Renewables Infrastructure Group Regulatory News (TRIG)

Interim Report for the six months ended 30 June 2020 The Renewables Infrastructure Group Limited

1.1 H1 2020 Highlights

· 113.0p NAV per share1, decreased by 1.7% since 31 December 2019 (115.0p)

· £2,009m Directors' portfolio valuation, up 15.1% since 31 December 2019 (£1,745m)2

· 9.4%: total shareholder return since IPO3 vs. 5.0% for the FTSE 250

· 6.76p: dividend target reaffirmed for the year to December 2020 (2019: 6.64p)

· 1,502MW portfolio generation capacity4 after disposals (31 December 2019 1,664MW)

· 640,000 tonnes of CO2 avoided4,5 (H1 2019: 350,000)

· £281m: invested in period (H1 2019: £347m)

· £120m equity capital raised (H1 2019: £302m)

Helen Mahy, CBE, Chairman of the Company, said:

"The challenges during the first half of this year have been significant for many companies, including TRIG. In light of this backdrop, I am pleased to report that our financial performance has remained resilient, sustained by strong operational performance. We continue to maintain our dividend guidance.

TRIG's sustainability objectives have never been more relevant as Europe seeks to recover from the Covid-19 pandemic. Climate change remains a pressing concern, and the Company's investments will continue to be instrumental in mitigating climate change and preserving the natural environment. The Company also seeks to have a positive effect on the communities we partner with and work in and, to that end, the Company has committed a further half a million pounds to support the communities around our assets in their response to the pandemic.

Looking ahead, our robust and diversified portfolio and our capable management team give me confidence that we will continue to provide our shareholders with sustainable returns through responsible investment."

Richard Crawford, Director, Infrastructure, InfraRed Capital Partners said:

"The portfolio has performed well throughout the six months, with good asset availability and favourable weather conditions allowing us to mitigate the lower wholesale power prices caused by the contraction in economic activity. Our diversified portfolio and revenue visibility places us in a strong position for any ongoing challenges.

Positive policy developments continue to provide long-term drivers for the transition to a zero-carbon future and the necessary investment to support this"

Webcast details

TRIG will be presenting its results for the first half of 2020 at 09:30 UK time today. The presentation will be broadcast live and an archive version of the presentation will be made available on the Group's website. The link for the broadcast is: https://www.lsegissuerservices.com/spark/RenewablesInfrastructureGroupLtdThe/events/02bd3889-383c-4771-be1d-117b82468952

1.2 Chairman's Statement

I am pleased to present TRIG's Interim Results for the six months to 30 June 2020, in which we delivered a positive and resilient performance despite the enormous uncertainties that now surround all of us.

The Covid-19 pandemic and the global response required to combat the virus has led to profound changes to the daily lives of so many around the world and has required us to adapt rapidly to a new way of working. Amidst this challenging backdrop, TRIG has still performed resiliently, with the Company's diversified portfolio of renewable energy assets continuing to provide essential clean power without any significant interruption.

Generation from the portfolio was 9% above budget during the half year; this is testament to the dedication of our operating teams as well as the good wind and irradiation levels. Asset availability has been solid despite the challenges of the restrictions imposed as a result of Covid-19 in the countries in which TRIG operates, remaining close to pre-pandemic levels. TRIG benefits from having assets that are typically located away from densely populated areas where infection rates are highest, and which do not require full-time site attendance.

As announced in April, the considerably lower economic activity due to the pandemic has reduced demand for electricity and other commodities. This has impacted current and forecast wholesale power prices, mostly in the near-term, which has fed through into asset valuations. Asset valuations have also been impacted by the future impact of forecast lower gas prices and increased renewable energy generation build-out. These negative valuation drivers were mitigated by both the high proportion of price fixes that the Company had in place and the value enhancing portfolio initiatives that the Managers implemented over the period. We alerted the market in April that the NAV would be adversely affected by the reduction in power prices arising principally as a result of the Covid-19 crisis, indicating a possible reduction in NAV of 5p per share before other factors were taken into account. I am pleased that the overall adverse impact at June 30 2020 has been partially offset, including a valuation uplift reflecting strong underlying demand for the asset class together with portfolio enhancements, such that the overall reduction in NAV over the 6 months is 2p only. The Company's net asset value ("NAV") has reduced to 113.0p at 30 June 2020 from 115.0p at 31 December 2019.

Despite trading through a period of significant market volatility, we still have been able to reaffirm our 2020 dividend and maintain positive cash coverage. TRIG is well placed; most of our revenues are fixed through government subsidies, which provides strong levels of visibility on cash flows in the near-to-medium term. Over the next five years, approximately 74% of our revenue is fixed through subsidies and power price fixes.

Recent events have drawn renewed attention to important global issues, including climate change, air pollution, health inequalities and social justice. Covid-19 has demonstrated how health and environmental issues have significant social implications and can bring material challenges for the way businesses operate. As such, TRIG continues to focus on environmental and financial sustainability, understanding long-term investment risk profiles and maintaining strong governance practices to support all stakeholders.

Production

The TRIG portfolio has had good performance in H1 2020, with production above budget by 9%. The portfolio produced 2,141GWh during the period, 50% higher than the comparable period in 2019 (1,429 GWh). This has been driven by growth in the portfolio and by excellent energy resource in all regions in Q1, and good wind resource in Scandinavia and solar resource in the UK and France in Q2.

The total achieved price for the portfolio in H1 2020 was £86.67/MWh, £2.50/MWh higher than the same period last year. This has been driven by the acquisition of higher-priced generation from offshore wind projects, partially offset by lower wholesale electricity prices in GB, Ireland and Scandinavia. The total achieved price has been further supported by improved commercial terms on new Power Purchase Agreements ("PPAs"). The recent investments in France and Germany with their fixed price structures, further enhances the portfolio's resilience to wholesale electricity price changes, with the added benefit of geographical diversification.

Financial Results and Valuation

The Company's NAV per share was 113.0p at 30 June 2020, a decrease of 1.7% to the NAV per share at 31 December 2019 of 115p. At 30 June 2020, the portfolio was valued at £2,009m, an increase of 15% on the valuation of the portfolio as at 31 December 2019 of £1,745m, this increase was predominantly driven by investments made in the period of £281m. TRIG's total NAV return from IPO to 30 June 2020 was 8.0%, including dividends paid.

After operating and finance costs, net cash flow covered the cash dividend 1.25 times6, or 2.2 times before the impact of repaying project-level debt. TRIG has maintained its loan amortisation profile, continuing to repay project level debt over the remaining subsidy periods.

Acquisitions and Capital Raising

TRIG successfully completed a significantly oversubscribed capital raise in May, raising gross proceeds of £120m from new and existing shareholders. We are grateful to our shareholders for this support and believe that it is testament to the attraction of TRIG's portfolio with its stable, largely contracted revenues during challenging times.

Over the period, TRIG made investments of £281m in three acquisitions7. Most significantly, we completed the acquisition on an interest in Merkur, the 396MW operational German offshore wind farm with fixed revenues for the next 13 years. Completion of the acquisition followed the exchange of contracts to acquire the project, which was announced in December 2019. TRIG will continue its disciplined approach to investment, reducing risk through diversification and seeking to balance our exposure to wholesale power prices with fixed and subsidised revenues.

Responsible Investment

As a renewable electricity generator, TRIG has been a leader in environmental and sustainable issues since its creation. However, the impact of the Covid-19 crisis has also placed a renewed emphasis on wider social considerations. This is one of your Board's key priorities, especially in relation to the responsibility we feel we have to the local communities where our assets are located. This year, we have allocated an additional £0.5m to help address the Covid-19 impact on the local communities around our sites, which will bring the total community contributions to over £1.4m in the year. Both of TRIG's Managers, InfraRed and RES, have also significantly increased their charitable support to alleviate the impact of Covid-19, whilst also focusing on the health and wellbeing of their staff.

Both the TRIG Board and the Company's Managers believe that strong performance on key sustainability metrics, is a crucial element of our overall operational excellence and translates into lower exposure to wider-risks over the longer term. Our Sustainability Policy articulates how TRIG embraces its responsibilities and mitigates risk to create a long-term, positive impact beyond purely commercial objectives and includes other Environmental, Social and Governance ("ESG") considerations. Sustainability is embedded into our approach, from when an investment is initially appraised before acquisition by InfraRed (who has increased its resources focusing on sustainability due diligence in its investment processes) and during operations by RES. We continue to improve how we report and monitor the sustainability of the portfolio, examples of which can be found in Section 2.5 of this report along with further detail of TRIG's Sustainability Goals.

