Ecofin U.s. $ Regulatory News (RNEW)

LEI: 2138004JUQUL9VKQWD21

Ecofin U.S. Renewables Infrastructure Trust PLC

Annual Financial Report

for the period from incorporation on 12 August 2020 to 31 December 2021

Ecofin U.S. Renewables Infrastructure Trust plc ("RNEW" or the "Company") is pleased to announce its audited results for the period from incorporation on 12 August 2020 to 31 December 2021 ("Period").

Chair's comment

"On behalf of the Board, I am pleased to present the Company's first Annual Financial Report. The Company is off to a promising start having fully invested its IPO proceeds into a diversified portfolio of U.S. solar and wind assets that supported declaring dividends totalling 3.2 cents per share, which was ahead of the 2-3 cents per share IPO target for the Period."

Patrick O' Donnell Bourke

Objective

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

Highlights

Figures reported either as at the referenced date or over the reporting period ended 31 December 2021. All references to cents and dollars ($) are to the currency of the U.S., unless stated otherwise.

1. These are alternative performance measures. ("APMs").

2. As at 31 December 2021, the Company held $5.4 million in cash and had $60 million headroom on its Revolving Credit Facility ("RCF") for potential future commitments.

3. Represents the Company's proportionate share.

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

5. Includes all construction and committed assets.

Key milestones during the period

2020

v Dec.

Ø 22 December Company's IPO, with 125.0 million shares issued

Closed and funded first three investments in solar assets (Oliver Solar, Ellis Road Solar, and SED Solar Portfolio) totalling $36 million

2021

v Feb.

Closed and funded fourth investment in two operating utility scale solar assets in California (Beacon Solar 2 & 5) totalling $24.8 million

v May

Ø Declared inaugural dividend (for quarter ended 31 March) of 0.40 cents per Share (one quarter ahead of IPO target)

Ø Committed to fifth investment in a commercial solar asset (Skillman Solar) in New Jersey totalling $6.2 million

v July

Ø Committed $25 million to sixth investment in a diversified portfolio of eleven solar projects totalling 62 MW* (Echo Solar Portfolio) spanning three states

v Aug.

Ø Declared second dividend (for quarter ended 30 June) of 0.60 cents per Share

v Sept.

Ø Closed solar project in Minnesota representing the largest solar asset (~25% of portfolio value) in the Echo Solar Portfolio

v Oct.

Ø RNEW Capital, LLC raised a $65.0 million revolving credit facility with KeyBank to provide operational flexibility

Ø Completed $49.0 million acquisition of an operating wind project in Texas, achieving full deployment of IPO proceeds (ahead of IPO target)

Ø Declared third dividend (for quarter ended 30 Sept) of 0.80 cents per Share

Ø Closed on Skillman Solar and additional $2.8 million investment to acquire a 2MW commercial solar operating project in New Jersey (Delran Solar)

2022

v Jan.

Ø Declared fourth dividend (for quarter ended 31 December) of 1.4 cents per Share, exceeding 2-3% year 1 dividend yield guidance

Ø NAV of $98.9 cents, up 0.9% since the IPO

Ø Closed on $15.9M construction debt facility for Echo Solar Portfolio - Minnesota asset

* Previously reported as a 69.4MW investment comprising 12 ground-mounted solar projects. One solar project from within the Echo Solar Portfolio has been released from commitment due to development delays (without any investment made) and will be reconsidered for future investment upon achieving its milestones.

Portfolio

1. Represents RNEW's proportionate ownership interest in the assets.

2. Cash equity ownership.

3. Average remaining revenue contract term (years).

Chair's Statement

Introduction

On behalf of the Board, I am pleased to present the first Annual Report for Ecofin U.S. Renewables Infrastructure Trust PLC for the Period. In operating terms, the Annual Report covers the period from the Company's successful IPO on 22 December 2020 until 31 December 2021.

Throughout the Period and in 2022 to date, the Company and its advisers have coped well with the impact of the COVID-19 pandemic. We are fortunate in that there has been no material impact on the Company's operations or its portfolio. At the time of writing, authorities in both the U.S. and the UK have lifted or are about to lift many of the ongoing restrictions related to COVID-19.

Milestones

In its inaugural financial Period, RNEW achieved significant milestones:

· completion, before the end of 2020, of the acquisition of three of the four seed assets set out in the Company's IPO prospectus. This was followed by completion of the fourth seed asset in February 2021;

· further investments in solar projects, namely two separate ground-mounted solar projects in New Jersey (2.6 MW and 2.0 MW); and a 62 MW portfolio comprising 11 ground-mounted solar projects across Minnesota, Virginia and Delaware1;

· the Company's first wind investment, comprising a 59.8 MW operating asset in Texas. With the completion of this asset in October, the Company's net IPO proceeds of $122.5 million became fully committed, well within the target of 12 months following IPO;

· the signing of a $65 million RCF made up of a $50 million two-year tranche and a $15 million three-year tranche. The facility also benefits from the added flexibility of an accordion option for an additional $20 million of capital which can be accessed subject to certain conditions; and

· an annual dividend yield for 2021 of 3.2%, above the 2-3% range indicated in the IPO prospectus. Our ability to exceed the 2-3% range in our first Period was due to the strong operating performance of the Company's diversified portfolio to date.

Portfolio overview

As at 31 December 2021, the Company's portfolio, which was well diversified in terms of both off-taker and geography, consisted of:

· SED Solar Portfolio - a 100% interest in an 11.3 MW commercial rooftop and ground-mounted solar portfolio consisting of 53 operating assets in Massachusetts and one operating asset in Connecticut, which have 100% of their revenues contracted for a weighted average remaining term of 14.7 years;

· Ellis Road Solar - a 100% interest in a 7.1 MW ground-mounted solar project in Massachusetts which has 100% of its revenues contracted for a remaining term of 19.5 years;

· Oliver Solar - a 100% interest in a 4.8 MW commercial rooftop solar project in California which has 100% of its revenues contracted for a remaining term of 13.9 years;

· Beacon Solar 2 & 5 - a 49.5% interest in a 107.8 MW solar portfolio comprising two operating assets in California, which have 100% of their revenues contracted with an investment grade rated utility for a remaining term of 21 years;

· Skillman Solar - a 100% interest in a 2.6 MW solar project in New Jersey with revenues contracted for a remaining term of 15 years, which has completed construction and is expected to become operational in Q2 2022;

· Echo Solar - a 100% interest in a 62 MW portfolio comprising 11 ground-mounted solar projects across Minnesota, Virginia and Delaware which have 100% of their revenues contracted for 25 years1; as at 31 December 2021, the Company had closed on the 13.7 MW solar project in Minnesota and expects to close on five additional solar assets in Virginia and Delaware during Q2 2022 totalling ~ 23 MW. The remaining five assets are expected to close in H2 2022 upon full completion of various development milestones;

· Delran Solar - a 100% interest in a 2.0 MW solar project in New Jersey, which has 100% of its revenues contracted for a remaining term of 13.5 years; and

· Whirlwind - a 100% interest in a 59.8 MW operating wind farm in Texas with revenues contracted for a remaining term of 6.0 years.

Total generation from the Company's assets during the Period was 169.2 GWh, 1.9% above budget, and the portfolio's remaining weighted average contracted period as at the year-end was 16.7 years2. More details on each asset and its performance are set out in the Investment Manager's Report.

Results

NAV as at 31 December 2021 was originally announced as 100.4 cents per Share. This was updated to 98.9 cents on 11 March 2022 to reflect a change in the valuation of Holdco, which had been updated to take account of an accrual for deferred tax in the U.S on assets acquired shortly after the IPO. For the period since IPO as a whole, NAV per Share grew by 0.9% as further described in the Portfolio Valuation section of the Investment Manager's Report. This is net of dividends paid of $2.3 million or 1.8 cents per Share during the Period.

The valuation of the portfolio at 31 December 2021 was supported by an independent valuation firm, Marshall & Stevens, and reflects an underlying blended weighted average pre-tax discount rate of 7.2%.

RNEW's total profit before tax for the Period was $3.4 million and earnings per Share, based on distributions received from RNEW's unconsolidated subsidiary, RNEW Holdco LLC ("Holdco") (which indirectly holds RNEW's assets through underlying subsidiaries), were 3.7 cents per Share. As at 31 December 2021, of the total 61 closed assets, 59 assets were in operation and 2 assets were under construction and scheduled to become operational.

Dividends

In May 2021, earlier than envisaged at the time of the IPO, the Board declared a maiden quarterly dividend of 0.4 cents per Share in respect of the period from IPO to 31 March 2021. This was followed by further dividends of 0.6 cents per Share for the quarter ended 30 June 2021, 0.8 cents per Share for the quarter ended 30 September 2021, and 1.4 cents per Share for the quarter ended 31 December 2021.

