
AQUILA EUROPEAN RENEWABLES PLC

ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
CONTENTS
STRATEGIC REPORT








 
 
 
 

 
 
For more information




Why Invest

Market Overview


FINANCIAL STATEMENTS
 
 
 
 
 
 
GOVERNANCE
 
 

 
 
 
 
OTHER INFORMATION
 


 
Other InformationFinancialsGovernanceStrategic Report
1
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Aquila European Renewables Plc (“AER”, the “Company”)
seeks to generate stable returns, principally in the form


INVESTMENT OBJECTIVE
 Solar PV 
Direct Asset Exposure to


> Read more on pages 5 and 6

> Read more on page 7

> Read more on page 18 and 19
Sagres, Portugal Olhava, FinlandOurique, Portugal
2
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
1. 
performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in
euros, unless stated otherwise.
2. Calculation based on NAV per Ordinary Share in euros, includes dividends and assumes no reinvestment of dividends.
3. Dividends paid/payable and declared relating to the period.
4. Calculation based on the operational result at special purpose vehicle (“SPV”) level. Refer to page 22 for further details.
5. Calculation based on average NAV over the period and regular recurring annual operating costs of the Company, further details can be found
on page 43.
6. Calculation based on Ordinary Share price in euros, includes dividends.
HIGHLIGHTS
92.3
Ordinary Share price
(cents)
2021: 102.0
451.7
Net assets
(EUR million)
2021: 417.4
12.9%
Total NAV return per
Ordinary Share
1,2
2021: 7.6%
110.6
NAV per Ordinary
Share (cents)
1
2021: 102.6
5.25
Dividend per Ordinary
Share (cents)
3
2021: 5.0
(4.5%)
Total Shareholder
return
1,6
2021: 0.5%
(16.6%)
Ordinary Share price
discount to NAV
1
2021: (0.6%)
1.1%
Ongoing
charges
1,5
2021: 1.1%
1.4x
Dividend
cover
1,4
2021: 1.1x
FINANCIAL INFORMATION – AS AT 31 DECEMBER 2022
Tesla, Nor way
Other InformationFinancialsGovernanceStrategic Report
3
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
1. Includes the investments in and the completion of The Rock and the Spanish solar PV Assets in 2022.
2. Calculation is based on NAV per Ordinary Share in euros, includes dividends and assumes no reinvestment of dividends.
3. 
4. As announced in February 2023 based on forward-looking assumptions as at 31 December 2022. Dividend cover presented is net of
existing project debt repayments, excludes the impact of the share buyback and assumes the 2023 target dividend is paid in 2023 to 2027.


5. Subject to the portfolio performing in line with expectations.
HIGHLIGHTS
80.7% growth in portfolio operating capacity
(+184.7 MW
1
) during 2022, resulting in a
step-change in earnings capacity
Electricity production during 2022 increased
by 27.6% compared to 2021 to 666.4 GWh
(2021: 522.3 GWh)
Annualised total NAV return of 7.1%
2
since
IPO, at the top end of long-term target

EUR 150.5 million of capital deployed or
committed during 2022 in unlevered solar PV,
increasing solar portfolio exposure to 51.5%
3
Robust dividend cover: 1.4x in 2022. 1.8x
expected in 2023 and 1.6x
4
on average over

2022 revenue of the portfolio 24.2% ahead
of budget, driven by favourable electricity
pricing environment
EUR 20.0 million share buyback announced
on 3 February 2023, in addition to a 5.0%
increase in target dividend for 2023
5
2022 total NAV return of 12.9%
2
, the highest
one-year return since IPO
SUBSEQUENT EVENTS
In April 2023, the Company extended the
maturity date of the Revolving Credit Facility
(“RCF”) by twelve months to April 2025
Members of the Board of Directors and
Investment Adviser announced their
commitment to acquire AER Ordinary Shares
Completion of the construction project
Guillena and The Rock EPCM takeover
declared in April 2023
4
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
We seek to generate stable returns, principally



• Opportunity to
participate in Europe’s
green energy transition.
• 
required to meet
green energy targets;
and
• Heterogenous power
markets provide

optionality.
• Highly experienced and
credentialed Investment
Adviser:
• Managing a 19 GW
clean energy portfolio
across Europe;
• 10 GW clean energy
development and
construction pipeline;
and
• Ambitious CO
2
reduction targets.
• European focused

by geography and
technology.
• High contracted revenues
(PPAs, Regulated Tariffs) to
ensure earnings visibility.
• Fully invested.
• Low gearing levels
(25.6%
3
).
• Strong dividend cover

operating portfolio.
• Long-term return target
of 6.0 to 7.5% (net of fees
and expenses).
• Ordinary Share price
discount to NAV

3
.
• Total NAV return of
12.9%
1,3
in 2022.
• Annualised total NAV
return of 7.1%
1,2,3
since
IPO.
• Two consecutive
increases in annual
dividend by 5.0% since
2021.
1. Includes dividends and assumes no reinvestment.
2. Assumes an opening NAV per share of 0.98.
3. 
performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in
euros, unless stated otherwise.
WHY INVEST?
MARKET
OPPORTUNITY
POSITIONING
RETURNS
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AT A GLANCE

1

Operating
By
Status
Hydropower
Solar PV
Wind energy
Spain Portugal
Denmark 
Norway Finland
By
Country
1. 


Solar PV
p


One
country
Two
countries
Four
countries
Sagres, Portugal
Jaén, Spain Holmen II, Denmark
By
Technology
43.9%
51.5%
4.6%
5.7%
15.3%
15.5%
17.3%
5.5%
40.7%
100.0%
6
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
AT A GLANCE CONTINUED







1
Solar PV
p
1


1
SAGRES
107.6 MW
BENFICA III
19.7 MWp
TESLA
150.0 MW
Ownership: 18.0% Ownership: 100.0% Ownership: 25.9%
ALBENIZ
50.0 MWp
HOLMEN II
18.0 MW
Ownership: 100.0% Ownership: 100.0%
OURIQUE
62.1 MWp
OLHAVA
34.6 MW
Ownership: 50.0% Ownership: 100.0%
GRECO
100.0 MWp
SVINDBAEK I + II
32.0 MW
Ownership: 100.0% Ownership: 99.9%
TIZA
30.0 MWp
THE ROCK
400.0 MW
Ownership: 100.0% Ownership: 13.7%
DESFINA
40.0 MW
Ownership: 89.0%
1. AER share.
The Rock

Tesla
Holmen II


Sagres

Ourique
Greco
Tiza
Albeniz
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

Solar PV
See page 24
for more information
SAGRES
CASE STUDY
See page 25
for more information
SPANISH PPAs
CASE STUDY
8
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

In my statement last year, I expressed
the hope that our Company was now
close to achieving the goals of its initial
stage of development, namely to have an



dividend. The transformation of both our
portfolio and our technological balance
is now evident, as we managed to achieve
these objectives during the 2022 calendar

been achieved.

construction projects, Albeniz, The Rock

our total portfolio operating capacity
increased by approximately 80.7% in
2022. The Company also successfully
deployed and committed an incremental

sheet resources, representing our largest
year on record for capital deployment.
In combination, these two events have led
to a step-change in the earnings capacity

capabilities and dividend cover to support
a progressive dividend policy.
Our announcement on 3 February 2023
highlighted the positive outlook for the

dividend cover guidance in the short to
medium term. More details of this outlook
were provided in that announcement
and are also available later in this report.
I would also refer our Shareholders to
the investor presentation of 6 February
2023 on our website (https://www.aquila-
european-renewables.com/investor-
relations/reports-publications#submenu),
which sets out in detail the assumptions
behind this analysis and models numerous
sensitivities in relation to both power
prices and production levels.

The Board also announced on

target dividend by 5.0% to 5.51 cents
per Ordinary Share for 2023, subject
to the portfolio performing in line with
expectations.
In 2023, the Company is expecting
dividend cover of 1.8x
1
and over the next

average cover of 1.6x
1

our fully invested balance sheet, and our
robust and resilient portfolio.
CHAIRMAN’S STATEMENT
I am pleased to present the





Ian Nolan
Chairman
1. These are targets only and not forecasts. There can be no assurance that these targets can or will be met and it should not be seen as an
indication of the Company’s expected or actual results or returns. These forecasts do not include the buybacks.
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Share Buyback Programme
As a result of last autumn’s volatility in the

the Company’s share price fell to trade at
a large and sustained discount to NAV per
Ordinary Share, in line with the peer group.


belief that the current share price did

underlying portfolio and consequently

share buyback programme. The share
buyback programme is expected to be
accretive to NAV per Ordinary Share and

Members of the AER Board of Directors
and Investment Adviser employees also
bought additional AER Ordinary Shares.
2022 Performance
During the reported period, revenue of
the portfolio was 24.2% above budget
due to higher than expected power
prices, particularly in the Nordics. This was
partially offset by the lower than expected
production of the portfolio by 6.9%,

that impacted Portugal during the period,
as well as lower than expected wind


Company’s dividend cover, which was 1.4x
during the reported period.

onshore Norwegian wind farm in which
AER owns 13.7% interest, became

from high electricity prices observed in
the NO4 pricing region. Over the next

Alcoa’s Aluminium smelter in Mosjøen
with renewable energy. Alcoa’s Aluminium
smelter is a key contributor to employment
and growth in Mosjøen. As at 25 April,
there have been no new developments
in the Sami appraisal case which is
scheduled to commence on 30 May 2023.
In April 2023, the Company announced
that the takeover under the Engineering,
Procurement and Construction
Management (“EPCM”) agreement
for The Rock has been achieved. Key
provisions are in place to ensure the EPCM
contractor, Eolus, remains responsible for
the appraisal case.

workable solutions to safeguard migration
of the reindeer and we look forward to
updating Shareholders in due course.
During 2022, the Investment Adviser’s

concluded three new Power Purchase
Agreements (“PPAs”) for our new solar
PV investments in Spain and were able to
lock-in attractive prices for up to seven
years, further enhancing the portfolio’s
income visibility and dividend cover over
the medium term.

The Company’s remaining commitments
(via its wholly owned subsidiary,
Tesseract Holdings Limited) amount


project which has been completed in
April 2023. AER has a very conservative
gearing structure, with low levels of

1

project level debt is fully amortising with

Holdings Limited, the Company also

its

Facility (“RCF”), which at 31 December

2
, with
the option to be increased by a further

subject to bank consent. In April 2023, the
Company extended the maturity date of
the RCF by twelve months to April 2025.
1. 
performance measures used, together with how these measures have been calculated, can be found on page 112.
2. Includes EUR 10.9 million provided as guarantees to offtakers when securing PPAs and town council as a part of dismantling guarantee and
grid connection guarantee.
Albeniz, Spain
10
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
CHAIRMAN’S STATEMENT CONTINUED
ESG
The Company is committed to
contributing to the UN Sustainable

ensure access to affordable, reliable,
sustainable and modern energy for all.

wind farm in Norway (AER interest:

membership award; this prize is given to
a member who has excelled in positive
engagement with the community through
social or environmental sustainability.

assessment results for the year with a
score of 88 out of 100, representing an
improvement compared to our 2021

average of 82 points.

reduced from 4 out of 5 to 3 out of 5 stars
due to the relative net underperformance
compared to its peer group. In response,

various improvements which are expected
to be introduced in 2023 and we look
forward to keeping Shareholders updated
on our progress throughout the year.
Regulatory Change
Recently, the European Commission
(“EC”) announced a public consultation
process to reform the European
electricity market design in order to
better protect consumers from excessive
price volatility and support their access
to secure energy from clean sources.
Importantly, the EC has committed to
securing European energy sovereignty
and achieving climate neutrality, whilst
recognising that renewables is the key
driver to achieve these goals, further
reinforcing the positive tailwinds in
this sector. Additionally, the EC has

which aims to provide a more supportive
environment for the scaling up of the EU’s
manufacturing capacity for the net-zero
technologies and products required
to meet Europe’s ambitious climate
targets. This will be done on four pillars:

environment, speeding up access to

for resilient supply chains.
The Investment Adviser is actively
contributing to the consultation process
in combination with the broader
industry. AER is well positioned given
its pan-European investment strategy,
which reduces our reliance on any single
power market, combined with a strong
contracted revenue base in the form of
Power Purchase Agreements or subsidies,
increasing our earnings visibility.

Since undergoing rapid growth in 2022,
AER now offers a fully invested balance

portfolio which the Board believes

than is implied by the recent share price
discount to NAV. As illustrated in our
short and medium-term dividend cover
guidance, the portfolio is expected to

over time, supporting our progressive

It is the Board’s view that there remains
an attractive and sizeable opportunity
to deploy incremental capital to help
fund the build-out of the very substantial

European geographies) developed by
Aquila Capital, our Investment Adviser.
Sagres, Portugal
Other InformationFinancialsGovernanceStrategic Report
11
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Outlook
The Board remains of the view that the
market outlook for renewable energy
generation in Europe is strong, reinforced
by a combination of geopolitical and
macro-economic factors, along with the
ever-more urgent need to decarbonise
Europe’s energy supply. We expect this to
ensure a continuing favourable regulatory
backdrop at the European level.
It is the ambition of the Board to build a
larger-scale portfolio to further enhance
the investment proposition for our current
and future Shareholders. Clearly our
share price needs to regain a premium
to our NAV to enable us to fund the
investment opportunities provided by
the Investment Adviser. We hope that the
Company’s continued strong operational
performance, combined with clear
and consistent communication of our
strengths and opportunities, can set us

journey involves the inaugural Shareholder
continuation vote, which will be tabled at

and which the Board is recommending
that Shareholders should support. I am

approximately 2.1% of the issued share
capital, will not be voting their shares in
respect of the continuation vote, given the

do so.
The Board and the Investment Adviser
have been engaging with our major
Shareholders in light of the disappointing
performance of the share price, despite
the 12.9% NAV return
1
achieved this year.
Your feedback as Shareholders is highly
valued and we hope our actions since
the announcement on 3 February 2023
demonstrate that we are listening and
will act decisively in the interests of all
Shareholders. The Board and its advisers
will, over the coming year, continue to
explore a number of different initiatives
to help secure recognition in the share
price of the real underlying value of the
portfolio with a commitment to review
broader options if that value fails to be

On behalf of the Board, we thank you for
the support that you have shown and we
hope, will continue to show, for a company

our collective objective of achieving a net
zero economy.
Ian Nolan
Chairman
25 April 2023
Tesla, Nor way
1. 
performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in
euros, unless stated otherwise.
12
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Aquila Capital is one of the leading
investment and industrial development
companies, managing over EUR

investors worldwide and managing one
of the largest clean energy portfolios
in Europe. Over the past two decades,
Aquila Capital and its subsidiaries have
committed to support the green energy
transition and create a more sustainable

company manages wind energy, solar PV,
hydropower energy and battery storage

Additionally, it has projects in sustainable
real estate and green logistics, either
completed or under development. Aquila

carbon forestry and data centres.
The Investment Adviser’s dedicated,
expert investment teams comprise over
700 employees worldwide. Moreover,
a strategic partnership since 2019 with
Japan´s Daiwa Energy & Infrastructure
draws on their sector networks and

manage and operate investments along
the entire value chain. As this business
model requires local management teams,
Aquila Capital is represented across 17

The Investment Adviser currently has

of development and construction
assets in the EMEA region, primarily in
solar PV located in Southern Europe.
This represents an attractive source of
growth opportunities for AER.
Aquila Capital’s in-house Markets

of experts dedicated to sourcing and
structuring Power Purchase Agreements,
market analysis, trading, origination,
FX, interest rates and other hedge
products, has facilitated the Company’s
proactive approach to hedging and risk
management.
The Company’s Alternative Investment
Fund Manager (“AIFM”), FundRock

Limited (previously known as
International Fund Management
Limited), has appointed Aquila Capital
as its Investment Adviser in respect
of the Company. Aquila Capital’s key
responsibilities are to originate, analyse
and assess suitable renewable energy
infrastructure investments and advise
the AIFM accordingly.
INVESTMENT ADVISER’S REPORT

European Renewables
INVESTMENT ADVISER BACKGROUND
WHAT’S IN

Investment Adviser Background 12
Investment Portfolio 14
Portfolio Updates 15
Contracted Revenue Position 18
Financial Performance 20
Market Commentary and Outlook 31
1. 
Overall CO
2
eq

1


produced
1

Households
supplied
1

Other InformationFinancialsGovernanceStrategic Report
13
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
1. 
indicative of size.
Current Renewables Portfolio of Aquila Capital in Europe
1
:
Portfolio Capacity

980 MW
281 plants
Solar PV
11,704 MW
343 PV parks

4,581 MW

Energy storage
systems
1,735 MW
25 projects

14
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
INVESTMENT ADVISER’S REPORT CONTINUED
Type Project Country
Capacity
1
Status COD
2

from COD
2
Equipment
manufacturer
Energy
offtaker
3
Offtaker
Ownership
in asset 
Acquisition

Sagres
Portugal
107. 6 M W
Operational
1951-2006 n/a
6
Various FiT EDP/Renta 18.0%
5
23.4% Jul-19

Portugal
19.7 MWp
Operational
2017/2020 30y AstroNova PPA Axpo 100.0% 0.0% Oct-20
Albeniz
Spain
50.0 MWp
Operational
2022 30y Canadian
Solar
PPA Statkraft 100.0% 0.0% Dec-20
Ourique
Portugal
62.1 MWp
Operational
2019 30y Suntec CfD ENI 50.0%
5
0.0% Jun-21
Greco
Spain
100.0 MWp
Construction
/Operational
2023 30y Jinko PPA Statkraft 100.0% 0.0%
Mar-22
Tiza
Spain
30.0 MWp
Operational
2022 30y Canadian
Solar
PPA Axpo 100.0% 0.0% Jun-22
Tesla
Norway
150.0 MW
Operational
2013, 2018 25y Nordex PPA Statkraft 25.9%
5
20.2% Jul-19
Holmen II
Denmark
18.0 MW
Operational
2018 25y Vestas FiP Energie.dk 100.0% 25.6% Jul-19

Finland
34.6 MW
Operational
2013-2015 27.5y Vestas FiT Finnish
Energy
100.0% 41.4% Sep-19

Denmark
32.0 MW
Operational
2018 25y Siemens FiP Energie.dk 99.9% 14.2% Dec-19 &
Mar-20
The Rock
Norway
400.0 MW
Operational
2022 30y Nordex PPA Alcoa 13.7%
5
50.6% Jun-20


40.0 MW
Operational
2020 25y Enercon FiP DAPEEP 89.0%
7
52.9%
8
Dec-20
Total
(AER share)
463.8 MW
1. Installed capacity at 100% ownership.
2. COD = Commercial Operations Date.
3. PPA = Power Purchase Agreement, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference.
4. Leverage level calculated as a percentage of debt plus fair value as at 31 December 2022.
5. Majority of remaining shares are held by entities managed and/or advised by Aquila Capital.
6. 21 individual assets. Approximately ten years remaining asset life when calculated using net full load years.
7. Represents voting interest. Economic interest is approximately 93.0%.
8. Calculation based on voting interest.
INVESTMENT PORTFOLIO
Tesla, Nor way
Albeniz, Spain
Sagres, Portugal
Other InformationFinancialsGovernanceStrategic Report
15
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
PORTFOLIO UPDATES – AS AT 31 DECEMBER 2022

