Renewables Infrastructure Grp (The) Announcement of Final Results (3135P)

TIDMTRIG

RNS Number : 3135P

Renewables Infrastructure Grp (The)

17 February 2021

F

17 February 2021

The Renewables Infrastructure Group Limited

("TRIG" or "the Company", a London-listed investment company advised by InfraRed Capital Partners ("InfraRed") as Investment Manager and RES ("Renewable Energy Systems") as Operations Manager)

Annual Results for the 12 months ended 31 December 2020

2020 Highlights - Resilient financial performance

-- Portfolio generated 3,953GWh of electricity in the year (2019: 3,036GWh)

-- NAV per ordinary share of 115.3p [1] as at 31 December 2020 (June 2020: 113.0p; December 2019: 115.0p)

-- Directors' portfolio valuation [2] of GBP2,213m as at 31 December 2020 (2019: GBP1,745m) following six acquisitions

-- NAV total return of 6.1% for the year and 8.1% since IPO (annualised) [3]

-- Earnings per ordinary share of 5.9p (2019: 11.4p) and profit before tax of GBP100m (2019: GBP162m). Gains as a result of a reduction in valuation discount rates and the Managers' portfolio and asset-level initiatives dampened by lower power price forecasts

-- Declared dividends of 6.76p per share in line with the target for 2020 (2019: 6.64p)

-- Dividend target [4] of 6.76p per share maintained for the year to 31 December 2021

Responsible investment practices at the heart of the business:

-- Health & safety remains a key priority throughout the pandemic - technology utilised to ensure governance and management standards maintained

-- GBP0.5m allocated to help address the impact of Covid-19 on the local communities around TRIG's sites, in addition to the c. GBP0.9m that the portfolio companies contribute to their local communities each year

-- TRIG is a supporter of the recommendations of the Task Force on Climate-related Financial Disclosures

-- Sustainability considerations fully integrated into InfraRed's investment process

-- New three-year, ESG-linked, SONIA revolving credit facility secured aligning TRIG's ESG commitments with funding arrangements.

Helen Mahy, CBE, Chairman of TRIG, said :

"I am pleased that in light of the Covid-19 backdrop, TRIG's financial performance has been resilient, including an increase in the Company's NAV per share, underpinned by a diversified portfolio and robust operational performance. The Board and I appreciate the performance of InfraRed, RES and our supply chain in what has been a challenging year.

My fellow Directors and I remain grateful for the support of TRIG's shareholders as demonstrated through two oversubscribed fundraisings in which the Company raised GBP320m, providing further economies of scale.

2021 is a pivotal year for the climate change agenda. We expect to see significant development of public policy in respect of decarbonisation of energy supply, renewables-supporting grid infrastructure and electrification of energy systems across TRIG's target markets in the run up to COP26."

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

"The portfolio has continued to perform well with generation 1% ahead of budget. Asset availability has been maintained by undertaking enhanced asset condition monitoring and undertaking proactive works when government restrictions in response to Covid-19 have allowed.

I am pleased that the six acquisitions in the year and two since year end have continued to enhance and diversify the portfolio alongside reducing TRIG's power price exposure.

We have seen an increasing volume of capital looking to deploy into sustainable investment themes, particularly renewables. In that context, a rigorous investment process, in which sustainability considerations are fully embedded, will remain key."

Webcast details

TRIG will be presenting its results at 09:30 UK time today. The presentation will be broadcast live and an archive version of the presentation will be made available on the Group's website. The link for the broadcast is http://bit.ly/TRIG_FY20_results_webinar

Enquiries

   InfraRed Capital Partners Limited                              [phone] 

Richard Crawford

Phil George

   Maitland/AMO                                                             [phone] 

James Isola

Zara de Belder

Notes

The Company

The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading London-listed renewable energy infrastructure investment company. The Company seeks to provide shareholders with an attractive long-term, income-based return with a positive correlation to inflation by focusing on strong cash generation across a diversified portfolio of predominantly operating projects.

TRIG is invested in a portfolio of over 75 wind, solar and battery storage projects with aggregate net generating capacity of over 1.8GW. TRIG is seeking further suitable investment opportunities which fit its stated Investment Policy.

Further details can be found on TRIG's website at www.trig-ltd.com .

Investment Manager

TRIG's Investment Manager is InfraRed Capital Partners Limited ("InfraRed") which has successfully invested in over 200 infrastructure projects since 1997. InfraRed is a leading international investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Seoul, Sydney and Mexico City. With over 190 professionals it manages in excess of USD 12 billion of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed is authorised and regulated by the Financial Conduct Authority.

The infrastructure investment team at InfraRed consists of over 85 investment professionals, all with an infrastructure investment background and a broad range of relevant skills, including private equity, structured finance, construction, renewable energy and facilities management.

InfraRed implements best-in-class practices to underpin asset management and investment decisions, promotes ethical behaviour and has established community engagement initiatives to support good causes in the wider community. InfraRed is a signatory of the Principles of Responsible Investment.

Further details can be found on InfraRed's website at www.ircp.com .

Operations Manager

TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's largest independent renewable energy company.

RES has been at the forefront of wind energy development for over 38 years, with the expertise to develop, engineer, construct, finance and operate projects around the globe. RES has developed or constructed onshore and offshore wind, solar, energy storage and transmission projects totalling more than 17GW in capacity. RES supports over 6.3GW of operational assets worldwide for a large client base. Headquartered in Hertfordshire, UK, RES is active in 10 countries and has over 2,000 employees engaged in renewables globally.

RES is an expert at optimising energy yields, with a strong focus on safety and sustainability. Further details can be found on the website at www.res-group.com .

Webcast details

TRIG will be presenting its results at 09:30 UK time today. The presentation will be broadcast live and an archive version of the presentation will be made available on the Group's website. The link for the broadcast is http://bit.ly/TRIG_FY20_results_webinar

01 Chairman's Statement

I am pleased to present the 2020 Annual Report & Financial Statements for The Renewables Infrastructure Group Limited ("TRIG" or "the Company"). In a year filled with uncertainty and challenges, the resilient performance of your company's assets underpinned by the Managers' portfolio enhancement initiatives, together with sustained market demand for renewable energy generating assets, have delivered NAV total return of 6.1% for the year. Acquisitions have continued to enhance and diversify TRIG's portfolio, and have reduced TRIG's power price exposure, thereby increasing the robustness of medium-term cash flow projections.

The Covid-19 pandemic dominated 2020 and persists into 2021. Throughout, the health, safety and welfare of the workforce of our Managers, site personnel and supply chain has remained paramount. I am pleased to report that Covid-aware practices were quickly implemented as the pandemic took hold. Operationally, we maintained our strong record of a low accident frequency rate. Generation was 1% ahead of budget, incorporating good asset availability in the context of Covid-19-related restrictions.

The limits on the movement and activities of people following the outbreak of the pandemic significantly depressed demand for electricity in 2020, contributing to greater power price volatility and lower overall power price forecasts. The timescale for recovery in economic activity is uncertain. Nonetheless, the threat of climate change persists. The decarbonisation agenda has remained central to government policy across Europe, with increasing electrification of the energy system and renewables build-out at the core of further policy developments such as the EU's New Green Deal and the key drivers in UK's 2020 Energy White Paper. Together, these are key drivers in resetting the sector's power price expectations and in 2020 we have seen an average 12% reduction in year-on-year power price forecasts across the markets in which TRIG has investments.

The Company draws on the expertise of its Managers: InfraRed, a leading infrastructure manager, and RES, the world's largest independent renewable energy company. They work on TRIG's behalf to ensure that portfolio diversification is maintained, performance of the portfolio is optimised, operations remain safe and efficient, and financial targets are achieved.

By investing in renewable energy, your company is helping to deliver a net-zero carbon future and playing an important role in mitigating climate change. TRIG's investment activities support progress towards many of the United Nations' Sustainable Development Goals ("SDGs") as well as increasing the share of renewable energy in the European energy mix. TRIG's generation capacity stands at 1.8GW ([5]) , which can generate enough renewable power for one million homes and avoid approximately 1.3m tonnes of carbon emissions per annum ([6]) .

My fellow Directors and I remain grateful for the support of TRIG's shareholders as demonstrated through two oversubscribed fundraisings in which the Company raised GBP320m. This capital funded investments in the UK, France and Germany, across onshore wind, offshore wind and solar PV technologies, providing further economies of scale. Through InfraRed's disciplined and proactive investment process, we continue to see a pipeline of attractive investment opportunities.

Financial Results

TRIG is notable amongst renewables investment companies for the combination of its scale with its portfolio diversification, both in terms of geography and technology. Diversification helps manage exposures to individual power markets, local weather patterns and regulatory risk (including different subsidy regimes), and resulted in a robust financial performance in 2020. Whilst the Covid-19 pandemic has affected all markets, it has had differing impacts on each European country where TRIG has an investment; for example, average power demand since 1 April 2020 compared to 'business as usual' has ranged from 2% less in Sweden to 6% less in the UK, with even greater short-term variability.

TRIG's net asset value ("NAV") per share was 115.3p at 31 December 2020, up from 113.0p at 30 June 2020 and 115.0p at 31 December 2019. The portfolio was valued at GBP2,213m as at 31 December 2020 (2019: GBP1,745m), with significant growth in the portfolio following investment activities and fundraising in the year. Valuation gains were buoyed by on-going demand for the asset class resulting in a reduction in valuation discount rates, as well as the Managers' portfolio and asset-level initiatives. However, gains were dampened by the reduction in power price forecasts across the geographies in which TRIG invests.

Profit before tax was GBP100m (2019: GBP162m) and earnings per share were 5.9p (2019: 11.4p). Cash received from the portfolio by way of distributions ([7]) was GBP148m (2019: GBP129m). Cash receipts were affected by lower power prices, caused by the Covid-19-related restrictions reducing energy demand; the potential impact was largely mitigated as the majority of asset-level revenues in the year were linked to fixed electricity pricing or subsidies.

TRIG continued to be acquisitive and the portfolio continued to grow with investments totalling GBP588m made and disposals ([8]) of GBP118m in 2020. Investments were funded by a combination of the proceeds of equity fundraisings and cash reserves including the reinvestment of surplus cash generated from the Company's portfolio. At 31 December 2020, the Company was drawn GBP40m under its renewed, three-year ESG-linked GBP500m revolving credit facility. TRIG has current investment commitments of GBP392m, of which GBP313m are expected to fall due by the end of H1 2021, including the completion of the Beatrice offshore wind farm acquisition and investments into construction projects (Blary Hill and Grönhult onshore wind farms).

TRIG's Ongoing Charges Percentage reduced to 0.94% (2019: 0.98%) ([9]) , reflecting the economies of scale of a bigger portfolio, including the tiered management fee, and is consistent with our strategy of providing value to our shareholders.

Dividends

The Board has declared a fourth interim dividend for the year ended 31 December 2020 of 1.69p per share to bring the aggregate 2020 dividend to 6.76p per share, in line with the target set for the year.

During 2020, the Company paid a total of GBP107.0m of dividends in cash and, in addition, issued GBP6.6m scrip for shareholders who elected to receive their dividends in shares, making a total of GBP113.6m of dividends (2019: GBP94.3m).

The dividend was well covered at 1.13 times, or 1.20 times after scrip take-up; however, cover was less than in the previous year (2019: 1.21 times and 1.32 times after scrip take-up), principally because of lower than forecast electricity prices in 2020.

In respect of the dividend, the Board's priority remains to ensure that it is sustainable in the long term. Accordingly, the Company's dividend policy is to increase the dividend when the Board considers it prudent to do so, considering forecast cash flows, expected dividend cover, inflation across TRIG's key markets, the outlook for electricity prices and the operational performance of the Company's portfolio.

The timing and speed of the economic recovery from the Covid-19 downturn remains unclear, meaning it is uncertain whether the recent recovery in near-term power prices will endure; and medium-term forecast electricity prices have reduced materially in the year. Given this backdrop and priority of sustainable dividends, the Board maintains an unchanged aggregate dividend target ([10]) of 6.76p per share for the 2021 financial year. This represents a prospective yield of 5.3% relative to the 31 December 2020 closing share price of 127.8p.

The Company expects to pay the 2021 dividend in four equal quarterly instalments as usual. A scrip alternative will continue to be provided, details of which can be found in the Scrip Dividend Circular 2020 (on the Company's website).

Investment Activity

TRIG continues to add selectively to its portfolio where the Investment Manager, InfraRed, identifies opportunities with attractive risk adjusted returns that complement the portfolio's diversification. These investments are scrutinised by the Managers through an investment process in which sustainability considerations are fully integrated. Disposals will be made when appropriate for portfolio balance and / or risk management, such as the accretive sale of the Ersträsk windfarm in Sweden back to Enercon following construction delays.

TRIG's acquisition focus remains unchanged, targeting investments in the UK and Europe (including France, Germany, Ireland, and the Iberian and Nordic regions) across onshore wind, offshore wind and solar PV technologies. Geographic and technological diversification avoids reliance on singular markets at risk of over-priced acquisitions due to scarcity premia; and the Company's exposure to any one regulatory regime, power price characteristics and weather system risk is reduced.

TRIG will have five investments in the offshore wind sector, once the investment in Beatrice in the UK is completed, having acquired stakes in Merkur in Germany and East Anglia 1 in the UK during 2020. These projects benefit from fixed, government-supported, electricity pricing for a term of eight to 15 years. These acquisitions, on a committed basis including that of Beatrice ([11]) , have been key to reducing the sensitivity of TRIG's NAV to a 10% decrease in the portfolio power price forecast from 7.4% of NAV at 31 December 2019 to 6.6% of NAV at 31 December 2020.

Offshore wind projects are fewer in number and significantly larger in scale than onshore renewables projects. This means that, with an increasing volume of capital looking to deploy into sustainable investment themes, they can be highly sought after, and that investment discipline is key. "Off-market" transactions sourced by InfraRed remain an important route to attractive opportunities.

The highly contracted nature of subsidised projects, including offshore wind, affords room to further diversify through selected non-subsidised assets, whilst retaining a balanced portfolio. The power price exposure of unsubsidised projects is typically managed through offtake agreements or hedging instruments. Such opportunities are most likely to come from the Nordic (onshore wind) and Iberian (solar PV) regions.

Portfolio Performance

In 2020, the portfolio generated 3,953GWh of electricity, including compensated curtailments (2019: 3,036GWh), with the year-on-year increase primarily due to acquisitions. Overall, generation was 1% ahead of budget. Good weather resource in Great Britain and Sweden was offset by grid curtailments in the Republic of Ireland and Germany, reinforcing the benefits of TRIG's diversified portfolio.

Asset availability has remained solid despite the challenges of Covid-19-related restrictions across Europe. TRIG benefits from sophisticated remote monitoring undertaken by project company management teams and the Operations Manager, and having assets that are typically located away from densely populated areas where infection rates have been highest.

Corporate Governance

Board composition is regularly discussed by the Board's Nomination Committee to ensure that the Company's non-executive Directors have a diverse range of relevant expertise and experience to apply to the oversight of the Company and to engage effectively with the Managers. I am pleased to welcome Tove Feld to the Board; she was appointed as a Non-Executive Director in March 2020 and brings with her significant experience in the offshore wind sector.

In 2022, the Company will reach the ninth anniversary of its IPO and three of the five Directors will have served nine years. The Nomination Committee has established a recruitment and orderly succession plan, which incorporates appropriate handover periods, the principles and provisions of the AIC Code ([12]) , and the recommendations of the Hampton-Alexander Review and the Parker Review. An external search process has commenced.

Sustainability

The Board believes investing responsibly and the consideration of environmental, social and governance ("ESG") factors are essential to maintain a sustainable business model over the long term. In addition to mitigating climate change, TRIG's sustainability goals are to preserve our natural environment, positively impact the communities we work in, and maintain ethics and integrity in governance. This means, through the Managers, ensuring each portfolio company takes responsibility for its ESG impact, risks and opportunities.

TRIG's Sustainability Policy (published on the Company's website) is designed to provide an overview of the Company's approach to ESG considerations, including climate change risks and opportunities. It comprises a framework of ESG objectives that are designed to improve outcomes for TRIG's shareholders and its portfolio's stakeholders. We report against these objectives in Section 2.5 - Sustainability.

The Board has allocated an additional GBP500,000 to help address the Covid-19 impact on the local communities around our sites. This is in addition to the c. GBP900,000 that the portfolio companies contribute to their local communities each year.

TRIG is a supporter of the Task Force on Climate-related Financial Disclosures ("TCFD"), in line with our commitment to SDG 13 Climate Action. TRIG continues to expand its assessment of the potential impact, including opportunities and risks, of climate change and its TCFD reporting, which can be found in Section 2.11 - Risks and Risk Management.

Through the process of renewing TRIG's revolving credit facility, the Company has secured an ESG-linked loan. This incorporates adjustments to the facility margin and commitment fee based on ambitious but achievable ESG targets.

TRIG retains the London Stock Exchange's Green Economy Mark, which recognises companies that make a significant contribution to the transition to a zero-carbon economy.

I am pleased that the Board's ethos is shared by the Managers who both have a longstanding commitment to sustainable investment. InfraRed's infrastructure business has maintained its "A+" rating in its PRI ([13]) assessment for the sixth consecutive year and RES have continued to maintain strong ESG credentials as highlighted in their annual Power for Good report and commitment to the Science Based Targets Initiatives.

Principal Risks and Uncertainties

The Board and the Managers monitor and, where practicable, mitigate a range of risks to TRIG's strategy. The main risks for the Company continue to be:

Regulation: government or regulatory support for renewables changing adversely;

Power prices: electricity prices falling or not increasing as expected; and

Production performance: portfolio electricity production falling short of expectations, including as a result of weather and asset availability.

2020 has seen the ambition of decarbonisation targets increase and begin to be translated into public policy, for example through the European New Green Deal, the European Covid-19 Recovery Fund and the UK Energy White Paper. Further detail is expected from governments across TRIG's target jurisdictions in the run up to the 26th UN Climate Change Conference of the Parties (COP26) in November 2021. The early pronouncements focussed on increasing the rollout of renewables, and are being followed by detailed policy aimed at delivering this. Public policy is now also beginning to set out the need on the demand side for new technologies and associated investment, such as renewables-fuelled 'green' hydrogen, charging infrastructure for electric vehicles, grid upgrades and long-duration storage to enable the transition to a net-zero carbon future; although the mechanisms for delivering this side of the equation are less clear.

Pressures on government budgets resulting from their response to the Covid-19 pandemic may result in fiscal action, such as regulatory change or increases in corporation tax rates. In France, a parliamentary proposal has been voted in to reduce certain historic tariffs on some older, higher feed-in-tariff solar projects. The tariff reductions have not yet been determined, but the impact is not expected to be significant for TRIG, affecting assets representing less than 1% of TRIG's portfolio by value. Countering the risk of retrospective regulatory action is governments' need to maintain investor confidence to support decarbonisation.

Power prices remain a key variable for the Company. Near-term power price forwards, which were dampened by reduced demand following the Covid-19 outbreak, began to recover towards the end of the year because of supply-side generation constraints and increasing gas prices. However, uncertainty remains with the risk of further movement restrictions across Europe. Medium and long-term power price forecasts are likely to be affected by the evolution of market expectations in respect of the power generation mix and the energy market structure. The impact of changes in power prices is reduced through management of the Company's power price sensitivity, which can be reduced through the acquisition of projects with government-backed, fixed power price revenues and fixing unsubsidised revenues through offtake agreements or hedging instruments. Following the completion of the acquisitions of Beatrice offshore wind farm and the Grönhult onshore wind farm, the power price for 78% of forecast revenues over the next five years will be fixed.

Production performance varies depending on weather and asset availability. The Operations Manager, RES, maximises availability through working with the respective on-site managers to ensure careful planning, execution of operations and timely repair works. In 2020, particular consideration has been given to Covid-aware working. This has meant enhanced asset condition monitoring and undertaking proactive works when government restrictions allow. The geographical and technological diversity of TRIG's portfolio provides resilience to varying weather conditions and spreads TRIG's exposure to different regulatory and power price markets, thus mitigating the key risks.

To date, the United Kingdom's departure from the European Union has had no material impact on TRIG. The consequences of potential supply chain disruption have been mitigated through ensuring appropriate levels of strategic spares at sites and by suppliers. Foreign exchange risk continues to be managed through the Investment Manager's application of the Company's hedging policy.

Outlook

2021 will be a pivotal year for the climate change agenda, with the United States re-joining the Paris climate agreement and the UK set to host COP26 in November. Government policies around the world have shown renewable energy has a central role to play in decarbonising our energy usage. We are confident that the markets in which TRIG operates will continue to grow as government policy encourages the transition to a net-zero carbon future.

TRIG's focus remains investing in the UK and other European countries where there are stable renewable energy frameworks. Acquisitions will continue to follow our strategy of maintaining a balanced portfolio with an appropriate risk-return profile and complement our existing, diversified portfolio. The greatest investment activity in TRIG's key markets is expected from subsidised offshore wind in the North Sea and onshore wind in France, and unsubsidised onshore wind in the UK and Nordics and solar in Iberia. For investments made by TRIG in unsubsidised projects, we would expect, over time, to utilise offtake agreements or hedging instruments to manage power price risk.

The challenges of 2020 have resulted in a recognition that, when environmental, social and economic sustainability come together in a strong governance framework, they create the foundations for a sustainable, long-term investment proposition. These are core tenets of TRIG's purpose and Sustainability Policy, and are at the heart of our Managers' approaches, providing the bedrock for your company's future success.

Helen Mahy CBE

Chairman

16 February 2021

02 Strategic Report

2.1 Objectives

TRIG aims to generate sustainable returns from a diversified portfolio of renewables infrastructure that contribute towards a zero-carbon future.

TRIG's diversified portfolio comprises predominantly operational wind farms and solar parks in the UK and Europe. The Company aims to provide its investors with long-term, stable dividends and to retain the portfolio's capital through re-investment of surplus cash flows after payment of dividends.

TRIG's key financial objectives are to provide its shareholders with:

an attractive, long-term, income-based return by focusing on strong cash generation across a portfolio of mostly operational renewable energy assets;

prudent financial management in terms of the approach to cost control, cash management, financing arrangements, foreign exchange and interest rate hedging; and

a diversified investment portfolio at scale in order to spread risk, increase share liquidity, obtain efficiencies and enhance NAV per share for investors.

2.2 Business Model and Strategy

TRIG gives responsible investment great importance and places sustainability at the heart of the business. To maintain a sustainable business model over the long-term, we believe it is necessary to conduct all business responsibly.

TRIG's approach to Responsible Investment is underpinned by the Company's Environmental, Social and Governance objectives, which are to:

mitigate Climate Change;

preserve our natural environment;

impact positively the communities in which TRIG works; and to

maintain ethics and integrity in governance.

2.2 Business Model and Strategy

Purpose

To generate sustainable returns from a diversified portfolio or renewables infrastructure that contribute towards a zero-carbon future.

Introduction

TRIG was one of the first investment companies investing in renewable energy infrastructure projects listed on the London Stock Exchange. TRIG completed its IPO in 2013 and has been a member of the FTSE-250 index since 2015. Its market capitalisation as at 31 December 2020 was approximately GBP2.4bn.

The growth in TRIG's portfolio since IPO has enabled the Investment Manager, InfraRed, to add diversification through technologies (onshore wind, offshore wind, solar PV and battery storage) and geographies (UK, Ireland, France, Germany and Sweden), with other geographies such as the Nordic, Benelux and Iberian regions being actively considered.

TRIG aims to provide its shareholders with long-term, sustainable returns from a diversified portfolio of renewables and related investments that contribute towards a net zero-carbon future whilst protecting the capital value of its investment portfolio through the re-investment of surplus cash flows after the payment of dividends.

Strategy

TRIG seeks to enhance the long-term sustainability of shareholder returns in three ways:

Portfolio Diversification: A key element of TRIG's strategy is to reduce the risk of concentration of assets in single power markets, regulatory frameworks, weather patterns and technology classes. A well-diversified portfolio helps improve the resilience of the Company's ongoing financial performance and valuation, contributing to the sustainability of returns to shareholders.

Responsible Investment: Our investments are long-term (with asset lives which may be 30 years or more) and require a long-term view to be taken both in the initial investment decisions and in the subsequent asset management with sustainable business practises. Through our commitment to our Sustainability Policy (available on the TRIG website), aligned to the United Nations Sustainability Development Goals and our own ESG goals, we place great importance on a responsible investment approach to deliver the Company's investment objective.

Value Enhancement: Extracting the most value from our portfolio includes actions targeted at both the preservation and the enhancement of value, whilst being mindful of ESG opportunities and risks. Proactive asset management is undertaken to optimise generation and minimise equipment downtime whilst operating safely with a prudent approach to risk and a disciplined approach to construction opportunities. Value maximisation underpins the generation of returns for shareholders.

Management

The Company currently has a board of five independent non-executive Directors (details of whom can be found in Section 3). The Board's role is to manage the governance of the Company in the interests of shareholders and other stakeholders. In particular, the Board monitors adherence to the Investment Policy, determines the risk appetite of the Group, sets Group policies and monitors the performance of the Investment Manager, the Operations Manager and other key service providers.

The Board meets a minimum of four times per year for regular Board meetings and there are several ad hoc meetings dependent upon the requirements of the business. In addition, the Board has five committees covering the areas of Audit, Nominations, Remuneration, Management Engagement and Market Disclosure, chaired by respective members of the Board, which receive and consider specialist independent advisor reports and presentations.

The Board takes advice from the Investment Manager, InfraRed, as well as from the Operations Manager, RES, on matters concerning the market, the portfolio and new investment opportunities. Day-to-day management of the Group's portfolio is delegated to the Investment Manager and the Operations Manager, with investment decisions within agreed parameters delegated to an Investment Committee constituted by senior members of the Investment Manager.

InfraRed Capital Partners Limited ("InfraRed") is TRIG's Investment Manager. The role of InfraRed is to provide the day-to-day investment management of TRIG. InfraRed undertakes investment activities including acquisitions and financial structuring within parameters set by the Board; financial management and reporting including portfolio valuations and investor relations. InfraRed also advises on strategy, risk management and funding requirements of the Group.

Renewable Energy Systems Limited ("RES") is TRIG's Operations Manager. The role of RES is to be responsible for overseeing the asset management of the portfolio. This includes oversight of operating and construction projects; operational reporting for all project companies; and designing and implementing portfolio performance optimisation plans. RES also provide support in the assessment of acquisition activities and investor relations

InfraRed is a leading international investment manager specialised in infrastructure and real estate. With over 190 employees and offices in London, New York, Hong Kong, Seoul and Sydney, InfraRed has a track record of around 20 years in raising and managing 17 infrastructure and real estate funds with over US$12bn of equity under management.

InfraRed is also Investment Manager to HICL Infrastructure Company Limited, the largest London-listed infrastructure investment company with a market capitalisation of GBP3.3bn as at 31 December 2020. Further details can be found on the website at www.ircp.com.

InfraRed is a part of SLC Management which is the institutional alternatives and traditional asset management business of Sun Life. Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate clients. As of 30 September 2020, Sun Life had total assets under management of C$1,186 billion. For more information please visit www.sunlife.com.

RES ("Renewable Energy Systems Limited") is TRIG's Operations Manager. RES is the world's largest independent renewable energy company having developed and/or constructed over 19GW of projects, with operations in 10 countries and over 2,500 employees globally. RES is a pure-play renewables company with the expertise to develop, construct and operate projects around the globe across a range of technologies including onshore and offshore wind, solar, energy storage and transmission & distribution.

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

RES is an expert at optimising energy yields, with a strong focus on safety and sustainability. Further details can be found on the website at www.res-group.com.

Other key service providers to the TRIG Group include Aztec Financial Services (Guernsey) Limited providing Company Secretarial and Administrative services, Investec Bank PLC and Liberum Capital Limited as joint brokers, Maitland/AMO as financial public relations advisers, Carey Olsen as legal advisers as to Guernsey law, Norton Rose Fulbright LLP as legal advisers as to English law, Link Asset Services (Guernsey) Limited as registrars and Deloitte LLP as auditor. Lenders to the Group's Revolving Credit Facility are National Australia Bank, Royal Bank of Scotland International, ING Group, Sumitomo Banking Corporation, Barclays and Santander.

The Board reviews the performance of all key service providers, including adherence of the Investment Manager and Operations Manager with TRIG's Sustainability Policy, on an annual basis through its Management Engagement Committee.

Group Structure

Through the group structure, the Company owns a portfolio of renewable energy infrastructure investments in the UK, Ireland, France, Germany and Sweden. TRIG seeks to protect and enhance the income from and value of the existing portfolio through active management and sourcing of new investments that enhance the diversity and scale of the portfolio, utilising the expertise of the market-leading Investment and Operations Managers appointed by the Company. The Company has a 31 December year-end, announces interim results in August and full year results in February. The Company pays dividends quarterly.

The Company is a self-managed Alternative Investment Fund under the European Union's Alternative Investment Fund Managers Directive.

TRIG is a Guernsey-registered investment company (which is not uncommon for UK-listed investment companies). Tax is paid by the portfolio companies in the markets in which they operate and by the Company's shareholders on the dividends they receive (according to the jurisdiction and taxation status of each shareholder). The structure ensures investors are not in a disadvantageous tax position compared to direct investors in infrastructure projects; in effect this emulates the structure formalised for real estate investors by the creation in the UK of Real Estate Investment Trusts ("REITs"). A similar tax treatment can be achieved by UK Investment Trust Companies located onshore by applying the UK's Investment Trust (Approved Company) (Tax) Regulations (2011) with the company deeming a portion of its dividends paid to investors as interest distributions (although we note that for certain UK shareholders the tax treatment of interest income is different to dividend income).

2.3 Investment Approach and Policy

Investment Approach

TRIG's investment approach is based on the following two factors:

The renewables market opportunity; and

The ability to construct a diversified portfolio across established, low-risk technologies, electricity markets, weather systems and revenue types.

Investment Policy

In order to achieve its investment objective, the Company invests principally in operational assets which generate electricity from renewable energy sources, with a particular focus on wind farms and solar PV parks.

Investments will be made principally by way of equity and shareholder loans which will generally provide for 100% or majority ownership of the assets by the holding entities. In circumstances where a minority equity interest is held in the relevant portfolio company, the holding entities will secure their respective shareholder rights (including voting rights) through shareholder agreements and other transaction documentation.

The Group aims to achieve diversification principally through investing in a range of portfolio assets across a number of distinct geographies and a mix of renewable energy technologies.

Limits

Investments are made in the UK and other European countries (including France, Ireland, Germany and Sweden with active consideration given to the Nordic, Benelux and Iberian regions) where the Directors, the Investment Manager and the Operations Manager believe there is a stable renewable energy framework. Not more than 65 per cent. of the Portfolio Value (calculated at the time of investment) may be invested in investments that are located outside the UK.

Investments will be made in onshore and offshore wind farms and solar PV parks, with the amount invested in other forms of energy technologies (or infrastructure that is complementary to, or supports the roll-out of, renewable energy generation) limited to 20 per cent. of the Portfolio Value, calculated at the time of investment.

In respect of investments in Portfolio Companies which have assets under development or construction (including the repowering of existing assets), the cost of works on such assets under development or construction (and not yet operational) to which Portfolio Companies are exposed may not in aggregate account for more than 15 per cent. of the Portfolio Value, calculated at the time of investment or commitment.

The Company will not invest more than 15 per cent., in aggregate, of the value of its total assets in other investment companies or investment trusts that are listed on the Official List [14] . In order to ensure that the Group has an adequate spread of investment risk, it is the Company's intention that no single asset will account for more than 20 per cent. of the Portfolio Value, calculated at the time of investment.

The Group may enter into borrowing facilities in the short term, principally to finance acquisitions. Such short-term financing is limited to 30 per cent. of the Portfolio Value. It is intended that any acquisition facility used to finance acquisitions is likely to be repaid, in normal market conditions, within a year through further equity fundraisings.

Wind farms and solar parks, generally assumed to have operating lives in excess of 25 years, with 30 years or more increasingly being assumed, held within Portfolio Companies generate long-term cash flows that can support longer term project finance debt. Such debt is nonrecourse and typically is fully amortising over a 10 to 15-year period. There is an additional gearing limit in respect of such non-recourse debt of 50 per cent. of the Gross Portfolio Value (being the total enterprise value of such Portfolio Companies), measured at the time the debt is drawn down or acquired as part of an investment. The Company may, in order to secure advantageous borrowing terms, secure a project finance facility over a group of Portfolio Companies and may acquire Portfolio Companies which have project finance arranged in this way.

Revenue

Generally, the Group will manage its revenue streams to moderate its revenue exposure to merchant power prices with appropriate use of power purchase agreements, Contracts-for-Difference, Feed-in-Tariffs and green certificates.

Hedging

The Company may borrow in currencies other than Pounds Sterling as part of its currency hedging strategy. The Group may enter into hedging transactions in relation to currency, interest rates and power prices for the purposes of efficient portfolio management. The Group will not enter into derivative transactions for speculative purposes.

Cash Balances

When the Company is not fully invested and pending reinvestment or distribution of cash receipts, cash received by the Group will be held as cash, or invested in cash equivalents, near cash instruments or money market instruments.

Origination of Further Investments

Each of the investments comprising the portfolio complies with the Company's investment policy and further investments will only be acquired if they comply with the Company's investment policy. It is expected that further investments will include operational onshore wind and solar PV investments that have been originated and developed by Renewable Energy Systems Limited, the Company's Operations Manager. The Company will also review investment opportunities originated by third parties, including from investment funds managed or advised by the Investment Manager or its affiliates.

Pursuant to the First Offer Agreement, the Company has a contractual right of first offer, for so long as the Operations Manager remains the operations manager of the Company in respect of the acquisition of investments in projects of which the Operations Manager wishes to dispose and which are consistent with the Company's investment policy. It is envisaged that the Operations Manager will periodically make available for sale further interests in projects although there is no guarantee that this will be the case. Investment approvals in relation to any acquisitions of investments from the Operations Manager are made by the Investment Manager through the Investment Committee.

Furthermore, any proposed acquisition of assets by the Group from InfraRed Funds will be subject to detailed procedures and arrangements established to manage any potential conflicts of interest that may arise. In particular, any such acquisitions will be subject to approval by the Directors (who are all independent of the Investment Manager and the Operations Manager) and will also be subject to an independent private valuation in accordance with valuation parameters agreed between the InfraRed Funds and the Company.

A key part of the Company's investment policy is to acquire assets that have been originated by RES by exercising the Company's rights under the First Offer Agreement. As such, the Company will not seek the approval of Shareholders for acquisitions of assets from the Operations Manager or members of its group in the ordinary course of its Investment Policy. However, in the event that the Operations Manager is categorised as a substantial shareholder of the Company for the purposes of the Listing Rules (i.e. it holds 10 per cent. or more of the Company's issued share capital and for a period of 12 months after its shareholding first drops below this threshold), the related party requirements of Chapter 11 of the Listing Rules will apply to the acquisition of solar assets from the Operations Manager or any member of its group and accordingly the Company will seek Shareholder approval, as necessary, for such acquisitions. Further Investments will be subject to satisfactory due diligence and agreement on price which will be negotiated on an arm's length basis and on normal commercial terms. It is anticipated that any Further Investments will be acquired out of existing cash resources, borrowings, funds raised from the issue of new capital in the Company or a combination of the three.

Repowering

The Company has the opportunity to repower the sites in some of the projects in the investment portfolio. For these purposes, repowering will include the removal of substantially all of the old electricity generating equipment in relation to a project, and the construction of new electricity generating equipment excluding, for the avoidance of doubt, repair, maintenance and refurbishment of existing equipment. Where the Company determines to repower a project originally acquired from the Operations Manager, the Operations Manager has the first option to repower such assets in partnership with the Company, whilst the Company has the right to acquire the newly constructed assets on completion, subject to satisfactory due diligence and for a price determined in accordance with a pre-agreed valuation mechanism and on normal commercial terms. Repowering projects will be treated as development or construction activity which, when aggregated with the cost of works to assets under development or construction to which Portfolio Companies are exposed, may not in aggregate account for more than 15 per cent. of the Portfolio Value, calculated at the time of investment or commitment.

Material Amendments

Material changes to the Company's investment policy may only be made in accordance with the approval of the Financial Conduct Authority and the Shareholders (by way of an ordinary resolution) and, for so long as the Ordinary Shares are listed on the Official List, in accordance with the Listing Rules. The investment limits detailed above apply at the time of the acquisition of the relevant investment. The Company will not be required to dispose of any investment or to rebalance its investment portfolio as a result of a change in the respective valuations of its assets. Non-material changes to the investment policy must be approved by the Board, taking into account advice from the Investment Manager and the Operations Manager, where appropriate.

2.4 Market Development

The role of electrification in achieving net zero [15]

Despite the ongoing global pandemic, 2020 has been an important year for the climate change agenda with a significant number of countries pledging to reduce their CO2 emissions levels to help combat climate change in an effort to ensure global warming remains within 2 degrees Celsius of pre-industrial levels by 2100.

Of the major global economies, during 2020 China and Japan joined the European Union and the UK in setting out targets to achieve net-zero emissions by 2060 and 2050, respectively. In the Unites States, President Joe Biden has led the country to re-join the Paris Agreement and to target net-zero carbon emissions by 2050. With a clear global tailwind behind the drive to reduce carbon emissions, policy decisions will be crucial to achieving these bold ambitions.

Importantly, there have been indications on the direction policy will take to achieving net-zero in the Company's core markets of the UK and Europe. For example, the UK Government's Energy White Paper "Powering our net zero future" provides a framework for the UK's path to net zero emissions. It includes significant electrification of heating and transport powered by renewable electricity bringing about a shift to electricity over other forms of power, whilst reducing overall energy consumption. The UK Government's analysis suggests electricity demand could double by 2050.

Similarly, in mainland Europe, significantly increasing electrification of energy use has been identified as essential in the EU's Strategy for Energy System Integration, published in summer 2020. The EU is also focusing on greater electrification of end-use sectors, specifically targeting heating and transport.

In both Europe and the UK, hydrogen has also been identified as a key tool for the decarbonisation of industry and buildings' energy usage where electrification is more difficult to achieve. Hydrogen is also a useful alternative for long-term energy storage to balance variable renewable electricity generation. The cleanest form of hydrogen production utilises renewable energy generation (commonly referred to as "green hydrogen"), though the development of technologies such as Carbon Capture Usage and Storage (CCUS) may also enable hydrogen to be produced using gas but capturing the carbon released by the process (commonly referred to as "blue hydrogen"). It is likely that both hydrogen production techniques will be necessary to decarbonise, with renewable electricity generation playing an essential long-term role in providing green hydrogen.

Building the renewable capacity required for net zero

With renewable electricity demand clearly expected to accelerate as we move towards 2050, there have been a number of pledges made by governments across Europe for the build-out of renewable generation capacity to support this. Reducing capital costs and low operational costs now makes most renewables the cheapest form of electricity generation across Europe - a journey TRIG and its Managers have actively participated in during the last eight years since the Company's launch.

United Kingdom

2020 saw the UK Government commit to holding regular Contract-for-Difference ("CfD") auctions every two years, with the fourth allocation round scheduled for late 2021. This fourth allocation round will reintroduce subsidies for onshore wind and solar. The UK Government is seeking to double the overall capacity awarded in allocation round four to 12GW. TRIG and its Managers each responded to the UK Government's consultation on the proposed amendments to the Contracts for Difference scheme, and will be submitting evidence to the 'Enabling a High Renewable, Net Zero Electricity System: Call for Evidence' consultation. TRIG's Managers also engage directly with policy makers and indirectly through industry bodies such as the Global Infrastructure Investor Association, The Infrastructure Forum and RenewablesUK.

Whilst it is positive for the renewables market in the UK that subsidies will be re-introduced for new onshore wind and solar projects, due to onshore planning and physical constraints it is still expected that the vast majority of renewables capacity developed in the UK will be offshore wind. The UK Government also reiterated its 40GW offshore wind capacity target for 2030. This is juxtaposed with the December 2020 GB power price forecasts that incorporate an assumption of c. 30GW of UK offshore wind is deployed by 2030, which itself is a substantial increase from 10GW today. This difference reflects the ongoing debate regarding the practicalities of the rate of deployment achievable, such as permitting timescales and build capacity; although as industry scales up, faster assumed deployment would put downward pressure on power price forecasts. The power price forecasts are expected to continue to change as market events and the consequences of the commitment to net zero evolve.

During 2020, the UK Government, as part of its Ten Point Plan for a green economic recovery, also set a target of 5GW of low-carbon hydrogen capacity by 2030 aiming to attract GBP4bn of private investment, with a detailed hydrogen strategy to be published in early 2021. Increased demand for electricity would help mitigate the impact of faster renewables deployment on power price forecasts.

Mainland Europe

The most significant EU policy development during 2020 in respect of the net zero carbon transition was the EUR750bn NextGenerationEU recovery fund pledge, as part of the next EU budget, which includes near-term support for renewable auctions and support to meet hydrogen deployment plans of 40GW of electrolyser capacity by 2030. EU member states will now incorporate this funding into established renewables frameworks.

Germany has also published a detailed hydrogen strategy as part of its economic stimulus in response to the Covid-19 pandemic, with EUR9bn of funding for hydrogen projects. The strategy aims to have 5GW of hydrogen production capacity by 2030 with a further 5GW added by 2040. Importantly, the strategy emphasises that green hydrogen is the most sustainable form of hydrogen generation in the long term, which could support demand for excess renewable generation in Germany during periods of high renewable resource.

In 2020, Germany, the Netherlands and Portugal also held auctions for wind and solar co-located with storage - an increasingly important trend to support grid stability. Whilst the past year demonstrated that European grids are capable of managing high levels of variable renewable generation (solar generation peaked at 54% in Spain, whilst Germany saw levels of intermittent renewable generation as high as 57%), the high costs of system flexibility in 2020 highlighted that further investment into grid infrastructure will be essential to decarbonisation.

Energy System Implications

With the increasing imperative to decarbonise energy consumption and utilise renewable electricity wherever possible, the European energy systems will need to adapt. Whilst the Covid-19 pandemic has provided insight into how a system with higher levels of renewable generation may operate, it has also highlighted the need for flexibility in the system as intermittent renewable generation becomes a greater proportion of the energy mix.

As well as the challenge of the physical integration of ever higher levels of intermittent generation, other market challenges will also emerge. With the low marginal cost of renewable electricity, in instances where renewables can meet or exceed the required demand the power price is reduced significantly ("cannibalisation") and can, at times, be negative. This results in increases in expected renewables deployment having a dampening effect on power price forecasts, as renewables are expected to set the power price more than previously expected over the long term. This phenomenon has been a factor behind the reduction in long-term power price forecasts seen over the year and reflected in the Company's 2020 financial performance and portfolio valuation. We discuss this further in Section 2.8 - Valuation of the Portfolio.

