modernising ageing or outdated
infrastructure and support growth. These include
the consultation for a 10 Year Infrastructure Strategy
paper which is due to be released in June 2025, the
creation of the National Infrastructure and Service
Transformation Authority (“NISTA”), and the Public
Accounts Committee’s inquiry into the use of private
finance to fund infrastructure investment in the UK.
InfraRed actively contributes to this discussion through
its various industry and trade organisation memberships,
including as a founder member of the Association of
Infrastructure Investors in PPPs (“AIIPs”). An increase
in dialogue between the public and private sectors on
the important role of private capital in infrastructure is
expected to lead to new investment opportunities for
HICL as well as provide a positive policy backdrop to
existing PPP investments.
Regulatory risk
Regulatory risk for the Company decreased in the year,
with both Affinity and LSPH receiving positive final
determinations covering the five-year period starting
1 April 2025. In the nearer term, the findings of the
Independent Commission into the UK water sector
(which is due to report in mid-2025) may result in
changes to regulation.
While the outcome is still uncertain, InfraRed is actively
participating in the process and expects a balanced set
of recommendations from the Commission.
During the year, Texas Nevada Transmission submitted
its draft rate case for Cross Texas Transmission (“CTT”)
to the regulator, setting out planned spending over the
next five years and a proposed cost of equity allowance.
CTT benefits from straightforward and transparent
regulation and as well as the expertise and track record
of CTT’s operator and co-shareholder, LS Power.
A decision is expected in the summer of 2025, with the
risk of a reduced spending or cost of equity allowance
balanced against the potential for outperformance.
More broadly, InfraRed mitigates regulatory risk by
managing regulatory exposures across jurisdictions
and regulators. The 23% of the portfolio with regulated
revenues comprises eight investments, in three countries,
spanning four different regulatory frameworks.
Facility condition risk
Following a thorough review as part of the September
2024 valuation process, InfraRed identified and
recognised an increase in forecast cost risk associated
with defect remediation and lifecycle delivery on a subset
of HICL’s PPP assets. PPPs currently constitute 57%
of the Group’s portfolio, and lifecycle risk and reward
is borne by the relevant portfolio company for 59% of
these. InfraRed is comfortable that the adjustments
made in September remain appropriate and continues
to closely monitor the appropriateness of asset-level
lifecycle forecasts.
The planning and delivery of lifecycle spending is
particularly important as PPP assets approach the end
of their concessions. Within the next ten years HICL has
43 projects (16% of the portfolio by value) scheduled for
transfer to the public sector, the first of which is in the
financial year ending 31 March 2026. The risks relating to
handback are substantially, but not entirely, mitigated for
the 41% of the PPP portfolio where lifecycle risk is borne
by the facilities management contractor.
Fortysouth
21HICL Annual Report 2025
Strategic Report FinancialsGovernance
Highlights
0.7x
Inflation
correlation
2.4%
of the portfolio
subject to
refinancing
requirements
in the next two
years
Client relationships
In respect of the PPP portfolio, the Investment Manager
continues to highlight that long-term partnership
frameworks inherently carry certain risks, which can
be heightened by broader operational and financial
challenges facing the UK public sector. In certain sectors,
such as UK healthcare, this pressure can translate
into actions that could prove adverse to the interests
of the PPP, including with respect to service delivery.
The disposal of the Tameside Hospital PPP in the period
for a nominal sum illustrates this risk. Although InfraRed
generally enjoys excellent working relationships with
HICL’s public sector clients and such instances are
not representative of the broader portfolio, further
disputes could result in reduced or withheld payments of
contracted revenues.
Macroeconomic risk
The macroeconomic climate continues to weigh on listed
market valuations for real assets, including for HICL.
Financial markets remain volatile, with geopolitical unrest
and concerns around sovereign indebtedness balanced
with the potential tailwinds from future reductions in
interest rates. InfraRed remains confident in the quality
and valuation of HICL’s portfolio, which has been
supported by market transactions, including for listed
portfolios. While this dynamic prevents HICL raising new
equity at present, the Investment Manager has clearly
demonstrated its ability to progress the Company’s
strategy nonetheless through portfolio rotation.
If inflation were to decrease more rapidly than projected,
this may put downward pressure on cash generation
and dividend cover given the Company’s cash flows
are correlated to inflation. HICL’s valuation forecasts are
below long-term market expectations, and short-term
inflation fluctuations are not expected to significantly
impact dividend cover. The Board’s dividend guidance
has been rigorously stress-tested by InfraRed against
multiple macroeconomic scenarios, including a return to
low inflation.
Market and outlook
HICL is well positioned to deliver its total return strategy,
notwithstanding a volatile macroeconomic backdrop.
The Company’s investments benefit from robust capital
structures and long-term protected revenues, strategically
brought together in a portfolio that delivers both resilient
yields and long-term growth. This underlying asset quality
and strategic portfolio construction have underpinned
stronger cash generation in the year and prompted the
Board’s revised dividend guidance.
InfraRed continues to review high-quality investment
opportunities for HICL, within a highly disciplined
framework for capital allocation. Macroeconomic volatility
presents variable market conditions and attractive
opportunities to experienced investors. InfraRed’s
approach remains highly selective, focused on
special situations and opportunities through existing
investments where higher returns can be achieved.
New investment opportunities will continue to be
appraised against alternative uses of capital, including
further share buybacks.
HICL’s balance sheet is highly resilient, enabling a flexible
and opportunistic approach to value creation. This has
been exemplified by HICL’s accretive portfolio rotation
strategy, delivering over £500m of disposals above
carrying value over the last 20 months. This activity not
only provides a reliable signal of underlying portfolio
value, but has enabled accretive rotation into attractive
investments, debt reduction and share buybacks.
InfraRed continues to observe strong long-term drivers
for infrastructure investment, underpinned by entrenched
infrastructure megatrends, and independent from the
economic cycle. Effective Government responses to this
significant infrastructure ‘gap’ continue to be developed
in real time, including the recent announcement of a
€500bn infrastructure fund in Germany, and the 10
Year Infrastructure Strategy due in the UK this summer.
Set against public sector balance sheets that are
increasingly stretched across developed markets, the role
for private capital is expected to be substantial and the
opportunity for specialist investors, such as HICL, enduring.
1 Source: Global Infrastructure Hub (gihub.org), Deloitte
Texas Nevada Transmission
Clean
water
22 HICL Annual Report 2025
Top 10 assets –
operational highlights
Investing in
infrastructure:
c.30%
RCV growth in real terms
between 2025-2030
Enriching lives:
950m
litres
clean water daily
providing on average 950 million litres
of clean water each day to a population
of more than 3.9 million people
Clean
water
Affinity Water provides on average 950 million litres of clean water each
day to a population of more than 3.9 million people in Southern and
Eastern England.
Ofwat published its final determination for AMP8 (2025-2030) for Affinity Water
(“Affinity”) in the period, which was formally accepted by the company on 17 February
2025. The final determination reflects several positive movements by the regulator
from its draft determination position which have delivered a modest increase in the
overall valuation of the business. These movements included a c.30bps increase in
the allowed Weighted Average Cost of Capital (“WACC”), a 23% uplift in total allowed
expenditure and the removal of formal restrictions on gearing and distributions. Given
the increased certainty around its financial outcomes following the final determination,
HICL has reduced the uncertainty premium previously applied to the discount rate
used to value Affinity by 30bps and expects that dividends from the company will
resume during the financial year ending 31 March 2026.
In support of Affinity’s significant capital programme and in line with previous
disclosure, HICL has now made a formal commitment to invest an additional £50m
into Affinity in the financial year ending 31 March 2026. HICL expects Affinity’s
Regulated Capital Value (“RCV”) to grow by c.30% in real terms over the course of
AMP8.
Affinity’s operational performance over the year was ahead of expectations, with
EBITDA 5% above HICL’s valuation assumption. The management team maintained its
focus on enhancing service delivery, with a particular emphasis on leakage reduction,
an area in which Affinity remains an upper quartile performer. Penalties incurred in
relation to per-capita consumption were in line with previous periods and have now
been recalibrated for PR24 to account for changes in water usage patterns post
Covid-19. The company also rectified the isolated issue that prevented it from meeting
its water quality target for the year.
In October 2024, Ofwat published its latest Water Company Performance Report,
the regulator’s annual assessment of the 17 largest water companies in England and
Wales. Affinity’s performance was rated as ‘average’, with no company classed as
‘leading’ and three noted as ‘lagging behind’. In addition to the progress on leakage,
Ofwat’s report showed that Affinity achieved the largest percentage reduction in water
supply interruptions over the 2023-2024 financial year and labelled the company a ‘top
performer’
1
in this area.
In March 2025, Affinity successfully issued a £350m fixed rate, 15.5-year bond.
The company achieved a margin 7bps within its existing spreads, which is a
good outcome against the current market backdrop and reflects Affinity’s strong
business performance and prudent capital structure. This funding negates the need
to undertake any refinancing before 2033 and supports the company’s broader
business plan for the AMP, which acknowledges the need to de-lever. As a result,
the company’s investment grade credit ratings were held two notches above Ofwat’s
required thresholds.
The outcome of PR24 and the recent debt issuance illustrate Affinity’s strong
positioning, which has been recognised by both the regulator and financial
markets. InfraRed will continue to work closely with the company’s management
team as it executes its AMP8 business plan.
1. Affinity Water
Sector: Electricity & Water
Location: UK
% of portfolio: 10.8% (March 2024: 8.3%)
HICL holding: 33.2%
Concession life remaining: Indefinite
Status: Operational
23HICL Annual Report 2025
Strategic Report FinancialsGovernance
1 Defined by Ofwat as companies that achieve their performance commitment level and are within the top 25%
of companies
Valuation sensitivity
RCV multiple -/+0.05x
Change in NAV in pence per share
(1.6) 1.6
24 HICL Annual Report 2025
2. A63 motorway
HICL’s investment relates to a 105km
stretch of the A63 Autoroute in France,
which connects Bordeaux to the Spanish
border. The road is an important trans-
European transport corridor for both
freight and leisure travel, enabling
journeys from the Iberian Peninsula and
Southwestern France to the whole of
Northern Europe.
Over the financial year, light and heavy
vehicle traffic numbers grew by 4% and
2% respectively. This robust underlying
performance demonstrates the motorway’s
strategic positioning as a key transport
corridor in Europe. The valuation was stable
during the year, despite lower-than-expected
construction cost inflation, to which toll rates
are contractually linked. HICL’s valuation
assumes that light and heavy vehicle traffic
volumes grow at an annual rate of 1.4% over
the long term, and is not sensitive to changes
in interest rates due to the fixed-rate debt
structure.
On 12 September 2024, the French
constitutional court validated the recently
enacted levy on long-distance transport
revenues. The portfolio company continues
to progress a legal challenge alongside
other large motorway concessionaires. If
the challenge is ultimately unsuccessful, the
company expects any increase in costs due to
the tax to be compensated through higher tolls.
Nonetheless, if the levy remains imposed with
no pass-through, InfraRed expects that the
impact on HICL’s valuation would be immaterial
given the relatively small amount of revenue
earned above the €120m threshold; the
residual risk remains appropriately reflected in
the discount rate used to value the investment.
In the year, HICL’s portfolio company took
steps to improve end-user experience and
enhance environmental efficiency. This
included awarding a 15-year sub-concession
to Zunder to install eight fast-charging points
at each service area along the route which, in
addition to ensuring it meets its electric vehicle
(“EV”) charging obligations and benefitting
EV drivers, will generate incremental variable
revenue for the asset over the concession
life. To meet the increasing parking needs
of heavy goods vehicles travelling on the
A63, HICL’s portfolio company also began
conducting development work to materially
expand capacity and install a new parking
system in one of its rest areas (see HICL’s
2025 Sustainability Report).
Sector: Transport
Location: France
% of portfolio: 7.6% (March 2024: 7.9%)
HICL holding: 24.0%
Concession life remaining: 26 years
Status: Operational
Investing in
infrastructure:
105km
dual carriageway
Enriching lives:
21m journeys in 2025
Driving
ambition
connecting Bordeaux to the Spanish
border via the A63 Autoroute
Change in NAV in pence per share
Valuation assumption: 1.4% CAGR
Valuation sensitivity
Traffic growth rate -/+0.5%
(1.2) 0.8
3. Fortysouth
Fortysouth is a leading independent mobile tower
operator in New Zealand. With over 1,600 wholly owned
towers covering 98% of New Zealand’s population,
Fortysouth enables mobile network operators, fixed
wireless providers, and critical communications operators
to deliver communications services that connect New
Zealanders to each other and the world.
Fortysouth delivered strong 2025 financial results, with EBITDA
for the year significantly higher than in 2024. This performance
was underpinned by the company’s effective sales strategy, cost
control and its availability-based, inflation-linked anchor tenancy
contract with One NZ.
Fortysouth outperformed HICL’s valuation assumption for
the period as it signed 77 new colocation agreements and
successfully transferred key existing mobile network operator
(“MNO”) customers onto long-term contracts that enhance the
quality and visibility of these revenue streams. Approximately
80% of co-location agreements reached were with the New
Zealand emergency services network which installs public safety
equipment on Fortysouth’s towers. The company’s strategic
partnership with this entity is a valuable source of incremental
colocation opportunities, offsetting lower colocations from MNOs
in the short-term.
The vast majority of tower upgrades budgeted for the year were
delivered on schedule, highlighting management’s continued
effective collaboration with One NZ. Over the period, 182 towers
were upgraded. The pace of new tower deployments over the
period has kept the company on track to deliver over 290 new
towers by March 2027. By changing the procurement approach
for new towers, the management team has been able to reduce
capital expenditure costs, which is expected to enhance the
value of HICL’s investment over the coming years. Fortysouth’s
progress with tower deployments and upgrades reflects New
Zealand’s significant 5G rollout ambitions, delivering advanced
connectivity for the country.
Fortysouth has no refinancing requirement before 2027, however,
InfraRed continues to work with management to explore an earlier
refinancing, should it generate value and improve distributable
cash flow.
Sector: Communications
Location: New Zealand
% of portfolio: 6.3% (March 2024: 6.5%)
HICL holding: 40.0%
Concession life remaining: Indefinite
Status: Operational
25HICL Annual Report 2025
Strategic Report FinancialsGovernance
Valuation sensitivity
Tenancy Ratio -/+0.05x
New tower roll-out -/+10%
Change in NAV in pence per share
Valuation assumptions: 0.25x increase
in tenancy ratio by 2040 and
4.0% 10-year tower deployment CAGR
(0.5) 0.5
(0.2)
0.2
4. Texas Nevada Transmission
Texas Nevada Transmission (“TNT”)
comprises two distinct electricity
transmission systems: Cross Texas
Transmission (“CTT”) and One Nevada
Transmission (“ON Line”). Together,
the networks consist of over 800km
of high-voltage transmission lines, as
well as a number of switching stations
and substations, which have been fully
operational since 2014.
Over the financial year to 31 March 2025,
TNT continued to perform well operationally,
achieving an average availability of over 99%
and no significant issues identified upon
system inspections. This reflects the quality of
maintenance undertaken by co-shareholder
and operator LS Power, which is a highly
reputable owner, operator and developer of
transmission assets in North America. Despite
this robust performance, HICL’s valuation
of TNT was adjusted primarily to reflect an
increase in the US reference rate over the
year, which is discussed in detail within the
Valuation of the Portfolio section of this report.
CTT’s rate case, which sets out the network’s
planned spending and capital structure for
the next regulatory period, was submitted
in January 2025, with an outcome expected
in summer 2025. CTT continues to invest in
growing its transmission capacity, with capital
expenditure over 2026 now projected to be
3.6x greater than previously forecast. The
current set of interconnection opportunities
identified by TNT’s management team implies
a level of investment over the short term above
HICL’s acquisition assumption. However,
HICL’s valuation prudently assumes this will
be an acceleration of capital expenditure
as opposed to incremental spending. If the
trend of actual capital expenditure exceeding
HICL’s assumption continues, the Company
would expect a positive valuation impact given
the growth of the asset base attracting the
regulated return.
In the US, the extensive queue of projects
awaiting grid interconnections has increased
the need to ensure that the country has
sufficient transmission capacity. According to
Federally funded research from the Lawrence
Berkeley Lab there are currently over 11,000
projects in this queue representing 1,570GW
of generator capacity and 1,030GW of battery
storage capacity. This compares to the total
installed generating capacity of 1,300GW
in the US today. The new interconnection
opportunities received by CTT reflect TNT’s
overall strategic positioning in addition to the
important role it continues to play in bringing
power from Texas’s rural, energy-generating
regions to its main population centres,
particularly as the deployment of generation
projects is expected to accelerate.
Sector: Electricity & Water
Location: USA
% of portfolio: 5.1% (March 2024: 5.6%)
HICL holding: 45.8%
Concession life remaining: Indefinite
Status: Operational
26 HICL Annual Report 2025
Valuation sensitivity
Regulated ROE -/+1.0%
Capex -/+10%
Change in NAV in pence per share
(0.3) 0.3
(0.9) 0.9
5. London St. Pancras High Speed
London St. Pancras High Speed (“LSPH”,
formerly High Speed 1) is the UK’s only
high-speed rail line, linking London St.
Pancras with the Channel Tunnel. It is
a vital component of the UK’s green
gateway to Continental Europe, and
also enables fast and frequent
domestic rail services between Kent
and Greater London.
International train path bookings reached
95% of pre-Covid levels on average over the
12 months to 31 March 2025, resulting in an
8% increase in international train path revenue
relative to FY24. While these bookings were
slightly below HICL’s forecast due to fewer
than expected spot bids, the early return
of direct London to Amsterdam services
and retail income being 7% above budget
helped to offset the impact, enabling LSPH to
achieve EBITDA for the year in line with HICL’s
valuation assumption.
Enabling greater competition on the line
has been a key priority since the time of
acquisition. In April 2025, LSPH launched
its International Growth Incentive Scheme,
designed to encourage international train
operators to launch new services on the line
by offering discounted prices over a three-year
period. The business plans of prospective
international operators were also aided by
an independent report commissioned by the
UK’s rail regulator which found that capacity
could be made available at the Temple Mills
train depot if required.
HICL’s valuation of LSPH continues to take a
probability-weighted view of the likely impact
of any new international operator. The long-
term train path forecast is underpinned by
a recent study suggesting that demand for
cross-channel rail travel is expected to treble
over the next 15 years
2
, and offsets the impact
of the slightly lower volume of train paths
expected to be run by Eurostar over the next
three years.
In January 2025, London St. Pancras
Highspeed also received a positive regulatory
determination. The lower maintenance costs
required over the next five years reflect the
high quality of the physical assets and will
result in reduced track access charges
payable by train operators. The track access
charges within the scope of the regulatory
review are passed through to Network Rail
so there is no direct impact on the company.
However, lower track access charges may
have a positive impact on the number of train
paths booked in the medium term, particularly
in the context of discussions with potential
new international operators.
Domestic services remain under UK
government control and the company
continues to benefit from the contractual
underpin from the Department for Transport,
guaranteeing 96% of pre-Covid domestic
track access revenues. HICL’s forecast
continues to assume that domestic train path
bookings will remain below pre-Covid levels
until March 2028. Albeit over FY25, domestic
paths were 12% higher than during the same
period last year and the December 2025
timetable submitted by the domestic operator
implies a further increase to levels c.89% of
those observed before Covid-19.
Sector: Transport
Location: UK
% of portfolio: 4.9% (March 2024: 4.6%)
HICL holding: 21.8%
Concession life remaining: 16 years
Status: Operational
Investing in
infrastructure:
300kph
top speed of
trains on LSPH
Enriching lives:
100%
renewable electricity
used to power trains
the UK’s rail link with
Continental Europe
Green
gateway
27HICL Annual Report 2025
Strategic Report FinancialsGovernance
Valuation sensitivity
Second opertor train paths -/+25%
Change in NAV in pence per share
Assuming no changes to discount rate
or Eurostar paths
(0.4) 0.4
28 HICL Annual Report 2025
6. Southmead Hospital
Southmead Hospital is a major 832-bed acute hospital,
providing accident, emergency and specialist medical
services to a population of almost one million people in
Bristol, South Gloucestershire, and North Somerset.
The project continues to operate well, achieving average
availability of 99.9% in the year and delivering shareholder
distributions as planned.
The management of construction defect remediation remained
a key focus for InfraRed, working collaboratively with the Trust
and other project stakeholders. Key milestones in the financial
year included reaching agreement on the core remedial works
programme and obtaining access to critical areas such as
operating theatres in the first half of the year, which enabled
required theatre works to be completed in the latter half. This
progress was received well by the Trust.
Following the thorough review undertaken during the September
2024 valuation, HICL recognised an increase in forecast cost risk
associated with defect remediation and lifecycle delivery at the
project, for which HICL’s portfolio company is responsible. These
assumptions remain appropriate, and InfraRed will continue to
closely manage the delivery of lifecycle over the coming years.
In early 2025, the Princess Royal returned to Southmead Hospital
to thank the team which treated her following an accident in
June2024. After a performance by the staff choir in the main
public atrium, she viewed the hospital’s air ambulance helicopter
pad and staff gardens.
Sector: Health
Location: UK
% of portfolio: 3.9% (March 2024: 3.9%)
HICL holding: 62.5%
Concession life remaining: 21 years
Status: Operational
29HICL Annual Report 2025
Strategic Report FinancialsGovernance
8. Royal School of Military Engineering
HICL’s investment covers over 50 buildings and
five training facilities used by the Royal School
of Military Engineering (“RSME”) Group, which
provides a wide range of training to the British
Army and defence forces.
RSME continued to operate well, with an average
availability during the financial year of over 99.9%. The
project continued to make regular distributions to HICL
in line with forecast, contributing strongly to HICL’s short-
term yield profile.
Following the thorough review undertaken during the
September 2024 valuation, HICL recognised an increase
in forecast cost risk associated with defect remediation
and lifecycle delivery at the project, which HICL’s portfolio
company is responsible for. A subsequent review of the
lifecycle budget supported the existing forecast, and
the suitability of the discount rate premium will therefore
continue to be monitored over the coming years.
In the year, HICL’s portfolio company supported a local
day school catering to individuals with severe learning
difficulties. This involved the purchase of straps to keep
wheelchairs within a proprietary bicycle trailer system
andimproving access to the local woodland walks
bordering the school’s boundary (See HICL’s 2025
Sustainability Report).
Sector: Accommodation
Location: UK
% of portfolio: 3.3% (March 2024: 3.5%)
HICL holding: 100.0%
Concession life remaining: 13 years
Status: Operational
7. Pinderfields and Pontefract Hospitals
Pinderfields and Pontefract Hospitals provide
acute hospital services to more than half a million
people living in the Wakefield and North Kirklees
districts of West Yorkshire. Pinderfields Hospital
is a designated major trauma centre and is home
to two specialist regional services in burns and
spinal injuries for the north of England.
Operationally, the project continued to perform in line
with expectations, achieving an average availability
during the financial year of over 99.9%. This was
reflected in the project being shortlisted in the Public
/ Private Collaboration, Healthcare sector category at
the Operational PPP awards that took place in the year.
Distributions for the year were in line with expectations,
materially contributing to HICL’s yield.
Following the thorough review undertaken during the
September 2024 valuation, HICL recognised an increase
in forecast cost risk associated with defect remediation
and lifecycle delivery at the project, for which HICL’s
portfolio company is responsible. These assumptions
remain appropriate, and InfraRed will continue to closely
manage the delivery of lifecycle over the coming years.
Over the financial year, InfraRed worked closely with
portfolio company stakeholders to progress the major
programme of capital works, which are anticipated to
complete in 2030. A significant milestone was met in
May 2024 when the portfolio company’s construction
partner completed the building of a large temporary
ward at Pinderfields Hospital, which currently holds 16
beds and spans 1,400m
2
of floor space.
Sector: Health
Location: UK
% of portfolio: 3.4% (March 2024: 3.5%)
HICL holding: 100.0%
Concession life remaining: 17 years
Status: Operational
The 16-bed arrangement is due to change to a 40-bed configuration over a six-month
period commencing early November 2025. Since its completion, this ward has been
used by the NHS Trust to accommodate patients while various components of the
main hospital undergo upgrades. The works to haematology and intensive care unit
(‘ICU’) wards were completed in February 2025. The completion of this temporary
ward also enabled the release of an additional distribution to HICL which was tied to
this milestone.
30 HICL Annual Report 2025
9. Home Office
HICL’s investment relates to the state-of-the-art
headquarters of the Home Office and the Department
for Environment, Food & Rural Affairs in central London.
The award-winning building has a number of energy-
saving features and has been designed to enhance the
experience of its 3,450 users.
Operationally, the project continued to perform well, achieving 99.0%
availability over the financial year despite day-to-day occupancy of
the building remaining well below maximum levels due to changes in
working patterns. The portfolio company continues to work closely
with its facilities management partner to ensure the building remains
available and that the internal environment is adapted to the number
of users. This strong operational performance was reflected in the
project being shortlisted in the Public / Private Collaboration category
at the Operational PPP awards that took place in the year.
With six years of concession length remaining, InfraRed is working
closely with various stakeholders to prepare for the return of the
asset to the public sector. This includes the increasingly proactive
oversight of lifecycle management along with detailed discussions
around asset condition with the facilities management provider
which is responsible for lifecycle delivery risk. Drawing on
its wider handback strategy, as referred to in the Investment
Manager’s Report, InfraRed continues to work closely with the
portfolio company and its contractors to ensure that preparations
progressed in a timely fashion, liaising with the client and National
Infrastructure and Service Transformation Authority (‘NISTA’)
where appropriate.
Sector: Accommodation
Location: UK
% of portfolio: 2.9% (March 2024: 3.0%)
HICL holding: 100.0%
Concession life remaining: 6 years
Status: Operational
31HICL Annual Report 2025
Strategic Report FinancialsGovernance
10. Altitude Infra
Altitude Infra holds a controlling position
in the largest independent wholesale
fibre network in France. As the sole
provider of fibre-to-the-home (“FTTH”)
in its 27 subsidised Public Initiative
Networks (“PINs”), Altitude Infra serves
more than five million homes with high-
speed broadband.
The asset benefits from France’s attractive
rural market framework, which is underpinned
by robust, national FTTH deployment targets
and overseen by Arcep, the French telecom
regulator. With this quasi-monopolistic
position, the company earns inflation-linked
wholesale revenues from selling broadband
and network services to internet service
providers such as Free, Bouygues Telecom,
Orange and SFR under a regulated tariff
structure.
Following HICL’s acquisition in 2023, Altitude
Infra has performed well operationally and
delivered significant progress against its
broader strategic objectives, which are
anchored around network rollout.
At 31 March 2025, the roll-out of Altitude Infra’s
fibre network in France was 96% complete,
which is broadly aligned with the schedule
assumed within HICL’s valuation. With the
roll-out now substantially concluded, focus has
shifted to steady-state operations and the rate
of new customer acquisition. Whilst Altitude
Infra’s customer penetration performance for
the year was in line with its budget, accelerating
this is a key priority for the company. As such,
the management team has implemented
several initiatives aimed at improving uptake,
including additional internet service provider
marketing, local stakeholder engagement and
participation in copper decommissioning trials.
These workstreams are led by the company’s
dedicated Wholesale Director tasked with
increasing customer adoption.
InfraRed is represented at the Altitude Infra
Board of Directors and uses this position to
support the company’s growth ambitions.
Since HICL’s acquisition, in addition to the
connection of new users to the network, the
management team has identified various
value enhancement opportunities linked to
the expansion of the company’s footprint and
optimising its capital structure.
An example of this activity is the strategic,
value accretive refinancing completed at one
of its underlying fibre network concession
vehicles.
Sector: Communications
Location: France
% of portfolio: 2.9% (March 2024: 2.6%)
HICL holding: 5.9%
Concession life remaining
: Indefinite
Status: Operational
Valuation sensitivity
Penetration Rate -/+5%
Change in NAV in pence per share
Valuation assumption:
89% penetration rate in 2040
(0.3) 0.3
Our Sustainability Strategy
Preserve the natural environment and mitigate
the impacts of climate change byinvesting
in the energy transition, delivering climate-
resilient infrastructure andworking to reduce
GHG emissions from HICL’s portfolio.
Positively impact the communities in
which HICL’s assets are located by actively
addressing the needs of clients, end users
and other key stakeholders.
Environment Communities
2025 Highlights
– InfraRed conducted an initial analysis
to better understand the portfolio’s
exposure to natural resource-
related risks and opportunities, drawing on
the Taskforce on Nature-related Financial
Disclosures (“TNFD”) recommendations
– Progressed the Company’s net zero
alignment plan, with the percentage of HICL’s
portfolio aligning, aligned to, or at net zero
rising to 34% from 26% at 31 March 2024
2025 Highlights
– Nine initiatives run by HICL portfolio
companies recognised as Gold Standard at
InfraRed’s Creating Better Futures Awards
for 2024
– Assessed the quality of infrastructure delivery
at a subset of HICL’s hospital assets using
NHS Estates Returns Information Collection
(“ERIC”) data, finding that this was generally
above average
F
Y
2
5
o
b
j
e
c
t
i
v
e
32 HICL Annual Report 2025
Home Office Blankenburg
2025 key stats
91%
Portfolio companies with
carbon reduction initiatives
2024: 76%
81%
Portfolio companies
with positive biodiversity
initiatives
2024: 76%
2025 key stats
92%
Portfolio companies that
gave charitable contributions
to environmental or social
initiatives
2024: 94%
9
Portfolio company initiatives
recognised as Gold Standard
at InfraRed’s 2024 Creating
Better Futures Awards
2024: 7
Promote fair and safe conditions as well
as diverse and inclusive workplaces within
HICL’sportfolio companies and across
thesupply chain.
Ensure that HICL maintains high standards
of ethics and integrity through the rigorous
implementation of policies and the provision
of transparent and balanced disclosure.
People Governance
2025 Highlights
– Following planned Board Director rotation,
the Company will be compliant with both the
Hampton-Alexander Review and the Parker
Review in 2025, in addition to meeting the
FCA’s Diversity Listing Rule targets from
July 2026
1
– Worked closely with the Investment Manager
to enhance the Board’s visibility over health
and safety risk management processes for
non-UK portfolio companies
2025 Highlights
– Specialist consultant review concluded
that the Investment Manager’s approach
to producing metrics featured in this report
was aligned with International Auditing
and Assurance Standards Board criteria
(seepage 65)
– Significant expansion of share buyback
programme which will be funded by
asset disposals, further evidencing the
alignment of the Board, Investment Manager
and shareholders
33HICL Annual Report 2025
Strategic Report FinancialsGovernance
A63 Royal School of Military Engineering
2025 key stats
96%
Portfolio companies which
completed an independent
health and safety audit
2024: 85%
17%
Gender pay gap at
portfoliocompanies
2024: 20%
2025 key stats
100%
Portfolio companies
with policies
concerning tax
2024: 93%
100%
Portfolio companies
with policies concerning
sustainability matters
2024: 93%
1 Subject to HICL’s proposed Senior Independent Director candidate being approved at
the Company’s 2025 Annual General Meeting and Directors being re-elected at the 2025
Annual General Meeting
34 HICL Annual Report 2025
Our societal contribution
By facilitating access to essential services in
a socially responsible manner, our projects
contribute to many of the UN Sustainable
Development Goals (“SDGs”) and deliver an
inherent social good. However, both the Board
and the Investment Manager acknowledge that
making a genuine social contribution involves
going above and beyond the reliable provision
of infrastructure.
Alignment of HICL’s portfolio with the SDGs
% byvaluation as at March 2025
22%
10%
11%
18%
26%
4%
9%
SDG How we support
Ensure healthy lives and
promote wellbeing for all
at all ages
HICL invests in 31 assets that directly
promote good health and wellbeing,
including hospitals, primary care centres
andfire stations.
Ensure inclusive and equitable
quality education and promote
lifelong learning opportunities
for all
HICL invests in 42 educational assets
including schools, colleges, libraries, training
facilities and universities that facilitate the
provision of essential learning outcomes.
Ensure availability and
sustainable management of
water and sanitation for all
Affinity Water is one of the UK’s largest
water-only companies, owning and managing
water projects and networks in an area
approximately 4,500km
2
across three supply
regions in the southeast of England.
Ensure access to affordable,
reliable, sustainable and modern
energy for all
HICL invests in six electricity transmission
assets with a total capacity of 4,500 MW
which support the provision of clean energy.
Build resilient infrastructure,
promote inclusive and
sustainable industrialisation
and foster innovation
HICL invests in six assets supporting
industry innovation and infrastructure
across fibre, telecommunications towers
and accommodation. These assets provide
essential services required to support the
functioning of modern economies.
Make cities and human
settlements inclusive, safe,
resilient and sustainable
HICL invests in 17 assets supporting
sustainable cities and communities, including
roads, railways and rolling stock. These assets
contribute to affordable and sustainable
transport systems.
Promote peaceful and inclusive
societies for sustainable
development, provide access to
justice for all and build effective,
accountable and inclusive
institutions at all levels
HICL invests in eight assets promoting peace,
justice and strong institutions, including
prisons, police stations, judicial courts, and
custodial centres.
3: Good health and wellbeing 22%
4: Quality education 10%
6: Clean water and sanitation 11%
7: Affordable and clean energy 9%
9: Industry, innovation and infrastructure 18%
11: Sustainable cities and communities 26%
16: Peace, justice and strong institutions 4%
35HICL Annual Report 2025
Strategic Report FinancialsGovernance
SDG How we support
Ensure healthy lives and
promote wellbeing for all
at all ages
HICL invests in 31 assets that directly
promote good health and wellbeing,
including hospitals, primary care centres
andfire stations.
Ensure inclusive and equitable
quality education and promote
lifelong learning opportunities
for all
HICL invests in 42 educational assets
including schools, colleges, libraries, training
facilities and universities that facilitate the
provision of essential learning outcomes.
Ensure availability and
sustainable management of
water and sanitation for all
Affinity Water is one of the UK’s largest
water-only companies, owning and managing
water projects and networks in an area
approximately 4,500km
2
across three supply
regions in the southeast of England.
Ensure access to affordable,
reliable, sustainable and modern
energy for all
HICL invests in six electricity transmission
assets with a total capacity of 4,500 MW
which support the provision of clean energy.
Build resilient infrastructure,
promote inclusive and
sustainable industrialisation
and foster innovation
HICL invests in six assets supporting
industry innovation and infrastructure
across fibre, telecommunications towers
and accommodation. These assets provide
essential services required to support the
functioning of modern economies.
Make cities and human
settlements inclusive, safe,
resilient and sustainable
HICL invests in 17 assets supporting
sustainable cities and communities, including
roads, railways and rolling stock. These assets
contribute to affordable and sustainable
transport systems.
Promote peaceful and inclusive
societies for sustainable
development, provide access to
justice for all and build effective,
accountable and inclusive
institutions at all levels
HICL invests in eight assets promoting peace,
justice and strong institutions, including
prisons, police stations, judicial courts, and
custodial centres.
3.9m
People served with clean
water by Affinity Water
3.1m
Homes connected to renewable
electricity by HICL’s OFTOs
2.3m
People served by HICL’s courts,
fire stations and police stations
>5m
Users of HICL’s
roads and railways
8.4m
People with access to
HICL’s healthcare facilities
120k
Student places across school,
college and university facilities
>5m
Homes connected to high-speed
internet by Altitude Infra
35,000
Accommodation places
Asset usage figures calculated based on publicly available data collected by InfraRed regarding the average annual
number of people served by HICL’s assets. Where data is not available, zero is assumed
36 HICL Annual Report 2025
Financial Review
HICL Infrastructure Plc prepares its financial information in
accordance with UK-adopted International Accounting Standards.
Consistent with the 2024 Annual Report, the Company’s financial
performance is reported under the Investment Basis which
consolidates the results of the Company, together with HICL
Infrastructure 2 S.à r.l. (“Luxco”) and Infrastructure Investments
Limited Partnership (“IILP”), referred to as the “Corporate Group”.
Luxco and IILP are referred to as the “Corporate Subsidiaries”.
Total return, which is defined as total comprehensive income for
the year; net assets or Net Asset Value (“NAV”), or earnings per
share (“EPS”), are the same under International Financial Reporting
Standards (“IFRS”) and the Investment Basis. The Board and the
Investment Manager manage the Company on an Investment
Basis, which is an Alternative Performance Measure (“APM”) and
is reconciled on page 39. Reconciliation of the Investment Basis
financial information to the IFRS statements is provided from page 40.
Summary income statement
Investment Basis
£m
For the
year ended
31 March 2025
For the
year ended
31 March 2024
Dividend income received 360.0 207.2
Interest income receivable 136.9 134.6
Fair value loss on revaluation
of investments (398.0) (237.4)
Foreign exchange loss on investments (38.3) (37.3)
Gain on foreign exchange derivatives 23.0 27.5
Other income 13.5 10.8
Total investment income 97.1 105.4
Expenses and finance costs (51.1) (74.8)
Profit before tax 46.0 30.6
Tax (0.1) (0.1)
Total Return 45.9 30.5
Earnings per share 2.3p 1.5p
Total investment income decreased by 8% to £97.1m in the year to
31 March 2025 (31 March 2024: £105.4m). While the increase in
discount rates was higher in the prior year (with a corresponding
decrease in valuation) than in the current year, this was compensated
for by a positive impact of macroeconomic factors in prior year.
By contrast, in the current year, the impact of macroeconomic factors
was also negative. The overall effect of these aggregated movements
in discount rates and macroeconomic factors is that investment return
is lower in the current year than the prior year.
Current year dividend income includes the disposal proceeds
of Northwest Parkway, which was sold in the prior year but with
proceeds received in the current year. There is an equal but
opposite offset to the dividend income through fair value movement.
The underlying
1
fair value movement was £111.0m (31 March
2024: £114.6m). Further details on the valuation movements are
provided in the Valuation of the Portfolio section on page 42.
The table below shows the breakdown of other income:
Investment Basis
£m
For the
year ended
31 March 2025
For the
year ended
31 March 2024
Project directors’ fees 9.4 6.5
Interest on bank deposits 1.4 0.6
Early repayment fees 2.7 3.7
Other income 13.5 10.8
Other income represents project directors’ fees charged to project
companies, which are recognised in other income when invoiced,
early repayment fees on loans, and bank interest earned on deposits.
The Corporate Group’s hedging policy targets NAV per share volatility of
no more than 2% for a 10% movement in foreign exchange (“FX”) rates.
During the year, the net impact of foreign exchange movements was a
£15.3m loss (31 March 2024: £9.8m loss), which represents 0.5% of the
closing NAV (31 March 2024: 0.3%). This follows a 1.7% movement in
weighted average FX rates in the year (31 March 2024: 2.3%).
The below table shows the impact of hedging on non-sterling assets:
Foreign exchange
hedging
£m
Rate as at
31 March
2025
Non-UK
assets FX hedge
FX hedge
as % of
non-UK
assets %
1%
sensitivity to
movement
in FX rates
1
Euro 1.19 761.1 432.3 57% 3.3
USA 1.29 164.8 112.2 68% 0.5
Canada 1.86 42.3 16.4 39% 0.3
New Zealand 2.27 204.4 97.8 48% 1.0
Total 1,172.6 658.7 56% 5.1
1 Sensitivity impact is net of derivatives
Expenses and finance costs
Investment Basis
£m
For the
year ended
31 March 2025
For the
year ended
31 March 2024
Finance costs 15.7 36.2
Investment Manager fees 30.7 33.9
Directors’ fees and expenses 0.6 0.5
Acquisition bid costs – (0.2)
Professional fees 4.1 4.4
Expenses and finance costs 51.1 74.8
Finance costs decreased to £15.7m (31 March 2024: £36.2m) principally
due to the full repayment of the Revolving Credit Facility (“RCF”) in May
2024. The RCF was not utilised again until March 2025 at which point
£10.0m was drawn. Finance costs therefore primarily reflect interest on
the £150.0m of private placement notes. The average total borrowing
in the year was £173.3m (31 March 2024: £478.4m), while the average
interest rate was 5.8% (31 March 2024: 6.4%), reflecting the impact of an
undrawn RCF throughout the majority of the year.
Investment Manager fees, including £0.1m charged to HICL
Infrastructure Plc, were £30.7m (31 March 2024: £33.9m).
The decrease was primarily due to the disposal activity in the prior
year, resulting in a lower average Gross Asset Valuation in the
current year and therefore lower management fees. Accordingly, the
Directors’ Valuation reduced to £3,227.1m at 31 March 2025 (31 March
2024: £3,333.4m). The calculation methodology is unchanged and is
in line with the Investment Manager fee agreement shown on page 71.
1 Fair value loss adjusted for dividend income, interest income, Director fees and early
repayment fees
37HICL Annual Report 2025
Strategic Report FinancialsGovernance
Tax
Tax charged to the Income Statement under the Investment Basis
relates to the Company’s immediate subsidiary, Luxco. As HICL
Infrastructure PLC has Investment Trust Company (“ITC”) status, it is
exempt from tax on certain items on the basis that tax is already paid
at the operating company level, thus protecting shareholders from
suffering double taxation. The Directors monitor compliance with the
ITC rules through reporting prepared by the Investment Manager and
are of the opinion that the Company has complied with its obligations
as an ITC for the year.
Ongoing Charges Ratio (“OCR”)
Investment Basis
£m
For the
year ended
31 March 2025
For the
year ended
31 March 2024
Investment Manager 30.7 33.9
Auditor fee for the Corporate Group 0.5 0.4
Non-audit fee paid to the Auditor:
Interim review 0.1 0.1
Directors’ fees and expenses 0.6 0.5
Other ongoing expenses 2.6 2.4
Total expenses 34.5 37.3
Average NAV 3,133.4 3,267.6
Ongoing charges 1.10% 1.14%
The OCR is calculated in line with the Association of Investment
Companies’ (“AIC”) guidance. It is defined as the annualised ongoing
charges (which exclude acquisition costs, finance costs and other
non-recurring items) divided by the average published undiluted Net
Asset Value of £3,133.4m for the year (31 March 2024: £3,267.6m).
The OCR for the year is 1.10% (31 March 2024: 1.14%). The decrease
is principally because of the lower GAV due to the prior year disposal
activity, resulting in a lower management fee.
Summary balance sheet and NAV
Investment Basis
£m 31 March 2025 31 March 2024
Investments at fair value 3,114.2 3,268.9
Net other assets 18.7 248.0
Net debt (102.2) (303.9)
Net assets 3,030.7 3,213.0
NAV per share (before dividend) 153.1p 158.2p
NAV per share (post-dividend) 151.0p 156.1p
Investments at fair value decreased by 5% to £3,114.2m (31 March
2024: £3,268.9m), principally due to the increase in the weighted
average discount rate by 0.4% to 8.4% (31 March 2024: 8.0%) and
a downside impact of FX movements on non-Sterling assets during
the year. The only disposal during the year was the sale of Tameside
Hospital for £1
2
. Further details on the movement in Investments at
fair value, which are net of commitments, are given in the Valuation of
the Portfolio section on page 42.
Net other assets decreased to £18.7m (31 March 2024: £248.0m),
since the prior year number included a receivable for proceeds
received in the year relating to the full disposal of Northwest Parkway
and partial disposal of Hornsea II OFTO announced in the year ended
31 March 2024. These disposal proceeds were used to fully repay the
RCF (balance of £187.2m at 31 March 2024) and fund the initial £50m
of share buybacks announced in May 2024.
An analysis of the movements in net debt is shown in the Summary
cash flow section below. The decrease relative to 31 March 2024 is
primarily due to the fact that no acquisitions were made in the year.
There was also an inflow of £21.5m from the physical settlement of FX
forwards that were entered into in order to hedge the FX exposure on
the non-Sterling investments, and where Sterling has strengthened
compared to the other currencies over the full year period. The RCF
balance was £10.0m as at the end of the year, used to partially fund
the £100m expansion to the share buyback programme announced
in March 2025.
NAV per share was 153.1p (31 March 2024: 158.2p) before the 2.07p
fourth quarterly distribution, due to be paid in June 2025. NAV per
share decreased by 5.1p, as a result of earnings per share of 2.3p and
the benefit from the impact of share buybacks of 0.9p, offset by 8.25p
of distributions for the year ending 31 March 2025. NAV per share
and earnings per share are the same under the Investment Basis
and IFRS.
Key accounting estimates and judgements
In preparing these accounts, the key accounting estimate is the
carrying value of the Corporate Group’s investments, which are stated
at fair value. Given the importance of the valuation of investments,
the Board’s Audit Committee has oversight of the Directors’
Valuation process and challenges the Valuation Policy, process and
application to individual investments on a semi-annual basis. A third
party is also appointed to carry out an independent review of the
Directors’ Valuation. Notwithstanding the above, asset valuations for
unquoted investments are inherently subjective, as they are based on
assumptions where judgement is required.
The Corporate Group’s underlying investments are generally not
based on observable market data and are instead valued using a
discounted cash flow analysis of forecast investment cash flows.
