TIDMTENT
RNS Number : 0666D
Triple Point Energy Transition PLC
19 June 2023
19 June 2023
Triple Point Energy Transition plc
("TENT" or the "Company" or, together with its subsidiaries, the
"Group")
RESULTS FOR THE YEARED 31 MARCH 2023
Transformative year; our new mandate is delivering compelling
opportunities; full capital commitment
9.2% NAV Total Return, full capital commitment, 1.1x cash
dividend cover
The Board of Triple Point Energy Transition plc (ticker: TENT),
the London listed infrastructure investment company supporting the
energy transition, is pleased to announce its audited results for
the year ended 31 March 2023. The Company's focus this year was on
building on its new investment mandate, launched in August 2022, to
seek opportunities in niche and exciting areas of the energy
transition, which offer superior risk adjusted returns and
diversification of revenue sources. TENT has now fully committed
its existing capital, delivered a 9.2% NAV total return and full
cash dividend cover.
31 March 2023 31 March 2022
--------------------------------------- ----------------- -----------------
Net asset value ("NAV") GBP99.4 million GBP96.1 million
NAV per share 99.44 pence 96.12 pence
Dividend declared per share 5.50 pence 5.50 pence
Total NAV return (2) 9.2% 4.9%
Cash dividend cover ratio (1)
(2) 1.1x 0.14x
Capital committed awaiting deployment GBP44.4 million GBP44.9 million
(2 3)
Fully invested portfolio valuation GBP132.1 million GBP123.6 million
(including commitment at cost)
(1)
(1) representative of total cash income, expenditure and
financing costs for the Company and TENT Holdings (the Company's
wholly owned subsidiary), divided by dividends paid in the
financial year to 31 March 2023
(2) alternative performance measure
(3) portfolio commitments will be largely funded by the Group's
undrawn GBP40 million Revolving Credit Facility ("RCF")
Financial Highlights
-- Total NAV return of 9.2% for year ended 31 March 2023 (31 March 2022: 4.9%)
-- Dividends declared in respect of the year ended 31 March 2023
total of 5.50 pence per Ordinary Share, fully covered by operating
cashflow 1.1x (net of expenses and finance costs for TENT and TENT
Holdings, the Company's wholly owned subsidiary)
o Equivalent to a dividend yield of 9% on the share price at 31
March 2023
o Future period earnings will benefit from the deployment of the
outstanding commitment of GBP39.6m into the Battery Energy Storage
Systems ("BESS") portfolio.
-- The Company's strategic focus on investing across the
spectrum of the energy transition has delivered a diversified set
of income streams across the portfolio, and the Company was
unaffected by the Electricity Generator Levy.
-- Weighted average project life remaining of 32 years, driven
by the long project life of the Hydroelectric Portfolio and debt
investments providing long term contractual cashflows, with 92% of
projected underlying income contractually underpinned over a
10-year period and 47% of income linked to inflation.
-- TENT announced on 14 March 2023 that it had completed, via
its wholly owned subsidiary TENT Holdings Limited ("TENT Holdings")
a 12-month extension of its fixed rate GBP40 million Revolving
Credit Facility (RCF) with TP Leasing Limited, extending it to 28
March 2025.
Operational highlights
-- Fully committed capital across a diversified portfolio of
opportunities in the energy transition sector including,
hydroelectric, CHP, BESS and LED.
-- Excellent portfolio performance with all asset classes
contributing positively to the strong financial performance.
-- New technologies added to the portfolio, increasing portfolio diversification, including:
o BESS;
o LED lighting; and
o post-period end, an investment in a renewables development
company, Innova Renewables.
-- The Hydroelectric Portfolio performed marginally below
expectations, however there was good availability during the
financial year taking full advantage of the rainfall in
Scotland.
-- The deployment of the BESS portfolio has progressed well
leading to the accession of two assets in the security of the loan
facility:
o The 20MW site at Oldham is now operational;
o Gerrards Cross is under construction and is anticipated to be
operational in 2023; and
o Two further BESS assets scheduled to become operational in
2024.
-- The CHP portfolio continues to benefit from the volatile gas
and electricity wholesale market, illustrating the resilience of
the economic model of these assets throughout the cycle.
Pipeline Highlights
-- Strong long-term pipeline of potential investment
opportunities worth GBP545 million including both debt and equity
investments.
-- Diverse range of technologies and sectors under
consideration, including solar, wind, battery storage, onsite
generation, energy efficiency, and hydrogen.
-- The pipeline investments currently yield an average return of
9% and cover UK and European markets.
Post Period Highlights
-- The Group committed a GBP5 million fixed rate debt investment
to Innova Renewables, to help fund its development pipeline of
solar, battery and energy storage systems across the UK. The
facility was fully drawn on 3 April 2023.
-- In June 2023, the Group deployed a further GBP3.9 million
into the BESS portfolio, resulting in a total deployment to date of
22%.
-- The Group successfully undertook the first drawdown under the
RCF, partly funding the BESS deployment.
John Roberts, the Company's Chair, commented:
"The year was a transformative period for TENT. In focusing
wholly on niche, but highly attractive, areas of the energy
transition, we believe we have an investment strategy which will
deliver robust shareholder returns throughout the cycle. The
results we are announcing today amply bear out our confidence.
The Company's portfolio now includes 19 investments across
attractive and key energy transition technologies comprising
hydroelectric, battery storage, renewable power, solar and BESS
development and LED lighting. This portfolio has proven its
earnings power with full dividend cover attained on delivering the
Company's dividend target of 5.50 pence per share (equating to a 9%
yield on the share price as at 31 March 2023). This has all been
achieved whilst avoiding any adverse impact from the Government's
electricity generator levy. Further, the Company's long term
revenue cash flows, of which 92% are contractually underpinned,
provide strong visibility on the sustainability of the portfolio's
earnings.
In addition, the Company's significant pipeline of attractive
opportunities currently yield a high return, while further adding
to the high level of diversification already apparent in the
Company's portfolio.
Whilst our share price has been impacted by the same equity
market turbulence that has affected all infrastructure investment
companies, we do not believe that our share price discount to NAV
is an accurate reflection of the clear attractions of the Company's
differentiated strategy. The portfolio enjoys a high level of
underlying committed revenue and we believe this comprises a highly
attractive value opportunity for investors wishing to benefit from
the global energy transition."
For further information, please contact: Triple Point Investment Management
LLP
Jonathan Hick +44 (0) 20 7201
Christophe Arnoult 8989
J.P. Morgan Cazenove (Corporate
Broker)
William Simmonds +44 (0) 20 7742
Jérémie Birnbaum 4000
Akur Limited (Financial Adviser)
Tom Frost
Anthony Richardson +44 (0) 20 7493
Siobhan Sergeant 3631
Buchanan (Financial PR)
Helen Tarbet
Henry Wilson
Hannah Ratcliff +44 (0) 20 7466
Verity Parker 5111
LEI: 213800UDP142E67X9X28
Further information on the Company can be found on its website:
http://www.tpenergytransition.com/
NOTES:
The Company is an investment trust which aims to invest in
assets that support the transition to a lower carbon, more
efficient energy system and help the UK achieve Net Zero.
Since its IPO in October 2020, the Company has made the
following investments and commitments:
-- Harvest and Glasshouse: provision of GBP21m of senior debt
finance to two established combined heat and power ("CHP") assets,
located on the Isle of Wight, supplying heat, electricity and
carbon dioxide to the UK's largest tomato grower, APS Salads
("APS") - March 2021
-- Spark Steam: provision of GBP8m of senior debt finance to an
established CHP asset in Teesside supplying APS, as well as a
further power purchase agreement through a private wire arrangement
with another food manufacturer - June 2021
-- Hydroelectric Portfolio (1): acquisition of six operational,
Feed in Tariff ("FiT") accredited, "run of the river" hydroelectric
power projects in Scotland, with total installed capacity of 4.1MW,
for an aggregate consideration of GBP26.6m (excluding costs) -
November 2021
-- Hydroelectric Portfolio (2): acquisition of a further three
operational, FiT accredited, "run of the river" hydroelectric power
projects in Scotland, with total installed capacity of 2.5MW, for
an aggregate consideration of GBP19.6m (excluding costs) - December
2021
-- BESS Portfolio: commitment to provide a debt facility of
GBP45.6m to a subsidiary of Virmati Energy Ltd (trading as
"Field"), for the purposes of building a portfolio of four
geographically diverse Battery Energy Storage System ("BESS")
assets in the UK with a total capacity of 110MW - March 2022
-- Energy Efficient Lighting: Funding of c.GBP2.2m to a lighting
solutions provider to install efficient lighting and controls at a
leading logistics company - March 2023
-- Innova: Provision of a GBP5m short term development financing
facility to Innova Renewables, building out a portfolio of Solar
and BESS assets across the UK - March 2023
The Investment Manager is Triple Point Investment Management LLP
("Triple Point") which is authorised and regulated by the Financial
Conduct Authority. Triple Point manages private, institutional, and
public capital, and has a proven track record of investment in
Energy Efficiency and decentralised energy projects.
Following its IPO on 19 October 2020, the Company was admitted
to trading on the Premium Segment of the Main Market of the London
Stock Exchange on 28 October 2022. The Company was also awarded the
London Stock Exchange's Green Economy Mark.
You may view the Annual Report in due course on the Company's
website. http://www.tpenergytransition.com/
Please note that page numbers in this announcement are in
reference to the Annual Report.
Strategic Report
Chair's Statement
Dear Shareholder,
I am pleased to present the results for Triple Point Energy
Transition plc ("TENT" or the "Company") for the year ended 31
March 2023. This is our first set of annual results reported under
our new mandate and name, announced in August 2022, which
consolidated the Company's focus on investing across the energy
sector to support the transition to Net Zero.
Our investment mandate covers three thematic areas:
-- distributed energy generation
-- energy storage and distribution
-- onsite energy generation and lower carbon consumption
This strategy reflects our conviction that a holistic,
system-wide approach to reducing emissions across every part of the
energy sector is vital to supporting the transition to Net Zero and
to delivering attractive returns for our investors. We also believe
that this approach gives us a highly differentiated position in our
sector, offering shareholders exposure to a diversified portfolio
of attractive investments in sectors and investment classes which
are not typically targeted by many other investment trusts.
The past year has been marked by unprecedented challenges and
opportunities in the global energy sector. The devastating war in
Ukraine, which has now entered its second year, and the resulting
energy crisis have exposed the vulnerabilities and risks of relying
on fossil fuels, especially imported gas, for meeting our energy
needs. This has also led to a cost-of-living crisis and inflation
increases, putting pressure on consumers and businesses. At the
same time, the events have triggered a wave of policy and market
developments which are designed to accelerate the energy
transition. The EU's REPowerEU plan, the US Inflation Reduction
Act, China's 14th Five-Year Plan, and other initiatives by major
economies have created a huge investment potential for clean energy
technologies globally, through a strong regulatory framework and
incentives for deployment. Moreover, global investment in clean
energy technologies matched that of fossil fuels for the first time
in 2022, signalling a shift in investor preferences and
expectations.
These global developments have a direct impact on the UK and EU
markets, which are the focus of our mandate. The UK and the EU are
both committed to achieving Net Zero emissions by 2050 and have set
ambitious targets and policies to accelerate the decarbonisation of
their energy systems. The UK's Powering Up Britain, the EU's Green
Deal, and the Glasgow Climate Pact are some of the key initiatives
that demonstrate this commitment and provide a clear direction for
our investment strategy. The UK and the EU are also facing
increasing energy security concerns and rising energy costs, which
create an urgent need for more domestic, diversified, and reliable
sources of energy. This is where our investment portfolio can
provide solutions and value for our shareholders and society.
By investing holistically across the energy sector, in assets
that generate, distribute or conserve electricity or heat, we are
able to capture the opportunities and mitigate the risks arising
from these developments. Our three thematic areas of focus are
complementary and synergistic, as they enable a lower-carbon, more
resilient, and more flexible energy system. They also generate
stable and predictable income for our investors, from long-term
contracts with high-quality counterparties or from wholesale or
merchant markets.
Investment Activity
I am delighted to report that the Company's remaining capital
has been fully committed to a portfolio of broadly diversified
opportunities across the energy transition sector. This achievement
reflects our ability to discern and execute attractive deals in a
competitive market. We have strategically utilised the funds to
invest in multiple asset classes and capital structures, providing
a solid defence against risks and challenges. Importantly we
balance both debt and equity investments to ensure a consistent
income stream, capital preservation, and capital growth.
The Group has continued to advance funds under the GBP45.6
million debt facility to a subsidiary of Virmati Energy Ltd, to
fund a 110MW portfolio of four BESS assets (the "BESS Portfolio").
During the period, GBP6.2 million of the facility was utilised,
with commitment fees being received in respect of the undrawn
balance. Post the balance sheet date, a further GBP3.9 million was
drawn.
The Group has also invested in new asset classes - LED lighting
and solar project development - through debt financing. This
further enhances our diversification, resilience to negative
trends, and participation in innovative technologies.
The Group's GBP2.2 million investment in the installation of new
Light Emitting Diodes ("LEDs") in several warehouses of an
investment-grade global logistics company, has led to a c.58%
reduction in the warehouses' energy consumption.
These investments not only showcase our commitment to advancing
this important energy transition industry but also enable us to
leverage the stability of debt financing to support projects which
reduce energy waste and drive sustainability.
Portfolio Performance
The portfolio continued to deliver a strong performance with all
asset classes contributing positively to the financial performance
of the Company.
The Hydroelectric Portfolio performed marginally below
expectations. The annual generation performance was c.5% lower than
forecast, due to a local grid curtailment of some of the schemes in
March 2023. One scheme has commenced development of water storage
capacity and is progressing to the next stage. This provides the
opportunity to increase the annual generation capacity by 1,250 MWh
and allows the scheme to target periods of peak load generation
through a controlled release of the flow.
The deployment of the BESS Portfolio has progressed during the
year, with the asset located in Oldham now operational and the
asset located in Gerrards Cross under construction and expected to
reach commercial operations in late 2023. The third and fourth
projects are expected to be operational during 2024. Once fully
deployed, the BESS assets will contribute to reduce grid
constraints and allow the inclusion of more renewable energy
generators to the energy mix.
The CHP Portfolio continues to benefit from the volatile gas and
electricity wholesale market which illustrates the resilience of
the economic model of these assets, as they benefit from dual
revenue sources (wholesale market and private offtake of heat and
power).
Financing
The Group, via its wholly owned subsidiary, TENT Holdings
Limited ("TENT Holdings"), has a GBP40 million Revolving Credit
Facility ("RCF") with TP Leasing Limited, and in March 2023, we
completed a 12-month extension of the RCF to 28 March 2025. The
interest rate charged is a fixed rate coupon of 6% pa on drawn
amounts.
TP Leasing Limited is an established private credit and asset
leasing business which is managed by the Investment Manager and, as
a result, is deemed to be a related party as defined in the Listing
Rules. The extension to the RCF was deemed to be a "smaller related
party transaction" for the purposes of LR11.1.10R and, therefore,
was undertaken in accordance with the relevant requirements of the
Listing Rules.
The Group will make use of the RCF to fund its committed
portfolio. The Group will follow a prudent approach to gearing with
a target medium-term gearing of up to 40% of Gross Asset Value
("GAV") and a maximum gearing that will not exceed 45% of GAV at
the time of drawdown, in line with the Company's borrowing
policy.
As at 31 March 2023, the RCF had not been drawn, however it is
expected that the RCF will be fully utilised during 2024.
Financial Results
During the year, TENT achieved a total profit and comprehensive
income of GBP8.8 million (31 March 2022: GBP4.8 million), which is
reflective of the growing investment portfolio that has increased
in value by 14% in the financial year. Further information on
profitability and financial performance can be found on pages 128
to 153.
The Company generated a total NAV return for shareholders of
9.2%, in excess of the Company's target. The NAV per share is 99.44
pence per share as at 31 March 2023 (31 March 2022: 96.12 pence per
share), an annual growth rate of 3.5%, which was made possible
through a combination of robust contractual revenues and the
revaluation of the investment portfolio.
TENT has delivered a dividend of 5.5 pence per share for the
year, which was cash covered 1.1x (31 March 2022: 0.14x). The
enhancement in coverage reflects the full deployment of the IPO
proceeds in the financial year. As a result, cash income generation
has increased approximately 300% to GBP9.0 million (31 March 2022:
GBP2.2 million).
Share Price
During the year, as part of a number of actions to improve the
share price liquidity and attract new investors, the Board decided
to migrate to the Premium Segment of the Main Market of the London
Stock Exchange, having been listed on the Specialist Fund Segment
since the IPO in October 2020. The Company commenced trading on the
Premium Segment on 28 October 2022.
The Board continues to monitor the Company's share price, which
has suffered following the mini budget in September 2022 and in the
higher interest rate environment. At the financial year end, the
Company's share price was 62.5 pence, representing a 37% discount
to NAV (31 March 2022: 84.5 pence, representing a 12% discount to
NAV). The Board believes that the discount to NAV is unwarranted,
is driven in large part by illiquidity of the shares and does not
reflect the quality of the Group's portfolio, the robust nature of
contractual earnings, and the future potential of its strategy.
The Board is concerned by the continuing level of share price
discount to NAV and continues to consider ways to address the
discount.
The Investment Manager has been actively engaging with stock
market analysts, existing and potential new shareholders and has an
active investor relations programme planned for the remainder of
2023.
In accordance with the Investment Management Agreement, the
Investment Manager has used 20% of the annual investment management
fee (net of relevant taxes) to acquire Ordinary Shares in the
Company. The Investment Manager purchased the following Ordinary
Shares during the financial year:
- 28 September 2022 - 41,550 Ordinary Shares at an average price of 80.86 pence per share
- 22 December 2022 - 57,616 Ordinary Shares at an average price of 80.00 pence per share
As at 31 March 2023, including other shares purchased in the
year, the Investment Manager held a total of 1,042,157 Ordinary
Shares in the Company, representing approximately 1.0% of the total
issued share capital.
Dividends
The Board is pleased to confirm the dividend in respect of the
quarter to 31 March 2023 of 1.375 pence per share, payable on or
around 14 July 2023 to holders of Ordinary Shares on the register
on 30 June 2023, bringing the total annual dividend to the target
of 5.50 pence per share. Cash received in the Company's wholly
owned subsidiary TENT Holdings, from the investee companies by way
of distributions, which includes interest and dividends, was GBP9.0
million. After operating and finance costs, the cash flow within
the Company and TENT Holdings was GBP5.9 million, cash covering the
dividends paid during the year of 5.50 pence per share by 1.1x.
The Company has set a dividend target of 5.50 pence per share
for the year ending 31 March 2024(1) .The Company notes that the
deployment of the loans to the BESS Portfolio and Innova is
expected to provide further income with which to cover dividends
over the course of FY24.
Notes:
(1) The dividend and return targets stated are Pounds Sterling
denominated returns targets only and not a profit forecast. There
can be no assurance that these targets will be met, and they should
not be taken as an indication of the Company's expected future
results.
Environmental, Social and Governance ("ESG")
The Company has adopted an approach to ESG which reflects the
importance of sustainability to the investment policy and to
maximise the potential for our ESG considerations to add value to
the portfolio.
Throughout the year there has been a focus on developing
relationships with asset owners (where we have debt investments)
and O&M contractors (where we own the asset) to improve data
collection and identify where discussion may lead to improved
action and ESG management of our portfolio. Climate and Net Zero
analysis are also a key priority with significant time allocated to
the evolution of these activities, which have been captured in our
voluntary reporting against the TCFD framework. The Board continues
to engage fully to support and seek progress on these fast evolving
and important areas. The Sustainability Report contains full
details on the approach including reporting aligned with a range of
relevant industry frameworks and best practice.
Summary & Outlook
The energy market is undergoing a seismic transformation, driven
by the urgent need for decarbonisation and a growing emphasis on
energy security and independence. The Company's broader investment
mandate positions it for success in this rapidly evolving landscape
by diversifying its portfolio across three thematic areas:
distributed energy generation, onsite energy generation and lower
carbon consumption, and energy storage and distribution. This
approach not only mitigates risk and enhances resilience but also
supports the Net Zero pathway, presenting a favourable outlook for
the Company's investment prospects.
The Company is well-positioned to capitalise on the immense
potential arising from the ambitious renewable energy targets and
various legislative initiatives in the UK and EU markets, such as
Powering Up Britain and REPowerEU. These programmes aim to unlock a
vast amount of investments and create a favourable environment for
the growth of clean energy technologies, opening up a market worth
$5.3 trillion across Europe(2) . By investing in innovative
solutions for the decarbonisation of buildings and transport and
leveraging its expertise in cutting-edge sectors such as battery
storage, green hydrogen, and LED lighting, the Company aims to
drive transformative change and contribute to the global shift
towards a low-carbon economy. The Company also intends to pursue
market-driven unsubsidised projects that can offer higher returns
with lower risks, as they are less exposed to policy changes and
provide increased flexibility. These projects further diversify the
Group's portfolio compared to other peers in the space and
differentiate the risk profile.
On behalf of the Board, I remain confident in the Company's
ability to continue generating sustainable income and capital
growth for our shareholders. We would like to extend the Board's
thanks to shareholders for their ongoing support and belief in our
differentiated investment case.