Given this dynamic, it is likely that market behaviours will need to change if the desired renewables build out is to be achieved. A suitable investment return is a prerequisite for private sector investment and whilst this return is achievable on current power price trajectories, if the market power price forecasts were to reduce to such an extent that a reasonable return were not achievable this would lead to a slowing in the expected capacity build out for renewables. Allowances are made in the power price forecasts used by TRIG for reductions in the base load prices where renewables set the marginal price more often and for the cannibalisation effect, reducing the captured prices beneath that which would be expected for a base load (i.e. "24/7") generator. Such allowances increase over time in keeping with power price forecasters' assumptions for renewables deployment.

This potentially negative impact on investment into renewables may be addressed by the expansion of subsidy mechanisms, but this may present upwards pressure on subsidy levels if the market power price is not providing sufficient pricing signals for returns to be achieved outside of subsidy periods. The UK Government's call for evidence to enable a high renewable, net zero electricity system is specifically consulting on many of these factors and demonstrates the UK Government's appreciation for the requirement of private capital investment and the importance of a supportive market environment for existing and future investments in renewable capacity.

How society uses energy will necessarily change. Enabling users to shift their demand to react to power pricing in a dynamic way will be essential to the transformation of Europe's energy system to address both physical and market requirements. Similarly, flexibility will also need to be provided through green hydrogen and other storage technologies, such as batteries, leading to smarter matching of the supply and demand for clean electricity. The transition to a net zero carbon energy system necessitates that currently separate networks for electricity, gas for heating and petrol or diesel for transport will increasingly need to become one system, as renewable electricity becomes the bedrock of the future energy system. In such a system, investment from companies such as TRIG will be fundamental to the future wellbeing of our societies and environment.

Expectations in respect of renewables build-out and electricity demand assumptions will evolve as the path to net-zero carbon becomes clearer. Nonetheless, important markers have been laid down by policy makers that point to a substantial role for investors in renewable energy in the energy transition and the Company will continue to play its role in the decarbonisation of energy systems across its key markets.

Portfolio Construction

TRIG invests across Europe in geographies that have a stable regulatory framework in wind, solar and related technologies such as battery storage. Diversification of geography and technology gives the portfolio exposure to different weather systems, regulatory environments and electricity markets while avoiding reliance on any single market. This strategy of portfolio growth and diversification supports the long-term investment proposition of delivering stable and sustainable dividends together with NAV resilience.

Combining assets across the available range of revenue options (from fully subsidised to completely unsubsidised) allows returns to be maintained at attractive levels whilst keeping power price exposure consistent. Increasingly a greater range of tools are becoming available to manage power price risk on assets exposed to market power prices and provide options to hedge power prices at a portfolio level, reducing the overall risk to the portfolio. With the changing dynamics of the energy system, the Managers continue to focus on power price exposure as a key metric to mitigate the risk associated with reductions in power prices.

A consequence of the greater visibility of revenues in the structure of CfDs, such as those used for newer subsidised offshore wind investments, or Feed in Tariffs, is that these projects can accommodate higher levels of financial gearing relative to ROC-subsidised or unsubsidised projects.

Market Outlook

2020 was a turbulent year for the European power sector with a reduction in economic output having a significant impact on the sector. Gas prices reached a low of 3 Euro per megawatt hour whilst electricity consumption fell by significantly across Europe [16] . These factors, combined with record levels of renewable generation, served to depress European power prices through much of 2020. On occasions, a confluence of abundant renewable resource and lower than usual levels of demand due to reduced economic activity led to instances of power prices turning negative in Germany. In the Nordics, where hydro power has a significant impact on short term power prices, higher rainfall contributed to the depression in power prices, but helped to stabilise short term pricing in comparison to other markets.

As economies begin to recover over the course of 2021, and with higher gas prices and thermal generation outages, European power prices are set to recover with forward prices significantly ahead of the troughs seen in early 2020; however, the timing and pace of this recovery is uncertain. In relation to the medium to long term, upcoming policy announcements addressing the plans for electrification will be key to providing the demand for their renewables build-out ambitions.

The Investment Manager's disciplined approach to portfolio construction ensures the Company has a balanced portfolio that is being selectively enhanced through diversifying investments whilst retaining a focus on the power price sensitivity of the portfolio's valuation. There is an attractive pipeline of opportunities after a material slow down in sale processes at the start of the pandemic and the Company, with the support of its shareholders, is in a strong position to benefit and to continue to provide sustainable, long-term returns to shareholders.

2.5 Sustainability

The TRIG Board and its Managers believe that renewable energy is an asset class where it is possible to achieve long-term investment yield whist making a material contribution to lower global carbon emissions.

For TRIG, investing responsibly is essential for us to maintain a sustainable business model over the long term. This goes further than our commitment to reducing carbon emissions through renewables investment but also includes other Environmental, Social and Governance ("ESG") considerations.

TRIG has four ESG goals which we seek to fulfil with every investment we make and as we conduct ourselves on a day-to-day basis:

Mitigate Climate Change

Preserve our natural environment

Positively impact the communities we work in

Maintain ethics and integrity in governance

ESG Objective: to mitigate climate change

Importance

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

Reducing carbon emissions is core to TRIG and its Managers. InfraRed and RES are both carbon neutral companies and offset their business's carbon emissions, including those associated with electricity usage and business travel. In addition, emissions are offset for the TRIG Board for business travel.

RES has also officially committed to the Science Based Targets Initiative (SBTi), the leading standard for corporate emissions reduction targets. This SBTi net-zero strategy aligns with both Managers' vision and TRIG's purpose.

2020 performance:

1.2 million tonnes of carbon emissions avoided ([17]) (2019: 800,000 tonnes)

3,953GWh of renewable electricity generated in the year (2019: 3,036GWh)

1.1 million homes (equivalent) powered by clean energy (2019: 720,000 homes)

72% of UK portfolio sourcing electricity under Renewable Electricity Supply Contracts ([18]) (2019: 52%)

Case Study New ESG-Linked Revolving Credit Facility

In December, TRIG refinanced and expanded its revolving credit facility ("RCF"). This new loan is one of the first ESG-linked SONIA loans of its kind and sets TRIG ambitious but achievable targets, noted below. This underlines TRIG's commitment to sustainability and helps align TRIG's interests with those of its debt and equity investors.

The interest charged in respect of the renewed RCF is linked to the Company's ESG performance. TRIG will incur a premium or reduction to its margin and commitment fee based on performance against defined sustainability targets. Those targets include:

Environmental: increase in the number of homes powered by clean energy from TRIG's portfolio

Social: increase in the number of community funds supported by TRIG

Governance: maintaining a low Lost Time Accident Frequency Rate (LTAFR)

The LTAFR is a key metric monitored by asset owners that measures the number of personnel injured and unable to perform their normal duties for seven days or more for each hundred thousand hours worked. The inclusion of this target aligns the cost of the renewed RCF with a key metric for TRIG: safety at work.

Performance against these targets will be measured annually from 2021 with the cost of the RCF being amended in the following year.

Case Study The carbon payback of windfarms

Elements of a renewable energy project's lifecycle result in carbon emissions, such as construction. Nonetheless, renewable energy projects make a positive contribution towards decarbonisation and limiting global warming to the science-based target of 1.5C by offsetting significantly more carbon emissions than they create.

The carbon payback period of onshore wind farms ranges from six to 12 months. This range includes the carbon associated with decommissioning the site, such as machinery for dismantling on site or transportation of people and waste to and from site. This means that a typical project's carbon emissions are offset in a much shorter timeframe than the intended lifetime of a wind farm.

This carbon payback range for different wind farms depends on the location and environment in which the wind farm has been built. For instance, the carbon payback period of windfarms in the UK is expected to lengthen as the electricity mix continues to decarbonize, thereby reducing the amount of carbon available to be displaced. Site windiness or the disturbance of peat on site also have a major influence on the carbon payback period.

Offshore wind farms have a slightly longer payback period, due to the use of vessels throughout the life cycle of the project, where the distance to shore is a major influence. Material extraction is one of the most carbon intensive aspects of wind turbines. Whilst there is more work to be done by the industry to improve the position further, particularly in respect of blades, overall the materials remain highly recyclable, providing an offset to the emissions at end-of-life if the carbon value of the materials is considered.

Overall, with wind farms expected to have an operational life which is often 30 years or more, the carbon payback ensures that the turbines deliver a net reduction in carbon emissions over the vast majority of their operating lives.

Mapping TRIG's contribution to the United Nations Sustainable Development Goals [19] ("SDGs")

SDG 7 - Affordable and clean energy: TRIG supports increasing the share of renewable energy in the global energy mix, which has a lower marginal cost, helping to keep wholesale electricity prices low. While TRIG constructs some assets, it generally acquires operational assets enabling developers to recycle capital into the build-out of more renewables.

SDG 9 - Industry, innovation and infrastructure : TRIG is responsible for a reliable, sustainable and resilient portfolio which makes renewable energy more affordable for all and supports increased renewables penetration. Where possible, TRIG seeks to upgrade its assets to increase resource use efficiency and with greater adoption of clean and environmentally-sound processes. In doing so, the aim is to improve efficiency and asset longevity, and to use the best, often innovative, operations & maintenance techniques to enhance asset productivity.

ESG Objective: to preserve the natural environment

Importance

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

2020 performance:

14 Active Environmental Management Projects [20] (2019: 12)

Mapping TRIG's contribution to the United Nations Sustainable Development Goals [21] ("SDGs")

SDG 12 - Responsible consumption and production: In its day-to-day asset management and operations maintenance, TRIG uses materials in a sustainable and efficient way where possible. Site managers collaborate across the supply chain to manage materials used by improving waste management, recycling and innovation in construction. When managing TRIG's assets, consideration is given as to how to limit waste through prevention, reduction, recycling and re-use.

SDG 15 - Life on land : Many of TRIG's assets have implemented measures to reduce the degradation of natural habitats and to protect local flora and fauna, including endangered species.

Case Study Garreg Lwyd

Hedgerow monitoring and maintenance is an important part of Garreg Lwyd's Habitat Management Plan.

The plant failure rate is well below the expected failure rate of 10-15% due to the ground and exposure conditions in the location. Other habitat management activities that continue to be surveyed at the site include stream corridors and ponds with associated habitat. These are monitored alongside other key receptors such as bat, dormouse, and great crested newt populations.

BSG Ecology surveyed the site in 2020 and confirmed the ecological success of the plan.

ESG Objective: to impact positively the communities in which TRIG works

Importance

We are sensitive to the impact that a large renewables asset could have on a local community. It is important that our assets make a positive contribution both to the environment and local communities. TRIG's assets are often in rural areas where communities may experience unemployment as well as limited social and health facilities. Local initiatives can produce tangible local benefits. Examples include:

Using local employment and sourcing materials locally where possible;

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

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

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

The Blary Hill project, which commenced construction in the year, is an example of community engagement in action:

As part of the Covid-19 management plan, RES used a local contractor to limit the number of people travelling to site from outside the area and to benefit local businesses.

Prior to works commencing on site, the project team engaged with the chair of the local community council to address any concerns in respect of working practices during the Covid-19 outbreak, with a follow up letter being sent to local residents.

In July 2020, the Blary Hill project team held a virtual 'Meet the Buyer' event during the lockdown to identify further local businesses and suppliers to support the project.

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

2020 performance:

GBP1.2m community investment [22] (2019: GBP950,000)

1,116 properties supported by Local Electricity Discount Schemes (2019: 1,125)

33 community funds (2019: 32)

Case Study Educational site visits

The TRIG Covid-19 Recovery Fund continues to provide important financial support to charities, not-for-profit and voluntary organisations across the UK and Ireland, impacted by Covid-19. Around GBP300,000 has now been distributed providing an array of services including conservation, education, alleviation of fuel poverty and emergency medical intervention. The remaining monies are expected to be distributed early in 2021.

Case Study Wells Community Support Hub, supported by Egmere Solar Farm

The Wells Community Hospital is a local charity that provides health and wellbeing services to the community. In response to the pandemic, a support hub was created with early services including prescription delivery, shopping and other similar services to serve the community. As the pandemic continued, the support hub evolved their services to include signposting to appropriate services, financial help and support, befriending and provision of free hot meals in partnership with a local arts organisation. With local foodbanks unable to cover the Wells area, a food parcel delivery service was initiated in partnership with the Trussell Trust.

The support hub has also been instrumental in the development of a local Good Neighbour Scheme, an initiative of Community Action Norfolk. To promote community cohesion, once regulations allow, all people supported through the hub will be invited to social meetings within the grounds of the hospital where they have a landscaped sensory garden. A donation of GBP3,500 was made to the support hub to help them continue their important work.

Case Study Keep Northern Ireland Beautiful, supported by Lough Hill Wind Farm

Keep Northern Ireland Beautiful is an independent charity dedicated to creating a cleaner and more sustainable Northern Ireland by improving environmental education, increasing public engagement for communities in need and raising environmental standards.

As a direct response to Covid-19, Keep Northern Ireland Beautiful ran their pilot "Food for Thought" programme. Over 500 food growing packs were distributed to those identified as most in need, followed by a course of 12 webinars covering growing and caring for their homegrown food and healthy cooking classes using this produce.

Covid-19 has reinforced the need for localisation and food sustainability and the TRIG Covid Fund has provided GBP10,000 for an expansion to the "Food for Thought" initiative with the "Fruit for Thought" scheme. The scheme will plant two community orchards at two schools within the Lough Hill Wind Farm catchment area. Benefits of the planting scheme include education in fruit growing and cookery and improved biodiversity to the area.

Workshops will be delivered at both schools covering engagement, site planning and then prepping and planting. These workshops will be followed up with sessions on maintenance and preserving the sites and its produce so both schools will be in a good position to manage their own orchards once established.

Mapping TRIG's contribution to the United Nations Sustainable Development Goals [23] ("SDGs")

SDG 11 - Sustainable cities and communities : TRIG implements measures to improve the quality of life for the local communities in which it operates, for example through hiring local contractors to improve local employment or donating to community funds. Such measures enable communities to be inclusive, safe and sustainable.

SDG 4 - Quality education: TRIG is able to help local schools add colour to their curriculum relating to climate change, energy and renewables and also to inspire young people about potential careers in an evolving industry. This is especially important because many of TRIG's assets are located in rural areas where employment options are limited.

ESG Objective: to maintain ethics and integrity in governance

Importance

For TRIG to perform its fiduciary function for its shareholders and to continue to operate over the longer-term, it is essential that TRIG is run responsibly and that the highest standards of ethics and integrity in governance are maintained across all areas including health and safety, managing conflicts of interests, and maintaining policies.

The Board has overall responsibility for TRIG's Sustainability Policy (www.trig-ltd.com/investor-relations/reports-publications) and its application, whilst the day-to-day management of the portfolio is delegated to both Managers.

InfraRed, the Investment Manager publishes its own sustainability policy, including its approach to the integration of sustainability considerations into the investment cycle, on InfraRed's website (www.ircp.com/sustainability-policy).

RES work together with InfraRed to ensure that Sustainability considerations are also prioritised in the ongoing management and reporting of the assets throughout the ownership period. The Project Company Boards maintain a responsibility to review and update SPV policies on an annual basis. This includes HSQE, Tax, ESG, and Cybersecurity.

RES, the Operations Manager, leads management of project level ESG policies and activities, whilst actively overseeing the ESG KPIs, community outreach activities, and health and safety standards.

Both Managers stress ethics and integrity in their own governance and believe it is vital to consider the needs of all stakeholders. They maintain policies on Sustainability, Modern Slavery, Diversity & Inclusion, and Whistleblowing and publish their own Sustainability Reports available on both the InfraRed and RES websites.

RES also achieved a new accreditation under ISO 55001 within 2020. ISO (International Organisation for Standardization) accreditation is an independently recognized standard for quality management systems. Certification to ISO 55001 provides a tangible measure of the capability and approach of RES as an asset manager, providing assurance to stakeholders through on-going validation of the value improvement process through external audits.

ISO 55001 provides a framework to:

Provide end-to-end lifecycle asset management;

Successfully optimise asset management

Optimise plant and equipment;

Adopt a risk-based approach;

Identify opportunities for value improvement;

Identify and manage asset risks;

Improve ESG performance.

Achieving and maintaining ISO accreditation demonstrates a commitment to providing consistently high quality services. RES is one of the first renewables asset managers in the UK and Ireland to achieve this standard.

RES already holds accreditation to various ISO management standards that provide assurance of a high level of service for TRIG sites including:

ISO 9001 - Quality Management

ISO 18001 - Environmental Management

ISO 45001 - Health & Safety Management

ISO 55001 compliments these standards and is intrinsically linked to work together.

2020 performance:

0.49 Reportable Lost Time Accidents per 100,000 hours [24] (2019: 0)

"A+" PRI rating achieved by InfraRed's Infrastructure division for the sixth consecutive year

60% female Board (2019: 50%)

Case Study Ethical governance

An investment opportunity was declined during the year, following due diligence findings in respect of birdlife protection. The findings meant that it was not clear whether the investment economics, particularly in respect of environmental permitting, could be delivered. Therefore, the opportunity did not present appropriate risk-reward dynamics for TRIG.

TRIG's Managers

Over 2020 InfraRed and RES have made further progress in enhancing and delivering their sustainability programmes in line with industry best practices.

InfraRed highlights of 2020 include:

Introducing new sustainability reporting framework across InfraRed to measure performance against a wider base of Sustainability KPIs.

Refining investment processes to include the introduction of early sustainability screening to ensure that InfraRed only pursues opportunities that align with its Sustainability Policy and key risks and opportunities are identified at the outset. While TRIG has its own Sustainability Policy, InfraRed's policy is also applied to the management of TRIG and its portfolio.

All InfraRed partners and employees have been set a sustainability objective reflective of their role, which directly impacts their performance assessment and overall remuneration.

InfraRed appointed a full-time Sustainability Manager to oversee the wider sustainability programme at InfraRed, but foremost to ensure investment and asset management processes comprehensively incorporate sustainability risks and considerations.

InfraRed became a certified CarbonNeutral(R) company, effective from 1 January 2019, and will remain carbon neutral as it firstly reduces, then offsets future carbon emissions.

InfraRed became a Supporter of the recommendations of the Task Force on Climate-related Financial Disclosures.

Sustainability has been at the heart of RES' activities since it commenced operation since 1982 as a pioneer in the development and deployment of wind energy projects, which has expanded over the years to encompass solar, offshore wind, storage as well as involvement in many other renewable technologies.

RES has:

Committed to the Science Based Targets Initiative. This initiative champions the adoption of "science-based" GHG emission reduction targets in-line with what the latest climate science says is necessary to meet the goals of the Paris Agreement;

Developed and produced annual Power for Good Report (https://www.res-group.com/media/342469/powerforgoodreport_2020.pdf);

Continued efforts in its Technology Recycling TaskForce, to maximise recycling in multiple technologies from turbine blades and PV modules to batteries;

Signed the New Plastics Economy Global Commitment, led by the Ellen MacArthur Foundation. As a signatory, RES will continue to work to eliminate unnecessary plastic.

Mapping TRIG's contribution to the United Nations Sustainable Development Goals [25] ("SDGs")

SDG 13 - Climate action: TRIG supports Climate Action primarily by integrating climate change measures into its policies and planning and by seeking to raise awareness of how to mitigate climate change. For example, climate change related risks are considered in the investment process and ongoing management of TRIG's assets. TRIG makes climate change risk disclosures in line with the Taskforce for Climate-related Financial Disclosure ("TCFD").

SDG 5 - Gender equality: TRIG's Board have chosen to adopt definitive policies with quantitative targets for Board diversity. The Managers report to the Board their progress on inclusion and diversity in the workplace.

SDG 3 - Good health and well-being: Health and Safety matters are reported to the Board on a quarterly basis. Asset managers and operations and maintenance contractors are required to have appropriate health and safety procedures in place and these are monitored on a regular basis.

2.6 Portfolio

The TRIG portfolio as at 31 December 2020 plus Beatrice Offshore wind farm and Grönhult onshore windfarm (both announced subsequent to the financial year end), includes 77 investments in the UK, Republic of Ireland, France, Sweden and Germany comprising 47 wind projects, 28 solar PV projects, one battery storage project and one mezzanine debt investment in a mixed portfolio

 
 Project                                            TRIG's  Net Capacity  Year Commissioned3 
                                                    Equity          (MW) 
                                               Interest(2) 
 Onshore wind Farms 
                           -----------------  ------------  ------------  ------------------ 
 Roos                           GB (England)          100%          17.1                2013 
                           -----------------  ------------  ------------  ------------------ 
 Grange                         GB (England)          100%          14.0                2013 
                           -----------------  ------------  ------------  ------------------ 
 Tallentire                     GB (England)          100%          12.0                2013 
                           -----------------  ------------  ------------  ------------------ 
 Garreg Lwyd                      GB (Wales)          100%          34.0                2017 
                           -----------------  ------------  ------------  ------------------ 
 Crystal Rig 2                 GB (Scotland)           49%          67.6                2010 
                           -----------------  ------------  ------------  ------------------ 
 Hill of Towie                 GB (Scotland)          100%          48.3                2012 
                           -----------------  ------------  ------------  ------------------ 
 Mid Hill                      GB (Scotland)           49%          37.2                2014 
                           -----------------  ------------  ------------  ------------------ 
 Blary Hill(4)                 GB (Scotland)          100%          35.0                2022 
                           -----------------  ------------  ------------  ------------------ 
 Paul's Hill                   GB (Scotland)           49%          31.6                2006 
                           -----------------  ------------  ------------  ------------------ 
 Crystal Rig 1                 GB (Scotland)           49%          30.6                2003 
                           -----------------  ------------  ------------  ------------------ 
 Solwaybank                    GB (Scotland)          100%          30.0                2020 
                           -----------------  ------------  ------------  ------------------ 
 Green Hill                    GB (Scotland)          100%          28.0                2012 
                           -----------------  ------------  ------------  ------------------ 
 Little Raith                  GB (Scotland)          100%          24.8                2012 
                           -----------------  ------------  ------------  ------------------ 
 Rothes 1                      GB (Scotland)           49%          24.8                2005 
                           -----------------  ------------  ------------  ------------------ 
 Freasdail                     GB (Scotland)          100%          22.6                2017 
                           -----------------  ------------  ------------  ------------------ 
 Rothes 2                      GB (Scotland)           49%          20.3                2013 
                           -----------------  ------------  ------------  ------------------ 

 Earlseat                      GB (Scotland)          100%          16.0                2014 
                           -----------------  ------------  ------------  ------------------ 
 Meikle Carewe                 GB (Scotland)          100%          10.2                2013 
                           -----------------  ------------  ------------  ------------------ 
 Neilston                      GB (Scotland)          100%          10.0                2017 
                           -----------------  ------------  ------------  ------------------ 
 Forss                         GB (Scotland)          100%           7.5                2003 
                           -----------------  ------------  ------------  ------------------ 
 Altahullion                SEM (N. Ireland)          100%          37.7                2003 
                           -----------------  ------------  ------------  ------------------ 
 Lendrum's Bridge           SEM (N. Ireland)          100%          13.2                2000 
                           -----------------  ------------  ------------  ------------------ 
 Lough Hill                 SEM (N. Ireland)          100%           7.8                2007 
                           -----------------  ------------  ------------  ------------------ 
                                SEM (Rep. of 
 Pallas                             Ireland)          100%          55.0                2008 
                           -----------------  ------------  ------------  ------------------ 
                                SEM (Rep. of 
 Taurbeg                            Ireland)          100%          25.3                2006 
                           -----------------  ------------  ------------  ------------------ 
                                SEM (Rep. of 
 Milane Hill                        Ireland)          100%           5.9                2000 
                           -----------------  ------------  ------------  ------------------ 
                                SEM (Rep. of 
 Beennageeha                        Ireland)          100%           4.0                2000 
                           -----------------  ------------  ------------  ------------------ 
 Haut Vannier(4)              France (North)          100%          43.0                2022 
                           -----------------  ------------  ------------  ------------------ 
 Venelle                      France (North)          100%          40.0                2020 
                           -----------------  ------------  ------------  ------------------ 
 Epine                        France (North)          100%          36.0                2019 
                           -----------------  ------------  ------------  ------------------ 
 Rosières                France (North)          100%          17.6                2018 
                           -----------------  ------------  ------------  ------------------ 
 Energie du Porcien           France (North)           42%          16.3                2012 
                           -----------------  ------------  ------------  ------------------ 
 Montigny                     France (North)          100%          14.2                2018 
                           -----------------  ------------  ------------  ------------------ 
 Les Vignes                   France (North)           42%           5.2                2009 
                           -----------------  ------------  ------------  ------------------ 
 Fontaine-Mâcon          France (North)           42%           5.1                2011 
                           -----------------  ------------  ------------  ------------------ 
 Haut Languedoc               France (South)          100%          29.9                2006 
                           -----------------  ------------  ------------  ------------------ 
 Haut Cabardes                France (South)          100%          20.8                2006 
                           -----------------  ------------  ------------  ------------------ 
 Cuxac Cabardes               France (South)          100%          12.0                2006 
                           -----------------  ------------  ------------  ------------------ 
 Roussas-Claves               France (South)          100%          10.5                2006 
                           -----------------  ------------  ------------  ------------------ 
 Rully                        France (North)           42%           5.0                2010 
                           -----------------  ------------  ------------  ------------------ 
 Val de Gronde                France (North)           37%           4.5                2011 
                           -----------------  ------------  ------------  ------------------ 
 Jädraås                    Sweden          100%         212.9                2013 
                           -----------------  ------------  ------------  ------------------ 
 Grönhult                        Sweden          100%          67.0                2022 
                           -----------------  ------------  ------------  ------------------ 
 Total onshore wind at 
  31 December 2020 incl. 
  Grönhult                                                  1,210.5 
                                              ------------  ------------  ------------------ 
 Offshore wind Farms 
                           -----------------  ------------  ------------  ------------------ 
 East Anglia 1                  GB (England)         14.3%         102.1                2020 
                           -----------------  ------------  ------------  ------------------ 
 Sheringham Shoal               GB (England)         14.7%          46.6                2012 
                           -----------------  ------------  ------------  ------------------ 
 Beatrice(5)                   GB (Scotland)         17.5%         102.9                2018 
                           -----------------  ------------  ------------  ------------------ 
 Merkur                              Germany           25%          99.0                2019 
                           -----------------  ------------  ------------  ------------------ 
 Gode Wind 1                         Germany           25%          82.5                2017 
                           -----------------  ------------  ------------  ------------------ 
 Total offshore wind at 
  31 December 2020 incl. 
  Beatrice                                                         433.1 
                                              ------------  ------------  ------------------ 
 
 
 Project                                 Market (Region)(1)      TRIG's  Net Capacity  Year Commissioned3 
                                                                 Equity          (MW) 
                                                              Interest2 
 Solar Photovoltaic Parks 
                                     ----------------------  ----------  ------------  ------------------ 
 Parley Court                                  GB (England)        100%          24.2                2014 
                                     ----------------------  ----------  ------------  ------------------ 
 Egmere Airfield                               GB (England)        100%          21.2                2014 
                                     ----------------------  ----------  ------------  ------------------ 
 Stour Fields                                  GB (England)        100%          18.7                2014 
                                     ----------------------  ----------  ------------  ------------------ 
 Tamar Heights                                 GB (England)        100%          11.8                2014 
                                     ----------------------  ----------  ------------  ------------------ 
 Penare Farm                                   GB (England)        100%          11.1                2014 
                                     ----------------------  ----------  ------------  ------------------ 
 Four Burrows                                  GB (England)        100%           7.2                2015 
                                     ----------------------  ----------  ------------  ------------------ 
 Parsonage                                     GB (England)        100%           7.0                2013 
                                     ----------------------  ----------  ------------  ------------------ 
 Churchtown                                    GB (England)        100%           5.0                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 East Langford                                 GB (England)        100%           5.0                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Manor Farm                                    GB (England)        100%           5.0                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Marvel Farms                                  GB (England)        100%           5.0                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Midi                                        France (South)         51%           6.1                2012 
                                     ----------------------  ----------  ------------  ------------------ 
 Plateau                                     France (South)         49%           5.9                2012 
                                     ----------------------  ----------  ------------  ------------------ 
 Puits Castan                                France (South)        100%           5.0                2011 
                                     ----------------------  ----------  ------------  ------------------ 

 Chateau                                     France (South)         49%           1.9                2012 
                                     ----------------------  ----------  ------------  ------------------ 
 Broussan                                    France (South)         49%           1.0                2012 
                                     ----------------------  ----------  ------------  ------------------ 
 Pascialone                                France (Corsica)         49%           2.2                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Olmo 2                                    France (Corsica)         49%           2.1                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Santa Lucia                               France (Corsica)         49%           1.7                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Borgo                                     France (Corsica)         49%           0.9                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Agrinergie 1 & 3                     France (Réunion)         49%           1.4                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Chemin Canal                         France (Réunion)         49%           1.3                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Ligne des 400                        France (Réunion)         49%           1.3                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Agriso(l)                            France (Réunion)         49%           0.8                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Agrinergie 5                         France (Réunion)         49%           0.7                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Logistisud                           France (Réunion)         49%           0.6                2010 
                                     ----------------------  ----------  ------------  ------------------ 
 Sainte Marguerite                      France (Guadeloupe)         49%           1.2                2011 
                                     ----------------------  ----------  ------------  ------------------ 
 Marie Galante                          France (Guadeloupe)         49%           1.0                2010 
                                     ----------------------  ----------  ------------  ------------------ 
 Total solar at 31 December 
  2020                                                                          156.3 
                                                             ----------  ------------  ------------------ 
 Battery Energy Storage/ 
  Mixed portfolio 
                                     ----------------------  ----------  ------------  ------------------ 
 Broxburn Energy Storage                      GB (Scotland)        100%          20.0                2018 
                                     ----------------------  ----------  ------------  ------------------ 
 Phoenix SAS Mezzanine                               France          0%             -                2015 
  Loan(6) 
                                     ----------------------  ----------  ------------  ------------------ 
 Total Portfolio at 31 
  December 2020 
  incl. Beatrice and Grönhult 
  (77 assets)(5)                                                              1,819.9 
                                                             ----------  ------------  ------------------ 
 Operating assets                                                             1,644.9 
                                                             ----------  ------------  ------------------ 
 Construction assets4                                                           175.0 
                                                             ----------  ------------  ------------------ 
 Contracted to acquire(5)                                                       169.9 
                                                             ----------  ------------  ------------------ 
 Total Portfolio at 31 
  December 2020 
  incl. Beatrice and Grönhult 
  (77 assets)(5)                                                              1,819.9 
                                                             ----------  ------------  ------------------ 
 

1 SEM refers to the Irish Single Electricity Market.

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

3. Where a project has been commissioned in stages, this refers to the earliest commissioning date. For construction assets, this refers to expected completion date.

4. Blary Hill and Haut Vannier are under construction.

5. An investment in Beatrice offshore wind farm was announced in January 2021 and is expected to complete later in Q1 2021, and an investment in the construction project Grönhult onshore wind farm was announced in February 2021.

6. This investment is in the form of mezzanine level bonds where the Company does not have an equity stake. The portfolio comprises five onshore wind farms in Northern France with a combined capacity of 74MW and four operational solar parks with battery storage located on the islands of Corsica and La Réunion with a combined capacity of 29MW ("the Portfolio"). All the Portfolio assets are backed by the French government's Feed-in-Tariff subsidy and have an average year of commission of 2015.

Portfolio Diversification

The TRIG portfolio benefits from being diversified across jurisdictions, power markets and generating technologies providing multiple revenue sources (contracted and/or subsidy sources and merchant sales into wholesale markets) as well as a variety of geographic areas with differing meteorological conditions (affecting wind speeds and solar irradiation applicable to each of TRIG's projects) and regulations. This is illustrated in the tables below, which is presented by project value as at 31 December 2020.

The tables below include all assets on a fully invested basis as at 31 December 2020 including the mezzanine level debt investment in Phoenix SAS and separately a fully committed basis including Beatrice and Grönhult.

Portfolio as at 31 December 2020

By Country/Power Market(1,2)

 
                England  Scotland  Northern     Republic  France  Sweden  Germany 
                & Wales      (GB)   Ireland   of Ireland 
                   (GB)               (SEM)        (SEM) 
Invested 
 basis at 
 31 December 
 2020               32%       25%        3%           3%     14%      9%      14% 
               --------  --------  --------  -----------  ------  ------  ------- 
Committed 
 basis at 
 16 February 
 2021               27%       33%        3%           3%     12%     10%      12% 
               --------  --------  --------  -----------  ------  ------  ------- 
 

By Technology(1)

 
                  Onshore wind  Offshore wind  Solar PV  Battery 
Invested basis 
 at 31 December 
 2020                      60%            28%       11%       1% 
                  ------------  -------------  --------  ------- 
Committed basis 
 at 16 February 
 2021                      55%            35%        9%       1% 
                  ------------  -------------  --------  ------- 
 

By Project Revenue Type

 
                 Indexed fixed  Indexed ROC  ROC Recycle   PPA Market  PPA Market 
                   PPAs & FiTs       Buyout    and Other   Revenue at     Revenue 
                                                                Floor 
Next 12 months             65%          17%           2%           4%         12% 
                 -------------  -----------  -----------  -----------  ---------- 
 

1 The segmentation above for investment commitments includes Beatrice as well as Grönhult and Blary Hill which are under construction.

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

Revenue Profile

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

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

In the longer term, based on its current portfolio, TRIG is expected to have greater exposure to future wholesale electricity prices as subsidies and contracts with pre-determined pricing run-off. As existing fixed-price contracts expire, the replacement contracts may also have fixed-price elements, and any future additions to the portfolio may have subsidies, decreasing the merchant proportion.

Acquisitions and Outstanding Commitments

The Group made gross investments in the year totalling GBP588m (excludes Beatrice offshore wind farm investment announced in January 2021 and Grönhult Onshore wind farm investment announced in February 2021), with divestment proceeds of GBP118m relating to the disposal of Estrask and the partial sell-down of Merkur, resulting in net investments made of GBP470m.

As at the date of this report, The Group has commitments of GBP392m relating to Blary Hill wind farm (in construction), Beatrice offshore wind farm and Grönhult onshore wind farm. The investments in Beatrice and Grönhult were announced after the year end. The investment in Beatrice is expected to complete later in Q1 2021, whilst the investment in Grönhult, a construction asset, will occur over the period of construction.

Investments Made

 
                                                                                                                             % of 
                                                                                                                        portfolio 
                                                                          Net                                                on a 
                                                                          Capacity                                      committed 
 Date                         Investment     Year             Equity      (MW)      Revenue                                 basis 
 Acquired    Project           type           commissioned     Share      [26]       Type [27]                Location       [28] 
                                             2022 
             Blary                            (currently 
 January      Hill onshore    New             under                                  Wholesale 
  2020        wind farm        investment     construction)   100%        35MW        market                   UK              2% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
             Merkur 
              offshore        New 
 May 2020     wind farm        investment    June 2019        24.6%       99.0MW     Feed-in-Tariff            Germany         7% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
             Fujin                                            Increased 
              onshore                                          from 
              wind farm                                        35% to 
 May 2020     portfolio       Incremental    2009-2012         42%        36MW       Feed-in-Tariff            France          1% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
                                             Due 2022 
             Haut Vannier                     (currently 
 October      onshore         New             under 
  2020        wind farm        Investment     construction)   100%        43MW       Contract-for-Difference   France          1% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
             East Anglia 
 November     1 offshore      New 
  2020        wind farm        Investment    2020             14.3%       102.1MW    Contract-for-Difference   UK              9% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
             Phoenix 
              SAS onshore 
              wind,           New 
              solar            Investment 
 December     & battery        - mezzanine   2015 (Weighted 
  2020        portfolio        debt           average)        0% [29]     74MW       Feed-in-Tariff            France          2% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
 Announced after 31 December 2020 
             Beatrice 
 January      offshore        New 
  2021        wind farm        Investment    2018             17.5%       102.9MW    Contract-for-Difference   UK             12% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
                                             Due 2022 
             Grönhult                    (currently 
 February     onshore         New             under                                  Wholesale 
  2021        wind farm        Investment     construction)   100%        67MW        Market                   Sweden          3% 
            ---------------  -------------  ---------------  ----------  ---------  ------------------------  --------  --------- 
 

Outstanding Commitments

 
                           H1 2021  H2 2021  H1 2022  Total 
 Outstanding Commitments 
  (GBPm)                       313       26       53    392 
-------------------------  -------  -------  -------  ----- 
 

At the date of this Annual report and following the initial investment in the Grönhult onshore wind farm which was announced in February 2020 and which is in construction, the Company is GBP65m drawn on its Revolving Credit Facility, having been GBP40m drawn at 31 December 2020. The Company has commitments falling due in H1 2020 of GBP313m mainly relating to the completion of the investment in the Beatrice offshore wind farm.

Projects Under Construction

By acquiring assets at an earlier stage in their development, TRIG seeks to access improved returns and enhanced deal flow. Moreover, TRIG has been able to seek value by capitalising on its Managers' expertise in the construction process: InfraRed as greenfield investor across its unlisted vehicles over many years and RES as a developer and/or constructor of over 16GW of renewable assets globally.

Vannier, the second project acquired from Envision, has commenced construction - but is currently on hold due to a challenge against an environmental permit. With commercial protection in place, the turbines are still being shipped from China, whilst legal proceedings continue. During 2020 TRIG acquired and commenced construction on the Blary Hill and Haut Vannier projects, in the UK and France respectively, as shown in the table of investments made during the year and post balance sheet date.

During 2020 construction was successfully completed by RES on Solwaybank, a UK onshore wind farm acquired in June 2018 and by Envision on Venelle, a French onshore wind farm acquired in March 2019, despite the challenges presented by the Covid-19 and the requirement to switch turbine supplier at Solwaybank.

6% of TRIG's portfolio by value, on a fully committed basis i.e. including investment commitments in Beatrice and Grönhult, was allocated to investments in construction assets, against an investment policy limit of 15%.

Ten Largest Investments

Set out below are the ten largest investments in the portfolio. As at 31 December 2020, the largest investment (East Anglia 1) accounted for approximately 10% of the portfolio by value. In total, the 10 largest projects accounted for approximately 55% of the project portfolio by value (2019: 52%).

 
                         Ten Largest Investments - Invested to date basis 
                                                        % of portfolio by 
                                                                 value at 
                     -----------  -------------  ------------------------ 
                                                 31 December  31 December 
 Project                Location           Type         2020         2019 
                     -----------  -------------  -----------  ----------- 
                                       Offshore 
 East Anglia 1           England           Wind          10%            - 
                     -----------  -------------  -----------  ----------- 
 Jädraås        Sweden   Onshore Wind           9%          11% 
                     -----------  -------------  -----------  ----------- 
                                       Offshore 
 Merkur                  Germany           Wind           8%            - 
                     -----------  -------------  -----------  ----------- 
                                       Offshore 
 Gode                    Germany           Wind           6%           9% 
                     -----------  -------------  -----------  ----------- 
                                        Onshore 
 Garreg Lwyd               Wales           Wind           5%           7% 
                     -----------  -------------  -----------  ----------- 
                                        Onshore 
 Solwaybank             Scotland           Wind           4%           3% 
                     -----------  -------------  -----------  ----------- 
                                       Offshore 
 Sheringham Shoal        England           Wind           4%           5% 
                     -----------  -------------  -----------  ----------- 
                                        Onshore 
 Crystal Rig II         Scotland           Wind           3%           4% 
                     -----------  -------------  -----------  ----------- 
                                        Onshore 
 Pallas                  Ireland           Wind           3%           5% 
                     -----------  -------------  -----------  ----------- 
 Mid Hill               Scotland   Onshore Wind           2%           3% 
                     -----------  -------------  -----------  ----------- 
 December 2020 largest ten investments              55% [30]          46% 
                                                 -----------  ----------- 
                                        Onshore 
 Altahullion          N. Ireland           Wind           2%           3% 
                     -----------  -------------  -----------  ----------- 
                                        Onshore 
 Little Raith           Scotland           Wind           2%           3% 
                     -----------  -------------  -----------  ----------- 
 December 2019 largest ten investments                                52% 
                                                 -----------  ----------- 
 
 

              Ten Largest Investments - Committed to date basis 
                                                 % of portfolio 
                                                       by value 
                                                             at 
                                                    31 December 
 Project               Location           Type             2020 
                     ----------  -------------  --------------- 
                                      Offshore 
 Beatrice               England           Wind              12% 
                     ----------  -------------  --------------- 
                                      Offshore 
 East Anglia 1          England           Wind               9% 
                     ----------  -------------  --------------- 
 Jädraås       Sweden   Onshore Wind               7% 
                     ----------  -------------  --------------- 
                                      Offshore 
 Merkur                 Germany           Wind               7% 
                     ----------  -------------  --------------- 
                                      Offshore 
 Gode                   Germany           Wind               5% 
                     ----------  -------------  --------------- 
                                       Onshore 
 Garreg Lwyd              Wales           Wind               5% 
                     ----------  -------------  --------------- 
                                       Onshore 
 Solwaybank            Scotland           Wind               4% 
                     ----------  -------------  --------------- 
 Grönhult           Sweden   Onshore Wind               3% 
                     ----------  -------------  --------------- 
                                      Offshore 
 Sheringham Shoal       England           Wind               3% 
                     ----------  -------------  --------------- 
                                       Onshore 
 Crystal Rig II        Scotland           wind               3% 
                     ----------  -------------  --------------- 
 December 2020 largest ten investments                 57% [31] 
                                                --------------- 
 

2.7 Operational Review

The Company sets out below its key metrics which it utilises to track its performance over time against its objectives.