The exception to this is the listed senior debt in the A13 Road project,
which is valued using the quoted market price of the bonds.
A key judgement is the assessment of whether the Company
meets the definition of an investment entity. IFRS 10 requires the
Group’s intermediate holding companies to be presented at fair
value, which reduces the transparency of the underlying investment
performance. As a result, the Group presents financial information on
the Investment Basis to ensure that the commentary in the Strategic
Report remains fair, balanced and understandable. The reconciliation
of the Investment Basis to IFRS is shown on pages 40 and 41.
2 Disposal proceeds for prior year sale of Northwest Parkway and partial sale of Hornsea II OFTO were received in the current year
38 HICL Annual Report 2025
Financial Review continued
Summary cash flow
Investment Basis
£m 31 March 2025 31 March 2024
Cash from investments 227.2 244.4
Operating costs (37.0) (39.8)
Finance costs (12.9) (29.0)
Net cash inflow before
capital movements 177.3 175.6
Cost of new investments – (435.1)
Investment disposal proceeds 230.0 269.4
Shares repurchased (61.2) –
Net cash flow from derivatives 21.5 6.8
Short-term intercompany borrowings – (0.3)
Debt arrangement fees paid – (2.5)
Dividends paid (166.1) (167.6)
Movement in the year 201.5 (153.7)
Net debt at start of year (303.9) (147.6)
Foreign exchange on cash 0.2 (2.6)
Net debt at end of year (102.2) (303.9)
The Corporate Group ended the year with net debt of £102.2m
(31 March 2024: £303.9m net debt). This is made up of drawings on
the RCF of £10.0m (31 March 2024: £187.2m) and private placement
loan notes of £150.0m (31 March 2024: £150.0m), net of cash and
cash equivalents of £57.8m (31 March 2024: £33.3m).
The £230.0m investment disposal proceeds represent the amounts
received into IILP in the current year from the prior year disposal of
Northwest Parkway and partial disposal of Hornsea II OFTO, net of all
direct costs and taxes.
Dividends of £166.1m (31 March 2024: £167.6m) were paid in the
year, with the decrease from prior year reflecting the impact of
share buybacks during the period, with 51.8m fewer shares in issue
at the end of the year, repurchased for £61.2m
1
including direct
costs. Dividend cash cover excluding disposals increased to 1.07x
(31 March 2024: 1.05x). Including profit on disposals of £82.7m
2
,
the dividend cash cover is 1.56x (31 March 2024: including profit on
disposals of £53.4m, cash cover was 1.37x).
Debt and gearing levels
The Corporate Group’s debt and borrowing facilities are held by IILP.
As at 31 March 2025, IILP had drawn £10.0m on its RCF (31 March
2024: £187.2m) and £6.0m by way of letters of credit (31 March
2024: £6.0m). The RCF was fully repaid in May 2024 using disposal
proceeds. £10.0m was subsequently drawn on the RCF in March
2025, used to support the £100m expansion to the Company share
buyback programme announced at the same time, and with up to
£50m of RCF funding in total approved by the Board and available
to fund this programme. Planned disposals will be used to fully fund
the buyback extension and repay the RCF. The RCF capacity was
reduced from £650m to £400m in May 2024, reflecting a decreased
forecast utilisation. In May 2025, the maturity of the RCF was
extended by one year to 30 June 2027.
In addition, IILP had a committed balance of €92.5m on its Letter
of Credit (“LCF”) facility (31 March 2024: €109.6m). The LCF was
originally put in place to support future equity commitments, and the
decrease in the year was a result of a reduction in LC commitments
associated with the partial disposal of Hornsea II OFTO in the prior
year. IILP also had £150.0m of private placement loan notes in issue.
Overall, the Corporate Group had £441.8m of available liquidity as
at 31 March 2025, made up of £384.0m capacity
3
on the RCF and
£57.8m of cash and cash equivalents.
The ratio of debt to Adjusted Gross Asset Value at the end of the year
was as follows:
31 March 2025
£m
31 March 2024
£m
Drawings
Bank borrowings 10.0 187.2
Letter of credit facility
4
83.5 99.7
Private Placement 150.0 150.0
243.5 436.9
Adjusted Gross Asset Value
Directors’ Valuation 3,227.1 3,333.4
Disposal proceeds due
5
5.1 233.2
Cash and cash equivalents 57.8 33.3
3,290.0 3,599.9
Borrowing ratio 7.4% 12.1%
Capital management
While the Company’s Ordinary Shares trade at a discount to the Net
Asset Value and there are sufficient funds to transact, at the sole
discretion of the Directors, the Company may:
– make market purchases of up to 14.99% per annum of its issued
Ordinary Shares; and
– make tender offers for the Ordinary Shares.
In May 2024, the Company announced a share buyback programme
of up to £50m, funded using disposal proceeds. An additional £100m
of share buybacks were announced in March 2025, to be funded
by additional planned disposal proceeds, and up to £50m in RCF
borrowings in the short term. As at 31 March 2025, 51.8m shares
had been bought back for a cost of £62.1m including direct costs.
While trading at a discount to net asset value, the Company is unable
to issue shares via a tap issuance
6
, but can do so on a wholly pre-
emptive basis.
Alternative Performance Measures (“APMs”)
The Directors assess the Corporate Group’s performance using a
variety of APMs that are not specifically defined under IFRS, which
provide additional information to investors as to how the Company is
managed and assessed. The APMs may not be directly comparable
with those used by other companies and therefore the Directors
wish to draw users’ attention to GAAP measures in the financial
statements from page 110 onwards. The Directors’ Investment Basis
is itself an APM.
1 £0.9m of the total £62.1m of shares repurchased, as mentioned throughout the Annual Report, were cash settled in early April 2025
2 This is the profit versus original cost on final disposal of Northwest Parkway and the partial disposal of Hornsea II OFTO in the prior year, and the current year disposal of Tameside Hospital
3 Consists of £400m facility less £10m of drawings and £6m of Letter of Credit utilisation
4 Consisting of £77.5m on the LCF and £6.0m on the RCF (31 March 2024: £93.7m on the LCF and £6.0m on the RCF)
5 Current year relates to a $6.6m tax refund due from the prior year Northwest Parkway disposal
6 Issuance of new shares as an extension of an original share issuance programme
03_FinReview_TCFD_v96.indd 3803_FinReview_TCFD_v96.indd 38 20/05/2025 20:5720/05/2025 20:57
39HICL Annual Report 2025
Strategic Report FinancialsGovernance
The explanation and rationale for the Investment Basis is shown on page 36 and its reconciliation to IFRS is shown from page 40. The table
below defines the Group’s APMs.
APM Purpose
2025 Investment
Basis
1
Calculation Reconciliation to IFRS
Annualised
return from
the portfolio
A ratio of underlying portfolio
performance within a given
year
7.7%
(2024: 9.0%)
£235.5m rebased return divided by
£3,042.1m rebased valuation, as
shown on the Valuation Report on
page 42
The calculation uses figures which are reconciled
to the Investment Basis on page 40 which, in
turn, is reconciled to IFRS in the Reconciliation of
Investment Basis to IFRS section below
Under IFRS, the return is 1.6% based on
investment income of £50.0m divided by an
investment value of £3,031.5m
Directors’
Valuation
A measure of the size of the
investment portfolio including
the value of further contracted
future investments committed
by HICL
£3,227.1m
(2024: £3,333.4m)
£3,114.2m Investment Basis
investments at fair value
plus £112.9m of contracted
commitments, including £49.9m of
new commitment for Affinity Water
The calculation uses portfolio assets shown
in the reconciliation in the Reconciliation of
Investment Basis to IFRS section below
The IFRS valuation is £3,031.5m as at
31 March 2025
Distributable
cash
A measure of cash received
by HICL Group from
underlying projects in theyear
£260.0m
(2024: £229.0m)
Calculated as net cash inflow before
capital movements of £177.3m
shown in the ‘Investment Basis
Summary Cash Flow’ plus £82.7m
net profit over original cost on final
disposal of Northwest Parkway
and the partial disposal of Hornsea
II OFTO in the prior year, and the
current year disposal of Tameside
Hospital
The calculation uses distributions received
from investments plus profit on disposal
Under IFRS net cash inflow is £226.7m,
consisting of cash received to support the
Company dividend and share buybacks plus
working capital requirements, net of expenses
paid in the year
Dividend
cash cover
A ratio of cash received from
underlying projects in the
period enabling distributions
to shareholders
1.56x
2
(2024: 1.37x)
£177.3m distributable cash received
in addition to £82.7m net profit
versus original cost on final disposal
of Northwest Parkway and the
partial disposal of Hornsea II OFTO
in the prior year, and the current
year disposal of Tameside Hospital,
divided by the £166.1m dividend for
the year ending 31 March 2025
The calculation uses the dividend paid in the
‘Statement of Changes in Equity’ divided by
distributable cash
The IFRS equivalent is 1.0x, as sufficient
funds are provided to the Company to cover
the dividend of £166.1m and working capital
of£4.7m
Cash
investments
Identifying new opportunities
in which to invest capital is
a driver of HICL’s ability to
deliver attractive returns
nil
(2024: £435.1m)
No investments were made
in the year
The equivalent balance under IFRS is shown in
the ‘Reconciliation of Statement of Cash Flows’
There were no cash investments made by the
Company and therefore there is no like-for-like
IFRS equivalent
Cash
proceeds
Cash proceeds from HICL’s
investments support HICL’s
returns to shareholders, as
well as our ability to invest in
new opportunities
£230.0m
(2024: £269.4m)
£230.0m cash received into IILP in
the year, directly or indirectly, from the
disposal of investments in the year,
net of all direct costs and taxes
The equivalent balance under IFRS is
shown in the ‘Reconciliation of Statement
of Cash Flows’
The Company received cash to support the
dividend and for working capital, which was
all funded by distributions from HICL Group
investments. Therefore there were no cash
proceeds received by the Company relating to
disposal of investments
Net cash/
(debt)
A measure of the available
liquid cash to invest in the
business offset by the
Corporate Group’s borrowings.
This is an indicator of the
financial risk in the Group’s
Statement of Financial Position
£(102.2)m
(2024: £(303.9)m)
£57.8m cash and cash equivalents
less £160.0m loans and borrowings
The equivalent balance under IFRS and the
reconciliation to the Investment Basis is shown
in the Reconciliation of Statement of Financial
Position
Cash and cash equivalents is £0.7m under
IFRS as at 31 March 2025, being the working
capital held by the Company
Borrowing
ratio
A measure of drawings as a
percentage of adjusted gross
asset value of the Corporate
Group
7.4%
(2024: 12.1%)
£243.5m debt (including £83.5m
letters of credit) divided by adjusted
Gross Asset Value of £3,227.1m.
Adjusted Gross Asset Value is the
Directors’ Valuation plus announced
disposals and cash and cash
equivalents (£62.9m in total)
The equivalent balance under IFRS in the
‘Reconciliation of Statement of Financial
Position’ in the Annual Report
The Company holds no debt, therefore the
borrowing ratio is not applicable under IFRS
1 APM calculations consistent with prior year
2 The calculation includes total profit on disposal of £82.7m. Excluding this, dividend cash cover is 1.07x. For 31 March 2024, profit on disposal was £53.4m and excluding this, dividend cash
cover was 1.05x
40 HICL Annual Report 2025
Financial Review continued
Reconciliation of Investment Basis to IFRS
Reconciliation of Statement of Comprehensive Income
£m
For the year ended 31 March 2025 For the year ended 31 March 2024
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Dividend income received and interest income
receivable 496.9 (365.9) 131.0 341.8 (143.8) 198.0
Fair value loss on revaluation of investments (398.0) 317.0 (81.0) (237.4) 74.6 (162.8)
Foreign exchange loss on investments (38.3) 38.3 – (37.3) 37.3 –
Gain on foreign exchange derivatives 23.0 (23.0) – 27.5 (27.5) –
Other income 13.5 (13.5) – 10.8 (10.8) –
Total investment income
1
97.1 (47.1) 50.0 105.4 (70.2) 35.2
Management fee (30.7) 30.7 – (33.9) 33.9 –
Finance costs (15.7) 15.7 – (36.2) 36.2 –
Other fund expenses
2
(4.7) 0.6 (4.1) (4.7) – (4.7)
Total expenses (51.1) 47.0 (4.1) (74.8) 70.1 (4.7)
Profit before tax 46.0 (0.1) 45.9 30.6 (0.1) 30.5
Tax (0.1) 0.1 – (0.1) 0.1 –
Earnings for the year 45.9 – 45.9 30.5 – 30.5
Earnings per share 2.3p – 2.3p 1.5p – 1.5p
Notes:
1 Total income shown in the IFRS accounts only relates to HICL and not those portfolio companies held through investment entity subsidiaries. The consolidation adjustments represent the results
recorded in the Corporate Subsidiaries
2 Other fund expenses comprise audit, valuation and other professional fees
41HICL Annual Report 2025
Strategic Report FinancialsGovernance
Reconciliation of Statement of Financial Position
£m
For the year ended 31 March 2025 For the year ended 31 March 2024
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Investments at fair value 3,114.2 (82.7) 3,031.5 3,268.9 (56.4) 3,212.5
Trade and other receivables 7.6 (7.3) 0.3 237.7 (237.4) 0.3
Other financial assets 26.0 (26.0) – 25.9 (25.9) –
Trade and other payables (13.9) 12.1 (1.8) (15.0) 14.1 (0.9)
Other current financial liabilities (1.0) 1.0 – (0.6) 0.6 –
Cash and cash equivalents 57.8 (57.1) 0.7 33.3 (32.2) 1.1
Loans and borrowings (160.0) 160.0 – (337.2) 337.2 –
Net assets attributable to Ordinary Shares 3,030.7 – 3,030.7 3,213.0 – 3,213.0
NAV per share (before dividend) 153.1p – 153.1p 158.2p – 158.2p
NAV per share (post-dividend) 151.0p – 151.0p 156.1p – 156.1p
Note:
The Investment Basis financial statements are prepared for performance measurement and therefore reserves are not analysed separately
Reconciliation of Statement of Cash Flows
£m
For the year ended 31 March 2025 For the year ended 31 March 2024
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Investment
Basis
Consolidation
adjustments
IFRS
Basis
Investment income received 227.2 (96.2) 131.0 244.4 (72.0) 172.4
Operating expenses paid (37.0) 32.9 (4.1) (39.8) 35.1 (4.7)
Finance costs paid (12.9) 12.9 – (29.0) 29.0 –
Net cash inflow before capital movements 177.3 (50.4) 126.9 175.6 (7.9) 167.7
Cost of new investments in subsidiary – – – (435.1) 435.1 –
Investment disposal proceeds 230.0 (230.0) – 269.4 (269.4) –
Investment repayment – 100.0 100.0 – – –
Shares repurchased (61.2) – (61.2) – – –
Net cash flow from derivatives 21.5 (21.5) – 6.8 (6.8) –
Debt arrangement fees paid – – – (2.5) 2.5 –
Short-term intercompany borrowings – – – (0.3) 0.3 –
Dividends paid (166.1) – (166.1) (167.6) – (167.6)
Movement in the year 201.5 (201.9) (0.4) (153.7) 153.8 0.1
Net (debt)/cash at start of year (303.9) 305.0 1.1 (147.6) 148.6 1.0
Foreign exchange on cash (0.2) (0.2) – (2.6) 2.6 –
Net (debt)/cash at end of year (102.2) 102.9 0.7 (303.9) 305.0 1.1
Note:
There is a difference between the change in cash and cash equivalents of the Investment Basis financial statements and the IFRS financial statements due to the cash balances held in the Corporate
Subsidiaries. Cash held within the Corporate Subsidiaries is not shown in the IFRS statements but is shown in the Investment Basis financial information
Movement in the Directors’ Valuation in the year ended 31 March 2025:
Future commitments
31 March
2024
Valuation
(226.9)
235.5
(126.2)
1.2
(1.5)
3,156.4
49.9
3,227.1
3,114.23,268.9 3,042.0
31 March
2025
Valuation
3
Investments Cash
distributions
Return
1
Change in
discount rate
Change in
economic
assumptions
Change in
FX on net
valuation
2
Change in
FX on equity
commitments
Rebased
Valuation
3,333.4
(38.3)
7.7%
(3.2)%
0.0%
(1.2)%
Income Statement Revenue
42 HICL Annual Report 2025
Valuation methodology and approach overview
InfraRed is responsible for preparing the valuation of HICL’s
investment portfolio for the Directors’ approval. This investment
valuation is called the Directors’ Valuation. It is an Alternative
Performance Measure (“APM”)
4
and comprises the investment
portfolio and future commitments adjusted for disposals committed
to by the Group at the reporting period end.
The Directors’ Valuation is the Group’s preferred valuation measure
because it better represents the Group’s total value at risk at the
balance sheet date. The valuation methodology and policy
5
are
unchanged from previous reporting periods.
The valuation is carried out on a six-monthly basis as at 31 March and
30 September each year. The Group’s investments are predominantly
unquoted and are mainly valued using a discounted cash flow
analysis of forecast investment cash flows
6
.
There is a secondary market for infrastructure investments and,
where appropriate and publicly available, external data points are
considered. The Directors’ Valuation is a sum-of-the-parts valuation,
and so no further adjustment is made to reflect the size, scarcity and
diversification of the overall portfolio.
The key external (macroeconomic and fiscal) factors affecting the
forecast of each portfolio company’s cash flows in local currency
are inflation rates, interest rates, GDP growth rates and applicable
tax rates. The Investment Manager makes forecast assumptions
for each of these external metrics using market data and economic
forecasts. The Investment Manager also exercises its judgement to
assess the expected future cash flows from each investment based
on the detailed financial models produced by each portfolio company.
The data in these models is adjusted to reflect specific operating
assumptions and to replace metrics used by portfolio companies with
those used by the Group where they are different.
The fair value for each investment is then derived from the
application of an appropriate market discount rate and year-end
currency exchange rate. The discount rate takes into account
risks associated with the financing of the investment (e.g. liquidity,
currency risks, market appetite) and its earnings quality (e.g.
predictability and covenant of the revenues and service delivery
challenges). These aregenerally differentiated by the phase of the
investment’s life (e.g. in construction or in operation).
More information on the Valuation Policy can be found on page 149.
The Directors’ Valuation is the key component in determining HICL’s
Net Asset Value (“NAV”) and so the Audit Committee receives and
challenges an independent report and opinion on the Investment
Manager’s valuation from a third-party valuation expert.
Directors’ Valuation at 31 March 2025
The Directors’ Valuation of the portfolio at 31 March 2025 was
£3,227.1m, a decrease of 3.2% (31 March 2024: £3,333.4m) versus
prior year. The 31 March 2025 Directors’ Valuation includes £112.9m
of outstanding equity commitments (31 March 2024: £64.5m) in
respect of three projects: Affinity Water (UK), the Blankenburg Tunnel
(Netherlands) and the B247 Road (Germany).
A breakdown of the movement in the Directors’ Valuation is shown in
the chart below.
Valuation of the Portfolio
1 ‘Return’ comprises the unwinding of the discount rate and project outperformance, including actual inflation
2 FX movement net of hedging is a loss of £15.3m
3 £3,227.1m reconciles, on an Investment Basis, to £3,114.2m investments at fair value (IFRS) together with £112.9m of future commitments
4 Further detail on the Group’s APMs, including a reconciliation to the IFRS financial statements, is shown on page 39
5 Refer to Appendix 2 on page 149 for further details on the Valuation Policy
6 The exception to this is the listed senior debt in the A13 Road project which is valued using the quoted market price of the bonds
43HICL Annual Report 2025
Strategic Report FinancialsGovernance
Investments
No cash investments were made during the year. As at 31 March
2025, investment commitments have increased to £112.9m (31 March
2024: £64.5m) due to the additional commitment of £49.9m on
Affinity Water.
Divestments
During the year, the Group disposed of its interest in Tameside
Hospital for a nominal amount of £1 to the project’s senior lender.
Rebased net valuation
The three valuations shown in the chart have been split between
investments at fair value and future commitments. The percentage
movements have been calculated on the rebased valuation of
£3,042.0m to reflect the returns generated on the capital employed in
the year.
The rebased portfolio delivered Income Statement revenue of 3.3%
in the year (31 March 2024: 2.8%). The income return showed an
increase when compared to the year ended 31 March 2024. This was
mainly due to a relatively smaller increase in the portfolio’s discount
rates in the current year, compared to the more substantial increases
in the prior year, when risk-free rates in the UK rose significantly.
Return from the portfolio
The return from the underlying portfolio of £235.5m (31 March
2024: £285.5m) represents a 7.7% (31 March 2024: 9.0%) increase
in the rebased valuation, compared to the weighted average
discount rate, or expected annualised return, of 8.0% at the start of
the year. The return is stated before changes to discount rates and
macroeconomic assumptions.
This annual portfolio performance was broadly in line with
expectations at the start of the year. The first half of the year saw
underperformance due to increased forecast lifecycle and defect
costs in a subset of UK PPP assets where lifecycle delivery risk
sits with the portfolio company (28% of the portfolio by value as at
31 March 2025). In response to these challenges, the Directors had
increased the discount rate by 15bps for those UK PPP assets where
lifecycle risk is borne by the portfolio company.
Largely offsetting this, HICL’s growth and construction assets
performed strongly in the second half of the year with a positive
outcome on the Final Determination for Affinity Water and
Blankenburg Tunnel successfully completing its construction and
commencing its availability payment.
Inflation
At 31 March 2025, RPI has reduced in the UK to 3.4% compared to
4.3% for the year ending 31 March 2024. Other jurisdictions also saw
a reduction in inflation.
In France, CPI reduced significantly over the year and was 0.8%
(31 March 2024: 2.3%). In the USA, CPI fell to 2.8% (31 March
2024: 3.5%). The impact of the decrease in actual inflation versus
forecast assumptions resulted in a reduction in NAV of £4.7m
(2024: £24.3m downside).
In the short to medium term, inflation forecasts are expected to
slightly increase and this has been reflected in the Company’s short-
term UK inflation assumptions for 2026.
Demand assets
HICL has five demand-based assets in the portfolio, representing
14% of the portfolio by value at 31 March 2025 (31 March 2024: 14%).
Four of these demand-based assets, namely the A63 Motorway,
LSPH, RMG Roads and M1-A1 are sensitive to GDP. Over the past
year, A63 and LSPH traffic profiles were marginally below HICL’s
forecast. In addition, LSPH continues to benefit from the contractual
underpin in relation to domestic track access revenues.
For further information on these assets, refer to the Top 10 assets –
operational highlights on pages 22 to 31.
44 HICL Annual Report 2025
Discount rates
As at 31 March 2025, HICL’s weighted average discount rate
increased to 8.4% from 8.0% at 31 March 2024. This upward revision
reflects a notable rise in 20-30 year government bond yields across
key jurisdictions, even as central banks have begun modestly cutting
policy rates.
Over the past year, the Bank of England, US Federal Reserve and the
European Central Bank have each reduced their base rates in total by
75 bps, 100 bps and 185 bps respectively. These reductions signal
the onset of a potential easing cycle. However, in contrast, yields on
long-dated government bonds have moved higher. This divergence
reflects shifting market expectations where investors are pricing at a
more cautious and protracted path for monetary easing.
The recently announced cash offer for BBGI Global Infrastructure
S.A. also provides a highly relevant data point for the Company’s
PPP portfolio, however, contrasts with rising government bond
yields. HICL’s upward adjustment to the discount rate reflects these
competing forces, alongside asset-specific considerations, both
upwards and downwards. The revised rates are also consistent with
observable market factors, which include data points across the
Company’s target markets and in other sectors and geographies in
which it operates, government bond yields and the implied equity
risk premium.
Throughout the year ended 31 March 2025, the Group executed one
transaction, which was to divest its interest in Tameside Hospital for
a nominal sum to the senior lenders, following a protracted dispute
with the Client. Beyond this, the number of relevant infrastructure
transactions observed in private markets continues to trend below
longer-term averages, with wider variability in competitive tension
for assets. The Investment Manager is noticing reduced levels of
transaction activity as the disconnect in pricing between public and
private markets persists and the future trajectory of interest rates
remains uncertain. However, private investors still have capital to
deploy and are seeking high quality infrastructure assets. Based on
this, we expect transaction activity to increase, which should present
opportunities for acquisition and divestment activity.
When setting the discount rate, the Investment Manager places
significant emphasis on the equity risk premium implied by current
government bond yields. For any change in the government bond
yields, the Investment Manager evaluates the discount rates to
ensure the premiums remain appropriate. The first six months to
30 September 2024 did not see any material movement to the
average 20–30-year government bond yields. However, the second
half of the year saw a significant rise in UK government bond yields
which increased by 70 bps from 4.5% at 30 September 2024 to 5.2%
at 31 March 2025.
Overall, the base discount rate for UK assets has increased by 40 bps
since 31 March 2024. This results in a UK weighted average discount
rate of 8.7% at 31 March 2025 (31 March 2024: 8.3%) and a risk
premium of 3.5% (31 March 2024: 3.9%). The Investment Manager
believes that the risk premium continues to be appropriate for HICL’s
core infrastructure UK assets.
Similarly, the USA, New Zealand and the Eurozone, have also seen
increases in long-term government bond yields ranging between
50-60 bps. This has been accommodated in the increased Weighted
Average Discount Rate.
Changes in economic assumptions
Changes in economic assumptions resulted in a small positive impact
of £1.1m (31 March 2024: £120.5m). This reduced impact relative to
the previous year is attributed to the lower volatility in inflation rates
over the past year compared to the prior year.
Foreign Exchange
Sterling strengthened against all relevant currencies in the period
resulting in a negative impact of £(38.3)m pre-hedging. Net of
hedging, the impact was £(15.3)m.
Valuation of the Portfolio continued
45HICL Annual Report 2025
Strategic Report FinancialsGovernance
Valuation assumptions
Apart from the discount rates, the other key economic assumptions used in determining the Directors’ Valuation of the portfolio are as follows:
31 March 2025 31 March 2024
Inflation rates
UK (RPI and RPIx)
1
3.00% p.a. to March 2026
3.25% p.a. to March 2030
2.50% p.a. thereafter
3.00% p.a. to March 2025
2.75% p.a. to March 2026
2.50% p.a. thereafter
UK (CPI/CPIH )
2
2.25% p.a. to March 2026
2.50% p.a. thereafter
2.25% p.a. to March 2025
2.00% p.a. to March 2026
2.50% p.a. thereafter
Eurozone (CPI) 2.00% p.a. 2.25% p.a. to March 2025
2.00% p.a. thereafter
Canada (CPI) 2.25% p.a. to March 2026
2.00% p.a. thereafter
2.25% p.a. to March 2025
2.00% p.a. thereafter
USA (CPI) 2.25% p.a. to March 2026
2.00% p.a. thereafter
2.00% p.a. to March 2025
2.00% p.a. thereafter
New Zealand (CPI) 2.25% p.a 2.75% p.a. to March 2025
2.25% p.a. thereafter
Interest rates
UK 3.50% p.a. 4.50% p.a. to March 2025, 3.25% p.a. thereafter
Eurozone 2.00% p.a. 3.00% p.a. to March 2025, 2.00% p.a. thereafter
Canada 2.25% p.a. 3.75% p.a. to March 2025, 3.00% p.a. thereafter
USA 3.75% p.a. to March 2026
3.50% p.a. thereafter
4.25% p.a. to March 2025, 3.25% p.a. thereafter
New Zealand 3.25% p.a. to March 2030
3.50% p.a. thereafter
4.25% p.a. to March 2025, 4.00% p.a. thereafter
Foreign
exchange
rates
GBP / EUR 1.19 1.17
GBP / CAD 1.86 1.71
GBP / USD 1.29 1.26
GBP / NZD 2.27 2.11
Tax rates
UK 25% 25%
Eurozone Ireland 12.5%
France 25%
Netherlands 25.8%
Ireland 12.5%
France 25%
Netherlands 25.8%
Canada 23% and 27% 23% and 27%
USA 21% Federal 21% Federal and 4.6% Colorado State
New Zealand 28% 28%
GDP growth
UK 2.0% p.a. 2.0% p.a.
Eurozone 1.8% p.a. 1.8% p.a.
1 Retail Price Index and Retail Price Index excluding Mortgage Interest Payments
2 Consumer Prices Index including owner-occupiers’ housing costs; used in the valuation of Affinity Water
(6.7)
(7.5)
(4.4)
(2.9)
(2.2)
(1.7)
(0.9) 0.9
(0.7) 0.6
1.4
2.1
2.1
4.4
-12p -10p -8p -6p -2p 0p 2p 4p 6p 8p 10p
-4p
12p
7.6
8.2
Negative correlation Positive correlation
Change in NAV in pence per share
46 HICL Annual Report 2025
Valuation of the Portfolio continued
1 NAV per share based on 1,980 million Ordinary Shares as at 31 March 2025
2 Sensitivities for inflation, interest rates, tax rates and lifecycle are based on the 35 largest investments extrapolated for the whole portfolio
3 Foreign exchange rate sensitivity is net of Group hedging as at 31 March 2025
Valuation sensitivities
The portfolio’s valuation is sensitive to each of the macroeconomic assumptions listed above. An explanation of the reason for the sensitivity
and an analysis of how each variable in isolation (i.e. while keeping the other assumptions constant) impacts the valuation as follows below
1,2,3
.
The sensitivities are also contained in Note 14 to the financial statements.
Discount Rate +/- 0.5%
Inflation -/+ 0.5%
Tax Rate +/- 5%
GDP -/+ 0.5%
Interest Rate (Cash) -/+ 1%
Lifecycle +/- 5%
FX Rates -/+ 5%
Interest Rate (Debt) +/- 1%
Valuation sensitivities – impact in pence per share
47HICL Annual Report 2025
Strategic Report FinancialsGovernance
Discount rate sensitivity
While not a macroeconomic assumption, the discount rate that
is applied to each portfolio company’s forecast cash flows, for
the purposes of valuing the portfolio, is the single most important
judgement and variable. The impact of a 0.5% change in the
discount rate on the Directors’ Valuation and the NAV per share is
shown above. This sensitivity to a movement in discount rates is of
a relatively linear relationship meaning that for a 1.0% movement in
discount rates the impact would be broadly twice as large as that
shown for a 0.5%movement.
Inflation rate sensitivity
PPP projects in the portfolio have contractual income streams derived
from public sector clients, which are rebased every year for inflation.
For the demand-based assets, the concession agreement usually
prescribes how user fees are set, which are generally reset annually
for inflation. For Affinity Water, revenues are regulated by Ofwat in
a five-yearly cycle with the pricing of water bills set with the aim of
providing an agreed return for equity that is constant in real terms for
the five-year period by reference to RPI currently and CPIH in the next
regulatory period.
The chart shows that the Directors’ Valuation and NAV per share
are both positively correlated to inflation. The portfolio’s inflation
correlation at 31 March 2025 was 0.7x (31 March 2024: 0.7x)
meaning that, should inflation be 1.0% p.a. higher than the valuation
assumption for all future periods the expected return from the
portfolio would increase by 0.7%, from 8.4% to 9.1%.
The portfolio valuation assumes UK inflation of 3.0% for the year
ending March 2026, 3.25% to March 2030, and 2.5% thereafter.
The March 2025 forecasts for RPI out to December 2025 range
from 2.7% to 4.9% from 15 independent forecasters as compiled by
HM Treasury, with an average forecast of 3.8%.
Gross Domestic Product (“GDP”) sensitivity
At 31 March 2025, the portfolio had four assets sensitive to GDP,
namely the A63, LSPH, RMG Roads and M1-A1 Road. These assets
are classified as GDP-sensitive because at times of higher economic
activity there will be greater traffic volumes using them, generating
increased revenues for the projects compared to periods of lower
economic activity.
If outturn GDP growth was 0.5% p.a. lower for all future periods than
those in the valuation assumptions set out on page 49, expected
return from the portfolio (before Group expenses) would decrease
0.2% from 8.4% to 8.2% (31 March 2024: 7.8%).
Interest rate sensitivity
The majority of HICL’s portfolio companies’ interest costs are at
fixed rates, either through fixed-rate bonds, bank debt which is
hedged with an interest rate swap or linked to inflation through
index-linked bonds. However, there are five investments – Affinity
Water, Fortysouth (NZ), TNT (USA), Altitude Infra (France), and XLT
– which have refinancing requirements, exposing these investments
to interest rate risk. The average gearing of these assets is 51%
(31 March 2024: 50%), which is lower than the portfolio gearing at
66% (31 March 2024: 68%). As set out on page 47, were interest rates
to be 1.0% higher in all future valuation periods, the expected return
from the portfolio would decrease by (0.03)% as a result of higher
financing costs, before accounting for the offsetting positive impact of
higher interest rates on cash balances.
In the case of other investments, sensitivity to interest rates
predominantly relates to the cash deposits which the portfolio
company is required to maintain as part of its senior debt funding.
For example, most PPP projects would have a debt service reserve
account in which six months of debt service payments are held.
At 31 March 2025, cash deposits for the portfolio were earning
interest at a rate of 3.4% per annum on average (31 March
2024: 4.9%).
Lifecycle expenditure sensitivity
Lifecycle (also called asset renewal or major maintenance)
expenditure concerns the replacement of material parts of the asset
to maintain it over the concession life. It involves larger items that are
not covered by routine maintenance, and for a building will include
items like the replacement of boilers, chillers, carpets and doors when
they reach the end of their useful economic lives.
The lifecycle obligation, together with the budget and the risk, is
either taken by the project company (and hence the investor) or
is subcontracted to the Facilities Management (“FM”) contractor.
Of the 111 investments, PPPs make up 57% of the overall portfolio
by value. For 59% of these PPP investments (34% of the overall
portfolio), the lifecycle risk and reward is borne by the project
company while for the remaining 41%, the risk is borne by the facilities
management contractor.
Corporation tax rate sensitivity
The profits of each portfolio company are subject to corporation tax
in the country where the project is located. The sensitivity considers
a5% movement in tax rates in all jurisdictions.
The UK corporation tax assumption for the portfolio valuation is 25%
(2024: 25%).
Foreign exchange rate sensitivity
34% of the portfolio by Directors’ Valuation, has exposure to foreign
exchange rates. The sensitivity shows, post-hedging, the impact
ofSterling appreciating or depreciating against these currencies
by+/- 5%.
Ten Largest Exposures – Counterparty
FM
March 2025
1 Bouygues 13%
2 In-house 11%
3 Equans 9%
4 EGIS 8%
Vodafone NZ 6%
Network Rail 5%
7 Siemens 5%
8 Mitie 3%
9 Babcock 3%
10 Other 37%
5
6
1
2
3
4
5
6
7
8
9
10
1 Within 1 year 8%
2 1-2 years −
3 2-5 years 6%
4 5-10 years 1%
10+ years 3%
Latent defects
limitation/Warranty
period expired
1
55%
7 Assets subject to
regulatory regimes
2
27%
5
6
1
2
3
4
5
6
7
Ten Largest Exposures – Counterparty
Latent defect warranty periods
March 2025
1 Colas 7%
2 DEME 3%
3 Siemens 3%
4 Strabag 2%
Bouygues 1%
Balfour Beatty 1%
7 Fluor 0%
8 Laing O'Rourke 0%
9 Vinci 0%
10 Other contractors 1%
11 Latent defects
limitation/Warranty
period expired
55%
12 Assets subject to
regulatory regimes
2
27%
5
6
1
2
3
4
11
12
Ten Largest Exposures – Counterparty
Construction
March 2025
6
5
8
9
10
7
48 HICL Annual Report 2025
Valuation of the Portfolio continued
1 By value, at 31 March 2025, using Directors’ Valuation excluding A13 senior bonds. Where a project has more than one operations contractor in a joint and several contract, the better credit
counterparty has been selected (based on analysis by the Investment Manager). Where a project has more than one operations contractor, not in a joint and several contract, the exposure
is split equally among the contractors, so the sum of the pie segments equals the Directors’ Valuation
2 Assets subject to regulatory regimes that help mitigate the potential impact of defects on equity
Market intelligence
Third-party advisers
Risk assessment and reporting
Oversight and feedback
Board
Risk Committee
Investment Committee
Fund Management team
Asset
Management
team
Portfolio
Management
team
Investments
team
Central
Support
functions
InfraRed Capital Partners Limited
HICL Infrastructure PLC
Project / Business Management teams
This schematic sets out the Company’s risk management framework:
49HICL Annual Report 2025
Strategic Report FinancialsGovernance
Risk and Risk Management
Risk management framework
HICL’s risk management framework covers all aspects of its
business. The Board monitors, challenges and evaluates InfraRed’s
management of risk through the consideration of scenarios that
could materially impact the performance of HICL were they to
occur. Having considered and analysed key risks, mitigating action
may be undertaken to reduce the likelihood and impact of each
risk manifesting.
The Board has ultimate responsibility for setting HICL’s risk policy and
risk appetite. It has convened a Risk Committee to assist the Board
by assessing the Group’s overall risk profile, recommending a risk
appetite, and ensuring its framework is appropriately designed and
effective. The terms of reference for the Risk Committee can be found
on HICL’s website.
Day-to-day monitoring, evaluation and management of risk
is undertaken by InfraRed as HICL’s Investment Manager.
Working closely with portfolio company management teams,
InfraRed’s Asset Management Team ensures the timely reporting of
project-specific risks to the HICL Fund Management Team as and
when they arise; the HICL Investment Committee also undertakes
a formal review of project-specific risks on a quarterly basis.
The Investment Manager is monitored and challenged by the Risk
Committee, which reports to the Board.
The Investment Manager uses its experience, insight from
investments within the Group’s portfolio and the wider infrastructure
market to consider future risks and develop appropriate mitigation
strategies. The Investment Manager oversees the deployment of
these strategies and directs portfolio company management teams
as required. Relevant systems, policies, oversight and third-party
assurance are utilised to ensure effective risk management.
The Board’s Management Engagement Committee reviews the
performance of the Investment Manager (as well as all key service
providers) at least annually. The Risk Committee reviews the
Investment Manager’s internal controls and their effectiveness on
a quarterly basis, and the Audit Committee also reviews InfraRed’s
financial control environment. No material issues were identified
by any committee during the year. The Investment Manager also
undertakes an annual assessment of the Company’s other key
service providers, which requires each supplier to sign a code
of conduct and fill in a questionnaire confirming compliance with
relevant laws and regulations. The Management Engagement
Committee reviews the results of this assessment, and any actual or
potential issues which could result in a material risk to the Group are
shared with the Risk Committee and Board.
The Investment Manager’s Risk team has developed a detailed
self-assessment internal control report, and this is reviewed on a
quarterly basis by the Risk Committee alongside similar control
reports from the Administrator and Company Secretary as well as
HICL’s Depositary.
50 HICL Annual Report 2025
Risk classes
Risk is evaluated across seven primary risk classes. These are
set out in the table below along with the Investment Manager’s
assessment of:
– The potential financial impact of plausible 12-month downside
scenarios, which are developed by the Investment Manager and
reviewed by the Risk Committee. They represent the estimated
impact of severe but plausible scenarios, meaning they are not
worst case. Each scenario is presented before (inherent) and after
(residual) the effect of mitigation strategies is considered; and
– A residual risk rating
1
based on the likelihood and mitigated impact
of the prudent downside scenario for each risk class.
If any one of the plausible 12-month downside scenarios described
above were to materialise, the NAV / share would be impacted
immediately, but the effect on cash flow may extend beyond the
current year, with a consequential impact on dividend cash cover.
The Risk Committee therefore focuses on the five-year cash flow
impact of each scenario.
The Investment Manager regularly presents stress scenarios and
associated mitigation strategies to the Risk Committee to assist its
assessment of more severe but lower-probability downside scenarios.
During the year, the Investment Manager worked with the Risk
Committee to develop a more quantitative approach to risk appetite
based on the outputs of the stress scenarios, and this will continue to
evolve over the course of the next financial year.
The residual risk from portfolio performance is still considered to be
high, and as part of the September 2024 valuation process InfraRed
identified and reflected an increase in forecast cost risk associated
with defect remediation and lifecycle delivery on a subset of UK
PPP assets. These valuation adjustments reflect the challenging
operating environment for capital works delivery and elevated client
expectations as handback approaches. These assumptions were
reviewed at the year-end and remain appropriate.
Notwithstanding the above, the Investment Manager achieved
several key milestones which successfully mitigated the impact on
the Group. Notably, Ofwat’s final determination for Affinity Water was
consistent with HICL’s expectation that the Company will resume
distributions in FY26, reducing uncertainty around cash generation
in the short to medium term. The remediation of construction-related
defects remains a priority, with works progressing well across
several projects. InfraRed continued to mitigate the risk of adverse
behaviour from public sector clients with effective engagement,
particularly through its position as an active, founding member
of The Association of Infrastructure Investors in Public Private
Partnerships (AIIP). The AIIP added four new members in the year to
strengthen its co-ordinated voice on industry issues with stakeholders
including the UK government. The Investment Manager and Risk
Committee also ensured that specific learnings from the protracted
dispute at Tameside Hospital were reflected in the Company’s risk
management framework.
Despite financial risk being materially mitigated through the repayment
of the RCF, which was subsequently extended to June 2027 after
the period end, the residual risk rating for the Financial / Market Risk
class was maintained as high in the year. This is due to persistent
macroeconomic turbulence and elevated interest rates impacting
the Company’s share price, which has been at a material discount
to NAV since February 2023. Higher government bond yields across
HICL’s core geographies were responsible for much of the increase in
the portfolio’s weighted average discount rate to 8.4% from 8.0% at
31 March 2024, which lowered the Company’s net asset value.
The residual risk rating for the political risk class continues to be
assessed as medium. Political and regulatory risk is an inherent
feature of the infrastructure asset class which can evolve at relatively
short notice. With elections having taken place across several HICL
geographies in the year, new government policies have the potential
to impact the Company either directly through its assets or indirectly
through broader macroeconomic effects. The risks associated with
these uncertain outcomes are primarily mitigated through HICL’s
diverse portfolio, which is exposed to a wide range of clients, sectors,
regulatory regimes and geographies.
Principal risks
The tables on the following pages summarise the principal risks which
are regularly reviewed by the Risk Committee and have the potential
to reduce the Company’s ability to achieve its strategic objectives
and materially impact HICL’s financial performance and reputation.
They are not an exhaustive list of risks and uncertainties faced by the
group. Further information on the principal risks and uncertainties
facing HICL can be found in HICL’s March 2019 Prospectus which is
available on the Company’s website at www.hicl.com.
The Directors have carried out a robust assessment of the
Company’s emerging and principal risks. The movement in risk status
for each principal risk, when compared with the previous financial
year, is set out in the tables below. The Investment Manager’s Report
(starting on page 16) provides additional commentary on how the risk
landscape faced by the Group has evolved during the year.
The risks posed by climate change, whilst not expected to be material
to the Group, are an integral part of the Investment Manager’s risk
management framework. Further information on the assessment and
management of climate-related risks can be found in the Task Force
on Climate-related Financial Disclosures, starting on page 61.
Risk and Risk Management continued
1 There are five residual risk ratings: the lowest being ‘Very Low’, then ‘Low’, ‘Medium’, ‘High’ and ‘Very High’
51HICL Annual Report 2025
Strategic Report FinancialsGovernance
Link to strategy
Deliver a
sustainabledividend
Grow Net Asset Value
Build a diversified
portfolioto manage risk
Provide a compelling
cost proposition
Change in risk level
No change
Decreased risk Increased risk
Portfolio performance risk
Principal risk
Adjustments to contracted orregulatedrevenues
Movement in risk
status in FY2025
Potential impact
– Reduced income from PPP
projects due to availability
deductions because of poor
operational performance or a
disputed approach to contract
management by clients
and advisers
– Under certain regulated
regimes, failure to meet
specified delivery outcomes can
result in penalties being earned,
reducing income
– Projects may be prevented from
making distributions by lenders
or in severe cases, default on
financing arrangements
– Adverse reputational impacts
from loss of revenue linked to
acute operational issues
Risk mitigation
– Contractual pass-through of
deductions to subcontractors,
which can be terminated and
replaced if performance is poor
for an extended period of time
– Collaborative and proactive
agreement with public sector
clients where disagreements
arise over performance
– Diversity of regulatory
mechanisms and
performance regimes
– For most regulated
assets, management
team compensation linked
to performance against
regulatory outcomes
FY25 outcome
– Low overall level of deductions
across the PPP portfolio, with
the vast majority passed down
to subcontractors
– Large proportion of deductions
were at Tameside Hospital which,
following a protracted dispute with
the client, was sold by HICL to the
project’s lenders for a nominal sum
– Addition of four new members to
the AIIP to further share expertise
on best approaches to managing
PPP projects and strengthen the
co-ordinated voice on industry
issues with key stakeholders
including the UK government
– Relatively low level of penalties
incurred by Affinity Water, in
line with expectations; Ofwat’s
published final determination for
Affinity Water for AMP8 (2025-2030)
is also expected to enable the
resumption of distributions in FY26
– Revenues at Fortysouth (largely
contracted) and TNT (regulated and
contracted) in line with expectations
Link to strategic
objectives
Primary risk classes
Residual
risk rating
Change
in year
NAV/share impact
Inherent vs Residual
Five-year cash flow impact
Inherent vs Residual
Portfolio performance risk High
Financial / market risk High
0 25
Political risk Medium
Operational risk – execution Low
0 25 0 25
Operational risk – portfolio and asset
management
Very Low
0 25 0 25
HICL central management risk Very Low
0 25 0 25
Operational risk – regulation and compliance Very Low
0 25 0 25
ResidualInherent
52 HICL Annual Report 2025
Risk and Risk Management continued
Portfolio performance risk (continued)
Principal risk
Revenue variability
Movement in risk
status in FY2025
Potential impact
– Actual usage of demand-
based assets below
valuation assumptions
– Potential default of financing
arrangements in the case of
significant underperformance
– Uncertain and unpredictable
impact on usage from long-term
behavioural changes, such as
increased home working
– Take up or adoption of new
communications technology
slower or less than expected
Risk mitigation
– Detailed analysis of demand risk
as part of due diligence process
at acquisition
– Use of independent third-
party traffic forecasts
where appropriate
– Assessment of risk of long-term
behavioural changes as part of
the Directors’ Valuation
– Strategic and critical nature
of the Group’s demand-
based assets
– Communications assets benefit
from monopolistic wholesale
market positioning or long-
term contracts
FY25 outcome
– Revenue at Altitude Infra ahead of
valuation assumptions
– Changes in behavioural
patterns post Covid-19 now well
understood and incorporated into
forecasts for A63 and London St.