Principal Risks and Uncertainties

As detailed in the Company's Annual Report to 31 December 2019, the principal risks and uncertainties affecting the Company remain as follows:

▲ portfolio electricity production falling short of expectations;

▲ electricity prices falling or not increasing as expected; and

▲ government or regulatory support for renewables changing adversely.

By maintaining geographical and technological diversity across TRIG's portfolio, utilising the specialised expertise of both Managers, TRIG is able to mitigate these risks. TRIG is resilient to varying weather conditions and its exposure to different regulatory and power price markets is diversified.

The short-to-medium term risks associated with power prices are heightened by uncertainty over the depth and duration of the Covid-19 pandemic and the current economic downturn. Power price risks are mitigated through the use of hedges that fix power prices and through subsidies available in different jurisdictions, including France and Germany where revenues are fixed with Feed-in-Tariffs or Contracts for Difference as well as Renewable Obligation Certificates in the UK.

Outlook

The Board believes that it is imperative to decarbonise the global economy, and this will continue to translate into attractive investment opportunities for TRIG. This demand for renewables will allow us to grow the portfolio and further improve diversification and economies of scale as well as providing additional liquidity for our investors. As economies begin to recover, we expect investment into clean energy to play a prominent role. TRIG continues to add to its portfolio where the Investment Manager identifies opportunities with attractive risk adjusted returns and which complement the portfolio's geographical and technical spread and power price sensitivity. In particular, we expect to see an increase of activity in offshore wind in the UK and Germany and we also continue to see the French onshore wind market as an attractive source of subsidised deals.

We believe that the Company's well-diversified portfolio is well placed to continue its strong operational performance, notwithstanding the current uncertain macro environment. As the pandemic continues our key priorities remain the health and safety of our people and maximising the performance of our operating portfolio. As owners and operators of renewable energy generating infrastructure, we operate in a sector of critical importance. Through careful risk management and mitigation we are working diligently with all of our stakeholders to ensure that our portfolio continues to deliver sustainable income to our shareholders.

Helen Mahy

Chairman

6 August 2020

1. The NAV per share at 30 June 2020 is calculated on the basis of 1,739,324,523 ordinary shares in issue and to be issued at 30 June 2020 including issues of ordinary shares under the scrip dividend scheme and managers' shares (in part payment of the management fee).

2. On an Expanded basis. Please refer to Section 3.0 for an explanation of the expanded basis.

3. On a share price plus dividends basis.

4. This is based on the portfolio on a committed basis with construction assets, the disposal of Ersträsk and the partial sell down of Merkur.

5. The committed portfolio is capable of powering a million homes and saving around 1.1m tonnes of CO2 annually based on average household electricity

consumption figures and the IFI Approach to GHG Accounting for Renewable Energy.

6. Dividend cover was 1.28 times after scrip take-up.

7. Post-period end TRIG sold down a share of Merkur to minority co-investors managed by InfraRed.

2.1 Summary Information on TRIG

The Renewables Infrastructure Group ("TRIG") was one of the first investment companies investing in renewable energy infrastructure projects listed on the London Stock Exchange. TRIG completed its IPO in 2013 raising £300 million and is a member of the FTSE-250 index with a market capitalisation as at 30 June 2020 of approximately £2.2 billion. TRIG offers investors access to the largest and most diverse renewables portfolio within the listed investment company peer group, with its strategy of diversifying risk by investing in multiple renewable energy technologies, jurisdictions and climate systems.

TRIG has two experienced managers, InfraRed Capital Partners and Renewable Energy Systems, working together to provide the Company's shareholders with best-in-class investment management and operational management.

InfraRed Capital Partners Limited ("InfraRed") is TRIG's Investment Manager and advises the Group on financial management, sourcing and executing on new investments and providing capital raising and investor relations services.

InfraRed is a leading international investment manager specialised in infrastructure and real estate. With over 190 employees and offices in London, New York, Hong Kong, Seoul and Sydney, InfraRed has a track record of around 20 years in raising and managing 17 infrastructure and real estate funds with over US$12bn of equity under management. InfraRed is also Investment Manager to HICL Infrastructure Company Limited, the largest London-listed infrastructure investment company with a market capitalisation of £3.2bn as at 30 June 2020. Further details can be found on the website at www.ircp.com.

In July 2020 Sun Life Financial Inc. (together with its subsidiaries and joint ventures, "Sun Life") purchased a majority stake in InfraRed. InfraRed now operates as a distinct business under SLC Management, Sun Life's alternative asset management business. The Sun Life acquisition will provide further support to InfraRed in its role as Investment Manager to TRIG over the coming years and InfraRed's management resources for TRIG will be unaffected. Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate clients. As of 30 September 2019, Sun Life had total assets under management of C$1,063 billion. For more information please visit www.sunlife.com.

RES ("Renewable Energy Systems Limited") is TRIG's Operations Manager. RES is the world's largest independent renewable energy company having developed and/or constructed over 18GW of projects, with operations in 10 countries and over 2,500 employees globally. RES is a pure-play renewables company with the expertise to develop, construct and operate projects around the globe across a range of technologies including onshore and offshore wind, solar, energy storage and transmission.

A large, dedicated team of RES staff provide portfolio-level operations management to the Company and its subsidiaries. RES also draws on the experience and skills of a much wider pool of expertise from within the company in order to fulfil its Operations Manager role, utilising nearly four decades of renewables experience to provide project-level services to TRIG and support the evaluation of investment opportunities for the Group.

RES has been at the forefront of the renewable industry for over 35 years, with a strong focus on safety and sustainability. RES provides a complete range of services for renewables projects - from development and design, through construction and engineering, to financing, power purchase agreements and support services. Further details can be found on the website at www.res-group.com.

2.2 Portfolio

As at 30 June 2020, the TRIG portfolio comprised 74 investments in the UK, Republic of Ireland, France, Sweden and Germany, including 45 wind projects, 28 solar photovoltaic projects and one battery storage project. Net of a disposal made post‑period end, the TRIG portfolio comprises 73 investments.

1. SEM refers to the Irish Single Electricity Market.

2. This is TRIG's equity share of the nominal capacity of the asset.

3. Where a project has been commissioned in stages, this refers to the earliest commissioning date.

4. Solwaybank, Venelle and Blary Hill are under construction.

5. Post-period end, TRIG sold down a share of Merkur to minority co-investors managed by InfraRed, leaving TRIG with an approximate 25% equity interest in the Project and Ersträsk. Further details can be found under Acquisitions in Section 2.4.

6. Following the completed investments in Merkur, Fujin, Blary Hill, the sell down of Merkur in July 2020 and the disposal of Ersträsk Phase 1 during Q3 2020.

Portfolio Diversification

The TRIG portfolio benefits from being diversified across multiple jurisdictions, power markets and generating technologies providing multiple revenue sources, as well as a variety of geographic areas with differing meteorological conditions (affecting wind speeds and solar irradiation applicable to each of TRIG's projects). This is illustrated in the segmentation analysis tables below, which is presented by project value as at 30 June 2020 plus subsequent planned disposals and committed investments at their expected cost.1

By Country/ Power Market1,2

By Technology1

1 On a committed basis. Segmentation tables includes construction assets (including construction costs), Solwaybank, Venelle and Blary Hill, the sell down of Merkur and the disposal of Ersträsk Phase 1 which is now complete.

2 Northern Ireland and the Republic of Ireland form a Single Electricity Market, distinct from that operating in Great Britain.

Revenue Profile

TRIG has the benefit of being diversified across five separate power markets: Great Britain, the integrated Single Electricity Market (of The Republic of Ireland and Northern Ireland), France, Sweden (which sits in the Nordic electricity market) and Germany.

The TRIG portfolio has substantial near-term protection in cash revenues from movements in wholesale power prices as the portfolio receives a high proportion of its revenue from selling electricity generated via Power Purchase Agreements ("PPAs") with fixed prices and from government subsidies such as Feed-in-Tariffs ("FiTs"), Contract for Difference ("CfDs"), Renewable Obligation Certificates ("ROCs") or other hedges.

In the longer term, based on its current portfolio, TRIG is expected to have greater exposure to wholesale electricity prices as subsidies and contracts with pre-determined pricing run-off. Over the next five years, 74%1 of electricity sales will be conducted at a fixed price and 67% over the next 10 years. As existing fixed-price contracts expire, the replacement contracts may also have fixed-price elements, decreasing the merchant proportion.