 Spain
Solar PV
 March 2022
 Construction/Operational
 100.0 MWp
Tiza
: Spain
Solar PV
 June 2022
 Operational
 30.0 MWp

solar PV project located in the region of Andalucía, southern Spain.

of two assets with a total capacity of 100.0 MWp, comprising Jaén


EUR 90.0 million, excluding earn-out, with the majority due at
completion. The remaining consideration for the portfolio is EUR

deferred payment for Jaén that was paid after the reporting period


Jaén achieved completion and started producing electricity in
November 2022, having secured a pay-as-produced PPA in October



project expected by the second quarter of 2023.

electricity annually over its lifetime, equivalent to approximately

2
avoidance in its lifetime.
In June 2022, the Company acquired 100.0% interest in Tiza, a solar
PV asset with 30 MWp capacity, located in the region of Almeria,


Solutions, which covers 70% of P50 production.

annually over its lifetime, representing approximately 62 kt of
CO
2
equivalent avoidance over its lifetime. During construction,

restoration and relocation of olive trees, the building of over ten
rabbit refuges built and the introduction of a natural barrier of
plants around the perimeter to protect the local fauna.
Jaén, Spain Tiza, Spain

Capital deployed or committed during 2022
16
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
INVESTMENT ADVISER’S REPORT CONTINUED
Albeniz
 Spain
Solar PV
 December 2020
 Operational
 50.0 MWp

 Norway

 June 2020
 Operational
 400.0 MW
The project is part of a cluster of four separate solar PV parks in
various stages of development and construction, owned by funds
managed by Aquila Capital. The portfolio is located in the south

solar PV technology.
The project was completed and became operational in June

commissioning taking place in August 2022. The asset is expected
to have an operating life of 30 years after commissioning. Albeniz



approximately 70% of production. The asset has been operational
since November 2022 following takeover under the Turbine Supply
Agreement (“TSA”). In April 2023, the Company announced that the
takeover under the EPCM agreement for The Rock has also been
achieved. Following takeover under the EPCM, all parties agreed that
Eolus will remain responsible for the upcoming appraisal case with the
Sami district, which is due to commence on 30 May 2023, and the result
of the case is expected on or before autumn 2023.
The project company, the developer and the turbine supplier are
currently involved in an arbitration process to settle outstanding claims
related to construction delays and extensions of time under the TSA.
The project company does not expect the arbitration case to negatively

Albeniz, Spain The Rock, Norway
PORTFOLIO UPDATES – AS AT 31 DECEMBER 2022 continued
Albeniz, Spain The Rock, Norway
Other InformationFinancialsGovernanceStrategic Report
17
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

1
500
400
300
200
100
50
2019 2020 2021 2022
350
250
150
0
450
EUR million
387.4
47.5
Invested Committed
During 2022 the Company has successfully deployed or committed EUR 150.5 million on new acquisitions and existing assets,
increasing its total capital deployment since IPO to EUR 434.8 million. As at 31 December 2022, the Company’s only remaining
commitments (via its wholly owned subsidiary, Tesseract Holdings Limited) amounted to approximately EUR 47.5 million relating


existing surplus liquidity comprising cash on hand and the RCF (please refer to the gearing section on page 26 for further
details).


geography and technology, whilst also offering potential to invest in construction projects which could enable further value
creation opportunities over time. These assets are spread across northern, eastern and southern Europe, over wind energy,

1. Data show invested capital as at 31 December of each year.
18
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
INVESTMENT ADVISER’S REPORT CONTINUED
1. Includes replacement PPA assumed to be secured for Olhava once the FiT runs out from 2025 for a tenor of three years.
2. Asset revenues are discounted by the weighted average portfolio discount rate as of 31 December 2022 and are taken from 1 January 2023 onwards.
3. Contracted revenue as at 31 December 2022, discounted by the weighted average portfolio discount rate.
4. Aggregate contracted revenue over entire asset life (not discounted).
5. Weighted based on investment value and on production hedged. Olhava future PPAs has been excluded as it has not yet been secured.
EUR
292m
3
EUR
411m
4
51.9%
1,2
7.4
years
5








CONTRACTED REVENUE POSITION

1


1,2
100%
90%
70%
50%
2023 2028 2033 2043
80%
60%
0%
20%
10%
40%
30%
2038
Market Fixed price PPA 

26.1%
48.1%
25.8%
Aquila will proactively seek to
replace expired PPA/tariff contracts
over time in order to maintain a high
degree of contracted revenues
Other InformationFinancialsGovernanceStrategic Report
19
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

countries and six different price zones in
Norway (NO2 and NO4 regions), Iberia
(Spain and Portugal), Finland, Denmark

different subsidy schemes as well as PPAs.
Contracted revenues expected over the

have decreased to 51.9% (December
2021: 68.5%) as a result of the increases
in electricity price forecasts (boosting
merchant exposure), combined with
the expiry of existing tariffs and PPAs,


However, the Company has continued
to focus on maintaining a high degree
of contracted revenues to mitigate its

short-term events which have the potential
to increase volatility in electricity prices.

periods of higher power prices, whilst
simultaneously enabling the Company


The Company has continued to implement

the year. During the year, the Investment

secured attractive PPAs for the Company
(see Spanish PPAs section on page 25 for
further detail):
•
Jaén: 70% of P50 production,
pay-as-produced with Statkraft

•

pay-as-produced with Statkraft
Markets, seven years;
• 


The Company was pleased to secure
these PPAs at such attractive price levels,
which were almost double what had been
observed for similar PPA terms over the
last few years.
The portfolio has good visibility of future

contract life of approximately 7.4 years for
revenues contracted (31 December 2021:

contracts its revenues with investment
grade counterparties.
Tiza, Spain
20
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
INVESTMENT ADVISER’S REPORT CONTINUED
Performance

1
(GWh)
Variance 2022
against
Technology Region 2022 2021 Variance P50 Budget
   395.0 11.6% (5.5%)
Solar PV Portugal, Spain  79.0 137.3% (2.9%)
Hydropower Portugal  48.4 (21.1%) (32.1%)
  522.3 27.6% (6.9%)

1
Technology 2022 2021
Wind energy  28.0%
Solar PV  18.1%
Hydropower  29.9%
Total  26.7%


Technology 2022 2021
Wind energy  98.6%
Solar PV  94.4%
Hydropower  98.6%
Total  98.2%

2,3
(EUR million)
Technology 2022 2021 Variance
Wind energy  33.6 37.6%
Solar PV  4. 2 190.1%
Hydropower  4.5 8.0%
Total  42.2 49.6%
FINANCIAL PERFORMANCE
1. 
2. 
3. 
4. Average technical availability based on weighted installed capacity (AER share).
Other InformationFinancialsGovernanceStrategic Report
21
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

Electricity production during 2022


acquisition of Tiza (30.0 MWp), the
operating solar PV asset, and the
completion of three of the four
assets under construction: The Rock



1
of production to the portfolio and
represent approximately 20.7% of
2022 total production. As a result, the
portfolio is well positioned given these


For 2022, revenue was 24.2% over
budget because of high electricity prices

2021 across Europe. The upward trend


in Ukraine, which drove commodity
prices up, most notably for gas and coal.
Prices in the Nordics were also impacted
due to tighter hydrological balance
and increased interconnection links to

Production performance was 6.9%
below budget, while technical availability
remained strong in all asset classes,
at 97.5%. The underperformance in
production was due to the severe drought

the year in Portugal; this led to Sagres
production to be 32.1% below budget.
Also, lower than expected wind levels

be 12.3% below budget. Furthermore,
irradiation in Iberia was slightly below
budget and this led to production being
2.9% below budget at the Iberian solar
PV assets, whilst slower wind levels in
the Nordics led to production being
4.0% below budget. Underperformance
in December was driven by lower than

and Norway. Production forecasts which
underpin the Company’s net asset value
are based on P50 production assumptions
sourced from leading technical advisers.
100.0
60.0
30.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
80.0
90.0
40.0
0.0
50.0
20.0
10.0
70.0
GWh
Wind Solar PV Hydropower Budget
Jaén and The Rock
commencement
Albeniz commencement
Tiza commencement
1. Accumulated production since economic transfer date of each asset, except for The Rock accumulated since completion occurred.
22
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
INVESTMENT ADVISER’S REPORT CONTINUED

1

EUR million
2
2022 2021 Variance (%)
Asset income 63.2 42.2 49.6%
Asset operating costs  (7.9) 57.0%
Interest and tax  (4.5) 32.3%
 44.9 29.9 50.3%
Asset debt amortisation  (12.2) (10.3%)
Company and HoldCo
3
expenses
5
, other  1.9 nmf
4
 29.1 19.6 48.8%
Dividends paid 21.2 17.0 24.4%
 1.4x 1.1x nmf
4
Reconciliation to Company Cash Flow Statement
EUR million 2022 2021 Variance (%)
Total underlying asset earnings 29.1 19.6 48.8%
SPV
Distributions to HoldCo  (6.9) 356.4%
Movement in working Capital  (10.8) (75.1%)
HoldCo
Expenses (excluding investment expenses) 1.6 0.6 181.1%

Investment advisory fee funded by share issuance
6
 (2.7) (50.6%)
Interest and dividend income 17.1 11.8 45.4%
Movement in working capital 4.5 (3.3) (238.8%)
Construction income — (4.0) n/a
Other
7
 0.2 (165.1%)
 16.9 4.4 281.0%



8
. The majority of

Total underlying asset earnings are calculated by aggregating the P&L of the Company’s SPVs (adjusted for AER’s share), less any
repayments of project level debt at the SPV level (adjusted for AER’s share), less fund level costs at the Company and HoldCo level.
FINANCIAL PERFORMANCE continued
1. 
performance measures used, together with how these measures have been calculated, can be found on page 112. Numbers and percentages
may vary due to rounding differences.
2. 
100.0% in 2021) rather than voting interest (89%).
3. Tesseract Holdings Limited.
4. nmf = not meaningful.
5. 

AER in relation to shareholder loans provided to construction assets.
6. 
7. 
8. References to SPVs in this section also includes holding companies, where applicable.
Other InformationFinancialsGovernanceStrategic Report
23
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
The Company reported robust dividend cover of 1.4x during the period, compared to 1.1x reported in 2021, driven by a 48.8%
increase in total underlying asset earnings. The improvement in total underlying asset earnings was primarily driven by higher
power prices across the portfolio whilst production also increased as a result of the successful completion of construction
projects (Albeniz, The Rock) and the acquisition of an operating asset (Tiza). Dividends paid increased by 24.4% as a result of
higher shares in issue due to capital raising in late 2021, combined with a 5.0% increase in the dividend target for 2022.

EUR million 2022 2021 Variance (%)

 16.9 4.4 281.0%
Investment advisory fee funded by share issuance 1.3 2.7 (50.6%)
HoldCo
  31.4 (108.5%)
Shareholder loan repayments
1
10.6 0.5 2139.2%
Acquisition of accrued interest from shareholder loan
2
1.5 2.4 (39.1%)
Other
3
0.3 — n/a
Consolidation adjustments  (37.0) (92.9%)
 25.3 4.4 476.0%
Dividends paid 21.2 17.0 24.4%
 1.2x 0.3x nmf
The table above provides an alternative dividend cover calculation based on actual cash distributions received by the Company
and HoldCo from the investment portfolio or SPVs. Cash distributions are paid in the form of dividends or Shareholder loan
payments (interest or principal).

Company and HoldCo, subject to certain adjustments (as shown in the table above), the most notable being distributions from
the Company’s assets in the form of Shareholder loan repayments.

activities, which was primarily driven by the completion of construction assets (Albeniz, The Rock), the acquisition of an operating
asset (Tiza) and the timing of distributions paid by the respective assets.
1. 
2. Accrued shareholder loan interest purchased at the Tiza acquisition (2021: Ourique).
3. 
24
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
CASE STUDY:
SAGRES OPTIMISATION
Sagres is a 107.6 MW hydropower asset in which AER acquired an 18.0% interest in





also being accretive to economic returns.


annual production for the asset (resulting in an increase in maximum net capacity
from 102.7 MW to 107.6 MW). This can be attributed to a series of improvements
to the hydropower plants performed by the Aquila Capital Asset Management
team between 2019 and 2022, such as upgrades to the control systems, major

hydromechanical equipment. This increase in production has been included in the
fourth quarter valuation of the asset , which increased by 1.8%. However, this was
offset by a rise in the discount rate during the same period.
Capacity 107.6 MW
Location Sagres, Portugal

100.0
92.0
86.0
2021 202220202010 2011 2012 2013 2014 2015 2016 2017 2018 2019
96.0
98.0
88.0
80.0
90.0
84.0
82.0
94.0
93.1
98.3
Prior ownership Average availability under prior ownership
Aquila / AER ownership Average availability under Aquila / AER ownership
Other InformationFinancialsGovernanceStrategic Report
25
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
CASE STUDY:
SPANISH PPAs

where the majority of the Company’s investment activities took place in 2022.
During the second half of 2022, the Spanish government introduced measures to
cap the price of electricity on merchant revenues and introduced a clawback on

strategy in response to regulatory changes and accordingly sought to maximise the


years, providing AER with a greater visibility on future revenues.
As illustrated in the graph below, two of the three PPAs were secured at peak

conservative approach was taken in order to gain greater visibility of the
expected start of operations and thus minimise any delivery risks under the PPA.


Capacity 130 MWp
Location Spain

80.0
40.0
January
2022
February
2022
March
2022
April
2022
May
2022
June
2022
July
2022
August
2022
September
2022
October
2022
November
2022
December
2022
January
2023
60.0
20.0
0
120.0
100.0
Tiza (6.5y – Start: 07/22) Jaén (5y – Start: 04/23) 
PPA signed
PPA signed PPA signed
Source: Aquila PPA pricing tool. Note that the Tiza PPA started in July 2022.
26
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Gearing
1
As at As at
31 December 31 December
EUR million 2022 2021 Variance
NAV  417.4 8 . 2%
Debt
2
 144. 3 7.5%
 561.8 8.0%

3
 25.7 (0.1 bps)
Weighted average maturity (years)  13.9 0.7
Weighted average interest rate (%)
4
 2.5 0.0 bps
RCF interest rate (%)
5
 1.85 0.0 bps

6
.

7
. The Company’s asset level debt is

offset by increased utilisation of the Company’s RCF.
During the period the Company increased the RCF limit from EUR 40.0 million to EUR 100.0 million (via its wholly owned subsidiary,
Tesseract Holdings Limited, which is the borrowing entity), with the maturity date extended by twelve months until April 2024. After
the reporting period, the Company subsequently exercised a further twelve month extension option under the RCF, extending the


(estimated at EUR 47.5 million).
Debt Summary as at 31 December 2022
1
AER Drawn debt Bullet/ Hedged
Project share (EUR million) Currency amortising Maturity proportion Type
Tesla 25.9% 9.0 EUR Partly amortising Mar-29 100.0% Bank Debt
Sagres 18.0% 7.0 EUR Fully amortising Jun-33 70.0% Bank Debt
Olhava 100.0% 19.2 EUR Fully amortising Dec-30/ 100.0% Bank Debt
Sep-31
Holmen II 100.0% 13.6 DKK Fully amortising Dec-37 93.2% Bank Debt
Svindbaek I 99.9% 7.8 DKK Fully amortising Dec-37 100.0% Bank Debt
The Rock: USPP Bond 13.7% 31.8 EUR Fully amortising Sep-45 100.0% Debt Capital Markets
       
       
  
RCF 100.0% 24.0
6
EUR Apr-25 0.0% Bank Debt
Total 155.2 82.6%
FINANCIAL PERFORMANCE continued
1. Foreign currency values converted to EUR as at 31 December 2022.

based on voting interest.
2. Debt corresponds to senior debt secured at project level and RCF

3. This disclosure is considered to represent the Company’s alternative

performance measures used, together with how these measures
have been calculated, can be found on page 112. All references to
cents are in euros, unless stated otherwise.
4. Weighted average all in interest rate for EUR denominated debt (excl.
RCF). DKK denominated debt has an average weighted interest rate
of 2.8% (2021: 2.7%).
5. Margin over EURIBOR.
6. Excludes bank guarantees of EUR 10.9 million.
7. The Company may take on long-term structural debt provided that,
at the time of entering into such debt, it does not exceed 50% of

Revolving Credit Facility, will be subject to a separate gearing limit so

into such debt.
INVESTMENT ADVISER’S REPORT CONTINUED
Other InformationFinancialsGovernanceStrategic Report
27
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Valuation
Fair Value
The table below shows the fair values of the investments on HoldCo level as well as the reconciliation to the respective item on
Company level.
Variance
EUR million 2022 2021 (%)
Tesla 35.5 31.4 13.1
Sagres 23.0 15.8 45.5
Holmen II 39.5 24.5 61.7
Olhava 27.2 27.3 (0.5)
Svindbaek 46.9 40.6 15.5
The Rock 41.7 45.0 (7. 3)
 17.1 16.7 2.2
Albeniz 55.1 46.0 19.8
28.5 40.9 (30.3)
Ourique 36.4 29.5 23.3
66.5 n/a n/a
Tiza 34.1 n/a n/a

1
451.5 317. 6 42.2
Cash and other current assets of HoldCo 6.4 9.2 (30.2)
Revolving credit facility drawn by HoldCo  — n/a
Elimination of intercompany shareholder loans  (9.8) (46.6)
 428.6 317.0 35.2
Svindbaek, Denmark
1. 

28
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)


6.3
(0.1)
15.1
4.9
4.1
103.1
317.6
2.8
0.4
(3.2)
(12.4)
5.4
6.5
451.5
2021
Acquisition
costs of new
investments
3
Tesla
Sagres
Holmen II Aalto Svindbaek The Rock

Albeniz

Ourique Greco
1.0
Tiza 2022
417.4
30.8
12.3
(21.2)
1.3
451.7
2021
102.6 cents
NAV per
Ordinary Share
Movements in
valuation of
investments
1

(loss) (AER)
11.0

(loss) (THL)
Dividends
paid
Other
2
2022
110.6 cents
NAV per
Ordinary Share
1. Excludes the impact of capital contributions.
2. Includes share issue costs (EUR -0.06 million), settlement of investment advisory fees (EUR 1.3 million) and FX losses (EUR -0.01 million).
3. 
million), capital injection (Sagres: EUR 2.2 million) and other (EUR 0.3 million).
INVESTMENT ADVISER’S REPORT CONTINUED
FINANCIAL PERFORMANCE continued
Valuation continued
Other InformationFinancialsGovernanceStrategic Report
29
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Tesla, Nor way
1. 
2. Includes production tax, high price contribution tax, and natural resources tax.
•
The Company’s NAV as at 31 December 2022 was EUR 451.7 million or 110.6 cents per Ordinary Share. Compared to

Ordinary Share (including dividends).
•
Dividends of EUR 21.2 million (5.2 cents per Ordinary Share) were paid during the year with respect to the fourth quarter of
2021 to the third quarter of 2022.
•
The main drivers of NAV movements throughout the reporting period include:
•
Forecast power prices: increase in short-term electricity price forecasts across the majority of the portfolio resulted in an
increase of 13.2 cents per Ordinary Share; the methodology continues to assume an average of two power price curves
from independent market analysts over the life of each asset. No forward or futures curves are used;
•

1
boosted the NAV per Ordinary Share by 6.9 cents, whilst medium and
long-term assumptions remain unchanged;
•
discount rate: the Company’s discount rate has increased by 70 bps to 7.2% (31 December 2021: 6.5%), following the
increase in risk-free rates across the portfolio, which has the effect of decreasing the valuation of each asset; and
•
Norwegian onshore wind taxes for Tesla and The Rock (-1.7 cents).
2

The Company owns 100.0% of its subsidiary Tesseract Holdings Limited (“HoldCo” or “THL”). The Company meets the


The Company has acquired underlying investments in SPVs through its investment in the HoldCo. The Investment Adviser

themselves as to the methodology, the discount rates and key assumptions applied, and the valuations. All SPV investments

assumptions shown on page 30 were used in the valuation of the SPVs.
30
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Valuation Assumptions
As at 31 December 2022
 The discount rate used in the valuations is calculated according to internationally recognised methods.