Pancras High Speed
– Independent report commissioned
by the UK’s rail regulator found
that the Temple Mills depot could
accommodate more trains if
necessary, key for prospective new
international operators for LSPH to
launch new cross-channel services
Link to strategic
objectives
Principal risk
Construction defects
Movement in risk
status in FY2025
Potential impact
– Disputes with the
subcontractor on the scope of
remediation required
– Increased cost to the
portfolio company where the
construction contractor is no
longer solvent or the statutory
limitations period has expired
– Lenders preventing the
project from distributing or
in severe cases, default on
financing arrangements
– Availability deductions may be
levied depending on the extent
of the defects and the works
required for remediation
– Adverse reputational impact
from material defect issues
Risk mitigation
– Legal rights of portfolio
companies to make claims
against construction
subcontractors for identified
defects during the statutory
limitations period
– Construction defects identified
through targeted surveys as
well as a regular programme of
operations and maintenance
– Adjudication or court
process used where
disputes arise and cannot be
commercially resolved
– Lifecycle budget to offset some
costs following the expiry of the
statutory limitations period
FY25 outcome
– Construction of a temporary ward
at Pinderfields and Pontefract
Hospitals enabled improvement
works to take place in the main
hospital building
– Across the portfolio more broadly,
proactive leadership and control
of the delivery of remediation
works by responsible parties
where necessary
– At Birmingham Hospitals, several
key commercial agreements
pertaining to the ongoing
programme of remedial works
were signed with the client and
contractor, including one which
protects unitary charge payments
to HICL’s portfolio company via a
standstill mechanism
– Specific learnings from the
protracted dispute at Tameside
Hospital related to construction
defects were reflected in the
Company’s risk management
framework following the disposal
of the project to its lenders for a
nominal sum
Link to strategic
objectives
53HICL Annual Report 2025
Strategic Report FinancialsGovernance
Link to strategy
Deliver a
sustainabledividend
Grow Net Asset Value
Build a diversified
portfolioto manage risk
Provide a compelling
cost proposition
Change in risk level
No change
Decreased risk Increased risk
Principal risk
Construction, operations and maintenance counterparties
Movement in risk
status in FY2025
Potential impact
– Operational underperformance
reducing a portfolio company’s
ability to fulfil its contractual
obligations, potentially leading
to revenue adjustments
(see above)
– Failure of a counterparty,
which is likely to lead to
lenders preventing projects
from distributing until the
counterparty is replaced
Risk mitigation
– Well-diversified portfolio,
mitigating concentration risk
– Counterparty credit risk
assessed on a regular basis
by InfraRed’s internal credit
risk team
– Continuous review of contingency
plans for a scenario in which
a key subcontractor enters
administration or liquidation
– A number of potential
replacement service providers
from InfraRed’s wide network
FY25 outcome
– No material deterioration in any
counterparty rating
– Construction of Blankenburg
Tunnel completed on schedule
during the year, reducing HICL’s
overall construction risk exposure
– Construction process at B247
(0.3% of valuation) is behind
schedule, albeit no valuation
impact is anticipated due to
contractual protections
Link to strategic
objectives
Principal risk
Operational costs
Movement in risk
status in FY2025
Potential impact
– Budgets for management
services contracts, lifecycle
costs and insurance premia
prove to be insufficient
– For certain regulated assets,
overspend against allowances
may reduce returns
– Overspends can also occur
where portfolio company
management teams are
responsible for operational
service delivery
Risk mitigation
– Risk for several types of
operational cost generally
passed down through
fixed price contracts to
industry specialists
– Regular assessment of lifecycle
budget adequacy
– For regulated businesses,
set stretching but achievable
expenditure allowances
– For some assets, management
team compensation linked to
performance business plan
– For 41% of HICL’s PPP portfolio
(57 projects), lifecycle obligations
sit with facilities management
contractors as opposed to
HICL’s project companies
FY25 outcome
– The challenging operating
environment for capital works
continues to affect lifecycle costs
in the UK PPP sector, in particular
those projects approaching
handback. In the year, an increase
in forecast cost risk associated
with defect remediation and
lifecycle delivery on a subset of
UK PPP assets was applied to the
Directors’ valuation
– Operational costs at all operating
businesses either in line with or
below valuation assumptions
Link to strategic
objectives
54 HICL Annual Report 2025
Risk and Risk Management continued
Financial and market risk
Principal risk
Investor sentiment
Movement in risk
status in FY2025
Potential impact
– Prolonged periods where
the share price trades below
HICL’s prevailing NAV, inhibiting
HICL’s ability to issue new
equity capital
– Inability to capitalise
on attractive
investment opportunities
Risk mitigation
– Ability to refinance HICL’s
Revolving Credit Facility (“RCF”)
to extend maturity and size (if
deemed appropriate)
– Under the authority granted
by shareholders, HICL may
repurchase shares equating
to c.14.99% of its total issued
share capital
– Strategic disposal to generate
cash to pay down drawings
under the RCF and facilitate
opportunistic acquisitions
without substantially increasing
HICL’s gearing
– Private Placement diversifies
sources of capital and extends
the maturity of debt to a longer
tenor at a fixed rate
FY25 outcome
– HICL’s share price discount to NAV
widened from 21% on 31 March
2024 to 28% on 31 March 2025
– The Group’s RCF term was
extended by one year
– £50m share buyback
programme completed
– New capital allocation plan
announced, under which a further
£100m will be deployed towards
share buybacks before the end
of the calendar year and the
Company will target disposals in
excess of £200m over FY26
– New investments in FY26 expected
to be limited to HICL’s existing
c.£50m commitment to support
Affinity Water’s business plan
Link to strategic
objectives
Principal risk
Discount and interest rates
Movement in risk
status in FY2025
Potential impact
– Increases in interest rates may
lead to increases in long-term
government bond yields, which
in turn may lead to increases
in the discount rate used for
comparable market transactions
– All other things being equal,
higher discount rates would
result in a reduction in the
portfolio valuation
Risk mitigation
– Higher interest rates usually
coincide with higher inflation,
elements which materially
offset each other in the
portfolio valuation
– Higher deposit interest income
when interest rates increase
partly mitigates the value
reduction arising from increased
discount rates
– Low overall sensitivity to the
impact of increased interest
rates on financing costs at
portfolio level
– Adequate and reasonable risk
premium added to risk-free
reference rate (long-dated
government bonds) used
to corroborate reference
discount rates
FY25 outcome
– A discount rate increase was applied
in H1 to a subset of UK PPP assets
where lifecycle delivery risk sits with
the portfolio company. A further
increase was made in the valuation
as at 31 March 2025 to reflect
significant increases in government
bond yields in key geographies.
These changes took the portfolio’s
weighted average discount rate to
8.4% from 8.0% at 31 March 2024
– Refinancings completed
successfully at TNT, Affinity Water
and Altitude Infra
– Discount rates used in the Directors’
Valuation corroborated by market
transactions and the Board’s third-
party expert opinion on the valuation
Link to strategic
objectives
55HICL Annual Report 2025
Strategic Report FinancialsGovernance
Link to strategy
Deliver a
sustainabledividend
Grow Net Asset Value
Build a diversified
portfolioto manage risk
Provide a compelling
cost proposition
Change in risk level
No change
Decreased risk Increased risk
Principal risk
Inflation
Movement in risk
status in FY2025
Potential impact
– Adverse impact on portfolio
valuation and distributable cash
flows if inflation levels below
HICL’s long-term assumptions
– Potential defaults under loan
arrangements in sustained
periods of deflation
– Sustained high inflation
may lead to increases in
interest rates and therefore
discount rates
– In some cases, inflation may
impact costs to a greater extent
than revenues
Risk mitigation
– HICL’s inflation assumptions are
carefully considered as part of
the Directors’ Valuation, drawing
from a wide range of forecasts
– Lower inflation usually coincides
with lower interest rates,
elements which materially
offset each other in the
portfolio valuation
– Negative impact of discount
rate increases should be
largely offset by positive impact
of inflation
– In many cases, both costs
and revenues are contractually
linked to the same inflation index
FY25 outcome
– Actual inflation, especially in the UK
and Europe, declined faster than
expected and was below HICL’s
forecast assumption
– Broader market turbulence and
macroeconomic uncertainty resulted
in rising government bond yields
despite falling inflation
– Valuation assumptions assume a
modest decrease in inflation over the
coming year
Link to strategic
objectives
Political risk
Principal risk
Policy changes
Movement in risk
status in FY2025
Potential impact
– Clients of HICL’s portfolio
companies or national
governments may choose to
terminate contracts
– Heightened public sector activity
around the prospect of PPP
‘handback’ and the mobilisation
of public sector resources for
the transition of UK PPP facilities
back to the public sector at
their expiry
– Governments may consider
taking certain assets back into
public ownership
Risk mitigation
– PPPs generally have a
contractual right to receive
compensation in the event
of counterparties voluntarily
terminating a PPP contract
– InfraRed’s active involvement in
various industry bodies which,
on behalf of the infrastructure
sector, engage with politicians,
civil servants, other policy
shapers, and regulators
– InfraRed’s direct interaction with
stakeholders of the portfolio’s
projects to extol the value that
the private sector brings to the
delivery of public infrastructure
FY25 outcome
– The new Labour government in
the UK has identified infrastructure
investment, delivered in partnership
with the private sector, as a key
economic growth catalyst and is
reassessing the scope to use PFI /
PPP frameworks
– The broader need for infrastructure
procurement enjoys bipartisan
political support across HICL’s
core geographies
– The Labour Party in the UK
has confirmed that rolling stock
leasing companies (such as
XLT) fall outside of its selective
nationalisation plans. HICL’s
investment in LSPH is also not
expected to be impacted
– Heightened political scrutiny of
UK water companies as a result
of sewage overflow events and
broader concerns around financial
management; negative sentiment
may indirectly impact Affinity Water
despite it having no sewerage
exposure. Risk was reduced after
Ofwat’s final determination for
AMP8 (2025-2030) reflected several
positive outcomes for the company.
Link to strategic
objectives
56 HICL Annual Report 2025
Risk and Risk Management continued
Political risk (continued)
Principal risk
Legal or regulatory changes
Movement in risk
status in FY2025
Potential impact
– Exposure to higher contractual
costs or obligations due to legal
and regulatory changes
– Adverse impact on the assets
that are subject to regular price
control reviews in the event of
failure to deliver the specified
levels of service or investment
Risk mitigation
– Continuous monitoring of
potential and actual changes to
regulations by the Investment
Manager and its advisers
to ensure both the Group
and its service providers
remain compliant
– Protection in relation to
changes in legislation is
provided by most social
and transport infrastructure
concessions through their
contractual structures
– InfraRed’s participation in
relevant consultation processes
to ensure that the legislature
and regulators hear the
concerns and views of HICL,
in its capacity as a private
sector investor
– Well-diversified portfolio across
clients, sectors and countries
FY25 outcome
– Affinity Water was rated as an ‘average’
performer (in line with the highest
awarded grade) in Ofwat’s most recent
Water Company Performance Report
– Ofwat’s final determination for
AMP8 (2025-2030) for Affinity Water
reflected several positive outcomes for
the company
– An independent review of the UK water
sector and its regulation was launched
by the UK government and is ongoing;
InfraRed expects a balanced outcome for
Affinity Water
– LSPH has limited direct exposure to
regulatory price control but also received
a positive determination from the Office
of Road and Rail, under which reduced
track access charges (which are passed
down to the operator) may have a
positive impact on the number of train
paths booked
– Texas Nevada Transmission submitted
its draft rate case for Cross Texas
Transmission to its regulator, setting
out planned spending over the next
five years. A decision is expected in the
summer of 2025
Link to strategic
objectives
Principal risk
Taxation changes
Movement in risk
status in FY2025
Potential impact
– Adverse impact on the Group
and portfolio value due to
taxation legislation or treaty
changes, such as corporation
tax rates and cross-border
tax rules
Risk mitigation
– Closely monitor relevant
cross-border tax rules and
broader taxation legislation
developments for any potential
adverse impact on the Group
FY25 outcome
– French constitutional court validated the
levy on revenues earned by long-distance
transport infrastructure operators.
The portfolio company at A63 Motorway
is progressing a legal challenge alongside
other large motorway concessionaires.
If this is ultimately unsuccessful, HICL
expects to be compensated through
higher tolls. Nonetheless, if the levy
remains with no pass through, InfraRed
expects an immaterial impact on HICL’s
valuation given the revenue threshold
for this tax is €120m; the residual risk is
also reflected in the discount rate used to
value the investment
– No other material changes in
tax legislation
Link to strategic
objectives
57HICL Annual Report 2025
Strategic Report FinancialsGovernance
Link to strategy
Deliver a
sustainabledividend
Grow Net Asset Value
Build a diversified
portfolioto manage risk
Provide a compelling
cost proposition
Change in risk level
No change
Decreased risk Increased risk
Operational risk – execution
Principal risk
Inadequate due diligence
Movement in risk
status in FY2025
Potential impact
– Underperformance against
acquisition assumptions
due to poor or inadequate
due diligence
Risk mitigation
– InfraRed’s Investment team
adopts a thorough due diligence
approach and have a depth of
experience in buying and selling
infrastructure assets
– Support of specialist advisers
(e.g. lawyers, technical
consultants, sustainability
advisers and tax advisers)
– Oversight is provided by the
HICL Investment Committee,
and by the Risk Committee and
Board in respect of matters
falling outside the Investment
Manager’s Approved Investment
Parameters (“AIP”)
FY25 outcome
– No new asset acquisitions in the
year. Most recent acquisitions
continue to perform in line
with expectations
Link to strategic
objectives
Principal risk
Asset pricing
Movement in risk
status in FY2025
Potential impact
– Infrastructure assets become
less attractive due to high
asset pricing
– Overpayment for assets leads
to lower realised investment
returns than expected
Risk mitigation
– InfraRed’s disciplined and
selective acquisition strategy,
leveraging the Investment
Manager’s international
Investments team
– New acquisitions can provide
inherent protection against rising
interest rates through inflation
correlation or regulated cost of
capital structures
FY25 outcome
– Discount rates used to value
new acquisitions corroborated
by market data points, including
HICL’s disposal activity, and
acquisitions and disposals made
by other InfraRed-managed funds
– The recently announced cash
offer for BBGI Global Infrastructure
S.A. provides a highly relevant
data point for the Company’s
PPP portfolio and supports
HICL’s valuation approach for
these assets
– Pricing data points from other
market transactions also provided
pertinent inputs to the adequacy
of discount rates used in HICL’s
valuation process
Link to strategic
objectives
58 HICL Annual Report 2025
Viability Statement
The AIC Code of Corporate Governance (the “AIC Code”) requires
the Directors to make a statement regarding the Company’s viability
in the Annual Report, explaining how they have assessed the
Company’s prospects, the period of time for which they have made
the assessment and why they consider that period to be appropriate.
The Directors have determined that the five-year period to March
2030 remains an appropriate period over which to assess the
Company’s viability due to the following reasons:
– The period aligns with the Company’s business planning
processes, including how the Directors assess the Company at
their annual strategy board meeting;
– It is the period over which the internal stress testing is performed; and
– Although the long-term and / or contractual nature of our
investments means that the Directors have a higher level of
confidence over the endurance and longevity of the Company,
it is challenging to assess and determine the regulatory, tax and
political environment outside the five-year period with any certainty.
Assessment of HICL’s Prospects
a. Business planning process
The Directors’ primary assessment of the Company’s prospects is
achieved through the annual strategic and business planning exercise.
The Directors review a five-year budget and business plan, which
is prepared by the Investment Manager and includes cash flow
projections to aid strategic planning and provide support for the dividend
approval process. The projections consider cash balances, investment
commitments, key covenants and limits, dividend cover, investment policy
compliance and other key financial indicators over that five-year period.
These projections are based on the Investment Manager’s expectations
of future asset performance, income and costs and are consistent with
the methodology applied to provide the valuation of investments.
b. Portfolio diversification
HICL’s portfolio consists of 111 companies whose underlying assets
are predominantly fully constructed and operating. PPPs make up 57%
of the portfolio at 31 March 2025, and all of HICL’s investments are in
jurisdictions with established and proven legal systems. The Company,
via the investments indirectly held by the Corporate Subsidiary IILP,
benefits from predictable long-term, contracted and inflation-linked cash
flows together with a set of risks that can be identified and assessed
(see Risk and Risk Management on page 49). The projects are each
financed on a non-recourse basis to the Company and forecasting is
supported by detailed financial models. The Directors believe that the
non-recourse financing and diversification within the investment portfolio
(the top 10 make up 51% of the portfolio) helps to withstand and mitigate
the risks it is most likely to meet. Finally, the Company and its Corporate
Subsidiaries have a low level of operating expenses relative to forecast
receipts from its portfolio investments, with its largest single cost being the
management fee, charged to IILP.
c. Approach to debt and gearing
The Company funds its investments using equity and via IILP, a long
term £150m private placement loan, which is due for repayment in
two tranches in 2033 and 2035. The gearing of the Company and its
Corporate Subsidiaries is well within its Board-approved investment
parameters in the five-year period. In addition, the Company can
withstand a material increase in interest costs due to the purchase
of a £200m cap, held by IILP, which protects the Company if SONIA
rates exceed 6.5%. The cap runs until June 2026.
The Company, via IILP, also has access to RCF of £400m, which is £16m
drawn (made up of £10m of cash drawn and £6m LC utilisation) at year
end. Likewise the Company, via IILP, also has access to its Letter of
Credit facility which is £77.5m drawn at year end.
d. Capital allocation process
Consistent with others in the alternative assets investment company
sector, the Company has suffered from an uncertain macroeconomic
backdrop and its shares have traded at a discount to NAV for all of
the year. Against this backdrop, the Company has demonstrated its
disciplined approach to capital allocation by continuing its strategic
asset disposal programme. This programme generated proceeds
from previously announced asset sales of £244m and allowed the full
repayment of the drawings on the RCF at the beginning of the year.
Should capital markets remain closed for an extended period, the
Company, via IILP, has access to an RCF, of which £384m remains
undrawn at 31 March 2025.
Assessment of Viability
In making this statement, the Directors have considered the resilience
of the Company and its Corporate Subsidiaries, considering both
its current position and its principal risks, in severe but plausible
downside scenarios, and the effectiveness of any mitigating actions.
Consideration has been given to the current increased market
volatility, political environment and heightened geopolitical risk.
The Investment Manager has prepared sensitivity analysis including
various stress scenarios which have been considered previously by
the Risk Committee. These include:
– Increasing tax rate assumptions by 5% for all assets;
– Increasing lifecycle costs by 33%;
– Inflation is 2% lower in every period than the base case assumptions;
– Assuming an increase in projects not distributing of 20% of the
portfolio (note this represents projects entering distribution lock-up
for a period of 24 months after which they are released);
– A 15% reduction in distribution from the Company’s operational
assets highlighting hypothetical operational challenges;
– Required injection of £50.0 million in an asset bailout combined
with an average forecast RCF cost of at least 200 basis points
above base case; and
– Combined scenario assuming:
– Funding a hypothetical £50m equity injection to continue
operating one or multiple assets and increased interest rates;
– 15% reduction in distributions from operational assets;
– Increase in lifecycle costs of 33%; and
– 50% reduction in final distributions from assets whose
concessions end within the viability period.
Individually, due to the diversified nature of the Company’s portfolio,
these scenarios pose a minimal threat to the Company’s solvency.
A severe scenario was also prepared to assess the loss in revenue
necessary to cause insolvency. Even under this scenario the analysis
demonstrated that the Company should remain viable over the five-
year assessment period.
Viability Statement
The Directors have a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as they fall due
over the five-year period to March 2030, on the assumption that there
is sufficient liquidity in the debt market to allow the Company, via its
Corporate Subsidiaries, to refinance or repay obligations becoming due
under its Revolving Credit Facility and Letter of Credit Facility, and that
its investments are not materially affected by retrospective changes to
government policy, laws or regulations.
03_FinReview_TCFD_v96.indd 5803_FinReview_TCFD_v96.indd 58 20/05/2025 21:0120/05/2025 21:01
59HICL Annual Report 2025
Strategic Report FinancialsGovernance
Strategic Report Disclosures
Investment Policy
HICL’s Investment Policy is to ensure a diversified portfolio which has
a number of similarly sized investments and is not dominated by any
single investment. HICL will seek to acquire Infrastructure equity with
similar risk / reward characteristics to the current portfolio, which may
include (but are not limited to):
– Public sector, government-backed or regulated revenues;
– Concessions which are predominantly ‘availability’ based
(i.e. the payments from the concession do not generally depend
on the level of use of the project asset); and / or
– Companies in the regulated utilities sector.
HICL will also seek to enhance returns for shareholders by acquiring
more diverse infrastructure investments. The Directors currently
intend that HICL may invest in aggregate up to 35% of its total assets
(at the time the relevant investment is made) in:
– Project companies which have not yet completed the construction
phases of their concessions but where prospective yield
characteristics and associated risks are deemed appropriate to
the investment objectives of HICL. This may include investment in
companies which are in the process of bidding for concessions,
to the extent that such companies form part of a more mature
portfolio of investments which HICL considers appropriate
to acquire;
– Project companies with ‘demand-based’ concessions where
the Investment Manager considers that demand and stability of
revenues are not yet established, and / or project companies which
do not have public sector sponsored / awarded or government-
backed concessions; and
– To a lesser extent (but counting towards the same aggregate
35% limit, and again at the time the relevant investment is made)
in limited partnerships, other funds that make infrastructure
investments and / or financial instruments and securities issued
by companies that make infrastructure investments, or whose
activities are similar or comparable.
Geographic focus
The Directors believe that attractive opportunities for HICL to enhance
returns for investors are likely to arise outside as well as within the
UK (where the majority of the projects in the current portfolio are
based). HICL may therefore make investments in the European Union,
Norway, Switzerland, the Americas and selected territories in Asia
and Australasia. HICL may also make investments in other markets
should suitable opportunities arise. HICL will seek to mitigate country
risk by concentrating on investment opportunities in jurisdictions
where it considers that contract structures and enforceability are
reliable and where (to the extent applicable) public sector obligations
carry what the Investment Manager believes to be a satisfactory
credit rating and where financial markets are relatively mature.
Single investment limit and diversity
ofclients and suppliers
For each new acquisition made, HICL will ensure that such
investment acquired does not have an acquisition value (or, if it is a
further stake in an existing investment, the combined value of both the
existing stake and the further stake acquired is not) greater than 20%
of the total gross assets of HICL immediately post-acquisition.
The total gross assets will be calculated based on the last published
gross investment valuation of the portfolio plus acquisitions made
since the date of such valuation at their cost of acquisition.
The purpose of this limit is to ensure the portfolio has a number of
investments and is not dominated by any single investment.
In selecting new investments to acquire, the Investment Manager will
seek to ensure that the portfolio of investments has a range of public
sector clients and supply chain contractors, in order to avoid over-
reliance on either a single client or a single contractor.
Restrictions under the Listing Rules
In accordance with the requirements of the Financial Conduct
Authority, HICL has adopted the policies set out below:
– HICL’s primary objective is investing and managing its assets
with a view to spreading or otherwise managing investment risk.
HICL must, at all times, invest and manage its assets in a way
which is in accordance with its Investment Policy;
– HICL will not conduct a trading activity which is significant in the
context of HICL as a whole. HICL will not cross-finance businesses
forming part of HICL’s investment portfolio; and
– No more than 10%, in aggregate, of HICL’s assets will be invested
in other listed closed-ended investment funds.
The Listing Rules may be amended or replaced over time.
To the extent that the above investment restrictions are no longer
imposed under the Listing Rules, those investment restrictions shall
cease to apply to HICL.
60 HICL Annual Report 2025
Risks and uncertainties
The principal risks and uncertainties facing HICL can be found in
HICL’s March 2019 Prospectus which is available on the Company’s
website at www.hicl.com. An update on the key risks currently faced
by the Company and associated mitigants are set out in the Risk and
Risk Management section of this report starting on page 49.
Environmental, social and community
matters
For a detailed explanation of HICL’s approach to Environmental,
Social and Governance / Responsible Investment, please see HICL’s
Sustainability Policy, which can be found on the Company’s website
at www.hicl.com. A comprehensive review of the year, including
case studies from the portfolio, can be found in HICL’s Sustainability
Report 2024, also available on the website.
Research and development activities
None.
Section 172(1) Statement
The Directors discharge their duties under Section 172 of the
Companies Act 2006 to act in good faith and to promote the success
of the Company for the benefit of shareholders as a whole.
As a closed-ended investment company, HICL has no employees.
Explanations of the impact of HICL’s activities on other stakeholders
are included in the Strategic Report.
Gender diversity
At the year end, the Board of Directors comprised seven non-
executives: four male and three female.
HICL has no employees.
Leverage
HICL is required under the Alternative Fund Managers Directive
(“AIFMD”) to make available to investors information in relation
to its leverage. Leverage is considered in terms of HICL’s overall
exposure to financial or synthetic gearing and includes any method
by which its exposure is increased whether through borrowing of
cash or securities, foreign currency holdings, leverage embedded
in derivative positions or by any other means. It is expressed as
the ratio between the total exposure of HICL and its Net Asset
Value such that if its exposure was equal to its Net Asset Value,
leverage would be disclosed as 100%; a value above 100% means
that HICL has leverage equal to the percentage amount above
100%. Exposure values are calculated by two methods, gross and
commitment, as defined within the AIFMD. Exposure under the
gross method represents the aggregate of all HICL’s exposures other
than cash balances held in base currency; the commitment method
takes into account the effect of different treatment of certain cash
and cash equivalent items and of offsetting instruments between
eligible assets to reflect netting and hedging arrangements in line
withregulatory requirements.
Maximum leverage levels have been set by the Board and InfraRed
and are in accordance with the maximum borrowing allowed by
HICL’s Articles of Association.
The table below sets out the current maxima, and permitted limit
and actual level of leverage for HICL as a percentage of its Net Asset
Value as at 31 March 2025.
Leverage
Gross
Method
Commitment
Method
Maximum limit 150% 125%
Actual level 126% 105%
Mike Bane
Chair
20 May 2025
Strategic Report Disclosures continued
61HICL Annual Report 2025
Strategic Report FinancialsGovernance
Introduction
HICL is a closed-ended investment company,
and therefore under Listing Rule 15.4.29R
is not required to comply with Listing Rule
9.8.6R(8). The Company has, however, been
voluntarily reporting using the four pillars of
the Task Force on Climate-Related Financial
Disclosures (TCFD) since its 2019 Annual
Report & Financial Statements and has added
to these disclosures in subsequent reporting
periods. TCFD is the established framework
for consistent, comparable and clear reporting
on a company’s approach to climate-related
risks and opportunities and assessing its
potential impact on that company.
HICL’s climate-related financial disclosures were prepared in
accordance with the four TCFD pillars and 11 recommendations set
out on page 66. The Company acknowledges that there is always
scope for improvement.
The Company’s climate-related financial disclosures, set out below,
cover the 12-month period to 31 March 2025 (the “Reporting Period”)
and satisfy the obligation of InfraRed Capital Partners Limited, as
the Company’s Investment Manager, to prepare a product report
for the Company in accordance with section ESG 2.3.5 of the
FCA Handbook.
The disclosures below provide key climate-related information,
and cross-references to where additional information can be found
(either within this report, or within HICL’s 2025 Sustainability Report,
published on the HICL website on the same day as this report).
Governance
The Board and Investment Manager recognises that climate change
may have a material impact on investment performance and returns
over the short, medium and long-term. Therefore, climate change
considerations are embedded throughout HICL’s business by seeking
to factor in climate-related risks and opportunities in investment
decisions and management of portfolios with a view to delivering
compelling risk-adjusted returns to shareholders.
The Board has overall responsibility for the oversight of HICL’s
sustainability risks and opportunities, of which climate change is an
important subset. The Board and the Investment Manager meet
on a quarterly basis, during which they review the risks facing the
Company, including risks related to climate change. The quarterly
meetings are also used to formally review the Company’s progress
against its broader sustainability strategy and objectives, along with
its positioning with respect to various sustainability-related regulatory
frameworks. Sustainability is also a key topic at the Board’s annual
strategy meetings.
Some of the Board’s committees also have key roles:
– The Risk Committee oversees and challenges InfraRed’s risk
management processes and analysis, and has a specific remit to
examine ‘horizon’ risks such as the long-term consequences of
climate change
– The Management Engagement Committee considers how
HICL service providers, including InfraRed, adhere to HICL’s
Sustainability Policy
– The Audit Committee reviews the Company’s approach to
disclosures, including those relating to climate change
Although management of the portfolio, as well as investment
decisions within agreed parameters, is delegated to InfraRed as
the Investment Manager, the Board has overall responsibility for the
Company’s investment policy.
On behalf of HICL, InfraRed actively identifies and mitigates the risks
that climate change poses to the Company and its portfolio, whilst
also looking to reduce the actual and potential adverse impacts of
business decisions on climate change, and as ultimately on society.
Further details of the process is outlined on the following pages.
In relation to climate-related opportunities, the Investment Manager
presents a review of the market to the Board on a quarterly basis.
As part of this review, potential new acquisition opportunities are
highlighted, including those which directly support the transition to a
low-carbon economy.
Further information on HICL’s corporate governance framework is
provided on page 72 of this Report. A diagram setting out HICL’s
reporting and risk management framework is set out on page 49 of
this Report.
Climate-related financial disclosures (TCFD)
62 HICL Annual Report 2025
Strategy
In 2024, on behalf of HICL, InfraRed engaged a third-party climate
specialist advisor to conduct a scenario-based climate change risk
assessment of the Company’s portfolio.
1
This assessment is still
considered valid as the Company did not make any new investments
during its financial year ended 31 March 2025 and there have been no
material updates to the climate science underpinning the assessment.
The key identified risks and opportunities with relation to HICL’s
business are summarised in the table below. In the short term, based
on current climate conditions, a subset of HICL’s assets remain
exposed to acute and chronic physical risks arising from different
extreme weather events, but the overall exposure is limited, and
mitigations are in place, and regularly reviewed. The Company may
also be exposed to transition risks if there are rapid, unexpected
changes to government policy, which are more likely under the 1.5°C
scenario as set out below. In general, the portfolio-level findings of
the climate change risk assessment demonstrate that the Company
remains highly resilient to both physical and transition risks associated
with climate change. The Board and the Investment Manager will
seek to update and review this assessment periodically.
TCFD continued
Process and methodology
The flow chart below sets out the process undertaken by the Investment Manager:
1
Physical risks: climate
hazard exposure
assessment
A location-based quantitative and qualitative physical risk assessment of HICL’s portfolio based
on three scenarios:
Scenario
Assumed global temperature
increase from pre-industrial
timesby the end of the century
Representative
Concentration
Pathways (RCP)
2
Hothouse world >4°C 8.5
Middle of the road 2-3°C 4.5
Net zero by 2050 scenario 1.5°C 1.9/2.6
2
Physical risks: impact
assessment
An assessment of acute and chronic hazards which would cause downtime and reduction in
capacity using several proprietary vulnerability models developed by the specialist adviser that
are specific to the assets
3
Physical risks: modelling
financial impact
Modelling the financial impact or Value at Risk (VaR) associated with the current (now until
2030) and future (beyond 2040) physical risk exposure and the consequences in terms of
financial impact or loss
4
Transition risk: sector
exposure assessment
This step included a sector-based assessment of exposure to transition risks of the portfolio
1 By value, using the Directors’ Valuation as at 31 March 2025, excluding the Company’s investments in A13 senior bonds
2 RCPs specify concentrations of greenhouse gases that will result in total radiative forcing increasing by a target amount by 2100, relative to pre-industrial levels
Summary of material risks and opportunities
TCFD Category Climate-related factor Potential financial impact Potential materiality
Physical Flooding Risk: Damage to physical structures resulting in unavailability / increased cost 4°C – Low
1.5°C – Low
Physical Winter storm Risk: Damage to physical structures resulting in unavailability / increased cost 4°C – Low
1.5°C – Low
Physical Drought Risk: Usage restrictions or increased costs at Affinity Water
Opportunity: Increased long-term investment required at Affinity Water
4°C – Med
1.5°C – Low
Transition Retrofitting of energy
efficiency solutions
Opportunity: Variation contracts awarded for existing PPP assets 4°C – Low
1.5°C – Low
Transition Increased public
transport use
Risk: Lower traffic using toll roads
Opportunity: greater usage of LSPH
4°C – Low
1.5°C – Med
Transition Move towards electric
vehicles and trains
Opportunity: Co-located EV charging at HICL’s toll road projects
Opportunity: Long-term use case for XLT
4°C – Low
1.5°C – Low
Transition Increased need for
renewable energy
Opportunity: Long-term use case for OFTO 4°C – Low
1.5°C – Low
Transition Remote working Risk: Reduced traffic volumes using demand-based transport assets
Opportunity: Greater take-up and adoption of technology benefitting
communications assets
4°C – Low
1.5°C – Med
The process and methodology undertaken by the Manager to analyse potential physical and transition risks consists of four stages:
The chart below sets out the portfolio exposure (by Directors’ Valuation as at 31 March 2025 excluding A13 senior bonds) to physical climate
risks based on current climate conditions, without mitigation:
Flash flood
Wildfire
Tornado
Lightning
Hailstorm
Winter storm
Tropical cyclone
Drought stress
Heat stress
Inland flood
Coastal flood
No Hazard
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Very low Low Medium High Very high
Portfolio exposure (by percentage of Directors’ valuation as at 31 March 2025 excluding A13 senior bonds)
63HICL Annual Report 2025
Strategic Report FinancialsGovernance
HICL’s portfolio is currently exposed to chronic hazards at ‘very low’ to
‘moderate’ levels, with limited intensification over time (beyond 2040)
under a ‘hothouse world’ scenario (>4°C). As would be expected,
exposure to acute hazards is greater, reaching ‘moderate’ to ‘high’
levels. However, these classifications are unchanged in the >4°C
scenario, demonstrating a lower level of vulnerability of the portfolio,
even in the event of extreme climate change. Specific exposure levels
vary by sector and geography, and InfraRed takes actions to address
heightened exposure to certain hazards at the portfolio company level.
HICL’s main physical risk exposures based on both current and future
conditions are to winter storms, subsidence, river flooding and coastal
flooding which is expected based on the weighting of the portfolio
towards Northern Europe. Geographical location is also an inherent
mitigant against other physical risks such as drought and heat stress.
Although some assets have very high exposure to flooding, significant
physical mitigation already exists in the form of flood defences,
particularly in low-lying countries such as the Netherlands.
The potential annual loss across the portfolio from windstorms and
flooding is not expected to be material, with mitigation measures
further reducing any impact in years with ‘severe’ impact events.
HICL’s assets benefit from comprehensive insurance policies,
which cover physical damage as a result of climate-related events.
As is common with real assets, insurance is one of the primary risk
mitigants against the financial impact of physical damage. In the
future, and particularly under a 4°C scenario, it is possible that the
cost of obtaining insurance increases as a result of the increased
likelihood of severe weather events, although this is likely to be limited
to a small number of assets. The impact of climate change risks on
future insurance premiums is factored into the assumptions used in
the valuation of each of HICL’s assets.
The following table shows the physical-risk hazard exposure for HICL’s portfolio.
Sector
Hazard Exposure
Current Climate
(RCP 2.6 scenario)
2040-50
(RCP 8.5 scenario)
Acute Chronic Acute Chronic
Communications 4 3 4 3
Electricity and water 3 2 3 2
Social infrastructure 3 1 3 2
Transport 4 1 4 2
Key
Very high ModerateHigh Low Very low
Physical risk analysis
The primary impact of climate change for HICL is likely to be borne by its portfolio companies: increased operating costs or reduced revenues as a
result of physical risks materialising. In many cases physical mitigation measures already exist and there is a degree of contractual protection from
increased costs to implement further measures. Such risks are likely to be exacerbated under a 4°C scenario, whereas under a 1.5°C scenario assets
are more likely to be impacted by transition risks.
64 HICL Annual Report 2025
TCFD continued
Transition risks and opportunities analysis
Examples of transition risks under a 1.5°C scenario include increased
public transport use, a reduction in overall journeys and car sharing,
which could impact some of HICL’s demand-based assets.
Beyond 2040, under a 1.5°C scenario, the impact of transition risks
could be greater, but many assets have inherent protection as they
provide vital services and generate low direct emissions.
Net zero alignment of the portfolio
To further strengthen the resilience of the HICL portfolio to transition
climate risks, the Investment Manager actively seeks to anticipate
and build capacity at portfolio company level to manage such risks.
The key industry frameworks that help the Manager assess the extent
to which the Fund’s portfolio is prepared for and aligned with a lower
carbon, energy-resilient future are the Net Zero Investment Framework
(NZIF)
1
and the Private Markets Decarbonisation Roadmap (“PMDR”).
2
These frameworks were developed by the investment industry for the
investment industry and categorise the level of alignment across the five
stages listed in the infographic below.
Currently, 34% of HICL’s portfolio by value is aligning, aligned to or at
net zero. See page 14 of HICL’s 2025 Sustainability Report for more
information about InfraRed’s approach to assigning assets into the
various stages of alignment to net zero.
As set out in this report, the Company has set interim targets relating
to net zero:
Portfolio coverage: 50% of HICL’s portfolio to be net zero, aligned
to net zero, or aligning to net zero by 2030.
Portfolio engagement: 90% of all portfolio company emissions
to be subject to direct or collective engagement and stewardship
actions by 2030.
The Company commits to reviewing these targets every five years at
a minimum.
Climate opportunities
There is likely to be greater scope to take advantage of opportunities
arising from the transition to lower-carbon, energy resilient economy,
such as asset repurposing and additional investment, for instance in
the installation of new EV charging infrastructure at toll road assets.
There will likely be the need for related investment such as rapid
charging or retrofitting of energy efficiency solutions. A key tenet of
HICL’s vision is to support sustainable modern economies by investing
in assets linked to the energy transition, and a 1.5°C scenario is likely to
increase the number of attractive investable opportunities in this space.
As of 31 March 2025, 27% of the portfolio is currently invested in climate
solutions
3
. While the Company anticipates that this will grow over time and
commits to maintaining transparency on the percentage of the portfolio
invested in climate solutions, the NZIF for Infrastructure recognises the
difficulty in setting a climate solutions target for funds of HICL’s nature.
The Company is therefore not setting a formal target at this time.
Risk management
How we identify and assess climate risks
andopportunities:
For new acquisitions, climate-related risks and opportunities are
considered throughout the investment process by the Investment
Manager. At the due diligence phase, the identification of climate-
related risks (physical or transition) and the potential impact (positive or
negative) is a standard practice. The findings of the climate change risk
assessment are presented to the Investment Manager’s Investment
Committee for consideration in the investment approval.
For existing projects, risks have been identified and assessed through
a detailed climate change risk assessment, as set out on pages 62 and
63. Over the year, InfraRed’s Asset Management and Sustainability
teams continued to engage with the management teams of HICL’s
portfolio companies, the vast majority of which have, guided by the
findings of the climate change risk assessment, discussed specific
climate-related risks and opportunities at board level, updated risk
registers, and developed mitigation strategies, where necessary.
How we manage climate risks and opportunities:
InfraRed’s Asset Management team ensures the timely reporting
of project-specific risks relating to climate change to the HICL Fund
Management team as and when they arise; the HICL Investment
Committee also undertakes a formal review of all project-specific risks
on a quarterly basis. This process ensures that material climate-
related risks feed into the Investment Manager’s quarterly reporting to
the Risk Committee, which in turn reports to the Board.
The Company’s positioning with respect to a transition to a lower-
carbon, energy-resilient economy is primarily considered through the
Investment Manager’s active approach to asset management and
portfolio construction.
HICL’s core infrastructure investments provide essential services to
communities, and as a result are inherently well positioned. For HICL’s
PPP projects, energy use is driven by the client, with the portfolio
company generally responsible for maintaining the equipment which
provides the building’s heating, cooling and lighting. Any changes
to these systems required under a 1.5°C scenario would usually be
accounted for under existing lifecycle budgets or alternatively treated as
a contract variation. In relation to HICL’s GDP-correlated demand-based
assets such as toll roads, which may be exposed to transition risks and
opportunities under a 1.5°C scenario, these benefit from strong strategic
positioning, in many cases serving as the connection between key
regional hubs. The Company also invests directly in assets which are
likely to benefit from a low-carbon transition, such as OFTOs.
More broadly, InfraRed’s exclusion policy specifically covers carbon-
intensive industries such as coal, oil and gas (where not aligned to
a low-carbon transition) and HICL does not invest in assets whose
primary purpose is electricity generation.
Sustainability considerations, including those related to climate,
are incorporated into the Investment Manager’s risk management
framework, which is used as the basis of risk reporting to the HICL
Risk Committee. In particular, sustainability considerations feature as
a material risk in the following risk classes:
– Political risk: in particular, policies associated with energy security
and the transition to net zero carbon emissions
– Operational risk: execution: through transaction due diligence
and investment decisions
– Portfolio performance risk: sustainability risks can affect
operational performance, including transitional and physical risks
associated with adverse climate change
1 Developed by the Institutional Investors Group on Climate Change (IIGCC) with support from other industry stakeholders and recommended for use by both asset owners and asset managers
2 Supplementary guidance to NZIF developed by Initiative Climat International (ICI) and Sustainable Markets Initiative
3 Climate solutions are defined as renewable energy, battery storage and other supporting infrastructure for the energy transition. This definition was informed by the EU taxonomy. We note that
changes in the EU taxonomy may lead to certain projects being reclassified, and our baseline may need to be revised to reflect such changes
65HICL Annual Report 2025
Strategic Report FinancialsGovernance
Climate-related risk is an explicit building block of portfolio performance
risk. Individual project companies submit regular progress reports to
InfraRed on the mitigation measures they are taking in response to the
climate change risk assessment. In turn, this enables the HICL Risk
Committee to consider the overall impact at portfolio level.
Further details are provided in the Risk and Risk Management on
page 49 of this report.
Other key climate metrics
2
Our specific climate and environment related metrics and targets, as set out in this report, have been made considering the TCFD
recommendations and are set out below:
Metric Current Year Previous Year
% Portfolio
reporting Goals
Carbon Reduction Initiatives 91% 76% 100%
50%
of portfolio aligning, aligned to or achieving net zero
by 2030
Weighted Average Carbon
Intensity (tCO
2
e / £m revenue) –
Scope 1, 2 and 3
309 280 98%
4
Carbon Footprint (tCO
2
e / £m
invested) – Scope 1, 2 and 3
30 26 98%
Water Reduction Initiatives 88% 88% 100% For portfolio companies where
wehaveoperational control:
3
100%
of portfolio companies with material water consumption
to have reduction initiatives in place by 2025
Waste Reduction Initiatives 90% 87% 100%
Positive Biodiversity Impacts 81% 76% 100%
Climate change risk register
andBoard meetings
86% 83% 100%
Portfolio emissions subject to
direct or collective engagement
and stewardship actions
85% 76% 98%
90%
of emissions to be subject to direct or collective
engagement and stewardship actions by 2030
Emissions (Attributable basis)
Year ended
31 December 2024
Year ended
31 December 2023
Scope 1
Direct GHG emissions – occur from sources that are owned or controlled by the organisation Nil Nil
Scope 2
Indirect GHG emissions – occur from the generation of purchased electricity, heating, cooling
and steam Nil Nil
Total Scope 1 and 2 (market-based) emissions (tCO
2
e) Nil Nil
Scope 3
Category 1, emissions from indirect purchased goods and services (tCO
2
e) 285 174
Category 15, emissions from all operational investments (tCO
2
e) 90,007 82,537
Category 15, emissions from all investments under construction (tCO
2
e) 4,569 7,022
Total Scope 1, 2 and 3 emissions (tCO
2
e) 94,861 89,733
Total Scope 1, 2 and 3 emissions (tCO
2
e) – including sold assets
1
94,861 94,453
Metrics and targets
The Board and the Investment Manager consider several metrics
in the management of the Company’s climate-related risks and
opportunities including, but not limited to:
Greenhouse gas (“GHG”) emissions
HICL has disclosed in the table below its Scope 1, 2 and 3 GHG
emissions for calendar year 2024.