Notes:
(2) Europe's Path to Clean Energy: A $5.3 Trillion Investment
Opportunity | BloombergNEF (bnef.com)
John Roberts
Chair
16 June 2023
Strategy and Business Model
The Company's purpose is to invest into infrastructure assets
that contribute to the energy transition and generate a stable and
growing long-term income stream for investors.
Originate Invest Operate and Hold
optimise
TENT originates TENT invests TENT operate TENT's strategy
Overview across the across the and optimise is to hold
spectrum of capital structure assets based investments
the energy of an energy on a two pronged to maturity.
transition. transition approach.
investment.
Competitive
Advantage This enables In certain Firstly, TENT This long-term
the Company technologies seeks to have stewardship
to identify such as CHP exposure to approach enables
the most attractive or BESS, investing strong management TENT to more
risk and return in debt may teams in an successfully
characteristics enable TENT energy sub originate
of opportunities to achieve sector. For opportunities,
across the better risk example, it with a view
energy transition adjusted returns has backed to aligning
space. than equity. one of the interests with
leading renewables project counterparties
This typically In others, developers over the investment
means that inflation protected in the UK, period.
TENT invests contracts in Innova Renewables.
in more niche more established
areas of the technologies, Working with
transition such as hydro-electric a diverse range
and avoids power, may of specialist
areas with offer more management.
elevated valuations, attractive teams across
such as subsidised equity opportunities. a range of
large scale energy sub
UK solar and sectors provides
wind generation. further diversification
to investors.
TENT seeks
to build long-term Secondly, the
partnerships Investment
with developers Manager's inhouse
and partners portfolio management
to secure repeat team actively
deal flow. manages the
investments,
identifying
opportunities
to enhance
performance
and mitigate
risks.
---------------------- ------------------------ ------------------------ ------------------------
Risk Management read more about our rigorous approach to risk management
on page 76
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Governance read about our approach to governance on page 88
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Changes to the Company's Investment Policy
Following approval at the Company's AGM on 25 August 2022, the
Company revised its Investment Policy, shifting focus from solely
Energy Efficiency investments in the United Kingdom towards a
broader spectrum of Energy Transition Assets in both the UK and
Europe. This revision to the Investment Policy reflects a strategic
adaptation to the evolving energy market and global trends. By
focusing on Energy Transition Assets and expanding its geographical
scope, the Company is positioning itself to capitalise on the
growing demand for sustainable and renewable energy solutions. This
is in line with global efforts to combat climate change and
transition towards a low-carbon economy. It allows the Group to
invest in innovative businesses that are contributing to the energy
transition, thereby potentially enhancing the Company's portfolio
and returns.
Investment Objective
The Company's Investment Objective is to generate a total return
for investors comprising sustainable and growing income and capital
growth.
Investment Policy
The Company intends to achieve its investment objective by
investing in a diversified portfolio of Energy Transition Assets
typically via the acquisition of equity in, or the provision of
debt financing to, the relevant Investee Company. The Company may
invest in opportunities in the United Kingdom (and the Crown
Dependencies) and Europe.
The Group will invest in a range of Energy Transition Assets
which meet the following criteria:
-- contribute towards the energy transition to lower, or zero, carbon emissions
-- are established technologies
-- contribute to the generation of stable and predictable income
across the Company's portfolio, as a whole, arising from:
o long-term revenues based on availability, usage, consumption
or energy savings-based contracts with good quality industrial,
governmental, and corporate Counterparties or off-takers (as
assessed by the Investment Manager's due diligence processes),
including Counterparties which represent multiple end-users; or
o assets with income from wholesale or merchant sources
(including, but not limited to, battery energy storage, pumped
storage or other power storage and discharge systems and renewable
power assets), typically where the Investee Company benefits from
an option to put in place a long term fixed contractual price if it
deems it necessary to do so and where operated by a reputable
operator; and
-- entitle the Company to receive cash flows over the medium to
long-term in Developed Country Currencies. The Company may, but
does not intend to, enter into any currency hedging
arrangements.
The Group's portfolio of Energy Transition Assets will
predominantly comprise operational Energy Transition Assets. It
will invest in either single assets or portfolios of multiple
assets.
Subject to the investment restrictions set out below, the Group
may, also invest in assets that are in the Development Phase or the
Construction Phase, either directly or through funding of a
third-party developer, where such investments will deliver an
attractive risk adjusted return.
In addition, the Company may invest in or acquire minority
interests in companies with a strategy that aligns with the
Company's overarching investment objective, such as developers,
operators or managers of Energy Transition Assets ("Other Related
Companies").
The Group will seek to diversify its commercial exposure through
contractual relationships, directly or indirectly (through the
Investee Company), with a range of different Counterparties and
off-takers, as appropriate to the relevant investment.
Investments may be acquired from a single or a range of vendors
and the Group may also enter into joint venture arrangements
alongside one or more co-investors, where the Group retains control
or has strong minority protections. Recognising the different risk
profiles and business models of the various technologies, the Group
can invest across both debt and equity investments. Debt
investments will include market standard downside protections
including, but not limited to, cash reserve accounts, security and
have robust contractual and covenant protections.
Investment restrictions
The Company will invest and manage its assets with the objective
of spreading risk and, in doing so, will maintain the following
investment restrictions:
-- no single debt commitment or debt investment to fund, via an
Investee Company, one or more Energy Transition Asset(s) will
represent more than 20 per cent. of Adjusted Gross Asset Value. No
single equity investment into an Energy Transition Asset directly
or via an Investee Company, will represent more than 20 per cent.
of Adjusted Gross Asset Value except, where the Group has control
over an Investee Company which holds multiple Energy Transition
Assets and such assets are standalone economic operations, between
which risk can be apportioned separately, this restriction shall
apply to each individual Energy Transition Asset;
-- the aggregate maximum exposure to any Counterparty will not
exceed 20 per cent. of Adjusted Gross Asset Value (and where an
Energy Transition Asset derives revenues from more than one source,
the relevant Counterparty exposure in each case shall be calculated
by reference to the proportion of revenues derived from payments
received from the Counterparty, rather than any other source). This
restriction does not apply to circumstances where all, or
substantially all, of the revenue generated by an Energy Transition
Asset is derived through connection to the wholesale electricity
market, for example, transmission or distribution networks, where
there are multiple potential off-takers;
-- the aggregate maximum exposure to assets in the Development
Phase and the Construction Phase will not exceed, 25 per cent. of
Adjusted Gross Asset Value, provided that, within this limit, the
aggregate maximum exposure to assets in the Development Phase will
not exceed 5 per cent. of Adjusted Gross Asset Value, and the
aggregate exposure to any one Developer will not exceed 10 per
cent. of Adjusted Gross Asset Value. The restriction on
Construction Phase assets will not apply to assets where on-site
commissioning is expected to be completed within a period of three
months and any equipment on order is sufficiently insurance
wrapped;
-- at least 70 per cent. of the value of the Group's portfolio
of Energy Transition Assets will comprise United Kingdom based
investment;
-- the Group will not invest more than 5 per cent. of Adjusted
Gross Asset Value, in aggregate, in the acquisition of minority
stakes in Other Related Companies, and at all times such
investments will only be made with appropriate minority protections
in place;
-- neither the Group nor any of the Investee Companies will
invest in any UK listed closed-ended investment companies; and
-- the Company will not conduct any trading activities which are
significant in the context of the Group as a whole.
Compliance with the above investment limits will be measured at
the time of investment or in the case of commitment at the time of
commitment, and noncompliance resulting from changes in the price
or value of assets following investment will not be considered as a
breach of the investment limits.
For the purposes of the foregoing, the term "Adjusted Gross
Asset Value" shall mean the aggregate value of the total assets of
the Company as determined using the accounting principles adopted
by the Company from time to time as adjusted to include any
third-party debt funding drawn by, or available to, any
unconsolidated Holding Entity.
Borrowing Policy
The Directors intend to use gearing to enhance the potential for
income returns and long-term capital growth, and to provide capital
flexibility. However, the Company will always follow a prudent
approach for the asset class with regards to gearing, and the Group
will maintain a conservative level of aggregate borrowings.
Gearing will be employed either at the level of the Company, at
the level of any Holding Entity or at the level of the relevant
Investee Company and any limits set out in this document shall
apply on a look-through basis. The Company's target medium term
gearing for the Wider Group will be up to 40 per cent. of Gross
Asset Value, calculated at the time of drawdown.
The Group may enter into borrowing facilities at a higher level
of gearing at the Investee Company or Holding Entity, provided that
the aggregate borrowing of the Wider Group shall not exceed a
maximum of 45 per cent. of Gross Asset Value, calculated at the
time of drawdown.
Debt may be secured with or without a charge over some or all of
the Wider Group's assets, depending on the optimal structure for
the Group and having consideration to key metrics including lender
diversity, cost of debt, debt type and maturity profiles.
Intra-group debt between the Company and (i) Holding Entities
and/or (ii) Investee Companies subsidiaries will not be included in
the definition of borrowings for these purposes.
Hedging and Derivatives
The Company will not employ derivatives for investment purposes.
Derivatives may however be used for efficient portfolio
management.
The Wider Group will only enter into hedging contracts (in
particular, in respect of inflation, interest rate, currency,
electricity price and commodity price hedging) and other derivative
contracts when they are available in a timely manner and on
acceptable terms. The Company reserves the right to terminate any
hedging arrangement in its absolute discretion. Any such hedging
transactions will not be undertaken for speculative purposes. The
Company can, but does not intend to, enter into any currency
hedging.
Cash management
The Company may hold cash on deposit for working capital
purposes and awaiting investment and, as well as cash deposits, may
invest in cash equivalent investments, which may include government
issued treasury bills, money market collective investment schemes,
other money market instruments and short-term investments in money
market type funds ("Cash and Cash Equivalents"). There is no
restriction on the amount of Cash and Cash Equivalents that the
Company may hold and there may be times when it is appropriate for
the Company to have a significant Cash and Cash Equivalents
position.
Key Performance Indicators ("KPIs")
The Company sets out below its KPIs which it uses to track the
performance of the Company over time against the objectives as
described in the Strategic Report on pages 14 to 85.
The Board believes that the KPIs detailed below provide
shareholders with sufficient information to assess how effectively
the Company is meeting its objectives. The Board monitors these
KPIs on an ongoing basis.
KPI AND DEFINITION RELEVANCE TO PERFORMANCE COMMENT
STRATEGY
Dividends per The dividend The Company is The Company's
share (share) reflects the paying a 5.50 target was to
(3) Company's ability pence per share pay a dividend
Dividends paid to deliver a dividend in respect of 5.50 pence
to shareholders low-risk income of the year ended per share in
and declared in stream from the 31 March 2023 respect of the
relation to the portfolio. (5.50 pence per year to 31 March
year. share for the 2023, which it
period to 31 achieved.
March 2022).
----------------------------- --------------------------- ------------------------
Total NAV return The total NAV 9.2% (4.9% for Total NAV return
(%) (4) return measure the year to 31 for the year
NAV growth and highlights the March 2022). ended 31 March
dividends paid gross return 2023 is 1.2%
per share in the to investors above the target
year. including dividends of 7% - 8%. NAV
paid. return was generated
through dividends
paid of 5.7%
and capital growth
of 3.5%.
----------------------------- --------------------------- ------------------------
NAV per share The NAV per share 99.44 pence per NAV of GBP99.5
(pence) shows our ability share. (96.12 million or 99.44
NAV divided by to grow the portfolio pence per share pence per share
number of shares and to add value for the year as at 31 March
outstanding as to it throughout to 31 March 2022). 2023.
at the period the lifecycle
end. of our assets.
----------------------------- --------------------------- ------------------------
Cash dividend Reflects the 1.1x. The Company has
cover (3,4) Company's ability The Company delivered successfully
Operational cash to cover its a dividend for paid a cash covered
flow divided by dividends from the year cash dividend and
dividends paid the income received covered 1.1x has experienced
to shareholders in its wholly (0.14x for the the advantages
during the year. owned subsidiary, year to 31 March of a full year
TENT Holdings, 2022). of income since
from the portfolio the IPO proceeds
companies. were fully deployed
and committed.
----------------------------- --------------------------- ------------------------
Contractual Revenue The forecasted 92% of forecasted The Group has
Average percentage revenue contractually income is contractually stable and predictable
of underlying underpinned and underpinned and income stream
forecast income due to the Group due to the Group from interest
contractually encompassing over the next payments and
underpinned over two key components: 10 years. government subsidies,
the next 10 years. interest payments ensuring the
on debt facilities financial stability
and government and growth of
subsidies received the organisation.
by the equity
investee companies.
----------------------------- --------------------------- ------------------------
Ongoing Charges Ongoing charges 1.94% annualised Company level
Ratio ("OCR") shows the effect (1.38% for the budgets are approved
(4) of the operational year to 31 March annually by the
Annualised ongoing expenses incurred 2022). Board and actual
charges (i.e., by the Company. spend is reviewed
excluding acquisition quarterly. This
costs and other is a key measure
non-recurring of our operational
items, such as performance.
the premium listing Keeping costs
application costs) low supports
divided by the our ability to
average published pay dividends.
undiluted NAV The increase
in the period, in OCR has mainly
calculated in been driven by
accordance with the increase
Association of in management
Investment Companies fees. In the
guidelines. prior financial
year, the management
fee calculation
was 0.9% of deployed
IPO proceeds
until 10 December
2021. At this
date 75% of net
IPO proceeds
had been deployed
and the investment
management fee
calculation changed
to 0.9% of NAV.
----------------------------- --------------------------- ------------------------
Avoided emissions A measure of 27,112 tonnes The tCO(2) avoided
(4) our success in CO(2) avoided has increased
The carbon emissions investing in in the year ended compared to end
avoided by the projects that 31 March 2023 of year 2022
Company's investments. have a positive (17,074 tonnes as expected,
environmental CO(2) avoided due to continued
impact through for the year deployment and
a decrease in to 31 March 2022). the inclusion
CO(2) emissions of full-year
compared to an data for the
equivalent asset. Hydroelectric
Portfolio.
----------------------------- --------------------------- ------------------------
Gross loan to The LTV measures 0% (0% for the The Group will
value ("LTV") the prudence year to 31 March follow a prudent
(4) of our financing 2022). approach to gearing
The proportion strategy, balancing with a target
of our GAV that the potential medium-term target
is funded by borrowings. amplification gearing of up
of returns and to 40% of GAV
portfolio diversification and a maximum
that come with gearing that
using debt against will not exceed
the need to successfully 45% of GAV, at
manage risk. the time of drawdown.
On full drawdown
of the RCF, the
gross LTV is
expected to be
around 30%, based
on prevailing
NAV and all the
existing commitments.
----------------------------- --------------------------- ------------------------
Notes:
(3) Investors should note that references to "dividends" and
"distributions" are intended to cover both dividend income and
income which is designated as an interest distribution for UK tax
purposes and therefore subject to the interest streaming regime
applicable to investment trusts.
(4) Alternative Performance Measure.
Investment Manager's Report
Review of the Period
The past year has been significant for the Company, marked by
fully committing all of the Group's remaining capital, broadening
of the Company's investment mandate with the change in Company name
to reflect this, as well as the migration of the Company's shares
to trading on the Premium Segment of the Main Market of the London
Stock Exchange. These events reflect our strategic vision and
ambition to drive sustainable growth and positive impacts in
today's challenging energy market.
A diversified mandate provides numerous advantages, such as
greater flexibility to invest in a wide array of opportunities and
the ability to adapt to market changes. This diversification
mitigates risk and allows us to stay competitive in the face of
emerging technologies and regulatory shifts.
The Group's strategic investments are unaffected by the
Electricity Generator Levy. Our successful transactions to date
have demonstrated the Investment Manager's expertise, showcasing
our experience in managing a range of asset classes and capital
structures, whilst building a compelling pipeline. In the deals
closed to date, 92% of the Group's revenues are contracted for the
next ten years, with 47% of the Group's revenues being linked to
inflation, providing a high level of visibility and security over
the Group's income stream.
As we continue to expand our portfolio, during the financial
year we have ventured into new asset classes and capital
structures, for example receivables financing of LED lighting and
solar and BESS project development through a debt structure. These
investments not only underscore our commitment to advancing
innovative technologies but also allow us to leverage the stability
of debt financing to support projects that drive energy transition
and sustainability, whilst generating ongoing contractual returns
for the Group at an attractive risk adjusted rate.
The investment trust market as a whole has had a challenging
year, and this compounded with the scale and illiquidity of the
Company's shares has driven its discount to NAV. We do not believe
that the Company's discount to NAV is reflective of the quality of
the Group's portfolio.
Investments
LED
During the period, the Group's lighting service partner
completed multiple projects installing LED lighting at logistics
warehouses, totalling c.GBP2.2 million. Starting in September 2022,
the Group has received monthly repayments for its fixed rate
receivables financing, with "hell or high water"(5) income
contracted over the next five years.
Solar Development Financing
In March 2023 the Group committed to providing a GBP5 million
development debt facility to Innova Renewables Limited, ("Innova"),
part of the Innova group, one of the UK's leading solar and BESS
developers and operators. The facility will be used to develop
ground-mounted solar and BESS assets across the UK. The facility
has a 12-month term and delivers fixed rate contractual returns to
investors that are materially higher than the Group's target return
of 7-8% pa, reflecting the flexibility of the Group's investment
strategy. The facility was fully drawn on 3 April 2023.
BESS Portfolio
In March 2022, the Group committed GBP45.6 million fixed rate
debt facility to fund a portfolio of four geographically diverse
BESS assets in the UK. The debt facility is provided to a
subsidiary of Virmati Energy Ltd and GBP6.3 million was drawn at 31
March 2023, with a further drawdown subsequent to the balance sheet
date of GBP3.9 million, resulting in 78% of the facility remaining
undrawn. It is expected that the facility will be fully drawn in
2024.
Portfolio Overview
Tech Exposure(6)
CHP 19.0% 25.1
Hydro 41.1% 54.3
BESS 34.5% 45.6
LED 1.6% 2.1
Development 3.8% 5.0
Total 100% 132.1
Investment Type(6)
Debt 58.9% 77.8
Equity 41.1% 54.3
Total 100% 132.1
Lifecycle Stage(6)
Operating 66.4% 87.7
Construction 3.7% 4.9
Commitments awaiting
deployment 26.1% 34.5
Development 3.8% 5.0
Total 100% 132.1
Asset Exposure(6)
Harvest 7.0% 9.2
Glasshouse 6.9% 9.2
Spark Steam 5.1% 6.7
Achnacarry 18.5% 24.4
Choire A Bhalachain 3.4% 4.6
Elementary Energy 2.6% 3.4
Ladaidh 6.1% 8.1
Luaidhe 3.6% 4.7
Phocachain 6.9% 9.1
BESS Drawn 4.7% 6.2
BESS Commitment 29.8% 39.4
LED 1.6% 2.1
Development 3.8% 5.0
Total 100% 132.1
Underlying Counterparty
Exposure(6)
Non-Investment Grade
(Unrated) 57.4% 75.7
Investment Grade (Rated) 42.6% 56.3
Total 100% 132.1
Notes:
5 With an absolute payment obligation.
(6) Weighted on the sum of underlying portfolio held at fair
value and commitments waiting deployment held at cost.
Portfolio performance
CHP Portfolio
In 2021 the Group made fixed rate debt investments into a
portfolio of three Combined Heat and Power ("CHP") Energy Service
Centre Companies ("ESCos) which deliver heat and power to
glasshouses leased by a large-scale tomato grower. These ESCos have
continued to perform above the budget in the financial year. This
demonstrates the benefits of the economic model underlying these
projects, which generate revenues from both the wholesale
electricity market and/or direct offtake of heat and power by the
glasshouse occupiers.
The benefit of the CHP assets' business model is that it has two
countercyclical sources of revenue, thereby providing a stable
income which, in turn, underpins the loan repayments to the Group,
as highlighted this year. Under ordinary conditions, where energy
prices are lower than they are currently, the revenues generated by
the CHP projects are predominantly from the demand from the tomato
producers which purchase the heat and power produced by the CHP
assets to operate their glasshouses. However, during times of
higher energy prices, the electricity produced by the CHP assets
during peak load periods is able to be exported and provides the
projects with significant revenues from the wholesale electricity
market instead.
In December 2022, following a difficult trading period, the
company leasing the glasshouses underwent a change of ownership
resulting in a stronger counterparty for the Group. The
recapitalised tomato grower has boosted the management team to
support and reposition the business. This provided an opportunity
for the Group to renegotiate some of the terms of the facility
agreement and introduce more reporting requirements.
The duality of the model also underpins the dual purpose of the
assets in supporting the grid by providing electricity during the
peak demand periods and supporting the UK local food supply at a
time when both sectors were challenged by their respective
constraints.
This year, the CHP Portfolio avoided 18,098 tCO(2) equivalent
emissions(7) .
Hydroelectric Portfolio
The financial year ended 31 March 2023 marked the first full
year of ownership of the Hydroelectric Portfolio. During the
period, the nine hydroelectric schemes performed below expectation.
The annual generation performance of the portfolio was closely
aligned to the long-term energy yield forecast, with a variance of
less than 5%. The marginal variance was due to a temporary period
of curtailment imposed on certain schemes by the local grid
operator in March 2023.
Portfolio performance since the commissioning of the nine assets
has been reliable and closely corroborates with the power
generation forecasts based on historical rainfall data.
Accordingly, the average annual generation performance over the
last six years is within 1% of the P50 estimate.