 Power prices are based on captured power price forecasts from leading market analysts. The forecasts are
independently sourced from providers with coverage in almost all European markets as well as providers
with regional expertise. The approach applied to all asset classes (wind energy, solar PV and hydropower)

a blend of three power price curve providers.
 Estimates are based on third-party energy yield assessments, which consider historic production data
(where applicable) and other relevant factors.
 

another two years to the long-term rate.
Asset life In general, an operating life of 25 to 30 years for onshore wind energy and 30 years for solar PV is
assumed. In individual cases, a longer operating life is assumed where the contractual arrangement
(i.e. O&M agreement with availability guarantee) supports such an assumption. The operating lives of
hydropower assets are estimated in accordance with their expected concession terms. The Investment
Adviser is currently undertaking a review of its portfolio to evaluate the prospect of asset life extensions.
Operating expenses Operating expenses are primarily based on respective contracts and, where not contracted, on the
assessment of a technical adviser.
Taxation rates 

 Based on the contractual position (e.g. EPC agreement), where applicable.
Portfolio Valuation – Key Assumptions
Metric 2022 2021
Discount rate Weighted average  6.5%
   2.0%
Remaining asset life
1
Wind energy (years) 22 23
Solar PV (years) 29 27
Hydropower (years) 10 11
Operating life assumption
2
Wind energy (years) 26 26
Solar PV (years) 30 30
Hydropower (years) n/a n/a

1. Remaining asset life based on net full load years. Does not consider any potential asset life extensions.
2. Asset life assumption from date of commissioning.
INVESTMENT ADVISER’S REPORT CONTINUED
FINANCIAL PERFORMANCE continued
Other InformationFinancialsGovernanceStrategic Report
31
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

1

200.0
2023 20292026 2032 2044 204720412035 2038 2050
100.0
0.0
150.0
50.0
EUR/MWh
Opex (+/-10%)
Impact on NAV per Ordinary Share
Asset Life (-/+ 1 year)

Production (P90/P10)
Power Prices (+/- 10%)
Discount Rate (+/- 10%)
-20c 20c-10c 10c0c
Q4 2021 Q4 2022 Futures
Asset Life Extensions

which is generally lower compared to the peer group and broader market, where up to +10 years in operating life have been observed.
The Company’s Investment Adviser is undertaking due diligence for each of the Company’s assets to validate a potential asset life
extension on a case-by-case basis across the portfolio. To demonstrate how an extension of asset life could impact the Company’s
NAV, if the life of wind energy assets were to be extended to 35 years, the Company’s NAV as of 31 December 2022 would increase
by 8.6% or 10 cents per Ordinary Share
1
. Similarly, if the life of the Company’s solar PV assets were to increase from 30 to 40 years

2
.
MARKET COMMENTARY AND OUTLOOK
1. 

captured price based on merchant revenue and merchant production. Previous methodology applied weighting based on last reported

2. Excludes any potential changes to opex/capex assumptions, which would be subject to further due diligence which would offset against some

32
Aquila European Renewables Plc Annual Report 2022
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Market Prices
In 2022 power markets witnessed the continuation of the uprise in power prices underway since the second half of 2021, with


However, since mid-2022 the governments of the jurisdictions in which the Company operate, together with the European
Commission, introduced measures in order to reduce these impacts. Nevertheless, near-term power price forecasts continue
to abide the demand and supply law, and are further enhanced by weather conditions. Thus, near-term forecasts provided by
independent markets analysts continue to be above historical levels.

1
EUR/MWh
600.0
400.0
January
2022
February
2022
March
2022
April
2022
May
2022
June
2022
July
2022
August
2022
September
2022
October
2022
November
2022
December
2022
January
2023
500.0
300.0
200.0
100.0
0
800.0
700.0

In 2022, power prices in the Nordics presented an increasing convergence from prices in continental Europe and were thus subjected
to increasing fuel prices. This was due to tighter hydrological balance, with hydro reservoirs below the average levels for 2021, and

(2021: EUR 62.3 per MW).
Additionally, due to the different patterns for southern and northern price areas in Norway, the impact of higher commodity prices differs


demand and abundant wind resources; however, a higher interconnection to the southern zones has resulted in an increase in prices.
1. 
Iberia Nordics 
INVESTMENT ADVISER’S REPORT CONTINUED
MARKET COMMENTARY AND OUTLOOK continued
Other InformationFinancialsGovernanceStrategic Report
33
Aquila European Renewables Plc Annual Report 2022
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Iberia
Whilst spot prices remained high across
all European geographies, average
spot prices in Iberia were at a discount
when compared to other geographies.
This was due to the temporary gas price
“cap” mechanism introduced by the
Spanish and Portuguese governments
in mid-June 2022, which held back the
impact of escalating fuel prices on power
prices. In Iberia, spot prices were, on
average, traded at EUR 167.9 per MW in
2022 (2021: EUR 111.9 per MW).
As described in the case study on page
25, the Investment Adviser with its

operating assets. This, together with the
high degree of contracted revenue in
the remaining Iberian assets, has limited
the impact of the new regulations on the
asset valuations.
Greece

impacted by elevated fuel prices more
than other European countries due to
the higher proportion of hours in which

price in the wholesale market. During
2022, power prices averaged EUR


an EUR 85.0 MW threshold applied
for revenue in the Day-Ahead Market.
However, since 100% of the revenues

regulations had no impact on the

EU Market Design
1
As a result of soaring energy prices
and with the aim to increase the
resilience of the EU’s energy market,

unveiled its draft proposal for a reform
of the EU electricity market. The
proposal aims to boost the deployment
of renewables by 2030, improve
consumer protection and enhance
industrial competitiveness. In doing
so, it aims to reduce the link between
electricity bills and volatile short-term
fossil fuel prices, whilst better protecting
consumers from future price spikes
and potential market manipulation.

various directives to promote the
use of more stable, long-term Power
Purchase Agreements (“PPAs”), in
order to make the energy market more
resilient following the expiration of
emergency tools. It aims to increase

and transparency by ensuring security
of supply, and fully utilising alternatives
to gas, such as storage and demand
response from individual Member
States.
The proposal seeks to enhance
the predictability and stability of
energy costs to boost industrial
competitiveness. In this context,

revenue stability, all public support
for new investments in infra-marginal
renewable electricity generation is set
to be in the form of two-way Contracts
for Difference (CfDs). Finally, the
proposal aims to boost liquidity for
forward contracts that lock-in future
prices and facilitate the integration of
renewables into the system by means of
transparency obligations relating to grid
congestion and trading deadlines closer
to real time.

Putting Europe’s Net-zero

In February 2023, the European

Industrial Plan (the “Plan”) to enhance
the competitiveness of Europe’s net-zero
industry and support a faster transition
to climate neutrality. The Plan aims to
provide a more supportive environment
for the scaling up of the EU’s net-zero
technologies and products that are
required to meet Europe’s ambitious
climate targets.
The Plan aims to build on former
initiatives implemented in the EU,
whilst being based on four pillars:

environment; (2) speeding up access to

trade for resilient supply chains.



The Commission is to provide a
regulatory framework that allows for

and fast-track permitting, while
promoting European strategic projects
and developing standards to support
the scale-up of technologies across the
EU Single Market.
Pillar 2 – Faster Access

This pillar aims to speed up investment

region. By guaranteeing a level playing


able to invest and/or grant aid to help
fast-track the green transition.
1. Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1591.
34
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Pillar 3 – Enhancing Skills
Between 35% and 40% of all jobs could
be affected by the green transition,
and so developing the skills needed for
well-paid quality jobs will be a priority
for the Commission. Therefore, it will
propose to establish Net-Zero Industry
Academies to roll out up-skilling and
re-skilling programmes in strategic
industries.

Resilient Supply Chains
There will be an expected increase
in global co-operation under the
principles of fair competition and open
trade. To that end, the Commission
will develop the EU’s network of
Free Trade Agreements and other
forms of co-operation with partners
to support the green transition. It
will also explore the creation of a
Critical Raw Materials Club, to bring
together raw material “consumers” and
resource-rich countries. This will help
to ensure the global security of supply

industrial base, and of Clean Tech/
Net-Zero Industrial Partnerships. It will

by ensuring foreign subsidies do not

Outlook
The outlook for the European
renewable energy sector continues
to be encouraging. Energy security,
affordability and decarbonisation
have become vital considerations for
governments and businesses in light

leading to increased competition as
well as public and private investment
in renewable infrastructure projects.
The dependence of many countries on
external suppliers of key commodities
has become an irrefutable concern given
the drastic reduction in Russian gas
supply into Europe. The resulting supply

stage for renewable infrastructure
to play a dominant role in delivering

independence in the coming future.
Energy prices are forecast to decrease
over the medium and long term, having
fallen from the peaks of 2022, with
governments likely to continue to utilise

reduce costs to consumers, who are
already feeling the pressure of higher

the Company’s business model and
investment portfolio have demonstrated
their resilience in enduring these
changes, continuing to deliver strong

prudent capital structure.
Adding further impetus to the renewable
energy sector is the EU’s developing

Act, focused on ensuring Europe’s
continued industrial competitiveness
throughout the energy transition.
Support by the EU through the
earmarking of substantial funding
for renewable projects, including the
REPowerEU plan, is being accelerated
with measures to give member states
greater freedom to support industry
and the fast-tracking of permitting and
access to funding for relevant projects.
This increased certainty and visibility
over the regulatory landscape is an
encouraging tailwind for the Company
and the sector. Moreover, we envisage
a continued acceleration of national
deployment plans for renewables in
order to meet existing net zero targets,
including the target of having renewable
energy sources account for at least
45% of the EU’s energy mix by 2030.
Europe will thus need to almost double
its existing share of renewable energy
by the end of the decade. This trend is
further compounded by decarbonisation
becoming an increasingly urgent
priority for governments and businesses
considering the repercussions of climate
change, especially the likelihood of
extreme weather events increasing in
frequency.
Finally, grid access has become an
increasingly critical concern across
several jurisdictions. Projects are
coming to market with grid connection
dates for the end of the decade and
beyond, in large part due to aging
networks and the need for capacity
upgrades, adding further urgency to
public and private investment in the
near future. Other technologies are
also gathering momentum, such as
the rising trend of (co-located) battery
energy storage systems (“BESS”),

green hydrogen power plants. The
Investment Adviser is well positioned
to participate in this stage of the green
energy transition given its dedicated

of installed capacity, across a pipeline
of 25 projects throughout Europe, and
the Company can invest up to 20% of


grids to integrate the rising demand for
renewable generation while improving
reliability of supply. Overall, tailwinds
behind the sector continue to be strong,

multiple opportunities whilst delivering
on a progressive dividend.
Aquila Capital

25 April 2023
MARKET COMMENTARY AND OUTLOOK continued
INVESTMENT ADVISER’S REPORT CONTINUED
Other InformationFinancialsGovernanceStrategic Report
35
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
ENVIRONMENTAL, SOCIAL


and education, reducing inequality, spurring economic growth and tackling climate change around the world. These goals are
set to stimulate action for people, the planet and prosperity, and aim to transform the world by 2030.

In 2018, the EU agreed to a climate and energy framework and set ambitious goals for 2030. The aim is to have a clean, affordable
and reliable energy system in Europe, targeting:
“The war in Ukraine following the global pandemic has created an exceptional environment
for renewable technologies in Europe. The announcement by the European Commission of

Zero industry and support a faster transition to climate neutrality provides welcome tailwinds

According to the International Energy Association (“IEA”)’s 2022 market report, renewable


the entire installed power capacity of China today. This is almost 30% higher than what was
forecast in the IEA’s 2021 report, making it their largest upward revision ever.
In parallel the EU’s efforts to regulate the industry using transparency frameworks such as
the Sustainable Finance Disclosure Regulation (“SFDR”) or the EU Taxonomy aims to further
facilitate investment into sustainable activities, including the energy transition. While the
alignment with these regulatory standards is not straight-forward, Aquila Capital uses

construction and operation of renewable energy projects do not come at the expense of the

support these initiatives.”
Angela Wiebeck


40.0% 32.0% 32.5%


greenhouse gas emissions

share of the energy
system


36
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)



of renewable assets, AER is able to deliver on its investment objectives as well as contribute towards the green economy.


Goal 

UN Sustainable

Ensure access to



•
AER’s portfolio produces renewable energy which contributes towards Europe’s
electricity mix.
•
Renewable energy is a cost-effective source of energy compared to other
options.
•
AER’s investments in renewable assets help to support and encourage further
investment in the industry.

infrastructure,




•
AER targets renewable investments which are supported by high quality
components and infrastructure in order to optimise the energy yield and
subsequent return to investors.
•
AER’s investments help to support the construction of shared infrastructure (e.g.
substations) which enables the further expansion of renewable energy sources.
•
AER’s Investment Adviser, Aquila Capital, is responsible for monitoring and
optimising the Company’s day-to-day asset performance. This process also
involves actively exploring how new technologies and other forms of innovation
can be utilised to enhance asset performance and sustainability (energy yield,
O&M, asset life).
Take urgent action
to combat climate


•
The Company’s 463.8 MW portfolio has the potential to power approximately
240.8 thousand households
1
and avoid approximately 240.8 thousand tonnes
of CO
2
emissions. AER has ambitious goals to expand its portfolio, which will be
accretive to further CO
2
reduction over time.
•
As a signatory to the UN Principles for Responsible Investments (“UN PRI”),

investment process for real assets, which includes considerations of climate
change.
1. Forecast households supplied and avoided CO
2

is assumed from July 2023.
ENVIRONMENTAL, SOCIAL

CONTINUED
continued
GRESB

real estate and infrastructure which
synthesises Environmental, Social,


assessment, with AER achieving an
overall score of 88 out of 100 (2020:

average of 82 points amongst its peer
group. In addition, AER achieved a 3 out

At portfolio level, the score shows an
improvement in performance in the
category of Leadership, Reporting and
Risk Management whilst the score in the
two remaining categories of Stakeholder
Engagement and Policies was maintained.
Meanwhile, at asset level, the rating
recognises AER’s policy frameworks and
strong performance in resource and
emission management, including water
consumption, greenhouse gas emissions
and energy use.
AER and its Investment Adviser will
continue to improve their systems and
policy frameworks, leading to potentially

performance in the coming years.
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37
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

Company acquired 89.0% interest in December 2020,
the project company has built a wooden house for the

entrance of the Parnassos National Park; this will support
the reforestation process of the landscape in the area, the
planting of 2,000 plants and the maintenance, fertilisation
and watering of them for the following three years.

the integration of a number of sustainability initiatives,
including the creation of a barrier of plants around the
perimeter of the solar PV (approximately 711 metres), an
increase in localised plantations with the addition of 152
units of retama sphaerocarpa and translocation of over
150 olive trees between the two projects, whilst pardoning
over 50 additional trees. Additionally, over 200 sheep
have been introduced into the solar PVs in order to control
the vegetation to avoid possible shading of the solar

supervised by the O&M provider, thus resulting in a smooth
operation that helps the local shepherds while providing a
sustainable vegetation control plan for the solar parks.

Reforestation

in Spain
 Tiza, Spain

38
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
continued
In March 2022, Midtfjellet Wind Farm (Tesla) was awarded
the Norwea’s membership award. This prize is given to a
member who has excelled in positive engagement with the
community, for example through social or environmental
sustainability.
Norwea writes
1
: “The prize goes to Midtfjellet Wind Farm
for its many years of work for outdoor life and activities in
and around the facility. At Midtfjellet, past and future meet
in a spectacular way. The landscape is wild and beautiful,
at the same time as it houses the production of clean and
renewable energy. The wind farm is a popular destination:

with the fantastic turbines make the whole experience
unique and special. Since the start in 2011, about 17,000
visitors have been on a guided tour of the area. There have
been people from nursing homes, kindergartens, schools,
universities and other institutions, as well as companies
and politicians. Congratulations to Midtfjellet Vindpark,
all employees in the company and partners who have
contributed to the success.”
In May 2022, the Investment Adviser’s Asset Management
team, Aquila Clean Energy, hosted a training session on
solar photovoltaic energy for a group of secondary school
students from the Agrupamento de Escolas de Oliveira do
Hospital school. The event helped to enhance awareness of
both photovoltaic energy and the operation of the Tapadas

The students visited a solar power plant with an installed
capacity of more than 15 MW to understand the main
characteristics of a PV plant, the different phases of a
renewable energy project including the development
and operation of a solar plant, and the importance of
sustainability for the environment.
Further training was given at the Tapadas and Azambuja PV
plants, which are located in Minde, Alcanena Municipality,
with the aim of raising awareness of job opportunities
related to solar PV energy and its technology. In Portugal
the unemployment rate in youths between 16-24 years
is 23.5%. These type of initiatives aim to reduce that
percentage.
Tesla Engagement



Tesla, Nor way 
1. Translation of text prepared by Norwea in Norwegian.
ENVIRONMENTAL, SOCIAL

CONTINUED
Other InformationFinancialsGovernanceStrategic Report
39
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
The independent Board of Directors has

policy and its implementation, with
the daily operations being delegated
to its independent AIFM, FundRock

Limited (“FundRock”). FundRock
monitors environmental, social and
governance risks, which are fully
integrated across every single stage of
its investment process. Aquila Capital

the Investment Adviser’s approach to
sustainability within the investment
process. Aquila Capital regards integrity
and diversity as key pillars in their
governance and they have been vital for
the growth and success of the Company.
The Investment Adviser is fully regulated
and supervised by the Federal Financial

Angela Wiebeck has joined the
Investment Adviser as Chief

from her previous role at UBS, with
responsibility for designing, expanding,
and optimising capabilities in topics

efforts.

The Board of Directors is appointed
based on expertise and merit, being

by diversity. The Board is comprised
of members with different skills and
experiences, whilst endeavouring to
comply with the Listing Rules on diversity.
The current Board is comprised of three
men and one woman, all non-executive

number of years of experience in their

non-executive member of the Board is
underway to further enhance the Board’s
independence, diversity and breadth of
experience. Additionally, the Investment


of culture (its employees comprise 56
different nationalities), and in terms of
gender (its gender ratio is 58% men and
42% women). Additionally, 27% of people
in leadership positions are female, of
which two, Susanne Wermter (CEO Aquila
Clean Energy) and Christine Brockwell
(CPO Aquila Clean Energy), are ranked in

List, honouring women working in wind
power worldwide.