Due to the nature of its business, HICL has no Scope 1 or Scope
2 GHG. The Company’s Scope 3 emissions primarily relate to the
emissions of its portfolio companies, although there is also a small
contribution from procurement of services and business travel.
The below sets out HICL’s emissions for the calendar year ending 31 December 2024:
1 Considers emissions from assets sold during the relevant year
2 Commentary on the changes in HICL’s metrics in comparison to 2024 can be found on pages 12, 20, 24 and 28 of HICL’s 2025 Sustainability Report
3 Note this target relates to portfolio companies where we have operational control in relation to setting and implementing water and waste reduction initiatives. Where we do not have
operational control (such as PPP/PFI projects), we will still engage on these initiatives
4 98% of HICL’s portfolio by valuation has emissions data reflected in the Total GHG Emissions calculations. For more information on HICL’s methodology for estimating and reporting
GHG emissions, please see page 33 of HICL’s 2025 Sustainability Report
TCFD continued
66
HICL Annual Report 2025
TCFD recommendations index
The table below sets out the 11 TCFD recommendations, and where the related information can be found.
Recommendation Recommended Disclosure Pages
Governance
– Describe the board’s oversight of climate-related risks and opportunities.
– Describe management’s role in assessing and managing climate-related
risks and opportunities.
Pages 62 and 63
Strategy
– Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.
– Describe the impact of climate-related risks and opportunities
on the organization’s businesses, strategy, and financial planning.
– Describe the resilience of the organization’s strategy, taking into consideration
different climate-related scenarios, including a 2°C or lower scenario.
Page 62 and 63
Risk management
– Describe the organization’s processes for identifying and assessing
climate-related risks.
– Describe the organization’s processes for managing climate-related risks.
– Describe how processes for identifying, assessing, and managing climate-related
risks are integrated into the organization’s overall risk management.
Page 64
Metrics and targets
– Disclose the metrics used by the organization to assess climate-related risks
and opportunities in line with its strategy and risk management process.
– Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions and the related risks.
– Describe the targets used by the organization to manage climate-related risks
and opportunities and performance against targets.
Page 65
WHAT’S IN THIS SECTION
Board and Governance 68
Board of Directors 69
The Investment Manager 71
Corporate Governance Statement 72
Management Engagement Committee (MEC) 78
Market Disclosure Committee 78
Nomination Committee 79
Risk Committee Report 80
Audit Committee Report 82
Directors’ Remuneration Report 88
Report of the Directors 92
Statement of Directors’ Responsibilities 95
Governance
67HICL Annual Report 2025
Strategic Report FinancialsGovernance
Operational structure
HICL Infrastructure PLC (“HICL”, or the “Company” and, together
with its subsidiaries, the “Group”) is a registered investment
company with an independent Board of Directors. Its shares have
a premium listing on the Official List of the UK Listing Authority and
trade on the main market of the London Stock Exchange.
Equity
Independent Directors
– Governance
– Oversight
– Strategy
Investment Manager
Administrator and
Company Secretary
– Aztec Financial
Services (UK) Limited
Advisers and
Service Providers
– Legal
– Corporate Broking
– Public Relations
HICL’s shareholders
HICL Infrastructure 2 S.à.r.l
Infrastructure Investments LP
(English limited partnership)
HICL’s portfolio companies
HICL Infrastructure PLC
AIF subject to the full scope of the AIFMD
(UK Investment Trust Company)
Portfolio of underlying investments
Group structure
Investments are made via the Corporate Subsidiaries, which comprise
a group structure involving a Luxembourg-domiciled investment
company and an English limited partnership (the “Partnership”),
together the Corporate Subsidiaries. HICL’s assets are therefore held
indirectly through the Corporate Subsidiaries and any subsidiaries are
wholly owned by the general partner of the Partnership on behalf of the
Partnership. InfraRed has been appointed the Investment Manager of
HICL and the Operator of the Partnership.
InfraRed has been appointed Alternative Investment Fund Manager
(“AIFM”) in accordance with the AIFM Directive, and also provides the
registered office of HICL.
The Company invests in infrastructure investments indirectly via the
Corporate Subsidiaries:
– HICL Infrastructure 2 S.à r.l., a société à responsabilité limitée
established in Luxembourg, is the sole limited partner in the
Partnership, an English limited partnership which has a special
purpose vehicle, the General Partner, as its general partner.
– The General Partner is a wholly owned indirect subsidiary of
InfraRed Partners LLP. The General Partner, on behalf of the
Partnership, has appointed InfraRed as Operator of the Partnership.
HICL Infrastructure 2 S.à r.l. invests the contributions it receives in
capital contributions and partner loans to the Partnership, which
acquires and holds the infrastructure investments.
HICL Infrastructure 2 S. à.r.l. has an independent Board, on which a
HICL Board Director sits, and takes advice on administration matters
from RSM Tax & Accounting Luxembourg S.à r.l.
Aztec Financial Services (UK) Limited is the Administrator to HICL and
also provides company secretarial services.
HICL’s infrastructure investments are registered in the name of the
General Partner or wholly owned subsidiaries of the Partnership.
Each of the underlying investments is made by a portfolio company,
(not shown in the operational structure diagram) which through its
contractual structure ensures no cross-collateralisation of the liabilities
(being, principally, the debt repayment obligations).
HICL’s portfolio comprises over 100 infrastructure investments.
The Company’s strategy relies on the expertise of its Investment
Manager, InfraRed Capital Partners Limited (“InfraRed”) and is
centred around protecting and enhancing the value of the existing
portfolio, in addition to sourcing new, appropriately priced assets.
HICL has a 31 March year end, announces its full-year results in
May and interim results in November. It also publishes two Interim
Update Statements each year, normally in March and August.
– HICL’s AIFM
– Management
– Strategy
– Reporting
– Acquisition Pipeline
– Asset Management
– Risk and Portfolio Management
Dividends
Interest + Principal
Board and Governance
68 HICL Annual Report 2025
Board of Directors
* Assuming a continuation of the years of service as a Director of HICL Infrastructure Company Limited
** Certain of the Directors maintain additional directorships that are also listed but not actively traded on various exchanges. Details may be obtained from the Company Secretary
The Board and the Committees
As at 31 March 2025, the Board of HICL comprised seven
independent, non-executive Directors whose role is to manage
HICL in the interests of shareholders and other stakeholders.
In particular, the Board approves and monitors adherence to
the Investment Policy and Acquisition Strategy, determines
risk appetite, sets policies, agrees levels of delegation to key
service providers and monitors their activities and performance
(including, specifically, that of the Investment Manager) against
agreed objectives. The Board will take advice from the Investment
Manager, where appropriate – for example, on matters concerning
the market, the portfolio and new acquisition opportunities.
The Board meets regularly – at least five times a year, each time
for two consecutive days – for formal Board and Committee
meetings. One of these Board meetings is devoted to considering
the strategy of HICL. There are also a number of ad hoc meetings
dependent upon business needs. In addition, the Board has
formed six Committees as set out on page 75.
Management of the portfolio, as well as investment decisions
within agreed parameters, is delegated to InfraRed as the
Investment Manager, which reports regularly to the Board.
At the quarterly Board and Committee meetings, the operating
and financial performance of the portfolio, its valuation and the
appropriateness of the risk and controls are reviewed.
Mr Kenneth Reid
Senior Independent Director
Chair of Management
EngagementCommittee
Nationality: British
Background and experience
Ken Reid is a Chartered Engineer with more than 35 years of
international experience in the sectors of infrastructure development
and investment, construction and services. Working initially with Kier
Group, and then from 1990 with Bilfinger Berger AG, he has been a
project leader and senior management executive responsible for large
and complex projects, operating companies and investment entities
across all continents. From 2007 to 2010, Ken served as a member of
the Group Executive Board of Bilfinger Berger AG.
Ken graduated in Civil Engineering from Heriot-Watt University, and
subsequently from Edinburgh Business School with an MBA. He is
a long-standing Member of the Institution of Civil Engineers, and is
a member of the Singapore Institute of Directors. Ken currently also
serves as a non-executive director of Sicon Limited.
Effective from July 2023, Ken assumed the role of HICL’s Senior
Independent Director.
Date of appointment*
Appointed to the Board 1 September 2016
Other public company directorships
(listed in London unless noted otherwise)**:
– None
Ms Rita Akushie
Chair of Audit Committee
Nationality: British
Background and experience
Rita Akushie is a chartered accountant and is currently the Pro Vice-
Chancellor (Finance & Operations) at the University of London. She was
appointed to the Board in January 2020.
She is a senior finance and commercial leader and for 24 years held
Finance Director, CFO and Deputy CEO roles in the Social Housing
sector for a number of organisations, including the Newlon Group.
In January 2019, Rita joined Cancer Research UK as Chief Financial
Officer & Executive Director of Corporate Resources, where she
had responsibility for Finance, Property, Procurement, Legal and
Compliance.
Rita graduated with a BA in Economics from the University of Ghana
and is a fellow of the Institute of Chartered Accountants in England
& Wales (“ICAEW”) and a fellow of the Association of Corporate
Treasurers, UK.
Date of appointment
Appointed to the Board on 1 January 2020
Other public company directorships
(listed in London unless noted otherwise)**:
– None
Mr Mike Bane
Chair of Board of Directors
Chair of Nomination
Committee
Nationality: British
Background and experience
Mike Bane has been a Guernsey resident for over 25 years. He is
a retired chartered accountant with over 35 years of professional
experience providing services to the asset management industry,
including the infrastructure sector. He was a member of EY’s EMEIA
Wealth and Asset Management Board and led EY’s services to
the asset management industry in the Channel Islands. He is non-
executive chair of the Guernsey Health Improvement Commission. Mike
graduated with a BA in Mathematics from Oxford University.
Date of appointment*
Appointed to the Board on 1 July 2018
Other public company directorships
(listed in London unless noted otherwise)**:
– Apax Global Alpha Limited
– abrdn Property Income Trust Limited
69HICL Annual Report 2025
Strategic Report FinancialsGovernance
Ms Frances Davies
Chair of Remuneration
Committee
Nationality: British
Background and experience
Frances Davies has more than 30 years of experience across various
roles within the banking and asset management industries. Since 2007,
she has been a partner of Opus Corporate Finance, a corporate finance
advisory business. Frances is also on the Aegon UK plc Group Board
and serves as Chair of the Federated Hermes Property Unit Trust.
Previously Frances served as Head of Global Institutional Business
at Gartmore Investment Management. She had also been a Director
at Morgan Grenfell Asset Management and SG Warburg. Ms Davies
graduated with an MA in Philosophy, Politics and Economics and an
MPhil in Management Studies, both from Oxford University.
Date of appointment
Appointed to the Board on 1 April 2019
Other public company directorships
(listed in London unless noted otherwise)**:
– Supermarket Income REIT PLC
Ms Liz Barber
Nationality: British
Background and experience
Liz Barber was previously at Kelda Group (Yorkshire Water) where
she served as Chief Executive Officer from 2019 until 2022, having
previously served as Chief Financial Officer from 2010. Prior to that, Liz
held a number of senior partner roles with EY LLP.
Liz is a fellow of the ICAEW where she is a member of the board and
Chair of the Risk Committee.
Liz graduated from the University of Leeds, where she has served as a
Lay Member of Council and Deputy Chair.
Liz is the Senior Independent Director of Cranswick plc, Sizewell C
Limited where she also chairs the Audit and Risk Committee and is the
Audit and Risk Committee Chair for Encyclis Limited.
Liz was previously a non-executive director of KCOM Plc, a UK fibre
broadband provider, and chaired the Yorkshire and Humber Climate
Commission.
Date of appointment
Appointed to the Board on 1 September 2022
Other public company directorships
(listed in London unless noted otherwise)**:
– Cranswick plc
– Renew Holdings plc
Mr Martin Pugh
Nationality: British
Background and experience
Martin Pugh has over 35 years in the infrastructure industry, spanning
roles in construction, development, investment, asset management
and strategic projects. Most recently he has provided executive
management support to several major infrastructure projects and,
prior to this, he held senior executive positions within Bilfinger Project
Investments, overseeing the investment performance of assets in
multiple sectors and across the UK and Europe.
Martin graduated in Civil & Structural Engineering and is a Chartered
Engineer.
Date of appointment
Appointed to the Board on 1 September 2022
Other public company directorships
(listed in London unless noted otherwise)**:
– None
Mr Simon Holden
Chair of Risk Committee
Nationality: British
Background and experience
Mr Simon Holden, Chartered Director (“CDir”) and Fellow of the Institute
of Directors, brings a combination of private equity investing and deep
equity capital markets experience to the Board. He held investment
director and interim-executive roles across several portfolio companies
whilst working at Terra Firma Capital Partners (and Candover
Investments prior to that). An independent director since 2016, he has
represented shareholder interests in a portfolio spanning: i) LSE-listed
FTSE 250 alternative asset companies (including infrastructure, real
estate, growth equity, IP rights, and activist mandates); ii) private equity
funds; iii) private operating companies; and iv) pro-bono public sector
advisory roles. An experienced Senior Independent Director and Risk
Committee Chair, he has successfully completed a wide variety of value
creation and corporate action strategies whilst navigating dynamic
challenges and engaging constructively with shareholders throughout.
Simon is currently a director of HICL Infrastructure PLC., Chrysalis
Investments and JPMorgan Global Core Real Assets (in managed
wind-down) and graduated from the University of Cambridge with an
MEng and MA in Manufacturing Engineering.
Date of appointment*
Appointed to the Board 1 July 2016
Other public company directorships
(listed in London unless noted otherwise)**:
– Chrysalis Investments Limited
– (In managed wind-down during 2025-2026) – JPMorgan Global Core
Real Assets Limited (in managed wind-down)
– (Retired) – Hipgnosis Songs Fund Limited – retired 29 July 2024 having
successfully led a competitive public-to-private process concluding
in a recommended Scheme of Arrangement to funds managed by
Blackstone at a 45% premium to pre-bid share price, 18% to NAV
– (Retired – Trian Investors 1 Limited (traded on the Specialist Funds
Segment of the LSE) – retired 26 April 2023 as part of a members’
voluntary liquidation following the successful conclusion of the
investment strategy and subsequent company closure
Board of Directors continued
* Assuming a continuation of the years of service as a Director of HICL Infrastructure
Company Limited
** Certain of the Directors maintain additional directorships that are also listed but not actively
traded on various exchanges. Details may be obtained from the Company Secretary
70 HICL Annual Report 2025
InfraRed is the Investment Manager to HICL. In addition, InfraRed
is the Operator of the Partnership by the General Partner, on behalf
of the Partnership. Under the terms of the Limited Partnership
Agreement, the Operator has full discretion to acquire, dispose of
or manage the assets of the Partnership, subject to investment
guidelines set out by the Board.
InfraRed is part of the InfraRed Group, an infrastructure investment
business, managing a range of infrastructure funds and investments.
InfraRed’s infrastructure investment team has a strong record of
delivering attractive returns for its investors, which include pension
funds, insurance companies, funds of funds, asset managers and
high net worth investors domiciled in the UK, Europe, North America,
Middle East and Asia.
Since 1990, the InfraRed Group (including predecessor organisations)
has launched 24 investment funds investing in infrastructure and
property, including HICL.
InfraRed is owned by Sun Life Financial Inc. (together with its
subsidiaries and joint ventures, “Sun Life”). InfraRed operates as a
distinct business under SLC Management, Sun Life’s alternatives
asset management business. As of 31 March 2025, Sun Life had
total assets under management of C$1,540bn. For more information
please visit www.sunlife.com.
The InfraRed Group currently manages ten infrastructure funds
(including HICL). The InfraRed Group currently has a staff of over
160 employees and partners, based mainly in offices in London
and with regional offices in New York, Seoul, Madrid and Sydney.
Its infrastructure team comprises over 100 professionals, all with an
infrastructure investment background and a broad range of relevant
skills, including private equity, structured finance, construction,
renewable energy and facilities management.
Within the infrastructure team, there is:
– a Fund Management team with overall responsibility for the
activities provided to HICL;
– an Investments team responsible for business development and
sourcing new investments;
– an Asset Management team responsible for managing the portfolio
of investments; and
– a Portfolio Management team responsible for financial reporting,
cash flow management, debt, foreign exchange hedging and tax.
Five senior members of the InfraRed team make up InfraRed’s
Investment Committee on behalf of HICL. The Investment Committee
has combined experience of over 100 years in making infrastructure
investments and managing investments and projects.
Further details on the InfraRed Group can be found at www.ircp.com.
Under the terms of the Investment Management Agreement, InfraRed
is entitled to a fixed management fee of £100,000 per annum,
together with all reasonable out-of-pocket expenses. InfraRed will not
receive any Directors’ or other fees from any project company.
During the year InfraRed, in its capacity as Operator, and the General
Partner was entitled to annual fees calculated on the following basis
and in the following order:
(i) 1.1 per cent of the proportion of the Adjusted Gross Asset Value
of HICL’s investments which have a value of up to (and including)
£750m in aggregate;
(ii) 1.0 per cent of the proportion of the Adjusted Gross Asset Value
of HICL’s investments that is not accounted for under which,
together with the investments under (i) above, have an Adjusted
Gross Asset Value of up to (and including) £1.5bn in aggregate;
(iii) 0.9 per cent of the proportion of the Adjusted Gross Asset Value
of HICL’s investments not accounted for under (i) or (ii) above
which, together with investments under (i) and (ii) above, have an
Adjusted Gross Asset Value of up to (and including) £2.25bn;
(iv) 0.8 per cent of the proportion of the Adjusted Gross Asset Value
of HICL’s investments not accounted for under (i), (ii) or above
which, together with investments under (i), (ii) and above, have an
Adjusted Gross Asset Value of up to (and including) £3.0bn; and
(v) 0.65 per cent of the proportion of the Adjusted Gross Asset
Value of HICL that is not accounted for under (i), (ii), (iii), (iv) above.
There are no acquisition or performance fees payable.
These fees are calculated and payable quarterly in arrears and are
based on the Adjusted Gross Asset Value of HICL’s assets at the
beginning of the period concerned, adjusted on a time basis for
acquisitions and disposals during the period.
Following the year end, a change to the basis of the annual fee was
agreed with effect from 1 July 2025, following the finalisation of the
contractual documentation. The new basis of the annual fee will
be the equal weighting of: (i) the Company’s average closing daily
market capitalisation, and (ii) the most recently published semi-annual
NAV. Apart from replacing Adjusted Gross Asset Value with the new
fee basis as described above, there is no change to the calculation
methodology and no other changes to the fees are proposed.
The Investment Management Agreement may be terminated by
either party giving the other party 36 months’ written notice (or, at
HICL’s option, making a payment in lieu of such notice). InfraRed’s
appointment as Operator has corresponding termination provisions,
and if InfraRed’s appointment as Investment Manager is terminated, it
may unilaterally terminate its appointment as Operator, and vice versa.
The Investment Manager
71HICL Annual Report 2025
Strategic Report FinancialsGovernance
Introduction
The Board recognises the importance of a strong
corporate governance culture that meets the
requirements of the UK Governance framework, including
the UK Listing Authority as well as other relevant bodies
such as the Association of Investment Companies
(“AIC”) of which HICL is a member. The Board has put
in place a framework for corporate governance which
it believes is appropriate for an investment company.
All Directors contribute to the Board discussions and
debates. The Board believes in providing as much
transparency for investors and other stakeholders as is
reasonably possible within the boundaries of client and
commercial confidentiality.
AIFM Directive
The Alternative Investment Fund Managers Directive
seeks to regulate AIFMs and imposes obligations on
Managers who manage Alternative Investment Funds
(“AIFs”) in the EU or who market shares in such funds
to EU investors. HICL is categorised as an externally
managed AIF for the purposes of the AIFM Directive.
In order to maintain compliance with the AIFM Directive,
HICL complies with various organisational, operational
and transparency obligations, including the pre-
investment disclosure information required by Article 23
of the AIFM Directive.
Non-mainstream pooled investments
HICL conducts its affairs as an Investment Trust. On this
basis, the Ordinary Shares should qualify as an “excluded
security” and therefore be excluded from the FCA’s
restrictions in COBS 4.12 of the FCA Handbook that
apply to non-mainstream pooled investment products.
The AIC Code of
CorporateGovernance
As a member of the AIC, the Board has considered
the Principles and Provisions of the 2024 AIC Code of
Corporate Governance (the “AIC Code”), a framework
of best practice in respect of the governance of
investment companies.
The AIC Code addresses the Principles and Provisions
set out in the UK Corporate Governance Code (“UK
Code”), as well as setting out additional Provisions
on issues that are of specific relevance to investment
companies. The Board considers that reporting
against the Principles and Provisions of the AIC Code,
which has been endorsed by the Financial Reporting
Council (“FRC”), provides more relevant information to
shareholders. HICL has complied with the Principles and
Provisions of the AIC Code.
The AIC Code is available on the AIC website
(www.theaic.co.uk).
It includes an explanation of how the AIC Code adapts
the Principles and Provisions set out in the UK Code to
make them relevant for investment companies.
Board
As at 31 March 2025, the Board comprised seven non-
executive Directors. In accordance with Provision 10
of the AIC Code, all of the non-executives who served
during the year are independent of the Investment
Manager. The Chair, Mike Bane, met the independence
criteria of the AIC Code Provision 11 upon appointment
and has continued to meet this condition throughout his
term of service.
Although not a requirement of the AIC Code, in
accordance with guidance in Provision 11, the Board has
one Senior Independent Director, Ken Reid. Ken met the
independence criteria of the AIC Code Provision 11 upon
appointment and has continued to meet this condition
throughout his term of service. Being non-executive
Directors, none of the Directors have a service contract
with the Company.
Download the
AIC Framework
online
www.theaic.co.uk
www.theaic.co.ukAugust 2024
The AIC Corporate
Governance Code
A framework of best practice
for member companies
Corporate Governance Statement
72 HICL Annual Report 2025
The Articles of Incorporation provide that each of
the Directors shall resign at each Annual General
Meeting (“AGM”) in accordance with Provision
23 of the AIC Code. All Directors intend to
resign.
With the exception of Simon Holden, the other Directors intend to
offer themselves for re-election at the forthcoming Annual General
Meeting in July 2025. Ken Reid will subsequently resign from the
Board in August 2025 having served nine years at that point.
The Board believes that the composition of the Board and its
Committees reflects a suitable mix of skills and experience and that
the Board, as a whole, and its Committees functioned effectively
during the last 12 months.
The Board is scheduled to meet at least five times a year and
between these formal meetings there is regular contact with the
Investment Manager, the Secretary and the Company’s Joint
Corporate Brokers. The Directors are kept fully informed of investment
and financial controls, and other matters that are relevant to the
business of the Company that should be brought to the attention of
the Directors.
The Directors also have access, where necessary in the furtherance
of their duties, to independent professional advice at the expense of
the Company.
The attendance record of Directors for the year to 31 March 2025 is
set out on page 76.
During the period to 31 March 2025, a further three ad hoc and
Committee meetings of the Board took place.
In addition to the statutory matters discussed at each quarterly
Board meeting, the principal focus is on the reports provided by
the Investment Manager, as well as those put forward by HICL’s
Corporate Brokers and financial public relations (“PR”) agent.
These are all standing agenda items.
Matters relating to HICL’s risk management and internal control
systems (including associated stress tests), are considered by the
Risk Committee (which, in turn, reports any significant matters /
findings to the Board) and these are set out in more detail in the Risk
Committee Report on page 80.
Papers are sent to Directors electronically,
normally at least a week in advance of the
Board meetings. Board papers include:
73HICL Annual Report 2025
Strategic Report FinancialsGovernance
Investment activity in the period
and the pipeline of potential new
investment opportunities;
A review of portfolio performance
in the period with material issues
identified and discussed;
A review of any sustainability
issues and Group sustainability
initiatives from the period;
A review of any health and
safety matters in the period;
A detailed financial review, including
detailed management accounts,
valuation and treasury matters; and
Reports from HICL’s
Corporate Brokers and from
the financial PR company.
Diversity policy
The Board believes that a diversity of viewpoints and personal
experiences, along with broad professional expertise, lead to
better decisions, is critical to innovation and provide a competitive
advantage in HICL’s marketplace. When recruiting new Directors, the
Board searches for candidates from a diverse range of backgrounds
and communities to attract the widest breadth of talent, skills and
outlook. The Board’s policy is to appoint individuals on merit, based
on their skills, experience and expertise.
HICL has achieved the key targets of the Hampton-Alexander Review
and the Parker Review, that 33% of the Board of Directors should be
women by the end of 2020 and at least one Director is from an ethnic
minority background by 2024. As at 31 March 2025, 43% (three)
of the Board of Directors were women and 14% (one) was from an
ethnic minority.
The FCA’s Listing Rules require a listed company to disclose in its
annual report whether it has met its diversity target of at least one
senior position on its board of directors (i.e. Chair, Chief Executive,
Senior Independent Director or Chief Financial Officer) being held
by a woman. Furthermore, the Listing Rules recognise that such
a disclosure requirement might not be appropriate in the context
of Chapter 15 closed-ended investment companies, the boards of
which are typically comprised wholly of non-executive directors.
However, the HICL Board believes it is important that this target
should be substantively met, and accordingly highlights that the
Chairs of the Audit, Risk, and Remuneration Committees are female.
HICL has no employees beyond its non-executive Board.
Gender identity and ethnic background reporting as at 31 March 2025
Number of HICL
Board members
Percentage of the
HICL Board
Number of senior
positions on the
HICL Board
Number in
Executive
Management
Percentage
of Executive
Management
1
Gender identity
Men 4 57% 2 6 86%
Women 3 43% 1 14%
Ethnic background
White British or other White (including
minority-white groups) 6 86% 2 7 100%
Black/African/Caribbean/Black British 1 14% 0 0 0%
Other ethnic group
0 0% 0 0 0%
43%
of the Board
are woman
14%
are from an
ethnic minority
Corporate Governance Statement continued
1 Executive Management is comprised of InfraRed’s HICL Investment Committee and senior members of Aztec which acts as Company Secretary
74 HICL Annual Report 2025
The Board meets regularly – at least
five times a year, each time for two
consecutive days – for formal Board
and Committee meetings.
Committees of the Board
Board
committees
Management Engagement
Committee (MEC)
Chair
Mr K Reid
Members
Ms R Akushie, Mr M Bane, Ms E Barber,
Ms F Davies, Mr S Holden, Mr M Pugh
Market Disclosure
Committee
Chair
Mr M Bane
Members
Ms R Akushie, Ms E Barber, Ms F Davies,
Mr S Holden, Mr M Pugh, Mr K Reid
Nomination
Committee
Chair
Mr M Bane
Members
Ms R Akushie, Ms E Barber,
Ms F Davies, Mr S Holden,
Mr M Pugh, Mr K Reid
Risk Committee
Chair
Ms E Barber
1
Members
Ms R Akushie, Mr M Bane,
Mr S Holden
1
,
Ms F Davies,
Mr M Pugh, Mr K Reid
Audit Committee
Chair
Ms R Akushie
Members
Ms E Barber, Ms F Davies, Mr S Holden,
Mr M Pugh, Mr K Reid
invitation: Mr M Bane
Remuneration
Committee
Chair
Ms F Davies
Members
Ms R Akushie, Mr M Bane,
Ms E Barber, Mr S Holden,
Mr M Pugh, Mr K Reid
The Board has formed six Committees; Audit, Management
Engagement, Market Disclosure, Nomination, Remuneration and
Risk which manage risk and governance.
Management of the portfolio, as well as investment decisions
within agreed parameters, is delegated to InfraRed as the
Investment Manager, which reports regularly to the Board.
At the quarterly Board and Committee meetings, the operating
and financial performance of the portfolio, its valuation and the
appropriateness of the risk and controls are reviewed.
75HICL Annual Report 2025
Strategic Report FinancialsGovernance
1 Mr Holden was succeeded by Ms Barber as Chair of the Risk Committee on 25 February 2025
Delegation of responsibilities
The Board has delegated the day-to-day administration of the
Company to Aztec Financial Services (UK) Limited in its capacity as
Company Secretary and Administrator.
HICL delegates the majority of the day-to-day activities required
to deliver the business model, including responsibility for the
majority of HICL’s risk and portfolio management, to the Investment
Manager, InfraRed, subject to the overall oversight and supervision
ofthe Directors.
InfraRed also operates and manages the Partnership and its assets
in accordance with and subject to the Investment Policy, investment
guidelines and Approved Investment Parameters (“AIPs”) that are
adopted by the Directors from time to time in conjunction with (and
with the agreement of) InfraRed.
The strategies and policies which govern the delegated activities
have been set by the Board in accordance with Section 172 of the
Companies Act 2016.
Committees of the Board
As well as regular Board meetings, the following Committees met
during the course of the year (as set out in the table below):
Audit, Management Engagement, Market Disclosure, Nomination,
Remuneration, and Risk. The formal terms of reference for each
Committee have been approved by the Board of HICL and are
available on the Investor Relations section of HICL’s website.
For efficiency and as all Directors are non-executive, all Committees
(apart from the Audit Committee) comprise all the Directors of
the Board.
The respective reports of the Remuneration Committee, the Risk
Committee and the Audit Committee are set out on pages 88, 80
and 82, respectively, of this Annual Report.
The Chair and members of each Committee as at 31 March 2025
were as follows:
Board attendance
Formal Board
Meetings (5)
Audit
Committee (8)
Management
Engagement
Committee (1)
Market Disclosure
Committee (1)
Nomination
Committee (3)
Remuneration
Committee (3)
Risk
Committee (4)
Mr M Bane* 5 7 1 1 3 2 4
Ms R Akushie 4 7 1 1 3 2 3
Mr S Holden 5 8 1 1 3 2 4
Mr K Reid 5 6 1 1 2 2 4
Ms F Davies 5 8 1 1 3 2 4
Ms E Barber 5 7 1 1 3 2 3
Mr M Pugh 5 7 1 1 3 2 4
* Mr Bane attends Audit Committee by invitation
76 HICL Annual Report 2025
Corporate Governance Statement continued
77HICL Annual Report 2025
Strategic Report FinancialsGovernance
Conflict of interest
As at 31 March 2025, the Board comprised seven non-executive
Directors, all of whom are independent of the Investment Manager.
None of the Directors sit on boards of other entities managed by the
Investment Manager.
Each Director is required to inform the Board of any potential or actual
conflicts of interest prior to any Board discussion.
It is expected that further investments for HICL will be sourced by
InfraRed and it is likely that some of these will be investments that
have been originated and developed by, and may be acquired
from InfraRed or from a fund managed by, InfraRed. Equally, HICL
may choose to sell one or more of its existing investments to a
fund managed by InfraRed. In order to deal with these potential
conflicts of interest, detailed procedures and arrangements have
been established to manage transactions between HICL, InfraRed
or funds managed by InfraRed (the “Rules of Engagement”). If HICL
invests in funds managed or operated by InfraRed, HICL shall bear
any management or similar fees charged in relation to such funds
provided, however, that the value of HICL’s investments in such funds
shall not be counted towards the valuation of HICL’s investments
for the purposes of calculating the management fees payable to
InfraRed. It is possible that, in the future, HICL may seek to purchase
certain investments from funds managed or operated by InfraRed
once those investments have matured and to the extent that the
investments suit HICL’s investment objectives and strategy. If such
acquisitions are made, appropriate procedures from the Rules of
Engagement will be put in place to manage the conflict. Key features
of the Rules of Engagement are described in HICL’s March 2019
Prospectus, available on the website at www.hicl.com.
Risk management and internal controls
The Board is responsible for HICL’s system of internal control and
for reviewing its effectiveness. To help achieve this end, the Board
has a designated Risk Committee. It follows a process designed to
meet the particular needs of HICL in managing the risks to which it
is exposed.
At each Board meeting, the Board also monitors HICL’s investment
performance in comparison to its stated objectives and it reviews
HICL’s activities since the last Board meeting to ensure adherence
to approved investment guidelines. The pipeline of new potential
opportunities is considered, and the prices paid for new or
incremental investments during the quarter are also reviewed,
asarethe offers received in relation to potential disposals.
The Investment Manager prepares management accounts and
updates business forecasts on a quarterly basis, which allows the
Board to assess HICL’s activities and review its performance.
The Board has reviewed the need for an internal audit function
and it has decided that the systems and procedures employed
by the Investment Manager and the Secretary, including their own
internal review processes and those of their parent companies, and
the work carried out by HICL’s external Auditors provide sufficient
assurance that a sound system of internal control, which safeguards
HICL, is therefore considered unnecessary albeit, from time to time,
independent assurance assignments may be commissioned by
the Board.
The Board recognises that these control systems can only be
designed to manage rather than eliminate the risk of failure to achieve
business objectives, and to provide reasonable, but not absolute,
assurance against material misstatement or loss, and rely on the
operating controls established by both the Company Administrator
and the Investment Manager.
The Audit Committee also plays a vital role in overseeing internal
controls. For more information please see the Audit Committee
Report starting on page 82.
The Board and the Investment Manager have agreed clearly defined
investment criteria, return targets, risk appetite and exposure limits.
Reports on these performance measures, coupled with cash
projections and investment valuations, are submitted to the Board
and the relevant Committees at each quarterly meeting.
Relations with shareholders
The Board welcomes the views of shareholders and places great
importance on communication with HICL’s shareholders.
HICL reports its full-year results to shareholders in May and interim
results in November as well as publishing two Interim Update
Statements each year, normally in March and August. HICL also
holds an AGM in July.
Results of Extraordinary and Annual General Meetings are
announced by the Company promptly after the relevant meeting.
Additionally, other notices and information are provided to
shareholders on an ongoing basis through the Company’s website in
order to assist in keeping shareholders informed. The Secretary and
Registrar monitor the voting of the shareholders, and proxy voting is
taken into consideration when votes are cast at the AGM.
Senior members of the Investment Manager make themselves
available to meet with principal shareholders and key sector analysts.
Feedback from these meetings is provided to the Board on a
regular basis.
Shareholders may contact any of the Directors via the Company
Secretary – including any in his or her capacity as Chair of one of
HICL’s Committees, as appropriate – whose contact details are on
HICL’s website.
During the year Mike Bane (Chair), Ken Reid (SID) and Frances Davies
held individual meetings with a number of institutional shareholders.
The Board’s intention is to continue to foster an open, two-way
communication with its shareholders.
78 HICL Annual Report 2025
Market Disclosure
Committee
The Committee has responsibility for
overseeing the disclosure of information
by the Company to meet its obligations
under the Market Abuse Regulation and
the Financial Conduct Authority’s Listing
Rules and Disclosure Guidance and
Transparency Rules.
The Market Disclosure Committee met once in the year to
31 March 2025.
A discussion on whether a Market Disclosure Committee needs
to be held is routinely taken during the quarterly Board meetings.
The full terms of reference for the Market Disclosure Committee
are available from HICL’s website.
The MEC of the Board is responsible
for reviewing all major service providers
to HICL, which includes the Investment
Manager. The terms of reference of this
Committee are approved by the Board of
HICL and are available on HICL’s website.
The MEC met in February 2025 to review the performance of
the key service providers including the Investment Manager.
No material weaknesses were identified in relation to the
Investment Manager; the recommendation to the Board was that
the current arrangements are appropriate and that the Investment
Manager provides good quality services and advice to HICL.
A review of key service providers was also undertaken. Overall,
the feedback on performance throughout the year was that
key services had been delivered to a very high standard and
the Committee resolved that the continued appointment of all
providers, including InfraRed, be recommended to the Board
forapproval, which was duly granted.
The full terms of reference for the MEC are available from
HICL’swebsite.
Management
Engagement
Committee (MEC)
Corporate Governance Statement continued
Nomination Committee
The Committee believes that Board
composition with respect to the balance of
skills, gender, experience and knowledge,
coupled with the mixed length of service,
provides for a sound base from which the
interests of investors will be served to a high
standard.
There is a good spread of skills on the Board and an appropriate
level of knowledge of regulatory requirements and regulations,
generally, as well as a number of Directors with accounting
qualifications and a good understanding of investment companies.
A summary of the wide range of skills and competencies offered by
Directors’ on the Board are summarised in the matrix below:
Succession planning for key roles, including the Chair and the
Chair of the Audit Committee, as well as the mix of skills and
experience on the Board more generally with respect to Director
recruitment, are explicitly considered and discussed by the
Nomination Committee.
Other than in exceptional circumstances, it is the policy of the
Board that Directors, including the Chair, will not serve more than
nine years on the Board, including time spent on the Board of HICL
Infrastructure Company Limited. As a general rule, a Director who
has served more than nine years will not be considered independent.
HICL has adopted a Diversity Policy (see the Report of the
Directors, page 92), which the Nomination Committee takes regard
of in all decision-making. The Nomination Committee had three
meetings in the year to 31 March 2025.
The full terms of reference for the Nomination Committee are
available from HICL’s website.
Board evaluation
In line with recognised best practice, the Nomination Committee
undertakes an externally facilitated Board evaluation at least
onceevery three years. In the intervening periods, the Nomination
Committee undertakes an annual self evaluation which
considerstheperformance, tenure, and independence of each
non-executive Director.
The Board most recently conducted its external self-evaluation last
year, whichwas undertaken by Lintstock Ltd.
Skills & Expertise
Investment
Company
UK PLC
Executive Non-Executive
Investor
Engagement Strategy Transactions Audit / Finance Infrastructure Sustainability
Mike Bane
Ken Reid
Rita Akushie
Liz Barber
Frances Davies
Simon Holden
Martin Pugh
Key: Expertise Experience
Director skills matrix
During the year, the Nomination Committee appointed Lintstock
Ltd to undertake an independent review of Directors’ skills and
experience. This exercise also enabled Directors to rank the
importance of the range of skills required for the role, and also
informs succession planning. The outputs of the review were
considered by the Nomination Committee in May 2025.
The table below displays the concentration of skills amongst
Directors across all of the areas considered in the review.
The scoring is based on a survey undertaken by all Directors, with
the output subsequently moderated to account for the spread of
ratings provided by Directors, and the Board members’ views as
to which of their colleagues they consider to be a key source of
expertise in each area.
79HICL Annual Report 2025
Strategic Report FinancialsGovernance
80 HICL Annual Report 2025
Risk Committee Report
I took over as Chair of the Risk Committee
on 25 February 2025 from Simon Holden,
who chaired the Committee from April 2017
and will be stepping down from the Board
in July 2025 in line with the UK Corporate
Governance code. I would like to thank Simon
for his steadfast leadership of the Committee
over the past eight years and for his significant
contribution to the maturing of HICL’s
approach to riskmanagement.
The Risk Committee operates within clearly defined terms of
reference, which are available on the Company’s website. The Risk
Committee includes all Directors and meets four times a year,
coinciding with the quarterly Board meetings, and is available to
meetad hoc should material matters arise.
In discharging its responsibilities, the duties of the Risk Committee
comprise defining the risk appetite of the Group, assessing,
monitoring and managing the principal risks to which the Group is
exposed, as well as establishing and overseeing mitigating action.
The Committee considers risk exposure and controls, stress and
scenario planning, regulatory compliance, portfolio company controls
and the three lines of defence.
Liz Barber
Risk Committee Chair
20 May 2025
Statement of the Chair of the
RiskCommittee
HICL has a risk management framework covering all aspects of the
Group’s business. The Company is an Alternative Investment Fund
(“AIF”) and the Investment Manager (as Alternative Investment Fund
Manager, (“AIFM”)) is responsible for risk management and has
well-established systems and controls to manage and monitor risk.
The Board places reliance on the Investment Manager’s systems and
controls, and through its Risk Committee (and its Audit Committee),
monitors, reviews and challenges their effectiveness.
The risk management framework operates across a range of
timeframes and likelihoods, from: i) previously identified risks with
mitigating actions already underway; ii) near-term emerging risks,
including potential catalysts of ‘black swan’ events; and iii) longer-term
‘horizon risks’ that might influence HICL’s portfolio and investment
policy in the decades ahead.
The risk management framework follows a cascade approach, with
three ‘lines of defence,’ to effectively safeguard and protect the
interests of HICL and its shareholders. The Investment Manager
implements mitigation strategies, which are regularly reported to and
assessed by the Risk Committee:
– The first line is the development of systems to implement effective
controls. These are set out in documents such as the Company’s
and the Investment Manager’s Policies and Controls Manuals.
The Company must be satisfied that the Investment Manager’s
systems and processes ensure that risk is effectively anticipated,
controlled, reported, and overseen. InfraRed, as the Investment
Manager, is responsible for the identification, classification,
assessment, and management of risk both within the existing
portfolio and in evaluating new investment opportunities.
– The second line is that of oversight and engagement from the Risk
Committee, which scrutinises and challenges InfraRed’s approach
to risk management. At each quarterly meeting, the Committee
conducts an in-depth review of the most material risks faced by
the Group, which are assessed quantitatively (based on potential
valuation and cash flow impact) and qualitatively (reputational
impacts). The Committee also considers longer-term factors to
which the Company may need to adapt in the future (‘horizon
risks’), as well as risks which may impact the future delivery of the
Company’s Investment Proposition, including ‘black swan’ risks
and climate change. Mitigation strategies are proposed by the
Investment Manager, with progress being monitored by the Risk
Committee. The Risk Committee also ensures that all relevant
policies are up to date and that delegated authorities are observed.
– The third line is third-party assurance which is used on an as-
needed basis to provide independent scrutiny of the Company’s
risk management and control framework. The results are
reported to each of the Risk Committee and the Audit Committee
as appropriate.
Main duties and general approach
The Risk Committee’s main duties are, as set out in its
terms of reference, to consider and where necessary make
recommendations to the Board, on the following:
– the implementation of an effective governance structure and control
framework which considers key areas of risk which are reported on
as appropriate;
– the Group’s risk appetite statement (reviewed annually at a minimum),
taking account of the current economic, political, and business
environment, as well as any short-term shocks or longer-term
trends which might affect portfolio performance or the reputation of
the Company;
– risk limits and tolerances, and risk management;
– ongoing regulatory compliance;
– the Group’s risk profile, challenging the assessment and
measurement of key risks whilst monitoring the actions taken to
manage and mitigate them;
– scenario analysis to determine whether proposed mitigation is
sufficient to manage the business risk profile within the Company’s
stated appetite; and
– the Investment Manager’s advice on material proposed changes to
the investment strategy, the treasury policy, the hedging policy, and
the risk policy.
81HICL Annual Report 2025
Strategic Report FinancialsGovernance
Routine business
The Committee considered and noted compliance with HICL’s
Investment Policy and other policies relating to gearing, hedging and
risk reportable events, which are fundamental to the Company’s
risk appetite.
Within the Investment Policy, the Risk Committee has established
AIPs. These are designated thresholds that are approved by the
Board in coordination with the Investment Manager. These set the
perimeter of HICL’s risk appetite as it relates to portfolio construction,
fund-level gearing and hedging. AIPs are adjusted from time to time
based on the evolution of the Company’s investment strategy and
operating environment, with the current framework having been
most recently refreshed in February 2023. Given the persistent
macroeconomic volatility experienced during the year, the Risk
Committee and the Investment Manager are currently operating
based on a more rigorous oversight of capital allocation decisions
than would be required by the AIPs, as set out in more detail below.
The Committee’s routine quarterly agenda covers, inter alia, a
summary of key risks faced by the Group (including changes to the
potential impact or timing of known risks as well as a consideration
of emerging and longer-term ‘horizon’ risks, with climate and
environmental risks notable amongst these), an assessment of ‘black
swan’ risks (which are by definition unlikely to occur but could arise
with limited warning and have a potentially significant impact on the
Company), a review of HICL’s risk management policies and updates
on relevant fund or portfolio company matters as required.
The management of health and safety is delegated to the Investment
Manager who, at every HICL Risk Committee meeting, will report
on significant (RIDDOR
1
notifiable) health and safety events for all
projects and make recommendations in respect of actual or potential
matters of concern. The safe working practices of HICL’s service
providers, portfolio companies and contractors and the avoidance of
injuries are always of paramount concern and are closely monitored.
The Risk Committee and Investment Manager regularly discuss the
ways in which RIDDOR reporting across HICL’s portfolio can be
enhanced further.
The Committee considered, at each meeting, regulatory compliance
reports from Aztec, the Company’s Administrator and Secretary
and from HICL’s Depositary. No significant action points or notable
comments arose in respect of these regular reviews.
