AQUILA EUROPEAN RENEWABLES PLC

Annual Report • Apr 26, 2023

STRATEGIC REPORT INVESTMENT OBJECTIVE HIGHLIGHTS WHY INVEST? AT A GLANCE CHAIRMAN’S STATEMENT INVESTMENT ADVISER’S REPORT INVESTMENT ADVISER BACKGROUND INVESTMENT PORTFOLIO PORTFOLIO UPDATES CONTRACTED REVENUE POSITION FINANCIAL PERFORMANCE CASE STUDY: SAGRES OPTIMISATION CASE STUDY: SPANISH PPAs MARKET COMMENTARY AND OUTLOOK ENVIRONMENTAL, SOCIAL AND GOVERNANCE 1. ENVIRONMENTAL 2. SOCIAL 3. GOVERNANCE INVESTMENT POLICY AND KEY PERFORMANCE INDICATORS SECTION 172 RISK AND RISK MANAGEMENT OTHER INFORMATION GOVERNANCE BOARD OF DIRECTORS INVESTMENT ADVISER CORPORATE GOVERNANCE AUDIT AND RISK COMMITTEE REPORT DIRECTORS’ REMUNERATION REPORT DIRECTORS’ REPORT STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS FINANCIALS INDEPENDENT AUDITORS’ REPORT STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS 1. General Information 2. Basis of Preparation 3. Significant Accounting Policies 4. Investments at Fair Value Through Profit or Loss 5. Income from Investments 6. Investment Advisory Fees 7. Other Expenses 8. Finance Costs 9. Taxation 10. Return per Ordinary Share 11. Trade and Other Receivables 12. Trade and Other Payables 13. Share Capital 14. Special Reserve 15. Net Assets per Ordinary Share 16. Dividend Paid 17. Financial Risk Management 18. Transactions with the Investment Adviser and Related Party Transactions 19. Distributable Reserves 20. Commitments and Contingencies 21. Unconsolidated Subsidiaries and Associates 22. Post Balance Sheet Events OTHER INFORMATION ALTERNATIVE PERFORMANCE MEASURES (“APMS”) GLOSSARY COMPANY INFORMATION NOTICE OF ANNUAL GENERAL MEETING NOTES TO THE NOTICE OF MEETING  AQUILA EUROPEAN RENEWABLES PLC  ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022 CONTENTS STRATEGIC REPORT                              For more information     Why Invest  Market Overview   FINANCIAL STATEMENTS             GOVERNANCE               OTHER INFORMATION           Other InformationFinancialsGovernanceStrategic Report 1 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Aquila European Renewables Plc (“AER”, the “Company”) seeks to generate stable returns, principally in the form   INVESTMENT OBJECTIVE  Solar PV  Direct Asset Exposure to   > Read more on pages 5 and 6  > Read more on page 7  > Read more on page 18 and 19 Sagres, Portugal Olhava, FinlandOurique, Portugal 2 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 1.  performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in euros, unless stated otherwise. 2. Calculation based on NAV per Ordinary Share in euros, includes dividends and assumes no reinvestment of dividends. 3. Dividends paid/payable and declared relating to the period. 4. Calculation based on the operational result at special purpose vehicle (“SPV”) level. Refer to page 22 for further details. 5. Calculation based on average NAV over the period and regular recurring annual operating costs of the Company, further details can be found on page 43. 6. Calculation based on Ordinary Share price in euros, includes dividends. HIGHLIGHTS 92.3 Ordinary Share price (cents) 2021: 102.0 451.7 Net assets (EUR million) 2021: 417.4 12.9% Total NAV return per Ordinary Share 1,2 2021: 7.6% 110.6 NAV per Ordinary Share (cents) 1 2021: 102.6 5.25 Dividend per Ordinary Share (cents) 3 2021: 5.0 (4.5%) Total Shareholder return 1,6 2021: 0.5% (16.6%) Ordinary Share price discount to NAV 1 2021: (0.6%) 1.1% Ongoing charges 1,5 2021: 1.1% 1.4x Dividend cover 1,4 2021: 1.1x FINANCIAL INFORMATION – AS AT 31 DECEMBER 2022 Tesla, Nor way Other InformationFinancialsGovernanceStrategic Report 3 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 1. Includes the investments in and the completion of The Rock and the Spanish solar PV Assets in 2022. 2. Calculation is based on NAV per Ordinary Share in euros, includes dividends and assumes no reinvestment of dividends. 3.  4. As announced in February 2023 based on forward-looking assumptions as at 31 December 2022. Dividend cover presented is net of existing project debt repayments, excludes the impact of the share buyback and assumes the 2023 target dividend is paid in 2023 to 2027.   5. Subject to the portfolio performing in line with expectations. HIGHLIGHTS 80.7% growth in portfolio operating capacity (+184.7 MW 1 ) during 2022, resulting in a step-change in earnings capacity Electricity production during 2022 increased by 27.6% compared to 2021 to 666.4 GWh (2021: 522.3 GWh) Annualised total NAV return of 7.1% 2 since IPO, at the top end of long-term target  EUR 150.5 million of capital deployed or committed during 2022 in unlevered solar PV, increasing solar portfolio exposure to 51.5% 3 Robust dividend cover: 1.4x in 2022. 1.8x expected in 2023 and 1.6x 4 on average over  2022 revenue of the portfolio 24.2% ahead of budget, driven by favourable electricity pricing environment EUR 20.0 million share buyback announced on 3 February 2023, in addition to a 5.0% increase in target dividend for 2023 5 2022 total NAV return of 12.9% 2 , the highest one-year return since IPO SUBSEQUENT EVENTS In April 2023, the Company extended the maturity date of the Revolving Credit Facility (“RCF”) by twelve months to April 2025 Members of the Board of Directors and Investment Adviser announced their commitment to acquire AER Ordinary Shares Completion of the construction project Guillena and The Rock EPCM takeover declared in April 2023 4 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) We seek to generate stable returns, principally    • Opportunity to participate in Europe’s green energy transition. •  required to meet green energy targets; and • Heterogenous power markets provide  optionality. • Highly experienced and credentialed Investment Adviser: • Managing a 19 GW clean energy portfolio across Europe; • 10 GW clean energy development and construction pipeline; and • Ambitious CO 2 reduction targets. • European focused  by geography and technology. • High contracted revenues (PPAs, Regulated Tariffs) to ensure earnings visibility. • Fully invested. • Low gearing levels (25.6% 3 ). • Strong dividend cover  operating portfolio. • Long-term return target of 6.0 to 7.5% (net of fees and expenses). • Ordinary Share price discount to NAV  3 . • Total NAV return of 12.9% 1,3 in 2022. • Annualised total NAV return of 7.1% 1,2,3 since IPO. • Two consecutive increases in annual dividend by 5.0% since 2021. 1. Includes dividends and assumes no reinvestment. 2. Assumes an opening NAV per share of 0.98. 3.  performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in euros, unless stated otherwise. WHY INVEST? MARKET OPPORTUNITY POSITIONING RETURNS Other InformationFinancialsGovernanceStrategic Report 5 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) AT A GLANCE  1  Operating By Status Hydropower Solar PV Wind energy Spain Portugal Denmark  Norway Finland By Country 1.    Solar PV p   One country Two countries Four countries Sagres, Portugal Jaén, Spain Holmen II, Denmark By Technology 43.9% 51.5% 4.6% 5.7% 15.3% 15.5% 17.3% 5.5% 40.7% 100.0% 6 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) AT A GLANCE CONTINUED        1 Solar PV p 1   1 SAGRES 107.6 MW BENFICA III 19.7 MWp TESLA 150.0 MW Ownership: 18.0% Ownership: 100.0% Ownership: 25.9% ALBENIZ 50.0 MWp HOLMEN II 18.0 MW Ownership: 100.0% Ownership: 100.0% OURIQUE 62.1 MWp OLHAVA 34.6 MW Ownership: 50.0% Ownership: 100.0% GRECO 100.0 MWp SVINDBAEK I + II 32.0 MW Ownership: 100.0% Ownership: 99.9% TIZA 30.0 MWp THE ROCK 400.0 MW Ownership: 100.0% Ownership: 13.7% DESFINA 40.0 MW Ownership: 89.0% 1. AER share. The Rock  Tesla Holmen II   Sagres  Ourique Greco Tiza Albeniz Other InformationFinancialsGovernanceStrategic Report 7 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)   Solar PV See page 24 for more information SAGRES CASE STUDY See page 25 for more information SPANISH PPAs CASE STUDY 8 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  In my statement last year, I expressed the hope that our Company was now close to achieving the goals of its initial stage of development, namely to have an    dividend. The transformation of both our portfolio and our technological balance is now evident, as we managed to achieve these objectives during the 2022 calendar  been achieved.  construction projects, Albeniz, The Rock  our total portfolio operating capacity increased by approximately 80.7% in 2022. The Company also successfully deployed and committed an incremental  sheet resources, representing our largest year on record for capital deployment. In combination, these two events have led to a step-change in the earnings capacity  capabilities and dividend cover to support a progressive dividend policy. Our announcement on 3 February 2023 highlighted the positive outlook for the  dividend cover guidance in the short to medium term. More details of this outlook were provided in that announcement and are also available later in this report. I would also refer our Shareholders to the investor presentation of 6 February 2023 on our website (https://www.aquila- european-renewables.com/investor- relations/reports-publications#submenu), which sets out in detail the assumptions behind this analysis and models numerous sensitivities in relation to both power prices and production levels.  The Board also announced on  target dividend by 5.0% to 5.51 cents per Ordinary Share for 2023, subject to the portfolio performing in line with expectations. In 2023, the Company is expecting dividend cover of 1.8x 1 and over the next  average cover of 1.6x 1  our fully invested balance sheet, and our robust and resilient portfolio. CHAIRMAN’S STATEMENT I am pleased to present the      Ian Nolan Chairman 1. These are targets only and not forecasts. There can be no assurance that these targets can or will be met and it should not be seen as an indication of the Company’s expected or actual results or returns. These forecasts do not include the buybacks. Other InformationFinancialsGovernanceStrategic Report 9 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Share Buyback Programme As a result of last autumn’s volatility in the  the Company’s share price fell to trade at a large and sustained discount to NAV per Ordinary Share, in line with the peer group.   belief that the current share price did  underlying portfolio and consequently  share buyback programme. The share buyback programme is expected to be accretive to NAV per Ordinary Share and  Members of the AER Board of Directors and Investment Adviser employees also bought additional AER Ordinary Shares. 2022 Performance During the reported period, revenue of the portfolio was 24.2% above budget due to higher than expected power prices, particularly in the Nordics. This was partially offset by the lower than expected production of the portfolio by 6.9%,  that impacted Portugal during the period, as well as lower than expected wind   Company’s dividend cover, which was 1.4x during the reported period.  onshore Norwegian wind farm in which AER owns 13.7% interest, became  from high electricity prices observed in the NO4 pricing region. Over the next  Alcoa’s Aluminium smelter in Mosjøen with renewable energy. Alcoa’s Aluminium smelter is a key contributor to employment and growth in Mosjøen. As at 25 April, there have been no new developments in the Sami appraisal case which is scheduled to commence on 30 May 2023. In April 2023, the Company announced that the takeover under the Engineering, Procurement and Construction Management (“EPCM”) agreement for The Rock has been achieved. Key provisions are in place to ensure the EPCM contractor, Eolus, remains responsible for the appraisal case.  workable solutions to safeguard migration of the reindeer and we look forward to updating Shareholders in due course. During 2022, the Investment Adviser’s  concluded three new Power Purchase Agreements (“PPAs”) for our new solar PV investments in Spain and were able to lock-in attractive prices for up to seven years, further enhancing the portfolio’s income visibility and dividend cover over the medium term.  The Company’s remaining commitments (via its wholly owned subsidiary, Tesseract Holdings Limited) amount   project which has been completed in April 2023. AER has a very conservative gearing structure, with low levels of  1  project level debt is fully amortising with  Holdings Limited, the Company also  its  Facility (“RCF”), which at 31 December  2 , with the option to be increased by a further  subject to bank consent. In April 2023, the Company extended the maturity date of the RCF by twelve months to April 2025. 1.  performance measures used, together with how these measures have been calculated, can be found on page 112. 2. Includes EUR 10.9 million provided as guarantees to offtakers when securing PPAs and town council as a part of dismantling guarantee and grid connection guarantee. Albeniz, Spain 10 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CHAIRMAN’S STATEMENT CONTINUED ESG The Company is committed to contributing to the UN Sustainable  ensure access to affordable, reliable, sustainable and modern energy for all.  wind farm in Norway (AER interest:  membership award; this prize is given to a member who has excelled in positive engagement with the community through social or environmental sustainability.  assessment results for the year with a score of 88 out of 100, representing an improvement compared to our 2021  average of 82 points.  reduced from 4 out of 5 to 3 out of 5 stars due to the relative net underperformance compared to its peer group. In response,  various improvements which are expected to be introduced in 2023 and we look forward to keeping Shareholders updated on our progress throughout the year. Regulatory Change Recently, the European Commission (“EC”) announced a public consultation process to reform the European electricity market design in order to better protect consumers from excessive price volatility and support their access to secure energy from clean sources. Importantly, the EC has committed to securing European energy sovereignty and achieving climate neutrality, whilst recognising that renewables is the key driver to achieve these goals, further reinforcing the positive tailwinds in this sector. Additionally, the EC has  which aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets. This will be done on four pillars:  environment, speeding up access to  for resilient supply chains. The Investment Adviser is actively contributing to the consultation process in combination with the broader industry. AER is well positioned given its pan-European investment strategy, which reduces our reliance on any single power market, combined with a strong contracted revenue base in the form of Power Purchase Agreements or subsidies, increasing our earnings visibility.  Since undergoing rapid growth in 2022, AER now offers a fully invested balance  portfolio which the Board believes  than is implied by the recent share price discount to NAV. As illustrated in our short and medium-term dividend cover guidance, the portfolio is expected to  over time, supporting our progressive  It is the Board’s view that there remains an attractive and sizeable opportunity to deploy incremental capital to help fund the build-out of the very substantial  European geographies) developed by Aquila Capital, our Investment Adviser. Sagres, Portugal Other InformationFinancialsGovernanceStrategic Report 11 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Outlook The Board remains of the view that the market outlook for renewable energy generation in Europe is strong, reinforced by a combination of geopolitical and macro-economic factors, along with the ever-more urgent need to decarbonise Europe’s energy supply. We expect this to ensure a continuing favourable regulatory backdrop at the European level. It is the ambition of the Board to build a larger-scale portfolio to further enhance the investment proposition for our current and future Shareholders. Clearly our share price needs to regain a premium to our NAV to enable us to fund the investment opportunities provided by the Investment Adviser. We hope that the Company’s continued strong operational performance, combined with clear and consistent communication of our strengths and opportunities, can set us  journey involves the inaugural Shareholder continuation vote, which will be tabled at  and which the Board is recommending that Shareholders should support. I am  approximately 2.1% of the issued share capital, will not be voting their shares in respect of the continuation vote, given the  do so. The Board and the Investment Adviser have been engaging with our major Shareholders in light of the disappointing performance of the share price, despite the 12.9% NAV return 1 achieved this year. Your feedback as Shareholders is highly valued and we hope our actions since the announcement on 3 February 2023 demonstrate that we are listening and will act decisively in the interests of all Shareholders. The Board and its advisers will, over the coming year, continue to explore a number of different initiatives to help secure recognition in the share price of the real underlying value of the portfolio with a commitment to review broader options if that value fails to be  On behalf of the Board, we thank you for the support that you have shown and we hope, will continue to show, for a company  our collective objective of achieving a net zero economy. Ian Nolan Chairman 25 April 2023 Tesla, Nor way 1.  performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in euros, unless stated otherwise. 12 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Aquila Capital is one of the leading investment and industrial development companies, managing over EUR  investors worldwide and managing one of the largest clean energy portfolios in Europe. Over the past two decades, Aquila Capital and its subsidiaries have committed to support the green energy transition and create a more sustainable  company manages wind energy, solar PV, hydropower energy and battery storage  Additionally, it has projects in sustainable real estate and green logistics, either completed or under development. Aquila  carbon forestry and data centres. The Investment Adviser’s dedicated, expert investment teams comprise over 700 employees worldwide. Moreover, a strategic partnership since 2019 with Japan´s Daiwa Energy & Infrastructure draws on their sector networks and  manage and operate investments along the entire value chain. As this business model requires local management teams, Aquila Capital is represented across 17  The Investment Adviser currently has  of development and construction assets in the EMEA region, primarily in solar PV located in Southern Europe. This represents an attractive source of growth opportunities for AER. Aquila Capital’s in-house Markets  of experts dedicated to sourcing and structuring Power Purchase Agreements, market analysis, trading, origination, FX, interest rates and other hedge products, has facilitated the Company’s proactive approach to hedging and risk management. The Company’s Alternative Investment Fund Manager (“AIFM”), FundRock  Limited (previously known as International Fund Management Limited), has appointed Aquila Capital as its Investment Adviser in respect of the Company. Aquila Capital’s key responsibilities are to originate, analyse and assess suitable renewable energy infrastructure investments and advise the AIFM accordingly. INVESTMENT ADVISER’S REPORT  European Renewables INVESTMENT ADVISER BACKGROUND WHAT’S IN  Investment Adviser Background 12 Investment Portfolio 14 Portfolio Updates 15 Contracted Revenue Position 18 Financial Performance 20 Market Commentary and Outlook 31 1.  Overall CO 2 eq  1   produced 1  Households supplied 1  Other InformationFinancialsGovernanceStrategic Report 13 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 1.  indicative of size. Current Renewables Portfolio of Aquila Capital in Europe 1 : Portfolio Capacity  980 MW 281 plants Solar PV 11,704 MW 343 PV parks  4,581 MW  Energy storage systems 1,735 MW 25 projects  14 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) INVESTMENT ADVISER’S REPORT CONTINUED Type Project Country Capacity 1 Status COD 2  from COD 2 Equipment manufacturer Energy offtaker 3 Offtaker Ownership in asset   Acquisition  Sagres Portugal 107. 6 M W Operational 1951-2006 n/a 6 Various FiT EDP/Renta 18.0% 5 23.4% Jul-19  Portugal 19.7 MWp Operational 2017/2020 30y AstroNova PPA Axpo 100.0% 0.0% Oct-20 Albeniz Spain 50.0 MWp Operational 2022 30y Canadian Solar PPA Statkraft 100.0% 0.0% Dec-20 Ourique Portugal 62.1 MWp Operational 2019 30y Suntec CfD ENI 50.0% 5 0.0% Jun-21 Greco Spain 100.0 MWp Construction /Operational 2023 30y Jinko PPA Statkraft 100.0% 0.0% Mar-22 Tiza Spain 30.0 MWp Operational 2022 30y Canadian Solar PPA Axpo 100.0% 0.0% Jun-22 Tesla Norway 150.0 MW Operational 2013, 2018 25y Nordex PPA Statkraft 25.9% 5 20.2% Jul-19 Holmen II Denmark 18.0 MW Operational 2018 25y Vestas FiP Energie.dk 100.0% 25.6% Jul-19  Finland 34.6 MW Operational 2013-2015 27.5y Vestas FiT Finnish Energy 100.0% 41.4% Sep-19  Denmark 32.0 MW Operational 2018 25y Siemens FiP Energie.dk 99.9% 14.2% Dec-19 & Mar-20 The Rock Norway 400.0 MW Operational 2022 30y Nordex PPA Alcoa 13.7% 5 50.6% Jun-20   40.0 MW Operational 2020 25y Enercon FiP DAPEEP 89.0% 7 52.9% 8 Dec-20 Total (AER share) 463.8 MW 1. Installed capacity at 100% ownership. 2. COD = Commercial Operations Date. 3. PPA = Power Purchase Agreement, FiT = Feed-in tariff, FiP = Feed-in premium, CfD = Contract for Difference. 4. Leverage level calculated as a percentage of debt plus fair value as at 31 December 2022. 5. Majority of remaining shares are held by entities managed and/or advised by Aquila Capital. 6. 21 individual assets. Approximately ten years remaining asset life when calculated using net full load years. 7. Represents voting interest. Economic interest is approximately 93.0%. 8. Calculation based on voting interest. INVESTMENT PORTFOLIO Tesla, Nor way Albeniz, Spain Sagres, Portugal Other InformationFinancialsGovernanceStrategic Report 15 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) PORTFOLIO UPDATES – AS AT 31 DECEMBER 2022   Spain Solar PV  March 2022  Construction/Operational  100.0 MWp Tiza : Spain Solar PV  June 2022  Operational  30.0 MWp  solar PV project located in the region of Andalucía, southern Spain.  of two assets with a total capacity of 100.0 MWp, comprising Jaén   EUR 90.0 million, excluding earn-out, with the majority due at completion. The remaining consideration for the portfolio is EUR  deferred payment for Jaén that was paid after the reporting period   Jaén achieved completion and started producing electricity in November 2022, having secured a pay-as-produced PPA in October    project expected by the second quarter of 2023.  