Downing Renewables & Infrastructure Trust plc Interim Report | A

Downing Renewables &

Infrastructure Trust PLC

Annual report for the year to 31 December 2022

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doretrust.com

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Contents

Company Overview

Highlights

l Key Metrics

l About us

Strategic Report

Chairman’s Statement

l Sustainability and Responsible Investment

l Strategy and Business Model

l The Investment Manager

l Portfolio Summary

l Investment Managers Report

l Section 172(1) Statement

l Risk & Risk Management

l Going Concern and Viability

Governance

Board of Directors

l Directors’ Report

l Corporate Governance Statement

l Nomination Committee Report

l Management Engagement Committee Report

l Audit and Risk Committee Report

l Directors’ Remuneration Report

l Statement of Directors’ Responsibilities

l Independent Auditor’s Report

Financial Statements

Statement of Comprehensive Income

l Statement of Financial Position

l Statement of Changes in Equity

l Statement of Cash Flows

l Notes to the Financial Statements

Other Information

Alternative Performance Measures

l Glossary

l Cautionary Statement

l Company Information

l Shareholder Information

Downing Renewables & Infrastructure Trust plc Annual Report | 1

Downing Renewables & Infrastructure Trust plc Annual Report | 2

Highlights

• Net asset value (“NAV”) as at 31 December 2022 was 118.6 pence per

ordinary share (£219 million), an increase of 15.1 pence (14.5%) per ordinary

share compared with the NAV as at 31 December 2021 of 103.5 pence per

ordinary share (£142 million).

• NAV total return

of 19.5% for the year to 31 December 2022 and 28.5%

since IPO in December 2020.

• Interim dividends of 5 pence per ordinary share paid during the year and

a further 1.25 pence per ordinary share declared (but not accrued) relating

to the quarter to 31 December 2022. Cash dividend cover of 1.26x

for

dividends paid during the year.

• The target dividend for the year from 1 January 2023 has been increased

by 7.6% to 5.38 pence per ordinary share.

• The Company’s portfolio generated 326GWh in 2022, avoided

153,457 tonnes of CO2e and powered the equivalent of 112,523 UK

homes. The Company now has a portfolio that is expected to generate

391 GWh of renewable electricity per year, an increase of 96.4% from

31 December 2021.

• Further deployment through the completion of five investments, costing in

aggregate at £72.6 million and comprising:

o Two operational hydropower plant portfolios, generating 12GWh

p.a. and 36GWh p.a. respectively and located in central Sweden, for

£20.1 million in January 2022;

o An operational 46 MW (108GWh p.a.) onshore wind farm located in

north-eastern Sweden for £19.8 million in February 2022;

These are alternative performance measures

Downing Renewables & Infrastructure Trust plc Annual Report | 3

o A portfolio of operational run-of-river hydropower plants in Sweden (17GWh p.a.) for

£16.8 million in May 2022;

o A further investment into the UK solar portfolio during October 2022 of £10 million,

used to repay the mezzanine debt that was present when the portfolio was acquired;

o A 14GWh hydropower portfolio of seven assets with significant reservoir capacity in

Sweden for £5.9 million in November 2022; and

o Post year end, completed the acquisition of two operational hydropower plants with

expected annual generation of 8.3GWh, located in Sweden for £5.1 million.

• Successfully raised gross proceeds of £52.9 million through a placing, an open offer, an

offer for subscription and an intermediaries offer at an issue price of 111.0 pence per

ordinary share in June 2022, exceeding the target size of the issue

Downing Renewables & Infrastructure Trust plc Annual Report | 4

Key Metrics

As at or for period ending

31 December 2022

As at or for the period ending

31 December 2021

Market capitalisation £210m £142m

Share price 113.5 pence 103.5 pence

Dividends with respect to the year £8.0m £2.9m

Dividends with respect to the year

per ordinary share

5.0 pence 3.5 pence

GAV

1, 2

£311m £221m

NAV £219m £142m

NAV per share 118.6 pence 103.5 pence

NAV total return with respect to the

year

1,2,4

19.5% 8.0%

Total Shareholder Return with

respect to the year

1,3

15.1% 5.%

NAV total return since inception

1,2,4

28.5% 7.9%

Total Shareholder Return since

inception

1,3

21.1% 5.3%

Weighted average discount rate 7.7% 7.3%

Environmental Performance

Assets avoided 153,457 tonnes of

and powered the equivalent of

112,523 homes

Assets avoided 80,942 tonnes of

and powered the equivalent of

59,432 homes

A glossary of terms can be found on page 152.

These are alternative performance measures.

A measure of total asset value including debt held in unconsolidated subsidiaries.

Total returns in sterling, including dividend reinvested.

Based on NAV at IPO of £0.98/share.

Downing Renewables & Infrastructure Trust plc Annual Report | 5

About DORE

Downing Renewables & Infrastructure

Trust PLC (“DORE” or the “Company”)

is a closed ended investment company

incorporated in England and Wales.

The Company aims to provide investors

with an attractive and sustainable level

of income, with an element of capital

growth, by investing in a diversified

portfolio of renewable energy and

infrastructure assets in the UK, Ireland

and Northern Europe.

The Company’s strategy, which focuses

on diversification by geography,

technology, revenue and project stage,

is designed to deliver the stability of

revenues and the consistency of income

to shareholders.

The Company is an Article 9 fund

pursuant to the EU Sustainable Finance

Disclosure Regulations (“SFDR”). The core

sustainable Investment Objective of the

Company is to accelerate the transition

to net zero through its investments,

compiling and operating a diversified

portfolio of renewable energy and

infrastructure assets to help facilitate the

transition to a more sustainable future.

This directly contributes to climate change

mitigation.

DORE is a Green Economy Mark (London

Stock Exchange) accredited company with

an ESG framework that aims to provide

investors with attractive returns while

contributing to the successful transition to

a net-zero carbon economy - resulting in a

cleaner, greener future.

As at 31 December 2022, the Company

had 184,622,487 ordinary shares in issue

which are listed on the premium segment

of the FCA’s Official List and traded

on the London Stock Exchange’s Main

Market.

DORE is managed by Downing LLP

(the “Investment Manager” or “Downing”).

Downing Renewables & Infrastructure Trust plc Annual Report | 6

Chairman’s Statement

On behalf of the Board, I am pleased to present the annual report of Downing

Renewables & Infrastructure Trust PLC covering the year to 31 December 2022

(the “Annual Report”). After another successful year of strategic diversification

and growth, we continue to execute our business plan and benefit from the

expanding Nordic and UK renewables markets.

Additional Equity Issuance

Following the £137.4 million raised during

the Company’s first financial period the

Company established a share issuance

programme to enable the issuance of up

to a further 250 million ordinary shares

over a 12-month period. In order to aid

our continuing growth plans and to enable

us to pursue value creating opportunities,

we issued a further 47.6 million new

ordinary shares on 7 June 2022 at a price

of 111 pence per share, raising gross

proceeds of £52.9 million, exceeding the

target size of the issue and increasing the

market capitalisation by 25.2%. As at the

reporting date, the Company’s market

capitalisation exceeded £200 million.

An element of the proceeds of the

fundraising was immediately used to

repay the revolving credit facility (“RCF”),

with the remainder earmarked to invest

in an attractive pipeline of opportunities

to further diversify the portfolio. The

fundraise represented c.35% of the

Company’s Ordinary Share capital

immediately prior to the Issue.

Acquisitions

During the period, the Company and its

wholly owned subsidiaries (together the

“Group”) have successfully invested £72.6

million in five new portfolio investments

and a further £5.1 million after the year

end. The Company now has a portfolio

that is expected to generate 391 GWh of

renewable electricity per year, double that

as at 31 December 2021.

Diversification remains central to the

strategy of the fund. During the period

we have added wind power, an additional

technology to our portfolio as well as

acquiring our first hydropower assets

in Sweden’s SE4 pricing zone. Investing

in different technologies in different

The Board is very satisfied with the £72.6 million deployed in the

five high-quality investments made in the year. At a portfolio level,

the Investment Manager’s in-house asset management team will continue

its focus on delivering continued positive operational performance.

This performance, alongside the NAV accretive acquisitions, has

underpinned our ability in increase the dividend target by 7.6%.

Downing Renewables & Infrastructure Trust plc Annual Report | 7

locations reduces the Company’s reliance

on any given natural resource, provides

exposure to assets with different

economic lives and reduces our exposure

to any single power market.

Each acquisition made since IPO has been

accretive to DORE’s NAV. During the year,

a £9m increase in NAV was recognised

as new investments were revalued

throughout the year.

I am very pleased to report that the

Investment Manager has made attractive

acquisitions since the year end by

completing the acquisition of two

additional operational hydropower plants

in Sweden (with annual generation of

8.3GWh), located on the Gillerån and

Moälven rivers in the SE2 electricity

pricing zone, for £5.1 million.

Debt Facilities

In the interests of capital efficiency and

to enhance income returns, long-term

capital growth and capital flexibility,

the Company is permitted to maintain a

conservative level of gearing. To allow

flexibility with making new investments,

the Group has access to two separate

loan facility agreements: a £40 million

RCF with Santander UK plc at a holding

company level and a seven-year EUR

43.5 million limited recourse debt facility

with SEB at Downing Hydro AB. The

RCF was increased from £25 million to

£40 million on 26 January 2023. Further

information on these facilities can be

found in the Investment Manager’s Review.

The Company’s borrowing policy is laid out

on page 32.

During the period, the RCF allowed the

Group the flexibility to capitalise on

its investment pipeline. In May 2022

the Group utilised the facility to fund a

c.£17 million acquisition of a portfolio

of hydropower plants. As mentioned

above, the RCF was repaid in full during

the period using the proceeds from the

subsequent fundraising.

Portfolio Performance

Operating profit for the portfolio of

generating assets was 14.7% above our

expectations.

The 3,260 operating assets generated

326 GWh of clean electricity during

the reporting period. The operational

performance of the Swedish wind

and UK solar assets was in line with

expectations and the dry summer we

experienced in Northern Europe, including

Sweden, impacted the hydropower

portfolio, leading to generation across

the hydropower portfolio being 10.8%

below long term expectations. This

contributed to higher power prices in

the region, driving a significant increase

in revenue and cashflows, which more

than outweighed the generation shortfall

caused by the dry conditions.

Financial Results

During the period the NAV per ordinary

share increased from 103.5 pence at

December 2021 to 118.6 pence at

December 2022, an increase of 14.5%.

Including dividends paid of 5 pence per

ordinary share in the year results in a NAV

total return since 31

December 2022

of 19.5%. This increase reflects the net

Downing Renewables & Infrastructure Trust plc Annual Report | 8

earnings and the valuation uplift across

all three technologies following strong

operational performance and a favourable

economic environment.

The NAV reflects the fair market valuation

of the Company’s portfolio based on a

discounted cash flow analysis over the

life of each of the Group’s assets plus

the value of the Company’s other assets

and liabilities. The assumptions which

underpin the valuation are provided by

the Investment Manager and the Board

has satisfied itself with the calculation

methodology and underlying assumptions.

Further details of the valuation change are

given on page 55.

The portfolio companies distributed

£12.3 million to the Company by way of

shareholder loan repayments and interest

during the period. An element of this

cash, £3.8 million, was retained in the

Company’s subsidiary DORE Hold Co and

forms part of the valuation.

The Company made a profit for the

year to 31 December 2022 of £33.2

million, resulting in earnings per ordinary

of 20.6 pence. This includes

unrealised

returns of £28.1 million.

Dividends

The Company has paid interim dividends

to Shareholders of 1.25 pence per share

for the first three quarters of 2022.

I am pleased that a further dividend of

1.25 pence per share has been announced

and will be paid on or around 31 March

2023 in respect of the quarter to

31 December 2022.

The Company achieved a cash dividend

cover of 1.26x for the dividends of

pence per share paid during the period

(including the dividend paid during the

period in respect of the quarter ending

31 December 2021). Dividend cover

is presented excluding dividends paid

immediately following the issuance of new

shares. If

these are included, the dividend

cover would be 1.17x. Cash dividend

cover has been calculated on a cash basis

of income received by the Company and

its immediate subsidiary.

The Company will target a dividend

of 5.38pps relating to the year to

December 2023, a 7.6% increase

from 2022. The increased dividend is

forecast to be fully covered by the current

portfolio. When near term pipeline assets

that are under exclusivity are taken into

account, the dividend cover against the

increased dividend is forecast to be in

excess of

1.4x.

This is the second increase in dividend

since DORE’s IPO in December 2020.

a result of the Company bringing

forward the 5 pence per share dividend

payment by six months from 1 July 2021,

DORE has paid out 1.5 pence per share

more in dividends than outlined at the

time of the

IPO.

Investment Policy

During the period, shareholders

approved amendments to the Company’s

investment policy, including to: (i) increase

the geographic and technology

investment restrictions until the Company

first surpasses a Net Asset Value of

Downing Renewables & Infrastructure Trust plc Annual Report | 9

£300 million; (ii) increase the limit on

short-term borrowings; and (iii) simplify

the definition of Gross Asset Value in

the Company’s investment policy. The

new limits are set out on the Company’s

website and the full investment policy

is available in the shareholder circular

dated 7 June 2022, also available on

the website.

Outlook

2022 was dominated by the ongoing war

in Ukraine and rising inflation. The Ukraine

crisis has forced governments, companies,

and citizens across the world to take a

hard look at how energy is sourced and

utilised. Over recent years renewables has

been a key growth sector for investment

companies, however, since the crisis

began there have been accelerated

commitments to renewables and

governments have now realised that the

energy transition is not only important for

the planet, but also for energy security.

We believe that DORE can play an active

part in this.

The Board is very satisfied with

the £7

2.6 million deployed in the

five high-quality investments made in the

year. At a portfolio level, the Investment

Manager’s in-house asset management

team will continue its focus on

delivering continued positive operational

performance, along with optimisation

initiatives where appropriate. The

Company will continue to leverage the

expertise of the Investment Manager to

deliver strong operational performance

whilst placing its sustainability goals at

the centre of its operational objectives.

In order to increase the Company’s

diversification, drive efficiencies of

scale at the portfolio level, spread the

fixed costs over a wider asset base and

increase liquidity for current and future

shareholders, the Board intends over

time to increase the size of the Company

through the issue of further shares. Any

such issuance will be priced at a premium

to the prevailing net asset value and will

be dependent on demand from investors

as well as the availability of pipeline

investments.

The Board looks forward to bringing

shareholders further updates on the

excellent progress made to date.

Share Buybacks

The Board intends to commence buying

back shares in the market where it

believes this to be in shareholders’

interests, noting that share buybacks

represent an attractive opportunity to

increase the Company’s investment

exposure to the existing portfolio at rates

of return well in excess of the relevant

discount rates.

Hugh W M Little

Chair

31 March 2023

Downing Renewables & Infrastructure

Trust PLC

Downing Renewables & Infrastructure Trust plc Annual Report | 10

As an active investor in renewable

energy and associated infrastructure,

our investments naturally contribute to

climate change mitigation by reducing

the greenhouse gas emissions from

burning fossil fuels to generate power.

Investments also contribute to countries’

net zero, green transition and energy

security strategies, as well as feature in

the decarbonised world energy outlooks

of the International Energy Agency.

For the UK this includes the legally

binding aim of net zero and we continue

to monitor developments from the UK

Infrastructure Bank, BEIS and Defra with

implications for the renewable energy

sector, such as hydrogen and other longer

duration storage.

The Company advocates the common

view that there can be no net zero carbon,

and therefore a limitation in warming

of 2°C above pre-industrial levels, by

mid-century, without renewable power.

We also acknowledge that each type of

renewable energy has its limitations and

drawbacks. For example: hydropower

needs careful consideration from a

biodiversity perspective; wind and solar

are intermittent generation technologies

and supply chains need scrutiny when

constructing new generation facilities.

The Investment Manager has a robust

process for identifying and managing

both ESG risk and opportunity in our

sustainable investment approach.

This includes identification of material

factors given the type of infrastructure

asset, an initial assessment for all deals,

detailed assessments for deals that

progress (referencing guidance from the

Global Real Estate Suitability Benchmark

(“GRESB”), Taskforce for Climate

Related Financial Disclosures (“TCFD”),

Sustainability Accounting Standards Board

(“SASB”), Sustainable Finance Disclosures

Regulation (“SFDR”), discussion and

governance at investment committee,

enhanced due diligence and monitoring

by the ESG team and asset managers for

identified risks.

Following investment, the Company is

an active owner. The Asset Manager

monitors the Company’s portfolio’s

emissions (made and avoided) and other

ESG credentials like jobs created and

biodiversity impacts, as we report below.

There are three distinct stages to

achieve benefits in emissions: data,

reduction and removal. As with many

other investors, our main attention for

the early 2020s is carbon data. Physical

and transition climate risk identification

also features, following the guidance

of TCFD. We note the risk of extreme

weather or changes in precipitation,

sea levels etc. on a real asset, and

opportunity from favourable policy,

incentives or customer preferences to a

power generation asset. At the specific

asset level, green loan principles have

been incorporated to the revolving credit

facility in order to promote projects with

environmental benefits.

Sustainability and Responsible

Investment

Downing Renewables & Infrastructure Trust plc Annual Report | 11

Responsible water usage & fish

protection

The Group operates hydropower plants

in several rivers across Sweden. The

Investment Manager is conscious of the

impact hydropower can have on the fish

population and environment, so is taking

ongoing action to operate and manage

these assets in a sustainable way for the

native fish populations.

The Group is proud to be part owners

of both Ljusnan and Dalvälven Water

Regulation Enterprises, enterprises

formed to coordinate water operations

in a river where more than one party

operates. Through these enterprises the

Group helps fund actions to positively

impact fish communities and the

surrounding environment. In Ljusnan there

is extensive placing of fish to increase

the population and construction of fish

ways to enable migration through the

river. In Dalälven, the Group contributes

to funding the construction of fish paths

by multiple hydropower plant owners

to enable fish migration upstream.

The Dalälven enterprise also has a fish

farm, from which fish are planted in the

region’s lakes and water bodies to help

manage and increase the population.

The enterprise is also involved in the legal

development and interpretation of Natura

2000 sites, which is an EU network of

protected areas and applies to areas along

Dalälven.

During the period the Group acquired

Fridafors, a Swedish hydropower asset

located in Mörrumsån upstream of which

both salmon and trout have areas of

reproduction. To facilitate the continuing

movement of these fish and, ensure the

stability of the wild salmon and trout

stock, a fish pass has been established. It is

estimated that thanks to the fish pass, an

additional 3,000 juvenile salmon and trout

will be produced. Other organisms such as

eels will also benefit from this opportunity

to travel freely up and down the

Mörrumsån river. The water flow will be

controlled by the hydropower plant, with a

baseflow of 1.0 m

/s during the winter and

a migration flow of 1.5 m

/s between 1

April and 30 November each year.

Over the coming years, all of the Group’s

hydropower assets will be a part of

the Swedish National Plan, which aims

to ensure modern and sustainable

use of Swedish water, as well as to set

modern environmental requirements for

hydropower assets. As a part of this plan,

Downing Renewables & Infrastructure Trust plc Annual Report | 12

a current status report will be created by

each respective county administrative

board outlining what improvements

should be made to enhance species

diversity in the rivers affected. The Asset

Manager continues to engage with the

authorities on the emergence of this plan

and is engaging with the authorities to

ensure that the Company is prepared

to action any sustainable aquaculture

principles. In future we will also consider

sustainable aquaculture principles and

measure the rates for reproduction,

mortality & disease, riverbed loading,

success of fish welfare plans in Dalälven

and management of antibiotics, feed and

waste for new fish to be placed in Ljusnan.

A plan for biodiversity gain

Downing has previously committed to

performing an ongoing programme of

ecological site surveys to identify, refine

and optimise our contribution to target

15 of the UN Sustainable Development

Goals (Life on Land). During the period

the Asset Manager appointed specialists

to perform surveys on 12 ground

mounted UK solar sites. The resulting

reports will set out the baseline habitat

conditions of the sites using the Natural

England Biodiversity Net Gain (BNG) v3.1

metric, alongside recommendations for

potential site-specific biodiversity gains.

This ensures that we have a streamlined

view of how to optimise habitats in this

portfolio.

All ecological reports have been finalised

on a site-by-site basis. At the portfolio

level, results showed that the hedgerows

on site were typically found to be

species rich, and therefore the biggest

source of biodiversity. For most sites, it

was reported that the ground mounted

solar panels were raised sufficiently that

shading was not negatively impacting the

grassland beneath.

The Investment Manager is pleased

that the portfolio is already displaying

good biodiversity and based on the

enhancements proposed by the

ecological specialists, the asset manager

is now establishing a biodiversity

enhancement project plan. Examples of

recommendations include adjusting the

intensity of sheep grazing to improve the

quality of the grass, sectioning off margins

with tussock grass, deploying doormouse

boxes and developing ponds. The

surveys highlighted a number of species

of interest, which will be given extra

attention. An example site of interest is

detailed in Andover, below.

Species observed at Andover Airfield

Andover Airfield is a 4.3 MWp ground

mounted solar site in Andover, UK.

The site has a land area of 44 acres,

predominantly made up of grassland.

Several important animal species were

observed on site such as the red listed

Yellowhammer and the amber listed

Meadow pipit. The meadow pipit

is “Amber listed” due to it declining

in numbers since the 1970s. The

“yellowhammer is on the “Red list”

because the breeding population has

declined by 50% in the past 25 years.

The Asset Manager is in the process of

erecting bird boxes to support these birds.

Downing Renewables & Infrastructure Trust plc Annual Report | 13

Small Heath butterfly was also seen on

the site which is a Species of Principal

Importance for the conservation of

biodiversity in England under the Natural

Environment and Rural Communities

(NERC) Act, an act which requires public

authorities to have regard for conserving

biodiversity. The biodiversity assessment

pointed to a number of opportunities

to improve the grassland and hedgerow

habitats at the site which would benefit

the Small Heath Butterfly, since their

diet pre- and post- transition from

caterpillars mainly consists of different

varieties of grass species and floral nectar

respectively. Improving the grassland and

hedgerows on the sites will also benefit

the birds in the area, as many of the

important birds live off insects whose

presence would increase if the condition

of the grassland was improved.

Downing Renewables & Infrastructure Trust plc Annual Report | 14

In the coming year and when weather

conditions allow, the Asset Manager is

looking to conduct ecological baseline

surveys for some of the Company’s

hydropower and wind assets to help

bolster sustainable land management

across the portfolio.

Community and Social Support

The Company proactively engages with

the local communities surrounding our

renewable energy generation facilities

in a number of ways. We place a great

emphasis on choosing appropriate

operations and maintenance partners

across our portfolio, not only to ensure

they have the correct skills and expertise

but also, wherever possible, to hire local

individuals. Not only does this reduce

the environmental impact from car and

van milage, a significant factor in rural

Sweden, but also supports the growth in

skilled jobs in the local communities.

Payments by the assets to local

communities’ averages around £20,000

per year, funds used to pay for local

community projects.

Downing Renewables & Infrastructure Trust plc Annual Report | 15

The Gabrielsberget Wind Farm is a great

example of these projects. The asset

has previously funded an outdoor gym,

track maintenance of ski touring runs,

the upkeep of the hockey rink at a local

school and the building and maintenance

of a public BBQ pit and gathering area to

name a few.

The UK solar portfolio is highly diversified

across individual assets with a significant

level of solar generation from the

commercial and residential rooftops assets

being provided on a free or discounted

basis to the property owner or resident.

During the year, 10,061 MWh was made

available free of charge to residential

occupants across Northern Ireland and

7, 895 MWh has been made available to

commercial landlords on a discounted

basis.

In addition to supplying UK properties,

some of our hydropower assets provide

a free power allowance to local residents

as a result of using their local waterways.

These agreements have been in place

since the construction of each power

plant. A total of 423 MWh has been

funded over the course of the year.

The generation made available to

residents during the year is enough to

completely power 3,730 UK homes for

the same time period. During the current

climate of rising electricity prices, this

free electricity is making a meaningful

difference to the residents.

Although not all energy generated is used

by the residents (with any excess being

exported to the grid), the retail value of

the electricity made available is in excess

of £2.9

million.

Downing Renewables & Infrastructure Trust plc Annual Report | 16

Green Energy Education

In 2021 the Company and Downing

announced their commitment to the UN’s

Sustainable Development Goal 13.3,

which is designed to “improve education,

awareness-raising and institutional

capacity on climate change mitigation,

adaptation, impact reduction and early

warning” and appointed Earth Energy

Education to help fulfil this. Earth Energy

Education is a company founded by

teaching professionals with the aim of

teaching young people about renewable

energy through site visits and in-school

workshops.

During the 2021/22 school year, over

190

primary school children from

different schools visited the Company’s

ground mount solar sites. The purpose

of these visits was to get children out of

the classroom and provide an interactive

platform to teach them about sustainable

energy production, the importance of

promoting biodiversity at renewable

energy sites and engaging them in

discussions about mitigating climate

change from an early age.

After each site visit Earth Energy

Education went into the schools to run

informative workshops on renewable

energy. For example, the “solar toy design

and make” workshops gave the children

the opportunity to see how sunlight

can be used as an energy source in a

hands-on way. These workshops were

appropriately tailored by year group and

their curriculum. It was noted by one

teacher that students who had previously

struggled to engage in classroom-based

lessons, responded well to the interactive

learning opportunities.

The Company intends to extend this

agreement into the 2022/23 school year

and beyond and is looking at ways to

enable school visits to more of its sites.

Downing Renewables & Infrastructure Trust plc Annual Report | 17

Downing is an active participant in wider sustainably

sector initiatives and policy advocacy. Downing is

a signatory to: the UN Principles for Responsible

Investment, the Financial Reporting Council’s UK

Stewardship Code, and the UN Global Compact. We are

also members of GRESB (including its Technical Expert

Group for Infrastructure), the Institutional Investors

Group on Climate Change (including the Climate Action

100+ investor collaboration and its UK Taxonomy working

group, advising HM Government on the new regulation).

We publicly support TCFD and the Transitions Pathway

Initiative. These commitments share Downing’s integration

of ESG factors in its investment process, from pre-deal

screening through to active asset management, and then

active ownership and transparency on outcomes.

Downing’s Approach

to Sustainability

Downing Renewables & Infrastructure Trust plc Annual Report | 18

Target 7.1:

By 2030, ensure universal access to affordable, reliable and modern energy services.

Target 7.2:

By 2030, increase substantially the share of renewable energy in the global energy mix.

Target 9.4:

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-

use efficiency and greater adoption of clean and environmentally sound technologies and industrial

processes, with all countries taking action in accordance with their respective capabilities.

Target 13.3:

Improve education, awareness-raising and human and institutional capacity on climate change mitigation,

adaptation, impact reduction and early warning.

Target 13.2:

Integrate climate change measures into national policies, strategies and planning.

Target 15.5:

Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity

and, by 2020, protect and prevent the extinction of threatened species.

Target 15.9:

By 2030, integrate ecosystem and biodiversity values into national and local planning, development

processes, poverty reduction strategies and accounts.

Target 15.a:

Mobilize and significantly increase financial resources from all sources to conserve and sustainably use

biodiversity and ecosystems.

Given their nature, DORE’s investments can play a role in

enabling and making a positive contribution to several UN

Sustainable Development Goals, and their sub-targets:

Downing Renewables & Infrastructure Trust plc Annual Report | 19

Climate Disclosure, based on the recommendations

of the Task Force for Climate Related Financial

Disclosures

The Company is not required to disclose under TCFD.

We are supporting the ethos of TCFD and its purpose of

addressing the systemic financial market risk of climate

change by integrating climate as a factor to governance,

strategy, risk and metrics activity. We are pleased to

share our climate disclosure below.

The TCFD Recommendations are structured around

four content pillars: 1. Governance; 2. Strategy;

Risk Management; and 4. Metrics & Targets.

The Company strives to maintain the highest

standards of corporate governance and effective risk

management at both a Company and a portfolio level.

Although the Company is not required to report under

the recommendations of the TCFD, many of those

recommendations are voluntarily followed in order to

enhance the Company’s disclosures. As reporting climate

impacts under TCFD becomes a mandatory requirement

for more entities, these disclosures shall be enhanced to

ensure full compliance with all the recommendations of

the framework and any sector specific additional guidance.

1. Governance

Governance is the responsibility of the Board, with key

functions delivered through delegated committees with

the oversight of the Board and the ongoing support of the

Investment Manager.

The Board meets on at least a quarterly basis, with

additional ad-hoc meetings arranged as appropriate.

Information relating to the Company’s activities in fulfilling

its sustainable Investment Objective are presented on

at least a quarterly basis. This data enables the Board

to satisfy itself that it is fulfilling the climate mitigation

obligations explicit in the Company’s sustainable

Investment Objective; “to accelerate the transition

to net zero through its investments, compiling and

operating a diversified portfolio of renewable energy and

infrastructure assets to help facilitate the transition to

a more sustainable future. This directly contributes to

climate change mitigation.”

On at least an annual basis the Board reviews climatic

data, specific to the geographies and asset types in the

portfolio, in order to review and develop the Company’s

strategy in relation to the risks and opportunities from

climate change.

The remit of the Board and its Committees are set out in

more detail in the Corporate Governance Statement on

pages 79 to 87. However, specifically the role of the Audit

and Risk Committee is to monitor the effectiveness of the

Company’s financial reporting, service providers, systems

of internal control and risk management, and the integrity

of the Company’s external audit processes. In fulfilling

this purpose, the Committee has oversight of financial

disclosures, including TCFD reporting.

In addition to the Board’s oversight functions, the

Directors have appointed an Investment Manager and

delegated the day-to-day management of the Company

to the Investment Manager. Rather than creating new

structures to govern and oversee the management of

climate change risks and opportunities, the Investment

Manager has integrated climate change into its existing

structures, processes and risk registers. On the instruction

of the Board, the Investment Manager gathers portfolio

data on an ongoing basis, that enables the board to

oversee the delivery of the Company’s sustainable

Investment Objective.

The Investment Manager also provides dedicated subject

matter expertise to support the Board’s annual review and

development of strategy in relation to climate change risks

and opportunities. The Investment Manager integrates

Environmental, Social and Governance factors into its

investment processes, with climatic factors forming

Downing Renewables & Infrastructure Trust plc Annual Report | 20

integral components of the investment thesis. Finally, the

Investment Manager operates an Investment Committee

to oversee and approve the acquisition and disposal of

assets on behalf of the portfolio. Climatic factors are

reviewed as critical components of the investment thesis.

2. Strategy

Scenario Analysis for Strategy Development

In order to analyse the potential range of risks and

opportunities associated with climate change, the Board

selected three scenarios from the potential six developed

by The Central Banks and Supervisors Network for

Greening the Financial System (“NGFS”). Selecting one

scenario from each of the available boxes, enabled the

board to consider the possible combinations of physical

and transitional risks.

NGFS Scenarios

Low Physical RiskH kHigher Physical Risk

Disorderly

Orderly Hot house world

Divergent

Net Zero

Current

Policics

NDCs

Below 2° C

Net Zero

2050

Physical risks arise from the changes in weather and

climate that impact infrastructure and economic activity.

They are typically sub-divided into acute risks like extreme

weather events or chronic risks like rising sea levels,

differentiated by the time taken to have a given effect.

Transition risks are the societal changes arising from a

transition to a low-carbon economy. They could arise

from changes in public sector policies, innovation or the

affordability of certain technologies, investor or consumer

sentiment towards behaviours or products.

The three selected scenarios are:

1. The Current Policies Scenario (Base Case)

assumes that only currently implemented policies

are preserved, leading to high physical risks.

Emissions grow until 2080 leading to about 3°C

of warming and severe physical risks. This includes

irreversible changes like higher sea levels.

2. The Delayed Transition Scenario assumes global

annual emissions do not decrease until 2030.

Strong policies are then needed to limit warming

to below 2°C. Negative emissions are limited.

This scenario assumes new climate policies are

not introduced until 2030 and the level of action

differs across countries and regions based on

currently implemented policies.

3. The Net Zero 2050 Scenario is an ambitious

scenario that limits global warming to 1.5°C

through stringent climate policies and innovation,

reaching net zero CO₂ emissions around 2050.

Some jurisdictions such as the US, UK, EU and

Japan reach net zero for all greenhouse gases by

this point. This scenario assumes that ambitious

climate policies are introduced immediately.

Physical risks are relatively low, but transition risks

are high.

Downing Renewables & Infrastructure Trust plc Annual Report | 21

Scenario Probabilities

These scenarios are not predictions and instead are

presented as hypothetical outcomes. However, an analysis

of their relative probability indicates how strategy may

develop over time or indeed where the Board focused

their analysis.

At this point in time, the Net Zero 2050 Scenario is

assessed to be the least probable of the three scenarios

recognizing the lack of sufficient international consensus,

co-operation and investment. The Net Zero 2050

Scenario is dependent upon near term variables and so

without significant change, its probability will drop sharply

in the near term.

Whilst the Current Policies Scenario will be updated to

reflect progress made at COP26, it remains the base case

scenario with the greatest probability. If policy progress

remains limited, the probability attributed to this >3˚C

scenario will increase over time.

The probability of achieving a Delayed Transition Scenario

is dependent upon future unknown variables, therefore

without any significant change over the medium term, its

probability will likely increase over time.

Recognising that the Current Policies Scenario is

considered the most probable, the Board’s analysis of

Climate risks was focused on an assumption of higher

physical risks and lower transitional risks. The relative

probability of these scenarios will be reviewed on at

least an annual basis and will inform future strategy

development.

Downing Renewables & Infrastructure Trust plc Annual Report | 22

Analysis Periods for Strategy Development

Recognising the international climate policy focus on the next 30 years and the projected lifespan of a number of the

assets within the Company’s portfolio, the Board’s scenario analysis was considered over a 30-year period, sub divided

into three time horizons: short-term 2022-2030; medium term 2031–2040; and long-term 2041-2050.

The illustrative table below shows how the relative combinations of physical and transitional risks might be expected to

develop over time and why the Board’s analysis focused on physical risks.