58%
men
56
different nationalities
42%
women
3
men
1
woman


Supply Chain Management



the economic interests of the Investment Adviser to the relevant authorities.
The Investment Adviser takes a multi-faceted approach to the mitigation of governance risks, limiting exposure to risks within the
supply chain. All EPC and Operations and Maintenance (O&M) contracts are negotiated with contractors operating in a country
adhering to the European Union’s labour minimum standards. Any sourcing of raw materials, components, equipment or services
from suppliers domiciled in countries linked to the use of forced labour is made with guarantees that such components are not
associated with human rights violations. Moreover, an in-house on-boarding and screening process for suppliers is in place to
prevent and mitigate any risk of human rights violations, including a pre-screening of counterparties in terms of bad press risk

to internal compliance and procurement policies. Measures include the selection of geographies with strong regulatory
frameworks, comprehensive internal due diligence processes that examine counterparties and their governance frameworks,
and the use of specialist advisers to conduct technical and legal due diligence analyses at the project level. All governance

40
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

The Company will seek to achieve
its investment objective, set out on

energy infrastructure investments in
continental Europe and the Republic of
Ireland comprising (i) wind, photovoltaic
and hydropower plants that generate
electricity through the transformation of
the energy of the wind, the sunlight and
running water as naturally replenished
resources, and (ii) non-generation
renewable energy related infrastructure
associated with the storage (such as
batteries) and transmission (such as
distribution grids and transmission
lines) of renewable energy, in each

construction/development (“Renewable
Energy Infrastructure Investments”).
The Company will acquire a mix of
controlling and non-controlling interests
in Renewable Energy Infrastructure
Investments and may use a range of
investment instruments in the pursuit of
its investment objective, including, but
not limited to, equity, mezzanine or debt
investments.
In circumstances where the Company
does not hold a controlling interest in
the relevant investment, the Company
will seek, through contractual and other
arrangements, to, inter alia, ensure that
the Renewable Energy Infrastructure
Investment is operated and managed
in a manner that is consistent with the
Company’s investment policy, including
any borrowing restrictions.

The Company aims to achieve

investing in a range of portfolio assets
across a number of distinct geographies
and a mix of wind, solar PV and hydro
technologies involved in renewable
energy generation. The Company
will observe the following investment
restrictions when making investments:
• 
Asset Value (including cash) will be
invested in any single asset;
• the Company’s portfolio will
comprise no fewer than six
Renewable Energy Infrastructure
Investments;
• no more than 20 per cent. of its

will be invested in non-generation
renewable energy related
infrastructure associated with the
storage (such as batteries) and
transmission (such as distribution
grids and transmission lines) of
renewable energy;
• 
Asset Value (including cash) shall be
invested in assets under development
and/or construction;
• no more than 50 per cent. of the

be invested in assets located in any
one country;
• no investments will be made in assets
located in the UK; and
• no investments will be made in fossil
fuel assets.
Compliance with the above restrictions
will be measured at the time of
investment and non-compliance
resulting from changes in the price or
value of assets following investment will
not be considered as a breach of the
investment restrictions.
The Company will hold its investments
through one or more special purpose
vehicles (“SPVs”) and the investment
restrictions will be applied on a
look-through basis.
Although not forming part of the
investment restrictions or the Investment
Policy, where Renewable Energy

from a Power Purchase Agreement,
the Company will take reasonable
steps to avoid concentration with a
single counterparty and intends that
no more than 25 per cent. of income
revenue received by Renewable Energy
Infrastructure Investments will be
derived from a single off-taker.

Policy
The Directors do not currently intend
to propose any material changes to
the Company’s Investment Policy.

Investment Policy set out above will
only be made with the approval of
Shareholders.
INVESTMENT POLICY AND

Other InformationFinancialsGovernanceStrategic Report
41
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

The Company does not intend to use
hedging or derivatives for investment
purposes but may from time to time
use derivative instruments such as
futures, options, futures contracts and
swaps (collectively “Derivatives”) to

of interest rates or electricity prices.
The Derivatives must be traded on
a regulated market or by private

institutions or reputable entities
specialised in this type of transaction.

The AIFM will ensure that a liquidity
management system is employed for
monitoring the Company’s liquidity
risks. The AIFM will ensure, on behalf
of the Company, that the Company’s
liquidity position is consistent at all
times with its investment policy, liquidity

held pending investment in Renewable
Energy Infrastructure Investments or
for working capital purposes will be
invested in cash equivalents, near cash
instruments, bearer bonds and money
market instruments.
Borrowing Limits
The Company may make use of
long-term limited recourse debt for
Renewable Energy Infrastructure
Investments to provide leverage

Company may also take on long-term
structural debt provided that at the time
of entering into (or acquiring) any new
long-term structural debt (including
limited recourse debt), total long-term
structural debt will not exceed 50 per

Value. For the avoidance of doubt, in
calculating gearing, no account will
be taken of any Renewable Energy
Infrastructure Investments that are made
by the Company by way of a debt or a
mezzanine investment. In addition, the
Company may make use of short-term
debt, such as a Revolving Credit Facility,
to assist with the acquisition of suitable
opportunities as and when they become
available. Such short-term debt will be
subject to a separate gearing limit so as

Asset Value at the time of entering into
(or acquiring) any such short-term debt.
In circumstances where these
aforementioned limits are exceeded
as a result of gearing of one or more
Renewable Energy Infrastructure
Investments in which the Company
has a non-controlling interest, the
borrowing restrictions will not be
deemed to be breached. However, in
such circumstances, the matter will be
brought to the attention of the Board
who will determine the appropriate
course of action.

The Company is targeting a progressive
dividend over the medium term with
a minimum dividend of 5 cents per
Ordinary Share, subject to having

Dividends are expected to be paid
quarterly, normally in respect of the
three months to 31 March, 30 June,

are expected to be made by way of
interim dividends to be declared in
May, August, November and February.
The Company will declare dividends in
euros and Shareholders will, by default,
receive dividend payments in euros.
Shareholders may, on completion of a
dividend election form, elect to receive
dividend payments in sterling (at their
own exchange rate risk). The date on
which the exchange rate between euro
and sterling is set will be announced
at the time the dividend is declared.
A further announcement will be made
once the exchange rate has been set.
Dividend election forms will be available
from the Registrar, Computershare
Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY or

The Company’s target dividend for 2023
was announced on 3 February 2023 and
is as set out in point (iv) on page 43.
42
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

Growth since IPO (June 2019)

(2021: 14.1%)
6.3%
10.8%
2020
NAV
share price returns
2021 2022
14.1%
11. 3%
27.6%
6.7%
The Board monitors both the NAV and share price
performance and compares with other similar
investment trusts. A review of performance is
undertaken at each quarterly Board meeting and the
reasons for relative under and over-performance against
various comparators is discussed. The Company’s NAV
total return and total Shareholder return since IPO

(2021: 14.1% and 11.3%) respectively. The Company’s
NAV total return and share price total return for the year

and 0.5%) respectively. On an annualised basis, the
NAV total return per Ordinary Share has achieved 7.1%

The Chairman’s Statement on pages 8 to 11
incorporates a review of the highlights during the
year. The Investment Adviser’s Report on pages 12 to
34 highlights investments made and the Company’s
performance during the year.



1

(2021: (0.6%))
6.5%
2020 2021 2022
(0.6%)
(16.6%)
The Company’s broker monitors the premium or
discount on an ongoing basis and keeps the Board
updated as and when appropriate. At quarterly Board
meetings the Board reviews the premium or discount
in the year since the previous meeting in comparison
with other investment trusts with a similar mandate.


On 3 February 2023, the Board announced the details
of a Buyback Programme for up to EUR 20 million
in response to the widening discount at which the
Company’s share price was trading, as compared to its
NAV per Ordinary Share, as they believe that the current

value in the portfolio. This is part of a broader package
of initiatives seeking to improve the marketability of the
Company’s shares. Since that date, the Company has
bought back for Treasury a total of 16,652,452 Ordinary
Shares for an aggregate amount of EUR 15.9 million.

The Board measures the Company’s success in achieving its investment objective by reference to the following KPIs:
INVESTMENT POLICY AND

CONTINUED
1. 
performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to

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43
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

Ongoing Charges
1

(2021: 1.1%)
1.4%
2020 2021 2022
1.1% 1.1%
The Board receives management accounts containing
an analysis of expenditure and which is reviewed at
its quarterly Board meetings. The Board reviews the
ongoing charges on a quarterly basis and considers
these to be reasonable in comparison to peers.
Based on the Company’s average net assets during
the year ended 31 December 2022, the Company’s

with the Association of Investment Companies (“AIC”)
methodology.

Financial Year (cents per share)
Target:
ents 2023
(2022: 5.25 cents)
4.00
cents
2020
Annual dividend per
Ordinary Share paid
since IPO
Target dividend per
Ordinary Share in
respect of the year to
31 December 2023
2021 2023
forecast
2022
5.00
cents
5.25
cents
5.51
cents
(target
dividend)
On 3 February 2023, the Company announced a
target dividend of 5.51 cents per Ordinary Share
(“2023 Target Dividend”) in relation to the year ending

accordance with the Company’s dividend policy to
pay a progressive dividend over the medium term
and is subject to the portfolio performing in line with
expectations. The 2023 Target Dividend represents an
increase of 5.0% versus the prior year and followed a
5.0% increase in the 2022 target dividend announced

The dividend target set for 2022 was for not less
than 5.25 cents per Ordinary Share, subject to the
performance of the portfolio. These were paid in

1. 
performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to

44
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
SECTION 172
Section 172 of the Companies Act 2006
requires the Board to act in a way that it
considers would most likely promote the

of all stakeholders, taking into account
the interests of stakeholders and the
environment in its decision-making and to
share how this duty has been discharged.
The Board’s values – integrity,
accountability and transparency – mean
that the Board has always worked hard
to communicate effectively with the
Company’s stakeholders. This is a two-way
process and the feedback received from
the Company’s stakeholders is highly
valued and factored into the Board’s
decision-making process.
The Company has a range of stakeholders,
and this section maps out who they
are, what the Board believes their key
interests to be, how the Company
enables engagement with stakeholders
and highlights the key results that have
consequently arisen during the year.
Company Sustainability

As an externally managed investment
company, the Company does not have
any employees. Its main stakeholders are
as set out in the diagram below, which
explains the relationship between the
Company and each of its stakeholders.

The Company was listed on the main
market of the London Stock Exchange on
5 June 2019. The Company’s investments
are held via its sole subsidiary, Tesseract
Holdings Limited, which in turn holds
the investment portfolio via a number


The Board is aware of the need to foster
the Company’s business relationships
with suppliers, customers and other key
stakeholders through its stakeholder
engagement activities. These activities
include meetings, annual reviews,
presentations and publications and

strategies and discharge its duties under
section 172 of the Act.
The Board carried out an annual review
of its key service providers, including the
Investment Adviser, to understand the
culture of its service providers to ensure
they and the Company can maintain high
standards of business conduct. The annual
review process involves the assessment of
the service providers’ policies and control
environments to ensure their continued
competitiveness and effectiveness.

As a public company listed on the London
Stock Exchange, the Company is subject
to the Listing Rules and the Disclosure

a regulatory requirement, for the Board
to act fairly between Shareholders. The
Board ensures that the Company complies
with the Listing Rules at all times and seeks
the advice of the Company Secretary,
lawyers and corporate broker in its
dealings.





(Company Secretary,
Lawyers, Brokers,
Administrators,
Registrars)

Aquila Capital
Investmentgesellschaft
mbH

Manager
FundRock Investment
Management Company



(Portfolio Holding Company)
SPVs
The Company
Other InformationFinancialsGovernanceStrategic Report
45
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
The Chairman and key Board members
met many of the Company’s key investors
to gauge their views on the Company’s
progress since IPO. Separately, the
Investment Adviser has participated in a
roadshow to meet with the Company’s key
investors. Additionally, on 29 March 2022,
the Company, together with its Investment
Adviser, held a Capital Markets Day to
provide Shareholders and analysts with
further background and information about
AER and its investments. The outcome
of these meetings was discussed by the
Board and as a consequence of these
meetings, and in order to better align the
Company with its Shareholders, a number
of initiatives have been undertaken as
detailed below.
In the run-up to year end and following the
mini budget announced under the Truss
administration, stock markets became
more volatile and the Company’s discount
to NAV widened. In response, and
following consultation with the Company’s

Board announced the details of a share
Buyback Programme for up to EUR 20
million pursuant to the authority granted

Meeting to purchase up to 14.99% of
the Company’s issued share capital.
The Board authorised the buyback as it
believes that the current share price does

in the Company’s portfolio. Since that
date the Company has bought back for
Treasury a total of 16,652,452 Ordinary
Shares for an aggregate amount of EUR
15.9 million. Since the start of the Buyback
Programme, the discount to NAV at which
the Company’s shares trade has narrowed
from 16.6%
1
to 14.6%
1
and the liquidity
in the Company’s shares has markedly
improved.
The Company’s name was changed
from Aquila European Renewables
Income Fund plc to Aquila European
Renewables plc to maximise the appeal
of the Company across a broader range
of investors and other stakeholders.
The name change became effective on

At its quarterly Board meetings, the Board
reviews and discusses detailed reports
from the Company’s broker and media PR
consultants in relation to the Company’s
share performance, trading and liquidity
as well as the composition of, and
changes to, the register of Shareholders.
Shareholders’ views are also considered
by the Board at those meetings to assist
the Board’s decision-making process and
to ensure expected returns are achieved

invest in appropriate renewable energy
infrastructure investments and to grow
the business in line with strategy and
expectation. Details of the decisions taken
by the Board during the year can be found
below under ‘Key Decisions made During
the Year ’.
The Investment Adviser and Board believe
that it is important for the Company’s
continued success to have the potential to
access equity capital in order to expand
the Company’s portfolio over time, to
further diversify the investment portfolio,
to create economies of scale and, at times
when the Company’s shares are trading at
a premium against its NAV, as a means to
manage such premium. The Company’s
shares traded at a premium early in the
year and during that time issued shares
to its Investment Adviser in lieu of its
quarterly management fees as detailed on
page 75. The Company may issue shares
from its Treasury account but will only
issue shares at a premium to NAV at the
time of issue.
To help the Board in its aim to act fairly
between the Company’s members, it
seeks to ensure effective communication
is provided to all Shareholders. The
Board encourages Shareholders to


representatives of the Investment Adviser
are available to meet Shareholders
in person and answer questions. The
Annual Report and half-yearly accounts
are distributed to the Company’s
Shareholders and made available on
the Company’s website. The quarterly
factsheet is also available on the
Company’s website.
The Company’s website –
www.aquila-european-renewables.com

channel and information hub for
Shareholders. As such, it includes full
details of the investment objective,
supporting philosophy and investment
process and performance along with
news, opinions, disclosures, results
and key information documents. It also
presents information about the Board,
its committees and other governance
matters and Shareholders are encouraged
to view the website in order to better
understand the Company.
1. 
performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to

46
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

As an externally managed investment
trust, the Company conducts all its
business through its key service providers.
The Board believes that maintaining
positive relationships with each of the
Company’s service providers is important
to support the Company’s long-term
success.
In order to ensure strong working
relationships, the Company’s key service
providers (the Investment Adviser, AIFM,
Company Secretary, Administrator)
are invited to attend quarterly Board
meetings to present their respective
reports. This enables the Board to exercise
effective oversight of the Company’s
activities. During the year, the Board
spent a considerable amount of time
between Board meetings engaging with
the Company’s key service providers
to continue to develop strong working
relationships and to determine good
working practices to ensure the smooth
operational function of the Company.
The Board and its advisers seek to
maintain constructive relationships with
the Company’s key service providers on
behalf of the Company through the annual
review process, regular communications,
meetings and the provision of relevant
information.

Manager (“AIFM”)
The AIFM is an important service provider
for the Company’s long-term success. The
AIFM has engaged Aquila Capital to act
as the Company’s the Investment Adviser
for the purpose of providing investment
advisory services to the Company. The
AIFM is responsible for reviewing each
investment opportunity prior to being
presented to the Board. In addition
to the reports the Board receive from
the Investment Adviser, it also receives
quarterly reports from the AIFM. The
Board maintains regular contact with the
AIFM in order to foster a constructive
working relationship. Additionally, the
AIFM is responsible for monitoring the
risks faced by the Company and these
are regularly discussed at meetings of the


The Investment Adviser is the most

Company and a description of its role
can be found on pages 74 to 75. The
performance of the Investment Adviser’s
is determined by the quality of the
Investment Adviser’s management team
and their ability to source high quality
assets at attractive prices.
The Board closely monitors the
Company’s investment performance
in relation to its objectives, investment
policy and strategy. To assist the Board,
the Investment Adviser provides monthly
reports. Additionally, the Investment
Adviser presents its quarterly production
and operational update reports at each
quarterly Board meeting. The Board
maintains constructive dialogue between
meetings with the Investment Adviser.
On a periodic basis, the Board visits the

the site of one of the portfolio assets or

are able to gain a better understanding
of the Investment Adviser, to meet key
members of the team and gain further
insight into the operation of each asset.
The Investment Adviser’s remuneration is
based on the NAV of the Company. From

Adviser’s fees will be paid in shares,
which aligns the Investment Adviser’s
interests with those of the Company’s
Shareholders.

Prior to being presented to the Board of
HoldCo, the Company’s wholly owned
subsidiary, the Company’s Board is
presented with potential investment

by the Investment Adviser and which
have undergone a process of analysis
and challenge by the AIFM, including
considerations relating to environmental,
social and governance issues. The Board
considers each proposal against the
Company’s investment objective (on
page 1), investment policy and strategy
as disclosed on pages 40 to 43 and
with consideration for the wider group
of stakeholders. In considering each
investment opportunity, the Board
considers the Company’s long-term
success, having particular regard to the
following aspects of each proposal:
•
potential revenue forecast to be
generated by each asset;
•
the diversity of the Company’s
portfolio;
•
any community and environmental
issues associated with each asset;
•
geopolitical risk;
•
the length of tenure of each asset;
•
hedging aspects to limit risk; and
• funding aspects, including the use

As at 31 December 2022, the Company
and the HoldCo had EUR 89.9 million of
liquidity consisting of EUR 24.7 million
in cash on hand plus EUR 65.1 million
in an undrawn revolving credit facility.
Remaining commitments via Tesseract
Holdings Limited amounted to EUR


The Company is an investor in renewable
energy assets and is acutely aware of
its impact on the environment. The

risk strategy which ensure that society and
the environment are considered when
implementing its investment strategy.

from the Company Secretary. Further

be found on pages 35 to 39 or on its
website at https://www.aquila-european-
renewables.com.
SECTION 172 CONTINUED
Other InformationFinancialsGovernanceStrategic Report
47
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

During the year the Board agreed to
increase the Company’s dividend by 5.0%
to 5.25 cents per ordinary share. Since
year end, on 3 February 2023, the Board
approved a further 5.0% increase to the
Company’s target dividend to 5.51 cents


During the year the Board authorised
the AIFM and Investment Adviser to
negotiate an increase in the Company’s
Revolving Credit Facility (“RCF”) following
which the bank agreed to increase the
Company’s RCF from EUR 40 million to
EUR 100 million and to extend the term
until maturity to April 2024. Since then,
the Board has instructed the AIFM and
Investment Adviser to negotiate a further
twelve month extension of the facility to
April 2025. Approval to this extension was
granted on 21 April 2023.
Name Change

the Board agreed to change the
Company’s name from Aquila European
Renewables Income Fund plc to Aquila
European Renewables plc with effect from
3 November 2022, to maximise the appeal
of the Company across a broader range of
investors and other stakeholders.