As a result of these progressive increases, I am very pleased to say the Company exceeded its target initial dividend yield of 2-3% in respect of the extended period from IPO until 31 December 2021, with a 3.2% dividend yield. Dividend cover was 1.1 times3.

If the dividend of 1.4 cents per Share for the quarter ended 31 December 2021 was maintained throughout 2022, this would result in a dividend yield of 5.6% (based on the IPO share price) which aligns with RNEW's IPO dividend target range for 2022 of 5.25%-5.75%.

Share price

At 31 December 2021 the share price was 99.0 cents per Share, a very slight 0.1% premium to the NAV of 98.9 cents per Share at the same date. Both the Board and the Investment Manager believe that the strong fundamentals of the Company, its portfolio, and the depth of the U.S. renewable energy middle market opportunity, together with the potential for a look-forward dividend yield for 2022 in line with the 5.25% to 5.75% target range stated in the IPO prospectus, provide the basis for the share price to continue trading at a consistent premium to NAV. During 2022 to date, the RNEW Share price has traded in a range from 99.0 cents to 108.0 cents per Share (RNEP 73.0p to 83.5p per Share).

Board

The Board has worked well since the Company's IPO. The Investment Management team and one of the Directors are based in the U.S. and as a result Board meetings are held remotely as a matter of course, but where possible and within the COVID-19 guidelines, Board members and advisers based in the UK met in person during 2021.

I would like to thank my fellow Directors, the Ecofin team and all our advisers for the significant progress made since RNEW's IPO and for the Company's performance to date.

Annual General Meeting

We look forward to welcoming Shareholders to the Company's Annual General Meeting ("AGM") to be held on 22 June 2022 at 125 London Wall, London EC2Y 5AS. More details can be found in the Notice of AGM.

Outlook

In December 2020, the U.S. Congress passed a broad spending bill which included a two-year extension of the Investment Tax Credit ("ITC") for solar power (retaining the 2020 rate of 26% which had been due to step down to 22% in 2021) and a one-year extension to the production tax credit ("PTC") for wind power.

Some of the first actions undertaken by the new U.S. administration which took office in early 2021 included President Biden signing an executive order to bring the U.S. back into the Paris Agreement as well as establishing a goal for the U.S. power sector to be carbon-free by 2035. The Infrastructure Investment and Jobs Act, which was heavily supported by President Biden and signed into law in November 2021, includes a substantial programme to update and modernise the electric grid in the U.S. through investments in transmission to accommodate increasing levels of renewable energy, together with investment to build out a national network of electric vehicle (EV) chargers, which will serve to increase demand for electricity. While the Build Back Better Act, which had over $500 billion allocated to climate-related infrastructure, did not obtain sufficient support in the Senate to become law, its climate related provisions are expected to be revisited in 2022.

Another feature of the last year or so has been the substantial increase in natural gas prices in the U.S. as in other industrialised nations. These higher prices tend to lead to higher wholesale electricity prices, especially in those U.S. power pools where natural gas is the marginal fuel. This upward trend in natural gas prices represents a positive factor for RNEW from a vantage point of re-contracting assets within the portfolio over the medium to long term.

While the Russian invasion of Ukraine in early 2022 is deeply concerning on a humanitarian, geopolitical and macro‑economic basis, RNEW's investments in U.S. renewable energy assets with long-term revenue contracts are well positioned to provide a resilient source of cash flow during these uncertain times.

Overall, the backdrop remains very supportive for further growth of the renewable sector in the U.S., which continues to be very active.

In terms of upcoming investments, as set out in more detail in the Investment Manager's Report, the Company ended the Period with $454 million of unlevered equity commitments, net of anticipated tax equity financing and adjusted for projects to be contractually dropped and added, and adjusted by renegotiated purchase prices anticipated to be contracted with respect to the Echo Solar Portfolio and $62 million of additional opportunities in exclusivity.5 In addition, the Company's near-term pipeline of potential investment opportunities remained very healthy and totalled $3.0 billion comprising 55 deals as at 31 December 2021. The Investment Manager is actively working on a number of potential investments in both solar and wind opportunities and the Board remains very positive about the scale of opportunity for RNEW and its outlook for the future.

Patrick O'D Bourke

Chair of the Board

14 April 2022

1. Previously reported as a 69.4MW investment comprising 12 ground-mounted solar projects. One solar project comprising the Echo Solar Portfolio has been released from commitment due to development delays (without any investment made and without any impact on the remainder of the Echo Solar Portfolio) and will be reconsidered for future investment upon achieving its milestones.

2. Includes all construction and committed assets.

3. Calculated based on Portfolio net cash distributions divided by dividends paid in respect of the quarters ended 31 March 2021, 30 June 2021 and 30 September 2021 and the dividend declared in respect of the quarter ended 31 December 2021.

4. Future equity obligations and commitments are estimates and subject to change.

5. Investment opportunities in exclusivity are contingent to completion of satisfactory due diligence, Ecofin investment committee approval, and negotiation. There is no guarantee that investment opportunities currently in exclusivity will be committed to the portfolio.

Investment Manager's Report

Overview

We are pleased with the progress made over the Period to fully invest the IPO proceeds in a high-quality portfolio spanning a diversified set of 61 solar and wind assets totalling 155 MW across six U.S. states6. Importantly, the portfolio benefits from fully contracted revenues predominantly with investment grade quality counterparties and a weighted average remaining contract term of 16.7 years7. The portfolio quality is evidenced through a 2.8% NAV total return since IPO and an increasing dividend (from earnings) each quarter that in aggregate exceeded the IPO target for the first year. Furthermore, we put in place a $65 million RCF on attractive terms from KeyBank, a leading U.S. renewable energy lender, which will provide operating flexibility to facilitate RNEW's sustained growth. Looking ahead, we continue to see positive market developments including strong sustained policy support for the renewables sector from the Biden administration.

We finished 2021 with ~$4.58 million of pending future equity obligations on closed construction assets and a committed pipeline of 10 solar assets (48 MW in the Echo Solar Portfolio in Virginia/Delaware) totalling ~$40.0 million in unlevered equity value for a collective future unlevered net equity commitment amount of $44.5 million9. We also maintain several investment opportunities on which we have exclusivity comprising i) a $11 million equity investment to acquire a single ~13 MW construction stage solar asset in the northeast region of the U.S., ii) a $9 million preferred equity investment in seven operating wind assets totalling 27 MW in the Midwest region of the U.S., and iii) a $42 million preferred equity investment in two construction stage wind and wind/solar hybrid assets across two midwestern states.9 Collectively, this near-term pipeline of committed and exclusive opportunities of unlevered net equity investment opportunities totals ~$107 million that provides a glidepath for the Company's growth in 2022.

6. Excludes assets that are committed but not yet closed.

7. Includes all construction and committed assets.

8. Figures are shown net of anticipated tax equity financing and adjusted for projects to be contractually dropped and added, and adjusted by renegotiated purchase prices anticipated to be contracted with respect to the Echo Solar Portfolio. Future equity obligations and commitments are estimates and subject to change.

9. Investment opportunities in exclusivity are contingent on completion of satisfactory due diligence and negotiation. There is no guarantee that investment opportunities currently in exclusivity will be committed to the portfolio.

Acquisitions

Since the IPO on 22 December 2020, the Company has closed and funded eight investments adding 61 assets totalling 155 MW across six U.S. states. The initial three investments in 55 assets (SED Solar Portfolio, Ellis Road Solar, and Oliver Solar) totalled $36 million and closed by 31 December 2020.

On 2 February 2021, the Company closed its fourth investment (56th and 57th assets) collectively totalling $24.8 million to acquire a 49.5% equity interest in Beacon Solar 2 & 5, two operating utility scale solar photovoltaic ("solar PV") assets in California.

On 4 May 2021, the Company announced its fifth investment, a commitment to acquire a 100% interest in a commercial solar PV asset in New Jersey for $6.2 million, comprising approximately $4.2 million of equity value ("Skillman Solar"). The Skillman Solar acquisition (58th asset) closed on 30 September 2021 and funding is expected to be completed in Q2 2022 as the asset reaches completion.

On 22 July 2021, the Company announced its sixth investment with the signing of a purchase agreement to acquire twelve solar PV assets at construction stage ("Echo Solar Portfolio"), subject to customary closing conditions. Since the announcement, one solar asset within the Echo Solar Portfolio has been released from commitment due to development delays (without any investment having been made) and will be reconsidered by RNEW for future investment upon achieving its milestones. The released asset has no impact on the economics of the remaining Echo Solar Portfolio.

On 17 September 2021, the Company closed the acquisition of the 13.7 MW solar asset (59th asset) in Minnesota representing approximately 28% of Echo Solar Portfolio's committed equity value. Construction is underway and the project is expected to begin operations in Q3 2022.