With the current high level of technical availability and
reliable forecasting at our disposal, it has become imperative for
us to focus on pursuing optimisation to maximise the scheme's
potential. Loch Blair is the largest generator of the Hydroelectric
Portfolio in MWh per year and we have focused on optimising this
scheme. The optimisation will involve construction of a small dam
upstream of the intake. The reservoir created will attenuate peak
rainfall which combined with a control of the release of the flow
feeding the existing plant will increase the annual generation.
This will enable the scheme to target the peak load period of the
tariff in the PPA, increasing revenues from the power
wholesale.
All Feed-in-Tariff revenues enjoy annual indexation to UK RPI.
This has resulted in Feed in Tariff rates being adjusted upwards by
RPI of 13.40% in 2023. 3.00% is forecast from 2024 to 2031 and
2.40% is forecast thereafter, which has given an uplift to revenues
and underpins the highly defensive and attractive nature of this
portfolio.
Considering the robustness of our projected revenues, which are
safeguarded by a dependable generation forecast and the Feed-in
Tariff, our management team is actively evaluating prospects to
enhance profitability related to the sale of electricity in the
wholesale market, with various options available.
The portfolio generated 18,965 MWh of renewable energy and
avoided 8,866 tCO(2) equivalent emissions. Please see page 51 of
the Sustainability Report for further detail.
The total generation of the portfolio remains under the
threshold of the Electricity Generation Levy and therefore the
Group will not be subject to the increased tax rate in the coming
years.
BESS Portfolio
The BESS Portfolio has a total capacity of 110MW. The first BESS
asset, located in Oldham, a one-hour duration battery project,
reached its Commercial Operation Debut ("COD") on 1 December 2022.
It is located in the North of England and has a total capacity of
20MW.
The second asset, at Gerrards Cross, located at the border of
Greater London, is also a one hour duration 20MW project and is
under construction with the COD expected in late 2023. The
remaining two BESS assets are located in Scotland (two-hour
duration battery; total capacity 50MW) and Wales (two-hour duration
battery; total capacity 20MW) and are expected to commence
construction in summer 2023 and to be operational in 2024.
While these projects are greenfield projects, the construction
risk is mitigated through the modular nature of the design where
high value components (the batteries) are manufactured off-site and
delivered ready to install. This reduces the risk of interface
issues and construction delay. The bespoke elements of the
projects, mainly the power step-up and export to the grid, are
similar to other renewable energy and conventional generation
projects. Given the relatively conservative loan to cost ratio the
construction risks are substantially borne by the equity
investors.
Notes :
(7) details of calculation can be found in Annex 1 - Reporting
Principles and Methodologies
Portfolio Valuation
The Investment Manager is responsible for conducting the fair
market valuation of the Group's investments. The Company engages
Mazars LLP as an external, independent, and qualified valuer to
assess the validity of the discount rates used by the Investment
Manager in the determination of fair value. During the financial
year the Company transitioned to reporting quarterly financial
updates and portfolio valuations, reporting for the periods 30
September, 31 December and 31 March in 2022/23.
For non-market traded investments (being all the investments in
the current portfolio), the valuation is based on a discounted cash
flow ("DCF") methodology and adjusted in accordance with the
International Private Equity Valuation Guidelines where appropriate
to comply with IFRS 13, given the special nature of portfolio
investments.
The valuation of each investment within the portfolio is
determined through the application of a suitable discount rate,
which accounts for the perceived risk to the investment's future
cash flows and by applying this discount rate, the present value of
the investment's expected cash flows is derived. The Investment
Manager exercises its judgement in assessing the expected future
cash flows 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, the Investment Manager
considers the relative risks associated with the revenues. For the
year ending 31 March 2023, the discount rates range from 5.6% to
8.3% pa. (31 March 2022: range from 5% to 8%).
The valuation of the portfolio by the Investment Manager and
reviewed and supported by the Directors as at 31 March 2023 was
GBP90.1 million (31 March 2022: GBP78.8 million).
Valuation movements
Although UK gilt rates have increased over the past 12 months,
the CHP Portfolio has been held at par during the financial year.
This is supported by the underlying trading performance of the
portfolio, exceeding budget for the second year in a row at a
revenue and profit level, which flowed through to higher debt
servicing cover ratios. Furthermore, during the financial year, the
borrowers' on-site customer was acquired and benefited from a cash
injection and balance sheet restructure. This reduction in
counterparty risk broadly offset increased movements in the
risk-free rate and the Company believes the discount rate applied
is consistent with market pricing for investments of this
nature.
During the financial year, the Group deployed 13.7% of the
committed debt proceeds into the BESS portfolio and it is expected
that during 2023 and 2024 the remaining commitment will be
drawn.
The valuation of the debt financing for the receivables from the
energy-efficient lighting portfolio has largely stayed consistent
throughout the financial year, with only a negligible change. This
stability reflects the high quality of the counterparties involved
and the associated risk-return ratio.
Due to the debt investments being valued at or close to par, the
fair value movements observed during the financial year primarily
stem from the equity investment into the Hydroelectric Portfolio. A
breakdown of the movement in the Directors' portfolio valuation is
detailed and explained below.
Valuation Movement in the year to 31 March 2023
(GBPmillions)
The opening valuation as at 31 March 2022 was GBP79.0 million.
When considering the in year cash investments through the Company's
wholly owned subsidiary, the rebased valuation was GBP86.5 million.
Each movement between the valuation at the start of the financial
year and the rebased valuation is considered in turn below:
Inflation
The war in Ukraine, in addition to the multiple primary impacts
felt in Ukraine itself, has driven an increase in energy and
commodity prices. This, along with supply chain bottlenecks has
continued to place significant upward pressure on inflation.
During the financial period, inflation forecasts for 2022 and
2023 have increased significantly and as a result have caused a
valuation uplift of GBP4.6 million. The methodology adopted in
relation to inflation, for both RPI and CPI, follows the latest
available (March 2023) Office for Budget Responsibility forecast
for the 12 months from the 31 March 2023 valuation date.
Thereafter, a long-term 3.00% assumption is made in relation to
RPI, dropping to 2.40% in 2031 to reflect the 0.60% reduction as
RPI is phased out and replaced with CPI.
The Company's long-term assumption for CPI remains at 2.25%. We
also model a power curve indexation assumption, as wholesale power
prices are not intrinsically linked to consumer prices, of
3.00%.
Power Prices
The valuation as at 31 March 2023 applies long-term, forward
looking power prices from a leading third-party consultant. A blend
of the two most recent quarters' central case forecasts are taken
and applied, consistent with the approach applied in previous
periods. The Company adopts this approach due to the
unpredictability and fluctuations in power price forecasts. Where
fixed price arrangements are in place, the valuation model reflects
this price for the relevant time period and subsequently reverts to
the power price forecast using the methodology described. The
updated power price forecast has been accretive to the valuation of
the Hydroelectric Portfolio by GBP2.0 million in the year ended 31
March 2023. The Company notes that the outlook for power prices is
expected to decline over the course of FY24, however the power
price forecast for the Hydroelectric Portfolio are underpinned by
the Feed-in-Tariff export rate.
Discount Rates
A range of discount rates are used when calculating the fair
value of the portfolio valuations and are representative of the
view of the Investment Manager and Board, who benefit from
Company's independent valuer's guidance. The discount rates are
indicative of the rate of return in the market for assets with
similar characteristics and risk profiles. The weighted average
discount rate of the investments made as at 31 March 2023 is 6.6%,
an increase of 46 basis points since 31 March 2022. The weighted
average discount rate of the deployed and committed portfolio as at
31 March 2023 is 7.2%.
During the financial year, the discount rate increase has caused
a reduction in the valuation in the Hydroelectric Portfolio of
GBP3.0 million. The discount rate movement is reflective of the
significant increase in gilt yields since the prior financial year,
and although the yields fell between the peak in September 2022 and
the year end, they remain higher than they were at the start of the
financial year.
Investment Obligations
At 31 March 2023, the Group had two outstanding investment
commitments totalling GBP44.4 million, one in relation to the BESS
Portfolio which has a total capacity of 110MW and a second with a
leading solar, battery and energy storage systems developer for a
12-month development finance facility.
The committed investment into the BESS Portfolio totals GBP45.6
million, via a fixed rate debt facility, of which GBP6.2 million
has been drawn and GBP39.4 million remains committed at the
financial year end, with a further GBP3.9 million being deployed in
June 2023.
The solar PV development finance fixed rate debt facility with
Innova is for GBP5.0 million and was fully drawn on 3 April
2023.
Fully invested portfolio valuation
The valuation of the portfolio on a fully invested basis can be
derived by adding the valuation at 31 March 2023 and the expected
outstanding commitments are as follows:
GBP million
Underlying Portfolio valuation as at
31 March 2023 87.7
Valuation of TENT Holdings Limited as
at 31 March 2023 2.4
Future investments committed at cost 44.4
------------
Portfolio valuation once fully invested 134.5
------------
Key Sensitivities
The following chart illustrates the sensitivity of the Company's
NAV per share to changes in key input assumptions (with labels
indicating the impact on the NAV in pence per share of the
sensitivities). The total portfolio is affected by changes in the
discount rate, whereas the other sensitivities pertain only to the
Hydroelectric Portfolio.
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.
Financial Review
The Company applies IFRS 10 and qualifies as an investment
entity. IFRS 10 requires that investment entities measure
investments, including subsidiaries that are themselves investment
entities, at fair value except for subsidiaries that provide
investment services which are required to be consolidated.
The Company's single, wholly owned subsidiary, TENT Holdings, is
the ultimate holding company for all the Company's investments.
It is, itself, an investment entity and is therefore measured at
fair value.
NAV
The Company's NAV and investment portfolio valuations are now
calculated on a quarterly basis on 30 June, 30 September, 31
December and 31 March each year. Valuations are prepared by the
Investment Manager and reviewed by Mazars LLP. The other assets and
liabilities of the Company are calculated by the Administrator. The
NAV is reviewed and approved by the Board. All variables relating
to the performance of the underlying assets are reviewed and
incorporated in the process of identifying relevant drivers of the
DCF valuation.
NAV Bridge for the year ended 31 March 2023 (GBPmillions)
The movement in NAV was driven by investment income of GBP7.3
million representing the interest and dividend income to TENT, via
TENT Holdings, the Company's sole wholly owned subsidiary through
which investments are purchased and measured at fair value. Income
was offset by investment management fees and other expenses, as
well as dividends paid to investors. The Investment portfolio
benefited from an increase in valuation, resulting in an unrealised
fair value gain of GBP4.0 million. The NAV at 31 March 2023 has
increased by GBP3.3 million.
Operating Results
The profit before tax of the Company has increased by 85% during
the financial year to GBP8.8 million (31 March 2022: GBP4.8
million), with earnings per share of 8.81 pence (31 March 2022:
4.76 pence).
Operating Expenses and Ongoing Charges
The operating expenses for the year ended 31 March 2023 amounted
to GBP2.5 million (31 March 2022: GBP1.3 million). During the
financial year the Company incurred one-off expenditure of GBP0.6
million in relation to the application to trading on the Premium
Segment of the Main Market of the London Stock Exchange.
During the financial year the management fee was calculated
based on NAV and in the prior financial year the management fee was
partly calculated in reference to deployed funds. In accordance
with the terms of the Investment Management Agreement once 75% of
the net IPO proceeds were deployed (achieved in December 2021), the
annual fee is calculated based on the Net Asset Value of the
Company.
The Company's OCR is 1.94% (31 March 2022: 1.38%). The primary
factor contributing to the increase is the management fee charge,
as described above. The ongoing charge ratio has been calculated as
an annualised ongoing charge (excluding non-recurring items),
divided by the average Net Asset Value in the period. With the
exception of the management fee, the operating expenses of the
Company are predominantly fixed and predetermined. As a result, as
the scale of the fund increases, the Operating Cost Ratio (OCR) is
expected to decline.
Cash Dividend Cover
The Company measures dividend cover on a look through basis, by
consolidating the income and operating expenses of its sole wholly
owned subsidiary, TENT Holdings. The below table summarises the
cash income, cash expenses and finance costs incurred by the
Company and TENT Holdings in the financial year ended 31 March
2023. The cash flow statement for the Company alone does not
capture the total income and expenses of the Group as the interest
income, financing costs and further expenses are received and paid
for by TENT Holdings.
In the year, the Company has delivered a cash dividend cover of
1.1x (2022: 0.14x). However, it is important to note that this
calculation includes one-off expenditure associated with the
migration to trading to the Premium Segment of the Main Market of
the London Stock Exchange and excluding the impact of this
exceptional one-off expenditure, the dividend cover increases to
1.2x.
The below table outlines the cash income and expenditure of the
Company and its wholly owned subsidiary TENT Holdings:
31 March 2023
GBPmillions
Consolidated cash income 9.0
Consolidated operating Cash Expenses and
Finance Costs (3.0)
Dividends paid per Statement of Changes in
Equity 5.5
Cash dividend cover 1.1x
-------------
Gearing and Liquidity
At the year ending 31 March 2023, the Group had cash balances of
GBP11.2 million (31 March 2022: GBP17.4 million).
The Group has a committed GBP40 million RCF in place and intends
utilise the facility to fund the commitments to the BESS
Portfolio.
Environmental, Social and Governance
The Investment Manager is committed to promoting ESG when
assessing investment opportunities and has been a signatory to the
United Nations' Principles for Responsible Investing ("PRI") since
2019.
In addition, the Investment Manager is a certified B Corp which
formalises its consideration of social and environmental
impact.
We have continued to focus on our ESG impact through the TENT
portfolio and during the year we enhanced the portfolio from an ESG
perspective through, for example, health and safety audits
conducted across the assets.
The overall TENT portfolio generated 18,965 MWh of renewable
energy and avoided 27,122 tonnes of CO(2) in the year ended 31
March 2023.
The Group targets a wide range of assets that contribute to
energy transition and the Investment Manager and Board believe that
TENT's investments are well-aligned to the energy transition
through the resulting avoided carbon. The Company also recognises
the importance of continuing to reduce the emissions intensity of
assets and will continue to track a pathway to Net Zero and will
report on reduction in emissions intensity of the assets each year,
along with continued reporting of avoided emissions. The Investment
Manager, with the oversight of the Board, has also conducted
extensive analysis to determine its ability to set an overarching
Net Zero target, to reduce its emissions intensity in line with the
accepted scientific consensus on reducing global temperature rises
to 1.5degc. At this time there is currently no established
methodology, or combination of methodologies, available to show the
Net Zero alignment of the diversified asset base that the Company
holds. The Investment Manager will continue to actively monitor
this position for future reporting.
Pipeline
Sector Pipeline % of Total Pipeline Weighted Average
GBPmillions Return
Distributed 55 10% 6.4%
------------- -------------------- -----------------
Efficient Storage 254 47% 7.6%
------------- -------------------- -----------------
Onsite Generation/Demand
Reduction 236 43% 10.6%
------------- -------------------- -----------------
Total 545 100% 8.8%
------------- -------------------- -----------------
The current pipeline comprises opportunities that would deliver
an average yield of 8.8%, indicating a high potential to further
support the dividend cover and deliver a progressive dividend
return to shareholders. The pipeline includes both debt and equity
opportunities, covering a range of technologies and sectors in the
Company's three thematic areas. Potential investments include BESS,
onsite generation, low-carbon energy consumption, and green
hydrogen.
The pipeline also includes early-stage development, mid-stage
development, pre-construction projects, and operational assets.
This means that the Company can use the pipeline to select a
balanced set of investments to deliver attractive risk-adjusted
returns to investors while also considering risk-return profiles
and time horizons. By investing a small part of the portfolio in
early-stage development, the Company can create value by taking
projects from concept to consent, capturing a larger proportion of
the project margin.
The pipeline includes several joint venture opportunities,
outright project purchases, and alternative debt funding
structures, including senior and mezzanine. This enhances the
benefit of diversifying capital deployment, allowing the Company to
strike the right balance of risk and return. The pipeline offers
multiple types of investment opportunities, which have different
implications on capital allocation and portfolio composition. By
engaging in JV opportunities, the Company can share risks and
rewards with other partners, while leveraging their expertise and
resources. By pursuing outright project purchases, the Company can
gain full ownership and control over the assets, as well as
optimise their design and operation. By providing alternative debt
funding structures, the Company can generate attractive returns
with lower risks than equity investments.
Outlook
Energy System Transformation
The transition towards Net Zero emissions by 2050, propelled by
the ambitious targets and robust policies of the UK and EU, is
precipitating a profound transformation in the energy system. This
shift, from centralised fossil fuel-based sources to decentralised,
renewable, and flexible energy systems, creates substantial
opportunities for investors well-positioned to navigate these
changes.
The intermittency of renewable energy sources and increased
electrification of assets presents a complex dynamic of challenges
and opportunities. Balancing grid stability against the
unpredictability of energy supply and demand necessitates
innovative solutions. The Company's diversified mandate provides a
robust framework to navigate these uncertainties, mitigate risk,
and tap into alternative sources of income, enhancing
resilience.
Decarbonisation of buildings and transport, sectors with
significant contributions to greenhouse gas emissions and energy
consumption, represents a key component of this transition.
Strategic investment decisions today in these sectors will shape
the emissions trajectory for the coming decades.
Company Strategy
In addition to optimising the existing portfolio and maximising
its value for shareholders, the long-term strategy of the Company
is designed to capitalise on the opportunities presented by the
energy transition as soon as additional capital is available. The
unique mandate allows for investments across three thematic areas
aligned with the key drivers of energy system transformation,
offering potential for significant value creation.
The Company will strengthen its focus on distributed energy
generation, specifically on renewable and lower-carbon assets.
Emerging technologies such as green hydrogen and carbon capture are
recognised for their potential, and the Company will actively
assess the viability of investing in these areas.
Energy storage and its distribution form critical parts of the
Company's strategy. By investing in assets like battery storage
systems, the Company aims to support the increased integration of
renewable energy sources into the grid, which is becoming
increasingly important in the context of volatility in energy
supply and demand.
The Company's commitment to onsite energy generation and lower
carbon consumption underscores its dedication to driving energy
transition and reducing emissions. By investing in solutions such
as rooftop solar and demand reduction measures, the aim is to
decrease dependence on grid connections, mitigating risks
associated with grid availability and volatile power prices.
In a market environment characterised by falling power prices,
the Company's diversified mandate offers a significant advantage.
This approach provides insulation from single-technology risks and
enables income generation from a wide range of sources. The Company
is confident that its strategic focus will continue to drive
shareholder value and contribute positively to the global
transition to a low-carbon economy.
Jonathan Hick
TENT Fund Manager
16 June 2023
Sustainability Report
Introduction
This report provides a summary of the Group's sustainability
outcomes, approach and ambition (as implemented by the Investment
Manager). The report includes Environmental, Social and Governance
performance, with a particular focus on how the Group's investments
align with its energy transition theme. It also provides detail on
the Investment Manager's credentials and resources to implement
this process.
TENT's approach to sustainability is predicated on the belief
that a low carbon economy and a Net Zero future can only be
achieved through the adoption of transition technologies:
technologies which offer decarbonised energy, support
decarbonisation, or enable existing economic activity to continue
whilst reducing carbon footprint, until more radical carbon-free
solutions become available. As a result, ensuring carbon avoided
against an appropriate counterfactual is essential to the selection
of every investment.
To implement a meaningful energy transition strategy, it is also
essential that assets are considered for possible unintended
negative social and environmental impacts, which may undermine
their energy transition benefits. Or where possible, that the
opportunity to improve the ESG performance of an asset is
implemented. ESG analysis is used throughout the investment process
to manage this consideration, and to improve outcomes where
possible.
Selecting assets for avoided carbon and energy transition
alignment
For an asset to qualify as a TENT investment, it must be
possible to demonstrate that its operation results in avoided
carbon, relative to the expected status quo or other sensible or
relevant counterfactual. There is no current industry methodology
for quantifying avoided carbon. TENT approaches this challenge by
ensuring transparency in our assessment and a willingness to
continue to critically reflect on how these calculations are made,
can be justified, and can be improved. Details of the
counterfactual approach are provided in the Methodology and
Principles section, Annex 1.
Data is collected during the due diligence stage of a deal to
determine an estimate of avoided carbon over the lifetime of the
asset, accounting where necessary for shifting counterfactuals such
as a decarbonising grid. This estimate is refined throughout the
deal process, and then tracked and refined further as necessary
during exposure to the asset. Agreement is sought early on from the
O&M or other asset manager to ensure the relevant carbon data
is provided. The alignment of the asset to a recognised energy
transition pathway is also assessed. In the UK, the alignment of
assets to the Balanced Pathway from the Climate Change Committee's
6(th) Budget is assessed.
The table details how each of the operational assets contributes
to the theme of energy transition, through avoided carbon or
renewable energy generation.
Avoided carbon
Lifetime avoided for reporting
carbon estimation period (tCO(2) Renewable Energy
(tCO(2) )(8) ) Generation (MWh)
CHP Harvest 53,000 5,396
------------- ------------------- ---------------- ------------------
Glasshouse 49,000 7,900
------------------------------- ------------------- ---------------- ------------------
Spark Steam 23,000 4,802
------------------------------- ------------------- ---------------- ------------------
Hydroelectric 186,000 8,865 18,965
------------------- ---------------- ------------------
BESS Oldham 3,000 -10
------------- ------------------- ---------------- ------------------
Lighting LED project 620 158
------------- ------------------- ---------------- ------------------
Data is for the year ended 31 March 2023, or from the point of
acquisition, if the investment was made during the course of the
year.