On 2 February 2023, Dr Patricia Rodrigues
replaced Kenneth MacRitchie as Chair
of the Remuneration and Nomination
Committee as part of the Board’s ongoing
commitment to ensure that they maintain
suitable diversity and representation
within the Board structure. The Board
has begun the process of recruiting an
additional Board member to further
expand its skills base and to enhance its
diversity.

Decisions Relating to the Company’s Portfolio of Assets
All acquisitions and decisions made during the year in respect of the Company’s portfolio of assets, including new acquisitions, PPA

12 to 34.

The Board agreed to purchase or issue shares to the Investment Adviser in relation to fees payable during the year as detailed below:
Amount
Issue or acquired by Price paid per
purchase of the Investment Ordinary Share
Date Ordinary Shares Adviser (EUR)
7 February 2022 Issue 731,520 1.0383
1 June 2022 Issue 554,773 1.021075
1 June 2022 Purchase 176,300 1.0376
5 August 2022 Purchase 760,053 1.01657415
9 November 2022 Purchase 852,206 0.947292
Following year end, and as instructed by the Board, the Company’s brokers purchased a further 900,340 Ordinary Shares at


The Board believes issuing shares to the Investment Adviser in lieu of fees further aligns the interests of the Investment Adviser
with the Company’s Shareholders.
48
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

During the year the Company has
carried out a robust assessment of its
principal and emerging risks and the
procedures in place to identify any
emerging risks are described below.

or Emerging Risks
The Board regularly reviews the
Company’s risk matrix, with a focus on
ensuring that the appropriate controls
are in place to mitigate each risk. The
experience and knowledge of the Board
is important, as is advice received
from the Board’s service providers,


responsible for the risk and portfolio
management services and outsources
the portfolio management to the
Investment Adviser.
1.  the Investment
Adviser provides a report to
the Board on a quarterly basis
or periodically as required on
industry trends and insight to future
challenges in the renewables sector
including the regulatory, political and
economic changes likely to impact
the renewables sector;
2. 
Manager (“AIFM”): following advice
from the Investment Adviser and
other service providers, the AIFM

including emerging risks, likely to
impact the Company;
3. Broker: the Broker provides

Company on the Company’s sector,
competitors and the investment
company market, whilst working with
the Board and Investment Adviser to
communicate with Shareholders;
4. Company Secretary: the Company
Secretary briefs the Board on
forthcoming legislation/regulatory
change that might impact the
Company; and
5. AIC: The Company is a member
of the Association of Investment
Companies, which provides regular
technical updates as well as drawing
members’ attention to forthcoming
industry and regulatory issues.

The Audit and Risk Committee
undertakes a review of the Company’s
risk matrix on a regular basis and a
formal review of the risk procedures
and controls in place at the AIFM and
other key service providers to ensure
that emerging (as well as known) risks

practicable, mitigated.
Principal Risks
The Board considers the following to be
the principal risks faced by the Company
along with the potential impact of these
risks and the steps taken to mitigate
them.
RISK AND RISK MANAGEMENT
Risks Potential Impact/Description Mitigation

1


The income and value of the Company’s investments
may be affected by future changes in the market price of
electricity.
While some of the revenues of the Company’s investments

on the wholesale market price of electricity, which is
volatile and is affected by a variety of factors, including:
•
market demand;
•
generation mix of power plants;
•
government support for various forms of power
generation;
•

• foreign exchange.
There is a risk that the actual prices received vary

shortfall in anticipated revenues by the Company.
Increased EU goals to push green economies will lead to
a ramp up of renewables and capacities with potential
to lead to grid oversupply issues resulting in pricing
pressures.
The current energy geopolitical crisis in Europe is driving
increasing energy prices and volatility which is likely to
have an impact on performance.
Windfall taxes, regulation and price caps introduced

Company’s revenue.
The Company holds a balanced mix of investments that




protecting the Company’s revenue from volatile electricity
prices.
The Investment Adviser retains the services of
market-leading energy consultants to assist with
determining future power pricing for the respective
regions.
The underlying SPV companies may use derivative
instruments such as futures, options, futures contracts

prices.
The Investment Adviser models and monitors power
price curves on an ongoing basis and will recommend
appropriate action. In addition, the Investment Adviser has
a dedicated team which is responsible for the origination,
negotiation and execution of all PPAs.
The Investment Adviser reviews the hedging strategy on
a deal-by-deal basis, both at time of investment and on an
ongoing basis. Should changes be required to the hedging
strategy, these will be recommended to the AIFM and
Board.
Other InformationFinancialsGovernanceStrategic Report
49
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Risks Potential Impact/Description Mitigation
continued
2


As evidenced with the ongoing war in Ukraine and the
various restrictions imposed, acts of war and resulting
sanctions can lead to O&M supply delays, volatile energy
markets and general uncertainty.
This can also lead to short-term price increases and more
focus on renewable energy infrastructure and increased
competition for assets.
With increasing competition for renewable investments,
new geographies may be considered, potentially
introducing additional political and regulatory risks.
The Investment Adviser, utilising its extensive experience,
is constantly monitoring geopolitical and macro-economic
developments. Where required, external geopolitical and
risk analysis is undertaken.
The Company does not have any direct exposure to
Ukraine or Russia, there are also no direct business
relations with counterparties from these countries.
3


Volatility in equity markets may cause the Company’s
shares to rise or fall and therefore to trade at a premium

the shares to trade at a discount this could impact the
Company’s ability to raise further equity to allow it to repay
debt or to support further investments.

of time, the Company could become vulnerable to a

may increase the likelihood of attracting votes against the

be held in June 2023.
The Company’s advisers monitor market conditions and
report regularly to the Board. In the event that the Company
is unable to raise new capital it could defer making any
new investments until the stock market recovers and, in
extreme circumstances, existing investments could be sold
to reduce debt and raise liquidity.
The Company’s share price recently decreased towards
a 20% discount to its net asset value. As a result, the
Board introduced a share buyback programme on

Board and its advisers continue to monitor the share price.
Global

A global recession may lead to electricity pricing volatility

possible impacts of a global recession include windfall
taxes, reduction in availability of debt, reduced access
to capital markets for fund raising and increased risk at
counterparties as balance sheets become stressed.

revenue and expenditure of investments. Thus changes

individual asset valuations and the resulting net asset value
performance of the Company.
The Investment Adviser has a dedicated Markets

origination, negotiation and execution of PPAs.

a present value basis) will be generated via government

Company’s revenue from volatile electricity prices.
Most of the non-contracted revenues and costs of the
Company’s investments are either indexed or correlated

Change in

Sentiment
A change in political direction or regulation in one of
the countries in which the Company targets investment
could lead to changes, reductions, caps or withdrawals
of government support arrangements, a windfall tax or
potentially the nationalisation of investments. This could
have a material impact on the valuation of the investments
and the Company’s net asset value.
Environmental groups may put pressure on the
government in relation to its renewables ambitions and
permits due to environmental concerns and impact on the
projects.
The AIFM, advised by the Investment Adviser with its

jurisdictions in which the Company invests.

on each investment and reviewed prior to signing off any
investment proposal.
Additional due diligence on development and construction
assets is undertaken for new investment opportunities in
order to avoid or mitigate any potential issues.

assets and performs ongoing monitoring of these risks.
Regulatory changes at the SPV level are monitored by the
Investment Adviser and reported to the Board/AIFM on an
ongoing basis.
50
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Risks Potential Impact/Description Mitigation
Operational
6
Investment

There is a risk that the portfolio underperforms and, as a
result, the target returns are not met over the longer term.
This could lead to the dividend not being covered and an
inability to pay the target dividend.
Adverse weather conditions may impact investment
performance through lower-than-expected

Investments under development or construction have
higher risk of performance due to permit and leases
potential challenges, construction budget slippage and
development performance.
Each quarter the Board reviews a report prepared by
the Investment Adviser on the portfolio performance.

investment is provided to the Board which closely monitors
performance of the individual assets.
The Investment Adviser has a substantial team of executives
employed across various disciplines within the renewables

monitor all of the investments.
New investments are reviewed and approved by the Board
in line with the Company’s investment policy of investing

technology.
In the case of development/construction assets, the
Investment Adviser puts in place legal agreements with the
developer to align all parties for a successful outcome and
mitigate the risks associated with the initial phase of the
investment.
Environmental




could result in the Company being liable for damages
or compensation to the extent that such losses are not
covered by insurance policies. In addition, adverse
publicity or reputational damage could follow.

Environmental – climate change, biodiversity issues or
environmental impairment.
 – impact on local communities in which the
Company’s assets operate as well as employee welfare
including health and safety incidents.
 – lack of a strong governance framework
within the Company could expose it to, among other
things, the negative impact of bribery and corruption.
The Investment Adviser performs detailed due diligence






Competition
for Assets
With increasing numbers of investors seeking exposure
to renewable assets, it is possible that new competitors
will enter the market in which the Company operates. This
could lead to increased pricing for the Company’s target
investments with corresponding lower returns and slower
deployment of uninvested cash.
The track record of the Investment Adviser and its market
position and penetration allow it to access potential
investments that newer entrants may not have access to.
Through the Investment Adviser, the Company has access
to a number of assets that are in the development phase,
creating a competitive advantage for the Company.
The Board is mindful of pricing when it reviews new
investment proposals and the need to deliver on the
Company’s target objective and strategy.
9


The majority of the operational risk in the Company’s
investments is retained by the counterparty or its
subcontractors. Failure to properly operate and maintain
assets may result in reduction of revenues and value
of assets. However, some risks will remain within the
investment.
Poor performance by a subcontractor may lead to
the need for a replacement, which could have cost
implications, impacting the performance of the investment
and potentially distributions to the Company until the
issue is resolved.
The value of the Company’s investments and the
income they generate may be affected by the failure of
counterparties to comply with their obligations under

Operation and maintenance (“O&M”) of assets are
subcontracted to a counterparty who is responsible for
ensuring effective continuing operation and maintenance

such counterparty has the experience and resources to
comply with its obligations and monitors compliance on an
ongoing basis.
Constant monitoring of the investments and the
counterparties/service providers allows the Investment

of counterparties and service providers ensures any impact
is limited.
The Investment Adviser assesses the credit risk of

counterparties to PPAs.
RISK AND RISK MANAGEMENT CONTINUED
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51
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Risks Potential Impact/Description Mitigation
Operational continued
10
Litigation
The Company may be subject to litigation either directly or
via its subsidiary or at SPV level.
Prior to an investment or the engagement of a third party,
a detailed due diligence exercise is undertaken to identify
any risks either from subcontractors or any party likely to be
impacted by the Company’s actions.

Local communities and relevant parties are consulted prior
to an investment or prior to formal engagement in order to
identify any potential grievance.
The Company has access to legal advisers who provide
advice at each stage of an investment and at each stage in
the Company’s life.
11

of the
Investment
Adviser
The Investment Adviser manages over EUR 14.7 billion for

potential new investments across various clients including
the Company.
The Investment Adviser employs experienced executives
to identify, acquire and manage the Company’s
investments. There is a risk that a key person leaves the
Investment Adviser.
The Company and AIFM are made aware of and review

being made. The Investment Adviser procures and
provides the Board with an independent fairness valuation

exists. When assets are bought along with other funds
managed by the Investment Adviser, the price is externally
validated.
In addition, an investment allocation policy has been
implemented by the Investment Adviser and has been
agreed by the Board.
The strength and depth of the Investment Adviser’s
resources mitigate the risk of a key person departure.
12

A hacker or third party could obtain access to the
Investment Adviser or any other service provider and
destroy data or use it for malicious purposes. Data records
could be destroyed, resulting in an inability to make
investment decisions and monitor investments.
The pandemic and more recently the Russian and Ukraine
war has increased IT security concerns and threats being
posed to the Company and operating structure by hackers
which may lead to loss of information or even a cash loss.
Service providers have been carefully selected for their
expertise and reputation in the sector. Each service
provider has provided assurances to the AIFM and the
Company on their cyber policies and business continuity
plans along with external audit reviews of their procedures
where applicable.
The Investment Adviser and key service providers have
information security policies in place and have appointed

for emergency events and crises, the monitoring of the
resumption and repair of the IT security measures after
completion of a disturbance or incident, and the ongoing
development of improvements to the IT security concept.
The Investment Adviser’s in-house Asset Management
team has reviewed the protective measures taken by the
counterparties and has further increased the vigilance
against cyber-attacks that could affect the performance
and infrastructure of the investments. Insurance is in place
to cover potential losses from direct attacks. For indirect
attacks (e.g. against grid operation or transmission system)
the various administrators, operation and maintenance

coverage to mitigate possible damages.
52
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Risks Potential Impact/Description Mitigation
Financial
13
Portfolio

There is a risk that the Company’s asset valuations and
underlying assumptions such as future electricity prices

meaning that the investment portfolio could be over or
under-valued.
The principal component of the Company’s balance sheet
is its portfolio of renewable investments. Each quarter, the
AIFM is responsible for preparing a fair market value of the
investments, with input and guidance from the Investment
Adviser. These valuations and the key underlying
assumptions are interrogated by the Board before being
approved.
The Investment Adviser has a strong track record in
undertaking valuations of renewable assets built up over
the years since it was founded in 2001.

proposed by the Investment Adviser, a fairness valuation
opinion from an independent adviser is procured by the
Investment Adviser for the AIFM and the Board.
The Investment Adviser and broker monitor market
competitors and provide feedback on valuation
methodologies and assumptions to the valuation team.



The use of leverage creates risks including:
•

•
covenant breaches;
•
enhanced loss on underperforming investments; and
• 

Fluctuations in interest rates may impact discount rates
which are applied to the portfolio valuations as well as
affecting cost of debt in both the underlying SPVs and the
Company.
The Company’s investment policy restricts the use of
leverage to:
•

• 
As at 31 December 2022, the Company’s subsidiary,
Tesseract Holdings Limited, had 4.0% of short-term debt
and on SPV level there was 21.6% of long-term structured

levels against these policy restrictions and reports them to
the Board on a quarterly basis.
The Investment Adviser provides updates of the covenant
compliance to the AIFM and to the Board periodically and

Interest rate risk on bank debt at the asset level is mitigated
by the use of hedging instruments.
The majority of the Company’s long-term structural debt

amortising.


Changes to Tax
Legislation or
Rates

rules, substance, withholding tax rules and rates, could
result in tax increases, resulting in a decrease in income
received from the Company’s investments.

government.
The corporate structure of the Company is reviewed
periodically by the Company and its advisers. The Board
has been kept informed of the recent introduction of the
windfall (and other tax arrangements) taxes introduced

timely basis and has carefully considered the impact on
the Company’s portfolio, which is further discussed in the
Investment Adviser’s Report.
The Investment Adviser works closely with tax and industry
experts prior to providing structuring recommendations to
the Company prior to investment and on an ongoing basis.
RISK AND RISK MANAGEMENT CONTINUED
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53
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Risks Potential Impact/Description Mitigation
continued
16

and

Changes
The Company fails to comply with section 1158 of the
Corporation Tax Act to ensure maintenance of investment
trust status, UK Listing Authority regulations including
Listing Rules, Foreign Account Tax Compliance Act and
Alternative Investment Fund Managers Directive (“AIFMD”).

regulations and fails to monitor those such as the SFDR,
changing disclosure requirements and green washing
risks.
Failure to comply with the relevant rules and obligations
may result in reputational damage to the Company or have

Possible uncertainty remains with post-Brexit negotiations
and eventual trade deals agreed. Unfavourable terms can
impact withholding taxes, double tax treaty limitations and
various other trading concerns.
Additionally, the Company operates in multiple markets
throughout Europe, and some have shown signs of
changes or potential in regulation as a response to high
power prices.
All service providers including the broker, Company
Secretary, Administrator, Investment Adviser and AIFM are
experienced in these areas and provide comprehensive
reporting to the Board and on the compliance of these
regulations.
The AIFM is experienced in compliance with the AIFMD
reporting obligations and reports at least quarterly to the
Board.
The Investment Adviser actively monitors changes in
regulation across the markets in which the Company
operates.
The Company complies with article 8 of the SFDR and as

to mitigate potential risks.
Emerging Risks
Risks Potential Impact/Description Mitigation

Climate-

Climate-related risks can be categorised as physical
or transitional risks. Physical risks are those associated
with the physical effects of climate change. They can
be event-driven (acute), such as cyclones, hurricanes,

or longer term (chronic) shifts in climate patterns, such as
sustained higher temperatures with melting of glaciers
and ice sheets causing sea level rise, permafrost melting,

precipitation, land degradation and changes in air quality.
Transitional risks are those that arise as economies transition
towards less polluting, greener solutions. These include
externally imposed risks such as the effect of legal and
regulatory requirements or policy changes, changes in
societal demands, advancements in technologies, market
changes and the consequent business decisions taken
to respond to such changes. Transitional risks have the
potential to crystallise suddenly, for example as a result
of policy changes. Physical or transitional climate-related
risks could impact the operation of the Company’s assets
and hence the production or revenue generated by the


hedging of price risks in the event of unforeseen changes in
regulatory requirements related to climate change.
Insurance is usually in place in the event of acute climate

resulting in production losses.
Financial model forecasts are based on P50 production
(the estimated annual amount of electricity generation
that has a 50% probability of being exceeded – both in any
single year and over the long-term – and a 50% probability
of being underachieved) data sourced from energy yield
assessments provided by external service providers.
The Company also mitigates the frequency of both physical
and transitional risks through extensive geographical



Crises
Risk of bank failure. On 10 March 2023, Silicon Valley Bank
and Signature Bank came close to collapse, prompting US
regulators to take control in an attempt to prevent contagion.
On 19 March 2023, it was announced that the Swiss
government had successfully negotiated the acquisition
of Credit Suisse by UBS in order to prevent its collapse and
prevent contagion. If either the US regulators or the Swiss

the Company’s bankers could have been affected, creating

The Company’s bankers are carefully chosen based on their
credit rating. Further due diligence is undertaken on each
bank to ensure they are robust before they are engaged by
the Company.
The Company’s funds are held by a number of banks in
order to diversify counterparty risk. Since the 10 March
2023 announcement, the AIFM has undertaken a review
of the Company’s banking arrangements to identify any
exposure to Silicon Valley, Signature and Credit Suisse
Banks. Following this analysis, the AIFM has concluded
that the Company’s exposure is minimal and unlikely to
negatively impact the Company.
54
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Greenhouse Gas Emissions
As the Company has outsourced
operations to third parties, there are no

to report in relation to the operation of

as a low energy user and is therefore
exempt from disclosures on greenhouse
gas emissions and energy consumption.
Investment trusts are currently exempt
from TCFD disclosure, but the Board will
continue to monitor the situation.
In relation to the Company’s
investments, the level of greenhouse
gas emissions arising from the low
volume of electricity imports and from
operation and maintenance activity is
not considered material for disclosure
purposes. Furthermore, as the assets
are renewable energy generators, they
reduce carbon dioxide emissions on a
net basis.