Operational Metrics

 
                                                            Operating 
                                                              history 
                                                           (portfolio 
                             Largest                         weighted   Electricity      Average 
                              single            Largest      average)    Production      Revenue 
 Metrics                  investment    ten investments         years    % increase    (GBP/MWh) 
                               as % of portfolio 
                                 by value [32] 
                        -------------------------------  ------------  ------------  ----------- 
                                                                           3,953GWh 
   (Year to)      2020           10%                55%     4.7 years          +30%        96.22 
       31 December 
                        ------------  -----------------  ------------  ------------  ----------- 
                                                                           3,036GWh 
                  2019           11%                52%     5.6 years          +51%        90.55 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
                                                                           2,042GWh 
                  2018            9%                51%     5.4 years          +16%       105.63 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
                                                                           1,766GWh 
                  2017           10%                52%     5.7 years          +20%        92.44 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
                                                                           1,469GWh 
                  2016           11%                52%     6.7 years           +9%        82.83 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
                                                                           1,344GWh 
                  2015           12%                56%     5.9 years          +65%        78.63 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
                  2014           10%                65%     5.0 years  814GWh +136%        84.43 
 ---------------------  ------------  -----------------  ------------  ------------  ----------- 
 

TRIG Portfolio Update

The portfolio performed well across the year, delivering a 1.3% positive generation variance to budget, ultimately stemming from the exceptional first quarter. Very strong production in January to March arose from good wind resource in all regions. Whilst the Scandinavian wind assets and solar assets continued to perform well, the positive impact of the first quarter was partially offset by below budget production from April to June and from August to the end of the year. Good wind resource dominated the beginning of the year, while grid unavailability dampened performance over the latter part of the year.

Regional Commentary

The table below shows the TRIG share of production by region against budget across the year.

 
                   Year ended 31 December 
                            2020 
                         Production 
                ---------------------------- 
                    Actual      Budget  Var. 
 Portfolio             MWh         MWh     % 
                ----------  ----------  ---- 
 GB Wind         1,321,076   1,250,173    6% 
                ----------  ----------  ---- 
 Offshore          905,604     971,589   -7% 
                ----------  ----------  ---- 
 Scandinavia       707,097     635,810   11% 
                ----------  ----------  ---- 
 France Wind       505,002     519,253   -3% 
                ----------  ----------  ---- 
 Ireland Wind      341,907     358,653   -5% 
                ----------  ----------  ---- 
 Solar             171,963     168,320    2% 
                ----------  ----------  ---- 
 Total           3,952,648   3,903,798  1.3% 
                ----------  ----------  ---- 
 

GB Wind

Generation was 6% above budget due to high wind resource in the first quarter. Operational performance for the year has been positive for all sites, with the exception of Little Raith.

Little Raith was acquired in late 2019 and suffered availability issues, for which compensation will be provided by the operations and maintenance provider. The availability issues were linked to pitch faults, which have been resolved through a series of planned upgrades performed in the second half of the year reducing the associated downtime and positioning the site well for the year ahead.

Solwaybank wind farm, located just north of Gretna in western Scotland, was commissioned in December 2020 and has entered the operational phase. During construction the site made good use of local stone and has planted more than 90,000 trees of varying variety including 14,000 native non-commercial broadleaf trees. The site has started active habitat management with water quality monitoring, peat dam surveys and habitat surveys.

Construction has started at Blary Hill wind farm on the Kintyre Peninsula in western Scotland and is progressing well with the targeted commercial operation date in January 2022.

Offshore Wind

TRIG's offshore generation was hampered by a month-long grid outage at Gode in the German North Sea, with Merkur also suffering grid outages earlier in the year. Within the UK North Sea, Sheringham Shoal ended the year up on budget.

At Gode, the combination of wind, negative pricing events and grid availability resulted in negative budget variance for the year. Merkur saw the introduction of a new Service Operation vessel this year which should lead to improved availability at the site.

Scandinavia Wind

Scandinavia performed strongly with production well above budget due to high wind resource with good availability.

As previously disclosed within the interim accounts, TRIG exercised its right to return the Ersträsk project (part of which was operational and part of which was under construction), to Enercon following a series of construction delays. Due to the contractual measures in place, the Company bore no construction or delay risks and therefore suffered no financial loss.

France Wind

Good availability from the newer sites in the north ensured the region benefited from the strong wind resource in the first and fourth quarter of 2020. The older sites in the south faced some operational challenges in the first half of the year. There were minor delays to repairs due to Covid-19 which have since been rectified with much improved availability and repowering work progressing well. In October, Envision achieved full commissioning of Venelle despite significant Covid-19-related delays, with the original take-over targeted in January 2020.

Vannier, also being built by Envision, has commenced construction, but is currently on hold due to an unexpected technical challenge against an environmental permit. It is hoped that this will be rectified in the coming months enabling construction to restart, and TRIG has the benefit of contractual protection. The project accounts for 1% of TRIG's portfolio.

Northern Ireland and Republic of Ireland Wind

The Ireland region enjoyed good wind resource but ended the year 5% below budget due to high regional grid curtailments, which had an approximate 10% impact upon production. TRIG has been represented by RES grid specialists throughout the year within an IWEA [33] working group, seeking grid improvements on curtailment and constraint issues across Ireland.

Despite restricted movement and health and safety guidelines relating to Covid-19, all Irish sites continued operating well with major component replacements being performed as required, benefitting from RES O&M stepping in for essential major component work on sites throughout the year.

GB Solar

GB solar generation was above budget due to high irradiation in the first half of the year. Rectification works and associated packages were completed at Penare, with Parley and Egmere sites due to follow during 2021, but are currently delayed due to Covid-19. As solar parks in some areas of England have increasingly been targeted by thieves, stealing panels or cabling, a range of advanced security measures are being applied across much of the GB portfolio.

A program of proactive inverter replacements was completed across the Cornwall Solar sites, replacing inverter technology which had performance issues, which will further improve the operating resilience of the portfolio.

Long-term Portfolio Performance against Budget

While there is some variance from month to month and year to year, performance during 2020 remains within long-term expectations. The geographical and technological diversity of the TRIG portfolio has provided good resilience to varying weather conditions, with total production close to budget since IPO.

Operational Enhancements

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

Examples of some of the commercial and technical value enhancements secured in 2020 include:

Yield-enhancing turbine upgrades: potential yield uplifts were assessed and implemented across the portfolio, including:

High Wind Ride Through upgrade at Crystal Rig 2, Rothes 2 and Mid Hill, increasing production by enabling turbines to continue generating at higher wind speeds

Energy Thrust upgrade at Meikle Carewe, increasing production through employing sensors to change the operating parameters dynamically as weather conditions change

Winter Ice Operation Mode implementation at recent acquisition Little Raith, improving turbine performance during icy periods, with site-specific technical assessment conducted to ensure the site continues to be operated safely.

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

Enhancing revenue: additional revenue streams were secured for TRIG's first subsidy-free GB windfarm, Blary Hill, through a 15-year Capacity Market contract

Reducing operational costs through technical expertise: grid settings were promptly rectified on a recent operational acquisition reducing ongoing grid charges, and bespoke CCTV solution implemented for French windfarms at significantly reduced cost.

Optimising contractual structures : new O&M contracts were put in place at three French projects, designed to improve performance and reduce costs.

Condition monitoring coupled with a robust approach to strategic spares across the portfolio continues to enable components to be proactively replaced ahead of failure, reducing downtime and repair costs.

The impact of Covid-19

Covid-19 was an important consideration across the full range of operation and maintenance, asset management and portfolio management teams that keep TRIG's sites running. Activities in the Covid-19 response effort can be broadly split into the following categories:

People: ensuring business continuity, but more importantly, the safety of employees, customers, suppliers and the wider community that interacts with TRIG. Strong resilience was demonstrated whilst changes were applied to working practices, with flexible and remote working embraced. Neither of the Managers has accessed any of the government's Covid-19 financial support programmes nor accessed the UK government's furlough scheme. Both Managers have continued to hire more resource to contribute towards the ongoing improvement in the day-to-day management of TRIG.

Operations: RES activated business continuity plans on both the operational and construction aspects of TRIG's assets, which are designated as critical renewable energy infrastructure. Site level management plans were modified to ensure safety of contractors, staff and the local community. At the construction sites, such as Solwaybank and Blary Hill, this includes temperature checks, continuous cleaning of shared spaces and rotating lunch breaks to minimise interactions. Additionally, contractors distanced themselves from the local community by staying in self-catering properties. RES' rigorous approach to strategic spares as well as condition monitoring, which helps to predict failures in advance, has minimised additional downtime due to Covid-19 restrictions. These measures along with other measures that RES undertook to also prepare for any potential risks associated with Brexit, also helped to secure services and TRIG's supply chain.

Control Centre: The RES global control centre in Glasgow maintained normal service despite the rapid transition to remote and home working. Investment in the control centre capability and retro-fitting older sites with new equipment to broaden the remote monitoring and reset capability for turbines and solar sites, has reduced the need for travel to operational sites.

Systems and technology: Prior to the pandemic, all of InfraRed's staff and 94% of RES staff already had laptops to support remote working. In RES case, further IT provision was rapidly made for the remainder, with computer-based telephony also already in place. Previous investment in system architecture and an enhanced and integrated suite of software to support communications and collaboration, facilitated the strong continuity of service to TRIG.

On-going evolution: As the virus and government responses continue to evolve, so do the site systems of work and wider support provided, to ensure that personnel are kept physically safe.

Health and Safety

A high standard of Health and Safety ("H&S") has always been essential in TRIG's operations. Covid-19 management, response and mitigation plans were developed at the start of the pandemic for the construction and operational sites and these were reviewed and updated through the year.

Reportable incidents and accidents are tracked and accident frequency rates are calculated so trends in performance can be seen.

The different asset managers across the portfolio continue to meet twice a year to share experiences on their sites, discuss matters impacting the industry and to promote best practice. Additionally, many of the asset managers ran their own initiatives such as the 'Don't Risk It' campaign within RES. Site specific H&S activities have also been undertaken such as the helicopter emergency rescue drill at the Merkur offshore project.

This year the annual quality assurance audits were undertaken remotely but still provided an opportunity to ensure that adequate emphasis, support and resources are given to H&S administration of the TRIG portfolio whilst ensuring compliance with current legislation and guidelines.

2.8 Valuation of the Portfolio

Introduction

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

For non-market traded investments (being all the investments in the current portfolio), the valuation is based on a discounted cash flow methodology and adjusted in accordance with the European Venture Capital Association's valuation guidelines where appropriate to comply with IFRS 13 and IFRS 10, given the special nature of infrastructure investments. Where an investment is traded, a market quote is used.

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

The Directors' Valuation of the portfolio as at 31 December 2020 was GBP2,213.0m. This valuation compares to GBP1,745.2m as at 31 December 2019 and GBP2,009.3m at 30 June 2020.

Valuation Movements

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

 
 Valuation movement during the period to 
  31 December 2020                                 GBPm     GBPm 
 Valuation of portfolio at 31 December 2019              1,745.2 
 Cash investments                                 588.2 
 Sell downs / exits                             (118.0) 
 Cash distributions from portfolio              (148.0) 
 Rebased valuation of portfolio                          2,067.5 
---------------------------------------------  --------  ------- 
 Changes in power prices forecast               (137.2) 
 Movement in discount rates                        62.8 
 Foreign Exchange Movement                         42.6 
 Balance of portfolio return                      177.3 
---------------------------------------------  --------  ------- 
 Valuation of portfolio at 31 December 2020              2,213.0 
---------------------------------------------  --------  ------- 
 (does not cast due to rounding differences) 
 

The opening valuation at 31 December 2019 was GBP1,745.2m. Allowing for investments of GBP588.2m, cash receipts from investments of GBP148.0m and the proceeds of disposals of GBP118.0m, from the sell down of Merkur [34] and exit from Ersträsk, the rebased valuation as at 31 December 2020 was GBP2,067.5m.

Cash investments of GBP588.2m during the year comprise the following investments:

 
 Investment during 2020              % of committed 
                                          Portfolio 
                                         Value [35] 
                                          Less than 
 Incremental acquisition on Fujin                1% 
 Solwaybank (construction funding)               1% 
 Haut Vannier                                    1% 
 Blary Hill                                      1% 
 Phoenix SAS                                     2% 
 Merkur (gross)                            10% [36] 
 East Anglia 1                                  10% 
-----------------------------------  -------------- 
 

Further detail on each investment is included in section 2.6.

Each movement between the rebased valuation of GBP2,067.5m and the 31 December 2020 valuation of GBP2,213.0m is considered in turn below:

   (i)    Forecast power prices: 

Forecasts for wholesale power prices have reduced materially across the forecast period (c.12% reduction from December 2019), having the impact of decreasing the valuation of the portfolio at 31 December 2020 by a net GBP137.2m. The valuation uses updated power price forecasts for each of the markets in which TRIG invests.

During the year the impact of Covid-19, the associated measures taken to combat its spread and the resultant impact on large sectors of national economies pushed down current and forecast electricity demand with knock on reductions in gas and carbon prices across most markets. These impacts compounded an already well supplied gas market, further exacerbated by particularly strong renewable generation during Q1 2020, pushing prices to low levels most noticeably during summer 2020.

Relaxations in the public health restrictions, coupled with developments in vaccinations and treatments and seasonal weather effects, led to a recovery in achieved power prices over H2 2020. In GB recent disruptions and delays to existing and planned interconnectors, coupled with some periods of low wind, resulted in increased gas consumption than would otherwise have been expected - this has increased short-term GB pricing. Colder temperatures and increased carbon prices have also added to near term electricity forward contracts.

Whilst over the medium and longer term forecasters expect global gas demand to increase in excess of supply which, in turn, forecasters expect to increase power prices, these increases are taking place from a lower baseline than expected in December 2019 as a result of economic contraction brought about by the Covid-19 pandemic. Furthermore the focused government stimulus packages and heightened attention on renewable energy as part of preventing climate change have also resulted in some assumed increases in renewables penetration for some of the markets TRIG invests in. The resulting curve is broadly flat in real terms and significantly lower than December 2019, reflecting a reduction of approximately 12%, primarily driven by the above. Please refer to Section 2.11 Risks and Risk Management for further analysis within the TCFD disclosure.

Power prices are one of the key risks faced by the Company: a number of factors go into power price forecasting to estimate electricity demand including the mix of generation technology meeting this demand and each technology's associated costs of supply. As such, it is inherently difficult to estimate and then apply these factors to accurately forecast the outcome of this dynamic market.

Material factors influencing the movement in the forecasts are an expectation for greater volumes of renewables within the generation mix (which has a low marginal cost so has the effect of reducing power price forecasts), reductions in the forecast cost of gas (reducing the costs of gas generation and therefore expectations for power prices when gas generation is the marginal price setter) offset by increases in the price of carbon (increasing the cost of thermal (gas & coal) generation and therefore expectations for power prices where these are the marginal price setters).

The weighted average power price used to determine the Directors' valuation [37] is shown below in real terms - this is comprised of the blend of forecasts for each of the power markets in which TRIG is invested after applying expected PPA power sales discounts and reflecting cannibalisation [38] .

 
 Region                                           Average     Average 
                                                2021-2025   2026-2050 
 GB (Real 2019 GBP/MWh)                                44          42 
 Average of 4 euro jurisdictions* (Real 2019 
  EUR/MWh)                                             42          46 
---------------------------------------------  ----------  ---------- 
 

*France, SEM, Germany and Sweden SE3

Cannibalisation is assumed within the adopted power price forecasts across each jurisdiction. The reduction in captured wholesale electricity power prices is forecast to be further impacted in each geography over time as the proportion of production coming from renewables in each market increases.

   (ii)   Foreign Exchange Movement: 

Over the year, sterling has depreciated by 5% versus the euro, leading to a GBP42.6m valuation gain on foreign exchange in relation to the euro-denominated investments located in Germany, Sweden [39] , France and the Republic of Ireland, which reduces to a net GBP21.7m gain after the impact of hedges held outside the portfolio at company level. At 31 December 2020, euro-denominated investments comprised 40% of the portfolio. Once the investments in Beatrice (UK), and Blary Hill (UK) and Grönhult (Sweden) wind farms are complete, the proportion of euro denominated investments based on the current portfolio will decrease to 37%.

(iii) Movement in valuation discount rates:

The weighted average portfolio valuation discount rate as at 31 December 2020 was 6.7% (31 December 2019: 7.25%). The discount rates used for valuing each investment represent an assessment of the rate of return at which infrastructure investments with similar risk profiles would trade on the open market. In addition, the mix of investments made in the year in lower risk projects decreased the discount rate by approximately 0.1% and achievement of construction completion on Solwaybank and Venelle resulted in a reduction in discount rates applied to each asset.

During the year we have observed continuing strong competition for renewables infrastructure, which remains a very sought-after asset class, and we continued to see new entrants to the market seeking to buy assets. This has resulted in a continued reduction in the prevailing discount rates applied to renewables investments. Other factors include the continued abundance of low-cost debt and very low risk-free returns. Overall the Investment Manager, based on its experience of bidding and transacting in the secondary market for renewable infrastructure assets, has applied an average reduction of 0.4% to discount rates across the portfolio compared to 31 December 2019.

During the year, the Company engaged an independent valuation of the portfolio and a further review of the discount rates adopted for the December 2020 valuation, which confirmed that the rates used were appropriate. This change in assumption has led to an increase in the valuation of the investments of GBP62.8m.

(iv) Balance of portfolio return:

This refers to the balance of valuation movements in the year (excluding (i) to (iii) above) and represents an uplift of GBP177.3m, equivalent to an 8.5% increase over the rebased value of the portfolio. The balance of portfolio return comprises the expected return, reflecting the net present value of the cash flows brought forward by a year at the average prevailing portfolio discount rate (7.25% before the discount rate reductions in the year), and outperformance comprising exceptional value enhancing items.

Value enhancing items include:

Solar asset life extensions: Following a detailed review of the portfolio of solar assets in H2 2020, the assumed lives of some assets were extended. Extension was considered on a case-by-case basis factoring in economic, technical and commercial constraints with a maximum life assumed of 40 years, some asset lives were not extended and others were extended less than the maximum. The assumed extensions incorporated the potential for increased maintenance requirements, reductions in availability, additional inverter replacements, the physical degradation of the panels and the inherent risks of the merchant revenues, including cannibalisation. The impact of extending assumed solar asset lives across the portfolio was an additional GBP8.0m of value as at 31 December 2020 and the weighted average asset life of the portfolio as at 31 December 2020 is 30 years with an average of 29 years for the wind portfolio and 37 years for the solar portfolio

Reduced maintenance costs: on renewal of O&M contracts and improved power purchase agreement terms

Reduced grid costs: removing Balancing Services Use of System (BSUoS) charges from transmission connected assets as of 1 April 2023. BSUoS charges represent the recovery of costs incurred by the network operator to keep the network balanced, these are currently being recovered from both consumers and generators, however from April 2023 this will solely be recovered from consumers. This impacts the larger wind farms in the portfolio [40] which have seen reduced forecast operating costs, however this change also contributed to a reduction in the GB price curve by lowering the marginal cost of generation in the forecasts

Reduction of discount rates post-construction: following the completion of construction at Venelle and Solwaybank the construction risk premia applied to the valuation discount rate for both assets has been reduced

Other items include:

Deposit rates: Over the year, there has been a reduction in interest rates assumed across all jurisdictions. This is a reflection of current macroeconomic projections. As at 31 December 2020, deposit rates assumptions remain at 0.25% and 0.00% in the short term (up to March 2023) in the UK and Europe respectively. These rates are then assumed to increase to 1.00% and 0.50% thereafter. The portfolio is relatively insensitive to changes in interest rates

This is an advantage of TRIG's approach of favouring long-term structured project financing, rather than shorter-term corporate debt. Structured project financing is secured against the underlying assets, with the substantial majority benefitting from long-term interest rate swaps which fix the interest cost to the projects. As such, the overall impact of deposit rate changes are negligible

Solar FiT potential charges: in France a parliamentary proposal has been voted in to reduce certain historic tariffs on some older higher FiT solar projects. The tariff reductions have not yet been determined, but the impact is not expected to be significant for TRIG, affecting assets representing less than 1% of TRIG's portfolio by value

Investment Obligations

At the balance sheet date, the Company had outstanding investment commitments in relation to the construction of Blary Hill wind farm.

 
 Name          Announced  Net MW        Status  Completion   Outstanding  Value (fully 
                                                      Date   Commitment*   committed)* 
 Blary Hill       Jan-20    35.0  Construction     Q1 2022            1%            2% 
------------  ----------  ------  ------------  ----------  ------------  ------------ 
 

After the balance sheet date, the Company entered into investment commitments in relation to two wind farms.

 
 Name             Announced  Net MW        Status  Completion  Value (fully 
                                                         Date   committed)* 
 Beatrice            Jan-21   102.9   Operational     Q2 2019           12% 
 Grönhult       Feb-21    67.2  Construction     Q4 2022            3% 
---------------  ----------  ------  ------------  ----------  ------------ 
 

*Expressed as a percentage of fully committed valuation of GBP2,629.8m

The timeline of outstanding commitments is presented below:

 
                           H1 2021  H2 2021  FY 2022  Total 
 Outstanding Commitments 
  (GBPm)                     312.6     25.7     53.6  391.8 
-------------------------  -------  -------  -------  ----- 
 

TRIG's Construction Wind farms

The three construction projects being managed by the company are as follows and represent 3% of the fully committed portfolio value at year end and 6% (including Grönhult) at the reporting date.

 
 Name of Asset        Location  Capacity     Expected 
                                    (MW)   Completion 
                                                 Date 
 Vannier        France (North)      42.5      Q1 2022 
 Blary Hill      GB (Scotland)        35      Q1 2022 
 Grönhult  Sweden (South)      67.2      Q4 2022 
--------------  --------------  --------  ----------- 
 

Fully Invested Portfolio Valuation

The valuation of the portfolio on a fully invested basis can be derived by adding the valuation at 31 December 2020 and the expected outstanding commitments as follows:

 
 Portfolio valuation 31 December 2020                 GBP2,213.0m 
 Initial investment in Grönhult (February 2021)     GBP25.0m 
 Future investment commitments                          GBP391.8m 
Portfolio valuation once fully invested               GBP2,629.8m 
----------------------------------------------------  ----------- 
 

Key Sensitivities

The following table illustrates the sensitivity of TRIG's NAV per share to changes in key input assumptions:

 
 Sensitivity               Impact (NAV per share)   Impact (NAV per share) 
 Discount rate +/- 0.5%            - 3.8%                   4 .1% 
                          -----------------------  ----------------------- 
 Output P90 / P10 (10 
  year)                           - 12.3%                   1 3.2% 
                          -----------------------  ----------------------- 
 Power price -/+ 10%               - 6.6%                   6 .5% 
                          -----------------------  ----------------------- 
 Inflation -/+ 0.5%                - 4.2%                   4 .5% 
                          -----------------------  ----------------------- 
 Operating costs +/- 
  10%                              - 5.0%                   5 .0% 
                          -----------------------  ----------------------- 
 Exchange rate -/+ 10%             - 1.3%                   1 .3% 
                          -----------------------  ----------------------- 
 Interest rate + 2% 
  / - 1%                           0 .0%                    0 .0% 
                          -----------------------  ----------------------- 
 Tax +/- 2%                        - 1.4%                   1 .4% 
                          -----------------------  ----------------------- 
 Asset Life -/+ 1yrs               - 1.0%                   0 .9% 
                          -----------------------  ----------------------- 
 

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

The sensitivities assume the portfolio is fully invested and hence the Portfolio Value for the sensitivity analysis is the sum of the Portfolio Valuation at 31 December 2020 (GBP2,213.0m), the initial investment in Grönhult made in February 2021 (GBP25m) and the outstanding investment commitments as set out above (GBP391.8m), i.e. GBP2,629.8m.

Accordingly, the NAV per share impacts shown above assumes the issue of further shares to fund the balance of these commitments.

All of TRIG's sensitivities above are stated after taking into account the impact of project level gearing on returns.

The output sensitivity above incorporates an updated calculation of the portfolio effect which reduces the variability as a result of the diversification of the portfolio. The increased diversification of the portfolio has increased this effect and consequently reduced the sensitivity of the portfolio.

2.9 Analysis of Financial Results

At 31 December 2020, the Group had investments in 75 projects. As an investment entity for IFRS reporting purposes, the Company carries these 75 investments at fair value. The results below are shown on a statutory and on an "expanded" basis as we have done in previous years. See the box below for further explanation.

 
 Basis of preparation 
  In accordance with IFRS 10 the Group carries investments at fair 
  value as the Company meets the conditions of being an Investment 
  Entity. In addition, IFRS 10 states that investment entities should 
  measure their subsidiaries that are themselves investment entities 
  at fair value. Being investment entities, The Renewables Infrastructure 
  Group (UK) Limited ("TRIG UK") and The Renewables Infrastructure 
  Group (UK) Investments Limited ("TRIG UK I"), the Company's subsidiaries, 
  through which investments are purchased, are measured at fair 
  value as opposed to being consolidated on a line-by-line basis, 
  meaning their cash, debt and working capital balances are included 
  as an aggregate number in the fair value of investments rather 
  than the Group's current assets. In order to provide shareholders 
  with more transparency into the Group's capacity for investment, 
  ability to make distributions, operating costs and gearing levels, 
  adjusted results have been reported in the pro forma tables below. 
  The pro forma tables that follow show the Group's results for 
  the year ended 31 December 2020 and the prior year on a non-statutory 
  "Expanded basis", where TRIG UK and TRIG UK I are consolidated 
  on a line-by-line basis, compared to the Statutory IFRS financial 
  statements (the "Statutory IFRS basis"). 

  The Directors consider the non-statutory Expanded basis to be 
  a more helpful basis for users of the accounts to understand the 
  performance and position of the Company because key balances of 
  the Group including cash and debt balances carried in TRIG UK 
  and TRIG UK I and expenses incurred in TRIG UK and TRIG UK I are 
  shown in full rather than being netted off. 
  The necessary adjustments to get from the Statutory IFRS basis 
  to the non-statutory Expanded basis are shown for the primary 
  financial statements. The commentary provided on the primary statements 
  of TRIG is on the Expanded Basis. 
 Income Statement                 Balance Sheet                 Cash Flow Statement 
  The Statutory IFRS basis         The Statutory IFRS basis      The Statutory basis 
  nets off TRIG UK and             includes TRIG UK and          shows cash movements 
  TRIG UK I's costs, including     TRIG UK I's cash, debt        for the top company 
  overheads, management            and working capital           only (TRIG Limited). 
  fees and acquisition             balances as part of           The Expanded basis shows 
  costs against income.            portfolio value. The          the consolidated cash 
  The Expanded basis includes      Expanded basis shows          movements above the 
  the expenses incurred            these balances gross.         investment portfolio 
  within TRIG UK and TRIG          There is no difference        which are relevant to 
  UK I to enable users             in net assets between         users of the accounts. 
  of the accounts to fully         the Statutory IFRS basis      Differences include 
  understand the Group's           and the Expanded basis.       income received by TRIG 
  costs. There is no difference    The majority of cash          UK and TRIG UK I applied 
  in profit before tax             generated from investments    to reinvestment and 
  or earnings per share            had been passed up from       expenses incurred by 
  between the two bases.           TRIG UK and TRIG UK           TRIG UK and TRIG UK 
                                   I to the Company by           I that are excluded 
                                   31 December 2020.             under the Statutory 
                                   At 31 December 2020,          IFRS basis. 
                                   TRIG UK I was GBP40m          The purchase of investments 
                                   drawn on its revolving        on the Expanded basis 
                                   credit facility (2019:        is funded by both the 
                                   GBPnil drawn) equalling       company's revolving 
                                   the difference between        credit facility and 
                                   the Statutory IFRS basis      amounts passed down 
                                   and the Expanded basis.       after capital raises. 
                                                                 The remaining balance 
                                                                 is that of reinvestment. 
                                 ----------------------------  ----------------------------- 
 

Income statement

 
                                         Year to 31 December 2020               Year to 31 December 2019 
 Summary income statement                             GBP'million                            GBP'million 
                              Statutory                  Expanded    Statutory                  Expanded 
                             IFRS Basis  Adjustments(1)     Basis   IFRS Basis  Adjustments(1)     Basis 
 Operating income                 119.2            26.6     145.8        145.6            16.7     162.3 
 Acquisition costs                    -           (0.8)     (0.8)            -           (2.1)     (2.1) 
                            -----------  --------------  --------  -----------  --------------  -------- 
 Net operating income             119.2            25.8     145.0        145.6            14.6     160.2 
 Fund expenses                    (1.8)          (18.2)    (20.0)        (1.6)          (14.2)    (15.8) 
 Foreign exchange 
  (loss)/ gains                  (17.0)           (3.9)    (20.9)         18.3             2.4      20.7 
 Finance costs                    (0.2)           (3.7)     (3.9)        (0.3)           (2.8)     (3.1) 
                            -----------  --------------  --------  -----------  --------------  -------- 
 Profit before tax                100.2               -     100.2        162.0               -     162.0 
                            -----------  --------------  --------  -----------  --------------  -------- 
 EPS(2)                            5.9p               -      5.9p        11.4p               -     11.4p 
 

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

2. Calculated based on the weighted average number of shares during the year being approximately 1,712.0 million shares.

Analysis of Expanded Basis financial results

Profit before tax for the year to 31 December 2020 was GBP100.2m, generating earnings per share of 5.9p, which compares to GBP162.0m and earnings per share of 11.4p for the year to 31 December 2019.

The EPS of 5.9p reflects lower valuation growth in the year versus a particularly strong period of valuation growth in the comparative period. The most significant adverse movement in valuation for the year has been due to a reduction in power price forecasts across all geographies. This is mostly attributable to the fall in demand and near to medium term forecast demand for electricity and the primary commodities that support wholesale electricity prices (gas, carbon and to some extent coal) caused by the worldwide Covid-19 crisis.

The adverse impact of power prices has been offset by favourable foreign exchange movements, a valuation discount rate reduction, efficient portfolio management and other valuation enhancements.

Operating Income reflects the portfolio value movement in the year and is more fully described in Section 2.6.

An increase in fund expenses in the year to 31 December 2020 as compared to the year to 31 December 2019 reflects the increase in the size of the portfolio.

Fund expenses of GBP20.0m (2019: GBP15.8m) includes all operating expenses and GBP16.9m (2019: GBP14.3m) fees paid to the Investment and Operations Managers. Management fees are charged at 1% of Adjusted Portfolio Value up to GBP1bn, 0.8% of Adjusted Portfolio Value in excess of GBP1bn and 0.75% of Adjusted Portfolio Value in excess of GBP2bn as set out in more detail in the Related Party and Key Advisor Transactions note, Note 14 to the financial statements.

During the year sterling weakened against the euro resulting in positive foreign exchange valuation movements for existing euro denominated assets resulting in a gain of GBP42.6m (2019: GBP42.3m loss), partially offset by loss on foreign exchange hedges and cash and debt balances held at Company level of GBP20.9m (2019: GBP20.7m gain). The net foreign exchange gain in the period is hence GBP21.7m (2019: GBP21.6m loss).

Finance costs relate to the interest and fees incurred relating to the Group's revolving credit facility. The finance costs in the period are higher than the comparative period reflecting the full amortisation of remaining capitalised arrangement fees in relation to the previous revolving credit facility as a result of the Company's increased and extended facility signed at the end of the year to 31 December 2020.

Acquisition costs relate to wind farm investments in the year, mostly attributable to the investments in Blary Hill, Merkur, and East Anglia.

 
                                                         Year to         Year to 
                                                     31 December     31 December 
                                                            2020            2019 
                                                   (GBP'million)   (GBP'million) 
 Acquisition costs                                           0.8             2.1 
 Total Acquisition commitments made in the year            516.8           612.1 
 Acquisition costs as % of investments                      0.1%            0.3% 
------------------------------------------------  --------------  -------------- 
 

The company has future commitments relating to Blary Hill, Beatrice ([41]) and Grönhult ([42]) as follows.

 
                            H1 2021   H2 2021      2022     Total 
                            (GBP'm)   (GBP'm)   (GBP'm)   (GBP'm) 
 Outstanding Commitments        313        26        53       392 
-------------------------  --------  --------  --------  -------- 
 

Ongoing charges

 
 Ongoing Charges (Expanded Basis)                Year to       Year to 
                                             31 December   31 December 
                                                    2020          2019 
                                                GBP'000s      GBP'000s 
 Investment and Operations Managers' fees         16,945        14,263 
 Audit fees                                          185           164 
 Directors' fees and expenses                        286           237 
 Other ongoing expenses                            1,521         1,161 
                                            ------------  ------------ 
 Total expenses(3)                                18,937        15,825 
                                            ------------  ------------ 
 Average net asset value                       2,014,672     1,610,883 
 Ongoing Charges Percentage (OCP)                  0.94%         0.98% 
------------------------------------------  ------------  ------------ 
 

3. Total expenses excludes GBP1.1m (2019: GBPnil) of lost bid costs incurred during the year.

The Ongoing Charges Percentage is 0.94% (2019: 0.98%). The ongoing charges have been calculated in accordance with AIC guidance and are defined as annualised ongoing charges (i.e. excluding acquisition costs and other non-recurring items) divided by the average published undiluted net asset value in the year. The Ongoing Charges Percentage has been calculated on the Expanded Basis and therefore takes into consideration the expenses of TRIG UK and TRIG UK I as well as the Company's.

The reduction in OCP level includes the benefit of growth in net assets: as the fixed costs of the Company are being spread over a larger capital base and the reduction in Manager fees charged on incremental acquisitions as the portfolio has become larger. Managers' fees for incremental assets are charged at a lower rate of 0.80% in respect of asset value above GBP1bn and 0.75% for incremental value above GBP2bn. The management fee will further reduce (to 0.70%) for incremental acquisitions should the portfolio value grow beyond GBP3bn. There is no performance fee paid to either of the Managers.

Balance sheet

 
 Summary balance                       As at 31 December 2020              As at 31 December 2019 
  sheet                                           GBP'million                         GBP'million 
                             Statutory               Expanded    Statutory               Expanded 
                            IFRS Basis  Adjustments     Basis   IFRS Basis  Adjustments     Basis 
 Portfolio value               2,160.9         52.1   2,213.0      1,741.5          3.7   1,745.2 
 Working capital                  12.3       (12.9)     (0.6)          1.7        (3.9)     (2.2) 
                           -----------  -----------  --------  -----------  -----------  -------- 
 Hedging Liability/Asset         (1.4)            -     (1.4)         12.6            -      12.6 
 Debt                                -       (40.0)    (40.0)            -            -         - 
 Cash                             23.1          0.8      23.9        127.6          0.2     127.8 
                           -----------  -----------  --------  -----------  -----------  -------- 
 Net assets(1)                 2,194.9            -   2,194.9      1,883.4            -   1,883.4 
                           -----------  -----------  --------  -----------  -----------  -------- 
 Net asset value 
  per share                     115.3p            -    115.3p       115.0p            -    115.0p 
 

Analysis of Expanded Basis financial results

Portfolio value grew by GBP467.8m in the year to GBP2,213.0m, primarily as a result of the investments made in the year to 31 December 2020 as described more fully in the "Valuation Movements" section of this Strategic Report.

Hedging assets and liabilities represent the value of outstanding foreign exchange derivatives used to manage the Company's risk to movements in the foreign exchange rate between Sterling and Euro. Working capital amounts include debtors, liabilities and capitalised financing costs.

Group cash at 31 December 2020 was GBP23.9m (2019: GBP127.8m) and acquisition facility debt drawn at 31 December 2020 was GBP40.0m (2019: GBPnil). The 2019 year end cash balance included equity capital raise proceeds subsequently deployed in 2020 of around GBP100m.

Net assets grew by GBP311.5m in the year to GBP2,194.9m. The Company raised GBP317.3m (after issue expenses) of new equity during the year and produced a GBP100.2m profit in the year, with net assets being stated after accounting for dividends paid in the year (net of scrip take up) of GBP107.0m. Other movements in net assets totalled GBP1.0m, being the Managers' shares accrued at 31 December 2020 and to be issued on or around 30 March 2021.

Net asset value ("NAV") per share as at 31 December 2020 was 115.3p compared to 115.0p at 31 December 2019.

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

 
                                         NAV per share   Shares in  Net assets 
                                                         issue (m)      (GBPm) 
 Net assets at 31 December 2019                 115.0p     1,637.5     1,883.4 
 Profit/EPS to 31 December 2020                5.9p(1)           -       100.2 
 Shares issued (net of costs)(2)               1.1p(3)       260.9       317.3 
 Dividends paid in 2020                         (6.7)p                 (113.7) 
 Scrip dividend take-up(4)                           -         5.0         6.6 
 H2 2020 Managers' shares to be issued               -         0.9         1.0 
---------------------------------------  -------------  ----------  ---------- 
 Net assets at 31 December 2020                 115.3p     1,904.3     2,194.9 
---------------------------------------  -------------  ----------  ---------- 
 

1. Calculated based on the weighted average number of shares during the year being 1,712.0m shares

2. Includes shares issued to managers (less costs) during the year.

3 The increase in net assets per share of 1.1p was the result of accretive share issues where shares were issued above the Company's net asset value per share.

4. Scrip dividend take-up comprises nil shares in March 2020 due to Scrip Dividend Alternative cancellation, 1.0 million shares in June 2020, equating to GBP1.2m, 2.6m shares in September 2020, equating to GBP3.5m, and 1.5m shares in December 2020, equating to GBP2.0m issued in lieu of dividends paid.

Cash flow statement

 
 Summary cash                    Year to 31 December 2020            Year to 31 December 2019 
  flow statement                              GBP'million                         GBP'million 
                         Statutory               Expanded    Statutory               Expanded 
                        IFRS Basis  Adjustments     Basis   IFRS Basis  Adjustments     Basis 
 Cash received 
  from investments           120.6         27.4     148.1         84.8         44.0     128.8 
 Operating 
  and finance 
  costs                      (1.7)       (17.5)    (19.3)        (1.1)       (13.8)    (14.9) 
---------------------  -----------  -----------  --------  -----------  -----------  -------- 
 Cash flow 
  from operations            118.9          9.9     128.8         83.7         30.2     113.9 
 Debt arrangement 
  costs                          -        (4.3)     (4.3)            -            -         - 
 Foreign exchange 
  gains/ (losses)            (3.4)        (3.5)     (6.9)          3.4          3.2       6.6 
 Issue of 
  share capital 
  (net of costs)             318.3        (1.9)     316.4        523.8        (1.9)     521.9 
 Acquisition 
  facility 
  drawn/(repaid)                 -         40.0      40.0            -            -         - 
 Portfolio 
  refinancing 
  and exit 
  proceeds                    68.2         49.8     118.0            -         64.6      64.6 
 Purchase 
  of new investments 
  (including 
  acquisition 
  costs)                   (499.5)       (88.8)   (588.9)      (413.8)       (96.0)   (509.8) 
 Distributions 
  paid                     (107.0)            -   (107.0)       (86.3)            -    (86.3) 
---------------------  -----------  -----------  --------  -----------  -----------  -------- 
 Cash movement 
  in year                  (104.5)          0.5   (103.9)        110.8          0.1     110.9 
 Opening 
  cash balance               127.6          0.2     127.8         16.8          0.1      16.9 
---------------------  -----------  -----------  --------  -----------  -----------  -------- 
 Net cash 
  at end of 
  year                        23.1          0.7      23.9        127.6          0.2     127.8 
---------------------  -----------  -----------  --------  -----------  -----------  -------- 
 

Analysis of Expanded Basis financial results

Cash received from investments in the year was GBP148.1m (2019: GBP128.8m). The increase in cash received compared with the previous year reflects the increase in the size of the portfolio. The adjustment reflects working capital movements and cash flow available for reinvestment and proceeds in the year.

Dividends paid in the year totalled GBP107.0m (net of GBP6.6m scrip dividends). Dividends paid in the prior year totalled GBP86.3m (net of GBP8.0m scrip dividends).

Cash flow from operations in the year was GBP128.8m (2019: GBP113.9m) and covers dividends paid of GBP107.0m in the year (2019: GBP86.3m) by 1.2 times (or 1.13 times without the benefit of scrip take up), or 2.0 times before factoring in amounts invested in the repayment in project-level debt. The Group repaid GBP98m of project-level debt (pro-rata to the Company's equity interest) in the year.

Share issue proceeds (net of costs) totalled GBP316.4m (2019: GBP521.9m) reflecting the net proceeds of the 260m shares issued during the year through the proceeds of two tap issues.

In the year, GBP588.9m was invested in acquisitions. These were funded through surplus cash at 31 December 2019 of around GBP100m, the May and December tap issues (net proceeds of GBP316.4m), drawings on the Company's acquisition facility of GBP40.0m, GBP118.0m raised through the exit of Ersträsk and sell-down of Merkur, as well as the reinvestment of surplus cash flows.

The Company's acquisition facility was drawn in the year to fund the investments in in Merkur. The facility was fully repaid in Q3 as the Company sold down part of the Merkur investment and exited its investment in Ersträsk. The facility was drawn again at year end to fund the acquisition of East Anglia 1.

At the date of this report following the completion of Grönhult, the Company is GBP65m drawn on its revolving credit facility.

Blary Hill and Grönhult wind farms are projects in construction with investments commitments outstanding and construction activity to be carried out over 2021 and 2022.

Beatrice wind farm is operational, and TRIG and its other shareholders have exchanged contracts to acquire the investment. Completion of the investment is expected to complete shortly following receipt of regulatory and lender consents.

Going Concern

The Group has the necessary financial resources to meet its obligations. The Group benefits from a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, it maintains a working capital component of GBP30m as part of its revolving credit facility (recently increased from GBP340m to GBP500m and limited to 30% of Portfolio Value). The Group's project-level external debt is non-recourse to the Company and is limited to 50% of Gross Portfolio Value. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

The directors do not believe that there is a significant risk to the business as a result of the Covid-19 pandemic but will continue to monitor any future developments. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Related Parties

Related party transactions are disclosed in note 18 to the condensed set of financial statements.