Illustrative Risk Composition over time

Risk Composition Short Term

2022 - 2030

Medium Term

2031 - 2040

Long Term

2041 - 2050

Current Policies Physical High Higher Highest

Transitional Low Low Low

Delayed Transition Physical High Higher Low

Transitional Low Highest High

Net Zero 2050 Physical Low Lower Lowest

Transitional Low Lower Lowest

Physical Factors, Portfolio Impacts and Modelling

Whilst climate change is a complex phenomenon, physical risks and opportunities to the portfolio were identified across

four principal factors: air temperature change, wind speed change, precipitation level change and change to incidence rate

of extreme weather events.

In addition to the data above, portfolio efficiency, micro and macro-economic data is reported to the Board on a

quarterly basis. Data relating to generation and portfolio efficiency is utilised to assess the effect of any physical risks to

the portfolio and the Company’s delivery of its sustainable Investment Objective. Micro and macro-economic data, for

example energy commodity prices, carbon emissions allowance prices and subsidy rates are utilised to assess the impact

of transitional risks.

For each risk factor, the portfolio technology and geographic exposure were considered to assess the potential impact on

the portfolio. An appropriate modelling input was then identified to enable the Board to assess the potential impact of the

factor.

For example, the table below describes how a projected change in precipitation may require changes to ground

maintenance activity associated with the solar portfolio and therefore how operational costs could change over time to

reflect this. Meanwhile changes to precipitation rates could affect generation from hydropower assets.

Downing Renewables & Infrastructure Trust plc Annual Report | 23

Physical Factors, impact and modelling table

Physical Factors

Solar Hydropower Wind

Impact on Portfolio Assumption to

flex

Impact on

Portfolio

Assumption to

flex

Impact on

Portfolio

Assumption to

flex

Air Temperature Δ Change in tech efficiency

due to temperature

fluctuations.

Performance ratio Timing of spring

melt

Generation profile Non-measurable

impact on

performance

N/A

Wind Δ Mounting structure

maintenance, potential to

reduce surface temperature

of modules

Operational costs Nil N/A Higher levels of

generation

Generation

Precipitation Δ Ground maintenance

activity, potential to impact

on surface dust of modules

Operational costs

relating to land

management

More water flow

and generation

capability

Generation Non-measurable

impact on

performance

N/A

Extreme Weather Δ Damage to equipment Operational

costs (insurance

premiums)

/ Capex on

drainage

Spill (efficiency

during high water

flow) / equipment

damage

Generation /

Capex

Reduced

availability due

to high winds/

equipment

damage

Generation/Opex

A worked example - precipitation change under the current policies scenario

The company’s solar assets are predominantly located in the United Kingdom. The left and middle maps show the

projected change in Precipitation (in %) in United Kingdom since the reference period 1986-2006, in the years 2030 and

2050 under a NGFS current policies scenario. The third map shows the difference between the two.

Precipitation Change UK

Downing Renewables & Infrastructure Trust plc Annual Report | 24

Short Term: Solar modules are typically hydrophobic, making it unlikely that increased precipitation would result in

mineral build-up on the modules, however prolonged periods of cloud cover may marginally reduce generation over the

short term. Increased precipitation could increase growth of vegetation around module arrays and require more frequent

maintenance as a result. To monitor these short-term effects, the efficiency of modules and their generation profiles are

monitored on an ongoing basis with this data built into ongoing portfolio valuations. Valuation models already allow for ad

hoc maintenance costs within operational expenditure.

Medium Term: Consistently higher precipitation rates may require additional capital expenditure to improve site drainage.

The Company’s hydropower assets are predominantly located in Sweden. The left and middle maps show the projected

change in Precipitation (in %) in Sweden since the reference period 1986-2006, in the years 2030 and 2050 under a

NGFS current policies scenario. The third map shows the difference between the two.

Precipitation Change Sweden

Short, Medium and Long Term: Increased precipitation rates are likely to have a positive effect on generation from

hydropower assets. Marginal increases to routine maintenance are likely to be offset by increased generation.

This worked example focused solely on projected precipitation changes in isolation from other factors, across two

technology types and geographies. When considered alongside other factors like changes in air temperature and wind

speed, the potential future variation in water supply to Nordic hydropower assets was assessed to have a more significant

potential impact on portfolio valuations than the marginal impact from UK based solar assets. For this reason, significant

work is undertaken before the acquisition of the hydropower portfolio and the forecast impact of climate change on the

specifics assets was included within financial pricing models.

Downing Renewables & Infrastructure Trust plc Annual Report | 25

Increased precipitation, both on an annual basis and on shorter timeframes can challenge the ability to handle high

water flow. Temperature drives the melting of snow reservoirs and milder winters can result in earlier spring floods and

increased flow during the winter months.

When the data is available, we consider using seasonal inflow a more accurate measure than precipitation alone as it

reflects the dimensioned flow that the power plant will get, both in terms of production and excess water flow.

The projected changes to the climate bring several other considerations in terms of potential impact to asset valuations.

Increased inflow during winter months can be beneficial if it continuous to correlate with higher electricity market prices,

although changes can also impact the level of wind generation and changing demands for heat.

The relative impact of Physical and Transitional risks

Changes to physical factors are projected from modelled greenhouse gas emissions, extrapolated principally from

population growth, economic activity, energy utilisation and the generation mix. Many of these physical factors are

omni-directional and the potential effects are assessed to be gradual.

Transitional factors can have a much wider spread of potential outcomes as a result of concentrated human

decision-making. For example, population growth is influenced by billions of unconnected human decisions and therefore

the probability of directional changes to population growth over the short term are extremely low. In contrast policy

changes to government subsidies can be influenced by a relatively small number of people over a short period of time.

Across each of the three scenarios there is an assumption that policies and consumer preferences are likely to become

more supportive of renewable energy generation over time. Whilst harder to project than the portfolio effects of physical

risks, transitional factors are likely to remain supportive of portfolio valuations.

Portfolio Sensitivity Analysis

Building on the scenario modelling and assumptions set out above, and data provided by NGFS for the most likely scenario

we are able to quantify the impact on environmental factors over an appropriate timeframe.

Metric 2020 -

2030

2030 -

2040

2040 -

2050

United Kingdom

Air Temperature Δ

temperature of air masses two meters above the

Earth's surface

0.3% 0.6% 0.8%

Wind Δ

velocity of an air mass 10 metres above ground

-0.3% -0.8% -1.7%

Precipitation Δ

mass of water (both rainfall and snowfall) falling on

the Earth's surface

-0.1% 2.0% 2.9%

Extreme Weather Δ

Percentage change in the cost of damage from such

events

6.9% 15.3% 23.3%

Downing Renewables & Infrastructure Trust plc Annual Report | 26

Metric 2020 -

2030

2030 -

2040

2040 -

2050

Sweden

Air Temperature Δ

temperature of air masses two meters above the

Earth's surface

0.4% 0.9% 1.2%

Wind Δ

velocity of an air mass 10 metres above ground

-0.1% -0.8% -1.2%

Precipitation Δ

mass of water (both rainfall and snowfall) falling on

the Earth's surface

0.8% 1.5% 1.9%

Extreme Weather Δ

level of damage from river floods that is expected to

occur every year, measured in USD.

16.0% 56.0% 34.8%

Taking the changes into account and making appropriate adjustments to valuation assumptions, through generation

profiles and levels, operational expenditure (including insurance premiums) and capital expenditure, provides us with an

estimate of the potential financial impact of climate change to the Company. The estimated impact on the NAV of the

Company would be approximately 0.68 pence per share.

Strategic Implications and Resilience of DORE’s Climate Change strategy

The physical risks of climate change present manageable risks to the portfolio, as described throughout the first section

of this report, however society’s transition to a lower carbon economy presents significant opportunities and upside

potential for the Company. The Company’s investment objective is to provide investors with an attractive and sustainable

level of income returns, with an element of capital growth, by investing in a diversified portfolio of renewable energy and

infrastructure assets in the UK, Ireland and Northern Europe.

Significant growth in renewable energy and its associated infrastructure is critical to meeting the required emission

reductions across an expanding electricity generation sector. This positions the Company well to continue delivering value

to investors through its robust climate change strategy.

3. Risk Management

The ongoing performance of the Company’s portfolio and all material factors affecting valuation are reviewed by the

Board on a quarterly basis. Market, climatic factors and events affecting valuation are constantly monitored by the

Investment Manager, with any extraordinary events leading to material changes to valuation communicated to investors.

The Investment Manager utilises in-house subject matter expertise to prepare reports for the Board throughout the

reporting period. These reports incorporate policy perspectives and data sourced from respected third-party policy

experts. On the basis of these reports, the board undertakes an annual review and development process in support of the

Company’s climate change strategy, identifying and evaluating the principal climate risks and opportunities.

The Board’s standard reporting pack contains data that enables them to oversee the delivery of the Company’s

sustainable Investment Objective, explicitly delivering output that supports climate change mitigation.

Downing Renewables & Infrastructure Trust plc Annual Report | 27

4. Metrics and Targets

The following data is currently utilised to support modelling of risks and opportunities in relation to the portfolio’s

technical generation mix and geographic exposure. The three common factors across analysis of the portfolio are air

temperature, wind speed and precipitation. In addition to these three common factors a fourth data source has been

selected for each geography and portfolio technology, as a proxy for potential changes to costs of extreme weather

events. The common source of the data is the NGFS Current Policies Scenario and the time period selected aligns to the

short, medium and long term horizons identified during scenario analysis for strategy development.

Projected Air Temperature Change (UK and Sweden)

Projected Wind Speed Change (UK and Sweden)

Projected Precipitation Rate Change (UK and Sweden)

Projected annual % change in cost of expected damage from tropical cyclones (UK)

Projected annual % change in cost of expected damage from river floods (Sweden)

These data sources will be updated and reviewed on an at least an annual basis to continue to support scenario analysis

and strategy development. Over time, additional data sources may be selected to reflect the portfolio’s diversification by

technology and geography.

In addition to the data above, portfolio efficiency, micro and macro-economic data is reported to the Board on a

quarterly basis. Data relating to generation and portfolio efficiency is utilised to assess the effect of any physical risks to

the portfolio and the Company’s delivery of its sustainable Investment Objective. Micro and macro-economic data, for

example energy commodity prices, carbon emissions allowance prices and subsidy rates are utilised to assess the impact

of transitional risks.

Scope 1 Emissions: When considering the direct emissions of the Company, we assess these to be negligible because

DORE does not own or lease building or vehicles. In addition, the majority of the Company’s business has been conducted

virtually.

Scope 2 Emissions: The Scope 2 emissions of the portfolio during the period are estimated to be 20.5 tC02e. These

emissions stem principally from electricity utilised by the hydropower assets within the portfolio and are estimated on the

basis of electricity usage and geographically specific residual grid emissions factors.

Scope 3 Emissions: The Scope 3 emissions of the portfolio are estimated to be 390 tCO2e. During the 2022 period,

an assessment was carried out on the emerging Scope 3 reporting standards expected from the Company as an

infrastructure investor, using guidance from the Greenhouse Gas Protocol. As a result, Scope 3 emissions reporting has

been significantly enhanced to cover more factors in the Company’s value chain. The emissions reported come from

equipment purchased for maintenance, operational waste, grass-cutting, solar panel cleaning and the accrued mileage of

contractors making routine site visits throughout the reporting period.

The Company does not yet set specific climate or GHG emission reduction targets.

Downing Renewables & Infrastructure Trust plc Annual Report | 28

Key Performance Indicators

1 Jan 2022 – 31 Dec 2022 Period ended 31 Dec 2021

Environmental performance

Number of renewable generation assets 3,260 3,255

MW of installed renewable generation capacity 184.5 121.4

GWh renewable energy generated 326 195

Share of non-renewable energy production 0% 0%

GHG emissions avoided (tCO2e) (Scope 4) 153,457 90,523

Equivalent UK homes powered 112,523 41,973

Equivalent trees planted 902,689 532,488

GHG emissions (Scope 1) (tCO2e) 0 0

GHG emissions (Scope 2) (tCO2e) 21 4

GHG emissions (Scope 3) (tCO2e) 390 13

Total GHG emissions (tCO2e) 411 17

Carbon footprint (tCO2e/€m) 1.2 Not reported

GHG intensity of investee companies (tCO2e/€m) 826 Not reported

Share of non-renewable energy consumption 59%* Not reported

Energy consumption intensity per high impact climate sector

(gWh/€m)

0.05 Not reported

Reservoir capacity managed (Mm

) 114.3 107

Acres of land managed 945 358

Acres of land grazed 272 247

Number of beehives 7 4

Number of bird boxes 12 12

Number of bat boxes 10 10

Environmental incidents (including non-compliance with permits/

regulations)

0 0

Activities negatively affecting biodiversity sensitive areas 0 0

Hazardous waste ratio (tonnes/€m) 0 Not reported

Social performance

O&M FTE jobs supported 16 Not reported

Number of health and safety audits 28 14

Key Performance Indicators

Downing Renewables & Infrastructure Trust plc Annual Report | 29

Key Performance Indicators

1 Jan 2022 – 31 Dec 2022 Period ended 31 Dec 2021

Number of serious accidents or injuries 0 0

Number of engagements with stakeholders including local

community complaints

No complaints No complaints

Number of sites able to host educational visits 2 2

Number of renewable energy education events sponsored 13 Not reported

Community funding £28,762 £19,6 46

GWh free or discounted renewable energy to homes and

businesses

18 9.9

Value of free or discounted renewable energy to homes and

businesses

£4.7m £2.8m

Exposure to companies active in the fossil fuel sector 0% 0%

Lack of processes and compliance mechanisms to monitor

compliance with UN Global Compact principles and OECD

Guidelines for Multinational Enterprises

No Not reported

Exposure to controversial weapons 0% 0%

Investee countries subject to social violations 0 Not reported

Governance performance

Unadjusted gender pay gap N/A Not reported

Fund board gender diversity (female %) 33% Not reported

* DORE’s Swedish assets’ energy supply comes from the typical fuel mix of the grid in Sweden which, whilst containing

significant renewables, is assumed not to be 100% renewable

Downing Renewables & Infrastructure Trust plc Annual Report | 30

Strategy and Business Model

The Board is responsible for the Company’s Investment Objective and

Investment Policy and has overall responsibility for ensuring the Company’s

activities are in line with such overall strategy. The Group’s Investment

Objective and Investment Policy are published below.

Corporate Summary

The Company is a closed ended investment

company incorporated in England and

Wales with registration number 12938740.

The Company aims to provide investors

with an attractive and sustainable level of

income, with an element of capital growth,

by investing in a diversified portfolio of

renewable energy and infrastructure assets

in the UK, Ireland and Northern Europe.

As at 31 December 2022, the Company had

184,622,487 ordinary shares in issue which

are listed on the premium segment of the

Official List and admitted to trading on the

London Stock Exchange’s Main Market.

Investment Objective

The Company’s Investment Objective is

to provide investors with an attractive and

sustainable level of income returns, with

an element of capital growth, by investing

in a diversified portfolio of renewable

energy and infrastructure assets in the

UK, Ireland and Northern Europe.

The core sustainable investment

objective of the Company is to accelerate

the transition to net zero through its

investments, compiling and operating a

diversified portfolio of renewable energy

and infrastructure assets to help facilitate

the transition to a more sustainable future.

The Company believes that this directly

contributes to climate change mitigation.

The Company has made disclosures

under the EU’s Sustainable Finance

Disclosure Regulation (“SFDR”) as part

of its commitment to sustainability. The

Company is an Article 9 fund under SFDR.

Investment Policy

The Company seeks to achieve its

investment objective through investment

in a diversified portfolio of renewable

energy and infrastructure assets in the UK,

Ireland and Northern Europe, comprising

(i) pre-dominantly assets which generate

electricity from renewable energy

sources; and (ii) other infrastructure assets

and investments in businesses whose

principal revenues are not derived from

the generation and sale of electricity on

the wholesale electricity markets (“Other

Infrastructure”) (together “Assets” and

each project being an “Asset”). Assets

may be operational, in construction

or construction-ready, at the time of

purchase. In-construction or construction-

ready Assets are assets which have in

place the required grid access rights,

land consents, planning, permitting and

regulatory consents in order to commence

construction. For the avoidance of doubt,

the Company does not acquire or fund

Assets that are at an earlier stage of

development than construction-ready.

The Company invests in a portfolio

of Assets that is diversified by:

(i) the principal technology utilised

Downing Renewables & Infrastructure Trust plc Annual Report | 31

to generate energy from renewable

sources, for example solar photovoltaic,

wind, hydro-electric or geo-thermal

(“Technology”); (ii) geography; and (iii) the

stage of development of a project, being

one of operational, construction-ready or

in-construction (each a “Project Stage”).

Whilst the Company intends primarily to

take controlling interests, it may acquire

a mix of controlling and non-controlling

interests in Assets and the Company may

use a range of investment instruments in

the pursuit of its investment objective,

including but not limited to equity and

debt investments.

In circumstances where the Company

does not hold a controlling interest in

the relevant investment, the Company

will seek to secure its shareholder

rights through contractual and other

arrangements, inter alia, to ensure that

the Asset is operated and managed in

a manner that is consistent with the

Company’s investment policy.

Investment Restrictions

The Company will observe the following

restrictions when making investments:

• the Company may invest no more

than 60% of Gross Asset Value in

Assets located in the UK, save that

until the Net Asset Value of the

Company first exceeds £300 million,

the Company may invest no more

than 75% of Gross Asset Value in

Assets located in the UK;

• the Company may invest no more

than 60% of Gross Asset Value in

Assets located in Ireland and Northern

Europe (combined), save that until the

Net Asset Value of the Company first

exceeds £300 million, the Company

may invest no more than 75% of

Gross Asset Value in Assets located

in Ireland and Northern Europe

(combined);

• the Company may invest no more

than 50% of Gross Asset Value in any

single Technology, save that until the

Net Asset Value of the Company first

exceeds £300 million, the Company

may invest no more than 60% of Gross

Asset Value in any single Technology;

• the Company may invest no more

than 25% of Gross Asset Value in

Other Infrastructure;

• the Company may invest no more

than 35% of Gross Asset Value in

Assets that are in construction or

construction ready;

• the Company may invest no more

than 30% of Gross Asset Value in any

one single Asset, and the Company’s

investment in any other single Asset

shall not exceed 25% of Gross Asset

Value;

• at the time of an investment or entry

into an agreement with an Offtaker,

the aggregate value of the Company’s

investments in Assets under contract

to any single Offtaker will not exceed

40% of Gross Asset Value;

Downing Renewables & Infrastructure Trust plc Annual Report | 32

• no more than 25% of Gross Asset

Value will be invested in Assets in

relation to which the Company does

not have a controlling interest;

• no investments will be made in

companies which generate electricity

through the combustion of fossil

fuels or derive a significant portion of

their revenues from the use or sale

of fossil fuels unless the purpose of

the investment is to transition those

companies away from the use of fossil

fuels and toward sustainable sources;

• the Company’s portfolio will comprise

no fewer than six Assets; and

• the Company will not invest in

other UK listed closed-ended

investment companies. 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 the

Assets following investment will not

be considered as a breach of the

investment restrictions. The Company

will hold its investments through one

or more SPVs and the investment

restrictions will be applied on a look

through basis to the Asset owning SPV.

Borrowing Policy

Long-term limited recourse debt at the

SPV level may be used to facilitate the

acquisition, refinancing or construction

of Assets. Where utilised, the Company

will seek to adopt a prudent approach to

financial leverage with the aim that each

Asset will be financed appropriately for the

nature of the underlying cashflows and

their expected volatility. Total long-term

structural debt will not exceed 50% of the

prevailing Gross Asset Value at the time of

drawing down (or acquiring) such debt.

In addition, the Company and/or its

subsidiaries 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

not to exceed 20% of the prevailing Gross

Asset Value at the time of drawing down

(or acquiring) any such short-term debt.

The Company may employ gearing at the

level of an SPV, any intermediate subsidiary

of the Company or the Company

itself, and the limits on total long-term

structural debt and short-term debt shall

apply on a consolidated basis across

the Company, the SPVs and any such

intermediate holding entities (disregarding

for this purpose any intra-Group debt

(i.e. borrowings and debt instruments

between members of the Group)).

In circumstances where these

aforementioned limits are exceeded as a

result of gearing of one or more Assets 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.

For general purposes the Company defines

“Gross Asset Value” as the aggregate of:

(i) the fair value of the Group’s underlying

investments (whether or not subsidiaries),

Downing Renewables & Infrastructure Trust plc Annual Report | 33

valued on a discounted cash flow basis as

described in the International Private Equity

and Venture Capital Valuation Guidelines

(latest edition December 2018); (ii) the

Group’s proportionate share of the cash

balances and cash equivalents of Group

companies and non-subsidiary companies

in which the Group holds an interest; and

(iii) the Group’s proportionate share of other

relevant assets or liabilities of the Group

valued at fair value (other than third party

borrowings) to the extent not included in

(i) or (ii) above. For the purposes of the

investment policy only, the definition of

Gross Asset Value is adjusted such that the

Group’s proportionate share of the cash

balances and cash equivalents of Group

companies and non-subsidiary companies

in which the Group holds an interest are

multiplied by two to reflect the gearing that

the Group could obtain upon investment of

such balances.

Currency and Hedging Policy

The Company adopts a structured risk

management approach in seeking to deliver

stable cash flows and dividend yield.

This may include entering into hedging

transactions for the purpose of efficient

portfolio management. This could include:

• foreign currency hedging on a portion

of equity distributions and net asset

value(s);

• foreign currency hedging on

construction budgets;

• interest and/or inflation rate hedging

through swaps or other market

instruments and/or derivative

transactions; and

• power and commodity price hedging

through power purchase arrangements

or other market instruments and/

or derivative transactions. Any such

transactions are not undertaken for

speculative purposes.

Cash management

The Company may hold cash on deposit

and may invest in cash equivalent

investments, which may include

short-term investments in money market

type funds (“Cash and Cash Equivalents”).

There is no restriction on the amount

of Cash and Cash Equivalents that the

Company may hold and there may be

times when it is appropriate for the

Company to have a significant Cash and

Cash Equivalents position.

Holding and Exit Strategy

It is intended that Assets will be held for

the long-term. However, if an attractive

offer is received or likely to be available,

consideration will be given to the sale of

the relevant Asset and reinvestment of the

proceeds.

Changes to and Compliance with the

Investment Policy

Any material change to the Company’s

investment policy set out above will

require the approval of Shareholders by

way of an ordinary resolution at a general

meeting and the approval of the FCA.

In the event of a breach of the investment

guidelines and the investment restrictions

set out above, the AIFM shall inform the

Board upon becoming aware of the same

Downing Renewables & Infrastructure Trust plc Annual Report | 34

and if the Board considers the breach to

be material, notification will be made to a

Regulatory Information Service.

Business Model

The Company was incorporated on

8 October 2020 as a public company limited

by shares. The Company carries on business

as an investment trust within the meaning

of section 1158 of the Corporation Tax

Act 2010 and was listed on the premium

segment of the main market of the London

Stock Exchange on 10 December 2020.

The Company holds and manages its

investments through a parent holding

company, DORE Hold Co Limited, of which

it is the sole shareholder. DORE Hold Co

in turn holds investments via a number

of intermediate holding companies and

SPVs. The jurisdictions in which the SPVs

are incorporated is typically determined

by the location of the assets, and further

portfolio-level holding companies may be

used to facilitate debt financings.

As at 31 December 2022, the Company

owns a portfolio of 3,260 Renewable

Energy Assets totalling 186 MW of

operational capacity.

Short term debt financing is available

through a £40 million RCF which may be

drawn on by DORE Hold Co Limited to

facilitate future growth plans.

The Company has a 31 December financial

year end and announces half-year results in

or around September and full-year results in

or around March. The Company intends to

pay dividends quarterly, targeting payments

in or around March, June, September and

December each year.

The Company has an independent board of

non-executive directors and has appointed

Gallium Fund Solutions Limited as its AIFM

to provide portfolio and risk management

services to the Company. The AIFM

has delegated the provision of portfolio

management services to the Investment

Manager, Downing LLP. Further information

on the Investment Manager is provided in

the Investment Manager’s Report.

As an investment trust, the Company

does not have any employees and is reliant

on third party service providers for its

operational requirements. Likewise, the

SPVs do not have any employees and

services are also provided through third

party providers. Each service provider has

an established track record and has in place

suitable policies and procedures to ensure

they maintain high standards of business

conduct and corporate governance.

Downing Renewables & Infrastructure Trust plc Annual Report | 35

Objective KPI and

Definition

Relevance to

Strategy

Performance Explanation

Attractive

and

sustainable

level of

income

Dividends

per share

(pence)

The dividend

reflects the

Company’s ability

to deliver a low

risk but growing

income stream

from the portfolio.

The Company

has paid

dividends of

3.75 pence

per share in

respect of the

year ending

31 December

2022. The

company has

declared a

further 1.25

pence per share

to be paid in

respect of

the period to

31 December

2022.

The Company

successfully met the

increased dividend

guidance of 5 pps

for the year to

31 December 2022.

The Company’s annual

dividend target will

increase by 7.6% for

the year ended 31

December 2023 to

5.38 pence per share.

Cash

dividend

cover

Reflects the

Company’s

ability to cover

its dividends

from the income

received from its

portfolio.

1.26x –

excluding

dividends paid

immediately

following the

issuance of

new shares

1.17x –

including

dividends paid

immediately

following the

issuance of new

The Company, through

DORE Hold Co

received distributions

of £12.3m from the

underlying projects

enabling the Company

to pay full covered

dividends. £8.5 million

was paid up via loan

interest from DORE

Hold Co in the period.

Downing Renewables & Infrastructure Trust plc Annual Report | 36

Objective KPI and

Definition

Relevance to

Strategy

Performance Explanation

Capital

preservation

with an

element

of capital

growth

NAV per

(pence)

The NAV per

share reflects our

ability to preserve

capital value

and also provide

an element of

capital growth

throughout the

life cycle of our

assets.

118.6 pence

per share

118.6 pence per share as

at 31 December 2022.

NAV has increased

since 31 December

2021 from 103.5 pence

per share after taking

into account dividends

paid and further equity

issuance during the year.

Total NAV

return (%)

The total NAV

return measure

highlights the

gross return

to investors

including

dividends paid.

19.5% The Company’s NAV

has increased due to

the upward revaluation

of the Company’s

Investment in Hold Co,

and its investments in a

portfolio of renewable

energy assets.

Total

Shareholder

return since

IPO

The share price

appreciation

plus reinvested

dividends over

a period, is a

measure of a

company’s capital

growth over the

long term.

20.8% The Company’s closing

share price as at

31 December 2022 was

113.5 pence per share.

Ongoing

charges

ratio

Ongoing charges

shows the drag

on performance

caused by the

operational

expenses incurred

by the Company.

1.5% Company level budgets

are approved annually

by the Board and actual

spend is reviewed

quarterly. Transaction

budgets are approved by

the Board and potential

abort exposure is

carefully monitored.

These are alternative performance measures

A glossary of terms can be found on page 152.

Downing Renewables & Infrastructure Trust plc Annual Report | 37

Objectives and Key Performance Indicators

The Company sets out above its KPIs which it uses to track the performance of the

Company over time against the objectives, as described in the Strategic Report on

pag

e 30. The Board is of the opinion that the KPIs detailed in the table above, alongside

the environmental, social and governance objectives set out on page 19 provide

shareholders with sufficient information to assess how effectively the Company is

meeting its objectives. The Board will continue to monitor these KPIs on an ongoing basis.

Downing Renewables

& Infrastructure Trust PLC

12938740

DORE HOLD CO LIMITED

13081088

Shareholders

Debt Providers

Santander UK Plc

Revolving credit facility

Ownership

Services

Key

Debt

Company Service Providers

Broker: Singer Capital Markets

Company Secretary: Link Company Matters

Administrator: Gallium Fund Solutions

Registrar: Link Company Matters

Auditors: BDO

PR Advisor: TB Cardew

Tax Adviser: EY

Legal: Gowling WLG

UK Solar

Assets

Swedish

Hydro Assets

Swedish

Wind Assets

UK Holding

Company

Swedish Holding

Company

AIFM

Gallium Fund Solutions

Investment Manager

Downing LLP

Debt Provider

Aviva

Debt Provider

Skandinaviska

Independent Board of Directors

Day to day management

subcontracted to Downing LLP

Downing Renewables & Infrastructure Trust plc Annual Report | 38

About Downing

The Company is managed by Downing

LLP, an established investment manager

with over 30 years’ experience and a

considerable track record in the core

renewables space. Downing is authorised

and regulated by the FCA and, as at

31 December 2022, had over £1.8 billion

of assets under management.

The Investment Manager has over

200 staff and partners. The team of

51 investment and asset management

specialists who focus exclusively on

energy and infrastructure transactions

are supported by business operations,

IT systems specialists, legal, HR and

regulatory and compliance professionals.

The Investment Manager is responsible

for the day-to-day management of

the Company’s investment portfolio

in accordance with the Company’s

Investment Objective and policy, subject to

the overall supervision of the Board.

The Investment Manager has managed

investments across various sectors in the

UK and internationally and identified the

Energy & Infrastructure sector as a core

area of focus from as early as 2010. Since

then, to date it has made 180 investments

in renewable energy infrastructure projects

and currently oversees 459 MWp of

electricity generating capacity, covering five

technologies across c.7,350 installations.

The Investment Manager

Downing Renewables & Infrastructure Trust plc Annual Report | 39

The key individuals responsible for executing the Company’s investment strategy are:

Tom Williams

Partner, Head of Energy

and Infrastructure

Tom joined the Investment

Manager as Partner in the

Energy & Infrastructure

team in July 2018. Tom

heads up the team and has

24 years of experience as

principal and adviser across

the private equity and

private debt infrastructure

sectors. Tom has carried

out successful transactions

totalling in excess of

£13 billion in the energy,

utilities, transportation,

accommodation and defence

sectors.

Tom started his career

working as a project finance

lawyer in 1999 before

moving into private equity

with Macquarie Group in

London and the Middle East.

Tom holds a Postgraduate

Diploma in Legal Practice

from the Royal College of

Law and a BA in law from

Cambridge University.

Henrik Dahlström

Investment Director

Henrik joined the

Investment Manager as

Investment Director in

June 2020 to expand its

European presence and lead

transactions in the Nordic

regions. Before joining

the Investment Manager,

Henrik spent 17 years with

Macquarie Infrastructure

and Real Assets (“MIRA”). At

MIRA, Henrik was a Director

responsible for covering

the Nordic region. This role

included the origination and

execution of transactions

in the renewable energy

and infrastructure sectors

as well as holding asset

management and board

responsibilities.

Henrik has worked across

renewable energy and

infrastructure sectors as a

principal for investments

in the UK and in Europe.

Henrik holds a master’s

degree in finance from

Gothenburg School of

Economics.

Tom Moore

Partner, Head of Fund

Reporting

Tom joined the Investment

Manager in May 2019 to

build a full-service asset

management team to provide

investors with an efficient

and class leading asset

management service. Tom

is now responsible for fund

and portfolio reporting and

investment operations across

private markets.

Prior to joining the

Investment Manager, Tom

was a Director at Foresight

Group, where he had

oversight of a significant

portfolio of renewable

energy investments.

Tom is a chartered

accountant and holds a

BSc in Economics from the

University of York.

Danielle Strothers

Head of Asset

Management

Danielle joined the

Investment Manager in

September 2019. Danielle

manages the asset

management function,

focussing on asset

performance, business

operations and compliance.

Danielle is also responsible

for the coordination of the

valuation process across the

energy portfolio.

Prior to joining Downing,

Danielle was a Senior

Portfolio Manager at

Foresight Group, where

she was responsible for

the operations of their

renewable energy portfolio.

Danielle is a chartered

accountant and holds a BSc

in Accounting & Finance

from the University of

Birmingham.

Portfolio Summary

At the year end, through its main subsidiary, the

Company owned 185 MW of hydropower, wind

and solar assets with expected annual generation

of around 382

GWh. The portfolio is diversified

across 3,260 individual installations and across

five

different energy markets.

Following the period end the Group has added an

additional 1.1 MW of hydropower assets with an

additional annual generation of 8.3 GWh. The

entire

portfolio now stands at 186 MW with an aggregate

expected annual generation of 391

GWh.

The Group currently has no exposure to any assets

under construction.