electricity annually over its lifetime, equivalent to approximately  2 avoidance in its lifetime. In June 2022, the Company acquired 100.0% interest in Tiza, a solar PV asset with 30 MWp capacity, located in the region of Almeria,   Solutions, which covers 70% of P50 production.  annually over its lifetime, representing approximately 62 kt of CO 2 equivalent avoidance over its lifetime. During construction,  restoration and relocation of olive trees, the building of over ten rabbit refuges built and the introduction of a natural barrier of plants around the perimeter to protect the local fauna. Jaén, Spain Tiza, Spain  Capital deployed or committed during 2022 16 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) INVESTMENT ADVISER’S REPORT CONTINUED Albeniz  Spain Solar PV  December 2020  Operational  50.0 MWp   Norway   June 2020  Operational  400.0 MW The project is part of a cluster of four separate solar PV parks in various stages of development and construction, owned by funds managed by Aquila Capital. The portfolio is located in the south  solar PV technology. The project was completed and became operational in June  commissioning taking place in August 2022. The asset is expected to have an operating life of 30 years after commissioning. Albeniz    approximately 70% of production. The asset has been operational since November 2022 following takeover under the Turbine Supply Agreement (“TSA”). In April 2023, the Company announced that the takeover under the EPCM agreement for The Rock has also been achieved. Following takeover under the EPCM, all parties agreed that Eolus will remain responsible for the upcoming appraisal case with the Sami district, which is due to commence on 30 May 2023, and the result of the case is expected on or before autumn 2023. The project company, the developer and the turbine supplier are currently involved in an arbitration process to settle outstanding claims related to construction delays and extensions of time under the TSA. The project company does not expect the arbitration case to negatively  Albeniz, Spain The Rock, Norway PORTFOLIO UPDATES – AS AT 31 DECEMBER 2022 continued Albeniz, Spain The Rock, Norway Other InformationFinancialsGovernanceStrategic Report 17 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  1 500 400 300 200 100 50 2019 2020 2021 2022 350 250 150 0 450 EUR million 387.4 47.5 Invested Committed During 2022 the Company has successfully deployed or committed EUR 150.5 million on new acquisitions and existing assets, increasing its total capital deployment since IPO to EUR 434.8 million. As at 31 December 2022, the Company’s only remaining commitments (via its wholly owned subsidiary, Tesseract Holdings Limited) amounted to approximately EUR 47.5 million relating   existing surplus liquidity comprising cash on hand and the RCF (please refer to the gearing section on page 26 for further details).   geography and technology, whilst also offering potential to invest in construction projects which could enable further value creation opportunities over time. These assets are spread across northern, eastern and southern Europe, over wind energy,  1. Data show invested capital as at 31 December of each year. 18 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) INVESTMENT ADVISER’S REPORT CONTINUED 1. Includes replacement PPA assumed to be secured for Olhava once the FiT runs out from 2025 for a tenor of three years. 2. Asset revenues are discounted by the weighted average portfolio discount rate as of 31 December 2022 and are taken from 1 January 2023 onwards. 3. Contracted revenue as at 31 December 2022, discounted by the weighted average portfolio discount rate. 4. Aggregate contracted revenue over entire asset life (not discounted). 5. Weighted based on investment value and on production hedged. Olhava future PPAs has been excluded as it has not yet been secured. EUR 292m 3 EUR 411m 4 51.9% 1,2 7.4 years 5         CONTRACTED REVENUE POSITION  1   1,2 100% 90% 70% 50% 2023 2028 2033 2043 80% 60% 0% 20% 10% 40% 30% 2038 Market Fixed price PPA   26.1% 48.1% 25.8% Aquila will proactively seek to replace expired PPA/tariff contracts over time in order to maintain a high degree of contracted revenues Other InformationFinancialsGovernanceStrategic Report 19 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  countries and six different price zones in Norway (NO2 and NO4 regions), Iberia (Spain and Portugal), Finland, Denmark  different subsidy schemes as well as PPAs. Contracted revenues expected over the  have decreased to 51.9% (December 2021: 68.5%) as a result of the increases in electricity price forecasts (boosting merchant exposure), combined with the expiry of existing tariffs and PPAs,   However, the Company has continued to focus on maintaining a high degree of contracted revenues to mitigate its  short-term events which have the potential to increase volatility in electricity prices.  periods of higher power prices, whilst simultaneously enabling the Company   The Company has continued to implement  the year. During the year, the Investment  secured attractive PPAs for the Company (see Spanish PPAs section on page 25 for further detail): • Jaén: 70% of P50 production, pay-as-produced with Statkraft  •  pay-as-produced with Statkraft Markets, seven years; •    The Company was pleased to secure these PPAs at such attractive price levels, which were almost double what had been observed for similar PPA terms over the last few years. The portfolio has good visibility of future  contract life of approximately 7.4 years for revenues contracted (31 December 2021:  contracts its revenues with investment grade counterparties. Tiza, Spain 20 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) INVESTMENT ADVISER’S REPORT CONTINUED Performance  1 (GWh) Variance 2022 against Technology Region 2022 2021 Variance P50 Budget     395.0 11.6% (5.5%) Solar PV Portugal, Spain   79.0 137.3% (2.9%) Hydropower Portugal  48.4 (21.1%) (32.1%)       522.3 27.6% (6.9%)  1 Technology 2022 2021 Wind energy  28.0% Solar PV  18.1% Hydropower  29.9% Total  26.7%   Technology 2022 2021 Wind energy  98.6% Solar PV  94.4% Hydropower  98.6% Total   98.2%  2,3 (EUR million) Technology 2022 2021 Variance Wind energy  33.6 37.6% Solar PV  4. 2 190.1% Hydropower  4.5 8.0% Total  42.2 49.6% FINANCIAL PERFORMANCE 1.  2.  3.  4. Average technical availability based on weighted installed capacity (AER share). Other InformationFinancialsGovernanceStrategic Report 21 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  Electricity production during 2022   acquisition of Tiza (30.0 MWp), the operating solar PV asset, and the completion of three of the four assets under construction: The Rock    1 of production to the portfolio and represent approximately 20.7% of 2022 total production. As a result, the portfolio is well positioned given these   For 2022, revenue was 24.2% over budget because of high electricity prices  2021 across Europe. The upward trend   in Ukraine, which drove commodity prices up, most notably for gas and coal. Prices in the Nordics were also impacted due to tighter hydrological balance and increased interconnection links to  Production performance was 6.9% below budget, while technical availability remained strong in all asset classes, at 97.5%. The underperformance in production was due to the severe drought  the year in Portugal; this led to Sagres production to be 32.1% below budget. Also, lower than expected wind levels  be 12.3% below budget. Furthermore, irradiation in Iberia was slightly below budget and this led to production being 2.9% below budget at the Iberian solar PV assets, whilst slower wind levels in the Nordics led to production being 4.0% below budget. Underperformance in December was driven by lower than  and Norway. Production forecasts which underpin the Company’s net asset value are based on P50 production assumptions sourced from leading technical advisers. 100.0 60.0 30.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 80.0 90.0 40.0 0.0 50.0 20.0 10.0 70.0 GWh Wind Solar PV Hydropower Budget Jaén and The Rock commencement Albeniz commencement Tiza commencement 1. Accumulated production since economic transfer date of each asset, except for The Rock accumulated since completion occurred. 22 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) INVESTMENT ADVISER’S REPORT CONTINUED  1  EUR million 2 2022 2021 Variance (%) Asset income 63.2 42.2 49.6% Asset operating costs  (7.9) 57.0% Interest and tax  (4.5) 32.3%  44.9 29.9 50.3% Asset debt amortisation  (12.2) (10.3%) Company and HoldCo 3 expenses 5 , other  1.9 nmf 4  29.1 19.6 48.8% Dividends paid 21.2 17.0 24.4%  1.4x 1.1x nmf 4 Reconciliation to Company Cash Flow Statement EUR million 2022 2021 Variance (%) Total underlying asset earnings 29.1 19.6 48.8% SPV Distributions to HoldCo  (6.9) 356.4% Movement in working Capital  (10.8) (75.1%) HoldCo Expenses (excluding investment expenses) 1.6 0.6 181.1%  Investment advisory fee funded by share issuance 6  (2.7) (50.6%) Interest and dividend income 17.1 11.8 45.4% Movement in working capital 4.5 (3.3) (238.8%) Construction income — (4.0) n/a Other 7  0.2 (165.1%)  16.9 4.4 281.0%    8 . The majority of  Total underlying asset earnings are calculated by aggregating the P&L of the Company’s SPVs (adjusted for AER’s share), less any repayments of project level debt at the SPV level (adjusted for AER’s share), less fund level costs at the Company and HoldCo level. FINANCIAL PERFORMANCE continued 1.  performance measures used, together with how these measures have been calculated, can be found on page 112. Numbers and percentages may vary due to rounding differences. 2.  100.0% in 2021) rather than voting interest (89%). 3. Tesseract Holdings Limited. 4. nmf = not meaningful. 5.   AER in relation to shareholder loans provided to construction assets. 6.  7.  8. References to SPVs in this section also includes holding companies, where applicable. Other InformationFinancialsGovernanceStrategic Report 23 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) The Company reported robust dividend cover of 1.4x during the period, compared to 1.1x reported in 2021, driven by a 48.8% increase in total underlying asset earnings. The improvement in total underlying asset earnings was primarily driven by higher power prices across the portfolio whilst production also increased as a result of the successful completion of construction projects (Albeniz, The Rock) and the acquisition of an operating asset (Tiza). Dividends paid increased by 24.4% as a result of higher shares in issue due to capital raising in late 2021, combined with a 5.0% increase in the dividend target for 2022.  EUR million 2022 2021 Variance (%)       16.9 4.4 281.0% Investment advisory fee funded by share issuance 1.3 2.7 (50.6%) HoldCo       31.4 (108.5%) Shareholder loan repayments 1 10.6 0.5 2139.2% Acquisition of accrued interest from shareholder loan 2 1.5 2.4 (39.1%) Other 3 0.3 — n/a Consolidation adjustments  (37.0) (92.9%)  25.3 4.4 476.0% Dividends paid 21.2 17.0 24.4%  1.2x 0.3x nmf The table above provides an alternative dividend cover calculation based on actual cash distributions received by the Company and HoldCo from the investment portfolio or SPVs. Cash distributions are paid in the form of dividends or Shareholder loan payments (interest or principal).  Company and HoldCo, subject to certain adjustments (as shown in the table above), the most notable being distributions from the Company’s assets in the form of Shareholder loan repayments.  activities, which was primarily driven by the completion of construction assets (Albeniz, The Rock), the acquisition of an operating asset (Tiza) and the timing of distributions paid by the respective assets. 1.  2. Accrued shareholder loan interest purchased at the Tiza acquisition (2021: Ourique). 3.  24 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CASE STUDY: SAGRES OPTIMISATION Sagres is a 107.6 MW hydropower asset in which AER acquired an 18.0% interest in      also being accretive to economic returns.   annual production for the asset (resulting in an increase in maximum net capacity from 102.7 MW to 107.6 MW). This can be attributed to a series of improvements to the hydropower plants performed by the Aquila Capital Asset Management team between 2019 and 2022, such as upgrades to the control systems, major  hydromechanical equipment. This increase in production has been included in the fourth quarter valuation of the asset , which increased by 1.8%. However, this was offset by a rise in the discount rate during the same period. Capacity 107.6 MW Location Sagres, Portugal  100.0 92.0 86.0 2021 202220202010 2011 2012 2013 2014 2015 2016 2017 2018 2019 96.0 98.0 88.0 80.0 90.0 84.0 82.0 94.0 93.1 98.3 Prior ownership Average availability under prior ownership Aquila / AER ownership Average availability under Aquila / AER ownership Other InformationFinancialsGovernanceStrategic Report 25 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CASE STUDY: SPANISH PPAs  where the majority of the Company’s investment activities took place in 2022. During the second half of 2022, the Spanish government introduced measures to cap the price of electricity on merchant revenues and introduced a clawback on  strategy in response to regulatory changes and accordingly sought to maximise the   years, providing AER with a greater visibility on future revenues. As illustrated in the graph below, two of the three PPAs were secured at peak  conservative approach was taken in order to gain greater visibility of the expected start of operations and thus minimise any delivery risks under the PPA.   Capacity 130 MWp Location Spain  EUR/MWh 80.0 40.0 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 August 2022 September 2022 October 2022 November 2022 December 2022 January 2023 60.0 20.0 0 120.0 100.0 Tiza (6.5y – Start: 07/22) Jaén (5y – Start: 04/23)  PPA signed PPA signed PPA signed Source: Aquila PPA pricing tool. Note that the Tiza PPA started in July 2022. 26 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Gearing 1 As at As at 31 December 31 December EUR million 2022 2021 Variance NAV  417.4 8 . 2% Debt 2  144. 3 7.5%   561.8 8.0%  3  25.7 (0.1 bps) Weighted average maturity (years)  13.9 0.7 Weighted average interest rate (%) 4  2.5 0.0 bps RCF interest rate (%) 5  1.85 0.0 bps  6 .  7 . The Company’s asset level debt is  offset by increased utilisation of the Company’s RCF. During the period the Company increased the RCF limit from EUR 40.0 million to EUR 100.0 million (via its wholly owned subsidiary, Tesseract Holdings Limited, which is the borrowing entity), with the maturity date extended by twelve months until April 2024. After the reporting period, the Company subsequently exercised a further twelve month extension option under the RCF, extending the   (estimated at EUR 47.5 million). Debt Summary as at 31 December 2022 1 AER Drawn debt Bullet/ Hedged Project share (EUR million) Currency amortising Maturity proportion Type Tesla 25.9% 9.0 EUR Partly amortising Mar-29 100.0% Bank Debt Sagres 18.0% 7.0 EUR Fully amortising Jun-33 70.0% Bank Debt Olhava 100.0% 19.2 EUR Fully amortising Dec-30/ 100.0% Bank Debt Sep-31 Holmen II 100.0% 13.6 DKK Fully amortising Dec-37 93.2% Bank Debt Svindbaek I 99.9% 7.8 DKK Fully amortising Dec-37 100.0% Bank Debt The Rock: USPP Bond 13.7% 31.8 EUR Fully amortising Sep-45 100.0% Debt Capital Markets                        RCF 100.0% 24.0 6 EUR Apr-25 0.0% Bank Debt Total 155.2 82.6% FINANCIAL PERFORMANCE continued 1. Foreign currency values converted to EUR as at 31 December 2022.  based on voting interest. 2. Debt corresponds to senior debt secured at project level and RCF  3. This disclosure is considered to represent the Company’s alternative  performance measures used, together with how these measures have been calculated, can be found on page 112. All references to cents are in euros, unless stated otherwise. 4. Weighted average all in interest rate for EUR denominated debt (excl. RCF). DKK denominated debt has an average weighted interest rate of 2.8% (2021: 2.7%). 5. Margin over EURIBOR. 6. Excludes bank guarantees of EUR 10.9 million. 7. The Company may take on long-term structural debt provided that, at the time of entering into such debt, it does not exceed 50% of  Revolving Credit Facility, will be subject to a separate gearing limit so  into such debt. INVESTMENT ADVISER’S REPORT CONTINUED Other InformationFinancialsGovernanceStrategic Report 27 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Valuation Fair Value The table below shows the fair values of the investments on HoldCo level as well as the reconciliation to the respective item on Company level. Variance EUR million 2022 2021 (%) Tesla 35.5 31.4 13.1 Sagres 23.0 15.8 45.5 Holmen II 39.5 24.5 61.7 Olhava 27.2 27.3 (0.5) Svindbaek 46.9 40.6 15.5 The Rock 41.7 45.0 (7. 3)      17.1 16.7 2.2 Albeniz 55.1 46.0 19.8  28.5 40.9 (30.3) Ourique 36.4 29.5 23.3  66.5 n/a n/a Tiza 34.1 n/a n/a  1 451.5 317. 6 42.2 Cash and other current assets of HoldCo 6.4 9.2 (30.2) Revolving credit facility drawn by HoldCo  — n/a Elimination of intercompany shareholder loans  (9.8) (46.6)     428.6 317.0 35.2 Svindbaek, Denmark 1.   28 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)   6.3 (0.1) 15.1 4.9 4.1 103.1 317.6 2.8 0.4 (3.2) (12.4) 5.4 6.5 451.5 2021 Acquisition costs of new investments 3 Tesla Sagres Holmen II Aalto Svindbaek The Rock  Albeniz  Ourique Greco 1.0 Tiza 2022 417.4 30.8 12.3 (21.2) 1.3 451.7 2021 102.6 cents NAV per Ordinary Share Movements in valuation of investments 1  (loss) (AER) 11.0  (loss) (THL) Dividends paid Other 2 2022 110.6 cents NAV per Ordinary Share 1. Excludes the impact of capital contributions. 2. Includes share issue costs (EUR -0.06 million), settlement of investment advisory fees (EUR 1.3 million) and FX losses (EUR -0.01 million). 3.  million), capital injection (Sagres: EUR 2.2 million) and other (EUR 0.3 million). INVESTMENT ADVISER’S REPORT CONTINUED FINANCIAL PERFORMANCE continued Valuation continued Other InformationFinancialsGovernanceStrategic Report 29 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Tesla, Nor way 1.  2. Includes production tax, high price contribution tax, and natural resources tax. • The Company’s NAV as at 31 December 2022 was EUR 451.7 million or 110.6 cents per Ordinary Share. Compared to  Ordinary Share (including dividends). • Dividends of EUR 21.2 million (5.2 cents per Ordinary Share) were paid during the year with respect to the fourth quarter of 2021 to the third quarter of 2022. • The main drivers of NAV movements throughout the reporting period include: • Forecast power prices: increase in short-term electricity price forecasts across the majority of the portfolio resulted in an increase of 13.2 cents per Ordinary Share; the methodology continues to assume an average of two power price curves from independent market analysts over the life of each asset. No forward or futures curves are used; •  1 boosted the NAV per Ordinary Share by 6.9 cents, whilst medium and long-term assumptions remain unchanged; • discount rate: the Company’s discount rate has increased by 70 bps to 7.2% (31 December 2021: 6.5%), following the increase in risk-free rates across the portfolio, which has the effect of decreasing the valuation of each asset; and • Norwegian onshore wind taxes for Tesla and The Rock (-1.7 cents). 2  The Company owns 100.0% of its subsidiary Tesseract Holdings Limited (“HoldCo” or “THL”). The Company meets the   The Company has acquired underlying investments in SPVs through its investment in the HoldCo. The Investment Adviser  themselves as to the methodology, the discount rates and key assumptions applied, and the valuations. All SPV investments  assumptions shown on page 30 were used in the valuation of the SPVs. 30 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Valuation Assumptions As at 31 December 2022  The discount rate used in the valuations is calculated according to internationally recognised methods.     Power prices are based on captured power price forecasts from leading market analysts. The forecasts are independently sourced from providers with coverage in almost all European markets as well as providers with regional expertise. The approach applied to all asset classes (wind energy, solar PV and hydropower)  a blend of three power price curve providers.  Estimates are based on third-party energy yield assessments, which consider historic production data (where applicable) and other relevant factors.    another two years to the long-term rate. Asset life In general, an operating life of 25 to 30 years for onshore wind energy and 30 years for solar PV is assumed. In individual cases, a longer operating life is assumed where the contractual arrangement (i.e. O&M agreement with availability guarantee) supports such an assumption. The operating lives of hydropower assets are estimated in accordance with their expected concession terms. The Investment Adviser is currently undertaking a review of its portfolio to evaluate the prospect of asset life extensions. Operating expenses Operating expenses are primarily based on respective contracts and, where not contracted, on the assessment of a technical adviser. Taxation rates    Based on the contractual position (e.g. EPC agreement), where applicable. Portfolio Valuation – Key Assumptions Metric 2022 2021 Discount rate Weighted average  6.5%      2.0% Remaining asset life 1 Wind energy (years) 22 23 Solar PV (years) 29 27 Hydropower (years) 10 11 Operating life assumption 2 Wind energy (years) 26 26 Solar PV (years) 30 30 Hydropower (years) n/a n/a  1. Remaining asset life based on net full load years. Does not consider any potential asset life extensions. 2. Asset life assumption from date of commissioning. INVESTMENT ADVISER’S REPORT CONTINUED FINANCIAL PERFORMANCE continued Other InformationFinancialsGovernanceStrategic Report 31 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  1  200.0 2023 20292026 2032 2044 204720412035 2038 2050 100.0 0.0 150.0 50.0 EUR/MWh Opex (+/-10%) Impact on NAV per Ordinary Share Asset Life (-/+ 1 year)  Production (P90/P10) Power Prices (+/- 10%) Discount Rate (+/- 10%) -20c 20c-10c 10c0c cents per share Q4 2021 Q4 2022 Futures Asset Life Extensions  which is generally lower compared to the peer group and broader market, where up to +10 years in operating life have been observed. The Company’s Investment Adviser is undertaking due diligence for each of the Company’s assets to validate a potential asset life extension on a case-by-case basis across the portfolio. To demonstrate how an extension of asset life could impact the Company’s NAV, if the life of wind energy assets were to be extended to 35 years, the Company’s NAV as of 31 December 2022 would increase by 8.6% or 10 cents per Ordinary Share 1 . Similarly, if the life of the Company’s solar PV assets were to increase from 30 to 40 years  2 . MARKET COMMENTARY AND OUTLOOK 1.   