On 12 October 2021, the Company closed its seventh investment (60th asset) to acquire a 100% interest in a further operating commercial solar asset in New Jersey for $2.8 million ("Delran Solar").

On 26 October 2021, the Company completed its eighth investment (61st asset) to acquire its first wind asset, through a $49 million acquisition to acquire a 100% interest in an operating wind asset in Texas ("Whirlwind). During Q4 2021, amounts were drawn on the RCF during the closing of Whirlwind and a $5 million balance remained outstanding as at 31 December 2021.

On 7 January 2022, the Company obtained a $15.9 million non-recourse construction loan from Seminole Financial Services, LLC, a U.S. specialist renewable lender, for the Echo Solar Portfolio - Minnesota asset. The Company expects to close on an additional four solar assets in Virginia and one solar asset in Delaware within the Echo Solar Portfolio totalling ~$19 million in unlevered equity value, net of tax equity commitments in the first half of 2022, funding of which will occur through the construction period.

Cumulative Invested Capital and Commitments at Each Period Since IPO ($ millions)

Portfolio Breakdown

1. Represents percentage ownership of class B membership interest in the tax equity partnership.

1. Represents percentage ownership of class B membership interest in the tax equity partnership.

1. On 7 January 2022, Ecofin obtained a $15.9 million non-recourse construction loan from Seminole, a U.S. specialist renewable lender, for this project.

Summary of Investments

1. SED Solar Portfolio

SED Solar Portfolio consists of 52 predominantly rooftop commercial solar projects in Massachusetts and 1 rooftop commercial solar project in Connecticut. The projects' output is fully contracted to a variety of investment grade quality schools, universities, municipalities, and corporations under long term fixed price power purchase agreements ("PPAs") . This investment demonstrates many of the most favorable aspects of Ecofin as a highly experienced manager specializing in the middle market. This opportunity arose from one of Ecofin's portfolio managers seeing a transaction announcement from the vendor which prompted a cold call to its CEO. The timing was ideal as the vendor was considering monetizing its interest in the SED Solar Portfolio which it had successfully developed and operated for several years. Given the middle market scale, the vendor was seeking an acquirer who had the expertise to efficiently underwrite and reliably execute the acquisition spanning 53 assets and dozens of revenue counterparties. Ecofin demonstrated its ability and closed on the portfolio acquisition just days after completing RNEW's IPO in December 2020. While the acquisition process was quite intensive, the effort has been worthwhile with the SED Solar Portfolio contributing substantial cash flow immediately following closing to facilitate RNEW's inaugural dividend in respect of the period ended 31 March 2021. Since closing the transaction, Ecofin has secured a fixed price revenue contract with an investment grade rated electric power company to hedge the price risk for 100% of SED Solar Portfolio's solar renewable energy credits ("SREC") through 2027.

2. Ellis Road Solar

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

3. Oliver Solar

Oliver Solar is a 4.8 MW commercial solar project in San Joaquin County, California that commenced operations in 2021. The project is strategically located on a major logistics and distribution centre for a global commerce company that serves as the power purchaser under a long-term fixed price PPA. This project was sourced bilaterally with a leading global renewable energy company where Ecofin has a longstanding relationship and has transacted with repeatedly. This project did experience construction delays due to COVID-19 related impacts but Ecofin has actively managed the process and no negative impact on valuation has occurred. Since closing the acquisition, Ecofin has secured a tax equity investment on customary terms from a large U.S. corporation with which it has transacted previously.

4. Beacon Solar 2

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

5. Beacon Solar 5

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

6. Skillman Solar

Skillman Solar is a 2.6 MW commercial solar project in New Jersey that completed construction in Q1 2022 and is expected to achieve COD in Q2 2022. The project provides power under a long-term fixed-price PPA to a corporate campus of a privately held financial, software, data, and media corporation that is a global leader in its respective segments. The project also generates substantial revenues through the state of New Jersey's fixed-price feed-in-tariff style renewable incentive program for a 15 year period. This project was originated bilaterally through a longstanding relationship with the commercial solar developer with which Ecofin has transacted in the past. While this project did experience some construction delays, Ecofin is actively managing the process with the construction firm through its contractual rights to ensure RNEW is not adversely impacted. Due to the investment structure, no negative impact has occurred to the investment valuation.

7. Echo Solar Portfolio

As at 31 December 2021, the Company had closed on one construction stage solar project in Minnesota totalling 13.7 MW within the Echo Solar Portfolio. A further 10 assets totalling 48 MW in Virginia and Delaware represent conditional acquisitions and are anticipated to be closed during 2022 upon the development milestones and other conditions having been completed. The Echo Solar Portfolio sells 100% of its output to two investment grade rated utilities under long term fixed price PPAs. This portfolio was originated through a leading global renewable energy company with which Ecofin has a longstanding relationship and has transacted with in the past to provide the vendor with confidence in our reliable execution. Ecofin is actively managing the construction process through weekly calls with the construction firm to approve milestone based payments and address issues. With a view to maintaining RNEW's capacity for ongoing investment, on 7 January 2022, Ecofin obtained a $15.9 million non-recourse construction loan from Seminole, a U.S. specialist renewable lender, for the Minnesota solar project. The loan with Seminole provides the Company with the possibility of expanding the financing to other Echo Solar assets depending on the Company's capital growth needs in 2022.

8. Delran Solar

Delran Solar is a 2.0 MW commercial rooftop solar project in New Jersey that commenced operations in 2020. The project provides power under a long-term fixed-price PPA to a corporate campus of a large publicly traded U.S. media corporation. The project also generates substantial revenues through the state of New Jersey's fixed-price feed-in-tariff style renewable incentive program for a remaining 13.5 year period. This project was originated bilaterally through a longstanding relationship with the commercial solar developer where Ecofin has transacted in the past.

9. Whirlwind

Whirlwind is a proven operating wind asset, placed in service in December 2007, using 26 Siemens 2.3 MW wind turbine generators with O&M performed by Siemens Gamesa under a long-term service and maintenance agreement. It benefits from a fixed-price PPA with an investment grade electric utility with approximately 6 years remaining on the initial contract term, providing predictable cash flow. Whirlwind is located in Texas, which is experiencing sustained growth in electricity demand due to population growth and corporations migrating to this business friendly state. With electricity prices linked to natural gas prices, which have been rising, these factors provide a good backdrop for recontracting in the future and potential for inflation protection. Whirlwind demonstrates Ecofin's sourcing network breadth beyond solar and was originated bilaterally with the vendor, which we believe generates value for RNEW's investors. As part of our portfolio management strategy, Ecofin will continue to evaluate potential to install battery storage on site as battery costs decline and/or tax credits are expanded for batteries. Given the deregulated nature of the Texas power market, it represents one of the most attractive for siting battery storage and potential for enhancing Whirlwind's offering of dispatchable power under medium term recontracting scenarios.

As at 31 December 2021, the portfolio was heavily weighted towards operating assets with 94% of NAV invested in operating assets at fair market value ("FMV") (66% of total invested and committed net equity capital9), reflecting the completion of construction at Ellis Road Solar, Oliver Solar and the operating asset acquisitions of Delran Solar and Whirlwind. The portfolio benefits from geographic diversification spanning six states to provide risk mitigation against regulatory and resource exposures. Furthermore, RNEW's portfolio reflects diversification across three renewable energy sectors of: utility scale solar (15%); commercial solar (58%); and wind (27%) to mitigate resource, regulatory, technology and market risks.

Portfolio Summary Charts10

Asset Name

Sector FMV

10. Includes all closed and committed assets based on equity exposure.

Asset Status

Operating - 66%

Construction - 34%

Contracted Revenues

The objective of RNEW's investment strategy is, among other things, to produce a stable and resilient cash flow through investment in renewable energy assets that benefit from a high degree of contracted revenues with creditworthy counterparties. RNEW's portfolio had 100% of its revenue contracted with a weighted average remaining term of 16.711 years as at 31 December 2021. The stability of revenues is further evidenced by the predominantly investment grade credit ratings of its assets' PPA counterparties. Throughout the COVID-19 pandemic to date, the Company has not experienced any payment delinquencies or defaults.

Revenue Contract Credit Ratings12

11. Includes all construction and committed assets.

12. Reported as a percentage of estimated 2022 revenue. Includes PPA and SREC contract counterparties. Reported S&P or S&P equivalent rating.

Approximately 99% of the portfolio benefits from fixed price revenues (many with annual escalators of 1-2%) through PPAs, contracted renewable energy incentive programs (SREC/RECs), and fixed rents under leases. These fixed price revenue contracts mitigate market price risk for the term of the contracts. Approximately 1% of the portfolio has a variable form of revenue contract. These contracts are set at a fixed discount to a defined Massachusetts utility electric rate, which provides an ongoing economic benefit to the customer (i.e., the offtaker/rooftop owner), as opposed to receiving the higher utility electric rate when consuming electricity from the grid. While the variable rate contract introduces an element of price volatility to the project, it also offers the potential to hedge inflation risk as utility rates in Massachusetts have appreciated 2.5% on average per annum from 1990-2019.