It is the Company’s policy to conduct
all business in an honest and ethical
manner. The Company takes a
zero-tolerance approach to bribery
and corruption and is committed to
acting professionally, fairly and with
integrity in all its business dealings and
relationships wherever it operates. The
Company does not tolerate the criminal
facilitation of tax evasion.
The Company’s AIFM, Investment
Adviser, Company Secretary,
Administrator and Depositary have

procedures are in place and that they
do not tolerate bribery. The Company’s
policy and the procedures that
implement it are designed to support
that commitment.

As required by law, a Director must
avoid a situation where he or she

Company’s interests. The Company’s
Articles of Association provide the
Directors authority to authorise potential

can impose limits or conditions when
giving authorisation if they think this is
appropriate. The procedure observed
by the Board in considering dealing with

•

excuse themself from the discussion

•
only Directors who have no interest
in the matter being considered
can debate the matter and take the
relevant decision; and
• in taking the decision the Directors
must act in a way they consider, in
good faith, will be most likely to
promote the Company’s success.
The Directors have declared any

Company. These are entered into
the Company’s register of potential

the Board. The Directors are obliged to
advise the Company Secretary as soon
as they become aware of any potential

The Company has established
procedures to deal with any potential


the AIFM (for the Company) and Aquila
managed funds who are counterparties
to the Company. These procedures may,
on a case-by-case basis, include:
•
separate teams at the Investment
Adviser being established in relation
to any proposed transaction to
represent the Company and the
relevant counterparty;
•
a fairness opinion on the value of
the Renewable Energy Infrastructure
Investments to be obtained from an
independent expert;
•
a due diligence and reporting
package from relevant professional
advisers on which the Company (or
other applicable vehicles) can place
reliance;
•
the AIFM operating its own risk
management system and internal
control system as well as monitoring
approved systems operated by the
Investment Adviser; and
OTHER INFORMATION

Other InformationFinancialsGovernanceStrategic Report
55
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
• 
the transaction being resolved in
accordance with procedures agreed
between the Investment Adviser
and the AIFM, subject to Board
agreement.
Employees
As the Company is an investment trust
it does not have any employees as all
functions are carried out by third-party
service providers. As at 31 December
2022, the Company had four Directors
who are non-executive and receive a

are male and one is female. The Board’s
policy on diversity is contained in the


Viability Statement
In accordance with the UK Corporate

Rules, the Directors have assessed the
prospects of the Company over a longer
period than the 12 months required by

In reviewing the Company’s viability,
the Directors have assessed the viability
of the Company for the period to

The Board believes that the Period,

appropriate time horizon over which
to assess the viability of the Company,
particularly when taking into account
the long-term nature of the Company’s
investment strategy, which are modelled

outlined on pages 48 to 53. Based
on this assessment, the Directors
have a reasonable expectation that
the Company will be able to continue
to operate and to meet its liabilities
as they fall due over the period to

In considering the prospects of the
Company, the Directors looked at the
key risks facing the Company, HoldCo
and the SPVs, focusing on the likelihood
and impact of each risk as well as any key
contracts, future events or timescales
that may be assigned to each key risk.

Company would continue to remain
viable under downside scenarios,
including a decline in long term
production and power price forecasts,
taking into account tax implications
and regulatory changes imposed
on renewables and on those in the
electricity generation market in certain
jurisdictions across Europe. These risks,
together with the mitigating factors of
each, are shown in the Principal Risk
section on pages 48 to 53.
As a sector-focused renewable energy
investment company, the Company
aims to produce stable dividends
while preserving the capital value of its
investment portfolio. As part of their
analysis, the Board were mindful that
the Company’s portfolio assets, held
via HoldCo, are predominantly fully
constructed and operating renewable
electricity generating facilities with asset

under consideration.
This assessment also included a detailed
review of the issues arising following
the war in Ukraine, high volatility in
commodity prices, the windfall revenue
clawback on inframarginal technologies
(e.g. solar PV, wind, nuclear, hydro)
and other taxes that currently face the
Company’s assets as disclosed in the
Principal Risk section on pages 48 to 53
and in the Investment Adviser’s Report
on pages 12 to 34. The Board have also
considered the impact of climate related
events on the Company’s assets and
on its ability to continue to produce
electricity. For example, based on the
guidance provided in the Company’s
February 2023 investor presentation,
the Company expects its 2023 target
dividend to be fully covered even if
forecast power prices decline by 30%.
Tiza, Spain
56
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Viability Statement continued
The Company has a low gearing level
representing 25.6% as at 31 December

of a RCF (which has an undrawn limit of
EUR 65 million) and non-recourse debt
at the asset level. The Company (via
its subsidiaries, where applicable) is in
compliance with its covenants related
to the RCF and non-recourse debt. The
Company has recently negotiated an
extension to its RCF which now expires in
April 2025. The Board and advisers have
analysed the covenants of the RCF and
based on stress testing the Company’s

exists in relation to both the Interest
Coverage Ratio (“ICR”) and Loan to
Value Ratios. For example, based on the


have to reduce by over 65% in order to
breach the Company’s ICR ratio.
The Board have also considered the
failure of Silicon Valley Bank and Credit
Suisse and the Impact of contagion, and
have concluded that the Company’s
counterparty banking relations are

The Directors believe that the Company
is well placed to manage its business
risks successfully over both the short
and long term and accordingly, the
Board has a reasonable expectation that
the Company will be able to continue
in operation and to meet its liabilities
as they fall due for a Period of at least

The internal control framework of the
Company is subject to a formal review
on at least an annual basis. On a regular
basis, the Board reviews the risk report
prepared by the AIFM.
The Directors do not expect there to be
any material increase in the expenses
of the Company over the Period. The
Company’s income from investments
provides substantial cover to the
Company’s operating expenses and
buyback programme, and any other
costs likely to be faced by the Company
over the Period of the assessment.
The Company is subject to a

to be held on 14 June 2023. Following
discussions with the Company’s broker,
Investment Adviser and a number of
existing shareholders, the Directors
are of the view that the continuation
vote will be passed at the forthcoming


the Director’s view of a positive vote for
the Company’s continuation as detailed

pages 78 and 79. If the Continuation
Resolution is not passed, then the
Directors shall within six months of
such Continuation Resolution not being
passed, put proposals to shareholders
for the reconstruction, reorganisation or
liquidation of the Company.
Outlook
The outlook for the Company,
including the future development
and performance of the Company, is
discussed in the Chairman’s Statement
on pages 8 to 11 and the Investment
Adviser’s Report on pages 12 to 34.
Strategic Report
The Strategic Report set out on pages
1 to 56 of this Annual Report was
approved by the Board of Directors

For and on behalf of the Board
Ian Nolan
Chairman of the Board
25 April 2023
OTHER INFORMATION CONTINUED
WHAT’S IN THIS SECTION
Board of Directors 58
Investment Adviser 60
Corporate Governance 61
Audit and Risk Committee Report 65
Directors’ Remuneration Report 68
Directors’ Report 73
Statement of Directors’ Responsibilities 81
Other InformationFinancialsGovernanceStrategic Report
57
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
GOVERNANCE
58
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
IAN NOLAN
Non-executive Chairman
Appointed on 8 April 2019
Ian Nolan led the team that was recruited by the UK
Government in 2011 to establish the UK Green Investment

Previously, Mr Nolan held the position of Chief Investment

currently a Partner and Chairman of the Investment Committee



Arthur Andersen and graduated with a BA in Economics from

Role
Chairman
KENNETH MACRITCHIE
Non-executive Director
Appointed on 8 April 2019
Kenneth MacRitchie has over 30 years’ experience of advising



thereafter, at Shearman & Sterling where he served on their

UK Government on renewable energy policy and led the
establishment of Low Carbon Contracts Company Limited,



Role
Mr MacRitchie stepped down as Chair of the Remuneration



R
A
BOARD OF DIRECTORS
Key
R
Remuneration and Nomination Committee
A
Audit and Risk Committee
Other InformationFinancialsGovernanceStrategic Report
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DAVID MACLELLAN
Non-executive Director
Appointed on 8 April 2019
David MacLellan is the founder and currently Chairman of RJD




of Murray Johnstone, where he was latterly Chief Executive,

on the boards of a number of companies and is currently a

council member of the British Venture Capital Association
and is a member of the Institute of Chartered Accountants of

Role
Chair of the Audit and Risk Committee and member of the

A
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PATRICIA RODRIGUES
Non-executive Director
Appointed on 17 April 2019
Dr Patricia Rodrigues has over two decades of leadership
experience in infrastructure and real asset investment and

several companies and funds investing in real assets globally
with a focus on ESG, including Legal & General Assurance
Society Ltd, and is an Investment Committee member of GLIL





before leading the growth strategy of the non-real estate Real


University of Porto and a PhD in Engineering from Cambridge

Role
Appointed Chair of the Remuneration and Nomination


R
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Key
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Remuneration and Nomination Committee
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Audit and Risk Committee
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CHRISTINE
BROCKWELL
LARS
MEISINGER
MICHAEL
ANDERSON

Advisory
Energy & Infrastructure EMEA

Corporate Development
Senior Manager, Partnerships and


Energy & Infrastructure EMEA
NICOLE ZIMMERMANN
DANIEL METZGER PASCAL HERRMANN
Manager, Partnerships and Portfolio
Advisory
Energy & Infrastructure EMEA
Associate, Partnerships and Portfolio
Advisory
Energy & Infrastructure EMEA
Analyst, Partnerships and Portfolio
Advisory
Energy & Infrastructure EMEA
INVESTMENT ADVISER
Other InformationFinancialsGovernanceStrategic Report
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CORPORATE GOVERNANCE
Introduction



considered the principles and
provisions of the AIC Code of Corporate


the principles and provisions set out in
the UK Corporate Governance Code

additional provisions on issues that are


against the AIC Code, which has been

Council, provides more relevant






how the AIC Code adapts the principles
and provisions set out in the UK Code
to make them relevant for investment

Compliance


complied with the recommendations
of the AIC Code except, as explained
below, where the Company does not


composed entirely of independent
non-executive Directors, has not
appointed a Management Engagement



providers is considered by the Board

not to appoint a Senior Independent
Director due to the Board being small


relating to the role of the Chief
Executive, executive Directors’
remuneration and the need for an

out in the AIC Code, the Board considers
these provisions are not relevant to the
Company as it is an externally managed

the Company’s day-to-day management
and administrative functions are

result, the Company has no executive
Directors, employees, or internal

not reported further in respect of these

The Board
At the date of this report, the
Board consists of four independent
non-executive Directors including


to 31 December 2022 its composition
was appropriate for an investment
company of the Company’s nature and

the Investment Adviser and are able to

to discharge their responsibilities


of relevant experience to meet the

biographies are shown on pages 58

In line with the AIC Code, the Board
has decided that each Director should
be subject to annual re-election by
Shareholders, although this is not



Copies of the Directors’ appointment


the Board, any new Director will receive
an induction, and relevant training is
available to Directors on an ongoing

A policy of insurance against Directors’


A procedure has been adopted for
Directors, in the furtherance of their
duties, to take independent professional

Directors’ Indemnities
Subject to the provisions of the
Companies Act 2006 and certain
provisions contained in the deed of
indemnity issued by the Company, the

Directors against all liabilities which any
Director may suffer or incur arising out
of or in connection with any claim made
or proceedings taken against them, or
any application made under sections

Act 2006 by them, on the grounds of
their negligence, default, breach of
duty or breach of trust, in relation to the

62
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
CORPORATE GOVERNANCE 
Board Committees

membership and chairmanship of its

Audit and Risk Committee

of the role, composition and meetings
of the Audit and Risk Committee
together with a description of the work
of the Audit and Risk Committee in

MacLellan is the Chair of the Audit and
Risk Committee and the other members
are Kenneth MacRitchie and Patricia

Remuneration and Nomination
Committee

Committee will meet at least once

principal duties include identifying and
nominating to the Board new Directors,
and undertaking an annual performance
evaluation of the Board, led by the


was the Chair of the Remuneration and

members of the Remuneration and
Nomination Committee were David


became Chair of the Remuneration and

remains a member of the Remuneration

Committee’s other responsibilities





consider the appropriate composition


consider the annual Board evaluation


Each committee has adopted formal
terms of reference, which are reviewed

available on the Company’s website or


functions of a Management Engagement

review and consider the actions and
judgements of management in relation

Statements, and the Company’s
compliance with the UK Code, the Listing
Rules, the Disclosure Guidance and

It will review the role of the Investment

effectiveness of the internal control
systems of the Company’s key service

Meeting Attendance
Remuneration
Quarterly Audit and
Board and Risk Nomination
Number of meetings held meetings Committee Committee
Ian Nolan
1
   
   
   
In addition, a number of ad hoc Board and committee meetings were held during the year to deal with administrative matters and


 Ian Nolan is not a member of the Audit and Risk Committee or the Remuneration and Nomination Committee; however, he attended each

Other InformationFinancialsGovernanceStrategic Report
63
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Decision Making

stewardship of the Company’s affairs
and has adopted a schedule of matters


operational matters of a material nature
are considered at its meetings, including
reviewing the Company’s performance
by reference to the Company’s key

Strategy Day is also held on at least an
annual basis, at which key operational
and marketing matters are discussed

All Board members attend this meeting,
together with key representatives of the



advice at the Company’s expense where
it judges it necessary to discharge its

During the year the Board considered
and recommended for approval to the

prior to investment, including, where
deemed appropriate, the need for
gearing, hedging and the overall

being presented to the Board, each

who reviewed it against an agreed set
criteria of items to ensure it was suitable
for the Company’s long-term success

Division of Responsibilities

responsibilities between the Chair, the

Role of the Chair includes:
•
leadership of the Board;
•
ensuring the Board is provided

to ensure it is able to discharge its
duties;
•
ensuring each Board member’s views
are considered and appropriate
action taken;
•
ensuring that each committee has the

•
engaging the Board in assessing and
improving its performance;
•
overseeing the induction and
development of Directors;
•

Adviser and other service providers;
•
seeking regular engagement
with major Shareholders in order
to understand their views on
governance and performance against
the Company’s investment objective
and investment policy;
•
ensuring that the Board as a whole
has a clear understanding of the
views of Shareholders; and
• ensuring regular engagement with
each service provider and keeping up

Role of the Board includes:
•
reviewing the Board pack ahead of
the meeting;
•
providing appropriate opinion,
advice and guidance to the Chairman
and fellow Board members;
•
supporting the Board, Chairman and

roles; and
• providing appropriate support at the

Role of Committee

•
ensuring appropriate papers are
considered at the meeting;
•
ensuring Committee members’
views and opinions are appropriately
considered;
•
seeking engagement with

related to their areas of responsibility;
•
maintaining relationships with
advisers; and
• obtaining independent professional

Board Diversity

of diversity and supports the

All Board appointments will be made
on merit and have regard to diversity,
including factors such as gender, skills,


four Directors, three of whom are male


that will shortly come into force that

met, the Board has agreed, following the
recommendation of the Remuneration
and Nomination Committee, to recruit
an additional Board member and have
agreed to consider candidates based on
merit and against set objective criteria,
whilst being mindful of the new Listing


organisation that has no links with the
Company, to help identify suitable

64
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
CORPORATE GOVERNANCE 
Board Tenure

the Company of having longer-serving
Directors together with progressive

does not believe that length of service in

from seeking re-appointment but, when
making a recommendation, the Board


mindful that they will reach their ninth
anniversary simultaneously in April

Board has adopted a succession plan


a Director with more than nine years’
service for re-election at the Company’s

In line with corporate governance best
practice, all of the Directors will retire
and offer themselves for re-election at
the AGM of the Company to be held on


Performance Evaluation
During the year the Board engaged
Lintstock, a company independent of
the Board and Company, to carry out a
performance evaluation of the Board,
its committees, the Chairman and the



of the Board and its committees, the
individual contribution of Directors,


Committee then met to discuss the
results of the performance evaluation
and the Board also considered a list of



considered, amongst other criteria, the
balance of skills of the Board, training

contribution of individual Directors and
the overall effectiveness of the Board

most recent performance evaluation
were positive and demonstrated that
the Directors showed the necessary


Internal Control

to review the effectiveness of the


responsibility for the Company’s system
of internal controls and for monitoring

controls is designed to manage rather
than eliminate the risk of failure to

provide only reasonable assurance


the aspects covered by the guidance and

in the key areas of business objectives,
accounting, compliance, operations,
and secretarial as being matters of
particular importance upon which it


that the existing arrangements, represent
an appropriate framework to meet

Directors review the effectiveness of
the internal control system throughout

Financial Aspects of



Other Aspects of


meetings each year, plus additional

meetings there is regular contact

and the Company Secretary and



reports separately in writing to the
Board concerning risks and internal
control matters within its remit, including


Additional ad hoc reports are received

at all times to the advice and services
of the Company Secretary, who is
responsible to the Board for ensuring
that Board procedures are followed and
that applicable rules and regulations are



the Board to monitor the Company’s
progress towards its objectives and
encompass an analysis of the risks

Company’s risk management and
internal controls systems is monitored
regularly and a formal review, utilising
a detailed risk assessment programme,

includes a review of the internal controls


Principal Risks

carried out a robust assessment of the
principal risks facing the Company,
including those that would threaten its
business model, future performance,

and how they are being managed are set


Other InformationFinancialsGovernanceStrategic Report
65
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
AUDIT AND RISK COMMITTEE REPORT
Audit and Risk Committee


the Board should establish an Audit
Committee comprising at least three or,
in the case of smaller companies, two


the Audit and Risk Committee has recent

has competence relevant to the sector in

Composition
David MacLellan, Kenneth MacRitchie
and Patricia Rodrigues are members
of the Committee, which is chaired by

written terms of reference and copies
of these are available on the Company’s


at least one of its members has recent

competence relevant to the sector in

Role and Responsibilities


are set out in its terms of reference,



activities during the year:
•
a detailed analysis of the Company’s

underlying assumptions used in
calculating the fair market valuation
of each renewable energy asset;
•
monitored and reviewed the
Company’s emerging and principal
risks and internal controls;
•
considering the ongoing assessment
of the Company as a going concern;
•
considered the appointment,
independence, objectivity and
remuneration of the auditor;
•
reviewed the audit plan, annual


• 
implications on the independence of
the auditor arising from the provision

Internal Audit

need for an internal audit function and
considers that this is not appropriate
given the nature and circumstances of
the Company as an externally managed
investment company with external

the need for an internal audit function

Financial Aspects of



the Company and for reviewing its


the maintenance of proper accounting

information upon which business
decisions are made and which is used
for publication, and that the assets of


to external agencies the services

fully informed of the internal control
framework established by each relevant

assurance on the effectiveness of internal


Responsibilities in respect of the





David MacLellan
Audit and Risk Committee Chair
66
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
AUDIT AND RISK COMMITTEE REPORT

Internal Audit continued
Financial Statements and


statements and considered the following


for the year ended 31 December 2022:
Valuation and Existence


to designate investments at fair value



investments are fairly valued due to the
uncertainty involved in determining the

reviewed the procedures in place for
ensuring the accurate valuation and
existence of investments, and approved
the valuation of the Company’s
investments and their existence at the
year end with the Investment Adviser,