Sweden

Great Britain

Northern Ireland

Cash

50.3%

33.3%

9.8%

6.7%

49%

28%

23%

Portfolio composition by valuation, as at 31 December 2022

Hydro

Wind

Solar

Technology by

Generation

Geographic

Exposure by GAV

Sweden

Great Britain

Northern Ireland

Cash

50.3%

33.3%

9.8%

6.7%

49%

28%

23%

Portfolio composition by valuation, as at 31 December 2022

Hydro

Wind

Solar

Technology by

Generation

Geographic

Exposure by GAV

Sweden - SE2

16.5%

26.1%

7.6%

33.3%

9.8%

6.7%

Sweden - SE3

Sweden - SE4

Great Britain

Northern Ireland

Cash

Power Market

Exposure by GAV

Downing Renewables & Infrastructure Trust plc Annual Report | 40

Portfolio composition by valuation, as at 31 December 2022

Power Market Exposure by GAV

Downing Renewables & Infrastructure Trust plc Annual Report | 41

Nor

ola

ind

Asse

Nor

ola

ind

Asse

Portfolio

Assets

Downing Renewables & Infrastructure Trust plc Annual Report | 42

Investment Technology

Date

Acquired

Location

Power Market /

Subsidy

Installed

capacity

(MW)

Expected annual

generation (GWh)

Ugsi Hydro Feb-21 Sweden SE3 1.8 9.9

Båthusströmmen Hydro Feb-21 Sweden SE3 3.5 10.3

Åsteby Hydro Feb-21 Sweden SE3 0.7 2.8

Fensbol Hydro Feb-21 Sweden SE3 3.0 14.0

Rödbjörke Hydro Feb-21 Sweden SE3 3.3 14.9

Väls Hydro Feb-21 Sweden SE3 0.8 3.2

Torsby Hydro Feb-21 Sweden SE3 3.1 13.7

Tvärforsen Hydro Feb-21 Sweden SE2 9.5 37. 0

Sutton Bridge Solar Mar-21 Great Britain Great Britain 6.7 6.7

Andover Airfield Solar Mar-21 Great Britain Great Britain 4.3 4.2

Kingsland Barton Solar Mar-21 Great Britain Great Britain 6.0 5.9

Bourne Park Solar Mar-21 Great Britain Great Britain 6.0 6.0

Laughton Levels Solar Mar-21 Great Britain Great Britain 8.3 8.8

Deeside Solar Mar-21 Great Britain Great Britain 3.8 3.4

Redbridge Farm Solar Mar-21 Great Britain Great Britain 4.3 4.2

Iwood Solar Mar-21 Great Britain Great Britain 9.6 9.3

New Rendy Solar

Mar-21 Great Britain Great Britain 4.8 4.7

Redcourt Solar Mar-21 Great Britain Great Britain 3.2 3.2

Oakfield Solar Mar-21 Great Britain Great Britain 5.0 4.7

Kerriers Solar Mar-21 Great Britain Great Britain 10.0 9.7

RSPCA Llys Nini Solar Mar-21 Great Britain Great Britain 0.9 0.8

Commercial portfolio Solar Mar-21 Great Britain Great Britain 5.5 4.3

Commercial portfolio Solar Mar-21 N. Ireland N. Ireland 0.7 0.5

Bombardier Solar Mar-21 N. Ireland N. Ireland 3.6 2.8

Residential portfolio Solar Mar-21 N. Ireland N. Ireland 13.1 10.1

Lemmån Hydro Jan-22 Sweden SE3 0.6 2.5

Ryssa Övre Hydro Jan-22 Sweden SE3 0.7 2.6

Ryssa Nedre Hydro Jan-22 Sweden SE3 0.6 2.4

Rots Hydro Jan-22 Sweden SE3 1.0 4.2

Gabrielsberget Syd Vind AB Wind Jan-22 Sweden SE2 46.0 107.9

Vallhaga Hydro Jan-22 Sweden SE2 2.1 12.8

Österforsens Kraftstation Hydro Jan-22 Sweden SE2 1.9 11.5

Bornforsen 1 Hydro Jan-22 Sweden SE2 0.5 2.9

Bornforsen 2 Hydro Jan-22 Sweden SE2 1.5 9.3

Fridafors Hydro May-22 Sweden

SE4 4.4 17.0

Summit Hydro Oct-22 Sweden SE3 3.1 13.4

Summit Hydro Oct-22 Sweden SE2 0.3 1.2

TOTAL AS AT THE REPORTING DATE: 184.5 382.5

Post balance sheet date acquisitions

Högforsen Hydro Feb-22 Sweden SE2 0.4 2.5

Gottne Hydro Feb-22 Sweden SE2 0.7 5.8

TOTAL AS AT THE DATE OF THIS REPORT: 185.6 390.8

Downing Renewables & Infrastructure Trust plc Annual Report | 43

Investment Manager’s Report

Introduction

We are delighted with the progress made

during the year. During the reporting period,

the Company announced five acquisitions,

all of which were accretive to NAV as their

fair value throughout the year exceeded

cost at acquisition. The acquisitions

strengthen the diversification of technology,

geography and power market exposure

that is central to the aims of the Company.

During the year the GAV grew by 40% from

£221.1 million to £310.4 million, and the

expected annual generation of the portfolio

grew by 93% from 199 GWh to 382 GWh.

Acquisitions and Capital Deployment

We have continued to expand the

portfolio completing five

acquisitions in

the wind and hydropower sectors totalling

£53 million, and deploying a further

£10

million in the UK solar portfolio.

The Group’s first wind acquisition was

a 46 MWp operational wind farm in

north-eastern Sweden. In addition, four

additional Swedish hydropower portfolios

were acquired, including the Group’s first

investment in the SE4 pricing zone in

Sweden. All acquisitions are 100% owned

by the Group.

During the year, a £9m increase in NAV

was recognised as new investments were

revalued throughout the year.

Hydro - Downing Hydro AB

The Company has a significant exposure

to hydropower investments, which offer

additional benefits to other renewable

generation technologies. The capacity

factor of hydropower assets is much

higher than a wind or solar asset, it is

generating for a much higher proportion

of the year, sometimes in excess of 70%

of the time. The assets have very long

lives and, all things remaining equal,

should be worth the same in 30 years

as they are today. That underpins NAV

resilience and means the cash flows

being generated by the assets are wholly

income yield and not a return of capital.

Hydropower also enables the storage of

water in reservoirs, which provides an

ability to control timing of generation and

align it to periods of higher power prices.

This complements traditional battery

technology storage facilities, which have

faster reaction times but can only provide

power for a shorter period of time.

DHAB is the vehicle through which the

Group acquires and owns its portfolio

of hydropower plants. In January 2022,

the Group acquired two operational

portfolios of hydropower plants located

in central Sweden for £20.1 million. The

acquisition comprised a c. 12 GWh per

annum portfolio of hydropower plants and

a c. 36 GWh per annum portfolio. These

acquisitions were largely funded through

a drawdown on the DHAB Swedish

hydropower portfolio debt facility signed

in November 2021 with Skandinaviska

Enskilda Banken AB (“SEB”).

The first portfolio comprises five

hydropower plants located on three

different rivers in central Sweden. The

sites benefit from a long operational

history and are located in the county

of Dalarna, which is in the attractive

Downing Renewables & Infrastructure Trust plc Annual Report | 44

SE3 price area. The second of the two

new portfolios include four run-of-river

hydropower plants situated on a single

river in central Sweden. The sites also

benefit from a long operational history

and were refurbished between 2010 and

2013. The hydropower plants are located

in and around the Swedish town Edsbyn in

the SE2 pricing zone.

In May 2022, the Company acquired,

through DHAB, a 100% interest in

an additional portfolio of operational

run-of-river hydropower plants in Sweden

for a total consideration of approximately

£17 million. The acquisition was funded

by drawing down on the RCF. This was

subsequently repaid in full using part of

the net proceeds of the June

2022 capital

raise.

The portfolio acquired in May 2022

comprises two hydropower plants located

in Sweden’s southern SE4 pricing region.

The plants were comprehensively renovated

between May 2014 and September 2019

and have an aggregate forecast annual

production of 17 GWh p.a. The newly

acquired hydropower plants will be fully

integrated into DORE’s existing hydropower

operational organisation.

The acquisition in May 2022 represented

DORE’s first assets located in the

attractive southern SE4 pricing region,

which has the highest wholesale power

prices in Sweden and benefits from

export cables to continental Europe. The

acquisitions in a new price zone further

supports DORE’s strategy of focusing on

diversification by geography, technology,

revenue and project stage, designed to

increase the stability of revenues and the

consistency of income to shareholders.

In November 2022, DHAB acquired

six further hydropower plants in the

SE3 pricing region (13GWh) and one

hydropower plant in the SE2 region

(1 GWh) for a total investment amount

of c. £6m. The hydropower plants are a

combination of run-of-river and storage

assets. This acquisition increased the

number of DHAB hydropower plants

to 26 and the total forecast annual

production of the hydropower portfolio

to c.189 GWh, a c.75% increase since

31 December 2021.

The fair value uplift of acquisitions has

increased the NAV due to operational

and capital efficiencies resulting from

the integration of the assets into the

Company’s platform, and also the more

attractive pricing available for individual

sites or small portfolios when compared to

larger facilities.

A framework agreement is in place with

Axpo (a leading Swiss energy company)

which allows DHAB to hedge power

prices through baseload products.

DHAB has hedged positions in line with

DORE’s risk management strategy. The

hydropower assets do not attract material

government subsidy payments.

Downing Renewables & Infrastructure Trust plc Annual Report | 45

Wind - Gabrielsberget

On 2 February 2022 the Group completed

its first onshore wind investment. The

Company acquired an operational 46 MW

onshore wind project located in Nordmaling,

north-eastern Sweden for £19.8 million. The

project has been operational for c. 10 years

and comprises 20 Enercon turbines with an

expected total annual production of 108

GWh. Gabrielsberget has a power purchase

agreement with Centrica.

Solar – Further Investment

In line with the original investment case,

on 7 October 2022 the Company repaid

the mezzanine debt that was present in

the UK solar portfolio when acquired

in 2021. This has further de-risked the

Company’s investment and increased

the Company’s NAV exposure to this

attractive portfolio by c.£10 million.

Portfolio Performance

For the period of operations between

1 January 2022 and 31 December 2022,

the 3,260 operating assets produced

approximately 326GWh of renewable

electricity.

From a financial perspective, the combined

portfolio performed extremely well with

an operating profit of £19.5 million, 14.7%

above expectations. Where we report

variances against expectations, those

expectations and budgets are set with

reference to the underlying valuation

models. Operating profit was driven

primarily by high power prices across the

UK and the Nordics, allowing the assets to

capture strong wholesale energy revenues.

The average power price achieved in the

UK and Sweden was £65.54/MWh and

EUR 53.27/MWh respectively, reflecting

fixed price contracts and hedging activity

previously put in place.

Operating profits across the hydropower

portfolio were c.£6m, 18.5% higher than

expected, despite generation being below

expectations at 128 GWh. This was due to

precipitation in Sweden falling 19% below

the long term yearly average resulting in

less water flow through the power plants.

The plants were able to maintain their high

operating profits despite an unusually dry

year in Sweden as a result of high power

prices and its ability to utilise its storage

capacity enabling it to shift generation to

higher pricing periods, further increasing

power prices achieved.

The wind portfolio also exceeded financial

targets, with an operating profit 68.1%

higher than budget. As the operational

performance was in line with expectations,

generating 108 GWh of electricity

during the period, the strong financial

performance was due to high power prices

in the SE2 region of Sweden.

Operating profit across the solar portfolio

was 6.4% higher than expected at

£12.6

million as a result of achieving high

power prices and higher than expected

ROC recycle payments. Generation

from the solar portfolio was in line with

expectations, generating 90 GWh across

the year.

The solar assets experienced strong

irradiation levels throughout the year,

8% above expectations. The deviation

between irradiation and generation was

Downing Renewables & Infrastructure Trust plc Annual Report | 46

primarily due to faults in some of the older

electrical equipment in the solar fleet

and delays in the supply chain resulting

in longer than normal waiting times

for replacement parts. Throughout the

course of the year the Asset Manager

has implemented a dynamic spare parts

strategy which involves completing various

modification works on site to increase

the compatibility with available spares

and allow for more flexibility across the

portfolio. Once complete, this strategy

will mitigate against the increased risks of

downtime given the current challenges in

the supply chain.

In addition, several DNO outages impacted

the Ground Mount portfolio throughout

the year. The Asset Manager was able to

work alongside the network operators to

adjust the timing of these to the winter

months where the outages would have a

lower impact on production or to coincide

with planned intrusive preventative

Operating Profit Expected vs Actual

Generation Expected vs Actual

5,000

10,000

15,000

20,000

Actual (MWh)

Expected (MWh)

WindSolarHydro

Actual

Expected

(MWh)

3,000

6,000

9,000

12,000

15,000

WindSolarHydro

Actual

Expected

(£’000)

2022 2021

Hydro Wind Solar Total Hydro Wind Solar Total

GWh generated 128.3 108.0 89.9 326.3 108.1 nil 87.0 195.1

Average price per

MWh

€72.92 €29.93 £65.54 £50.95 €40.84 n/a £52.42 £42.83

Revenues (£m) 8.2 3.1 15.4 26.7 3.7 nil 13.1 16.8

Operating profit

(£m)

6.0 1.0 12.5 19.5 2.9 nil 10.2 13.1

Downing Renewables & Infrastructure Trust plc Annual Report | 47

maintenance that would otherwise have

caused downtime.

Portfolio and Asset Management

Downing has invested significantly in an

in-house asset management team capable of

providing a full scope service to a wide range

of generation and storage technologies.

Established in 2019, the team totals 24

people, four of whom are based in an office

in Stockholm which opened in 2021. There

is a broad range of skills and expertise across

the asset management team including power

markets, engineering, data analytics, finance,

and commercial management.

The asset management team works in parallel

to the investment team and ensures work

is started long before an asset is acquired.

Prior to acquisition, Downing carries out

a comprehensive onboarding process to

ensure that new assets are transitioned

smoothly into the wider energy portfolio.

The plan captures all key milestones that

need to be completed as part of the

transition, including the collection of key

documents such as project contracts and

design documents.

The onboarding process also ensures that

the assets are embedded into existing

processes, such as contract management and

compliance, incident tracking, monitoring,

and reporting. Assets are fully incorporated

within the asset management team’s

portfolio reporting systems within 60 days of

completion.

This dynamic onboarding process not only

enables a smooth transition of new assets

but is also critical in supporting the team’s

data led approach to asset management.

By focussing on the collection and quality

of the portfolio data set, the team of data

analysts have been able to deploy the latest

technologies and tools to optimise strategies

such as preventative maintenance or water

dispatch to increase power generation and

therefore returns to investors

Health and Safety

The health and safety of contractors

and the public is a fundamental part of

management processes.

Throughout the period, a range of

workstreams were carried out by

the Asset Manager in line with the

Company’s approach to Health and Safety

management.

Re-defining O&M

processes for an “On

the move” dispatch

center

Configuration

of Central Hydro

SCADA

Real time

monitoring, alarms

and reporting

GPM SCADA

Monitoring

Current IT

Landscape

Feasibility

Automated production

planning, replacing

current manual

forecasting processes

Automation of onsite

components such as

water level regulation,

gates and sensors

Hydrogrid Realtime

Dispatch

Optimisation

Software

Site Automation

and Communication

upgrades

Installation of

Remote Onsite

Equipment

Set up of Central

Hydro SCADA

Define Project

Objectives and

Target IT Landscape

Stage 1

System

Installation

Hydro Digitalisation Project

Monitoring and communications upgrade strategy to improve efficiencies and create value across a

mature fleet of hydro power plants

Stage 2

Implementation

and Configuration

Stage 3

Adoption into

Asset Operations

Downing Renewables & Infrastructure Trust plc Annual Report | 48

Following the investment into

Gabrielsberget, a 46MW wind site in

northern Sweden, the Asset Manager

ensured that the appropriate safety

procedures are applied on site reflecting

the seasonal conditions at the site. During

icy conditions and risk of ice falling from

turbine blades, all turbines are oriented

North to standardise the danger area. In

addition, during an icing event and when

the blade heating system is activated,

technicians must visually inspect the

blades and make sure that the work can be

performed under safe conditions.

Downing further increased its

operational expertise with the

appointment of Magnus Hopstadius

in January 2023. Magnus has over

14 years’ experience in technical asset

management, with particular focus

on global wind assets. Magnus brings

knowledge of global health and safety

practises and procedures.

A rolling programme of Health and Safety

audits continues across the portfolio.

These audits are based on a two-tier

approach, where risks and procedures

are audited at the site level and also the

operator level. Downing has a process

of continuous assessment and feedback

of site and operator practices, ensuring

effective management systems are in place

and adhered to.

Finally, IT systems are used to thoroughly

track all incidents. As well as these systems

enabling performance measurement

and trend analysis, they also ensure the

effective communication, escalation, and

management of incidents.

Optimisation

During the period, the Asset Manager

continued to develop and implement

performance and proprietary data

optimisation strategies, the latter

enhancing Downing’s data driven approach

to asset management.

A digitalisation pilot is underway enabling all

hydropower sites in remote areas of Sweden

to deliver data such as dam and water flow

level to one central hub. This data can be

used in real time to automate production

planning, enhance maintenance strategies

and enable effective monitoring through

sensors and detection equipment. The first

site was successfully connected in December

2022, with the others to follow in 2023.

In the meantime, the Asset Manager has

produced a temporary Optimal Price

Analysis tool for the flexible hydropower

assets, enabling enhanced commercial

monitoring of production planning

arrangements.

Work has continued to integrate Green

Power Monitor (GPM) across the portfolio.

This system allows the Asset Manager

to monitor performance and weather

conditions in real time. The integration

of Gabrielsberget wind farm has required

significant hardware development on

site in November 2022, including a new

system to increase connection speed and

allow for extra ports for GPM to connect

to the GPM. Integration was completed

in February 2023. In early 2023, the

hydropower sites will also be integrated

with GPM.

Downing Renewables & Infrastructure Trust plc Annual Report | 49

A co-development project is underway

with WinJi AG to create an interface that

produces predictive component failure

analysis and identification of likely short and

long term maintenance costs for ground

mounted solar sites. WinJi will use algorithms

that consider performance, equipment,

incident and meteorological data. WinJi

released two iterations of the project during

Q4 2022. This included a Mean Time To

Failure report to display inverters at portfolio

and installation level. Development has

continued with mapping GPM error codes

to operational faults so that the data can

be used to identify anomalies and future

faults. In January 2023, Downing appointed

Moji Ghorbanali to architect and implement

a database for the energy portfolio. This

will initially support the automation and

efficiency of data processes and will play a

key role in driving optimisation through data

across the portfolio.

The Asset Manager continues to improve

and implement a dynamic spare parts

strategy across the portfolio, aimed at

reducing downtime and maintaining asset

performance. Equipment and technical

characteristics of all sites are being

reviewed to understand the degree to

which there is equipment intercompatibility

and an assessment of all parts (i) criticality

and (ii) likelihood of failure is underway.

Significant progress has been made on

the solar portfolio spare part optimisation

process with ground mounted solar

assets grouped where they can share key

components. A number of initiatives are

planned to maximize availability of spare

parts, including, for two assets, a wider

equipment replacement exercise which

will allow for improved performance and

also release of parts that can be kept in

stock for use across compatible assets with

similar characteristics. Key component

orders have now been issued and

contractual arrangements are underway

to allow use of equipment across different

assets with multiple changeable settings.

Several new and optimised contracts

were placed during the period. With the

acquisition of several new hydropower

assets during the period, the Asset

Manager has incorporated these new

sites into the optimised O&M contracts

strategy.

Ongoing active power price management

ensures that performance optimisations

can deliver a strong financial performance

for the portfolio.

Financing and Capital Structure

The Group adopts a prudent approach to

leverage. Its objective is that each asset will

be financed appropriately for the nature of

its underlying cashflows and their expected

volatility. Long-term debt may be used where

appropriate at the SPV level to facilitate

acquisitions, refinancing, capital expenditure

or construction of assets.

Total long-term structural debt will not exceed

50% of the prevailing Gross Asset Value. At

31 December 2022, including project level

financing, the Group’s leverage stood at 30%.

In addition, the Company and/or its

subsidiaries may also make use of

Downing Renewables & Infrastructure Trust plc Annual Report | 50

short-term debt, such as a revolving credit

facility, to assist with the acquisition of

suitable opportunities as and when they

become available.

Revolving Credit Facility

As at 31 December 2022, the Group had

entered into a loan agreement through its

main subsidiary DORE Hold Co Limited for

a £25 million RCF with Santander UK plc.

The RCF is available until December 2025,

with the possibility to be extended for a

further year. On 26 January 2023, the

Company announced that the RCF had

been increased to £40m further facilitating

the execution capabilities of the Company’s

pipeline.

The terms of the RCF now includes a

‘Green Projects’ initiative, operating under

the Loan Market Association’s (LMA) Green

Loan Principles, a framework of market

standards and guidelines that provides a

consistent methodology for use across the

green loan market.

Under the ‘Green Projects’ criteria, the RCF

can only be used in connection with assets

that present environmental benefits and

appropriate green credentials. Additional

monitoring and reporting obligations on

the environmental benefits delivered

by such assets will be required, which

comfortably aligns with DORE’s current

investment strategy as an Article 9 fund.

The RCF has the additional benefit of being

able to be drawn in both GBP and EUR

(with the ability to also able to make use

of funds in other currencies) and is priced

at the Sterling Overnight Index Average

(“SONIA”) plus 2.25% per annum. The

Group will make use of the RCF mainly to

fund the acquisition of additional assets.

Refinancing of Hydropower Assets

The Group initially acquired DHAB, its Swedish

hydropower portfolio, on an unlevered basis

in February 2021, shortly after the Company’s

IPO. In light of the strong transaction pipeline

and ongoing capital expenditure requirements,

DHAB has entered into a seven-year bullet

repay EUR 43.5 million debt facility with SEB,

a leading corporate bank in the Nordics. As of

31 December 2022, DHAB had utilised EUR

27.4m of the facilities, predominately as source

of funding for acquiring further hydropower

plants in Sweden during 2022. The remainder

of the undrawn facility is predominately to

fund future capital expenditure requirements

and further acquisitions. The total cost of the

drawn debt is 2.3%, benefitting from swaps

until end of 2032.

A summary of the debt across the portfolio can be found in the table below:

2022 2021

Hydro Wind Solar Working

capital

Total Hydro Wind Solar Working

capital

Total

Equity value (£’m) 103.0 26.4 62.6 26.9 218.9 65.9 0.0 44.4 31.5 141.8

Debt (£’m) 23.0 0.0 68.5 0.0 91.5 0.0 0.0 79. 3 0.0 79.3

GAV (£’m) 126 26.4 131.1 26.9 310.4 65.9 0.0 123.7 31.5 221.1

Downing Renewables & Infrastructure Trust plc Annual Report | 51

UK Solar Portfolio

Medium term amortising debt (September

2034 maturity) is in place for the

United Kingdom solar portfolio and,

as at 31

December 2022, comprised

outstanding principal amounts of

£68.5

million lent by Aviva.

c. 12% of this debt is fixed at an interest

rate of 3.37%. The interest rate is fixed

in real terms on the remaining balance

at 0.5%. The debt service of this larger

debt tranche is inflation-adjusted, with

indexation tracking UK RPI.

Foreign Exchange

The Group’s assets in Sweden earn

revenues in EUR and incur some

operational cost in SEK. Assets in UK

operate entirely in sterling.

The Group, together with its foreign

exchange advisor, has developed and

implemented its foreign exchange risk

management policy in line with the

Prospectus. The policy targets hedging the

short to medium-term distributions (up to

five years) from the portfolio of assets, that

are not denominated in GBP on a “linear

reducing basis”, whereby a high proportion

of expected distributions in year one are

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

Fixed revenues (other) Merchant revenuesFixed revenues (inﬂation linked)

20%

40%

60%

80%

100%

Dividend hedges by year

Power Prices – Fixed vs Merchant

10%

20%

30%

40%

50%

60%

70%

80%

202620252024

Axis Title

2023

Percentage of EUR denominated

dividend receipts

Downing Renewables & Infrastructure Trust plc Annual Report | 52

hedged and the proportion of expected

distributions that are hedged reduces in a

linear fashion over the following four years.

This is a rolling programme and each year

further hedges are expected to be put in

place to maintain the profile.

In total, 28% of the Group’s EUR dividend

receipts from SPVs out to March 2026

were hedged as at the reporting date.

In addition, 51% of the Group’s EUR

denominated NAV is hedged.

Power markets and exposure

Through its portfolio companies, the

Group adopts a medium to long-term

power price hedging policy for its

generation assets, providing an extra

degree of certainty over the cash flows

over the hedged periods. The fixed price

generation position for the portfolio

as of 31 December 2022 is set out in

the chart below, showing the impact of

the combination of subsidy and fixed

income from power sales. The hedging

positions are continuously reviewed

to ensure

an appropriate position is

maintained and new hedges are taken

out as

appropriate.

The Ukraine war will continue to have a

major impact on power prices in Europe and

the UK as gas supply is dominated by Russia.

Consequently, the UK gas and UK power

markets are likely to stay volatile as long as

the uncertainty about the Russian gas supply

continues. The Company is well protected

from this volatility, due its high level of fixed

pricing over the short to medium term, which

can be seen on the chart below.

United Kingdom

The energy markets continued to be

dominated by the Ukraine conflict.

Forward natural gas prices started to fall

towards the end of the year, especially for

Summer and Winter 2023, mostly on the

back of warmer weather. There is a belief

in the market that Winter 2023 might

become tighter than Winter 2022, given

Russian gas filling up the storage over

2022 will not be available for 2023.

UK Win 23 UK Sum 24

UK Win 24 UK Sum 25 UK Sum 25

UK Spot

UK Sum 23

Jan-22Jan-21 Apr-21 Jul-21 Oct-21 Jul-22 Oct-22

100

200

300

400

500

600

UK Win 25

UK Sum 25

UK Win 24

UK Sum 24

UK Win 23

UK Sum 23

UK Spot

£/MWh

Downing Renewables & Infrastructure Trust plc Annual Report | 53

Consequently, power prices remain

volatile, especially in the spot and day

ahead markets, mostly due to the volatile

gas and carbon prices as described

above but also due to maintenance

interconnectors, continued reduced

French nuclear capacity and varying

wind

generation.

During the year, the. UK government

introduced the Electricity Generator Levy,

a windfall profit tax on most non-fossil

electricity generators of 45% on power

revenue exceeding £75/MWh (inflation

adjusted) applied to generation exported

to national grid or to local distribution

networks. The levy calculation is subject

to a £10m allowance. Revenues stemming

from behind-the-meter generation (i.e.

generation that is not exported to the grid

but it is consumed on site) are exempt

from this windfall tax and there is a group

generation threshold of 50 GWh. The

Group is not affected given the total

eligible generation for the purpose of the

levy is within the threshold.

Nordics

The Nordic power market remained

volatile and continues to show a

dependency on hydro resources which

have seen an increase of intermittent

generation of the total production mix for

the last ten years. Until October, the year

was considerably drier than normal, which

led to a deficit in the hydrological balance

and a tighter price coupling with the

extreme continental prices. Subsequently,

high precipitation resulted in high inflow,

especially in southern Norway. In addition,

temperatures have been higher than

normal, resulting in lower demand. The

volatility in wind generation added to the

volatility in the spot market which was

amplified by dry/wet spells, temperature

and hydrology levels throughout the

fourth quarter of 2022.

100

200

300

400

500

Nordic forward Cal 2025

Nordic forward Cal 2024

Nordic forward Cal 2023

Nordic Spot

€/MWh

Jan-21 Mar-21 Jul-21

Nordic forward 2023 Nordic forward 2024 Nordic forward 2025Nordic Spot

Nov-21 Jan-22 Jan-23Mar-22 Jul-22 Nov-22

Downing Renewables & Infrastructure Trust plc Annual Report | 54

Dividends

The Company achieved a cash dividend cover of 1.26x for the dividends of 5 pence per

share paid during the period. Dividend cover is presented excluding dividends paid to new

shareholders immediately following the issuance of new shares. If these are included, the

dividend cover would be 1.17x. Cash dividend cover has been calculated on a cash basis

of income received by the company and its immediate subsidiary.

The Board has resolved to pay the Company’s fourth interim dividend of the year of

1.25 pence per share, equivalent to £2.3 million, in respect of the three months to 31

December 2022. This will bring total dividends in respect of the financial year to 5 pence

per share, which is in line with the Company’s updated dividend guidance. The fourth

interim dividend is not reflected in the accounts to 31 December 2022.

The Company has chosen to designate part of each interim dividend as an interest

distribution for UK tax purposes. Shareholders in receipt of such a dividend will be

treated for UK tax purposes as though they have received a payment of interest in

respect of the interest distribution element of this dividend. This will result in a reduction

in the corporation tax payable by the Company.

Dividends in respect of the financial year to 31 December 2022 are as follows:

For the Period

Ended

Dividend Paid No. of Shares Total

Dividend

(pence per

share)

Interest

Element

(pence per

share)

Dividend

Element

(pence per

share)

March 2022 June 2022 137, 0 0 8 , 4 87 1.25 0.810 0.440

June 2022 September 2022 184,622,487 1.25 0.750 0.500

September 2022 December 2022 184,622,487 1.25 0.625 0.625

December 2022 March 2023 184,622,487 1.25 0.880 0.380

The Company intends to pay dividends on a quarterly basis, with dividends typically

declared in respect of the quarterly periods ending March, June, September and December.

Payment of the relevant dividend declared is expected be made within three months of the

relevant quarter end.

The Company will target a dividend of 5.38pps related to the year to 31 December 2023,

a 7.6% increase from 2022. The increased dividend is expected to be fully covered by the

current portfolio. When near term assets that are under exclusivity are taken into account,

the dividend cover against the increased dividend is expected to be in excess of 1.4x.

Downing Renewables & Infrastructure Trust plc Annual Report | 55

NAV (£'m)

Opening

(1-Jan-22)

Management

fee

Other costs

and charges

Performance

Future

power prices

Inﬂation

Discount

Rate

FV uplift relating

to new assets

Closing

(31-Dec-22)

Dividend

Other

Fund Raising

141.8

(1.8)

(1.9)

9.3

18.0

13.3

2.9

(10.9)

8.9

(4.7)

51.9

(8.0)

218.9

£100

£120

£140

£160

£180

£200

£220

£240

NAV Movement Bridge

Net asset value and Portfolio Valuation

The Company’s NAV increased by 54.4% during the year from £141.8 million to £218.9 million. On a pence per share basis it increased by 14.6% from 103.5 pence

per share to 118.6 pence per share as at 31 December 2022. The NAV increase was driven by additional fundraising, strong operational performance and increases

in long term power price forecasts.

The bridge below shows the movement in NAV during the period, with each step explained further below.

Downing Renewables & Infrastructure Trust plc Annual Report | 55

Opening

Represents the NAV at 31 December 2021.

Dividends

Distributions paid by the Company in the period.

Management Fee

Fees charged to the Company by the Investment Manager.

Other costs and charges

Charges incurred by the Company, and its immediate subsidiary DORE Hold Co, in its

normal operations. No transaction costs are included.

Performance

Represents the difference between the expected performance, and actual

performance of the portfolio companies throughout the year.

Power Prices

The Group uses long-term, forward-looking power price forecasts from third

party consultants for the purposes of asset valuations. In both the UK and

Sweden, an equal blend is taken from the most recent central case forecasts

from two leading consultants, enabling a more holistic view of the power market

to be included in the valuation. Where fixed price arrangements are in place, the

financial model will reflect this price for the relevant time frame. The impact of

our short-term power hedging strategy is also included in this step.

The power price forecasts that are used in the valuations are set out below,

alongside a comparison against the last reporting period.

Inflation

Near-term inflation forecasts were revised during the period reflective of the

increasing rate of inflation and in line with government forecasts.

The Group is now using near-term (calendar year 2023) inflation forecast

of 6.42% for the purposes of UK asset valuations, falling to a medium-term

inflation forecast of 3.0% from 2024. From 2030 onwards, this forecast reduces

to 2.25% in line with the RPI reform announced by the UK Government.

A near-term inflation forecast of 5.58% is used for the Swedish asset valuations.

The forecast in the medium term (from 2024) to long term reduces to 2.0%, in

line with the long term Swedish central bank’s target inflation rate.

Models are also updated quarterly to reflect actual inflation to date.

This is a component of the Fair Value of Investment.

Downing Renewables & Infrastructure Trust plc Annual Report | 56

Other Valuation Assumptions

Asset life

Where the land is owned by an external

landlord, which is the case for the UK solar

and Swedish wind assets, asset operations

have been modelled to the earlier of the

expiry of the planning or permit, and

the lease agreement. As well as these

factors, life assumptions are also capped

at the useful economic life of the specific

equipment installed on site.

As such, the Swedish wind portfolio is

capped at 30 years.

The UK solar portfolio is capped at

25 years. It is noted that over the last

few years the market has started to

assign economic value to years 25-40 for

solar assets, where lease and planning

arrangements allow. Downing has and

will continue to explore opportunities

with local councils and landlords to

extend existing planning permissions and

lease agreements. In several cases this

has been

successful and extensions to

planning permission have been granted in

recent

months.

To get comfortable with the technical

operation risk post 25 years, we are now

in the process of working through the

valuation approach for modelling the cash

flows after year 25. This involves building

an accurate forecast for lifecycle and

maintenance costs, based on historic data

and external sources. Once this exercise

is complete, we will look to include life

extensions into the DORE valuation.

Where the land is owned with the asset,

which is the case for the Swedish hydro

assets, there are no constraints in terms

of lease agreements that need to be

considered in the valuation. Also, due to

the nature of hydro as an asset class, the

assets have an infinite life assuming an

appropriate level of capex to maintain the

equipment and dams etc.

As a result, valuations are based on a

perpetual life where the model assumes

the portfolio is sold in 2050. The 2050

sales price multiple is calculated as a

function of the 2021 purchase price

inflated, as well as the annual expected

generation.

Foreign Exchange

The impact of foreign exchange movements on underlying investment

valuations. The impact of the foreign exchange hedging activity is included in

this movement.

Cashflows from assets that are generated in a non-sterling currency are

converted in each period they are earned using the actual hedges in place, with

the residual amounts converted at the relevant exchange rate.

The relevant exchange rate is taken from a forward curve provided by the

Company’s foreign exchange advisors for ten years, at which point the

exchange rate is held constant due to the impracticalities of hedging currency

further into the future.

This step represents the impact of foreign exchange movements on underlying

investment valuations.

Discount rate

Discount rates used for the purpose of the valuation process are representative

of the Investment Manager’s and the Board’s assessment of the rate of return in

the market for assets with similar characteristics and risk profile.

As a result of movements in the risk-free rate in both the UK and Sweden,

discount rates were increased by 0.5% to 8% for the operational levered UK

solar and Swedish hydropower portfolios and by 0.3% to 6.3% for the unlevered

Swedish wind farm during the period. The increased discount rates took effect

as at 30 September 2022.

Discount rates in use across the portfolio range from 6.0% to 8.0%, with the

weighted value at 7.7%.

Acquisitions

The difference between the original cost of an investment and the fair value of

that investment throughout the year, using assumptions in place at the time of

the acquisition.

Other

Reflects changes to the underlying valuations as a result of changes to

operational contracts (such as insurance), long term capital expenditure

assumptions and long term debt pricing, along with other minor changes.

This is a component of the Fair Value of Investment.

Downing Renewables & Infrastructure Trust plc Annual Report | 57

Portfolio Valuation sensitivities

The NAV reflects the fair market valuation

of the Company’s portfolio based on a

discounted cash flow analysis over the life

of each of the Group’s assets plus the cash

balances of the Company and its holding

Company and other cash and working

capital balances in the Group.

The portfolio valuation is the largest

component of the NAV and the key

sensitivities to this valuation are considered

to be discount rate and the principal

assumptions used in respect of future

revenues and costs.