The revenue profile reported below represents a snapshot of RNEW's existing revenue contracts as at 31 December 2021 and does not assume any replacement revenue contracts following the expiry of these contracts. With increased adoption of renewable energy in the U.S. and rising natural gas prices (which tend to result in higher power prices in U.S. markets where natural gas is the marginal fuel), we believe that RNEW's prospects for re-contracting at the end of revenue contract terms remain positive.

RNEW Portfolio Revenue Breakdown

Present

Year 20

Portfolio Performance

In the Period ended 31 December 2021, the portfolio generated 169.2 GWh of clean energy, 1.9% ahead of budget. Of the total, the solar assets generated 130.2 GWh, 3.6% lower than budget (see project variances and explanations below) and Whirlwind generated 39.0 GWh, 25.7% higher than budget (principally due to lower than forecasted economic curtailment) since its acquisition in October 2021.

The performance of the underlying operating portfolio combined with its 100% contracted revenue structure generated revenues of $6.1 million for the Company, which was ahead of budget due to higher than expected cash distributions from Whirlwind in Q4 2021, offset by lower than expected distributions from solar assets. This enabled the Company to declare dividends totalling 3.2 cents per share, which exceeded the targeted dividend yield of 2-3% (based on the share price at launch) for the extended Period through to 31 December 2021.

Net Production Variance vs. Budget (GWh)

Values and totals have been rounded to the nearest decimal.

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

2. Oliver Solar reached COD on 29 November 2021 and has been accruing PPA revenue based on P50 modelled production since that date. However, due to some commissioning and testing delays with its power purchaser, a global commerce company, the system was not energised as at 31 December 2021.

Production variance summary:

a, b Underperformance primarily due to lower insolation and soiling in Q3 due to California wildfires along with fuse failures in combiner boxes (which are being replaced and remediated).

c Underperformance primarily due to lower insolation in Q3 including a historically high level of rain occurring in July across Massachusetts.

d Underperformance primarily due to start-up issues including inverter faults during Q2 and lower insolation in Q3 due to the aforementioned historically high level of rain occurring in July across Massachusetts, which was partially offset by project outperformance in Q4.

e Underperformance primarily due to marginally lower insolation in Q4.

f Outperformance primarily due to lower than forecasted levels of economic curtailment.

Financing

As at 31 December 2021, the Company's U.S. subsidiaries at a project level had debt balances of $47.1 million, which correspond to approximately 27.3% of Gross Asset Value ("GAV"). Other leverage, based on drawn debt on the RCF, totalled $5.0 million, which corresponds to approximately 2.9% of GAV. This combined leverage compares to the maximum limit of 65% in the Company's Investment Policy, as further detailed in the table below. Given that the Company's portfolio primarily comprises operating assets that have long-term fixed-price revenue contracts with investment grade counterparties, construction and term loan financing opportunities at both a project and group level are widely available on attractive terms. With that in mind, the Company's Investment Manager and Board favour a measured approach to using leverage to mitigate interest rate and default risk. The Company proactively and successfully put in place both a RCF and non-recourse construction loan at its U.S. subsidiaries as described below:

On 19 October 2021, RNEW Capital, LLC, entered into a $65 million secured RCF with KeyBank, one of the premier lenders to the U.S. renewable energy industry. The RCF comprises a $50 million, two-year tranche priced at LIBOR plus 1.75% and a $15 million, three-year tranche priced at LIBOR plus 2.00%. The RCF is secured upon certain of the Company's investment assets and offers the ability to substitute reference assets. The RCF also includes an accordion option which provides access to an additional $20 million of capital which can be accessed subject to certain conditions. This substantial commitment with attractive pricing and terms reflects the high quality of RNEW's portfolio.

On 7 January 2022, a wholly-owned U.S. subsidiary of RNEW, Westside Solar Partners, LLC (i.e. "Echo Solar - MN"), entered in a $15.9 million non-recourse construction loan related to and secured by the 13.7 MW Minnesota commercial solar asset within the Echo Solar Portfolio.

Through the 49.5% acquisition of the Beacon 2 and 5 operating solar assets, the Company assumed its share of amortising project term loans that totalled $47.1 million, as referred to above.

On 31 December 2021, the Company had GAV of $172.7 million, and total recourse and non-recourse debt of $52.1 million, resulting in total leverage of 30.2%.

The borrowing facilities available to the Company and its subsidiaries at 7 January 2022 were as set out in the table below:

13. As at 31 December 2021.

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

15. Closed 7 January 2022.

Portfolio Valuation

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

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

At IPO on 22 December 2020, the Company raised $125.0 million (before costs) by issuing 125,000,000 Shares.

As set out in the NAV bridge below, the Company's NAV as at 31 December 2021 was $123.7 million, predominantly reflecting movement in the valuation of investments and dividends paid.

NAV Bridge Since 31 December 2020 ($M)

Change in ProjectCo DCF: Represents the impact on the fair value of Holdco and RNEW NAV from changes to a) DCF depreciation/Quarterly cashflow roll-forward, b) Change in project-level debt, c) Adjustments to discount rates/factors, and d) Adjustments to DCF assumptions. As of 31 December 2021, NAV had decreased by $0.2M millions since 31 December 2020 due to changes in DCF FMV of the underlying assets.

Change in ProjectCo Financial Assets, net of distributions to RNEW: Represents the impact on the fair value of Holdco and RNEW NAV due to increases or decreases in cash, receivables, payables and other net working capital account balances at the project company level.

Q1-Q4 Cash distributions from ProjectCos to RNEW: Represents cash generated by project companies which was distributed up to RNEW during the Period for purposes of paying dividends to Shareholders.

Q1-Q3 Cash dividends to Shareholders: Dividends of $2.3 million (1.8 cents per Share) were paid during the Period in respect of the period to 30 September 2021. In addition, after the Period end, the Company declared a further dividend of 1.4 cents per Share in respect of the quarter ended 31 December 2021. Over the Period, the portfolio generated net revenue sufficient to cover the dividend approximately 1.1 times.

Deferred Tax Liability: Represents the impact on the fair value of Holdco and RNEW NAV due to an accrual for deferred tax at RNEW Holdco, LLC, the Company's wholly-owned U.S. subsidiary, which is subject to U.S. income taxes.

Net accrued expenses: Represents both the impact on fair value of Holdco due to increases or decreases in cash, receivables, payables and other net working capital account balances at the Holdco level as well as the change in net working capital at the RNEW level.

The assumptions set out in this section remain subject to continuous review by the Investment Manager and the Board.

Portfolio Valuation Sensitivities

The figure below shows the impact on the portfolio valuation of changes to the key input assumptions ("sensitivities") with the horizontal x-axis reflecting the impact on NAV per Share. The sensitivities are based on the portfolio of assets as at 31 December 2021. For each sensitivity illustrated, it is assumed that potential changes occur independently with no effect on any other assumption. It should be noted that the relatively moderate impact of a change in forecast merchant power prices reflects the long term fixed price contracted revenues of the Company's portfolio, with a weighted average remaining contracted term of 16.7 years16 as at 31 December 2021. Similarly, the moderate impacts due to variations in operational expenses reflect a number of the Company's assets having fixed price, long-term operating expenses including O&M, property leases, and payments in lieu of taxes.

16. Includes all construction and committed assets.

Market Outlook

The period since RNEW's IPO has seen a number of positive developments in the U.S. renewable energy industry. In 2021, U.S. solar and wind installations represented over 80% of new power capacity, contributing more than 28 GW. By way of comparison, this new clean energy capacity is more than four times that of new gas-fired power installations last year. With these additions, renewable energy now represents more than 25% of U.S. power generating capacity and is forecasted to exceed 30% by 2024 according to Federal Energy Regulatory Commission ("FERC") data. While acknowledging the human suffering arising out of the Russian-Ukraine conflict, we believe that it should have a positive impact on propelling renewable energy in the U.S. and globally as nations revisit their reliance on imported fossil fuels and reorient their policies to enhance domestic energy security. Furthermore, with rising fossil fuel costs, particularly natural gas, which sets the marginal power price across most U.S. power markets, renewables competitive positioning has strengthened due to its abundant and free fuel source. We also believe that these factors contribute to an improved outlook for recontracting RNEW's assets over the medium term.

In late December 2020, the Consolidated Appropriations Act 2021 extended the existing solar ITC for two additional years and the onshore wind PTC for one additional year. Solar projects on which construction starts in 2020 through 2022 qualify for a 26% ITC, reducing to 22% in 2023. All such projects that start construction through 2022 must be placed in service by the end of 2025. This is alongside the current regulations governing tax credits which require that projects must be completed within four years after construction starts, thereby providing a multi-year pipeline of solar and wind opportunities that began construction in 2021 and can still access the current year ITC or PTC through 2025.