captured price based on merchant revenue and merchant production. Previous methodology applied weighting based on last reported  2. Excludes any potential changes to opex/capex assumptions, which would be subject to further due diligence which would offset against some  32 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Market Prices In 2022 power markets witnessed the continuation of the uprise in power prices underway since the second half of 2021, with   However, since mid-2022 the governments of the jurisdictions in which the Company operate, together with the European Commission, introduced measures in order to reduce these impacts. Nevertheless, near-term power price forecasts continue to abide the demand and supply law, and are further enhanced by weather conditions. Thus, near-term forecasts provided by independent markets analysts continue to be above historical levels.  1 EUR/MWh 600.0 400.0 January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 August 2022 September 2022 October 2022 November 2022 December 2022 January 2023 500.0 300.0 200.0 100.0 0 800.0 700.0  In 2022, power prices in the Nordics presented an increasing convergence from prices in continental Europe and were thus subjected to increasing fuel prices. This was due to tighter hydrological balance, with hydro reservoirs below the average levels for 2021, and  (2021: EUR 62.3 per MW). Additionally, due to the different patterns for southern and northern price areas in Norway, the impact of higher commodity prices differs   demand and abundant wind resources; however, a higher interconnection to the southern zones has resulted in an increase in prices. 1.  Iberia Nordics  INVESTMENT ADVISER’S REPORT CONTINUED MARKET COMMENTARY AND OUTLOOK continued Other InformationFinancialsGovernanceStrategic Report 33 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Iberia Whilst spot prices remained high across all European geographies, average spot prices in Iberia were at a discount when compared to other geographies. This was due to the temporary gas price “cap” mechanism introduced by the Spanish and Portuguese governments in mid-June 2022, which held back the impact of escalating fuel prices on power prices. In Iberia, spot prices were, on average, traded at EUR 167.9 per MW in 2022 (2021: EUR 111.9 per MW). As described in the case study on page 25, the Investment Adviser with its  operating assets. This, together with the high degree of contracted revenue in the remaining Iberian assets, has limited the impact of the new regulations on the asset valuations. Greece  impacted by elevated fuel prices more than other European countries due to the higher proportion of hours in which  price in the wholesale market. During 2022, power prices averaged EUR   an EUR 85.0 MW threshold applied for revenue in the Day-Ahead Market. However, since 100% of the revenues  regulations had no impact on the  EU Market Design 1 As a result of soaring energy prices and with the aim to increase the resilience of the EU’s energy market,  unveiled its draft proposal for a reform of the EU electricity market. The proposal aims to boost the deployment of renewables by 2030, improve consumer protection and enhance industrial competitiveness. In doing so, it aims to reduce the link between electricity bills and volatile short-term fossil fuel prices, whilst better protecting consumers from future price spikes and potential market manipulation.  various directives to promote the use of more stable, long-term Power Purchase Agreements (“PPAs”), in order to make the energy market more resilient following the expiration of emergency tools. It aims to increase  and transparency by ensuring security of supply, and fully utilising alternatives to gas, such as storage and demand response from individual Member States. The proposal seeks to enhance the predictability and stability of energy costs to boost industrial competitiveness. In this context,  revenue stability, all public support for new investments in infra-marginal renewable electricity generation is set to be in the form of two-way Contracts for Difference (CfDs). Finally, the proposal aims to boost liquidity for forward contracts that lock-in future prices and facilitate the integration of renewables into the system by means of transparency obligations relating to grid congestion and trading deadlines closer to real time.  Putting Europe’s Net-zero  In February 2023, the European  Industrial Plan (the “Plan”) to enhance the competitiveness of Europe’s net-zero industry and support a faster transition to climate neutrality. The Plan aims to provide a more supportive environment for the scaling up of the EU’s net-zero technologies and products that are required to meet Europe’s ambitious climate targets. The Plan aims to build on former initiatives implemented in the EU, whilst being based on four pillars:  environment; (2) speeding up access to  trade for resilient supply chains.    The Commission is to provide a regulatory framework that allows for  and fast-track permitting, while promoting European strategic projects and developing standards to support the scale-up of technologies across the EU Single Market. Pillar 2 – Faster Access  This pillar aims to speed up investment  region. By guaranteeing a level playing   able to invest and/or grant aid to help fast-track the green transition. 1. Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1591. 34 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Pillar 3 – Enhancing Skills Between 35% and 40% of all jobs could be affected by the green transition, and so developing the skills needed for well-paid quality jobs will be a priority for the Commission. Therefore, it will propose to establish Net-Zero Industry Academies to roll out up-skilling and re-skilling programmes in strategic industries.  Resilient Supply Chains There will be an expected increase in global co-operation under the principles of fair competition and open trade. To that end, the Commission will develop the EU’s network of Free Trade Agreements and other forms of co-operation with partners to support the green transition. It will also explore the creation of a Critical Raw Materials Club, to bring together raw material “consumers” and resource-rich countries. This will help to ensure the global security of supply  industrial base, and of Clean Tech/ Net-Zero Industrial Partnerships. It will  by ensuring foreign subsidies do not  Outlook The outlook for the European renewable energy sector continues to be encouraging. Energy security, affordability and decarbonisation have become vital considerations for governments and businesses in light  leading to increased competition as well as public and private investment in renewable infrastructure projects. The dependence of many countries on external suppliers of key commodities has become an irrefutable concern given the drastic reduction in Russian gas supply into Europe. The resulting supply  stage for renewable infrastructure to play a dominant role in delivering  independence in the coming future. Energy prices are forecast to decrease over the medium and long term, having fallen from the peaks of 2022, with governments likely to continue to utilise  reduce costs to consumers, who are already feeling the pressure of higher  the Company’s business model and investment portfolio have demonstrated their resilience in enduring these changes, continuing to deliver strong  prudent capital structure. Adding further impetus to the renewable energy sector is the EU’s developing  Act, focused on ensuring Europe’s continued industrial competitiveness throughout the energy transition. Support by the EU through the earmarking of substantial funding for renewable projects, including the REPowerEU plan, is being accelerated with measures to give member states greater freedom to support industry and the fast-tracking of permitting and access to funding for relevant projects. This increased certainty and visibility over the regulatory landscape is an encouraging tailwind for the Company and the sector. Moreover, we envisage a continued acceleration of national deployment plans for renewables in order to meet existing net zero targets, including the target of having renewable energy sources account for at least 45% of the EU’s energy mix by 2030. Europe will thus need to almost double its existing share of renewable energy by the end of the decade. This trend is further compounded by decarbonisation becoming an increasingly urgent priority for governments and businesses considering the repercussions of climate change, especially the likelihood of extreme weather events increasing in frequency. Finally, grid access has become an increasingly critical concern across several jurisdictions. Projects are coming to market with grid connection dates for the end of the decade and beyond, in large part due to aging networks and the need for capacity upgrades, adding further urgency to public and private investment in the near future. Other technologies are also gathering momentum, such as the rising trend of (co-located) battery energy storage systems (“BESS”),  green hydrogen power plants. The Investment Adviser is well positioned to participate in this stage of the green energy transition given its dedicated  of installed capacity, across a pipeline of 25 projects throughout Europe, and the Company can invest up to 20% of   grids to integrate the rising demand for renewable generation while improving reliability of supply. Overall, tailwinds behind the sector continue to be strong,  multiple opportunities whilst delivering on a progressive dividend. Aquila Capital  25 April 2023 MARKET COMMENTARY AND OUTLOOK continued INVESTMENT ADVISER’S REPORT CONTINUED Other InformationFinancialsGovernanceStrategic Report 35 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) ENVIRONMENTAL, SOCIAL   and education, reducing inequality, spurring economic growth and tackling climate change around the world. These goals are set to stimulate action for people, the planet and prosperity, and aim to transform the world by 2030.  In 2018, the EU agreed to a climate and energy framework and set ambitious goals for 2030. The aim is to have a clean, affordable and reliable energy system in Europe, targeting: “The war in Ukraine following the global pandemic has created an exceptional environment for renewable technologies in Europe. The announcement by the European Commission of  Zero industry and support a faster transition to climate neutrality provides welcome tailwinds  According to the International Energy Association (“IEA”)’s 2022 market report, renewable   the entire installed power capacity of China today. This is almost 30% higher than what was forecast in the IEA’s 2021 report, making it their largest upward revision ever. In parallel the EU’s efforts to regulate the industry using transparency frameworks such as the Sustainable Finance Disclosure Regulation (“SFDR”) or the EU Taxonomy aims to further facilitate investment into sustainable activities, including the energy transition. While the alignment with these regulatory standards is not straight-forward, Aquila Capital uses  construction and operation of renewable energy projects do not come at the expense of the  support these initiatives.” Angela Wiebeck   40.0% 32.0% 32.5%   greenhouse gas emissions  share of the energy system   36 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)    of renewable assets, AER is able to deliver on its investment objectives as well as contribute towards the green economy.   Goal   UN Sustainable  Ensure access to    • AER’s portfolio produces renewable energy which contributes towards Europe’s electricity mix. • Renewable energy is a cost-effective source of energy compared to other options. • AER’s investments in renewable assets help to support and encourage further investment in the industry.  infrastructure,     • AER targets renewable investments which are supported by high quality components and infrastructure in order to optimise the energy yield and subsequent return to investors. • AER’s investments help to support the construction of shared infrastructure (e.g. substations) which enables the further expansion of renewable energy sources. • AER’s Investment Adviser, Aquila Capital, is responsible for monitoring and optimising the Company’s day-to-day asset performance. This process also involves actively exploring how new technologies and other forms of innovation can be utilised to enhance asset performance and sustainability (energy yield, O&M, asset life). Take urgent action to combat climate   • The Company’s 463.8 MW portfolio has the potential to power approximately 240.8 thousand households 1 and avoid approximately 240.8 thousand tonnes of CO 2 emissions. AER has ambitious goals to expand its portfolio, which will be accretive to further CO 2 reduction over time. • As a signatory to the UN Principles for Responsible Investments (“UN PRI”),  investment process for real assets, which includes considerations of climate change. 1. Forecast households supplied and avoided CO 2  is assumed from July 2023. ENVIRONMENTAL, SOCIAL  CONTINUED continued GRESB  real estate and infrastructure which synthesises Environmental, Social,   assessment, with AER achieving an overall score of 88 out of 100 (2020:  average of 82 points amongst its peer group. In addition, AER achieved a 3 out  At portfolio level, the score shows an improvement in performance in the category of Leadership, Reporting and Risk Management whilst the score in the two remaining categories of Stakeholder Engagement and Policies was maintained. Meanwhile, at asset level, the rating recognises AER’s policy frameworks and strong performance in resource and emission management, including water consumption, greenhouse gas emissions and energy use. AER and its Investment Adviser will continue to improve their systems and policy frameworks, leading to potentially  performance in the coming years. Other InformationFinancialsGovernanceStrategic Report 37 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  Company acquired 89.0% interest in December 2020, the project company has built a wooden house for the  entrance of the Parnassos National Park; this will support the reforestation process of the landscape in the area, the planting of 2,000 plants and the maintenance, fertilisation and watering of them for the following three years.  the integration of a number of sustainability initiatives, including the creation of a barrier of plants around the perimeter of the solar PV (approximately 711 metres), an increase in localised plantations with the addition of 152 units of retama sphaerocarpa and translocation of over 150 olive trees between the two projects, whilst pardoning over 50 additional trees. Additionally, over 200 sheep have been introduced into the solar PVs in order to control the vegetation to avoid possible shading of the solar  supervised by the O&M provider, thus resulting in a smooth operation that helps the local shepherds while providing a sustainable vegetation control plan for the solar parks.  Reforestation  in Spain  Tiza, Spain  38 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) continued In March 2022, Midtfjellet Wind Farm (Tesla) was awarded the Norwea’s membership award. This prize is given to a member who has excelled in positive engagement with the community, for example through social or environmental sustainability. Norwea writes 1 : “The prize goes to Midtfjellet Wind Farm for its many years of work for outdoor life and activities in and around the facility. At Midtfjellet, past and future meet in a spectacular way. The landscape is wild and beautiful, at the same time as it houses the production of clean and renewable energy. The wind farm is a popular destination:  with the fantastic turbines make the whole experience unique and special. Since the start in 2011, about 17,000 visitors have been on a guided tour of the area. There have been people from nursing homes, kindergartens, schools, universities and other institutions, as well as companies and politicians. Congratulations to Midtfjellet Vindpark, all employees in the company and partners who have contributed to the success.” In May 2022, the Investment Adviser’s Asset Management team, Aquila Clean Energy, hosted a training session on solar photovoltaic energy for a group of secondary school students from the Agrupamento de Escolas de Oliveira do Hospital school. The event helped to enhance awareness of both photovoltaic energy and the operation of the Tapadas  The students visited a solar power plant with an installed capacity of more than 15 MW to understand the main characteristics of a PV plant, the different phases of a renewable energy project including the development and operation of a solar plant, and the importance of sustainability for the environment. Further training was given at the Tapadas and Azambuja PV plants, which are located in Minde, Alcanena Municipality, with the aim of raising awareness of job opportunities related to solar PV energy and its technology. In Portugal the unemployment rate in youths between 16-24 years is 23.5%. These type of initiatives aim to reduce that percentage. Tesla Engagement    Tesla, Nor way  1. Translation of text prepared by Norwea in Norwegian. ENVIRONMENTAL, SOCIAL  CONTINUED Other InformationFinancialsGovernanceStrategic Report 39 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) The independent Board of Directors has  policy and its implementation, with the daily operations being delegated to its independent AIFM, FundRock  Limited (“FundRock”). FundRock monitors environmental, social and governance risks, which are fully integrated across every single stage of its investment process. Aquila Capital  the Investment Adviser’s approach to sustainability within the investment process. Aquila Capital regards integrity and diversity as key pillars in their governance and they have been vital for the growth and success of the Company. The Investment Adviser is fully regulated and supervised by the Federal Financial  Angela Wiebeck has joined the Investment Adviser as Chief  from her previous role at UBS, with responsibility for designing, expanding, and optimising capabilities in topics  efforts.  The Board of Directors is appointed based on expertise and merit, being  by diversity. The Board is comprised of members with different skills and experiences, whilst endeavouring to comply with the Listing Rules on diversity. The current Board is comprised of three men and one woman, all non-executive  number of years of experience in their  non-executive member of the Board is underway to further enhance the Board’s independence, diversity and breadth of experience. Additionally, the Investment   of culture (its employees comprise 56 different nationalities), and in terms of gender (its gender ratio is 58% men and 42% women). Additionally, 27% of people in leadership positions are female, of which two, Susanne Wermter (CEO Aquila Clean Energy) and Christine Brockwell (CPO Aquila Clean Energy), are ranked in  List, honouring women working in wind power worldwide.  58% men 56 different nationalities 42% women 3 men 1 woman   Supply Chain Management    the economic interests of the Investment Adviser to the relevant authorities. The Investment Adviser takes a multi-faceted approach to the mitigation of governance risks, limiting exposure to risks within the supply chain. All EPC and Operations and Maintenance (O&M) contracts are negotiated with contractors operating in a country adhering to the European Union’s labour minimum standards. Any sourcing of raw materials, components, equipment or services from suppliers domiciled in countries linked to the use of forced labour is made with guarantees that such components are not associated with human rights violations. Moreover, an in-house on-boarding and screening process for suppliers is in place to prevent and mitigate any risk of human rights violations, including a pre-screening of counterparties in terms of bad press risk  to internal compliance and procurement policies. Measures include the selection of geographies with strong regulatory frameworks, comprehensive internal due diligence processes that examine counterparties and their governance frameworks, and the use of specialist advisers to conduct technical and legal due diligence analyses at the project level. All governance  40 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  The Company will seek to achieve its investment objective, set out on  energy infrastructure investments in continental Europe and the Republic of Ireland comprising (i) wind, photovoltaic and hydropower plants that generate electricity through the transformation of the energy of the wind, the sunlight and running water as naturally replenished resources, and (ii) non-generation renewable energy related infrastructure associated with the storage (such as batteries) and transmission (such as distribution grids and transmission lines) of renewable energy, in each  construction/development (“Renewable Energy Infrastructure Investments”). The Company will acquire a mix of controlling and non-controlling interests in Renewable Energy Infrastructure Investments and may use a range of investment instruments in the pursuit of its investment objective, including, but not limited to, equity, mezzanine or debt investments. In circumstances where the Company does not hold a controlling interest in the relevant investment, the Company will seek, through contractual and other arrangements, to, inter alia, ensure that the Renewable Energy Infrastructure Investment is operated and managed in a manner that is consistent with the Company’s investment policy, including any borrowing restrictions.  