Cloudberry Clean Energy ASA

Annual Report (ESEF) • Mar 20, 2024

Cloudberry Clean Energy ASA Annual report 2023 Cloudberry Clean Energy ASA Content Cloudberry in brief 3 Letter from the CEO 4 Overview and highlights 8 Executive Management 18 Board of Directors 20 Board of Directors report 23 Sustainability report 36 Corporate Governance report 132 Consolidated financial statements Group 142 Parent company financial statements 210 Responsibility statement 229 Alternative performance measures 230 Auditor’s report 235 Reporting Cloudberry Clean Energy ASA (“the Company”), its subsidiaries (wholly and partly owned) and invest ments in associated companies and joint ventures (“the Group” or “Cloudberry”) reports consolidated financial statements in accordance with IFRS and a supplementary proportionate 1 segment reporting. Proportionate financials represent Cloudberry’s proportionate share of the financial results, assets, and liabilities of all entities and excluding any eliminations of transactions between segments. Cloudberry believes that propor- tionate reporting provides enhanced insight into the operation, financing and future prospects of the Group. Proportionate reporting is aligned with internal management reporting, analysis and decision making. Cloudberry is preparing for the adoption of the European Sustainability Reporting Standards (ESRS) required by the Corporate Sustainability Reporting Directive (CSRD). The framework is based on the structure Environment, Social and Governance (ESG). For more information see our Sustainability report. 1 See Alternative Performance Measure chapter for further definitions. Cloudberry Annual report 2023 Introduction 2 Cloudberry in brief Cloudberry is a renewable energy company, born, bred, and operating in the Nordics. We own, develop, and operate hydropower plants, wind farms and solar plants in Norway, Sweden and Denmark. We are powering the transition to a sustainable future by providing new renewable energy today and for future generations. As the junction box between capital, projects and local stakeholders, we balance respect for nature, biodiversity, and community values with sustainable and profitable growth. We believe in a fundamental and increasing long-term demand for renewable energy in Europe. With this as a cornerstone, we have built a sustainable and scalable platform for creation of stakeholder value. Cloudberrys growth strategy Our current portfolio in production and under construction in Norway, Sweden and Denmark consists of 25 hydropower assets and 105 wind turbines (organized in six projects). We have a local and active ownership strategy and prefer majority ownership; however, in certain investments we have shared ownership alongside strong, strategic partners. The scalable Cloudberry platform is positioned for profitable growth, both in terms of energy production and our in-house development portfolio. We are backed by strong owners and an expe- rienced management team. Our shares are traded on the Oslo Stock Exchange’s main list, ticker: CLOUD. Cloudberrys business model Cloudberry has a develop, own and operate business model of renewable assets. In 2023 Cloudberry was organised in three revenue generating segments and one cost-efficient corporate segment. Development is a green-field developer for hydro, wind and solar projects. Development has a solid track record of organic, in-house developments of wind and hydropower assets in Norway, Sweden & Denmark, and has recently started developing solar projects in Denmark and Norway. Production is an active owner of renewable power assets in the Nordics. Operations is an asset manager and operator of renewable assets including a digital operating platform. Our strong commitment to local communities and our integrated and responsible focus on the value chain ensures value creation and optimization of stakeholder interests. Our Nordic clean renewable platform Operations Development Production Our Values Be Supportive • Be Committed • Be Bold • Be Exceptional 3Cloudberry Annual report 2023 Introduction Letter from the CEO Cloudberry – Leading the way in the Nordic energy transition Letter from the CEO Cloudberry Annual report 2023 Introduction 4 Cloudberry’s purpose is to provide clean sustainable energy today and for future generations. With sustainability at the core and a strong culture, our team of exceptional people are all set on delivering on this sole purpose. We create local opportunities through our Nordic network and accretive project developments, while executing on our construction portfolio in a safe and