Managing wider ESG risk and opportunity
The Company recognises it is important to balance supporting
assets which will result in avoided carbon with the potential wider
impacts on environment and society. Failure to take due care could
result in unintended negative impacts as a result of the investment
decisions taken by the Company. ESG integration helps to manage
this risk and also identify where improved practice can be
implemented to drive positive outcomes for people and planet.
The Investment Manager's approach to ESG integration is to
ensure it is embedded at each stage of the investment process. Each
step of the investment process represents an opportunity to
consider how ESG factors may influence the short and long-term
success of a project.
Notes:
(8) Avoided carbon for the reporting period is based on
estimated energy savings from the point of investment.
Topics of assessment
While the approach to ESG must take into account the individual
nature of the target asset, for example, its size and type, region,
operational environment and stage of project cycle, there are
common measures that can be systematically applied to calculate the
longevity of an infrastructure asset's value. For responsible
infrastructure investments, the following areas are considered
relevant:
Environmental
We consider use, generation type, and carbon intensity of
energy, along with water use and its pollution. We also look at
levels of waste generated, avoided and disposed of approach to raw
material sourcing and supply chain sustainability, and build in
impacts on biodiversity and habitat by understanding management and
protection measures. Carbon analysis is also carried out to ensure
the asset will avoid emissions compared to an appropriate
counterfactual.
Social
We consider the asset quality and fit with a more sustainable
economy, including relevance/appropriateness to the locality. We
seek reassurance of good customer and stakeholder relations,
including management of land rights, accessibility, and social
inclusion of access to the asset. We expect strong management and
reporting of health and safety (during and after build) as well as
good labour management. This includes staff wellbeing, good
diversity and inclusion practices, appropriate training, and
presence of fair pay, including reassurance of the absence of
modern slavery.
Governance
We scrutinise management, at the level where it is most material
to the success of the asset, to promote accountability and
responsiveness to stakeholders by addressing issues such as Boards
and senior management, pay structure, ownership and accounting
practices. We also look for evidence of best practice in approaches
to tax policy, management of bribery and corruption and conflicts
of interest.
Climate analysis
Within initial deal scanning and on-going pre acquisition due
diligence, the Investment Manager considers the implications of
climate change on the long-term value of the Company. Details on
the approach to date in the management of climate change are
captured in our voluntary reporting under the Task Force on Climate
related Financial Disclosure (TCFD) framework.
Operational ESG outcomes:
The following information provides high-level outcomes of the
ESG credentials within TENT's investments.
Environmental Social Governance
Environ-mental Health Workers Modern Local Apprentice-ships H&S policy Gender O&M
incidents & Safety receive slavery employ-ment review/ Diversity contractors
incidents living policy Audit(9) of SPV review/
(Riddor/ wage in directors audit
non-Riddor) place (% female)
------------ --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Non
CHP Portfolio Harvest Non reported reported Y Y 2 0 Y 0 n/a(10)
------------ --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Non
Glasshouse Non reported reported Y Y 2 1 Y 0 n/a(10)
---------------------------- --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Spark Non
Steam Non reported reported Y Y 1 0 Y 0 n/a(10)
---------------------------- --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Hydroelectric Y
Portfolio 0 0/0 Y N 5(11) 0.25(11) (external) 0 Y
--------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
BESS Portfolio Oldham 0 0/4(12) Y(13) Y 0 0 Y 0 Y
------------ --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Gerrards
Cross 0 0/0 Y(13) Y 0 0 Y 0 Y
---------------------------- --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Lighting LED Project 1(14) 0/2(15) Y Y 0 0 Y 0 n/a(16)
------------ --------------- ------------ --------- -------- ------------ ----------------- ----------- ----------- ------------
Operational ESG outcomes for each of the Group's investments.
Reporting at the asset level unless stated otherwise.
Notes:
(9) Audit reviews conducted internally unless stated
otherwise
(10) On-going long-term contract
(11) Number reported in full time equivalent positions - the
TENT O&M contracts represent circa 20% time equivalent of a 25
person workforce and 2 apprentices at the O&M level
(12) Non Riddor incidents: Incorrect site discharging; fire
alarm reset without incident, site lost communication briefly;
attempted site break in
(13) Refers to pay levels within the O&M
(14) Broken fluorescent tube
(15) Non Riddor incidents: Broken tube fragments falling to
floor; computer monitor accidentally damaged
(16) No maintenance in contract
The portfolio is regularly reviewed for opportunities to improve
these ESG credentials and look for other opportunities to create
additional social or environmental opportunities or risk
management. The details below provide further insight on some
specific outcomes linked to particular environmental and social
themes, or particular assets.
TENT is committed to the health and safety of employees,
contractors and the public. Over the period, the Investment Manager
has conducted a two-tiered audit process to assess the
Hydroelectric Portfolio. The first step consisted of a site visit
by the technical adviser whereby some observations and
recommendations were highlighted. The second step involved a
desktop review by a specialised health and safety consultancy who
confirmed that the observations had been recognised by the O&M
service and were already progressing with improvements. The
consultancy concluded from the audit that there were no major
concerns regarding the current O&M service and that significant
assurance can be taken that there is no significant or ongoing
health and safety risks. TENT will continue to arrange periodic
health and safety audits and continue to monitor the progress of
corrective actions. The BESS, CHP and LED portfolios continue to
report on health and safety requirements as per the reporting
agreements. The owners carried out internal H&S audits in the
period.
Recognising the need for a responsible supply chain in BESS
BESS assets have an important role to providing much-needed
resiliency to an ever more renewable grid. Despite this positive
impact, there are potential ESG risks, in particular, within the
supply chain of BESS assets, that the Investment Manager has aimed
to mitigate: human rights issues may exist within mineral supply
chains, embodied emissions are significant, and circular
end-of-life options for the assets are not well established. To
minimise the risk of human rights issues in the supply chain,
agreements are in place at the Gerrards Cross site to ensure that
the EPC contractor conducts appropriate supply chain due diligence
to establish supply chain transparency compliance with the OECD Due
Diligence Guidance for Responsible Supply Chains of Minerals.
Additionally, all battery cells in use avoid the use of the
riskiest mineral, cobalt. This transparency, combined with waste
and emissions data collection for the construction phase of the
assets, will be used to refine a lifecycle carbon assessment of the
assets, to identify emissions hotspots and reduce embodied
emissions for future projects. The Facility Agreement with the
borrower further includes an interest rate reduction in the period
where cells are disposed of, to fund responsible recycling.
Widening the value of the Hydroelectric Portfolio to benefit
local communities
The Hydroelectric Portfolio contributes to local communities
with payments averaging around GBP42,000 per year. These funds are
used to support community projects including teaching Gaelic in
primary schools, community woodlands preservation, heritage
societies, village upkeep such as updating fire alarms systems and
roof repairs. One particular community has used the contribution to
provide grants to students attending tertiary education who would
otherwise struggle with considerable travel costs from living in a
remote location.
Investment Manager's credentials and approach
The Investment Manager is a purpose-led investor, committed to
responsible investment and aligning the funds it manages to
sustainability themes.
TPIM became signatories to the PRI in 2019 and will receive
their first public star rating in November 2023. The Investment
Manager is also B Corp certified since December 2022 with a score
of 97.6.
Responsibility for the ESG integration strategy sits with the
Head of Sustainability. There are a number of oversight functions
in place to ensure the effective implementation of ESG by
investment teams with the support of the Sustainability Team.
The Investment Manager operates a Sustainability Group which
consists of senior partners and managers from across the Investment
Manager. This group meets monthly to discuss sustainability
initiatives. The Sustainability Group is chaired by TPIM's
Co-Managing Partner; and both Managing Partners sit on the group.
The Sustainable Investment Subgroup (SISG) reports to the
Sustainability Group. The SISG consists of senior investment team
members from across the Investment Manager. This SISG meets every
eight weeks to share best practice, latest industry activity and
ESG ideas from across the business. It can also be called to review
an investment opportunity for critical debate should it present a
complex sustainability profile.
During the reporting period, one investment opportunity was
presented to the SISG to discuss more complex sustainability and
responsible investment themes associated with the opportunity.
Based on this review process, the deal was supported and ultimately
progressed to funding.
The Sustainability Team conducts an annual ESG monitoring
programme to assess the effectiveness of ESG integration for TENT.
The ESG integration policy is reviewed, including opportunities for
development and evolution. The findings of this audit are presented
to the Sustainability Group for discussion and further action if
appropriate and is also reported to the TENT Board.
The Sustainability Team are also subject to quarterly risk
reviews by the risk team, and any identified sustainability risks
are recorded on the TPIM risk register and on TENT's risk register
where relevant, which are both reviewed quarterly by the Investment
Manager's Risk Committee. The Head of Sustainability also sits on
the Risk Committee to ensure that the Investment Manager's outlook
for risk appropriately considers sustainability issues.
The Board is actively engaged in discussion in relation to
sustainability risks and opportunities facing portfolio companies
and assets, through information provided by the investment team and
sustainability team, including deep dives into sustainability
integration, engagement, target setting and performance.
For further details on Investment Manager Governance processes
please refer to page 63 of the Annual Report.
The transparency of TENT's sustainability activities is an
important aspect of the Investment Manager's commitment. The data
provided reflects avoided carbon and alignment to the energy
transition theme and disclosures in line with a number of external
frameworks and regulations. TENT is not currently required to
report against any of these frameworks, however the Investment
Manager and Board recognise the importance of structured and
comparable sustainability information for the Group and as such
follows a range of reporting frameworks. These frameworks have
their limitations and challenges in interpretation and the
Investment Manager looks to implement a value-adding approach to
TENT which is not driven solely by frameworks.
Framework based reporting
Respecting latest reporting requirements and to demonstrate
clearly how the Company and the Investment Manager align with
relevant frameworks, the Annual Report provides reporting according
to the following:
I. Intended approach to Sustainable Disclosure Regulation (SDR)
II. Principles for Responsible Investments (PRI)
III. UN Sustainable Development Goals (SDGs)
IV. Sustainable Financial Disclosure Regulation (SFDR)
V. Task Force on Climate-related Financial Disclosure (TCFD)
Section 172(1) Statement
The Board is committed to promoting the long-term success of the
Company whilst conducting business in a fair, ethical, and
transparent manner.
The Board makes every effort to understand the views of the
Company's key stakeholders and to take into consideration these
views as part of its decision-making process. Our key stakeholders
are our shareholders, the Investment Manager, our service
providers, the asset-level service counterparties, the investee
companies/borrowers and our lenders. Information on our stakeholder
engagement, including how the Board keeps itself informed about
stakeholder's views and how we take their views into account in
decision-making, can be found on pages 74 to 75 of the Annual
Report.
The majority of the key stakeholder groups interface with the
Company primarily through the Investment Manager. The Investment
Manager is responsible for communicating stakeholder concerns to
the Board, such that they can input on actions as required.
As an investment company, the Company does not have any
employees and conducts its core activities through third-party
service providers. The Board seeks to ensure each service provider
has an established track record and is required to have in place
suitable policies and procedures to ensure they maintain high
standards of business conduct, treat shareholders fairly, and
employ corporate governance best practice.
The following disclosure describes how the Directors have had
regard to the matters set out in section 172(1) (a) to (f) when
performing their duty under s172 and forms the Directors' statement
required under section 414CZA of the Act.
The likely consequence of any decision in the long Please refer to
term the Investment
The nature of our business means that the Board Objectives and
have to consider the long-term impact of their decisions, business model
given that the Company's investments are generally on pages 20 to
held for the long term. 24
The Board hold a strategy day annually, which allows
for the effectiveness of past decisions to be assessed
and to consider the actions of the Company going
forward.
The interests of the Company's employees Please refer to
As a closed-ended investment company, the Company stakeholder engagement
does not have any employees but maintains close section on pages
working relationships with the Investment Manager 74 to 75
and Administrator.
------------------------
The need to foster the Company's business relationships Please refer to
with suppliers, customers and others stakeholder engagement
The Company's primary suppliers are our service section on pages
providers, principally the Investment Manager and 74 to 75
Administrator. The Board engages regularly with
both, as well as at its Board meetings.
------------------------
The impact of the Company's operations on the community Please refer to
and the environment the sustainability
Having a positive environmental impact is central report on pages
to the Company's operations, given that its strategy 50 to 54
is to invest in assets, support the transition to
a lower carbon economy, and help the UK achieve
Net Zero.
------------------------
The desirability of the Company maintaining a reputation Please refer to
for high standards of business conduct page 88 of the
The Directors have a duty to promote the success Corporate Governance
of the Company for the benefit of shareholders. Statement
As such they are dedicated to ensuring the maintenance
of high standards of business conduct and corporate
governance.
------------------------
The need to act fairly as between members of the Please refer to
Company stakeholder engagement
The Board actively engages with shareholders and section on pages
considers their interests when setting the Company's 74 to 75
strategy.
------------------------
Principal Decisions
Principal decisions have been defined as those that have a
material impact to the Group and its key stakeholders. In taking
these decisions, the Directors considered their duties under
section 172 of the Act. Below we provide describe some of the
principal decisions made by the Board in the year and demonstrate
how the Board took account of stakeholders' interest in making
those decisions.
Migration to the Premium Segment of the Main Market of the
London Stock Exchange
With effect from 28 October 2022, the Company migrated the
trading of its shares to the Premium Segment of the Main Market of
the London Stock Exchange and listed on the FCA's Official List. In
its decision making process, the Board considered the associated
costs of the migration and the expected benefits. The Company's
shareholders, were the key stakeholder impacted by this decision
and the Board gave due consideration to their interests, concluding
that it was in the best interests of the Company and its
shareholders, as it would provide the opportunity to increase the
diversity of the shareholder base and improve liquidity of the
Company's shares.
Net Zero planning
During the year the Board had multiple discussions regarding
sustainability and has held workshops with the Investment Manager
and the Carbon Trust to discuss the approach to Net Zero planning
and setting targets. In considering Net Zero planning, the Board
considered the interests of shareholders and also the Investee
Companies and Borrowers in which the Group has invested. The
decisions made by the Board in respect to Net Zero planning will
directly impact the Investee Companies and Borrowers. The
Investment Manager has been continuously engaged with those key
stakeholders to support them in providing data and reporting
required by the Company. Further the Board recognises the ever
growing importance of sustainability to its shareholders and
therefore considers tracking progress towards Net Zero to be
aligned with shareholder interests.
Risk appetite
The Board has an established risk appetite, which was updated
during the year, to reflect the updated Investment Policy and to
better align the categories with those in the risk register. In
updating the risk appetite, the Board considered the interests of
the shareholders, the Investment Manager and the lenders. The
intention of the risk appetite is to provide guidance to the
Investment Manager on what level of risk the Board are comfortable
taking, in the pursuit of achieving the Company's Investment
Objective. The risk appetite provides an effective way for the
Board to monitor the Investment Manager's activity and ensures that
the interests of the shareholders are appropriately protected.
Stakeholder Engagement
Stakeholder Shareholders
Why is it important to engage? Shareholders and their continued support are critical to the continuing
existence of the business and delivery of our long-term strategy.
--------------------------------------------------------------------------
How have the Investment Manager/Directors The way in which we engage with our shareholders is set out on page
engaged? 97 of the Corporate Governance Report.
During the year, the Investment Manager met with the majority of
existing shareholders as well as prospective investors. The Chair
and the Senior Independent Director met with a number of shareholders
following publication of the Company's interim results for the period
ended 30 September 2022.
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What were the key topics The key topics of discussion included: deployment of capital, frequency
of engagement? of communications with shareholders, the Company's share price discount
to NAV, the change of the Company's name and Investment Policy.
--------------------------------------------------------------------------
What was the feedback obtained A key piece of feedback received, was that the Company did not
and/or the outcome of the communicate
engagement? regularly enough, about the progress of the underlying assets in
the portfolio, with the market through RNS announcements and other
channels. Following due consideration, the Board approved the publication
of the Company's unaudited NAV and portfolio update on a quarterly
basis.
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Stakeholder Investment Manager
Why is it important to engage? The Investment Manager is responsible for executing the Investment
Objective within the Investment Policy of the Company.
-------------------------------------------------------------------------
How have the Investment Manager/Directors The Board maintains regular and open dialogue with the Investment
engaged? Manager at Board meetings and has regular contact on operational
and investment matters outside of meetings.
The Management Engagement Committee is responsible for conducting
periodic reviews of the Investment Manager.
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What were the key topics A key topic of conversation during the year revolved around the
of engagement? Company's share price discount to NAV and the development of a strategy
to reduce the discount.
-------------------------------------------------------------------------
What was the feedback obtained In developing a strategy to manage the Company's share price discount
and/or the outcome of the to NAV, it was decided to change the Company's name and investment
engagement? policy to better reflect the nature of the current portfolio of
investments and offer a greater number of opportunities for investment
in the future.
Following this change, the Investment Manager has been heavily engaged
with shareholders and prospective investors to promote the Company.
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Stakeholder Service Providers
Why is it important to engage? As an externally managed Company, we are reliant on our service
providers to conduct our core activities. We believe that fostering
constructive and collaborative relationships with our service providers
will assist in the promotion of the success of the Company.
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How have the Investment Manager/Directors The Board maintains regular contact with its service providers,
engaged? both through Board and Committee meetings, as well as outside the
regular meeting cycle.
The Management Engagement Committee is responsible for conducting
periodic reviews of service providers.
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What were the key topics In discussion with the Investment Manager, the Board considered
of engagement? the appointment of a new broker.
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What was the feedback obtained On 24 June 2022, the Company announced the appointment of J.P. Morgan
and/or the outcome of the Cazenove as its sole broker. Since their appointment, J.P. Morgan
engagement? Cazenove have been highly engaged with shareholders and the Company
have undertaken several activities in an attempt to reduce the Company's
share price discount to NAV.
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Stakeholder Asset-level service counterparties
Why is it important to engage? Asset-level counterparties are an essential stakeholder group and
engagement with them is important to ensure assets are operating
safely and effectively.
-----------------------------------------------------------------------
How have the Investment Manager/Directors The Investment Manager has developed strong working relationships
engaged? with the asset-level counterparties and has regular communication
with them to ensure the assets are being managed appropriately.
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What were the key topics During the year, the O&M contracts for the Hydroelectric Portfolio
of engagement? were renegotiated.
-----------------------------------------------------------------------
What was the feedback obtained The renegotiated contracts ensure that fair working mechanisms between
and/or the outcome of the the operator and the owner are embedded in the contract, as well
engagement? as providing visibility and business continuity to the operator
who has since hired more personnel.
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Stakeholder Investee Companies/Borrowers
Why is it important to engage? Investee companies and borrowers are companies in which TENT Holdings
has invested either by debt or equity. They are an essential stakeholder
and engagement with them, particularly the individuals responsible
for their operations, is important to ensure the maintenance and
performance of each investee company.
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How have the Investment Manager/Directors The Investment Manager holds Board positions on the Hydroelectric
engaged? Portfolio.
Each investee company and borrower have certain reporting obligations
to the Group.
--------------------------------------------------------------------------
What were the key topics The Investment Manager engaged with the boards and senior management
of engagement? of the investee companies to discuss the relationship going forward,
including frequency of reporting.
--------------------------------------------------------------------------
What was the feedback obtained During the year the Investment Manager has renegotiated the reporting
and/or the outcome of the requirements and information disclosure with the Hydroelectric Portfolio
engagement? O&M contractors and the borrowers, specifically requiring reporting
on ESG KPIs .
--------------------------------------------------------------------------
Stakeholder Lenders
Why is it important to engage? The lenders provide an essential source of finance for the Group,
allowing it to pursue investment opportunities.
-------------------------------------------------------------------------
How have the Investment Manager/Directors The Investment Manager provides reporting to the Lender on covenant
engaged? compliance and communicates with them as required.
-------------------------------------------------------------------------
What were the key topics During the year the Group, via the Investment Manager, negotiated
of engagement? an extension of its existing GBP40 million RCF with TP Leasing Limited.
-------------------------------------------------------------------------
What was the feedback obtained The GBP40 million RCF was successfully extended to 28 March 2025
and/or the outcome of the on advantageous terms including a very competitive annual coupon
engagement? despite a rising interest rate environment.
-------------------------------------------------------------------------
Risk Management
The Board and the Investment Manager recognise that risk is
inherent in the operation of the Company and are committed to
effective risk management to ensure that shareholder value is
protected and maximised.
As an externally managed investment company, the Company
outsources key services to the Investment Manager and other service
providers and relies on their systems and controls. The Board has
ultimate responsibility for oversight of risk management and
internal controls within the Company. The Board sets the risk
appetite for the Company, and reviewed and updated it in the year.
The Investment Manager presents the Company's top risks, changes
since the previous quarter, risks outside of appetite and emerging
risks to the Board on a quarterly basis for their review. The Board
assesses and challenges the effectiveness of the Investment
Manager's risk management against the risk appetite and controls to
manage risks within that appetite, particularly those which would
threaten its business model, future performance, solvency,
valuation, liquidity or reputation. Further details of the Board's
activities relating to risk can be found on pages 76 to 82.