A broad range of assumptions are used in

the Company’s valuation models. These

assumptions are based on long-term

forecasts and are generally not affected by

short-term fluctuations in inputs, whether

economic or technical.

The Investment Manager exercises its

judgement and uses its experience in

assessing the expected future cash flows

from each investment.

The impact of changes in the key drivers of

the valuation are set out below.

Discount Rate

The weighted average discount rate of the

portfolio at 31 December 2022 was 7.7%.

The Investment Manager considers a

variance of plus or minus 1.0% is to

be a reasonable range of alternative

assumptions for discount rates.

Energy Yield

For the solar assets, our underlying

assumption set assumes the so called P50

level of electricity output based on reports

by technical advisors. The P50 output is

the estimated annual amount of electricity

generation that has a 50% probability of

being exceeded and a 50% probability of

being underachieved.

For hydropower assets, the expected

annual average production is applied to the

valuation, similar to the P50 assumption

applied to solar and wind assets. Given the

long operational record of the hydropower

assets, the annual production forecast is

derived from historic datasets and validated

by technical advisors.

The Energy Yield sensitivities uses a

variance of plus or minus 5% applied to the

generation.

Power Prices

The power price sensitivity assumes a

10% increase or decrease in power prices

relative to the base case for each year of

the asset life.

Downing Renewables & Infrastructure Trust plc Annual Report | 58

While power markets can experience

volatility in excess of +/-10% on a

short-term basis, the sensitivity is intended

to provide insight into the effect on the

NAV of persistently higher or lower power

prices over the whole life of the portfolio,

which is a more severe downside scenario.

Inflation

The Company’s inflation assumptions

are set out above. A long-term inflation

sensitivity of plus and minus 1.0% is

presented below.

Foreign Exchange

The Company’s foreign exchange policy

is set out above. A sensitivity of plus and

minus 10% is applied to any non-hedged

cashflows derived from non-sterling assets.

The Company will also try to ensure

sufficient near-term distributions from any

non-sterling investments are hedged.

Market development and

opportunities

Demand for electricity worldwide

continued to be resilient in 2022, despite

the global energy crisis caused by Russia’s

invasion of Ukraine. According to the

International Energy Agency (“IEA”),

global electricity demand grew by 2% in

2022

. The electrification of transport and

heating sectors continued to accelerate,

with record numbers of Electric Vehicles

and heat pumps sold in 2022. However,

the unprecedented energy prices in 2022

contributed to a rise in inflation, with the

economic slowdowns and high electricity

prices stifling growth in electricity demand

in most regions of the world.

According to IEA, Renewables and nuclear

energy is expected to dominate the growth

of global electricity supply over the next

three years, together meeting on average

IEA Electricity Market Report, 2023.

Negative directional change to assumption

(15.00) (10.00) (5.00) 0.00 5.00 10.00 15.00

Discount rate (+/- 1%)

Inﬂation (+/- 1%)

Generation (+/- 5%)

Power prices (+/- 10%)

FX (+/- 10%)

NAV Movement (PPS)

Positive directional change to assumption

Sensitivities

Downing Renewables & Infrastructure Trust plc Annual Report | 59

more than 90% of the additional demand.

The share of renewables in the global

power generation mix is forecast to rise

from 29% in 2022 to 35% in 2025.

As a result of Russia’s invasion of Ukraine,

combined with other factors such as

droughts across Europe (impacting hydro

generation) and low nuclear generation

due to closures and unavailabilities, the

European Union saw in 2022 the highest

absolute growth in power generation

emissions since 2003 (excluding the 2021

post-pandemic rebound). The setback

in the European Union is expected

to be temporary, however, as power

generation emissions are expected to

decrease on average by about 10%

annually through 2025. In order to reduce

reliance on fossil fuels and to increase

resilience to

price shocks, the European

Commission published its REPowerEU

plan in May 2022 to accelerate clean

energy

deployment.

In 2022, Europe experienced the most

pronounced increase in wholesale

electricity prices, where they were, on

average, more than twice as high as in

2021. The exceptionally mild winter so

far in 2022/23 in Europe helped temper

wholesale electricity prices, but the prices

remain high compared with recent years

and there are risks of continued tight

supply in Europe for the winter 2023/24.

The Investment Manager is progressing a

significant pipeline of opportunities across

technologies / sectors including wind, solar,

hydro and utilities. The geographical focus of

the opportunities in progress is the Nordic

region and the UK, with certain further

opportunities across Northern Europe.

The outlook for the Company remains

encouraging; two new acquisitions have

been made in 2022 and proven operational

and financial performance from the

Company’s existing assets provide a strong

foundation for future growth.

Downing Renewables & Infrastructure Trust plc Annual Report | 60

Section 172(1) Statement

The Directors confirm that they have acted in a way

that they consider, in good faith, to be the most likely to

promote the success of the Company for the benefit of its

members as a whole, and in doing so have had regard to

the matters set out in section 172(1) of the Companies Act

2006 (“s172 Matters”). The following disclosures describe

how the Directors have regard for the s172 Matters.

Section 172(1) Description

(a) the likely consequences of any decision

in the long term

The aim of the Board and of the Investment Manager is to ensure the long-

term sustainable success of the Company and, therefore, the likely long-term

consequences of any decision is a key consideration.

The Board and Investment Manager believe they have acted in good faith in

managing the Company during the year, with a view to promoting the Company’s

long-term sustainable success and achieving its wider objectives for the benefit of

our shareholders as a whole, having regard to our wider stakeholders and the other

matters set out in s172 Matters.

(b) the interests of the company’s

Employees

As a closed-ended investment company, the Company has no employees; however,

the interests of any employees within project companies are considered when making

decisions.

business relationships with suppliers,

customers and others

The Board’s approach is described under ‘Stakeholder Engagement’ below.

(d) the impact of the company’s operations

on the community and the environment

The Board places a high value on monitoring ESG issues and establishes the overall

strategy for ESG matters pertaining to the Company. The Board is responsible for

managing any climate-related risks for the group, including transparent disclosure of

these risks, and taking mitigating actions to reduce or eliminate them where possible.

A description of the Company’s sustainable and responsible Investment Policy is

set out on pages 10 to 29.

(e) the desirability of the company

maintaining a reputation for high standards

of business conduct

The Board’s approach is described under ‘Culture and Values’ below.

(f) the need to act fairly as between

members of the company

The Board’s approach is described under ‘Stakeholder Engagement’ below.

Downing Renewables & Infrastructure Trust plc Annual Report | 61

Culture and Values

The overarching duty of the Board is to promote the

Company’s success for the benefit of investors while

taking other stakeholders’ interests into consideration.

The Company strives to maintain the highest standards

of business conduct and corporate governance, and the

Investment Manager ensures that appropriate oversight,

control, and policies are in place to ensure that the

Company treats its stakeholders fairly.

Through ongoing dialogue and engagement with its

key stakeholders, the Board seeks to ensure that its

purpose, values, and strategy are aligned with this culture

of openness, debate, and integrity. The Board, which

consists of two male and one female members, aims to

create a supportive business culture while also providing

constructive challenge, as well as to provide shareholders

and other stakeholders with regular information.

Although the Company has no employees, it is committed

to respecting human rights in its broader relationships.

Both the Company and the Investment Manager have

anti-bribery and corruption policies in place to ensure

business integrity, a commitment to truth and fair dealing,

and compliance with all applicable laws and regulations.

To assist in maintaining a culture of good governance,

the Company has several policies and procedures in place,

including those relating to diversity, anti-bribery (including

the acceptance of gifts and hospitality), tax evasion,

conflicts of interest, and Directors’ dealings in the

Company’s shares.

The Board assesses and monitors compliance with these

policies on a regular basis through Board meetings

and the annual evaluation process. The Board seeks

to appoint the most appropriate service providers for

the Company’s needs and evaluates their services on

a regular basis. The Board considers the culture of the

Investment Manager and other service providers through

regular reporting, receiving regular information, and ad

hoc interactions.

Downing Renewables & Infrastructure Trust plc Annual Report | 62

Stakeholder Engagement

This section describes how the Board engages with its key stakeholders, how it considers their interests and the outcome

of the engagement when making decisions, the long-term consequences of any decision, and how it maintains a reputation

for high standards of business conduct.

Stakeholder Why is it Important to

Engage?

How has the Company

communicated and

engaged?

What were the key

topics of engagement?

Key strategic decisions

impacting stakeholder

group during period

Shareholders Shareholders and their

ongoing support are

critical to the business’s

continued existence and

the deployment of our

long-term investment

strategy.

The Company makes

regular market

announcements where

appropriate.

The Company has

published quarterly fact

sheets available on the

Company’s website.

Views and feedback are

sought from institutional

investors via the

Company’s corporate

broker.

A large number of

investor meetings were

held prior to fundraising

during the year to engage

shareholders with the

Company’s strategy. Prior

to the Annual General

Meeting (“AGM”) in April

2022 and the subsequent

General Meeting in

June 2022, shareholders

were given the

opportunity to engage

with the Board and the

Investment Manager,

and are encouraged to

do so at other times

throughout the year.

The Company has made

acquisitions during the

year which should be

accretive to the NAV

over the long-term.

The Company raised

c.£52.9 million during

the year. The proceeds

were used to repay the

revolving credit facility

and to invest in an

attractive pipeline of

near term opportunities,

which are intended to

further diversify our

portfolio, in line with the

Company’s strategy.

The Company put a

revised investment policy

to shareholders for

approval.

Investment

Manager

The Investment Manager

is responsible for carrying

out the Investment

Objective within the

parameters of the

Company’s Investment

Policy.

The Board maintains

regular and open

dialogue with the

Investment Manager

at Board meetings and

has regular contact

on operational and

investment matters

outside of meetings.

In addition to all

matters concerning the

Company’s Investment

Objective, the Board

met with the Investment

Manager to discuss the

Group’s structure and

the interpretation of

investment restrictions.

Determination that

the Investment

Manager maintains a

strong internal control

environment and that the

Investment Manager’s

continued appointment

is in the best interests of

shareholders.

Downing Renewables & Infrastructure Trust plc Annual Report | 63

Stakeholder Why is it Important to

Engage?

How has the Company

communicated and

engaged?

What were the key

topics of engagement?

Key strategic decisions

impacting stakeholder

group during period

Service

providers

As an externally managed

Company, we are reliant

on our service providers

to conduct our core

activities. We believe that

fostering constructive

and collaborative

relationships with our

service providers will

assist in the promotion

of the success of the

Company.

The Board maintains

regular contact with

its service providers,

both through Board and

Committee meetings,

as well as outside the

regular meeting cycle.

The Management

Engagement Committee

is responsible for

conducting periodic

reviews of service

providers. During the

year, the Management

Engagement Committee

assessed that the

continued appointment

of all service providers

remained in the best

interests of the Company

and its shareholders.

Throughout the year, the

Board has worked closely

with its professional

service providers, such

as its external auditors,

joint corporate brokers,

legal counsel, and the

company secretary, to

ensure that the Company

is managed efficiently and

accurately in accordance

with applicable laws,

regulations, and best

practices.

Key service providers

have been retained,

providing continuity of

service and familiarity

with the objectives of the

Company.

Asset-level

counterparties

Asset-level

counterparties are an

essential stakeholder

group and engagement

with them is important

to ensure assets

are operating safely

and effectively and

performing as expected.

As part of continual

monitoring of

investments, we have

a regular dialogue with

these counterparties.

The key engagement

with asset-level

counterparties was

during the due

diligence process prior

to completing the

investment

Acquired five new

assets during the period,

increasing ongoing

servicing requirements

from O&M counterparties.

Debt-providers Providers of

long-term debt are

key to supporting the

Company’s long term

objectives through

enabling the continued

financing of investment

opportunities.

The Company and

its unconsolidated

subsidiaries provide

regular updates on

covenant compliance and

current positioning.

Pricing and sizing of

the debt was a key

consideration for

the Company.

Debt will be a key

component of the

Company’s funding

strategy looking forward

and the portfolio will

utilise the RCF debt

facility when beneficial.

Downing Renewables & Infrastructure Trust plc Annual Report | 64

Risks and Risk Management

The Board recognises that effective risk management is

key to the Group’s success and that a proactive approach

is critical to ensuring the sustainable growth and resilience

of the Group. Risk is described as the potential for events

to occur that may result in damage, liability or loss.

Should any of these events occur, the Company may

well be adversely impacted, potentially leading to the

disruption of the Company’s business model, as well as

potential damage to the reputation or financial standing of

the Company.

The benefit of a risk management framework is that it

allows for potential risks to be identified in advance and

may enable these risks to either be mitigated or possibly

even converted into opportunities. The Company’s

Prospectus, issued in June 2022 detailed the potential

risks that the Directors considered were material

that could occur during the process of implementing

the Company’s Investment Policy.

Principal Risks and Uncertainties

Procedures to identify principal or emerging risks

It is not possible to eliminate all risks that may be faced by

the Company.

The objective of the Company’s risk management

framework and policies adopted by the Company is to

identify risks and enable the Board to respond to risks

with mitigating actions to reduce the potential impacts

should any of the risks materialise.

The Board, through the Audit and Risk Committee,

regularly reviews the Company’s risk register, with a focus

on ensuring appropriate controls are in place to mitigate

each risk. Taking considered risk is the essence of all

business and investment activity.

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.

Downing Renewables & Infrastructure Trust plc Annual Report | 65

Risk Identified Risk Description Risk Impact Mitigation

Exposure to

wholesale

electricity prices

and risk to

hedging power

prices

The Company makes investments

in Assets with revenue exposure

to wholesale electricity prices.

The market price of electricity is

volatile and is affected by a variety

of factors, including market demand

for electricity, levels of electricity

generation, the generation mix

of power plants, government

support for various forms of power

generation and fluctuations in the

market prices of commodities and

foreign exchange.

Market demand for electricity

can be impacted by many factors,

including changes in consumer

demand patterns, increased usage

of smart grids, a rise in demand for

electric vehicle charging capacity

and residential participation in

renewable energy generation.

Such changing dynamics could

have a material adverse effect on

the Company’s profitability, the

NAV and the price of the Ordinary

Shares.

To the extent that the Company or

an SPV enters contracts to fix the

price it receives on the electricity

generated or enters into derivatives

with a view to hedging against

fluctuations in power prices, the

Company or SPV, may be exposed

to risk related to delivering an

amount of electricity over a specific

period.

If there are periods of

non-production the Company or an

SPV may need to pay the difference

between the price it has sold the

power at and the market price at

that time.

The Investment Manager closely

monitors exposure to power price

movements. Sensitivity to long term

forecasts will be disclosed to investors

and the Board on a regular basis.

Many assets are expected to have

a significant proportion of revenue

that is not linked to power price

forecasts including subsidies such as

feed-in-tariffs.

In addition, assets are geographically

diverse, spreading exposure across

different power markets and price

drivers. Short and medium-term

exposure to power prices will be

managed by locking power prices on

a rolling basis. See chart on page 51

for an illustration of the portfolio’s

current fixed vs merchant revenues.

Downing Renewables & Infrastructure Trust plc Annual Report | 66

Risk Identified Risk Description Risk Impact Mitigation

Exposure to the

transactional

effects of foreign

exchange rate

fluctuations

and risks of

foreign exchange

hedging

To the extent the Company invests

in non-sterling jurisdictions, it may

be exposed to foreign exchange

risk caused by fluctuations in the

value of foreign currencies when

the net income and valuations of

those operations in non-Sterling

jurisdictions are translated

into

Sterling for the purposes of

financial reporting.

While the Company and SPVs

may enter derivative transactions

to hedge such foreign exchange

rate exposures, there can be no

guarantee that the Company and/or

SPVs will be able to, or will elect to,

hedge such exposures, or that were

entered into, will be successful.

The Company and/or SPVs may

be required to satisfy margin calls

in respect of hedges and in certain

circumstances may not have such

collateral readily available. In these

circumstances, the Company could

be forced to sell an Asset or borrow

further funds to meet a margin

call or take a loss on a position.

To the extent that the Company

and/or SPVs do rely on derivative

instruments to hedge exposure to

exchange rate fluctuations, they

will also be subject to counterparty

risk. Any failure by a hedging

counterparty to discharge its

obligations could have a material

adverse effect on the Company’s

profitability, the NAV and the price

of the Ordinary Shares.

Natural hedging of foreign exchange

exposure will occur due to an

element of costs and debt (for capital

structuring purposes) being linked to

the local currency.

The Company will hedge expected

income from foreign assets up to five

years in advance.

Non-compliance

with the

investment

trust eligibility

conditions under

sections S1158/

S1159 of the CTA

2010

As an approved investment trust,

the Company is exempt from UK

corporation tax on its chargeable

gains and capital profits on loan

relationships.

If the Company fails to maintain

its investment trust status from

HMRC, in such circumstances, the

Company would be subject to the

normal rates of corporation tax on

chargeable gains and capital profits

arising on the transfer or disposal

of investments and other assets.

Which could adversely affect the

Company’s financial performance,

its ability to provide returns to its

Shareholders or the post-tax returns

received by its Shareholders.

The Company has contracted out the

relevant monitoring to appropriately

qualified professionals. The

Investment Manager also monitors

relevant qualifying conditions.

The Investment Manager and the

Company Secretary report on

regulatory matters to the Board on

a quarterly basis. The assessment

of regulatory risks forms part of the

Board’s risk management framework.

Downing Renewables & Infrastructure Trust plc Annual Report | 67

Risk Identified Risk Description Risk Impact Mitigation

Construction

risks for certain

renewable

energy projects

SPVs may undertake projects that

are in the Construction Phase or

are construction ready which may

be exposed to certain risks, such as

cost overruns, construction delays

and construction defects that may

be outside the Company’s control.

Should completion of any project

overrun (both in terms of time

and budget), there is a risk that

payments may be required to

be made to (or withheld by) a

counterparty in relation to the

delay. If the completion of a project

overruns, it would also result in a

delayed start to receipt of revenues,

which could affect the Company’s

ability to achieve its target returns,

depending on the nature and scale

of such delay.

Additional costs and expenses,

delays in construction or carrying

out repairs, failure to meet technical

requirements, lack of warranty

cover and/or consequential

operational failures or malfunctions

may have a material adverse effect

on the Company’s profitability, the

NAV and the price of the ordinary

shares.

The Investment Manager will monitor

construction carefully and report

frequently to the Board and AIFM.

The Investment Manager has an

experienced asset management team

including technical experts to oversee

construction projects. The Investment

Manager will undertake an extensive

due diligence process prior to

investment with input from the Board

(including technical expertise).

Third party experts will be used as

required to enhance knowledge and

experience.

Reliance on third-

party service

providers

The Company, whose Board is

non-executive, and which has no

employees, is reliant upon the

performance of third-party service

providers for its executive function.

The Company relies on the

Investment Manager and other

service providers and their

reputation in the energy and

infrastructure market.

The third-party provider may

prove to be insufficiently skilled

for the role or perform the roles

required to an inadequate level,

which may cause the Company

to underperform, to breach

regulations, or in extremis to go

into administration.

There are clear service level

agreements in place for all third-party

providers and provisions are in place

that any provider can be replaced,

subject to an initial term or a breach

of the agreement occurring.

They have all been chosen for being

skilled and experienced in their areas

of expertise. The Board has regular

oversight over all the other providers.

Lack of

availability

of suitable

renewable

energy projects

Competition for renewable energy

projects in the primary investment

or secondary investment markets,

may result in the Company being

unable to make investments or on

terms that enable the target returns

to be delivered.

If the Investment Manager is unable

to source sufficient opportunities

within a reasonable timeframe,

whether by reason of fundamental

change in market conditions creating

lack of available opportunities, too

much competition or otherwise.

A greater proportion of the

Company’s assets will be held in

cash for longer than anticipated and

the Company’s ability to achieve

its Investment Objective may be

adversely affected.

The Company has an Investment

Manager in place with a strong track

record, who strengthened their team

ahead of the fund launch.

Through extensive industry

relationships the Investment Manager

provides access to a significant

pipeline of investment opportunities.

Downing Renewables & Infrastructure Trust plc Annual Report | 68

Risk Identified Risk Description Risk Impact Mitigation

Conflicts of

interest

The Investment Manager and

the AIFM may manage from

time-to-time other managed

Funds pursuing similar investment

strategies to that of the Company

and which may be in competition

with the Company.

The appointment of the AIFM

is on a non-exclusive basis and

each of the AIFM and Investment

Manager manages other accounts,

vehicles and funds pursuing similar

investment strategies to that of the

Company.

This has the potential to give rise to

conflicts of interest. The Company

may also be in competition with

other Downing Managed Funds for

Assets. In relation to the allocation

of investment opportunities.

The AIFM and the Investment

Manager have clear conflicts of

interest and allocation policies in

place.

Transactions where it is perceived

that there may be potential conflicts

of interest are overseen by the

Investment Manager’s Conflicts

Committee, an independent fairness

opinion on valuation may also be

commissioned where deemed

necessary.

The application of allocation policy

is reviewed by the Investment

Managers Compliance Department,

and by the Board on annual basis.

Further information on these

procedures can be found in the

Company’s Prospectus dated

12 November 2020.

Risks relating

to the technical

performance of

assets

The long-term performance of the

assets acquired does not match

the expectations at the time of the

acquisition.

Incorrect assumptions against

technical performance of assets, or

the availability of natural resources

may lead to additional costs and

expenses, carrying out repairs, or

reduced revenues.

Any delays or reduction in the

production or supply of energy may

have a material adverse effect on

the performance of the Company,

the NAV, the Company’s earnings

and returns to shareholders.

The Company will appoint third

party technical advisors for every

transaction. The advisors will

undertake a review of the technology,

design, installation (if applicable),

and natural resource availability and

provide an analysis of expected long

term generation yields.

Where Assets are going through

construction, appropriate contractual

guarantees will be provided.

Operators will often provide

guarantees as to the availability or

performance of Assets.

Downing Renewables & Infrastructure Trust plc Annual Report | 69

Risk Identified Risk Description Risk Impact Mitigation

Counterparties’

ability to make

contractual

payments

The Company’s revenue derives

from the renewable energy projects

in the portfolio, the Company

and its SPVs will be exposed

to the financial strength of the

counterparties to such projects and

their ability to meet their ongoing

contractual payment obligations.

The failure by a counterparty to

pay the contractual payments due,

or the early termination of a PPA

by an Offtaker due to insolvency,

may materially affect the value

of the portfolio and could have

a material adverse effect on the

performance of the Company, the

NAV, the

Company’s earnings and

returns to shareholders.

The Investment Manager will look

to build in suitable mechanisms to

protect the income stream from the

relevant renewable energy projects,

which may include parent guarantees

and liquidated damages payments

on termination.

Exposure to defaults may be

further mitigated by contracting

with counterparties who are public

sector or quasi-public sector bodies

or who

are able to draw upon

government subsidies to partly fund

contractual payments.

As part of the acquisition process,

the Investment Manager conducts a

thorough due diligence process on

all projects.

Risks associated

with Cyber

Security

There exists an increasing threat of

cyber-attack in which a hacker may

attempt to access the Company’s

website or its secure data, or the

computer systems that relate to

one of its Assets and attempt to

either destroy or use this data for

malicious purposes.

Increased regulation, laws, rules and

standards related to cyber security,

could impact the Company’s

reputation or result in financial loss

through the imposition of fines.

Suffering a cyber breach will also

generally incur costs associated

with repairing affected systems,

networks and devices.

If one or several Assets became the

subject of a successful cyber-attack,

to the extent any loss or disruption

following from such attack would

not be covered or mitigated by

any of the Company’s insurance

policies, such loss or disruption

could have an adverse effect on the

performance of the affected Asset

and consequently on the Company’s

profitability, the NAV and the price

of the Ordinary Shares.

Cyber security policies and

procedures implemented by key

service providers are reported to the

Board regularly to ensure conformity.

Thorough third-party due diligence is

carried out on all suppliers engaged

to service the Company. All providers

have processes in place to identify

cyber security risks and apply and

monitor appropriate risk plans.

Further financial risks are detailed in note 16 of the financial statements.

Downing Renewables & Infrastructure Trust plc Annual Report | 70

Emerging Risks

Emerging risks are characterised by a

degree of uncertainty; therefore, the

Investment Manager and the Board

consider new and emerging risks every six

months. The risk register is then updated

to include these considerations. The Board

has a process in place to identify emerging

risks, such as climate related risks, and

to determine whether any actions are

required. The Board relies on regular reports

provided by the Investment Manager and

the Administrator regarding risks that the

Company faces. When required, experts

are employed to provide further advice,

including tax and legal advisers.

Climate Change

Environmental laws and regulations

continue to evolve as the UK, Europe

and

the rest of the world continue to

focus their efforts on the goals laid out

by the Paris Agreement. In jurisdictions

where the Company’s Assets are

located, newly implemented laws and/or

regulations may have an impact on a given

Asset’s activities.

These laws may impose liability whether

or not the owner or operator of the Assets

knew of or was responsible. There can be

no assurance that environmental costs and

liabilities will not be incurred in the future.

In addition, environmental regulators

may seek to impose injunctions or other

sanctions on an Asset’s operations that

may have a material adverse effect on its

financial condition and valuation. Climate

change may also have other wide-ranging

impacts such as an increased likelihood

of market reform, insurance coverage

availability and cost.

Climate change may also lead to increased

variability in average weather patterns

such as periods of increased or reduced

wind speeds or rainfall as well as extreme

events which may affect the performance

of the Company’s investments.

Physical Effects of Climate Change

While efforts to mitigate climate change

continue to progress, the physical impacts

are already emerging in the form of

changing weather patterns. Such as the

recent heatwaves experienced in North

America and recent flash flooding seen

throughout the UK and Europe.

Extreme weather events can result

in flooding, drought, fires and storm

damage, which may potentially impair

the operations of existing and future

portfolio companies at certain locations or

impacting locations of companies within

their supply chain.

Transition Risks

Much of the conversation around climate

change focuses on environmental

impacts, such as rising temperatures

and extreme weather events. A big

part of climate risk, however, involves

transition risk – or the risk that results

from changing policies, practices and

technologies that arise as countries and

societies work to decrease their reliance

on carbon. In the near and medium term,

transition risks to portfolio investments

may arise from any unexpected changes

to existing government policies. An

increase in renewables build-out ambition

without sufficient demand could reduce

power price forecasts. This could have a

negative impact on the valuation of the

Company’s

assets.

Downing Renewables & Infrastructure Trust plc Annual Report | 71

Going Concern and Viability

Statement

Going Concern

The Board, in its consideration of the

going concern position of the Company,

has reviewed comprehensive cash flow

forecasts prepared by the Company’s

Investment Manager which are based on

market data and believes, based on those

forecasts, the assessment of the Company’s

subsidiary’s banking facilities and the

assessment of the principal risks described

in this report, that it is appropriate to

prepare the financial statements of the

Company on the going concern basis.

In arriving at their conclusion that the

Company has adequate financial resources,

the Directors were mindful that the Group

had cash of £23 million as at 31 December

2022, though £5.1 million has been spent

on new acquisitions since the reporting

date. The Group utilised EUR 27.4 million

of its facility with SEB to help fund the

additional hydropower acquisitions. There

is EUR 16.1 million remaining available to

be drawn on this facility. The directors are

provided with base cash flow forecasts and

potential downside scenarios.

Through its main subsidiary, DORE Hold

Co Limited, the Company has access

to an undrawn £40 million RCF which

is available for either new investments

or investment in existing projects and

working capital. The RCF is currently

undrawn.

The Company’s net assets at

31 December 2022 were £218.9 million

and total expenses for the period ended

31 December 2022 were £2.9 million,

which represented approximately 1.5% of

average net assets during the period.

The Directors are satisfied that the

Company has sufficient resources to

continue to operate for the foreseeable

future, a period of not less than

12 months from the date of this report.

Accordingly, they continue to adopt the

going concern basis in preparing these

financial statements.

Viability Statement

In accordance with Principle 21 of the

AIC Code, the Board has assessed the

prospects of the Company over a period

longer than 12 months required by the

relevant ’Going Concern’ provisions. In

reviewing the Company’s viability, the

Directors have assessed the viability

of the Company for the period to

31 December 2027 (the ‘Period’). The

Board believes that the Period, being

approximately five years, is an appropriate

time horizon over which to assess the

viability of the Company, particularly

when considering the long-term nature

of the Company’s investment strategy,

which is modelled over five years, and

the principal risks outlined above. Based

on this assessment, the Directors have a

Downing Renewables & Infrastructure Trust plc Annual Report | 72

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 31 December 2027.

In making this statement, the Directors

have considered and challenged the

reports of the Investment Manager in

relation to the resilience of the Company,

taking account of its current position,

the principal risks faced in severe but

reasonable scenarios, including a stressed

scenario, the effectiveness of any

mitigating actions and the Company’s risk

appetite.

Sensitivity analysis has been undertaken

to consider the potential impacts of

such risks on the business model, future

performance, solvency and liquidity over

the period, both on an individual and

combined basis. This has considered the

achievement of budgeted energy yields,

the level of future electricity and gas

prices, continued government support for

renewable energy subsidy payments and

the impact of a downside scenario which

includes significant reduction of projects’

yields under severe power price and

generation volume assumptions.

The Directors have determined that a

five-year look forward to December

2027 is an appropriate period over which

to provide its viability statement. This is

consistent with the outlook period used in

medium-term forecasts regularly prepared

for the Board by the Investment Manager

and the discussion of any new strategies

undertaken by the Board in its normal

course of business.

These reviews consider both the market

opportunity and the associated risks,

principally the ability to raise third-party

funds and invest capital, or mitigating

actions taken, such as a reduction of

dividends paid to shareholders or utilisation

of additional borrowings available under

the RCF.

Board approval of the Strategic Report

The Strategic Report has been approved

by the Board of Directors and signed on

its behalf by the Chair.

Hugh W M Little

Chair

31 March 2023

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Downing Renewables & Infrastructure Trust plc Annual Report | 74

Hugh W M Little

Chair

Hugh was appointed as Chair

and Director of the Company

on 28 October 2020, as well as

serving as Chair of the Company’s

Management Engagement

Committee (“MEC”).

Hugh qualified as a chartered

accountant in 1982. In 1987 he

joined Aberdeen Asset Management

(“AAM”) and from 1990 to 2006

oversaw the growth of the private

equity business before moving into

the corporate team as Head of

Acquisitions. Hugh retired from AAM

in 2015.

In addition to his directorships

at Downing Renewables &

Infrastructure Trust plc, Hugh serves

as a Director of Dark Matter Distillers

Limited and as a governor of Robert

Gordon’s College. In recent years,

Hugh has also been Chair of Drum

Income Plus REIT plc and CLAN

Cancer Support, a local charity. Hugh

won the ‘Non-Executive Director of

the Year’ award at the Institute of

Directors, Scotland awards ceremony

held in 2019.

Joanna Holt

Non-Executive Director

Joanna was appointed as a Director

of the Company on 28 October 2020

and serves as chair of the Company’s

Nomination Committee.

Joanna is a specialist in the technical

and commercial elements of energy

projects, with 20 years’ experience

in renewable energy and flexibility

investments, building on her

academic engineering background.

In 2015, Joanna co-founded

international consultancy company

Everoze; a company that provides

a broad range of engineering and

strategic consulting services, as

well as the development of other

start-ups in this space. Prior to co-

founding Everoze, Joanna led the

global Project Engineering Group

within DNV Renewables and was

a member of the DNV Renewable

Advisory Board. Joanna’s early career

included management consultancy

(PWC) and project finance (Fortis

Bank). Jo has previously used the

name Joanna De Montgros.

Ashley Paxton

Non-Executive Director

Ashley was appointed as a Director

of the Company on 28 October 2020

and serves as Chair of the Company’s

Audit & Risk and Remuneration

Committees.

Ashley has over 30 years of

experience serving the funds and

financial services industry in London

and Guernsey, with deep sectoral

experience supporting listed funds.

Ashley was a partner with KPMG

in the Channel Islands (“C.I.”) from

2002 and transitioned from audit to

become its C.I. Head of Advisory in

2008; a position he held through to

his retirement from the firm in 2019.

Ashley is a Fellow of the Institute of

Chartered Accountants in England

and Wales (ICAEW) and a resident

of Guernsey. In addition to his

directorships at Downing Renewables

& Infrastructure Trust plc, he serves as

Director at JZ Capital Partners Limited

and Twentyfour Select Monthly

Income Fund Limited, and on a number

of other unlisted company boards. He

plays an important role in the local

third sector as Chairman of the Youth

Commission for Guernsey & Alderney;

a locally based charity delivering high

quality targeted services to children

and young people to support the

development of their social, physical

and emotional wellbeing.

Board of Directors

Downing Renewables & Infrastructure Trust plc Annual Report | 75

The Directors of the Company are pleased to present their

report for the year ended 31 December 2022.

Directors

The Directors who held office during the year and as at the

date of this report are detailed on page 74.

Details of the Directors’ terms of appointment can be found

in the corporate governance statement and the Directors’

remuneration report.

Share Capital

The Company was granted authority at the 2022 AGM

to issue up to 13,700,800 Ordinary Shares (equivalent to

10% of the Company’s issued Ordinary Share capital as at

the date of the AGM) on a non-pre-emptive basis until the

conclusion of the Company’s next annual general meeting

in 2023. No ordinary shares have been allotted under this

authority during the year. As at the date of this report,

the Company may allot further ordinary shares up to an

aggregate nominal amount of £137,008 under its existing

authority.

Following the passing of the proposed Issue Resolutions

at the General Meeting on 23 June 2022, the Directors

were granted authority to issue up to 250 million Ordinary

Shares on a non-pre-emptive basis under the Initial Issue

and Share Issuance Programme.

Following the General Meeting held on 23 June 2022,

the Company announced that gross proceeds of

approximately £52.9 million had been raised through the

issue of 47,614,000 Ordinary Shares at an issue price of

111.0 pence per Ordinary Share. The shares were issued

to institutional investors and professionally advised

private investors and admitted to trading on the Premium

Segment of the London Stock Exchangeʼs Main Market on

27 June 2022. As at the date of this report, the Company

may allot further ordinary shares up to an aggregate

nominal amount of £2,023,860 under its existing

authority. This authority will expire on 6 June 2023.