The inauguration of President Biden in January 2021 marked a further strengthening of the Federal Government's support for renewable energy. The climate agenda is a central priority for President Biden who, on his first day in office, signed an executive order to bring the U.S. back into the Paris Agreement (which took effect on 19 February 2021). He also issued a series of executive actions in support of policies seeking to combat climate change by using a "whole of government" approach. He established a goal for the U.S. power sector to be carbon-free by 2035, a very ambitious objective considering the U.S. power grid is still 60% reliant on fossil fuel generation. These orders included directing federal agencies to eliminate fossil fuel subsidies and procure carbon pollution-free electricity for federal facilities. On 8 December 2021, he issued a series of climate related executive orders including directing the Federal Government to use its procurement power to achieve 100% carbon pollution free electricity by 2030. Given that the Federal Government is the largest U.S. landowner and energy consumer, we expect this order to have a positive impact on solar, wind and battery storage project development and construction in the years to come. This order alone is projected to result in the Federal Government procuring more than 10 GW of renewable energy by 2030. In addition to these actions, President Biden supports legislation for a 10-year ITC extension and a direct pay or refundable tax credit to be enacted, both of which would require Congressional approval.

For several months in 2021, Congress debated a large social and climate infrastructure bill known as the Build Back Better ("BBB") Act. In November, the Democratic Party controlled U.S. House of Representatives passed the $2.2 trillion act, which included approximately $555 billion allocated to climate related investments including the multi-year extension of various tax credits for solar and wind. In December, with Democratic Senator Joe Manchin's announced "no" decision, the U.S. Senate was unable to obtain the 50 votes needed to pass BBB. While BBB would have expanded tax credits to standalone battery storage and extended tax credits for wind and solar for 10 years, we do not believe that BBB has a material impact on our near-to-medium-term outlook for RNEW's addressable U.S. solar and wind markets given the multi-year tax credit policies currently in place. The Democratic Congressional leadership has signalled its intent to continue pressing for a modified BBB bill in 2022. We believe that BBB's inability to be enacted in 2021 was more attributable to the enormous cost of its social welfare agenda rather than its climate related package. Therefore, we remain optimistic that a scaled down bill with material renewable tax credit extensions will gain bi-partisan support in 2022, particularly after the mid-term Congressional elections in November 2022.

Over the last several months, inflation and supply chain concerns across many industries including wind and solar power have garnered attention as economies emerge from the slack demand related to COVID-19 and experience supply and demand imbalances. Moreover, the Russia-Ukraine conflict has had an impact of increasing aluminium and steel prices which are inputs into the installation of solar systems. We expect equipment prices to continue to rise in the near term as they have in the past when various supply and demand catalysts such as tariffs, tax credit extension and expiration, pandemics, and other factors have occurred. To date, the Company has not experienced any material impacts due to inflation across its construction and operating stage assets. As a general matter, the Company invests predominantly in construction and operating stage assets where the risks of inflation in construction costs are mitigated through fixed price EPC contracts and/or purchase agreements where potential cost overruns and delays are allocated to the construction firm or vendor. Similarly, the Company typically structures O&M services for its projects under medium to long‑term (i.e. 3-10 years) fixed priced contracts with experienced operators to mitigate temporary price fluctuations. Finally, with the U.S. renewable energy industry's projected sustained growth through the coming decade, we expect the number of O&M service providers to increase over time which will continue to increase competition to service the Company's growing portfolio and cushion potential inflationary pressures.

2021 also saw substantial capital inflows into sustainable and renewables-focused investment vehicles. Ecofin's observation is that the lion's share of fund flows continues to go into large ($ billion) infrastructure funds while acknowledging increasing flows broadly across the renewable energy spectrum. RNEW's focus is on the "middle market" of U.S. renewable energy, where Ecofin sees less deep capital markets relative to the large‑scale segment, which is more heavily targeted by large funds and strategic investors (i.e., utilities, independent power producers ("IPPs"), etc.) acquiring assets through advisor led auctions. Based on Ecofin's experience of evaluating dozens of solar and wind acquisition opportunities and committing to new investments for RNEW, our view is that market conditions and discount rates for U.S. renewables assets should remain stable relative to the past couple of years.

Solar

The U.S. solar industry continues to demonstrate remarkable growth, representing the single largest share (52%) of new U.S. electric generating capacity additions in 2021. In 2021, 12.8 GW of utility scale solar was installed and approximately 5.0 GW of distributed solar (less than 1 MW) was installed. With 5.4 GW of solar capacity added in Q3 2021, the U.S. now has 113.5 GW of installed solar capacity, enough to power 21.8 million American homes.

This growth is particularly impressive as the industry navigated through international trade policy and supply chain related challenges. In November 2021, the U.S. solar industry welcomed the Department of Commerce ("DOC") dismissing petitions to issue anti-dumping and countervailing duties ("AD / CVD") on solar cells from Malaysia, Thailand, and Vietnam, which would have significantly increased module prices. On the same day, the U.S. Customs and Border Protection clarified its policies around the enforcement of its Withhold Release Order against silica-based products from Hoshine Silicon Industry Co. in China's Xinjiang region. However, in March 2022, the DOC initiated a new AD / CVD case against crystalline silicon photovoltaic (PV) based products from Vietnam, Malaysia, Thailand, and Cambodia intended to provide broader enforcement of the Section 201 tariffs on imported Chinese solar modules, which was extended for four years in February 2022. We anticipate that this development will dampen the forecasted pace of growth for the U.S. solar industry while the case runs its course over the next several months. As a policy matter, these developments reinforce the desire of the U.S. government to create a level playing field with China and promote the development of domestic solar PV module manufacturing. On a positive note, the Section 201 tariff extension includes an exemption for bi-facial PV modules, which are a primary component used in utility scale solar projects.

During Q3 2021, 6.1 GW of new revenue contracts were signed, bringing the total to 81 GW of U.S. utility scale projects in development with revenue contracts. Similarly, we are seeing strong interest across the country from corporations, municipalities, universities, schools, and hospitals to enter into PPAs with commercial scale solar systems. Given near term supply chain constraints introducing delays and equipment cost inflation, we expect to see developers being more selective on the projects they advance in 2022 and potentially electing to defer marginal projects until 2023 to optimise economics.

From RNEW's vantage point, investments in contracted solar assets remain at the core of achieving its investment objectives. As we look to investing in 2022, RNEW benefits from having a sizeable pipeline of announced conditional acquisitions (the Echo Solar Portfolio of 10 solar assets in Virginia and Delaware that are anticipated to close in 2022 totalling $41 million of equity value) where the cost inflation risks are mitigated through the contractual structure with a financially strong and large global renewable energy company. As of 31 December 2021, Ecofin's pipeline of commercial and utility scale solar opportunities consisted of more than 35 deals totalling in excess of $1.3 billion. Taking stock of the current market and policy environment, we remain confident in our ability to source operating and ready-to-build contracted solar opportunities to fuel RNEW's growth, consistent with its investment objective.

Wind

U.S. wind power capacity totals 133 GW, making it the third-largest source of electricity generation in the country. In 2021, 10.8 GW of wind power capacity was installed. Of this total, several projects involved repowering older wind farms with larger and more efficient components such as longer blades and updated controls to enhance performance and re-access available PTCs. At the end of 2021, FERC estimated 21.6 GW of high probability wind projects in development with potential to come online by 2024. The Biden administration strongly supports the growth of the U.S. wind industry. While it has heavily promoted the nascent offshore wind industry through a series of executive actions and permit approvals, the Biden administration has also signalled its support for the more mature onshore wind industry through endorsing the ten year extension of PTCs, which is being actively considered and requires Congressional approval.

With the successful closing of Whirlwind in October 2021, RNEW has achieved its sector diversification objective through a proven operating wind asset with a long-term fixed price PPA with an investment grade utility. As at 31 December 2021, Ecofin's pipeline of wind investment opportunities comprised eighteen deals totalling over $1.5 billion. Within this, Ecofin is under exclusivity to invest $9 million in a portfolio of seven operating stage and one construction stage wind projects totalling 27 MW and $42 million in two construction stage wind and wind/solar hybrid projects. The wind investments under exclusivity are both structured as preferred equity to enable regular quarterly payments of a 7.5% annual dividend yield from inception through the construction period into operations. Based on the wind investment opportunities in the pipeline and screened during the Period, we remain convinced about wind's role in providing meaningful diversification benefits, particularly as RNEW grows and broadens its access to larger wind assets and portfolios readily accessible in the market.