2.10 Financial KPIs and Review of the Year

 
                          (Year to)    (Year to)    (Year to)     (Year to)     (Year to)     (Year to)      (Year to) 
                             31 Dec       31 Dec       31 Dec        31 Dec        31 Dec        31 Dec         31 Dec 
                               2020         2019         2018          2017          2016          2015           2014 
 Dividend 
  per share 
  (declared)                  6.76p        6.64p        6.50p         6.40p         6.25p         6.19p          6.08p 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 Share price                 127.8p       138.4p       113.2p        108.6p        109.6p        102.3p        104.00p 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 Net Asset 
  Value per 
  share                      115.3p       115.0p       108.9p        103.6p     100.1p(2)      99.0p(2)         102.4p 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
                                          +29.3%       +10.7%       + 5.11%       + 15.8%        + 4.4%         + 7.5% 
 Total Shareholder                     (FTSE All    (FTSE All         (FTSE         (FTSE         (FTSE          (FTSE 
  Return(3)                   -2.9%       Share:       Share:    All Share:    All Share:    All Share:     All Share: 
   for the 
   year (share            (FTSE All 
   price basis)       Share: -9.8%)      +19.2%)       -9.5%)       +13.1%)      + 16.8%)       + 1.0%)        + 1.2%) 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 Portfolio 
  Value                   GBP2,213m    GBP1,745m    GBP1,269m     GBP1,081m       GBP819m       GBP712m        GBP473m 
  Year-on-year 
  growth                       +27%         +38%         +17%          +32%          +15%          +51%           +57% 
  Number 
  of projects                 77(1)           74           62            57            53            36             29 
  Aggregate 
  capacity               1,820MW(1)      1,664MW      1,110MW         821MW         710MW         658MW          439MW 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 Market 
 capitalisation 
 Year-on-year 
 growth                 GBP2,432.6m  GBP2,265.0m  GBP1,333.9m    GBP1028.8m     GBP912.9m     GBP749.7m      GBP432.1m 
 Number 
 of shares                    +7.4%         +70%         +30%          +13%          +28%          +73%           +36% 
 in issue 
 at year 
 end                       1,904.4m     1,636.5m     1,178.4m        947.3m        833.0m        732.8m         415.5m 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 Ongoing 
  Charges 
  Percentage                  0.94%        0.98%        1.12%         1.11%         1.10%         1.20%          1.25% 
-------------------  --------------  -----------  -----------  ------------  ------------  ------------  ------------- 
 

1 Including investment commitments as at 31 December 2020 in Beatrice offshore wind farm.

2 NAV per share in 2015 was in particular affected by the removal, in the UK's 2015 Summer Budget, of the benefit to renewables generators of selling Levy Exemption Certificates, effective 1 August 2015. NAV per share in 2016 is expressed after the payment of an additional quarter's worth of dividends as a result of the switch to quarterly dividends from semi-annual dividends. In aggregate, 7.7975p per share of dividends were paid in 2016.

3 Total Shareholder Return ("TSR") measures the internal rate of return based on the share price at the beginning and end of the financial year together with dividends per share reinvested in the Company.

The weighted average portfolio discount rate is 6.7%. Adjusted to take account of fund-level costs, the weighted average portfolio discount rate implies the expected level of return to investors from a theoretical investment in the Company made at NAV per share.

Financing

The Group's GBP500m revolving credit facility is with Royal Bank of Scotland International, National Australia Bank, ING Bank NV, Sumitomo Mitsui Banking Corporation, Santander and Barclays. The facility expiry date is 31 December 2023 with an option to extend for up to an additional 24 months. Margins on the facility when drawn are 1.85%. The facility can be drawn in Sterling or Euros.

The revolving credit facility enables the Group to fund new acquisitions and to provide letters of credit for future investment obligations should they be required. The facility includes a GBP30m working capital element.

The short-term financing provided by the revolving credit facility is limited to 30% of the portfolio value. It is intended that any facility used to finance acquisitions is repaid, in normal market conditions, within a year through equity fundraisings.

The acquisition facility was drawn down in the year to fund investments and subsequently repaid following capital raises.

In addition to the revolving credit facility, the projects may have underlying project level debt. There is an additional gearing limit in respect of such debt, which is non-recourse to TRIG, of 50% of the Gross Portfolio Value (being the total enterprise value of such portfolio companies), measured at the time the debt is drawn down or acquired as part of an investment. The Company may, in order to secure advantageous borrowing terms, secure a project finance facility over a group of portfolio companies.

The project-level gearing at 31 December 2020 across the portfolio was 43% (2019: 36%). Principal repayments in the year totalled GBP98m, as the debt is retired over the project's subsidy periods. Notwithstanding this repayment, the overall gearing has increased mainly due to the mix of the acquisitions. Notably, TRIG made sizable investments in 2020 in Merkur and East Anglia 1 which are younger and have greater subsidy revenues (giving lower power price sensitivity) than the portfolio average but consequently carry greater leverage. The inclusion of Beatrice and Grönhult in the portfolio (which were not invested at 31 December) has a limited impact on portfolio gearing, as while Beatrice is geared at a level above the portfolio average, Grönhult is ungeared, with the resulting gearing level unchanged at 43%.

The vast majority of the debt is fixed and has an average cost of 3.4% (including margin). The project level debt is fully amortising and repaid in each case over the period of the subsidy term. The portfolio weighted average subsidy life remaining is 12 years.

Foreign Exchange Hedging

At the year-end, 40% of the portfolio was located within France, the Republic of Ireland, Sweden ([43]) and Germany and hence is invested in euro-denominated assets. Once the committed investments in Beatrice, Blary Hill and Grönhult wind farms are fully subscribed the proportion of euro-denominated investments based on the current portfolio and valuation will decrease to 37%.

The Group enters into forward hedging contracts against expected income from the euro-denominated investments' distributions up to four years ahead. In addition, the Group aims to enter into further forward hedging contracts such that, when combined with the "income hedges", the overall level of hedge achieved in relation to the euro-denominated assets is at least 50% of their aggregate value. The group may also make drawings under the revolving credit facility in euros which provides further foreign exchange hedging.

During the majority of 2020 the Group targeted hedging of approximately 60% to 80% of the overall euro portfolio value. The Group has been maintaining this increased hedging level since H2 2019 in light of the increased exchange rate volatility.

The Investment Manager keeps under review the level of euros hedged, with the objective of minimising variability in shorter-term cash flows and reducing NAV volatility. It seeks to maintain a balance between managing the sterling value of cash flow receipts and mark-to-market cash outflows.

As well as addressing foreign exchange uncertainty on the conversion of the expected euro distributions from investments, the hedge also provides a partial offset to foreign exchange movements in the portion of the portfolio value relating to the euro-denominated assets.

The impact on NAV per share of a 10% movement in the euro exchange rate after the impact of hedges held by the Group outside of the investment portfolio is 1.4p assuming an effective euro foreign exchange hedge of 60% - this is explained in more detail in Section 2.7 and Note 4 in the Notes to the Financial Statements (Valuation Sensitivities - euro/sterling exchange rate).

2.11 Risks and Risk Management

Risk Management

The Company has a risk management framework in place covering all aspects of the Group's business. Given the nature of the Company (being an Investment Company where the Company outsources key services to the Investment Manager, Operations Manager and other service providers), reliance is placed on the Group service providers' own systems and controls.

The identification, assessment and management of risk are integral elements of the Investment Manager's and the Operations Manager's work in both managing the existing portfolio and in transacting new investment opportunities.

The Managers and Board discuss and consider what emerging risks there are to the Company at the board meetings. The Company has a range of advisers in addition to its Managers. These advisers report on key topics and potential events which may present potential risks that the Board and the Manager need to monitor and, where possible, mitigate. In addition, the Company and its Managers are registered with various industry bodies which alert both the Board and the Managers of emerging risks as key events and news items unfold.

The inherent risk of each existing and emerging risk is assessed based on their likelihood of occurring and their potential impact should they manifest. Where necessary and possible, mitigation plans are developed to reduce the residual risk.

The Managers utilise their systems, their policies, oversight of the supply chain and third-party input to manage these risks. The strength of mitigants and controls is applied to the inherent risk to determine the residual risk, which is classified as 'high', 'medium', 'low' or 'insignificant'. If a new risk arises or the likelihood of a risk occurring increases, a mitigation strategy is, where appropriate, developed and implemented together with enhanced monitoring by the Investment Manager and / or Operations Manager.

The Managers review and consider the Group's key and emerging risks with the Board on a quarterly basis. Given the stability of the Company's investment policy and focus of its strategy (i.e. investments in renewable energy infrastructure projects in the UK or Europe), the risks in the Group are not expected to change materially from quarter to quarter. Nonetheless, risks relating to the Covid-19 pandemic have emerged in the year and risks relating to the UK's exit from the EU have manifested at year-end. More detail in respect of each of these is set out below.

Detailed reporting in line with the recommendations of the Task Force on Climate-related Financial Disclosures ("TCFD") is set out later in this Risks and Risk Management section. This reporting includes linking the potential risks associated with climate change to the Company's principal risks.

The Board's Management Engagement Committee also reviews the performance of the Investment Manager and Operations Manager (as well as all key service providers) annually, which includes a consideration of the Managers' internal controls and their effectiveness and the maintenance of a risk control matrix.

Risks and Uncertainties

The Board and the Managers have considered and reviewed the key risks. Risks relating to the Covid-19 pandemic have emerged in the year and risks relating to the UK's exit from the EU ("Brexit") have manifested at year-end. Both have the potential to affect the Company in 2021. The risks arising from these two events are embedded in the risk framework and the risk factors already identified by the Board and the Managers, and are extracted in the tables below. As such, the Board and the Managers have concluded that there has been no material change to the key risks or their residual risk classifications in the year.

Risks relating to the Covid-19 pandemic:

 
  Risk factor      Key mitigants 
  Health and         Enhanced Covid-19 site practices were promptly 
   safety             implemented for the supply chain to adhere to, 
                      and remain under on-going review, including testing 
                      crew boarding vessels, temperature checking on-site 
                      and when entering buildings, segregation of work 
                      teams, dedicating work vehicles to specified individuals 
                      and working from home. Operationally, this has 
                      meant we have maintained our strong record of 
                      a low accident frequency rate in our supply chain 
                 ------------------------------------------------------------- 
  Energy yield       Maintaining asset availability through enhanced 
                      asset condition monitoring and undertaking proactive 
                      works when government restrictions allow 
                 ------------------------------------------------------------- 
  Electricity        The power price in much of 2020 was dampened 
   pricing            by reduced demand following the Covid-19 outbreak. 
                      The impact was reduced through a significant portion 
                      of revenues being linked to fixed electricity 
                      pricing or subsidies in the year 
                      The potential impact of grid curtailments at 
                      periods of high renewables generation was principally 
                      reduced by the portfolio's diversification across 
                      energy markets. In the UK, compensation was obtained 
                      for some of the portfolio through participation 
                      in the Optional Downward Flexibility Management 
                      scheme 
                 ------------------------------------------------------------- 
  Political          Pressures on government budgets resulting from 
   / regulatory       their response to the Covid-19 pandemic may result 
                      in fiscal action 
                      France, a proposal has been voted in to reduce 
                      certain historical tariffs. Further detail is 
                      provided in Section 2.8 - Valuation of the Portfolio. 
                      This affects assets representing less than 1% 
                      of TRIG's portfolio, by value, and is not expected 
                      to have a significant financial impact on the 
                      overall portfolio 
                      Further retrospective action in Europe to existing 
                      subsidy arrangements is mitigated as governments 
                      look to maintain investor confidence to support 
                      decarbonisation 
                 ------------------------------------------------------------- 
  Taxation           Increased risk across the portfolio arising from 
                      governments' response to the economic and social 
                      consequences of the Covid-19 pandemic, which may 
                      result in an increase in tax rates to fund their 
                      expenditure 
                      The sensitivity of the Company's NAV to changes 
                      in taxation rates is provided in Section 2.8 - 
                      Valuation of the Portfolio 
                 ------------------------------------------------------------- 
 

Risks relating to Brexit:

 
  Risk factor       Key mitigants 
  Political           Brexit may affect the relationship between Scotland 
   / regulatory        and the UK as a whole. An independent Scotland's 
                       energy policies may impact the renewables market, 
                       potentially including future new capacity deployment, 
                       the treatment of historical subsidies or the trajectory 
                       of power prices. The relationship between the 
                       Scottish devolved government and the UK's government 
                       at Westminster is monitored 
                       Changes to UK fiscal policy may arise following 
                       Brexit. The UK government's policy agenda is monitored 
                       Additional administration has been introduced 
                       for goods, including parts, crossing the UK border. 
                       It is expected that this will become integrated 
                       into 'business as normal' as familiarity with 
                       new processes and procedures increases 
                  ------------------------------------------------------------ 
  Electricity         Power prices in GB's two day-ahead auctions were 
   pricing             previously linked to a European-wide algorithm. 
                       These are now de-coupled from each other resulting 
                       in market inefficiencies. The risk of additional 
                       price volatility is reduced through a significant 
                       portion of TRIG's near-term portfolio-level revenue 
                       benefits from government-backed subsidies. The 
                       auctions may be re-coupled as part of new market 
                       mechanisms by 2022 
                       As noted in the UK Government's Energy White 
                       Paper, their intention is to establish a new net 
                       zero carbon cap and trade Emissions Trading Scheme 
                       ("ETS"). This will replace the UK's current ETS, 
                       which replaced the UK's participation in the EU 
                       ETS on 1 January 2021. Government policy will 
                       continue to be monitored 
                  ------------------------------------------------------------ 

  Sub-contractor      The risk of sub-contractor delivery failure or 
   delivery            delay arising from Brexit related border controls 
                       is mitigated through a dedicated programme by 
                       the Operations Manager of ensuring the assets 
                       in TRIG's portfolio and their sub-contractors 
                       hold critical spares and that proactive monitoring 
                       and maintenance was being undertaken to reduce 
                       risk of failure 
                  ------------------------------------------------------------ 
  Macroeconomic       Foreign exchange risk continues to be managed 
   factors             through the Investment Manager's application of 
                       the Company's hedging policy 
                  ------------------------------------------------------------ 
 

Risks identified in the Company's risk management framework

This section sets out the key risks faced by the Group categorised by their residual risk rating.

The table below sets out the Company's principal risks with a 'high' residual risk categorisation. They relate to macro factors driven by externalities where the common mitigant is the diversification within TRIG's portfolio.

 
RESIDUAL RISK - 'HIGH' 
--------------------------------------------------------------------------------------------- 
  Risk factor                  Key mitigants 
                             ---------------------------------------------------------------- 
  Energy yield                   Diversification of the portfolio across a variety 
   Portfolio electricity          of geographies, therefore weather systems, and 
   production falling             renewables technologies, including the complimentary 
   short of expectations          seasonal bias of solar production 
                                  Established nature of wind and solar technologies; 
                                  typical levels of availability in a given year 
                                  are around 96% to 99% 
                                  Experience of Operations Manager in monitoring 
                                  portfolio production and delivering asset availability 
                                  Utilisation of the Operations Manager's and 
                                  third-parties' expertise when assessing energy 
                                  yield estimates during acquisition due diligence 
                                  Improvements in technology providing future 
                                  opportunities for enhancement, life extensions 
                                  and repowering 
                                  The sensitivity of the Company's NAV to deviations 
                                  from energy yield expectations is provided in 
                                  Section 2.8 - Valuation of the Portfolio 
                             ---------------------------------------------------------------- 
  Electricity                      A significant portion of TRIG's near-term portfolio-level 
   pricing                          revenue benefits from a government-backed subsidies 
   Electricity                      (e.g. renewable obligation certificates, feed 
   prices moving                    in tariffs and contracts for difference) or 
   adversely, including             power price fixes 
   as a result                      Diversification of the portfolio across a variety 
   of renewables                    of geographies means that electricity is sold 
   build-out exceeding              into distinct electricity markets (GB, Irish 
   the growth in                    SEM [44] , France, Nordics and Germany), each 
   electricity                      with different factors influencing the regional 
   demand, the                      electricity price 
   volume of renewables             Long-term nature of revenues and forward pricing 
   in the energy                    mechanisms, including through offtake agreements 
   mix increasing                   with utility or corporate counterparties and 
   resulting in                     hedging instruments with financial institutions, 
   greater power                    provides some protection against short-term 
   price 'cannibalisation',         fluctuations 
   and lower natural                The weighted average power price forecast used 
   gas and carbon                   to determine the Directors' valuation is comprised 
   prices                           of a blend of the forecasts for each of the 
   A summary of                     power markets in which TRIG is invested after 
   the impact of                    applying expected power purchase agreement sales 
   market development               discounts and reflecting cannibalisation 
   on electricity                   In the longer term, transition risks associated 
   pricing is provided              with climate change, including the impact of 
   in Section 2.4                   greater or faster renewables build-out assumptions, 
   - Market Development             may be mitigated through: 
                                     *    Storage technologies enabling renewables to become 
                                          partly dispatchable and able to capture higher 
                                          prevailing prices at times of higher demand 
 
 
                                     *    The increasing electrification of the transport and 
                                          heating sector and the commercial development of 
                                          renewables-generated 'green' hydrogen could support 
                                          long-term demand for power 
 
 
                                     *    Detailed reporting in line with the recommendations 
                                          of the Task Force on Climate-related Financial 
                                          Disclosures ("TCFD") is set out later in this Risks 
                                          and Risk Management section 
 
 
                                    The sensitivity of the Company's NAV to changes 
                                    in power price forecast assumptions is provided 
                                    in Section 2.8 - Valuation of the Portfolio 
                             ---------------------------------------------------------------- 
  Political /                    UK and European economies where opportunities 
   regulatory                     fall within TRIG's acquisition focus are expected 
   Government or                  to continue to demonstrate a robust approach 
   regulatory support             to grandfathering commitments [45] to existing 
   for renewables                 installed capacity 
   changes adversely,             Future subsidies generally track the fall in 
   including retrospective        development costs of maturing technologies, 
   changes to contracted          providing appropriate public value-for-money 
   tariffs or established         With the reductions in costs of deploying renewables 
   cost frameworks                driving renewable energy to grid parity, unsubsidised 
   A summary of                   assets are being developed, particularly in 
   public policy                  the Nordic (onshore wind) and Iberian (solar 
   frameworks is                  PV) regions 
   set out in Section             Emphasis on energy security as a key item on 
   2.4 - Market                   the public agenda, in light of both dwindling 
   Development                    North Sea fossil fuel production and broader 
                                  geopolitical concerns 
                                  Strong public and political momentum in TRIG's 
                                  markets of focus towards meeting long-term United 
                                  Nations, European Union and national decarbonisation 
                                  efforts (e.g. the EU's New Green Deal and the 
                                  UK's Energy White Paper) 
                             ---------------------------------------------------------------- 
 
 
RESIDUAL RISK - 'MEDIUM' 
------------------------------------------------------------------------------------ 
 Risk factor             Key mitigants 
                        ------------------------------------------------------------ 
  Liquidity /               The Investment Manager's policies and controls 
   treasury management       in relation to cash management 
                             Regular cash monitoring by the Board and Investment 
                             Manager 
                             Regular cash flow forecasting and stress testing 
                             prepared by the Investment Manager and considered 
                             by the Board in setting dividend targets and 
                             declaring dividends 
                             Revolving credit facility provides liquidity 
                             to finance acquisitions between equity capital 
                             markets fundraising 
                        ------------------------------------------------------------ 
  Counterparty              Diversification of counterparty exposure through 
   credit                    several component suppliers and service sub-contractors 
                             The Managers have dedicated credit monitoring 
                             functions. Their analysis is reported to the 
                             Board quarterly 
                             Managers prepare contingency plans when credit 
                             quality deteriorates to prepare for an event 
                             of counterparty failure 
                             Credit quality of project counterparties is 
                             assessed as part of the acquisition due diligence 
                             process 

                             Further detail on the portfolio's counterparty 
                             exposure is provided below 
                        ------------------------------------------------------------ 
  Taxation                  Corporation and local tax rates are changed 
                             by governments and local authorities from time 
                             to time. Some mitigation is achieved as a result 
                             of the diversification across geographies and 
                             therefore different government policies 
                             Relevant tax rules are closely monitored, utilising 
                             third-party advisers where necessary 
                             The sensitivity of the Company's NAV to changes 
                             in taxation rates is provided in Section 2.8 
                             - Valuation of the Portfolio 
                        ------------------------------------------------------------ 
  Sub-contractor            The Operations Manager, RES, typically sits 
   delivery                  on the boards of the project companies. Through 
                             this role, and reporting information provided, 
                             the Operations Manager reviews projects and 
                             their sub-contractors' performance 
                             Where RES is a sub-contractor to a project 
                             or in other specific circumstances, representatives 
                             of the Investment Manager, InfraRed, will sit 
                             on the board of the project company 
                             The Operations Manager maintains a regular 
                             dialogue with major sub-contractors to ensure 
                             challenges and issues are resolved proactively 
                             In extremis, sub-contractors can be terminated 
                             for poor performance. Replacement sub-contractors 
                             are generally readily available 
                        ------------------------------------------------------------ 
  Macroeconomic             Foreign exchange: hedging policy established 
   factors                   and adhered to 
                             Inflation: the income from the portfolio has 
                             a correlation with inflation. Most of the subsidy 
                             regimes and some costs are linked to inflation. 
                             It is expected that power prices have some positive 
                             correlation with inflation in the longer term 
                             Interest rates: fixed-rate debt or interest 
                             rate swaps to reduce interest rate exposure 
                             at project level; limited exposure at Company 
                             level 
                             The sensitivity of the Company's NAV to changes 
                             in macroeconomic factors is provided in Section 
                             2.8 - Valuation of the Portfolio 
                        ------------------------------------------------------------ 
  Construction              Through the acquisition process, the Investment 
   projects                  Manager, with input from the Operations Manager, 
                             undertakes risk allocation and counterparty 
                             due diligence when determining the appropriate 
                             valuation for, and whether to proceed with, 
                             the opportunity, utilising input from third-party 
                             legal and technical advisers where necessary 
                             The Operations Manager sits on the boards of 
                             the project companies. Through this role, and 
                             with reporting information provided, the Operations 
                             Manager reviews construction progress and is 
                             able to intervene where necessary 
                             The Operations Manager provides quarterly updates 
                             to the Board on each project in construction 
                        ------------------------------------------------------------ 
  Physical single           Some infrastructure that is important to the 
   points of failure         performance of TRIG's portfolio exists outside 
                             the direct control of individual projects, such 
                             as grid connections. Exposure to single points 
                             of failure is reduced through portfolio diversification 
                             and TRIG's balanced portfolio manages single 
                             asset concentration 
                             Acquisition due diligence considers the contractual 
                             provisions and protections for individual projects, 
                             factoring the conclusions into investment valuations 
                             and decisions 
                             Actively monitored by the Operations Manager 
                             through project company risk matrices and analysis 
                             of shared exposure between projects 
                        ------------------------------------------------------------ 
 
 
RESIDUAL RISK - 'LOW' OR 'INSIGNIFICANT' GROUPED BY AIFMD CATEGORY 
------------------------------------------------------------------------ 
 AIFMD category   Risks 
                 ------------------------------------------------------- 
 Operational         Energy yield 
                      Political / regulatory 
                      Sub-contractor delivery 
                      Construction projects 
                      Physical single points of failure 
                      Health & safety 
                      Climate change - see later in this section 
                      for TRIG's reporting against the recommendations 
                      of the Task force on Climate-related Financial 
                      Disclosures 
                      ('TCFD') 
                      Stakeholders: communities and investment partners 
                      Asset-level regulatory compliance Insurance 
                      Cybersecurity 
                      Fraud and management override 
                      Breach of Company-level regulations or contractual 
                      covenants 
                      Transaction due diligence and structuring 
                      Key person and Company-level service provider 
                      failure 
                      Conflicts of interest 
                      Portfolio valuation error 
                 ------------------------------------------------------- 
  Liquidity          Liquidity / treasury management 
                      Asset-level liquidity and gearing 
                 ------------------------------------------------------- 
  Counterparty       Counterparty concentration 
                 ------------------------------------------------------- 
  Credit             Risk of counterparty failure 
                 ------------------------------------------------------- 
  Market             Electricity pricing 
                      Macroeconomic factors, including interest rates, 
                      inflation and foreign exchange 
                      Equity capital markets 
                      Deal flow and transaction pricing 
                      Breach of company policies 
                 ------------------------------------------------------- 
  Taxation           Changes in corporation tax rates, limitations 
                      on tax relief on interest deductions and other 
                      tax risks 
                 ------------------------------------------------------- 
 

Climate change related risks and opportunities

The recommendations of the Task Force on Climate-Related Financial Disclosures, of which TRIG is a supporter, is the established framework for consistent, comparable and clear reporting on a company's approach to climate change and assessing its potential impact on the company.

TRIG began voluntarily reporting against the TCFD recommendations in its 2019 Annual Report & Financial Statements, acknowledging that compliance with all 11 disclosure recommendations would be progressed over time. Where TRIG will add to these disclosures in future periods, we set out the steps being taken to achieve compliance for the 2021 Annual Report & Financial Statements.

TRIG's climate-related reporting follows the four core elements defined by the TCFD.

1. Governance

 
  Board oversight                             Managers' role 
  The Board has overall responsibility        TRIG's Sustainability Policy, 
   for the oversight of TRIG's                 including climate change considerations, 
   sustainability risks and opportunities,     applies to both making new investments 
   of which climate change is an               (throughout the deal screening 
   important subset. Its approach              and due diligence processes) 
   is set out in TRIG's Sustainability         and the running of the current 
   Policy, which is available on               portfolio (asset management 
   TRIG's website.                             activities, monitoring and reporting). 
   The Board and Managers meet                 Day-to-day management of TRIG's 
   on a quarterly basis, during                portfolio is delegated to its 
   which they review the risks                 Investment Manager, InfraRed, 
   facing the Company, including               and its Operations Manager, 
   risks related to climate change.            RES. 
   TRIG's investment strategy is               The Managers monitor climate-related 
   intertwined with progress towards           government policy, engaging 

   a net zero carbon future. As                with policy makers where appropriate, 
   such, consideration of the transition       and physical changes in the 
   and physical consequences of                climate, to inform the application 
   climate change features in the              of TRIG's strategy and the Managers' 
   Board's discussions. The Board              assessment of the risks faced 
   considers climate-related opportunities     by the Company. 
   through its discussions with                Quarterly, TRIG's Advisory Committee, 
   the Managers of TRIG's strategy             comprised of representatives 
   and risks through its risk management       from both Managers, considers 
   framework.                                  TRIG's strategy and risks, the 
   The Board's Management Engagement           output of which is reported 
   Committee reviews the Managers'             to and discussed with the Board. 
   performance annually, including             InfraRed and RES each report 
   their adherence to the Company's            on their sustainability-related 
   Sustainability Policy.                      activities, including relating 
   The Board's Audit Committee                 to climate change. Their reporting 
   considers the Company's climate-related     is available on their respective 
   disclosures.                                websites. 
                                               Representatives of RES and InfraRed 
                                               typically sit on the board of 
                                               each project company. Through 
                                               this role, they ensure that 
                                               climate change related risks 
                                               are considered by project company 
                                               management teams and reflected 
                                               in project company risk registers. 
                                            ------------------------------------------- 
 

2. Strategy

TRIG's business model is specifically designed to take advantage of the investment opportunities arising from the decarbonisation of energy usage. The pace of the transition to a net-zero carbon future will dictate the size of the investment opportunity for TRIG. Under current plans for renewables deployment spread over the range of European countries in which TRIG invests, coupled with the expected need for the replacement of existing installations in due course, the Managers expect there to be significant investment opportunities for the Company over the long term. Notwithstanding this, TRIG recognises that risks relating to climate change could have an impact on the Company.

The table below set out a selection of key climate-related opportunities and risks as they apply to TRIG. Risks arising from climate change overlap with the Company's principal risks: energy yield, energy pricing and government / regulations. A broader description of opportunities is set out in Section 2.2 - Business Model and Strategy and risks are set out earlier in Section 2.11 - Risk and Risk Management. The table includes a qualitative assessment of the impact of climate-related opportunities and risks on:

TRIG's investments, strategy and financial planning;

Incorporating the expected timeframes.

 
  Impact          Opportunities                            Risks 
  Portfolio       In the medium term, government           In the near and medium 
   investments     policy stemming from the                 term, transition risks 
                   transition to a net-zero                 to portfolio investments 
                   carbon economy may present               arise from unexpected changes 
                   opportunities for follow-on              to government policies. 
                   investments in the existing              Increase in renewables 
                   portfolio such as:                       build-out ambition without 
                   The co-location of storage,              sufficient demand side 
                   which may enhance the                    action can reduce power 
                   asset and provide access                 price forecasts. 
                   to a new revenue stream;                 In the medium and long 
                   Repowering existing sites                term, if adverse climate 
                   to extend asset life and                 change is not arrested, 
                   enhance investment performance.          portfolio investments will 
                   In France, for example,                  likely be exposed to more 
                   repowered sites are able                 frequent extreme weather 
                   to bid for new subsidies;                events, increasing the 
                   Expanding sites to efficiently           risk of physical damage 
                   increase investment scale                to on-site infrastructure 
                   whilst utilising existing                and off-site transmission 
                   site knowledge and, potentially,         and distribution systems, 
                   grid infrastructure.                     alongside additional safety 
                                                            risks and operational considerations. 
                                                            Such events may acute, 
                                                            including: 
                                                            Forest, grassland or peat 
                                                            fires; 
                                                            Flooding; or 
                                                            Storms and high speed 
                                                            wind gusts. 
                                                            Or chronic, including: 
                                                            Increased temperatures 
                                                            such that the thermal capacity 
                                                            of equipment could be exceeded; 
                                                            Changes to ground conditions 
                                                            from increased rain; or 
                                                            Changes to cloud cover 
                                                            impacting ground-level 
                                                            solar irradiation. 
                                                            Risks also include potential 
                                                            long-term changes to weather 
                                                            patterns causing material 
                                                            increase or decrease in 
                                                            an asset's energy yield 
                                                            from that expected at the 
                                                            time of investment. 
                                                            Mitigation comes from portfolio 
                                                            diversification across 
                                                            geographies and technologies, 
                                                            to reduce the overall impact 
                                                            of action taken by an individual 
                                                            government, any local extreme 
                                                            weather event or single 
                                                            asset failure. 
                ---------------------------------------  ---------------------------------------- 
  Strategy        Government policies across               In the near and medium 
                   Europe have shown renewable              term, projects are likely 
                   energy has a central role                to grow in scale, which 
                   to play in decarbonising                 may result in fewer opportunities 
                   our energy usage. This                   by number. This means that 
                   has resulted in significant              with an increasing volume 
                   growth in markets where                  of capital looking to deploy 
                   TRIG has an acquisition                  into sustainable investment 
                   focus. In the near term,                 themes, renewable energy 
                   the greatest investment                  projects can be highly 
                   activity in TRIG's key                   sought after, and investment 
                   markets is expected from                 discipline is key. "Off-market" 
                   subsidised offshore wind                 transactions sourced by 
                   in the North Sea and onshore             the Investment Manager, 
                   wind in France, and unsubsidised         InfraRed, remain an important 
                   onshore wind in the UK                   route to attractive opportunities. 
                   and Nordics and solar                    In the long term, as portfolios 
                   in Iberia.                               mature and subsidy periods 
                   In the medium term, the                  come to an end, the power 
                   development of renewables                price exposure of renewable 
                   frameworks across Europe                 investment portfolios will 
                   (if they are demonstrated                naturally increase. The 

                   to be credible, stable                   power price exposure of 
                   and robust) could result                 projects exposed to merchant 
                   in broadening TRIG's diversification     power price is typically 
                   to further geographies.                  managed through offtake 
                   In the long term, as newer               agreements or hedging instruments. 
                   storage technologies mature, 
                   investment opportunities 
                   may arise in such projects. 
                   This may include the production 
                   and storage of 'green' 
                   hydrogen and its subsequent 
                   use to generate electricity. 
                ---------------------------------------  ---------------------------------------- 
  Financial       In 2020, TRIG entered                    Increasing penetration 
   planning        into a new ESG-linked                    of intermittent renewable 
                   revolving credit facility.               electricity generators 
                   This provides the opportunity            in the energy system risks 
                   to reduce the margin and                 increasing the volatility 
                   commitment fees under                    in the prevailing and forecast 
                   the facility should TRIG                 power price. 
                   meet certain targets,                    In the near term, exposure 
                   including increasing the                 is reduced through increasing 
                   number of homes powered                  the proportion of revenues 
                   by clean energy from TRIG's              with fixed power prices, 
                   portfolio.                               achieved through acquisition 
                   The strength of the renewables           of investments with subsidised 
                   investment theme is underpinned          revenues, fixing under 
                   by both its strong ESG                   offtake agreements and 
                   credentials, including                   the use of hedging instruments. 
                   the positive impact on                   In the medium term, the 
                   climate change, and investors'           build-out of long-term 
                   desire for long-term sustainable         storage infrastructure, 
                   income. This provides                    charging infrastructure 
                   the opportunity for TRIG                 for electric vehicles and 
                   to continue to grow. For                 grid upgrades will help 
                   existing shareholders                    provide flexibility to 
                   this means greater diversification       the energy system. This 
                   through further acquisitions,            will support the power 
                   increased economies of                   price at times when renewables 
                   scale, and accretion through             generation may exceed electricity 
                   raising capital at a share               demand, thereby reducing 
                   price in excess of the                   periods of low or negative 
                   Company's net asset value                pricing. 
                   per share. 
                ---------------------------------------  ---------------------------------------- 
 

Impact of different climate related scenarios

TRIG's portfolio returns and potential to grow the portfolio are subject to both transition risks and physical risks.

Transition Risks: Risks related to the transition to a lower-carbon economy. The risks can be grouped into four categories: policy and legal risk; technological risk; market risk; and reputational risk.

Physical Risks: Risks associated with physical impacts from climate change that could affect carbon assets and operating companies. These impacts may include "acute" physical damage from variations in weather patterns (such as severe storms, floods, and drought) and "chronic" impacts such as sea level rise, and desertification.

The Board and the Managers have identified three key factors that will be impacted by the transition and physical risks of climate change:

Power price forecasts, which are impacted by renewables build-out assumptions and the extent to which renewable electricity can be utilised when it is generated. This risk is most likely to manifest in a 2 degrees Celsius or lower scenario, where transition risks are greatest. The Investment Manager's analysis, having taken input from a leading third-party power forecaster, is set out below.

Energy yield, which could be impacted by changes to weather patterns. Weather models are not able to forecast the impact of climate change scenarios on site-by-site weather patterns.

Asset availability, maintenance costs and replacement costs will be impacted by changes in weather patterns that result in more severe events such as storms, floods and wildfire. This risk is most likely to manifest in a higher temperature scenario, where physical risks are greatest.

High transition risk scenario (typically associated with a 1.5-2 degrees Celsius temperature change)

Under this scenario, we assume that policy measures are put in place that accelerate the decarbonisation of energy production, including higher than expected levels of renewables deployment, and the contribution of each country where TRIG invests to net-zero carbon is achieved by 2050. Physical risks from extreme weather events are less frequent and effective insurance coverage remains generally available.

In a high transition risk scenario:

There is downward pressure on forecast power prices for renewables generators due to greater decarbonisation of the energy mix from that assumed in the Company's valuation power price forecasts.

This is, in part, offset by an increase in electricity demand as transport, industry and heating move away from fossil fuels.

An increase in carbon prices is expected; however, this is likely to be offset by lower gas prices and greater periods of time when non-emitting generation is setting the prevailing power price.

Although these scenarios are very difficult to formulate, modelling undertaken suggests a possible impact of this scenario is a c. 11% reduction in the forecast portfolio power curve. If no mitigating action is taken then there could be a potential GBP120m to GBP220m (or 5p/share to 10p/share) reduction of NAV. This impact could be reduced as a result of industry efficiencies, such as lower operating costs arising from greater competition between sub-contractors as the sector continues to scale up.

One of the challenges to achieving more renewables build-out than assumed in current power price forecasts, and therefore decarbonisation, is that as long-term power price falls, this creates a feedback loop of making fewer new projects financially viable, which in turn reduces the rollout rate and therefore reduces the downward pressure on forecast power prices. As noted the in Chairman's Statement, governments across TRIG's target markets are beginning to set out detailed policies in relation to both supply and demand for renewable electricity, which may address this feedback loop, provide support to the power price and achieve the levels of renewables rollout required for net-zero carbon by 2050.

High physical risk scenario (typically associated with a 3-4 degrees Celsius temperature change)

This is a climate change scenario that results in temperature change of greater than 3 degrees Celsius, resulting in extreme weather events that could threaten the successful operation of assets within the portfolio. We assume that under this scenario, renewables build-out lags expectations and energy is not decarbonised to an extent consistent with a lower impact from climate change and that insurance for damages may become unavailable or very expensive.

Whilst current power price forecasts are not prepared on the basis of an overall temperature change, the underlying assumptions, particularly relating to renewables build-out, are consistent with a 3 degrees Celsius scenario.

The Operations Manager is undertaking a review of the portfolio for assets that may be at greater risk of extreme weather events such as storms, floods and wildfire. Projects at higher risk will be examined to identify the potential cost associated with these events and to mitigate their impact. We expect to provide an estimated financial impact in the 2021 Annual Report & Financial Statements.

A key mitigant to the portfolio as a whole suffering from a material event at any one asset is the portfolio's asset diversification including the geographic spread across five European countries, which helps to reduce the impact of localised weather events.

Sustainability considerations, including those relating to climate change, are integrated throughout InfraRed's investment process. Scenario and sensitivity analysis is also undertaken as part of due diligence and examined by the Investment Committee when considering investment approval.

   3.   Risk Management 

Overall, as previously noted, TRIG's business model is specifically designed to take advantage of the investment opportunities arising from the decarbonisation of energy usage. Nonetheless, climate-related risks exist and are identified and discussed through the Managers' wider risk management processes. They are identified and assessed by the Managers when making new investments (throughout the deal screening and due diligence processes) and in the running of the current portfolio (asset management activities, monitoring and reporting).

Climate-related risks identified through the acquisition process are managed through the acquisition business plan and investment pricing. The appropriateness of mitigating action is considered by the Investment Committee as part of the investment process.

Representatives of RES and InfraRed sit on the board of each project company. Through this role, they ensure that climate change related risks are considered by project company management teams, reflected in project company risk registers, and appropriate mitigation plans are put in place.

Those identified in the running of the current portfolio are managed through mitigating action, where possible. Management activities are discussed by the Advisory Committee through their quarterly review of portfolio performance.

These risks are integrated into TRIG's risk management framework through the investment process and reported quarterly to the Board. The Board considers the completeness of the risks recognised and the sufficiency of controls and mitigation, identifying where it is felt further action is required.

   4.   Metrics and Targets 

Metrics

The Company utilises a range of metrics to monitor the contribution of the portfolio to mitigating climate change. These can be found in the Section 2.5 - Sustainability, and include the following:

Renewable energy generation

Tonnes of carbon emissions avoided

Homes powered by clean energy, which impacts the margin and commitment fee paid under TRIG's ESG-linked revolving credit facility

Proportion of portfolio sourcing electricity under renewable energy tariffs

Number of Active Environmental Management projects

The Board and Managers consider a number of metrics that relate to climate-related opportunities and risks:

Renewables build-out assumptions in TRIG's investment and target acquisition markets, which impacts long-term power price forecast assumptions

Percentage of revenues with fixed power prices, which impacts the extent to which fluctuations in power price forecasts affects the portfolio valuation and forecast cash flows

Energy yield, where deviations from expectations are examined for climate-related risk factors, including those arising from asset availability

Greenhouse Gas (GHG) emissions

TRIG's Scope 1 and Scope 2 greenhouse gas emissions are disclosed below. TRIG has adopted the operational control boundary approach for the measurement of energy emissions for TRIG projects, as the Directors believe this reflects the level of emissions that can be actively controlled and reduced.

In 2020, the portfolio generated 3,953GWh of electricity, including compensated curtailments (2019: 3,036GWh), which was enough renewable power for 1.1m homes and displaced 1.2m tonnes of carbon emissions.

The Board and the Managers remain committed to reducing carbon emissions where possible, and continue to focus on energy saving opportunities in the Company's activities and underlying projects where appropriate.

TRIG will provide reporting on Scope 3 emissions, and other greenhouse gases where relevant, from the 2021 Annual Report & Financial Statements.

Emissions have been calculated in accordance with the GHG Protocol Corporate Accounting and Reporting Standard. UK Government Conversion Factors have been utilised for UK investments and the latest EU RE-DISS values to calculate emissions for non UK investments.

 
  Disclosure                  Year ended 31 December    Year ended 31 December 
                               2020                      2019 
  Scope 1 - direct 
   emissions (tCO2e)          0                         0 
                            ------------------------  ------------------------ 
  Scope 2 - indirect 
   emissions, location 
   based (tCO2e)              1489                      1481 
                            ------------------------  ------------------------ 
  Total Scope 1 and 
   2 emissions (tCO2e)        1489                      1481 
                            ------------------------  ------------------------ 
  Intensity ratio (tCO(2) 
   e per MWh)                 0.06%                     0.07% 
                            ------------------------  ------------------------ 
  Scope 2 - indirect 
   emissions, market 
   based (tCO2e)              666                       646 
                            ------------------------  ------------------------ 
 

Targets

The Company's annual budgeting and semi-annual valuation process includes forecasts that may be influenced by the transition and physical impacts of climate change. These include expectations in respect of variables, in particular:

Percentage of revenues with fixed power prices, which impacts the extent to which fluctuations in power price forecasts affects the portfolio valuation and forecast cash flows

Energy yield, where deviations from expectations are examined for climate-related risk factors, including those arising from asset availability

Deviations of these variables from budgets and changes to the variables in forecasts may serve as leading indicators of changes to climate-related opportunities, risks and performance.

As noted above, further scenario analysis is underway, which may lead to further relevant metrics and targets being identified.

Counterparty Exposures

Given the importance of state subsidies for investment in renewables, TRIG has exposure to the creditworthiness of and policy commitments by national governments and is reliant on the consistency of government policy, for example "grandfathering" within the UK whereby renewables generators continue to receive the same level of subsidy, set upon commissioning, for the duration of the incentive. In addition, each project company enters into a commercial PPA [46] with a utility or energy trading company to enable them to sell the electricity generated and to receive the FiT [47] or ROC [48] subsidy payments. The project companies have entered into PPA's with a range of providers. Each project company enters into a contract for the maintenance of the plant. In the case of wind, this is often with the turbine manufacturer. There are also contracts with construction companies who may be building or maintaining plant and/or have defect guarantees for past works. For both wind and solar sectors, projects may also benefit from equipment provider warranties. Failure of any of these counterparties represents a risk for the group.

There are significant exposures to counterparties, for example, Statkraft (as PPA provider), Siemens and Vestas (as turbine suppliers and maintainers) and Natural Power Services and RES (as service providers). In the event that a counterparty or guarantor enters insolvency, then there is a risk of disruption while counterparties are replaced and a risk of distribution lock-up for the assets that are project financed.

Given the Covid-19 global pandemic, and financial difficulties faced by some other turbine suppliers, there is concern around the future of turbine suppliers in the sector. Whilst TRIG has the largest exposures to Siemen and Vestas, the largest turbine suppliers in Europe, the Company does use a wide range a suppliers to help mitigate concentration risk. The fundamentals behind the industry, policies supporting wind energy globally, remain in place and we believe that although certain turbine suppliers may be facing difficulty, the risk is not systemic.

2.12 Stakeholders and Corporate Culture

Stakeholder Management: The Board believes in the importance of conducting business responsibly. That means behaving ethically, respecting people and respecting the environment.