The Committee concluded each quarterly meeting with an
assessment of whether HICL was performing in compliance with its
stated risk appetite and, confirmed that, taken as a whole, this was
the case. The Committee also concludes by ensuring the Investment
Manager’s attention focuses on any areas the Chair wishes to see
closer scrutiny of and reporting against in subsequent quarters as
matters arising.
Process and reporting updates
Over the course of the year, the Investment Manager continued to
refine its risk management process and its quarterly reporting to the
Risk Committee in several areas:
Stress testing and scenario analysis
A rolling programme of stress testing and scenario analysis for
HICL was presented to the Risk Committee at each of its meetings
throughout the year. The Investment Manager continued to refine
the scenarios included within each Primary Risk Class based on the
Company’s evolving portfolio and operating environment. With some
of HICL’s PPP assets now approaching the end of their concession
terms, the Investment Manager presented a new stress test in
the Portfolio Performance risk class to assess the uncertainties
around these processes in greater detail. Relevant tests in this risk
class relating to client interactions and the Group’s exposure to
borrowing costs were also updated to reflect the macroeconomic and
political environment.
Facility condition risk
Given the increasingly challenging operating environment for capital
works and elevated client expectations as handback approaches,
the Risk Committee led new workstreams in the year to assess
the Company’s exposure to facility condition risk in greater detail.
The outputs of these workstreams informed the increase in forecast
cost risk associated with defect remediation and lifecycle delivery
on a subset of UK PPP assets that were then reflected in HICL’s
portfolio valuation.
Capital allocation oversight
Given the persistent volatility in the macroeconomic environment
and the consequential impacts on the Company’s share price and
ability to raise equity capital, the Risk Committee and the Investment
Manager decided to maintain the more rigorous transaction oversight
framework agreed in the previous year. Under this framework, all
potential new investments and disposals are reviewed by the Board
with approval sought to enter into the transaction when HICL’s
shares trade below the Company’s Net Asset Value. The Risk
Committee also assisted the Board with broader capital allocation
decisions during the year, particularly with respect to the use of
disposal proceeds, which in turn influenced the decision to fully
repay the Company’s RCF and launch a share buyback programme.
These actions were guided by the Committee’s intention to
reduce HICL’s exposure to risks within the financial / market risk
class, which remains outside its appetite as a result of the share
price performance.
Risk appetite analysis
The Investment Manager worked with the Risk Committee to
complete a detailed review of the Company’s Risk Appetite
Statement, which considers the economic, political, and business
environment, as well as any short-term shocks or longer-term trends
that may affect portfolio performance. An outcome of this was the
introduction of a scale that grades HICL’s seven primary risk classes
according to the Company’s appetite to take risk. This was produced
with consideration of example grading systems included in the UK
Government Finance Function’s latest Risk Appetite Guidance Note.
Working closely with the Risk Committee, the Investment Manager
also enhanced the Company’s quantitative risk management
approach, and revised HICL’s risk incident materiality thresholds to
ensure these are appropriately robust as the Company and market
continue to evolve.
1 Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1985
82 HICL Annual Report 2025
Governance and responsibilities
All members of the Committee are independent non-executive
Directors. The Board believes members have the necessary range of
financial, risk, control and commercial experience required to provide
effective challenge to the Investment Manager, external Auditor, and
other advisers as appropriate. In particular, the Board is satisfied that
Rita Akushie, Mike Bane, attending by invitation of the Committee,
and Liz Barber have the recent and relevant financial experience
required as outlined in the Financial Reporting Council’s (“FRC’s”)
Corporate Governance Code.
The external Auditor and the third-party valuation expert are invited to
attend the Audit Committee meetings at which the Annual and Interim
Reports are considered, and at which they can meet with the Audit
Committee without representatives of the Investment Manager being
present. The Audit Committee has direct access to KPMG LLP and to
key senior staff of the Investment Manager, and it reports its findings
and recommendations to the Board, which retains the ultimate
responsibility for the Company’s financial statements.
Committee effectiveness
The results of the Committee effectiveness review for 2025
confirm the Committee is operating effectively. It is considered well
constituted and chaired, providing an effective and appropriate level
of challenge and oversight of the areas within its remit.
I am pleased to present the Audit Committee
report for the year ended 31 March 2025.
Myreport outlines the work performed by
theCommittee in the year.
We held regular scheduled meetings during the year, four
of which were aligned with the Company’s reporting cycle.
Member attendance can be found on page 76. Other regular
attendees at these meetings included: the Company Chair, members
of the Investment Manager including the CFO, the external Auditor,
KPMG LLP, and the independent third-party valuation expert.
In accordance with the Committee’s role in the investment valuations,
separate meetings were held to review and challenge the Investment
Manager’s valuation assumptions, judgements and resulting
valuations of the Company’s underlying portfolio of infrastructure
assets. The full list of Committee roles and responsibilities can be
found in the terms of reference available on HICL’s website.
The Audit Committee is the formal forum through which the external
Auditor reports to the Board of Directors.
After a thorough tender process, and to manage the risk around
the longevity of auditor engagement, the Board intends to appoint
Deloitte LLP as the Company’s new auditor, for the financial year
starting 1 April 2025, subject to shareholder approval at the 2025
Annual General Meeting. Accordingly, this will be the final year that
KPMG will audit the Company. I would like to thank KPMG for their
contribution to the Company as auditor, and I look forward to working
with Deloitte in future years.
I met with the CFO in advance of Committee meetings, to discuss
their reports as well as any relevant issues. I also met privately with
KPMG as part of my ongoing review of their effectiveness. In addition,
the Committee held a discussion with KPMG without the Investment
Manager present, and where they reviewed KPMG’s audit findings.
I also met periodically with other members of the Investment Manager
who have responsibility for HICL.
I, or another member of the Audit Committee, will continue to be
available at each AGM to respond to any questions from shareholders
regarding our activities.
Rita Akushie
Audit Committee Chair
20 May 2025
Audit Committee Report
83HICL Annual Report 2025
Strategic Report FinancialsGovernance
Compliance with Corporate Governance code
During the year, the Committee received a further update on the
changes to the UK Corporate Governance code, covering the
Board’s requirements around monitoring of a risk management and
internal control framework, with a particular focus on the requirement
to declare effectiveness of controls in the annual accounts, effective
from accounting periods beginning on or after 1 January 2026.
Work is ongoing to ensure compliance with the Code as it comes
into force.
The Company’s internal control and risk management systems,
including those in relation to the financial reporting process include:
– An overview of the Investment Manager’s system of key control
and oversight processes, line manager reviews and systems’
access controls;
– updates for the Committee on accounting developments, including
draft and new accounting standards and legislation;
– approval of the Company’s budget in February 2025 by the
Board and a comprehensive system of financial reporting to the
Board, based on the annual budget with quarterly reporting of
actual results, analysis of variances, scrutiny of key performance
indicators and regular re-forecasting;
– reports from the Investment Manager on matters relevant to the
financial reporting process, including quarterly assessments of
internal controls, processes and fraud risk;
– independent updates and reports from the external Auditor on
accounting developments, application of accounting standards,
key accounting judgements and observations on systems and
controls, where appropriate;
– an overview of the Investment Manager’s appointment of
experienced and professional staff, both by recruitment
and promotion, of the necessary calibre to fulfil their allotted
responsibilities as part of the Management Engagement
Committee in February 2025; and
– appropriate Board oversight of external reporting.
Going concern and viability
The Directors are required to make a statement in the Annual Report
as to the Company’s long-term viability. The Committee provides
advice to the Board on the form and content of the statement,
including the underlying assumptions, shown on page 58. To enable
it to provide this advice, the Committee evaluated a report from the
Investment Manager setting out its view of the Company’s long-term
viability and content of the proposed Viability Statement. This report
was based on the Group’s five-year strategic plan and covered
forecasts for investments and realisations, liquidity and gearing,
including forecast outcomes of the stress test of the plan and forecast
capital and liquidity performance against an assessment of the
Group’s risk profile.
Areas of accounting judgement and
controlfocus
The Committee pays particular attention to matters it considers to
be important by virtue of their complexity, level of judgement and
potential impact on the financial statements and wider business
model. Significant areas of focus considered by the Committee
are detailed in the table below, alongside the actions taken by the
Committee (with appropriate challenge from the external Auditor) to
address them.
What the Committee reviewed in the year
ended 31 March 2025
Internal control, compliance
and risk management
– HICL’s system of control and risk management
– The Viability Statement and the supporting stress
test scenarios
– An update on compliance with HMRC’s Senior Accounting
Officer (“SAO”) regime including wider tax controls
– Updates on changes to the UK Corporate Governance
Code, covering Board responsibility around risk
management and internal control framework and annual
accounts disclosure requirements, with the material
changes effective from accounting periods beginning after
1 January 2026
Risk review
– Valuation reports and the investment portfolio valuation
– Updates on compliance with regulatory rules and
compliance monitoring findings
– Approach to tax policy and strategy
– Annual tax update
– Going concern and liquidity
Financial reporting
– Annual and interim reports
– Key accounting judgements and estimates
– Application of APMs, including the Investment Basis
– The Annual Report to ensure that it is fair, balanced
and understandable
– RCF extension
External audit
– Confirmation of the external Auditor’s independence
– Policy and approval for non-audit fees
– FY2025 audit plan, including significant audit risks
(being the valuation of investments in Investment
Entity Subsidiaries)
– Audit results report, including the results from audit
procedures performed to address significant audit risks
– External Auditor performance and effectiveness
– A tender of the Company’s external audit, resulting in
the intention to appoint Deloitte LLP as the new auditors
effective from 1 April 2025
84 HICL Annual Report 2025
Audit Committee Report continued
Significant issue considered Audit Committee actions and conclusions
Valuation of investments
The total carrying value of ‘Investments at fair value through profit or
loss’ at 31 March 2025 was £3,031.5m (2024: £3,212.5m). See Note
12 to the financial statements.
The fair value of the Company’s investment is based on the Net Asset
Value (“NAV”) of the direct Corporate Subsidiary, Luxco. Luxco’s
NAV is based on the NAV of IILP, being the Limited Partner of IILP.
The NAV of IILP in turn is based on the fair value of the underlying
investments in its portfolio of infrastructure assets.
Other than the A13 Senior Secured Bond (which is listed and therefore
valued based on the quoted market price), market quotations are
not available for the Company’s underlying investments, so their
valuations are undertaken using a discounted cash flow methodology.
This methodology requires a series of material judgements to be
made, as further explained in the Valuation of the Portfolio section
starting on page 42 of this report.
The Audit Committee met eight times throughout the year to discuss
the valuation process and methodology with the Investment Manager
as part of the 2024 Interim and 2025 Annual Report process and early
NAV release in October 2024.
The Investment Manager carries out valuations semi-annually and
provides detailed valuation reports to the Audit Committee. The Audit
Committee also receives half-year and year-end valuation reports and
opinions from a third-party valuation expert. The Audit Committee
considered and challenged the valuation assumptions, with particular
focus on inflation, judgements, and methodology.
The Audit Committee met with KPMG six times during the year.
In November 2024, the Audit Committee reviewed and agreed KPMG’s
initial audit plan, while in April 2025 the Audit Committee discussed the
audit approach with a final update on the audit provided by KPMG in
May 2025.
KPMG explained the results of their audit and confirmed that the results
of KPMG’s audit testing were satisfactory.
Valuation of investments – discount rates
The discount rates used to determine the valuation are selected
and recommended by the Investment Manager. The discount rate
is applied to the expected future cash flows from each investment’s
financial forecasts to arrive at a valuation (discounted cash flow
valuation). The resulting valuation is therefore sensitive to the discount
rate selected.
The Investment Manager is experienced in valuing these investments
and adopts discount rates reflecting their current and extensive
experience of the market. The Investment Manager sets out the
discount rate assumptions and the sensitivity of the valuation of the
investments to this discount rate in the Valuation of the Portfolio
section starting on page 42 of this report.
The Audit Committee challenged the Investment Manager on its
material judgements and compared this to feedback from the third-
party valuation expert.
The Investment Manager highlighted to the Audit Committee the
forecast impact on cash flows of several stress scenarios alongside its
assessment of the risk to these cash flows.
The Investment Manager presented analysis of the risk-free rate
movement and implied risk premium when determining discount rates.
The Audit Committee was satisfied that the range of discount rates was
appropriate for the valuation carried out by the Investment Manager.
Valuation of investments – key forecast assumptions
The key forecast assumptions are future inflation rates, interest
rates, rates of GDP and tax rates. These assumptions are explained
in further detail in the Valuation of the Portfolio section starting on
page42 of this report.
The Audit Committee considered in detail and provided robust
challenge to the economic assumptions that are subject to judgement
and that may have a material impact on the valuation. In addition, the
Audit Committee considered the impact (both actual and potential)
of geopolitical and macroeconomic issues on these key economic
assumptions as well as on the investments’ underlying cash flows, in
particular for those with demand risk. Particular focus was also given to
the assessment of lifecycle risk on PPP assets.
The Audit Committee reviewed the Investment Manager’s valuation
reports, in conjunction with a report and opinion on the valuation from a
third-party valuation expert.
Inflation during the year was slightly lower than HICL’s assumptions
that resulted in a small downside. In the short term, inflation forecasts
are expected to increase slightly and this has been reflected in the
Company’s short-term UK inflation assumptions for 2026. The third-
party valuation expert confirmed that the inflation assumptions were in
line with within their acceptable range.
The Investment Manager provided sensitivities showing the impact of
changing these assumptions, which have been considered by the Audit
Committee and the external Auditor.
The Audit Committee concluded that the Investment Manager’s
valuation process was robust, that a consistent valuation methodology
had been applied throughout the year and that the key forecast
assumptions applied were appropriate.
85HICL Annual Report 2025
Strategic Report FinancialsGovernance
Significant issue considered Audit Committee actions and conclusions
Going concern and Viability Statement
The financial statements have been prepared on a going concern
basis, with the assessment period of five years unchanged in the
Viability Statement. See Note 2 for details.
The Investment Manager provided a paper explaining the rationale for
the going concern basis of preparation, which has been considered by
the Audit Committee and the external Auditor.
The Audit Committee met with the Investment Manager to discuss the
rationale and challenge key assumptions applied, as part of its review of
the Annual Report.
The Audit Committee also reviewed the Company’s Viability Statement
and accompanying commentary, as well as projections and sensitivities
prepared by the Investment Manager to support the Statement.
The Audit Committee concluded that the Investment Manager’s
judgement applied to the going concern basis of preparation and the
Company’s Viability Statement was appropriate.
Alternative Performance Measures (“APMs”)
There are various APMs used throughout the Annual Report to give
investors more information. One of these is the Investment Basis
which is included to aid users of the Annual Report to assess the
Company’s underlying operating performance and its gearing, as well
as providing greater transparency into HICL’s Statement of Financial
Position, including its capacity for investment and ability to make
distributions. Total return, NAV, and EPS are the same under IFRS
and the Investment Basis. The Board and the Investment Manager
manage the Company on an Investment Basis.
The Audit Committee reviewed the Investment Manager’s assessment
of the Investment Basis, including its presentation, by challenging the
disclosures made in the Annual Report and whether due attention was
given to the distinction between the Investment Basis and IFRS.
Other APMs and their relevance to investors were challenged by the
Audit Committee in order that the Annual Report provides meaningful
disclosure to investors. The Financial Review section starting on page
36 details the assessment and calculation of APMs.
Fair, balanced and understandable
The 2024 AIC Code of Corporate Governance requires the Board
to present a fair, balanced and understandable assessment of the
Company’s position and prospects.
As noted above, the Company prepares pro forma summary financial
information under the Investment Basis and IFRS Basis, withthe
reconciliation between the two, in order to report the relevant
financialperformance and position to stakeholders.
The Audit Committee reviewed the March 2025 Annual Report to
ensure that, when taken as a whole, it presents a fair, balanced and
understandable assessment of the Company’s position and prospects.
The Audit Committee received a draft version of the March 2025 Annual
Report for their review and comment, as well as a specific paper from
the Investment Manager to aid their assessment of the March 2025
Annual Report being fair, balanced and understandable.
As such, the Audit Committee was able to provide positive confirmation
to the Board, for it to fulfil its obligations under the AIC Code of
Corporate Governance.
The key areas highlighted to the Audit Committee as part of the fair,
balanced and understandable review are:
– Fair: A well established valuation process that is independently
reviewed by a third-party valuation expert and where discount rates
are benchmarked against competitors. In addition, disposal activity
helps support the robustness of the NAV reported.
– Balanced: A solid underlying portfolio performance, with particular
upside in specific assets such as the regulatory outcome on Affinity
Water, offset by UK PPP asset-specific lifecycle risk adjustments, and
any macroeconomic impact such as the increase in the weighted
average discount rate. Also highlighted was the proactive and
disciplined approach to capital management, through the repayment
of the RCF and the launch of the buyback programme.
– Understandable: Clear statements around APMs, particularly the
Investment Basis and Directors’ Valuation, with reconciliation to
IFRS where applicable, and consistency of language throughout the
Annual Report such as when referring between HICL Infrastructure
Plc as the Company, and the rest of the Group.
86 HICL Annual Report 2025
Audit Committee Report continued
Accounting policies and practices
The Audit Committee reviewed the appropriateness of, and was
satisfied with, the Company’s accounting policies.
The Directors exercised judgement in determining whether the
Company and the Corporate Subsidiaries meet the IFRS 10 definition
of an investment entity. By virtue of the Company and Corporate
Subsidiaries’ status as investment entities, all investments (including
the Corporate Subsidiaries) are accounted for at fair value through
profit or loss. Further details are contained within Note 2 of the
financial statements.
Internal controls
The Audit Committee reviewed the Company’s statement on internal
controls in relation to accounting records, the valuation process and
accounts preparation, prior to endorsement by the Board.
The Management Engagement Committee reviews the adequacy
and effectiveness of the Investment Manager’s internal controls as
part of its annual review of the Investment Manager’s performance.
In addition, the Board reviews and debates a quarterly self-
assessment internal control report prepared by the Investment
Manager – see the Risk and Risk Management section of this report
starting on page 49 for further details.
Internal audit
In line with FRC guidance, the Audit Committee keeps under review
the need for an internal audit function. The Audit Committee is
satisfied that the systems of internal control of the Company, the
Investment Manager and the Administrator are adequate to fulfil the
Board’s obligation in this regard and that currently an internal audit
function is not necessary. Sun Life Financial Inc, as the parent of the
Investment Manager, has an internal audit function which could be
available to HICL if required. Additionally, HICL’s Depositary provides
cash flow monitoring, asset ownership verification and oversight
services to the Company. The Committee considers the need for
discrete internal audit engagements as appropriate.
External Auditor
The Audit Committee notes the requirements of the UK Corporate
Governance Code and in particular the requirement to put the
external audit out to tender at least every ten years and to rotate
auditors every twenty years. To manage the risk around the longevity
of auditor engagement, and after a thorough tender process, Deloitte
LLP was selected as the Company’s new external Auditor, for the
financial year starting 1 April 2025, subject to shareholder approval at
the 2025 Annual General Meeting.
The Company is also in compliance with the requirements of the
Statutory Audit Services for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014, which relates to the
frequency and governance of tenders for the appointment of the
external Auditor (put out to tender every ten years or communicate a
tender plan if not done so for five years) and the setting of a policy on
the provision of non-audit services.
Auditor independence
The Audit Committee is responsible for reviewing KPMG’s
independence and performance. It establishes policies for the
provision of non-audit services by the external Auditor and reviews
the terms under which the external Auditor may be appointed to
perform non-audit services, and the scope and results of the audit,
including KPMG’s effectiveness. To safeguard the independence and
objectivity of the external Auditor, the Audit Committee ensures that
any advisory and / or consulting services provided by the external
Auditor do not conflict with their statutory audit responsibilities.
Permitted audit and audit-related services include the statutory audit
of HICL and of its subsidiaries, the Company’s Interim Review and
other permitted audit related services. The Audit Committee has
pre-approved these services up to £20,000, which are reported after
the event to the Audit Committee. Non-audit services above this limit
require prior approval from the Committee.
87HICL Annual Report 2025
Strategic Report FinancialsGovernance
Assessment of independence
and effectiveness
To fulfil its responsibility regarding the independence of the external
Auditor, the Audit Committee considered:
– changes in the audit partner and other audit personnel in the audit
plan for the current year;
– a report from the external Auditor describing their arrangements to
identify, report and manage any conflicts of interest;
– the extent of non-audit services provided by the external Auditor
and its member network firms.
To assess the effectiveness of the external Auditor, the Audit
Committee reviewed.
– the external Auditor’s fulfilment of the agreed audit plan and
variations from it;
– the external Auditor’s use of valuation specialists to support the
valuation audit of the portfolio;
– reports highlighting the major issues that arose during the course
of the audit;
– feedback from the Investment Manager evaluating the performance
of the external audit team, covering such areas as technical
expertise, audit quality and quality of audit team; and
– the FRC’s annual report on audit quality inspections.
The Audit Committee is satisfied with KPMG’s effectiveness and
independence as auditor, having considered the degree of diligence
and professional scepticism demonstrated by them.
Audit and non-audit fees
The Audit Committee reviews the scope and results of the audit,
its effectiveness and the independence and objectivity of the
external Auditor, with particular regard to the level of non-audit fees.
Current year fees were:
March 2025
£m
March 2024
£m
Audit services
Audit of the Company and
intermediate holding entities 1.0 0.9
Audit of HICL’s project subsidiaries
and other audit-related services – –
1.0 0.9
Non-audit services
Interim review of the Company 0.1 0.1
Other non-audit services – –
0.1 0.1
Total 1.1 1.0
Non-audit services in the table above consisted of audit-related
assurance services for the Company’s Interim Report. In total, it
represented 9% (2024: 10%) of total audit fees.
The Audit Committee considers KPMG to be independent of the
Company and that the provision of permitted non-audit services
in line with HICL’s policy is not a threat to the objectivity and
independence of the conduct of the audit. KPMG confirmed their
compliance with their standard independence and objectivity
procedures to the Audit Committee.
88 HICL Annual Report 2025
Directors’ Remuneration Report
The Remuneration Committee’s report
includes the Directors’ Remuneration Policy,
an explanation of the Committee’s structure
and responsibilities, a report on its activities
in the year ended 31 March 2025 and
relevant required reporting on remuneration
andshareholdings.
This report is prepared in accordance with the Listing Rules of the
FCA, the relevant sections of the Companies Act 2006 and the
Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, (as amended by the Large and Medium-
sized Companies and Groups (Accounts and Reports) Amendment
Regulations 2013, the Companies (Miscellaneous Reporting)
Regulations 2018 and the Companies (Directors’ Remuneration
Policy and Directors’ Remuneration Report) Regulations 2019).
Those aspects of the report that are required to be audited are
labelled as such.
The Committee met twice during the year. There have been no
changes to the Directors’ Remuneration Policy or the Terms
of Reference of the Remuneration Committee. After careful
consideration, the Committee recommended to the Board that the
Chair and Directors’ fees are increased based on a 2.6% inflationary
uplift, in order to continue to attract and retain Directors with an
appropriate skillset and experience for the Company.
This Directors’ Remuneration Report was adopted by the Board and
signed on its behalf by:
Frances Davies
Remuneration Committee Chair
20 May 2025
Directors’ Remuneration Policy
The Directors’ Remuneration Policy is determined by the
Remuneration Committee. In accordance with the provisions
of the AIC Code of Corporate Governance (the “AIC Code”),
Directors’ remuneration is designed to reflect their duties and time
commitments. Remuneration is set at a reasonable level to attract and
retain Directors of the necessary quality and experience to execute
effective governance and oversight of the Company, to support
strategy and to promote long-term sustainable success. The specific
additional responsibilities of the Chair, Senior Independent Director,
and the Chairs of the various committees of the Board are taken
into account. The policy aims to be fair and reasonable compared to
equivalent investment trusts, investment companies and other similar-
sized financial companies. The effects of inflation are also considered.
Reasonable travel and associated expenses are reimbursed.
HICL’s Articles of Association limit the aggregate fees payable to
the Board to a total of £700,000 p.a. (or such amount as HICL’s
shareholders, in a general meeting, shall determine from time to
time) excluding reimbursable expenses. Within that limit it is the
responsibility of the Remuneration Committee, as a Committee
of the Board, to determine Directors’ remuneration in conjunction
with the Chair of the Board. The remuneration of the Chair of
the Board is determined by the Remuneration Committee only.
Relevant comparative information is considered in forming these
recommendations and the views expressed by shareholders are
taken into consideration. The Remuneration Committee seeks the
views of an independent external remuneration consultant at least
every three years to assist its review of remuneration. This was last
carried out in the financial year ended 31 March 2024, with the next
triennial review scheduled to be performed in the financial year ended
31 March 2027.
Directors’ fees are fixed and are payable in cash. As all Directors
are non-executive, they are not eligible for share options, long-
term incentive schemes or other benefits, performance-related or
otherwise. Directors do not have service contracts and there is no
provision for compensation for loss of office. Each new Director is
provided with a letter of appointment. Additional fees are payable at
the discretion of the Remuneration Committee where Directors are
involved in duties beyond those normally expected, for example, in
relation to the issue of a prospectus.
This policy and the level of Directors’ fees is reviewed annually by the
Remuneration Committee and applies with effect from 1 April of each
year, subject to shareholder approval at the AGM.
Committee structure and responsibilities
The Remuneration Committee is composed of all the Directors
including the Chair of the Company, as he was deemed to be
independent at the time of his appointment. This membership is
deemed appropriate on the basis that all Directors are independent
and have the requisite experience and knowledge of the Company to
appropriately determine remuneration. The membership of all seven
Independent Directors ensures that no single Director has undue
influence on the outcome of their own remuneration. The Committee
operates in accordance with the Directors’ Remuneration Policy
(as set out on page 88) and with Principles P, Q and R of the 2024
AIC Code.
Mar 25
450
0
150
50
100
200
250
300
HICL TSR (LHS) FTSE 250 TSR (LHS)
350
400
4.0
0
1.0
0.5
1.5
2.0
2.5
3.0
3.5
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 16 Mar 17Mar 14 Mar 15 Mar 18 Mar 21 Mar 22Mar 19 Mar 20 Mar 24Mar 23
FTSE All share TSR (LHS) S&P Global Infra Index TSR (LHS) HICL Beta vs FTSE All-Share (RHS)
Beta
Total Shareholder Return
89HICL Annual Report 2025
Strategic Report FinancialsGovernance
Relevant performance information
In setting the Directors’ remuneration, consideration is given to the
size, complexity and relative performance of the Company. The graph
below highlights the comparative Total Shareholder Return (share
price and dividends) (“TSR”) for an investment in the Company
1
for
the 19-year period from inception until 31 March 2025 compared with
an investment in the FTSE All Share, FTSE 250 and the Morningstar
Investment Trust Infrastructure indices over the same period.
During that period the TSR was 5.8% p.a. compared with the FTSE
All Share index return of 6.0% p.a., the FTSE 250 return of 6.6% p.a.
and the S&P Global Infrastructure index which returned 6.6% p.a.
The table below is provided to enable shareholders to assess
the relative importance of Directors’ remuneration. It compares
remuneration against dividends paid and share buybacks of the
Company in the year ended 31 March 2025.
Actual expenditure 31 March 2025 31 March 2024
Aggregate Directors’ remuneration £571,500
2
£520,645
Aggregate dividends paid to
shareholders
£166,129,752 £167,597,765
Aggregate cost of Ordinary
Shares repurchased
£61,697,073 £0
Review of remuneration
The Remuneration Committee performed a review of Board
remuneration in the year ended 31 March 2025. The review noted
that CPI inflation in the year to 31 March 2025 was 2.6% and
recommended an increase in fees for all Board roles of 2.6%.
This inflationary increase was consistent with the recommendations
of the last independent report by Trust Associates
3
.
In proposing remuneration, consideration was given to inflation,
fees paid to directors of comparable companies, and the need
to sufficiently attract, retain and motivate Directors with sufficient
experience and specialisms. The Committee also noted specific
shareholder feedback following the 2024 AGM, as set out in more
detail on page 91.
The proposed remuneration, analysed by role, for the year
ending 31 March 2025 is set out in the following table, together
with comparatives:
1 Including its predecessor, HICL Infrastructure Company Limited, from inception in March 2006 until March 2019
2 Rounded to the nearest £500
3 www.trustassociates.co.uk/2014/wp-content/uploads/2024/09/Investment-Company-NED-Fee-Survey-2024.pdf
90 HICL Annual Report 2025
Directors’ Remuneration Report continued
Role
1
Total fees
proposed
(Year ended
31 March 2026)
Fees approved
(Year ended
31 March 2025)
2
Chair £122,000 £119,000
Senior Independent Director £86,000 £84,000
Audit Committee Chair £86,000 £84,000
Risk Committee Chair £84,000 £82,000
Director £69,500 £67,500
Luxembourg representative £9,000 £9,000
Total
3
£526,000 £580,500
1 The fees approved/proposed relate to the roles performed and not to individuals per se
2 Approved at the AGM on 17 July 2024
3 The total proposed fee presented is based on the full year remuneration for six Directors (2024: seven Directors) and does not include pro rata allocations, which have not yet been confirmed
Statement of implementation of Remuneration Policy in the current financial year
The Board has adopted the proposals for Directors’ remuneration as recommended by the Remuneration Committee and will seek shareholder
approval for the Directors’ Remuneration Policy and this report including the proposed remuneration at the AGM on 23 July 2025.
The total fees paid to Directors in the year were within the annual fee cap of £700,000, contained in the Remuneration Policy approved by
shareholders at the AGM on 17 July 2024.
Directors’ remuneration – audited
Total remuneration paid/due in year
Year ended
31 March 2025
Year ended
31 March 2024
M Bane* £128,000 £118,000
F Nelson^ – £22,320
K Reid £84,000 £69,325
R Akushie £84,000 £73,000
L Barber £68,910 £58,500
F Davies £67,500 £58,500
S Holden £80,590 £70,500
M Pugh £67,500 £58,500
Total £580,500 £528,645
Figures rounded to nearest £
*The Chair was the highest paid Director, includes £9,000 in respect of Luxembourg subsidiary
^ Remuneration pro-rated for the year
91HICL Annual Report 2025
Strategic Report FinancialsGovernance
Statement of Directors’ shareholdings – audited
The Directors of the Company on 31 March 2025, and their interests in the shares of the Company, are shown in the table below:
Number of Ordinary Shares 31 March 2025 31 March 2024
M Bane 160,102 94,602
K Reid 30,917 29,011
R Akushie 34,518 16,500
L Barber 29,662 29,662
F Davies 25,000 25,000
S Holden 57,694 27,694
M Pugh 22,000 22,000
Total 359,893 244,469
All of the holdings of the Directors and their families are beneficial. No changes to these holdings had been notified up to the date of this report.
Statement of shareholder voting
At the last AGM held on 17 July 2024, the resolutions relating to the Directors’ Remuneration Report for the year ended 31 March 2024 and the
Director’s Remuneration were approved.
The percentage of votes cast was 62%. The results of the votes on resolutions relating to remuneration are summarised in the table below:
In Favour Discretion Against Withheld
Resolution Votes % Votes % Votes % Votes %
9 Remuneration Report 1,126,529,269 89.96 107,298 0.01 125,584,893 10.03 289,028 0.02
10 Remuneration Policy 1,241,896,180 99.18 107,298 0.01 10,195,768 0.81 311,242 0.02
Following the AGM, the Board committed to consult with those shareholders who voted against the Directors’ Remuneration Report. The Chair
of the Board and the Chair of the Remuneration Committee engaged with relevant shareholders in order to provide greater background on the
approved increases, as well as to invite further discussion to better understand their views. To the extent that further feedback was provided, it
was considered by the Remuneration Committee when proposing fees in the current financial year.
92 HICL Annual Report 2025
Report of the Directors
The Directors present their Annual Report on
the affairs of HICL, together with the financial
statements and auditor’s report, for the year
to 31 March 2025. The Corporate Governance
Statement forms part of this report.
Details of significant events since the balance sheet date are
contained in Note 20 to the financial statements.
An indication of likely future developments in the business of HICL
and details of research and development activities are included in
theStrategic Report.
Information about the use of financial instruments by HICL and its
subsidiaries is given in Note 14 to the financial statements.
Principal activity
HICL is a registered investment company under Section 833 of the
Companies Act 2006, incorporated in the UK. Its shares have a
premium listing on the Official List of the UK Listing Authority and
trade on the main market of the London Stock Exchange.
Investment Trust status
The Company has been approved as an Investment Trust Company
(“ITC”) under Sections 1158 and 1159 of the Corporation Taxes Act
2010. The Company had to meet relevant eligibility conditions to
obtain approval as an ITC, and must adhere to ongoing requirements
to maintain its ITC status including, but not limited to, retaining no
more than 15% of its annual income. The Company has conducted
itsaffairs to ensure it complies with these requirements.
Results
HICL’s results for the year are summarised in the Financial Review on
page 36 and are set out in detail in the financial statements.
Distributions and share capital
HICL declared four quarterly interim distributions, totalling 8.25p per
share, for the year ended 31 March 2025 as follows:
Amount Declared Record date Paid/to be paid
2.06p 17/07/2024 26/07/2024 30/09/2023
2.06p 13/11/2024 22/11/2024 31/12/2024
2.06p 27/02/2025 07/03/2025 31/03/2025
The fourth quarterly interim distribution, of 2.07p per share, for the
year ended 31 March 2025 was declared by HICL on 14 May 2025,
and is due to be paid on 30 June 2025.
HICL has one class of share capital, Ordinary Shares, of which
there were 1,979,671,246 in issue as at 1 April 2025. This number
reduced from prior year due to the Company buying back
shares under its buyback programme. Strategy Shareholders
may reinvest their dividends via a Dividend Reinvestment Plan
(“DRIP”), the details of which can be obtained by emailing
shareholderenquiries@cm.mpms.mufg.com.
Dividend history
Interim dividend
Year ended
31 March 2025
Year ended
31 March 2024
Year ended
31 March 2023
Year ended
31 March 2022
Year ended
31 March 2021
Year ended
31 March 2020
3-month period ending 30 June 2.06 2.06 2.06 2.06 2.06 2.06
3-month period ending 30 September 2.06 2.06 2.06 2.06 2.06 2.06
3-month period ending 31 December 2.06 2.06 2.06 2.06 2.06 2.06
3-month period ending 31 March 2.07 2.07 2.07 2.07 2.07 2.07
Paid/declared 8.25p 8.25p 8.25p 8.25p 8.25p 8.25p
Directors
The Directors who held office during the year to 31 March 2025 were:
Director Role(s) Years of service*
Mr M Bane* Chair of the Board, Nomination and Market Disclosure Committees 6 years 9 months
Ms R Akushie Chair of the Audit Committee 5 years 3 months
Mr S Holden* Chair of the Risk Committee** 8 years 9 months
Ms F Davies Chair of the Remuneration Committee 6 years 0 months
Mr K Reid* Senior Independent Director 8 years 7 months
Ms E Barber Chair of the Risk Committee*** 2 years 7 months
Mr M Pugh 2 years 7 months
* Assuming a continuation of the years of service as a Director of HICL Infrastructure Company Limited
** Until 25 February 2025
*** From 25 February 2025
04_Governance_v77.indd 9204_Governance_v77.indd 92 20/05/2025 21:0320/05/2025 21:03
93HICL Annual Report 2025
Strategic Report FinancialsGovernance
Corporate governance
The Corporate Governance Statement on page 72 outlines the
code of corporate governance against which HICL reports and its
compliance, or otherwise, with the individual principles. It includes
detail on the various Committees of the Board, their composition and
their terms of reference.
Annual General Meeting (“AGM”)
HICL’s AGM is held in July each year. The forthcoming meeting is
scheduled for 23 July 2025.
Investment Manager and Operator
InfraRed Capital Partners Limited (the “Investment Manager”
or “InfraRed”) acts as Investment Manager to HICL and acts as
Operator of the limited partnership which holds and manages
HICL’s investments. A summary of the contract between HICL, its
subsidiaries and InfraRed in respect of services provided is set out
inNote 18 to the financial statements.
Further information on the Investment Manager, including fee
arrangements with HICL can be found in The Investment Manager
section on page 71.
The Investment Management Agreement was entered into in March
2019 and was reviewed and approved by the Board in connection
with the change in domicile of HICL from Guernsey to the United
Kingdom and shareholders had an opportunity to vote on the
Investment Management Agreement as part of those proposals.
The Board assesses InfraRed’s performance as Investment Manager
annually through the Management Engagement Committee. For more
information, see the Corporate Governance Statement on page 77.
The Directors are of the opinion that the continued appointment of
InfraRed as HICL’s Investment Manager is in the best interests of the
shareholders of HICL.
AIFMD disclosures
In accordance with the Alternative Investment Fund
Managers Directive:
– information in relation to HICL’s leverage can be found in the
Strategic Report;
– remuneration of InfraRed as HICL’s AIFM can be found below in
AIFM Remuneration;
– a summary of the activities of HICL can be found in the Investment
Manager’s Report starting on page 16;
– a full list of the risks facing HICL can be found in HICL’s March 2019
Prospectus, available from the Company’s website (see also the
Risk Committee Report on page 80); and
– none of HICL’s assets are subject to special arrangements arising
from their illiquid nature.
AIFM remuneration
The AIFMD Remuneration Code requires InfraRed in its capacity as
AIFM of HICL, to make relevant remuneration disclosures available
to investors.
InfraRed assesses its list of AIFMD Code Staff. AIFMD Code Staff
arenotified of their status and the associated implications.
InfraRed has established a remuneration policy. A summary of
InfraRed’s remuneration policy is contained in the Annual Report
and Accounts of InfraRed Partners LLP, which are available from
Companies House.
The aggregate total remuneration paid by the InfraRed Group for
theyear ended 31 March 2025 was £39,709,251.
This was divided into fixed remuneration of £20,963,359 attributable
to 160 beneficiaries and variable remuneration of £18,745,892
attributable to 153 beneficiaries. The aggregate total remuneration
paid by the Group which contains InfraRed to AIFMD Code Staff in
the year was £11,809,503 and the number of senior management
andrisk takers was 21.
The Investment Manager fees charged to the Company were £0.1m
(disclosed as Investment Manager fees in Note 18, of which the full
balance remained payable at 31 March 2025. InfraRed is also the
Operator of IILP, the Corporate Subsidiary through which HICL holds
its investments. The total Operator fees were £30.6m, of which £7.5m
remained payable at 31 March 2025.
Brokers, Administrator
andCompanySecretary
HICL’s joint corporate brokers at 31 March 2025 are Investec Bank
plc and RBC Capital Markets.
The Administrator and Company Secretary is Aztec Financial
Services (UK) Limited.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Directors’
Report confirm that, so far as they are each aware, there is no
relevant audit information of which HICL’s auditor is unaware; and
each Director has taken all the steps that he or she ought to have
taken as a Director to make him or herself aware of any relevant
audit information and to establish that HICL’s auditor is aware of
that information.
Other information
An indication of likely future developments in the business and
particulars of significant events which have occurred since the end
ofthe financial year have been included in the Strategic Report.
The Strategic Report includes information required by the Companies
Act 2006 (Strategic Report and Directors’ Report) Regulations 2008.
Auditor
The auditor for this financial report was KPMG LLP. To ensure auditor
rotation obligations are met and in accordance with Section 489 of
the Companies Act 2006, the Board intends to appoint Deloitte as
HICL’s auditor for the financial year starting 1 April 2025, subject to
shareholder approval at the 2025 Annual General Meeting.
94 HICL Annual Report 2025
Substantial interests in share capital
As at 31 March 2025, HICL is aware of or has received notification
in accordance with the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rule 5 of the following interests in 3% or
more of HICL’s shares to which voting rights are attached (at the date
of notification):
Number of
shares held
Percentage
held
Brewin Dolphin Limited 160,751,373 8.11%
Rathbones Investment Management 146,869,684 7.41%
Investec Wealth & Investment Limited 111,202,901 5.61%
Cazenove Capital Management 71,937,943 3.63%
Hargreaves Lansdown 69,338,746 3.50%
BlackRock 67,610,026 3.41%
M&G Investments 65,225,467 3.29%
Payment of suppliers
It is the policy of HICL to settle all investment transactions in
accordance with the terms and conditions of the relevant market in
which it operates. HICL continues to meet the criteria to qualify for
Payment Practice Reporting. This requires HICL Infrastructure PLC
to report on its payment policies and specific data on payments and
suppliers that demonstrate achieved performance every six months.
For the purpose of this reporting HICL Infrastructure PLC is required
to state a standard payment term. As HICL Infrastructure PLC does
not have standard payment terms defined, the standard payment
period in line with government guidance is the contractual payment
period most commonly used in the period; this has been deemed to
be 30 days.
Greenhouse gas emissions (GHG) reporting
See page 65 – Metrics and targets.
Political contributions
HICL made no political donations during the year (2024: none).
Going concern
The Company’s business activities, together with the factors likely
to affect its future development, performance and position are set
out in HICL’s Business Model on page 14. The financial position of
the Group, its cash flow and liquidity position are described in the
Investment Manager’s Report on page 20 and the Financial Review
on page 40. In addition, the Notes of the financial statements include:
the Company’s objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to credit risk
and liquidity risk.
The Directors have assessed going concern by considering areas of
financial risk, the Group’s access to credit facilities and by reviewing
cash flow forecasts with a number of stress scenarios. They also
considered the Group’s considerable financial resources, including
investments in a significant number of project assets and access to
credit facilities (details of which are set out in the Financial Review
from page 36 and Note 15 to the financial statements).
The majority of these project assets operate long-term contracts
with various public sector customers and suppliers across a range
of infrastructure projects. The financing for these projects is non-
recourse to the Company.
Based on this analysis, the Directors have concluded that the
Company has adequate resources to continue in operational
existence for the foreseeable future, a period of at least 12 months
from the date of approving these financial statements. Thus,
they consider it appropriate to adopt the going concern basis of
accounting in preparing the annual financial statements.
Share repurchases
During the year there was a sustained and material disconnect
between public market valuations and private market transactions for
inflation-correlated core infrastructure. The Board therefore allocated
£50m of the disposal proceeds received from the sale of Northwest
Parkway towards a share buyback programme which was expanded
by a further £100m during the year.
The Company bought back 51,816,815 shares over the year under
its buyback programme, 2.6% of the total outstanding at 31 March
2024. The number of shares outstanding at 31 March 2025 is
1,979,671,246. The latest authority to purchase shares for cancellation
was granted to the Directors on 17 July 2024.
Sustainability
The Board is committed to sustainability leadership in the sector.
To minimise the environmental impact of HICL’s corporate affairs, all
reporting to the Board and its various Committees is paperless.
Treasury shares
Section 724 of the UK 2006 Companies Act allows companies
to hold shares acquired by market purchase as treasury shares,
rather than having to cancel them. Issued shares may be held in
treasury and may be subsequently cancelled or sold for cash in the
market. This gives HICL the ability to reissue shares quickly and
cost efficiently, thereby improving liquidity and providing HICL with
additional flexibility in the management of its capital base.
There are currently 51,816,815 shares held in treasury, as a result of
the Company’s share buyback programme. The Board would only
authorise the resale of such shares from treasury at prices at or above
the prevailing Net Asset Value per share (plus costs of the relevant
sale). In the interests of all shareholders the Board will keep the matter
of treasury shares under review.
Report of the Directors continued
95HICL Annual Report 2025
Strategic Report FinancialsGovernance
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law they have elected to prepare
the financial statements in accordance with UK-adopted international
accounting standards and applicable law.
Under company law 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 its profit or loss for that
period. In preparing these financial statements, the Directors are
required to:
– select suitable accounting policies and then apply
them consistently;
– make judgements and estimates that are reasonable, relevant
and reliable;
– state whether they have been prepared in accordance with UK-
adopted international accounting standards;
– assess the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
– use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
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 its
financial statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have
general responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Company and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of
the corporate and financial information included on the Company’s
website. Legislation in the UK governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
Responsibility statement of the Directors in
respect of the annual financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company; and
– the Strategic Report/Directors’ Report includes a fair review of the
development and performance of the business and the position
of the issuer, together with a description of the principal risks and
uncertainties that they face.
In accordance with Disclosure Guidance and Transparency Rule
(“DTR”) 4.1.16R around electronic tagging of Annual Reports, the
financial statements will form part of the annual financial report
prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on
these financial statements provides no assurance over whether
the annual financial report has been prepared in accordance with
those requirements.
We consider the Annual Report and accounts, taken as a whole,
is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy.