sustainable way. This is our contribution locally and globally to the ongoing climate and energy crisis. The transformative Odin transaction marked a strong start to 2023. In May, Cloudberry completed the acquisition of 80% of the Odin portfolio from Skovgaard Energy A/S (“Skovgaard”). The agree- ment secured Cloudberry a majority stake in a portfolio consisting of 51 high-quality wind turbines in production and a long-term development agree- ment for future projects in Denmark. The Odin portfolio substantially contributed to the cashflow and diversified Cloudberry’s production profile with an estimated net production of 311 GWh. Entering into Denmark was a significant milestone in 2023, and we are very pleased to see how the relationship with Skovgaard is developing and how the Odin portfolio is performing. On the development side, we already observe a strong cooperation between Skovgaard and Cloudberry and anticipate that the Danish platform will add significant value to our development and production segments in the future. Together with Skovgaard we are partnering on a climate park project (“Nees Hede”), a highly inter- esting 175MW (140 MW proportionate) solar project. With falling prices on solar panels, Cloudberry sees opportunities integrating solar and wind assets. In a time with volatile power prices and capex costs, we continue to see how important it is to have a flexi- ble and diversified portfolio of renewable projects throughout the Nordics to minimize risk. Project execution remains a top priority for Cloudberry. In 2023 Cloudberry took an investment decision on the Munkhyttan project with first power already expected in 2024. We are very happy to see that the projects under construction are progressing according to plan and currently looking to meet time and cost targets with no safety issues. All turbines at Sundby are undergoing test-production, while the hydro project, Kvemma is complete and will soon be connected to the grid. In addition, we observe valuable developments in our pipeline and backlog “2023 has truly been a transformative year for Cloudberry; capitalizing on our network and competence to scale our Nordic renewable platform.” Anders Lenborg, CEO 5Cloudberry Annual report 2023 Introduction Anders J. Lenborg Chief Executive Officer projects throughout the Nordics. We believe local projects closely aligned with local stakeholders can add significant value to Cloudberry over time. We will continue to dedicate our time and resources to progress our backlog projects towards permitted projects. In 2023, Norway saw a significant negative impact from the resource rent tax proposal with consider- able resources devoted to assessing and lobbying for its outcome. The proposal has since been concluded, resulting in improvements for existing onshore wind projects compared to initial proposal, while new projects have achieved investment neutrality through cash compensation from the Norwegian state. Please see corporate segment for further assessment. As a result, we will continue to develop our Norwegian wind projects in our backlog. Moreover, Cloudberry will continue to focus on hydro projects in Norway, prioritizing wind in Sweden and pursuing both wind and solar projects in Denmark. Additionally, we are actively exploring storage oppor- tunities in connection with our projects to future optimize selected projects. We have also landed an ambitious “3 in 30” strategy in 2023 for Cloudberry towards 2030. Our ambition is to be involved in 3 TWh of producing assets, have 3 TWh of permitted projects and 3g CO 2 per kWh of emissions. Profitable growth and capital discipline remain key priorities in the short term. The successful sale of three hydropower plants in 2023 for record prices to a private infrastructure investor shows how Cloudberry can create value through the full life cycle of the assets. By keeping selected projects and farming down on others, we effectively recycle profits into new renewable projects. We have also started buying back own shares to take advantage of shares being traded well below our historical asset values. This is part of our value creation of maximizing shareholder value while financing new opportunities. In Cloudberry we have placed sustainability at the core of everything we do and view it as essential to our long-term achievements and value-creation. We treasure our local community and business partner- ships, and work closely with our employees, business partners, shareholders, neighbours, and other local community members to create this value and share the rewards fairly. Our stakeholders