TRIG aims to maintain high standard of business conduct and stakeholder engagement and to ensure a positive impact on the community and environment in which it operates. This requires monitoring and consideration of its stakeholders by building strong relationships with suppliers, customers, communities and authorities among others.

TRIG's relationships with its stakeholders and its dedication to maintaining a responsible approach to investment, is essential to position TRIG well for the longer term - and is expected by its shareholders.

TRIG and its appointees work with many stakeholders in the management of the business in the following categories:

Shareholders & the Board: The Board of Directors is ultimately accountable to the Shareholders for the running of the business and the making of key strategic decisions and all key appointments of service providers. The Board delegates certain activities including day-to-day investment management and operations management and works closely with all the key service providers. Shareholder interaction is regarded as a critical component of the management of TRIG and the Board works closely with the Managers, InfraRed and RES, with the Company Secretary, Aztec, and with the Company's brokers, Investec and Liberum, in order to keep abreast of the needs and concerns of shareholders. The Chairman offers to meet with major shareholders on a regular basis and many continue to benefit from the opportunity to speak with her impartially without TRIG's Managers present on a variety of matters, including governance.

Corporate-level suppliers: As well as the critical day-to-day oversight of the portfolio provided by InfraRed and RES, TRIG has a set of corporate providers which ensure the smooth running of the Company. In administration, Aztec provides consistent support for corporate and company secretarial activities, while Investec and Liberum act as key intermediaries between the Company and our shareholder base, working with the Managers to arrange meetings with current and prospective investors, monitoring equity market conditions and advising on capital raising activities, which have been regular given the growth of our business. TRIG benefits from the commitment and flexibility of six corporate lenders for the Company's revolving credit facility, namely Royal Bank of Scotland, National Australia Ban, ING, Sumitomo Mitsui Banking Corporation, Barclays and Santander. Carey Olsen and Norton Rose Fulbright provide corporate legal support for the business in Guernsey and London respectively and tax services are provided by KPMG. Our registrar, Link Market Services maintains the shareholder register and manages the processing of shareholder communications with our other advisers. On the public relations side TRIG receives advice and practical coordination from Maitland/AMO Strategic Advisers. TRIG also accesses a number of key data providers, including technical reports in relation to acquisitions and regular power price forecasts and commentary from several specialised providers. The Company's auditor is Deloitte. Additional valuation services are provided by independent valuers from time to time. The Company also receives a range of other services including shareholder list analysis, webhosting, design and remuneration consulting.

Operational partners: TRIG benefits from co-investing alongside a number of joint venture partners, some being developers and vendors, such as Equinor, Orsted, SSE and Akuo Energy and others being financial co-investment partners, for example APG and Equitix. In each case, the Managers build on the relationship with the co-investor, providing representatives to attend project board meetings to coordinate and monitor the investment, with the additional potential to share best practices.

Vendors: TRIG's reputation for reliability and efficiency in transaction management with a variety of vendor counterparties (having now transacted with 18 counterparties) helps the Company to continue to derive value in origination by accessing projects off-market (including from RES itself under the right of first offer agreement).

Portfolio Customers: As an energy provider, TRIG's key customers are PPA counterparties. These offtakers pay for and receive TRIG's portfolio companies' output - with revenues being payments for the renewables benefits as well as commercial power for those projects permitted to receive power market revenues.

Portfolio Suppliers: TRIG's key operational suppliers include Original Equipment Manufacturer's ("OEMs"), spare part O&M providers and increasingly Independent Service Providers ("ISPs"). On construction projects the key suppliers are the EPC Contractors, turbine suppliers and balance of plant contractors. Utilities also provide certain site-specific services such as meter readings. The operations teams maintain relationships with the site landowners who receive rental payments. Lenders to the project companies include many leading domestic and international banking groups, TRIG's Managers maintain discussions with key lenders as there are opportunities to refinance projects as market conditions allow and this has been done selectively within the portfolio to date.

Local Communities: TRIG is conscious of its role in the local communities in which its projects operate. Close consultation with local planning authorities is an important feature of renewables whether in construction, during operations or preparing for the potential repowering or dismantling of a project. Socially, TRIG seeks to provide educational events at its larger sites, while also contributing via community funds to local projects ranging from playgroups to cultural events. In 2020, TRIG allocated an additional GBP0.5m to help address the Covid-19 impact on the local communities where TRIG's sites are located.

Economic activities around the sites provide additional demand for local goods and services as well as local employment opportunities for example in the maintenance of the sites and access. These are particularly valued in areas where a long-term urbanisation trend has resulted in reduction in the local rural economies.

TRIG seeks to promote best practices across the portfolio, in areas as diverse as noise monitoring, shadow flicker, ice throw, landscaping, the provision of community events and liaison with the local media.

We discuss how TRIG interacts with the local community further in Section 2.5, Sustainability.

Other External Stakeholders: The Company maintains a close dialogue, through its Managers, with key regulators as well as with the regulated networks, such as National Grid and the relevant network operators in the UK. At a policy level, TRIG's Managers monitor requirements and engage with key government departments and regulatory bodies. At the network level, TRIG's Managers and O&M providers communicate in several areas for example on grid outage issues, on the role of renewables assets as locally embedded suppliers of energy as well as on technical or contractual issues. In the investment company space, the Association of Investment Companies (AIC) plays a key role in shaping the influence of this growing segment of the London market and TRIG seeks to apply AIC guidelines where relevant to its business and maintains an active dialogue as one of the leading companies in its sub-sector. The Managers also keep market financial analysts appraised of TRIG's strategy, performance and outlook.

Section 172(1) Statement: The Company provides disclosure relevant to the requirements of Section 172(1) a)-f) throughout the Strategic Report, in line with Association of Investment Companies (AIC) guidance. Please see the table below for a reference to where this information can be found:

 
 Section 172(1) statement          Reference 
  area 
 The issues, factors and           During the Board's quarterly meetings, 
  stakeholders the Directors        both Investment Manager and Operations 
  consider relevant in              Manager are required to provide updates 
  complying with section            on items that relate to section (a)-(f). 
  172 (1) (a) to (f) and            The chief way this is done is through a 
  how they have formed              quarterly Investment Manager and Operations 
  that opinion.                     Manager reports. 
                                    The Company's relationships with suppliers, 
                                    customers and contractors is a key part 
                                    of the operations report, whilst items 
                                    relating to shareholders, Company reputation 
                                    and investment decisions are contained 
                                    within the Investment Manager report. 
                                    The Board challenges the Managers to be 
                                    alert to the concerns of stakeholders and 
                                    how best to address these concerns to ensure 
                                    continuing positive stakeholder engagement. 
                                    The Company's risk review framework also 
                                    facilitates the identification of items 
                                    relevant to the Section 172 (1) statement. 
                                    The annual review of the Strategy by the 
                                    Board encompasses the longer-term factors 
                                    relating to the Company's decisions and 
                                    the implications for the communities and 
                                    environments in which our investments are 
                                    made. 
                                    As part of the Annual Strategic Review 
                                    process, key stakeholders such as partners, 
                                    suppliers, customers and local communities 
                                    are also discussed. The Board's approach 
                                    to engaging with these stakeholders are 
                                    outlined above. 
                                  -------------------------------------------------- 
  (a) the likely consequences      The Board considers the likely consequences 
   of any decision in the           on all stakeholders of decisions taken 
   long-term                        as part of the Annual Review process. For 
                                    further information please see sections 
                                    2.2 Business Model and Strategy and 2.3 
                                    Investment Approach and Policy 
                                  -------------------------------------------------- 
  (b) the interests of             The Company does not have any employees. 
   the Company's employees          For information on the Managers please 
                                    see section 2.12 Stakeholders and Corporate 
                                    Culture 
                                  -------------------------------------------------- 
  (c) the need to foster           Please see section 2.12 Stakeholders and 
   the Company's business           Corporate Culture 
   relationships with suppliers, 
   customers and others 
                                  -------------------------------------------------- 
  (d) the impact of the            The risk framework of the Company overseen 
   Company's operations             by the Board specifically consider environmental 

   on the community and             and social factors, as detailed in section 
   the environment                  2.11 Risks and Risk Management. Please 
                                    see sections 2.5 Sustainability and 2.12 
                                    Stakeholders and Corporate Culture for 
                                    further information. 
                                  -------------------------------------------------- 
  (e) the desirability             An example of this would the Company's 
   of the Company maintaining       signing of an ESG-linked credit facility 
   a reputation for high            as explained elsewhere in this report. 
   standards of business            This facility is the first of its nature 
   conduct                          in the listed infrastructure sector and 
                                    enhances the Company's reputation for high 
                                    standards of business conduct. Please also 
                                    see sections 2.5 Sustainability and 2.12 
                                    Stakeholders and Corporate Culture 
                                  -------------------------------------------------- 
  (f) the need to act fairly       Please see sections 2.5 Sustainability 
   as between members of            and 2.12 Stakeholders and Corporate Culture 
   the Company                      and 6 Corporate Governance Statement 
                                  -------------------------------------------------- 
 

Corporate Culture

The Company's approach to corporate culture, including sustainability and diversity and inclusion, includes:

Considering that the risk appetite of the Company is consistent with the risk appetite of the Company on a regular basis;

Embedding and improving on good practices in the day-to-day management processes - which are assessed by the Board in the course of the quarterly Board meetings as well as in a wide range of ad hoc interactions during the year;

Ensuring both Managers and the Board maintain specific initiatives to promote diversity and inclusion;

Promoting an appropriate culture of stewardship, responsibility, accountability and openness; and

A focus by the Board and Managers on appropriate interaction with key stakeholders, including shareholders, lenders, regulators, vendors, co-investors and suppliers.

The Chairman, Helen Mahy, sets a strong example in maintaining an effective corporate culture, for example, by her active advocacy of equal opportunities. Outside TRIG, Helen is a member of the steering committee of the Parker Review into the Ethnic Diversity of UK boards which was published in October 2017 and updated in February 2020. In addition, she is a patron of a charity, the Social Mobility Business Partnership, she is co-chair of the Employers Social Mobility Alliance and an Equality and Human Rights Commissioner.

The Board has been at least 50% female since launch and following the appointment of Tove Feld in March 2020, three of the five Directors are female. Its members are drawn from the British Isles, Germany and Scandinavia, which are each a key market for TRIG's assets.

As TRIG has no employees beyond the non-executive Board. The Directors look through to the culture of TRIG's key service providers in annual review processes as well as on an ongoing basis. The executive management of TRIG is provided by its Managers, InfraRed and RES. Both are global businesses with broad representation across its employees reflecting the international nature of their activities.

Both Managers support equal opportunities for recruitment and when managing existing employees, regardless of age, race, gender or personal beliefs and preferences. Both Managers prioritise work force engagement and have implemented a range of initiatives to improve employee wellbeing, including fitness and mental health schemes, mentorship programs, promoting charity work and organising social activities. Both companies have HR systems in place which allow employees to raise any concerns in confidence. InfraRed and RES recognise that when their employees are engaged they will benefit from higher staff retention, better productivity and increased employee loyalty.

At InfraRed there are over 25 nationalities represented with an average age of 38 across the InfraRed business comprising over 190 professionals. In order to support diverse recruitment of candidates on merit and not on background, race or gender, InfraRed staff may undergo "unconscious bias" training and new staff are often recruited via a carefully considered process which is "name blind".

The Board interacts regularly with staff of the Managers both at senior and operational levels, in both formal and informal settings. This promotes greater openness and trust between the key individuals engaged in delivering against the Company's objectives and ensures the Managers remain fully aligned with the Company's corporate culture and approach to sustainability. The Board also engages closely throughout the year with the Company's administrator, brokers, and legal and public relations advisers to gauge the broader positioning and direction of the business.

In addition to the Board Meetings being attended by the core senior InfraRed and RES teams, other more junior members from InfraRed and RES are encouraged to join. Not only does this aid their development, but it also allows the Board to gain insight into how senior management are supported and how prepared the Managers are in relation to key person risk and long-term succession planning.

The Investment Manager, InfraRed Capital Partners, has a strong and clear set of Values - which it promotes and monitors both group-wide and at the individual level (through assessments) - focusing on the principles of Passion, Curiosity, Trust, Partnership and Fulfilment.

InfraRed also adopts and implements the Principles for Responsible Investment ("PRI") (an investor initiative in partnership with UNEP Finance Initiative and UN Global Compact) which are widely recognised and highly regarded around the world. In the annual assessment by PRI, InfraRed has achieved excellent ratings, standing well above industry standards for the last six consecutive years. The PRI can be summarised as follows:

to showcase leadership in responsible investment;

to incorporate sustainability issues into investment analysis and decision-making;

to be active owners and incorporate sustainability issues into ownership policies and practices;

to seek appropriate disclosures on sustainability issues by the entities in which the investments are made;

to promote acceptance and implementation of PRI within the investment industry; and

to report on activities and progress towards implementing the PRI.

Culture is very important for the Operations Manager, RES, from both a business perspective and to RES people. The RES culture is what enables its strategy and what motivates its people to perform. RES's senior leadership are of the view that empowering employees and a strong safety culture is necessary to make a positive impact in the communities it works in.

RES' leadership maintains that as the organisation grows and adapts, it remains true to its culture, heritage and vision to create a future where everyone has access to affordable low carbon energy. RES' core values are most simply reflected in their values of Passion, Accountability, Collaboration and Excellence.

RES supervises a range of activities at a corporate level, to support staff in their own volunteering and charitable fundraising endeavours. At a portfolio level, activities are designed to enhance the interaction with the local communities as well as to make a difference to the amenities available in often remote locations where TRIG's projects are sited.

Anti-Bribery and Corruption

Although TRIG has no employees, TRIG is committed to respecting human rights in its broader relationships.

TRIG does not tolerate corruption, fraud, the receiving of bribes or breaches in human rights. Both InfraRed and RES have anti-corruption and bribery policies in place in order to maintain high standards of business integrity, a commitment to truth and fair dealing and a commitment to complying with all applicable laws and regulations.

Both Managers have training for anti-bribery and corruption which all employees are required to complete annually.

All counterparties undergo a process to mitigate against bribery and corruption. When InfraRed completes acquisitions on behalf of TRIG, there is vendor due diligence and all sales and purchase agreements are required to have anti bribery and corruption protection clauses.

Disclosure

On the basis of the Managers' recommendations, the Directors have considered the existing sustainability and corporate culture policies relative to good industry practice as applicable to an infrastructure investment company and believe them to be current and appropriate.

The Board remains committed to high standards of corporate governance and keeps the Company's practices under review with respect to current best practice. Further details of how the Company complies with the various corporate governance standards are set out in the section on Corporate Governance and Regulatory Matters.

The Board wishes to be at the forefront of disclosure and reporting of the Company's performance and strategic intentions. The Board believes this is achieved by the communications as follows:

annual report and accounts;

interim statement and accounts;

detailed presentations to accompany the results;

announcements of all material acquisitions; and

meetings with shareholders held by the Investment Manager and the Operations Manager.

TRIG is a supporter of the Task Force on Climate-related Financial Disclosures ("TCFD"). Disclosure aligned to TCFD guidance in consistent with the Company's approach to promoting best practice disclosure. Climate change is a live topic and expertise on the subject continues to evolve. Section 2.11 Risk and Risk Management covers TRIG's approach to governance and risk management around climate change scenario analysis.

The Company's website (www.TRIG-Ltd.com) which includes the Company's prospectuses, financial disclosures and other announcements since launch provides further information on TRIG and its investments.

Disclosure of key sensitivities and risks has been developed by the Board working with the Managers. The level and type of disclosure has been developed and refined in order to assist in a full and fair analysis of the Company and its investments.

This Strategic Report is approved by the Board of Directors of The Renewables Infrastructure Group Limited.

Helen Mahy

16 February 2021

Registered Office:

East Wing, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3PP

03 Board of Directors

Stakeholders and Corporate Culture

Members of TRIG's Board of Directors, all of whom are non-executive and independent of the Managers, are listed below.

Helen Mahy CBE

Chairman

Appointed 14 June 2013, Helen is an experienced chairman and non-executive Director. In addition to being Chairman of the Company, Helen serves as a non-executive Director for SSE plc and is an Equality and Human Rights Commissioner as well as co-chair of the Employers Social Mobility Alliance. Previous Directorships include SVG Capital plc, Stagecoach Group plc, Aga Rangemaster Group plc, Primary Health Properties plc, Bonheur ASA and she was also Chairman of MedicX Fund Ltd. Helen was Group Company Secretary and General Counsel of National Grid plc and was a member of its Executive Committee from September 2003 to January 2013 when she retired from National Grid plc. Helen qualified as a barrister and was an Associate of the Chartered Insurance Institute. In 2015 she was awarded a CBE for services to business, particularly relating to diversity in the workplace. Helen is a resident of the UK.

Shelagh Mason

Director and Senior Independent Director

Appointed 14 June 2013, Shelagh is an English property solicitor. She was Senior Partner of Spicer and Partners Guernsey LLP until November 2014 and retired at the end of October 2020 as a consultant with Collas Crill LLP, specialising in English commercial property. She is also non-executive Chairman of the Channel Islands Property Fund Limited which is listed on the The International Stock Exchange Authority Limited and Chairman of Riverside Capital PCC, recently appointed to the Board of Skipton International Limited. Shealgh is also on the Board of Starwood European Real Estate Finance Limited and Ruffer Investment Company, both London listed. Previously Shelagh was a member of the board of Directors of Standard Life Investments Property Income Trust, a property fund listed on the London Stock Exchange for 10 years until December 2014. She retired from the board of MedicX Fund Limited, a main market listed investment company investing in primary healthcare facilities in 2017 after 10 years on the board. She is a past Chairman of the Guernsey Branch of the Institute of Directors and a member of the Chamber of Commerce, the Guernsey International Legal Association and she also holds the IOD Company Direction Certificate and Diploma with distinction. Shelagh is a resident of Guernsey.

Jon Bridel

Director and Audit Committee Chair

Appointed 14 June 2013, Jon currently serves across various listed and unlisted companies as a Director or non-executive Chairman. These include Sequoia Economic Infrastructure Income Fund Limited and SME Credit Realisation Fund Limited, as well as DP Aircraft I Limited and Fair Oaks Income Limited which are listed on the Specialist Fund Segment. Jon previously worked as Managing Director of Royal Bank of Canada's investment businesses in the Channel Islands and in senior management positions in the British Isles and Australia in banking, specialising in corporate finance and commercial credit and in private multi-national businesses as Chief Financial Officer. Graduating from the University of Durham with a degree of Master of Business Administration in 1988, Jon also holds qualifications from the Institute of Chartered Accountants in England and Wales where he is a Fellow, the Australian Institute of Company Directors and is a Chartered Marketer. Jon is a Member of the Chartered Institute of Marketing, a Chartered Director and Fellow of the Institute of Directors and a Chartered Fellow of the Chartered Institute for Securities and Investment. Jon is a resident of Guernsey.

Klaus Hammer

Director and Management Engagement Committee Chair

Appointed 1 March 2014, Klaus is a graduate of the University of Hamburg and gained an MBA at IMD Lausanne. He was previously Chief Operating Officer of the global combined-cycle gas turbine power plant business of EON, and also served on a variety of boards including EON Värmekraft Sverige AB, Horizon Nuclear Power Ltd. and the UK Association of Electricity Producers. Prior to E.On, which he joined in 2005, he spent 20 years with Royal Dutch Shell in a variety of roles in both Europe and Africa. Among his other recent roles, he was a public member of Network Rail until mid-2014. Klaus also advises investors in energy-related businesses. In 2018, he supported the setting-up of a major defence contractor on an interim basis as Executive Finance Director in Australia. Klaus is a resident of Germany.

Tove Feld

Director

Appointed 1 March 2020. Tove is a Danish national and has more than 25 years' experience in the renewables sector, with a focus on offshore wind. Her previous roles include the Chief Technical Officer at DONG Energy Wind Power (now Orsted) where she had a prominent role in preparing the company for IPO, as well Head of Engineering Solutions for Offshore Wind at Siemens Wind Power. Ms Feld also currently serves on the Board of Representatives of the Danish Technical University, and the Boards of FORCE Technology, a leading technological service company, and CEKO Sensors ApS, an industrial monitoring and optimisation sensor technology business. Ms Feld has a Ph.D from Aalborg University (Denmark) and Executive MBA from IMD (Switzerland). Tove is a resident of Denmark.

4.0 Statement of Directors' Responsibilities

The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations. The Companies (Guernsey) Law, 2008, as amended, requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Article 4 of the IAS Regulation and applicable law.

Under company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, International Accounting Standard 1 requires that Directors:

Properly select and apply accounting policies;

Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

Provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

Make an assessment of the company's ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report and Corporate Governance Statement. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey and the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement

We confirm that to the best of our knowledge:

The financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

The Chairman's Statement, Strategic Report and Report of the Directors include a fair review of the development and performance of the business and the position of the Company and Group taken as a whole together with a description of the principal risks and uncertainties that it faces; and

The annual report and financial statements when taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

Disclosure of information to the Auditor

The Directors who held office at the date of approval of this Directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware and that each Director has taken all the steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditor

Deloitte LLP have expressed their willingness to continue in office as auditor and a resolution proposing their re-appointment will be submitted at the Annual General Meeting.

On behalf of the Board of Directors of The Renewables Infrastructure Group Limited

Helen Mahy

16 February 2021

Registered Office:

East Wing, Trafalgar Court, Les Banques, St Peter Port, Guernsey, Channel Islands, GY1 3PP

5.0 Report of the Directors

The Directors present their report and accounts of the Company for the year to 31 December 2020.

Principal Activity

The Company is a closed-ended Guernsey incorporated investment company, investing in and managing a portfolio of investments in renewable energy infrastructure project companies. Its shares have a premium listing on the Official List of the UK Listing Authority and are traded on the main market for listed securities of the London Stock Exchange.

Results and Distributions

The results for the year are summarised in the Operational and Financial Review and Valuation of the Portfolio section of the Strategic Report (Sections 2.7 and 2.8) and set out in detail in the audited financial statements.

Distributions and Share Capital

The Company has declared four quarterly interim dividends for the year ended 31 December 2020 for an aggregate annual dividend of 6.76p (2019: 6.64p) per share as follows:

1.69p per share was declared on 6 May 2020, to shareholders on the register as at 14 May 2020, paid on 30 June 2020,

1.69p per share was declared on 3 August 2020, to shareholders on the register as at 13 August 2020, paid on 30 September 2020,

1.69p per share paid on 5 November 2020, to shareholders on the register as at 12 November 2020, paid on 31 December 2020, and

1.69p share was declared on 4 February 2021, to shareholders on the register on 11 February 2021, to be paid on 31 March 2021.

The Company had one class of share capital, Ordinary Shares, in issue as at 31 December 2020.

Shares in Issue

Ordinary Shares in issue have increased during the year from 1,636,563,717 to 1,903,402,338 as a result of further share issues, issues of shares to the Managers in lieu of fees pursuant to the Investment Management Agreement (in relation to InfraRed Capital Partners Limited) and the Operations Management Agreement (in relation to Renewable Energy Systems Limited) and take up of scrip shares in lieu of dividends.

 
 Date             Description                           New Ordinary      Number of 
                                                       Shares Issued      Shares in 
                                                                              Issue 
 31 December 
  2019            Opening Position                                 -  1,636,563,717 
                 -----------------------------------  --------------  ------------- 
                  Issue of shares to the Managers 
                   in lieu of fees relating H2 
 31 March 2020     2019                                      889,550  1,637,453,267 
                 -----------------------------------  --------------  ------------- 
 21 May 2020      Share issue                            100,000,000  1,737,453,267 
                 -----------------------------------  --------------  ------------- 
                  Issue of scrip dividend shares 
                   in lieu of 2020 1st (Q1) interim 
 30 June 2020      dividend                                  977,776  1,738,431,043 
                 -----------------------------------  --------------  ------------- 
                  Issue of scrip dividend shares 
 30 September      in lieu of 2020 2nd (Q2) interim 
  2020             dividend                                2,601,332  1,741,032,375 
                 -----------------------------------  --------------  ------------- 
                  Issue of shares to the Managers 
 30 September      in lieu of fees relating to 
  2020             H1 2020                                   893,480  1,741,925,855 
                 -----------------------------------  --------------  ------------- 
 15 December 
  2020            Share issue                            160,000,000  1,901,925,855 
                 -----------------------------------  --------------  ------------- 
                  Issue of scrip dividend shares 
 31 December       in lieu of 2020 3rd (Q3) interim 
  2020             dividend                                1,476,483  1,903,402,338 
                 -----------------------------------  --------------  ------------- 
 31 December 
  2020            Closing Position                                 -  1,903,402,338 
                 -----------------------------------  --------------  ------------- 
 

Share Issues in the Year

Over 2020, the Company issued 260m shares over two tap equity issues (excluding the issuance of Managers' shares and scrip issues). These issues raised gross proceeds of GBP320m at a premium to NAV.

These issues took place in May and December. The May fundraise resulted in the issue of 100m shares at 120.0p each. The December fundraise resulted in the issue of 160m shares at 125.0p each.

The net proceeds of these raisings have been used to acquire assets over the year for the TRIG portfolio and to pay down the Company's revolving credit facility. At the 31 December 2020, the Company's acquisition facility was GBP40m drawn.

Shares Issued to the Managers

The Managers are paid 20% of their annual management fee (up to an adjusted portfolio value of GBP1bn) and advisory fees in shares. In relation to this, 889,550 shares were issued in March 2020 (578,208 to the Investment Manager and 311,343 to the Operations Manager) relating to fees for the second six months of 2019. A further 893,480 shares were issued in September 2020 (580,762 to the Investment Manager and 312,718 to the Operations Manager) relating to fees for the first 6 months of 2020. Shares in lieu of fees relating to the second six months of 2020 (expected to be 885,012 shares in total - comprised of 575,258 to the Investment Manager and 309,754 to the Operations Manager) are to be issued in March 2021. (See Note 18 to the financial statements for further detail).

For the calculation of Net Asset Value ("NAV") per share as at 31 December 2020, the shares earned by the Managers but not yet issued at that date have been included in the number of shares meaning that the Net Assets are divided by 1,904,287,350 shares to arrive at the NAV per share.

For the calculation of Earnings per Share ("EPS"), the shares earned by the Managers but not yet issued have been included in the calculation of the weighted average number of shares based upon them being issued at the end of the quarter in which the management fees were earned. The resulting weighted average shares in issue used to calculate EPS is 1,711,999,406.

In addition, senior representatives and connected individuals of the Managers hold approximately two million shares.

As a result of the share issues during the year and the expected issuance to the Managers in March 2021, the number of shares in the Company held by the Investment Manager is expected to be 2,359,503 and the number of shares held by the Operations Manager is expected to be 1,240,080.

Scrip Shares

An annual ordinary resolution to authorise the Directors to offer the shareholders the right to receive further Ordinary Shares ("Scrip Shares") instead of cash in respect of all or part of any dividend that may be declared will be proposed at the forthcoming Annual General Meeting in 2021.

The Board believes that it would be in the general interest of shareholders, who may be able to treat distributions of Scrip Shares as capital for tax purposes or who may otherwise wish to roll over their dividend entitlement into further investment in the Company, to have the option of electing to receive part or all of their dividends in the form of Scrip Shares. Shareholders who elect to take Scrip Shares instead of receiving cash dividends will increase their holdings without incurring dealing costs or stamp duty. The Company benefits from the retention of cash for further investment which would otherwise be paid out as dividend.

The scrip dividend alternative was offered to shareholders in relation to the interim dividends declared for the year ended 31 December 2020, other than the 31 March 2020 dividend relating to the final quarter of 2019 which was cancelled on basis that the market volatility and movements in the Company's share at the time due to the impact on markets of the Covid-19 pandemic could have resulted in the Reference Price being materially in excess of the prevailing market price. This dividend was paid as cash. A scrip alternative will again be offered to shareholders for the dividend to be paid on 30 March 2021 relating to the final quarter of 2020 and a scrip dividend circular will be published separately in May 2021 with details of the scrip dividend alternative for 2021. The Scrip Shares issued do not have any entitlement to the dividends paid in the same month and declared in the month before they are issued. The average take-up of scrip dividends over the year was 8.3%, and relates to the three quarters of the year where scrip dividends were available.

Guernsey regulatory environment

As a Guernsey-registered closed-ended investment company, TRIG is subject to certain ongoing obligations to the Guernsey Financial Services Commission.

Directors

The Directors who held office during the year to 31 December 2020 were:

Helen Mahy CBE

Jon Bridel

Shelagh Mason

Klaus Hammer

Tove Feld (appointed 1 March 2020)

Biographical details of each of the Directors are shown in Section 3.

Investment Manager

InfraRed Capital Partners Limited (the "Investment Manager" or "InfraRed") acts as Investment Manager to the Group. A summary of the contract between the Company, its subsidiaries and InfraRed in respect of services provided is set out in Note 18 to the accounts.

Operations Manager

Renewable Energy Systems Limited (the "Operations Manager" or "RES") acts as Operations Manager to the Group. A summary of the contract between the Company, its subsidiaries and RES in respect of services provided is set out in Note 18 to the accounts.

Further details of the Managers are provided in Section 2.2 of the Strategic Report.

Broker, Administrator and Company Secretary

The Company's joint brokers during the year to 31 December 2020 were Investec Bank PLC and Liberum Capital Limited.

The Company's Administrator during the year to 31 December 2020 is Aztec Financial Services (Guernsey) Limited.

Substantial Interests in Share Capital

As at 16 February 2021, the Company has received notification in accordance with the Financial Conduct Authority's Disclosure and Transparency Rule 5 of the following interests in 5% or more of the Company's Ordinary Shares to which voting rights are attached:

 
                                      Number of Ordinary Shares Held  Percentage 
                                                                            Held 
 Newton Investment Management Ltd                        153,727,491        8.08 
                                      ------------------------------  ---------- 
 Rathbone Investment Management Ltd                      123,694,606        6.50 
                                      ------------------------------  ---------- 
 M&G Investment Management Ltd                           113,684,892        5.97 
                                      ------------------------------  ---------- 
 Investec Wealth & Investment                             99,352,684        5.22 
                                      ------------------------------  ---------- 
 

Donations

The Company made no political donations during the year or the preceding year.

Payment of Suppliers

It is the policy of the Company to settle all suppliers in accordance with the terms and conditions of the relevant market in which it operates. Although no specific code or standard is followed, suppliers of goods and services are generally paid within 30 days of the date of any invoice. The Company has no trade creditors.

Criminal Finances Act

The Board of The Renewable Infrastructure Company Limited has a zero-tolerance commitment to preventing persons associated with it from engaging in criminal facilitation of tax evasion. The Board has satisfied itself in relation to its key service providers that they have reasonable provisions in place to prevent the criminal facilitation of tax evasion by their own associated persons and will not work with service providers who do not demonstrate the same zero tolerance commitment to preventing persons associated with it from engaging in criminal facilitation of tax evasion.

Going Concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in Section 2.9, Analysis of Financial Results of the Strategic Report. In addition, Notes 1 to 4 to the financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Group has the necessary financial resources to meet its obligations. The Group benefits from a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, it maintains a working capital component of GBP30m as part of its revolving credit facility (recently increased from GBP340m to GBP500m and limited to 30% of Portfolio Value) ([49]) . The Group's project-level financing is non-recourse to the Company and is limited to 50% of Gross Portfolio Value. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.

Following the financial period the company exchanged contracts to acquire an equity interest of 17.5% in Beatrice offshore wind farm and also exchanged contracts to acquire the Grönhult onshore wind farm which is in construction. The Company has sufficient headroom in its revolving credit facility to finance these transactions.

The directors do not believe that there is a significant risk to the business as a result of the Covid-19 pandemic but will continue to monitor any future developments.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of these financial statements. Thus, they adopt the going concern basis of accounting in preparing the annual financial statements.

This conclusion is based on a review of the Company's cash flow projections including reasonably expected downside sensitivities together with cash and committed borrowing facilities available to it.

Viability Statement

The Directors have assessed the viability of the Group over a five-year period to December 2025.

The Directors have determined that the five-year period to December 2025 is an appropriate period over which to provide this viability statement as this period accords with the Group's business planning exercises.

In making this statement the Directors have considered the resilience of the Group, which includes the sustainability of its business model and strategy, taking account of its current position, the principal risks facing the business (being the level of electricity production, the level of future energy prices and continued government support for renewable subsidy payments), in severe but plausible downside scenarios typically focussed on negative changes to the level of electricity production and future energy prices, and the effectiveness of any mitigating actions. Scenarios can be built up from the key sensitivities of the portfolio valuation, which are presented in Section 2.8 (Valuation of the Portfolio).

As explained in the Chairman's Statement and in Section 2.11 (Risks and Risk Management), the Directors do not consider the risks to the Company from Brexit, Covid-19 or Climate Change to significantly affect the principal risks set out in Section 2.11 (Risks and Risk Management).

As part of being a self-managed Alternative Investment Fund, the Directors, together with the Managers, rigorously assess the risks facing the Group and consider sensitivity analysis against the principal risks identified.

The Company's risk management processes (described in Section 2.11 (Risks and Risk Management)) consider the key risks during this five-year period and beyond. These include risks relating to sustainability, including those arising from environmental, social and governance ("ESG") matters. An input to the risk management process is a key element of InfraRed's investment process, in which sustainability and ESG considerations are fully integrated both before projects are acquired and whilst under TRIG's ownership, and RES's approach to asset management (both described in Section 2.5 (Sustainability)).

Climate change related risks are set out in line with the recommendations of the Task Force for Climate-related Financial Disclosures ("TCFD") in Section 2.11 (Risks and Risk Management) and the consideration of these are integrated into the investment process, as described in Section 2.5 (Sustainability), and can be mapped over to the portfolio valuation sensitivity analysis, presented in Section 2.8 (Valuation of the Portfolio).

A key climate change transition risk is the impact of greater penetration of intermittent renewable electricity generators in the energy system lowering the forecast power price and increasing its day-to-day volatility. Exposure to this risk is reduced through:

Factoring renewables build out assumptions into the forecast wholesale and captured power price assumptions; and

Increasing the proportion of revenues with fixed power prices, achieved through acquisition of investments with subsidised revenues, fixing under offtake agreements and the use of hedging instruments.

TRIG is the owner of a portfolio of project companies whose underlying assets are predominately fully constructed and operating renewable electricity generating facilities. As a result, TRIG benefits from predictable long term cash flows and a set of risks that can be identified and assessed. The projects are each supported by detailed financial models. The Directors believe that the diversification within the portfolio of projects helps to withstand and mitigate for the risks it is most likely to meet.

The Investment Manager prepares and the Directors review summary five-year cash flow projections each year as part of 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 period. Sensitivity analysis considers the potential impact of the Group's principal risks actually occurring (individually, and together). These projections are based on the Managers' expectations of future asset performance, income and costs, and are consistent with the methodology applied to provide the valuation of the investments. The Directors review significant changes to the Company's cash projections each quarter with the Managers as part of the quarterly Board meetings. The viability assessment assumes continued government support for existing subsidy arrangements for the projects within the portfolio that are spread across five jurisdictions (UK, Ireland, Sweden, Germany and France). Where governments change subsidy arrangements applying to renewables projects these changes are expected to apply only to projects not yet operating.

The Directors believe that whilst the risk to the value of the Company's investments, its ability to operate its projects and generate revenue presented by the ongoing Covid-19 pandemic remains significant, there has been minor disruption to the business to date and the risk mitigating activities have served to reduce the impact and highlight the Company's resilience. Throughout, the health, safety and welfare of the workforce of our Managers and supply chain has remained paramount. Covid-aware practices were quickly implemented as the pandemic took hold. Operationally, this meant we maintained, and expect to continue, our strong record of a low accident frequency rate and good asset availability. Further detail on the risk factors arising from the Covid-19 pandemic and the key mitigants is set out in Section 2.11 (Risks and Risk Management).

The Directors continue to work with the Managers to ensure that the portfolio of investments is able to operate as effectively as possible. The Managers have performed downside risk scenario planning encompassing a range of potential outcomes and these 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 period to December 2025.

Internal Controls Review

Taking into account the information on emerging and principal risks and uncertainties provided in Section 2.11 of the Strategic Report and the ongoing work of the Audit Committee in monitoring the risk management and internal control systems on behalf of the Board (see Section 8, the Audit Committee Report), the Directors:

are satisfied that they have carried out a robust assessment of the Company's emerging and principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity;

are satisfied the Company has adequate safeguards and procedures in place to continue during the Covid-19 pandemic and can continue to function effectively; and

have reviewed the effectiveness of the risk management and internal control systems and no significant failings were identified.

The internal controls review covers material controls including financial, operational and compliance controls.

To enable the Directors to provide this statement in relation to risks and controls the Directors have worked with the Managers to:

review the Company's risk matrix each quarter;

consider each Manager's compliance with their own internal controls each quarter:

to receive presentations from each Manager on the effectiveness of these controls and their internal controls environment;

consider the Company's risk appetite, agree this with the Managers and document this;

assess the impact Covid-19 has had on the Company; and

consider the risk culture of the Company and within the Managers and confirm these are appropriate and expected to support the sustainability of the company and consistent with the risk appetite

Share repurchases

No shares have been bought back in the period. The latest authority for the Company to make market purchases of Ordinary Shares was granted to the Directors on 6 May 2020 and expires on the date of the next Annual General Meeting. The Directors are proposing that their authority to buy back shares be renewed at the forthcoming Annual General Meeting.

Treasury Shares

Section 315 of the Companies (Guernsey) Law, 2008 allows companies to hold shares acquired by market purchase as treasury shares, rather than having to cancel them. Up to 14.99% of the number of shares in issue at the date of the last AGM (6 May 2020) may be held in treasury and may be subsequently cancelled or sold for cash in the market. This gives the Company the ability to reissue shares quickly and cost efficiently, thereby improving liquidity and providing the Company with additional flexibility in the management of its capital base.

There are currently no shares held in treasury. The Board would only authorise the sale of shares from treasury at prices at or above the prevailing net asset value per share (plus costs of the relevant sale). If such a measure were to be implemented, this would result in a positive overall effect on the Company's net asset value. In the interests of all shareholders, the Board will keep the matter of treasury shares under review.

On behalf of the Board of Directors of The Renewables Infrastructure Group Limited

Helen Mahy

16 February 2021

Registered Office:

East Wing, Trafalgar Court, Les Banques,

St Peter Port, Guernsey, Channel Islands, GY1 3PP

6.0 Corporate Governance Statement

Introduction

The Board recognises the importance of a strong corporate governance culture that meets the listing requirements. The Board has put in place a framework for corporate governance which it believes is appropriate for an investment company in line with the best practices in relation to matters affecting shareholders, communities, regulators and other stakeholders of the Company. With a range of relevant skills and experience, all Directors contribute to the Board discussions and debates on corporate governance. In particular, the Board believes in providing as much transparency for investors as is reasonably possible to ensure investors can clearly understand the prospects of the business and enhance liquidity of its shares while also preserving an appropriate level of commercial confidentiality.

AIFM Directive

The Alternative Investment Fund Managers Directive seeks to regulate alternative investment fund managers (in this paragraph, "AIFM") and imposes obligations on managers who manage alternative investment funds (in this paragraph, "AIF") in the EU or who market shares in such funds to EU investors. The Company is categorised as a self-managed Non-EEA AIF for the purposes of the AIFM Directive. In order to maintain compliance with the AIFM Directive, the Company needs to comply with various organisational, operational and transparency obligations.

The Board of TRIG has considered the Principles and Provisions of the AIC Code of Corporate Governance (AIC Code). The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the UK Code), as well as setting out additional Provisions on issues that are of specific relevance to investment companies. The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council and the Guernsey Financial Services Commission, provides more relevant information to shareholders. The company has complied with the Provisions and applied the Principles of the AIC Code. The AIC Code is available on the AIC website (www.theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies.

Guernsey Regulatory Environment

The Guernsey Financial Services Commission (the "Commission") issued a Finance Sector Code of Corporate Governance. The Code comprises Principles and Guidance, and provides a formal expression of good corporate practice against which shareholders, boards and the Commission can better assess the governance exercised over companies in Guernsey's finance sector.

The Commission recognises that the different nature, scale and complexity of specific businesses will lead to differing approaches to meeting the Code. Companies which report against the UK Corporate Governance Code or the AIC Code are also deemed to meet this code. The Directors have determined that the Company will continue as a Guernsey-registered closed-ended investment company.

Non-Mainstream Pooled Investments

On 1 January 2014, certain changes to the FCA rules relating to restrictions on the retail distribution of unregulated collective investment schemes and close substitutes came into effect.

As announced by the Company on 7 January 2014, following the receipt of legal advice the Board confirms that it conducts the Company's affairs, and intends to continue to conduct the Company's affairs, such that the Company would qualify for approval as an investment trust if it were resident in the United Kingdom. It is the Board's intention that the Company will continue to conduct its affairs in such a manner and that Independent Financial Advisers should therefore be able to recommend its Ordinary Shares to ordinary retail investors in accordance with the FCA's rules relating to non-mainstream investment products.

The Board

The Board consists of five non-executive Directors. In accordance with Provision 10 of the AIC Code all of the non-executives are independent of the Investment Manager. The Chairman, Helen Mahy, met the independence criteria of the AIC Code Provision 11 upon appointment and has continued to meet this condition throughout her term of service. Although not a requirement of the AIC Code, in accordance with guidance in Provision 11, the Board has a Senior Independent Director, Shelagh Mason, who was appointed as Senior Independent Director in 2013. Being non-executive Directors, none of the Directors has a service contract with the Company.

The Articles of Incorporation provide that each of the Directors shall retire at each annual general meeting in accordance with Provision 23 of the AIC Code. All five Directors intend to retire and offer themselves for re-election at the forthcoming Annual General Meeting on 5 May 2021.

The Board believes that the balance of skills, gender, experience ethnicity, and knowledge of the current Board provides for a sound base from which the interests of investors will be served to a high standard. Following the growth of the Company in recent years and as those Directors nearing their ninth anniversary of appointment retire, the Board has an active succession plan and expect to appoint new Directors over the next 2 years. The number of Directors may increase to 7 for some periods in order to aid succession planning and to ensure an orderly transition. In light of this, the Board will in 2021 initiate the recruitment of further non-executive Directors. The Board has chosen to adopt a definitive policy with quantitative targets for Board diversity. The Company aspires to equal representation of men and women on the Board and from 1 March 2014 this was achieved, with the Board now 60% female.