1 Based on nominal revenue projections. Fixed revenues include all subsidised and fixed or hedged revenues.

2.3 Market Developments and Opportunities

The period has been dominated by the unfolding Covid-19 global pandemic. Severe restrictions on movement have had adverse impacts on economic output and demand for power. Governments and central banks are enacting significant measures to support economies and as restrictions are eased in TRIG's key markets, there has been slight improvement in demand for power.

Power demand

Power demand fell across TRIG's key markets during the period. Reflecting the mild winter and the severity and timing of Covid-19 measures, power demand was significantly reduced at the peak of movement restrictions across TRIG's key markets, and are now averaging approximately 7% below demand levels that would be expected without the impact of Covid-19.1

In the UK, TRIG's largest market, average demand is running approximate 10% below 2019 levels. However, power demand has been increasing as lockdown measures have eased.

Such an unanticipated and prolonged reduction in demand has consequences for how the energy system is managed. In particular, balancing the grid during times where generation exceeds demand has been challenging for system operators, increasing the likelihood of grid curtailment or constraints. These challenges have raised awareness of the need for greater grid infrastructure investment across the markets.

In GB, National Grid have introduced the Optional Downward Flexibility Management (ODFM) service, in addition to its established Balancing Mechanism (BM). This scheme allows embedded generators to be compensated when asked by National Grid to stop generating to help match electricity supply and demand and to support network resilience. Seven of TRIG's GB wind projects have been registered within the ODFM, of which five have been called upon to reduce output, in addition to the seven already participating in the BM. Four solar projects are also registered within ODFM.

Power prices

As a consequence of the fall in demand for electricity and other commodities, particularly gas and lignite, power prices have fallen. These commodities are important as they set the market for power prices in the UK and Germany respectively, with the German market in turn a price-setting country for European interconnected power flows. Across TRIG's key markets, season ahead power prices have fallen c.10% over the last six months. TRIG benefits from diversification across the markets in which the Company has assets, with a number of different primary power price drivers in each market.

Power price and economic forecasts show increasing demand for electricity over the coming years, however the timing will be dependent on the pace of economic recovery in TRIG's key markets and therefore sensitive to further pandemic-induced disruption.

Within TRIG's portfolio, 80% of revenues generated in the year are expected to be at a fixed price as a result of a significant portion of portfolio revenues arising from subsidies and other fixed revenues, including hedges put in place before the onset of the pandemic. Further ahead, over the next 10 years 67% of forecast revenues arise from fixed pricing and 60% over the next 15 years, giving strong revenue visibility over the coming years. Typically, forward power markets offer best value in the 1-3 year time horizon, which together with subsidies reaching their expiry, results in a reduced proportion fixed revenues over the longer period. New short-term electricity price fixes are anticipated to continue to be placed on an on-going basis, which will increase the percentages shown below over time, consistent with our prudent approach to electricity price hedging.

1. BNEF: Historical electricity demand/ Covid-19: compare regions

TRIG's estimated power prices and subsidy receipts based on the current portfolio

Next 5 years (till 2024): 74% fixed

Next 10 years (till 2029): 67% fixed

Next 15 years (till 2034): 60% fixed

The Green Recovery Opportunity

One of the few beneficial consequences of the reduction in activity caused by the Covid-19 pandemic has been the short-term reduction in carbon emissions globally and improved air quality. Global daily CO2 emissions reduced by 17%1 by early April 2020 compared with average emissions from 2019 and, at their peak, emissions in individual countries fell by 26% on average. With a clear and pressing need for economic stimulus to drive economic recovery, there is broad political support in the EU and the UK to use recovery funds as a means to drive forward the energy transition to a future without greenhouse gas emissions.

The European Green Deal, announced prior to the widespread outbreak of Covid-19, is now central to the European Commission's economic recovery plans. These plans include investing in various policy areas including €25bn into renewable energy between 2021 and 2027. Many of the Green Deal initiatives will not only necessitate renewable energy to displace fossil fuel demand but will increase the overall demand for renewable electricity, for example through the electrification of transport.

The UK government is now holding Presidency of the UN COP26 Climate Conference, has announced an urgent drive to start projects that are ready for construction, including renewable energy infrastructure, to increase investment and economic activity. In addition, in March the UK government set out details of the next Contract for Difference (CfD) round for 2021. Importantly, the government announced that this will be open for "established" technologies including solar and onshore wind.

TRIG is well placed in all of its key markets to participate in the green recovery plans of governments. The Company's Managers, InfraRed and RES, have strong capabilities in these markets and have a disciplined approach to portfolio construction with a strong track record.

Political Risk - Brexit

The UK left the EU on the 31st January 2020 and then entered into the transition period. The period during which an extension could be requested to the transition period for the UK exiting the EU expired at the end of June, in accordance with the Withdrawal Agreement, suggesting that both parties now must agree a trade deal by December 2020. With the UK officially leaving the EU's internal energy market at the end of the year, both the UK Government and European Commission have stated that they are keen on maintaining a strong co-operation on energy policy and will establish a new energy trade.

One of the advantages of having a geographically diversified portfolio is that the Company is less exposed to any single, localised risk factor. Political and regulatory risks are spread across our portfolio and although the UK is (and is likely to remain) our largest individual market, it now represents 56% of our portfolio compared to 72% at 31 December 2018.

1. University of East Anglia research published in the Nature journal May 2020

2.4 Portfolio Performance

Capital Raising and Acquisitions

During the period, the Company raised gross proceeds of £120m by way of a non-pre-emptive tap issue in May. The net proceeds of the Issue was applied in repaying amounts drawn under the Company's revolving credit facility (RCF).

Out of its £281m invested in H1 2020, TRIG invested £263m into new projects (Merkur offshore wind farm in Germany, Blary Hill and Fujin) and £18m to fund construction expenditure at Solwaybank. 

The ongoing Covid-19 pandemic has had a material impact on TRIG's pipeline, with many transaction processes delayed. However, we expect the second half of 2020 to see increased activity and the Investment Manager continues to appraise an attractive pipeline across multiple geographies and technologies.

Outstanding Commitments and Divestments

Delays in the construction of Phase 2 of the Ersträsk onshore wind farm in Sweden resulted in the project missing key milestones and, given the near-term prospects for its progression, the Company chose not to proceed with the investment in Phase 2. Under the terms of the sale and purchase agreement for Ersträsk, payment was only due if the turbines became operational by the key milestones.

The Company took no construction or delay risks and will suffer no financial loss. TRIG had an option to sell Phase 1 back to Enercon, the developer, in the event that Phase 2 does not complete. This has been exercised given that Phase 1 was only intended to be part of the larger project. The contractual terms provide for the Company to recover its investment together with its expected return over the period of its investment. The sale back to Enercon completed in July 2020.

There are £41m of investment commitments for construction projects due over the rest of 2020 and into 2021. Receipts from the partial sell‑down of Merkur and the exercise of the put option for Ersträsk Phase I are £119m.

Projects Under Construction

By acquiring assets at an earlier stage, TRIG has been able to access improved returns and enhanced deal flow. Moreover, TRIG has been able to seek value by capitalising on its Managers' expertise in the construction process: InfraRed as greenfield investor across its unlisted vehicles and RES as a developer and/or constructor of over 18GW of renewable energy assets globally.

The three construction projects within the portfolio are Venelle, Solwaybank and Blary Hill, representing 9% of Portfolio Value. The Solwaybank and Blary Hill projects are being completed under fixed price Engineering, Procurement & Construction (EPC) contracts with the Operations Manager RES.

Operations

The TRIG portfolio has had very good operational performance in H1 2020, with electricity production above budget by 9.3%, driven by very good energy resource coupled with good availability.

The impact of Covid-19 on operations was kept to a minimum through the deployment of robust contingency plans and forward investments in technology and capabilities over the preceding years to enhance operational capabilities and provide resilience. For example, supply chain disruption mitigated by the holding of strategic spares and assets were able to continue to operate without daily site attendance, with remote "re-sets" from operational control centres with business continuity plans.

The underlying wind speeds were very strong across all regions in Q1, but lower than expected in Q2, apart from Scandinavia which also performed well in Q2. Solar irradiation has generally been strong across the whole of H1, with a particularly good April and May, being two of the more important months in the period.