The Company aims to achieve  investing in a range of portfolio assets across a number of distinct geographies and a mix of wind, solar PV and hydro technologies involved in renewable energy generation. The Company will observe the following investment restrictions when making investments: •  Asset Value (including cash) will be invested in any single asset; • the Company’s portfolio will comprise no fewer than six Renewable Energy Infrastructure Investments; • no more than 20 per cent. of its  will be invested in non-generation renewable energy related infrastructure associated with the storage (such as batteries) and transmission (such as distribution grids and transmission lines) of renewable energy; •  Asset Value (including cash) shall be invested in assets under development and/or construction; • no more than 50 per cent. of the  be invested in assets located in any one country; • no investments will be made in assets located in the UK; and • no investments will be made in fossil fuel assets. Compliance with the above restrictions will be measured at the time of investment and non-compliance resulting from changes in the price or value of assets following investment will not be considered as a breach of the investment restrictions. The Company will hold its investments through one or more special purpose vehicles (“SPVs”) and the investment restrictions will be applied on a look-through basis. Although not forming part of the investment restrictions or the Investment Policy, where Renewable Energy  from a Power Purchase Agreement, the Company will take reasonable steps to avoid concentration with a single counterparty and intends that no more than 25 per cent. of income revenue received by Renewable Energy Infrastructure Investments will be derived from a single off-taker.  Policy The Directors do not currently intend to propose any material changes to the Company’s Investment Policy.  Investment Policy set out above will only be made with the approval of Shareholders. INVESTMENT POLICY AND  Other InformationFinancialsGovernanceStrategic Report 41 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  The Company does not intend to use hedging or derivatives for investment purposes but may from time to time use derivative instruments such as futures, options, futures contracts and swaps (collectively “Derivatives”) to  of interest rates or electricity prices. The Derivatives must be traded on a regulated market or by private  institutions or reputable entities specialised in this type of transaction.  The AIFM will ensure that a liquidity management system is employed for monitoring the Company’s liquidity risks. The AIFM will ensure, on behalf of the Company, that the Company’s liquidity position is consistent at all times with its investment policy, liquidity  held pending investment in Renewable Energy Infrastructure Investments or for working capital purposes will be invested in cash equivalents, near cash instruments, bearer bonds and money market instruments. Borrowing Limits The Company may make use of long-term limited recourse debt for Renewable Energy Infrastructure Investments to provide leverage  Company may also take on long-term structural debt provided that at the time of entering into (or acquiring) any new long-term structural debt (including limited recourse debt), total long-term structural debt will not exceed 50 per  Value. For the avoidance of doubt, in calculating gearing, no account will be taken of any Renewable Energy Infrastructure Investments that are made by the Company by way of a debt or a mezzanine investment. In addition, the Company may make use of short-term debt, such as a Revolving Credit Facility, to assist with the acquisition of suitable opportunities as and when they become available. Such short-term debt will be subject to a separate gearing limit so as  Asset Value at the time of entering into (or acquiring) any such short-term debt. In circumstances where these aforementioned limits are exceeded as a result of gearing of one or more Renewable Energy Infrastructure Investments in which the Company has a non-controlling interest, the borrowing restrictions will not be deemed to be breached. However, in such circumstances, the matter will be brought to the attention of the Board who will determine the appropriate course of action.  The Company is targeting a progressive dividend over the medium term with a minimum dividend of 5 cents per Ordinary Share, subject to having  Dividends are expected to be paid quarterly, normally in respect of the three months to 31 March, 30 June,  are expected to be made by way of interim dividends to be declared in May, August, November and February. The Company will declare dividends in euros and Shareholders will, by default, receive dividend payments in euros. Shareholders may, on completion of a dividend election form, elect to receive dividend payments in sterling (at their own exchange rate risk). The date on which the exchange rate between euro and sterling is set will be announced at the time the dividend is declared. A further announcement will be made once the exchange rate has been set. Dividend election forms will be available from the Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or  The Company’s target dividend for 2023 was announced on 3 February 2023 and is as set out in point (iv) on page 43. 42 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  Growth since IPO (June 2019)  (2021: 14.1%) 6.3% 10.8% 2020 NAV share price returns 2021 2022 14.1% 11. 3% 27.6% 6.7% The Board monitors both the NAV and share price performance and compares with other similar investment trusts. A review of performance is undertaken at each quarterly Board meeting and the reasons for relative under and over-performance against various comparators is discussed. The Company’s NAV total return and total Shareholder return since IPO  (2021: 14.1% and 11.3%) respectively. The Company’s NAV total return and share price total return for the year  and 0.5%) respectively. On an annualised basis, the NAV total return per Ordinary Share has achieved 7.1%  The Chairman’s Statement on pages 8 to 11 incorporates a review of the highlights during the year. The Investment Adviser’s Report on pages 12 to 34 highlights investments made and the Company’s performance during the year.    1  (2021: (0.6%)) 6.5% 2020 2021 2022 (0.6%) (16.6%) The Company’s broker monitors the premium or discount on an ongoing basis and keeps the Board updated as and when appropriate. At quarterly Board meetings the Board reviews the premium or discount in the year since the previous meeting in comparison with other investment trusts with a similar mandate.   On 3 February 2023, the Board announced the details of a Buyback Programme for up to EUR 20 million in response to the widening discount at which the Company’s share price was trading, as compared to its NAV per Ordinary Share, as they believe that the current  value in the portfolio. This is part of a broader package of initiatives seeking to improve the marketability of the Company’s shares. Since that date, the Company has bought back for Treasury a total of 16,652,452 Ordinary Shares for an aggregate amount of EUR 15.9 million.  The Board measures the Company’s success in achieving its investment objective by reference to the following KPIs: INVESTMENT POLICY AND  CONTINUED 1.  performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to  Other InformationFinancialsGovernanceStrategic Report 43 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  Ongoing Charges 1  (2021: 1.1%) 1.4% 2020 2021 2022 1.1% 1.1% The Board receives management accounts containing an analysis of expenditure and which is reviewed at its quarterly Board meetings. The Board reviews the ongoing charges on a quarterly basis and considers these to be reasonable in comparison to peers. Based on the Company’s average net assets during the year ended 31 December 2022, the Company’s  with the Association of Investment Companies (“AIC”) methodology.  Financial Year (cents per share) Target: ents 2023 (2022: 5.25 cents) 4.00 cents 2020 Annual dividend per Ordinary Share paid since IPO Target dividend per Ordinary Share in respect of the year to 31 December 2023 2021 2023 forecast 2022 5.00 cents 5.25 cents 5.51 cents (target dividend) On 3 February 2023, the Company announced a target dividend of 5.51 cents per Ordinary Share (“2023 Target Dividend”) in relation to the year ending  accordance with the Company’s dividend policy to pay a progressive dividend over the medium term and is subject to the portfolio performing in line with expectations. The 2023 Target Dividend represents an increase of 5.0% versus the prior year and followed a 5.0% increase in the 2022 target dividend announced  The dividend target set for 2022 was for not less than 5.25 cents per Ordinary Share, subject to the performance of the portfolio. These were paid in  1.  performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to  44 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) SECTION 172 Section 172 of the Companies Act 2006 requires the Board to act in a way that it considers would most likely promote the  of all stakeholders, taking into account the interests of stakeholders and the environment in its decision-making and to share how this duty has been discharged. The Board’s values – integrity, accountability and transparency – mean that the Board has always worked hard to communicate effectively with the Company’s stakeholders. This is a two-way process and the feedback received from the Company’s stakeholders is highly valued and factored into the Board’s decision-making process. The Company has a range of stakeholders, and this section maps out who they are, what the Board believes their key interests to be, how the Company enables engagement with stakeholders and highlights the key results that have consequently arisen during the year. Company Sustainability  As an externally managed investment company, the Company does not have any employees. Its main stakeholders are as set out in the diagram below, which explains the relationship between the Company and each of its stakeholders.  The Company was listed on the main market of the London Stock Exchange on 5 June 2019. The Company’s investments are held via its sole subsidiary, Tesseract Holdings Limited, which in turn holds the investment portfolio via a number   The Board is aware of the need to foster the Company’s business relationships with suppliers, customers and other key stakeholders through its stakeholder engagement activities. These activities include meetings, annual reviews, presentations and publications and  strategies and discharge its duties under section 172 of the Act. The Board carried out an annual review of its key service providers, including the Investment Adviser, to understand the culture of its service providers to ensure they and the Company can maintain high standards of business conduct. The annual review process involves the assessment of the service providers’ policies and control environments to ensure their continued competitiveness and effectiveness.  As a public company listed on the London Stock Exchange, the Company is subject to the Listing Rules and the Disclosure  a regulatory requirement, for the Board to act fairly between Shareholders. The Board ensures that the Company complies with the Listing Rules at all times and seeks the advice of the Company Secretary, lawyers and corporate broker in its dealings.      (Company Secretary, Lawyers, Brokers, Administrators, Registrars)  Aquila Capital Investmentgesellschaft mbH  Manager FundRock Investment Management Company    (Portfolio Holding Company) SPVs The Company Other InformationFinancialsGovernanceStrategic Report 45 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) The Chairman and key Board members met many of the Company’s key investors to gauge their views on the Company’s progress since IPO. Separately, the Investment Adviser has participated in a roadshow to meet with the Company’s key investors. Additionally, on 29 March 2022, the Company, together with its Investment Adviser, held a Capital Markets Day to provide Shareholders and analysts with further background and information about AER and its investments. The outcome of these meetings was discussed by the Board and as a consequence of these meetings, and in order to better align the Company with its Shareholders, a number of initiatives have been undertaken as detailed below. In the run-up to year end and following the mini budget announced under the Truss administration, stock markets became more volatile and the Company’s discount to NAV widened. In response, and following consultation with the Company’s  Board announced the details of a share Buyback Programme for up to EUR 20 million pursuant to the authority granted  Meeting to purchase up to 14.99% of the Company’s issued share capital. The Board authorised the buyback as it believes that the current share price does  in the Company’s portfolio. Since that date the Company has bought back for Treasury a total of 16,652,452 Ordinary Shares for an aggregate amount of EUR 15.9 million. Since the start of the Buyback Programme, the discount to NAV at which the Company’s shares trade has narrowed from 16.6% 1 to 14.6% 1 and the liquidity in the Company’s shares has markedly improved. The Company’s name was changed from Aquila European Renewables Income Fund plc to Aquila European Renewables plc to maximise the appeal of the Company across a broader range of investors and other stakeholders. The name change became effective on  At its quarterly Board meetings, the Board reviews and discusses detailed reports from the Company’s broker and media PR consultants in relation to the Company’s share performance, trading and liquidity as well as the composition of, and changes to, the register of Shareholders. Shareholders’ views are also considered by the Board at those meetings to assist the Board’s decision-making process and to ensure expected returns are achieved  invest in appropriate renewable energy infrastructure investments and to grow the business in line with strategy and expectation. Details of the decisions taken by the Board during the year can be found below under ‘Key Decisions made During the Year ’. The Investment Adviser and Board believe that it is important for the Company’s continued success to have the potential to access equity capital in order to expand the Company’s portfolio over time, to further diversify the investment portfolio, to create economies of scale and, at times when the Company’s shares are trading at a premium against its NAV, as a means to manage such premium. The Company’s shares traded at a premium early in the year and during that time issued shares to its Investment Adviser in lieu of its quarterly management fees as detailed on page 75. The Company may issue shares from its Treasury account but will only issue shares at a premium to NAV at the time of issue. To help the Board in its aim to act fairly between the Company’s members, it seeks to ensure effective communication is provided to all Shareholders. The Board encourages Shareholders to   representatives of the Investment Adviser are available to meet Shareholders in person and answer questions. The Annual Report and half-yearly accounts are distributed to the Company’s Shareholders and made available on the Company’s website. The quarterly factsheet is also available on the Company’s website. The Company’s website – www.aquila-european-renewables.com  channel and information hub for Shareholders. As such, it includes full details of the investment objective, supporting philosophy and investment process and performance along with news, opinions, disclosures, results and key information documents. It also presents information about the Board, its committees and other governance matters and Shareholders are encouraged to view the website in order to better understand the Company. 1.  performance measures used, together with how these measures have been calculated, can be found on pages 112 to 113. All references to  46 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  As an externally managed investment trust, the Company conducts all its business through its key service providers. The Board believes that maintaining positive relationships with each of the Company’s service providers is important to support the Company’s long-term success. In order to ensure strong working relationships, the Company’s key service providers (the Investment Adviser, AIFM, Company Secretary, Administrator) are invited to attend quarterly Board meetings to present their respective reports. This enables the Board to exercise effective oversight of the Company’s activities. During the year, the Board spent a considerable amount of time between Board meetings engaging with the Company’s key service providers to continue to develop strong working relationships and to determine good working practices to ensure the smooth operational function of the Company. The Board and its advisers seek to maintain constructive relationships with the Company’s key service providers on behalf of the Company through the annual review process, regular communications, meetings and the provision of relevant information.  Manager (“AIFM”) The AIFM is an important service provider for the Company’s long-term success. The AIFM has engaged Aquila Capital to act as the Company’s the Investment Adviser for the purpose of providing investment advisory services to the Company. The AIFM is responsible for reviewing each investment opportunity prior to being presented to the Board. In addition to the reports the Board receive from the Investment Adviser, it also receives quarterly reports from the AIFM. The Board maintains regular contact with the AIFM in order to foster a constructive working relationship. Additionally, the AIFM is responsible for monitoring the risks faced by the Company and these are regularly discussed at meetings of the   The Investment Adviser is the most  Company and a description of its role can be found on pages 74 to 75. The performance of the Investment Adviser’s is determined by the quality of the Investment Adviser’s management team and their ability to source high quality assets at attractive prices. The Board closely monitors the Company’s investment performance in relation to its objectives, investment policy and strategy. To assist the Board, the Investment Adviser provides monthly reports. Additionally, the Investment Adviser presents its quarterly production and operational update reports at each quarterly Board meeting. The Board maintains constructive dialogue between meetings with the Investment Adviser. On a periodic basis, the Board visits the  the site of one of the portfolio assets or  are able to gain a better understanding of the Investment Adviser, to meet key members of the team and gain further insight into the operation of each asset. The Investment Adviser’s remuneration is based on the NAV of the Company. From  Adviser’s fees will be paid in shares, which aligns the Investment Adviser’s interests with those of the Company’s Shareholders.  Prior to being presented to the Board of HoldCo, the Company’s wholly owned subsidiary, the Company’s Board is presented with potential investment  by the Investment Adviser and which have undergone a process of analysis and challenge by the AIFM, including considerations relating to environmental, social and governance issues. The Board considers each proposal against the Company’s investment objective (on page 1), investment policy and strategy as disclosed on pages 40 to 43 and with consideration for the wider group of stakeholders. In considering each investment opportunity, the Board considers the Company’s long-term success, having particular regard to the following aspects of each proposal: • potential revenue forecast to be generated by each asset; • the diversity of the Company’s portfolio; • any community and environmental issues associated with each asset; • geopolitical risk; • the length of tenure of each asset; • hedging aspects to limit risk; and • funding aspects, including the use  As at 31 December 2022, the Company and the HoldCo had EUR 89.9 million of liquidity consisting of EUR 24.7 million in cash on hand plus EUR 65.1 million in an undrawn revolving credit facility. Remaining commitments via Tesseract Holdings Limited amounted to EUR   The Company is an investor in renewable energy assets and is acutely aware of its impact on the environment. The  risk strategy which ensure that society and the environment are considered when implementing its investment strategy.  from the Company Secretary. Further  be found on pages 35 to 39 or on its website at https://www.aquila-european- renewables.com. SECTION 172 CONTINUED Other InformationFinancialsGovernanceStrategic Report 47 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  During the year the Board agreed to increase the Company’s dividend by 5.0% to 5.25 cents per ordinary share. Since year end, on 3 February 2023, the Board approved a further 5.0% increase to the Company’s target dividend to 5.51 cents   During the year the Board authorised the AIFM and Investment Adviser to negotiate an increase in the Company’s Revolving Credit Facility (“RCF”) following which the bank agreed to increase the Company’s RCF from EUR 40 million to EUR 100 million and to extend the term until maturity to April 2024. Since then, the Board has instructed the AIFM and Investment Adviser to negotiate a further twelve month extension of the facility to April 2025. Approval to this extension was granted on 21 April 2023. Name Change  the Board agreed to change the Company’s name from Aquila European Renewables Income Fund plc to Aquila European Renewables plc with effect from 3 November 2022, to maximise the appeal of the Company across a broader range of investors and other stakeholders.  On 2 February 2023, Dr Patricia Rodrigues replaced Kenneth MacRitchie as Chair of the Remuneration and Nomination Committee as part of the Board’s ongoing commitment to ensure that they maintain suitable diversity and representation within the Board structure. The Board has begun the process of recruiting an additional Board member to further expand its skills base and to enhance its diversity.  Decisions Relating to the Company’s Portfolio of Assets All acquisitions and decisions made during the year in respect of the Company’s portfolio of assets, including new acquisitions, PPA  12 to 34.  The Board agreed to purchase or issue shares to the Investment Adviser in relation to fees payable during the year as detailed below: Amount Issue or acquired by Price paid per purchase of the Investment Ordinary Share Date Ordinary Shares Adviser (EUR) 7 February 2022 Issue 731,520 1.0383 1 June 2022 Issue 554,773 1.021075 1 June 2022 Purchase 176,300 1.0376 5 August 2022 Purchase 760,053 1.01657415 9 November 2022 Purchase 852,206 0.947292 Following year end, and as instructed by the Board, the Company’s brokers purchased a further 900,340 Ordinary Shares at   The Board believes issuing shares to the Investment Adviser in lieu of fees further aligns the interests of the Investment Adviser with the Company’s Shareholders. 