The Investment Manager has responsibility for identifying
potential risks at an early stage, escalating risks or changes to
risk, and relevant considerations and implementing appropriate
mitigations which are recorded in the Group's risk register. Where
relevant the financial model is stress tested to assess the
potential impact of certain risks against the likelihood of
occurrence. In assessing risks, both internal controls and external
factors that could mitigate the risk are considered. A post
mitigation risk score is then determined for each principal risk.
The Group's detailed risk register identifying risks and controls
to mitigate their potential impact and/or likelihood is maintained
by the Investment Manager, and subject to an annual review by the
Board.
Risk appetite
Managing risk is fundamental to the delivery of the Company's
strategy, and this is achieved by defining risk appetite and
managing risks within that appetite. Risk appetite is the level of
risk the Company is willing to take to achieve its strategic
objectives. The Board has defined its risk appetite using a
category of risks inherent to the environment in which the Company
operates. This enables the actual risks which are identified by the
Investment Manager to be compared to the defined appetite, to
identify where any additional mitigation activity is required. The
Company manages its risks within the tolerance set. Any risks
outside of appetite are subject to additional oversight and action
planning.
The Board has reviewed the Company's appetite for each of the
principal risks set out below. The Company seeks to take risk in
executing its strategy and in line with its Investment Policy. The
Company's risk management framework is designed to manage rather
than eliminate the risk of failure to achieve objectives and
breaches of risk appetite.
The Board reviews and monitors the Company's risk appetite on,
at least, an annual basis to ensure that it remains appropriate and
consistent with the Investment Policy.
Principal Risks and Uncertainties
The table below sets out what we believe to be the principal
risks and uncertainties facing the Group. The table does not cover
all of the risks that the Group may face. The Board defines the
Group's risk appetite, enabling the Group, in both quantitative and
qualitative terms, to judge the level of risk it is prepared to
take in achieving its overall objectives. Additional risks and
uncertainties not presently known to management or deemed to be
less material at the date of this report may also have an adverse
effect on the Group.
A risk heat map is included on page 77 of the Annual Report.
Risk Identified Risk Description Risk Impact Mitigation
Introduction A technological or The future legislative As part of the Group's acquisition Post
of, or regulatory prohibition process, the Investment Manager Mitigation
amendment change could occur or tax of particular fuels conducts Impact
to laws, which (such a thorough due diligence process Moderate
regulations, could have the as natural gas) or as a on Post
or technology effect result all projects that takes account of Mitigation
(especially of rendering an of technological innovation the technology, regulatory Likelihood
in relation investment or environment, Moderate to
to climate in which the Group otherwise by changes to law potential future regulatory High
change) has and changes Change in Year
invested obsolete or regulation that renders an and the robustness of any Stable
materially change investment Government
the obsolete could threaten the subsidy.
way in which a profitability
service of such an investment, in In particular, the Group considers
or product is particular how to manage the risk of carbon
delivered due to the financing pricing
or alter the return projections through using carbon price
profile of an that are dependent on an forecasts
investment. extended and offsetting carbon cost risk to
project life. If such a off-takers where possible. The
In addition, change Group
environmental were to occur, these assets monitors government guidance and
regulators may seek would is
to impose have very few alternative looking to build the portfolio in
injunctions uses line with this guidance. See the
or other sanctions should they become obsolete. Company's
on reporting toward TCFD on pages 62
an investment's to 71 for further detail.
operation
due to changes in The Group's Investment Strategy
laws focuses
or regulations that on a diverse range of assets
may have a material across
adverse effect on various energy transition
its sub-sectors,
financial condition. which reduces the impact on the
Carbon pricing is a Group
particular risk. should any such changes impact any
one sector. As a result, the Group
is not impacted by the recent
Electricity
Generation Levy.
-------------------- ----------------------------- ---------------------------------- --------------
Ability to Ability to raise It may be difficult to raise The Board has been closely Post
raise additional further equity given that the monitoring Mitigation
additional equity, may limit share price has been trading the Company's share price discount Impact
equity the below NAV for some time, as to NAV and liquidity and is Moderate
Group's ability to part keeping Post
achieve of a broader market options for managing the discount Mitigation
its Investment background and liquidity under review. Likelihood
Objective. where most other investment Moderate to
trusts The Company has increased the High
in energy are also trading at frequency Change in Year
a discount. of its communications with Stable
investors,
Without sufficient funding, for example by publishing
the unaudited
Group will be unable to quarterly NAV and portfolio
pursue updates.
suitable investments in line
with its Investment Policy.
The Company has delivered a fully
covered dividend for the year
ended
31 March 2023, demonstrating the
quality
of the portfolio to potential
equity
investors.
-------------------- ----------------------------- ---------------------------------- --------------
Weather changes Hydro, solar, wind This would affect their The Investment Manager is Post
or ability introducing Mitigation
other renewable to perform as well as optimisation projects in the Impact
production expected, Hydroelectric Moderate
levels may be lower causing detriment to the Portfolio; installing log barriers Post
than forecast or revenues to expand the pooling storage of Mitigation
more and Net Asset Value of the the Likelihood
drastic as a result Group. water, so that there is a greater Moderate
of climate change amount in reserve to cater for Change in Year
lower New
rain levels or to capture excess
rainfall.
Energy forecasts take into account
predicted changes in energy
resource.
The Company utilises an external
provider,
Climate X, to analyse and quantify
the risk of physical damage to its
assets resulting from climate
change.
-------------------- ----------------------------- ---------------------------------- --------------
Investments The Group's Different technologies are at The Group's portfolio is being Post
are performance risk of poor operational and built Mitigation
concentrated may be negatively financial performance in the up in phases with technology Impact
in a particular impacted event of mechanical exposure Moderate
technology if its portfolio is breakdown, being monitored and a variety of Post
overly concentrated or obsolescence caused by technologies Mitigation
in any one disruptive in its investment pipeline. Likelihood
technology technologies. This would Moderate
type. affect The technologies that TENT invests Change in Year
their ability to perform as in are proven technologies, with Stable
well established
as expected, causing operating track records. Further
detriment diversification
to the revenues and Net Asset has been achieved during the year
Value of the Group. ended 31 March 2023, with the
addition
of two technologies into the
portfolio
bringing the total to five
technology
types.
-------------------- ----------------------------- ---------------------------------- --------------
Exposure to The Group makes Changes in market demand for The Company targets Energy Post
power prices investments electricity, including Transition Mitigation
and risk to in projects and changes projects where a significant Impact
hedging power concessions in consumer demand patterns, portion Moderate
prices with revenue could have a material adverse of revenues are set by long term Post
exposure effect on the Company's contracts Mitigation
to power prices. The profitability, with an end user and/or off-taker, Likelihood
market price of the Net Asset Value, the to mitigate the volatility of Moderate
electricity Company's commodity Change in Year
is volatile and is earnings and returns to prices. Alternatively, the company Stable
affected shareholders. may invest through debt
by a variety of structures,
factors, To the extent that the Group with the equity sponsor taking the
including market enters into contracts to fix primary exposure to commodity
demand the price that it receives on prices.
for electricity, the the electricity generated or
generation mix of enters into derivatives with In addition, the Group believe
power a view to hedging against that
plants, government fluctuations the transition to a lower carbon
support in power prices, the Group economy,
for various forms of will increased usage of smart grids and
power generation, as be exposed to risk related to residential participation in
well as fluctuations delivering an amount of renewable
in the market prices electricity energy generation should all
of commodities and over a specific period. If positively
foreign there impact demand levels and patterns
exchange. are periods of non-production for electricity.
the Group may need to pay the
difference between the price The Group aims to spread credit
it has sold the power at and risk
the market price at that by putting in place PPAs with a
time. range
of different counterparties.
-------------------- ----------------------------- ---------------------------------- --------------
The valuation The valuation of Changes in values attributed The Investment Manager is Post
of investments assets to investments during each responsible Mitigation
is subject is inherently quarter for carrying out the fair market Impact
to subjective may result in volatility in valuation Moderate
uncertainties leading to the of the Group's investments, but Post
uncertainty Net Asset Values that the the Mitigation
about how projects Group Group engages external independent Likelihood
are reports from period to valuers to assess the validity of Moderate
valued from period period. these valuations, with quarterly Change in Year
to reviews Stable
period. These and annual audits.
uncertainties
arise from project Valuations are prepared using
valuation external
assumptions and as market benchmarks and
well externally-sourced
as macro-economic power market curves from reputable
factors, providers or a blend from more
such as inflation than
and one. The fair valuation of
interest rates, investments
which is calculated in accordance with
feed into operating IPEV
assumptions and (International Private Equity and
discount Venture Capital) valuation
rates, with higher guidelines.
discount
rates leading to
lower
Net Asset Values.
-------------------- ----------------------------- ---------------------------------- --------------
Counterparties' The Group's revenue The failure by a counterparty As part of the Group's acquisition Post
ability to derives from the to pay the contractual process, the Investment Manager Mitigation
make investments payments conducts Impact
contractual in the portfolio, due, or the early termination a thorough due diligence process Moderate
payments and of an investment due to on Post
the Group is exposed insolvency, all projects that includes a Mitigation
to the financial may materially affect the credit Likelihood
strength value check on counterparties. Moderate
of the of the portfolio and could Change in Year
counterparties have The Investment Manager will look Stable
to such projects and a material adverse effect on to
their ability to the performance of the Group, build in suitable mechanisms to
meet the Net Asset Value, the protect
their contractual Group's the Group's income stream from the
payment earnings and returns to s relevant investment, which may
obligations. hareholders. include
parent guarantees and liquidated
damages
payments on termination.
Following asset acquisitions, the
Investment Manager puts in place,
and follows, an ongoing management
plan tailored to the specific
asset.
The Group's exposure to defaults
may
be further mitigated by
contracting
with counterparties who are public
sector or quasi-public sector
bodies
or who are able to draw upon
government
subsidies to partly fund
contractual
payments.
-------------------- ----------------------------- ---------------------------------- --------------
Target returns The Group's targeted Generating returns which are There are regular reviews of the Post
are not met returns are targets lower than the targeted investment Mitigation
only, based on returns environment, competition, the Impact
estimates would probably affect the pipeline, Moderate
and assumptions share the portfolio, and future cash Post
which price of the Company, which flow Mitigation
are subject to would focused on the Group's returns. Likelihood
significant affect its ability to raise The Moderate
uncertainties, further Group has the flexibility to Change in Year
including finance. structure Stable
competitive market investments to be as competitive
pricing as
being lower than possible through the overall terms
targeted of a funding solution rather than
returns, and actual just on price.
returns may be
materially In addition, the Group's Revolving
lower than targeted Credit Facility has given the
returns. Group
access to funding with a cheaper
cost
of capital which should help
towards
achieving its target returns.
The Group's average pipeline
return
is 9%, with a broad range of
opportunities
across a range of sectors, asset
classes
and return profiles. The ability
to
reinvest capital into higher
returning
opportunities should help towards
achieving its target returns.
-------------------- ----------------------------- ---------------------------------- --------------
Supply Chain Increases in the Delays to delivery of key Long lead time items, such as with Post
costs items BESS assets, are typically secured Mitigation
of raw materials and required for the construction through deposit payments, with Impact
shipping increase of energy transition assets penalties Moderate
the can for delays passed onto to Post
overall supply chain result in delays to projects contractual Mitigation
costs. being funded by the Group, counterparties, therefore limiting Likelihood
therefore the impact on the Group. Moderate
High demand for impacting returns. Change in Year
energy Alternative methods for sourcing New
transition assets raw
increases materials are being developed,
the length of time which
taken will ease supply chain pressures
to receive key over
items. time.
With the exception of the BESS
Portfolio,
this risk has a limited impact on
the remainder of the portfolio
given
the operational nature of assets.
Spare parts strategies have been
established
to limit the impact of supply
chain
issues for each of the respective
investments.
-------------------- ----------------------------- ---------------------------------- --------------
Ability to Ability to raise Should debt not be available The Company, through its wholly Post
raise debt debt at the terms assumed in the owned Mitigation
on acceptable on acceptable terms, financial subsidiary, TENT Holdings, Impact
terms may limit the model, TENT may be unable to successfully Moderate to
Group's meet the total NAV return extended its existing GBP40 High
ability to deliver target million Post
the and/or reduce dividend cover. RCF to 28 March 2025 on acceptable Mitigation
target returns and terms. This provides funding for Likelihood
dividend the Low to
coverage. Group to invest into the BESS Moderate
Portfolio Change in Year
and allow it to reinvest the Decrease
capital
recycled into and attractive
pipeline
of opportunities above the current
blended return of the portfolio.
.
-------------------- ----------------------------- ---------------------------------- --------------
Reliance on The Group relies on The performance of the Group Unless there is a default, either Post
the Investment the Investment depends, in part, on the party may terminate the Investment Mitigation
Manager Manager's ability Management Agreement by giving not Impact
services and its of the Investment Manager to less than 12 months' written Moderate to
reputation provide competent and notice, High
in the energy and efficient such notice not being served Post
infrastructure services to the before Mitigation
market. As a result, Group. the fourth anniversary of the date Likelihood
the Group's of Admission (which was October Low to
performance The departure of any of the 2020). Moderate
will, to a large key Change in Year
extent, personnel of the Investment The Board regularly reviews and Decrease
depend on the Manager monitors
Investment without adequate replacement the Investment Manager's
Manager's abilities may also have a material performance.
in the energy adverse In addition, the Board meets
transition effect on the Group's regularly
market. performance. with the Investment Manager to
In addition, if any such ensure
personnel that we maintain a positive
were to do anything or were working
alleged relationship.
to have done something that
may The key personnel of the
be the subject of public Investment
criticism Manager are subject to a six-month
or other negative publicity notice period which would provide
or sufficient time for the Investment
may lead to investigation, Manager to find a suitable
litigation replacement
or sanction, this may have an with relevant industry experience.
adverse impact on the Group
and
its reputation by
association.
Termination of the Investment
Management
Agreement would severely
affect
the Group's ability to
effectively
manage its operations and may
have a negative impact on the
share price of the Company.
-------------------- ----------------------------- ---------------------------------- --------------
Since the last Annual Report, the following risks have been
removed from the Principal Risks table:
- Significant abortive costs in terms of financial cost and time
- Geopolitical
Each of these risks are still being actively managed through our
risk management process.
The risk of ability to raise additional finance has been broken
out into ability to raise debt on acceptable terms and ability to
raise additional equity.
Emerging risks
Emerging risks are characterised by a degree of uncertainty and
the Investment Manager and the Board consider new and emerging
risks every six months, the risk register is then updated to
include these considerations.
The Board have recognised climate change as a risk since fund
inception and where known risks have been identified, and
considered material they enter the risk register, and in some cases
the principal risk register, as is the case, for example, with
carbon pricing and weather effects. Our inclusion of climate change
in emerging risks is recognition of the continued uncertainty which
exists on the severity of physical climate change and the scale and
nature of political action to counter it.
Climate Change Scientific knowledge continues to develop and the
latest Intergovernmental Panel on Climate Change's (IPCC) sixth
assessment report, published in March 2023, confirmed that latest
data indicates remaining within a 1.5 degree world is unlikely to
be achievable, and that staying within a 4 degree world is the more
realistic target still requiring urgent and significant action to
be achieved. In the face of this latest insight, we see increasing
risk of laws and/or regulation being introduced with the purpose of
driving a transition to lower carbon emissions which may impact a
given asset's activities. Assets are also at increased risk from
physical climate risks resulting from the more turbulent and
unpredictable weather and environmental conditions, caused by a
warming climate.
Transition Risks The risk that results from changing policies,
practices and technologies that arise as countries and societies
work to decrease their reliance on carbon. In the near and medium
term, transition risks to portfolio investments may arise from any
unexpected changes to existing government policies. This could have
a negative impact on the valuation of the Group's portfolio. For
the top-rated transition risks please refer back to the progress
report under the Task Force on Climate-related Financial Disclosure
framework.
Physical Effects of Climate Change While efforts to mitigate
climate change continue to progress, the physical impacts are
already emerging in the form of changing weather patterns. For
example, 2022 saw both heatwaves and flash flooding throughout the
UK and Europe. We assess for ten major extreme weather events:
flooding (river, coastal, surface) subsidence, landslides, coastal
erosion, heat stress, storm, droughts, wildfires, which may
potentially impair the operations of existing and future portfolio
companies at certain locations or impacting locations of companies
within their supply chain. The investment manager now uses a
specialist external data platform to identify predicted physical
risk exposure (ten major physical risks) for TENT's investments, or
future prospective assets, in a <1.5- and 3-degree warming
environment. For the top-rated physical risks please refer back to
the progress report under the Task Force on Climate-related
Financial Disclosure framework.
Going Concern and Viability Statement
Going Concern
The Directors have adopted the going concern basis in preparing
the Annual Report for the year ended 31 March 2023. In reaching
this conclusion, the Directors have considered the liquidity of the
Company's portfolio of investments as well as its cash position,
income and expenditure commitments, until September 2024.
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Investment Manager's Report. The Group faces a
number of risks and uncertainties, as set out in the Strategic
Report. The financial risk management objectives and policies of
the Group, including exposure to credit risk, price risk and market
risk are disclosed in Note 17 to the financial statements.
The Group continues to meet day to day liquidity needs through
its cash resources.
As at 31 March 2023, the Company had net assets of GBP99.4
million including cash balances of GBP9.3 million. The Company's
sole wholly owned subsidiary, TENT Holdings, has a GBP40 million
RCF which is undrawn and a GBP2 million cash balance which, on a
Group basis, offer sufficient cashflow to meet the Company's
obligations, including investment commitments of GBP44.4 million,
as they fall due. The covenants on the RCF are limited to gearing
and interest cover and the Group is expecting to comply with these
covenants on drawdown and in future periods. The Company
acknowledges the current trend of rising interest rates, and while
the Group's Revolving Credit Facility (RCF) interest rate is fixed
until March 2025, there is a possibility of future increases. As
part of the assessment of its ongoing operations and viability, the
Group has analysed the potential impact of such a scenario. The
findings indicate that the Company would continue to operate as a
going concern and maintain ample liquidity.
The Group's investment portfolio consists of fixed-rate debt
investments, with most of these investments having contractual
maturities between 2031 and 2035. Additionally, the Group has the
Hydroelectric Portfolio, which is fully operational and has an
economic lifespan of over thirty years. As a result, the Group
benefits from long-term contractual cash flows and a set of risks
that can be identified and assessed. The loan investments
contribute a fixed return, and the Hydroelectric Portfolio benefits
from upward only RPI linked revenue flow under a UK government
scheme. The Hydroelectric Portfolio also benefits from fixed price
PPAs, with institutional counterparties, for the next financial
year. Forecast revenues thereafter are subject to wholesale power
prices, the levels of which are based upon qualified independent
forecasts.
The Group's cash outflows encompass operational expenses, debt
servicing, dividend payments, and costs associated with acquiring
new assets. These outflows are anticipated to be covered by the
Group's current cash reserves and cash generated from its
operations. The Company actively monitors its cash obligations on a
regular basis to ensure it maintains adequate liquidity.
The war in Ukraine continues into 2023 and the impact of
sanctions placed on Russia aimed to weaken the Russian economy have
had considerable impact on its affiliated countries during the
year. Although sanctions are a foreign policy tool deployed in
several contexts, the coordinated sanctions on Russia are
significant to the global economy due to the size of the Russian
economy. The Company does not have any direct exposure to Russia
and no assets located in nearby jurisdictions, however we, the
Company, continues to monitor the macroeconomic consequences on the
investment portfolio closely, including energy price volatility,
increase risk of political intervention to regulate prices, change
in inflation, taxes and further sanctions. The Directors do not
consider that the effects of the conflict have created a material
uncertainty over the assessment of the Company as a going
concern.
On the basis of this review, and after making due enquiries, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least 12 months from the date of approval of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
Viability Statement
The Directors have assessed the viability of the Group over a
five-year period to March 2028.
In making this statement the Directors have considered the
resilience of the Group, taking account of its current position,
the principal risks facing the business (especially the level of
future energy prices and our counterparties' ability to make
contractual payments), in severe but plausible downside scenarios
and the effectiveness of any mitigating actions.
The Directors have determined that the five-year period to March
2028 is an appropriate period over which to provide this viability
statement as this period accords with the Group's business planning
exercises and is appropriate for the investments owned by the
Group. The Group's risk management processes, described in the Risk
Management section, consider the key risks during this five-year
period and beyond. These include sustainability-related risks that
take into account ESG considerations, including the physical and
transition risks of climate change (in line with the
recommendations of the Task Force on Climate-related Financial
Disclosures ("TCFD")).
The viability analysis has been prepared on the assumption that
the Groups investments comprising fixed rate debt investments and a
portfolio of hydroelectric assets which are fully operational with
economic lives well in excess of the period being considered. As a
result, the Group benefits from long-term cash flows and a set of
risks that can be identified and assessed. Over the next five
years, the loan investments contribute a fixed return, and the
Hydroelectric Portfolio contributes returns based on its upward
only RPI linked revenue flow under a UK government arrangement. The
Hydroelectric Portfolio also benefits from fixed price PPAs, with
institutional counterparties, for the next year. Forecast revenues
thereafter are subject to wholesale power prices whose levels are
based upon qualified independent forecasts. The projects are each
supported by detailed financial models.
The Directors believe that portfolio diversification of asset
classes across the energy transition landscape with fixed rate debt
in multiple technologies and equity investments in hydroelectric
assets helps to withstand and mitigate risks it is most likely to
meet.