GB Wind

GB Wind generation was 13% above budget due to high wind resource in January and February and continued strong operational performance overall. Little Raith, which was acquired late 2019, suffered some availability issues linked to pitch faults which turn the blades. These are being addressed by a pitch upgrade during the summer.

Offshore Wind

Output overall has been broadly on budget. Maintenance activities were adapted due to Covid-19 to focus on the operationally critical areas, with a gearbox exchange successfully achieved at Gode, but delayed some months at Sheringham due to challenges accessing a jack-up vessel. Merkur, included since January this year, has been

impacted by offshore substation outages due to planned maintenance being brought forward from later in the year, but output since mid-March has been as expected.

1 This is TRIG’s equity share of the nominal capacity of the windfarm2 The main revenue type during the subsidy period, typically 15 or 20 years from start of operations. Thereafter all revenues are wholesale power market. FiT refers to Feed-in-Tariffs and CfD refers to Contract for Differences.

Scandinavian Wind

Scandinavian production was well above budget due to high wind resource, particularly in January - April, coupled with good availability.

French Wind

French wind had good availability from the newer sites in the north which ensured the region benefited from the good wind resource in Q1, though Q2 was notably down. The older sites in the south faced some operational challenges with activities requiring close proximity working causing some delays due to Covid-19. Repowering preparations of these older projects is progressing. More turbines were commissioned at the Venelle project, with site takeover now expected in Q4 following minor Covid‑19-related delays.

Irish Wind

Irish wind production was in line with budget in H1. The excellent wind resource and operational performance in Q1 was offset by low wind resource and grid curtailments in Q2 due to low electricity demand. Despite restricted movement across Ireland, all Irish sites continued operations with consideration to health and safety guidelines, benefitting from RES O&M stepping in for essential major component work on some sites - for example a gearbox exchange at Lendrum's Bridge - reducing down time.

Solar

Solar generation was 6% above budget due to high irradiation in April and May, supported by continued strong operational performance. A program of proactive inverter replacements across two of the older and smaller sites with inverter technology known to be less reliable is planned for this year, which will further improve the operating resilience of the portfolio.

Enhancements

As Operations Manager, RES is dedicated to enhancing the value of the portfolio through both commercial and technical initiatives. RES' Benefits Mapping framework fosters a culture of innovation, with opportunities regularly identified both at individual site level and portfolio level.

In 2020, the following enhancements have been or are being implemented:

▲ Turbine performance upgrades, increasing annual energy yield and revenue whilst using innovative pricing mechanisms to optimise the commercial position.

▲ Capacity Market contract secured for Blary Hill, an additional 15-year revenue stream for TRIG's first subsidy-free GB wind project.

▲ Fast response to National Grid's Optional Downward Flexibility Management scheme enabling multiple projects to participate, protecting revenue during periods of oversupply and removing the risk of an emergency disconnection.

▲ Grid settings improved at a recently acquired asset following identification of high excess capacity charges, reducing annual operating costs.

▲ New O&M contracts put in place at three French projects, designed to improve performance and reduce costs.

▲ Bespoke CCTV solutions installed on a number of solar sites following a security review, helping to protect the assets and keep insurance costs down.

Preparatory work for life extensions and repowering are also being progressed, utilising RES' expertise as a developer and constructor, with specialist land, technical and commercial personnel supporting the strategy and implementation.

Extended project life is considered as part of investment decisions for upgrades, supported by detailed monitoring of site performance.

HSQE (Health, safety, quality and environment)

Regrettably there have been four incidents where injuries to subcontractors have occurred during H1, the most notable involving a vessel servicing an offshore project colliding with a turbine from another site. The other incidents included an O&M technician trapping his hand in a door during strong winds, injury to a fingertip whilst bolt torqueing within a turbine and a construction worker slipping approximately half a metre whilst dismounting from a vehicle. This is reflected in our LTAFR (Lost Time Accident Frequency Rate) value in Section 2.5.

We continue to coordinate H&S activities across the group, seeking to share learnings and best practice. A safety stand-down day is scheduled for Q3 where time will be taken to share ideas and focus on behaviours and factors influencing risk decision making.

2.5 Sustainability

ESG Objective: to mitigate climate change

Our business is focussed on owning and operating renewable energy assets. TRIG's primary sustainability goal is to mitigate climate change, and all of the investments in the portfolio contribute towards this. TRIG's Investment Policy only permits investment in renewables and other forms of infrastructure that is complementary to, or supports the roll-out of, renewable energy generation.

By investing in renewables, TRIG is supporting the roll-out of greater levels of clean energy by enabling developers to recycle their capital into more projects.

2020 Interim Performance

· 640,000 tonnes of carbon emissions avoided (H1 2019: 350,000)1

· 1,050,000 homes powered by clean energy per year (H1 2019: 720,000)

· 2,141 GWh of renewable electricity generated (H1 2019: 1,430GWh)

· 57% of UK portfolio sourcing electricity under Renewable Energy Supply Contracts (H1 2019: 52%)2

1. H1 2019/20 actual values updated in accordance with the IFI Approach to GHG Accounting for Renewables Energy. Portfolio at year end is capable of mitigating 1.1m tonnes of carbon emissions

2. This relates to electricity used on site

ESG Objective: to preserve the natural environment

RES as Operations Manager works with asset managers to preserve the natural environment by executing environmental management plans agreed with the authorities during the project consenting process, undertaking vegetation surveys, preventing biodiversity loss, recycling where possible and careful usage of materials. Further opportunities with landowners and other stakeholders are also sought. These activities are carried out in accordance with site specific Construction Method Statements and Habitat Management plans where applicable.

Examples of portfolio level initiatives implemented that support this goal include:

· Farming crops and livestock between rows of solar panels;

· Habitat management measures to protect species that are found at or near TRIG sites;

· Monitoring of wildlife and species at or near TRIG sites;

· Planting trees and shrubs not only to replace any removed for asset construction and/or maintenance, but also to supplement those already there; and

· Thoughtful construction techniques to reduce lorry movements and/or materials usage.

2020 Interim Performance

· 12 Active Environmental Projects

(Number of operational TRIG sites engaged in pro-active habitat management plans that exceed standard environmental maintenance) (H1 2019: 12)

ESG Objective: impact positively the communities in which TRIG works

We are sensitive to the impact that a large renewables asset has on a local community. It is important that not only do our assets make a positive contribution overall, but they also make a positive contribution to the local communities that host them. TRIG assets are often in rural areas where communities may have unemployment, fewer social facilities and limited access to health facilities. Local initiatives can produce tangible local benefits.

Examples include:

· Using local employment and sourcing materials locally where possible;

· The Local Electricity Discount Scheme (LEDS), whereby properties closest to certain wind farms are eligible for a discount on their electricity bills;

· Educating the next generation about sustainability and renewable energy through school education days on TRIG sites; and

· Supporting local good causes, often via community funds, such as donating to help fund social hubs, local healthcare, schools and entertainment.

TRIG's Operations Manager RES and its asset managers proactively engage with the community, meeting with the public on a regular basis and has protocols in place to govern community benefit arrangements which are administered by local organisations who are best placed to understand local priorities.

ESG Objective: to maintain ethics and integrity in governance

For TRIG to perform its fiduciary function for its shareholders and to continue to operate over the longer-term, it is essential that TRIG is run responsibly and that the highest standards of ethics and integrity in governance are maintained.

All governance issues are taken seriously, examples include:

· Maintaining market-leading health and safety performance;

· Upholding the Investment Policy and Sustainability processes;

· Ensuring employee wellbeing and a positive culture at the workplace of both of TRIG's Managers;

· Managing conflicts of interests;

· Maintaining other governance policies, including those relating to whistleblowing, anti-Modern Slavery and diversity; and

· Promoting charity and volunteering.

2020 Interim Performance

· 0.81 Reportable Lost time accidends per 100,000 hours worked (H1 2019:0)1

· A+ PRI score achieved by InfraRed Infrastructure for six consecutive years

· 60% female Board from March 2020 (H1 2019: 50%)

1 The LTAFR is calculated on the basis of the number of accidents which have occurred in the period divided by the number of hours worked multiplied by 100,000 to give a rate for every 100,000 hour worked. Whilst all accidents are recorded by RES, only accidents that have resulted in the incapacitation of a worker for more than seven days are included in this calculation in line with reportable accidents as defined UK HSE RIDDOR regulation.