A special resolution was passed at the 2022 AGM

granting the Directors authority to repurchase up to

20,537,572 Ordinary Shares (representing 14.99% of the

Company’s issued Ordinary Share capital as at the date

of the AGM) during the period, expiring on the earlier of

the Company’s annual general meeting to be held in 2023

and 31 December 2023. This authority will expire at the

conclusion of, and renewal will be sought at, the annual

general meeting to be held later this year. Ordinary Shares

purchased by the Company may be held in treasury or

cancelled. No ordinary shares have been bought back

under this authority.

At the year end, and at the date of this report, the issued

share capital of the Company comprised 184,622,487

ordinary shares. At general meetings of the Company,

ordinary shareholders are entitled to one vote on a show

of hands and, on a poll, to one vote for every ordinary

share held.

At 31 December 2022 and at the date of this report, the

total voting rights of the Company were 184,622,487.

Downing Renewables & Infrastructure Trust plc Annual Report | 76

Directors’ Report

Substantial Shareholdings

The Directors have been informed of the following notifiable interests in the Company’s voting rights as at the date of this

report:

Shareholder Number of

Ordinary

% of Total

Voting

Rights

Bagnall Energy Limited 27,5 01, 267 14.89

T Choithram & Sons Ltd (UK) 10,000,000 5.41

EFG Private Bank Limited 9,031,331 4.89

The Company has not been informed of any changes to the notifiable interests between 31 December 2022 and the date of

this report.

Information About Securities Carrying Voting Rights

The following information is disclosed in accordance with

The Large and Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008 and DTR 7.2.6

of the Financial Conduct Authority’s Disclosure Guidance

and Transparency Rules:

• the Company’s capital structure and voting rights and

details of the substantial shareholders in the Company

are set out above;

• proposals to grant powers to the Board to issue and

buy back the Company’s shares will be set out in the

notice of AGM; and

• there are no restrictions concerning the transfer of

securities in the Company or on voting rights, no

special rights regarding control attached to securities

and no agreements between holders of securities

regarding their transfer known to the Company.

Dividends and Dividend Policy

Dividends paid in respect of the year ended 31 December

2022 are set out on in note 20 to the financial statements.

The Company currently targets quarterly dividends

totalling 5 pence in respect of the 12 months ending

31 December 2022. The Company adopts a progressive

dividend policy taking into consideration the prevailing

inflationary environment. Given the nature of the

Company’s income streams, the Board expects that this

will result in increases to the dividend in the medium term.

The target dividend for the year from 1 January 2023 has

been increased by 7.6% to 5.38 pence per ordinary share.

The Company pays dividends on a quarterly basis with

dividends typically declared in respect of the quarterly

periods ending March, June, September and December

and paid in June, September, December and March

respectively. Dividends on Ordinary Shares shall be

declared and paid in Sterling. The Company may, where

the Directors consider it appropriate, use the special

distributable reserve created by the cancellation of its

Share premium account to pay dividends. Distributions

made by the Company may take either the form of

dividend income, or of “qualifying interest income” which

may be designated as interest distributions for UK tax

purposes.

Significant Agreements

On 3 December 2021 the Company’s wholly owned

subsidiary, Dore Holdco Limited, executed a £25 million

multi-currency revolving credit facility with Santander UK

plc, as arranger, agent and security trustee (“Santander”).

The RCF was increased from £25 million to £40 million

on 26 January 2023. The facility can be extended for

a further year at Santander’s approval. The facility can

be drawn in GBP and EUR (with the Company also able

to make use of funding in other currencies). As at the

December 2022, no capital has been drawn down

under the Revolving Credit Facility Agreement.

Further details regarding the principal agreements

between the Company and its service providers, including

the Investment Manager, are set out in note 4 to the

financial statements.

Downing Renewables & Infrastructure Trust plc Annual Report | 77

Downing Renewables & Infrastructure Trust plc Annual Report | 78

Financial Risk Management

Information about the Company’s financial risk

management objectives and policies is set out in note 16

to the financial statements.

Greenhouse Gas Emissions and Taskforce on Climate-Related

Financial Disclosures

Information about the Company’s GHG emissions and the

Company’s reporting against the TCFD recommendations

is set out in the strategic report on pages 19 to 29.

Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include

specified information in a single identifiable section of

the annual report or a cross reference table indicating

where the information is set out. The information required

under Listing Rule 9.8.4(7) in relation to allotments of

shares is set out on page 76. The Directors confirm that

no additional disclosures are required in relation to Listing

Rule 9.8.4.

Audit Information

The Directors holding office at the date of this annual report

confirm that, so far as they are each aware, there is no

relevant audit information of which the Company’s Auditor

is unaware. Each Director has taken all the steps that they

ought to have taken as a Director to make themselves aware

of any relevant audit information and to establish that the

Company’s Auditor is aware of that information.

Streamlined Energy Carbon Reporting

As the Company has outsourced operations to third

parties, there are no significant greenhouse gas emissions

to report from the operations of the Company. The

Company qualifies as a low energy user due to producing

less than 40,000 kWh and is therefore exempt from

disclosures on greenhouse gas emissions and energy

consumption.

Further detail on the Company’s environmental reporting

can be seen in the Sustainability report on pages 28

and 29.

Future Developments

Further information regarding likely future developments

in the business of the Company is set out in the

Investment Manager’s Report on page 58.

Post Balance Sheet Events

Dividends

On 23 February 2023, The Board declared an interim

dividend of 1.25 pence per share with respect to the

period ended 31 December 2022.

The Dividend is expected to be paid on or around 31

March 2022 to shareholders on the register on 3 March

2023. The ex-dividend date is 3 March 2023.

Acquisitions

• The Company, through its main subsidiary acquired

two operational power plants located in Sweden for

£5.1 million.

This Directors’ report has been approved by the Board.

By order of the Board

Link Company Matters Limited

Company Secretary

31 March 2023

Corporate Governance

Statement

This corporate governance statement forms part of the

Directors’ report.

Introduction from the Chairman

I am pleased to present the corporate governance statement

for the year ended 31 December 2022. The Company

reports on its compliance with the AIC Code in this

statement, as well as how the Board and its committees have

operated over the past year and how the Board exercises

effective stewardship over the Company’s activities in

the interests of shareholders. The Board is accountable to

shareholders for the governance of the Company’s affairs

and is committed to upholding the highest level of corporate

governance for the Company’s long-term success.

The Company assesses its governance standards against

the principles and recommendations of the AIC Code, as

published in 2019.

The Board believes that reporting against the principles

and recommendations of the AIC Code provides better

information to shareholders because it addresses all of the

principles set out in the UK Code while also establishing

additional principles and recommendations on issues

of particular relevance to investment companies and is

endorsed by the FRC. According to the terms of the FRC’s

endorsement, AIC members who report against the AIC

Code and the AIC Guide fully meet their obligations under

the UK Code and the related disclosure requirements

contained in the FCA’s listing rules.

A copy of the AIC Code can be found at www.theaic.co.uk.

A copy of the UK Code can be obtained at www.frc.org.uk.

Statement of Compliance with the AIC Code

According to the FCA’s listing rules, the Company is

required to provide shareholders with a statement on how

the AIC Code’s main and supporting principles have been

applied, as well as whether the Company has complied

with the AIC Code’s provisions. The Board recognises the

importance of a strong corporate governance culture and

has established a framework for corporate governance

which it considers to be appropriate to the business of the

Company as a whole.

It should be noted that, because the Company is an

investment trust, all of its Directors are non-executive,

and the majority of the Company’s day-to-day

responsibilities are delegated to third parties. As a result,

the Company has not reported on the UK Code provisions

relating to the role of the chief executive, executive

remuneration or internal audit.

The Board has reviewed the principles and

recommendations of the AIC Code and considers that it

has complied throughout the year, except that Directors

are not appointed for a specific term as all Directors are

non-executive and the Company has adopted a policy

of all Directors, including the Chair, standing for annual

re-election. The Board is mindful of and will have regard

to corporate governance best practice recommendations

with respect to the tenure of the Chair and in future

succession planning. The Company does not have a

Senior Independent Director. The Board believes that

the appointment of a Senior Independent Director is not

necessary at present given the size of the Company.

The Principles of the AIC Code

The AIC Code is comprised of 18 Principles and 42

Provisions over five sections covering the following areas:

1. Board Leadership and Purpose;

2. Division of Responsibilities;

3. Composition, Succession and Evaluation;

4. Audit, Risk and Internal Control; and

5. Remuneration

The Board’s Corporate Governance Statement sets

out how the Company has complied with each of the

Principles of the AIC Code.

Downing Renewables & Infrastructure Trust plc Annual Report | 79

Downing Renewables & Infrastructure Trust plc Annual Report | 80

AIC Code Principle How the Company Complies

A successful company is led by an

effective board, whose role is to

promote the long-term sustainable

success of the Company, generating

value for shareholders and

contributing to wider society.

Members of the Board are fully engaged and bring diverse skills to the table fostering healthy

debate. The Investment Objective is to provide investors with an attractive and sustainable level

of income returns, with an element of capital growth, by investing in a diversified portfolio of

renewable energy and infrastructure assets in the UK, Ireland and Northern Europe.

As part of this, the opportunities and risks faced by the business are considered, monitored and

assessed on a regular basis, both in terms of potential and emerging risks that the Company may

face. More detail regarding the principal risks and uncertainties and the sustainability of the

business model can be found in the Strategic Report on pages 64 to 70.

The Board should establish the

Company’s purpose, values and

strategy, and satisfy itself that

these and its culture are aligned.

All directors must act with integrity,

lead by example and promote the

desired culture.

The purpose of the Company is also the Investment Objective which is to provide investors

with an attractive and sustainable level of income returns, with an element of capital growth,

by investing in a diversified portfolio of renewable energy and infrastructure assets in the UK,

Ireland and Northern Europe.

The investment process followed by the Investment Manager is set out on pages 30 to 37.

The Board embraces a culture of inclusivity, fairness and responsibility, adopting a responsible

governance culture. Transparency and openness are important values both amongst Board

members and in the Board’s dealings with the Company’s stakeholders. The Board assesses and

monitors its own culture as part of the annual Board evaluation process, including its policies,

practices and behaviour to ensure that it is appropriately aligned to the Company’s activities.

The Board should ensure that the

necessary resources are in place for

the Company to meet its objectives

and measure performance against

them. The Board should also

establish a framework of prudent

and effective controls, which enable

risk to be assessed and managed.

The Board and the Management Engagement Committee regularly review the performance of

the Company and the performance and resources of the Investment Manager and other key

service providers to ensure that the Company can continue to meet its objectives.

The Audit and Risk Committee is responsible for assessing and managing risks. Further

information about how this is done can be found in the Audit and Risk Committee Report on

pages 92 to 94.

In order for the Company to meet

its responsibilities to shareholders

and stakeholders, the Board should

ensure effective engagement with,

and encourage participation from,

these parties.

The Board understands its responsibilities to Shareholders and stakeholders and stakeholder

considerations form an important part of decision making. Further information on the Company’s

engagement with stakeholders is set out in the Section 172 statement on pages 60 to 63.

The Board considers the impact any decision will have on all relevant stakeholders to ensure that

they are making a decision that promotes the long-term success of the Company, including those

in relation to dividends, new investment opportunities and capital requirements.

The Directors welcome the views of all Shareholders and place considerable importance on

communications with them. All Shareholders are encouraged to attend the AGM, where they

will be given the opportunity to question the Chairman, the Board and representatives of the

Investment Manager. In addition, the Directors are available to meet Shareholders. Shareholders

wishing to communicate with the Chairman, or any other member of the Board, may do so by

writing to the Company Secretary at dorecosec@linkgroup.co.uk.

The Management Engagement Committee reviews the performance and continuing appointment

of the Company’s key service providers annually to ensure that performance levels are

satisfactory and any service issues can be discussed, as appropriate.

Downing Renewables & Infrastructure Trust plc Annual Report | 81

AIC Code Principle How the Company Complies

The Chair leads the Board and

is responsible for its overall

effectiveness in directing the

Company. They should demonstrate

objective judgement throughout

their tenure and promote a culture

of openness and debate. In addition,

the Chair facilitates constructive

Board relations and the effective

contribution of all Non-Executive

Directors, and ensures that

Directors receive accurate, timely

and clear information.

The Chair is responsible for leading the Board and is responsible for its overall effectiveness

in directing the affairs of the Company. The Chair ensures that all Directors receive accurate,

timely and clear information and promotes a culture of openness and debate in Board meetings

and within the Company by encouraging and facilitating the effective contribution of other

Directors.

There is a clear division of responsibilities between the Chair, the Directors, the Investment

Manager and the Company’s other third-party service providers.

The Board meets regularly throughout the year and representatives of the Investment Manager

are in attendance, when appropriate, at each meeting and most Committee meetings. The

Board has agreed a schedule of matters specifically reserved for decision by the Board which is

available on the Company’s website.

Prior to each Board and Committee meeting, Directors are provided with a comprehensive set

of papers giving detailed information on the Company’s investment performance, transactions

and financial position. All Directors have timely access to all relevant management, financial and

regulatory information.

The review of the performance of the Chair was carried out during the year by Joanna Holt as

the Chair of the Nomination Committee as part of the Board evaluation exercise. The document

setting out the role of the Chair is available on the Company’s website. This review concluded

that the Chair continues to make a significant contribution to, and devotes sufficient time to the

affairs of, the Company and continues to display excellent leadership.

The Board should consist of

an appropriate combination of

Directors (and, in particular,

independent non-executive

Directors) such that no one

individual or small group of

individuals dominates the Board’s

decision making.

All of the Directors are non-executive and are independent of the Investment Manager and the

other service providers.

The Chair, Hugh Little, was independent of the Investment Manager at the time of his

appointment in 2020 and remains so. No Director is a director of another investment company

managed by the Company’s Investment Manager.

Non-executive Directors should

have sufficient time to meet their

board responsibilities. They should

provide constructive challenge,

strategic guidance, offer specialist

advice and hold third party service

providers to account.

As part of the Board evaluation process, the contributions of each Director, as well as the time

commitments made by each Board member are considered and reviewed. The Directors’ other

commitments are regularly reviewed, and any new appointments are considered by the other

Directors to ensure there is no conflict of interest or risk of over boarding.

Following the Board evaluation, it was concluded that each Director provides appropriate levels

of challenge and provided the Company and the Investment Manager with strategic guidance

and specialist advice when required.

The Management Engagement Committee reviews the performance and cost of the Company’s

third-party service providers on an annual basis. More information regarding the work of the

Management Engagement Committee can be found on page 91.

The Board, supported by the

Company Secretary, should ensure

that it has the policies, processes,

information, time and resources

it needs in order to function

effectively and efficiently.

The Directors have access to the advice and services of the Company Secretary through

its appointed representatives and the Company Secretary is responsible to the Board for

ensuring that Board procedures are followed, and that applicable rules and regulations are

complied with. The Company Secretary is also responsible for ensuring good information

flows between all parties.

Downing Renewables & Infrastructure Trust plc Annual Report | 82

AIC Code Principle How the Company Complies

Composition, succession and evaluation

Appointments to the Board should

be subject to a formal, rigorous

and transparent procedure, and an

effective succession plan should be

maintained. Both appointments and

succession plans should be based

on merit and objective criteria and,

within this context, should promote

diversity of gender, social and ethnic

backgrounds, cognitive and personal

strengths.

The Board has established a Nomination Committee, comprising all Directors. This Committee

will lead the appointment process of new Directors as and when vacancies arise and as part

of the Directors’ ongoing succession planning. More information regarding the work of the

Nomination Committee can be found on pages 88 to 90.

In accordance with the AIC Code, the Board is comprised of a mixture of individuals who have

an appropriate balance of skills and experience to meet the future opportunities and challenges

facing the Company. Appointments are made first and foremost on the basis of merit and taking

into account the recognised benefits of all types of diversity. The Board ensures that diversity

is an important consideration and part of the selection criteria used to assess candidates to

achieve a balanced Board.

The Company’s policy on diversity can be found on page 88.

The Board and its committees

should have a combination of skills,

experience and knowledge.

Consideration should be given

to the length of service of the

Board as a whole and membership

regularly refreshed.

The Directors bring a wide range of skills, experience and knowledge to the Board. Further

details are set out in their biographies on page 74.

The Directors’ skills, experience and knowledge are reviewed as part of the annual Board

evaluation process. When considering new appointments in future, the Board will review the

skills of the Directors and seek to add persons with complementary skills or who possess skills

and experience which fill any gaps in the Board’s knowledge or experience and who can devote

sufficient time to the Company to carry out their duties effectively.

Annual evaluation of the Board

should consider its composition,

diversity and how effectively

members work together to achieve

objectives. Individual evaluation

should demonstrate whether each

director continues to contribute

effectively.

The Board has agreed to evaluate its own performance and that of its Committees, Chair and

Directors on an annual basis. For the period under review, this was carried out by way of a

questionnaire prepared by the Company Secretary. A report was circulated to the Directors

which set out the results of the evaluation process and the Directors met subsequently to

discuss the findings and take any actions. The Nomination Committee led the evaluation, which

covered the functioning of the Board as a whole, the effectiveness of the Board Committees,

the performance of the Chair and the independence and contribution made by each Director.

The Nomination Committee considers the findings of the evaluation process when making a

recommendation to the Board regarding the election and re-election of Directors.

Following this review, the Board is satisfied that the structure, mix of skills and operation of the

Board is effective and relevant for the Company and it is recommended that shareholders vote

in favour of the election of the Directors at the AGM to be held in June 2023.

Further information regarding the proposed election of each Director can be found in the

Notice of AGM.

Audit, risk and internal control

The Board should establish

formal and transparent policies

and procedures to ensure the

independence and effectiveness of

external audit functions and satisfy

itself on the integrity of financial

and narrative statements.

The Audit and Risk Committee ensures that any work outside the scope of the standard audit

work requires prior approval by the Audit and Risk Committee. This enables the Committee

to ensure that the Auditor remains fully independent.

The Audit and Risk Committee carries out a review of the performance of the Auditor on an

annual basis. Feedback from other third parties, including the Investment Manager, is included

as part of this assessment to ensure that the Audit and Risk Committee takes into account the

views of different parties who have a close working relationship with the Auditor.

Further information regarding the work of the Audit and Risk Committee can be found on

page 92.

Downing Renewables & Infrastructure Trust plc Annual Report | 83

AIC Code Principle How the Company Complies

The Board should present a fair,

balanced and understandable

assessment of the Company’s

position and prospects.

The Board, through the Audit and Risk Committee, has considered the Annual Report and

financial statements as a whole and agreed that they believe that the document presents a fair,

balanced and understandable assessment of the Company’s position and prospects.

The Board should establish

procedures to manage risk, oversee

the internal control framework, and

determine the nature and extent of

the principal risks the Company is

willing to take in order to achieve its

long-term strategic objectives.

The Audit and Risk Committee reviews reports from the principal service providers

on compliance and the internal and financial control systems in operation and relevant

independent audit reports thereon.

The Audit and Risk Committee has carried out an annual review of the effectiveness of

the Company’s systems of internal control. Given the nature of the business, and being an

Investment Trust, the Company is reliant on its service providers and their own internal

controls. The Audit and Risk Committee reviews the control systems in operation at the

Company’s key service providers on an annual basis, insofar as they relate to the affairs of

the Company.

As set out in more detail in the Audit and Risk Committee on pages 92 to 94 the Company

has in place a detailed system for assessing the adequacy of those controls.

Remuneration policies and practices

should be designed to support

strategy and promote long-term

sustainable success.

As outlined in the Remuneration Policy on page 100, the Company follows the

recommendation of the AIC Code that non-executive Directors’ remuneration should reflect

the time, commitment and responsibilities of the role. The Company’s policy is that the

remuneration of non-executive Directors should reflect the experience of the Board as a whole

and be determined with reference to comparable organisations and appointments. Directors

are not eligible for bonuses, share options, long-term incentive schemes or other performance-

related benefits as the Board does not believe that this is appropriate for non-executive

Directors.

The Remuneration Policy is therefore designed to attract and retain high quality Directors,

whilst ensuring that Directors remain focused and incentivised to promote the long-term

sustainable success of the Company.

All Directors hold shares in the Company, all of which were purchased in the open market

and using the Directors’ own resources.

More information regarding the work of the Remuneration Committee can be found in the

Remuneration Report and Policy which are set out on pages 95 to 100.

A formal and transparent

procedure for developing policy

on remuneration should be

established. No Director should

be involved in deciding their own

remuneration outcome.

The Remuneration Policy has been developed with reference to the peer group and the

principles of the AIC Code. There are agreed Directors’ remuneration levels which all non-

executive Directors receive (irrespective of experience or tenure) for Directors, for the Audit

and Risk Committee Chair and for the Chair of the Company. Any changes to the Chairman’s

fee are considered by the Remuneration Committee as a whole, with the exception of the Chair

who excuses himself for this part of the meeting.

Directors should exercise

independent judgement and

discretion when authorising

remuneration outcomes, taking

account of company and

individual performance, and wider

circumstances.

Any decision regarding remuneration is taken after considering the performance of the

Company and wider market conditions and circumstances.

Downing Renewables & Infrastructure Trust plc Annual Report | 84

Board of Directors

Under the leadership of the Chair, the Board of

Directors is collectively responsible for the long-term

sustainable success of the Company, generating value

for shareholders and contributing to wider society. It

provides overall leadership, sets the strategic aims of

the Company and ensures that the necessary resources

are in place for the Company to meet its objectives and

fulfil its obligations to shareholders, within a framework

of high standards of corporate governance and effective

internal controls. The Directors are responsible for the

determination of the Company’s Investment Policy and

investment strategy and have overall responsibility for the

Company’s activities, including the review of investment

activity and performance and the control and supervision

of the Investment Manager.

The Board consists of three non-executive Directors. It

seeks to ensure that it has an appropriate balance of skills

and experience, and considers that, collectively, it has

substantial recent and relevant experience of investment

trusts and financial and public company management. The

Chair of the Audit and Risk Committee, Ashley Paxton, has

recent and relevant financial experience as set out in his

biography on page 74.

The terms and conditions of the appointment of the

Directors are formalised in letters of appointment, copies

of which are available for inspection from the Company’s

registered office. None of the Directors has a contract of

service with the Company nor has there been any other

contract or arrangement between the Company and any

Director at any time during the year. Directors are not

entitled to any compensation for loss of office.

Board Operation

The Directors have adopted a formal schedule of matters

specifically reserved for the approval of the Board. These

include the following:

• approval of the Company’s Investment Policy, long-

term objectives and investment strategy;

• approval of acquisitions from, divestments to, or

co-investments by the Company with other funds

which are managed by the Investment Manager;

• approval of Annual and Interim Reports and financial

statements and accounting policies, prospectuses,

circulars and other shareholder communications;

• approval of the raising of new capital and major

financing facilities;

• approval of dividends and the Company’s dividend

policy;

• Board appointments and removals;

• appointment and removal of the Investment Manager,

AIFM, Auditor and the Company’s other service

providers; and

• approval of the Company’s operating budgets.

Board Meetings

The Company has four scheduled Board meetings a year,

with additional meetings arranged as necessary.

At each Board meeting, the Directors follow a formal

agenda which is circulated in advance by the Company

Secretary. The Investment Manager, Administrator, AIFM

and Company Secretary regularly provide the Board

with financial information, including an annual expenses

budget, together with briefing notes and papers in relation

to changes in the Company’s economic and financial

environment, statutory and regulatory changes and

corporate governance best practice.

At each Board meeting, representatives from the

Investment Manager are in attendance to present reports

to the Directors covering the Company’s current and

future activities, portfolio of assets and its investment

performance over the preceding period. The Board and

the Investment Manager operate in a fully supportive,

co-operative and open environment and ongoing

communication with the Board is maintained between

formal meetings.

Committees

The Board has established four committees to assist

its operations: the Audit and Risk Committee, the

Management Engagement Committee, the Remuneration

Committee and the Nomination Committee. The delegated

responsibilities of each committee are clearly defined

in formal terms of reference, which are available on the

Company’s website.

Given the size and nature of the Board it is felt appropriate

that all Directors are members of all Committees.

Downing Renewables & Infrastructure Trust plc Annual Report | 85

Audit and Risk Committee

The Audit and Risk Committee meets twice a year and is

chaired by Ashley Paxton.

The Committee ensures that the Company’s financial

performance is properly monitored, controlled and

reported. The Committee has direct access to the

Company’s Auditor and provides a forum through which

the Auditor reports to the Board. Representatives of

the Auditor attend both scheduled meetings of the

Committee.

Further details about the Audit and Risk Committee and

its activities during the year under review are set out on

pages 92 to 94.

Nomination Committee

The Nomination Committee meets once a year and is

chaired by Joanna Holt. The Committee oversees Board

recruitment and succession planning and the annual Board

evaluation process.

Further details about the Nomination Committee and

its activities during the year under review are set out on

pages

88 to 90.

Management Engagement Committee

The Management Engagement Committee meets once a

year and is chaired by Hugh Little. The Committee reviews

the performance and continuing appointment of the

Investment Manager and the Company’s other principal

service providers.

Further details about the Management Engagement

Committee and its activities during the year under review

are set out on page 91.

Remuneration Committee

The Remuneration Committee meets once a year and is

chaired by Ashley Paxton. The Committee conducts an

annual review of the remuneration of the Directors.

Further details about the Remuneration Committee and

its activities during the year under review are set out on

pages 95 to 100.

Meeting Attendance

The number of scheduled Board and Committee meetings held during the period ended 31 December 2022 and the

attendance of the individual Directors is shown below:

Board Audit and Risk

Committee

Nomination

Committee

Remuneration

Committee

Management

Engagement

Committee

Number

entitled to

attend

Number

attended

Number

entitled to

attend

Number

attended

Number

entitled to

attend

Number

attended

Number

entitled to

attend

Number

attended

Number

entitled to

attend

Number

attended

Hugh Little 4 4 2 2 1 1 1 1 1 1

Ashley Paxton 4 4 2 2 1 1 1 1 1 1

Joanna Holt 4 4 2 2 1 1 1 1 1 1

Downing Renewables & Infrastructure Trust plc Annual Report | 86

During the financial year ended 31 December 2022, the

Company held a number of additional meetings to discuss

acquisitions and fundraising.

Induction of New Directors

A procedure for the induction of new Directors has been

established, including the provision of an induction pack

containing relevant information about the Company, its

processes and procedures. New appointees have the

opportunity of meeting with the Chair, relevant persons at

the Investment Manager and the Company Secretary.

Election/Re-election of Directors

Under the Company’s Articles of Association and in

accordance with the AIC Code, Directors are required

to retire at the first AGM following their appointment.

Thereafter, at each AGM all Directors will seek annual

re-election. Following formal performance evaluation

as detailed below, the Board strongly recommends

the re-election of each of the Directors based on

their experience and expertise in investment matters,

their independence and continuing effectiveness and

commitment to the Company.

Conflicts of Interest

It is the responsibility of each individual Director to avoid

an unauthorised conflict of interest situation arising. The

Director must request authorisation from the Board as

soon as he/she becomes aware of the possibility of an

interest that conflicts, or might possibly conflict, with the

interests of the Company (“situational conflicts”). The

Company’s Articles of Association authorise the Board to

approve such situations, where deemed appropriate.

A register of conflicts is maintained by the Company

Secretary and is reviewed at Board meetings, to ensure

that any authorised conflicts remain appropriate. The

Directors are required to confirm at these meetings

whether there has been any change to their position.

The Board is responsible for considering Directors’

requests for authorisation of situational conflicts and for

deciding whether or not the situational conflict should be

authorised. The factors to be considered will include:

• whether the situational conflict could prevent the

Director from properly performing their duties;

• whether it has, or could have, any impact on the

Company; and

• whether it could be regarded as likely to affect the

judgement and/ or actions of the Director in question.

When the Board is deciding whether to authorise a

conflict or potential conflict, only Directors who have

no interest in the matter being considered are able to

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 are able to impose limits or conditions when

giving authorisation if they think this is appropriate in the

circumstances.

Insurance and Indemnity Provisions

The Board has agreed arrangements whereby Directors

may take independent professional advice in the

furtherance of their duties. The Company has Directors’

and Officers’ liability insurance, Public Offering of

Securities insurance and professional indemnity insurance

to cover legal defence costs. Under the Company’s

Articles, the Directors are provided, subject to the

provisions of UK legislation, with an indemnity in respect

of liabilities which they may sustain or incur in connection

with their appointment. This indemnity was in force

during the year and remains in force as at the date of this

report. Apart from this, there are no third-party indemnity

provisions in place for the Directors.

Performance Evaluation of the Board

The Directors are aware that they need to continually

monitor and improve performance and recognise this

can be achieved through regular Board evaluation, which

provides a valuable feedback mechanism for improving

Board effectiveness. The Directors have therefore opted

to undertake an internal performance evaluation by

way of questionnaires specifically designed to assess

the strengths and independence of the Board and the

Chairman, individual Directors and the performance of

the Committees. The evaluation of the Chair is carried

out by the other Directors of the Company, led by the

Chair of the Nomination Committee. The questionnaires

are also intended to analyse the focus of Board meetings

and assess whether they are appropriate, or if any

additional information may be required to facilitate Board

discussions. The Chair acts on the results of the evaluation

by recognising the strengths and addressing any

Downing Renewables & Infrastructure Trust plc Annual Report | 87

weaknesses of the Board as appropriate. The results of

the Board evaluation process are reviewed and discussed

by the Board as a whole. This evaluation process is carried

out annually.

Following the evaluation process conducted during the

year under review, the Board considers that all current

Directors contribute effectively and have the skills and

experience relevant to the leadership and direction of the

Company. The Board has satisfied itself that the Directors

have enough time to devote to the Company’s affairs.

Internal Control Review

The Board is responsible for the systems of internal

controls relating to the Company, including the reliability

of the financial reporting process and for reviewing the

systems’ effectiveness. The Directors have reviewed

and considered the guidance supplied by the FRC on

risk management, internal control and related finance

and business reporting and an ongoing process has been

established for identifying, evaluating and managing

the principal risks faced by the Company. This process,

together with key procedures established with a view to

providing effective financial control, was in place during

the year under review and at the date of this report.

The internal control systems are designed to ensure

that proper accounting records are maintained, that the

financial information on which business decisions are

made and which is issued for publication is reliable, and

that the assets of the Company are safeguarded.

The risk management process and systems of internal

control are designed to manage rather than eliminate

the risk of failure to achieve the Company’s objectives. It

should be recognised that such systems can only provide

reasonable, not absolute, assurance against material

misstatement or loss.

The Directors have carried out a review of the

effectiveness of the systems of internal control as they

have operated over the year and up to the date of

approval of the report and financial statements. There

were no matters arising from this review that required

further investigation and no significant failings or

weaknesses were identified.

Internal Control Assessment Process

Robust risk assessments and reviews of internal controls

are undertaken regularly in the context of the Company’s

overall Investment Objective.

In arriving at its judgement of what risks the Company

faces, the Board has considered the Company’s operations

in light of the following factors:

• the nature and extent of risks which it regards as

acceptable for the Company to bear within its overall

business objective;

• the threat of such risks becoming reality;

• the Company’s ability to reduce the incidence and

impact of risk on its performance;

• the cost to the Company and benefits related to the

review of risk and associated controls of the Company;

and

• the extent to which third parties operate the relevant

controls.

A risk matrix has been produced against which the risks

identified and the controls in place to mitigate those risks

can be monitored. The risks are assessed based on the

likelihood of them happening, the impact on the business

if they were to occur and the effectiveness of the controls

in place to mitigate them. This risk matrix is reviewed

twice a year by the Audit and Risk Committee and at other

times as necessary. The principal risks that have been

identified by the Board are set out on pages 64 to 70.

Downing Renewables & Infrastructure Trust plc Annual Report | 88

Nomination Committee Report

I am pleased to present the Nomination Committee

(the “Committee”) Report for the year ended

31 December 2022.

Meetings

The Committee comprises all Directors of the Company

and met once during the year.

Responsibilities of the Committee

The primary responsibilities of the Committee are as follows:

• to review the structure, size and composition

(including the skills, knowledge, experience and

diversity) of the Board;

• to give full consideration to succession planning

for Directors in the course of its work, taking into

account the challenges and opportunities facing the

Company, and the skills and expertise needed on the

Board in the future;

• to identify and nominate for the approval of the

Board, candidates to fill Board vacancies as and

when they arise;

• to review the results of the Board performance

evaluation process that relate to the composition of

the Board; and

• to review annually the time required from non-

executive Directors.

The Committee’s terms of reference are available on the

Company’s website. The Committee’s meeting attendance

is set out on page 85.

Appointment of New Directors

The Committee regularly reviews the composition and

effectiveness of the Board and its committees with the

objective of ensuring that these have the appropriate balance

of skills and experience required to meet the current and

future opportunities and challenges facing the Company.

When considering the appointment of new Directors, the

Committee will actively consider a range of factors including

the expertise and experience required in a prospective

candidate and the diversity of the Board, as set out in the

Company’s Diversity Policy below.

Diversity Policy

In accordance with the AIC Code, the Board is comprised

of a mixture of individuals who have an appropriate

balance of skills and experience to meet the future

opportunities and challenges facing the Company.

Appointments are made on the basis of merit and

objective criteria designed to promote diversity of gender,

social background, ethnicity, age, sexual orientation,

disability, and professional and industry specific

knowledge, all of which are important considerations in

ensuring that the Board and its committees have the right

balance of skills, experience, independence and knowledge

to carry out their responsibilities.

The Board is made up of 33% female Directors, therefore

meeting the recommendation of the FTSE Women

Leaders Review (formally known as the Hampton-

Alexander review).

The Committee is mindful of the new gender and diversity

recommendations by the FCA on diversity and inclusion

on company boards effective for financial years beginning

on or after 1 April 2022:

a) at least 40% of individuals on the Board are to be

women;

b) at least one senior Board position is to be held by a

woman; and

c) at least one individual on the Board is to be from a

minority ethnic background.