48 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  During the year the Company has carried out a robust assessment of its principal and emerging risks and the procedures in place to identify any emerging risks are described below.  or Emerging Risks The Board regularly reviews the Company’s risk matrix, with a focus on ensuring that the appropriate controls are in place to mitigate each risk. The experience and knowledge of the Board is important, as is advice received from the Board’s service providers,   responsible for the risk and portfolio management services and outsources the portfolio management to the Investment Adviser. 1.  the Investment Adviser provides a report to the Board on a quarterly basis or periodically as required on industry trends and insight to future challenges in the renewables sector including the regulatory, political and economic changes likely to impact the renewables sector; 2.  Manager (“AIFM”): following advice from the Investment Adviser and other service providers, the AIFM  including emerging risks, likely to impact the Company; 3. Broker: the Broker provides  Company on the Company’s sector, competitors and the investment company market, whilst working with the Board and Investment Adviser to communicate with Shareholders; 4. Company Secretary: the Company Secretary briefs the Board on forthcoming legislation/regulatory change that might impact the Company; and 5. AIC: The Company is a member of the Association of Investment Companies, which provides regular technical updates as well as drawing members’ attention to forthcoming industry and regulatory issues.  The Audit and Risk Committee undertakes a review of the Company’s risk matrix on a regular basis and a formal review of the risk procedures and controls in place at the AIFM and other key service providers to ensure that emerging (as well as known) risks  practicable, mitigated. Principal Risks The Board considers the following to be the principal risks faced by the Company along with the potential impact of these risks and the steps taken to mitigate them. RISK AND RISK MANAGEMENT Risks Potential Impact/Description Mitigation  1   The income and value of the Company’s investments may be affected by future changes in the market price of electricity. While some of the revenues of the Company’s investments  on the wholesale market price of electricity, which is volatile and is affected by a variety of factors, including: • market demand; • generation mix of power plants; • government support for various forms of power generation; •  • foreign exchange. There is a risk that the actual prices received vary  shortfall in anticipated revenues by the Company. Increased EU goals to push green economies will lead to a ramp up of renewables and capacities with potential to lead to grid oversupply issues resulting in pricing pressures. The current energy geopolitical crisis in Europe is driving increasing energy prices and volatility which is likely to have an impact on performance. Windfall taxes, regulation and price caps introduced  Company’s revenue. The Company holds a balanced mix of investments that     protecting the Company’s revenue from volatile electricity prices. The Investment Adviser retains the services of market-leading energy consultants to assist with determining future power pricing for the respective regions. The underlying SPV companies may use derivative instruments such as futures, options, futures contracts  prices. The Investment Adviser models and monitors power price curves on an ongoing basis and will recommend appropriate action. In addition, the Investment Adviser has a dedicated team which is responsible for the origination, negotiation and execution of all PPAs. The Investment Adviser reviews the hedging strategy on a deal-by-deal basis, both at time of investment and on an ongoing basis. Should changes be required to the hedging strategy, these will be recommended to the AIFM and Board. Other InformationFinancialsGovernanceStrategic Report 49 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Risks Potential Impact/Description Mitigation continued 2   As evidenced with the ongoing war in Ukraine and the various restrictions imposed, acts of war and resulting sanctions can lead to O&M supply delays, volatile energy markets and general uncertainty. This can also lead to short-term price increases and more focus on renewable energy infrastructure and increased competition for assets. With increasing competition for renewable investments, new geographies may be considered, potentially introducing additional political and regulatory risks. The Investment Adviser, utilising its extensive experience, is constantly monitoring geopolitical and macro-economic developments. Where required, external geopolitical and risk analysis is undertaken. The Company does not have any direct exposure to Ukraine or Russia, there are also no direct business relations with counterparties from these countries. 3   Volatility in equity markets may cause the Company’s shares to rise or fall and therefore to trade at a premium  the shares to trade at a discount this could impact the Company’s ability to raise further equity to allow it to repay debt or to support further investments.  of time, the Company could become vulnerable to a  may increase the likelihood of attracting votes against the  be held in June 2023. The Company’s advisers monitor market conditions and report regularly to the Board. In the event that the Company is unable to raise new capital it could defer making any new investments until the stock market recovers and, in extreme circumstances, existing investments could be sold to reduce debt and raise liquidity. The Company’s share price recently decreased towards a 20% discount to its net asset value. As a result, the Board introduced a share buyback programme on  Board and its advisers continue to monitor the share price.  Global  A global recession may lead to electricity pricing volatility  possible impacts of a global recession include windfall taxes, reduction in availability of debt, reduced access to capital markets for fund raising and increased risk at counterparties as balance sheets become stressed.  revenue and expenditure of investments. Thus changes  individual asset valuations and the resulting net asset value performance of the Company. The Investment Adviser has a dedicated Markets  origination, negotiation and execution of PPAs.  a present value basis) will be generated via government  Company’s revenue from volatile electricity prices. Most of the non-contracted revenues and costs of the Company’s investments are either indexed or correlated   Change in  Sentiment A change in political direction or regulation in one of the countries in which the Company targets investment could lead to changes, reductions, caps or withdrawals of government support arrangements, a windfall tax or potentially the nationalisation of investments. This could have a material impact on the valuation of the investments and the Company’s net asset value. Environmental groups may put pressure on the government in relation to its renewables ambitions and permits due to environmental concerns and impact on the projects. The AIFM, advised by the Investment Adviser with its  jurisdictions in which the Company invests.  on each investment and reviewed prior to signing off any investment proposal. Additional due diligence on development and construction assets is undertaken for new investment opportunities in order to avoid or mitigate any potential issues.  assets and performs ongoing monitoring of these risks. Regulatory changes at the SPV level are monitored by the Investment Adviser and reported to the Board/AIFM on an ongoing basis. 50 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Risks Potential Impact/Description Mitigation Operational 6 Investment  There is a risk that the portfolio underperforms and, as a result, the target returns are not met over the longer term. This could lead to the dividend not being covered and an inability to pay the target dividend. Adverse weather conditions may impact investment performance through lower-than-expected  Investments under development or construction have higher risk of performance due to permit and leases potential challenges, construction budget slippage and development performance. Each quarter the Board reviews a report prepared by the Investment Adviser on the portfolio performance.  investment is provided to the Board which closely monitors performance of the individual assets. The Investment Adviser has a substantial team of executives employed across various disciplines within the renewables  monitor all of the investments. New investments are reviewed and approved by the Board in line with the Company’s investment policy of investing  technology. In the case of development/construction assets, the Investment Adviser puts in place legal agreements with the developer to align all parties for a successful outcome and mitigate the risks associated with the initial phase of the investment.  Environmental     could result in the Company being liable for damages or compensation to the extent that such losses are not covered by insurance policies. In addition, adverse publicity or reputational damage could follow.  Environmental – climate change, biodiversity issues or environmental impairment.  – impact on local communities in which the Company’s assets operate as well as employee welfare including health and safety incidents.  – lack of a strong governance framework within the Company could expose it to, among other things, the negative impact of bribery and corruption. The Investment Adviser performs detailed due diligence        Competition for Assets With increasing numbers of investors seeking exposure to renewable assets, it is possible that new competitors will enter the market in which the Company operates. This could lead to increased pricing for the Company’s target investments with corresponding lower returns and slower deployment of uninvested cash. The track record of the Investment Adviser and its market position and penetration allow it to access potential investments that newer entrants may not have access to. Through the Investment Adviser, the Company has access to a number of assets that are in the development phase, creating a competitive advantage for the Company. The Board is mindful of pricing when it reviews new investment proposals and the need to deliver on the Company’s target objective and strategy. 9   The majority of the operational risk in the Company’s investments is retained by the counterparty or its subcontractors. Failure to properly operate and maintain assets may result in reduction of revenues and value of assets. However, some risks will remain within the investment. Poor performance by a subcontractor may lead to the need for a replacement, which could have cost implications, impacting the performance of the investment and potentially distributions to the Company until the issue is resolved. The value of the Company’s investments and the income they generate may be affected by the failure of counterparties to comply with their obligations under  Operation and maintenance (“O&M”) of assets are subcontracted to a counterparty who is responsible for ensuring effective continuing operation and maintenance  such counterparty has the experience and resources to comply with its obligations and monitors compliance on an ongoing basis. Constant monitoring of the investments and the counterparties/service providers allows the Investment  of counterparties and service providers ensures any impact is limited. The Investment Adviser assesses the credit risk of  counterparties to PPAs. RISK AND RISK MANAGEMENT CONTINUED Other InformationFinancialsGovernanceStrategic Report 51 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Risks Potential Impact/Description Mitigation Operational continued 10 Litigation The Company may be subject to litigation either directly or via its subsidiary or at SPV level. Prior to an investment or the engagement of a third party, a detailed due diligence exercise is undertaken to identify any risks either from subcontractors or any party likely to be impacted by the Company’s actions.  Local communities and relevant parties are consulted prior to an investment or prior to formal engagement in order to identify any potential grievance. The Company has access to legal advisers who provide advice at each stage of an investment and at each stage in the Company’s life. 11  of the Investment Adviser The Investment Adviser manages over EUR 14.7 billion for  potential new investments across various clients including the Company. The Investment Adviser employs experienced executives to identify, acquire and manage the Company’s investments. There is a risk that a key person leaves the Investment Adviser. The Company and AIFM are made aware of and review  being made. The Investment Adviser procures and provides the Board with an independent fairness valuation  exists. When assets are bought along with other funds managed by the Investment Adviser, the price is externally validated. In addition, an investment allocation policy has been implemented by the Investment Adviser and has been agreed by the Board. The strength and depth of the Investment Adviser’s resources mitigate the risk of a key person departure. 12  A hacker or third party could obtain access to the Investment Adviser or any other service provider and destroy data or use it for malicious purposes. Data records could be destroyed, resulting in an inability to make investment decisions and monitor investments. The pandemic and more recently the Russian and Ukraine war has increased IT security concerns and threats being posed to the Company and operating structure by hackers which may lead to loss of information or even a cash loss. Service providers have been carefully selected for their expertise and reputation in the sector. Each service provider has provided assurances to the AIFM and the Company on their cyber policies and business continuity plans along with external audit reviews of their procedures where applicable. The Investment Adviser and key service providers have information security policies in place and have appointed  for emergency events and crises, the monitoring of the resumption and repair of the IT security measures after completion of a disturbance or incident, and the ongoing development of improvements to the IT security concept. The Investment Adviser’s in-house Asset Management team has reviewed the protective measures taken by the counterparties and has further increased the vigilance against cyber-attacks that could affect the performance and infrastructure of the investments. Insurance is in place to cover potential losses from direct attacks. For indirect attacks (e.g. against grid operation or transmission system) the various administrators, operation and maintenance  coverage to mitigate possible damages. 52 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Risks Potential Impact/Description Mitigation Financial 13 Portfolio  There is a risk that the Company’s asset valuations and underlying assumptions such as future electricity prices  meaning that the investment portfolio could be over or under-valued. The principal component of the Company’s balance sheet is its portfolio of renewable investments. Each quarter, the AIFM is responsible for preparing a fair market value of the investments, with input and guidance from the Investment Adviser. These valuations and the key underlying assumptions are interrogated by the Board before being approved. The Investment Adviser has a strong track record in undertaking valuations of renewable assets built up over the years since it was founded in 2001.  proposed by the Investment Adviser, a fairness valuation opinion from an independent adviser is procured by the Investment Adviser for the AIFM and the Board. The Investment Adviser and broker monitor market competitors and provide feedback on valuation methodologies and assumptions to the valuation team.    The use of leverage creates risks including: •  • covenant breaches; • enhanced loss on underperforming investments; and •   Fluctuations in interest rates may impact discount rates which are applied to the portfolio valuations as well as affecting cost of debt in both the underlying SPVs and the Company. The Company’s investment policy restricts the use of leverage to: •  •  As at 31 December 2022, the Company’s subsidiary, Tesseract Holdings Limited, had 4.0% of short-term debt and on SPV level there was 21.6% of long-term structured  levels against these policy restrictions and reports them to the Board on a quarterly basis. The Investment Adviser provides updates of the covenant compliance to the AIFM and to the Board periodically and  Interest rate risk on bank debt at the asset level is mitigated by the use of hedging instruments. The majority of the Company’s long-term structural debt  amortising.   Changes to Tax Legislation or Rates  rules, substance, withholding tax rules and rates, could result in tax increases, resulting in a decrease in income received from the Company’s investments.  government. The corporate structure of the Company is reviewed periodically by the Company and its advisers. The Board has been kept informed of the recent introduction of the windfall (and other tax arrangements) taxes introduced  timely basis and has carefully considered the impact on the Company’s portfolio, which is further discussed in the Investment Adviser’s Report. The Investment Adviser works closely with tax and industry experts prior to providing structuring recommendations to the Company prior to investment and on an ongoing basis. RISK AND RISK MANAGEMENT CONTINUED Other InformationFinancialsGovernanceStrategic Report 53 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Risks Potential Impact/Description Mitigation continued 16  and  Changes The Company fails to comply with section 1158 of the Corporation Tax Act to ensure maintenance of investment trust status, UK Listing Authority regulations including Listing Rules, Foreign Account Tax Compliance Act and Alternative Investment Fund Managers Directive (“AIFMD”).  regulations and fails to monitor those such as the SFDR, changing disclosure requirements and green washing risks. Failure to comply with the relevant rules and obligations may result in reputational damage to the Company or have  Possible uncertainty remains with post-Brexit negotiations and eventual trade deals agreed. Unfavourable terms can impact withholding taxes, double tax treaty limitations and various other trading concerns. Additionally, the Company operates in multiple markets throughout Europe, and some have shown signs of changes or potential in regulation as a response to high power prices. All service providers including the broker, Company Secretary, Administrator, Investment Adviser and AIFM are experienced in these areas and provide comprehensive reporting to the Board and on the compliance of these regulations. The AIFM is experienced in compliance with the AIFMD reporting obligations and reports at least quarterly to the Board. The Investment Adviser actively monitors changes in regulation across the markets in which the Company operates. The Company complies with article 8 of the SFDR and as  to mitigate potential risks. Emerging Risks Risks Potential Impact/Description Mitigation  Climate-  Climate-related risks can be categorised as physical or transitional risks. Physical risks are those associated with the physical effects of climate change. They can be event-driven (acute), such as cyclones, hurricanes,  or longer term (chronic) shifts in climate patterns, such as sustained higher temperatures with melting of glaciers and ice sheets causing sea level rise, permafrost melting,  precipitation, land degradation and changes in air quality. Transitional risks are those that arise as economies transition towards less polluting, greener solutions. These include externally imposed risks such as the effect of legal and regulatory requirements or policy changes, changes in societal demands, advancements in technologies, market changes and the consequent business decisions taken to respond to such changes. Transitional risks have the potential to crystallise suddenly, for example as a result of policy changes. Physical or transitional climate-related risks could impact the operation of the Company’s assets and hence the production or revenue generated by the   hedging of price risks in the event of unforeseen changes in regulatory requirements related to climate change. Insurance is usually in place in the event of acute climate  resulting in production losses. Financial model forecasts are based on P50 production (the estimated annual amount of electricity generation that has a 50% probability of being exceeded – both in any single year and over the long-term – and a 50% probability of being underachieved) data sourced from energy yield assessments provided by external service providers. The Company also mitigates the frequency of both physical and transitional risks through extensive geographical    Crises Risk of bank failure. On 10 March 2023, Silicon Valley Bank and Signature Bank came close to collapse, prompting US regulators to take control in an attempt to prevent contagion. On 19 March 2023, it was announced that the Swiss government had successfully negotiated the acquisition of Credit Suisse by UBS in order to prevent its collapse and prevent contagion. If either the US regulators or the Swiss  the Company’s bankers could have been affected, creating  The Company’s bankers are carefully chosen based on their credit rating. Further due diligence is undertaken on each bank to ensure they are robust before they are engaged by the Company. The Company’s funds are held by a number of banks in order to diversify counterparty risk. Since the 10 March 2023 announcement, the AIFM has undertaken a review of the Company’s banking arrangements to identify any exposure to Silicon Valley, Signature and Credit Suisse Banks. Following this analysis, the AIFM has concluded that the Company’s exposure is minimal and unlikely to negatively impact the Company. 54 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Greenhouse Gas Emissions As the Company has outsourced operations to third parties, there are no  to report in relation to the operation of  as a low energy user and is therefore exempt from disclosures on greenhouse gas emissions and energy consumption. Investment trusts are currently exempt from TCFD disclosure, but the Board will continue to monitor the situation. In relation to the Company’s investments, the level of greenhouse gas emissions arising from the low volume of electricity imports and from operation and maintenance activity is not considered material for disclosure purposes. Furthermore, as the assets are renewable energy generators, they reduce carbon dioxide emissions on a net basis.   