The Investment Manager prepares and considers, and the Board
reviews, summary cash flow projections bi-annually as part of
management reporting, business planning and dividend approval
processes. The projections consider cash balances, key covenants
and limits, dividend cover, investment policy compliance and other
key financial indicators over the five-year period.
These projections are based on the Investment Manager's
expectations of future asset performance, income and costs, and are
consistent with the methodology applied to produce the valuation of
the investments.
In the viability assessment, the Company has thoroughly
evaluated its capacity to sustain operations in various challenging
scenarios. These scenarios include a potential decrease in income
and an increase in Group expenditure, higher interest rates and
even an extreme scenario involving a substantial valuation
write-down. The assessment has confirmed that both the Company and
the Group would remain viable, fulfilling all obligations, while
also maintaining adequate liquidity and (except in the extreme
scenario where a waiver would be necessary) meeting the covenant
conditions associated with the RCF.
The Directors continue to encourage the Investment Manager to
ensure that the portfolio of investments is able to operate as
effectively as possible. The Investment Manager has performed
downside risk scenario planning encompassing a range of potential
outcomes including a breakeven scenario where the model is stressed
to failure, illustrating a highly unlikely outcome. The other
downside scenarios demonstrate that whilst profitability may be
adversely affected, the Company and its investments are expected to
remain viable.
Based on this review, the Directors confirm that they have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
five-year period to March 2028.
Board Approval of the Strategic Report
The Strategic Report has been approved by the Board of Directors
and signed on its behalf by the Chair.
John Roberts
Chair
16 June 2023
Financial Statements
Income Statement
For the year ended 31 March 2023
Year Ended Year Ended
31 March 2023 31 March 2022
Note Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------- ----- -------- -------- -------- -------- -------- --------
Investment income 5 7,282 - 7,282 2,451 - 2,451
Profit arising on the revaluation of investments
at the year end - 4,017 4,017 - 3,634 3,634
-------- -------- -------- -------- -------- --------
Investment return 7,282 4,017 11,299 2,451 3,634 6,085
-------- -------- -------- -------- -------- --------
Investment management fees 4 662 221 883 327 109 436
Other expenses 6 1,581 22 1,603 867 21 888
-------- -------- -------- -------- -------- --------
2,243 243 2,486 1,194 130 1,324
Profit before taxation 5,039 3,774 8,813 1,257 3,504 4,761
-------- -------- -------- -------- -------- --------
Taxation 8 - - - - - -
Profit Loss after taxation 5,039 3,774 8,813 1,257 3,504 4,761
-------- -------- -------- -------- -------- --------
Other comprehensive income - - -
Total comprehensive income 5,039 3,774 8,813 1,257 3,504 4,761
-------- -------- -------- ======== ======== ========
Basic & diluted earnings per share (pence) 9 5.04p 3.78p 8.81p 1.26p 3.50p 4.76p
The total column of this statement is the Income Statement of
the Company prepared in accordance with the requirements of the Act
and in accordance with the UK adopted international accounting
standards. The supplementary revenue return and capital columns
have been prepared in accordance with the Association of Investment
Companies Statement of Recommended Practice (AIC SORP).
All revenue and capital items in the above statement derive from
continuing operations.
This Income Statement includes all recognised gains and
losses.
The accompanying Notes are an integral part of this
statement.
Balance Sheet
at 31 March 2023
Company Number: 12693305
31 March 2023 31 March 2022
Note GBP'000 GBP'000
Non-current assets
Investments at fair value
through profit or loss 12 90,060 78,952
------------------ ------------------
Current assets
Trade and other receivables 13 374 453
Cash and cash equivalents 9,257 17,144
9,631 17,597
------------------ ------------------
Total assets 99,691 96,549
------------------ ------------------
Current liabilities
Trade and other payables 14 (242) (412)
(242) (412)
------------------ ------------------
Net assets 99,449 96,137
================== ==================
Equity attributable to
equity holders
Share capital 15 1,000 1,000
Share premium 13 13
Special distributable reserve 91,037 91,444
Capital reserve 7,093 3,319
Revenue reserve 306 361
Total equity 99,449 96,137
================== ==================
Shareholders' funds
Net asset value per Ordinary
Share (pence) 11 99.44p 96.12p
The statements were approved by the Directors and authorised for
issue on 19 June 2023 and are signed on behalf of the Board by:
Dr John Roberts
Chair
16 June 2023
The accompanying Notes are an integral part of this
statement.
Statement of Changes in Shareholders' Equity
For the year ended 31 March 2023
Special
Issued Distributable Capital Revenue
Capital Share Premium Reserve Reserve Reserve Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For year ended 31
March 2023
Opening balance 1,000 13 91,444 3,319 361 96,137
-------- ------------- -------------- -------- -------- -------
Issue of share capital 15 - - - - -
Total comprehensive
income for the year - - - 3,774 5,039 8,813
Dividends Paid 10 - - (407) - (5,094) (5,501)
Balance at 31 March
2023 1,000 13 91,037 7,093 306 99,449
======== ============= ============== ======== ======== =======
Special
Issued Distributable Capital Revenue
Capital Share Premium Reserve Reserve Reserve Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For year ended 31
March 2022
Opening balance 1,000 - 97,009 (185) (336) 97,488
-------- ------------- -------------- -------- -------- -------
Issue of share capital 15 - 13 - - - 13
Total comprehensive
income for the year - - - 3,504 1,257 4,761
Dividends Paid 10 - - (5,565) - (560) (6,125)
Balance at 31 March
2022 1,000 13 91,444 3,319 361 96,137
======== ============= ============== ======== ======== =======
The capital reserve represents the proportion of Investment
Management fees and other expenses, where applicable, charged
against capital and realised/unrealised gains or losses on the
disposal/revaluation of investments. The unrealised element of the
capital reserve is not distributable. The special distributable
reserve was created on court cancellation of the share premium
account. The revenue, special distributable and realised capital
reserves are distributable by way of dividend and total GBP91.0
million (31 March 2022: GBP91.6 million).
The accompanying Notes are an integral part of this
statement.
Statement of Cash Flows
For the year ended 31 March 2023
Year ended Year ended
31 March 2023 31 March 2022
Note GBP'000 GBP'000
Cash flows from operating activities
Profit before taxation 8,813 4,761
Gain on revaluation of investments
held at fair value through profit
or loss 12 (4,017) (3,634)
Cash flows from operations 4,796 1,127
Interest income 5 (3,402) (2,451)
Interest received 2,541 1,646
Decrease in receivables 13 (57) 34
Increase / (Decrease) in payables 14 (170) 263
Net cash flows from operating
activities 3,708 619
--------------- --------------------------
Cash flows from investing activities
Purchase of financial assets
at fair value through profit
or loss 12 (9,433) (56,019)
Loan principal repaid 12 3,339 2,103
Net cash flows used in investing
activities (6,094) (53,916)
--------------- --------------------------
Cash flows used in financing
activities
Issue of shares 15 - 13
Dividends paid (5,501) (6,125)
Net cash flows from financing
activities (5,501) (6,112)
--------------- --------------------------
Net decrease in cash and cash
equivalents (7,887) (59,409)
=============== ==========================
Reconciliation of net cash flow
to movements in cash and cash
equivalents
Cash and cash equivalents at
beginning of year 17,144 76,553
Net decrease in cash and cash
equivalents (7,887) (59,409)
Cash and cash equivalents at
end of year 9,257 17,144
=============== ==========================
The accompanying Notes are an integral part of this
statement.
Notes to the Financial Statements
1. Corporate Information
The Company is incorporated and domiciled in the United Kingdom
and registered in England and Wales under number 12693305 pursuant
to the Act. The address of its registered office, which is also its
principal place of business, is 1 King William Street, London EC4N
7AF.
On 28 October 2022, the ordinary shares of the Company were
admitted to the premium listing segment of the Official List of the
Financial Conduct Authority and were admitted to the Premium
Segment of the Main Market of the London Stock Exchange. Prior to
which, with effect from IPO, the Company's ordinary shares traded
on the Specialist Fund Segment of the Main Market of the London
Stock Exchange.
The financial statements comprise only the results of the
Company, as its investment in TENT Holdings is included at fair
value through profit or loss as detailed in the key accounting
policies below.
The Company has appointed Triple Point Investment Management LLP
as its Investment Manager (the "Investment Manager") pursuant to
the Investment Management Agreement dated 25 August 2020. The
Investment Manager is registered in England and Wales under number
OC321250 pursuant to the Act. The Investment Manager is regulated
by the FCA, number 456597.
The Company intends to achieve its Investment Objective by
investing in a diversified portfolio of energy transition
investments mostly in the United Kingdom. The Company, through TENT
Holdings, will invest in a range of energy transition assets which
will contribute, or are already contributing, to energy
transition.
2. Significant accounting policies
Basis of Preparation
The financial statements, which aim to give a true and fair
view, have been prepared in accordance with UK-adopted
international accounting standards and the applicable legal
requirements of the Companies Act 2006.
The Company prepares its financial statements in compliance with
UK-adopted International Accounting Standards.
The financial statements have been prepared in accordance with
the guidelines outlined in the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture
Capital Trusts ("SORP") issued by the Association of Investment
Companies ("AIC") in April 2021. This ensures that the financial
statements are relevant and applicable to the Company.
In line with the SORP, supplementary information has been
provided to analyse the Statement of Comprehensive Income and
distinguish between items of a revenue and capital nature. This
supplementary information is presented alongside the total
Statement of Comprehensive Income, allowing for a comprehensive
understanding of the Company's financial performance and the
breakdown between revenue and capital activities.
The financial statements are prepared on the historical cost
basis, except for revaluation of certain financial investments at
fair value through profit or loss. The principal accounting
policies adopted are set out below and consistently applied,
subject to changes in accordance with any amendments in IFRS.
The Company regularly reviews estimates and underlying. Any
revisions to accounting estimates are recognised in the period in
which the estimates are revised and in future periods affected. The
significant estimates, judgements, or assumptions made during the
period are detailed on pages 137 to 138.
Basis of Consolidation
The sole objective of the Company, through its subsidiary TENT
Holdings, is to make investments, via individual corporate
entities. The Company typically will subscribe for equity in or
issue loans to TENT Holdings in order for it to finance its
investments.
The Directors have concluded that in accordance with IFRS 10,
the Company meets the definition of an investment entity having
evaluated the criteria that needs to be met (see below). Under IFRS
10, investment entities are required to hold subsidiaries at fair
value through the Income Statement rather than consolidate them on
a line-by-line basis, meaning TENT Holdings' cash, debt and working
capital balances are included in the fair value of the investment
rather than in the Company's assets and liabilities. However, in
substance, TENT Holdings is investing the funds of the investors of
the Company on its behalf and is effectively performing investment
management services on behalf of many unrelated beneficiary
investors. TENT Holdings Limited meets the criteria to be
classified as an independent investment entity in accordance with
IFRS 10, thereby meeting the criteria of exemption from
consolidating its subsidiaries. The Company therefore does not
consolidate its Subsidiaries.
Characteristics of an investment entity
There are three key conditions to be met by the Company for it
to meet the definition of an investment entity. For each reporting
period, the Directors will continue to assess whether the Company
continues to meet these conditions:
1. It obtains funds from one or more investors for the purpose
of providing these investors with professional investment
management services;
2. It commits to its investors that its business purpose is to
invest its funds solely for returns (including having an exit
strategy for investments) from capital appreciation, investment
income or both; and
3. It measures and evaluates the performance of substantially
all its investments on a fair value basis.
In satisfying the second criteria, the notion of an investment
time frame is critical. An investment entity should not hold its
investments indefinitely but should have an exit strategy for their
realisation. The Company intends to hold its investments through
TENT Holdings for the remainder of their useful life to preserve
the capital value of the portfolio. However, as the energy
transition assets are expected to have no residual value after
their life, the Directors consider that this demonstrates a clear
exit strategy from these investments.
Subsidiaries are therefore measured at fair value through profit
or loss, in accordance with IFRS 13 "Fair Value Measurement", IFRS
10 "Consolidated Financial Statements" and IFRS 9 "Financial
Instruments".
The Directors believe the treatment outlined above provides the
most relevant information to investors.
Going Concern
The Directors have adopted the going concern basis in preparing
the Annual Report for the year ended 31 March 2023. In reaching
this conclusion, the Directors have considered the liquidity of the
Company's portfolio of investments as well as its cash position,
income and expenditure commitments, until September 2024.
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Investment Manager's Report. The Group faces a
number of risks and uncertainties, as set out in the Strategic
Report. The financial risk management objectives and policies of
the Group, including exposure to credit risk, price risk and market
risk are disclosed in Note 17 to the financial statements.
The Group continues to meet day to day liquidity needs through
its cash resources.
As at 31 March 2023, the Company had net assets of GBP99.4
million including cash balances of GBP9.3 million. The Company's
sole wholly owned subsidiary, TENT Holdings, has a GBP40 million
RCF which is undrawn and a GBP2 million cash balance which, on a
Group basis, offer sufficient cashflow to meet the Company's
obligations, including investment commitments of GBP44.4 million,
as they fall due. The covenants on the RCF are limited to gearing
and interest cover and the Group is expecting to comply with these
covenants on drawdown and in future periods. The Company
acknowledges the current trend of rising interest rates, and while
the Group's Revolving Credit Facility (RCF) interest rate is fixed
until March 2025, there is a possibility of future increases. As
part of the assessment of its ongoing operations and viability, the
Group has analysed the potential impact of such a scenario. The
findings indicate that the Company would continue to operate as a
going concern and maintain ample liquidity.
The Group's investment portfolio consists of fixed-rate debt
investments, with most of these investments having contractual
maturities between 2031 and 2035. Additionally, the Group has the
Hydroelectric Portfolio, which is fully operational and has an
economic lifespan of over thirty years. As a result, the Group
benefits from long-term contractual cash flows and a set of risks
that can be identified and assessed. The loan investments
contribute a fixed return, and the Hydroelectric Portfolio benefits
from upward only RPI linked revenue flow under a UK government
scheme. The Hydroelectric Portfolio also benefits from fixed price
PPAs, with institutional counterparties, for the next financial
year. Forecast revenues thereafter are subject to wholesale power
prices, the levels of which are based upon qualified independent
forecasts.
The Group's cash outflows encompass operational expenses, debt
servicing, dividend payments, and costs associated with acquiring
new assets. These outflows are anticipated to be covered by the
Group's current cash reserves and cash generated from its
operations. The Company actively monitors its cash obligations on a
regular basis to ensure it maintains adequate liquidity.
The war in Ukraine continues into 2023 and the impact of
sanctions placed on Russia aimed to weaken the Russian economy have
had considerable impact on its affiliated countries during the
year. Although sanctions are a foreign policy tool deployed in
several contexts, the coordinated sanctions on Russia are
significant to the global economy due to the size of the Russian
economy. The Company does not have any direct exposure to Russia
and no assets located in nearby jurisdictions, however we, the
Company, continues to monitor the macroeconomic consequences on the
investment portfolio closely, including energy price volatility,
increase risk of political intervention to regulate prices, change
in inflation, taxes and further sanctions. The Directors do not
consider that the effects of the conflict have created a material
uncertainty over the assessment of the Company as a going
concern.
On the basis of this review, and after making due enquiries, the
Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for at
least 12 months from the date of approval of this report.
Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
Financial Instruments
Financial assets and financial liabilities are recognised on the
Company's statement of financial position when the Company becomes
a party to the contractual provisions of the instrument. Financial
assets are to be de-recognised when the contractual rights to the
cash flows from the instrument expire or the asset is transferred,
and the transfer qualifies for de-recognition in accordance with
IFRS 9 Financial Instruments.
Financial assets
The Company classifies its financial assets as either
investments at fair value through profit or loss or financial
assets at amortised cost. The classification depends on the purpose
for which the financial assets are acquired. The Investment Manager
determines the classification of its financial assets at initial
recognition.
Investments at fair value through profit or loss
At initial recognition, the Company measures its investments,
through its investment in TENT Holdings, at fair value through
profit or loss and any transaction costs are expensed to profit or
loss. The Company subsequently, through its investment in TENT
Holdings, continues to measure all investments at fair value and
any changes in the fair value are recognised as gains or losses on
investments at fair value through profit or loss within investment
income.
Investments at fair value through profit or loss are recognised
upon initial recognition as financial assets at fair value through
profit or loss in accordance with IFRS 9. Investments held at fair
value through profit or loss consist of the Company's subsidiary,
TENT Holdings.
The Company's investment in TENT Holdings comprises both equity
and loan notes. The Company measures its investment as a single
class of financial asset at fair value in accordance with IFRS 13
Fair Value Measurement.
In determining the fair value, the Board will consider any
observable market transactions and will measure fair value using
assumptions that market participants would use when pricing the
asset, including any assumptions regarding risk surrounding the
transaction.
Financial assets at amortised cost
Trade receivables, loans and other receivables that are
non-derivative financial assets and that have fixed or determinable
payments that are not quoted in an active market are classified as
"financial assets at amortised cost". Trade receivables, loans and
other receivables are measured at amortised cost using the
effective interest method, less any impairment. They are included
in current assets, except where maturities are greater than 12
months after the reporting date, in which case they are to be
classified as non-current assets. The Company's financial assets
held at amortised cost comprise "trade and other receivables" and
"cash and cash equivalents" in the statement of financial
position.
Financial liabilities and equity
Debt and equity instruments are classified as either financial
liabilities or as equity in accordance with the substance of the
contractual arrangement.
Financial liabilities
Financial liabilities are classified as other financial
liabilities, comprising other non-derivative financial instruments,
including trade and other payables, which are to be measured at
amortised cost using the effective interest method.
Effective interest method
The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts through the expected
life of the financial instrument to the relevant asset's carrying
amount.
Fair value estimation for investments at fair value
The Group's investments are not typically traded in active
markets. Fair value is calculated by discounting at an appropriate
discount rate future cash flows expected to be received, by TENT
Holdings, from the investment portfolio. The underlying cash flows
are from investments in both equity (dividends and equity
redemptions), shareholder, inter-company and third-party loans
(interest and repayments). The valuations are based on the expected
future cash flows, using reasonable assumptions and forecasts for
revenues, operating costs, macro-level factors and an appropriate
discount rate.
The discount rates used in the valuation exercise represent the
Investment Manager's best assessment of the rate of return in the
market for assets with similar characteristics and risk profile.
The discount rates are reviewed on a regular basis and updated,
where appropriate, to reflect changes in the market and in the
project risk characteristics.
Investments, which are entered into by TENT Holdings, are
designated upon initial recognition as held at fair value through
profit or loss. Gains or losses resulting from the movement in fair
value of the investments are reflected in the valuation of TENT
Holdings and recognised in the Statement of Comprehensive Income at
each quarterly valuation point.
The Company's loan and equity investment in TENT Holdings is
held at fair value through profit or loss which is measured by
reference to the net asset value of TENT Holdings. Gains or losses
resulting from the movement in fair value are recognised in the
Company's Statement of Comprehensive Income at each quarterly
valuation point.
For each quarterly valuation period the Company engages
external, independent and qualified valuers to assess the validity
of the forecast cash flow assumptions and discount rates used by
the Investment Manager in determination of fair value. The Board
reviews and approves the valuations following appropriate challenge
and examination.
Revenue Recognition
Gains and losses on fair value of investments in the income
statement represent gains or losses that arise from the movement in
the fair value of the Company's investment in TENT Holdings.
Investment income comprises interest income and dividend income
received from the Company's subsidiary, TENT Holdings. Interest
income is recognised in the Income Statement using the effective
interest method.
Dividends from TENT Holdings are recognised when the Company's
right to receive payment has been established.
Share capital and share premium
The Company's Ordinary Shares are classified as equity and are
not redeemable. Costs associated or directly attributable to the
issue of new equity shares are recognised as a deduction in equity
and are charged from the share premium account.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, deposits held
on call with banks and other short-term highly liquid deposits with
original maturities of three months or less. At 31 March 2023, the
Company's cash balances were held in the Company's bank current
account.
There are no expected credit losses and the counterparty risk is
mitigated as the banking institution that the Company holds
balances with has high credit ratings assigned by international
credit rating agencies.
Foreign currencies
Items included in the financial statements are presented in
Pounds Sterling because that is the currency of the primary
economic environment in which the Company operates and is the
Company's functional currency.
Transactions and balances
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
reporting date are translated at the foreign exchange rate ruling
at that date. Foreign exchange differences arising on translation
are recognised in the Income Statement.
Dividends
Dividends to the Company's shareholders are recognised when they
become legally payable. In the case of interim dividends, this is
when they are paid. In the case of final dividends, this is when
they are approved by the shareholders at the Annual General
Meeting.
Fund Expenses
Expenses are accounted for on an accruals basis. Share issue
expenses of the Company directly attributable to the issue and
listing of shares are charged to the share premium account. The
Company's investment management fee, administration fees and all
other expenses are charged through the Income Statement.
Capital expenses
In accordance with the Company's investment objective, it is
anticipated that income returns will constitute the majority of the
Company's long-term return and based on the estimated apportionment
of future returns (which cannot be guaranteed), 25% of the
investment management fee is charged as a capital item within the
Income Statement.
All expenditures are carefully assessed to determine whether
they are related to revenue or capital. Subsequently, the
expenditure will be appropriately allocated to the respective
section in the income statement.