The Committee continues to develop succession plans

to increase diversity on the Board; however, it also

recognised that the size of the Board should be considered

alongside the Company’s specific needs. Diversity of

thought, skills and experience was the key focus for Board

Downing Renewables & Infrastructure Trust plc Annual Report | 89

member selection at IPO and subsequently, and Board composition is felt to be well-rounded and commensurate for the

Company’s present needs. As the Company continues to grow and prosper, the Committee is considering the need to

embellish the board further and will give due consideration to the new gender and ethnic diversity recommendations as

part of future Director appointments alongside the particular established needs of the Company.

The following tables, in the prescribed format, show the gender and ethnic background of the Directors as of the date of

this report, in accordance with Listing Rule 9 Annex 2.1.

Gender identity or sex

Number of Board

members

Percentage on the

Board

Number of senior

positions on the

Board

Men 2 66.6% 1

Women 1 33.3% 0

Not specified/prefer not to say 0 0 0

Ethnic background

Number of Board

members

Percentage on the

Board

Number of senior

positions on the

Board

White British or other White (including

minority white groups)

3 100% 1

Mixed/Multiple Ethnic Groups 0 0 0

Asian/Asian British 0 0 0

Black/African/Caribbean/ Black British 0 0 0

Other ethnic group, including Arab 0 0 0

Not specified/prefer not to say 0 0 0

The data in the above tables was collected through self-reporting by the Directors.

Downing Renewables & Infrastructure Trust plc Annual Report | 90

Tenure Policy

Directors are not appointed for a specific term as all

Directors are non-executive. The Company has adopted

a policy of all Directors, including the Chairman, standing

for annual re-election. The Board is mindful of, and will

have regard to, corporate governance best practice

recommendations with respect to the tenure of the

Chairman and in future succession planning, as appropriate.

Performance Evaluation of the Board

The Committee has considered the performance of

the Board and concluded that each Director continues

to demonstrate the appropriate skills, experience and

commitment to contribute effectively to the Board. Further

information on the performance evaluation of the Board can

be found in the Corporate Governance report on page 86.

Joanna Holt

Chair of the Nomination Committee

31 March 2023

Downing Renewables & Infrastructure Trust plc Annual Report | 91

Management Engagement

Committee Report

I am pleased to present the Management

Engagement Committee (the “Committee”) Report

for the year ended 31 December 2022.

Meetings

The Committee comprises all Directors of the Company

and met once during the year.

Responsibilities of the Committee

The primary responsibilities of the Committee are as

follows:

• to monitor and evaluate the performance of the

Investment Manager and its compliance with the

terms of the investment management agreement;

• to monitor and evaluate the performance of

the Alternative Investment Fund Manager and

its compliance with the terms of the alternative

investment fund management agreement;

• to consider the appropriateness of the investment

management agreement, that it is fair, complies

with all regulatory requirements, conforms with

market and industry practice and remains in the best

interests of shareholders;

• to consider the appropriateness of the alternative

investment fund management agreement, that it

is fair, complies with all regulatory requirements,

conforms with market and industry practice and

remains in the best interests of shareholders;

• to consider and review the level and method of

remuneration of the Investment Manager and the

Alternative Investment Fund Manager pursuant to

the terms of their respective agreements with the

Company;

• to consider the continuing appointment of the

Investment Manager and Alternative Investment

Fund Manager and make recommendations to the

Board; and

• to review the performance and services provided by

the Company’s other service providers and consider

whether the continuing appointment of such service

providers under the terms of their agreements are in

the interests of shareholders as a whole, and make

recommendations to the Board.

The Committee’s terms of reference are available on the

Company’s website. Committee meeting attendance is set

out on page 85.

Continuing Appointment of the Investment

Manager

The Board, through the Management Engagement

Committee, keeps the performance and continuing

appointment of the Investment Manager under continual

review. The Committee conducts an annual review of

the Investment Manager’s performance and makes a

recommendation to the Board about its continuing

appointment.

The Directors consider that the Investment Manager has

executed the Company’s investment strategy according to

the Board’s expectations. Accordingly, the Board believes

that the continuing appointment of Downing LLP as

the Investment Manager of the Company, on the terms

agreed, is in the best interests of the Company and its

shareholders.

Hugh W M Little

Chair of the Management Engagement Committee

31 March 2023

Downing Renewables & Infrastructure Trust plc Annual Report | 92

Audit and Risk

Committee Report

I am pleased to present the Audit and Risk

Committee Report for the year ended

31 December 2022.

Meetings

The Committee (the “Committee”) comprises all Directors

of the Company and met twice during the year ended 31

December 2022 and once post year end.

Responsibilities of the Committee

The primary responsibilities of the Committee are as

follows:

• to monitor the integrity of the financial statements

of the Company including its annual and interim

reports and any other formal announcements

relating to its financial performance;

• to review and report to the Board on any significant

financial reporting issues and judgements which

those statements contain having regard to matters

communicated to it by the Auditor;

• to review the content of the annual report and

financial statements and advise the Board on

whether, taken as a whole, it is fair, balanced and

understandable and provides shareholders with

sufficient information to assess the Company’s

position and performance, business model and

strategy;

• to keep under review the Company’s internal

financial controls and review the adequacy and

effectiveness of the Company’s internal control and

risk management systems and monitor the proposed

implementation of such controls;

• to assess the current position of the Company’s

emerging and principal risks, including those

that would threaten its business model, future

performance, solvency or liquidity and reputation,

and how they are managed and mitigated, and the

prospects of the Company over such period as

deemed appropriate;

• to manage the relationship with the Company’s

external Auditor, including reviewing the Auditor’s

remuneration, independence and performance and

make recommendations to the Board as appropriate;

• to review the Auditor’s independence and

objectivity and the effectiveness and quality of the

audit process; and

• to consider annually whether there is a need for the

Company to have its own internal audit function.

Activities in the Year

• conducted a review of the internal controls and

risk management systems of the Company and its

third-party service providers;

• agreed the plan and fees with the Auditor in respect

of the interim review of the half-year report for

the period ended 30 June 2022 and the statutory

audit of the Annual Report for the year ended

31 December 2022, including the principal areas of

focus;

• received and discussed with the Auditor its report

on the results of the review of the half-yearly

financial statements and the year-end audit;

• reviewed the Company’s interim and annual financial

statements and recommended these to the Board

for approval;

• reviewed the methodology and assumptions applied

in valuing the assets of the Company;

• reviewed whether an internal audit function would

be of value and concluded that this would provide

minimal additional comfort at considerable extra cost

to the Company;

• reviewed the continued application adoption of the

investment entity accounting standard; and

• reviewed the viability statement.

Downing Renewables & Infrastructure Trust plc Annual Report | 93

Significant issues

The Committee considered the following key issues in

relation to the Company’s financial statements during the

year. A more detailed explanation of the consideration of

the issues set out below, and the steps taken to manage

them, is set out in the Principal Risks and Uncertainties on

pages 64 to 70.

Valuation of Investments

The discount rates used to determine the valuation are

selected and recommended by the Investment Manager.

The discount rate is applied to the expected future cash

flows from each investment’s financial forecasts to arrive

at a valuation (discounted cash flow valuation).

The Audit and Risk Committee has considered the

subjectivity and appropriateness of the discount rates and

other key assumptions used to determine the valuation of

the investments held through DORE Hold Co, which could

affect the NAV and share price of the Company.

The board is comfortable with the valuation and have

discussed with the Investment Manager and external

auditor.

Internal controls

The Committee carefully considers the internal control

systems by continually monitoring the services and

controls of its third-party service providers. The

Committee reviewed and, where appropriate, updated

the risk matrix during the year under review. This is done

on a biannual basis. The Committee received a report

on internal control and compliance from the Investment

Manager, the Administrator and the Registrar and no

significant matters of concern were identified.

Going concern and long-term viability of the Company

The Committee considered the Company’s financial

requirements for the next 12 months and concluded

that it has sufficient resources to meet its commitments.

Consequently, the financial statements have been

prepared on a going concern basis. The Committee also

considered the longer-term viability statement within the

Annual Report for the year ended 31 December 2022,

covering a five-year period, and the underlying factors and

assumptions which contributed to the Committee deciding

that this was an appropriate length of time to consider the

Company’s long-term viability.

Adoption of Investment entity accounting standard

Under IFRS 10, investment entities are required to hold

subsidiaries at fair value through the Income Statement

rather than consolidate them on a line-by-line basis. There

are three key conditions to be met by the Company for

it to meet the definition of an investment entity. Further

detail on this can be found in note 2 to the Financial

Statements.

The Directors have reviewed the criteria and are satisfied

that the Company meets the criteria of an Investment

Entity under IFRS 10. As explained in note 2 to the

financial statements, the Directors are of the opinion that

the Company meets the requirements of an “Investment

Entity”. Assessing whether the Company and certain

subsidiaries met the criteria of Investment Entities, in

accordance with the definition set out in IFRS 10 was

seen as a key judgement. The Audit and Risk Committee

debated the appropriateness of adopting the standard

with the Investment Manager and external auditor. The

Audit and Risk Committee concluded that applying the

investment entity exemption to IFRS 10 will improve

stakeholders’ understanding of the financial performance

and position of the Group.

The Company’s viability statement can be found on

page 71.

Downing Renewables & Infrastructure Trust plc Annual Report | 94

Audit fees and non-audit services provided by the

Auditor

The Committee reviewed the audit plan and fees

presented by the Auditor and considered its report on the

financial statements. Total fees for the year payable to

the Auditor amounted to £312,000. This figure includes

non-audit fees of £157,50 0 in respect of the professional

fees in respect of the share issuance programme.

All non-audit services provided by the Auditor during the

year were approved in advance by the Audit and Risk

Committee and Directors. Further information on the fees

paid to the Auditor is set out in note 6 to the financial

statements.

Effectiveness of the external audit

The Committee reviews the effectiveness of the external

audit carried out by the Auditor on an annual basis. The

Chair of the Committee maintained regular contact with

the Company’s Audit Partner throughout the year and also

met with them prior to the finalisation of the audit of the

Annual Report and financial statements for the year ended

31 December 2022, without the Investment Manager

present, to discuss how the external audit was carried out,

the findings from such audit and whether any issues had

arisen from the Auditor’s interaction with the Company’s

various service providers.

Independence and objectivity of the Auditor

The Committee has considered the independence and

objectivity of the Auditor and has conducted a review of

non-audit services which the Auditor has provided during

the year under review. The Committee receives an annual

confirmation from the Auditor that its independence is not

compromised by the provision of such non-audit services.

Peter Smith is the Audit Partner allocated to the Company

by BDO LLP. The audit of the financial statements for

the year ended 31 December 2022 is his second as Audit

Partner. The Committee is satisfied that the Auditor’s

objectivity and independence is not impaired by the

performance of their non-audit services and that the

Auditor has fulfilled its obligations to the Company and its

shareholders.

Re-appointment of the Auditor

Following a review of the Auditor’s performance,

services provided during the year, and independence and

objectivity, the Committee has recommended to the Board

that BDO LLP be re-appointed as the Company’s auditor.

The approval for the re-appointment of BDO as Auditor

will be sought from shareholders at the Company’s Annual

General Meeting on 8 June 2023.

Ashley Paxton

Chair of the Audit and Risk Committee

31 March 2023

Downing Renewables & Infrastructure Trust plc Annual Report | 95

Directors’ Remuneration Report

Statement from the Chair

I am pleased to present the Directors’

Remuneration Report (the “Committee”)

for the year ended 31 December 2022.

As set out in the Corporate Governance

statement on pages 79 to 87, the

Committee comprises all Directors

and meets at least once a year to

discuss matters relating to Directors’

remuneration.

During the year ended 31 December

2022, the annual fees were set at the

rate of £50,000 for the Chair, £40,000

for the Chair of the Audit and Risk

Committee and £35,000 for a Director.

These fees levels were set in 2020, prior

to the Company’s IPO.

At its meeting in November 2022,

the Committee compared Directors’

remuneration to that of the Company’s

peer group and the average for

similar-sized investment trusts.

The Committee also reviewed the

Trust Associates 2022 Newsletter on

Investment Company Non-Executive

Directors’ Fees. The Committee

noted that Directors’ fees had not

been increased since the Company’s

incorporation, and following two

successful fundraises and rising inflation,

a modest increase in Directors’ fee

levels was deemed appropriate and in

the best interests of the Company and

its shareholders.

Therefore, following the review, the

Committee agreed to raise the Chair’s

fee to £55,000 per year, the Audit &

Risk Committee Chair’s fee to £45,000

per year, and the Directors’ fee to

£40,000 per year. These changes took

effect on 1 October 2022.

The Remuneration Policy will be

implemented in the same manner as

it was in the previous financial year.

There are no planned changes to the

Remuneration Policy in 2023.

Directors’ Fee Levels

Expected

fees for the

year ending

31 December

2023

Fees for the

year ended

31 December

2022

Chair £55,000 £50,000

Chair of the Audit and Risk Committee £45,000 £40,000

Director £40,000 £35,000

The approval of shareholders would be required to increase the aggregate limit for

Directors’ fees of £300,000 per annum, as set out in the Company’s articles of

association.

Downing Renewables & Infrastructure Trust plc Annual Report | 96

Voting at the AGM

The Directors’ Remuneration Report is put to a shareholder vote on an annual basis.

The Directors’ Remuneration Policy is put to a shareholder vote in the first year of

a Company or in any year where there is to be a change to the policy and, in any

event, at least once every three years. The Company’s Remuneration Report and

Remuneration Policy were approved by shareholders at its AGM on 6 April 2022,

and there will be no changes to the policy this year. An ordinary resolution will be

put to shareholders at the upcoming AGM in June 2023 to receive and approve the

Directors’ Remuneration Report for the year ended 31 December 2022.

The votes cast by proxy at the Company’s AGM in 2022 were as follows:

Directors’

Remuneration Report

(AGM 2022)

Directors’

Remuneration Policy

(AGM 2022)

Number of

votes

% of votes

cast

Number of

votes

% of votes

cast

For 52,161,106 99.86 52,151,106 99.82

Against 74,028 0.14 96,528 0.18

Total votes cast 52,235,134 100 52,247,634 100

Number of votes

withheld

39,325 – 26,825 –

Downing Renewables & Infrastructure Trust plc Annual Report | 97

Performance of the Company

The Company does not have a specific benchmark but has deemed the FTSE All-

Share Index to be the most appropriate comparator for its performance. This graph

has been chosen as a comparison as it is a publicly available broad equity index which

focuses on smaller companies and is therefore more relevant than most other publicly

available indices.

10 Dec

2020

10 Mar

2021

10 Jun

2021

10 Mar

2022

10 Jun

2022

10 Sep

2021

10 Dec

2021

10 Sep

2022

10 Dec

2022

DORE FTSE All-share

100

105

110

115

120

125

Total Shareholder Return

Directors’ Remuneration for the Year Ended 31 December 2022 (audited)

The remuneration paid to the Directors during the year ended 31 December 2022 is

set out in the table below:

Fees

Year ended

31 December

2022

Expenses

Year ended

31 December

2022

Total

Year ended

31 December

2022

Fees

Period ended

31 December

2021

Expenses

Period ended

31 December

2021

Total

Period ended

31 December

2021

Percentage

change

(fees only)

2021 – 2022

Hugh W M

Little

51,250 3,74 4 54,994 58,333 Nil 58,333 2.5%

Joanna

Holt

36,250 2,294 38,544 40,833 Nil 40,833 3.6%

Ashley

Paxton

41,250 3,412 44,662 46,667 Nil 46,667 3.1%

128,750 9,450 138,200 145,833 Nil 145,833

All Directors were appointed on 28 October 2020. There is no variable component to

the Directors’ pay, all pay is fixed.

Downing Renewables & Infrastructure Trust plc Annual Report | 98

Relative Importance of Spend on Pay

The table below sets out in respect of the year ended 31 December 2022:

a) the remuneration paid to the Directors;

b) the Investment management fee; and

c) the distributions made to shareholders by way of dividend.

Year ended

31 December

2022

£’000

Period ended

31 December

2021

£’000

Percentage

change

2021-2022

Directors’ remuneration 125 146 -14%

Investment management fee 1,781 1,284 38%

Dividends paid to shareholders 8,039 2,938 172%

Directors’ Interests (audited)

There is no requirement under the Company’s Articles of Association for Directors to

hold shares in the Company.

As set out in the Company’s Prospectus at IPO, Joanna Holt agreed that any fees

payable to her in respect of her first year of service should, save where the Company

and the Directors agreed otherwise, be used to acquire shares in the Company.

Downing Renewables & Infrastructure Trust plc Annual Report | 99

All of Ashley Paxton’s shares are held jointly with Alexandra Paxton, a person closely associated with Ashley Paxton.

As at 31 December 2022, the interests of the Directors and any connected persons in

the shares of the Company are set out below:

Year ended

31 December

2022

Number of

Period ended

31 December

2021

Number of

Hugh W M Little 150,000 150,000

Joanna Holt 21,085 21,085

Ashley Paxton

80,000 80,000

There have been no changes to any of the above holdings between 31 December

2022 and the date of this report.

None of the Directors or any persons connected with them had a material interest in

the Company’s transactions, arrangements or agreements during the year.

Downing Renewables & Infrastructure Trust plc Annual Report | 100

Remuneration Policy

A resolution to approve this

Remuneration Policy was proposed at

the Company’s AGM on 6 April 2022.

The resolution was passed, and the

policy provisions outlined below will

be in effect until they are next put

to shareholders for renewal of that

approval, which must happen every

three years, or if the Remuneration

Policy is changed, in which case

shareholder approval for the new

Remuneration Policy will be sought.

The Company follows the

recommendation of the AIC Code that

non-executive Directors’ remuneration

should reflect the time commitment

and responsibilities of the role. The

Board’s policy is that the remuneration

of non-executive Directors should

reflect the experience of the Board

as a whole and be determined with

reference to comparable organisations

and appointments. The fees of the

non-executive Directors are determined

within the limits set out in the

Company’s articles of association; the

Directors are not eligible for bonuses,

pension benefits, share options,

long-term incentive schemes or other

benefits. There are no performance

conditions attached to the remuneration

of the Directors as the Board does

not consider such arrangements or

benefits necessary or appropriate

for non-executive Directors. Under

the Directors’ letters of appointment,

there is no notice period, and no

compensation is payable to a Director

on leaving office.

It is the Board’s policy that Directors

do not have service contracts,

but Directors are provided with

a letter of appointment as a non-

executive Director. The terms of their

appointment provide that Directors shall

retire and be subject to election at the

first annual general meeting after their

appointment. The Directors are subject

to retirement by rotation in accordance

with the articles of association; however,

the Company has adopted the policy of

annual re-election of all Directors.

The Company is committed to ongoing

shareholder dialogue and any views

expressed by shareholders on the fees

being paid to Directors would be taken

into consideration by the Board when

reviewing the Directors’ remuneration

policy and in the annual review of

Directors’ fees.

Approval

The Directors’ Remuneration Report

was approved by the Board and signed

on its behalf by:

Ashley Paxton

Chair of the Remuneration Committee

31 March 2023

Downing Renewables & Infrastructure Trust plc Annual Report | 101

Statement of Directors’

Responsibilities

In respect of the financial statements

The Directors are responsible for preparing the Annual Report and the financial

statements in accordance with UK adopted international accounting standards and

applicable law and regulations.

Company law requires the Directors to prepare financial statements for each

financial year. Under that law the Directors are required to prepare financial

statements in accordance with UK adopted international accounting standards.

Under company law the Directors must not approve the financial statements unless

they are satisfied that they give a true and fair view of the state of affairs of the

Company and of the profit or loss for the Company for that period.

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

• select suitable accounting policies and then apply them consistently;

• state whether they have been prepared in accordance with UK adopted

international accounting standards, subject to any material departures disclosed

and explained in the financial statements;

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

• prepare the financial statements on the going concern basis unless it is

inappropriate to presume that the Company will continue in business; and

•

prepare a directors’ report, a strategic report and directors’ remuneration report

which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are

sufficient to show and explain the Company’s transactions and disclose with

reasonable accuracy at any time the financial position of the Company and enable

them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence

for taking reasonable steps for the prevention and detection of fraud and other

irregularities. The Directors are responsible for ensuring that the annual report and

accounts, taken as a whole, are fair, balanced, and understandable and provides

the information necessary for shareholders to assess the Company’s position,

performance, business model and strategy.

Downing Renewables & Infrastructure Trust plc Annual Report | 102

Website publication

The Directors are responsible for ensuring the annual report and the financial

statements are made available on a website. Financial statements are published

on the Company’s website in accordance with legislation in the United Kingdom

governing the preparation and dissemination of financial statements, which

may vary from legislation in other jurisdictions. The maintenance and integrity

of the Company’s website is the responsibility of the Directors. The Directors’

responsibility also extends to the ongoing integrity of the financial statements

contained therein.

Directors’ responsibilities pursuant to DTR4

The Directors confirm that, to the best of their knowledge:

• The financial statements have been prepared in accordance with the applicable

set of accounting standards and Article 4 of the IAS regulation and give a true

and fair view of the assets, liabilities, financial position and profit and loss of the

Company.

• The annual report includes a fair review of the development and performance

of the business and the financial position of the Company, together with a

description of the principal risks and uncertainties that they face.

On behalf of the Board.

Hugh W M Little (Chair)

31 March 2023

Downing Renewables & Infrastructure Trust plc Annual Report | 103

Downing Renewables & Infrastructure Trust plc Annual Report | 104

Independent Auditor’s Report

To the members of Downing Renewables & Infrastructure Trust Plc

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the

Company’s affairs as at 31 December 2022 and of

its profit for the year then ended;

• have been properly prepared in accordance with UK

adopted international accounting standards;

• have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the financial statements of Downing

Renewables and Infrastructure PLC (the ‘Company’) for

the year ended 31 December 2022 which comprise the

Statement of Comprehensive Income, the Statement of

Financial Position, the Statement of Changes in Equity,

the Statement of Cash Flows and notes to the financial

statements, including a summary of significant accounting

policies. The financial reporting framework that has been

applied in their preparation is applicable law and UK

adopted international accounting standards.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further

described in the Auditor’s responsibilities for the audit of

the financial statements section of our report. We believe

that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion. Our audit

opinion is consistent with the additional report to the

audit committee.

Independence

Following the recommendation of the audit committee,

we were appointed by the Board on 10 November 2020

to audit the financial statements for the period ended

31 December 2021 and subsequent financial periods.

The period of total uninterrupted engagement including

retenders and reappointments is 2 years, covering the

period ended 31 December 2021 and year ended 31

December 2022. We remain independent of the Company

in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the

UK, including the FRC’s Ethical Standard as applied to

listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these

requirements. The non-audit services prohibited by that

standard were not provided to the Company.

Conclusions relating to going concern

In auditing the financial statements, we have concluded

that the Directors’ use of the going concern basis of

accounting in the preparation of the financial statements is

appropriate. Our evaluation of the Directors’ assessment

of the Company’s ability to continue to adopt the going

concern basis of accounting included:

• Assessing and challenging the inputs in the cashflow

forecast prepared by the Directors against existing

contractual commitments, including performing

stress testing considering downside scenarios and

assessing the impact on the Company’s liquidity

position;

• Assessing assumptions used within the valuation

models to supporting documentation per the Key

audit matter noted below and considering how these

impact on the ability of the portfolio companies to

make distributions to the Company and therefore on

the Company’s ability to meet its commitments as

they fall due;

• Reviewing the future commitments of the Company

and checking they have been appropriately

incorporated into the forecast; and

• Reviewing the amount of headroom in the forecasts

of both the base case and downside scenarios.

Downing Renewables & Infrastructure Trust plc Annual Report | 105

Based on the work we have performed, we have not

identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast

significant doubt on the Company’s ability to continue as a

going concern for a period of at least twelve months from

when the financial statements are authorised for issue.

In relation to the Company’s reporting on how it has

applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to

the Directors’ statement in the financial statements about

whether the Directors considered it appropriate to adopt

the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors

with respect to going concern are described in the relevant

sections of this report.

Overview

Key audit matters 2022 2021

Valuation of investments Yes Yes

Materiality Company financial statements as a whole

£3.290m (2021:£2.125m) based on 1.5% (2021: 1.5%) of Net

assets

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the

Company and its environment, including the Company’s

system of internal control, and assessing the risks of

material misstatement in the financial statements. We

also addressed the risk of management override of internal

controls, including assessing whether there was evidence

of bias by the Directors that may have represented a risk of

material misstatement.

Key audit matters

Key audit matters are those matters that, in our

professional judgement, were of most significance in our

audit of the financial statements of the current period

and include the most significant assessed risks of material

misstatement (whether or not due to fraud) that we

identified, including those which had the greatest effect on:

the overall audit strategy, the allocation of resources in the

audit, and directing the efforts of the engagement team.

These matters were addressed in the context of our audit

of the financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion

on these matters.

Downing Renewables & Infrastructure Trust plc Annual Report | 106

Key audit matters How the scope of our audit addressed the key audit matter

Valuation of Investments

See note 9 and accounting

policy on page 122.

100% of the underlying

investment portfolio is

represented by unquoted equity

and loan investments.

The valuation of investments

is calculated using discounted

cash flow models. This is a highly

subjective accounting estimate

where there is an inherent risk of

bias arising from the investment

valuations being prepared by

the Investment Manager (with

the assistance of externally

appointed experts), who is

remunerated based on the net

asset value of the company.

These estimates include

judgements including future

power prices, power generation,

discount rates, asset lives and

inflation.

Investments at fair value

through profit or loss is the

most significant balance in the

financial statements and is

the key driver of performance

therefore we determined this to

be a key audit matter.

In respect of the all equity investments valued using discounted cash

flow models, we performed the following specific procedures:

• For new investments, obtained and reviewed purchase

agreements and contracts and considered whether inputs were

accurately reflected in the valuation model.

• For existing investments, we analysed changes in significant

assumptions and inputs compared with assumptions audited in

previous periods and vouched these to supporting documentation

and independent evidence including industry data.

• Used spreadsheet analysis tools to assess the integrity of the

valuation models.

• Agreed power generation and power price forecasts to power

purchase agreements and independent reports prepared

by management’s experts. We assessed the competency,

independence and objectivity of the management’s expert.

• Challenged the appropriateness of the selection and application

of key assumptions in the model including the discount rate,

inflation, asset life, energy yield and power price applied by

benchmarking to available industry data and with the assistance

of our internal valuations experts.

• Reviewed the corporation tax workings within the valuation

model and considered whether these had been modelled

accurately in the context of current corporation tax legislation

and rates

• Agreed a sample of cash and other net assets incorporated

into the valuation to bank statements and investee company

management accounts.

• Considered the accuracy of forecasting by comparing forecasts to

actual results.

• Vouched loans to loan agreements, verified the terms of the loans

and recalculated interest income and compared to that recorded.

For each of the key assumptions in the valuation models, we

considered the appropriateness of the assumption by benchmarking

to available industry data and consulting with our internal valuations

experts and considering whether alternative reasonable assumptions

could have been applied. We considered each assumption in isolation

as well as in conjunction with other assumptions and the valuation as

a whole in order to derive a reasonable range of valuations and assess

whether the company’s valuation was within that range.

Key observations

Based on our procedures performed we found the valuation of the

investment portfolio and judgements applied therein to be acceptable.

Downing Renewables & Infrastructure Trust plc Annual Report | 107

Our application of materiality

We apply the concept of materiality both in planning

and performing our audit, and in evaluating the effect

of misstatements. We consider materiality to be the

magnitude by which misstatements, including omissions,

could influence the economic decisions of reasonable users

that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the

probability that any misstatements exceed materiality,

we use a lower materiality level, performance materiality,

to determine the extent of testing needed. Importantly,

misstatements below these levels will not necessarily be

evaluated as immaterial as we also take account of the

nature of identified misstatements, and the particular

circumstances of their occurrence, when evaluating their

effect on the financial statements as a whole.

Based on our professional judgement, we determined

materiality for the financial statements as a whole and

performance materiality as follows:

Company financial statements

2022 2021

Materiality

£3.290m £2.125m

Basis for determining materiality 1.5% of Net Assets

Rationale for the benchmark applied Net Asset Value is a key indicator of performance and as such the most relevant

benchmark on which to base materiality for the users of the financial statements..

Performance materiality £2.303m £1.487m

Basis for determining performance materiality 70% of Materiality

Rationale for the percentage applied for

performance materiality

The level of performance materiality applied was set after having considered a

number of factors including our assessment of the Company’s overall control

environment and the expected total value of known and likely misstatements and

the level of transactions in the year.

Specific materiality

We also determined that for those items impacting

realised return, a misstatement of less than materiality for

the financial statements as a whole, specific materiality,

could influence the economic decisions of users as it is a

measure of the Company’s performance. As a result, we

determined materiality for these items to be £267k (2021:

a lower testing threshold of £217k was applied), based

on 5% of revenue return before tax (2021: 10% of gross

expenditure). We further applied a performance materiality

level of 70% (2021:70%) of specific materiality to ensure

that the risk of errors exceeding specific materiality was

appropriately mitigated.

We used a specific materiality in the current year rather

than a lower testing threshold given the presence of a

dividend target and therefore an enhanced incentive to

overstate revenue returns.

Reporting threshold

We agreed with the Audit Committee that we would report

to them all individual audit differences in excess of £65k

(2021:£42k) and for those items impacting realised return

£5k (2021: n/a). We also agreed to report differences

below these thresholds that, in our view, warranted

reporting on qualitative grounds.

Downing Renewables & Infrastructure Trust plc Annual Report | 108

Other information

The directors are responsible for the other information.

The other information comprises the information included

in the annual report other than the financial statements

and our auditor’s report thereon. Our opinion on the

financial statements does not cover the other information

and, except to the extent otherwise explicitly stated in

our report, we do not express any form of assurance

conclusion thereon. Our responsibility is to read the other

information and, in doing so, consider whether the other

information is materially inconsistent with the financial

statements or our knowledge obtained in the course of

the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent

material misstatements, we are required to determine

whether this gives rise to a material misstatement in the

financial statements themselves. If, based on the work

we have performed, we conclude that there is a material

misstatement of this other information, we are required to

report that fact.

We have nothing to report in this regard.

Corporate governance statement

The Listing Rules require us to review the Directors’

statement in relation to going concern, longer-term viability

and that part of the Corporate Governance Statement

relating to the Company’s compliance with the provisions

of the UK Corporate Governance Code specified for our

review.

Based on the work undertaken as part of our audit, we

have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent

with the financial statements or our knowledge obtained

during the audit.

Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going

concern basis of accounting and any material uncertainties identified; and

• The Directors’ explanation as to their assessment of the Company’s prospects, the

period this assessment covers and why the period is appropriate.

Other Code provisions • Directors’ statement is fair, balanced and understandable;

• Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks;

• The section of the annual report that describes the review of effectiveness of risk

management and internal control systems; and

• The section describing the work of the Audit Committee

Downing Renewables & Infrastructure Trust plc Annual Report | 109

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by

the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report

and Directors’

report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for which the

financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal

requirements.

In the light of the knowledge and understanding of the Company and its environment obtained in the course of

the audit, we have not identified material misstatements in the strategic report or the Directors’ report.

Directors’

remuneration

In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in

accordance with the Companies Act 2006.

Matters on which

we are required

to report by

exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006

requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received

from branches not visited by us; or

• the financial statements and the part of the Directors’ remuneration report to be audited are not in

agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors’

Responsibilities, the Directors are responsible for the

preparation of the financial statements and for being

satisfied that they give a true and fair view, and for such

internal control as the Directors determine is necessary to

enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are

responsible for assessing the Company’s ability to continue

as a going concern, disclosing, as applicable, matters related

to going concern and using the going concern basis of

accounting unless the Directors either intend to liquidate

the Company or to cease operations, or have no realistic

alternative but to do so.

Auditor’s responsibilities for the audit of the

financial statements

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these

financial statements.

Extent to which the audit was capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above,

to detect material misstatements in respect of irregularities,

including fraud. The extent to which our procedures

are capable of detecting irregularities, including fraud is

detailed below:

Downing Renewables & Infrastructure Trust plc Annual Report | 110

We gained an understanding of the legal and regulatory

framework applicable to the Company and the industry

in which it operates, and considered the risk of acts by

the company which were contrary to applicable laws and

regulations, including fraud. We considered the significant

laws and regulations to be compliance with Companies Act

2006, the FCA listing and DTR rules, the principles of the UK

Corporate Governance Code, requirements of s.1158 of the

Corporation Tax Act, and applicable accounting standards.

Our procedures in response to the above included:

• Agreement of the financial statement disclosures to

underlying supporting documentation;

• Enquiries of management, the board and relevant

Service Organisations regarding known or suspected

instances of non-compliance with laws and regulation

and fraud. We corroborated our enquiries through

our review of board meeting minutes for the year

and other evidence gathered during the course of the

audit; and

• Obtaining an understanding of the control

environment in monitoring compliance with laws and

regulations.

We assessed the susceptibility of the financial statements

to material misstatement, including fraud and considered

the fraud risk areas to be the valuation of investments,

revenue recognition and management override of controls.

Our procedures in response to the above included:

• The procedures set out in the Key Audit Matters

section above;

• Obtaining independent evidence to support the

ownership of investments;

• Recalculating the investment management fees in

total;

• Recalculating interest income in total and agreeing

receipts to bank; and

• Testing a risk based sample of journal entries to

supporting documentation and evaluating whether

there was evidence of bias by the Directors that

represented a risk of material misstatement due to

fraud.

We also communicated relevant identified laws and regulations

and potential fraud risks to all engagement team members and

remained alert to any indications of fraud or non-compliance

with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks

of material misstatement in the financial statements,

recognising that the risk of not detecting a material

misstatement due to fraud is higher than the risk of

not detecting one resulting from error, as fraud may

involve deliberate concealment by, for example, forgery,

misrepresentations or through collusion. There are inherent

limitations in the audit procedures performed and the

further removed non-compliance with laws and regulations

is from the events and transactions reflected in the financial

statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on

the Financial Reporting Council’s website at: www.frc.org.

uk/auditorsresponsibilities. This description forms part of

our auditor’s report.

Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been

undertaken so that we might state to the Company’s

members those matters we are required to state to them

in an auditor’s report and for no other purpose. To the

fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the Company and the

Company’s members as a body, for our audit work, for this

report, or for the opinions we have formed.

Peter Smith (Senior Statutory Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, United Kingdom

March 2023

BDO LLP is a limited liability partnership registered in

England and Wales (with registered number OC305127).