The Board appoints all directors on merit. When the Nominations Committee considers Board succession planning and recommends appointments to the Board, it takes into account a variety of factors. Knowledge, experience, skills, personal qualities, residency and governance credentials play an important part. Consideration is also given to the gender, ethnicity, colour, national origin, sexual orientation, age, religion and disability of individuals. The Nominations Committee recognises that a diverse Board enhances its performance. The Nominations Committee is also cognisant of the role it can play in promoting social mobility. In making recommendations to the Board the Nominations Committee will also seek to follow the recommendations of the Hampton Alexander and Parker Reviews.

The Board recommends the re-election of each Director and supporting biographies are disclosed in Section 3 of this annual report.

The Board is scheduled to meet at least four times a year and between these formal meetings there is regular contact with the Investment Manager and Operations Manager, the Secretary and the Company's Joint Brokers. The Directors are kept fully informed of investment and financial controls, and other matters that are relevant to the business of the Company that should be brought to the attention of the Directors. The Directors also have access, where necessary in the furtherance of their duties, to independent professional advice at the expense of the Company.

The attendance record of Directors for the period to 31 December 2020 is set out below:

 
                      Quarterly                    Management 
                          Board                    Engagement  Remuneration  Nomination  Market Disclosure 
                       meetings  Audit Committee    Committee     Committee   Committee          Committee 
 Number of meetings           4                4            3             4           4                  4 
--------------------  ---------  ---------------  -----------  ------------  ----------  ----------------- 
 Meetings Attended: 
 H Mahy                       4             N/A*            3             4           4                  2 
 J Bridel                     4                4            3             4           4                  4 
 S Mason                      4                4            3             4           4                  4 
 K Hammer                     4                4            3             4           4                  4 
 T Feld*                      3                3            3             3           3                  3 
--------------------  ---------  ---------------  -----------  ------------  ----------  ----------------- 
 

* Helen Mahy is not a member of the Audit Committee and attends at the invitation of the Committee and Tove Feld only joined in March 2020 so missed the first Board meeting in 2020.

During the period, a further 19 ad hoc Board/Committee meetings were held in Guernsey to deal with matters substantially of an administrative nature and these were attended by those Directors available.

The Board considers agenda items laid out in the notice and agenda of meeting which are circulated to the Board in advance of the meeting as part of the Board papers. Directors may request any agenda items to be added that they consider appropriate for Board discussion. Each Director is required to inform the Board of any potential or actual conflicts of interest prior to Board discussion.

The Board constantly considers the Company's strategy with regard to market conditions and feedback from shareholders received directly or from the Managers. The investment strategy is reviewed regularly with the Investment Manager. Board meetings include a review of investment performance and associated matters such as health and safety, marketing/investor relations, risk management, gearing, general administration and compliance, peer group information and industry issues.

The Board and the governance arrangements continued to operate effectively during 2020 despite restrictions preventing face to face meetings for much of the year. The Board and Managers and other service providers were able to utilise digital tools to conduct virtual board meetings and other ad-hoc meetings.

Performance Evaluation

The Board evaluates its performance and considers the tenure and independence of each Director on an annual basis. The annual evaluation for the period ended 31 December 2020 has been completed by the Chairman and took the form of a questionnaire completed by all of the Directors and additionally by the Managers and the Company Secretary, including one to one interviews with each Director holding office as at 31 December 2020. The questionnaire covered Board effectiveness including areas such as inclusion and diversity in accordance with the recommendations of the Parker Review ([50]) . For the evaluation of the Chairman, the Senior Independent Director discussed the results of a questionnaire with the Chairman following consultation with the other Directors. The exercise confirmed that the Board runs well and effectively with an appropriate level of balance and challenge.

The Board continues to monitor training for Directors. The Directors consider and report regularly their training needs and their continuing professional development and training carried out. For example, during the year, the Directors attended courses on relevant subjects including cyber security, tax, corporate culture and the new corporate governance code. The Board has asked the Managers, Company Secretary and advisers to provide technical training recognising the ongoing recruitment of new Directors. Examples of such technical training requested are with respect to Market Abuse Regulations and GDPR.

Due to the Covid-19 pandemic, no site visits were possible however the Directors believe that visiting TRIG's assets enable them to gain a deeper understanding of the Company's operations and the challenges faced on a day-to-day basis by the projects' asset managers and will resume site visits when appropriate in line with government guidance. A key element of the Board's role is to provide investors with reassurance as to the robustness of their oversight of the business. To this end the TRIG Chairman met a number of institutional investors in the Company and answered questions on the Company's governance. The Chairman will continue to proactively offer meetings with shareholders facilitated by the Managers and Corporate Brokers. The Directors would like the Company to have the broadest possible shareholders base and for the Company's shares to be held as widely as possible. The Directors have asked the Managers to continue to work towards this objective.

The Board asks the leadership teams at both Managers to regularly provide business updates. In particular, the Board have requested the Managers to provide further detailed sector insight into topics pertinent to the running of the Company, for example on technological developments specific to offshore windfarms.

The independence of each Director has been considered and each has been confirmed as being independent of the Company and its Managers. The Board believes that the composition of the Board and its Committees reflect a suitable mix of skills and experience, and that the Board, as a whole, and its Committees functioned effectively during 2020 and since the launch of the Company in 2013. The Board has employed the use of a skills matrix to identify if there are missing competences and confirmed that the existing Directors held the appropriate range of skills. The skills matrix tool also informs the selection process during the appointment of new directors.

Going forward, the Board intends to retain certain aspects of the practises adopted during the Covid-19 pandemic. For example, where previously phone calls were commonly utilised for ad-hoc meetings it has been decided that virtual meetings, where possible, should be arranged as they facilitate better interaction. Also with the induction of a new Director having to take place remotely, the Board and Managers are refining the on-boarding process, incorporating the learnings from this year.

The Board is diverse in its composition and thought processes. The Directors have a breadth of experience relevant to the Company. The Directors believe that any changes to the Board's composition can be managed without undue disruption. The members of the Board strive to challenge each other constructively to make sure all issues are examined from different angles and the Board holds the Managers properly to account on their progress on sustainability, responsible investment and diversity.

Delegation of Responsibilities

The Board has delegated the following areas of responsibility:

The day-to-day administration of the Company has been delegated to Aztec Financial Services (Guernsey) Limited in its capacity as Company Secretary and Administrator.

The Investment Manager has full discretion (within agreed parameters) to make investments in accordance with the Company's Investment Policy and has responsibility for financial administration and investor relations, in addition to advising the Board in relation to further capital raisings and the payment of dividends amongst other matters, subject to the overall supervision and oversight of the Board. Among the specific tasks of the Investment Manager are the overall financial management of the Company and existing portfolio as a whole, including the deployment of capital, management of the Group's debt facilities, hedging arrangements, the sourcing of new investments, preparing the semi-annual valuations, the statutory accounts, the management accounts, business plans, presenting results and information to shareholders, coordinating all corporate service providers to the Group and giving the Board general advice.

The Operations Manager is responsible for monitoring, evaluating and optimising technical and financial performance across the portfolio. The services provided by the Operations Manager include maintaining an overview of project operations and reporting on key performance measures, recommending and implementing strategy on management of the portfolio including energy sales agreements, insurance, maintenance and other areas requiring portfolio-level decisions, maintaining and monitoring health and safety and operating risk management policies. The Operations Manager also works jointly with the Investment Manager on sourcing and transacting new business, providing assistance in due diligence of potential new acquisitions, refinancing of existing assets and investor relations. The Operations Manager does not participate in any investment decisions taken by or on behalf of the Company or undertake any other regulated activities for the purposes of the UK's Financial Services and Markets Act 2000.

Members of the Investment Manager's and/or the Operations Manager's teams are also appointed as Directors of the Group's project companies and/or intermediate holding companies and as part of their role in managing the portfolio, they attend Board meetings of these companies and make appropriate decisions. Material decisions are referred back to the TRIG's investment committee and/or advisory committee for consideration and determination, and the TRIG Board is consulted on key matters relevant to TRIG's strategy, policies or overall performance, both on an ad hoc basis where required and during formal reporting sessions, including all matters outside the Managers' delegated authority.

Committees of the Board

The committees of the Board are the Audit Committee, the Remuneration Committee, the Nomination Committee, the Management Engagement Committee, and the Market Disclosure Committee. Terms of reference for each Committee have been approved by the Board.

The Chairman and members of each committee as at 31 December 2020 are as follows:

 
                                                  Management       Market 
                Audit  Remuneration  Nomination   Engagement   Disclosure 
            Committee     Committee   Committee    Committee    Committee 
 Chairman    J Bridel       S Mason      H Mahy     K Hammer       H Mahy 
 Members      S Mason        H Mahy    J Bridel     J Bridel     J Bridel 
             K Hammer      J Bridel     S Mason      S Mason      S Mason 
               T Feld      K Hammer    K Hammer       H Mahy     K Hammer 
                             T Feld      T Feld       T Feld       T Feld 
---------  ----------  ------------  ----------  -----------  ----------- 
 

Nomination Committee

The main terms of reference of the Committee are:

regularly review the structure, size and composition required of the Board and make recommendations to the Board with regard to any changes (including skills, knowledge and experience in accordance with Principle K of the AIC Code);

give full consideration to succession planning for Directors taking into account the challenges and opportunities facing the Company; and

be responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise.

ensure plans are in place for orderly succession to the Board and oversee the development of a diverse pipeline for succession.

The Nomination Committee met four times during 2020. The Board is currently composed of 40% male and 60% female Directors. The Board is commencing a process to appoint further non-executive Directors in order to ensure an orderly succession process.

Management Engagement Committee

The terms of reference of this committee are to review the relationships between the Company and its main service providers, including their performance, compliance with their contracts, and levels of fees paid. Recommendations from the Committee's review are given to the Board for consideration and action.

The Management Engagement Committee met four times in 2020 in accordance with its plan to review the performance of the key service providers to the Group and the Company. No material weaknesses were identified, some recommendations were conveyed to certain providers, and the recommendation to the Board was that the current arrangements are appropriate and provide good quality services and advice to the Company and the Group. The Committee convenes a planning meeting in August each year followed by a meeting in November of each year to review the Investment Manager and Operations Manager, and a meeting in February of each year to review the other service providers. The Managers were duly considered at the meeting of the Management Engagement Committee in November 2020 and no material issues were identified in connection with their respective appointments.

Details of the activities of the Remuneration Committee and the Audit Committee are set out in Section 7 and Section 8 respectively. All terms of reference for committees are available from the Company's website or the Company Secretary upon request.

Market Disclosure Committee

The Committee has responsibility for overseeing the disclosure of information by the Company to meet its obligations under the Market Abuse Regulation and the Financial Conduct Authority's Listing Rules and Disclosure Guidance and Transparency Rules.

The main terms of reference for the Committee are:

To consider and decide whether information meets the definition of inside information and whether the Company should announce immediately or whether it is permissible to delay the announcement.

When disclosure of inside information is delayed, to maintain all required records, monitor the conditions permitting delay and to provide any required notifications to the Financial Conduct Authority

The committee should also consider the requirement for an announcement in the case of leaks of inside information.

To ensure that effective arrangements are in place to prevent access to inside information.

The Market Disclosure Committee met four times during 2020.

Relations with Shareholders - AIC Code Principle D

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. The Investment Manager produces a regular factsheet which is available on the Company's website. Senior members of the Investment Manager and Operations Manager make themselves available, as practicable, to meet with principal shareholders and key sector analysts. Feedback from these meetings is provided to the Board on a regular basis. The Board is also kept fully informed of all relevant market commentary on the Company by the Company's Financial PR agency, as well as receiving relevant updates from the Managers and the Company's brokers. During the period, the Chairman of the Board met several separate institutional shareholders of the Company, providing the chance for Shareholders to have a dialogue directly with the Board.

The Company reports formally to shareholders twice a year and will hold an Annual General Meeting in Guernsey on 5 May 2021, at which members of the Board will be available to answer shareholder questions. In May 2020, Covid-19 restrictions resulted in the Annual General Meeting being conducted virtually, to which shareholders were invited to join. If restrictions are still in force in May 2021, we will be offering the same access to shareholders again via another virtual Annual General Meeting. In addition, shareholders receive written communications from the Company either with documents enclosed or to notify them of new information available to view on the Company's website.

Results of Extraordinary and Annual General Meetings are announced by the Company promptly after the relevant meeting. Additionally, other notices and information are provided to shareholders on an ongoing basis through the Company's website in order to assist in keeping shareholders informed. The Secretary and Registrar monitor the voting of the shareholders and proxy voting is taken into consideration when votes are cast at the Annual General Meeting.

Shareholders may contact the Board via the Company Secretary, whose contact details are found in Section 11, Directors and Advisers of this report.

7.0 Directors' Remuneration Report

Directors' Remuneration Report

The Remuneration Committee, chaired by Shelagh Mason and comprising all the Directors, operates within clearly defined terms of reference.

The terms of reference of the Committee are to determine and agree the Board policy for the remuneration of the Directors of the Company, including the approval of any ad-hoc payments in respect of additional corporate work required (e.g. for the work involved with the issue of prospectuses and equity fund raises).

Statement of the Chairman of the Remuneration Committee

As all Directors of the Company are non-executive, they receive an annual fee appropriate for their responsibilities and time commitment but there are no other incentive programmes or performance-related emoluments.

During the year the Committee commissioned Trust Associates to conduct a formal review of Directors' remuneration. Trust Associates are independent of the Company and its Directors. In performing their work, Trust Associates considered:

The increase in the net assets of TRIG (approximately double, by value, since the previous formal review in 2017), the number of assets in the portfolio, the size of individual assets, and co-investing and partnering activities;

The time commitment required to appropriately perform each Director's role and their responsibilities in respect of TRIG;

Additional fees where a Director's duties extend beyond those normally expected as part of the Director's appointment (e.g. Chairmanship of the Board or one of its Committees); and

Market remuneration levels to attract and retain high-calibre directors.

The recommendations of Trust Associates were evaluated by the Committee, which proposes and the Board has, subject to Shareholders' approval, agreed to implement increases set out in the table below, which, other than in respect of the Chairman of the Board, are consistent with the guidance provided by Trust Associates. The Remuneration Committee received a recommendation from the Chairman of the Board and proposes to shareholders that the increase in the Chairman of the Board's remuneration be less than that proposed by Trust Associates. The Chairman of the Board's recommendation balances the increase in time commitment to perform the role and the appropriate level to attract a high-calibre successor, with the on-going challenging economic conditions resulting from the Covid-19 pandemic notwithstanding that the operations of the Company are continuing with no material adverse effect.

Remuneration Policy

All Directors of the Company are non-executive and as such there are:

no service contracts with the Company;

no long-term incentive schemes;

no options or similar performance incentives; and

no payments for loss of office unless approved by shareholder resolution.

The Directors' remuneration shall:

reflect the responsibility, experience, time commitment and position on the Board;

allow the Chairman of the Board and the Chairmen of each of the Board's committees to be remunerated in excess of the remaining Board members to reflect their increased roles of responsibility and accountability;

be paid quarterly in arrears;

include remuneration for additional, specific corporate work which shall be carefully considered and only become due and payable on completion of that work; and

be reviewed by an independent professional consultant with experience of investment companies and their fee structures, at least every three years.

The maximum annual limit of aggregate fees payable to the Directors as set in the Articles of Association is GBP450,000.

Remuneration Committee

The Remuneration Committee met four times during 2020 to consider the remuneration of the Directors. Its membership comprised of all Directors of the Company, which was deemed appropriate as they are each independent and have the requisite knowledge of the Company and experience to appropriately determine remuneration.

The Committee reviewed the advice from its independent remuneration consultant, Trust Associates, on appropriate fee increases to apply and the Committee's recommendation is set out below. This includes an increase in the annual supplement for the additional responsibility borne by the Senior Independent Director (Shelagh Mason) and the Chairman of the Management Engagement Committee (Klaus Hammer) to GBP3,500 (2019: GBP3,000) for each director.

The table below sets out the Directors' remuneration approved and actually paid for the year to 31 December 2020 as well as that proposed for the year ending 31 December 2021.

 
                                                          Supplement 
                                                      for additional 
                                Base remuneration   responsibilities    Remuneration                             Total 
                                         proposed           proposed   rate proposed   Remuneration       remuneration 
 Director     Role                       for 2021           for 2021        for 2021   rate in 2020       paid in 2020 
 Helen        Chairman                  GBP81,000                  -       GBP81,000      GBP75,000          GBP75,000 
  Mahy 
 Jon Bridel   Audit Committee           GBP65,000                  -       GBP65,000      GBP60,000          GBP60,000 
               Chairman 
 Klaus        Chairman                  GBP53,000           GBP3,500       GBP56,500      GBP53,000          GBP53,000 
  Hammer      of the 
              Management 
              Engagement 
              Committee 
 Shelagh      Senior                    GBP53,000           GBP3,500       GBP56,500      GBP53,000          GBP53,000 
  Mason       Independent 
              Director 
 Tove Feld    Director                  GBP53,000                  -       GBP53,000      GBP50,000          GBP41,667 
                                                                                                                ([51]) 
 Total                                 GBP305,000           GBP7,000      GBP312,000     GBP291,000         GBP282,667 
-----------  -----------------  -----------------  -----------------  --------------  -------------  ----------------- 
 

No additional fees were payable to the Directors in 2020. Where the Company requires Directors to work on specific corporate actions, such as the raising of further equity, an additional fee will be appropriately determined.

Directors are entitled to claim reasonable expenses which they incur attending meetings or otherwise in performance of their duties relating to the Company. The total amount of Directors' expenses paid for 2020 was GBP2,906.

The Board also considered the availability of time of each Director, taking into account their other commitments, and concluded that adequate time was in each case available for the appropriate discharge of the Company's affairs.

The Board will seek approval at the AGM in May 2021 for the Remuneration Policy and the annual Directors' fees for routine business for 2021, as set out above, with a view to implementing the proposed increases back dated to 1 January 2021.

Directors' Interests

The Directors of the Company at 31 December 2020, and their interests in the Ordinary Shares of the Company, are shown in the table below.

 
                 31 December 2020  31 December 2019 
                  Ordinary Shares   Ordinary Shares 
 Helen Mahy               116,472           113,320 
 Jon Bridel                27,466            26,423 
 Klaus Hammer              27,620            26,571 
 Shelagh Mason            118,697           115,975 
 Tove Feld                 20,255               n/a 
---------------  ----------------  ---------------- 
 

Some of the Directors' shares may be held jointly with their spouse. All holdings of the Directors and their families are beneficial. No changes to these holdings had been notified up to the date of this report.

Other Disclosures

At the last AGM, held on 6 May 2020, the following resolution including Directors Remuneration was approved:

Ordinary Resolution 9 - To approve the Directors' remuneration report, including the proposed annual remuneration for routine business for each Director, as set out in the Report and Financial Statements, for the year ending 31 December 2020:

 
             Shares voted  Percentage 
 In Favour    995,518,478       98.13 
 Against       18,979,897        1.87 
 Withheld      13,284,562         N/A 
-----------  ------------  ---------- 
 

Performance

In setting the Directors' remuneration, consideration is given to the size and performance of the Company. In 2020, the Total Shareholder Return (on a share price basis) for the Company was (2.9)% (2019: 29.3%) versus (9.8)% for the FTSE-All Share Index (2019: 19.2%). Over the period from the IPO in July 2013 to 31 December 2020 the annualised Total Shareholder Return for the Company was 9.3% and for the FTSE-All Share it was 4.5%.

8.0 Audit Committee Report

The Audit Committee has been in operation since the inception of the Company. Chaired by Jon Bridel, it operates within clearly defined terms of reference and comprises all of the Directors other than the Chairman (who is not a member in accordance with provision 24 of the UK Corporate Governance Code). It is also the formal forum through which the auditor reports to the Board of Directors and they met four times in 2020 (it meets at least three times annually).

The main duties of the Audit Committee are:

giving full consideration of, and recommending to the Board for approval, the contents of the half year and annual financial statements and reviewing the external auditor's report thereon including consideration of whether the financial statements are overall fair, balanced and understandable;

agreeing with the auditor the external audit plan including discussing with the external auditor the key risk areas within the financial statements;

considering and understanding the key risks of misstatement of the financial statements and formulating an appropriate plan to review these and agreeing with the Managers their processes to manage these risk areas;

reviewing the Viability and Going Concern Statements and reviewing the work prepared by the Investment Manager supporting these statements

reviewing the draft valuation of the Company's investments prepared by the Investment Manager and making a recommendation to the Board on the valuation;

monitoring ESG performance in line with the Company's ESG goals and ensuring appropriate disclosures with respect to these targets are reported and reviewed;

reviewing the scope, results, cost effectiveness, independence and objectivity of the external auditor as well as reviewing the effectiveness of the external audit process and making any recommendations to the Board for improvement of the audit process;

reviewing and recommending to the Board for approval the audit, audit related and non-audit fees payable to the external auditor or their affiliated firms overseas and the terms of their engagement;

reviewing the appropriateness of the Company's accounting policies;

ensuring the standards and adequacy of the internal control systems;

to consider any reports or information received in respect of whistleblowing; and

reporting to the Board on how it has discharged its duties.

None of the members of the Audit Committee have any involvement in the preparation of the financial statements of the Company, as this has been contracted to the Investment Manager.

The Audit Committee meets the external auditor before and after their audit and has discussed with the auditor the scope of their annual audit work and also their audit findings. The auditor attends the Audit Committee meetings at which the annual and interim accounts are considered, and at which they have the opportunity to meet with the Committee without representatives of the Managers being present. The Audit Committee has direct access to the auditor and to key senior staff of the Investment Manager, and it reports its findings and recommendations to the Board which retains the ultimate responsibility for the financial statements of the Company.

Membership

The Chair of the Audit Committee, Jon Bridel, is a fellow of the Institute of Chartered Accountants in England and Wales and in addition serves as chairman of the audit committee for other listed investment companies. Previously Jon worked in senior positions in investment, corporate finance and commercial banking and was CFO of two private multinational businesses. The Board is satisfied that Jon has recent and relevant financial experience as required under the UK Corporate Governance Code. The other members of the Audit Committee are Shelagh Mason, Klaus Hammer and Tove Feld. Shelagh has extensive experience of investment companies and Klaus and Tove have extensive experience of the renewables sector. The qualifications of the Audit Committee members are outlined in the Director's Biographies in Section 3.

Significant Issues Considered

After discussion with both the Managers and the external auditor, the Audit Committee determined that the key risks of misstatement of the Company's financial statements related to the valuation of the investments.

Valuation of Investments

As outlined in Note 13 to the financial statements, the total carrying value of the investments at fair value (excluding the fair value of TRIG UK and TRIG UK I) at 31 December 2020 was GBP2,160.9m (2019: GBP1,741.5m). Market quotations are not available for these financial assets, and as such, their valuation is undertaken using a discounted cash flow methodology. This requires a series of material judgements to be made as further explained in Note 4 to the financial statements.

The valuation process and methodology were discussed by the Audit Committee with the Investment Manager at the time of the interim review, in November 2020 prior to the year-end valuation process and again in February 2021 as part of the year-end sign off process. The Committee met with the auditor when it reviewed and agreed the auditor's Group audit plan and also at the conclusion of the audit of the financial statements, in particular discussing the valuation process. The Investment Manager carries out a valuation semi-annually and provides a detailed valuation report to the Company. The Company also engaged a third-party valuation expert to provide an independent valuation at June 2020 and also to review the valuation discount rates at December 2020. In July 2020, the expert provided a report to the Audit Committee that corroborated the valuation of the portfolio at June 2020. The expert also provided a report to the Audit Committee in February 2021 that confirmed that the discount rates at 31 December 2020 adopted at were reasonable.

Valuation of Investments - key forecast assumptions

The Audit Committee considered in detail those assumptions that are subject to judgement that have a material impact on the valuation. The key assumptions are:

Power Price Assumptions

A significant proportion of the wind and solar projects' income streams are contracted subsidy streams and power income under long-term PPAs; some of which have fixed price mechanisms. However, over time the proportion of power income that is fixed reduces and the proportion where the Company has exposure to wholesale electricity prices increases. The Investment Manager considers the forecasts provided by expert energy advisors and adopts a profile of assumed future power prices by jurisdiction. Further detail on the assumptions made in relation to power prices and other variables that may be expected to affect these are included in the Valuation section of the Strategic Report.

Macroeconomic Assumptions

Macroeconomic assumptions include inflation, foreign exchange, interest and tax rate assumptions. The Investment Manager's assumptions in this area are set out and explained in the Valuation section of the Strategic Report.

Other Key Income and Costs Assumptions

Other key assumptions include operating costs, facility energy generation levels and facility remaining operating life assumptions.

The Audit Committee considers the remaining operating life assumptions in light of public information provided by the Company's peer group and reports provided by the Operations Manager during the year considering the remaining operational lives for investments and considering any potential extension of those lives and the recognition of additional value resulting to be appropriate. The independent valuation carried out in June 2020 also supported the assumed operating lives.

The Investment Manager has discussed and agreed the valuation assumptions with the Audit Committee. In relation to the key estimates and judgements underpinning the valuation, the Investment Manager has provided sensitivities showing the impact of changing these assumptions and these have been reviewed by the Investment Manager and the Audit Committee to assist in forming an opinion on the fairness and balance of the annual report together with their conclusion on the overall valuation.

Valuation Discount Rates

The discount rates adopted to determine the valuation are selected and recommended by the Investment Manager. The discount rate is applied to the expected future cash flows for each investment's financial forecasts derived adopting the assumptions explained above, amongst others, to arrive at a valuation (discounted cash flow valuation). The resulting valuation is sensitive to the discount rate selected. The Investment Manager is experienced and active in the area of valuing these investments and adopts discount rates reflecting its current extensive experience of the market. It is noted however that this requires subjective judgement and that there is a range of discount rates which could be applied. The discount rate assumptions and the sensitivity of the valuation of the investments to this discount rate are set out in the Valuation section of the Strategic Report.

The Audit Committee discussed with the Investment Manager the process adopted to arrive at the selected valuation discount rates (which includes comparison with other market transactions and an independent review of valuation discount rates by a third-party valuation expert both at December 2019 and at December 2020) and satisfied itself that the rates applied were appropriate.

Auditor Interaction

The external auditor explained the results of their review of the valuation, including their consideration of the Company's underlying cash flow projections, the economic assumptions and discount rates to the Audit Committee. On the basis of their audit work there were no adjustments proposed that were material in the context of the financial statements as a whole.

Internal Controls and Risk Management

The Board is responsible for the Company's system of internal control and for reviewing its effectiveness and has therefore established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed.

The process is based on a risk-based approach to internal control through a matrix which identifies the key functions carried out by the Investment Manager, Operations Manager and other service providers; the various activities undertaken within those functions; the risks associated with each activity; and the controls employed to minimise and mitigate those risks. A scoring based on 1 to 5 for Likelihood and 1 to 5 for Impact is used and these are multiplied together to give a total score. Mitigation is considered on a scale of 1 to 5 and this leads to a residual risk rating being derived. The matrix is updated on an on-going basis and reviewed quarterly and the Board considers all material changes to the risk ratings and the action which has been, or is being, taken. By their nature, these procedures will provide a reasonable, but not absolute, assurance against material misstatement or loss.

At each Board meeting, the Board also monitors the Group's investment performance and it reviews the Group's activities since the last Board meeting to ensure that the Investment Manager is adhering to the Company's Investment Policy and approved investment guidelines. The pipeline of new potential opportunities is considered and the prices paid for new investments during the quarter are also reviewed.

Further, at each Board meeting, the Board receives reports from the Company Secretary and Administrator in respect of compliance matters and duties they have performed on behalf of the Company.

The Board has considered the need for an internal audit function and it has decided that the systems and procedures employed by the Investment Manager, the Operations Manager and the Administrator, including their own internal review processes and processes in place in relation to the Company, provide sufficient assurance that a sound system of internal control, which safeguards the Company's assets, is maintained. An internal audit function specific to the Group is therefore considered unnecessary.

The Board recognises that these control systems can only be designed to manage rather than eliminate the risk of failure to achieve business objectives, and to provide reasonable, but not absolute, assurance against material misstatement or loss, and relies on the operating controls established by the Company's Administrator, the Investment Manager and the Operations Manager. The Board considers on a periodic basis whether further third party assurance is appropriate, and reviews annually the proficiency of such controls in light of changes in the business and its environment.

The Investment Manager prepares management accounts and updates business forecasts on a quarterly basis, which allow the Board to assess the Company's activities and review its performance. The Board and the Investment Manager have agreed clearly defined investment criteria, return targets, risk appetite, and exposure limits. Reports on these performance measures, coupled with cash projections and investment valuations, are submitted to the Board at each quarterly meeting.

The Operations Manager prepares quarterly project performance and project financial analysis, and highlights the key activities performed and any specific new risks identified relating to the operating portfolio for consideration by the Board.

Appointment of the external auditor

Deloitte LLP was appointed to be external auditor for the TRIG Group on 19 September 2013, following a competitive tendering process. This process involved a review of the audit proposals and interviewing and challenging of each firm.

The objectivity of the external auditor is reviewed by the Audit Committee which also reviews the terms under which the external auditor may be appointed to perform non-audit services. The Audit Committee reviews the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditor, with particular regard to any non-audit work that the auditor may undertake. In order to safeguard auditor independence and objectivity, the Audit Committee ensures that any audit-related and/or other assurance services provided by the external auditor does not conflict with their statutory audit responsibilities.

Audit-related and/or other assurance services generally relate to the review of the interim financial statements and other assurance work generally completed by the auditor. Limited tax compliance work and capital raising work associated with the auditor is also allowed in certain circumstances. Any non-audit services conducted by the external auditor outside of these areas which are above GBP20,000 in aggregate in any period require the consent of the Audit Committee. The external auditor may not undertake any work for the Company in respect of the following matters - preparation of the financial statements, valuations used in financial statements, provision of investment advice, taking management decisions or advocacy work in adversarial situations. In general the Company seeks to avoid using Deloitte for non-audit services and the Audit Committee will only approve their appointment for these where they are convinced that that Deloitte are best placed to carry out this work and that the appointment could not be expected to impair their audit independence.

Total fees paid amounted to GBP637,935 for the year ended 31 December 2020 of which GBP151,626 related to audit and audit related services to the Company and its subsidiaries, TRIG UK and TRIG UK Investments, and GBP433,194 related to audit of the Group's project subsidiaries. In addition, audit fees of GBP15,000 for the company and GBP33,000 for the project subsidiaries were agreed in the current year in respect to the prior year. The non-audit services provided by Deloitte in the year to the Company and its subsidiaries are in relation to the review of the interim financial statements at the half year totalling GBP39,000, and minor other services totalling GBP14,115.

European Union (EU) statutory audit legislation stipulates that fees for permissible non-audit services should not exceed 70% of the average audit fees paid by the group in the last three consecutive financial years following its implementation in 2016. In accordance with Crown Dependencies' Audit Rules and the FRC Revised Ethical Standard, this policy is adopted by the Audit Committee. Although it is not applicable to this reporting period as it only applies in the year ending 31 December 2021, the Audit Committee must monitor auditor independence and will consider these criteria as part of this role.

Notwithstanding such services the Audit Committee considers Deloitte LLP to be independent of the Company and that the provision of such non-audit services is not a threat to the objectivity and independence of the conduct of the audit.

To fulfil its responsibility regarding the independence of the external auditor, the Audit Committee considered:

changes in audit personnel in the audit plan for the current period;

a report from the external auditor describing their arrangements to identify, report and manage any conflicts of interest; and

the extent of non-audit services provided by the external auditor.

To assess the effectiveness of the external audit process, the Audit Committee reviewed:

the external auditor's fulfilment of the agreed audit plan and variations from it;

reports highlighting the major issues that arose during the course of the audit; and

the effectiveness and independence of the external auditor having considered the degree of diligence and professional scepticism demonstrated by them.

The Audit Committee notes the requirements of the UK Corporate Governance Code and in particular the requirement to put the external audit out to tender at least every 10 years. This is the eighth year of Deloitte's appointment as the Company's auditor and the Company intends to commence a competitive tender exercise for the Company's audit work during 2021 and to conclude that exercise with sufficient time such that any potential new audit firm appointed could allow a cooling off period before their appointment (should they already be providing services to the Company and/or Group that require such a cooling off period).

It is intended that any potential new audit firm appointment or reappointment of Deloitte following the competitive tender exercise would apply for either the year ending 31 December 2022 or 31 December 2023 and years thereafter. The Audit Committee plans to report the results of that exercise via the Audit Committee report in the 2021 Annual Report and seek shareholder approval of that appointment in the Annual General Meeting in May 2022.

The Audit Committee remains satisfied with Deloitte's effectiveness and independence as auditor having considered the degree of diligence and professional scepticism demonstrated by them.

As such, the Committee has not considered it necessary during this period to conduct a tender process for the appointment of its auditors for the year ending 31 December 2021.

The Audit Partner for the Company is John Clacy. Deloitte rotate the Audit Partner every five years and the most recent rotation took place during 2019.

The Audit Committee confirms that TRIG has complied with the requirements of The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 since it became a member of the FTSE 250 Index on 18 December 2015 and up to 31 December 2020. Deloitte were appointed as external auditor in 2013 following a competitive process and the Audit Committee terms of reference are in line with the Order.

The Committee conducts a formal review of Deloitte following the issue of these financial statements as it did in 2020 to ensure that the Committee considers all aspects of the auditor's service and performance. The outcome of the review in May 2020 was positive and led to no material concerns over the performance of the auditor.

Having satisfied itself that the external auditor remains independent and effective, the Audit Committee has recommended to the Board that Deloitte LLP be reappointed as auditor for the year ending 31 December 2021.

Audit Committee Performance Evaluation

During the year the Committee evaluated its performance considering checklists provided by leading audit firms. All of the Directors and the Managers completed the form and the results were discussed at an Audit Committee meeting. A few items of a minor nature arose and led to recommendations that have been adopted. Overall the finding of the evaluation was that the Audit Committee is sufficiently skilled and experienced and effective in carrying out its role.

09 Financial Statements

Income Statement

For the year ended 31 December 2020

 
                                                Year ended     Year ended 
                                               31 December    31 December 
                                                      2020           2019 
                                       Note      GBP'000's      GBP'000's 
 Net Gains on Investments                 6         41,010         82,190 
 Investment Income from Investments       6         78,165         63,440 
-------------------------------------  ----  -------------  ------------- 
 Total operating income                            119,175        145,630 
 Fund expenses                            7        (1,794)        (1,610) 
-------------------------------------  ----  -------------  ------------- 
 Operating profit                                  117,381        144,020 
 Finance and other (expense)/ income      8       (17,215)         18,009 
-------------------------------------  ----  -------------  ------------- 
 Profit before tax                                 100,166        162,029 
 Income tax credit/(expense)              9              -              - 
-------------------------------------  ----  -------------  ------------- 
 Profit after tax                        10        100,166        162,029 
-------------------------------------  ----  -------------  ------------- 
 Attributable to: 
 Equity holders of the parent                      100,166        162,029 
-------------------------------------  ----  -------------  ------------- 
                                                   100,166        162,029 
-------------------------------------  ----  -------------  ------------- 
 Earnings per share (pence)              10            5.9           11.4 
-------------------------------------  ----  -------------  ------------- 
 

All results are derived from continuing operations. The accompanying notes are an integral part of these financial statements.

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

Balance Sheet

For the year ended 31 December 2020

 
                                                             As at          As at 
                                                       31 December    31 December 
                                                              2020           2019 
                                               Note      GBP'000's      GBP'000's 
 Non-current assets 
 Investments at fair value through profit or 
  loss                                           13      2,160,946      1,741,457 
---------------------------------------------  ----  -------------  ------------- 
 Total non-current assets                                2,160,946      1,741,457 
---------------------------------------------  ----  -------------  ------------- 
 Current assets 
 Other receivables                               14         12,501         14,730 
 Cash and cash equivalents                       15         23,116        127,589 
---------------------------------------------  ----  -------------  ------------- 
 Total current assets                                       35,617        142,319 
---------------------------------------------  ----  -------------  ------------- 
 Total assets                                            2,196,563      1,883,776 
---------------------------------------------  ----  -------------  ------------- 
 Current liabilities 
 Other payables                                  16        (1,692)          (339) 
---------------------------------------------  ----  -------------  ------------- 
 Total current liabilities                                 (1,692)          (339) 
---------------------------------------------  ----  -------------  ------------- 
 
 Total liabilities                                         (1,692)          (339) 
---------------------------------------------  ----  -------------  ------------- 
 Net assets                                      12      2,194,871      1,883,437 
---------------------------------------------  ----  -------------  ------------- 
 
 Equity 
 Share capital and share premium                 17      2,046,237      1,721,309 
 Other reserves                                  17          1,005          1,008 
 Retained reserves                               17        147,629        161,120 
---------------------------------------------  ----  -------------  ------------- 
 Total equity attributable to owners of the 
  parent                                         12      2,194,871      1,883,437 
---------------------------------------------  ----  -------------  ------------- 
 Net assets per Ordinary Share (pence)           12          115.3          115.0 
---------------------------------------------  ----  -------------  ------------- 
 

The accompanying notes are an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 16 February 2021, and signed on its behalf by Jon Bridel and Helen Mahy.

Statement of Changes in Shareholders' Equity

As at 31 December 2020

 
                                                   Share 
                                                 capital 
                                               and share        Other     Retained        Total 
                                                 premium     reserves     reserves       equity 
                                               GBP'000's    GBP'000's    GBP'000's    GBP'000's 
 Shareholders' equity at beginning of 
  year                                         1,721,309        1,008      161,120    1,883,437 
-------------------------------------------  -----------  -----------  -----------  ----------- 
 Profit for the year                                   -            -      100,166      100,166 
 Dividends paid                                        -            -    (107,028)    (107,028) 
 Scrip shares issued in lieu of dividend           6,629            -      (6,629)            - 
 Ordinary Shares issued                          320,000            -            -      320,000 
 Costs of Ordinary Shares issued                 (3,704)            -            -      (3,704) 
 Ordinary Shares issued in year in lieu 
  of Management Fees, earned in H2 2019(1)         1,008      (1,008)            -            - 
 Ordinary Shares issued in year in lieu 
  of Management Fees, earned in H1 2020(2)           995            -            -          995 
 Ordinary Shares to be issued in lieu 
  of Management Fees, earned in H2 2020(3)             -        1,005            -        1,005 
-------------------------------------------  -----------  -----------  -----------  ----------- 
 Shareholders' equity at end of year           2,046,237        1,005      147,629    2,194,871 
-------------------------------------------  -----------  -----------  -----------  ----------- 
 

For the year ended 31 December 2019

 
                                                     Share 
                                                   capital        Other     Retained        Total 
                                               and premium     reserves     reserves       equity 
                                                 GBP'000's    GBP'000's    GBP'000's    GBP'000's 
 Shareholders' equity at beginning of 
  year                                           1,189,542        1,008       93,352    1,283,902 
-------------------------------------------  -------------  -----------  -----------  ----------- 
 Profit for the year                                     -            -      162,029      162,029 
 Dividends paid                                          -            -     (86,285)     (86,285) 
 Scrip shares issued in lieu of dividend             7,976            -      (7,976)            - 
 Ordinary Shares issued                            529,650            -            -      529,650 
 Costs of Ordinary Shares issued                   (7,859)            -            -      (7,859) 
 Ordinary Shares issued in year in lieu 
  of Management Fees, earned in H2 2018(4)           1,008      (1,008)            -            - 
 Ordinary Shares issued in year in lieu 
  of Management Fees, earned in H1 2019(5)             992            -            -          992 
 Ordinary Shares to be issued in lieu 
  of Management Fees, earned in H2 2019(1)               -        1,008            -        1,008 
-------------------------------------------  -------------  -----------  -----------  ----------- 
 Shareholders' equity at end of year             1,721,309        1,008      161,120    1,883,437 
-------------------------------------------  -------------  -----------  -----------  ----------- 
 

In line with the Investment Management Agreement and the Operations Management Agreement, 20 per cent. of the management fees are to be settled in Ordinary Shares up to an Adjusted Portfolio Value of GBP1 billion.

1 The GBP1,008,216 transfer between reserves represents the 889,550 shares that relate to management fees earned in the six months to 31 December 2019 and were recognised in other reserves at 31 December 2019, and were issued to the Managers during the year, with the balance being transferred to share premium reserves on 31 March 2020.

2 The GBP994,533 addition to the share premium reserve represents the 893,480 shares that relate to management fees earned in the six months to 30 June 2020 and were issued to the Managers on 30 September 2020.

3 As at 31 December 2020, 885,012 shares equating to GBP1,005,464, based on a Net Asset Value ex dividend of 113.61 pence per share (the Net Asset Value at 31 December 2020 of 115.3 pence per share less the interim dividend of 1.69 pence per share) were due but had not been issued. The Company intends to issue these shares to the Managers around 31 March 2021.

4 The GBP1,008,218 transfer between reserves represents the 939,844 shares that relate to management fees earned in the six months to 31 December 2018 and were recognised in other reserves at 31 December 2018, and were issued to the Managers during the year, with the balance being transferred to share premium reserves on 31 March 2019.

5 The GBP991,778 addition to the share premium reserve represents the 875,047 shares that relate to management fees earned in the six months to 30 June 2019 and were issued to the Managers on 30 September 2019.

The accompanying notes are an integral part of these financial statements.

Cash Flow Statement

As at 31 December 2020

 
                                                               Year ended     Year ended 
                                                              31 December    31 December 
                                                                     2020           2019 
                                                      Note      GBP'000's      GBP'000's 
 Cash flows from operating activities 
 Profit before tax                                      10        100,166        162,029 
 Adjustments for: 
 Net gain on investments                             6, 13       (41,010)       (82,190) 
 Investment income from investments                      6       (78,165)       (63,440) 
 Acquisition costs                                                     20              - 
 Movement in other reserves relating to Manager 
  shares                                                              (3)              - 
 Realised (loss)/gain on settlement of FX forwards                (3,122)          4,165 
 Finance and other expense/ (income)                     8         17,215       (18,009) 
---------------------------------------------------  -----  -------------  ------------- 
 Operating cash flow before changes in working 
  capital                                                         (4,899)          2,555 
 
 Changes in working capital: 
 Decrease/ (increase) in receivables                                  831          (540) 
 Decrease in payables                                             (1,245)           (47) 
---------------------------------------------------  -----  -------------  ------------- 
 Cash flow from operations                                        (5,313)          1,968 
 
 Distributions from investments                         13        120,654         84,757 
 Interest on bank deposits                                            155            379 
---------------------------------------------------  -----  -------------  ------------- 
 Net cash from operating activities                               115,496         87,104 
---------------------------------------------------  -----  -------------  ------------- 
 
 Cash flows from investing activities 
 Purchases of investments                               13      (499,466)      (413,844) 
 Amounts realised from exit proceeds                               68,125              - 
 Acquisition costs                                                   (20)              - 
---------------------------------------------------  -----  -------------  ------------- 
 Net cash used in investing activities                          (431,361)      (413,844) 
---------------------------------------------------  -----  -------------  ------------- 
 
 Cash flows from financing activities 
 Proceeds from issue of share capital during 
  year                                                            322,003        531,650 
 Costs in relation to issue of shares                   17        (3,704)        (7,859) 
 Dividends paid to shareholders                         11      (107,028)       (86,285) 
---------------------------------------------------  -----  -------------  ------------- 
 Net cash from financing activities                               211,271        437,506 
---------------------------------------------------  -----  -------------  ------------- 
 Net (decrease)/ increase in cash and cash 
  equivalents                                                   (104,594)        110,766 
---------------------------------------------------  -----  -------------  ------------- 
 Cash and cash equivalents at beginning of year         15        127,589         16,760 
 Exchange gains on cash                                               121             63 
---------------------------------------------------  -----  -------------  ------------- 
 Cash and cash equivalents at end of year               15         23,116        127,589 
---------------------------------------------------  -----  -------------  ------------- 
 

The accompanying notes are an integral part of these financial statements.