By order of the Board authorised signatory:
Aztec Financial Services (UK) Limited
Company Secretary
20 May 2025
Registered Office:
Aztec Financial Services (UK) Limited:
Forum 4, Solent Business Park, Parkway South,
Whiteley, Fareham PO15 7AD
Statement of Directors’ Responsibilities
in respect of the Annual Report and the financial statements
WHAT’S IN THIS SECTION
KPMG LLP’s Independent Auditor’s Report 97
Income statement 109
Statement of financial position 110
Statement of changes in shareholders’ equity 111
Cash flow statement 112
Notes to the financial statements 113
Appendix 1: SFDR Disclosures 143
Appendix 2: Valuation Policy 149
Appendix 3: Infrastructure Market – Sources 150
Glossary 151
Directors and Advisers 153
Financials
96 HICL Annual Report 2025
97HICL Annual Report 2025
Strategic Report FinancialsGovernance
KPMG LLP’s Independent Auditor’s Report
To the members of HICL Infrastructure plc
1. Our opinion is unmodified
In our opinion the financial statements of HICL Infrastructure Plc (“the Company”):
– give a true and fair view of the state of the Company’s affairs as at 31 March 2025, and of its profit for the year then ended;
– have been properly prepared in accordance with UK-adopted international accounting standards; and
– have been prepared in accordance with the requirements of the Companies Act 2006..
What our opinion covers
We have audited the financial statements of HICL Infrastructure Plc (“the Company”) for the year ended 31 March 2025 included in the Annual
Report, which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Shareholders’ Equity, Cash Flow
Statement and the related Notes, including the accounting policies in Note 2.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion
and matters included in this report are consistent with those discussed and included in our reporting to the Audit Committee (“AC”).
We have fulfilled our ethical responsibilities under, and we remain independent of the Company in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed public interest entities.
2. Overview of our audit
Factors driving
ourview of risks
We considered the developments affecting the Company
since the last audit for the year ended 31 March 2024
and have updated our risk assessment. The risk over the
Valuation of Investments in Investment Entity subsidiary
remains broadly the same this year given the continued
macroeconomic volatility.
The inherent complexity and subjectivity required, means
that the valuation of Investments in Investment Entity
subsidiary, which is primarily driven by the valuation of the
underlying infrastructure, PFI and PPP projects, continued
to be a focus area.
As part of our risk assessment, we have maintained our
focus on the valuation of the Investments in Investment
Entity subsidiary. This has included specific focus on
discount rates, macroeconomic assumptions (such as
inflation, GDP growth and interest rates), project specific
cash flow forecasts and overlay adjustments made by the
Company to the underlying models.
Key Audit Matter Vs FY24 Item
Valuation of Investments
in Investment
Entity subsidiary
4.1
Audit committee
interaction
During the year, the AC met 8 times. KPMG are invited to attend all AC meetings and are provided with an opportunity
to meet with the AC in private sessions. For the Key Audit Matter, we have set out communications with the AC in
section 6, including matters that required particular judgement.
The matters included in the Audit Committee Chair’s report on page 82 are materially consistent with our observations
of those meetings.
98 HICL Annual Report 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
Our independence We have fulfilled our ethical responsibilities under, and
we remain independent of the Company in accordance
with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities.
We have not performed any non-audit services during
FY25 or subsequently which are prohibited by the FRC
Ethical Standard.
We were first appointed as auditor by the Directors
for the year ended 31 March 2019. The period of
uninterrupted engagement is for the seven financial
years ended 31 March 2025, and for the nineteen
financial years ended 31 March 2025 when also
including HICL Infrastructure Company Limited (the
previous Guernsey listed entity). These are the first
set of the Company’s financial statements signed by
Jonathan Martin. This is also the last financial period to
be audited by KPMG.
Total audit fee £1.0m
Audit related fees
(including interim review)
£0.1m
Other services £0.1m
Non-audit fee as a %
of total audit and audit
related fee %
8.5%
Date first appointed 26 February 2019
Uninterrupted audit tenure 7 years
Next financial period
which requires a tender
2026
Tenure of engagement
partner
1 years
Materiality
(item 6 below)
The scope of our work is influenced by our
view of materiality and our assessed risk of
material misstatement.
We have determined overall materiality for the financial
statements as a whole at £31.5m (FY24: £32.1m).
Consistent with FY24, we determined that total assets
remains the benchmark for the Company as this
is directly driven by the valuation of Investments in
Investment Entity subsidiary which ultimately is most
influential to the users of the financial statements.
As such, we based our materiality on total assets,
of which it represents 1% (FY24: 1%).
Materiality levels used in our audit
Materiality
PM
AMPT
£31.5m
£32.1m
£24m
£23.6m
2024
2025
2024
2025
2024
2025
£1.6m
£1.6m
Materiality: Company Materiality
PM: Performance Materiality
AMPT: Audit Misstatement Posting Threshold
The impact of
climate change
onour audit
Climate change is an area of increased focus for investors and stakeholders. HICL Infrastructure Plc, as an Investment
Trust is impacted by climate change to the extent that shareholders are interested in how climate change and
associated risks affect investment decisions and investment valuations.
We have considered the potential impact of climate change on the financial statements as part of planning our audit.
This included the impacts on the infrastructure, PPP and PFI projects held indirectly by the Company through its
investment entity subsidiary.
As a part of our audit, we have made enquiries of management to understand the extent of the potential impact of
climate change risk on the Company’s financial statements. We also performed a risk assessment of how the impact
of climate change may affect the financial statements and our audit, in particular over the valuation of Investments in
Investment Entity subsidiary. We considered the impact of climate change on the performance of investee companies
with particular focus on the reasonableness of the free cash flow forecast. Taking into account the nature of the
Company’s underlying investments in infrastructure, PPP and PFI projects, our assessment is that the climate related
risks to the Company’s business strategy and financial planning did not have a significant impact on our audit, including
our key audit matter.
We have also read the disclosure of climate related information in the front half of the annual report as set out
on pages 61-66 and considered consistency with the financial statements and our audit knowledge.
99HICL Annual Report 2025
Strategic Report FinancialsGovernance
3. Going concern, viability and principal risks and uncertainties
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease
their operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that
there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from
the date of approval of the financial statements (“the going concern period”).
Going concern
We used our knowledge of the Company, its industry, and the
general economic environment to identify the inherent risks to its
business model and analysed how those risks might affect the
Company’s financial resources or ability to continue operations over
the going concern period. The risks that we considered most likely to
adversely affect the available financial resources over this period are:
– Operational or performance issues within the portfolio which
increases the number of infrastructure, PPP and PFI investments
not distributing and the impact of this on the Company’s
distribution income and cash flows; and
– Continued geopolitical tension and low investor confidence
environment leading to a need to provide further liquidity support
to underlying infrastructure, PPP and PFI investments
We considered whether these risks could plausibly affect the liquidity
of the Company in the going concern period by comparing severe,
but plausible downside scenarios that could arise from these risks
individually and collectively against the level of available financial
resources included in the Company’s financial forecasts.
Our procedures also included an assessment of whether the going
concern disclosure in Note 2 of the financial statements gives a
complete and accurate description of the Directors’ assessment of
going concern.
Accordingly, based on those procedures, we found the Directors’
use of the going concern basis of accounting without any material
uncertainty for the Company to be acceptable.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Company will
continue in operation.
Our conclusions
– We consider that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements
is appropriate;
– We have not identified, and concur with the Directors’ assessment
that there is not a material uncertainty related to events or conditions
that, individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for the going
concern period;
– We have nothing material to add or draw attention to in relation to
the Directors’ statement in Note 2 to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Company’s use
of that basis for the going concern period, and we found the going
concern disclosure in Note 2 to be acceptable; and
– The related statement under the UK Listing Rules set out on page94
is materially consistent with the financial statements and our
audit knowledge.
100 HICL Annual Report 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ disclosures in respect
of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
– the Directors’ confirmation on page 50 that they have carried out a
robust assessment of the emerging and principal risks facing the
Company, including those that would threaten its business model,
future performance, solvency and liquidity;
– the Emerging and Principal Risks disclosures describing these
risks and how emerging risks are identified and explaining how
they are being managed and mitigated; and
– the Directors’ explanation in the viability statement of how they
have assessed the prospects of the Company, over what period
they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
We are also required to review the viability statement set out on
page58 under the UK Listing Rules.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our financial statements audit. As
we cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the absence of
anything to report on these statements is not a guarantee as to the
Company’s longer-term viability.
Our reporting
We have nothing material to add or draw attention to in relation to
these disclosures.
We have concluded that these disclosures are materially consistent with
the financial statements and our audit knowledge.
4. Key audit matter
What we mean
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the
greatest effect on:
– the overall audit strategy;
– the allocation of resources in the audit; and
– directing the efforts of the engagement team.
We include below the Key Audit Matter (unchanged from FY24) together with our key audit procedures to address this matter and our results
from those procedures. This matter was addressed, and our results are based on procedures undertaken, for the purpose of our audit of the
financial statements as a whole. We do not provide a separate opinion on this matter.
101HICL Annual Report 2025
Strategic Report FinancialsGovernance
4.1 Valuation of investments in investment entity subsidiary
Financial Statement Elements
Our assessment of risk vs FY23 Our results
FY25 FY24
Investments
in Investment
Entity subsidiary
£3,031.5m £3,212.5m
Our assessment is the risk
is similar to FY24
FY25: Acceptable
FY24: Acceptable
Description of the Key Audit Matter
Subjective valuation
The Company’s Investments in Investment Entity subsidiary are
measured at fair value and represent a significant proportion of
the Company’s net assets. The fair value of the investment entity
subsidiary is determined primarily based on the valuation of the
underlying infrastructure, PPP and PFI projects.
The fair value of the unquoted investments is determined using the
income approach whereby the long term forecasted cash flows
of individual assets are discounted, with their cash flows and / or
discount rate adjusted to reflect the risk profile associated with these
investments. In addition, inherent to these long term forecasted cash
flows are macro-economic assumptions such as inflation, foreign
exchange rates, tax rates, deposit rates and for certain demand-
based investments, Gross Domestic Product (GDP).
For the purposes of our audit, we have assessed the risk of
misstatement of the valuation related to these assumptions and
datapoints.
Discount rate
The discount rate assumption is the element over which there is
the highest degree of subjectivity, because of the ongoing global
macroeconomic uncertainty.
Other assumptions and data points
We considered that there is a lower level of audit risk associated with
other assumptions and data points as these are less judgemental
and, in some cases, are more readily evidenced to third party data
sources. However, due to the relevance of these assumptions to the
overall valuation, we nonetheless consider these areas to also have
had the greatest effect on the overall audit strategy and planning of
the audit. Those assumptions and data points are:
– Inflation
– GDP growth rates
– Deposit rates
– Tax rates
– Project revenue and expenses
– Management overlay adjustments to cash flows
The effect of these matters is that, as part of our risk assessment,
we determined that the valuation of Investments in Investment
Entity subsidiary has a high degree of estimation uncertainty, with a
potential range of reasonable outcomes greater than our materiality
for the financial statements as a whole, and possibly many times that
amount. The financial statements (Note 14) disclose the sensitivity
estimated by the Company.
Our response to the risk
Control design
We performed the procedures below rather than seeking to rely on any
of the Company’s controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Our procedures included:
Our valuations expertise
We challenged the Company on the assumptions inherent in the
valuation of infrastructure, PPP and PFI projects by using our own
valuations specialists to assess whether assumptions such as
discount rates, inflation, GDP growth, deposit and tax rates are within
a reasonable range independently developed by them based on
market data.
Assessing valuer’s credentials
We considered the methodology applied by the third party valuer
engaged by the Investment Manager to challenge the reasonableness
of the Company’s investment valuations. We obtained and assessed
the third party valuer’s findings, held discussions with them and
considered the impact, if any, on our audit work.
Assessing transparency
We considered the appropriateness, in accordance with relevant
accounting standards, of the disclosures in respect of Investments in
Investment Entity subsidiary and the effect of changing one or more
inputs to reasonably possible alternative valuation assumptions.
Risk assessment
The Company’s Investments in Investment Entity subsidiary is
determined primarily based on the valuation of the underlying
infrastructure, PPP and PFI projects. We considered various factors
in assessing which unquoted investments were subject to heightened
risk. These included those investments which are individually material in
value, material demand and regulated investments, those with negative
operational or financial developments and those with higher lifecycle
risk. Moreover, we also selected investments on a haphazard basis to
validate our risk assessment.
Test of detail
For a selection of underlying investments which we had concluded
were subject to heightened risk, we performed a range of additional
procedures. Examples of these test of details included:
We reperformed the discounted cash flow calculation using the
Company’s inputs and assumptions. We constructed our own
discounted cash flow models for each underlying asset, tested and
compared the results with the Company’s valuation.
In instances, where there has been a transaction during the year or
post year end, we compared the Company’s valuation to the initial
transaction price and associated financial offers.
We conducted inquiries with some of the asset managers to assess the
current performance and the expectation of future performance and
identify any operational issues of the asset’s future performance.
102 HICL Annual Report 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
We agreed key revenue inputs to the forecasted cash flows to
external sources, such as third party contracts and invoices.
Material expenses were agreed to the supplier invoices received
and where possible to underlying agreements for leases and asset
maintenance contracts. We assessed the nature of the overlay
adjustments and challenged the Investment Manager on these
based on qualitative factors such as certainty of revenue sources or
operational concerns.
Each underlying projects is held by a separate intermediate holding
company, so we obtained the latest audited financial statements
(where available) of these holding companies. We compared historic
cash flow projections to the audited financial information in order
to evaluate the accuracy of forecasts. Additionally, we used this
information to assess the reasonableness of the cash flow projection
for the next financial period. We inspected the financial statements
for any material uncertainty on going concern for the portfolio
companies. Where identified, we held discussions with management
to understand the circumstances and assess any impact on
the valuation.
Communications with HICL Infrastructure plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the audit of the fair value of the Investments in Investment Entity subsidiary including details of our planned substantive
procedures relevant to the key audit matter.
– Our conclusions on the appropriateness of the Company’s fair value methodology.
– Our conclusions on the appropriateness of the valuation of the Investments in Investment Entity subsidiary and, for underlying investments
subject to valuation specialists review, an indication of where the Company’s valuation point lay within our reasonable range.
– The adequacy of the disclosures, particularly as it relates to the sensitivity of the valuation inputs.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
The identification of the discount rate assumption as being the element over which there is the highest degree of subjectivity, and our
assessment of the reasonableness of the discount rates used by the Directors in the valuation.
Our results
Based on the risk identified and our procedures performed, we consider the valuation of the Investments in Investment Entity subsidiary to be
acceptable (FY24: acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 84 for details on how the Audit Committee
considered the valuation of the Investments in Investment Entity subsidiary as an area of significant attention, pages 113-114 for the accounting
policy on the valuation of the Investments in Investment Entity subsidiary, and Pages 122-125/Note 12 & 14 for the financial disclosures.
4.1 Valuation of investments in investment entity subsidiary continued
103HICL Annual Report 2025
Strategic Report FinancialsGovernance
5. Our ability to detect irregularities, and our response
Fraud – identifying and responding to risks of material misstatement due to fraud
Fraud risk
assessment
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that
could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk
assessment procedures included:
– enquiring of the Investment Manager, the Directors and the Audit Committee, as to the Company’s high-level
policies and procedures to prevent and detect fraud, including the Investment Manager’s policy and channel
for whistleblowing as well as whether they have knowledge of any actual, suspected or alleged fraud.
– reading Board and Audit Committee minutes.
– considering the Investment Manager’s fee arrangement and how closely it is linked to the valuation of the
Company’s Investments in Investment Entity subsidiary.
– discussions among the engagement team regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud. The engagement team includes the audit partner and staff
who have extensive experience of working with companies in the same sectors as the Company operates,
and this experience was relevant to the discussion about where fraud risks may arise.
Risk
communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of
fraud throughout the audit.
Fraud risks
As required by auditing standards, and taking into account possible pressures to meet performance targets,
we perform procedures to address the risk of management override of controls, in particular the risk that the
Company may be in a position to make inappropriate accounting entries and the risk of bias in accounting
estimates and judgements.
On this audit we do not believe there is a fraud risk related to revenue recognition because of the simplistic
nature of the investment income. The simple nature and low volume of individual revenue transactions means
there is a remote risk of material misstatement from fraudulent manipulation; and opportunities for a material
misstatement due to fraudulent revenue recognition are limited due to the nature of the investment income.
We did not identify any additional fraud risks.
Procedures to
address fraud risks
Our audit procedures included evaluating the design and implementation of controls over journal entries and
other adjustments and inquiring of the Investment Manager about any inappropriate or unusual activity relating
to the processing of journal entries and other adjustments.
We substantively tested all material post-closing journal entries by comparing the identified journal entries to
supporting documentation. Based on the results of our risk assessment procedures and understanding of the
process, no further high-risk journal entries or other adjustments were identified.
We also assessed the accounting estimate related to the valuation of Investments in Investment Entity
subsidiary for any indicator of management bias.
104 HICL Annual Report 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
Laws and regulations – identifying and responding to risks of material misstatement relating
to compliance with laws and regulations
Laws and regulations
risk assessment
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the
financial statements from our general commercial and sector experience, through discussion with the Directors
and Investment Manager (as required by auditing standards), and discussed with the Directors and Investment
Manager the policies and procedures regarding compliance with laws and regulations.
As the Company is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of
non-compliance throughout the audit.
Direct laws context
andlink to audit
The potential effect of these laws and regulations on the financial statements varies considerably.
The Company is subject to laws and regulations that directly affect the financial statements including:
– financial reporting legislation (including related companies’ legislation),
– distributable profits legislation,
– taxation legislation including the Company’s status as an Investment Trust Company.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related
financial statement items.
Most significant
indirect law/
regulationareas
The Company is subject to many other laws and regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the financial statements, for instance through the
imposition of fines or litigation.
We identified the following areas as those most likely to have such an effect:
– Anti-bribery and corruption;
– Data protection;
– Anti-money laundering;
– Competition legislation;
– Market abuse regulations; and
– Certain aspects of Company legislation recognizing the financial and regulated nature of the Company’s
activities and its legal form
Auditing standards limit the required audit procedures to identify non-compliance with these laws and
regulations to enquiry of the Directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context
Context of the ability
of the audit to detect
fraud or breaches of
law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some
material misstatements in the financial statements, even though we have properly planned and performed our
audit in accordance with auditing standards. For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely the inherently
limited procedures required by auditing standards would identify it. In addition, as with any audit, there
remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to
detect non-compliance with all laws and regulations.
105HICL Annual Report 2025
Strategic Report FinancialsGovernance
6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to
help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements,
both individually and in the aggregate, on the financial statements as a whole.
£31.5M
(FY24: £32.1M)
Materiality for the
financial
statements
as a whole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Company financial statements as a whole was set at £31.5m (FY24: £32.1m). This was
determined with reference to a benchmark of total assets.
Consistent with FY24, we determined that total assets remains the main benchmark for the Company as
shareholders consider the valuation of the investment portfolio which is indirectly held by the Investment Entity
subsidiary as the primary financial indicator to understand the Company’s performance.
Our materiality of £31.5m was determined by applying a percentage to the total assets. When using a
benchmark of total assets to determine overall materiality, KPMG’s approach for listed entities considers a
guideline range of 0.5% - 1% of the measure. In setting overall materiality, we applied a percentage of 1%
(FY24: 1%) to the benchmark.
£23.6M
(FY24: £24M)
Performance
materiality
What we mean
Our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, to reduce to an acceptable level the risk that individually immaterial misstatements in
individual account balances add up to a material amount across the financial statements as a whole.
Basis for determining performance materiality and judgements applied
We have considered performance materiality at a level of 75% (FY24: 75%) of materiality for HICL Infrastructure
Plc financial statements as a whole to be appropriate.
We applied this percentage in our determination of performance materiality because we did not identify any
factors indicating an elevated level of risk.
£1.6M
(FY24: £1.6M)
Audit misstatement
posting threshold
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative
point of view. We may become aware of misstatements below this threshold which could alter the nature,
timing and scope of our audit procedures, for example if we identify smaller misstatements which are indicators
of fraud.
This is also the amount above which all misstatements identified are communicated to HICL Infrastructure Plc’s
Audit Committee.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 5% (FY24: 5%) of our materiality for the financial
statements. We also report to the Audit Committee any other identified misstatements that warrant
reporting on qualitative grounds.
The overall materiality for the financial statements of £32.1m compares as follows to the main financial statement caption amounts:
Total income Profit before tax Net assets
FY25 FY24 FY25 FY24 FY25 FY24
Financial statement caption £50.0m £35.2m £45.9m £30.5m £3,030.7m £3,213m
Materiality as % of caption 63% 91% 68.6% 105% 1.04% 1%
106 HICL Annual Report 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
7. The scope of our audit
What we mean
Scope
How the auditor determined the procedures to be performed across the Company.
Our audit of the Company was undertaken to the materiality level specified above and was performed by a
single audit team.
As disclosed within the Risk Committee Report on page X, administrative and secretarial operations of the
Company are provided by Aztec Financial Services (UK) Limited (the ‘Administrator and Company Secretary’).
We therefore identified the financial reporting system operated by the Company’s Administrator and Company
Secretary to be the main IT system relevant to our audit. We obtained and read the Administrator and Company
Secretary’s type 2 service organisation controls report to assist us in evaluating the design of the general IT
controls of the main finance system.
Consistent with our approach noted within the key audit matter on pages X and Y, we did not plan to rely on
any of the Company’s controls in relation to any areas of our audit. This is because the nature of the majority
of the Company’s balances (including Cash and cash equivalents and Investment Income) is such that we
would expect to obtain audit evidence primarily from external confirmations (for Cash and cash equivalents)
and tracing receipts to bank statements based on the dividend declarations (for Investment Income). This is
considered more efficient and therefore the scope of the audit work performed was fully substantive in all
aspects of the audit for the year ending 31 March 2025.
8. Other information in the annual report
The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on
the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge.
Our reporting
Based solely on that work we have not identified material misstatements
or inconsistencies in the other information.
Strategic report and directors’ report
Our responsibility and reporting
Based solely on our work on the other information described above
we report to you as follows:
– we have not identified material misstatements in the strategic report
and the Directors’ report;
– in our opinion the information given in those reports for the financial
year is consistent with the financial statements; and
– in our opinion those reports have been prepared in accordance
with the Companies Act 2006.
Directors’ remuneration report
Our responsibility
We are required to form an opinion as to whether the part of the
Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Our reporting
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
107HICL Annual Report 2025
Strategic Report FinancialsGovernance
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a
material inconsistency between the financial statements and our audit
knowledge, and:
– the Directors’ statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Company’s position and performance,
business model and strategy;
– the section of the annual report describing the work of the
Audit Committee, including the significant issues that the Audit
Committee considered in relation to the financial statements, and
how these issues were addressed; and
– the section of the annual report that describes the review of the
effectiveness of the Company’s risk management and internal
control systems.
Our reporting
Based on those procedures, we have concluded that each of these
disclosures is materially consistent with the financial statements and our
audit knowledge.
We are also required to review the part of the Corporate Governance
Statement relating to the Company’s compliance with the provisions
of the UK Corporate Governance Code specified by the UK Listing
Rules for our review.
We have nothing to report in this respect.
Other matters on which we are required to report by exception
Our responsibility
Under the Companies Act 2006, we are required to report to you if, in
our opinion:
– adequate accounting records have not been kept by the Company,
or
– the Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
– certain disclosures of Directors’ remuneration specified by law are
not made; or
– we have not received all the information and explanations we
require for our audit.
Our reporting
We have nothing to report in these respects.
108 HICL Annual Report 2025
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 95, the Directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is including these financial statements in an annual financial report prepared under Disclosure Guidance and Transparency Rule
4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with
those requirements.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Jonathan Martin (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
Canary Wharf
London
E14 5GL
20 May 2025
KPMG LLP’s Independent Auditor’s Report continued
To the members of HICL Infrastructure plc
109HICL Annual Report 2025
Strategic Report FinancialsGovernance
Note
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Investment income 131.0 198.0
Net loss on revaluation of investment in Investment Entity Subsidiary (81.0) (162.8)
Total investment income
5 50.0 35.2
Company expenses
6 (4.1) (4.7)
Profit before tax 45.9 30.5
Tax
8 – –
Profit for the year
9 45.9 30.5
Earnings per share – basic and diluted (pence)
9 2.3 1.5
All results are derived from continuing operations. There is no other comprehensive income or expense and consequently a statement of other
comprehensive income has not been prepared.
The accompanying Notes are an integral part of these financial statements.
Income statement
For the year ended 31 March 2025
110 HICL Annual Report 2025
Note
31 March 2025
£m
31 March 2024
£m
Non-current assets
Investment in Investment Entity Subsidiary
2,14 3,031.5 3,212.5
Total non-current assets 3,031.5 3,212.5
Current assets
Trade and other receivables 0.3 0.3
Cash and cash equivalents 0.7 1.1
Total current assets 1.0 1.4
Total assets
3,032.5 3,213.9
Current liabilities
Trade and other payables (1.8) (0.9)
Total current liabilities
(1.8) (0.9)
Total liabilities
(1.8) (0.9)
Net assets 3,030.7 3,213.0
Equity
Share capital
16 0.2 0.2
Share premium
16 1,213.3 1,213.3
Revenue reserve 1,810.3 1,902.8
Capital reserve 69.0 96.7
Treasury shares reserve
1
16 (62.1) −
Total equity
11 3,030.7 3,213.0
Net assets attributable to Ordinary Shares (pence)
11 153.1 158.2
1 Prior year comparatives have been re-presented to separate Treasury Shares from Capital reserves. The negative Treasury shares reserve balance results in an increase in Capital reserves.
There is no impact on Net Assets
The accompanying Notes are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 20 May 2025, and signed on its behalf by:
M Bane R Akushie
Director Director
Statement of financial position
As at 31 March 2025
Company registered number: 11738373
111HICL Annual Report 2025
Strategic Report FinancialsGovernance
Statement of changes in shareholders’ equity
For the year ended 31 March 2025
Note
Share
capital
£m
Share
premium
£m
Revenue
reserve
2
£m
Capital
reserve
2
£m
Treasury
shares
reserve
1,2
£m
Total
shareholders’
equity
£m
Shareholders’ equity as at 31 March 2024 0.2 1,213.3 1,902.8 96.7 – 3,213.0
Profit/(loss) for the year – – 73.6 (27.7) – 45.9
Shares repurchased – – – – (62.1) (62.1)
Distributions paid to shareholders
10 – – (166.1) – – (166.1)
Shareholders’ equity at 31 March 2025 0.2 1,213.3 1,810.3 69.0 (62.1) 3,030.7
For the year ended 31 March 2024
Note
Share
capital
£m
Share
premium
£m
Revenue
reserve
2
£m
Capital
reserve
2
£m
Treasury
shares
reserve
1,2
£m
Total
shareholders’
equity
£m
Shareholders' equity at 31 March 2023 0.2 1,213.3 1,992.9 143.6 – 3,350.0
Profit/(loss) for the year – – 77.4 (46.9) – 30.5
Shares repurchased – – – – –
Distributions paid to shareholders
10 – – (167.6) – – (167.6)
Shareholders’ equity at 31 March 2024 0.2 1,213.3 1,902.8 96.7 – 3,213.0
1 Prior year comparatives have been re-presented to separate Treasury Shares from Capital reserves. The negative Treasury shares reserve balance results in an increase in Capital reserves.
There is no impact on Net Assets
2 Revenue, Capital and Treasury shares reverses are described in accounting policies Note 2 Equity and reserves
The accompanying Notes are an integral part of these financial statements.
112 HICL Annual Report 2025
Cash flow statement
For the year ended 31 March 2025
Note
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Cash flows from operating activities
Profit before tax 9 45.9 30.5
Adjustments for:
Total investment income
5 (50.0) (35.2)
Operating cash flows before movements in working capital (4.1) (4.7)
Changes in working capital:
Decrease in receivables – 0.1
Increase/(Decrease) in payables – (0.1)
Cash flow from operations (4.1) (4.7)
Investment income received 131.0 172.4
Net cash flow from operating activities 126.9 167.7
Cash flow from investing activities
Investment repayment
12 100.0 –
Net cash flow from investing activities 100.0 –
Cash flows from financing activities
Shares repurchased
16 (61.2) –
Distributions paid to shareholders
10 (166.1) (167.6)
Net cash used in financing activities (227.3) (167.6)
Net (decrease)/increase in cash and cash equivalents (0.4) 0.1
Cash and cash equivalents at beginning of period 1.1 1.0
Cash and cash equivalents at end of period 0.7 1.1
The accompanying Notes are an integral part of these financial statements.
113HICL Annual Report 2025
Strategic Report FinancialsGovernance
Notes to the financial statements
For the year ended 31 March 2025
1. Reporting entity
HICL Infrastructure PLC (the “Company” or “HICL”) is a public limited
company incorporated, domiciled and registered in England, in the
United Kingdom. The financial statements as at and for the year
ended 31 March 2025 comprise the financial statements for the
Company only as explained in Note 2.
The Company has one direct corporate subsidiary, being HICL
Infrastructure 2 S.à.r.l (“Luxco”). Luxco is the limited partner in
Infrastructure Investments Limited Partnership (“IILP”) (both are a
“Corporate Subsidiary” and together the “Corporate Subsidiaries”).
The Company and its Corporate Subsidiaries (together the “Corporate
Group”) invest in infrastructure projects in the United Kingdom, the
Eurozone, North America and New Zealand. The Corporate Group
and all subsidiaries in the group portfolio are the “HICL Group”.
2. Key accounting policies
Basis of preparation
The financial statements have been prepared in accordance with UK-
adopted International Accounting Standards (“IFRS”).
The financial statements are presented in pounds sterling, which is
the Company’s functional currency. The principal accounting policies
applied in the preparation of the Company’s financial statements are
shown below. These policies have been consistently applied.
Going concern
The Company’s business activities, together with the factors likely to
affect its future development, performance and position are set out
in HICL’s Business Model section of the Strategic Report starting
on page 10. In addition, Notes 14 to 17 of the financial statements
include: the Company’s objectives, policies and processes for
managing its capital; its financial risk management objectives; details
of its financial instruments and hedging activities; and its exposures to
credit risk and liquidity risk.
The Company, and its ability to continue as a going concern, is reliant
on investment income and investment repayment from Luxco in order
to meet its liabilities, both contractual and expected, for a period of at
least 12 months from the date of approving the financial statements
(“the going concern period”). Luxco is in turn reliant on IILP for this
funding. The Directors have assessed the going concern of the
Company by considering areas of financial risk that could impact
funding to the Company, the Corporate Group’s, via IILP, access to
the RCF, which in May 2025 was extended by one year to June 2027,
and LCF, and liquidity considerations on the £150m private placement
debt (details of which are set out in the Financial Review starting on
page 36) and by reviewing cash flow forecasts both at the Company
level and at the Corporate Group level. The Directors also performed
stress testing under severe but plausible scenarios including a 20%
reduction in distributions from projects (above projects currently in
lock-up), and a 33% increase in lifecycle risk costs, for a period of
12 months. Judgement is applied in determining when the cash flow
from underlying assets is assumed to be received when determining
the cash flow forecast, based on the contractual nature or demand
assumptions of each asset.
The Directors also considered the Company’s considerable financial
resources, being the Company’s indirect investments in a significant
number of project assets, via its Corporate Group, and whose
distributions, alongside the Company’s indirect access to funding
facilities via IILP, support the liquidity of the Company. The going
concern analysis included an assessment, at the Corporate Group
level, which in turn supports the Company, of the potential variability
in returns and cash flows from project companies. The Directors also
noted that the financing for project companies is non-recourse to
the Company.
Based on this analysis, the Directors have concluded that the
Company has adequate resources to meet its liabilities as they fall
due for the going concern period. Thus, they consider it appropriate
to adopt the going concern basis of accounting in preparing the
annual financial statements.
New and revised standards
There are no new or amended accounting standards or
interpretations adopted during the year that have a material impact
on the financial statements. The Company notes the following new
standards and interpretations which were in issue and effective at the
date of these financial statements.
– Amendments to IAS 1: Classification of Liabilities as Current or
Non-current (effective for accounting periods beginning on or after
1 January 2024)
– Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements
(effective for accounting periods beginning on or after
1 January 2024)
– Amendments to IFRS 16: Lease Liability in a Sale and
Leaseback (effective for accounting periods beginning on or after
1 January 2024)
– Amendments to IAS1: Non-current Liabilities with Covenants
(effective for accounting periods beginning on or after
1 January 2024)
The Company also notes the following standards and interpretations
which were in issue but not effective at the date of these financial
statements. They are not expected to have a material impact on the
Company’s financial statements.
– Amendments to IAS 21: Lack of Exchangeability (effective for
accounting periods beginning on or after 1 January 2025)
– Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosures (effective for accounting periods
beginning on or after 1 January 2026)
– IFRS 18: Presentation and Disclosure in Financial Statements
(effective for accounting periods beginning on or after
1 January 2027)
– IFRS 19: Subsidiaries without Public Accountability: Disclosures
(effective for accounting periods beginning on or after
1 January 2027)
Financial instruments
Financial assets and liabilities are recognised in the Statement
of Financial Position when the Company becomes a party to the
contractual provisions of the instrument. Financial assets and liabilities
are derecognised when the contractual rights to the cash flows
from the instrument expire or the asset or liability is transferred and
the transfer qualifies for derecognition in accordance with IFRS 9
‘Financial Instruments: Recognition and measurement’.
114 HICL Annual Report 2025
Notes to the financial statements continued
For the year ended 31 March 2025
2. Key accounting policies continued
Non-derivative financial instruments
Non-derivative financial instruments comprise the Company’s
investment in the equity and debt of its direct Corporate Subsidiary,
Luxco, trade and other receivables, cash and cash equivalents, loans
and borrowings and trade and other payables.
Non-derivative financial instruments are recognised initially at fair
value including directly attributable transaction costs, except for
financial instruments measured at fair value through profit or loss.
Subsequent to initial recognition, non-derivative financial instruments
are measured as described below.
Investments in equity and debt securities
Investments in the equity and loan stock of entities engaged
in infrastructure activities, which are not classified as indirect
subsidiaries of the Company or which are indirect subsidiaries not
consolidated in the Company’s results, are designated at fair value
through profit or loss since the Company manages these investments
and makes purchase and sale decisions based on their fair value.
The Company has one direct subsidiary, Luxco, which is also an
investment entity.
Other
Other non-derivative financial instruments are measured at amortised
cost using the effective interest method, less any impairment losses for
financial assets. Interest income or expenses, foreign exchange gains
and losses and impairment are recognised in the Income Statement.
Any gain or loss on derecognition is recognised in the Income Statement.
Fair values
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants
at the measurement date in the principal or, in its absence, the most
advantageous market to which the Company has access to at that date.
The fair value of the Company’s investment in Luxco is based on
the Net Asset Value of IILP and the sundry assets and liabilities of
Luxco, which are measured at fair value. IILP’s Net Asset Value is
based on the fair value of the underlying investments in its portfolio
of infrastructure assets, since IILP manages these investments and
makes purchase and sale decisions based on their fair value.
The fair value of IILP’s underlying investments is determined using
the income approach, which discounts the expected cash flows
attributable to each asset at an appropriate rate to arrive at its fair
value. In determining the appropriate discount rate, regard is given to
relevant long-term government bond yields, the specific risks of each
investment and the evidence of recent transactions. Further detail on
the methods and assumptions used in estimating the fair values of the
financial instruments is included in Note 14. IILP has issued £150m of
private placement notes. These notes are held at amortised cost.
Investment income
Investment income comprises dividend income and gains/(losses)
on the debt and equity investments, which comprises the change in
fair value of the Company’s investment in Luxco. Dividend income
is recognised when the Company’s right to receive payment
is established.
Share capital and share premium
Ordinary Shares are classified as equity. Costs directly attributable to
the issue of new shares are recognised as a deduction from the share
premium account.
Equity and reserves
The Company is a UK approved Investment Trust Company. Financial
statements prepared under IFRS are not required to apply the provisions
of the Statements of Recommended Practice issued by the UK
Association of Investment Companies for the financial statements of
Investment Trust Companies (the “SORP”). However, where relevant and
appropriate, the Directors have looked to follow the recommendations of
the SORP. The Directors have chosen to rename distributable and other
reserves into a Revenue reserve, Capital reserve and Treasury shares
reserve respectively. The Directors have exercised their judgement in
applying the SORP and a summary of these judgements are as follows:
– Net gains / losses on investments are applied wholly to the Capital
reserve as they relate to the revaluation or disposal of investments;
– Dividends are applied to the Revenue reserve except under specific
circumstances where a dividend arises from a return of capital
or proceeds from a refinancing, when they are applied to the
Capital reserve;
– Fees payable are applied to the Capital reserve where the service
provided is, in substance, an intrinsic part of an intention to acquire
or dispose of an investment;
– Operating costs are applied wholly to the Revenue reserve as there
is no clear connection between the operating expenses of the
Company and the purchase and sale of an investment;
– Foreign exchange movements are applied to the Revenue reserve
where they relate to movements on non-portfolio assets; and
– Shares repurchased, including any direct costs, are applied to the
Treasury shares reserve.
Cash and cash equivalents
Cash and cash equivalents held by the Company comprise cash
balances, deposits held at call with banks and other short-term,
highly liquid investments with original maturities of three months or
less. Cash equivalents, including demand deposits, are held for the
purpose of meeting short-term cash commitments rather than for
investment or other purposes.
Income tax
Income tax represents the sum of the tax currently payable and
deferred tax. Current tax is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the Income
Statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that
are never taxable or deductible. Tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Foreign exchange gains and losses
Transactions entered into by the Company in a currency other than its
functional currency are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at
the rates ruling at the balance sheet date. Exchange differences arising
on the re-translation of unsettled monetary assets and liabilities are
recognised immediately in the Income Statement.
Expenses
All expenses are accounted for on an accruals basis. The Company’s
investment management fee, administration fees and all other
expenses are charged through the Income Statement.
Dividends payable
Dividends payable to the Company’s shareholders are recognised
when they become legally payable. In the case of interim dividends, this
is when they are paid. In the case of final dividends, this is when they
are approved by the shareholders at the Annual General Meeting.
115HICL Annual Report 2025
Strategic Report FinancialsGovernance
Segmental reporting
The Chief Operating Decision Maker (the “CODM”) has been
determined to be the Board, who are of the opinion that the Company
is engaged in a single segment of business, being the investment in
infrastructure. The Company has no single major customer.
The internal financial information used by the CODM on a quarterly
basis to allocate resources, assess performance and manage the
Company presents the business as a single segment comprising the
portfolio of investments in infrastructure assets.
3. Critical accounting judgements, estimates
and assumptions
The preparation of financial statements in accordance with UK adopted
international accounting standards requires management to make
judgements, estimates and assumptions in certain circumstances that
affect reported amounts. The judgements, estimates and assumptions
that have a significant risk of causing a material adjustment to the
disclosure or to the carrying amounts of assets and liabilities are
outlined below.
Key judgements
Investment Entities
The Company has applied IFRS 10 ‘Consolidated Financial Statements’,
International accounting standards 11 ‘Joint Arrangements’ and IFRS 12
‘Disclosure of Interests in Other Entities’ in these financial statements,
which require investment entities to measure certain subsidiaries,
including those that are themselves investment entities, at fair value
through the Income Statement, rather than consolidating their results.
To determine that the Company continues to meet the definition of
an investment entity the Company is required to satisfy the following
three criteria:
– It obtains funds from one or more investors for the purpose
of providing these investors with professional investment
management services;
– It commits to its investors that its business purpose is to invest
its funds solely for returns from capital appreciation, investment
income or both; and
– It measures and evaluates the performance of substantially all of its
investments on a fair value basis.
The Corporate Subsidiaries carry out investment activities and incur
overheads and borrowings on behalf of the Company. They are
considered investment entities themselves and are therefore
measured at fair value in these financial statements.
Consistent with previous years, the Company meets the criteria due
to the following reasons:
– It delivers stable returns to shareholders through a mix of income
yield and capital appreciation;
– It provides investment management services and has several
investors who pool their funds to gain access to infrastructure
related investment opportunities that they might not have had
access to individually; and
– It has elected to measure and evaluate the performance of all its
investments on a fair value basis. The fair value method is used to
represent the Company’s performance in its communication to the
market, including investor presentations. In addition, the Company
reports fair value information internally to Directors, who use fair value
as the primary measurement attribute to evaluate performance.
The Directors are of the opinion that the Company has all the typical
characteristics of an investment entity and continues to meet the definition
in the standard. This conclusion is reassessed on an annual basis.
Key estimation uncertainties
The key area where estimates are significant to the financial statements
and have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial
year is the valuation of the Company’s Investment Entity Subsidiary,
Luxco. Luxco holds the investment in IILP, which in turn indirectly holds
investments in infrastructure assets which are held at fair value.
The portfolio is well-diversified by sector, geography and underlying
risk exposures. The principal risks to the operational performance, and
therefore the underlying cash flows of the investments are i) adjustments
to contracted or regulated revenues, ii) revenue variability, iii) construction
defects, iv) construction, operations and maintenance counterparties,
and v) operational costs.
The underlying investments are generally not based on observable
market data and are instead valued using a discounted cash flow analysis
of forecast investment cash flows. The exception to this is the listed
senior debt in the A13 Road project, which is valued using the quoted
market price of the bonds. There is a secondary market for infrastructure
investments and, where appropriate and publicly available, external data
points are considered. The key external (macroeconomic and fiscal)
factors affecting the forecast of each portfolio company’s cash flows in
local currency are inflation rates, interest rates, GDP growth rates and
applicable tax rates. Management exercise judgement in determining the
appropriate assumptions that underpin these valuations, but which are
supported by an independent review by a third-party valuation expert.
The portfolio valuation is sensitive to key macroeconomic assumptions.
Note 14 sets out the sensitivity of these key assumptions to reasonably
possible changes.
Forecast assumptions for each of these external metrics are made using
market data and economic forecasts. Management exercise judgement
to assess the expected future cash flows from each investment based
on the detailed financial models produced by each portfolio company.
The data in these models is adjusted to reflect specific operating
assumptions and to replace metrics used by portfolio companies
with those used by the HICL Group where they are different. The fair
value for each investment is then derived from the application of an
appropriate market discount rate and year-end currency exchange rate.
The discount rate takes into account risks associated with the financing
of the investment (e.g. liquidity, currency risks, market appetite) and its
earnings quality (e.g. predictability and covenant of the revenues and
service delivery challenges). When setting the discount rate, Management
place significant emphasis on the equity risk premium implied by
current government bond yields. This approach helps determine where
premiums settle as risk-free rates change. However, Management also
evaluates the discount rates to ensure premiums remain appropriate.
These are generally differentiated by the phase of the investment’s life (e.g.
in construction or in operation).
116 HICL Annual Report 2025
Notes to the financial statements continued
For the year ended 31 March 2025
4. Geographical analysis
The tables below provide an analysis based on the geographical location of the Company’s underlying indirect investments
1
.
Investment income UK Eurozone
Rest of
the World Total
31 March 2025 £58.2m £4.2m £(12.4)m £50.0m
31 March 2024 £24.0m £8.8m £2.4m £35.2m
Investment in investment entity subsidiaries UK Eurozone
Rest of
the World Total
31 March 2025 £2,041.7m £588.7m £401.1m £3,031.5m
31 March 2024 £2,124.3m £645.0m £443.2m £3,212.5m
1 The Company has one direct investment, Luxco
5. Total investment income
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Investment income received 131.0 198.0
Net loss on revaluation of investment in Investment Entity Subsidiary (81.0) (162.8)
Total 50.0 35.2
6. Company expenses
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Fees to auditor 0.6 0.5
Investment Manager fees (Note 18) 0.1 0.1
Directors’ fees (Note 18) 0.6 0.5
Professional fees 2.8 3.6
Total 4.1 4.7
Fees to auditor comprise the Company’s £0.5m audit fees as well as £0.1m fees to KPMG LLP in respect of their interim review of the
Company’s accounts (2024: £0.4m audit fees and £0.1m interim review fees). Additional fees to KPMG LLP relating to the audit of the
Company’s subsidiaries were £0.5m (2024: £0.5m). The non-audit services for the Company, its subsidiaries and affiliates were £0.1m
(2024: £0.3m).
117HICL Annual Report 2025
Strategic Report FinancialsGovernance
Information regarding the Group’s Auditor
During the year, the Group received the following services from its external Auditor, KPMG LLP. The table below is prepared in accordance with
Companies Act requirements, which is consistent with IFRS.
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Audit Services
Statutory audit
Company 0.5 0.4
UK Subsidiaries 0.5 0.5
Total audit services 1.0 0.9
Non-audit services
Other assurance services 0.2 0.4
Total audit and non-audit services 1.2 1.3
7. Employees
The Company had no employees during the year (31 March 2024: Nil).