Downing Renewables & Infrastructure Trust plc Annual Report | 111Downing Renewables & Infrastructure Trust plc Annual Report | 111

Downing Renewables & Infrastructure Trust plc Annual Report | 112

Statement of Comprehensive

Income

For the year from 1 January 2022 to 31 December 2022

Notes

Revenue

December

2022

£’000s

Capital

December

2022

£’000s

Total

December

2022

£’000s

Revenue

December

2021

£’000s

Capital

December

2021

£’000s

Total

December

2021

£’000s

Income

Return on investment 5 8,044 28,058 36,102 4,978 7,327 12,305

Total income 8,044 28,058 36,102 4,978 7,327 12,305

Expenses

Investment

management fees

4 (1,781) – (1,781) (1,284) – (1,284)

Directors’ fees 18 & 22 (125) – (125) (146) – (146)

Other expenses 6 (1,001) – (1,001) (745) – (745)

Total expenses (2,907) – (2,907) (2,175) – (2,175)

Profit before taxation 5,137 28,058 33,195 2,803 7,327 10,130

Taxation 7 – – – – – –

Profit after taxation 5,137 28,058 33,195 2,803 7,327 10,130

Profit and total

comprehensive

income attributable to:

Equity holders of the

Company

5,137 28,058 33,195 2,803 7,327 10,130

Earnings per share –

Basic & diluted (pence)

8 3.2 17.4 20.6 2.6 6.8 9.4

The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance

with International Financial Reporting Standards (IFRS) as adopted. The supplementary revenue return and capital

columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended

Practice (AIC SORP).

Downing Renewables & Infrastructure Trust plc Annual Report | 113

Statement of Financial Position

As at 31 December 2022

Notes

31 December 2022

£’000s

31 December 2021

£’000s

Non-current assets

Investments at fair value through profit and loss 9 196,866 131,508

196,866 131,508

Current assets

Trade and other receivables 10 567 280

Cash and cash equivalents 15 23,328 11,254

23,895 11,534

Total assets 220,761 143,042

Current liabilities

Trade and other payables

11 (1,862) (1,201)

(1,862) (1,201)

Total liabilities (1,862) (1,201)

Net assets 218,899 141,841

Capital and reserves

Called up share capital 12 1,846 1,370

Share Premium 65,910 14,506

Special distributable reserve 13 114,618 118,435

Revenue reserve 1,140 203

Capital reserve 35,385 7, 327

Shareholders’ funds 218,899 141,841

Net asset value per ordinary share (pence) 14 118.57 103.5

The audited financial statements of Downing Renewables & Infrastructure Trust PLC were approved by the Board of

Directors and authorised for issue on 31 March 2023 and are signed on behalf of the Board by:

Hugh W M Little

Chair

Company registration number 12938740

Downing Renewables & Infrastructure Trust plc Annual Report | 114

Statement of Changes in Equity

For the year ending 31 December 2022

Notes

Capital

£’000s

Premium

£’000s

Capital

Reserve

£’000s

Revenue

Reserve

£’000s

Special

Distributable

Reserve

£’000s

Total

£’000s

Balance at the start of

the period

– – – – – –

Gross proceeds from

share issue

1,370 136,001 – – – 137,371

Bonus shares – (52) – – –

(52)

Share issue costs – (220) – – (2,450) (2,670)

Dividend – – – (2,600) (338) (2,938)

Transfer to special

distributable reserve

– (121,223) – – 121,223 –

Total comprehensive

income for the period

– – 7, 327 2,803 – 10,130

Net assets attributable

to shareholders at

31 December 2021

1,370 14,506 7,327 203 118,435 141,841

Gross proceeds from

share issue

12 476 52,375 – – – 52,851

Share issue costs 12 – (971) – – 22 (949)

Dividends 20 – – – (4,201) (3,840) (8,041)

Total comprehensive

income for the year

– – 28,058 5,137 – 33,195

Net assets attributable

to shareholders at

31 December 2022

1,846 65,910 35,385 1,140 114,618 218,899

The Company’s distributable reserves consist of the Special distributable reserve, Capital reserve attributable to realised

gains and Revenue reserve. There have been no realised gains or losses at the reporting date.

Downing Renewables & Infrastructure Trust plc Annual Report | 115

Statement of Cash Flows

For the year ending 31 December 2022

Notes

Year to

31 December 2022

£000s

Incorporation to

31 December 2021

£000s

Cash flows from operating activities

Profit before taxation 33,196 10,130

Adjusted for:

Interest income 5 (7,792) (4,978)

Unrealised gains on investments at fair value 5 (28,058) (7,327 )

Increase in receivables (285) (280)

Increase in payables 661 1,201

Net cash outflows from operating activities (2,278) (1,254)

Cash flows from investing activities

Purchase of investments 9 (38,008) (121,749)

Loan Interest Received 9 8,500 2,546

Net cash outflows from investing activities (29,508) (119,203)

Cash flows from financing activities

Gross proceeds of share issue 12 52,852 137,371

Bonus shares 12 – (52)

Dividends Paid 20 (8,041) (2,938)

Share issue costs 12 (949) (2,670)

Net cash flows from financing activities 43,862 131,711

Increase in cash and cash equivalents 12,074 11,254

Cash and cash equivalents at the start of the year 11,254 –

Cash and cash equivalents at the end of the year 15 23,328 11,254

Downing Renewables & Infrastructure Trust plc Annual Report | 116

Notes to the

Financial Statements

1. General Information

The Company is registered in England

and Wales under number 12938740

pursuant to the Companies Act 2006 and

its registered office Link Company Matters

Limited 6th Floor, 65 Gresham Street,

London, United Kingdom, EC2V 7NQ.

The Company was incorporated on

8 October 2020 and is a Public Limited

Company and the ultimate controlling

party of the group. The Company’s

ordinary shares were first admitted to

the premium segment of the Financial

Conduct Authority’s Official List and to

trading on the Main Market of the London

Stock Exchange under the ticker DORE on

10 December 2020.

The audited financial statements of the

Company (the “financial statements”) are

for the period from 1 January 2022 to

31 December 2022 and comprise only

the results of the Company, as all of its

subsidiaries are measured at fair value in

line with IFRS 10 as disclosed in note 2.

The Company’s objective is to generate

an attractive total return for investors

comprising stable dividend income

and capital preservation, with the

opportunity for capital growth through

the acquiring and realising value from a

diverse portfolio of renewable energy

infrastructure projects.

The Company currently makes its

investments through its principal

holding company and single subsidiary,

DORE Hold Co Limited (“Hold Co”), and

intermediate holding companies which

are directly owned by the Hold Co.

The Company controls the Investment

Policy of each of the Hold Co and its

intermediate holding companies in order

to ensure that each will act in a manner

consistent with the Investment Policy of

the Company.

The Company has appointed Downing

LLP as its Investment Manager (the

“Investment Manager”) pursuant to the

Investment Management Agreement

dated 12 November 2020. The

Investment Manager is registered in

England and Wales under number

OC341575 pursuant to the Companies

Act 2006. The Investment Manager is

regulated by the FCA, number 545025.

2. Basis of preparation

The financial statements have been

prepared in accordance with UK-adopted

international accounting standards and

with the requirements of the Companies

Act 2006 as applicable to companies

reporting under those standards.

The financial statements have also

been prepared as far as is relevant and

applicable to the Company in accordance

with the Statement of Recommended

Practice: Financial Statements of

Investment Trust Companies and

Venture Capital Trusts (“SORP”) issued

in October 2019 by the Association of

Investment Companies (“AIC”).

The financial statements are prepared

on the historical cost basis, except

For the year ending 31 December 2022

Downing Renewables & Infrastructure Trust plc Annual Report | 117

for the revaluation of certain financial

instruments at fair value through profit

or loss. The principal accounting policies

adopted are set out below. These policies

are consistently applied.

The financial statements are presented

in Sterling, which is the Company’s

functional currency and are rounded

to the nearest thousand, unless

otherwise stated.

Estimates and underlying assumptions

are reviewed regularly on an on-going

basis. Revisions to accounting estimates

are recognised in the year in which the

estimates are revised and in any future

year affected. The significant estimates,

judgement or assumptions for the year are

set out on page 119.

Basis of Consolidation

The sole objective of the Company and

through its subsidiary DORE Hold Co

Limited is to own Renewable Energy

Infrastructure Projects, via individual

corporate entities. Hold Co typically

will issue equity and loans to finance

its investments.

The Directors have concluded that in

accordance with IFRS 10, the Company

meets the definition of an investment

entity having evaluated the criteria that

needs to be met (see below). Under

IFRS 10, investment entities are required

to hold subsidiaries at fair value through

profit or loss rather than consolidate them

on a line-by-line basis, meaning Hold Co’s

cash, debt and working capital balances are

included in the fair value of the investment

rather than in the Company’s assets and

liabilities. Hold Co has one investor which

is the Company. However, in substance,

Hold Co is investing the funds of the

investors of the Company on its behalf

and is effectively performing investment

management services on behalf of many

unrelated beneficiary investors.

Characteristics of an investment entity

There are three key conditions to be met by

the Company for it to meet the definition

of an investment entity. For each reporting

year, the Directors will continue to assess

whether the Company continues to meet

these conditions:

• It obtains funds from one or more

investors for the purpose of providing

these investors with professional

investment management services;

• It commits to its investors that its

business purpose is to invest its funds

solely for the returns (including having

an exit strategy for investments) from

capital appreciation, investment income

or both; and

• It measures and evaluates the

performance of substantially all its

investments on a fair value basis.

In satisfying the second criterion, the notion

of an investment timeframe is critical.

An investment entity should not hold its

investments indefinitely but should have

an exit strategy for their realisation. The

Downing Renewables & Infrastructure Trust plc Annual Report | 118

Company intends to hold its renewable

energy infrastructure assets for the

remainder of their useful life to preserve the

capital value of the portfolio. However, as

the renewable energy infrastructure assets

are expected to have no residual value after

their useful lives, the Directors consider that

this demonstrates a clear exit strategy from

these investments.

Subsidiaries are therefore measured at fair

value through profit or loss, in accordance

with IFRS 13 “Fair Value Measurement”,

IFRS 10 “Consolidated Financial Statements”

and IFRS 9 “Financial Instruments”.

The Directors believe the treatment

outlined above provides the most relevant

information to investors.

Going concern

The Directors have adopted the going

concern basis in preparing the Annual

Report. The following is a summary of the

Director’s assessment of going concern

status of the Company. In reaching this

conclusion, the Directors have considered

the liquidity of the Company’s portfolio

of investments as well as its cash

position, income and expense flows. As at

31 December 2022, the Company had net

assets of £218.9 million (2021: £141.8)

million including cash balances of £23.3

(2021: £11.3) million which are sufficient

to meet current obligations as they fall

due. Since the year end £5.1 million has

been spent on new acquisitions. The

Group, through one of its unconsolidated

subsidiaries, utilised EUR 27.4 million

of its facility with SEB to help fund the

additional hydropower acquisitions.

Through its main subsidiary, DORE Hold

Co Limited, the Company has access to a

RCF of £40

million which is available for

either new investments or investment in

existing projects and working capital. At

the reporting date £0m had been drawn

down from the RCF.

The Directors and the Investment

Manager continue to actively monitor this

and its potential effect on the Company

and its investments.

In particular, they have considered the

following specific key potential impacts:

• Unavailability of key personnel at the

Investment Manager or Administrator;

and

• Increased volatility in the fair value of

investments.

The directors have considered the impact

of the Ukraine war on SPV revenues,

which are derived from the sale of

electricity, and note that 58% of revenues

are not exposed to floating power prices.

Revenue is received through power

purchase agreements in place with

providers of electricity to the market

and also through government subsidies.

In the year since acquisition and up to

the date of this report, there has been

no significant impact on revenue and

cash flows of the SPVs. The SPVs have

contractual operating and maintenance

agreements in place with large and

reputable providers. Therefore, the

Directors and the Investment Manager

Downing Renewables & Infrastructure Trust plc Annual Report | 119

do not anticipate a threat to the

Group’s revenue.

The Directors do not consider that the

effects of COVID-19 have created a

material uncertainty over the assessment

of the Company as a going concern.

The Directors have reviewed Company

forecasts and projections which cover

a period of at least 12 months from

the date of approval of this report,

considering foreseeable changes in

investment and trading performance,

which show that the Company has

sufficient financial resources to continue

in operation for at least the next

12 months from the date of approval of

this report. The directors have considered

the impact of the current economic

environment in their review. On the

basis of this review, and after making

due enquiries, the Directors have a

reasonable expectation that the Company

has adequate resources to continue in

operation and accordingly. They continue

to adopt the going concern basis in

preparing the financial statements.

Segmental reporting

The Chief Operating Decision Maker (the

“CODM”) being the Board of Directors,

is of the opinion that the Company is

engaged in a single segment of business,

being investment in renewable energy

infrastructure.

The Company has no single major

customer. The internal financial

information to be used by the CODM on

a quarterly basis to allocate resources,

assess performance and manage the

Company will present the business as a

single segment comprising the portfolio

of investments in renewable energy

infrastructure assets.

Critical accounting judgements, estimates

and assumptions

In the application of the Company’s

accounting policies, which are described

in note 3, the Directors are required

to make judgements, estimates and

assumptions about the fair value of

assets and liabilities that affect reported

amounts. It is possible, that actual results

may differ from these estimates.

The preparation of the financial

statements requires management

to make judgements, estimates and

assumptions that affect the application of

the accounting policies and the reported

amount of assets, liabilities, income and

expenses. Estimates, by their nature,

are based on judgement and available

information, hence actual results may

differ from these judgements, estimates

and assumptions.

The key assumptions that have a

significant impact on the carrying value

of investments that are valued by

reference to the discounted value of

future cashflows are the useful life of

the assets, the discount rates, the rate

of inflation, the price at which the power

and associated benefits can be sold and

Downing Renewables & Infrastructure Trust plc Annual Report | 120

the amount of electricity the assets are

expected to produce. The sensitivity

analysis of these key assumptions

is outlined in note 9 to the financial

statements, on page 128.

Useful lives are based on the Investment

Manager’s estimates of the period over

which the assets will generate revenue

which are periodically reviewed for

continued appropriateness. Where land

is leased from an external landlord, the

operational life assumed for the purposes

of the asset valuations is valued at the

earlier of planning or lease expiry. Where

a project has a life in excess of 75

years,

the land it is located on is owned and

there are no constraints regarding

planning, asset valuations are based on a

perpetual life including long term capital

expenditure assumptions. This is the

basis for the valuation of the hydropower

assets. The actual useful life may be a

shorter or longer period depending on the

actual operating conditions experienced

by the asset.

The discount rates are subjective

and therefore it is feasible that a

reasonable alternative assumption

may be used resulting in a different

value. The discount rates applied to the

cashflows are reviewed regularly by the

Investment Manager to ensure they are

at the appropriate level. The Investment

Manager will take into consideration

market transactions, where of similar

nature, when considering changes to the

discount rates used.

The revenues and expenditure of the

investee companies are frequently, partly,

or wholly subject to indexation and an

assumption is made as to near term and

long-term rates.

The price at which the output from

the generating assets is sold is a factor

of both wholesale electricity prices

and the revenue received from the

Government support regimes. Future

power prices are estimated using

external third-party forecasts which

take the form of specialist consultancy

reports, which reflect various factors

including gas prices, carbon prices and

renewables deployment, each of which

reflect the UK and global response to

climate change.

The Company’s investments in unquoted

investments are valued by reference to

valuation techniques approved by the

Directors and in accordance with the

International Private Equity and Venture

Capital (“IPEV”) Guidelines.

As noted above, the Board have

concluded that the Company meets

the definition of an investment entity

as defined in IFRS 10. This conclusion

involved a degree of judgement and

assessment as to whether the Company

meets the criteria outlined in the

accounting standards.

Downing Renewables & Infrastructure Trust plc Annual Report | 121

New, revised and amended standards

applicable to future reporting periods

There were no new standards or

interpretations effective for the first

time for periods beginning on or after

incorporation that had a significant effect

on the Company’s financial statements.

Furthermore, none of the amendments to

standards that are effective from that date

had a significant effect on the financial

statements.

New and revised standards not applied

At the date of authorisation of these

financial statements, the following

amendments had been published and

will be mandatory for future accounting

periods. Effective for accounting periods

beginning on or after 1 January 2022:

• a number of narrow-scope amendments

to IFRS 3 “Business combinations”,

IAS 16 “Property, plant and equipment”,

IAS 37 “Provisions, contingent liabilities

and contingent assets” and annual

improvements on IFRS 1 “First-time

Adoption of IFRS”, IFRS 9 “Financial

instruments”, IAS 41 “Agriculture” and

the Illustrative Examples accompanying

IFRS 16 “Leases”.

Effective for accounting periods beginning

on or after 1 January 2023:

• Narrow-scope amendments to

IAS 1 “Presentation of Financial

Statements”, Practice statement 2 and

IAS 8 “Accounting Policies, Changes in

Accounting Estimates and Errors”.

• Amendments to IAS 12, “Income

Taxes” – deferred tax related to assets

and liabilities arising from a single

transaction.

• Amendments to IFRS 17, “Insurance

contracts” – this standard replaces

IFRS 4, which currently permits a wide

variety of practices in accounting for

insurance contracts.

Effective for accounting years beginning

on or after 1 January 2024:

• Amendments to IAS 1 on classification

of liabilities clarify that liabilities are

classified as either current or non-

current, depending on the rights that

exist at the end of the reporting year.

The impact of these standards is

not expected to be material to the

reported results and financial position of

the Company.

Downing Renewables & Infrastructure Trust plc Annual Report | 122

3. Significant Accounting Policies

Financial Instruments

Financial assets and financial liabilities are

recognised on the Company’s Statement

of Financial Position when the Company

becomes a party to the contractual

provisions of the instrument. Financial

assets are to be de-recognised when

the contractual rights to the cash flows

from the instrument expire or the asset

is transferred, and the transfer qualifies

for de-recognition in accordance with

IFRS 9 Financial Instruments.

Financial assets

The Company classifies its financial

assets as either investments at fair value

through profit or loss or financial assets

at amortised cost. The classification

depends on the purpose for which the

financial assets are acquired. Management

determines the classification of its

financial assets at initial recognition.

Investments at fair value through profit or

loss (“FVTPL”)

The fair value of investments in

renewable energy infrastructure

projects is calculated by discounting at

an appropriate discount rate future cash

flows expected to be received by the

Company’s intermediate holdings, from

investments in both equity (dividends

and equity redemptions), shareholder

and inter-company loans (interest and

repayments).

Investments are designated upon

initial recognition as held at fair value

through profit or loss. Gains or losses

resulting from the movement in fair

value are recognised in the Statement of

Comprehensive Income at each valuation

point. As shareholder loan investments

form part of a managed portfolio of

assets whose performance is evaluated

on a fair value basis, loan investments are

designated at fair value in line with equity

investments. The Company’s loan and

equity investments in Hold Co are held

at fair value through profit or loss. Gains

or losses resulting from the movement in

fair value are recognised in the Company’s

Statement of Comprehensive Income at

each valuation point.

Financial assets are recognised/

derecognised at the date of the purchase/

disposal. Investments are initially

recognised at cost, being the fair value

of consideration given. Transaction

costs are recognised in the Statement of

Comprehensive Income as incurred. Fair

value is defined as the amount for which

an asset could be exchanged between

knowledgeable willing parties in an arm’s

length transaction. Fair value is calculated

on a levered, discounted cashflow basis in

accordance with IFRS 13.

Financial assets at amortised cost

Loans and other receivables are measured

at amortised cost using the effective

interest method, less any impairment.

They are included in current assets,

except where maturities are greater

than 12 months after the reporting date,

Downing Renewables & Infrastructure Trust plc Annual Report | 123

in which case they are to be classified

as non-current assets. The Company’s

financial assets held at amortised cost

comprise “other receivables” and “cash

and cash equivalents” in the statement of

financial position.

Impairment

Impairment provisions for loans and

receivables are recognised based on a

forward-looking expected credit loss

model. All financial assets assessed under

this model are immaterial to the financial

statements.

Financial liabilities

Financial liabilities are classified as other

financial liabilities, comprising other

non-derivative financial instruments,

including trade and other payables, which

are to be measured at amortised cost

using the effective interest method.

Financial liabilities and equity

Debt and equity instruments are classified

as either financial liabilities or as equity

in accordance with the substance of the

contractual arrangement.

Equity instruments

The Company’s Ordinary Shares

are classified as equity and are not

redeemable. Costs associated or directly

attributable to the issue of new equity

shares are recognised as a deduction in

equity and are charged either from the

share premium account or the special

distributable reserve, created on court

cancellation of share premium account.

Taxation

The Company is approved as an

Investment Trust Company (“ITC”)

under sections 1158 and 1159 of the

Corporation Taxes Act 2010 and part

2 Chapter 1 Statutory Instrument

2011/2999. The approval is subject to

the Company continuing to meet the

eligibility conditions of the Corporation

Tax Act 2010. The Company intends

to ensure that it complies with the ITC

regulations on an ongoing basis and

regularly monitors the conditions required

to maintain ITC status.

Under the current system of taxation

in the UK, the Company is not liable to

taxation on its operations in the UK.

Current tax is the expected tax payable

on the taxable income for the year, using

tax rates that have been enacted or

substantively enacted at the date of the

Statement of Financial Position.

Dividends

Dividends to the Company’s shareholders

are recognised when they become legally

payable. In the case of interim dividends,

this is when they are paid. In the case

of final dividends, this is when they are

approved by the shareholders at the

Annual General Meeting.

Downing Renewables & Infrastructure Trust plc Annual Report | 124

Income

Income includes investment income from

financial assets at FVTPL and finance

income.

Investment income from financial assets

at FVTPL is recognised in the Statement

of Comprehensive Income within income

when the Company’s right to receive

payments is established.

Finance income comprises interest earned

on intercompany loans and is recognised

on an accruals basis.

Expenses

Expenses are accounted for on an

accruals basis. Share issue expenses

directly attributable to the listing of shares

are charged through profit and loss with

incremental costs associated with raising

capital charged through the Special

Distributable Reserve or Share Premium

Account. The Company’s investment

management fee, administration fees

and all other expenses are charged

through the Statement of Comprehensive

Income. In respect of the analysis

between revenue and capital these items

are presented and charged 100% as

revenue items.

Cash and cash equivalents

Cash and cash equivalents comprise

cash balances, deposits held on call with

banks and other short-term highly liquid

deposits with original maturities of three

months or less.

Deposits to be held with original

maturities of greater than three months

are included in other financial assets.

There are no expected credit losses as

the bank institutions will have high credit

ratings assigned by international credit

rating agencies.

4. Investment management fees

Under the terms of the Investment

Management Agreement, the Investment

Manager is entitled to a management fee

from the Company, which is calculated

quarterly in arrears at 0.95% of NAV per

annum up to £500 million and 0.85% per

annum of NAV in excess of £500 million.

The Company incurred £1,780,561 (2021:

£353,135) of management fees during

the year, investment management fees of

£1,426,289 (2021: £933,414) were unpaid

at the year end.

No performance fee is payable to

the Investment Manager under the

Investment Management Agreement and

there are no provisions that would entitle

the Investment Manager to a performance

fee in respect of future years.

Downing Renewables & Infrastructure Trust plc Annual Report | 125

5. Return on investment

31 December

2022

£’000s

31 December

2021

£’000s

Unrealised movement in fair value of investments (Note 9) 28,058 7, 327

Interest receivable on shareholder loans (Note 9) 7,792 4,978

Provision of Corporate Services to DORE Holdco Limited

252 0

36,102 12,305

6. Other expenses

31 December

2022

£’000s

31 December

2021

£’000s

Alternative investment fund manager fee 152 110

Fees payable to the Company’s auditor for the audit of

the Company’s annual accounts

167 96

Fees payable to the Company’s auditor for other services – 89

Company secretarial fee 58 62

Legal fees 69 87

Depositary fee 49 48

Hedging advisory 25 39

Marketing fee 64 53

Broker fee 88 53

Retainer fee – 34

Professional fees 199 –

Other fees 130 74

1,001 745

Downing Renewables & Infrastructure Trust plc Annual Report | 126

Total fees payable to BDO LLP for non-audit services during the year were £157,500

(2021: £88,500) for professional fees provided in respect of the share issuance

programme, this cost was taken directly to share premium. These services were pre-

approved by the Audit and Risk Committee and are not subject to the fee cap. Audit fees

which relate to the year ending 31 December 2022 were £154,500, £12,500 relate to

accruals for the period ending 31 December 2021.

7. Taxation

Taxable income during the year was offset by expenses and the tax charge for the year

ended 31 December 2022 is £Nil.

As described above, the Company is recognised as an ITC for accounting years and

therefore not liable to UK taxation. To the extent that there is insufficient group tax relief

available to eliminate taxable profits, the Company may make interest distributions to

reduce taxable profits to nil.

(a) Analysis of charge in the year

Revenue

£’000

Capital

£’000

Total

£’000

Analysis of tax charge / (credit) in the year:

Current tax:

UK corporation tax on profits of the year – – –

Adjustments in respect of previous year – – –

Deferred tax:

Origination & reversal of timing differences – – –

Adjustments in respect of previous years – – –

Tax charge / (credit) on profit on ordinary activities – – –

Downing Renewables & Infrastructure Trust plc Annual Report | 127

(b) Factors affecting total tax charge for the year

The effective UK corporation tax rate applicable to the Company for the year is 19%.

The tax charge differs from the charge resulting from applying the standard rate of UK

corporation tax for an investment trust company. The differences are explained below.

Revenue

£’000

Capital

£’000

Total

£’000

Profit / (Loss) on ordinary activities before tax 5,336 25,058 30,394

Profit on ordinary activities multiplied by standard

rate of corporation tax in the UK of 19%

1,013 4,761 5,774

Effect of:

Capital profits not taxable – (4,761) (4,761)

Non-taxable income – – –

Expenses non deductible –

Interest distributions (1,013) – (1,013)

Timing differences – – –

Group relief – – –

Excess management expenses – – –

Total charge / (credit) for the year

– – –

HM Revenue & Customs (“HMRC”) has granted approval to the Company’s status as an

investment trust, and it is the Company’s intention to continue meeting the conditions

required to obtain approval in the foreseeable future. Investment companies which

have been approved by HMRC under section 1158 of the Corporation Tax Act 2010,

as amended are exempt from tax on capital gains.

The March 2021 Budget announced a further increase to the main rate of corporation

tax to 25% from 1 April 2023. This rate has been substantively enacted at the balance

sheet date.

There is no unrecognised deferred tax asset or liability at 31 December 2022.

Downing Renewables & Infrastructure Trust plc Annual Report | 128

8. Earnings per share

Revenue

£’000s

Capital

£’000s

Total

£’000s

Revenue and capital profit attributable

to equity holders of the Company

5,137 28,058 33,196

Weighted average number of ordinary

shares in issue

161,532,958 161,532,958 161,532,958

Basic and diluted earnings per share

(pence)

3.2 17.4 20.6

Basic and diluted earnings per share are the same as there are no arrangements which

could have a dilutive effect on the Company’s ordinary shares.

9. Investments at fair value through profit and loss

Total

2022

£’000s

Total

2021

£’000s

Fair value at start of the year 131,508 –

Loan advanced to DORE Hold Co Limited 38,008 113,749

Shareholding in DORE Hold Co limited – 8,000

Unrealised gain on investments at FVTPL 28,058 7,327

Loan Interest (movement) (708) 2,432

Fair value at end of the year 196,866 131,508

There is a loan agreement between the Company and DORE Hold Co Limited

for £200,000,000 (2021: £120,000,000). At the reporting date £151,756,990

(2021: £113,748,641) had been advanced. The rate of interest on the loan is a rate agreed

between DORE Hold Co Limited and the Company and has been set at 6% per annum.

Interest accrued at the year end and outstanding at the reporting date amounted to

£1,724,341 (2021: £2,432,398). Interest is repayable at the repayment date of 31 December

2030 unless otherwise agreed between the parties to repay earlier.

Downing Renewables & Infrastructure Trust plc Annual Report | 129

The Company received interest payments of £8,500,000 (2021: £2,546,000) during

the year. Included in the fair value are cash balances at DORE Hold Co of £4.8 million

(2021: £21.8 million).

The Company owns 100% of the nine shares in DORE Hold Co Limited. These shares

were allotted for a consideration of £8,000,000.

Fair value measurements

IFRS 13 “Fair Value Measurement” requires disclosure of fair value measurement by level.

The level of fair value hierarchy within the financial assets or financial liabilities ranges

from level 1 to level 3 and is determined on the basis of the lowest level input that is

significant to the fair value measurement.

The fair value of the Company’s investments is ultimately determined by the underlying

net present values of the SPV (“Special Purpose Vehicle”) investments. Due to their

nature, they are always expected to be classified as level 3 as the investments are not

traded and contain unobservable inputs.

The fair value hierarchy consists of the following three levels:

• Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 - Inputs other than quoted prices included within Level 1 that are observable

for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived

from prices).

• Level 3 - Inputs for the asset or liability that are not based on observable market data

(unobservable inputs).

Downing Renewables & Infrastructure Trust plc Annual Report | 130

The following table analyses the Company's assets at 31 December 2022:

Level 1

£’000s

Level 2

£’000s

Level 3

£’000s

Total

£’000s

Investment portfolio summary

Unquoted investments at fair

value through profit and loss

– – 196,866 196,866

Total – – 196,866 196,866

The determination of what constitutes ‘observable’ requires significant judgement by

the Company. Observable data is considered to be market data that is readily available,

regularly distributed or updated, reliable and verifiable, not proprietary, and provided by

independent sources that are actively involved in the relevant market.

The only investment held at fair value is the investment in DORE Holdco Limited, which is

fair valued at each reporting date. The investment has been classified within level

3 as the

investment is not traded and contains unobservable inputs.

As the fair value of the Company’s equity and loan investments in Hold Co is ultimately

determined by the underlying fair values of the SPV investments, the Company’s

sensitivity analysis of reasonably possible alternative input assumptions is the same as for

the Group.

There have been no transfers between levels during the year.

Valuations are derived using a discounted cashflow methodology in line with IPEV

Valuation Guidelines and take into account, inter alia, the following:

i. due diligence findings where relevant;

ii. the terms of any material contracts including PPAs;

iii. asset performance;

iv. power price forecasts from leading market consultants; and

v. the economic, taxation or regulatory environment.

Downing Renewables & Infrastructure Trust plc Annual Report | 131

The DCF valuations of the Company’s investments represent the largest component of

GAV and the key sensitivities are considered to be the discount rate used in the DCF

valuations and assumptions in relation to inflation, energy yield, foreign exchange and

power price.

The shareholder loan and equity investments are valued as a single class of financial asset

at fair value in accordance with IFRS 13 Fair Value Measurement.

Sensitivity

Sensitivity analysis is produced to show the impact of changes in key assumptions

adopted to arrive at the valuation. For each of the sensitivities, it is assumed that

potential changes occur independently of each other with no effect on any other base

case assumption, and that the number of investments in the portfolio remains static

throughout the modelled life. Accordingly, the NAV per share impacts shown below

assume the issue of further shares to fund these commitments.

Information on climate related sensitivities can be found on pages 25 and 26.

The analysis below shows the sensitivity of the portfolio value (and its impact on NAV)

to changes in key assumptions as follows:

Discount rate

The weighted average valuation discount rate applied to calculate the portfolio valuation

is 7.7%.

An increase or decrease in this rate by 1.0% points has the following effect on valuation.

Discount rate NAV per

impact

-1.0%

change

£’000s

Total

portfolio

Value

£’000s

+1.0%

change

£’000s

NAV per

impact

Directors’ valuation –

Dec 2022

10.53 19,438 196,866 (16,238) (8.80)

Downing Renewables & Infrastructure Trust plc Annual Report | 132

Energy yield

The table below shows the sensitivity of the portfolio valuation to a sustained decrease

or increase of energy generation by minus or plus 5% on the valuation, with all other

variables held constant. The fair value of the solar investments is based on a “P50” level

of electricity generation for the renewable energy assets, being the expected level of

generation over the long term. For hydropower assets, the expected annual average

production is applied to the valuation, similar to the P50 assumption applied to solar and

wind assets.

A change in the forecast energy yield assumptions by plus or minus 5% has the following

effect.

Energy Yield NAV per

impact

-5%

change

£’000s

Total

portfolio

Value

£’000s

+5%

change

£’000s

NAV per

impact

Directors’ valuation –

Dec 2022

(9.42) (17, 383) 196,866 17, 369 9.41

Power prices

The sensitivity considers a flat 10% movement in power prices for all years, i.e. the

effect of adjusting the forecast electricity price assumptions in each of the jurisdictions

applicable to the portfolio down by 10% and up by 10% from the base case assumptions

for each year throughout the operating life of the portfolio.

A change in the forecast electricity price assumptions by plus or minus 10% has the

following effect.

Power Prices NAV per

impact

-10%

change

£’000s

Total

portfolio

Value

£’000s

+10%

change

£’000s

NAV per

impact

Directors’ valuation –

Dec 2022

(9.84) (18,172) 196,866 18,126 9.82

Downing Renewables & Infrastructure Trust plc Annual Report | 133

Inflation

The projects’ income streams are principally a mix of subsidies, which are amended

each year with inflation, and power prices, which the sensitivity assumes will move

with inflation. The projects’ operating expenses typically move with inflation, but debt

payments are fixed. This results in the portfolio returns and valuation being positively

correlated to inflation. The weighted average long-term inflation assumption across the

portfolio is 2.4%.

The sensitivity illustrates the effect of a 1.0% decrease and a 1.0% increase from the

assumed annual inflation rates in the financial model for each year throughout the

operating life of the portfolio.

Inflation NAV per

impact

-1.0%

change

£’000s

Total

portfolio

Value

£’000s

+1.0%

change

£’000s

NAV per

impact

Directors’ valuation –

Dec 2022

(5.52) (10,192) 196,866 11,263 6.10

Foreign exchange

The Company, where appropriate, seeks to manage its exposure to foreign exchange

movements, to ensure that the Sterling value of known future investment commitments

is fixed. The portfolio valuation assumes foreign exchange rates based on the relevant

foreign exchange rates against GBP at the reporting date. A change in the foreign

exchange rate by plus or minus 10% (Euro against Swedish Krona), has the following effect

on the NAV, with all other variables held constant. The effect is shown after the effect of

current level of hedging which reduces the impact of foreign exchange movements on the

Company’s NAV.