2.6 Valuation of the Portfolio

The Investment Manager is responsible for carrying out a fair market valuation of the Group's investment portfolio which is presented to the Directors for their approval and adoption. Valuations are carried out on a six-monthly basis as at 31 December and 30 June each year.

For non-market traded investments (being all the investments in the current portfolio), the valuation principles used are based on a discounted cash flow methodology and adjusted in accordance with the European Venture Capital Associations' valuation guidelines where appropriate to comply with IFRS 13 and IFRS 9, given the special nature of infrastructure investments. Where an investment is traded, a market quote is used.

The valuation for each investment in the portfolio is derived from the application of an appropriate discount rate to reflect the perceived risk to the investment's future cashflows to give the present value of those cash flows. The Investment Manager exercises its judgement in assessing the expected future cashflows from each investment based on the project's expected life and the financial model produced by each project entity. In determining the appropriate discount rate to apply to a given investment the Investment Manager takes into account the relative risks associated with the revenues which include fixed price per MWh income (lower risk) or merchant power sales income (higher risk). As a refinement to the process of determining the appropriate discount rate, in view of the increasing variation of project ages and revenue mixes within the portfolio, where a project has both income types a theoretical split of future receipts has been applied, with a different (higher) discount rate used for an investment's return deriving from the merchant income compared to the fixed price income, equivalent to using an appropriate blended rate for the investment.

The Directors' valuation of the portfolio of 74[1] project investments as at 30 June 2020 was £2,009.3m (31 December 2019: £1,745.2m). From time to time the Board engages an independent third-party expert to review the Manager's valuation, and accordingly the Board commissioned an independent valuation from the Accountants BDO as at 30 June 2020. BDO's work included a review of the key valuation assumptions including discount rates, power price and cannibalisation, inflation and other macroeconomic assumptions, operating costs and asset lives. BDO's work corroborated the TRIG June 2020 valuation and the key underlying assumptions.

Valuation Movement

A breakdown of the movement in the Directors' valuation of the portfolio in the period is set out in the table below.

* A net gain of £22.4m after the impact of foreign exchange hedges held at Company level.

The opening valuation at 31 December 2019 was £1,745.2m. Allowing for cash investments of £281.3m and cash receipts from investments of £78.2m, the rebased valuation as at 30 June 2020 was £1,948.3m.

*Represents initial funding of the investment only, future investment is expected to be made over next two years represents a further 2%.

**Following the partial sell-down, Merkur will represent 9% of Portfolio Value.

Each movement between the rebased valuation of £1,948.3m and the 30 June 2020 valuation of £2,009.3m is considered in turn below:

(i) Forecast power prices:

Movements in power price forecasts during the six-month period had the impact of reducing the valuation of the portfolio by a net £123.1m. The valuation uses updated power price forecasts for each of the markets in which TRIG invests.

Power price forecasts have decreased markedly in the near term, principally driven by significant reductions in current and forecast electricity demand and also reductions in gas and carbon prices brought about by the impact of Covid 19 and the associated measures taken to combat its spread and the resultant impact on large sectors of national economies. These impacts have compounded an already well supplied gas market and have been further exacerbated by particularly strong renewable generation during Q1 2020. Whilst over the medium and longer term forecasters expect global gas demand to increase in excess of supply which they expect to increase power prices, the current expectation is for the longer term gas prices to revert to a slightly lower level than forecast previously in December 2019. As a result the longer term forecast power prices are somewhat reduced.

The weighted average power price inis comprised of the blend of the forecasts for each of the power markets in which TRIG is invested after applying expected PPA power sales discounts and reflecting cannibalisation[2]. The equivalent power price curve assumed at 31 December 2019 is also shown, as is the curve based upon the 31 December 2019 portfolio as at 30 June 2020.

The significant reduction in near term forecast wholesale power prices results in a higher gradient of the forecast power price curve, but after the shorter term COVID-19 disruption, forecast power prices remain essentially flat in real terms. The table below separates prices average real in Great Britain and the average across the other four Euro denominated markets (SEM, France Germany and Sweden, weighted by value) for the period 2020-2024 and beyond.

*France, Germany, SEM and Sweden SE3

(ii) Foreign exchange:

Over the half-year Sterling has depreciated 7% against the Euro compared to the rate at December 2019 (30 June 2020: EUR 1.1039; 31 December 2019: EUR 1.1827). The investments in the period (which were predominantly made in Euros) were on average made when Sterling was between the opening and closing exchange rates, resulting in an average movement from acquisition to 30 June 2020 of 3%. In aggregate this has led to a gain in the period of £56.0m in the valuation of the Euro-denominated investments located in France, the Republic of Ireland, Sweden[3] and Germany. After the impact of forward currency hedges held at Company level are taken into account, the foreign exchange gain reduces to £22.4m.

Euro-denominated investments comprised 49% of the portfolio at the period end[4].

Once the committed investments are fully subscribed and the expected sell downs have taken place the proportion of Euro denominated investments based on the current portfolio and valuation reduces to 44%.

The Group enters into forward hedging contracts (selling Euros, buying sterling) for an amount equivalent to its expected income from Euro-denominated investments over the short term, currently approximately the next 48 months. In addition, the Group enters into further forward hedging contracts such that, when combined with the "income hedges", the overall level of hedge achieved in relation to the Euro-denominated assets is typically between 50% and 80%. Hedging has also been effected when making investments using the revolving acquisition facility by drawing in the local currency of the acquisition.

The Investment Manager keeps under review the level of Euro exposure and utilises hedges, with the objective of minimising variability in shorter term cash flows with a balance between managing the sterling value of cash flow receipts and potential mark-to-market cash outflows.

(iii) Movement in valuation discount rates:

During the period the pandemic and associated responses had a disruptive impact on transactions, significantly reducing the volume of transactions observed during the most impacted months, compared to the same period in previous years however this had materially reversed towards the end of the period with a significant pickup in activity in the later months. In general, observed pricing levels during the period remained strong, particularly on assets viewed as safer (with less merchant power price exposure).

Overall, the Investment Manager, based on transaction and bidding experience in the secondary market for renewable infrastructure assets, has applied an average reduction of slightly less than 0.2% change to discount rates. This change in assumption has led to an increase in the valuation of the investments of £29.2m.

The weighted average portfolio valuation discount rate as at 30 June 2020 was 7.00% (31 December 2019: 7.25%). The reduction reflects the market discount rate observations described above, the reduction in risk associated with the reduction in forecast merchant power prices across the portfolio and the impact of acquisitions in the year (the mix of investments made in the period left the discount rate broadly unchanged).

The Company's independent valuation exercise conducted as at 30 June 2020 included a review of the valuation discount rates adopted which confirmed the rates used were appropriate.

The discount rate used for valuing each investment represents an assessment of the rate of return at which infrastructure investments with similar risk profiles would trade on the open market.

Balance of portfolio returns:

(This refers to the balance of valuation movements in the period (excluding (i) to (iii) above) and represents an uplift of £98.9m and a 5.1% increase over the half-year in the rebased value of the portfolio. The balance of portfolio return mostly reflects the net present value of the cashflows brought forward by six months at the prevailing portfolio discount rate (7.25% per annum before acquisitions and the period end reduction in the discount rate). Notwithstanding the sharp fall in power prices in Q2 due to the lock-downs, the very favourable weather in Q1 led to overall generation being above budget), and the return also benefitted from positive valuation movements from reduced maintenance costs on renewal O&M of contracts and improved power purchase agreement terms.

Investment Obligations

*Expressed as a percentage of portfolio valuation once fully invested which takes into account expenditure on the above construction projects and the disposal of Ersträsk and the sell down of part of the investment in Merkur.

At 30 June 2020, the Company had outstanding investment commitments on two projects (Solwaybank and Blary Hill) with both projects in construction. The outstanding commitments are expected to be invested during the remainder of 2020 and 2021.

During the six months to 30 June 2020, £281.3m was invested in projects of which £18.0m related to commitments made in 2018 (Solwaybank).

The investments made in the period are set out on Section 2.4 and are the following wind farms: an incremental stake in Fujin (France), Blary Hill (UK) and Murkur (Germany).

Outstanding commitments in relation to the Solwaybank and Blary Hill projects are shown below:

TRIG's Construction Windfarms

At the period-end TRIG had three projects in construction as follows, representing 9% of the portfolio valuation once fully invested.

Fully Invested Portfolio Valuation

The valuation of the portfolio on a fully invested basis can be derived by adding the valuation at 30 June 2020 and the expected outstanding commitments as follows:

2.7 Valuation Sensitivities

Section 5, Note 3, also illustrates in detail the sensitivity of TRIG's NAV per share to changes in key input assumptions in full detail.