8. Income tax
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Current taxes
Current year – –
– –
The effective rate of corporation tax in the UK for a large company is 25% (2024: 25%). The tax charge in the year was lower than the standard
and effective tax rate due to differences explained below:
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Profit before tax
Profit before tax multiplied by the UK corporation tax rate of 25% (2024: 25%) 11.5 7.6
Effect of:
Non-deductible net loss on revaluation of investment in Investment Entity Subsidiary 20.2 40.7
Non-taxable investment income received (32.8) (49.5)
Other 1.1 1.2
Total – –
The Directors are of the opinion that the Company has complied with the requirements for maintaining investment trust status for the purposes
of section 1158 of the Corporation Tax Act 2010. This allows certain capital profits of the Company to be exempt from UK tax. Additionally,
the Company may designate dividends wholly or partly as interest distributions for UK tax purposes. Interest distributions are treated as tax
deductions against taxable income of the Company so that investors do not suffer double taxation on their returns.
The Company is not expected to generate taxable profits not covered by the Investment Trust exemption in the foreseeable future. Therefore no
deferred tax asset has been recognised in respect of these losses.
Tax payable by investments
The financial statements do not directly include the tax charges for any of the Company’s intermediate holding companies or investments
as these are held at fair value. All of these investments and intermediate holding companies are subject to taxes in the countries in which
they operate.
118 HICL Annual Report 2025
Notes to the financial statements continued
For the year ended 31 March 2025
9. Earnings per share
Basic and diluted earnings per share is calculated by dividing the profit for the period attributable to equity shareholders of the Company by the
weighted average number of Ordinary Shares in issue during the period.
Year ended
31 March 2025
Year ended
31 March 2024
Profit attributable to equity holders of the Company £45.9m £30.5m
Weighted average number of Ordinary Shares in issue, excluding treasury shares
1
2,014.2m 2,031.5m
Total basic and diluted earnings per Ordinary Share 2.3 pence 1.5 pence
1 No new shares were issued in the year (31 March 2024: no new shares issued). In the year, the Company bought back 51,816,815 shares, held as treasury shares, for £62.1m including all direct
costs. At 31 March 2025, the Company had 2,031,488,061 shares in issue with par value 0.01p each, of which 51,816,815 were held as treasury shares (31 March 2024: 2,031,488,061)
10. Distributions to Company shareholders
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Total distributions paid to Company shareholders in the period:
Quarterly dividend for 31 March 2024 of 2.07p (2024: 2.07p) per share 42.1 42.2
Quarterly dividend for 30 June 2024 of 2.06p (2024: 2.06p) per share 41.7 41.8
Quarterly dividend for 30 September 2024 of 2.06p (2024: 2.06p) per share 41.4 41.8
Quarterly dividend for 31 December 2024 of 2.06p (2024: 2.06p) per share 40.9 41.8
166.1 167.6
Amounts not recognised as distributions to equity holders during the year:
Quarterly dividend proposed for 31 March 2025 of 2.07p per share 40.9 42.2
The quarterly dividend is due to be paid by 30 June 2025.
The Company has elected to distribute a percentage of the dividends paid to shareholders as an interest distribution for tax purposes.
Quarterly interest streaming fluctuates due to several factors, including the forecast annual effective interest received from underlying projects
(which moves with acquisitions and disposals) and FX hedging gains/losses.
11. Net assets per Ordinary Share
31 March 2025 31 March 2024
Shareholders’ equity as at 31 March £3,030.7m £3,213.0m
Less: fourth interim dividend £(40.9)m £(42.2)m
£2,989.8m £3,170.8m
Number of Ordinary Shares as at 31 March, excluding treasury shares 1,979.7m 2,031.5m
Net assets per Ordinary Share after deducting fourth interim dividend 151.0p 156.1p
Add fourth interim dividend 2.07p 2.07p
Net assets per Ordinary Share at 31 March 153.1p 158.2p
119HICL Annual Report 2025
Strategic Report FinancialsGovernance
12. Investment in Investment Entity Subsidiary
Total amount of the investment in Luxembourg Corporate Subsidiary
Year ended
31 March 2025
£m
Year ended
31 March 2024
£m
Opening balance 3,212.5 3,349.7
Loss on revaluation
of investment (Note 5) (81.0) (162.8)
(Decrease)/Increase in investment
1
(100.0) 25.6
Total amount at year end 3,031.5 3,212.5
1 Decreases in investment for the year ended 31 March 2025 principally relates to a decrease in loan for the repurchase of shares
The Company records the fair value of its direct Corporate Subsidiary, Luxco, based on the Net Asset Value of IILP and the sundry assets and
liabilities of Luxco. IILP’s Net Asset Value is based on the aggregate fair value of each of its investments along with the working capital of its
intermediate holding companies. The Company loan investment in Luxco is held at fair value, which is materially in line with the carrying value of
the loan. The terms of the loan agreement between the Company and Luxco allow for Luxco to draw on demand up to the agreed limit, where
the loan can be repaid partially or in full at any time without penalty, and where interest is based on specific terms per the loan agreement based
on adjusted income received by IILP.
The fair values of the underlying investments are mainly valued using a discounted cash flow analysis of forecast investment cash flows and
which are subject to key macroeconomic assumptions as detailed in Note 3 Critical accounting judgements, estimates and assumptions.
The Investment Manager has carried out fair market valuations of IILP’s portfolio companies as at 31 March 2025. The Directors have satisfied
themselves as to the methodology used, the discount rates applied, and the valuation. The Directors have also engaged an independent third
party with experience in valuing these types of investments to assess and opine on the appropriateness of the assumptions and valuations
determined by the Investment Manager. This work included using independent market information, reviewing a selection of underlying data
and determining an appropriate range. Based on this, the Directors received an independent opinion supporting the reasonableness of the
valuation. All investments are valued using a discounted cash flow methodology except for the A13 investment in listed senior bonds which is
valued based on quoted market price at the balance sheet date. The valuation techniques and methodologies have been applied consistently
with the prior year. Discount rates range from 7.0% to 9.8%
2
(weighted average of 8.4%) (31 March 2024: weighted average of 8.0%).
The fair values of the Corporate Group’s financial assets and liabilities not held at fair value, which include the £150m private placement issued
by IILP, are not materially different from their carrying values.
In general, the terms of senior funding arrangements may restrict the ability of portfolio companies to make distributions, which impact the fair
value of the affected investments, and therefore impacts the fair value of Luxco.
Significant restrictions include:
– Historic and projected debt service and loan life cover ratios exceed a given threshold;
– Required cash reserve account levels are met;
– Senior lenders have agreed the current financial model that forecasts the economic performance of the project company and have approved
the annual budget for the company; and
– Portfolio company compliance with the terms of senior funding arrangements.
13. Acquisitions and Disposals, via the Corporate Subsidiaries
Acquisitions
The Company, via the Corporate Subsidiary IILP, did not make any acquisitions during the year. However, the Company, via IILP, made a future
commitment in Affinity Water for £49.9m during the year.
Disposals
– The Company, via the Corporate Subsidiary IILP, disposed of its investment in Tameside Hospital for proceeds of £1.
– £244m of proceeds from the disposal of the final 23.3% stake in Northwest Parkway and 50% of the stake in Hornsea II OFTO, announced in
the year ended 31 March 2024, were received by the Corporate Group in the year.
2 Excludes discount rate of A13 as listed bond
120 HICL Annual Report 2025
14. Financial instruments
Fair value estimation
The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments:
Financial instruments
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.
Where applicable, further information about the assumptions used in determining fair value is disclosed in the Notes specific to that asset
or liability.
Classification of financial instruments
31 March 2025
£m
31 March 2024
£m
Financial assets
Investment in Investment Entity Subsidiary 3,031.5 3,212.5
Financial assets at fair value through profit or loss 3,031.5 3,212.5
Trade and other receivables 0.3 0.3
Cash and cash equivalents 0.7 1.1
Financial assets – amortised cost 1.0 1.4
Financial liabilities – other financial liabilities
Trade and other payables (1.8) (0.9)
Financial liabilities (1.8) (0.9)
The Directors are of the opinion that the carrying values of all financial instruments are approximately equal to their fair values.
Fair value hierarchy
The fair value hierarchy is defined as follows:
– Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
– Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
– Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs, with the fair value of the
investments valued using a discounted cash flow analysis of forecast investment cash flows, and which are subject to key macroeconomic
assumptions as detailed in Note 3 Critical accounting judgements, estimates and assumptions).
31 March 2025
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Investment in Investment Entity Subsidiary (Note 12) – – 3,031.5 3,031.5
31 March 2024
Level 1 Level 2 Level 3 Total
£m £m £m £m
Investment in Investment Entity Subsidiary (Note 12) – – 3,212.5 3,212.5
There were no transfers between Level 1, 2 or 3 during the period. A reconciliation of the movement in Level 3 assets is disclosed in Note 12.
Notes to the financial statements continued
For the year ended 31 March 2025
121HICL Annual Report 2025
Strategic Report FinancialsGovernance
Level 3 Valuation methodology
Methodology Description Inputs
Fair value at
31 March (£m)
Sensitivity on key
unobservable input
Fair value impact
of sensitivities (£m)
+5%/-5%
NAV The fair value of the investment
in the Company’s Investment
Entity Subsidiary, Luxco, which
is equal to its carrying value
Inputs that are not based on observable
market data. The fair value of the
Company’s investment in Luxco is
basedon Luxco’s holding in IILP that
isheld at fair value
3,031.5
(2024: 3,212.5)
A 5% sensitivity
on closing NAV
chosen due to
historical volatility
151.6
(2024: 160.6)
The value of the Company’s investment in its Investment Entity Subsidiary is sensitive to changes in the macroeconomic assumptions used as
part of the portfolio valuation process. As part of its analysis, the Directors have considered the potential impact of a change in a number of
the macroeconomic assumptions used in the valuation process. By considering these potential scenarios, the Directors are well positioned to
assess how the Company is likely to perform if affected by variables and events that are inherently outside of the control of the Directors and the
Investment Manager. The key macroeconomic assumptions that the portfolio valuation is sensitive to are:
Discount rate sensitivity
While not a macroeconomic assumption, the discount rate that is applied to each portfolio company’s forecast cash flows, for the purposes of
valuing the portfolio, is the single most important judgement and variable.
Inflation rate sensitivity
PPP projects in the portfolio have contractual income streams derived from public sector clients, which are rebased every year for inflation.
For the demand-based assets, the concession agreement usually prescribes how user fees are set, which are generally reset annually for
inflation. For Affinity Water, revenues are regulated by Ofwat in a five-yearly cycle with the pricing of water bills set with the aim of providing an
agreed return for equity that is constant in real terms for the five-year period by reference to RPI currently and CPIH in the next regulatory period.
Gross Domestic Product (“GDP”) sensitivity
At 31 March 2025, the portfolio had four assets sensitive to GDP, namely the A63, LSPH, RMG Roads and M1-A1 Road. These assets are
classified as GDP-sensitive because at times of higher economic activity there will be greater traffic volumes using them, generating increased
revenues for the projects compared to periods of lower economic activity.
Interest rate sensitivity
The majority of the HICL Group’s portfolio companies’ interest costs are at fixed rates, either through fixed-rate bonds, bank debt which
is hedged with an interest rate swap or linked to inflation through index linked bonds. However, there are five investments (Affinity Water,
Fortysouth, TNT, Altitude Infra, and XLT) which have refinancing requirements, exposing these investments to interest rate risk.
In the case of other investments, sensitivity to interest rates predominantly relates to the cash deposits which the portfolio company is required
to maintain as part of its senior debt funding. For example, most PPP projects have a debt service reserve account in which six months of debt
service payments are held.
Lifecycle expenditure sensitivity
Lifecycle (also called asset renewal or major maintenance) expenditure concerns the replacement of material parts of the asset to maintain
it over the concession life. It involves larger items that are not covered by routine maintenance and for a building will include items like the
replacement of boilers, chillers, carpets and doors when they reach the end of their useful economic lives.
The lifecycle obligation, together with the budget and the risk, is either taken by the project company (and hence the investor) or is
subcontracted to the FM contractor.
Corporation tax rate sensitivity
The profits of each portfolio company are subject to corporation tax in the country where the project is located.
Foreign exchange rate sensitivity
The portfolio has exposure to foreign exchange rates.
122 HICL Annual Report 2025
14. Financial instruments continued
Sensitivities
The Directors have considered changes in macroeconomic assumptions in the underlying assets for the which Company holds an interest via
its indirect Company Subsidiary IILP. The sensitivity has the same impact on both net assets and total investment income.
Sensitivities
-0.5% p.a.
change
Investment at fair
value through
profit or loss
+0.5% p.a.
change
Discount rates
31 March 2025 £161.9m £3,031.5m £(147.8)m
31 March 2024 £173.8m £3,212.5m (£158.2)m
Inflation rates
31 March 2025 £(132.4)m £3,031.5m £150.2m
31 March 2024 £(141.3)m £3,212.5m £160.0m
GDP
31 March 2025 £(56.5)m £3,031.5m £41.8m
31 March 2024 £(55.3)m £3,212.5m £38.4m
-1% p.a.
change
Investment at fair
value through
profit or loss
+1 p.a.
change
Cash deposit rates
31 March 2025 £(43.1)m £3,031.5m £42.8m
31 March 2024 £(46.9)m £3,212.5m £46.5m
Debt interest rates
31 March 2025 £12.7m £3,031.5m £(12.9)m
31 March 2024 £25.5m £3,212.5m £(27.7)m
-5% p.a.
change
Investment at fair
value through
profit or loss
+5% p.a.
change
Tax
31 March 2025 £105.6m £3,031.5m £(105.5)m
31 March 2024 £107.1m £3,212.5m £(107.9)m
The sensitivity assumes that the changes are for all future periods, and is consistent with that shown by the Company’s listed infrastructure
peers allowing for comparisons to be made. A higher sensitivity is not considered necessary as the mix of the portfolio means that the sensitivity
is relatively linear and it is possible to estimate the impact if percentage changes are in multiples of this sensitivity.
The Directors recognise that any macroeconomic volatility can give rise to a greater possible range of values than has been reported in
recent years.
15. Loans and borrowings
The Corporate Group’s multi-currency £400m RCF, held via the Corporate Subsidiary IILP, was reduced from £650m in May 2024 at
IILP’s request. Post year-end, the three-year tenor RCF was extended by a year out to 30 June 2027. £10m was drawn on the RCF as at
31 March 2025.
IILP has issued £150m of private placement loan notes. The notes were issued in two tranches; £100m expiring in 2033 and £50m expiring in
2035. The weighted average interest rate is 5.80% (5.75% after hedging).
Notes to the financial statements continued
For the year ended 31 March 2025
123HICL Annual Report 2025
Strategic Report FinancialsGovernance
16. Share capital and reserves
Ordinary Shares
31 March 2025
m
31 March 2024
m
Authorised and issued at the beginning and the end of the year 2,031.5 2,031.5
Shares repurchased and held as treasury shares (51.8) –
Authorised and issued, excluding treasury shares, at end of year – fully paid 1,979.7 2,031.5
As at 31 March 2025, 51,816,815 shares, purchased for £62.1m including direct costs, were held as treasury shares following their repurchase.
The share repurchase programme may be cancelled at any time. The holders of the 1,979,671,246 Ordinary Shares, excluding treasury shares,
at 31 March 2025 (31 March 2024: 2,031,488,061) are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company.
Post year-end, a further 13,372,003 shares were repurchased, and held as treasury shares, up until the date of the approval of the financial
statements, with 1,966,299,243 Ordinary Shares in issue, excluding treasury shares, as at 19 May 2025.
No new share issuances occurred during the year ended 31 March 2025 or the year end 31 March 2024.
Share capital
31 March 2025
£m
31 March 2024
£m
Opening balance 0.2 0.2
Balance at end of year 0.2 0.2
Share premium
31 March 2025
£m
31 March 2024
£m
Opening balance 1,213.3 1,213.3
Balance at end of year 1,213.3 1,213.3
Revenue, Capital and Treasury shares reserves
Revenue, Capital and Treasury shares reserves are detailed in the Statement of Changes in Equity. The composition of the Capital, Revenue
and Treasury shares reserves are detailed in Note 2: Equity and reserves.
17. Financial risk management
The Corporate Group is exposed to market risk (which includes currency risk, interest rate risk and inflation risk), credit risk and liquidity risk
arising from the financial instruments held by the Corporate Subsidiary, IILP, and as are disclosed below. The Corporate Group, via IILP, owns a
portfolio of investments predominantly in the subordinated loan stock and equity of project companies. These companies are structured at the
outset to minimise financial risks where possible. Ongoing risk management occurs through the individual boards of the project companies and
monitored through regular financial and operational performance reports.
Market risk
Returns from HICL Group’s investments are affected by market events giving rise to changes in the value of underlying portfolio assets.
The value of these investments will be a function of the discounted value of their expected future cash flows and as such will vary with, inter alia,
movements in interest rates, market prices and the competition for such assets.
As at 31 March 2025, the proportion of the portfolio considered sensitive to GDP has reduced to 13% (14% at 31 March 2024). Four assets
remain sensitive to GDP, namely, the A63, M1-A1 Road, RMG Roads and LSPH. At times of higher economic activity there will be greater traffic
volumes using these roads and railways, generating increased revenues for the projects than compared to periods of lower economic activity
and therefore these are assessed as GDP sensitive investments.
Interest rate risk
The Corporate Group has indirect exposure to interest rates through changes to the financial performance and the valuation of portfolio companies
caused by interest rate fluctuations in loans and borrowings at IILP. The Company itself does not have any borrowings but does have an interest-
bearing loan with Luxco and therefore is exposed to interest rate risk. The sensitivity of the portfolio companies to interest rates is shown in Note 14.
Inflation risk
The infrastructure project companies in which the Corporate Group, via IILP, invests are generally structured so that contractual income and
costs are either wholly or partially linked to specific inflation metrics where possible to minimise the risks of mismatch between income and
costs due to movements in inflation. The Corporate Group’s overall cash flows vary with inflation, although they are not fully correlated as not
all flows are indexed. The effects of inflation changes do not always immediately flow through to the Corporate Group’s cash flows, particularly
where a project’s loan stock debt carries a fixed coupon and the inflation changes flow through by way of changes to dividends in future
periods. As RPI is to be aligned with CPIH from 2030, RPI-linked project companies have been aligned to CPIH from this date. The sensitivity of
the Corporate Group to inflation is shown in the sensitivities table in Note 14.
124 HICL Annual Report 2025
Notes to the financial statements continued
For the year ended 31 March 2025
17. Financial risk management continued
Currency risk
The Corporate Group monitors its foreign exchange exposures using its near-term and long-term cash flow forecasts. Its policy is to use
foreign exchange hedging to provide protection against the effect of exchange rate fluctuations on the level of Sterling distributions that the
Corporate Group expects to receive over the medium term, where considered appropriate. This may involve the use of forward exchange and
other currency hedging contracts at IILP level, as well as the use of Euro, Canadian dollar, US dollar, NZ dollar and other currency denominated
borrowings. At 31 March 2025, the Corporate Group, via IILP, hedged its currency exposure through Euro, Canadian dollar, NZ dollar and US
dollar forward contracts. This has reduced the volatility in the NAV from foreign exchange movements.
The hedging policy is designed to provide confidence in the near-term yield and to limit NAV per share sensitivity to no more than 2% for a 10%
foreign exchange movement. The sensitivity of the Corporate Group to currency risk is shown in the sensitivities table in Note 14. The proceeds
from the Northwest Parkway disposal received during the year were fully hedged from the date the sale was signed in the prior year.
Credit risk
Credit risk is the risk that a counterparty of the Corporate Group will be unable or unwilling to meet a commitment that it has entered into with
the Corporate Group.
The Corporate Group is subject to credit risk on its loans, receivables, cash and deposits. The Corporate Group’s cash and deposits are held
with reputable banks. The credit quality of loans and receivables within the Investment Portfolio is based on the financial performance of the
individual portfolio companies. For those assets that are not past due, it is believed that the risk of default is small and capital repayments and
interest payments will be made in accordance with the agreed terms and conditions of the investment.
The Corporate Group’s maximum exposure to credit risk over financial assets is the carrying value of those assets in the balance sheet.
The Corporate Group does not hold any collateral as security.
Liquidity risk
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet
date to the contractual maturity date.
31 March 2025
Less than
1 year
£m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
More than
5 years
£m
Trade and other payables 1.8 – – –
Total 1.8 – – –
31 March 2024
Less than
1 year £m
Between 1
and 2 years
£m
Between 2
and 5 years
£m
More than
5 years
£m
Trade and other payables 0.9 – – –
Total 0.9 – – –
125HICL Annual Report 2025
Strategic Report FinancialsGovernance
18. Related party transactions and transactions with the Investment Manager
InfraRed was appointed under an Investment Management Agreement, dated 4 March 2019, as Investment Manager to, and the AIFM of, the
Company. The Investment Management Agreement may be terminated by either party to the agreement, being the Company or InfraRed,
giving three years’ written notice to the other, or if InfraRed’s appointment as Operator (see below) is terminated. Under the Investment
Management Agreement, InfraRed is entitled to a fee of £0.1m per annum, payable half-yearly in arrears by the Company and which is subject
to review, from time to time.
The Investment Manager fees charged to the Company were £0.1m (31 March 2024 £0.1m), (disclosed as Investment Manager fees in Note 6).
InfraRed is also the Operator of IILP, the Corporate Subsidiary through which the Company indirectly holds its investments. InfraRed has been
appointed as the Operator by the General Partner of IILP, Infrastructure Investments General Partner Limited, a company within the same group
as InfraRed. The Operator and the General Partner may each terminate the appointment of the Operator by either party giving three years’
written notice. Either the Operator or the General Partner may terminate the appointment of the Operator by written notice if the Investment
Management Agreement is terminated in accordance with its terms. The General Partner’s appointment does not have a fixed term. However, if
InfraRed ceases to be the Operator, the Company has the option to buy the entire share capital of the General Partner and the InfraRed Group
has the option to sell the entire share capital of the General Partner to the Company, in both cases for nominal consideration. The Directors
consider the value of the option to be insignificant.
In the year to 31 March 2025, in aggregate InfraRed and the General Partner were entitled to fees and / or profit share equal to: 1.1 per cent per
annum of the adjusted gross asset value of all investments of HICL up to £750m, 1.0 per cent per annum for the incremental value in excess of
£750m up to £1,500m, 0.9 per cent for the incremental value in excess of £1,500m, 0.8 per cent for the incremental value in excess of £2,250m
and 0.65 per cent for the incremental value in excess of £3,000m.
The total Operator fees were £30.6m (2024: £33.8m), of which £7.5m remained payable at 31 March 2025 (2024: £8.1m).
As at 31 March 2025, InfraRed is 100% owned by Sun Life Financial Inc. (together with its subsidiaries and joint ventures,“Sun Life”), with
InfraRed having exercised the right to sell the remaining 20% in July 2024. InfraRed is a distinct business under SLC Management, the
alternatives asset manager of Sun Life.
Sun Life holds £50.0m of the private placement notes issued by IILP, on an arm’s length basis. As at 31 March 2025, total interest paid to Sun
Life in the year was £2.9m (2024: £1.5m) and £1.0m of interest had been accrued.
The Directors of the Company, who are considered to be key management personnel, received fees for their services. Their fees were £0.6m for
the year ended 31 March 2025 (2024: £0.5m) (see Note 6). One Director also receives fees for serving as Director of Luxco, and whose annual
fees are £9.0k (2024: £8.0k). (Further detail is included in the Directors’ Remuneration Report starting on page 90).
19. Guarantees and other commitments
As at 31 March 2025, the Company, via its Corporate Subsidiary IILP had £112.9m of commitments for future project investments (31 March
2024: £64.5m), with the increase in the year due to the £49.9m commitment into Affinity Water.
The security trustee of the RCF within the Corporate Group, and on behalf of certain secured parties, has a first ranking charge over 100% of
the share capital of HICL Infrastructure 2 S.à r.l as part of this RCF arrangement.
20. Events after balance sheet date
In May 2025, the £400m three-year tenor RCF, which is due to expire in June 2026, was extended by one year to 30 June 2027.
On 14 May 2025, the Company declared an interim dividend of 2.07 pence per share in respect of the final quarter of the year to 31 March
2025. The total dividend payable by 30 June 2025, is based on a record date of 23 May 2025 and the number of shares in issue, excluding
treasury shares, at that time being 1,966,299,243, subject to any additional share buybacks up to this date.
13,372,003 shares were repurchased between the balance sheet date and 19 May 2025 as part of the share buyback programme, for the
amount of £15.3m including all direct fees.
Subject to finalisation of contractual arrangements, and effective from 1 July 2025, the basis for the management fee charged by InfraRed is to
be amended to 50% the average of the Company’s most recently published NAV, and 50% the daily average closing market capitalisation of the
Company (capped so the base fee payable will be no higher than under the existing GAV fee arrangement).
126 HICL Annual Report 2025
Notes to the financial statements continued
For the year ended 31 March 2025
21. Related undertakings
Below is a list of the Company’s subsidiaries and related undertakings – incorporated in the United Kingdom unless otherwise stated. Further,
the following subsidiaries have not been consolidated in these financial statements, as a result of applying IFRS 10 and Investment Entities
(Amendments to IFRS 10, IFRS 12 and IAS 27).
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Academy Services (Norwich) Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Academy Services (Norwich) Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Academy Services (Oldham) Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Academy Services (Oldham) Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Academy Services (Sheffield) Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Academy Services (Sheffield) Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Adagia B.V. Strawinskylaan 1021, 1077 XX,
Amsterdam, The Netherlands
100% 100% N/A
2
N/A
2
N/A
2
Addiewell Prison (Holdings) Ltd C/o Sodexo Remote Sites Limited, 4Th
Floor, The Exchange No. 62 Market
Street, Aberdeen, Scotland AB11 5PJ
67% 67% N/A
2
N/A
2
N/A
2
Addiewell Prison Ltd C/o Sodexo Remote Sites Limited, 4Th
Floor, The Exchange No. 62 Market
Street, Aberdeen, Scotland AB11 5PJ
67% 67% N/A
2
N/A
2
N/A
2
Affinity Water Capital Funds Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 1.4 177.5
Affinity Water East Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 1.8 64.5
Affinity Water Finance (2004) Plc The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% N/A
2
N/A
2
N/A
2
Affinity Water Finance plc The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% N/A
2
N/A
2
N/A
2
Affinity Water Holdco Finance Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 (0.8) 282.6
Affinity Water Holdings Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 - 291.7
Affinity Water Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 (37.3) (155.6)
Affinity Water Pension Trustees Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% N/A
2
N/A
2
N/A
2
Affinity Water Southeast Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 1.7 66.1
AGP (2) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
AGP Holdings (1) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Albion Healthcare (Doncaster)
Holdings Limited
Third Floor Broad Quay House,
PrinceStreet, Bristol, BS1 4DJ
50% 50% N/A
2
N/A
2
N/A
2
127HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Albion Healthcare (Doncaster) Limited Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
50% 50% N/A
2
N/A
2
N/A
2
Albion Healthcare (Oxford) Holdings
Limited
Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
25% 25% N/A
2
N/A
2
N/A
2
Albion Healthcare (Oxford) Limited Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
25% 25% N/A
2
N/A
2
N/A
2
Altitude Infra 1 Terrasse Bellini 92919 Puteaux
LaDefense, France
6% 6% 31-Dec-24 (25.5) 1,082.7
Altitude Infrastructure Construction 1 Terrasse Bellini 92919 Puteaux
LaDefense, France
6% 6% 31-Dec-24 15.6 (38.5)
Altitude Infrastructure Exploitation 1bis Place de la Défense, 92400
Courbevoie, France
6% 6% N/A
2
N/A
2
N/A
2
Altitude Infrastructure THD 1bis Place de la Défense, 92400
Courbevoie, France
3% 3% 31-Dec-24 (109.2) (88.8)
Amalie Infrastructure Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Amalie PFI (UK) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 2.7 36.9
Annes Gate Property Plc 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Ashburton Services (Holdings) Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Ashburton Services Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Aspire Defence Finance Plc Aspire Business Centre, Ordnance
Road, Tidworth, SP9 7QD
12% 12% N/A
2
N/A
2
N/A
2
Aspire Defence Holdings Limited Aspire Business Centre, Ordnance
Road, Tidworth, SP9 7QD
12% 12% N/A
2
N/A
2
N/A
2
Aspire Defence Limited Aspire Business Centre, Ordnance
Road, Tidworth, SP9 7QD
12% 12% N/A
2
N/A
2
N/A
2
Atlandes S.A. 15 Avenue Leonard De Vinci, 33600
Pessac, France
24% 24% 31-Dec-24 34.1 0.1
Axiom Education (Edinburgh) Holdings
Limited
Blake House 3 Frayswater Place,
Cowley, Uxbridge, Middlesex, UB8 2AD
100% 100% N/A
2
N/A
2
N/A
2
Axiom Education (Edinburgh) Limited Blake House 3 Frayswater Place,
Cowley, Uxbridge, Middlesex, UB8 2AD
100% 100% N/A
2
N/A
2
N/A
2
Axiom Education (Perth & Kinross)
Holdings Limited
Blake House 3 Frayswater Place,
Cowley, Uxbridge, Middlesex, UB8 2AD
100% 100% N/A
2
N/A
2
N/A
2
Axiom Education (Perth & Kinross)
Limited
Blake House 3 Frayswater Place,
Cowley, Uxbridge, Middlesex, UB8 2AD
100% 100% 31-Dec-23 1.5 (52.6)
BAAK Blankenburg-Verbinding B.V. Ringwade 71, 3439 LM Nieuwegein,
TheNetherlands
70% 70% 31-Dec-23 13.4 42.1
Bangor And Nendrum Schools
Services Holdings Limited
C/o Cleaver Fulton Rankin, 50 Bedford
Street, Belfast, BT2 7FW
40% 40% N/A
2
N/A
2
N/A
2
Bangor And Nendrum Schools
Services Limited
C/o Cleaver Fulton Rankin, 50 Bedford
Street, Belfast, BT2 7FW
40% 40% N/A
2
N/A
2
N/A
2
128 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Bass LIFT Holdings Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
99% 99% N/A
2
N/A
2
N/A
2
Bee Invest 1 91, rue du Faubourg Saint-Honoré,
75008 Paris, France
100% 100% N/A
2
N/A
2
N/A
2
Betjeman Holdings Jvco Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% 31-Mar-24 - 336.4
Betjeman Holdings Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% 31-Mar-24 (32.9) 48.0
Betjeman Holdings Midco Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% 31-Mar-24 13.8 334.7
Birmingham And Solihull Lift (Fundco
1) Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Birmingham And Solihull Lift (Fundco
2) Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Birmingham And Solihull Lift (Fundco
3) Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Birmingham And Solihull Lift (Fundco
4) Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Birmingham and Solihull Local
Improvement Finance Trust Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Blue Light Holdings Limited Level 7, One Bartholomew Close, Barts
Square, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Blue3 (Gloucestershire Fire) (Holdings)
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Blue3 (Gloucestershire Fire) Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
BNC IXAS SPC Holding B.V. Herikerbergweg 292, 1101CT,
The Netherlands
25% 25% N/A
2
N/A
2
N/A
2
BNC Pi2 Holding B.V. Europalaan 40, 3526 KS Utrecht,
The Netherlands
100% 100% N/A
2
N/A
2
N/A
2
Boldon School (Holdings) Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Boldon School Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Brentwood Healthcare Partnership
Holding Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Brentwood Healthcare Partnership
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
By Education (Barking) Holdings
Limited
Quadrant House, 4 Thomas More
Square, London, E1W 1YW
100% 100% N/A
2
N/A
2
N/A
2
By Education (Barking) Limited Quadrant House, 4 Thomas More
Square, London, E1W 1YW
100% 100% N/A
2
N/A
2
N/A
2
ByCentral Holdings Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
ByCentral Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
129HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
ByWest (Holdings) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
ByWest Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
CAE Aircrew Training Services Plc MSHATF, Raf Benson, Wallingford,
Oxfordshire, OX10 6AA
22% 22% N/A
2
N/A
2
N/A
2
Central Blackpool PCC Holding
Company Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Central Blackpool PCC Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Children's Ark Partnerships Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Children's Ark Partnerships Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Claymore Roads (Holdings) Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
50% 50% N/A
2
N/A
2
N/A
2
Claymore Roads Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
50% 50% N/A
2
N/A
2
N/A
2
Connect M1-A1 Holdings Limited Q14 Quorum Business Park, Benton
Lane, Newcastle Upon Tyne, NE12 8BU
30% 30% N/A
2
N/A
2
N/A
2
Connect M1-A1 Limited Q14 Quorum Business Park, Benton
Lane, Newcastle Upon Tyne, NE12 8BU
30% 30% N/A
2
N/A
2
N/A
2
Consort Healthcare (Birmingham)
Funding Plc
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
30% 30% N/A
2
N/A
2
N/A
2
Consort Healthcare (Birmingham)
Holdings Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
30% 30% N/A
2
N/A
2
N/A
2
Consort Healthcare (Birmingham)
Intermediate Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
30% 30% N/A
2
N/A
2
N/A
2
Consort Healthcare (Birmingham)
Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
30% 30% N/A
2
N/A
2
N/A
2
Consort Healthcare (Blackburn)
Funding Plc
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Blackburn)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Blackburn)
Intermediate Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Blackburn)
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Mid Yorkshire)
Funding Plc
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Mid Yorkshire)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Mid Yorkshire)
Intermediate Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
130 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Consort Healthcare (Mid Yorkshire)
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Consort Healthcare (Salford) Holdings
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
50% 50% N/A
2
N/A
2
N/A
2
Consort Healthcare (Salford)
Intermediate Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
50% 50% N/A
2
N/A
2
N/A
2
Consort Healthcare (Salford) PLC 8 White Oak Square, London Road,
Swanley, BR8 7AG
50% 50% N/A
2
N/A
2
N/A
2
Criterion Healthcare Holdings Limited C/o Equitix Management Services
Limited, 2nd Floor Toronto Square,
Toronto Street, Leeds, West Yorkshire,
LS1 2HJ
36% 36% N/A
2
N/A
2
N/A
2
Criterion Healthcare Plc C/o Equitix Management Services
Limited, 2nd Floor Toronto Square,
Toronto Street, Leeds, West Yorkshire,
LS1 2HJ
36% 36% N/A
2
N/A
2
N/A
2
Cross London Trains Finance
Company Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
6% 6% N/A
2
N/A
2
N/A
2
Cross London Trains HoldCo 2 Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
6% 6% N/A
2
N/A
2
N/A
2
Cross London Trains HoldCo Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
6% 6% 30-Jun-24 (75.5) 377.2
Cross London Trains Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
6% 6% 30-Jun-24 4.2 (57.1)
Cross Texas Transmission, LLC 251 Little Falls Drive, Wilmington,
NewCastle, DE, 19808, USA
46% 46% 31-Dec-23 26.8 472.3
CSES (Dorset) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
CSM PPP Services (Holdings) Limited Suite 54, Morrison Chambers,
32Nassau Street, Dublin 2, Ireland
76% 76% N/A
2
N/A
2
N/A
2
CSM PPP Services Limited Suite 54, Morrison Chambers,
32Nassau Street, Dublin 2, Ireland
76% 76% N/A
2
N/A
2
N/A
2
CTRL (UK) Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
CVS Leasing Limited MSHATF, Raf Benson, Wallingford,
Oxfordshire, OX10 6AA
87% 87% N/A
2
N/A
2
N/A
2
D3 - Societe de Ia deviation de
Troissereux
21 Rue Hippolyte Bayard, Pae Du Haut-
Ville, 60000, Beauvais, France
90% 90% N/A
2
N/A
2
N/A
2
Daiwater Investment Limited The Hub, Tamblin Way, Hatfield,
Hertfordshire AL10 9EZ
33% 33% 31-Mar-24 - 757.2
Derby School Solutions (Holdings)
Limited
8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Derby School Solutions Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners BBE
(Holdings) Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
50% 50% N/A
2
N/A
2
N/A
2
131HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Diamond Transmission Partners BBE
Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
50% 50% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners
Galloper (Holdings) Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
49% 49% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners
Galloper Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
49% 49% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners
Hornsea Two (Holdings) Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
38% 75% 31-Mar-24 (2.5) (45.0)
Diamond Transmission Partners
Hornsea Two Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
38% 75% 31-Mar-24 (2.5) (45.0)
Diamond Transmission Partners RB
(Holdings) Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
49% 49% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners RB
Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
49% 49% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners
Walney Extension (Holdings) Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
29% 29% N/A
2
N/A
2
N/A
2
Diamond Transmission Partners
Walney Extension Limited
Mid City Place, 71 High Holborn,
London, WC1V 6BA
29% 29% N/A
2
N/A
2
N/A
2
Directroute (Tuam) Holdings Limited M17/M18 Operations Centre, Furzy Park,
Athenry, Co Galway, Ireland
100% 100% N/A
2
N/A
2
N/A
2
Directroute (Tuam) Limited M17/M18 Operations Centre, Furzy Park,
Athenry, Co Galway, Ireland
100% 100% N/A
2
N/A
2
N/A
2
Dorset Emergency Services PPP
(Holdings) Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Ealing Care Alliance (Holdings) Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Ealing Care Alliance Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Ealing Schools Partnerships Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Ealing Schools Partnerships Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Eastbury Park (Holdings) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
50% 50% 31-Dec-23 - 35.9
Eastbury Park Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
50% 50% N/A
2
N/A
2
N/A
2
Emblem Schools (Holdings) Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
30% 30% N/A
2
N/A
2
N/A
2
Emblem Schools Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
30% 30% N/A
2
N/A
2
N/A
2
Enterprise Civic Buildings (Holdings)
Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Enterprise Civic Buildings Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
132 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Enterprise Education Conwy Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
90% 90% N/A
2
N/A
2
N/A
2
Enterprise Education Holdings
ConwyLimited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
90% 90% N/A
2
N/A
2
N/A
2
Enterprise Healthcare Holdings Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Enterprise Healthcare Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Falkirk Schools Gateway HC Limited Exchange Tower, 19 Canning Street,
Edinburgh, Scotland, EH3 8EH
30% 30% N/A
2
N/A
2
N/A
2
Falkirk Schools Gateway Limited Exchange Tower, 19 Canning Street,
Edinburgh, Scotland, EH3 8EH
30% 30% N/A
2
N/A
2
N/A
2
FCC (East Ayrshire) Holdings Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
26% 26% N/A
2
N/A
2
N/A
2
FCC (East Ayrshire) Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
26% 26% N/A
2
N/A
2
N/A
2
Fibre Business Infrastructure 2 Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 2.8 35.3
Fortysouth GP Limited Level 1, 46 Sale Street, Aukland Central,
Auckland
40% 40% N/A
2
N/A
2
N/A
2
Fortysouth Group LP Level 1, 46 Sale Street, Aukland Central,
Auckland
40% 40% N/A
2
N/A
2
N/A
2
Fortysouth Hold LP Level 1, 46 Sale Street, Aukland Central,
Auckland
40% 40% 31-Mar-25 (20.5) (28.2)
Fortysouth Limited Level 1, 46 Sale Street, Aukland Central,
Auckland
40% 40% 31-Mar-25 (0.2) 462.0
Fortysouth Towers Limited Level 1, 46 Sale Street, Aukland Central,
Auckland
40% 40% N/A
2
N/A
2
N/A
2
Galvani BidCo Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
19% 19% 31-Dec-23 (204.8) 202.9
Galvani JVCo Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
19% 19% N/A
2
N/A
2
N/A
2
Galvani MidCo Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
19% 19% 31-Dec-23 (183.8) 202.8
GGB inBalans BV Location no. 000026016591,
Strawinskylaan, Amsterdam,
10211077XX, The Netherlands
85% 85% N/A
2
N/A
2
N/A
2
GGB inBalans Investco B.V Hagenweg 3 c, 4131 LX,Vianen,
TheNetherlands
100% 100% N/A
2
N/A
2
N/A
2
Glasgow Healthcare Facilities
(Holdings) Limited
2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
25% 25% N/A
2
N/A
2
N/A
2
Glasgow Healthcare Facilities Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
25% 25% N/A
2
N/A
2
N/A
2
133HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Great Basin Investment, LLC 251 Little Falls Drive, Wilmington,
NewCastle, DE, 19808, USA
45% 45% N/A
2
N/A
2
N/A
2
Great Basin Transmission Holdings,
LLC
251 Little Falls Drive, Wilmington,
NewCastle, DE, 19808, USA
45% 45% N/A
2
N/A
2
N/A
2
Great Basin Transmission South, LLC 251 Little Falls Drive, Wilmington,
NewCastle, DE, 19808, USA
45% 45% 31-Dec-23 8.8 (56.7)
Green Timbers GP Limited 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
100% 100% N/A
2
N/A
2
N/A
2
Green Timbers Holdings Limited 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
100% 100% N/A
2
N/A
2
N/A
2
Green Timbers Limited Partnership 301- 1321 Blanshard Street, Victoria,
BC, V8R 1X1, Canada
100% 100% 31-Mar-25 4.1 39.7
H & D Support Services (Holdings)
Limited
Astral House, Imperial Way, Watford,
Hertfordshire, WD24 4WW
100% 100% N/A
2
N/A
2
N/A
2
H & D Support Services Limited Astral House, Imperial Way, Watford,
Hertfordshire, WD24 4WW
100% 100% N/A
2
N/A
2
N/A
2
Hadfield Healthcare Partnerships
Holding Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Hadfield Healthcare Partnerships
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
HDM Schools Solutions (Holdings)
Limited
C/o DLA Piper Scotland LLP, FAO
Simon Rae, Collins House, Rutland
Square, Edinburgh, Scotland, EH1 2AA
75% 75% N/A
2
N/A
2
N/A
2
HDM Schools Solutions Ltd. C/o DLA Piper Scotland LLP, FAO
Simon Rae, Collins House, Rutland
Square, Edinburgh, Scotland, EH1 2AA
75% 75% N/A
2
N/A
2
N/A
2
Healthcare Centres PPP Holdings Ltd Suite 54, Morrison Chambers,
32Nassau Street, Dublin 2, Ireland
60% 60% N/A
2
N/A
2
N/A
2
Healthcare Centres PPP Ltd Suite 54, Morrison Chambers,
32Nassau Street, Dublin 2, Ireland
60% 60% N/A
2
N/A
2
N/A
2
Helix Acquisition Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
Helix Bufferco Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
Helix Holdings Limited 13 Castle Street, St Helier, Jersey,
JE2 3BT
35% 35% 31-Mar-24 (83.1) (913.4)
Helix Midco Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
HICL Infrastructure (Canada) Inc. 1133 Melville Street, Suite 3500,
The Stack, Vancouver, BC, V6E 4E5,
Canada
100% 100% N/A
2
N/A
2
N/A
2
HICL Infrastructure 2 SARL
1
42 Rue de la Vallée 2661 Luxembourg 100% 100% 31-Mar-25 166.7 1,267.4
HICL Infrastructure 3 SARL 42 Rue de la Vallée 2661 Luxembourg 100% 100% N/A
2
N/A
2
N/A
2
HICL Infrastructure Green Timbers Inc. 1133 Melville Street, Suite 3500,
The Stack, Vancouver, BC, V6E 4E5,
Canada
100% 100% N/A
2
N/A
2
N/A
2
134 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
High Speed One (HS1) Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
High Speed Rail Finance (1) PLC 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
High Speed Rail Finance PLC 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% N/A
2
N/A
2
N/A
2
Highway Management (Scotland)
Holding Limited
Part First Floor, 1 Grenfell Road,
Maidenhead, Berkshire, SL6 1HN
50% 50% N/A
2
N/A
2
N/A
2
Highway Management (Scotland)
Limited
Part First Floor, 1 Grenfell Road,
Maidenhead, Berkshire, SL6 1HN
50% 50% N/A
2
N/A
2
N/A
2
Highway Management M80
Investment Limited
Part First Floor, 1 Grenfell Road,
Maidenhead, Berkshire, SL6 1HN
50% 50% N/A
2
N/A
2
N/A
2
Holdfast Training Services Limited Building 29, HQ RSME Brompton
Barracks, Chatham, Kent, ME4 4UG
100% 100% N/A
2
N/A
2
N/A
2
HS1 Limited 5th Floor, Kings Place, 90 York Way,
London, N1 9AG
35% 35% 31-Mar-24 132.0 289.2
Information Resources (Oldham)
Holdings Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Information Resources (Oldham)
Investment Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Information Resources (Oldham)
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Infrared Towers Investments Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 8.7 131.8
Infraspeed (Holdings) BV 2132 LS Hoofddorp, Taurusavenue 155,
The Netherlands
43% 43% 31-Dec-24 9.6 34.3
Infraspeed BV 2132 LS Hoofddorp, Taurusavenue 155,
The Netherlands
43% 43% 31-Dec-24 10.1 33.7
Infrastructure Central Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (0.6) 261.5
Infrastructure Investments (A63)
Holdings Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-24 14.0 208.1
Infrastructure Investments (Affinity)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 0.8 303.1
Infrastructure Investments (Australia)
LLP
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 0.0 127.5
Infrastructure Investments (Bond)
Holdings LLP
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Bond) LLP Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Colorado)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 25.0 212.3
Infrastructure Investments (Defence)
Holdings Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 0.5 58.7
Infrastructure Investments (Defence)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (14.0) 44.1
135HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Infrastructure Investments (Germany)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Health)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Hsl Zuid)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 5.9 61.8
Infrastructure Investments (No 7)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (No 8)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Portal) GP
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Portal)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (Portal) LP Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (3.0) 50.5
Infrastructure Investments
(Portsmouth) Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (1.3) 61.3
Infrastructure Investments (Roads)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments (TNT)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (13.9) 48.8
Infrastructure Investments Aria Holdco
Limited (Dissolved 24/09/2024)
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments Aria Topco
Limited (Dissolved 10/09/2024)
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments Betjeman
(Holdco) Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments Betjeman
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments Galvani
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (10.4) 43.7
Infrastructure Investments Group
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 42.8 1,538.9
Infrastructure Investments Holdings
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (28.6) 274.7
Infrastructure Investments LP Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 34.2 3,212.2
Infrastructure Investments OFTO 1
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments OFTO 2
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments PPP OFTO
Holdings LLP
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 6.2 118.0
Infrastructure Investments PPP OFTO
LLP
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 (1.4) 145.5
136 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Infrastructure Investments PPP OFTO
MidCo LLP
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 0.0 111.8
Infrastructure Investments Roads
Management Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Infrastructure Investments TNT (US)
LLC
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% (7.6) 55.0
Ivywood Colleges Holdings Limited 7 Queens Road, Belfast,
NorthernIreland, BT3 9DT
75% 75% N/A
2
N/A
2
N/A
2
Ivywood Colleges Limited 7 Queens Road, Belfast,
NorthernIreland, BT3 9DT
75% 75% N/A
2
N/A
2
N/A
2
Ivywood Colleges Parking Limited 7 Queens Road, Belfast,
NorthernIreland, BT3 9DT
75% 75% N/A
2
N/A
2
N/A
2
IXAS Zuid Oost B.V Langbroekdreef 18, 1108 EB,
Amsterdam, The Netherlands
25% 25% 31-Dec-24 2.0 56.2
Kajima Darlington Schools Holding
Limited
10 St. Giles Square, London,
WC2H 8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima Darlington Schools Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima Haverstock Holding Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima Haverstock Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima Newcastle Libraries Holding
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima Newcastle Libraries Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima North Tyneside Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kajima North Tyneside Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Kent Education Partnership (Holdings)
Limited
Part First Floor, 1 Grenfell Road,
Maidenhead, Berkshire, SL6 1HN
50% 50% N/A
2
N/A
2
N/A
2
Kent Education Partnership Limited Part First Floor, 1 Grenfell Road,
Maidenhead, Berkshire, SL6 1HN
50% 50% N/A
2
N/A
2
N/A
2
Kluster 1 Avenue Eugène Freyssinet, 78280
Guyancourt, France
85% 85% N/A
2
N/A
2
N/A
2
Liaison Infrastructure Routière
Investissement
91, rue du Faubourg Saint-Honoré,
75008 Paris, France
100% 100% N/A
2
N/A
2
N/A
2
Mahi Tahi Towers Investments Pty Ltd Level 4, Suite 4, 225 George Street,
Sydney NSW, 2000, Australia
100% 100% (2.6) 184.6
Manchester Housing (MP Equity)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Manchester Housing (MP SubDebt)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Manchester Housing (MP TopCo)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
137HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Manchester School Services Holdings
Limited
8th Floor, 6 Kean Street, London,
WC2B 4AS
76% 76% N/A
2
N/A
2
N/A
2
Manchester School Services Limited 8th Floor, 6 Kean Street, London,
WC2B 4AS
76% 76% N/A
2
N/A
2
N/A
2
Medway Community Estates Limited 55 Station Road, Beaconsfield,
Buckinghamshire, HP9 1QL
60% 60% N/A
2
N/A
2
N/A
2
Medway Fundco Limited 55 Station Road, Beaconsfield,
Buckinghamshire, HP9 1QL
60% 60% N/A
2
N/A
2
N/A
2
Medway Fundco Two Limited 55 Station Road, Beaconsfield,
Buckinghamshire, HP9 1QL
60% 60% N/A
2
N/A
2
N/A
2
Metier Healthcare Limited 4 Estates Yard, Wellhouse Lane, Barnet,
Hertfordshire, EN5 3DG
100% 100% N/A
2
N/A
2
N/A
2
Metier Holdings Limited 4 Estates Yard, Wellhouse Lane, Barnet,
Hertfordshire, EN5 3DG
100% 100% N/A
2
N/A
2
N/A
2
Minerva Education and Training
(Holdings) Limited
C/o Albany Spc Services Limited 3rd
Floor, 3-5 Charlotte Street, Manchester,
M1 4HB
45% 45% N/A
2
N/A
2
N/A
2
Minerva Education and Training
Limited
C/o Albany Spc Services Limited 3rd
Floor, 3-5 Charlotte Street, Manchester,
M1 4HB
45% 45% N/A
2
N/A
2
N/A
2
Motorway Infrastructure SAS 92 avenue de Wagram, 75017 Paris,
France
10% 10% 31-Dec-24 34.1 0.1
New Intermediate Care Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
New Schools Investment Company
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Newham Learning Partnership (Hold
Co) Limited
Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
80% 80% N/A
2
N/A
2
N/A
2
Newham Learning Partnership (Project
Co) Limited
Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
80% 80% N/A
2
N/A
2
N/A
2
Newham Learning Partnership (PSP)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Newham Transformation Partnership
Limited
Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
80% 80% N/A
2
N/A
2
N/A
2
Newport School Solutions (Holdings)
Limited
8th Floor, 6 Kean Street, London,
WC2B 4AS
100% 100% N/A
2
N/A
2
N/A
2
Newport School Solutions Limited 8th Floor, 6 Kean Street, London,
WC2B 4AS
100% 100% N/A
2
N/A
2
N/A
2
Newton Abbot Health Holdings Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Newton Abbot Health Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Nordie 2 Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
30% 30% 31-Dec-24 29.0 168.2
Nordie France SAS 91, rue du Faubourg Saint-Honoré,
75008 Paris, France
30% 30% 31-Dec-23 (4.6) 103.6
138 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Nordie Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 8.3 116.5
Northwest Connect General
Partnership
301- 1321 Blanshard Street, Victoria,
BC, V8R 1X1, Canada
50% 50% N/A
2
N/A
2
N/A
2
Northwest Connect Holdings Inc. 301- 1321 Blanshard Street, Victoria,
BC, V8R 1X1, Canada
50% 50% N/A
2
N/A
2
N/A
2
Northwest Connect Inc. 301- 1321 Blanshard Street, Victoria,
BC, V8R 1X1, Canada
50% 50% N/A
2
N/A
2
N/A
2
Northwest Connect Investment Inc. 301- 1321 Blanshard Street, Victoria,
BC, V8R 1X1, Canada
50% 50% N/A
2
N/A
2
N/A
2
Ochre Solutions (Holdings) Limited Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
40% 40% 31-Dec-23 (3.4) (67.8)
Ochre Solutions Limited Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
40% 40% 31-Dec-23 (3.4) (67.8)
Paradigm (Sheffield BSF) Holdings
Limited
Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
54% 54% N/A
2
N/A
2
N/A
2
Paradigm (Sheffield BSF) Limited Third Floor Broad Quay House,
Prince Street, Bristol, BS1 4DJ
54% 54% N/A
2
N/A
2
N/A
2
PFF (Dorset) Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Pi2 B.V. Europalaan 40, 3526 KS Utrecht,
The Netherlands
100% 100% N/A
2
N/A
2
N/A
2
Pi2 Holding B.V. Europalaan 40, 3526 KS Utrecht,
The Netherlands
100% 100% N/A
2
N/A
2
N/A
2
PIP Infrastructure Investments
(Southmead) Limited
Cannon Place, Cannon Street, London,
EC4N 6AF
25% 25% N/A
2
N/A
2
N/A
2
Platon Saclay S.A.S 1 Avenue Eugène Freyssinet, 78280
Guyancourt, France
85% 85% N/A
2
N/A
2
N/A
2
PPP Services (North Ayrshire) Holdings
Limited
2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
26% 26% N/A
2
N/A
2
N/A
2
PPP Services (North Ayrshire) Limited 2nd Floor, Drum Suite, Saltire Court,
20 Castle Terrace, Edinburgh, EH1 2EN
26% 26% N/A
2
N/A
2
N/A
2
Prima 200 Fundco No 1 Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Prima 200 Fundco No 2 Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Prima 200 Fundco No 3 Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Prima 200 Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
60% 60% N/A
2
N/A
2
N/A
2
Prime Infrastructure Investments
Limited
5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
50% 50% N/A
2
N/A
2
N/A
2
Prime LIFT Investments Limited 5 The Triangle, Wildwood Drive,
Worcester, Worcestershire WR5 2QX
99% 99% N/A
2
N/A
2
N/A
2
139HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Prisma 21 S.A.S 1 Avenue Eugène Freyssinet, 78280
Guyancourt, France
85% 85% N/A
2
N/A
2
N/A
2
Prospect Healthcare (Hinchingbrooke)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
75% 75% N/A
2
N/A
2
N/A
2
Prospect Healthcare (Hinchingbrooke)
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
75% 75% N/A
2
N/A
2
N/A
2
R B L H Medway Investmentn
Company Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Ravensbourne Health Services
(Holdings) Limited
8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
Ravensbourne Health Services Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
RBLH Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
RBLH RWF Investment Company
Limited
Level 7, One Bartholomew Close, Barts
Square, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Redwood Partnership Ventures 2
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Redwood Partnership Ventures 3
Limited
10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
Redwood Partnership Ventures
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Renaissance Miles Platting Holding
Company Limited
3rd Floor, Suite 6c, Sevendale House,
5-7 Dale Street, Manchester, M1 1JB
50% 50% N/A
2
N/A
2
N/A
2
Renaissance Miles Platting Limited 3rd Floor, Suite 6c, Sevendale House,
5-7 Dale Street, Manchester, M1 1JB
50% 50% N/A
2
N/A
2
N/A
2
RL Investment Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Road Infrastructure (Ireland) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% 31-Mar-25 4.9 75.1
Road Management Consolidated plc Cannon Place, Cannon Street, London,
EC4N 6AF
58% 58% N/A
2
N/A
2
N/A
2
Road Management Group Limited Cannon Place, Cannon Street, London,
EC4N 6AF
58% 58% N/A
2
N/A
2
N/A
2
Road Management Limited Cannon Place, Cannon Street, London,
EC4N 6AF
58% 58% N/A
2
N/A
2
N/A
2
Road Management Services 43 Orchard Place, London, England,
E14 0JW
42% 42% N/A
2
N/A
2
N/A
2
Road Management Services
(Gloucester) Limited
Cannon Place, Cannon Street, London,
EC4N 6AF
58% 58% 31-Dec-24 (7.0) 31.9
Road Management Services
(Peterborough) Limited
Cannon Place, Cannon Street, London,
EC4N 6AF
58% 58% 31-Dec-24 (2.6) 36.9
RSP (Holdings) Limited Precision House, McNeil Drive,
Motherwell, Scotland, ML1 4UR
30% 30% N/A
2
N/A
2
N/A
2
RWF Health And Community
Developers (Tranche 1) Limited
55 Station Road, Beaconsfield,
Buckinghamshire, HP9 1QL
60% 60% N/A
2
N/A
2
N/A
2
140 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
RWF Health And Community
Developers Limited
55 Station Road, Beaconsfield,
Buckinghamshire, HP9 1QL
60% 60% N/A
2
N/A
2
N/A
2
S&W TLP (Hold Co One) Limited Suite 6c, 3rd Floor Sevendale House,
5-7 Dale Street, Manchester, England,
M1 1JB
80% 80% N/A
2
N/A
2
N/A
2
S&W TLP (Hold Co Two) Limited Suite 6c, 3rd Floor Sevendale House,
5-7 Dale Street, Manchester, England,
M1 1JB
80% 80% N/A
2
N/A
2
N/A
2
S&W TLP (Project Co One) Limited Suite 6c, 3rd Floor Sevendale House,
5-7 Dale Street, Manchester, England,
M1 1JB
80% 80% N/A
2
N/A
2
N/A
2
S&W TLP (Project Co Two) Limited Suite 6c, 3rd Floor Sevendale House,
5-7 Dale Street, Manchester, England,
M1 1JB
80% 80% N/A
2
N/A
2
N/A
2
S&W TLP (PSP One) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
S&W TLP (PSP Three) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
S&W TLP (PSP Two) Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
S&W TLP Education Partnership
Limited
Suite 6c, 3rd Floor Sevendale House,
5-7 Dale Street, Manchester, England,
M1 1JB
80% 80% N/A
2
N/A
2
N/A
2
Salford Schools Solutions Holdco
Limited
3rd Floor, Suite 6c, Sevendale House,
5-7 Dale Street, Manchester, M1 1JB
50% 50% N/A
2
N/A
2
N/A
2
Salford Schools Solutions Limited 3rd Floor, Suite 6c, Sevendale House,
5-7 Dale Street, Manchester, M1 1JB
50% 50% N/A
2
N/A
2
N/A
2
Schools Capital Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
51% 51% N/A
2
N/A
2
N/A
2
Schools Investment Company (IRL)
Limited
Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Schools Public/Private P'ships (Ireland)
Ltd
Suite 54, Morrison Chambers,
32Nassau Street, Dublin 2, Ireland
50% 50% N/A
2
N/A
2
N/A
2
Services Support (Cleveland) Holdings
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Services Support (Cleveland) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
100% 100% N/A
2
N/A
2
N/A
2
Services Support (Gravesend)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
73% 73% N/A
2
N/A
2
N/A
2
Services Support (Gravesend) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
73% 73% N/A
2
N/A
2
N/A
2
Services Support (Manchester)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
73% 73% N/A
2
N/A
2
N/A
2
Services Support (Manchester) Limited 8 White Oak Square, London Road,
Swanley, BR8 7AG
73% 73% N/A
2
N/A
2
N/A
2
Sheff Schools TopCo Limited 10 St. Giles Square, London,
WC2H8AP
75% 75% N/A
2
N/A
2
N/A
2
141HICL Annual Report 2025
Strategic Report FinancialsGovernance
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Sheffield LEP Limited Third Floor Broad Quay House,
PrinceStreet, Bristol, BS1 4DJ
90% 90% N/A
2
N/A
2
N/A
2
Sheppey Route (Holdings) Limited Cannon Place, Cannon Street, London,
EC4N 6AF
50% 50% N/A
2
N/A
2
N/A
2
Sheppey Route Limited Cannon Place, Cannon Street, London,
EC4N 6AF
50% 50% N/A
2
N/A
2
N/A
2
Sussex Custodial Services (Holdings)
Limited
Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Sussex Custodial Services Limited Unit 18, Riversway Business Village
Navigation Way, Ashton-On-Ribble,
Preston, PR2 2YP
100% 100% N/A
2
N/A
2
N/A
2
Texas Nevada Transmission, LLC 251 Little Falls Drive, Wilmington,
NewCastle, DE, 19808, USA
46% 46% 31-Dec-24 29.4 465.2
The Hospital Company (Southmead)
Holdings Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
63% 63% N/A
2
N/A
2
N/A
2
The Hospital Company (Southmead)
Limited
8 White Oak Square, London Road,
Swanley, BR8 7AG
63% 63% 31-Dec-23 0.1 (79.1)
The Renfrewshire Schools Partnership
Limited
Precision House, McNeil Drive,
Motherwell, Scotland, ML1 4UR
30% 30% N/A
2
N/A
2
N/A
2
Trans Park Highway Finance Inc 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
50% 50% N/A
2
N/A
2
N/A
2
Trans Park Highway General
Partnership
1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
50% 50% N/A
2
N/A
2
N/A
2
Trans Park Highway Holding Inc. 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
50% 50% N/A
2
N/A
2
N/A
2
Trans Park Highway Inc. 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
50% 50% N/A
2
N/A
2
N/A
2
Trans Park Highway Investment Inc. 1321 Blanshard Street, Suite 301,
Victoria, BC, V8W 0B6, Canada
50% 50% N/A
2
N/A
2
N/A
2
TW Accommodation Services
(Holdings) Limited
8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
TW Accommodation Services Limited 8th Floor, 6 Kean Street, London,
WC2B4AS
100% 100% N/A
2
N/A
2
N/A
2
UK GDN Investments HoldCo Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
UK GDN Investments Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
UK GDN Investments TopCo Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Via Erste Beteiligungsgesellschaft mbH Franz-Ehrlich-Str. 5 12489, Berlin,
Germany
100% 100% N/A
2
N/A
2
N/A
2
Via Mühlhausen GmbH & Co. KG Vor dem Riedtor 7, 99998 Mühlhausen,
Germany
50% 50% N/A
2
N/A
2
N/A
2
Willcare (MIM) Limited 128 Buckingham Palace Road,
London,SW1W 9SA
100% 100% N/A
2
N/A
2
N/A
2
Willcare Holdings Limited 128 Buckingham Palace Road,
London,SW1W 9SA
100% 100% N/A
2
N/A
2
N/A
2
142 HICL Annual Report 2025
21. Related undertakings continued
Notes to the financial statements continued
For the year ended 31 March 2025
Entity Registered address
Shareholding
Year end
Profit/
(Loss)
£m
Aggregate
Capital &
Reserves
£m31-Mar-25 31-Mar-24
Wooldale Partnerships Holdings
Limited
10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Wooldale Partnerships Limited 10 St. Giles Square, London,
WC2H8AP
50% 50% N/A
2
N/A
2
N/A
2
Yorker Holdings PKR Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
Zealburg Holdings Limited Level 7, One Bartholomew Close,
BartsSquare, London, EC1A 7BL
100% 100% N/A
2
N/A
2
N/A
2
1 Denotes a direct shareholding
2 In line with the Companies Act requirements, no disclosure has been made where capital and reserves and profit or loss are not considered to be material
143HICL Annual Report 2025
Strategic Report FinancialsGovernance
Appendix 1: SFDR Disclosures (Unaudited)
Product name: HICL Infrastructure PLC
Legal entity identifier: 213800BVXR1E5L7PEV94
Environmental and / or social characteristics
Did this financial product have a sustainable investment objective?
Yes No
It made sustainable investments
with an environmental objective:
___%
in economic activities that qualify
as environmentally sustainable
under the EU Taxonomy
in economic activities that do
not qualify as environmentally
sustainable under the
EU Taxonomy
It made sustainable investments
with a social objective: ___%
It promoted Environmental/Social
(E/S) characteristics and while
it did not have as its objective
a sustainable investment, it
had a proportion of ___% of
sustainable investments
with an environmental objective in
economic activities that qualify as
environmentally sustainable under
the EU Taxonomy
with an environmental objective
in economic activities that
do not qualify as environmentally
sustainable under the
EU Taxonomy
with a social objective
It promoted E/S characteristics,
but did not make any
sustainable investments
To what extent were the environmental and / or social
characteristics promoted by this financial product met?
HICL Infrastructure PLC’s (the “Company” or “HICL”) investment proposition is to deliver
sustainable income and capital growth from a diversified portfolio of investments in core
infrastructure. The Company offers investors stable, long-term returns from core infrastructure
assets that are vital to communities. HICL’s vision is to enrich lives through infrastructure and
to attain the E/S Characteristics. The Company’s E/S Characteristics were met by focusing on
the following sustainability themes:
– Strong Social Foundation, through investments in health, education, law & order,
and accommodation;
– Connecting Communities, through investments in rail and rolling stock, fibre networks and
telecom towers; and
– Sustainable Modern Economies, through investments in assets that contributing to the energy
transition to achieve net zero carbon emissions and deliver climate resilient infrastructure,
including water, offshore electricity transmission, district energy and electricity distribution.
(together, the “E/S Characteristics”).
HICL’s Manager, InfraRed Capital Partners, (“The Investment Manager”, “The Manager” or
“InfraRed”) ensured that, through the reporting period, HICL:
– invested in assets with a social purpose and proactively engaged with its stakeholders to
improve sustainability outcomes across the portfolio;
– made a positive overall impact on the communities in which our assets are located; and
– through all of the above, aligned the interests of stakeholder groups of HICL’s investments
which typically have long asset lives.
Sustainable investment
means an investment
in an economic activity
that contributes to an
environmental or social
objective, provided that
the investment does not
significantly harm any
environmental or social
objective and that the
investee companies follow
good governance practices.
The EU Taxonomy is a
classification system laid
down in Regulation (EU)
2020/852, establishing
a list of environmentally
sustainable economic
activities. That Regulation
does not lay down a list
of socially sustainable
economic activities.
Sustainable investments with
an environmental objective
might be aligned with the
Taxonomy or not.
144 HICL Annual Report 2025
Appendix 1: SFDR Disclosures continued
In addition, The Manager takes an active approach to long-term sustainability which is based
on a foundation of robust sustainbaility principles. During the reportin period, the Investment
Manager used environmental criteria to assess how effectively portfolio companies steward
the natural environment, assist with the transition to a low carbon economy and comply with
relevant laws and regulations. Through a social set of standards, the Investment Manager
evaluated the asset-specific approach to health & safety, labour standards and working
conditions as well as the relationships held with stakeholders and surrounding communities.
How did the sustainability indicators perform?
InfraRed has used the following sustainability indicators to measure the attainment of the E/S
characteristics:
– Environmental: Energy, water and waste management, consideration of climate risks and
Scope 1, 2, 3 emissions; and
– Social: Community contributions to environmental or social initiatives, and health & safety
polices and performance, assessment of human rights and diversity and inclusion policies.
(together, the “Sustainability Indicators”).
Information regarding the performance of HICL’s investments against all sustainability
indicators besides Scope 1, 2 and 3 Emissions is provided in the table on page 65 of this
Annual Report. Information regarding the Company’s investments’ performance against
Scope 1, 2 and 3 Emissions is provided in the table on page 65 of this Annual Report.
…and compared to previous periods?
A comparison to the previous period’s results can be found in the table contained in page 65.
What were the objectives of the sustainable investments that the
financial product partially made and how did the sustainable investment
contribute to such objectives?
N/A
How did the sustainable investments that the financial product partially
made not cause significant harm to any environmental or social
sustainable investment objective?
N/A
How were the indicators for adverse impacts on sustainability factors
taken into account?
N/A
Were sustainable investments aligned with the OECD Guidelines for
Multinational Enterprises and the UN Guiding Principles on Business
and Human Rights? Details:
N/A
The EU Taxonomy sets out a “do no significant harm” principle by which Taxonomy-
aligned investments should not significantly harm EU Taxonomy objectives, and is
accompanied by specific EU criteria.
The “do no significant harm” principle applies only to those investments underlying
the financial product that take into account the EU criteria for environmentally sustainable
economic activities. The investments underlying the remaining portion of this financial
product do not take into account the EU criteria for environmentally sustainable
economic activities.
Any other sustainable investments must also not significantly harm any environmental
or social objectives.
Sustainability indicators
measure how the
environmental or social
characteristics promoted by
the financial product
are attained.
145HICL Annual Report 2025
Strategic Report FinancialsGovernance
How did this financial product consider principal adverse
impacts on sustainability factors?
Prior to acquisition of an investment, the Investment Manager considers performance against
the mandatory principal adverse impact indicators in Table 1 Annex 1 of the SFDR RTS, to the
extent that relevant data is available from each potential investee company. Post-acquisition,
the Manager ensured assessment of the mandatory principal adverse impacts on an
ongoing basis through an annual sustainability survey which portfolio companies are asked
to complete, the results of which are published in HICL’s Sustainability Report each year.
Information regarding InfraRed’s consideration of the principal adverse impacts in respect of
HICL’s investments is provided in HICL’s Sustainability Report.
What were the top investments of this financial product?
The information shown in the table below has also been provided on pages 6 and 7 of this
Annual Report.
Asset Location Sector 31 March 2025
Affinity Water UK Electricity & Water 10.8%
A63 Motorway France Transport 7.6%
Fortysouth New Zealand Communications 6.3%
Texas Nevada Transmission USA Electricity & Water 5.1%
London St. Pancras High Speed UK Transport 4.9%
Southmead Hospital UK Health 3.9%
Pinderfields & Pontefract Hospitals UK Health 3.4%
Royal School of Military Engineering UK Accommodation 3.3%
Home Office UK Accommodation 2.9%
Altitude Infra France Communications 2.9%
31 March 2025 largest ten investments 51.1%
What was the proportion of sustainability-related investments?
N/A
What was the asset allocation?
99.3% of HICL’s investments were made to attain the E/S characteristics in the reporting period.
To confirm, the Company’s asset allocation has been calculated based on market values
in respect of “#1 Aligned with E/S characteristics” investments and mark-to-market value
in respect of the “#2 Other” assets (as detailed further below).
#2 Other – 0.7%
#1 Aligned with E/S
characteristics – 99.3%
Investments
#1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or
social characteristics promoted by the financial product.
#2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or
social characteristics, nor are qualified as sustainable investments.
In which economic sectors were the investments made?
The Company’s investments were in core infrastructure assets, in the following sectors:
Accommodation, Communications, Education, Electricity & Water, Healthcare, Fire, Law &
Order and Transport.
Principal adverse impacts
are the most significant
negative impacts of
investment decisions on
sustainability factors relating
to environmental, social
and employee matters,
respect for human rights,
anti-corruption and anti-
bribery matters.
The list includes the
investments constituting
the greatest proportion
of investments of the
financial product during
the reference period which
is: the 12-month period to
31 March 2025.
Asset allocation describes
the share of investments in
specific assets.
146 HICL Annual Report 2025
Appendix 1: SFDR Disclosures continued
1 As provided in Annex I of Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021
2 Fossil gas and / or nuclear related activities will only comply with the EU Taxonomy where they contribute to limiting climate
change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective – see explanatory note in the
left-hand margin. The full criteria for fossil gas and nuclear energy economy activities that comply with the EU Taxonomy are
laid down in Commission Delegated Regulation (EU) 2022/1214
Taxonomy-aligned activities
are expressed as a share of:
– Turnover reflects the
‘greenness’ of investee
companies today.
– Capital expenditure
(CapEx) shows the green
investments made by
investee companies,
relevant for a transition
to a green economy.
– operational expenditure
(OpEx) reflects the green
operational activities of
investee companies.
To what extent were the sustainable investments with
an environmental objective aligned with the EU Taxonomy?
InfraRed is not currently in a position to disclose how and to what extent the investments
underlying the Company are in economic activities that qualify as environmentally sustainable
economic activities (as defined in Article 3 of the EU Taxonomy). This is because HICL’s
investments are in social infrastructure, which cannot at present be assessed against the EU
Taxonomy. In accordance with the European Commission’s Decision Notice of 13 May 2022
(C(2022) 3051), InfraRed confirms that the Company’s investments are 0% EU Taxonomy-
aligned.
Did the financial product invest in fossil gas and / or nuclear energy
related activities complying with the EU Taxonomy?
2
Yes (specify below, and details in
the graphs of the box)
No
In fossil gas
In nuclear energy
The graphs below show in green the percentage of investments that were aligned with
the EU Taxonomy. As there is no appropriate methodology to determine the taxonomy-
alignment of sovereign bonds,* the first graph shows the Taxonomy alignment in relation
to all the investments of the financial product including sovereign bonds, while the second
graph shows the Taxonomy alignment only in relation to the investments of the financial
product other than sovereign bonds.
* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.
† Given the nature of the Company, degree of alignment for CapEx was not assessed.
147HICL Annual Report 2025
Strategic Report FinancialsGovernance
To comply with the EU
Taxonomy, the criteria for
fossil gas include limitations
on emissions and switching
to fully renewable power
or low-carbon fuels by the
end of 2035. For nuclear
energy, the criteria include
comprehensive safety and
waste management rules.
Enabling activities directly
enable other activities to make
a substantial contribution to
an environmental objective.
Transitional activities are
activities for which low-
carbon alternatives are not yet
available and, among others,
have greenhouse gas emission
levels corresponding to the
best performance.
Sustainable investments with
an environmental objective
that do not take into account
the criteria for environmentally
sustainable economic
activities under Regulation
(EU) 2020/852.
What was the share of investments made in transitional and enabling
activities?
As noted above, the Company is not currently in a position to disclose how and to what
extent the investments underlying the Company align with the EU Taxonomy. Therefore, the
Company is not in a position to disclose the minimum share of investments in transitional
and enabling activities.
How did the percentage of investments that were aligned with the
EU Taxonomy compare with previous reference periods?
N/A
What was the share of sustainable investments with an environmental
objective not aligned with the EU Taxonomy?
N/A
What was the share of socially sustainable investments?
N/A
What investments were included under “other”, what was their purpose
and were there any minimum environmental or social safeguards?
In relation to “other” investments, currency, interest rate and power price hedging carried out
seek to provide protection against foreign exchange risk and increasing costs of servicing
Group Debt (as defined in the Prospectus) drawn down to finance investments. However,
currency and interest rate hedging transactions will only be undertaken for the purpose
of efficient portfolio management and will not be carried out for speculative purposes.
In respective of this reporting period specifically, the value of investments in “other” was 0.7%.
What actions have been taken to meet the environmental
and / or social characteristics during the reference period?
HICL took several actions during the period to meet its E/S Characteristics. An outline and a
few examples are provided below. For more detailed information please refer to HICL’s 2025
Sustainability Report.
Social outcomes
As a trusted steward of essential infrastructure assets, HICL sits at the heart of communities
and plays a key role in modern society. An example of one of HICL’s social initiatives over the
past year is an initiative that has been scaled across a number of its healthcare assets, the
purple book initiative. The Purple Book is an electronic guide to facilities management and
patient services that assists the Trust’s staff with understanding the on-site support services
that are available to both them and their patients. The book aims to encourage collaborative
relationships between clinical and facilities management staff to promptly respond to patient
needs. The initiative was identified at InfraRed’s Creating Better Futures awards and efforts
have since been made to replicate it at other assets. In 2024, Birmingham Hospital developed
a guide for Trust staff to publicise the services offered by the hospital’s various facilities
management providers.
The Purple Book allows ward staff to provide the public and patients with concise information
regarding the services offered by the facilities management team. In turn, these services
become more accessible, resulting in more efficient hospital operations and better end-
user experiences.
148 HICL Annual Report 2025
Reference benchmarks
are indexes to measure
whether the financial product
attains the environmental or
social characteristics that
they promote.
Environmental initiatives
During the period, HICL and the Manager continued to focus their engagement with portfolio
companies on building climate resilience, managing impacts on biodiversity and improving
resource efficiency.
In one example implemented in 2024, the Metropolitan Police Specialist Training Centre,
launched an initiative to address resource consumption on site. For context, the Metropolitan
Police Specialist Training Centre project is a 27-year concession to finance, remodel /
refurbish, operate, and maintain an existing training facility for the Mayor’s Office for Policing
and Crime. The brief required remodelling the existing site into two separate disciplines: public
order training and specialist firearms training. During 2024, the project successfully delivered
an initiative in collaboration with other stakeholders to design and fund a solution to reduce
food waste on site. The solution was delivered in the form of the ‘Rocket Composter’ – a
compost machine capable of transforming food waste generated into nutrient-rich compost.
The implementation of the rocket composter results in the recycling of 100% food waste
on site, significantly reducing the overall cost associated with refuse disposal. The process
produces on site compost, which is then used to enrich a local herb and vegetable garden
developed through volunteering efforts which are supplied back to the local kitchen. This not
only reduces waste but also provides a financial benefit to the project by lowering costs
associated with purchasing ingredients for catering services and handling of food waste.
How did this financial product perform compared to the
reference benchmark?
N/A
How does the reference benchmark differ from a broad market index?
N/A
How did this financial product perform with regard to the sustainability
indicators to determine the alignment of the reference benchmark with
the environmental or social characteristics promoted?
N/A
How did this financial product perform compared with the reference
benchmark?
N/A
How did this financial product perform compared with the broad market
index?
N/A
Appendix 1: SFDR Disclosures continued
149HICL Annual Report 2025
Strategic Report FinancialsGovernance
Valuation Policy
As described in the Valuation of the Portfolio section on page 46, the
Group’s investments are predominantly valued using a discounted
cash flow (“DCF”) analysis of the forecast investment cash flows from
each portfolio company.
The following is an overview of the key assumptions and principles
applied in the valuation and forecasting of future cash flows:
– Discount rates and other key valuation assumptions (as outlined
above) continue to be applicable
– Contracts for PPP projects and demand-based assets are not
terminated before their contractual expiry date
– A reasonable assessment is made of operational performance,
including in relation to PPP projects, payment deductions and the
ability to pass these down to subcontractors
– Distributions from each portfolio company reflect reasonable
expectations, including consideration of financial covenant
restrictions from senior lenders
– Lifecycle and capital maintenance risks are either not borne
by the portfolio company because they are passed down to a
subcontractor or, where borne by the portfolio company, are
incurred per current forecasts
– For demand-based assets, a reasonable assessment is made of
future revenue growth, typically supported by forecasts made by an
independent third party
– Where assets are in construction, a reasonable assessment is
made as to the timing of completion and the ability to pass down
any costs of delay to subcontractors
– Where a portfolio company expects to receive residual value from
an asset, that the projected amount for this value is realised
– Non-UK investments are valued in local currency and converted to
sterling at the period end exchange rates
– A reasonable assessment is made of regulatory changes in the
future which may impact cash flow forecasts
– Perpetual investments are assumed to have a finite life (e.g.
Affinity Water is valued using a terminal value assumption)
– In forming the above assessments, the Investment Manager works
with portfolio companies’ management teams, as well as engaging
with suitably qualified third parties such as technical advisers, traffic
consultants, legal advisers and regulatory experts
Regulated assets – Affinity Water
The valuation drivers and metrics for certain regulated assets are
different in certain aspects from the Company’s other market
segments – in particular, it is necessary to forecast future regulatory
outcomes as well as operational performance against targets and
allowances agreed with the regulator.
The Regulated Capital Value (“RCV”) multiple, which measures a
company’s enterprise value as a multiple of RCV, is the most widely
used valuation metric for UK regulated assets and forms a useful
cross-check to the DCF-derived valuation. An RCV multiple will vary
depending on a company’s risk profile and operational performance,
influenced by factors such as whether the business is listed, its level
of gearing, whether it is responsible for funding a pension deficit, and
its business scope and complexity.
Appendix 2
150 HICL Annual Report 2025
Appendix 3
The Infrastructure Market – Sources
Page 8
– Chancellor sets out strategic priorities for National Wealth Fund,
National Wealth Fund (2025)
– Lessons learned: private finance for infrastructure, National
AuditOffice (2025)
– NHS leaders explore private finance for crumbling estate,
FinancialTimes (2025)
– NHS leaders call for use of private finance to build hospitals,
Financial Times (2025)
– Does the UK Autumn Budget 2024 deliver on climate?,
IIGCC(2024)
– Prime Minister sets out blueprint to turbocharge AI, GOV.UK (2025)
– EQT says Europe becoming ‘more attractive’ for infrastructure
investments, Financial Times (2025)
– Germany’s parliament approves Friedrich Merz’s €1tn spending
plan, Financial Times (2025)
– EU invests record €7 billion in sustainable, safe and smart transport
infrastructure, European Commission (2025)
– France unveils €109 billion AI investment plan, Euractiv.com (2025)
– Core infrastructure deals source: Combination of Infralogic and
InfraRed internally reviewed deal universe
– More and more district heating networks in Europe are switching
from combustion to large heat pumps, fern.org (2025)
Page 9
– Trump announces private-sector $500 billion investment in
AIinfrastructure, Reuters (2025)
– How data centers and the energy sector can sate AI’s hunger
forpower, McKinsey & Company (2025)
– Investing in Canada Plan – Building a Better Canada, Government
of Canada (2025)
– New Zealand pitches itself as ‘safe harbour’ for foreign investments,
Financial Times (2025)
– Government urges Future Fund to invest in Australian infra,
ET,Infrastructure Investor (2024)
– New public-private partnerships framework has Labour’s backing,
RNZ (2024)
– Energy sector unites for Energy Transition Framework,
Powerco(2025)
– Recommended Cash Offer, BBGI (2025)
– AEP to sell stake in transmission companies to KKR-PSP
consortium for $2.8B, Utility Dive (2025)
– Ohio and I&M Transcos Minority Interest Acquisition,
AmericanElectric Power (2025)
– Spark announces sale of remaining shares in Connexa,
Spark(2024)
– Core infrastructure deals source: Combination of Infralogic
andInfraRed internally reviewed deal universe
151HICL Annual Report 2025
Strategic Report FinancialsGovernance
Item Definition
Acquisition Strategy This identifies the scope for current acquisitions; further details can be found in HICL’s Business Model
section of this report
AIPs Approved Investment Parameters
AIF Alternative Investment Fund
AIFM Alternative Investment Fund Manager
AIFMD The Alternative Investment Fund Managers Directive seeks to regulate alternative investment fund managers
(“AIFM”) and imposes obligations on managers who manage alternative investment funds (“AIF”) in the EU or
who market shares in such funds to EU investors
AIC The Association of Investment Companies is a UK trade association for the closed-ended investment
company industry
AIC Code The 2019 AIC Code of Corporate Governance
AMP8 The UK water industry regulatory period from 2025 to 2030
Corporate assets These are assets that provide services or access to essential assets for corporate counterparties. The
relationship between the infrastructure asset owner and the corporate counterparty is usually contractual,
with prices set through a commercial negotiation or a market-clearing price
Corporate Group Refers to HICL and its Corporate Subsidiaries
Corporate Subsidiaries HICL Infrastructure 2 S.à.r.l. and Infrastructure Investments Limited Partnership
Demand-based assets Infrastructure assets with revenues linked to the usage of the underlying assets
Directors’ Valuation Fair market valuation of HICL’s investments and commitments at the balance sheet date. Further details
can be found in the Valuation of the Portfolio section of the report
ESG Environmental, Social and Governance
EPS Earnings per share
FATCA The Foreign Account Tax Compliance Act provisions of the US Hiring Incentives to Restore Employment Act
FCA UK Financial Conduct Authority
FM Facilities Management
Growth Assets The assets in HICL’s portfolio which are expected to generate increasing earnings over time as they invest in
their capital bases
HICL HICL Infrastructure Company Limited prior to 31 March 2019 and HICL Infrastructure PLC from 1 April 2019
IFRS Basis Basis on which HICL prepares its IFRS financial statements. HICL applies IFRS 10 and Investment Entities
(Amendments to IFRS 10, IFRS 12 and IAS 27) and therefore does not consolidate any of its subsidiaries,
including those that are themselves investment entities
InfraRed InfraRed Capital Partners and its Group, more details of which can be found at www.ircp.com
Investment Manager InfraRed Capital Partners Limited acting in its capacity as Investment Manager to HICL pursuant to the
Investment Advisory Agreement
Investment Basis Pro forma financial information on the basis that HICL consolidates the results of the Corporate Subsidiaries
Investment Policy HICL’s Investment Policy has not materially changed since IPO and can be found on the website at
/www.hicl.com/about-us/strategy-investment-policy/
Glossary
152 HICL Annual Report 2025
Item Definition
IPO Initial Public Offering, the act of offering the stock of a company on a public stock exchange for the first time.
HICL completed its IPO in March 2006
Lifecycle Concerns the replacement of material parts of an asset to maintain it over its concession life
Market capitalisation A measure of the size of a company calculated by multiplying the number of shares in issue by the price
of the shares
NAV Net Asset Value, the value of the investment company’s assets, less any liabilities it has. The NAV per share is
the NAV divided by the number of shares in issue. The difference between the NAV per share and theshare
price is known as the discount or premium
Net zero A portfolio coverage target, defined by the Net Zero Investment Framework for Infrastructure, is the
percentage of assets under management that will be net zero, aligned or aligning by a given year. To
be considered aligning, an asset must have short- and medium-term targets that are underpinned by
science-based pathways for its sector; it must disclose all material scope emissions (including Scope 3)
and evidence the governance of net zero plans. The requirements of aligned status have a greater focus
on implementation. The asset must have forecast emissions performance against targets set as well as a
decarbonisation strategy to support the reduction projection. To be considered net zero, actual emissions
must match or outperform the science-based decarbonisation pathway
Ofwat The UK Water Services Regulation Authority
Ongoing charges A measure of the regular, recurring costs of running an investment company, expressed as a percentage
ofNAV
Operating company A company that owns and operates infrastructure assets
Partnership Infrastructure Investments Limited Partnership
Portfolio company Companies that own or operate infrastructure assets, in which HICL has an investment
PPP project Public–Private Partnership projects involving long-term contracts between a public sector client and a private
company for the delivery of a service or facility for the use by the general public, public bodies, authorities
oragencies, usually in return for an availability payment
PR19 Ofwat’s final methodology for the 2019 Price Review, covering the regulatory period from 2020 to 2025
(“AMP7”)
PR24 Ofwat’s proposed methodology for the 2024 Price Review, covering the regulatory period from
2025 to 2030(“AMP8”)
PRI Principles for Responsible Investment
Project company An infrastructure project or concession with a defined expiry date, including a special purpose company
(orother entity) formed with the specific purpose of undertaking an infrastructure project
Regulated assets Infrastructure assets with monopolistic characteristics and which are subject to regulatory oversight
Revolving Credit Facility An acquisition facility provided by lenders, held via a Corporate Subsidiary and expiring in June 2026.
Seethe Financial Review section of the report
RIDDOR Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
Total Shareholder Return Return based on interim dividends paid plus movement in the period, divided by opening NAV per share
UN SDGs United Nations Sustainable Development Goals
Glossary continued
153HICL Annual Report 2025
Strategic Report FinancialsGovernance
Directors and Advisers
Directors
Mike Bane (Chair)
Rita Akushie
Liz Barber
Frances Davies
Simon Holden
Martin Pugh
Kenneth Reid
Registered Office
One Bartholomew Close
Barts Square
London
EC1A 7BL
Registrar
MUFG Corporate Markets
51 Lime Street
London
EC3M 7DQ
Company Secretary
and Administrator
Aztec Financial Services (UK)
Limited
Forum 4, Solent Business Park
Parkway South
Whiteley
Fareham
PO15 7AD
Investment Manager
and Operator
InfraRed Capital Partners Limited
One Bartholomew Close
Barts Square
London
EC1A 7BL
+44 (0)20 7484 1800
Auditor
KPMG LLP
15 Canada Square
London
E14 5GL
Financial PR
Brunswick Group Advisory Ltd
16 Lincoln’s Inn Fields
London
WC2A 3ED
Joint Corporate Brokers
Investec Bank plc
30 Gresham Street
London
EC2V 7QP
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
06_Appendix1_BackCover_v32.indd 15306_Appendix1_BackCover_v32.indd 153 20/05/2025 21:1420/05/2025 21:14
154 HICL Annual Report 2025
Company
HICL Infrastructure PLC is incorporated in England and Wales under
the Companies Act 2006 with registered no. 11738373 and registered
as an investment company under Section 833 of the Companies
Act 2006.
Investment Manager and Operator
InfraRed Capital Partners Limited is an English limited company
registered in England & Wales under number 03364976 and
authorised and regulated by the Financial Conduct Authority
(authorisation number 195766). InfraRed is a part of SLC
Management which is the institutional alternatives and traditional
asset management business of Sun Life.
Shareholders’ funds
£3.0bn as at 31 March 2025
Market capitalisation
£2.2bn as at 31 March 2025
Investment Manager and Operator fees
1.1% per annum of the average of the Company’s most recently
published NAV and its daily average closing market capitalisation up
to £750m, 1.0% from £750m up to £1.5bn, 0.9% from £1.5bn up to
£2.25bn, 0.8% from £2.25bn to £3.0bn, 0.65% above £3.0bn plus
£0.1m per annum investment management fee
1
No fee on new acquisitions
No performance fee
Fees relating to shareholder matters from underlying
project companies are paid to the Group (and not to the
Investment Manager).
ISA, NISA, PEP and SIPP status
The shares are eligible for inclusion in NISAs, ISAs and PEPs (subject
to applicable subscription limits) provided that they have been
acquired by purchase in the market, and they are permissible assets
for SIPPs.
NMPI status
HICL conducts its affairs as an investment trust. On this basis,
the Ordinary Shares should qualify as an ‘excluded security’
and therefore be excluded from the FCA’s restrictions in COBS
4.12 of the FCA Handbook that apply to non-mainstream pooled
investment products.
AIFMD status
HICL is a UK domiciled and tax-resident public limited company,
which will operate its affairs as a UK Investment Trust Company, and
an Alternative Investment Fund under the AIFM Directive.
HICL has appointed InfraRed Capital Partners Limited as
its Investment Manager and AIFM under the Investment
Management Agreement.
FATCA
HICL has registered for FATCA and has GIIN number E6TB47.99999.
SL.826
Investment Policy
HICL’s Investment Policy can be found in full on the website at
www.hicl.com
ISIN and SEDOL
ISIN: GB00BJLP1Y77 SEDOL: BJLP1Y7
Website
www.hicl.com
1 The base fee payable under the new arrangements will be capped such that the base fee
payable will be no higher than under the existing GAV-based arrangements
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Directors and Advisers continued
Find out more
hicl.com
Registered address
HICL Infrastructure PLC
(Registered number: 11738373)
Level 7, One Bartholomew Close
Barts Square
London, EC1A 7BL