In summary, we believe that the Company's investment strategy of focusing on a diversified set of proven renewable energy assets in the U.S. middle market remains differentiated. Moreover, Ecofin, with its seasoned investment team and proprietary sourcing network, is uniquely positioned to access the sustained growth of U.S. renewables that is decarbonising the U.S. power system while achieving RNEW's investment objective. With the IPO proceeds fully deployed into a well-diversified portfolio of solar and wind assets selling power under contract to investment grade quality counterparties and a substantial pipeline of near-term investment opportunities secured under contract, RNEW is well-positioned for the year ahead. At a time of substantial geopolitical and market uncertainty, we believe that RNEW offers investors an opportunity to access predictable and uncorrelated dividends from this unique sustainable infrastructure investment.

Impact Report

ESG Integration and Impact

Impact goal: Allocate capital using an ESG integrated investment process to build and operate a diversified portfolio of renewable energy assets that achieves RNEW's investment objective

The Company's emphasis on ESG comes from the top: its Board of Directors is diverse and has substantial and relevant investment experience to provide strong corporate governance.

RNEW is focused on allocating capital using an investment process which fully integrates ESG considerations and analysis to build and operate a diversified portfolio of renewable energy assets consistent with RNEW's investment objective. The Company has selected Ecofin as its Investment Manager which aligns with its investment and impact objectives.

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

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

v 7 Affordable and Clean Energy

v 8 Decent Work and Economic Growth

v 9 Industry, Innovation and Infrastructure

v 11 Sustainable Cities and Communities

v 13 Climate Action

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

ESG integration

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

Ecofin has developed a proprietary ESG due diligence risk assessment framework (ESG Risk Assessment) that combines both qualitative and quantitative data. This ESG Risk Assessment is embedded in Ecofin's investment memoranda and systematically applied by the investment team to all opportunities prior to investment authorisation by Ecofin's Investment Committee. Each of the Company's eight closed and committed investments spanning 71 assets was analysed through Ecofin's ESG Risk Assessment prior to investment commitment. Ecofin believes this approach to assessing ESG issues serves to mitigate risk and enhance RNEW's impact. Environmental factors affecting climate risk are reviewed to determine an investment's impact and ability to reduce GHG emissions, air pollution and water consumption. Analysis of environmental issues also considers the impact that the investment will have on land use and considers mitigation plans when issues are identified. Analysis of social issues may encompass an investment's impact on the local community and consider health and safety together with the counterparties to be engaged to construct and operate the assets. Governance is reviewed in partnership with qualified third-party legal counsel to ensure compliance with all laws and regulations, strong ongoing corporate governance through strict reporting protocols with qualified operators and project asset managers and annual independent financial statement audits.

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

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

Impact

RNEW's portfolio produced approximately 169.2 GWh of clean electricity during 2021, enough to power approximately 15,800 homes, offsetting approximately 89,500 tonnes of CO2e and avoiding the consumption of approximately 22,000 million litres of water. RNEW focuses on investments that have a positive environmental impact by reducing GHG emissions, air pollution and water consumption. Ecofin seeks to analyse and report on ESG factors on a consistent basis to maximise the impact of its investment activities. To assess environmental impact, Ecofin goes beyond measuring CO2 emissions avoided and quantifies other GHG emissions, such as methane and nitrous oxide, and also measures the contribution that investments make to save water consumption. Water is consumed by thermoelectric (i.e. coal and gas) power plants in the cooling process associated with steam turbine generators. Water savings occur in the same way that renewable energy generation offsets CO2 emissions from thermoelectric generators. Ecofin calculates estimated water savings by reference to the U.S. Energy Information Administration's ("EIA") thermoelectric cooling water data by location and applying it to the production from RNEW's portfolio.

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

Task Force on Climate-related Financial Disclosures

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

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

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

Investment Objective and Investment Policy

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

Investment objective

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

Investment policy and strategy

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

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

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

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

Investment restrictions

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

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

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

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

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

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

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

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

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

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

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

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

· any Renewable Assets that are located outside of the United States will only be located in other OECD countries. Such Renewable Assets will represent not more than 15 per cent. of Gross Assets.

References in the investment restrictions detailed above to "investments in" or "exposure to" shall relate to the Company's interests held through its Investment Interests.

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

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

Gearing policy

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

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

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

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

Currency and hedging policy

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

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

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

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

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

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

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

Cash management policy

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

Amendments to the investment objective, policy and investment restrictions

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

Risk Management

Principal Risks

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

Emerging risks

The Directors have identified the following emerging risk:

Chinese Solar Materials Tied to Forced Labour

On December 23, 2021, President Biden signed the Uyghur Forced Labor Prevention Act ("UFLPA") into law. The UFLPA is the latest in a line of U.S. efforts to address the plight of Uyghurs and other persecuted minority groups in China's Xinjiang Uyghur Autonomous Region ("XUAR"). A key feature of UFLPA is the creation of a rebuttable presumption that all goods manufactured even partially in the XUAR are the product of forced labour and therefore not entitled to entry at U.S. ports.

A significant portion of the world's polysilicon, which is used to make solar panels, comes from China. In order to help ensure that the solar supply chain remains free of forced labour and to raise awareness within the industry, the Solar Energy Industries Association ("SEIA") has been calling on solar companies to move their supply chains out of XUAR. SEIA has been informed that many companies have moved supply chains out of XUAR, and many are having independent third-party audits. These audits are conducted to verify that supply chain partners do not use forced labour and that materials in solar products do not come from Xinjiang.

Risk Management

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

Directors on the Risk Committee bring external knowledge of the renewable energy, investment trust (and financial services generally) marketplace, trends, threats etc. as well as macro/ strategic insight. The Risk Committee carried out a formal review of the Company's risks at its meeting held on 31 August 2021.

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

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

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

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

Key Performance Indicators

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

· Performance;

· Dividends and Dividend Target;

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

· Ongoing charges ratio.

Performance

As the Company's objective is to seek to provide Shareholders with an attractive level of distributions with prospects of modest capital growth over the long term, performance is best measured in terms of total return. The Company's NAV and share price total returns for the Period were 2.8% and 0.8% respectively. There is no single index against which the Company's performance may be meaningfully assessed. Therefore, the Board refers to a variety of relevant data and this is reflected in both the Chair's Statement and the Investment Manager's Report. As explained in the Chair's Statement, the Board has reviewed the performance in the Period and is satisfied with the longer term prospects of the portfolio.

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

Dividends and Dividend Target

Dividends form a key component of the total return to Shareholders and the Company exceeded its dividend target of 2 - 3% (based on the IPO issue price of 100 cents per Share) in respect of the Period. The Company declared four interim dividends in respect of the Period (aggregate total of 3.2 cents per Share), representing a 3.2% return on investment (based on the IPO issue price of 100 cents per Share). In its IPO Prospectus, the Company set out a 5.25% - 5.75% annual dividend target range for 2022 and beyond.

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

Premium/discount of share price to net asset value per Share

The Board monitors the price of the Company's Shares in relation to their NAV and the premium/discount at which the Shares trade. The Company has Shareholder authority to issue and buy back Shares, which could assist short term management, however the level of discount or premium is mostly a function of investor sentiment and demand for the Shares, over which the Board may have limited influence. The share price stood at a 0.1% premium to NAV as at 31 December 2021. Further details are provided in the Chair's Statement.

Ongoing charges ratio

The expenses of managing the Company are carefully monitored by the Board. The standard performance measure of these is the ongoing charges ratio ("OCR"), which is calculated by dividing the sum of such expenses over the course of the year, including those charged to capital, by the average NAV over the year. This ratio provides a guide to the effect on performance of annual operating costs. The Company's OCR for the period from IPO to 31 December 2021 year was 1.47%.

Statement of Directors' Responsibilities in Respect of the Financial Statements

Directors' responsibilities

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

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the financial statements in accordance with international accounting standards in conformity with the requirements of the Act. 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. The Directors are also required to prepare financial statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

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

· select suitable accounting policies and then apply them consistently;

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

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

· state whether they have been prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, subject to any material departures disclosed and explained in the financial statements;

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

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Act and, as regards the financial statements, Article 4 of the IAS Regulation.

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

Website publication

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

Directors' responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

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

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

Patrick O'D Bourke

Chair of the Board

14 April 2022

Statement of Comprehensive Income

Period from Incorporation on 12 August 2020 to 31 December 2021

The total column of the Statement of Comprehensive Income is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the Period.

Profit on ordinary activities after taxation is also the total comprehensive profit for the Period.

Statement of Financial Position

As at 31 December 2021

Approved and authorised by the Board of directors for issue on 14 April 2022.

Patrick O'D Bourke

Chair of the Board

Ecofin U.S. Renewables Infrastructure Trust PLC was incorporated in England and Wales with registered number 12809472.