It is the Company’s policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates. The Company does not tolerate the criminal facilitation of tax evasion. The Company’s AIFM, Investment Adviser, Company Secretary, Administrator and Depositary have  procedures are in place and that they do not tolerate bribery. The Company’s policy and the procedures that implement it are designed to support that commitment.  As required by law, a Director must avoid a situation where he or she  Company’s interests. The Company’s Articles of Association provide the Directors authority to authorise potential  can impose limits or conditions when giving authorisation if they think this is appropriate. The procedure observed by the Board in considering dealing with  •  excuse themself from the discussion  • only Directors who have no interest in the matter being considered can debate the matter and take the relevant decision; and • in taking the decision the Directors must act in a way they consider, in good faith, will be most likely to promote the Company’s success. The Directors have declared any  Company. These are entered into the Company’s register of potential  the Board. The Directors are obliged to advise the Company Secretary as soon as they become aware of any potential  The Company has established procedures to deal with any potential   the AIFM (for the Company) and Aquila managed funds who are counterparties to the Company. These procedures may, on a case-by-case basis, include: • separate teams at the Investment Adviser being established in relation to any proposed transaction to represent the Company and the relevant counterparty; • a fairness opinion on the value of the Renewable Energy Infrastructure Investments to be obtained from an independent expert; • a due diligence and reporting package from relevant professional advisers on which the Company (or other applicable vehicles) can place reliance; • the AIFM operating its own risk management system and internal control system as well as monitoring approved systems operated by the Investment Adviser; and OTHER INFORMATION  Other InformationFinancialsGovernanceStrategic Report 55 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) •  the transaction being resolved in accordance with procedures agreed between the Investment Adviser and the AIFM, subject to Board agreement. Employees As the Company is an investment trust it does not have any employees as all functions are carried out by third-party service providers. As at 31 December 2022, the Company had four Directors who are non-executive and receive a  are male and one is female. The Board’s policy on diversity is contained in the   Viability Statement In accordance with the UK Corporate  Rules, the Directors have assessed the prospects of the Company over a longer period than the 12 months required by  In reviewing the Company’s viability, the Directors have assessed the viability of the Company for the period to  The Board believes that the Period,  appropriate time horizon over which to assess the viability of the Company, particularly when taking into account the long-term nature of the Company’s investment strategy, which are modelled  outlined on pages 48 to 53. Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue to operate and to meet its liabilities as they fall due over the period to  In considering the prospects of the Company, the Directors looked at the key risks facing the Company, HoldCo and the SPVs, focusing on the likelihood and impact of each risk as well as any key contracts, future events or timescales that may be assigned to each key risk.  Company would continue to remain viable under downside scenarios, including a decline in long term production and power price forecasts, taking into account tax implications and regulatory changes imposed on renewables and on those in the electricity generation market in certain jurisdictions across Europe. These risks, together with the mitigating factors of each, are shown in the Principal Risk section on pages 48 to 53. As a sector-focused renewable energy investment company, the Company aims to produce stable dividends while preserving the capital value of its investment portfolio. As part of their analysis, the Board were mindful that the Company’s portfolio assets, held via HoldCo, are predominantly fully constructed and operating renewable electricity generating facilities with asset  under consideration. This assessment also included a detailed review of the issues arising following the war in Ukraine, high volatility in commodity prices, the windfall revenue clawback on inframarginal technologies (e.g. solar PV, wind, nuclear, hydro) and other taxes that currently face the Company’s assets as disclosed in the Principal Risk section on pages 48 to 53 and in the Investment Adviser’s Report on pages 12 to 34. The Board have also considered the impact of climate related events on the Company’s assets and on its ability to continue to produce electricity. For example, based on the guidance provided in the Company’s February 2023 investor presentation, the Company expects its 2023 target dividend to be fully covered even if forecast power prices decline by 30%. Tiza, Spain 56 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Viability Statement continued The Company has a low gearing level representing 25.6% as at 31 December  of a RCF (which has an undrawn limit of EUR 65 million) and non-recourse debt at the asset level. The Company (via its subsidiaries, where applicable) is in compliance with its covenants related to the RCF and non-recourse debt. The Company has recently negotiated an extension to its RCF which now expires in April 2025. The Board and advisers have analysed the covenants of the RCF and based on stress testing the Company’s  exists in relation to both the Interest Coverage Ratio (“ICR”) and Loan to Value Ratios. For example, based on the   have to reduce by over 65% in order to breach the Company’s ICR ratio. The Board have also considered the failure of Silicon Valley Bank and Credit Suisse and the Impact of contagion, and have concluded that the Company’s counterparty banking relations are  The Directors believe that the Company is well placed to manage its business risks successfully over both the short and long term and accordingly, the Board has a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due for a Period of at least  The internal control framework of the Company is subject to a formal review on at least an annual basis. On a regular basis, the Board reviews the risk report prepared by the AIFM. The Directors do not expect there to be any material increase in the expenses of the Company over the Period. The Company’s income from investments provides substantial cover to the Company’s operating expenses and buyback programme, and any other costs likely to be faced by the Company over the Period of the assessment. The Company is subject to a  to be held on 14 June 2023. Following discussions with the Company’s broker, Investment Adviser and a number of existing shareholders, the Directors are of the view that the continuation vote will be passed at the forthcoming   the Director’s view of a positive vote for the Company’s continuation as detailed  pages 78 and 79. If the Continuation Resolution is not passed, then the Directors shall within six months of such Continuation Resolution not being passed, put proposals to shareholders for the reconstruction, reorganisation or liquidation of the Company. Outlook The outlook for the Company, including the future development and performance of the Company, is discussed in the Chairman’s Statement on pages 8 to 11 and the Investment Adviser’s Report on pages 12 to 34. Strategic Report The Strategic Report set out on pages 1 to 56 of this Annual Report was approved by the Board of Directors  For and on behalf of the Board Ian Nolan Chairman of the Board 25 April 2023 OTHER INFORMATION CONTINUED WHAT’S IN THIS SECTION Board of Directors 58 Investment Adviser 60 Corporate Governance 61 Audit and Risk Committee Report 65 Directors’ Remuneration Report 68 Directors’ Report 73 Statement of Directors’ Responsibilities 81 Other InformationFinancialsGovernanceStrategic Report 57 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) GOVERNANCE 58 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) IAN NOLAN Non-executive Chairman Appointed on 8 April 2019 Ian Nolan led the team that was recruited by the UK Government in 2011 to establish the UK Green Investment  Previously, Mr Nolan held the position of Chief Investment  currently a Partner and Chairman of the Investment Committee    Arthur Andersen and graduated with a BA in Economics from  Role Chairman KENNETH MACRITCHIE Non-executive Director Appointed on 8 April 2019 Kenneth MacRitchie has over 30 years’ experience of advising    thereafter, at Shearman & Sterling where he served on their  UK Government on renewable energy policy and led the establishment of Low Carbon Contracts Company Limited,    Role Mr MacRitchie stepped down as Chair of the Remuneration    R A BOARD OF DIRECTORS Key R Remuneration and Nomination Committee A Audit and Risk Committee Other InformationFinancialsGovernanceStrategic Report 59 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DAVID MACLELLAN Non-executive Director Appointed on 8 April 2019 David MacLellan is the founder and currently Chairman of RJD     of Murray Johnstone, where he was latterly Chief Executive,  on the boards of a number of companies and is currently a  council member of the British Venture Capital Association and is a member of the Institute of Chartered Accountants of  Role Chair of the Audit and Risk Committee and member of the  A R PATRICIA RODRIGUES Non-executive Director Appointed on 17 April 2019 Dr Patricia Rodrigues has over two decades of leadership experience in infrastructure and real asset investment and  several companies and funds investing in real assets globally with a focus on ESG, including Legal & General Assurance Society Ltd, and is an Investment Committee member of GLIL      before leading the growth strategy of the non-real estate Real   University of Porto and a PhD in Engineering from Cambridge  Role Appointed Chair of the Remuneration and Nomination   R A Key R Remuneration and Nomination Committee A Audit and Risk Committee 60 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CHRISTINE BROCKWELL LARS MEISINGER MICHAEL ANDERSON  Advisory Energy & Infrastructure EMEA  Corporate Development Senior Manager, Partnerships and   Energy & Infrastructure EMEA NICOLE ZIMMERMANN DANIEL METZGER PASCAL HERRMANN Manager, Partnerships and Portfolio Advisory Energy & Infrastructure EMEA Associate, Partnerships and Portfolio Advisory Energy & Infrastructure EMEA Analyst, Partnerships and Portfolio Advisory Energy & Infrastructure EMEA INVESTMENT ADVISER Other InformationFinancialsGovernanceStrategic Report 61 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CORPORATE GOVERNANCE Introduction    considered the principles and provisions of the AIC Code of Corporate   the principles and provisions set out in the UK Corporate Governance Code  additional provisions on issues that are   against the AIC Code, which has been  Council, provides more relevant       how the AIC Code adapts the principles and provisions set out in the UK Code to make them relevant for investment  Compliance   complied with the recommendations of the AIC Code except, as explained below, where the Company does not   composed entirely of independent non-executive Directors, has not appointed a Management Engagement    providers is considered by the Board  not to appoint a Senior Independent Director due to the Board being small   relating to the role of the Chief Executive, executive Directors’ remuneration and the need for an  out in the AIC Code, the Board considers these provisions are not relevant to the Company as it is an externally managed  the Company’s day-to-day management and administrative functions are  result, the Company has no executive Directors, employees, or internal  not reported further in respect of these  The Board At the date of this report, the Board consists of four independent non-executive Directors including   to 31 December 2022 its composition was appropriate for an investment company of the Company’s nature and  the Investment Adviser and are able to  to discharge their responsibilities   of relevant experience to meet the  biographies are shown on pages 58  In line with the AIC Code, the Board has decided that each Director should be subject to annual re-election by Shareholders, although this is not    Copies of the Directors’ appointment   the Board, any new Director will receive an induction, and relevant training is available to Directors on an ongoing  A policy of insurance against Directors’   A procedure has been adopted for Directors, in the furtherance of their duties, to take independent professional  Directors’ Indemnities Subject to the provisions of the Companies Act 2006 and certain provisions contained in the deed of indemnity issued by the Company, the  Directors against all liabilities which any Director may suffer or incur arising out of or in connection with any claim made or proceedings taken against them, or any application made under sections  Act 2006 by them, on the grounds of their negligence, default, breach of duty or breach of trust, in relation to the  62 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CORPORATE GOVERNANCE  Board Committees  membership and chairmanship of its  Audit and Risk Committee  of the role, composition and meetings of the Audit and Risk Committee together with a description of the work of the Audit and Risk Committee in  MacLellan is the Chair of the Audit and Risk Committee and the other members are Kenneth MacRitchie and Patricia  Remuneration and Nomination Committee  Committee will meet at least once  principal duties include identifying and nominating to the Board new Directors, and undertaking an annual performance evaluation of the Board, led by the   was the Chair of the Remuneration and  members of the Remuneration and Nomination Committee were David   became Chair of the Remuneration and  remains a member of the Remuneration  Committee’s other responsibilities      consider the appropriate composition   consider the annual Board evaluation   Each committee has adopted formal terms of reference, which are reviewed  available on the Company’s website or   functions of a Management Engagement  review and consider the actions and judgements of management in relation  Statements, and the Company’s compliance with the UK Code, the Listing Rules, the Disclosure Guidance and  It will review the role of the Investment  effectiveness of the internal control systems of the Company’s key service  Meeting Attendance Remuneration Quarterly Audit and Board and Risk Nomination Number of meetings held meetings Committee Committee Ian Nolan 1                           In addition, a number of ad hoc Board and committee meetings were held during the year to deal with administrative matters and    Ian Nolan is not a member of the Audit and Risk Committee or the Remuneration and Nomination Committee; however, he attended each  Other InformationFinancialsGovernanceStrategic Report 63 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Decision Making  stewardship of the Company’s affairs and has adopted a schedule of matters   operational matters of a material nature are considered at its meetings, including reviewing the Company’s performance by reference to the Company’s key  Strategy Day is also held on at least an annual basis, at which key operational and marketing matters are discussed  All Board members attend this meeting, together with key representatives of the    advice at the Company’s expense where it judges it necessary to discharge its  During the year the Board considered and recommended for approval to the  prior to investment, including, where deemed appropriate, the need for gearing, hedging and the overall  being presented to the Board, each  who reviewed it against an agreed set criteria of items to ensure it was suitable for the Company’s long-term success  Division of Responsibilities  responsibilities between the Chair, the  Role of the Chair includes: • leadership of the Board; • ensuring the Board is provided  to ensure it is able to discharge its duties; • ensuring each Board member’s views are considered and appropriate action taken; • ensuring that each committee has the  • engaging the Board in assessing and improving its performance; • overseeing the induction and development of Directors; •  Adviser and other service providers; • seeking regular engagement with major Shareholders in order to understand their views on governance and performance against the Company’s investment objective and investment policy; • ensuring that the Board as a whole has a clear understanding of the views of Shareholders; and • ensuring regular engagement with each service provider and keeping up  Role of the Board includes: • reviewing the Board pack ahead of the meeting; • providing appropriate opinion, advice and guidance to the Chairman and fellow Board members; • supporting the Board, Chairman and  roles; and • providing appropriate support at the  Role of Committee  • ensuring appropriate papers are considered at the meeting; • ensuring Committee members’ views and opinions are appropriately considered; • seeking engagement with  related to their areas of responsibility; • maintaining relationships with advisers; and • obtaining independent professional  Board Diversity  of diversity and supports the  All Board appointments will be made on merit and have regard to diversity, including factors such as gender, skills,   four Directors, three of whom are male   that will shortly come into force that  met, the Board has agreed, following the recommendation of the Remuneration and Nomination Committee, to recruit an additional Board member and have agreed to consider candidates based on merit and against set objective criteria, whilst being mindful of the new Listing   organisation that has no links with the Company, to help identify suitable  64 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) CORPORATE GOVERNANCE  Board Tenure  the Company of having longer-serving Directors together with progressive  does not believe that length of service in  from seeking re-appointment but, when making a recommendation, the Board   mindful that they will reach their ninth anniversary simultaneously in April  Board has adopted a succession plan   a Director with more than nine years’ service for re-election at the Company’s  In line with corporate governance best practice, all of the Directors will retire and offer themselves for re-election at the AGM of the Company to be held on   Performance Evaluation During the year the Board engaged Lintstock, a company independent of the Board and Company, to carry out a performance evaluation of the Board, its committees, the Chairman and the    of the Board and its committees, the individual contribution of Directors,   Committee then met to discuss the results of the performance evaluation and the Board also considered a list of    considered, amongst other criteria, the balance of skills of the Board, training  contribution of individual Directors and the overall effectiveness of the Board  most recent performance evaluation were positive and demonstrated that the Directors showed the necessary   Internal Control  to review the effectiveness of the   responsibility for the Company’s system of internal controls and for monitoring  controls is designed to manage rather than eliminate the risk of failure to  provide only reasonable assurance   the aspects covered by the guidance and  in the key areas of business objectives, accounting, compliance, operations, and secretarial as being matters of particular importance upon which it   that the existing arrangements, represent an appropriate framework to meet  Directors review the effectiveness of the internal control system throughout  Financial Aspects of    Other Aspects of   meetings each year, plus additional  meetings there is regular contact  and the Company Secretary and    reports separately in writing to the Board concerning risks and internal control matters within its remit, including   Additional ad hoc reports are received  at all times to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are    the Board to monitor the Company’s progress towards its objectives and encompass an analysis of the risks  Company’s risk management and internal controls systems is monitored regularly and a formal review, utilising a detailed risk assessment programme,  includes a review of the internal controls   Principal Risks  carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance,  and how they are being managed are set   Other InformationFinancialsGovernanceStrategic Report 65 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) AUDIT AND RISK COMMITTEE REPORT Audit and Risk Committee   the Board should establish an Audit Committee comprising at least three or, in the case of smaller companies, two   the Audit and Risk Committee has recent  has competence relevant to the sector in  Composition David MacLellan, Kenneth MacRitchie and Patricia Rodrigues are members of the Committee, which is chaired by  written terms of reference and copies of these are available on the Company’s   at least one of its members has recent  competence relevant to the sector in  Role and Responsibilities   are set out in its terms of reference,    activities during the year: • a detailed analysis of the Company’s  underlying assumptions used in calculating the fair market valuation of each renewable energy asset; • monitored and reviewed the Company’s emerging and principal risks and internal controls; • considering the ongoing assessment of the Company as a going concern; • considered the appointment, independence, objectivity and remuneration of the auditor; • reviewed the audit plan, annual   •  implications on the independence of the auditor arising from the provision  Internal Audit  need for an internal audit function and considers that this is not appropriate given the nature and circumstances of the Company as an externally managed investment company with external  the need for an internal audit function  Financial Aspects of    the Company and for reviewing its   the maintenance of proper accounting  information upon which business decisions are made and which is used for publication, and that the assets of   to external