% Change in Portfolio Value due to impact of sensitivity

For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case assumption, and that the number of investments in the portfolio remains static throughout the modelled life.

The sensitivities assume the portfolio is fully invested and assumes the partial sell down of Merkur and sale of Ersträsk Phase I. As such the Portfolio Value for the sensitivity analysis is the sum of the Portfolio Valuation at 30 June 2020 (£2,009.3m) and the outstanding investment commitments as set out above, i.e. £1,931.3m.

2.8 Financing

The Group has a £340m revolving acquisition facility (which includes a £20m working capital element) with the Royal Bank of Scotland, National Australia Bank and ING Bank NV to fund new acquisitions. The facility expires on 31 December 2021 with the option to extend for a further 12 months. This type of short-term financing is limited to 30% of the Portfolio Value. It is intended that any facility used to finance acquisitions is likely to be repaid, in normal market conditions, within a year through equity fundraisings.

The acquisition facility was drawn c £50m as at 30 June 2020 and was repaid in full shortly after the period end having applied the receipt from the partial sell down of the Merkur investment.

The investments in the period (£281m) were funded by cash brought forward from the prior year (c £100m), an equity fund raise in May of £120m before costs, reinvestment of surplus cashflows and drawings under the revolving capital facility.

The majority of the projects within the Company's investment portfolio have underlying long term debt (by value, 60% of the Group's investments have project finance raised against them and 40% are ungeared). There is a gearing limit in respect of such project finance debt, which is non-recourse to TRIG, of 50% of the Gross Portfolio Value (being the total enterprise value of the Group's portfolio companies), measured at the time the debt is drawn down or acquired as part of an investment. The Company may, in order to secure advantageous borrowing terms, secure a project finance facility over a group of portfolio companies.

The project-level gearing across the portfolio was 38% as at 30 June 2020 which is slightly above the level at 31 December 2019 which was 36%. This reflects the impact of the acquisitions in the period that had on average higher gearing than the portfolio. The main addition is Merkur Offshore wind farm which has project financing in place to be fully repaid within the subsidy period.

The vast majority of the debt is fixed and has an average cost of 3.8% (including margin) reflecting the terms available on interest rate swaps when the project debt was initially put in place.

As at 30 June 2020, the Group had cash balances of £24.4m, excluding cash held in investment project companies as working capital or otherwise. Post-period end the Group received £118m following the disposals of Ersträsk and Merkur and repaid the acquisition facility.

3.0 Analysis of Financial Results

At 30 June 2020 the Group had investments in 74[6] projects. As an investment entity for IFRS reporting purposes, the Company carries these 74 investments at fair value. The results below are shown on a statutory and on an "expanded" basis as we have done in previous years. See the box below for further explanation.

Income statement

1. The following were incurred within TRIG UK and TRIG UK I; acquisition costs, some foreign exchange exposure, the majority of expenses and acquisition facility fees and interest. The income adjustment offsets these cost adjustments.

2. £56.0m of foreign exchange gain have been recognised in the valuation and this gain is included within Operating Income. Accordingly the net gain for the Company arising from foreign exchange movements is £22.4m. The Company holds foreign exchange hedges at Company level outside of the Investment Portfolio to reduce the impact of foreign exchange movements.

3. Calculated based on the weighted average number of shares during the period being approximately 1,659.0 million shares.

Analysis of Expanded Basis financial results

Profit before tax for the six months to 30 June 2020 was £16.3 million, generating earnings per share of 1.0p, which compares to £122.2 million and earnings per share of 9.3p for the six months to 30 June 2019.

The EPS of 1.0p reflects a small level of overall valuation growth in the period versus a particularly strong period of valuation growth in the comparative period. The valuation movement in the period to 30 June 2020 has most significantly been affected by a significant reduction in power price forecasts across all geographies mostly attributable to the fall in demand and near to medium term forecast demand for electricity and the primary commodities that support wholesale electricity prices (gas, carbon and to some extent coal) caused by the worldwide Covid-19 crisis.

The significant adverse impact of reductions in power price forecasts were partially offset by favourable foreign exchange movements, a valuation discount rate reduction, and other valuation enhancements.

Operating Income reflects the Portfolio Value movement in the six months and are fully described in Section 2.6 of this report.

Increase in fund expenses in the six months to 30 June 2020 as compared to the six months to 30 June 2019 reflect the increase in the size of the portfolio.

Acquisition costs relate to the investments in the period, being Blary Hill, Merkur and the incremental acquisition within the Fujin JV.

Fund expenses of £9.4 million (H1 2019: £7.1 million) includes all operating expenses and £8.2 million (H1 2019: £6.5 million) fees paid to the Investment and Operations Managers. Management fees are charged at 1% of Adjusted Portfolio Value up to £1 billion, 0.8% in excess of £1 billion and 0.75% in excess of £2 billion as set out in more detail in the Related Party and Key Advisor Transactions note, Note 13 to the financial statements.

During the period sterling weakened against the Euro resulting in foreign exchange valuation movements for the Euro denominated assets leading to a valuation gain of £56.0million (2019: £6.8 million gain) within the portfolio, partially offset by losses on foreign exchange hedges and cash and debt balances held at Company level of £33.6 million (2019: £2.1 million loss) recorded in the Income Statement. The net foreign exchange gain in the period is hence £22.4 million (2019: £4.7 million gain).

Finance costs relate to the interest and fees incurred relating to the Group's revolving acquisition facility. The finance costs in the period are in line with the comparative period reflecting a similar average level of drawings on the revolving acquisition facility during each period.

Ongoing charges

1. Total expenses exclude £0.2 million (2019: £nil) of lost bid costs incurred during the period.

The Ongoing Charges Percentage for the period is 0.96% (FY 2019: 0.98%). The ongoing charges have been calculated in accordance with AIC guidance and are defined as annualised ongoing charges (i.e. excluding acquisition costs and other non-recurring items) divided by the average published undiluted net asset value in the period. The Ongoing Charges Percentage has been calculated on the Expanded Basis and therefore takes into consideration the expenses of TRIG UK and TRIG UK I as well as the Company's.

The reduction in OCP level reflects both the fixed costs of the company being spread over a larger capital base and the reduction in Manager fees charged on incremental acquisitions as the portfolio has become larger. Managers' fees for incremental assets are charged at a lower rate of 0.8% and now 0.75% as the Portfolio Valuation of the Company has expanded past £2 billion. There is no performance fee paid to any service provider.

Balance sheet

Analysis of Expanded Basis financial results

Portfolio Value grew by £264.1 million in the six months to £2,009.3 million, primarily as a result of the investments made in the six months to 30 June 2020 as described more fully in the "Valuation Movements" section of this Strategic Report.

Cash at 30 June 2020 was £24.4 million (2019: £127.8 million) and acquisition facility debt drawings were £49.8m (2019: £nil). The acquisition facility was repaid following the planned partial sell-down of Merkur on 3rd July 2020.

Net assets grew by £82.3 million in the period to £1,965.7 million. The Company raised £118.7 million (after issue expenses) of new equity during the period and produced a £16.3 million profit in the period, with net assets being stated after accounting for dividends paid in the period (net of scrip take up) of £53.7 million. Other movements in net assets totalled £1.0 million, being Managers' shares accruing in H1 2020 and to be issued on or around 30 September 2020.

Net asset value ("NAV") per share as at 30 June 2020 was 113.0p compared to 115.0p at 31 December 2019.

Net asset value ("NAV") and Earnings per share ("EPS") reconciliation

1. Calculated based on the weighted average number of shares during the period being 1,659.0 million shares

2. 1.66p dividend paid 31 March 2020 related to Q4 2019 (£27.2 million) and 1.69p dividend paid 30 June 2020 related to Q1 2020 (£27.7 million).

3. Scrip dividend take-up comprises 1.0 million shares, equating to £1.2 million, issued in lieu of the dividends paid June 2020.

4. Balance does not sum as a result of rounding differences.

Cash flow statement

Analysis of Expanded Basis financial results

Cash received from investments in the period was £78.1 million (2019: £63.2 million). The increase in cash received compared with the previous period reflects the increase in the size of the portfolio.