Notes to the Financial Statements

As at 31 December 2020

   1.    General information 

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

These financial statements are for the year ended 31 December 2020 and comprise only the results of the Company as all of its subsidiaries are measured at fair value as explained below in Note 2 (a).

   2.    Key accounting policies 
   (a)   Basis of preparation 

The financial statements were approved and authorised for issue by the Board of Directors on 16 February 2021.

The financial statements, which give a true and fair view, have been prepared in compliance with the Companies (Guernsey) Law, 2008 and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") using the historical cost basis, except that the financial instruments classified at fair value through profit or loss are stated at their fair values. All accounting policies have been applied consistently in these financial statements.

The financial statements are presented in pounds sterling, which is the Company's functional currency. Foreign operations are included in accordance with the policies set out in this note.

The preparation of financial statements in conformity with IFRS as adopted by the EU requires the Directors to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in the year of the revision and future years if the revision affects both current and future years. Note 3 shows critical accounting judgements, estimates and assumptions.

   (b)   Going concern 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report and also commented on in the Viability Statement contained in the Directors' Report . The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Results section in 2.9. In addition, Notes 1 to 4 of the financial statements include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Group has a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, the Company maintains a prudent level of leverage, limited to 30% of portfolio value for fund level financing, and limited to 50% of gross portfolio value for the Group's project-level financing. The project level financing is non-recourse to the Company.

At 31 December 2020, the Company's leverage was 2% for fund level financing (2019: 0%) and 43% for project level financing (2019: 36%).

The Group has the necessary financial resources to meet its obligations. The Group benefits from a range of long-term contracts with various major UK and European utilities and well-established suppliers across a range of infrastructure projects. In addition, it maintains a working capital component of GBP30m as part of its revolving credit facility (currently sized at GBP500m and limited to 30% of Portfolio Value). The facility was renegotiated and extended from GBP340m to GBP500m in December 2020 at lower rates to support the Company's investments in new acquisitions. The facility is available for a 3-year term and the larger size of the facility reflects the increased scale of acquisitions being made by the Company, it was GBP40m drawn at 31 December 2020.

The Company has sufficient headroom on its revolving credit facility covenants. These covenants have been tested and relate to interest cover ratios and group gearing limits and the Company does not expect these covenants to breached. The Company and its direct subsidiaries have a number of Guarantees, detailed in Note 19. These guarantees relate to certain obligations that may become due by the underlying investments over their useful economic lives. We do not anticipate these guarantees to be called in the next 12 months and in many cases the potential obligations are insured by the underlying investments.

The Group's project-level financing is non-recourse to the Company and is limited to 50% of Gross Portfolio Value.

A cash balance of GBP23.1m at 31 December 2020 is held by the Company, with further amounts held in the Company's direct and indirect subsidiaries. In addition, the Company has a working capital facility on its revolving credit facility of GBP30m.

As at the date of this report, The Group has commitments of GBP392m relating to Blary Hill wind farm (in construction), Beatrice offshore wind farm and Grönhult onshore wind farm. The investments in Beatrice and Grönhult were announced after the year end. The investment in Beatrice is expected to complete later in Q1 2021, whilst the investment in Grönhult, a construction asset, will occur over the period of construction. Further to the above, the Company has a number of outstanding commitments which are detailed in section 2.6 of this Annual Report. These commitments can be fully covered by the Company's revolving credit facility.

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

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

As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The directors do not believe that there is a significant risk to the business as a result of the Covid-19 pandemic but will continue to monitor any future developments.

Having performed the assessment of going concern, the Directors considered it appropriate to prepare the financial statements of the Company on a going concern basis. The Company has sufficient financial resources and liquidity and is well placed to manage business risks in the current economic environment and can continue operations for a period of at least 12 months from the date of these financial statements.

   (c)   Basis of consolidation 

The Company applies IFRS 10 'Consolidated Financial Statements', and as an investment entity is required to measure all of its subsidiaries at fair value. The financial statements therefore comprise the results of the Company only. Subsidiaries are those entities owned by the Company. The Company has ownership of an investee, when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee as defined in IFRS 10 'Consolidated Financial Statements'.

The Directors believe it is appropriate and relevant to the investor to account for the investment portfolio at fair value, where consolidating it would not be.

The Company's subsidiaries, TRIG UK and TRIG UK I, carry out investment activities and incur overheads and borrowings on behalf of the Group. The Directors therefore provide an alternative presentation of the Company's results in the Strategic Report in Section 2.9 prepared under the "Expanded basis", which includes the consolidation of TRIG UK and TRIG UK I.

An entity shall consider all facts and circumstances when assessing whether it is an investment entity, including its purpose and design. Under the definition of an investment entity, as set out in paragraph 27 in the standard, the entity must satisfy all three of the following tests:

Obtains funds from one or more investors for the purpose of providing those investors with investment management services; and

Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both (including having an exit strategy for investments); and

Measure and evaluate the performance of substantially all of its investments on a fair value basis.

In respect of the first criterion, TRIG is an investment company which enables shareholders to gain exposure to a diversified portfolio of renewable energy and related infrastructure investments coupled with the management of these investments.

In respect of the second criterion, the Company's purpose is to invest funds for returns from capital appreciation and investment income. The Company's exit of its investments in project companies may be at the time the existing turbines or other generation assets get to the end of their economic lives or planning or leasehold land interests expire at which point the project companies may be considering redevelopment (referred to as a "repowering") of the site. The Company may remain invested in the event there is the opportunity to repower and undertake the repowering, subject to its investment limits on construction activity being met and depending on economic considerations at the time. The Company may also exit investments earlier for reasons of portfolio balance or profit as there is an active secondary market for renewables projects in the countries in which we operate.

In respect of the third criterion, the board evaluates the performance of the assets on a fair market value basis throughout the year as part of the management accounts review, and the company undertakes a fair market valuation of its portfolio twice a year for inclusion in its report and accounts with the movement in the valuation taken to the Income Statement and thus measured within its earnings.

Taking these factors into consideration, the Directors are of the opinion that the Company has all the typical characteristics of an investment entity and meets the definition in the standard.

   (d)   Financial instruments 

Financial assets and liabilities are recognised on the balance sheet when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred, and the transfer qualifies for derecognition in accordance with IFRS 9 'Financial Instruments'.

Financial derivatives are valued using a Mark to Market valuation based on the underlying derivative contracts that are executed with the banks.

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value including directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Investments in equity and debt securities

Investments in the equity, loan stock and mezzanine debt of entities engaged in renewable energy activities are designated upon initial recognition as held at fair value through profit or loss. Gains or losses resulting from the movement in fair value are recognised in Income Statement at each valuation point.

Financial assets are recognised/derecognised at fair value at the date of the purchase/disposal. A financial asset (in whole or part) is derecognised either:

When the group has transferred substantially all of the risk and rewards of ownership; or

When it has neither transferred or retained substantially all of the risks and rewards when it no longer has control over the asset or a portion of the asset; or

When the contractual rights to receive cash flow has expired.

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

The Group manages these investments and makes purchase and sale decisions based on their fair value.

The Directors consider the equity and loan stock to share the same investment characteristics and risks and they are therefore treated as a single unit of account for valuation purposes and a single class for disclosure purposes.

   (e)   Impairment 

Financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognised in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost the reversal is recognised in the income statement.

   (f)    Share capital and share premium 

Ordinary Shares are classified as equity. Costs directly attributable to the issue of new shares or associated with the establishment of the Company that would otherwise have been avoided are written off against the value of the ordinary share premium.

   (g)   Cash and cash equivalents 

Cash and cash equivalents comprises of cash balances, deposits held on call with banks and other short-term, highly liquid investments with original maturities of three months or less. Bank overdrafts that are repayable on demand are included as a component of cash and cash equivalents for the purpose of the cash flow statement.

   (h)   Investment income 

Income from investments relates solely to returns from the Company's subsidiaries, TRIG UK and TRIG UK I. This is recognised as it accrues by reference to the principal outstanding and the effective interest rate applicable and dividends when these are received.

   (i)    Income tax 

Under the current system of taxation in Guernsey, the Company is exempt from paying taxes on non-Guernsey source income or capital gains.

   (j)    Foreign exchange gains and losses 

Transactions entered into by the Company in a currency other than its functional currency are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the income statement.

   (k)   Segmental reporting 

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

   (l)    Fund expenses 

All expenses are accounted for on an accruals basis. The Company's investment management and administration fees (refer to Note 7), finance costs and all other expenses are charged through the income statement.

(m) Acquisition costs

In line with IFRS 3 (Revised), acquisition costs are expensed to the income statement as incurred.

   (n)   Dividends 

Dividends are recognised when they become legally payable. In the case of interim dividends, this is when they are paid. For scrip dividends, where the Company issues shares with an equal value to the cash dividend amount as an alternative to the cash dividend, a credit to equity is recognised when the shares are issued.

   (o)   Statement of compliance 

Pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987 the Company is a Registered Closed-Ended Investment Scheme. As an authorised scheme, the Company is subject to certain ongoing obligations to the Guernsey Financial Services Commission and meets its compliance requirements.

   (p)   Share-based payments 

Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at that date the entity obtains the goods or the counterparty renders the service.

   (q)   New and revised standards 

At the date of authorisation of these financial statements, The Group has applied the following new and revised IFRS that has been issued:

Amendments to IAS 1 and IAS 8 Definition of Material effective for periods beginning on or after 1 January 2020)

Amendments to References to the Conceptual Framework in IFRS Standards (effective for periods beginning on or after 1 January 2020)

Definition of a Business (Amendments to IFRS 3 Business Combinations) (effective for periods beginning on or after 1 January 2020

The directors have determined that the adoption of the Standards listed above have not had a material impact on the financial statements of the Company.

   3.    Critical accounting judgements, estimates and assumptions 

The preparation of financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions in certain circumstances that affect reported amounts. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

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

IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Board base the fair value of the investments on information received from the Investment Manager. Fair value is calculated on a discounted cash flow basis.

Fair values for those investments for which a market quote is not available, in this instance being all investments, are determined using the income approach, which discounts the expected cash flows at the appropriate rate. In determining the discount rates applied, several factors are considered including, relevant long-term government bond yields, specific risks associated with the technology (onshore wind, offshore wind, battery storage and solar) and geographic location of the underlying investment, and the evidence of recent transactions. The investments at fair value through profit or loss, whose fair values include the use of level 3 inputs, are valued by discounting future cash flows from investments in both equity (dividends and equity redemptions) and subordinated loans (interest and repayments) to the Group at an appropriate discount rate.

The weighted average discount rate applied in the December 2020 valuation was 6.7% (2019: 7.25%). The discount rate is considered one of the most significant unobservable inputs through which an increase or decrease would have a material impact on the fair value of the investments at fair value through profit or loss which are further discussed in Note 4 under sensitivities.

The other material impacts on the measurement of fair value are the forward-looking power price curve, energy yields, operating costs and macro-economic assumptions (including rates of inflation) which are further discussed in Note 4 under sensitivities.

The Investment Manager, when considering the assumptions to apply to the valuation of the investments at 31 December 2020 takes into account several key assumptions.

Key Judgements

By virtue of the Company's status as an investment fund, and in conjunction with IFRS 10 for investment entities, investments are designated upon initial recognition to be accounted for at fair value through profit or loss.

The Directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost in the financial statement are approximately equal to their fair values.

   4.    Financial instruments 

Financial risk management

The objective of the Group's financial risk management is to manage and control the risk exposures of its investment portfolio. 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 Investment Manager, which has documented procedures designed to identify, monitor and manage the financial risks to which the Group is exposed. Note 4 presents information about the Group's exposure to financial risks, its objectives, policies and processes for managing risk and the Group's management of its financial resources.

Through its subsidiaries, TRIG UK and TRIG UK I, the Company invests in a portfolio of investments predominantly in the subordinated loan stock and ordinary equity of renewable energy project companies. These companies are structured at the outset to minimise financial risks where possible, and the Investment Manager primarily focuses their risk management on the direct financial risks of acquiring and holding the portfolio but continues to monitor the indirect financial risks of the underlying projects through representation, where appropriate, on the Boards of the project companies, and the receipt of regular financial and operational performance reports.

The Company has a diversified portfolio of assets which include investments with both higher and lower risks and returns. These risks and return differences relate, but are not limited to, qualification to receive government subsidies, exposure to fluctuations in future energy prices and levels of project finance debt.

Interest rate risk

The Group invests in subordinated loan stock of project companies, usually with fixed interest rate coupons. The portfolio's cash flows are continually monitored and reforecast, both over the near future and the long-term, to analyse the cash flow returns from investments. The Group may use borrowings to finance the acquisition of investments and the forecasts are used to monitor the impact of changes in borrowing rates against cash flow returns from investments as increases in borrowing rates will reduce net interest margins.

The Group's policy is to ensure that interest rates are sufficiently hedged to protect the Group's net interest margins from significant fluctuations when entering into material medium/long-term borrowings. This includes engaging in interest rate swaps or other interest rate derivative contracts.

The Company has an indirect exposure to changes in interest rates through its investment in project companies, many of which are financed by senior debt. Senior debt financing of project companies is generally either through floating rate debt, fixed rate bonds or index linked bonds. Where senior debt is floating rate, the projects typically have similar length hedging arrangements in place, which are monitored by the project companies' managers, finance parties and boards of directors.

Inflation risk

The Group's project companies are generally structured so that contractual income and costs are either wholly or partially linked to specific inflation, where possible, to minimise the risks of mismatch between income and costs due to movements in inflation indexes. The Group's overall cash flows vary with inflation, although they are not directly correlated as not all flows are indexed. The effects of these inflation changes do not always immediately flow through to the Group's cash flows, particularly where a project's loan stock debt carries a fixed coupon and the inflation changes flow through by way of changes to dividends in future years. The sensitivity of the portfolio valuation is shown further on in Note 4.

Market risk

Returns from the Group's investments are affected by the price at which the investments are acquired. The value of these investments will be a function of the discounted value of their expected future cash flows, and as such will vary with, inter alia, movements in interest rates, market prices and the competition for such assets. The Investment Manager carries out a full valuation semi-annually and this valuation exercise takes into account changes described above.

Currency risk

The projects, in which the Group invests, all conduct their business and pay interest, dividends and principal in sterling, with the exception of the euro-denominated investments which at 31 December 2020 comprised 40% (2019: 39%) of the portfolio by value on an invested basis and 37% (2019: 45%) of the portfolio by value on a committed basis. The sensitivity of the portfolio valuation is shown in this note.

The Group monitors its foreign exchange exposures using its near-term and long-term cash flow forecasts. Its policy is to use foreign exchange hedging to provide protection to the level of sterling distributions that the Company aims to pay over the medium-term, where considered appropriate. This may involve the use of forward exchange.

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. Key credit ratings for the Company's counterparties are detailed in note 16.

The credit standing of subcontractors is reviewed, and the risk of default estimated for each significant counterparty position. Monitoring is on-going, and year end positions are reported to the Board on a quarterly basis. The Group's largest credit risk exposure to a project at 31 December 2020 was to the East Anglia One project, representing 9% (2019: Jadraas project, representing 11%) of the portfolio by value, and the largest subcontractor counterparty risk exposure was to Siemens who provided turbine maintenance services in respect of 39% (2019: Siemens 36%) of the invested portfolio by value.

The Group's investments enter into Power Price Agreements ("PPA") with a range of providers through which electricity is sold, the PPAs are priced into the fair value of the investments. The largest PPA provider to the portfolio at 31 December 2020 was Statkraft who provided PPAs to projects in respect of 22% (2019: Statkraft 29%) of the portfolio by value.

At 31 December 2020, there were no loans and other receivables considered impaired for the Group.

The Group's maximum exposure to credit risk over financial assets is the carrying value of those assets in the balance sheet. The Group does not hold any collateral as security.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient financial resources and liquidity to meets its liabilities when due. The Group ensures it maintains adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group's investments are predominantly funded by share capital and medium-term debt funding.

The Group's investments are generally in private companies, in which there is no listed market and therefore such investment 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 Group's investments have borrowings which rank senior and have priority over the Group's own investments into the companies. This senior debt is structured such that, under normal operating conditions, it will be repaid within the expected life of the projects. Debt raised by the investment companies from third parties is without recourse to the Group.

The Group's revolving credit facility, which was GBP40m drawn at 31 December 2020 (2019: GBPnil), is held by TRIG UK and TRIG UK I, and is guaranteed by the Company. The facility was increased and extended on 17 December 2020 and is in place until December 2023.

Capital management

TRIG UK and TRIG UK I, the Company's subsidiaries, have a GBP500m revolving credit facility with Royal Bank of Scotland International Limited, National Australia Bank Limited, ING Bank N.V, Barclays Bank PLC, Banco Santander S.A. London Branch and Sumitomo Mitsui Banking Corporation. The Facility expires on 31 December 2023. The facility was GBP40m drawn at 31 December 2020.

The Group makes prudent use of its leverage. Under the investment policy, borrowings, including any financial guarantees to support outstanding subscription obligations but excluding internal Group borrowings of the Group's underlying investments, are limited to 30% of the portfolio value.

From time to time, the Company issues its own shares to the market; the timing of these purchases depends on market prices.

In order to assist in the narrowing of any discount to the Net Asset Value at which the Ordinary Shares may trade, from time to time the Company may at the sole discretion of the Directors:

make market purchases of up to 14.99% per annum of its issued Ordinary Shares; and

make tender offers for the Ordinary Shares.

There were no changes in the Group's approach to capital management during the year.

Fair value estimation

The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments:

Non-derivative financial instruments

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses the income approach, which discounts the expected cash flows attributable to each asset at an appropriate rate to arrive at fair values. In determining the discount rate, regard is had to relevant long-term government bond yields, the specific risks of each investment and the evidence of recent transactions.

Derivative financial instruments

The fair value of financial instruments inputs other than quoted prices traded in active markets is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price. Note 2 discloses the methods used in determining fair values on a specific asset/liability basis. Where applicable, further information about the assumptions used in determining fair value is disclosed in the notes specific to that asset or liability.

Classification of financial instruments

 
                                                    31 December  31 December 
                                                           2020         2019 
                                                       GBP'000s     GBP'000s 
 Financial assets 
 Designated at fair value through profit or loss: 
    Investments                                       2,160,946    1,741,457 
    Other financial assets                                    -       12,621 
--------------------------------------------------  -----------  ----------- 
 Financial assets at fair value                       2,160,946    1,754,078 
--------------------------------------------------  -----------  ----------- 
 
 At amortised cost: 
    Other receivables                                    12,501        2,109 
    Cash and cash equivalents                            23,116      127,589 
--------------------------------------------------  -----------  ----------- 
 Financial assets at amortised cost                      35,617      129,698 
--------------------------------------------------  -----------  ----------- 
 
 Financial liabilities 
 Designated at fair value through profit or loss: 
    Other financial liabilities                           1,399            - 
--------------------------------------------------  -----------  ----------- 
 Financial liabilities at fair value                      1,399            - 
--------------------------------------------------  -----------  ----------- 
 
 At amortised cost: 
    Other payables                                          293          339 
--------------------------------------------------  -----------  ----------- 
 Financial liabilities at amortised cost                    293          339 
--------------------------------------------------  -----------  ----------- 
 

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

Other financial assets/liabilities represent the fair value of foreign exchange forward agreements in place at the year end.

Fair value hierarchy

The fair value hierarchy is defined as follows:

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

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

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

 
                                                        As at 31 December 2020 
                                               Level 1     Level 2     Level 3       Total 
                                             GBP'000's   GBP'000's   GBP'000's   GBP'000's 
 Investments at fair value through profit 
  or loss                                            -           -   2,160,946   2,160,946 
------------------------------------------  ----------  ----------  ----------  ---------- 
                                                     -           -   2,160,946   2,160,946 
------------------------------------------  ----------  ----------  ----------  ---------- 
 
 Other financial liabilities                         -       1,399           -       1,399 
------------------------------------------  ----------  ----------  ----------  ---------- 
                                                     -       1,399           -       1,399 
------------------------------------------  ----------  ----------  ----------  ---------- 
 
 
                                                        As at 31 December 2019 
                                               Level 1     Level 2     Level 3       Total 
                                             GBP'000's   GBP'000's   GBP'000's   GBP'000's 
 Investments at fair value through profit 
  or loss                                            -           -   1,741,457   1,741,457 
------------------------------------------  ----------  ----------  ----------  ---------- 
                                                     -           -   1,741,457   1,741,457 
------------------------------------------  ----------  ----------  ----------  ---------- 
 
 Other financial assets                              -      12,621           -      12,621 
------------------------------------------  ----------  ----------  ----------  ---------- 
                                                     -      12,621           -      12,621 
------------------------------------------  ----------  ----------  ----------  ---------- 
 

Other financial liabilities/assets represent the fair value of foreign exchange forward agreements in place at the year end.

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

 
                                                    31 December  31 December 
                                                           2020         2019 
                                                      GBP'000's    GBP'000's 
 Portfolio value                                      2,213,030    1,745,186 
 
 TRIG UK and TRIG UK I 
    Cash                                                    737          216 
    Working capital                                    (17,211)      (5,550) 
    Debt(1)                                            (35,610)        1,605 
--------------------------------------------------  -----------  ----------- 
                                                       (52,084)      (3,729) 
 
 Investments at fair value through profit or loss     2,160,946    1,741,457 
--------------------------------------------------  -----------  ----------- 
 

1 Debt arrangement costs of GBP4,390k (2019: GBP1,605k) have been netted off the GBP40m (2019: GBPnil) debt drawn by TRIG UK and TRIG UK I.

Level 2

Valuation methodology

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

Level 3

Valuation methodology

The Investment Manager has carried out fair market valuations of the investments as at 31 December 2020 and the Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the valuation. All investments are at fair value through profit or loss and are valued using a discounted cash flow methodology.

The fair value of investments has been calculated using a bifurcated methodology whereby cash flows are discounted on the basis of the risk and return profile of the underlying cash flows.

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

 
                                         31 December 2020               31 December 2019 
 UK inflation rates (other 
  than ROC's)                                       2.75%                          2.75% 
 Inflation applied to UK 
  ROC Income                                        2.75%    3.0% 2020, 2.75% thereafter 
 Ireland, France, Sweden 
  and Germany inflation                                           1.75% 2019-2020, 2.00% 
  rates                                  2.00% thereafter                     thereafter 
-------------------------------  ------------------------  ----------------------------- 
                                     0.25% to March 2023,           1.00% to 31 December 
 UK deposit interest rates                1.0% thereafter         2021, 2.00% thereafter 
-------------------------------  ------------------------  ----------------------------- 
 Ireland, France, Sweden 
  and Germany deposit interest   0.0% to March 2023, 0.5%           1.00% to 31 December 
  rates                                        thereafter         2021, 2.00% thereafter 
-------------------------------  ------------------------  ----------------------------- 
 UK corporation tax rate                           19.00%                         19.00% 
-------------------------------  ------------------------  ----------------------------- 
                                                           33.3% + 1.1% above EUR763,000 
 France corporation tax              28%; reducing to 25%         threshold; reducing to 
  rate                                            by 2022                    25% by 2022 
-------------------------------  ------------------------  ----------------------------- 
 Ireland corporation tax           12.5% active rate, 25%         12.5% active rate, 25% 
  rate                                       passive rate                   passive rate 
-------------------------------  ------------------------  ----------------------------- 
 Swedish corporation tax            21.4% for 2020, 20.6%          21.4% for 2020, 20.6% 
  rate                                         thereafter                     thereafter 
-------------------------------  ------------------------  ----------------------------- 
 Germany corporation tax 
  rate                                              15.8%                          15.8% 
-------------------------------  ------------------------  ----------------------------- 
 Euro/sterling exchange 
  rate                                             1.1191                         1.1827 
-------------------------------  ------------------------  ----------------------------- 
 Energy yield assumptions                        P50 case                       P50 case 
-------------------------------  ------------------------  ----------------------------- 
 

Valuation Sensitivities

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

The sensitivities assume the portfolio is fully invested and hence the Portfolio Value for the sensitivity analysis is the sum of the Portfolio Valuation at 31 December 2020 (GBP2,213.0m), the initial investment in Grönhult made in February 2021 (GBP25m) and the outstanding investment commitments as set out in Section 2.8 (GBP391.8m), i.e. GBP2,629.8m.

Accordingly, the NAV per share impacts shown below assume the issue of further shares to fund these commitments.

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

Discount rates

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

The weighted average valuation discount rate applied to calculate the portfolio valuation is 6.7% at 31 December 2020 (2019: 7.25%). An increase or decrease in this rate by 0.5% points has the following effect on valuation.

 
                                   NAV/ share                Total Portfolio                NAV/ share 
 Discount rate                         impact  -0.5% change            Value  +0.5% change      impact 
 Directors' valuation - December 
  2020                                  +4.7p    +GBP107.3m      GBP2,629.8m    -GBP100.5m       -4.4p 
---------------------------------  ----------  ------------  ---------------  ------------  ---------- 
 Directors' valuation - December 
  2019                                  +4.4p     +GBP81.1m      GBP2,095.6m     -GBP75.9m       -4.1p 
---------------------------------  ----------  ------------  ---------------  ------------  ---------- 
 

Power Price

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

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

 
                              NAV/ share               Total Portfolio               NAV/ share 
 Power Price                      impact  -10% change            Value  +10% change      impact 
 Directors' valuation - Dec 
  2020                             -7.6p   -GBP173.6m      GBP2,629.8m   +GBP172.7m        7.6p 
----------------------------  ----------  -----------  ---------------  -----------  ---------- 
 Directors' valuation - Dec 
  2019                             -8.5p   -GBP156.0m      GBP2,095.6m   +GBP156.4m        8.5p 
----------------------------  ----------  -----------  ---------------  -----------  ---------- 
 

Energy Yield

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

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

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

 
                              NAV/ share            P90 10  Total Portfolio            P10 10  NAV/ share 
 Energy Yield                     impact   year exceedance            Value   year exceedance      impact 
 Directors' valuation - Dec 
  2020                            -14.3p        -GBP324.4m      GBP2,629.8m        +GBP349.3m       15.3p 
----------------------------  ----------  ----------------  ---------------  ----------------  ---------- 
 Directors' valuation - Dec 
  2019                            -11.5p        -GBP211.3m      GBP2,095.6m        +GBP195.4m       10.7p 
----------------------------  ----------  ----------------  ---------------  ----------------  ---------- 
 

Inflation rates

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

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

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

 
                                   NAV/ share                Total Portfolio                NAV/ share 
 Inflation assumption                  impact  -0.5% change            Value  +0.5% change      impact 
 Directors' valuation - December 
  2020                                  -4.8p    -GBP110.1m      GBP2,629.8m    +GBP120.0m        5.3p 
---------------------------------  ----------  ------------  ---------------  ------------  ---------- 
 Directors' valuation - December 
  2019                                  -4.7p     -GBP85.4m      GBP2,095.6m     +GBP92.6m        5.1p 
---------------------------------  ----------  ------------  ---------------  ------------  ---------- 
 

Operating costs

The sensitivity shows the effect of a 10% decrease and a 10% increase to the base case for annual operating costs for the portfolio, in each case assuming that the change to the base case for operating costs occurs with effect from 1 January 2021 and that change to the base case remains reflected consistently thereafter during the life of the projects.

 
                                   NAV/ share               Total Portfolio               NAV/ share 
 Operating costs                       impact  -10% change            Value  +10% change      impact 
 Directors' valuation - December 
  2020                                   5.8p   +GBP131.5m      GBP2,629.8m   -GBP132.6m       -5.8p 
---------------------------------  ----------  -----------  ---------------  -----------  ---------- 
 Directors' valuation - December 
  2019                                   4.5p    +GBP83.2m      GBP2,095.6m    -GBP82.8m       -4.5p 
---------------------------------  ----------  -----------  ---------------  -----------  ---------- 
 

Taxation rates

The profits of each project company are subject to corporation tax in their home jurisdictions at the applicable rates (the tax rates adopted in the valuation are set out in Note 4 to the financial statements). The tax sensitivity looks at the effect on the Directors' valuation of changing the tax rates by +/- 2% each year in each jurisdiction and is provided to show that tax can be a material variable in the valuation of investments. The sensitivities incorporate the impact of portfolio level reliefs.

 
                                   NAV/ share              Total Portfolio              NAV/ share 
 Taxation rates                        impact  -2% change            Value  +2% change      impact 
 Directors' valuation - December 
  2020                                   1.6p   +GBP37.2m      GBP2,629.8m   -GBP37.4m       -1.6p 
---------------------------------  ----------  ----------  ---------------  ----------  ---------- 
 Directors' valuation - December 
  2019                                   1.1p   +GBP19.4m      GBP2,095.6m   -GBP18.9m       -1.0p 
---------------------------------  ----------  ----------  ---------------  ----------  ---------- 
 

Interest rates

This shows the sensitivity of the portfolio valuation to the effects of a reduction of 1% and an increase of 2% in interest rates. The change is assumed with effect from 1 January 2021 and continues unchanged throughout the life of the assets.

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

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

 
                                   NAV/ share              Total Portfolio              NAV/ share 
 Interest rates                        impact  -1% change            Value  +2% change      impact 
 Directors' valuation - December 
  2020                                  -0.0p    -GBP0.9m      GBP2,629.8m    +GBP0.2m        0.0p 
---------------------------------  ----------  ----------  ---------------  ----------  ---------- 
 Directors' valuation - December 
  2019                                  -0.0p    -GBP0.0m      GBP2,095.6m    +GBP0.6m        0.0p 
---------------------------------  ----------  ----------  ---------------  ----------  ---------- 
 

Currency rates

The sensitivity shows the effect of a 10% decrease and a 10% increase in the value of the euro relative to sterling used for the 31 December 2020 valuation (based on a 31 December 2020 exchange rate of EUR1.1191 to GBP1). In each case it is assumed that the change in exchange rate occurs from 1 January 2021 and thereafter remains constant at the new level throughout the life of the projects.

At the year-end, 35% of the committed portfolio was located in Sweden, France, Germany and Ireland comprising euro-denominated assets.

The Group has entered into forward hedging of the expected euro distributions for up to 48 months ahead and in addition placed further hedges to reach a position where at least 50% of the valuation of euro-denominated assets is hedged. The hedge reduces the sensitivity of the portfolio value to foreign exchange movements and accordingly the impact is shown net of the benefit of the foreign exchange hedge in place. The value of the outstanding commitments on Grönhult are included in this sensitivity. A 60% hedge is assumed for the sensitivity below and during 2020 typical hedge levels have been between approximately 60-80%.

 
                                   NAV/ share               Total Portfolio               NAV/ share 
 Currency rates                        impact  -10% change            Value  +10% change      impact 
 Directors' valuation - December 
  2020                                  -1.4p    -GBP31.9m      GBP2,629.8m    +GBP31.9m        1.4p 
---------------------------------  ----------  -----------  ---------------  -----------  ---------- 
 Directors' valuation - December 
  2019                                  -1.8p    -GBP33.8m      GBP2,095.6m    +GBP33.8m        1.8p 
---------------------------------  ----------  -----------  ---------------  -----------  ---------- 
 

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

Asset Lives

Assumptions adopted in the year-end valuation typically range from 25 to 40 years from the date of commissioning, with an average 29 years for the wind portfolio and 37 years for solar portfolio. The overall average across the portfolio at 31 December 2020 is 30 years (31 December 2019: 29 years).

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

 
                                   NAV/ share     -1 year  Total Portfolio    +1 year  NAV/ share 
  Asset Lives                          impact      change            Value     change      impact 
 Directors' valuation - December 
  2020                                  -1.2p   -GBP27.0m      GBP2,629.8m  +GBP23.4m        1.0p 
---------------------------------  ----------  ----------  ---------------  ---------  ---------- 
 Directors' valuation - December 
  2019                                  -1.3p  (GBP23.9m)      GBP2,095.6m  +GBP22.1m        1.2p 
---------------------------------  ----------  ----------  ---------------  ---------  ---------- 
 
   5.    Segment reporting 

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

   6.    Total operating income 
 
                                         For year       For year 
                                            ended          ended 
                                      31 December    31 December 
                                             2020           2019 
                                         GBP'000s       GBP'000s 
 Interest income from investments          78,165         63,440 
 Gain on investments                       41,010         82,190 
----------------------------------  -------------  ------------- 
 Total operating income                   119,175        145,630 
----------------------------------  -------------  ------------- 
 

The gains on investment are unrealised. On the Expanded basis, which includes TRIG UK and TRIG UK I, the Company's subsidiaries, that the Directors consider to be an extension of the Company's investment activity, total operating income is GBP145,826k (2019: GBP162,316k). The reconciliation from the IFRS basis to the expanded basis is shown in Section 2.9 of the Strategic Report.

   7.    Fund expenses 
 
                                                            For year       For year 
                                                               ended          ended 
                                                         31 December    31 December 
                                                                2020           2019 
                                                            GBP'000s       GBP'000s 
 Fees payable to the Company's Auditor: 
    For audit of the Company's financial statements              140            124 
    For the other audit-related assurance services                39             29 
    For additional fees in respect to the prior year              15              - 
 Investment and management fees (Note 18)                        200            200 
 Directors' fees (Note 18)                                       283            228 
 Other costs                                                   1,117          1,028 
-----------------------------------------------------  -------------  ------------- 
  Fund expenses                                                1,794          1,029 
-----------------------------------------------------  -------------  ------------- 
 

The fees to the Company's Auditor include GBP39k (2019: GBP29k) payable in relation to audit-related assurance services in respect of the interim review of the half yearly financial statements.

In addition to the above, GBP445k (2019: GBP371k) was paid to Deloitte LLP (the Company's auditor) in respect of audit services provided for 2020 audit to unconsolidated subsidiaries. Additionally there were GBP33k of audit services provided to unconsolidated subsidiaries related to the prior year, but agreed in the current year. These amounts are therefore not included within fund expenses above.

On the Expanded basis, fund expenses are GBP19,987k (2019: GBP17,936k); the difference being the costs incurred within TRIG UK and TRIG UK I, the Company's subsidiaries. The reconciliation from the IFRS basis to the Expanded basis is shown in Section 2.9 of the Strategic Report.

The Company had no employees during the current or prior year. The Company has appointed the Investment Manager and the Operations Manager to manage the portfolio, the Company and its subsidiaries, on its behalf.

   8.    Finance and other (expense)/ income 
 
                                                           For year       For year 
                                                              ended          ended 
                                                        31 December    31 December 
                                                               2020           2019 
                                                           GBP'000s       GBP'000s 
 Interest income: 
 Interest on bank deposits                                      155            379 
----------------------------------------------------  -------------  ------------- 
 Total finance income                                           155            379 
----------------------------------------------------  -------------  ------------- 
 
 (Loss)/ gain on foreign exchange: 
 Realised (loss)/ gain on settlement of FX forwards         (3,122)          4,165 
 Fair value (loss)/ gain of FX forward contracts           (14,020)         14,058 
 Other foreign exchange losses                                (228)          (593) 
----------------------------------------------------  -------------  ------------- 
 Total (loss)/ gain on foreign exchange                    (17,370)         17,630 
----------------------------------------------------  -------------  ------------- 
 Finance and other (expense)/ income                       (17,215)         18,009 
----------------------------------------------------  -------------  ------------- 
 

On the Expanded basis, finance income is GBP155k (2019: GBP379k) and finance costs are GBP4,036k (2019: GBP3,384k); the difference being the Group's acquisition facility costs which are incurred within TRIG UK and TRIG UK I, the Company's subsidiaries. These costs are shown in Section 2.9 of the Strategic Report.

   9.    Income tax 

Under the current system of taxation in Guernsey, the Company is exempt from paying taxes on income, profits or capital gains. Therefore, income from investments is not subject to any further tax in Guernsey, although these investments will bear tax in the individual jurisdictions in which they operate.

10. Earnings per share

Earnings per share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of Ordinary Shares in issue during the year.

 
                                                         31 December   31 December 
                                                                2020          2019 
 Profit attributable to equity holders of the Company 
  (GBP'000)                                               GBP100,166    GBP162,029 
 Weighted average number of Ordinary Shares in issue 
  ('000)                                                   1,711,999     1,422,876 
 Earnings per Ordinary Share (Pence)                            5.9p         11.4p 
------------------------------------------------------  ------------  ------------ 
 

Further details of shares issued in the year are set out in Note 17.

11. Dividends

 
                                                            31 December   31 December 
                                                                   2020          2019 
                                                               GBP'000s      GBP'000s 
 Amounts recognised as distributions to equity holders 
  during the year: 
 Interim dividend for the 3 month year ended 31 December 
  2018 of 1.625p                                                               19,148 
 Interim dividend for the 3 month year ended 31 March 
  2019 of 1.66p                                                                23,986 
 Interim dividend for the 3 month year ended 30 June 
  2019 of 1.66p                                                                24,008 
 Interim dividend for the 3 month year ended 30 September 
  2019 of 1.66p                                                                27,119 
 Interim dividend for the 3 month year ended 31 December 
  2019 of 1.66p                                                  27,167 
 Interim dividend for the 3 month year ended 31 March 
  2020 of 1.69p                                                  27,673 
 Interim dividend for the 3 month year ended 30 June 
  2020 of 1.69p                                                  29,379 
 Interim dividend for the 3 month year ended 30 September 
  2020 of 1.69p                                                  29,439 
----------------------------------------------------------  -----------  ------------ 
                                                                113,658        94,261 
----------------------------------------------------------  -----------  ------------ 
 
 
 Dividends settled as a scrip dividend alternative     6,629   7,976 
 Dividends settled in cash                           107,028  86,285 
---------------------------------------------------  -------  ------ 
                                                     113,657  94,261 
---------------------------------------------------  -------  ------ 
 

On 4 February 2021, the Company declared an interim dividend of 1.69 pence per share for the period 1 October 2020 to 31 December 2020. The total dividend, GBP32,167,500, payable on 31 March 2021, is based on a record date of 12 February 2021 and the number of shares in issue at that time being 1,903,402,338.

 
                                                         31 December  31 December 
                                                                2020         2019 
                                                               Pence        Pence 
 Amounts recognised as distributions to equity holders 
  during the year: 
 Interim dividend for the quarter ended December 2018                       1.625 
 Interim dividend for the quarter ended March 2019                           1.66 
 Interim dividend for the quarter ended June 2019                            1.66 
 Interim dividend for the quarter ended September 2019                       1.66 
 Interim dividend for the quarter ended December 2019           1.66 
 Interim dividend for the quarter ended March 2020              1.69 
 Interim dividend for the quarter ended June 2020               1.69 
 Interim dividend for the quarter ended September 2020          1.69 
-------------------------------------------------------  -----------  ----------- 
 Total dividend per share                                       6.73        6.605 
-------------------------------------------------------  -----------  ----------- 
 

12. Net assets per Ordinary Share

 
                                                        31 December   31 December 
                                                               2020          2019 
                                                           GBP'000s      GBP'000s 
 Shareholders' equity at balance sheet date            GBP2,194,871  GBP1,883,437 
-----------------------------------------------------  ------------  ------------ 
 Number of shares at balance sheet date, including 
  management shares accrued but not yet issued            1,904,287     1,637,453 
-----------------------------------------------------  ------------  ------------ 
 Net Assets per Ordinary Share at balance sheet date 
  (Pence)                                                    115.3p        115.0p 
-----------------------------------------------------  ------------  ------------ 
 

In line with the Investment Management Agreement and the Operations Management Agreement, 20 per cent of the Group's management fees are to be settled in Ordinary Shares. Shares are issued to the Investment Manager and the Operations Manager twice a year in arrears, usually in March and September for the half year ending December and June, respectively.

As at 31 December 2020, 885,012 shares equating to GBP1,005,464, based on a Net Asset Value ex dividend of 113.61 pence per share (the Net Asset Value at 31 December 2020 of 115.3 pence per share less the interim dividend of 1.69 pence per share) were due but had not been issued. The Company intends to issue these shares around 31 March 2021.

In view of this, the denominator in the above Net assets per Ordinary Share calculation is as follows:

 
                                                            31 December    31 December 
                                                                   2020           2019 
                                                                   000s           000s 
 Ordinary Shares in issue at balance sheet date               1,903,402      1,636,564 
 Number of shares to be issued in lieu of Management 
  fees                                                              885            890 
--------------------------------------------------------  -------------  ------------- 
 Total number of shares used in Net Assets per Ordinary 
  Share calculation                                           1,904,287      1,637,453 
--------------------------------------------------------  -------------  ------------- 
 

13. Investments at fair value through profit or loss

Investments at fair value through profit or loss is the sum of the portfolio valuation and the carrying amount of TRIG UK and TRIG UK I, the Company's subsidiaries.

 
                                      31 December   31 December 
                                             2020          2019 
                                         GBP'000s      GBP'000s 
 Brought forward                        1,741,457     1,267,255 
 Investments in the year                  499,466       413,844 
 Distributions paid to the Company      (188,779)      (84,757) 
 Interest income from investments          67,792        62,925 
 Gain on valuation                         41,010        82,190 
-----------------------------------  ------------  ------------ 
 Carried forward                        2,160,946     1,741,457 
-----------------------------------  ------------  ------------ 
 

The following information is non-statutory. It provides additional information to users of the financial statements, splitting the fair value movements between the investment portfolio and TRIG UK and TRIG UK I, the Company's subsidiaries that were previously consolidated.