agencies the services  fully informed of the internal control framework established by each relevant  assurance on the effectiveness of internal   Responsibilities in respect of the      David MacLellan Audit and Risk Committee Chair 66 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) AUDIT AND RISK COMMITTEE REPORT  Internal Audit continued Financial Statements and   statements and considered the following   for the year ended 31 December 2022: Valuation and Existence   to designate investments at fair value    investments are fairly valued due to the uncertainty involved in determining the  reviewed the procedures in place for ensuring the accurate valuation and existence of investments, and approved the valuation of the Company’s investments and their existence at the year end with the Investment Adviser,   Policy which sets out the valuation  valuation by the Investment Adviser using fair market valuations of the SPV companies that hold the Renewable Energy Infrastructure Investments on an annual basis as at 31 December    principles used to calculate the fair value of the assets are based on International    derived from the present value of the  using reasonable assumptions and forecasts for revenues and operating   the key estimates and assumptions used in the valuation model are appropriate and that the investments have been  assumptions include the useful life of the assets, the discount rates, the rate   the amount of electricity the assets are  Recognition of Income Income may not be accrued in the   Committee reviewed the Administrator’s procedures for recognition of income and reviewed the treatment of income  Tax Status  on the realisation of investments if investment trust status is not  the compliance of the Company during the period with the eligibility conditions in order for investment trust status to be  Going Concern  going concern assessment and concluded that it is appropriate for the  prepared on a going concern basis as described in the Directors’ Report on  Calculation of the Investment Adviser’s Fees  Adviser’s fees and concluded that     Conclusion with Respect to   the Annual Report for the year to  is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company’s business model, strategy    through a process of review of the  parties involved in the production of the  Audit Arrangements  was selected as the Company’s auditor at the time of the Company’s launch following a competitive process and    audit partner, Richard McGuire, was  appointment of the auditor is reviewed annually by the Committee and the Board and is subject to approval by   out to tender within ten years of the  the audit partner must be rotated    Committee at its November 2022 Committee meeting, ahead of the commencement of the Company’s  the audit process, materiality scope and  Other InformationFinancialsGovernanceStrategic Report 67 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Internal Control and Risk During the year the Committee,  service providers, carefully considered the Company’s matrix of risks and     Company’s principal risks can be found     Committee reviewed these reports and  control weaknesses or other issues that needed to be brought to the Board’s  Auditors’ Independence  independence of the auditor and the objectivity of the audit process and  obligations to Shareholders and as independent auditor to the Company  the Committee recommends the re-appointment of PwC and their re-appointment will be put forward to the Company’s Shareholders at the   there are no issues in respect of the  Effectiveness of External Audit  reviewing the effectiveness of the  received a presentation of the audit plan from the external auditor prior to the commencement of the audit, and a presentation of the results of the audit following completion of the  Committee received feedback from the Company Secretary, Administrator   the above review, the Committee has agreed that the re-appointment of the auditor should be recommended to the Board and the Shareholders of the  Provision of Non-Audit Services  Guidance on Audit Committees and has formulated a policy on the provision of non-audit services by the Company’s  that the Company’s appointed auditor will not be considered for the provision of certain non-audit services, such as accounting and preparation of the   provide other non-audit services which are not restricted by the policy, and this  During 2021, the Company also engaged with PwC to perform reporting accountant services in relation to admission of new shares to trading  assessed that this non-audit service is a permissible service in accordance with    PwC was not engaged to undertake non-audit services for the year ended  Committee Evaluation  considered as part of the annual performance evaluation which was    the Committee was operating effectively and had the appropriate balance of skills  David MacLellan Audit and Risk Committee Chair 25 April 2023 68 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Dr Patricia Rodrigues Remuneration and Nomination Committee Chair DIRECTORS’ REMUNERATION REPORT Remuneration and   Committee is responsible for reviewing the remuneration payable to the Directors, taking into account the relevant circumstances of the Company, the time commitment and relevant experience and skills of the Board and the average fees paid to the   Kenneth MacRitchie was the Chair of the Remuneration and Nomination  the Remuneration and Nomination Committee are David MacLellan and  2023, Dr Rodrigues became Chair of the Remuneration and Nomination Committee and Mr MacRitchie remains  Nomination Committee has formal written terms of reference and copies of these are available on the Company’s    Committee met once during the year  Annual Chair’s Statement I am pleased to present the Remuneration Report for the year to 31 December 2022, which has been prepared in accordance with sections   auditor to audit certain sections of the Remuneration Report; where this is the case the relevant section has been  Directors’ Remuneration During the year under review, each of the Directors were entitled to receive a  the Chairman of the Board who receives EUR 75,000 and the Chair of the Audit and Risk Committee who receives a fee  Directors’ fees are in respect of their appointment as a non-executive Director of the Company and their appointment     During the year, the Remuneration and Nomination Committee reviewed the Directors’ remuneration, and it was agreed that the Board’s remuneration, other than the Chairman’s, be increased  In carrying out its review, the Committee considered the remuneration of each Board member, taking into consideration their individual role, expected time commitment, experience and skills, and the market expectation of the remuneration paid to the Company’s Board and the remuneration paid to  No commissions or performance-related payments were awarded or would be awarded to the Directors by the   respect of the Company’s accounting period ended 31 December 2022 will be payable out of the assets of the   do not receive bonuses or other performance-related remuneration, share options, pension contributions   No Director has waived or agreed to waive any emoluments from the  Other InformationFinancialsGovernanceStrategic Report 69 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Remuneration Consideration  Annual fee Annual Annual from 8 April fee from fee from 2019 to 1 January 1 April 31 March 2023 2021 2021 Role EUR EUR EUR Chairman 75,000 75,000 75,000                 AGM Approval of the Remuneration Policy and Remuneration Implementation Report    material variation to the Remuneration Policy is proposed and in which case Shareholder approval will be sought to amend the   Remuneration Consultants Remuneration consultants were not engaged by the Company during the year under review and in respect of the    Remuneration Policy  package for non-executive Directors, which are contained in the Remuneration Policy, are as detailed below: Current and Future Policy Component Director Purpose of Reward Operation Annual fee Chairman of the Board  Company and its subsidiary,  Determined by the Remuneration and  Annual fee Other Directors  Directors of the Company and its  Limited Determined by the Remuneration and  Additional fee Chair of each committee  time commitment, if deemed appropriate Determined by the Remuneration and  Expenses All Directors Reimbursement of expenses incurred in the performance of their duties Submission of appropriate supporting documentation to the Chairman or a fellow Board  In accordance with the Company’s Articles of Association, Board fees in aggregate cannot exceed EUR 500,000 per annum,  70 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REMUNERATION REPORT  Directors’ Service Contracts       Statement of Consultations   Fees Payable on Recruitment        Effective Date       Year ended 31 December 2022 Year ended 31 December 2021 Taxable       Percentage increase 1 Director EUR EUR EUR EUR EUR EUR 2022 2021 2020 Ian Nolan 75,000 — 75,000       David MacLellan 50,000 — 50,000       Kenneth MacRitchie 43,000 — 43,000       Patricia Rodrigues 43,000 — 43,000        211,000 — 211,000              Other InformationFinancialsGovernanceStrategic Report 71 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Performance      Relative Importance of Spend on Pay   Year ended Year ended 31 December 31 December 2022 2021 (EUR ’000)  Spend on Directors’ fees 169  Company’s operating expenses and advisory fees 4,715  Dividends paid and payable to Shareholders 21,165     20 -10 Jun 2019 Sep 2019 Dec 2019 Jun 2020 Sep 2020 Dec 2020 Mar 2020 Jun 2021 Sep 2021 Dec 2021 Mar 2021 Jun 2022 Sep 2022 Dec 2022 Mar 2022 0 -30 10 40 30 -20 AER share price AER NAV  72 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REMUNERATION REPORT     Ordinary Ordinary Shares as at Shares as at 31 December 31 December 2022 2021 Ian Nolan 100,000 100,000 David MacLellan 75,000 75,000 Kenneth MacRitchie 50,000 50,000 Patricia Rodrigues 50,000 50,000 In the period from 1 January 2023 to the date of this report Mr Nolan and Mr MacLellan purchased the following shares:    Date of Price paid Shares holding in transaction per share purchased the Company                        Voting on Remuneration Matters at the 2022 AGM and in Respect of Remuneration Policy  Other Disclosures At the last AGM, held on 9 June 2022, the following resolution, including Directors’ remuneration, was approved:  Shares voted Percentage         Against 261 0% Withheld 0 0% Statement   Implementation Report summarises, as applicable, for the year to 31 December 2022:    Dr Patricia Rodrigues Remuneration and Nomination Committee Chair 25 April 2023 Other InformationFinancialsGovernanceStrategic Report 73 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REPORT Strategic Report  conjunction with the Strategic Report on  Corporate Governance    Risk and Risk Management    Viability Statement   Legal and Taxation Status  within the meaning of section 833  Company conducts its affairs to meet  investment trust under section 1158  Company received initial approval as an investment trust and the Company must meet eligibility conditions and ongoing   the Directors, the Company has met  approval as an investment trust for the  Market Information  listed on the London Stock Exchange  Share is published through a regulatory  Retail Distribution of Investment Company Shares via Financial Advisers and Other Third-Party Promoters   which investment products can be promoted to retail investors, certain      distribution of its shares, being shares in an investment trust, is not restricted as a   affairs so that the shares issued by the Company can be recommended by  intends to continue to do so for the  Articles of Association Amendments to the Company’s  Ordinary Resolution to be passed by  Management The Board  to Shareholders for the overall  Board has adopted a Schedule of Matters Reserved for the Board which sets out the division of responsibilities between the Board and its various committees, the Chairman and the Chairs of the various committees,    of external independent advisers, the Board manages risk and governance of  Appointment and   and replacement of Directors are contained in the Company’s Articles of    appointment and re-election at least  in accordance with the UK Code of Corporate Governance, the Board has resolved that all Directors shall stand for  Alternative Investment          statements for the year ended 31 December 2022. 74 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REPORT  Management continued Alternative Investment continued During the year, Apex Group        management of the Company, including the following services:   Infrastructure Investments in accordance with the investment policy;   Renewable Energy Infrastructure  approval and as recommended by     Adviser and making relevant recommendations to the Board; and   Board, and executing transactions    risk management services to the Company, including:   establishment of a risk reporting framework;   compliance with the investment policy and the investment restrictions in accordance with  policies and procedures, and providing regular updates to the Board;   Company’s exposures, leverage, counterparty and concentration risk; and     executed transactions, carry out    assist the Board in establishing, maintaining and reviewing valuation policies for calculating     per annum plus an additional  annum of the NAV of the Company that exceeds EUR 300 million;   per annum in respect of each jurisdiction in which a marketing   and   Investment Adviser fee payable by   An additional fee will be agreed   on behalf of, the Company to undertake additional risk and duties outside the   either party on not less than six months’  may be terminated earlier by the    from the Company in relation to  discharge of its duties other than those arising by reason of gross negligence,  Investment Adviser   as the Investment Adviser to provide  in respect of the Company, pursuant to   for certain investment advisory services to the Company, including sourcing potential opportunities in which the Company may invest, as well as ongoing monitoring of the Renewable Energy   advisory services provided to the  its Renewable Energy Infrastructure   continue in force for an initial period of   will continue thereafter on a rolling basis and may be terminated following the initial period of twelve months’ notice   the Investment Adviser for losses that the Investment Adviser may incur in the performance of its duties pursuant to the Investment Advisory Agreement that are not attributable to the fraud, gross negligence, or wilful default of, the Investment Adviser determined by  Under the Investment Advisory Agreement, the following fee is payable to the Investment Adviser: •  the Company up to EUR 300 million; •  of the Company between EUR 300 million and EUR 500 million; and •    appointment, the Investment Adviser    as announced on 6 August 2021, this arrangement was extended by an  If the Ordinary Shares are trading at a premium to the prevailing NAV, the Company will issue new Ordinary Shares  the Ordinary Shares are trading at a discount to the prevailing NAV at the relevant time, no new Ordinary Shares will be issued by the Company and instead the Company will instruct its  the value of the fee due in the relevant  Agreement is terminable by either the Investment Adviser or the Company giving to the other not less than six  would not expire earlier than the third   Other InformationFinancialsGovernanceStrategic Report 75 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) In accordance with the Investment Advisory Agreement, the Board agreed to purchase or issue shares to the Investment Adviser     Company Secretary and Administrator    Alternative Investment Fund Managers Directive     Continuing Appointment of Service Providers    and concluded that each offered a satisfactory service and that their continued appointment was in the best long-term interests  Share Capital Shares issued during the year Number Price paid Date of shares per share        Issue of Ordinary Shares to the Investment Adviser pursuant to the        Issue of Ordinary Shares to the Investment Adviser pursuant to the        Purchase of shares to satisfy the Investment Advisory Agreement During the year under review the following shares were purchased on behalf of the Investment Adviser in full satisfaction of the Investment Advisory Agreement: Number Price paid of shares for shares                              76 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REPORT  Management continued Share Capital continued Buyback of shares   Number of Price paid                                                                                                                                                                                                                                                                                Voting rights       Other InformationFinancialsGovernanceStrategic Report 77 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Restrictions   restrictions on the distribution of dividends and the repayment of capital, and no agreements to which the Company is a party  Power to issue shares    At the 2022 AGM the Company’s Shareholders approved a renewal of the authority previously granted at the 2021 AGM to allot   the forthcoming AGM, where authority will be sought to renew this authority up to a maximum of 20% of the Ordinary Shares in      Results and Dividend    Dividend amount In respect of the per Ordinary Ex-dividend period to Shares in cents Pay date Record date date                           comprising 3% or more of the issued share capital of the Company: Percentage       1                                                  Percentage       1                               78 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REPORT  Settlement of Ordinary Share Transactions Ordinary Share transactions in the   Shareholder Engagement  importance of engaging with the Company’s Shareholders to gauge their views on topics affecting the   to attend the Company’s AGM on   how to do this can be found in the Notes to the Notice of AGM which   available shortly after the AGM on      dividend information and other  Appointment of Auditors   having expressed their willingness to  put forward for re-appointment at the Company’s AGM and the Board will seek authority to determine their remuneration  Going Concern    of the Directors’ assessment of the going     this conclusion, the Directors have considered its cash position, income,  programme and compliance with the  assets as at 31 December 2022 was       2022 of its Gross Asset Value, comprised     compliance with its covenants related  Company has recently negotiated an   have analysed the covenants of the   headroom exists in relation to both the      65% in order to breach the Company’s  year ended 31 December 2022 were     document, based on the aggregate of investments and cash held, the Company has substantial operating   are the payment of dividends, costs  investments and payment due in respect of the settlement of shares purchased in respect of the Company’s buyback   balances to fund its commitments to Guillena, which as at 31 December 2022 was the Company’s only remaining commitment which is intended to be   review of the issues arising following the war in Ukraine; high volatility in commodity prices; the windfall revenue clawback on inframarginal technologies   face the Company’s assets, as discussed in the Chairman’s Statement and Investment Adviser’s Report on pages 8    that the Company would continue to remain viable under downside scenarios, including a decline in long term production and power price  guidance provided in the Company’s  the Company expects its 2023 target dividend to be fully covered even if   derived from the sale of electricity,  Purchase Agreements which cover the   Continuation Resolution at this   Company’s broker, Investment Adviser and a number of existing shareholders, the Directors are of the view that the Continuation Resolution will be passed   factors that support the Director’s view of a positive vote for the Company’s continuation as detailed below: •  is one of the largest participants in the European renewables market and provides the Company with access to a 10 GW development and construction pipeline, providing  term growth; •  Company’s portfolio has resulted in high level of earnings visibility and  Board to recently announce a 5% increase to its dividend target for 2023; •  dividend yield which compares favourably to other renewable funds providing exposure to European assets; •  positioned, with all of its construction projects completed, relatively low   In addition, the Investment Adviser is also undertaking due diligence in relation to asset life extensions which could realise further upside within the portfolio; Other InformationFinancialsGovernanceStrategic Report 79 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) •  a proactive approach to capital allocation following the EUR 20 million share buyback programme  •  Investment Adviser have demonstrated strong shareholder alignment through the commitment of the Investment Adviser to take its management fee in shares since IPO, as well as recent share purchases by select members of the Board and employees of the Investment Adviser; and •  structure, which is up to 30% less than peers based on its Ongoing Charges  If the Continuation Resolution is not passed, then according to the Company’s articles, the Directors shall within six months of such Continuation Resolution not being passed, put proposals to shareholders for the reconstruction, reorganisation  Accordingly, the Directors expect that if the Continuation Resolution is not passed, an event which the Directors consider to be unlikely, formulating and implementing any such proposals  operations for a period of at least 12 months from the date of approval of the  Auditor Information Each of the Directors, at the date of the    no relevant audit information of which the Company’s auditors are unaware; and    aware of any relevant information and to establish that the Company’s auditors are aware of that   be interpreted in accordance with   Annual General Meeting The following information is important and requires your immediate attention. If you are in any doubt about the action you should take, you should seek advice from your stockbroker, bank manager,  adviser authorised under the Financial Services and Markets Act 2000.   