Dividends paid in the period totalled £53.7 million (net of £1.2m scrip dividends) and reflect dividends paid for the quarter ended 31 March 2020 (£27.2 million, net of £nil million scrip dividends) and the quarter ended 30 June 2020 (£26.4 million, net of £1.2 million scrip dividends). Dividends paid in the comparative period totalled £40.7 million (net of £2.4 million scrip dividends).

Cash flow from operations in the period was £68.6 million (2019: £56.1 million) and covers dividends paid of £53.6 million in the period by 1.28 times (or 1.25 times without the benefit of scrip take up), or 2.2 times before factoring in amounts invested in the repayment in project-level debt. The Group repaid £49.8million of project-level debt (pro-rata to the Company's equity interest) in the period.

Share issue proceeds (net of costs) totalling £118.7 million (2019: £297.6 million) resulting from the issue of 100 million shares issued at 120p in May 2020.

The Company's acquisition facility was drawn in Euro in the period to fund the investment in Merkur and then partially repaid in May and June following fund raising and distributions received from projects. The facility was fully repaid following the period end as the Company sold down part of the Merkur investment.

In the period, £281.3 million was invested in acquisitions. These were funded through the remaining surplus cash at 31 December 2020, the May 2020 equity issue, reinvestment of investment cashflows and drawings from the acquisition facility.

Cash balances decreased in the period by £103.4 million reflecting the capital deployed in new investments in H1 2020.

Going Concern

The Group has the necessary financial resources to meet its obligations. The Group benefits from a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, it maintains a working capital component of £20m as part of its revolving acquisition facility (currently sized at £340m and limited to 30% of Portfolio Value). The Group's project-level external debt is non-recourse to the Company and is limited to 50% of Gross Portfolio Value. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The directors do not believe that there is a significant risk to the business as a result of the COVID-19 pandemic but will continue to monitor any future developments. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

Related Parties

Related party transactions are disclosed in note 13 to the condensed set of financial statements.

There have been no material changes in related party transactions described in the last annual report.

4.0 Statement of Directors' Responsibilities

We confirm that to the best of our knowledge:

1. The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting; and

2. The Chairman's Statement and the Managers' Report meets the requirements of an Interim Managers' Report, and includes a fair review of the information required by

a. DTR 4.2.7R, being an indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

b. DTR 4.2.8R, being the disclosure of related parties' transactions and changes therein.

By order of the Board

Helen Mahy

Chairman

6 August 2020

5.0 Financial Statements

Condensed Income Statement

For the six-month period 1 January 2020 to 30 June 2020

All results are derived from continuing operations.

There is no other comprehensive income or expense apart from those disclosed above and consequently a statement of comprehensive income has not been prepared.

Condensed Balance Sheet

For the six month period 1 January 2020 to 30 June 2020

The accompanying Notes are an integral part of these interim financial statements.

The interim financial statements were approved and authorised for issue by the Board of Directors on 6 August 2020, and signed on its behalf by:

Condensed Statement of Changes in Equity

For the six month period 1 January 2020 to 30 June 2020

For the year ended 31 December 2019

In line with the Investment Management Agreement and the Operations Management Agreement, 20 per cent. of

the management fees (up to an Adjusted Portfolio Value of £1 billion) are settled in Ordinary Shares.

1 The £1,008,216 transfer between reserves represents the 889,550 shares that relate to management fees earned in the six months to 31 December 2019 and were recognised in other reserves at 31 December 2019, and were issued to the Managers during the period, with the balance being transferred to share premium reserves, on 31 March 2020.

2 As at 30 June 2020, 893,480 shares equating to £994,536, based on a Net Asset Value ex dividend of 111.31 pence per share (the Net Asset Value at 30 June 2020 of 113 pence per share less the interim dividend of 1.69 pence per share) were due but had not been issued. The Company intends to issue these shares to the Managers on or around 30 September 2020.

3 The £1,008,218 transfer between reserves represents the 939,844 shares that relate to management fees earned in the six months to 31 December 2018 and were recognised in other reserves at 31 December 2018, and were issued to the Managers during the period, with the balance being transferred to share premium reserves, on 31 March 2019.

4 The £991,778 addition to the share premium reserve represents the 875,047 shares that relate to management fees earned in the six months to 30 June 2019 and were issued to the Managers on 30 September 2019.

Condensed Cash Flow Statement

For the six month period 1 January 2020 to 30 June 2020

The accompanying Notes are an integral part of these interim financial statements.

Notes to the Unaudited Financial Statements

For the six month period 1 January 2020 to 30 June 2020

1. General information

The Renewables Infrastructure Group Limited ("TRIG" or the "Company") is a closed ended investment company incorporated in Guernsey under Section 20 of the Companies (Guernsey) Law, 2008. The shares are publicly traded on the London Stock Exchange under a premium listing. Through its subsidiaries, The Renewables Infrastructure Group (UK) Limited ("TRIG UK") and The Renewables Infrastructure Group (UK) Investments Limited ("TRIG UK I"), TRIG invests in operational renewable energy generation projects, predominantly in onshore and offshore wind and solar PV segments, across the United Kingdom and Northern Europe. The Company, TRIG UK, TRIG UK I and its portfolio of investments are known as the "Group".

The interim condensed unaudited financial statements of the Company (the "interim financial statements") as at and for the six months ended 30 June 2020 comprise only the results of the Company, as all of its subsidiaries are measured at fair value following the amendment to IFRS 10 as explained below in Note 2.

The annual financial statements of the Company for the year ended 31 December 2019 were approved by the Directors on 17 February 2020 and are available from the Company's Administrator and on the Company's website http://trig-ltd.com/.

Since the start of 2020 an outbreak of coronavirus (which causes COVID-19) has spread to become a global pandemic, which in conjunction with the public health responses of various governments, has led to uncertainty in the market. The directors of the Company continue to follow advice given by the national and international agencies (including the World Health Organisation and Public Health England) to ensure best practices are followed.

To date there has not been a material impact on the ability of the Company's to carry out its operations. Restrictions imposed by governments on public health grounds have impacted the consumption of electricity, and consequently electricity prices, however these measures are currently expected to be transitory and in place for the shortest period practicable, ultimately with a recovery to previous levels expected at this time. Consequently, the directors do not believe that there is a significant risk to the value of the Company's investments, operations or its overall business as a result of the COVID-19 pandemic but will continue to monitor any future developments.

2. Key accounting policies

Basis of preparation

The interim financial statements were approved and authorised for issue by the Board of Directors on 6 August 2020.

The annual financial statements of the Company are prepared in accordance with IFRS as adopted by the European Union ("EU") using the historical cost basis, except that the financial instruments classified at fair value through profit or loss are stated at their fair values and that the Company has applied the amendment to IFRS 10, as adopted by the EU and as described below. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting', as adopted by the EU and in compliance with the Companies (Guernsey) Law, 2008.

The interim financial statements are presented in sterling, which is the Company's functional currency.

IFRS 10 states that investment entities should measure all of their subsidiaries that are themselves investment entities at fair value. Being investment entities, TRIG UK and TRIG UK I are measured at fair value as opposed to being consolidated on a line-by-line basis, meaning their cash, debt and working capital balances are included in the fair value of investments rather than the Group's current assets.

The Chief Operating Decision Maker (the "CODM") is of the opinion that the Group is engaged in a single segment of business, being investment in renewable infrastructure to generate investment returns while preserving capital. The financial information used by the CODM to allocate resources and manage the Group presents the business as a single segment comprising a homogeneous portfolio. The CODM has been identified as the Board of Directors of the Company acting collectively.

The Group has the necessary financial resources to meet its obligations. The Group benefits from a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, it maintains a working capital component of £20m as part of its revolving acquisition facility (currently sized at £340m and limited to 30% of Portfolio Value). The Group's project-level external debt is non-recourse to the Company and is limited to 50% of Gross Portfolio Value.

The Company has sufficient headroom on its revolving acquisition facility covenants. These covenants have been tested and relate to interest cover ratios and group gearing limits. The Company and its direct subsidiaries have a number of Guarantees, detailed in Note 14. These guarantees relate to certain obligations that may become due by the underlying investments over their useful economic lives. We do not anticipate these guarantees to be called in the next 12 months and in many cases the potential obligations are insured by the underlying investments.

A cash balance of £24.1m at 30 June 2020 is held by the Company, with further amounts held in the Company's direct and indirect subsidiaries. In addition the Company has a working capital facility on its revolving acquisition facility of £20m. In addition £118m was received in July as part of the Company's planned exit from Ersträsk and partial sell-down of Merkur. Some of these proceeds were used to repay the revolving acquisition facility in full, which was £49.8m drawn at 30 June 2020. Further to the above the Company has commitments of £41m due over the next two years as construction milestones are achieved.