Statement of Changes in Equity

Period from Incorporation on 12 August 2020 to 31 December 2021

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

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

Statement of Cash Flows

Period from Incorporation on 12 August 2020 to 31 December 2021

Notes to the Financial Statements

Period from incorporation on 12 August 2020 to 31 December 2021

1. General Information

Ecofin U.S. Renewables Infrastructure Trust PLC ("RNEW" or the "Company") is a public company limited by shares incorporated in England and Wales on 12 August 2020 with registered number 12809472. The Company is a closed-ended investment company with an indefinite life. The Company commenced operations on 22 December 2020 when its Shares were admitted to trading on the LSE. The Directors intend, at all times, to conduct the affairs of the Company so as to enable it to qualify as an investment trust for the purposes of section 1158 of the Corporation Tax Act 2010, as amended.

The registered office and principal place of business of the Company is 6th Floor, 125 London Wall, London, EC2Y 5AS.

At the Company's IPO, 125,000,001 Shares were admitted to the premium segment of the LSE, upon raising gross proceeds of US$125.0 million.

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

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

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

Sanne Fund Services (UK) Limited, (formerly PraxisIFM Fund Services (UK) Limited), provides administrative and company secretarial services to the Company under the terms of an administration agreement between the Company and the Administrator.

2. Basis of Preparation

The financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards ("IFRS") adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The financial statements have been prepared on the historical cost basis, as modified for the measurement of certain financial instruments at fair value through profit or loss ("FVTPL").

The financial statements have also been prepared as far as is relevant and applicable to the Company in accordance with the Statement of Recommended Practice ("SORP") issued by the AIC in April 2021.

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

There are no comparatives as this is the Company's first accounting period.

Basis of consolidation

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

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

Characteristics of an investment entity

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

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

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

· Company measures and evaluates the performance of substantially all of its investments on a fair value basis.

In assessing whether the Company meets the definition of an investment entity set out in IFRS 10, the Directors note that:

· the Company has multiple investors and obtains funds from a diverse group of shareholders who would otherwise not have access individually to investing in renewable energy and sustainable infrastructure investments ("Renewable Assets") due to high barriers to entry and capital requirements;

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

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

The Directors are of the opinion that the Company meets all the typical characteristics of an investment entity and therefore meets the definition set out in IFRS 10. The Directors are satisfied that investment entity accounting treatment appropriately reflects the Company's activities as an investment trust.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements. The following is a summary of the Directors' assessment of the going concern status of the Company, which considered the adequacy of the Company's resources and the impacts of the COVID-19 pandemic.

In reaching their conclusion, the Directors considered the Company's cash flow forecasts, cash position, income and expense flows. The Company's net assets at 31 December 2021 were $123.7 million. As at 31 December 2021, the Company held $5.4 million in cash and had $60 million headroom on its RCF, and anticipates to close on a tax equity arrangement in Q2-Q3 of 2022 which would consist of financing towards the Echo Solar Portfolio. The Company continues to meet its day-to-day liquidity needs through its cash resources. The total expenses for the Period ended 31 December 2021 were $2.0 million, which represented approximately 1.6% of average net assets during the Period. At the date of approval of this Annual Report, based on the aggregate of investments and cash held, the Company had substantial cover for its operating expenses.

The major cash outflows of the Company are the costs relating to the acquisition of new investments and the payment of dividends. The Directors review financing reporting at the quarterly Board meeting, which includes reporting related to indebtedness, compliance with borrowing covenants and fund investment limits. The Directors are confident that the Company has sufficient cash balances and access to equity markets, including pending tax equity financing arrangements, in order to fund commitments to acquisitions detailed in note 19 to the financial statements, should they become payable.

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

Underlying SPV revenues are derived primarily from the sale of electricity by project companies through PPAs in place with large and creditworthy utilities, municipalities, and corporations. Most of these PPAs are contracted over a long period with a weighted average remaining term as at 31 December 2021 of 16.7 years.

During the Period 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 service providers. Therefore, the Directors and the Investment Manager do not anticipate a material threat to SPV revenues.

The market and operational risks and financial impact as a result of the ongoing COVID-19 pandemic, and measures introduced to combat its spread, were discussed by the Board, with updates on operational resilience received from the Investment Manager, Administrator and other key service providers. The Investment Manager actively monitors risks (including COVID-19 related) with the potential to impact the Company's investments through its recurring engagement with service providers including operators, construction firms, and project asset managers. The Board was satisfied that the Company's key service providers have the ability to continue to operate.

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

Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates are, by their nature, based on judgement and available information, hence actual results may differ from these judgements, estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the fair value of the investments as disclosed in note 4 to the financial statements.

Key judgements

As disclosed above, the Directors have concluded that the Company and Holdco meet the definition of an investment entity as defined in IFRS 10. This conclusion involved a degree of judgement and assessment as to whether the Company met the criteria outlined in IFRS 10.

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

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

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

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

Segmental reporting

The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged in a single segment of business, being investment in renewable energy infrastructure assets to generate investment returns whilst preserving capital. The financial information used by the Chief Operating Decision Maker to manage the Company presents the business as a single segment.

All of the Company's income is generated within the U.S.

All of the Group's non-current assets are located in the U.S.

New standards and amendments issued but not yet effective

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

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

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Reference to the Conceptual Framework - Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.

Definition of Accounting Estimates - Amendments to IAS 8

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

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

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

3. Significant Accounting Policies

Financial Instruments

Financial assets

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

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

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

Financial liabilities

The Company's financial liabilities include trade and other payables and other short term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

Recognition, derecognition and measurement

Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

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

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Gains and losses resulting from the movement in fair value are recognised in the Statement of Comprehensive Income.

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Taxation

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

Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains. Shortly after listing the Company received approval as an Investment Trust by HMRC. Current tax is the expected tax payable on the taxable income for the Period, using tax rates that have been enacted or substantively enacted at the date of the Statement of Financial Position.

Deferred taxation

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the Statement of Comprehensive Income except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off tax assets against tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Income

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

Dividend income is recognised when received and is reflected in the Statement of Comprehensive Income as Investment Income.

Bank deposit interest income is earned on bank deposits on an accruals basis.

Expenses

All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Statement of Comprehensive Income, all expenses, including the Investment Management fee, are presented in the revenue column of the Statement of Comprehensive income as they are directly attributable to the operations of the Company with the exception of costs incurred in the acquisition of the seed assets, which have been charged as a capital item in the Statement of Comprehensive Income.

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

Foreign currency

Transactions denominated in foreign currencies are translated into U.S. Dollars at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Period end are reported at the rates of exchange prevailing at the Period end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss to capital or revenue in the Statement of Comprehensive Income as appropriate. Foreign exchange movements on investments are included in the Statement of Comprehensive Income within gains on investments.

Cash and cash equivalents

Cash and cash equivalents includes deposits held at call with banks and other short-term deposits with original maturities of three months or less.

Share capital and share premium

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

Repurchases of the Company's own Shares are recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Nature and purpose of equity and reserves:

Share capital represents the nominal value (1 cent per share) of the issued share capital.

The Share premium account arose from the net proceeds of new Shares.

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

The capital reserve reflects any:

· gains or losses on the disposal of investments;

· exchange movements of a capital nature;

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

· expenses which are capital in nature

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

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

Dividend payable

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

4. Investment Held at Fair Value Through Profit or Loss

As at 31 December 2021, the Company had one investment, being Holdco. The cost of the investment in Holdco is US$119,203,824.

Fair value measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following 3 levels:

Level 1

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

Level 2

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

Level 3

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

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

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

Valuation methodology

The Company owns 100% of its subsidiary Holdco through which the Company has acquired all its underlying investments in SPVs. As discussed in Note 2, the Company meets the definition of an investment entity as described by IFRS 10, and as such the Company's investment in Holdco is valued at fair value. In accordance with Company policy, the Investment Manager has engaged an independent valuation firm, Marshall & Stevens to carry out fair market valuations of the underlying investments as at 31 December 2021.

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

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

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

Valuation Sensitivities

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

(i) Discount rates

Pre-tax discount rates applied in the DCF valuations are determined by Marshall & Stevens using a multitude of factors, including pre-tax discount rates disclosed by the Company's global peers and comparable infrastructure asset classes as well as the internal rate of return inherent in the original purchase price when underwriting the asset. The DCF valuations utilize two classes of pre-tax discount rates: a) contracted discount rate applied to the contracted cash flows of each asset and b) uncontracted discount rate (higher) applied to the uncontracted (or "merchant") cash flows of each investment which occur after the initial PPA and/or other contract term.