Taxation
Under the current system of taxation in the UK, the Company is
liable to taxation on its operations in the UK. 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 tax is the tax expected to be payable or recoverable on
temporary 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. Deferred tax
liabilities are generally 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 assets and liabilities are not recognised if the temporary
differences arise from goodwill or from the initial recognition of
other assets and liabilities in a transaction that affects neither
the tax profit or the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments, except where the Company is
able to control the timing of the reversal of the difference and it
is probable that the temporary difference will not reverse in the
foreseeable future. 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 Income Statement 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.
Deferred tax assets and liabilities are not discounted.
New, revised and amended standards applicable to future
reporting periods
There were no new standards or interpretations effective in the
year that have had a significant impact on the Company's financial
statements. Furthermore, none of the amendments to the standards
summarised below have had a significant effect on the financial
statements.
New and revised standards not applied
At the date of authorisation of these financial statements, the
following amendments had been published and will be mandatory for
future accounting periods beginning on or after 1 January 2023:
-- Amendments to IFRS 17, "Insurance contracts" - this standard
replaced IFRS 4, which currently permits a wide variety of
practices in accounting for insurance contracts.
-- Narrow-scope amendments to IAS 1 "Presentation of Financial
Statements", practise statement 2 and IAS 8 "Accounting Policies,
Changes in Accounting Estimates and Errors".
-- Amendments to IAS 12 "Income Taxes" - deferred tax related to
assets and liabilities arising from a single transaction.
Effective for accounting periods beginning on or after 1 January
2024:
-- Amendments to IAS 1 on classification of liabilities clarify
that liabilities are classified as either current or non-current,
depending on the rights that exist at the end of the reporting
period and amendments to Non-current Liabilities with
covenants.
-- Amendments to IFRS16 on Lease Liability in a Sale and Leaseback.
The impact of these standards is not expected to be material to
the reported results of the Company.
Segmental Reporting
The Chief Operating Decision Maker (the "CODM") being the Board
of Directors, is of the opinion that the Company is engaged in a
single segment of business, being investment. All the investments
are based in the UK.
The Company has no single major customer. The internal financial
information to be used by the CODM on a quarterly basis to allocate
resources, assess performance and manage the Company will present
the business as a single segment comprising the portfolio of
investments in energy transition assets.
3. Critical accounting estimates, judgements and assumptions
In the application of the Company's accounting policies, which
are described in Note 2, the Directors are required to make
judgements, estimates and assumptions about the fair value of
assets and liabilities that affect reported amounts. It is possible
that actual results may differ from these estimates.
The preparation of the financial statements requires the Board
to make judgements, estimates and assumptions that affect the
application of the accounting policies and the reported amount of
assets, liabilities, income and expenses. Estimates, by their
nature, are based on judgement and available information, hence
actual results may differ from these judgements, estimates and
assumptions.
The key estimates that have a significant impact on the carrying
values of underlying investments that are valued by reference to
the discounted value of future cash flows are the useful life of
the assets, the discount rates, the rate of inflation, the price at
which the power and associated benefits can be sold and the amount
of electricity the assets are expected to produce. The sensitivity
analysis of these key assumptions is outlined in Note 12 to the
financial statements, on page 142.
For equity investments, entered into by TENT Holdings, useful
lives are based on the Investment Manger's estimates of the period
over which the assets will generate revenue which are periodically
reviewed for continued appropriateness. Where land is leased from
an external landlord, the operational life assumed for the purposes
of the asset valuations is valued at lease expiry or end of
contractual extension options. For the loan investments the future
cash flows are as per contractual maturity of the facility.
The discount rates are subjective and therefore it is feasible
that a reasonable alternative assumption may be used resulting in a
different value. The discount rates applied to cash flows are
reviewed regularly by the Investment Manager to ensure they are at
an appropriate level. The Investment Manager will take into
consideration market transactions, of similar nature, when
considering changes to the discount rates used. For the year end
and half-year accounts and the other quarterly NAV updates, the
Company engages external, independent and qualified valuers to
assess the validity of the discount rates used by the Investment
Manager in determination of fair value.
For equity investments, by TENT Holdings, the revenues and
expenditure of the investee companies are frequently or wholly
subject to indexation and an assumption is made as to near term and
long-term rates. For debt investments, by TENT Holdings, the
cashflows are determined by reference to contractual
arrangements.
The price at which the output from the generating equity assets
is sold is a factor of both wholesale electricity prices and the
revenue received from the Government support regimes such as the
Feed in Tariffs. Future power prices are estimated using external
third-party forecasts which take the form of special consultancy
reports, which reflect various factors including gas prices, carbon
prices and renewables deployment.
TENT Holdings' investments in unquoted investments are valued by
reference to valuation techniques approved by the Directors and in
accordance with the International Private Equity and Venture
Capital ("IPEV") Guidelines.
As noted above, the Board has concluded that the Company meets
the definition of an investment entity as defined in IFRS 10. This
conclusion involved a degree of judgement and assessment as to
whether the Company meets the criteria outlined in the accounting
standards.
4. Investment management fees
The Company and the Investment Manager entered into an
Investment Management Agreement on 25 August 2020.
During the financial year the Annual Management Fee was
calculated at 0.9% of Net Asset Value. In the prior financial year,
the Annual Management Fee was calculated on the deployed cash funds
arising from IPO, until 10 December 2021. At this date 75% of net
IPO proceeds had been deployed and therefore for the remaining part
of the financial year 2022 the fee was calculated at 0.9% of
NAV.
Under the terms of the agreement, the Investment Manager must
use 20% of the management fee received (net of taxes) to acquire
shares in the Company. On a semi-annual basis, following the
announcement of the Net Asset Value for the semi-annual periods
ending 31 March and 30 September in each year, the Investment
Manager shall procure that the Wider Triple Point Group shall apply
an amount, in aggregate, equal to 20% of the Annual Management Fee
for the relevant six-month period as follows:
(a) where the Ordinary Shares are trading at, or at a premium
to, the latest published Net Asset Value per Ordinary Share; the
Investment Manager shall procure that the Wider Triple Point Group
shall use the relevant amount to subscribe for new Ordinary Shares
issued at the latest published Net Asset Value per Ordinary Share
applicable at the date of issuance; or
(b) where the Ordinary Shares are trading at a discount to the
latest published Net Asset Value per Ordinary Share; the Investment
Manager shall procure that the Wider Triple Point Group shall, as
soon as reasonably practicable, use the relevant amount to make
market purchases of Ordinary Shares within four months of the
relevant Net Asset Value publication date.
The Annual Management Fee is payable on a quarterly basis, and
Ordinary Shares are acquired by the Wider Triple Point Group on a
half-yearly basis. Any such Ordinary Shares acquired by the Wider
Triple Point Group are subject to a minimum lock-in period of 12
months.
Investment management fees paid or accrued during the year were
as follows:
For the year ended For the year ended
31 March 2023 31 March 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash element 662 221 883 317 106 423
Equity element* - - - 10 3 13
662 221 883 327 109 436
------- ------- ------- ----------- ------- -------
* During the financial year ended 31 March 2023, the Investment
Manager purchased shares in the Company through the open market, as
the share price was trading at a discount to NAV. In the prior
financial year, the Company issued new shares to the Investment
Manager, as the shares were trading at a premium to NAV.
5. Investment Income
For the year ended For the year ended
31 March 2023 31 March 2022
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Interest on cash
deposits 48 - 48 5 - 5
Interest income from
investments 3,354 - 3,354 2,446 - 2,446
Dividend income from
investments 3,880 - 3,880 - - -
7,282 - 7,282 2,451 - 2,451
------- ------- ------- ----------- ------- -------
6. Operating Expenses
For the year ended For the year ended
31 March 2023 31 March 2022
------------------------- -------------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Investment Management
fees 662 221 883 327 109 436
Directors' fees* 200 - 200 200 - 200
Company's audit fees:
- in respect of audit
services 109 - 109 70 - 70
- in respect of non-audit
services 44 - 44 25 - 25
Premium Listing Fees 547 - 547 - - -
Other operating expenses 681 22 703 572 21 593
------- ------- ------- ----------- ------- ---------
2,243 243 2,486 1,194 130 1,324
*Directors' fees exclude employer's national insurance
contributions and travel expenses which are included as appropriate
in other operating expenses. Travel expenses for the year ended 31
March 2023 totalled GBP485 (31 March 2022: GBP643).
7. Employees
The Company had no employees during the period.
Full detail on Directors' fees is provided in Note 19. The
Directors' fees exclude employer's national insurance contribution
which is included as appropriate in other operating expenses. There
were no other emoluments during the period.
8. Taxation
Analysis of charge in the period
For the year ended For the year ended
31 March 2023 31 March 2022
------------------------- -------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Corporation tax - - - - - -
------- ------- ------- ------- ------- ---------
The effective UK corporation tax rate applicable to the Company
for the period is 19%. The tax charge differs from the charge
resulting from applying the standard rate of UK corporation tax for
an investment trust company. The differences are explained
below:
For the year ended For the year ended
31 March 2023 31 March 2022
------------------------- -------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit before taxation 5,039 3,774 8,813 1,257 3,504 4,761
------- ------- ------- ------- ------- -------
Corporation tax at 19% 957 717 1,674 239 666 905
Effect of:
Capital (gain) not deductible (763) (763) - (690) (690)
Interest distributions (646) - (646) (239) - (239)
Dividends received not taxable (737) - (737)
Disallowed expenditure 108 - 108 - - -
Group relief of excess management expenses 318 46 364 - 24 24
Tax charge for the period - - - - - -
------- ------- ------- ------- ------- -------
The Directors are of the opinion that the Company has complied
with the requirements for maintaining investment trust status for
the purposes of section 1158 of the Corporation Tax Act 2010. This
allows certain capital profits of the Company to be exempt from UK
tax.
Additionally, the Company has in the financial year utilised the
interest streaming election which allows the Company to designate
dividends wholly or partly as interest distributions for UK tax
purposes. Interest distributions are treated as tax deductions
against taxable income of the Company so that investors do not
suffer double taxation on their returns.
The financial statements do not directly include the tax charges
for the Company's intermediate holding company, as TENT Holdings is
held at fair value. TENT Holdings is subject to taxation in the
United Kingdom at the current main rate of 19%.
9. Earnings per Share
For the year ended For the year ended
31 March 2023 31 March 2022
------------------------- -------------------------
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit attributable to
the equity
holders of the Company
(GBP'000) 5,039 3,774 8,813 1,257 3,504 4,761
Weighted average number
of
Ordinary Shares in issue
(000) 100,014 100,014 100,014 100,014 100,014 100,014
Profit per Ordinary share
(pence) -
basic and diluted 5.04p 3.77p 8.81p 1.26p 3.50p 4.76p
Dilution of the earnings per share as a result of the equity
element of the investment management fee as disclosed in Note 4, is
not expected to have a material impact on the basic earnings per
share.
There is no difference between the weighted average Ordinary and
diluted number of Shares.
10. Dividends and Interest Distributions
Dividend per
Interim dividends paid during share Interest distribution Total dividend
year ended 31 March 2023 pence per share pence GBP'000
Final quarter interim dividend
for the year ended 31 March
2022 0.678 0.697 1,375
First quarter interim dividend
for year ended
31 March 2023 0.799 0.576 1,375
Second quarter interim dividend
for year ended
31 March 2023 0.799 0.576 1,375
Third quarter interim dividend
for year ended
31 March 2023 0.799 0.576 1,376
3.075 2.425 5,501
------------ ----------------------- --------------
Interim dividends declared after
31 March 2023 and not accrued Dividend per Interest distribution Total dividend
in the year share pence per share pence GBP'000
Fourth quarter interim dividend
for the year ended 31 March
2023 0.370 1.005 1,375
0.370 1.005 1,375
------------ ----------------------- --------------
As at the date of this report, the Board declared a fourth
quarter interim dividend of 1.375 pence per share with respect to
the period ended 31 March 2023. The dividend is expected to be paid
on or around 14 July 2023 to shareholders on the register on 30
June 2023 The ex-dividend date is 29 June 2023. The Company has
chosen to designate part of this interim dividend as an interest
distribution. 1.005 pence per share will be paid as an interest
payment and 0.370 as an ordinary dividend.
Shareholders in receipt of an interest distribution will be
treated for UK tax purposes as though they received a payment of
interest. This will result in a reduction in the corporation tax
payable by the Company.
11. Net assets per Ordinary share
31 March 2023 31 March 2022
------------- -------------
GBP'000 GBP'000
Total shareholders' equity (GBP'000) 99,449 96,137
Number of Ordinary Shares in issue ('000) 100,014 100,014
Net asset value per Ordinary Share (pence) 99.44p 96.12p
------------- -------------
12. Investments at Fair Value through Profit or Loss
As set out in Note 2, the Company designates its interest in its
wholly owned direct subsidiary as an investment at fair value
through profit or loss.
Summary of the Company's valuation is below:
31 March 2023 31 March 2022
------------- -------------
GBP'000 GBP'000
Fair value at start of the year 78,952 20,883
Loan advanced to TENT Holdings Limited
in the year 7,964 32,704
Shareholding in TENT Holdings Limited
invested in the year 1,469 23,315
Capitalised interest 997 519
Loan principal repaid (3,339) (2,103)
------------- -------------
Fair value of other net assets in intermediate
holding company 4,017 3,634
Fair Value of Company's investments as
at end of the year 90,060 78,952
------------- -------------
Loans advanced to TENT Holdings in the year totalled
GBP7,964,000. The advances were made at an interest rate of 7% to
enable TENT Holdings to complete the loan investment in BESS and
LEDs.
The Company owns five shares in TENT Holdings, representing 100%
of issued share capital, allotted for a consideration of GBP24.8
million. The fair value of the investment in TENT Holdings on 31
March 2023 is GBP90.1 million (31 March 2022: GBP79.0 million).
Capitalised interest represents interest recognised in the
income statement but not paid. This is instead added to the loan
balance on which interest for future periods is computed. The loan
from the Company to TENT Holdings, which enabled TENT Holdings to
complete investments into Harvest, Glasshouse and Spark Steam,
carry commensurate terms and repayment profiles. All payments from
the borrower and capitalised interest are in accordance and in line
with the contractual repayments with the respective underlying
facility agreements with Harvest, Glasshouse and Spark Steam as
agreed at inception.
Reconciliation of Portfolio Valuation:
31 March 2023 31 March 2022
------------- -------------
GBP'000 GBP'000
Portfolio Valuation 87,680 78,787
Intermediate holding company cash 1,982 293
Intermediate holding company debt* 329 454
Intermediate holding company net working
capital 69 (582)
Fair Value of Company's investments as
at end of the period 90,060 78,952
------------- -------------
*Debt arrangement costs of GBP329,000 (31 March 2022:
GBP454,000) which are capitalised and expensed to profit or loss
under amortised cost. At 31 March 2023 nil debt was drawn (31 March
2022: nil).
Fair Value measurements
As set out in Note 2, the Company accounts for its interest in
its wholly owned direct subsidiary, TENT Holdings, as an investment
at fair value through profit or loss.
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 three levels:
-- level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
-- level 2 - inputs other than quoted prices included within
level 1 that are observable for the assets or liabilities, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
and
-- level 3 - inputs for assets or liabilities that are not based
on observable market data (unobservable inputs).
The determination of what constitutes "observable" requires
significant judgement by the Company. Observable data is considered
to be market data that is readily available, regularly distributed
or updated, reliable and verifiable, not proprietary, and provided
by independent sources that are actively involved in the relevant
market.
The financial instruments held at fair value are the instruments
held by the Group in the investee companies, which are fair valued
at each reporting date. The investments have been classified within
level 3 as the investments are not traded and contain certain
unobservable inputs. The Company's investments in TENT Holdings are
also considered to be level 3 assets.
As the fair value of the Company's equity and loan investments
in TENT Holdings is ultimately determined by the underlying fair
values of the equity and loan investments, made by TENT Holdings,
the Company's sensitivity analysis of reasonably possible
alternative input assumptions is the same as for those
investments.
There have been no transfers between levels during the
period.
Valuations are derived using a discounted cash flow methodology
in line with IPEV Valuation Guidelines and consider, inter alia,
the following:
i. due diligence findings where relevant;
ii. the terms of any material contracts including PPAs;
iii. asset performance;
iv. power price forecasts from leading consultants; and
v. the economic, taxation or regulatory environment.
The DCF valuation of the Group's investments represents the
largest component of GAV and the key sensitivities are considered
to be the discount rate used in the DCF valuation and assumptions
relating to inflation, energy yield and power prices.
The shareholder loan and equity investments, in TENT Holdings,
are valued as a single asset class at fair value in accordance with
IFRS 13 Fair Value Measurement.
Sensitivity
Sensitivity analysis is produced to show the impact of changes
in key assumptions adopted to arrive at the valuation. For each of
the sensitivities, it is assumed that potential changes occur
independently of each other with no effect on any other base case
assumption, and that the number of investments in the portfolio
remains static throughout the modelled life.
The analysis below shows the sensitivity of the portfolio value
(and its impact on NAV) to changes in key assumptions as
follows:
Discount rate
The weighted average valuation discount rate applied to
calculate the portfolio valuation is 6.57% (31 March 2022:
6.11%).
An increase or decrease in this rate by 0.5% points has the
following effect on valuation.
NAV per Total NAV per
share -0.5% portfolio +0.5% share
Discount Rate impact change value change impact
pence GBP'000 GBP'000 GBP'000 pence
Valuation - March
2023 2.84 92,896 90,060 87,478 (2.58)
Energy yield
The table below shows the sensitivity of the Hydroelectric
Portfolio valuation to a sustained decrease or increase of energy
generation by minus or plus 5% on the valuation, with all other
variables held constant. The fair value of the Hydroelectric
Portfolio is assessed on a "P50" level of electricity generation,
representing the expected level of generation over the long
term.
A change in the forecast energy yield assumptions by plus or
minus 5% has the following effect.
NAV per Total NAV per
share -5% portfolio share
Energy Yield impact change value +5% change impact
pence GBP'000 GBP'000 GBP'000 pence
Valuation - March
2023 (3.18) 86,880 90,060 93,193 3.13
Power Prices
The sensitivity considers a flat 10% movement in power prices
for all years, i.e. the effect of adjusting the forecast
electricity price assumptions applicable to the Hydroelectric
Portfolio down by 10% and up by 10% from the base case assumptions
for each year throughout the operating life of the Hydroelectric
Portfolio.
A change in the forecast electricity price assumptions by plus
or minus 10% has the following effect.
NAV per Total NAV per
share -10% portfolio +10% share
Power Prices impact change value change impact
pence GBP'000 GBP'000 GBP'000 pence
Valuation - March
2023 (2.37) 87,686 90,060 92,855 2.79
Inflation
The Hydroelectric Portfolio's income streams are principally
subsidy based, which is amended each year with inflation, with the
remaining income being from the power price, which the sensitivity
assumes will move with inflation. Operating expenses relating to
the Hydroelectric Portfolio, typically move with inflation, but
debt payments on the shareholder loans are fixed. This results in
the portfolio returns and valuations being positively correlated to
inflation. The average long-term inflation assumptions across the
portfolio are 3.00% for RPI from 2024 to 2030 (inclusive) and 2.40%
thereafter, 2.25% for CPI from 2024. The Company models wholesale
power prices inflating at 3% from 2024 onwards as power prices are
not intrinsically linked to consumer prices, unlike costs of sales
and labour.
The sensitivity illustrates the effect on the portfolio of a
0.5% decrease and a 0.5% increase from the assumed annual inflation
rates in the financial model throughout the operating life of the
portfolio.
NAV per Total NAV per
share -0.5% portfolio +0.5% share
Inflation impact change value change impact
pence GBP'000 GBP'000 GBP'000 pence
Valuation - March
2023 (2.34) 87,721 90,060 92,540 2.48
13. Trade and other Receivables
For the year ended For the year ended
31 March 2023 31 March 2022
------------------ ------------------
GBP'000 GBP'000
Prepayments 111 114
Other receivables 263 339
374 453
------------------ ------------------
14. Trade and other Payables
For the year ended For the year ended
31 March 2023 31 March 2022
------------------ ------------------
GBP'000 GBP'000
Accrued expenses 219 125
Other payables 23 287
242 412
------------------ ------------------
15. Share Capital and Reserves
For the year ended 31 March
2023
Allotted, issued and fully Nominal value of
paid: Number of shares shares (GBP)
Opening balance as at 1 April
2022 100,014,079 1,000,140.79
Ordinary Shares of 1p each - -
Closing balance of Ordinary
Shares at 31 March 2023 100,014,079 1,000,140.79
-------------------------------- -------------------- ------------------
For the year ended 31 March
2022
Allotted, issued and fully Nominal value of
paid: Number of shares shares (GBP)
Opening balance as at 1 April
2021 100,000,000 1,000,000.00
Ordinary Shares of 1p each 14,079 140.79
Closing balance of Ordinary
Shares at 31 March 2022 100,014,079 1,000,140.79
-------------------------------- ------------------ ------------------
The Company did not issue any new shares to the Investment
Manager in year ending March 2023, under the terms of the
Investment Management Agreement. Shares acquired by the Investment
Manager in the year have been purchased on the open market to
fulfil that requirement.
Shareholders are entitled to all dividends paid by the Company
and, on a winding up, provided the Company has satisfied all its
liabilities, the shareholders are entitled to all of the residual
assets of the Company.