Foreign Exchange NAV per

impact

-10%

change

£’000s

Total

portfolio

Value

£’000s

+10%

change

£’000s

NAV per

impact

Directors’ valuation –

Dec 2022

(8.26) (15,258) 196,866 18,606 10.08

Downing Renewables & Infrastructure Trust plc Annual Report | 134

10. Trade and other receivables

31 December

2022

£’000s

31 December

2021

£’000s

Prepayments 271 14

VAT 44 266

Debtors 252 –

567 280

11. Trade and other Payables

31 December

2022

£’000s

31 December

2021

£’000s

Accounts Payable 1,098 51

Accruals 764 1,150

1,862 1,201

Included in the accruals amount at the year end, £525,893 relates to the management fee

charged by Downing LLP during the year.

Downing Renewables & Infrastructure Trust plc Annual Report | 135

12. Called up share capital

Allotted, issued and fully paid: Number of Shares

Opening Balance at 1 January 2022 137, 0 0 8, 4 87

Ordinary Shares issued – June 2022 47,614,000

Closing Balance of Ordinary Shares at 31 December 2022 184,622,487

Each ordinary share has equal rights to dividends and has equal rights to participate in a

distribution arising from a winding up of the Company.

The Company issued 47,614,000 additional ordinary shares on 27 June 2022 raising

gross proceeds of £52,851,540. The share issue costs incurred to raise the funding

was

£971,557. Accrued share issuance costs of £22,432 relating to the previous

accounting year was rebated. The net share issuance costs for the year therefore

amounted to £949,124.

13. Special distributable reserve

At 31 December 2022 the special distributable reserve account was £114,617,564.

(2021: 118,435,271).

14. Net asset value per ordinary share

The basic total net assets per ordinary share is based on the net assets attributable to

equity shareholders as at 31 December 2022 of £218,899,172 (2021: £141,841,774) and

ordinary shares of 184,622,487 (2021: 137,008,487) in issue at 31 December 2022.

There is no dilution effect and therefore no difference between the diluted total net assets

per ordinary share and the basic total net assets per ordinary share.

Downing Renewables & Infrastructure Trust plc Annual Report | 136

15. Cash and Cash equivalents

At the year end, the Company had cash of £23.3 (2021: £11.3) million. This balance was

held by the Royal Bank of Scotland.

16. Financial Risk Management

The Company’s investment activities expose it to a variety of financial risks, including,

interest rate risk, foreign exchange risk, power price risk, credit risk and liquidity risk. The

Board of Directors have overall responsibility for overseeing the management of financial

risks, however the review and management of financial risks are delegated to the AIFM

and Investment Manager.

Each risk and its management are summarised below.

Foreign exchange risk

Foreign exchange risk is defined as the risk that the fair value of future cash flows will

fluctuate because of changes in foreign exchange rates. The Company monitors its

foreign exchange exposures using its near-term and long-term cash flow forecasts. Its

policy is to use foreign exchange hedging to provide protection to the level of sterling

distributions that the Company aims to receive from portfolio companies over the

medium-term, where considered appropriate. This may involve the use of forward

exchange. The Company's sensitivity to foreign exchange risk can be seen in note 9.

Interest rate risk

The Company may be exposed to changes in variable market rates of interest as this could

impact the discount rate and therefore the valuation of the projects as well as the fair

value of the loan receivables. The Company is not considered to be materially exposed to

interest rate risk.

Downing Renewables & Infrastructure Trust plc Annual Report | 137

The Company’s interest and non-interest bearing assets and liabilities as at 31 December

2022 are summarised below:

Assets Interest

Bearing

£’000s

Non-

Interest

bearing

£’000s

Total

£’000s

Cash and cash equivalents – 23,328 23,328

Trade and other receivables – 567 567

Investments at fair value through profit and loss 151,757 45,109 196,866

Total assets at 31 December 2022 151,757 69,004 220,761

Total assets at 31 December 2021 113,749 29,293 143,042

Liabilities

Accrued expenses – (1,862) (1,862)

Total liabilities at 31 December 2022 – (1,862) (1,862)

Total liabilities at 31 December 2021 – (1,201) (1,201)

Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its financial obligations

as they fall due. The Investment Manager, AIFM and the Board continuously monitor

forecast and actual cash flows from operating, financing, and investing activities to

consider payment of dividends, repayment of trade and other payables or funding further

investing activities.

The Company ensures it maintains adequate reserves, will put in place banking facilities

and will continuously monitor forecast and actual cash flows to seek to match the

maturity profiles of financial assets and liabilities.

Downing Renewables & Infrastructure Trust plc Annual Report | 138

At the year end, the Company’s investments were in secured loan and equity investments

in private companies, in which there is no listed market and therefore such investments

would take time to realise, and there is no assurance that the valuations placed on the

investments would be achieved from any such sale process. The Company’s Hold Co is

the entity through which the Company holds its investments, the liquidity of Hold Co

is reflective of the investments in which it holds. The Company’s main subsidiary holds an

RCF, which has currently been undrawn.

Less than

1 year

1-5

years

More than

5 years

Total

£’000 £’000 £’000 £’000

Assets

Investments at fair value

through profit and loss (note 9)

– – 196,866 196,866

Trade and other receivables 252 – – 252

Cash and cash equivalents 23,328 – – 23,328

Liabilities

Trade and other payables (1,862) – – (1,862)

Total at 31 December 2022 21,718 – 196,866 218,584

Total at 31 December 2021 10,333 – 131,508 141,841

Credit risk

Credit risk is the risk that a counterparty of the Company will be unable or unwilling to meet a

commitment that it has entered into with the Company. It is a key part of the pre-investment

due diligence. The credit standing of the companies which the Company intends to lend or

invest is reviewed, and the risk of default estimated for each significant counterparty position.

Monitoring is on-going, and year end positions are reported to the Board on a quarterly basis.

Credit risk may also arise from cash and cash equivalents and deposits with banks and

financial institutions. The Company and its subsidiaries may mitigate their risk on cash

investments by only transacting with major international financial institutions with high

credit ratings assigned by international credit rating agencies.

The carrying value of the investments and cash represent the Company’s maximum

exposure to credit risk.

Downing Renewables & Infrastructure Trust plc Annual Report | 139

The Company’s credit risk exposure as at 31 December 2022 is summarised below:

As at

31 December

2022

£’000s

As at

31 December

2021

£’000s

Trade and other receivables 252 -

Loan Investment 151,757 113,749

Cash and cash equivalents 23,328 11,254

Total 175,337 125,003

There is a loan agreement between the Company and DORE Hold Co Limited for

£200,000,000 (2021: £120,000,000). DORE Hold Co Limited is a wholly owned subsidiary

of the Company. The total undrawn facility is £48,243,010.

Price risk

Price risk is defined as the risk that the fair value of a financial instrument held by the

Company will fluctuate. Investments are measured at FVTPL. As at 31 December

2022, the Company held three investments through its intermediate holding company.

The value of the underlying renewable energy investments held by Hold Co will vary

according to a number of factors including discount rate used, asset performance and

forecast power prices.

Capital risk management

The capital structure of the Company at the year-end consists of equity attributable

to equity holders of the Company, comprising issued capital and reserves. The Board

continues to monitor the balance of the overall capital structure so as to maintain investor

and market confidence. The Company is not subject to any external capital requirements.

Market risk

Returns from the Company’s investments are affected by the price at which the

investments are acquired. The value of these investments will be a function of the

discounted value of their expected future cash flows, and as such will vary with,

inter alia,

movements in interest rates, market prices and the competition for such assets. The

Investment Manager carries out a full valuation quarterly and this valuation exercise takes

into account changes described above.

Downing Renewables & Infrastructure Trust plc Annual Report | 140

17. Unconsolidated subsidiaries, associates and joint ventures

The following table shows subsidiaries of the Group. As the Company is regarded as an

Investment Entity as referred to in note 2, these subsidiaries have not been consolidated

in the preparation of the financial statements:

Investment Place of Business Ownership Interest

as at 31 December

2022

DORE Hold Co Limited

England

100%

DORE Sweden Hold Co Limited

England

100%

Downing Hydro AB

Sweden

100%

Abercomyn Solar Ltd

England

100%

Andover Airfield Solar Developments Ltd

England

100%

Appleton Renewable Energy

England

100%

Appleton Renewables

England

100%

Beeston Solar Energy Ltd

England

100%

Beeston Solar Ltd

England

100%

Bourne Park Solar Ltd

England

100%

Brookside Solar Ltd

England

100%

Brown Argus Trading Ltd

England

100%

Chalkhill Commercial PV Ltd

England

100%

Chalkhill Life Holdings Ltd

England

100%

Deeside Solar Farm Ltd

England

100%

Emerald Isle Solar Energy Ltd

Northern Ireland

100%

Emerald Isle Solar Ltd

Northern Ireland

100%

Greenacre Redbridge Ltd

England

100%

Greenacre Solar Energy Ltd

England

100%

Greenacre Solar Ltd

England

100%

Heulwen Solar Ltd

England

100%

Hulse Energy Ltd

Northern Ireland

100%

Hulse Renewable Energy Ltd

Northern Ireland

100%

KPP132 Ltd

England

100%

KPP141 Ltd

Northern Ireland

100%

Moray Energy Ltd

Northern Ireland

100%

Moray Power (UK) Ltd

Northern Ireland

100%

Moray Power Ltd

Northern Ireland

100%

Newton Solar Energy Ltd

England

100%

Newton Solar Ltd

England

100%

Penarth Energy Ltd

England

100%

Ridgeway Solar Energy Ltd

England

100%

Ridgeway Solar ltd

England

100%

Ringlet Trading Ltd

England

100%

ROC Solar (UK) Ltd

Northern Ireland

100%

ROC Solar Ltd

Northern Ireland

100%

Solar Finco 1 Limited

England

100%

Solar Finco 2 Limited

England

100%

Solar Finco 3 Limited

England

100%

Downing Renewables & Infrastructure Trust plc Annual Report | 141

Investment Place of Business Ownership Interest

as at 31 December

2022

TGC Solar Oakfield Ltd

England

100%

Triumph Renewable Energy Ltd

Northern Ireland

100%

Triumph Solar Energy Ltd

Northern Ireland

100%

Triumph Solar Ltd

Northern Ireland

100%

Voltaise (UK) Ltd

England

100%

Voltaise Ltd

England

100%

Wakehurst Renewable Energy Ltd

Northern Ireland

100%

Wakehurst Renewables Ltd

Northern Ireland

100%

York NIHE Ltd

Northern Ireland

100%

York Renewable Energy Ltd

England

100%

York Renewables Ltd

Northern Ireland

100%

Watten i Sverige AB

Sweden

100%

Edsbyn Vattenkraft AB

Sweden

100%

Downing Summit AB

Sweden

100%

AB Rots Ovre Kraftverk

Sweden

100%

ASI Produktion AB

Sweden

100%

Downing Wind Sweden Holdco AB

Sweden

100%

Gabrielsberget Syd Vind AB

Sweden

100%

7 DORE Hold Co is the intermediate holding company of the Group, this is 100% owned by

DORE PLC

8 The Registered office is St Magnus House, 3 Lower Thames Street, London EC3R 6HD

9 These Companies are 100% owned by DORE Hold Co Limited

10 The registered office is c/o Cirio Advokatbyra Box 3294, 103 65 Stockholm

11 Appleton Renewable Energy Ltd is 100% owned by Appleton Renewables, Appleton

Renewable Energy Ltd, in turn owns 100% of Andover Airfield Solar Developments Ltd

12 These companies are 100% owned by Solar Finco 1 Ltd

13 Bourne Park Solar is 100% owned by Penarth Energy Ltd

14 These companies are 100% owned by Chalkhill Life Holdings Ltd

15 Emerald Isle Solar Energy Limited is 100% owned by Emerald Isle Solar Ltd

16 Both companies are 100% owned by Greenacre Solar Ltd

17 Hulse Renewable Energy Ltd is 100% owned by Hulse Energy Ltd

18 Moray Energy Ltd and Moray Power (UK) are 100% owned by Moray Power Ltd,

Moray Power (UK) Ltd owns 100% of KPP 132 Ltd

19 Newton Solar Energy is 100% owned by Newton Solar Ltd

20 Both companies are 100% owned by Ridgeway Solar Ltd

21 ROC Solar (UK) ltd is 100% owned by ROC Solar Ltd

22 Solar Finco 1 Ltd is 100% owned by Solar Finco 2 Ltd

23 Solar Finco 2 Ltd is 100% owed by Solar Finco 3 Ltd

24 Triumph Solar Energy is 100% owned by Triumph Solar Ltd, Triumph Solar Energy Ltd in

turn owns 100% of Triumph Renewable Energy Ltd and KPP 141 Ltd.

Downing Renewables & Infrastructure Trust plc Annual Report | 142

24 Triumph Solar Energy is 100% owned by Triumph Solar Ltd, Triumph Solar Energy Ltd in

turn owns 100% of Triumph Renewable Energy Ltd and KPP 141 Ltd.

25 Voltaise (UK) Limited is 100% owned by Voltaise Ltd.

26 Wakehurst Renewable Energy Ltd is 100% owned by Wakehurst Renewables Ltd

27 These Companies are 100% owned by York Renewables Ltd

28 These Companies are 100% owned by Downing Hydro AB

29 These Companies are 100% owned by Downing Wind Sweden Holdco AB

18. Employees and Directors

The Company is governed by a Board of Directors, all of whom are independent and

non-executive. During the year, they received fees for their services of £125,000

(2021: £145,833). The Company has 3 non-executive Directors.

Other than the Directors, the Company had no employees during the year.

19. Contingencies and commitments

The Company has no commitments or contingencies.(2021: no commitments or

contingencies). The total undrawn facility on the loan between the Company and DORE

Hold Co Limited is £48,243,010.

20. Dividends declared

As outlined on page 8 of the Chairman’s statement, in the IPO Prospectus on

12 November 2020, the Company was targeting an initial annualised dividend yield of

3% by reference to the IPO price of £1.00, in respect of the financial year from IPO on

10 December 2020 to 31 December 2021 (equating to 3.0 pence per share), rising to

a target annualised dividend yield of 5% by reference to the IPO price in respect of the

financial year to 31 December 2022.

Interim dividends paid during the year

ended 31 December 2022

Dividend per share

pence

Total dividend

£’000s

With respect to the quarter ended

30 December 2021

1.25 1,713

With respect to the quarter ended

31 March 2022

1.25 1,712

With respect to the quarter ended

30 June 2022

1.25 2,308

With respect to the quarter ended

31 September 2022

1.25 2,308

5.00 8,041

Downing Renewables & Infrastructure Trust plc Annual Report | 143

Interim dividends declared after

31 December 2022 and not accrued

in the year

Dividend per share

pence

Total dividend

£’000s

With respect to the quarter ended

31 December 2022

1.25 2,308

On 23 February 2023, The Board declared an interim dividend of 1.25 pence per share

with respect to the year ended 31 December 2022.

The Dividend is expected to be paid on or around 31 March 2023 to shareholders on the

As announced in September 2021, the Company has increased the dividend to 5 pence

representing a dividend per share of 1.25 pence for the quarter ending September 2021

and thereafter.

During the year, the Board declared four interim dividends of 1.25 pence per share in

respect of the quarterly periods ending 31 March 2022, 30 June 2022, 30 September

2022 and 31 December 2022. As outlined in the Company’s Prospectus, the Company

has chosen to designate part of these interim dividends as an interest distribution.

The dividend for the period to 31 December 2022, was paid as 0.425 pence per share

as an interest payment and 0.825 as an ordinary dividend. The dividend paid for the

period to 31 March 2022 was paid as 0.437 pence per share as an interest payment and

0.813 as an ordinary dividend. The dividend paid for the period to 30 June 2022 was paid

as 0.5 pence per share as an interest payment and 0.750 as an ordinary dividend. The

dividend paid for the period to 30 September 2022 was paid as 0.625 pence per share as

an interest payment and 0.625 as an ordinary dividend.

Shareholders in receipt of such a dividend will be treated for UK tax purposes as

though they have received a payment of interest in respect of the interest distribution

element of this dividend. This will result in a reduction in the corporation tax payable by

the Company.

21. Events after the balance sheet date

Dividends

On 24 February 2023, The Board declared an interim dividend of 1.25 pence per share

with respect to the period ended 31 December 2022.

The dividend is expected to be paid on or around 31 March 2023 to shareholders on the

Downing Renewables & Infrastructure Trust plc Annual Report | 144

The target dividend for the year from 1 January 2023 has been increased by 7.6% to

5.38 pence per ordinary share.

Acquisitions

The Company, through its main subsidiary acquired two operational power plants located

in Sweden for £5.1 million.

22. Related party transactions

The amounts incurred in respect of the Investment Management fees during the year

to 31 December 2022 was £1,781,037. Of this amount, £1,426,289 were unpaid at

31 December 2022.

The Investment Manager is owed £113,830 commission in respect of funds raised during

the placing, open offer, offer for subscription and intermediaries offer. This amount

remained unpaid at the year end.

The amounts paid in respect of Directors fees during the year to 31 December 2022 was

£125,000. The directors fees were increased by £5,000 per annum from 1 October 2022

which remains unpaid. The amounts paid to individual directors during the year were as

follows:

Hugh W M Little (Chair) £50,000, with an amount of £1,250 unpaid.

Jo Holt

£35,000, with an amount of £1,250 unpaid.

Ashley Paxton £40,000, with an amount of £1,250 unpaid.

Due to the Company being an externally managed investment company, there are no

other fees due to key management personnel.

Intercompany Loans

During the year interest totalling £7.79 (2021: £4.98) million was charged on the

Company’s long-term interest-bearing loan between the Company and its subsidiary.

At the year end, £1.7 (2021: £2.4) million remained unpaid.

The loan to DORE Hold Co Limited is unsecured. As at the balance sheet date, the loan

balance stood at £151.7 (2021: £113.7) million.

Downing Renewables & Infrastructure Trust plc Annual Report | 145

In reporting financial information, the Company presents alternative performance

measures, (“APMs”), which are not defined or specified under the requirements of IFRS.

The Company believes that these APMs, which are not considered to be a substitute for

or superior to IFRS measures, provide stakeholders with additional helpful information on

the performance of the Company. The APMs presented in this report are shown below:

Gross Asset Value or GAV

A measure of total asset value including debt held in unconsolidated subsidiaries.

As at 31 December 2022 Page

As at 31

December

2022 £'000

As at 31

December

2021

£'000

NAV a 113 218,899 141,841

Debt held in

unconsolidated subsidiaries

b n/a 91,495 79,250

Gross Asset Value a + b 310,394,595 221,091

NAV Total Return

A measure of NAV performance over the reporting year (including dividends paid). NAV

total return is shown as a percentage change from the start of the year. It assumes that

dividends paid to shareholders are reinvested at NAV at the time the shares are quoted

ex-dividend.

Year Ended

31 December 2022

Page

As at 31

December

2022

£’000

As at 31

December

2021

£’000

NAV at 1 January 2022 pence a n/a 103.5 98.00

NAV at 31 December

2022

pence b 113 118.6 103.5

Reinvestment

assumption

pence c n/a 0.1 0.02

Dividends paid pence d 8 5 2.25

Total NAV Return ((b + c + d)/a) - 1 19.5% 7.9%

Alternative Performance

Measures

Downing Renewables & Infrastructure Trust plc Annual Report | 146

Total Shareholder Return

A measure of share price performance over the reporting year (including dividends

reinvested). Share price total return is shown as a percentage change from the start of the

year. It assumes that dividends paid to shareholders are reinvested in the shares at the

time the shares are quoted ex-dividend.

Year Ended

31 December 2022

Page

As at 31

December

2022

£’000

As at 31

December

2021

£’000

Opening price at 1

January 2022

pence a n/a 103.50 100.00

Closing price at 31

December 2022

pence b 4 113.50 103.50

Benefits of reinvesting

dividends

pence c n/a 0.06 0.03

Dividends paid pence d 8 5 2.25

Total Return ((b + c + d)/a) - 1 15.1% 5.8%

Ongoing Charges

A measure, expressed as a percentage of average net assets, of the regular, recurring

annual costs of running the Company per Ordinary Share. This has been calculated and

disclosed in accordance with the AIC methodology.

Year Ended

31 December 2022

Page

Year

Ended 31

December

2022

£’000

Year

Ended 31

December

2021

£’000

Average NAV a n/a 200,318 126,443

Annualised Expenses b n/a 2,907 2,056

Ongoing charges ratio b / a 1.5% 1.6%

Downing Renewables & Infrastructure Trust plc Annual Report | 147

Dividend yield

This is the annualised measure of the amount of cash dividends paid out to shareholders

relative to the IPO price of £1.00 per share and the issue price.

Year Ended

31 December 2022

Page

Year

Ended 31

December

2022

£’000

Year

Ended 31

December

2021

£’000

Dividend from IPO to

31 December 2022

pence a n/a 7. 25 3.50

Ordinary Share price as

at 31 December 2022

pence b 4 113.50 103.50

Issue price at IPO pence c n/a 100.00 100.00

Annualisation factor d n/a 0.95 0.95

Dividend yield by

reference to share price

(a/b * d) 6.07% 3.32%

Dividend yield by

reference to Issue Price

(a/c * d) 6.89% 3.31%

Dividend Cover

Dividend cover illustrates the number of times the Company’s cash flow can cover it

dividend payments to Shareholders.

Dividend Cover

Year Ended

31 December 2022

Page

Year

Ended 31

December

2022

£’000

Year

Ended 31

December

2021

£’000

Cash flows (from portfolio

companies)

a n/a 12,135 4,678

Cash expenses (Company and

Hold Co)

b n/a (2,767) (1,339)

Dividends for FY 2022 (excluding

new equity)

c n/a 7,4 4 6 2,756

Dividends for FY 2022 (including

new equity)

d n/a 8,041 2,938

Dividend Cover excluding new

equity

(a + b) / c 1.26 1.21

Dividend Cover including new

issuance

(a + b) / d 1.17 1.14

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As a Financial Market Participant with products labelled as Article 9 under the EU’s Sustainable Finance Disclosure

Regulation, the Company is required to make a statement on principal adverse sustainability impacts. These are included

alongside other indicators in the table on pages 28 and 29.

SFDR indicators not included in the table on pages 28 and 29 as not relevant to infrastructure investment (i.e. more

applicable to listed investments) are:

– Exposure to companies active in the fossil fuel sector

– Exposure to energy-inefficient real estate assets

– Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD)

Guidelines for Multinational Enterprises

– Emissions to water

– Exposure to controversial weapons

Under Annex V, a template periodic report for financial products referred to in Article 9(1), (2) and (3) of Regulation (EU)

2019/2088 is required. This follows for DORE.

To what extent was the sustainable investment objective of this financial product met?

Did this financial product have a sustainable investment objective?

[tick and fill in as relevant, the percentage figure represents the sustainable investments]

Yes

It made sustainable investments with an environmental

objective: %

in economic activities that qualify as environmentally

sustainable under the EU Taxonomy

in economic activities that do not qualify as

environmentally sustainable under the EU Taxonomy

It promotes Environmental/Social (E/S) characteristics

and while it does not have as its objective a sustainable

investment, it had a proportion of % of sustainable

investments

with an environmental objective in economic

activities that qualify as environmentally sustainable

under the EU Taxonomy

with an environmental objective in economic

activities that do not qualify as environmentally

sustainable under the EU Taxonomy

with a social objective

It made sustainable investments with

a social objective: %

It promotes E/S characteristics, but did not make any

sustainable investments

100

SFDR Periodic Disclosure

Template (Unaudited)

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The Company is an impact fund, falling under Article 9 of the European Union’s Sustainable Finance Disclosure

Regulation, with a core sustainable investment objective to accelerate the transition to net zero through its investments,

compiling and operating a diversified portfolio of renewable energy and infrastructure assets to help facilitate the

transition to a more sustainable future. This directly contributes to climate change mitigation.

This objective above has been met by investments in renewable energy.

How did the sustainability indicators perform?

The performance of sustainability indicators can be found in the preceding section.

...and compared to previous periods?

As this is the first reporting period, a comparison to previous periods is not made. The 2023 Disclosure will include

commentary to compare to 2022.

How did the sustainable investments not cause significant harm to any sustainable investment objective?

The pre-investment scorecard and process (see next section) captures risk of significant harm through either a low overall

score, or through a low score to individual questions. The ESG team independently review and provide an opinion, up to

recording any risk and plans to mitigate. In the period, no deals were rejected based on causing harm to a sustainability

objective. Instead, investments in renewable energy contributed to the objective of reducing or avoiding greenhouse

emissions, and therefore climate change mitigation.

How did this financial product consider principal adverse impacts on sustainability factors?

Pre-investment research uses a proprietary scorecard based on multiple sustainability factors and assesses risks or other

potential indicators for adverse sustainability impacts. The EU Taxonomy and the Do No Significant Harm criteria are also

referenced within the scorecard and process. The objective is to identify any risks and provide a foundation for future

monitoring and engagement.

As investors in infrastructure, data availability and likelihood of occurrence for breaches of the OECD Guidelines for

Multinational Enterprises and the UN Guiding Principles on Business and Human Rights is different to other asset classes

like listed equity. Our approach is to monitor via quarterly declarations in the Operations & Maintenance providers' KPI

forms and to assume providers have correctly reported with no violations unless notified.

2. What were the top investments of this financial product?

During the reference period, which is full year 2022, the top three largest investments by installed capacity were the

Gabrielsberget Syd Vind AB wind farm in Sweden (46MW), the Summit hydro plant also in Sweden (14MW) and a

residential solar portfolio in N. Ireland (13.1 MW).

The Portfolio Summary section has full investments of this financial product, including infrastructure sub-sector and

location.

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3. What was the proportion of sustainability-related investments?

What was the asset allocation?

100% to renewable power, based on this flow described in the guidance for Annex V:

Investment → #1 Sustainable (environmental objectives) → Environmental → Taxonomy-aligned

Note we have legacy assets transferred in from other entities that have not been assessed through the research and

scorecard process described in part 1 above. However given the sector of these assets, they are assumed to meet

the technical screening criteria for sustainability under the Taxonomy: wind, solar and hydro (using the run of river

qualification).

In which economic sectors were the investments made?

Following the EU Taxonomy Compass: Sector is Energy, Activity is Electricity generation from hydropower, Electricity

generation from wind power, Electricity generation using solar photovoltaic technology.

What was the share of sustainable investments with an environmental objective that were not aligned with the EU Taxonomy?

What was the share of socially sustainable investments?

What investments were included under “not sustainable”, what was their purpose and were there any minimum environmental or

social safeguards?

None.

4. What actions were taken to attain the sustainable investment objective during the reference period?

The objective, in line with DORE’s prospectus, was attained by the generation of renewable power as a natural contributor

to climate change mitigation by reducing the emissions from burning fossil fuels to generate power. Three actions in

particular were taken.

Robust integration of material sustainability factors, risks and potentially adverse impacts to investment committee

discussions and decisions.

Active ownership and monitoring these sustainability impacts post-investment.

A dynamic, internal ESG dashboard for KPIs – including Scope 1-3, plus avoided, greenhouse gas emissions – is used to

report performance of sustainability indicators during the reference period.

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We recognise the Global Reporting Initiative as the global best practice for sustainability reporting. Relevant indicators are

mapped below.

Statement of use

The Company has reported the information cited in this GRI content index for the period 1 January to 31 December 2022

with reference to the GRI Standards.

GRI 1 used, GRI 1: Foundation 2021

GRI STANDARD DISCLOSURE LOCATION

GRI 2: General

Disclosures 2021

2-1 Organizational details Legal name & Ownership: Downing Renewables &

Infrastructure Trust PLC (“DORE” or the “Company”)

Location of headquarters: London Counties of

operation: UK, Sweden

2-3 Reporting period, frequency and contact

point

1 Jan to 31 Dec 2022. Annual reporting. Contact:

Roger Lewis, Head of ESG

2-4 Restatements of information None

2-5 External assurance None

2-23 Policy commitments This report: Chairman’s Statement

2-28 Membership associations This report: Downing’s approach to sustainability

GRI 302: Energy 2016 302-1 Energy consumption within the

organization

Key Performance Indicators on pages 28 and 29

302-3 Energy intensity Key Performance Indicators on pages 28 and 29

GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased, managed

in, or adjacent to, protected areas and areas of

high biodiversity value outside protected areas

Key Performance Indicators on pages 28 and 29

304-2 Significant impacts of activities, products

and services on biodiversity

Key Performance Indicators on pages 28 and 29

304-3 Habitats protected or restored Key Performance Indicators on pages 28 and 29

GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions Key Performance Indicators on pages 28 and 29

305-2 Energy indirect (Scope 2) GHG emissions Key Performance Indicators on pages 28 and 29

305-3 Other indirect (Scope 3) GHG emissions Key Performance Indicators on pages 28 and 29

305-4 GHG emissions intensity Key Performance Indicators on pages 28 and 29

305-5 Reduction of GHG emissions Key Performance Indicators on pages 28 and 29

GRI 407: Freedom of

Association and Collective

Bargaining 2016

407-1 Operations and suppliers in which the

right to freedom of association and collective

bargaining may be at risk

Key Performance Indicators on pages 28 and 29

GRI 408: Child Labor

2016

408-1 Operations and suppliers at significant risk

for incidents of child labor

Key Performance Indicators on pages 28 and 29

GRI 409: Forced or

Compulsory Labor 2016

409-1 Operations and suppliers at significant risk

for incidents of forced or compulsory labor

Key Performance Indicators on pages 28 and 29

GRI Standards

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Glossary

2016 Paris Agreement

an agreement within the United Nations Framework Convention on Climate Change, dealing with

greenhouse-gas-emissions mitigation, adaption, and finance, signed in 2016

AIC Association of Investment Companies

Asset Manager INFRAM LLP a company operated by Downing LLP. Downing LLP is the controlling member.

CCGT Combined Cycle Gas Turbines

Corporate PPA a PPA with a corporate end-user of electricity rather than with an electricity utility

CO2 Carbon dioxide

CO2e Carbon dioxide equivalent

COP26 The 2021 United Nations Climate Change Conference

DHAB Downing Hydro AB

distribution network low voltage electricity network that carries electricity locally from the substation to the end-user

ESG environmental, social and governance

FiT feed-in tariff

GAV

Gross asset value – the aggregate value of the Group’s underlying investments, cash and cash

equivalents, and third-party borrowings.

GBP Pounds Sterling

GHG Greenhouse Gas

Group the Company and its subsidiaries

GW Gigawatt

GWh Gigawatt hours

Investment Manager Downing LLP (Company No: OC341575)

IPO Initial Public Offering

KPI key performance indicator

MW Megawatt

MWh Megawatt hour

MWp Megawatt peak

NAV Net asset value

NAV Total Return A measure of NAV performance over the reporting year (including dividends paid)

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NIROC/s Northern Ireland ROC/s

O&M operations and maintenance

Ofgem the Office of Gas and Electricity Markets

Offtaker a purchaser of electricity and/or ROCs under a PPA

Other Infrastructure

Means other infrastructure assets and investments in businesses whose principal revenues are not

derived from the generation and sale of electricity on the wholesale electricity markets

PPA a power purchase agreement

PPS Pence per share

RCF Revolving credit facility

Renewable Energy Directive EU Renewable Energy Directive (2009/28/EC)

RO Renewables Obligation

ROC/s renewables obligation certificate/s

SE2 South Sweden

SE3 North Sweden

SEB Skandinaviska Enskilda Banken AB

SEK Swedish Kroner

SEM Single Electricity Market

SFDR Sustainable Finance Disclosure Regulation

Solar PV photovoltaic solar

SORP Statement of recommended practise

SPV Special purpose vehicle

Sustainable Development Goals

Set out in the 2030 Agenda for Sustainable Development, adopted by all United Nations Member

States in 2015

Total Shareholder Return A measure of share price performance over the reporting year (including dividends reinvested)

transmission network

high voltage power lines that transport electricity across large distances at volume, from large power

stations to the substations upon which the distribution networks connect

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Cautionary Statement

The Review Section of this report has

been prepared solely to provide additional

information to shareholders to assess the

Company’s strategies and the potential for

those strategies to succeed. These should

not be relied on by any other party or for

any other purpose.

The Review Section may include

statements that are, or may be deemed

to be, “forward-looking statements”.

These forward-looking statements can

be identified by the use of forward-

looking terminology, including the terms

“believes”, “estimates”, “anticipates”,

“expects”, “intends”, “may”, “will” or

“should” or, in each case, their negative

or other variations or comparable

terminology.

These forward-looking statements

include all matters that are not historical

facts. They appear in a number of places

throughout this document and include

statements regarding the intentions,

beliefs or current expectations of the

Directors and the Investment Manager

concerning, amongst other things, the

Investment Objectives and Investment

Policy, financing strategies, investment

performance, results of operations,

financial condition, liquidity, prospects,

and distribution policy of the Company

and the markets in which it invests.

By their nature, forward-looking

statements involve risks and uncertainties

because they relate to events and depend

on circumstances that may or may not

occur in the future. Forward-looking

statements are not guarantees of future

performance. The Company’s actual

investment performance, results of

operations, financial condition, liquidity,

distribution policy and the development

of its financing strategies may differ

materially from the impression created by

the forward-looking statements contained

in this document.

Subject to their legal and regulatory

obligations, the Directors and the

Investment Manager expressly

disclaim any obligations to update or

revise any forward-looking statement

contained herein to reflect any change

in expectations with regard thereto

or any change in events, conditions or

circumstances on which any statement

is based. In addition, the Review Section

may include target figures for future

financial year. Any such figures are targets

only and are not forecasts.

This Annual Report has been prepared for

the Company as a whole and therefore

gives greater emphasis to those matters

which are significant in respect of

Downing Renewables & Infrastructure

Trust PLC and its subsidiary undertakings

when viewed as a whole.

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