 
                                                      31 December  31 December 
                                                             2020         2019 
                                                         GBP'000s     GBP'000s 
 Fair value of investment portfolio 
 Brought forward value of investment portfolio          1,745,185    1,268,681 
 Investments in the year                                  588,249      507,786 
 Project refinancing and exit proceeds(2)               (117,950)     (64,577) 
 Distributions paid to the Company                      (147,958)    (128,804) 
 Interest income                                           69,869       49,649 
 Dividend income                                           23,506            - 
 Gain on valuation                                         52,130      112,449 
---------------------------------------------------  ------------  ----------- 
 Carried forward value of investment portfolio          2,213,030    1,745,185 
---------------------------------------------------  ------------  ----------- 
 
 Fair value of TRIG UK & TRIG UK I 
 Brought forward value of TRIG UK & TRIG UK I             (3,728)      (1,426) 
 Cash movement                                                521           72 
 Working capital movement                                (11,661)      (1,572) 
 Debt movement(1)                                        (37,215)        (802) 
---------------------------------------------------  ------------  ----------- 
 Carried forward value of TRIG UK & TRIG UK I            (52,083)      (3,728) 
---------------------------------------------------  ------------  ----------- 
 Total investments at fair value through profit or 
  loss                                                  2,160,947    1,741,457 
---------------------------------------------------  ------------  ----------- 
 

1 Debt arrangement costs of GBP4,390k (2019: GBP1,605k) have been netted off the GBP40m (2019: GBPnil) debt drawn by TRIG UK and TRIG UK I.

2 In the current year this related to the exit of Erstrask and the sell down of Merkur. In the prior year this related to proceeds from project refinancings.

The gains on investment are unrealised.

The SPV's (Project companies) in which the company invests are generally restricted on their ability to transfer funds to the Company under the terms of their individual senior funding arrangements. Significant restrictions include:

   -   Historic and projected debt service and loan life cover ratios exceed a given threshold; 
   -   Required cash reserve account levels are met; 

- Senior lenders have agreed the current financial model that forecasts the economic performance of the project company;

   -   The Project company is in compliance with the terms of its senior funding arrangements; and 
   -   Senior lenders have approved the annual budget for the company. 

Details of investments recognised at fair value through profit or loss were as follows:

 
                                              31 December 2020      31 December 2019 
                                            --------------------  -------------------- 
                                                    Subordinated          Subordinated 
 Investments (project name)        Country  Equity    loan stock  Equity    loan stock 
 TRIG UK                                UK    100%          100%    100%          100% 
 TRIG UK I                              UK    100%          100%    100%          100% 
 Roos                                   UK    100%          100%    100%          100% 
 The Grange                             UK    100%          100%    100%          100% 
 Hill of Towie                          UK    100%          100%    100%          100% 
 Green Hill                             UK    100%          100%    100%          100% 
 Forss                                  UK    100%          100%    100%          100% 
 Altahullion                            UK    100%          100%    100%          100% 
 Lendrums Bridge                        UK    100%          100%    100%          100% 
 Lough Hill                             UK    100%          100%    100%          100% 
                                  Republic 
 Milane Hill                    of Ireland    100%          100%    100%          100% 
                                  Republic 
 Beennageeha                    of Ireland    100%          100%    100%          100% 
 Haut Languedoc                     France    100%          100%    100%          100% 
 Haut Cabardes                      France    100%          100%    100%          100% 
 Cuxac Cabardes                     France    100%          100%    100%          100% 
 Roussas-Claves                     France    100%          100%    100%          100% 
 Puits Castan                       France    100%          100%    100%          100% 
 Churchtown                             UK    100%          100%    100%          100% 
 East Langford                          UK    100%          100%    100%          100% 
 Manor Farm                             UK    100%          100%    100%          100% 
 Parsonage                              UK    100%          100%    100%          100% 
 Marvel Farms                           UK    100%          100%    100%          100% 
 Tamar Heights                          UK    100%          100%    100%          100% 
 Stour Fields                           UK    100%          100%    100%          100% 
 Meikle Carewe                          UK    100%          100%    100%          100% 
 Tallentire                             UK    100%          100%    100%          100% 
 Parley                                 UK    100%          100%    100%          100% 
 Egmere                                 UK    100%          100%    100%          100% 
 Penare                                 UK    100%          100%    100%          100% 
 Earlseat                               UK    100%          100%    100%          100% 
                                  Republic 
 Taurbeg                        of Ireland    100%          100%    100%          100% 
 Four Burrows                           UK    100%          100%    100%          100% 
 Rothes 2                               UK     49%           49%     49%           49% 
 Mid Hill                               UK     49%           49%     49%           49% 
 Paul's Hill                            UK     49%           49%     49%           49% 
 Rothes 1                               UK     49%           49%     49%           49% 
 Crystal Rig 1                          UK     49%           49%     49%           49% 
 Crystal Rig 2                          UK     49%           49%     49%           49% 
 Broussan                           France   48.9%          100%   48.9%          100% 
 Plateau                            France   48.9%          100%   48.9%          100% 
 Borgo                              France   48.9%          100%   48.9%          100% 
 Olmo 2                             France   48.9%          100%   48.9%          100% 
 Chateau                            France   48.9%          100%   48.9%          100% 
 Pascialone                         France   48.9%          100%   48.9%          100% 
 Santa Lucia                        France   48.9%          100%   48.9%          100% 
 Agrinergie 1&3                     France   48.9%          100%   48.9%          100% 
 Agrinergie 5                       France   48.9%          100%   48.9%          100% 
 Agrisol                            France   48.9%          100%   48.9%          100% 
 Chemin Canal                       France   48.9%          100%   48.9%          100% 
 Ligne des 400                      France   48.9%          100%   48.9%          100% 
 Logistisud                         France   48.9%          100%   48.9%          100% 
 Marie Galante                      France   48.9%          100%   48.9%          100% 
 Sainte Marguerite                  France   48.9%          100%   48.9%          100% 
 Freasdail                              UK    100%          100%    100%          100% 
 FVP du Midi                        France   51.0%          100%   51.0%          100% 
 Neilston                               UK    100%          100%    100%          100% 
 Garreg Lwyd                            UK    100%          100%    100%          100% 
 Broxburn                               UK    100%          100%    100%          100% 
 Sheringham Shoal                       UK   14.7%         14.7%   14.7%         14.7% 
                                  Republic 
 Pallas                         of Ireland    100%          100%    100%          100% 
 Solwaybank                             UK    100%          100%    100%          100% 
 Montigny                           France    100%          100%    100%          100% 
 Rosieres                           France    100%          100%    100%          100% 
 Ersträsk                      Sweden       -             -     75%           75% 
 Jadraas                            Sweden    100%          100%    100%          100% 
 Venelle                            France    100%          100%    100%          100% 
 Fujin                              France   41.9%          100%   34.6%          100% 
 Epine                              France    100%          100%    100%          100% 
 Little Raith                           UK    100%          100%    100%          100% 
 Gode Wind 1                       Germany     25%           25%     25%           25% 
 Blary Hill                             UK    100%          100%       -             - 
 Merkur                            Germany   24.6%         24.6%       -             - 
 Haut Vannier                       France    100%          100%       -             - 
 East Anglia 1                          UK   14.3%         14.3%       -             - 
 
 
                                          31 December 2020      31 December 2019 
                                        --------------------  -------------------- 
                                                   Mezzanine             Mezzanine 
 Investments (project name)    Country  Ownership       debt  Ownership       debt 
 Phoenix                        France          -       100%          -          - 
 

On 8 April 2020, TRIG acquired 100% shareholder loan interest and 100% equity interest in Blary Hill Energy Limited with the rights to construct a 35MW wind farm in West Scotland. The project was developed by RES and will be constructed by RES under a fixed price EPC Contract.

On 24 April 2020, TRIG made an additional investment into Fujin SAS, a holding company which owns a portfolio of five operational windfarms in France. TRIG made the initial investment in June 2019; the additional investment brings TRIG's holding from 34.6% to 41.9%.

On 12 May 2020, TRIG completed the acquisition of a 35.7% shareholder loan interest and 35.7% equity interest in Merkur following receipt of German foreign investment approvals and EU merger clearances. TRIG partnered with the Dutch pension investor, APG, who acquired the remaining 64.3% in the Project. This is consistent with TRIG's strategy of partnering with aligned co-investors on larger transactions.

Merkur was acquired from a consortium of Partners Group (on behalf of its clients), DEME Concessions, GE Energy Financial Services, ADEME and a private fund separately managed by InfraRed, TRIG's Investment Manager. The transaction process included the procedures set out in the Company's investment policy and recent prospectuses, these include the conduct of independent due diligence by a specially constituted buy-side committee and an independent third-party valuation and approval by TRIG's Board of Directors, all of whom are independent of the Investment Manager.

On 3 July 2020, TRIG sold down a share of its investment in Merkur to minority co-investors managed by InfraRed, leaving TRIG with a 24.6% equity interest in the Project. The amount which was owed by the co-investment party was recognised in the fair value of investments at 30 June 2020, using a discounted cash flow methodology. The amount has been paid to a subsidiary of the Company.

On 29 July 2020, the Company exercised its put option to sell back its 75% interest in Ersträsk to its developer, Enercon, due to construction delays. On this date the exit was completed and transferred. TRIG has not suffered any financial loss. Under the terms of the sale and purchase agreement for Ersträsk, the Company was protected. Payment would only have been due if the turbines became operational by the key milestones. The Company did not take construction or delay risks.

On 19 October 2020, TRIG acquired 100% shareholder loan and 100% equity interest in Haut Vannier SAS with the rights to construct a 43MW wind farm in France. The project has been developed by Envision and Velocita, who will continue to carry out the construction which is already in progress and is expected to complete in 2022.

On 22 December 2020, TRIG exchanged contracts to invest in Phoenix SAS, a holding company consisting of 5 operational onshore wind farms in northern France and 4 operational solar parks with battery storage in Corsica and La Réunion. TRIG has invested in the project in form of mezzanine level bonds which gives information and management rights similar to those of a minority equity investor. The project was developed by Akuo Energy, TRIG has partnered with other investors in France to invest in this project.

On 31 December 2020, TRIG completed the acquisition of 14.3% indirect equity interest in East Anglia One, a newly constructed operational offshore wind farm located off the coast of Suffolk in the North Sea from Green Investment Group. TRIG partnered with InfraRed European Infrastructure Fund 4, a fund managed by InfraRed, who acquired a 5.7% indirect equity interest in the project alongside TRIG.

In the year, TRIG made an additional investment in Solwaybank and Blary Hill to fund their construction timetable, in line with outstanding commitments.

Further detail of acquisitions made in the year can be found in Section 2.6 of the Strategic Report.

14. Other receivables

 
                                       31 December  31 December 
                                              2020         2019 
                                         GBP'000's    GBP'000's 
 Other receivables                          12,501        2,110 
 Fair value of FX forward contracts              -       12,620 
------------------------------------  ------------  ----------- 
                                            12,501       14,730 
------------------------------------  ------------  ----------- 
 

15. Cash and cash equivalents

 
                              31 December  31 December 
                                     2020         2019 
                                GBP'000's    GBP'000's 
 Bank balances                     23,116      127,589 
---------------------------  ------------  ----------- 
 Cash and cash equivalents         23,116      127,589 
---------------------------  ------------  ----------- 
 

On the Expanded basis, which includes balances carried in TRIG UK and TRIG UK I, cash is GBP23,853k (2019: GBP127,804k). The reconciliation from the IFRS basis to the Expanded basis is shown in Section 2.9 of the Strategic Report.

As at the year end, cash and cash equivalents on the Expanded basis consisted of GBP20,000k held with Sumitomo Mitsui Banking Corporation Europe Limited and GBP3,853k held with Royal Bank of Scotland International Limited. At 31 December 2020 Sumitomo Mitsui Banking Corporation Europe Limited had an S&P credit rating of A/ Stable and Royal Bank of Scotland International Limited had an S&P credit rating of A-/ Negative.

16. Other payables

 
                                       31 December  31 December 
                                              2020         2019 
                                         GBP'000's    GBP'000's 
 Management fees(1)                             50           50 
 Fair value of forward FX contracts          1,399            - 
 Other payables                                243          289 
------------------------------------  ------------  ----------- 
                                             1,692          339 
------------------------------------  ------------  ----------- 
 

1 For related party and key advisor transactions see note 18.

The Company has entered into forward foreign currency contracts to hedge the expected euro distributions up to a maximum of 48 months. In addition, the Company has placed further hedges to reach a position where approximately 80% of the valuation of euro denominated assets is hedged, providing a partial offset to foreign exchange movements in the portfolio value relating to such assets.

The increase in the foreign exchange hedging level to 80% occurred during late 2019 and remains under review and the level of hedges may change in the future.

The following table details the forward foreign currency contracts outstanding as at 31 December 2020. The total euro balance hedged at 31 December 2020 was EUR747.5m (2019: EUR636.5m).

 
                                        31 December 2020 
                            Average     Foreign    Notional 
                           exchange    currency       value  Fair value 
                               rate   EUR'000's   GBP'000's   GBP'000's 
 Less than 3 months               -           -           -           - 
 3 to 6 months               1.1153     151,200     135,572          56 
 6 to 12 months              1.1037      36,600      33,163         237 
 12 to 24 months             1.1121     275,700     247,907     (1,218) 
 Greater than 24 months      1.1042     284,000     257,203       (474) 
------------------------  ---------  ----------  ----------  ---------- 
                             1.1093     747,500     673,844     (1,399) 
------------------------  ---------  ----------  ----------  ---------- 
 

As at the year end, the valuation on the foreign exchange derivatives consisted of GBP1,989k payable to Natwest Markets Plc and GBP560k receivable from National Australia Bank Limited. At 31 December 2020 Natwest Markets Plc had an S&P credit rating of A-/Negative and National Australia Bank Limited had an S&P credit rating of AA-/Negative.

17. Share capital and reserves

 
                                               Ordinary       Ordinary 
                                                 Shares         Shares 
                                            31 December    31 December 
                                                   2020           2019 
                                                 '000's         '000's 
 Opening balance                              1,636,564      1,178,373 
----------------------------------------  -------------  ------------- 
 Issued for cash                                260,000        450,000 
 Issued as a scrip dividend alternative           5,056          6,376 
 Issued in lieu of management fees                1,783          1,815 
----------------------------------------  -------------  ------------- 
 Issued at 31 December - fully paid           1,903,403      1,636,564 
----------------------------------------  -------------  ------------- 
 

On 21 May 2020, the Company issued 100,000,000 shares raising GBP120,000,000 before costs.

On 15 December 2020, the Company issued 160,000,000 shares raising GBP200,000,000 before costs.

In each case the Company used the funds to repay the revolving credit facility and then fund acquisitions.

The company issued 5,055,591 shares in relation to scrip take-up as an alternative to dividend payments in relation to the dividends paid in the year.

The holders of the 1,903,402,338 (2019 1,636,563,717) Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. The Company shares are issued at nil par value.

Share premium

 
                                   31 December  31 December 
                                          2020         2019 
                                      GBP'000s     GBP'000s 
 Opening balance                     1,721,309    1,189,542 
 Ordinary Shares issued                328,632      539,627 
 Cost of Ordinary Shares issued        (3,704)      (7,859) 
--------------------------------  ------------  ----------- 
 Closing balance                     2,046,237    1,721,309 
--------------------------------  ------------  ----------- 
 

Other reserves

 
                                                           31 December   31 December 
                                                                  2020          2019 
                                                              GBP'000s      GBP'000s 
 Opening balance                                                 1,008         1,008 
 Shares to be issued in lieu of management fees incurred 
  in H1 2019                                                         -           991 
 Shares to be issued in lieu of management fees incurred 
  in H2 2019 (Note 18)                                               -         1,008 
 Shares to be issued in lieu of management fees incurred 
  in H1 2020 (Note 18)                                             995             - 
 Shares to be issued in lieu of management fees incurred 
  in H2 2020 (Note 18)                                           1,005             - 
 Shares issued in the year, transferred to share premium       (2,002)       (2,000) 
---------------------------------------------------------  -----------  ------------ 
 Closing balance                                                 1,006         1,008 

---------------------------------------------------------  -----------  ------------ 
 

Retained reserves

Retained reserves comprise retained earnings, as detailed in the statement of changes in shareholders' equity.

18. Related party and key advisor transactions

Loans to related parties:

 
                                                            31 December   31 December 
                                                                   2020          2019 
                                                                 '000's        '000's 
 Short-term balance outstanding on accrued interest 
  receivable                                                     11,423         1,050 
 Short-term balance outstanding from TRIG UK, in relation 
  to Management fees to be settled in shares(2)                   1,005         1,008 
 Long-term loan stock to TRIG UK and TRIG UK I(1)             1,312,037       997,255 
----------------------------------------------------------  -----------  ------------ 
                                                              1,324,465       999,314 
----------------------------------------------------------  -----------  ------------ 
 

1 Included within Investments at fair value through profit or loss on the Balance Sheet

2 Included within Other receivables on the Balance Sheet

During the year, interest totalling GBP78,165k (2019: GBP63,440k) was earned in respect of the long-term interest-bearing loan between the Company and its subsidiaries TRIG UK and TRIG UK I, of which GBP11,423k (2019: GBP1,050k) was receivable at the balance sheet date.

Key advisor transactions

The Group's Investment Manager (InfraRed Capital Partners Limited) and Operations Manager (Renewable Energy Systems Limited) are entitled to 65 per cent and 35 per cent, respectively, of the aggregate management fee (see below), payable quarterly in arrears.

The aggregate management fee payable to the Investment Manager and the Operations Manager is 1 per cent of the Adjusted Portfolio Value in respect of the first GBP1 billion of the Adjusted Portfolio Value, 0.80 per cent in respect of the Adjusted Portfolio Value between GBP1 billion and GBP2 billion, 0.75 per cent in respect of the Adjusted Portfolio Value between GBP2 billion and GBP3 billion and 0.70 per cent in respect of the Adjusted Portfolio Value in excess of GBP3 billion. These fees are payable by TRIG UK, less the proportion that relates solely to the Company, the advisory fees, which are payable by the Company.

The advisory fees payable to the Investment Manager and the Operations Manager in respect of the advisory services they provide to the Company are GBP130k per annum and GBP70k per annum, respectively. The advisory fees charged to the Company are included within the total fee amount charged to the Company and its subsidiary, TRIG UK as set out above. The Investment Manager advisory fee charged to the income statement for the year was GBP130k (2019: GBP130k), of which GBP33k (2019: GBP33k) remained payable in cash at the balance sheet date. The Operations Manager advisory fee charged to the income statement for the year was GBP70k (2019: GBP70k), of which GBP18k (2019: GBP18k) remained payable in cash at the balance sheet date.

The Investment Manager management fee charged to TRIG UK for the year was GBP10,884k (2019: GBP9,141k), of which GBP2,484k (2019: GBP2,289k) remained payable in cash at the balance sheet date. The Operations Manager management fee charged to TRIG UK for the year was GBP5,861k (2019: GBP4,922k), of which GBP1,337k (2019: GBP1,233k) remained payable in cash at the balance sheet date.

In addition, the Operations Manager received GBP9,752k (2019: GBP7,704k) for services in relation to Asset Management, Operation and Maintenance and other services provided to project companies within the investment portfolio, and GBP65k (2019: GBP175k) for additional advisory services provided to TRIG UK, neither of which are consolidated in these financial statements.

In line with the Investment Management Agreement and the Operations Management Agreement, 20 per cent of the Group's aggregate management fees up to an Adjusted Portfolio Value of GBP1 billion are to be settled in Ordinary Shares. The shares issued to the Managers by the Company relate to amounts due to the Managers by TRIG UK. Accordingly, TRIG UK reimburses the Company for the shares issued.

As at 31 December 2019, 889,550 shares equating to GBP1,008,216, based on a Net Asset Value ex dividend of 113.34 pence per share (the Net Asset Value at 31 December 2019 of 115.0 pence per share less the interim dividend of 1.66 pence per share) were due, in respect of management fees earned in H2 2019, but had not been issued. The Company issued these shares on 31 March 2020.

On 30 September 2020, the Company issued 893,480 shares, equating to GBP994,533, based on a Net Asset Value ex dividend of 111.31 pence per share (the Net Asset Value at 30 June 2020 of 113.0 pence per share less the interim dividend of 1.69 pence per share), in respect of management fees earned in H1 2020.

As at 31 December 2020, 885,012 shares equating to GBP1,005,464, based on a Net Asset Value ex dividend of 113.61 pence per share (the Net Asset Value at 31 December 2020 of 115.3 pence per share less the interim dividend of 1.69 pence per share) were due, in respect of management fees earned in H2 2020, but had not been issued. The Company intends to issue these shares on 31 March 2021.

The Directors of the Company received fees for their services. Further details are provided in the Directors' Remuneration Report. Total fees for the Directors for the year were GBP282,667 (2019: GBP227,700). Directors' expenses of GBP3,042 (2019: GBP9,448) were also paid in the year.

All of the above transactions were undertaken on an arm's length basis.

19. Guarantees and other commitments

As at 31 December 2020, the Company and its subsidiaries, had provided GBP58.9m (2019: GBP36.7m) in guarantees in relation to projects in the TRIG portfolio.

The Company also guarantees the revolving credit facility, entered into by TRIG UK and TRIG UK I, which it may use to acquire further investments.

As at 31 December 2020 the Company has GBP392m of future investment obligations relating to four wind farms (2019: GBP350.4m relating to four wind farms).

More details on timing and amounts can be found in section 2.9 of the Strategic Report.

The Company and its subsidiaries have issued decommissioning and other similar guarantee bonds with a total value of GBP22.9m.

On 12 February 2021, the Company announced that it had exchanged contracts to acquire an equity interest of 100% of Grönhult. The Project is a construction onshore wind farm in Sweden with investment commitments outstanding and construction to be carried out over 2021 and 2022.

20. Contingent consideration

The Group has performance-related contingent consideration obligations of up to GBP0.4m (2019: GBP32.3m) relating to acquisitions completed prior to 31 December 2020. These payments depend on the performance of certain wind farms and other contracted enhancements. The payments, if triggered, would be due between 2021 and 2026. The valuation of the investments in the portfolio does not assume that these enhancements are achieved. If further payments do become due, they would be expected to be offset by an improvement in investment. The arrangements are generally two way in that if performance is below base case levels some refund of consideration may become due.

21. Events after the balance sheet date

On 15 January 2021, the Company announced that it had exchanged contracts to acquire an equity interest of 17.5% in Beatrice offshore wind farm, located off the north east coast of Scotland. The wind farm will be purchased from Copenhagen Infrastructure Partners and has been developed by SSE plc. Regulatory and lender consents are expected to be received in the coming weeks and TRIG has partnered with other investors to invest in this project which is in line with its strategy of partnering with aligned co-investors on larger transactions.

On 4 February 2021, the Company declared an interim dividend of 1.69 pence per share for the quarter 1 October 2020 to 31 December 2020. The total dividend, GBP32,167,500 payable on 31 March 2021, is based on a record date of 12 February 2021 and the number of shares in issue at that time being 1,903,402,338.

On 12 February 2021, the Company announced that it had exchanged contracts to acquire Grönhult, a ready-to-build onshore wind farm located in the southwest of Sweden. The Project is being acquired from Vattenfall, the leading Swedish utility and a major developer of renewables, who will also manage the construction process and will provide ongoing asset management services. Construction will begin in Q2 2021 and become operation at the end of Q4 2022. On completion, the Project is expected to represent approximately 3% of TRIG's portfolio value on a fully committed basis and investments in Sweden will account for 10% of TRIG's portfolio.

There are no other events after the balance sheet date, which are required to be disclosed.

22. Subsidiaries

As a result of applying Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) and Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28), all subsidiaries (including Associates and Joint Ventures) are held at fair value based on the Company's ownership interest as opposed to being consolidated on a line-by-line basis. The following subsidiaries have not been consolidated in these Financial Statements;

 
                                                                      Ownership 
 Name                                                        Country   Interest 
 The Renewables Infrastructure Group (UK) Limited                 UK       100% 
 The Renewables Infrastructure Group (UK) Investments 
  Limited                                                         UK       100% 
 Roos Energy Limited                                              UK       100% 
 Grange Renewable Energy Limited                                  UK       100% 
 Hill of Towie Limited                                            UK       100% 
 Green Hill Energy Limited                                        UK       100% 
 Wind Farm Holdings Limited                                       UK       100% 
 Forss Wind Farm Limited                                          UK       100% 
 Altahullion Wind Farm Limited                                    UK       100% 
 Lendrum's Bridge Wind Farm Limited                               UK       100% 
 Lendrum's Bridge (Holdings) Limited                              UK       100% 
 Lough Hill Wind Farm Limited                                     UK       100% 
                                                         Republic of 
 MHB Wind Farms Limited                                      Ireland       100% 
                                                         Republic of 
 MHB Wind Farms (Holdings) Limited                           Ireland       100% 
 The Renewables Infrastructure Group (France) SAS             France       100% 
 CEPE de Haut Languedoc SARL                                  France       100% 
 CEPE du Haut Cabardes SARL                                   France       100% 
 CEPE de Cuxac SARL                                           France       100% 
 CEPE des Claves SARL                                         France       100% 
 CEPE de Puits Castan SARL                                    France       100% 
 European Investments (SCEL) Limited                              UK       100% 
 European Investments (Cornwall) Limited                          UK       100% 
 Churchtown Farm Solar Limited                                    UK       100% 
 East Langford Solar Limited                                      UK       100% 
 Manor Farm Solar Limited                                         UK       100% 
 European Investments Solar Holdings Limited                      UK       100% 
 Sunsave 12 (Derriton Fields) Limited                             UK       100% 
 Sunsave 25 (Wix Lodge Farm) Limited                              UK       100% 
 Parley Court Solar Park Limited                                  UK       100% 
 Egmere Airfield Solar Park Limited                               UK       100% 
 Penare Farm Solar Park Limited                                   UK       100% 
 European Investments (Earlseat) Limited                          UK       100% 
 Earlseat Wind Farm Limited                                       UK       100% 
 European Investments Solar Holdings 2 Limited                    UK       100% 
 BKS Energy Limited                                               UK       100% 
 Hazel Renewables Limited                                         UK       100% 
 Kenwyn Solar Limited                                             UK       100% 
 MC Power Limited                                                 UK       100% 
 Tallentire Energy Limited                                        UK       100% 
                                                         Republic of 
 Taurbeg Limited                                             Ireland       100% 
 Fred. Olsen Wind Limited                                         UK        49% 
 Fred. Olsen Wind Holdings Limited                                UK        49% 
 Crystal Rig Windfarm Limited                                     UK        49% 
 Rothes Wind Limited                                              UK        49% 
 Paul's Hill Wind Limited                                         UK        49% 
 Crystal Rig II Limited                                           UK        49% 
 Rothes II Limited                                                UK        49% 
 Mid Hill Wind Limited                                            UK        49% 
 Freasdail Energy Limited                                         UK     100.0% 
 FVP Broussan                                                 France      48.9% 
 FVP Chateau                                                  France      48.9% 
 FPV du Plateau                                               France      48.9% 
 SECP Borgo                                                   France      48.9% 
 Sole e Aria 1                                                France      48.9% 
 SECP Olmo 2                                                  France      48.9% 
 Sole e Aria 2                                                France      48.9% 
 FPV Pascialone                                               France      48.9% 
 Sole e Aria 3                                                France      48.9% 
 FPV Santa Lucia                                              France      48.9% 
 FPV Agrinergie                                               France      48.9% 
 FPV d'Export                                                 France      48.9% 
 Agrisol 1A Services                                          France      48.9% 
 SECP Chemin Canal                                            France      48.9% 
 FPV Ligne des Quatre Cents                                   France      48.9% 
 FPV Ligne des Bambous                                        France      48.9% 
 Heliade Bellevue                                             France      48.9% 
 SECP Creuilly                                                France      48.9% 
 Akuo Tulip Assets SAS                                        France      48.9% 
 Verrerie Photovoltaique SAS                                  France     100.0% 
 FPV du Midi                                                  France      51.0% 
 Neilston Community Wind Farm LLP                                 UK       100% 
 Garreg Lwyd Energy Limited                                       UK       100% 
 UK Energy Storage Services Limited                               UK       100% 
 Scira Offshore Energy Limited                                    UK      14.7% 
                                                         Republic of 
 Pallas Energy Supply Limited                                Ireland       100% 
                                                         Republic of 
 Pallas Windfarm Limited                                     Ireland       100% 
 CEPE Rosieres SARL                                           France       100% 
 CEPE Montigny SARL                                           France       100% 
 Solwaybank Energy Limited                                        UK       100% 
 European Wind Investments Group Limited                          UK       100% 
 European Wind Investments Group 2 Limited                        UK       100% 
 Irish Wind Investments Group Limited                             UK       100% 
 Offshore Wind Investments Group Limited                          UK       100% 
 Scandinavian Wind Investments Group Limited                      UK       100% 
 European Storage Investments Group Limited                       UK       100% 
 Trafalgar Wind Holdings Limited                                  UK       100% 
 European Investments Tulip Limited                               UK       100% 
 Sirocco Wind Holding AB                                      Sweden       100% 
 Jadraas Vindkraft AB                                         Sweden       100% 
 Hallasen Kraft AB                                            Sweden       100% 
 Parc Eollen Nordex XXI SAS (Epine)                           France       100% 
 Fujin SAS                                                    France      34.6% 
 Energie du Porcin                                            France      27.7% 
 Eolienne de Rully                                            France      34.6% 
 Parc Eollen de Fontaine Macon                                France      34.6% 
 Parc Eollen de Vignes                                        France      34.6% 
 Energie Eollenne Somme II                                    France      30.8% 
 C.E.P.E. Rosieres                                            France       100% 
 C.E.P.E. Montigny La Cour SARL                               France       100% 
 Energies TIlle et Venelle Holdings SAS                       France       100% 
 Energies Entre Tille et Venelle SAS                          France       100% 
 German Offshore Wind Invstments Group (Holdings) 
  Limited                                                    Germany       100% 
 German Offshore Wind Investments Group Limited              Germany       100% 
 GOW01 Investor LuxCo SARL                                Luxembourg        50% 
 Gode Wind 1 Investor Holding GmbH                           Germany        50% 
 Gode Wind 1 Offshore Wind Farm GmbH                         Germany        25% 
 Little Raith Wind Farm Limited                                   UK       100% 
 Blary Hill Energy Limited                                        UK       100% 
 Merkur Offshore Wind Farm Holdings Limited                       UK        69% 
 Merkur Offshore GP GmbH                                     Germany      24.6% 
 Merkur Offshore Investment Holdings GmbH & Co KG            Germany      24.6% 
 Merkur Offshore Holdings GmbH                               Germany      24.6% 

 Partners Group Merkur Investments I SARL                 Luxembourg      24.6% 
 Partners Group Merkur Investments II SARL                Luxembourg      24.6% 
 PG Merkur Holding GmbH                                      Germany      24.6% 
 Merkur Offshore GmbH                                        Germany      24.6% 
 Haut Vannier Holding SAS                                     France       100% 
 Haut Vannier SAS                                             France       100% 
 Offshore Wind Investments Group 2 Limited                        UK       100% 
 Verneuil Holdings Limited                                        UK      71.7% 
 Bilbao Offshore Investment Limited                               UK     35.85% 
 Bilbao Offshore Holding Limited                                  UK     35.85% 
 East Anglia One Limited                                          UK     35.85% 
 Offshore Wind Investments Group 3 Limited                        UK       100% 
 Offshore Wind Investments Group 4 Limited                        UK       100% 
 

10 Directors and Advisers

Directors and Advisers

DIRECTORS

Helen Mahy (Chairman)

Jonathan (Jon) Bridel

Shelagh Mason

Klaus Hammer

Tove Feld (Appointed 1 March 2020)

REGISTRAR

Link Market Services (Guernsey) Limited

PO Box 627

St Peter Port

Guernsey

GY1 4PP

ADMINISTRATOR TO COMPANY, DESIGNATED MANAGER, COMPANY SECRETARY AND REGISTERED OFFICE

Aztec Financial Services (Guernsey) Limited

PO Box 656

East Wing

Trafalgar Court

Les Banques

St Peter Port

Guernsey

GY1 3PP

[phone]

INVESTMENT MANAGER

InfraRed Capital Partners Limited

Level 7, One Bartholomew Close

Barts Square

London EC1A 7BL

OPERATIONS MANAGER

Renewable Energy Systems Limited

Beaufort Court

Egg Farm Lane

Kings Langley

Hertfordshire WD4 8LR

FINANCIAL PR

Maitland/AMO

3 Pancras Square

Kings Cross

London N1C 4AG

UK TRANSFER AGENT

Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

Helpline: 0871 664 0300

AUDITOR

Deloitte LLP

Regency Court

Esplanade

St Peter Port

Guernsey GY1 3HW

BROKERS

Investec Wealth & Investment Limited

30 Gresham Street

London EC2V 7QP

Liberum Capital Limited

Ropemaker Place

25 Ropemaker Street

London EC2Y 9LY

Key Company Data

 
 Company name            The Renewables Infrastructure Group Limited 
 Registered address      East Wing 
                          Trafalgar Court 
                          Les Banques 
                          St Peter Port 
                          Guernsey 
 Listing                 London Stock Exchange - Premium Listing (TRIG) 
 Ticker symbol           TRIG 
 SEDOL                   BBHX2H9 
 Index inclusion         FTSE All-Share, FTSE 250, FTSE 350 and FTSE 
                          350 High Yield indices 
 Company year end        31 December 
 Dividend payments       Quarterly (March, June, September, December) 
 Investment Manager      InfraRed Capital Partners Limited 
  ("IM") 
 Operations Manager      Renewable Energy Systems Limited 
  ("OM") 
 Company Secretary       Aztec Financial Services (Guernsey) Limited 
  and Administrator 
 Shareholders' funds     GBP2,195m as at 31 December 2020 
 Market capitalisation   GBP2,433m as at 31 December 2020 
 Management Fees         1.0% per annum of the Adjusted Portfolio Value1 
                          of the investments up to GBP1.0bn (with 0.2% 
                          of this paid in shares), falling to (with no 
                          further elements paid in shares) 0.8% per annum 
                          for the Adjusted Portfolio Value above GBP1.0bn, 
                          0.75% per annum for the Adjusted Portfolio Value 
                          above GBP2.0bn and 0.7% per annum the Adjusted 
                          Portfolio Value above GBP3.0bn. Fees are split 
                          between the Investment Manager (65%) and the 
                          Operations Manager (35%). 
                          No performance or acquisition fees. 
 ISA, PEP and SIPP       The Ordinary Shares are eligible for inclusion 
  status                  in PEPs and ISAs (subject to applicable subscription 
                          limits) provided that they have been acquired 
                          by purchase in the market, and they are permissible 
                          assets for SIPPs. 
 NMPI status             Following the receipt of legal advice, the Board 
                          confirms that it conducts the Company's affairs, 
                          and intends to continue to conduct the Company's 
                          affairs, such that the Company would qualify 
                          for approval as an investment trust if it were 
                          resident in the United Kingdom. It is the Board's 
                          intention that the Company will continue to 
                          conduct its affairs in such a manner and that 
                          IFAs should therefore be able to recommend its 
                          Ordinary Shares to ordinary retail investors 
                          in accordance with the FCA's rules relating 
                          to non-mainstream investment products. 
 FATCA                   The Company has registered for FATCA and has 
                          a GIIN number J0L1NL.99999.SL.831. 
 KID                     The Company's KID can be found on the Company's 
                          website. 
 Investment policy       The Company's Investment Policy is set in Section 
                          2.3 and can also be found on the Company's website. 
 Website                 www.TRIG-Ltd.com 
 

Notes:

1 Adjusted Portfolio Value means fair market value, taking into account any project financing, less any other debt held other than the acquisition facility.

[1] The NAV per share at 31 December 2020 is calculated on the basis of the 1,903,402,338 Ordinary Shares in issue at 31 December 2020 plus a further 885,012 Ordinary Shares to be issued to the Managers in relation to part-payment of Managers' fees for H2 2020 and a NAV of GBP2,194.9m.

[2] On an Expanded Basis. Please refer to Section 2.9 for an explanation of the Expanded Basis.

[3] Please refer to Section 2.10 for more detail on Company performance.

[4] Past performance is no guarantee of future returns. There can be no assurance that targets will be met or that the Company will make any distributions, or that investors will receive any return on their capital. Capital and income at risk.

[5] Calculated based on each project's generation capacity pro-rated for TRIG's share of subordinated debt and equity capital. Capacity is from both generation and battery output and includes expected capacity arising from investment commitments as at 16 February 2021.

[6] On a committed basis at the date of this report, and based on average regional household electricity consumption figures and the IFI Approach to GHG Accounting for Renewable Energy. The Portfolio, in 2020, generated electricity capable of powering a million homes and displaced c. 1.2m tonnes of CO(2) .

   [7]   Including dividends, interest and loan repayments. 

[8] Sale of the Ersträsk windfarm in Sweden back to Enercon following construction delays and the planned part sell down of TRIG's stake in Merkur offshore windfarm in Germany to minority co-investors.

   [9]   Using the methodology of the Association of Investment Companies ("AIC"). 

[10] This is a target only and not a profit forecast. There can be no assurance that this target will be met.

   [11]     As announced in January 2021 and expected to complete later in Q1 2021. 

[12] The AIC Code has been endorsed by the Financial Reporting Council (FRC) and the Guernsey Financial Services Commission (GFSC).

[13] Principles for Responsible Investment, a United Nations-supported international network of investors.

[14] The list maintained by the Financial Conduct Authority (acting in its capacity as the UK Listing Authority) in accordance with Section 74(1) of the Financial Services and Markets Act 2000 (the Act) for the purposes of Part VI of the Act.

[15] Net zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. There are two different routes to achieving net zero, which work in tandem: reducing existing emissions and actively removing greenhouse gases.

   [16]     According to the Bloomberg New Energy Finance Covid-19 impact tracker 

[17] Actual values calculated in accordance with the IFI Approach to GHG Accounting for Renewable Energy. Portfolio at year end is capable of mitigating 1.3m tonnes of carbon emissions p.a.

[18] This relates to electricity used on site.

[19] https://www.un.org/sustainabledevelopment

[20] Number of operational TRIG sites engaged in pro-active habitat management plans that exceed standard environmental maintenance.

[21] https://www.un.org/sustainabledevelopment

[22] Including amount distributed so far via additional TRIG Covid funding.

[23] https://www.un.org/sustainabledevelopment

[24] The LTAFR is calculated on the basis of the number of accidents which have occurred in the period divided by the number of hours worked multiplied by 100,000 to give a rate for every 100,000 hours worked. Whilst all accidents are recorded by RES, only accidents that have resulted in a worker being unable to perform their normal duties for more than seven days are included in this calculation in line with reportable accidents as defined by UK HSE RIDDOR regulation. 'As previously reported, the HSE considers the central estimate for the 'All Industries' injury frequency rate to be 1.24 per 100,000 hours (2014 value). The UK renewables industry is working to create industry specific benchmarks to compare with moving forward.

[25] https://www.un.org/sustainabledevelopment

   [26]     This is TRIG's equity share of the nominal capacity of the windfarm 

[27] The main revenue type during the subsidy period. Thereafter all revenues are wholesale power market.

[28] The segmentation above is on a fully committed basis and includes assets under construction at the time the investment was committed.

[29] The Phoenix SAS portfolio investment is made in the form of mezzanine level bonds where the Company does not have an equity stake. The portfolio comprises five onshore wind farms in Northern France with a combined capacity of 74MW and four operational solar parks with battery storage located on the islands of Corsica and La Réunion with a combined capacity of 29MW ("the Portfolio"). All the Portfolio assets are backed by the French government's Feed-in-Tariff subsidy and have an average year of commission of 2015.

[30] This column does not cast due to rounding differences

   [31]     This column does not cast due to rounding differences 
   [32]     On an invested basis 
   [33]     Irish Wind Energy Association 
   [34]     The percentage of committed Portfolio value for Merkur (net) is 7% 

[35] Committed Portfolio Value is GBP2,629.8m and includes GBP392m of investment commitments outstanding at the Balance Sheet date.

   [36]     The percentage of committed Portfolio value for Merkur (net) is 7% 

[37] Power price forecasts used in the Directors' valuation for each market are based on analysis by the Investment Manager using data from leading power market advisers. In the illustrative blended price curve, the power price forecasts are weighted by the P50 estimate of production for each of the projects in the 31 December 2020 portfolio. Forecasts are shown net of assumptions for PPA discounts and cannibalisation. The average level of reduction to the baseload forecast power price assumed to renewable generation across the portfolio is approximately 15%.

[38] Cannibalisation describes the effect that renewables (an intermittent generator) can have on the overall power prices, whereby the marginal cost of generation, which in turn drives the power prices, is lower than the average which would be expected of a continuous base load generator as a result of the additional supply when renewables are generating. Rates differ over time and between markets but all are affected.

[39] The majority of Jädraås wind farm income is from wholesale power sales which in the Nord Pool are denominated in Euros. Accordingly, the investment is treated as Euro denominated notwithstanding that the smaller subsidy element of the revenues and some operating costs are denominated in Swedish Krona.

   [40]     Includes Sheringham, Freasdail and Crystal Rig II 

[41] TRIG announced in January 2021 that it had exchanged contracts to purchase a stake in Beatrice offshore wind farm from Copenhagen Infrastructure Partners alongside other investors. Completion is expected in the following weeks upon receipt of regulatory and lender consents.

[42] TRIG announced in February 2021 that it has exchanged contracts to acquire ready-to-build Grönhult onshore wind farm from Vattenfall who will also manage the construction process. Construction will begin in Q2 2021 and is expected to be operational at the end of Q4 2022.

[43] The majority of the Jädraås wind farm income is from wholesale power sales which in the Nord Pool are denominated in Euros. Accordingly, the investment is treated as Euro denominated notwithstanding that the smaller subsidy element of the revenues and some operating costs are denominated in Swedish Krona.

[44] SEM refers to the Irish Single Electricity Market

[45] Notwithstanding in France where a proposal has been voted in to reduce certain historical tariffs. Further detail is provided in Section 2.8 - Valuation of the Portfolio. This affects assets representing less than 1% of TRIG's portfolio, by value, and is not expected to have a significant financial impact on the overall portfolio

[46] Power Purchase Agreement

[47] Feed-in Tariff

[48] Renewables Obligation Certificates

[49] Please refer to Note 2.b. Going Concern for further details of the Company's leverage at the end of the year.

[50] The Parker Review into the Ethnic Diversity of UK boards which was published in October 2017 and updated in February 2020

[51] Tove Feld's remuneration was pro-rated from commencement of her Directorship on the 1st of March 2020.

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February 17, 2021 02:00 ET (07:00 GMT)