Policy which sets out the valuation

valuation by the Investment Adviser
using fair market valuations of the SPV
companies that hold the Renewable
Energy Infrastructure Investments on
an annual basis as at 31 December



principles used to calculate the fair value
of the assets are based on International



derived from the present value of the

using reasonable assumptions and
forecasts for revenues and operating


the key estimates and assumptions used
in the valuation model are appropriate
and that the investments have been

assumptions include the useful life of
the assets, the discount rates, the rate


the amount of electricity the assets are

Recognition of Income
Income may not be accrued in the


Committee reviewed the Administrator’s
procedures for recognition of income
and reviewed the treatment of income

Tax Status

on the realisation of investments
if investment trust status is not

the compliance of the Company during
the period with the eligibility conditions
in order for investment trust status to be

Going Concern

going concern assessment and
concluded that it is appropriate for the

prepared on a going concern basis as
described in the Directors’ Report on

Calculation of the Investment
Adviser’s Fees

Adviser’s fees and concluded that




Conclusion with Respect to


the Annual Report for the year to

is fair, balanced and understandable
and provides the information necessary
for Shareholders to assess the
Company’s business model, strategy



through a process of review of the

parties involved in the production of the

Audit Arrangements

was selected as the Company’s auditor
at the time of the Company’s launch
following a competitive process and



audit partner, Richard McGuire, was

appointment of the auditor is reviewed
annually by the Committee and the
Board and is subject to approval by


out to tender within ten years of the

the audit partner must be rotated



Committee at its November 2022
Committee meeting, ahead of the
commencement of the Company’s

the audit process, materiality scope and

Other InformationFinancialsGovernanceStrategic Report
67
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Internal Control and Risk
During the year the Committee,

service providers, carefully considered
the Company’s matrix of risks and




Company’s principal risks can be found




Committee reviewed these reports and

control weaknesses or other issues that
needed to be brought to the Board’s

Auditors’ Independence

independence of the auditor and the
objectivity of the audit process and

obligations to Shareholders and as
independent auditor to the Company

the Committee recommends the
re-appointment of PwC and their
re-appointment will be put forward
to the Company’s Shareholders at the


there are no issues in respect of the

Effectiveness of External Audit

reviewing the effectiveness of the

received a presentation of the audit
plan from the external auditor prior
to the commencement of the audit,
and a presentation of the results of
the audit following completion of the

Committee received feedback from
the Company Secretary, Administrator


the above review, the Committee has
agreed that the re-appointment of the
auditor should be recommended to
the Board and the Shareholders of the

Provision of Non-Audit Services

Guidance on Audit Committees and has
formulated a policy on the provision of
non-audit services by the Company’s

that the Company’s appointed auditor
will not be considered for the provision
of certain non-audit services, such as
accounting and preparation of the


provide other non-audit services which
are not restricted by the policy, and this

During 2021, the Company also
engaged with PwC to perform reporting
accountant services in relation to
admission of new shares to trading

assessed that this non-audit service is a
permissible service in accordance with



PwC was not engaged to undertake
non-audit services for the year ended

Committee Evaluation

considered as part of the annual
performance evaluation which was



the Committee was operating effectively
and had the appropriate balance of skills

David MacLellan
Audit and Risk Committee Chair
25 April 2023
68
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Dr Patricia Rodrigues
Remuneration and Nomination Committee Chair
DIRECTORS’ REMUNERATION REPORT
Remuneration and


Committee is responsible for
reviewing the remuneration payable
to the Directors, taking into account
the relevant circumstances of the
Company, the time commitment and
relevant experience and skills of the
Board and the average fees paid to the


Kenneth MacRitchie was the Chair of
the Remuneration and Nomination

the Remuneration and Nomination
Committee are David MacLellan and

2023, Dr Rodrigues became Chair of
the Remuneration and Nomination
Committee and Mr MacRitchie remains

Nomination Committee has formal
written terms of reference and copies
of these are available on the Company’s



Committee met once during the year

Annual Chair’s Statement
I am pleased to present the
Remuneration Report for the year to
31 December 2022, which has been
prepared in accordance with sections


auditor to audit certain sections of the
Remuneration Report; where this is
the case the relevant section has been

Directors’ Remuneration
During the year under review, each of
the Directors were entitled to receive a

the Chairman of the Board who receives
EUR 75,000 and the Chair of the Audit
and Risk Committee who receives a fee

Directors’ fees are in respect of their
appointment as a non-executive Director
of the Company and their appointment




During the year, the Remuneration and
Nomination Committee reviewed the
Directors’ remuneration, and it was
agreed that the Board’s remuneration,
other than the Chairman’s, be increased

In carrying out its review, the Committee
considered the remuneration of
each Board member, taking into
consideration their individual role,
expected time commitment, experience
and skills, and the market expectation of
the remuneration paid to the Company’s
Board and the remuneration paid to

No commissions or performance-related
payments were awarded or would
be awarded to the Directors by the


respect of the Company’s accounting
period ended 31 December 2022 will
be payable out of the assets of the


do not receive bonuses or other
performance-related remuneration,
share options, pension contributions


No Director has waived or agreed
to waive any emoluments from the

Other InformationFinancialsGovernanceStrategic Report
69
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Remuneration Consideration

Annual fee
Annual Annual from 8 April
fee from fee from 2019 to
1 January 1 April 31 March
2023 2021 2021
Role EUR EUR EUR
Chairman 75,000 75,000 75,000
   
   
AGM Approval of the Remuneration Policy and Remuneration Implementation Report



material variation to the Remuneration Policy is proposed and in which case Shareholder approval will be sought to amend the


Remuneration Consultants
Remuneration consultants were not engaged by the Company during the year under review and in respect of the



Remuneration Policy

package for non-executive Directors, which are contained in the Remuneration Policy, are as detailed below:
Current and Future Policy
Component Director Purpose of Reward Operation
Annual fee Chairman of the Board 
Company and its subsidiary,

Determined by the
Remuneration and

Annual fee Other Directors 
Directors of the Company and its

Limited
Determined by the
Remuneration and

Additional fee Chair of each committee 
time commitment, if deemed
appropriate
Determined by the
Remuneration and

Expenses All Directors Reimbursement of expenses
incurred in the performance of
their duties
Submission of appropriate
supporting documentation to
the Chairman or a fellow Board

In accordance with the Company’s Articles of Association, Board fees in aggregate cannot exceed EUR 500,000 per annum,

70
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REMUNERATION REPORT

Directors’ Service Contracts






Statement of Consultations


Fees Payable on Recruitment







Effective Date






Year ended 31 December 2022 Year ended 31 December 2021
Taxable
     
Percentage increase
1
Director EUR EUR EUR EUR EUR EUR 2022 2021 2020
Ian Nolan 75,000 — 75,000      
David MacLellan 50,000 — 50,000      
Kenneth MacRitchie 43,000 — 43,000      
Patricia Rodrigues 43,000 — 43,000      
 211,000 — 211,000      


 



Other InformationFinancialsGovernanceStrategic Report
71
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Performance





Relative Importance of Spend on Pay


Year ended Year ended
31 December 31 December
2022 2021
(EUR ’000) 
Spend on Directors’ fees 169 
Company’s operating expenses and advisory fees 4,715 
Dividends paid and payable to Shareholders 21,165 



20
-10
Jun
2019
Sep
2019
Dec
2019
Jun
2020
Sep
2020
Dec
2020
Mar
2020
Jun
2021
Sep
2021
Dec
2021
Mar
2021
Jun
2022
Sep
2022
Dec
2022
Mar
2022
0
-30
10
40
30
-20
AER share price AER NAV 
72
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REMUNERATION REPORT




Ordinary Ordinary
Shares as at Shares as at
31 December 31 December
2022 2021
Ian Nolan 100,000 100,000
David MacLellan 75,000 75,000
Kenneth MacRitchie 50,000 50,000
Patricia Rodrigues 50,000 50,000
In the period from 1 January 2023 to the date of this report Mr Nolan and Mr MacLellan purchased the following shares:
Date of Price paid Shares holding in
transaction per share purchased the Company
    
    
 
Voting on Remuneration Matters at the 2022 AGM and in Respect of Remuneration Policy

Other Disclosures
At the last AGM, held on 9 June 2022, the following resolution, including Directors’ remuneration, was approved:

Shares voted Percentage
  
Against 261 0%
Withheld 0 0%
Statement


Implementation Report summarises, as applicable, for the year to 31 December 2022:



Dr Patricia Rodrigues
Remuneration and Nomination Committee Chair
25 April 2023
Other InformationFinancialsGovernanceStrategic Report
73
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REPORT
Strategic Report

conjunction with the Strategic Report on

Corporate Governance



Risk and Risk Management



Viability Statement


Legal and Taxation Status

within the meaning of section 833

Company conducts its affairs to meet

investment trust under section 1158

Company received initial approval as an
investment trust and the Company must
meet eligibility conditions and ongoing


the Directors, the Company has met

approval as an investment trust for the

Market Information

listed on the London Stock Exchange

Share is published through a regulatory

Retail Distribution of Investment
Company Shares via Financial
Advisers and Other Third-Party
Promoters


which investment products can be
promoted to retail investors, certain





distribution of its shares, being shares in
an investment trust, is not restricted as a


affairs so that the shares issued by the
Company can be recommended by

intends to continue to do so for the

Articles of Association
Amendments to the Company’s

Ordinary Resolution to be passed by

Management
The Board

to Shareholders for the overall

Board has adopted a Schedule of
Matters Reserved for the Board which
sets out the division of responsibilities
between the Board and its various
committees, the Chairman and the
Chairs of the various committees,



of external independent advisers, the
Board manages risk and governance of

Appointment and


and replacement of Directors are
contained in the Company’s Articles of



appointment and re-election at least

in accordance with the UK Code of
Corporate Governance, the Board has
resolved that all Directors shall stand for

Alternative Investment









statements for the year ended 31 December 2022.
74
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REPORT 
Management continued
Alternative Investment
continued
During the year, Apex Group







management of the Company, including
the following services:
 
Infrastructure Investments in
accordance with the investment
policy;
 
Renewable Energy Infrastructure

approval and as recommended by

 

Adviser and making relevant
recommendations to the Board; and
 
Board, and executing transactions



risk management services to the
Company, including:
 
establishment of a risk reporting
framework;
 
compliance with the investment
policy and the investment
restrictions in accordance with

policies and procedures, and
providing regular updates to the
Board;
 
Company’s exposures, leverage,
counterparty and concentration
risk; and
 


executed transactions, carry out



assist the Board in establishing,
maintaining and reviewing
valuation policies for calculating


 
per annum plus an additional

annum of the NAV of the Company
that exceeds EUR 300 million;
 
per annum in respect of each
jurisdiction in which a marketing


and
 
Investment Adviser fee payable by


An additional fee will be agreed


on behalf of, the Company to undertake
additional risk and duties outside the


either party on not less than six months’

may be terminated earlier by the



from the Company in relation to

discharge of its duties other than those
arising by reason of gross negligence,

Investment Adviser


as the Investment Adviser to provide

in respect of the Company, pursuant to


for certain investment advisory services
to the Company, including sourcing
potential opportunities in which the
Company may invest, as well as ongoing
monitoring of the Renewable Energy


advisory services provided to the

its Renewable Energy Infrastructure


continue in force for an initial period of


will continue thereafter on a rolling basis
and may be terminated following the
initial period of twelve months’ notice


the Investment Adviser for losses that
the Investment Adviser may incur in the
performance of its duties pursuant to
the Investment Advisory Agreement
that are not attributable to the fraud,
gross negligence, or wilful default of,
the Investment Adviser determined by

Under the Investment Advisory
Agreement, the following fee is payable
to the Investment Adviser:
•

the Company up to EUR 300 million;
•

of the Company between EUR 300
million and EUR 500 million; and
• 


appointment, the Investment Adviser



as announced on 6 August 2021, this
arrangement was extended by an

If the Ordinary Shares are trading at
a premium to the prevailing NAV, the
Company will issue new Ordinary Shares

the Ordinary Shares are trading at a
discount to the prevailing NAV at the
relevant time, no new Ordinary Shares
will be issued by the Company and
instead the Company will instruct its

the value of the fee due in the relevant

Agreement is terminable by either the
Investment Adviser or the Company
giving to the other not less than six

would not expire earlier than the third


Other InformationFinancialsGovernanceStrategic Report
75
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
In accordance with the Investment Advisory Agreement, the Board agreed to purchase or issue shares to the Investment Adviser




Company Secretary and Administrator



Alternative Investment Fund Managers Directive




Continuing Appointment of Service Providers



and concluded that each offered a satisfactory service and that their continued appointment was in the best long-term interests

Share Capital
Shares issued during the year
Number Price paid
Date of shares per share
   
Issue of Ordinary Shares to the Investment Adviser pursuant to the
   
Issue of Ordinary Shares to the Investment Adviser pursuant to the
   
Purchase of shares to satisfy the Investment Advisory Agreement
During the year under review the following shares were purchased on behalf of the Investment Adviser in full satisfaction of the
Investment Advisory Agreement:
Number Price paid
of shares for shares
  
  
  



76
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REPORT 
Management continued
Share Capital continued
Buyback of shares


Number of Price paid
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Voting rights






Other InformationFinancialsGovernanceStrategic Report
77
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Restrictions


restrictions on the distribution of dividends and the repayment of capital, and no agreements to which the Company is a party

Power to issue shares



At the 2022 AGM the Company’s Shareholders approved a renewal of the authority previously granted at the 2021 AGM to allot


the forthcoming AGM, where authority will be sought to renew this authority up to a maximum of 20% of the Ordinary Shares in





Results and Dividend



Dividend amount
In respect of the per Ordinary Ex-dividend
period to Shares in cents Pay date Record date date
     
     
     
     


comprising 3% or more of the issued share capital of the Company:
Percentage
  
1

   
   
    
   
   
   
   

Percentage
  
1

   
   
   
   
 
78
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REPORT 
Settlement of Ordinary Share
Transactions
Ordinary Share transactions in the


Shareholder Engagement

importance of engaging with the
Company’s Shareholders to gauge
their views on topics affecting the


to attend the Company’s AGM on


how to do this can be found in the
Notes to the Notice of AGM which


available shortly after the AGM on





dividend information and other

Appointment of Auditors


having expressed their willingness to

put forward for re-appointment at the
Company’s AGM and the Board will seek
authority to determine their remuneration

Going Concern



of the Directors’ assessment of the going




this conclusion, the Directors have
considered its cash position, income,

programme and compliance with the

assets as at 31 December 2022 was






2022 of its Gross Asset Value, comprised




compliance with its covenants related

Company has recently negotiated an


have analysed the covenants of the


headroom exists in relation to both the





65% in order to breach the Company’s

year ended 31 December 2022 were




document, based on the aggregate
of investments and cash held, the
Company has substantial operating


are the payment of dividends, costs

investments and payment due in respect
of the settlement of shares purchased
in respect of the Company’s buyback


balances to fund its commitments to
Guillena, which as at 31 December 2022
was the Company’s only remaining
commitment which is intended to be


review of the issues arising following
the war in Ukraine; high volatility in
commodity prices; the windfall revenue
clawback on inframarginal technologies


face the Company’s assets, as discussed
in the Chairman’s Statement and
Investment Adviser’s Report on pages 8



that the Company would continue
to remain viable under downside
scenarios, including a decline in long
term production and power price

guidance provided in the Company’s

the Company expects its 2023 target
dividend to be fully covered even if


derived from the sale of electricity,

Purchase Agreements which cover the


Continuation Resolution at this


Company’s broker, Investment Adviser
and a number of existing shareholders,
the Directors are of the view that the
Continuation Resolution will be passed


factors that support the Director’s view
of a positive vote for the Company’s
continuation as detailed below:
•

is one of the largest participants in
the European renewables market
and provides the Company with
access to a 10 GW development and
construction pipeline, providing

term growth;
•

Company’s portfolio has resulted in
high level of earnings visibility and

Board to recently announce a 5%
increase to its dividend target for
2023;
•

dividend yield which compares
favourably to other renewable funds
providing exposure to European
assets;
•

positioned, with all of its construction
projects completed, relatively low


In addition, the Investment Adviser
is also undertaking due diligence in
relation to asset life extensions which
could realise further upside within the
portfolio;
Other InformationFinancialsGovernanceStrategic Report
79
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
•

a proactive approach to capital
allocation following the EUR 20
million share buyback programme

•

Investment Adviser have
demonstrated strong shareholder
alignment through the commitment
of the Investment Adviser to take its
management fee in shares since IPO,
as well as recent share purchases by
select members of the Board and
employees of the Investment Adviser;
and
• 
structure, which is up to 30% less than
peers based on its Ongoing Charges

If the Continuation Resolution is
not passed, then according to the
Company’s articles, the Directors
shall within six months of such
Continuation Resolution not being
passed, put proposals to shareholders
for the reconstruction, reorganisation

Accordingly, the Directors expect that
if the Continuation Resolution is not
passed, an event which the Directors
consider to be unlikely, formulating
and implementing any such proposals

operations for a period of at least 12
months from the date of approval of the

Auditor Information
Each of the Directors, at the date of the

 
no relevant audit information of which
the Company’s auditors are unaware;
and



aware of any relevant information
and to establish that the Company’s
auditors are aware of that


be interpreted in accordance with


Annual General Meeting
The following information is
important and requires your
immediate attention. If you are in any
doubt about the action you should
take, you should seek advice from
your stockbroker, bank manager,

adviser authorised under the Financial
Services and Markets Act 2000.