16. Special Distributable Reserve
On 19 October 2020 the Company's Ordinary Shares were admitted
to trading on the Specialist Fund Segment of the London Stock
Exchange, the Directors applied to the Court and obtained a
judgement on 12 January 2021 to cancel the amount standing to the
credit of the share premium account of the Company.
As stated by the Institute of Chartered Accountants in England
and Wales ("ICAEW") and the Institute of Chartered Accountants in
Scotland ("ICAS") in the technical release TECH 02/17BL, the
Companies (Reduction of Share Capital) Order 2008 SI 2008/1915
("the Order") specifies the cases in which a reserve arising from a
reduction in a company's capital (i.e., share capital, share
premium account, capital redemption reserve or redenomination
reserve) is to be treated as a realised profit as a matter of
law.
The Order also disapplies the general prohibition in section 654
on the distribution of a reserve arising from a reduction of
capital. The Order provides that if a limited company having a
share capital reduces its capital and the reduction is confirmed by
order of court, the reserve arising from the reduction is treated
as a realised profit unless the court orders otherwise.
The amount of the share premium account cancelled and credited
to the Company's Special reserve was GBP97.0 million which can be
utilised to fund distributions by way of dividends to the Company's
shareholders. As at the year ending 31 March 2023, the special
distributable reserve balance is GBP91.0 million (31 March 2022:
GBP91.4 million).
17. Financial Risk Management
The Company's investment activities expose it to a variety of
financial risks; including, interest rate risk, power price risk,
credit risk and liquidity risk. The Board of Directors has overall
responsibility for overseeing the management of financial risks,
however the review and management of financial risks are delegated
to the AIFM.
Each risk and its management are summarised below.
Interest rate risk
Interest rate risk arises from the possibility that changes in
interest rates will affect future cash flows or the fair values of
financial instruments. The Company is exposed to interest rate risk
on its cash balances held with counterparties, bank deposits,
revolving credit facility, advances to counterparties through loans
to its subsidiary. The Company may be exposed to changes in
variable market rates of interest as this could impact the discount
rate and therefore the valuation of the investments as well as the
fair value of the loan receivable. Furthermore, the Company may be
exposed to interest rates rises when the revolving credit facility
is refinanced. The Company is not considered to be materially
exposed to interest rate risk so no sensitivity has been performed.
Sensitivity analysis is disclosed in Note 12 to show the impact of
changes in key assumptions adopted to arrive at the valuation of
investments.
The Company's interest and non-interest-bearing assets and
liabilities are summarised below:
Non-interest
Interest bearing bearing Total value
GBP'000 GBP'000 GBP'000
For the year ended 31 March 2023
Assets: 57,537 32,523 90,060
Investments at fair value
through profit or loss
Other receivables 263 263
Cash and cash equivalents 9,257 9,257
Total Assets 66,794 32,786 99,580
---------------- ------------ ------------
Liabilities:
Trade and other payables 242 242
Total Liabilities 242 242
---------------- ------------ ------------
Non-interest
Interest bearing bearing Total value
GBP'000 GBP'000 GBP'000
For the year ended 31 March 2022
Assets:
Investments at fair value
through profit or loss 52,116 26,836 78,952
Other receivables 339 339
Cash and cash equivalents 17,144 - 17,144
Total Assets 69,260 27,175 96,435
---------------- ------------ ------------
Liabilities:
Trade and other payables - 412 412
Total Liabilities - 412 412
---------------- ------------ ------------
Liquidity risk
Liquidity risk is the risk that the Company may not be able to
meet its financial obligations as they fall due. The AIFM and the
Board continuously monitor forecast and actual cash flows from
operating, financing, and investing activities to consider payment
of dividends, repayment of trade and other payables or funding
further investing activities.
The Company maintains appropriate reserves and has through TENT
Holdings established a revolving credit facility. This facility
will be utilised to fund the Group's investment commitments,
ensuring sufficient liquidity to meet obligations The Company will
continuously monitor forecast and actual cash flows to seek to
match the maturity profiles of financial assets and
liabilities.
At the period end, the Company's investments, through TENT
Holdings, were in equity and secured loan investments in private
companies, in which there is no listed market and therefore such
investments would take time to realise, and there is no assurance
that the valuations placed on the investments would be achieved
from any such sale process. The Company's wholly owned subsidiary
TENT Holdings, is the entity through which the Company holds its
investments. The liquidity of TENT Holdings is reflective of the
investments which it holds.
Financial liabilities by maturity at the period end are shown
below:
For year ended March Less than More than
2023 1 year 1-5 years 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000
Liabilities:
Trade and other Payables (242) (242)
------------------------- --------- --------- --------- -------
For year ended March Less than More than
2022 1 year 1-5 years 5 years Total
GBP'000 GBP'000 GBP'000 GBP'000
Liabilities:
Trade and other Payables (412) - - (412)
------------------------- --------- --------- --------- -------
Credit Risk
Credit risk is the risk that a counterparty of the Group will be
unable or unwilling to meet a commitment that it has entered into
with the Group. It is a key part of the pre-investment due
diligence. The credit standing of the companies which the Group
intends to lend to or invest in is reviewed, and the risk of
default estimated for each significant counterparty position.
Monitoring is on-going, and period end positions are reported to
the Board on a quarterly basis.
Credit risk also arises from cash and cash equivalents,
derivative financial instruments, loan investments held through
TENT Holdings and deposits with banks and financial institutions.
The Company and its subsidiaries may mitigate their risk on cash
investments and derivative transactions by only transacting with
major international financial institutions with high credit ratings
assigned by international credit rating agencies, this is in line
with the Company's treasury policy.
The Company had no derivatives during the period and the
Company's cash balances were held in the Company's current account.
In light of the collapse of long-standing financial institutions in
recent times, the Company intends to further mitigate its risk by
assessing the viability of holding cash balances in an additional
bank account with a credit rating of at least Fitch A- or Moody's
A3.
To further mitigate counterparty risk, the credit rating and key
financials such as cash balance and net asset positions, of the
banking provider is reviewed on a regular basis.
The carrying value of the investments, trade and other
receivables and cash represent the Company's maximum exposure to
credit risk.
Price Risk
Price risk is defined as the risk that the fair value of a
financial instrument held by the Group will fluctuate. Investments
are measured at fair value through profit and loss. As at 31 March
2023, the Company held 11 indirect investments through its
intermediary holding company, TENT Holdings. The value of the
investments held by TENT Holdings will vary according to a number
of factors including; discount rate used, asset performance and
forecast power prices. Sensitivity analysis is disclosed in Note
12.
Capital Risk Management
The capital structure of the Company at the year-end consists of
equity attributable to equity holders of the Company, comprising
issued capital and reserves. The Board continues to monitor the
balance of the overall capital structure so as to maintain investor
and market confidence. The Company is not subject to any external
capital requirements.
Market Risk
Returns from the Company's indirect investments are affected by
the price at which the investments are acquired. The value of these
investments will be a function of the discounted value of their
expected future cash flows, and as such will vary with, inter-alia,
movements in interest rates, market prices and competition for such
assets. The Investment Manager carries out a full valuation
quarterly and this valuation exercise takes into account such
changes.
18. Subsidiaries
The following table shows subsidiaries of the Group. As the
Company is regarded as an Investment Entity as referred to in Note
2, the subsidiaries have not been consolidated in the preparation
of the financial statements.
Place of Ownership interest
Investment Business as at 31 March 2023
TENT Holdings * UK 100.00%
Achnacarry Hydro Limited** UK 100.00%
Elementary Energy Limited** UK 99.32%
Green Highland ALLT Choire A Bhalachain
(255) Limited** UK 100.00%
Green Highland ALLT Ladaidh (1148) Limited** UK 100.00%
Green Highland ALLT Luaidhe (228) Limited** UK 100.00%
Green Highland ALLT Phocachain (1015)
Limited** UK 100.00%
Place of Ownership interest
Investment Business as at 31 March 2022
TENT Holdings * UK 100.00%
Achnacarry Hydro Limited** UK 100.00%
Elementary Energy Limited** UK 99.32%
Green Highland ALLT Choire A Bhalachain
(255) Limited** UK 100.00%
Green Highland ALLT Ladaidh (1148) Limited** UK 100.00%
Green Highland ALLT Luaidhe (228) Limited** UK 100.00%
Green Highland ALLT Phocachain (1015)
Limited** UK 100.00%
* Direct shareholding in a financial services investment holding
company.
** Indirect shareholding in an electricity production
company.
19. Related Party Transactions
Director's Fees
The amounts incurred in respect of Director's fees during the
period to 31 March 2023 was GBP200,000 (31 March 2022: GBP200,000).
These amounts have been fully paid at 31 March 2023. The amounts
paid to individual directors during the period were as follows:
For the year ended For the period ended
31 March 2023 31 March 2022
Dr John Roberts (Chair) GBP75,000 GBP75,000
Rosemary Boot GBP45,000 GBP45,000
Sonia McCorquodale GBP40,000 GBP40,000
Dr Anthony White GBP40,000 GBP40,000
Director's Expenses
The expenses claimed by the Directors during the period to 31
March 2023 was GBP485 (31 March 2021: GBP643). These amounts have
been fully paid at 31 March 2023. The amounts paid to individual
directors during the period were as follows:
For the year ended For the period ended
31 March 2023 31 March 2022
Dr John Roberts (Chair) GBP156 GBP551
Rosemary Boot GBP61 GBP51
Sonia McCorquodale GBP216 -
Dr Anthony White GBP52 GBP41
Directors' interests
Details of the direct and indirect interest of the Directors and
their close families in the ordinary share of one pence each in the
Company at 31 March 2023 were as follows:
% of Issued share
Number of Shares Capital
Dr John Roberts (Chair) 40,000 0.04%
Rosemary Boot 40,000 0.04%
Sonia McCorquodale 10,000 0.01%
Dr Anthony White 40,000 0.04%
The Company and Subsidiaries
During the year interest totalling GBP3,353,665 was earned on
the Company's long-term interest-bearing loans between the Company
and its subsidiary (31 March 2022: GBP2,445,736). At the period
end, GBP195,417 was outstanding (31 March 2022: GBP344,105).
The loans to TENT Holdings are unsecured; the underlying loan
from TENT Holdings to the investment portfolio are secured against
the assets of the companies by a fixed and floating charge.
On 13 April 2022, the Company subscribed for one ordinary share
for a total consideration of GBP1,000,000 in TENT Holdings. The
share subscription was used to fund payment of the subsidiary's
arrangement fees in connection with the revolving credit facility
and to partially fund the first drawdowns into the LED lighting
portfolio. A further share subscription of one ordinary share, was
executed on 26 August 2022, for a total consideration of GBP469,281
in TENT Holdings. The subsidiary used the proceeds to further fund
the deployment into the LED lighting portfolio.
On 22 September 2022, TENT Holdings paid a GBP1,148,426 dividend
to the Company. On 30 March 2023 an additional dividend of
GBP2,731,501 was paid by TENT Holdings to the Company. The
dividends represent a commensurate dividend received by TENT
Holdings from the Hydroelectric Portfolio in the same period.
The AIFM and Investment Manager
The Company and Triple Point Investment Management LLP have
entered into the Investment Management Agreement pursuant to which
the Investment Manager has been given responsibility, subject to
the overall supervision of the Board, for active discretionary
investment management of the Company's Portfolio in accordance with
the Company's Investment Objective and Policy.
As the entity appointed to be responsible for risk management
and portfolio management, the Investment Manager is the Company's
AIFM. The Investment Manager has full discretion under the
Investment Management Agreement to make investments in accordance
with the Company's Investment Policy from time to time.
This discretion is, however, subject to: (i) the Board's ability
to give instructions to the Investment Manager from time to time;
and (ii) the requirement of the Board to approve certain
investments where the Investment Manager has a conflict of interest
in accordance with the terms of the Investment Management
Agreement.
Under the terms of the Investment Management Agreement, the
Investment Manager is entitled to a fee calculated at the rate
of:
-- 0.9%, per annum of the adjusted NAV in respect of the Net
Asset Value of up to, and including, GBP650 million; and
-- 0.8%, per annum of the adjusted NAV in respect of the Net
Asset Value in excess of GBP650 million.
The management fee is calculated and accrues quarterly and is
invoiced quarterly in arrears. During the period ended 31 March
2023, management fees of GBP883,215 (31 March 2022: GBP436,478)
were incurred of which GBPnil (31 March 2022: GBP207,765) was
payable at the period end.
Investment Manager's Interest in shares of the Company
On 27 September 2022, the Investment Manager purchased on the
open market 41,500 Ordinary Shares in the Company in accordance
with the terms of the Investment Management Agreement pursuant to
which 20% of the management fee paid is used to acquire new
ordinary shares of GBP0.01 each in the capital of the Company. The
average price per Investment Management Ordinary Share was
GBP0.8086.
On 22 December 2022, the Investment Manager purchased on the
open market 57,616 Ordinary Shares in the Company in accordance
with the terms of the Investment Management Agreement pursuant to
which 20% of the management fee paid is used to acquire new
ordinary shares of GBP0.01 each in the capital of the Company. The
average price per Investment Management Ordinary Share was
GBP0.8.
The below table details of the interests of the Investment
Manager, held by an entity within the Wider Triple Point Group, in
the ordinary shares of one pence each in the Company as at 31 March
2023. In the year, Perihelion One limited increased its
shareholding in the Company by 369,195, through acquiring shares on
the open market.
% of Issued share
Number of Shares Capital
Perihelion One Limited 1,042,157 1%
Perihelion One Limited is a company within the Wider Triple
Point Group.
Guarantees and other commitments
The Company is the guarantor of the GBP40 million RCF between
its sole wholly owned subsidiary TENT Holdings and TP Leasing
Limited. The RCF was entered into on 13 March 2022 and extended on
29 March 2023 for a 12 month period to 28 March 2025. The facility
remains undrawn at year end 31 March 2023. Alongside the extension,
the pricing terms were adjusted to reflect the current interest
rate environment, and for the 2(nd) year of the RCF facility, the
interest rate charged will be a fixed rate coupon of 6% pa on drawn
amounts. In the 3(rd) year of the facility, the interest will be
calculated on the lower of a fixed rate coupon of 6% pa; or the sum
of the one-year SONIA swap rate plus a fixed rate coupon of 2.5%
pa, calculated no later than 30 days prior to the 2(nd) anniversary
of the facility term.
TP Leasing Limited is an established private credit and asset
leasing business which is managed by the Investment Manager and, as
a result, is deemed to be a related party as defined in the Listing
Rules. The RCF extension is deemed to be a "smaller related party
transaction" for the purposes of LR11.1.10R. Prior to entering into
the Facility Agreement, (i) the terms of the RCF extension were
approved as fair and reasonable by the Directors and (ii) the
Company obtained a fair and reasonable opinion for shareholders
from a qualified, independent adviser. The Board was satisfied with
the conflict management procedures put in place, including team
segregation within the Investment Manager.
20. Commitments and Contingent Liabilities
The Company's wholly owned subsidiary, TENT Holdings, has
entered a GBP45.6 million investment commitment, to fund the build
of a portfolio of four geographically diverse BESS assets in the
UK. GBP39.4 million of the commitment is outstanding at the year
end date, and is forecast to be fully deployed in 2024. The
commitment will be funded by the undrawn GBP40 million RCF
available to TENT Holdings.
On 31 March 2023, the Company's wholly owned subsidiary, TENT
Holdings, entered into a 12 month secured lending facility
agreement of GBP5 million with Innova for the purpose of financing
the repayment of shareholder loans and the funding of the project
development and acquisition of new renewables projects.
21. Events after the Reporting period
On 3 April 2023, the GBP5.0 million Innova facility was fully
drawn.
On 8 June 2023, the BESS Portfolio completed a drawdown of a
further GBP3.9 million, which was partly funded by the Group's
revolving credit facility.
Dividend
As at the date of this report, the Board declared a fourth
quarter interim dividend of 1.375 pence per share with respect to
the period ended 31 March 2023. The dividend is expected to be paid
on or around 14 July 2023 to shareholders on the register on 30
June 2023. The ex-dividend date is 29 June 2023. The Company has
chosen to designate part of this interim dividend as an interest
distribution. 1.005 pence per share will be paid as an interest
payment and 0.370 as an ordinary dividend.
22. Ultimate controlling party
In the opinion of the Board, on the basis of the shareholdings
advised to them, the Company has no ultimate controlling party.
Glossary and Definitions
The Act Companies Act 2006
AIC Code The AIC Code of Corporate Governance
produced by the Association of Investment
Companies
-------------------------------------------
AIFM The alternative investment fund manager
of the Company, Triple Point Investment
Management LLP
-------------------------------------------
AIFMD The EU Alternative Investment Fund
Managers Directive 2011/61/EU
-------------------------------------------
BESS Battery Energy Storage Systems
-------------------------------------------
BESS Portfolio GBP45.6 million debt facility to a
subsidiary of Virmati Energy Ltd (trading
as Field), to fund a portfolio of four
Battery Energy Storage Systems assets
-------------------------------------------
CfDs Contracts for difference
-------------------------------------------
CHP Combined heat and power
-------------------------------------------
CHP Portfolio A total debt investment of GBP29 million
into Harvest and Glasshouse and Spark
Steam
-------------------------------------------
CODM Chief Operating Decision Maker
-------------------------------------------
The Company Triple Point Energy Transition plc
(company number 12693305).
-------------------------------------------
DCF Discounted Cash Flow
-------------------------------------------
DTR FCA Disclosure and Transparency Rules
-------------------------------------------
EGL Electricity Generator Levy
-------------------------------------------
ESG Environmental, Social and Governance
-------------------------------------------
ESS Energy Storage Systems
-------------------------------------------
EU European Union
-------------------------------------------
EV Electric Vehicle
-------------------------------------------
FCA Financial Conduct Authority
-------------------------------------------
FRC Financial Reporting Council
-------------------------------------------
GAV Gross Asset Value
-------------------------------------------
GHG Green House Gas
-------------------------------------------
Group The Company and any subsidiary undertakings
from time to time
-------------------------------------------
Harvest and Glasshouse Harvest Generation Services Limited
and Glasshouse Generation Limited
-------------------------------------------
HVAC Heating, Ventilation and Air Conditioning
-------------------------------------------
Hydroelectric Portfolio Elementary Energy Limited
Green Highland Allt Ladaidh (1148)
Limited
Green Highland Allt Choire A Bhalachain
(255) Limited
Green Highland Allt Phocachain (1015)
Limited
Green Highland Allt Luaidhe (228) Limited
Achnacarry Hydro Limited
-------------------------------------------
IEA International Energy Agency
-------------------------------------------
Innova Innova Renewables Limited
-------------------------------------------
IPEV International Private Equity and Venture
Capital
-------------------------------------------
ITC Investment Trust Company
-------------------------------------------
Investment Manager or TPIM Triple Point Investment Management
LLP
-------------------------------------------
IPO The admission by the Company of 100
million Ordinary Shares to trading
on the Specialist Fund Segment of the
Main Market, which were the subject
of the Company's initial public offering
on 19 October 2020
-------------------------------------------
IPO Prospectus The Company's Prospectus for its initial
public offering, published on 25 August
2020
-------------------------------------------
kWh Kilowatt-hour
-------------------------------------------
LED Light-emitting Diode
-------------------------------------------
Listing Rules Financial Conduct Authority Listing
Rules
-------------------------------------------
MW Megawatt
-------------------------------------------
MWh Megawatt-hour
-------------------------------------------
NAV The net asset value, as at any date,
of the assets of the Company after
deduction of all liabilities determined
in accordance with the accounting policies
adopted by the Company from time-to-time
-------------------------------------------
NGFS Network for Greening the Financial
System
-------------------------------------------
Net Zero A target of completely negating the
amount of greenhouse gases produced
by human activity, to be achieved by
reducing emissions and implementing
methods of absorbing carbon dioxide
from the atmosphere
-------------------------------------------
OCR Ongoing charges ratio
-------------------------------------------
O&M Operations & Maintenance
-------------------------------------------
PPA Power Purchase Agreement
-------------------------------------------
PRI Principals for Responsible Investing
-------------------------------------------
Project SPV Special Purpose Vehicle in which energy
transition assets are held
-------------------------------------------
RCF The Group's GBP40 million Revolving
Credit Facility, via TENT Holdings,
with TP Leasing Limited
-------------------------------------------
SDG Sustainable Development Goals
-------------------------------------------
SDR Sustainable Disclosure Regulation.
-------------------------------------------
SECR Streamlined Energy and Carbon Reporting
-------------------------------------------
SFDR Sustainable Finance Disclosure Regulation
-------------------------------------------
SONIA Sterling Overnight Index Average
-------------------------------------------
SORP Statement of Recommended Practise
-------------------------------------------
Spark Steam Spark Steam Limited
-------------------------------------------
tCO(2) Tonnes of carbon dioxide emissions
-------------------------------------------
tCO(2) e Tonnes of carbon dioxide equivalent.
Emissions of all greenhouse gases,
expressed in units of carbon dioxide
equivalence, based on global warming
potential
-------------------------------------------
TCFD Task Force on Climate-related Financial
Disclosures
-------------------------------------------
TENT Holdings The wholly owned subsidiary of the
Company: TENT Holdings Limited (company
number 12695849)
-------------------------------------------
UN SDGs United Nations Sustainable Development
Goals
-------------------------------------------
Wider Triple Point Group Triple Point LLP (company number OC310549)
and any subsidiary undertakings from
time to time
-------------------------------------------
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