expect us to operate our business in line with the strongest envi- ronmental, social, and governance (ESG) principles and we have the same expectation of ourselves, as well as of our partners and suppliers. We strive to live the broad sense of sustainability in everything we do and hope our 2023 Sustainability Report will give you a deeper insight into Cloudberry’s ESG work in practice. We have also throughout the year seen the ben- efit of having the competence that sits within the Captiva organization and were pleased to become a 100% owner. Since its initial acquisition, Captiva have added significant value to Cloudberry’s hydro and wind development, procurement & construction pro- cesses as well as being recognized as a renowned asset manager for power plants in the Nordics. With this acquisition, Cloudberry aims to further integrate key business areas within Captiva to optimize scala- bility and operational efficiency. A transformative year for Cloudberry would not have been possible without the exceptional dedication and outstanding performance of all Cloudberry col- leagues. I would like to thank my colleagues for their hard work and commitment in another year where Cloudberry continue to pioneer the industry. I would also like to thank the Board of Directors and our shareholders for their continued support for building The Leading Nordic Independent Power Producer. Cloudberry is perfectly positioned for the future energy demand with a flexible Nordic platform, a large project portfolio, a dedicated and competent team with solid funding. Cloudberry Annual report 2023 Introduction 6 We deliver our construction projects on time and at or below budget 7Cloudberry Annual report 2023 Introduction Overview and highlights 1 Asset portfolio per reporting date with proportionate ownership to Cloudberry i.e. excluding sold assets. Production figures represent normalised annual production. Production Production incl. under construction 1 In production Capacity: 267 MW Production: 825 GWh Under construction Capacity: 27 MW Production: 80 GWh Total Capacity: 294 MW Production: 905 GWh Development Construction permit Capacity: 200 MW Production: 333 GWh Backlog Backlog (exclusive projects) Projects: 20 Capacity: 625 MW Pipeline (non-exclusive projects) Projects: >20 Capacity: >2 500 MW Norway 116 MW Denmark 100 MW Sweden 78 MW Production portfolio incl. under construction Cloudberry continues to deliver profitable growth. In 2023, the company has increased its production & development portfolio, strengthened its balance sheet and increased the facility agreement with local savings banks. Below is an overview of our portfolio per reporting date. Cloudberry Annual report 2023 Introduction 8 Main developments in 2023 Financials (per 31.12.2023, consolidated figures unless otherwise stated) • Revenue increased almost three times, from NOK 217m to NOK 610m • EBITDA significantly improved from NOK 151m to NOK 263m • Proportionate EBITDA improved from NOK 381 to NOK 401m • Strong balance sheet and low debt. Cash position of NOK 779m • Booked equity increased from NOK 3 794m to 4 617m Operational • Cloudberry acquired 80% of the Odin portfolio from Skovgaard Energy A/S (“Skovgaard”) including land and a long-term exclusive development agreement of new projects. The production portfolio consisting of 51 Vestas and Siemens turbines in total 106 MW (net to Cloudberry). A game changing step into the attractive Danish market, creating a strong and diversified position for Cloudberry • Cloudberry shows significant value creation through the sale of three hydropower plants for a transaction value of NOK 703 million, yielding an internal rate of return (IRR) of above 55% p.a. to Cloudberry or 2.0x the booked equity • Increased debt facility with NOK 800m to a total of NOK 2 200m • Final investment decision on Munkhyttan I. An 18.6 MW project in the attractive SE-3 region. Revenue generation is expected by end of 2024 • All projects under construction are progressing according to time and cost with no safety issues. Sundby is expected to be delivered below budget • Acquired the remaining 40% of Captiva to become a 100% owner. Asset management, procurement and development in Captiva will be fully integrated, while the digital platform will undergo a strategic review • Signed a three-year power purchase agreement (“PPA”) for 31.5 GWh annual proportionate production in DK-1 with a fixed power price of DKK 0.77 per kWh (NOK 1.18 per kWh) • Realised power price of NOK 0.75 per kWh in 2023 • Proportionate production increased 94% from 268 GWh to 520 GWh • Cloudberry is preparing for the Corporate Sustainability Reporting Directive (CSRD) and has conducted a double materiality assessment following CSRD guidelines. A gap assessment and limited assurance of the greenhouse gas (GHG) emission reporting have been performed and approved by a third-party auditor. Furthermore, Cloudberry has committed to both near-term and long-term emission reductions, aligning with the Science Based Target Initiative (SBTi). • Received an environmental certification from “Bra Miljöval” (Good Environmental Choice). The certificate demonstrates that the electricity production from the Sundby wind farm meets a set of environmental criteria, including biodiversity. This allows Cloudberry to increase the value of the Guarantees of Origin (GOs), leading to increased revenues from the production of renewable energy. Cloudberry aims to obtain Bra Miljöval certification for additional power plants in our portfolio Subsequent events • Nees Hede (140 MW proportionate Solar). Acquired the Nees Hede project in February 2024. Ready to construct 140 MW solar in the attractive DK-1 region. Cloudberry is prioritizing Nees Hede due to the project’s strategic fit and attractive business case (sharp fall in solar panel prices) as the first project from the development agreement in Odin • In February 2024 Odin Energy Holding received a payment of EUR 6m (EUR 4.8m proportionate to Cloudberry) under the previously reported power purchase agreement with Skovgaard, entered into in combination with the Odin transaction 9Cloudberry Annual report 2023 Introduction Portfolio development compared to last year Producing Under construction Permitted 20232022 267 148 40 128 316 27 200 494 Portfolio development MW Project overview 1 Cloudberry became a public company in 2020 with 3 MW of hydro and wind assets under production and 12 MW under construction. Cloudberry listed as a unique exposure to an attractive market through a scalable and efficient platform for growth within Nordic renewable assets. Since then, Cloudberry’s focus has been to grow the producing platform while also continuously increasing the development platform. This to create a robust running cashflow through increased power sales supported by a strong balance sheet. Per the reporting date the portfolio has grown to 267 MW under production, and a total of 494 MW when permitted projects and projects under construction are included. 1 Per reporting date Cloudberry Annual report 2023 Introduction 10 The figures below summarize the status of our projects Project Technology Location Price area Total capacity (MW) Ownership Cloudberry's proporionate capacity (MW) Cloudberry's estimated production (GWh) Status Røyrmyra Wind Norway NO-2 2 100% 2 8 Producing Forte (5 assets, NO-2) Hydro Norway NO-2 26 34% 8 29 Producing Forte (4 assets, NO-3) Hydro Norway NO-3 19 34% 6 21 Producing Forte (6 assets, NO-5) Hydro Norway NO-5 33 34% 11 37 Producing Finnesetbekken Hydro Norway NO-5 1 100% 1 3 Producing Bjørgelva Hydro Norway NO-4 3 100% 3 7 Producing Usma Hydro Norway NO-3 9 100% 9 26 Producing Tinnkraft Hydro Norway NO-2 2 100% 2 6 Producing Bøen I & II Hydro Norway NO-2 6 100% 6 18 Producing Ramsliåna Hydro Norway NO-2 2 100% 2 6 Producing Skåråna (2 assets) Hydro Norway NO-2 4 100% 4 14 Producing Odal Vind Wind Norway NO-1 163 33.4 % 54 176 Producing Hån Wind Sweden NO-1 21 100% 21 74 Producing Odin 1 Wind Denmark DK-1 1 133 80% 106 311 Producing Sundby Wind Sweden SE-3 32 100% 32 89 Test Production Total 1 (Producing) 454 267 825 Kvemma Hydro Norway NO-5 8 100% 8 20 Const/Prod. H1 2024 Munkhyttan Wind Sweden SE-3 19 100% 19 60 Const/Prod. H2 2024 Total 2 (Producing + under constr.) 481 294 905 Duvhalllen Wind Sweden SE-3 60 100% 60 165 Constr. permit Nees Hede Solar Denmark DK-1 175 80% 140 168 Constr. permit Total 3 (Prod. + const. + permit) 716 494 1 238 1 Odin portfolio. 288 GWh in DK-1. 18 GWH in SE-3. 6 GWh in DK-2 price region 0 100 200 300 400 500 Total Duvhallen Nees (80%) Total Munkhyttan Kvemma Total Sundby Odin (80%) Hån Odal (33.4%) Hydro, small scale Hydro, Forte (34%) Røyrmyra Producing Under construction Construction permit 2 25 MW 106 54 27 21 32 267 8 19 294 140 60 494 11Cloudberry Annual report 2023 Introduction Cloudberry has organized its development activities into three regional focus areas Norway Primarily hydro development, including industrial wind projects (Cloudberry & Captiva) Sweden Primarily wind development, including storage (Cloudberry) Denmark Wind and solar development (Cloudberry & Odin/Skovgaard) The backlog consists of 20 exclusive projects (625 