Company’s lawyers, CMS Cameron  details of the AGM, the resolutions proposed and how to vote by proxy are described in the Notice of Meeting on pages 116 to 117 of this Annual Report and the explanatory notes on pages 118    Resolutions relating to the following items of special business will be proposed at the forthcoming AGM to  Resolution 3 Remuneration Policy   Shareholders will be asked to receive and approve the Remuneration Policy of the Company set out in full on page 69 by way of an ordinary resolution at  successfully passed, the Remuneration Policy will apply immediately following  of any proposed material variation to the Remuneration Policy or should the resolutions to approve the Remuneration Policy, or the Remuneration Implementation Report, fail to be passed at the forthcoming AGM, Shareholder approval will be sought for a proposed  Resolution 4 Continuation Vote  that the Directors propose an ordinary resolution at the AGM to be held in 2023, and every fourth AGM thereafter, that the Company continue its business as a closed-ended investment company for a   the Company continue its business as  In the event that such a resolution is not  draw up proposals for the reconstruction,  the Company for consideration by Shareholders at a General Meeting to be convened for a date not more than six months after the date of the meeting at which such ordinary resolution was not   Statement at page 8 to page 11, the Board strongly recommends that Shareholders vote in favour of the   80 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) DIRECTORS’ REPORT  Resolutions 12, 13 and 14 Authority to Issue Ordinary Shares and to Dis-apply Pre-emption Rights At the forthcoming AGM the Board is seeking to renew the authority granted to them at the AGM held on 9 June 2022  the Company’s shares in issue as at the  130,511,365 Ordinary Shares, excluding  pre-emption rights when allotting up to     aggregate authority is in keeping with recent revised guidance from the Investment Association in relation to a UK investment company and the UK Pre-Emption Group adapted for the context of an investment company and   in guidance, the Directors are aware that the combined authority to dis-apply pre-emption rights in respect of up to 20% of the Company’s issued Ordinary Share capital sought under Resolutions  offering shareholders the opportunity to   10% authority creating an aggregate 20%  believe that a higher 20% authority is  to grow and further expand its assets, as well as to lower the Company’s ongoing  Shares will only be issued at a price more  Ordinary Share at the time of issue, after  discretion of the Board when it is deemed to be in the best interests of Shareholders   resolutions will expire at the conclusion  renewed prior to this date via a General    Resolution 15 Renewal of Authority to Purchase own Shares  the AGM held on 9 June 2022 to make  Ordinary Shares in issue as at the date    31 December 2022, the Company did not utilise its authority to purchase  Company purchased for treasury a total   will expire at the conclusion of the  recommend that a new authority to purchase up to 58,696,830 Ordinary   in issue, excluding treasury shares, at the  be granted and a resolution to that  Ordinary Shares purchased will either be held in treasury or, if the Directors so  expire at the Company’s AGM to be held     by way of market purchase as treasury shares, rather than having to cancel  the ability to re-issue Ordinary Shares    in the management of its capital  from treasury at a price less than the  at the time of their sale unless they   Company did not hold any shares in    Ordinary Shares are purchased at the discretion of the Board and when it is deemed to be in the best interests  will be purchased for cancellation or for treasury only when the shares are trading at a discount to the net  Resolution 16 Notice of   best interests of Shareholders of the Company to have the ability to call   will therefore propose resolution 16 at the AGM to approve the reduction in the minimum notice period from 21 to   Once approval is granted, the approval would be effective until the Company’s next AGM, when it is intended that a  In accordance with the Shareholders’ Rights Directive, the Company will offer the Shareholders the ability to vote by  accessible to all Shareholders, should   be used by the Board under appropriate  Regulatory Disclosures – Information to be Disclosed in Accordance with Listing Rule 9.8.4.  companies to report certain information      information can be found on page 75 on the issue of shares undertaken by the  By order of the Board Jenny Thompson   Limited Company Secretary 25 April 2023 Other InformationFinancialsGovernanceStrategic Report 81 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN   preparing the Annual Report and the      the Directors have prepared the  international accounting standards in conformity with UK adopted international accounting standards and  Act 2006 as applicable to companies  Under Company law, Directors must not   and fair view of the state of affairs of the     • select suitable accounting policies and then apply them consistently; • state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any material departures disclosed and explained  • make judgements and accounting estimates that are reasonable and prudent; and •  the going concern basis unless it is inappropriate to presume that the   safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud     the Company’s transactions and disclose with reasonable accuracy at any time  and enable them to ensure that the  Remuneration Report comply with the    the maintenance and integrity of the  the United Kingdom governing the preparation and dissemination of    Each of the Directors, whose names and functions are listed in Corporate  best of their knowledge: •  which have been properly prepared in accordance with UK adopted international accounting standards, give a true and fair view of the assets,  of the Company; and • the Directors’ Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal   Ian Nolan Chairman 25 April 2023 82 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Opinion In our opinion, Aquila European Renewables Plc’s (formerly Aquila European Renewables Income Fund  •      •     •                  Basis for Opinion            Independence                 Our Audit Approach Overview Audit Scope •      •       •        Key Audit Matters •   •   Materiality •    •   The Scope of Our Audit     Key Audit Matters                          INDEPENDENT AUDITORS’ REPORT   Other InformationFinancialsGovernanceStrategic Report 83 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Key audit matter How our audit addressed the key audit matter Valuation of investments held at fair value               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          Ability to continue as a going concern (Continuation Resolution)      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   •   •             84 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)               Materiality  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   INDEPENDENT AUDITORS’ REPORT   Other InformationFinancialsGovernanceStrategic Report 85 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Conclusions Relating to      •       •    scenarios, including assessing    •  underlying formulae and   •         • Performed procedures over               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          Strategic Report and Directors’ Report               Directors’ Remuneration   been properly prepared in accordance  Corporate Governance Statement                        •     •        86 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Corporate Governance Statement  •             •      •                                •         •     •            Responsibilities for the Financial Statements and  Responsibilities of the Directors for the Financial Statements                 going concern, disclosing, as applicable,       Auditors’ Responsibilities for the Audit of the Financial Statements                           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    INDEPENDENT AUDITORS’ REPORT   Other InformationFinancialsGovernanceStrategic Report 87 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)   •        •           •   •     •        •    •                                      Use of This Report             Other Required Reporting Companies Act 2006 Exception Reporting   •    •      •    •         Appointment           Other Matter               Richard McGuire (Senior Statutory Auditor)       88 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) STATEMENT OF COMPREHENSIVE INCOME  For the year ended   31 December 2022  Revenue Capital Total      (EUR ’000) (EUR ’000) (EUR ’000)      — 41,778 41,778      — (13) (13)      15,929 — 15,929       1,200 — 1,200 — — —   (3,150) — (3,150)      (1,565) — (1,565)      12,414 41,765 54,179       (75) — (75)      12,339 41,765 54,104       — — — — — —   12,339 41,765 54,104        3.02 10.24 13.26       3.02 10.24 13.26         Other InformationFinancialsGovernanceStrategic Report 89 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) STATEMENT OF FINANCIAL POSITION     31 December  2022   (EUR ’000)          428,641            5,630         19,893   25,523          (2,514)  (2,514)   23,009    451,650             4,082        255,643         125,082        65,618   Revenue reserve 1,225    451,650    110.64c    Ian Nolan   90 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) STATEMENT OF CHANGES IN EQUITY  Share Share premium Special Capital Revenue          (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000)  1 January 2022 4,069 254,388 134,393 23,853 740 417,443     13 1,313 — — — 1,326   — (58) — — — (58)   — — — 41,765 12,339 54,104   — — (9,311) — (11,854) (21,165)  31 December 2022 4,082 255,643 125,082 65,618 1,225 451,650                             1 January 2021                                           31 December 2021            Other InformationFinancialsGovernanceStrategic Report 91 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) STATEMENT OF CASH FLOWS  Year ended  31 December  2022   (EUR ’000)         54,179          (41,778)       3,668        859                  (71,369)        1,459         —        (1,428) —                 1,326        (58)        (21,165)        (75)                                92 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Characteristics of an                                                                2. Basis of Preparation                               Accounting for Subsidiary                           1. General Information Aquila European Renewables Plc                                   German Federal Financial Supervisory                NOTES TO THE FINANCIAL STATEMENTS  Other InformationFinancialsGovernanceStrategic Report 93 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) •        •      •           •      •          •                  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                     94 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)  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      Key Estimation and Uncertainty: Investments at Fair Value                                                     2. Basis of Preparation  Critical Accounting Judgements, Estimates and Assumptions          Key Judgements                                               NOTES TO THE FINANCIAL STATEMENTS   Other InformationFinancialsGovernanceStrategic Report 95 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)                   Taxation            Deferred Taxation  payable or recoverable on differences                        Policies Financial Instruments Financial Assets                              Recognition, Derecognition                      New Standards, Interpretations and Amendments Adopted from         New Standards and Amendments          Amendments to IAS 1:  Current or Non-current                         96 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS    Deferred Taxation     Segmental Reporting     Income       Expenses 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      Cash and Cash Equivalents   Share Capital, Special Reserve and Share Premium     Other InformationFinancialsGovernanceStrategic Report 97 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)    31 December  2022    Fair Value Fair Value      (EUR ’000)  (a) Summary of valuation        428,641                 293,068    71,369     (1,459)   362,978           65,663                       41,778               Fair Value Measurements               Level 1 Level 2 Level 3 Total     (EUR ’000) (EUR ’000) (EUR ’000) (EUR ’000)       — — 428,641 428,641      — — 428,641 428,641      98 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS    Fair Value Measurements      Year ended   31 December  2022  (EUR ’000)  Opening balance 316,953        71,369         (1,459)      41,778    428,641   Valuation Methodology         Valuation Assumptions As at 31 December 2022       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 Valuation Sensitivities       (i) Discount Rates     NAV per -0.5% +0.5% NAV per                    4.8 471,283 451,650 433,174 (4.5)      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   100 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS    Valuation Sensitivities  (iii) Energy Yield    NAV per P90 Total P10 NAV per                    (8.9) 415,175 451,650 488,123 9.0         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 NAV per Total NAV per                   (2.4) 441,663 451,650 458,869 1.8 (vi) Operating Expenses     NAV per Total NAV per                   3.6 466,393 451,650 436,281 (3.7) Other InformationFinancialsGovernanceStrategic Report 101 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 5. Income from Investments For the  year ended year ended 31 December  2022   (EUR ’000)       15,929         1,200 — Total income 17,129  6. Investment Advisory Fees For the year ended   31 December 2022  Revenue Capital Total    (EUR ’000) (EUR ’000) (EUR ’000)      3,150 — 3,150      a)  b)  c)            Share-Based Payments   Fair value                                                     102 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS   6. Investment Advisory Fees continued Share-Based Payments  Fair value                                               7. Other Expenses For the year ended   31 December 2022  Revenue Capital Total    (EUR ’000) (EUR ’000) (EUR ’000)     254 — 254     Tax compliance 132 — 132       169 — 169       12 — 12      87 — 87       352 — 352      147 — 147      23 — 23       67 — 67       61 — 61       162 — 162       33 — 33      66 — 66      1,565 — 1,565     8. Finance Costs For the year ended   31 December 2022  Revenue Capital Total    (EUR ’000) (EUR ’000) (EUR ’000)      72 — 72       3 — 3     Total 75 — 75           Other InformationFinancialsGovernanceStrategic Report 103 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 9. Taxation (a) Analysis of Tax Charge in the Year For the year ended   31 December 2022  Revenue Capital Total    (EUR ’000) (EUR ’000) (EUR ’000)     — — — — — — (b) Factors Affecting Total Tax Charge for the Year    For the year ended   31 December 2022  Revenue Capital Total    (EUR ’000) (EUR ’000) (EUR ’000)     12,339 41,765 54,104       2,344 7,935 10,279         — (7,937) (7,937)     — 2 2       (228) — (228) — — —  13 — 13        19 — 19      (2,148) — (2,148)     — — — — — —           10. Return per Ordinary Share For the   year ended year ended 31 December   2022       12,339        41,765       54,104     407,926,535       407,926,535  104 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS   10. Return per Ordinary Share    For the   year ended year ended 31 December   2022         407,926,535           —       407,926, 535  11. Trade and Other Receivables   31 December  2022          5,542        —   Prepaid expenses 88   Total 5,630   12. Trade and Other Payables   31 December  2022    Accrued expenses 1,291       645 —       578   Total 2,514   13. Share Capital   31 December 2022             408,225,705 4,082    Total 408,225,705 4,082           Other InformationFinancialsGovernanceStrategic Report 105 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)                            406,939,412 1,286,293 — 408,225,705                                   14. Special Reserve     15. Net Assets per Ordinary Share   16. Dividend Paid  For the year ended  31 December 2022          Ordinary Share (EUR ’000)    1.25c 5,096      1.3125c 5,351     1.3125c 5,353     1.3125c 5,365    Total 5.1875c 21,165      For the year ended  31 December 2022          Ordinary Share (EUR ’000)    1.3125c 5,351    1.3125c 5,353    1.3125c 5,365     1.3125c 5,334   Total 5.2500c 21,403     106 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS   17. Financial Risk Management     Market Risk     (i) Currency Risk    (ii) Interest Rate Risk           bearing bearing Total             — 19,893 19,893     — 5,630 5,630    248,451 180,190 428,641               — (2,514) (2,514)                                                                                            Other InformationFinancialsGovernanceStrategic Report 107 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Credit Risk         31 December  2022      248,451        5,630         19,893   Total 273,974       31 December  2022           2,170       15,183       2,540  Total 19,893                  (EUR’000) (EUR’000) (EUR’000) (EUR’000)     (2,514) — — (2,514) Total (2,514) — — (2,514)                            Total          108 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS   17. Financial Risk Management  Capital and Risk Management                18. Transactions with the Investment Adviser and Related Party Transactions           Year ended  31 December  2022   (EUR)   75,000        50,000   43,000        43,000       at 31 December   2022       100,000       75,000   50,000        50,000   Other InformationFinancialsGovernanceStrategic Report 109 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) 19. Distributable Reserves     20. Commitments and Contingencies       21. Unconsolidated Subsidiaries and Associates     for the    year ended period ended       31 December  31 December      2022  2022      (EUR million)  (EUR million)      43.0  180.2                          SPV       for the    year ended period ended       31 December  31 December      2022  2022      (EUR million)  (EUR million)      4.3  27. 2                       (0.0)  53.0                0.1  4.2                0.1  4.2                0.2  2.1            110 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE FINANCIAL STATEMENTS   21. Unconsolidated Subsidiaries and Associates    for the    year ended period ended       31 December  31 December      2022  2022      (EUR million)  (EUR million)      (1.7)  40.2                2.2  56.7                  0.4  24.1                (0.4)  52.4               2.1  37.5                0.0  0.0                         for the    year ended period ended       31 December  31 December      2022  2022      (EUR million)  (EUR million)      (0.4)  51.3                   132.0 NOK  1,069.7 NOK           in Tesla   Other InformationFinancialsGovernanceStrategic Report 111 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)     22. Post Balance Sheet Events Share Buyback Programme    Revolving Credit Facility (“RCF”)  Guillena Completion  The Rock: Engineering, Procurement and Construction Management Agreement   Dividend Payment  Purchase of Shares for the Investment Adviser    112 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) ALTERNATIVE PERFORMANCE MEASURES (“APMS”)         (Discount)/Premium    31 December  Page 2022        110.6        92.3         (16.6%)  Ongoing Charges   Year ended  31 December  Page 2022        438,421          4,715   (b÷a) 1.1%  Total Return               a 2 102.00 102.58     b 5.19 5.19     c 2 92.25 110.64 Total return ((c+b)÷a)-1 (4.5%) 12.9%                                 Total return     31 December  Page 2022        98.0       110.6        14.4          7.1%       Other InformationFinancialsGovernanceStrategic Report 113 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Dividend Cover   Year ended  31 December  Page 2022       29,093         21,165   Dividend cover ratio  1.4   Year ended  31 December  Page 2022        12,339         21,165   Dividend cover ratio a÷b 0.6    Year Ended  31 December  page 2022      25,320        21,165  Dividend cover ratio      1.2  Gross Asset Value   31 December  Page 2022        451,650        131,203          24,000 —       606,853   Gearing  31 December  Page 2022        606,853        131,203          24,000 — Gearing ratio 25.6%    114 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) GLOSSARY NAV per Ordinary Share    O&M  Ongoing charges     Ordinary Shares              Record Date              Share price     Total return      Gearing  GWh  The HoldCo   Index    Investment company   Investment trust                             MWh  Net assets or net asset value (“NAV”)   AIC  Alternative Investment Fund      Alternative Investment Fund     Annual General Meeting        the Company  CREST   Dividend         EU  Ex-dividend date        Financial Conduct Authority    Other InformationFinancialsGovernanceStrategic Report 115 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) Administrator and        Registrar Computershare Investor     Independent Auditors     CMS Cameron McKenna    AIFM FundRock Management        Investment Adviser Aquila Capital     Germany Broker     Directors (all non-executive)      1   COMPANY INFORMATION   116 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)                                          Special Resolutions                  (i)               (ii)    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       Ordinary Resolutions                                                Other InformationFinancialsGovernanceStrategic Report 117 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)                    (i)              (ii)                                       (i)         (ii)    (iii)               (iv)         (v)                               118 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc) NOTES TO THE NOTICE OF MEETING   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           (i)      (ii)                                               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          120 Aquila European Renewables Plc Annual Report 2022 (formerly Aquila European Renewables Income Fund plc)                                                                       (i)      (ii)    (iii)                                    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