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

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

(ii) Energy Production

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

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

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

(iii) Curtailment

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

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

(iv) Merchant Power Prices

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

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

(v) Operating Expenses

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

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

5. Income

6. Investment Management Fees

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

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

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

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

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

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

7. Other Expenses

The Auditor's fee for the statutory audit of the Period is $123,000 (including VAT of $20,500). BDO also reviewed the Company's initial accounts as at 28 February 2021 for a fee of $61,900 (including VAT of $10,300). Further, during the Period, the Company engaged BDO to perform reporting accountant services for a fee of $135,000 (including VAT of $22,000) in relation to the Company's admission of new Shares to trading on the LSE, which has been treated as a capital expense and included in 'share issue costs' disclosed in the Statement of Changes in Equity.

8. Earnings Per Share

Earnings per Share is based on the profit in the period from incorporation on 12 August 2020 to 31 December 2021 of $3,443,000 attributable to the weighted average number of Shares in issue of 92,475,686 in the Period. Revenue and capital profit/(loss) are $4,202,000 and ($759,000) respectively.

9. Taxation

(a) Analysis of charge in the Period

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

The effective UK corporation tax rate applicable to the Company for the Period is 19.00%. 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:

Investment companies which have been approved by the HMRC under section 1158 of the Corporation Tax Act 2010 are exempt from tax on UK capital gains. Due to the Company's status as an Investment Trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided for deferred tax on any capital gains or losses arising on the revaluation of investments.

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

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

10. Trade and Other Receivables

11. Trade and Other Payables

12. Share Capital

The Shares have attached to them full voting, dividend and capital distribution (including on winding-up) rights. They confer rights of redemption. The Initial Redeemable Preference Shares did not carry a right to receive notice of or attend or vote at any general meeting of the Company unless no other shares were in issue at that time. The Initial Redeemable Preference Shares were treated as equity in accordance with the requirements of IFRS. The Initial Redeemable Preference Shares did not confer the right to participate in any surplus remaining following payment of such amount.

In accordance with the Company's Prospectus, the Company has the right to issue C Shares of nominal value 1 cent each pursuant to any Subsequent Issue under the Share Issuance Programme. There were no C Shares in issue during the Period to 31 December 2021.

On incorporation, the issued share capital of the Company was $0.01 represented by one Share, which was subscribed for by Ecofin Advisors, LLC. On 22 October 2020, the 50,000 Initial Redeemable Preference Shares were allotted to Ecofin Advisors, LLC. The Initial Redeemable Preference Shares were paid up as to one quarter of their nominal value and were redeemed immediately following Admission out of the proceeds of the Initial Issue.

On 22 December 2020, the Company was admitted to the premium segment of the main market of the LSE and to the premium segment of the Official List of the FCA ("Admission"). Pursuant to this, 125,000,000 Shares were issued at a price of $1.00 per Share.

During the Period, the Company issued 27,929 Shares with respect to the first quarter and 25,568 Shares with respect to the second quarter to the Company's Investment Manager, in relation to investment management fees paid during the Period at issuance prices of $0.9906 and $0.9847 respectively.

The Company's issued share capital at 31 December 2021 comprised 125,053,498 Shares and this is the total number of Shares with voting rights in the Company.

13. Dividends

(a) Dividends paid in the Period

The Company paid the following interim dividends during the Period:

(b) Dividends paid and payable in respect of the financial period

The dividends paid and payable in respect of the financial period are the basis on which the requirements of s1158-s1159 of the Corporation Tax Act 2010 are considered.

After the Period end, the Company declared an interim dividend of 1.4 cents per Share for the period 1 October 2021 to 31 December 2021, which was paid on 11 March 2022 to Shareholders on the register at 25 February 2022.

14. Special Distributable Reserve

As indicated in the Prospectus, following admission of the Company's Shares to trading on the LSE, the Directors applied to the Court and obtained a judgement on 29 January 2021 to cancel the amount standing to the credit of the share premium account of the Company. The amount of the share premium account cancelled and credited to the Company's Special distributable reserve was $121,250,000, which can be utilised to fund distributions to the Company's Shareholders.

15. Net Assets Per Share

Net assets per share is based on $123,723,000 of net assets of the Company as at 31 December 2021 attributable to the 125,053,498 Shares in issue as at the same date.

16. Related Party Transactions with the Investment Manager and Directors

Investment Manager

Fees payable to the Investment Manager by the Company under the IMA are shown in the Statement of Comprehensive Income. As at 31 December 2021, the fee outstanding but not yet paid to the Investment Manager was $317,000.

As at 31 December 2021, the Investment Manager's total holding of Shares in the Company was 8,606,995.

Directors

The Company is governed by a Board of Directors, all of whom are non-executive, and it has no employees. Each of the Directors was appointed on 22 October 2020.

Each of the Directors is entitled to receive a fee from the Company at such rate as may be determined in accordance with the Articles. Each Director currently receives a fee payable by the Company at the rate of £40,000 per annum.

The Chair of the Board receives an additional £10,000 per annum. The Chair of the Audit Committee, the Chair of the Management Engagement Committee and the Chair of the Risk Committee each receive an additional £6,000 per annum.

The Chair was entitled to an additional one-off payment of £10,000 and the other Directors were entitled to an additional one-off payment of £7,500 each in consideration of the work undertaken in connection with the approval and publication of the Prospectus, paid by the Company conditional on Admission.

The aggregate remuneration and benefits in kind of the Directors in respect of the Company's accounting period ended 31 December 2021 which are payable out of the assets of the Company were $301,500. The Directors are also entitled to out‑of‑pocket expenses incurred in the proper performance of their duties.

The Directors had the following shareholdings in the Company, all of which were beneficially owned.

17. Financial Risk Management

The Investment Manager, AIFM and the Administrator report to the Board on a quarterly basis and provide information to the Board which allows it to monitor and manage financial risks relating to the Company's operations. The Company's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. These risks are monitored by the AIFM. Each risk and its management is summarised below.

(i) Currency Risk

Foreign currency risk is defined as the risk that the fair values of future cash flows will fluctuate because of changes in foreign exchange rates. A currency loss of $334,000 arose during the Period, predominantly on the IPO proceeds that were received in GBP and subsequently converted to U.S. Dollars. However based on current operations, as the Company's financial assets and liabilities are denominated in U.S. Dollars and substantially all of its revenues and expenses are in U.S. Dollars, the Directors do not expect frequent transactions in foreign currencies and therefore currency risk is considered to be low and no sensitivity to currency risk is presented.

(ii) Interest Rate Risk

The Company's interest rate risk on interest bearing financial assets is limited to interest earned on money market cash deposits.

The Company's interest and non-interest bearing assets and liabilities as at 31 December 2021 are summarised below:

The money market cash deposits and bank accounts included within cash and cash equivalents bear interest at low or zero interest rates and therefore movements in interest rates will not materially affect the Company's income and as such a sensitivity analysis is not necessary.

The Company's subsidiary, Holdco, has interest rate risk through the RCF and through certain SPVs' project level loans which are priced by reference to LIBOR plus a margin. The total exposure to debt through Holdco at 31 December 2021 was $52.1 million. An increase or decrease in interest rates of 0.5% would impact the net asset value of Holdco and the Company by $260,000 negatively or positively respectively.

(iii) Price Risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Company will fluctuate. As of 31 December 2021, the Company held one investment, being its shareholding in Holdco, which is measured at fair value. The value of the underlying renewable energy investments held by Holdco varies according to a number of factors, including discount rate, asset performance, solar irradiation, wind speeds, operating expenses and forecast power prices. The sensitivity of the investment valuation due to price risk is shown in note 4.

(iv) Credit Risk

Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Company is exposed to credit risk in respect of trade and other receivables and cash at bank.

The Company's maximum exposure to credit risk exposure as at 31 December 2021 is summarised below:

Cash and cash equivalents are held with U.S. Bank whose Standard & Poor's credit rating is AA-. The Company's credit risk exposure is minimised by dealing with financial institutions with investment grade credit ratings. No balances are past due or impaired.

Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Manager and the Board continuously monitor forecast and actual cashflows from operating, financing and investing activities to consider payment of dividends, repayment of the Company's shareholder loans or further investing activities.

The following tables detail the Company's expected maturity for its financial assets (excluding equity investment in Holdco) and liabilities together with the contractual undiscounted cash flow amounts:

Capital management

The Company considers its capital to comprise Share capital, distributable reserves and retained earnings. The Company is not subject to any externally imposed capital requirements. The Company's share capital and reserves are shown in the Statement of Financial Position at a total of $123,723,000.

The Company's primary capital management objectives are to ensure the sustainability of its capital to support continuing operations, meet its financial obligations and allow for growth opportunities. Generally, acquisitions are anticipated to be funded with a combination of current cash, borrowings and equity.

18. Unconsolidated Subsidiaries, Associates and Other Entity

The following table shows subsidiaries and associates of the Company. As the Company is regarded as an Investment Entity as referred to in note 2, these subsidiaries and associates have not been consolidated in the preparation of the financial statements. The ultimate parent undertaking is Ecofin U.S. Renewables Infrastructure Trust PLC.