As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The directors do not believe that there is a significant risk to the business as a result of the COVID-19 pandemic but will continue to monitor any future developments. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

The condensed interim financial information has been prepared on the basis of the accounting policies, significant judgements, key assumptions and estimates as set out in the notes to the Group's annual financial statements for the year ended 31 December 2019.

The same accounting policies, presentation and methods of computation are followed in these interim financial statements as were applied in the preparation of the Company's financial statements for the year ended 31 December 2019.

The Company's financial performance does not suffer materially from seasonal fluctuations.

The initial difference between the transaction price and the fair value, derived from using the discounted cash flows methodology at the date of acquisition, is recognised only when observable market data indicates there is a change in a factor that market participants would consider in setting the price of that investment. For the period ended 30 June 2020 and the year ended 31 December 2019, there were no such differences. In addition, there was no material change on applying fair values between the date of acquisition and the reporting date for acquisitions in the period ended 30 June 2020 and 31 December 2019.

3. Financial instrument

The Directors believe that the carrying values of all financial instruments are not materially different to their fair values.

Other financial assets/liabilities represent the fair value of foreign exchange forward agreements in place at the period end. In the period, the net fair value of foreign exchange forward agreements changed from being held as an asset to that of a liability.

Fair value hierarchy

The fair value hierarchy is defined as follows:

▲ Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

▲ Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

▲ Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Investments at fair value through profit or loss comprise the fair value of the investment portfolio, on which the sensitivity analysis is calculated, and the fair values of TRIG UK and TRIG UK I, the Company's subsidiaries, being its cash, working capital and debt balances.

1 Debt arrangement costs of £1,206k (Dec 2019: £1,605k) have been netted off the £49,826k (Dec 2019: £nil) debt drawn by TRIG UK and TRIG UK I.

Level 2

Valuation methodology

Fair value is based on price quotations from financial institutions active in the relevant market. The key inputs to the discounted cash flow methodology used to derive fair value include foreign currency exchange rates and foreign currency forward curves. Valuations are performed on a six-monthly basis every June and December for all financial assets and all financial liabilities.

Level 3

Valuation methodology

The Investment Manager has carried out fair valuations of the investments as at 30 June 2020 and the Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the valuation. All investments are at fair value through profit or loss and are valued using a discounted cash flow methodology. The fair value of investments has been calculated using a bifurcated methodology whereby cash flows are discounted on the basis of the risk and return profile of the underlying cash flows. Section 2.6 of this report outlines the valuation methodology in greater detail.

The following economic assumptions were used in the discounted cash flow valuations at:

Valuation Sensitivities

Sensitivity analysis is produced to show the impact of changes in key assumptions adopted to arrive at the valuation. For each of the sensitivities, it is assumed that potential changes occur independently of each other with no effect on any other base case assumption, and that the number of investments in the portfolio remains static throughout the modelled life.

The sensitivities assume the portfolio is fully invested and assumes the partial sell-down of Merkur and sale of Erstrask Phase 1. As such the Portfolio Value for the sensitivity analysis is the sum of the Portfolio Value as 30 June 2020 (£2,009.3m) and the outstanding investment commitments as set out above, i.e. £1,931.3m.

The analysis below shows the sensitivity of the portfolio value (and its impact on NAV) to changes in key assumptions as follows:

Discount rates

The discount rates used for valuing each investment are based on market information and the current bidding experience of the Group and its Managers.

The portfolio valuation discount rate applied to calculate the portfolio valuation is 7.0% at 30 June 2020 (December 2019: 7.25%). An increase or decrease in this rate by 0.5% and has the following effect on valuation.

Power Price

The sensitivity considers a flat 10% movement in power prices for all years, i.e. the effect of adjusting the forecast electricity price assumptions in each of the jurisdictions applicable to the portfolio down by 10% and up by 10% from the base case assumptions for each year throughout the operating life of the portfolio.

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

Energy Yield

The base case assumes a "P50" level of output. The P50 output is the estimated annual amount of electricity generation (in MWh) that has a 50% probability of being exceeded - both in any single year and over the long term - and a 50% probability of being under achieved. Hence the P50 is the expected level of generation over the long term.

The sensitivity illustrates the effect of assuming "P90 10-year" (a downside case) and "P10 10-year" (an upside case) energy production scenarios. A P90 10-year downside case assumes the average annual level of electricity generation that has a 90% probability of being exceeded over a 10-year period. A P10 10-year upside case assumes the average annual level of electricity generation that has a 10% probability of being exceeded over a 10-year period. This means that the portfolio aggregate production outcome for any given 10-year period would be expected to fall somewhere between these P90 and P10 levels with an 80% confidence level, with a 10% probability of it falling below that range of outcomes and a 10% probability of it exceeding that range. The sensitivity includes the portfolio effect which reduces the variability because of the diversification of the portfolio. The sensitivity is applied throughout the life of each asset in the portfolio (even where this exceeds 10 years).

The table below shows the sensitivity of the portfolio value to changes in the energy yield applied to cash flows from project companies in the portfolio as per the terms P90, P50 and P10 explained above.

Inflation rates

The projects' income streams are principally a mix of subsidies, which are typically amended each year with inflation, and power prices, which the sensitivity assumes will move with inflation. The projects' management, maintenance and tax expenses typically move with inflation, but debt payments are fixed. This results in the portfolio returns and valuation being positively correlated to inflation.

The portfolio valuation assumes 2.75% p.a. inflation for the UK and 2.0% p.a. for each of Germany, Sweden, France and Ireland over the long term.

The sensitivity illustrates the effect of a 0.5% decrease and a 0.5% increase from the assumed annual inflation rates in the financial model for each year throughout the operating life of the portfolio.

Operating costs

The sensitivity shows the effect of a 10% decrease and a 10% increase to the base case for annual operating costs for the portfolio, in each case assuming that the change to the base case for operating costs occurs with effect from 1 July 2020 and that change to the base case remains reflected consistently thereafter during the life of the projects.

Taxation rates

The profits of each project company are subject to corporation tax in their home jurisdictions at the applicable rates (the tax rates adopted in the valuation are set out in Note 3 to the financial statements). The tax sensitivity looks at the effect on the Directors' valuation of changing the tax rates by +/- 2% each year in each jurisdiction and is provided to show that tax can be a material variable in the valuation of investments.

Interest rates

This shows the sensitivity of the portfolio valuation to the effects of a reduction of 1% and an increase of 2% in interest rates. The change is assumed with effect from 1 July 2020 and continues unchanged throughout the life of the assets.

The portfolio is relatively insensitive to changes in interest rates. This is an advantage of TRIG's approach of favouring long-term structured project financing (over shorter term corporate debt) which is secured with the substantial majority of this debt having the benefit of long-term interest rate swaps which fix the interest cost to the projects.

The portfolio sensitivity to interest rates is assessed asymmetrically, noting that there is limited capacity for further interest rate reductions.

Currency rates

The sensitivity shows the effect of a 10% decrease and a 10% increase in the value of the euro relative to sterling used for the 30 June 2020 valuation (based on a 30 June 2020 exchange rate of €1.1039 to £1). In each case it is assumed that the change in exchange rate occurs from 1 July 2020 and thereafter remains constant at the new level throughout the life of the projects.

At the period-end , 44% of the committed portfolio was located in Sweden, France, Germany and Ireland comprising euro-denominated assets. The Group has entered into forward hedging of the expected euro distributions for the next 36-48 months and in addition placed further hedges to reach a position where up to 80% of the valuation of euro-denominated assets is hedged. The hedge reduces the sensitivity of the portfolio value to foreign exchange movements and accordingly the impact is shown net of the benefit of the foreign exchange hedges in place which is assumed to be 60% for the sensitivity analysis. All committed investments are included in this sensitivity.

The euro/sterling exchange rate sensitivity does not attempt to illustrate the indirect influences of currencies on UK power prices which are interrelated with other influences on power prices.

Asset Lives

Assumptions adopted in the valuation typically range from 25 to 30 years from the date of commissioning, with an average 29 years for the wind portfolio and 30 years for solar portfolio. The overall average across the portfolio at 30 June 2020 is 29 years (31 December 2019: 29 years).

The sensitivity below shows the impact on the valuation of assuming all assets within the portfolio have a year longer and a year shorter asset life assumed.