Company’s lawyers, CMS Cameron

details of the AGM, the resolutions
proposed and how to vote by proxy are
described in the Notice of Meeting on
pages 116 to 117 of this Annual Report
and the explanatory notes on pages 118



Resolutions relating to the following
items of special business will be
proposed at the forthcoming AGM to

Resolution 3 Remuneration Policy


Shareholders will be asked to receive
and approve the Remuneration Policy
of the Company set out in full on page
69 by way of an ordinary resolution at

successfully passed, the Remuneration
Policy will apply immediately following

of any proposed material variation to
the Remuneration Policy or should the
resolutions to approve the Remuneration
Policy, or the Remuneration
Implementation Report, fail to be passed
at the forthcoming AGM, Shareholder
approval will be sought for a proposed

Resolution 4 Continuation Vote

that the Directors propose an ordinary
resolution at the AGM to be held in 2023,
and every fourth AGM thereafter, that
the Company continue its business as a
closed-ended investment company for a


the Company continue its business as

In the event that such a resolution is not

draw up proposals for the reconstruction,

the Company for consideration by
Shareholders at a General Meeting to be
convened for a date not more than six
months after the date of the meeting at
which such ordinary resolution was not


Statement at page 8 to page 11, the
Board strongly recommends that
Shareholders vote in favour of the


80
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
DIRECTORS’ REPORT 
Resolutions 12, 13 and 14
Authority to Issue Ordinary
Shares and to Dis-apply
Pre-emption Rights
At the forthcoming AGM the Board is
seeking to renew the authority granted
to them at the AGM held on 9 June 2022

the Company’s shares in issue as at the

130,511,365 Ordinary Shares, excluding

pre-emption rights when allotting up to




aggregate authority is in keeping
with recent revised guidance from the
Investment Association in relation to
a UK investment company and the UK
Pre-Emption Group adapted for the
context of an investment company and


in guidance, the Directors are aware
that the combined authority to dis-apply
pre-emption rights in respect of up to
20% of the Company’s issued Ordinary
Share capital sought under Resolutions

offering shareholders the opportunity to


10% authority creating an aggregate 20%

believe that a higher 20% authority is

to grow and further expand its assets, as
well as to lower the Company’s ongoing

Shares will only be issued at a price more

Ordinary Share at the time of issue, after

discretion of the Board when it is deemed
to be in the best interests of Shareholders


resolutions will expire at the conclusion

renewed prior to this date via a General



Resolution 15 Renewal of
Authority to Purchase own
Shares

the AGM held on 9 June 2022 to make

Ordinary Shares in issue as at the date



31 December 2022, the Company did
not utilise its authority to purchase

Company purchased for treasury a total


will expire at the conclusion of the

recommend that a new authority to
purchase up to 58,696,830 Ordinary


in issue, excluding treasury shares, at the

be granted and a resolution to that

Ordinary Shares purchased will either
be held in treasury or, if the Directors so

expire at the Company’s AGM to be held




by way of market purchase as treasury
shares, rather than having to cancel

the ability to re-issue Ordinary Shares



in the management of its capital

from treasury at a price less than the

at the time of their sale unless they


Company did not hold any shares in



Ordinary Shares are purchased at the
discretion of the Board and when it
is deemed to be in the best interests

will be purchased for cancellation
or for treasury only when the shares
are trading at a discount to the net

Resolution 16 Notice of


best interests of Shareholders of the
Company to have the ability to call


will therefore propose resolution 16 at
the AGM to approve the reduction in
the minimum notice period from 21 to


Once approval is granted, the approval
would be effective until the Company’s
next AGM, when it is intended that a

In accordance with the Shareholders’
Rights Directive, the Company will offer
the Shareholders the ability to vote by

accessible to all Shareholders, should


be used by the Board under appropriate

Regulatory Disclosures –
Information to be Disclosed in
Accordance with Listing Rule
9.8.4.

companies to report certain information





information can be found on page 75 on
the issue of shares undertaken by the

By order of the Board
Jenny Thompson


Limited
Company Secretary
25 April 2023
Other InformationFinancialsGovernanceStrategic Report
81
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN


preparing the Annual Report and the





the Directors have prepared the

international accounting standards
in conformity with UK adopted
international accounting standards and

Act 2006 as applicable to companies

Under Company law, Directors must not


and fair view of the state of affairs of the




•
select suitable accounting policies
and then apply them consistently;
•
state whether they have been
prepared in accordance with UK
adopted international accounting
standards, subject to any material
departures disclosed and explained

•
make judgements and accounting
estimates that are reasonable and
prudent; and
• 
the going concern basis unless it is
inappropriate to presume that the


safeguarding the assets of the Company
and hence for taking reasonable steps
for the prevention and detection of fraud




the Company’s transactions and disclose
with reasonable accuracy at any time

and enable them to ensure that the

Remuneration Report comply with the



the maintenance and integrity of the

the United Kingdom governing the
preparation and dissemination of



Each of the Directors, whose names
and functions are listed in Corporate

best of their knowledge:
•

which have been properly prepared
in accordance with UK adopted
international accounting standards,
give a true and fair view of the assets,

of the Company; and
• the Directors’ Report includes a
fair review of the development and
performance of the business and the
position of the Company, together
with a description of the principal


Ian Nolan
Chairman
25 April 2023
82
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Opinion
In our opinion, Aquila European
Renewables Plc’s (formerly Aquila
European Renewables Income Fund

•





•




• 
















Basis for Opinion











Independence
















Our Audit Approach
Overview
Audit Scope
•





•






• 






Key Audit Matters
•


• 

Materiality
•



• 

The Scope of Our Audit




Key Audit Matters

























INDEPENDENT AUDITORS’ REPORT


Other InformationFinancialsGovernanceStrategic Report
83
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Key audit matter How our audit addressed the key audit matter
Valuation of investments held at fair value



























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
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



Ability to continue as a going concern
(Continuation Resolution)

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
84
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
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

Materiality



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 
 
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












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INDEPENDENT AUDITORS’ REPORT 

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Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Conclusions Relating to


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

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





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


scenarios, including assessing



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
underlying formulae and


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







• Performed procedures over











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






















Reporting on Other
Information

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
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

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






























Strategic Report and
Directors’ Report














Directors’ Remuneration


been properly prepared in accordance

Corporate Governance
Statement























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



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






86
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Corporate Governance
Statement 
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

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• 
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

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
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
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• 
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








Responsibilities for the
Financial Statements and

Responsibilities of the
Directors for the Financial
Statements










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going concern, disclosing, as applicable,
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Auditors’ Responsibilities
for the Audit of the Financial
Statements

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


INDEPENDENT AUDITORS’ REPORT 

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87
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

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
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


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Companies Act 2006
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
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


•





•



• 







Appointment










Other Matter














Richard McGuire (Senior
Statutory Auditor)






88
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
STATEMENT OF COMPREHENSIVE INCOME

For the year ended 
31 December 2022 
Revenue Capital Total   
 (EUR ’000) (EUR ’000) (EUR ’000)   
  — 41,778 41,778   
 — (13) (13)   
  15,929 — 15,929   
  1,200 — 1,200 — — —
  (3,150) — (3,150)   
  (1,565) — (1,565)   

 12,414 41,765 54,179   
 (75) — (75)   

 12,339 41,765 54,104   
 — — — — — —

 12,339 41,765 54,104   

  3.02 10.24 13.26   

  3.02 10.24 13.26   





Other InformationFinancialsGovernanceStrategic Report
89
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
STATEMENT OF FINANCIAL POSITION

 
31 December 
2022 
(EUR ’000) 

  428,641 

  5,630 
 19,893 
25,523 

  (2,514) 
(2,514) 
 23,009 
 451,650 
 
 4,082 
 255,643 
 125,082 
 65,618 
Revenue reserve 1,225 
 451,650 
 110.64c 


Ian Nolan


90
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
STATEMENT OF CHANGES IN EQUITY

Share
Share premium Special Capital Revenue
     
 (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000)

1 January 2022 4,069 254,388 134,393 23,853 740 417,443

 13 1,313 — — — 1,326
 — (58) — — — (58)
 — — — 41,765 12,339 54,104
  — — (9,311) — (11,854) (21,165)

31 December 2022 4,082 255,643 125,082 65,618 1,225 451,650

    
     
      

1 January 2021      

      
      
      
       

31 December 2021      

 

Other InformationFinancialsGovernanceStrategic Report
91
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
STATEMENT OF CASH FLOWS

Year ended 
31 December 
2022 
(EUR ’000) 

 54,179 

 (41,778) 
 3,668 
 859 
  

  (71,369) 
  1,459 
 — 
 (1,428) —
  

  1,326 
 (58) 
  (21,165) 
 (75) 
  
  
  
  

92
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Characteristics of an




 



 











 







 






























2. Basis of Preparation






























Accounting for Subsidiary


























1. General Information
Aquila European Renewables Plc

























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93
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
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





Going Concern












































94
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)






















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

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
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


























Key Estimation and Uncertainty:
Investments at Fair Value

















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


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

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
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
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


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


















2. Basis of Preparation

Critical Accounting Judgements,
Estimates and Assumptions









Key Judgements














































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95
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)


















Taxation











Deferred Taxation

payable or recoverable on differences























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Financial Assets





























Recognition, Derecognition





















New Standards, Interpretations
and Amendments Adopted from








New Standards and Amendments









Amendments to IAS 1:

Current or Non-current
























96
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 


Deferred Taxation 



Segmental Reporting




Income






Expenses









Foreign Currency






Cash and Cash Equivalents


Share Capital, Special Reserve and Share Premium




Other InformationFinancialsGovernanceStrategic Report
97
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)

 
31 December 
2022 

Fair Value Fair Value
 

(EUR ’000) 
(a) Summary of valuation

 428,641 
  

 293,068 
 71,369 
 (1,459) 
 362,978 

 65,663 
  
   


 41,778 
  




Fair Value Measurements











 
Level 1 Level 2 Level 3 Total    
(EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000)    

 — — 428,641 428,641    
— — 428,641 428,641    
98
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 


Fair Value Measurements 




Year ended 
31 December 
2022 
(EUR ’000) 
Opening balance 316,953 
 71,369 
 (1,459) 
 41,778 
 428,641 
Valuation Methodology








Valuation Assumptions
As at 31 December 2022
 



 




 

 


 




 

Other InformationFinancialsGovernanceStrategic Report
99
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 

 
Valuation Sensitivities






(i) Discount Rates


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
NAV per -0.5% +0.5% NAV per
    
     
 4.8 471,283 451,650 433,174 (4.5)


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NAV per Total NAV per
    
     
 (10.6) 408,308 451,650 495,715 10.8
(iii) Energy Yield

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



100
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 


Valuation Sensitivities 
(iii) Energy Yield 


NAV per P90 Total P10 NAV per
    
     
 (8.9) 415,175 451,650 488,123 9.0












NAV per Total NAV per
    
     
 (4.3) 434,122 451,650 470,280 4.6


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
NAV per Total NAV per
    
     
 (2.4) 441,663 451,650 458,869 1.8
(vi) Operating Expenses




NAV per Total NAV per
    
     
 3.6 466,393 451,650 436,281 (3.7)
Other InformationFinancialsGovernanceStrategic Report
101
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
5. Income from Investments
For the 
year ended year ended
31 December 
2022 
 (EUR ’000) 
  15,929 
 1,200 —
Total income 17,129 
6. Investment Advisory Fees
For the year ended 
31 December 2022 
Revenue Capital Total   
(EUR ’000) (EUR ’000) (EUR ’000)   
 3,150 — 3,150   

a) 
b) 
c) 










Share-Based Payments


Fair value
 
    
     
     
     
     
     
     
102
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 

6. Investment Advisory Fees continued
Share-Based Payments 
Fair value
 
    
     
     
     
     
     
7. Other Expenses
For the year ended 
31 December 2022 
Revenue Capital Total   
(EUR ’000) (EUR ’000) (EUR ’000)   
 254 — 254   
Tax compliance 132 — 132   
 169 — 169   
 12 — 12   
 87 — 87   


352 — 352   
 147 — 147   
 23 — 23   
 67 — 67   
 61 — 61   
 162 — 162   
 33 — 33   
 66 — 66   
 1,565 — 1,565   
8. Finance Costs
For the year ended 
31 December 2022 
Revenue Capital Total   
(EUR ’000) (EUR ’000) (EUR ’000)   
  72 — 72   
 3 — 3   
Total 75 — 75   
 




Other InformationFinancialsGovernanceStrategic Report
103
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
9. Taxation
(a) Analysis of Tax Charge in the Year
For the year ended 
31 December 2022 
Revenue Capital Total   
(EUR ’000) (EUR ’000) (EUR ’000)   
 — — — — — —
(b) Factors Affecting Total Tax Charge for the Year



For the year ended 
31 December 2022 
Revenue Capital Total   
(EUR ’000) (EUR ’000) (EUR ’000)   
 12,339 41,765 54,104   
 2,344 7,935 10,279   

 — (7,937) (7,937)   
 — 2 2   
 (228) — (228) — — —
 13 — 13   

 19 — 19   
 (2,148) — (2,148)   
 — — — — — —










10. Return per Ordinary Share
For the 
year ended year ended
31 December 
 2022 
  12,339 
  41,765 
  54,104 
 407,926,535 
 407,926,535 
104
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 

10. Return per Ordinary Share 

For the 
year ended year ended
31 December 
 2022 

 407,926,535 

 — 

 407,926, 535 
11. Trade and Other Receivables
 
31 December 
2022 
 
  5,542 
  — 
Prepaid expenses 88 
Total 5,630 
12. Trade and Other Payables
 
31 December 
2022 
 
Accrued expenses 1,291 
 645 —
 578 
Total 2,514 
13. Share Capital
 
31 December 2022 
   

 408,225,705 4,082  
Total 408,225,705 4,082  







Other InformationFinancialsGovernanceStrategic Report
105
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 
   
    
 406,939,412 1,286,293 — 408,225,705
 
   
    
    


14. Special Reserve




15. Net Assets per Ordinary Share


16. Dividend Paid

For the year ended 
31 December 2022 
   
 Ordinary Share (EUR ’000)  
 1.25c 5,096  
 1.3125c 5,351  
 1.3125c 5,353  
 1.3125c 5,365  
Total 5.1875c 21,165  


For the year ended 
31 December 2022 
   
 Ordinary Share (EUR ’000)  
 1.3125c 5,351  
 1.3125c 5,353  
 1.3125c 5,365  

1.3125c 5,334  
Total 5.2500c 21,403  
 
106
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 

17. Financial Risk Management




Market Risk




(i) Currency Risk



(ii) Interest Rate Risk



 
bearing bearing Total
   
 — 19,893 19,893
 — 5,630 5,630
 248,451 180,190 428,641
   

 — (2,514) (2,514)
   



 
  
   
   
   
   
   

   
   







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107
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Credit Risk






 
31 December 
2022 
 
 248,451 
 5,630 
 19,893 
Total 273,974 


 
31 December 
2022 
 
  2,170 
   15,183 
  2,540 
Total 19,893 






   
(EUR’000) (EUR’000) (EUR’000) (EUR’000)
 (2,514) — — (2,514)
Total (2,514) — — (2,514)

   
   
    
Total     


108
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 

17. Financial Risk Management 
Capital and Risk Management















18. Transactions with the Investment Adviser and Related Party Transactions










Year ended 
31 December 
2022 
(EUR) 
75,000 
  50,000 
43,000 
  43,000 



 
at 31 December 
2022 
 100,000 
  75,000 
50,000 
  50,000 

Other InformationFinancialsGovernanceStrategic Report
109
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
19. Distributable Reserves




20. Commitments and Contingencies






21. Unconsolidated Subsidiaries and Associates


 
for the   
year ended period ended  
 31 December  31 December 
   2022  2022 
    (EUR million)  (EUR million) 
    43.0  180.2 
  
 
 
SPV


 
for the   
year ended period ended  
 31 December  31 December 
   2022  2022 
    (EUR million)  (EUR million) 
    4.3  27. 2 
  
 
 
    (0.0)  53.0 
 
 
 
    0.1  4.2 
  
 
 
    0.1  4.2 
  
 
 
    0.2  2.1 
 
 
 
110
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE FINANCIAL STATEMENTS 

21. Unconsolidated Subsidiaries and Associates 
 
for the   
year ended period ended  
 31 December  31 December 
   2022  2022 
    (EUR million)  (EUR million) 
    (1.7)  40.2 
  
 
 
    2.2  56.7 
 
 
 

    0.4  24.1 
 
 
 
    (0.4)  52.4 
 
 
 
    2.1  37.5 
 
 
 
    0.0  0.0 
 
 
 




 
for the   
year ended period ended  
 31 December  31 December 
   2022  2022 
    (EUR million)  (EUR million) 
    (0.4)  51.3 
 
 
 
 
    132.0 NOK  1,069.7 NOK 
  
 

in Tesla


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111
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)




22. Post Balance Sheet Events
Share Buyback Programme



Revolving Credit Facility (“RCF”)

Guillena Completion

The Rock: Engineering, Procurement and Construction Management Agreement


Dividend Payment

Purchase of Shares for the Investment Adviser



112
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
ALTERNATIVE PERFORMANCE MEASURES (“APMS”)








(Discount)/Premium

 
31 December 
Page 2022 
   110.6 
   92.3 
   (16.6%) 
Ongoing Charges


Year ended 
31 December 
Page 2022 
   438,421 

  4,715 
 (b÷a) 1.1% 
Total Return


   
 a 2 102.00 102.58
 b 5.19 5.19
 c 2 92.25 110.64
Total return ((c+b)÷a)-1 (4.5%) 12.9%
   
    
   
    
Total return
 
31 December 
Page 2022 
   98.0 
   110.6 
   14.4 
 
 7.1% 
 

 
Other InformationFinancialsGovernanceStrategic Report
113
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Dividend Cover


Year ended 
31 December 
Page 2022 
   29,093 
   21,165 
Dividend cover ratio 1.4 

Year ended 
31 December 
Page 2022 
   12,339 
   21,165 
Dividend cover ratio a÷b 0.6 

Year Ended 
31 December 
page 2022 
   25,320 
   21,165 
Dividend cover ratio    1.2 
Gross Asset Value


31 December 
Page 2022 
   451,650 
   131,203 

  24,000 —
  606,853 
Gearing

31 December 
Page 2022 
   606,853 
   131,203 

  24,000 —
Gearing ratio 25.6% 
 
114
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
GLOSSARY
NAV per Ordinary Share



O&M

Ongoing charges




Ordinary Shares













Record Date













Share price




Total return





Gearing

GWh

The HoldCo


Index



Investment company


Investment trust




























MWh

Net assets or net asset value
(“NAV”)


AIC

Alternative Investment Fund





Alternative Investment Fund




Annual General Meeting







the Company

CREST


Dividend








EU

Ex-dividend date







Financial Conduct Authority



Other InformationFinancialsGovernanceStrategic Report
115
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
Administrator and







Registrar
Computershare Investor




Independent Auditors




CMS Cameron McKenna



AIFM
FundRock Management







Investment Adviser
Aquila Capital




Germany
Broker




Directors (all non-executive)





1


COMPANY INFORMATION
 
116
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 







































Special Resolutions
 















(i) 













(ii) 




















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

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

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 




 



 





 


 

 
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 
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 
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 

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 

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 

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117
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 

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


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
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










(ii) 



























 








(i) 







(ii) 


(iii) 













(iv) 







(v) 








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 

















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118
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
NOTES TO THE NOTICE OF MEETING
 


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

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

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
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
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




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 
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

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119
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 

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 
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
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 
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 
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
 
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


120
Aquila European Renewables Plc Annual Report 2022
(formerly Aquila European Renewables Income Fund plc)
 




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
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



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

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
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
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
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


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




 





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
 

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
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
 
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
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
(i) 

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(ii) 
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(iii) 
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

 

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

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


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
INVESTING IN A BRIGHTER FUTURE
AQUILA CAPITAL ANNUAL REPORT 2021
For more information please contact:
Aquila Group
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Important Notice: This document serves informational purposes only. It constitutes neither an investment advice, an investment service nor
the invitation to make offers or any declaration of intent; the contents of this document also do not constitute a recommendation for any
other actions. The validity of the provided information is limited to the date of preparation of this document and may change at any time for
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the information. Historical information cannot be understood as a guarantee for future earnings. Predictions concerning future developments
only represent forecasts. Statements to future economic growth depend on historical data and objective methods of calculation and must
be interpreted as forecasts. No assurances or warranties are given, that any indicative performance or return will be achieved in the future.
The terms Aquila and Aquila Capital comprise companies for alternative and real asset investments as well as sales, fund-management and
service companies of Aquila Group (“Aquila Group” meaning Aquila Capital Holding GmbH and its affiliates in the sense of sec. 15 et seq. of
the German Stock Corporation Act (AktG)). The respective responsible legal entities of Aquila Group that offer products or services to (potential)
investors/customers, are named in the corresponding agreements, sales documents or other product information.
A publication of Aquila Capital Investmentgesellschaft mbH. As at 31.12.2021.
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AQUILA GROUP
Valentinskamp 70
20355 Hamburg
Germany
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