MW) across the Nordics · 7 Hydro projects · 10 Onshore wind projects · 2 Solar projects · 1 Storage project Development portfolio Cloudberry has since listing in 2020 focused on building a robust backlog and pipeline of new development opportunities across the Nordics. Through the acquisition of Odin (Skovgaard partner) and Captiva, the development competence and access to greenfield opportunities have been strengthened significantly and put into a greater industrial framework. As of today, Cloudberry has an onshore pipeline of 7 TWh (> 2 000 MW) across the Nordics and an exclusive backlog of 625 MW. Focus has been on projects where we can see favorable economic returns and relatively low impact. We believe several of these projects will add significant value to Cloudberry over time as available renewable projects in the southern parts of the Nordics are getting more and more restricted (i.e. regulations, nature impact, local stakeholder interests) while the need for green power is increasing. Cloudberry is also working with several large and undisclosed forest owners (land access) and established industrial companies (off-taker of green power) across the Nordics in order to create favorable projects for both parties. Cloudberry Annual report 2023 Introduction 12 NO4 700 GWh NO3 >200 GWh NO5 (Small Hydro) SE3 >4 500 GWh (onshore) SE2 >3 000 GWh (Near-shore) SE2 SE3 >5 000 GWh (Near-shore) DK1 >1 000 GWh SE4 >100 GWh NO1 >500 GWh NO2 >200 GWh Overview of our non-exclusive pipeline The pipeline consist of hydro, onshore & near-shore wind, solar and storage projects Local development teams in Norway, Sweden & Denmark with long-lasting networks and strong track records. These are projects where there are ongoing local dialogues, where land lease agreements are being negotiated and where we see potential Nordic pipeline > 7,000 GWh on-shore Nordic pipeline > 7 000 GWh onshore 13Cloudberry Annual report 2023 Introduction We positively impact the decarbonization of Europe by providing clean energy eq. of 104 000 households. Calculated based Eurostat’s average electricity consumption in Europe from 2 500 – 5 000 kWh, with 5 000 kWh used. Cloudberry Annual report 2023 Introduction 14 Key Performance Measures 2023 2022 Financials Consolidated FY Revenue 610m 217m EBITDA 263m 151m Cash 789m 1 538m Interest-bearing debt 1 585m 339m Total equity 4 617m 3 794m Proportionate FY Revenue 711m 646m EBITDA 401m 381m Sustainability 1 Proportionate CO 2 reduction EU-27 electricity mix 121 836 tons CO eq. 59 496 tons CO eq. Direct and indirect emissions 12 891 tons CO eq. 10 529 tons CO eq. Development Proportionate Construction permits year-end 2 200 MW 128 MW Backlog year-end 625 MW 420 MW Production Proportionate Production 520 GWh 268 GWh In operation year-end 267 MW 148 MW Operations Proportionate Asset Management & Advisory year-end 2 300 MW 1 100 MW 3 1 CO 2 reduction and the direct and indirect GHG emissions have been adjusted for previous years. Go to the Sustainability section for details. 2 Construction permit includes the 140MW proportionate Nees Hede solar project which was closed subsequent to the balance sheet date. 3 Cloudberry 100% owner of Operations year end 2023 (60% ownership year end 2022. 15Cloudberry Annual report 2023 Introduction Market and power prices For the year 2023, the Nordic system price averaged at EUR 59/MWh, a significant increase compared to historical price-levels of EUR 30 to 40/ MWh 1 , but a decline from EUR 136/MWh in 2022. The shortfall of Russian gas on the back of the war in Ukraine created a highly volatile power market in 2022 with peaking power prices. Throughout 2023 the European power markets have rebalanced with lower gas prices and a mild winter. Looking towards 2030, Volue expects that the Nordic system price will increase (real 2023 terms) with increased consumption and declining power balances. New interconnectors and high level of power exchanges with the continental Europe will most likely continue to influence Nordic prices in a positive way for Cloudberry. This effect will be further increased with the opening of the Viking Link from Denmark to the UK. The internal price differences in the Nordics were also evident in 2023, with a difference of above EUR 50/MWh from the northern parts of Norway and the favourable DK1 price region in the south. This price differences from the northern price regions and the higher southern regions are expected to continue due to significant grid bottlenecks from north to south in the Nordic countries. The demand for more power in Europe is expected to increase going forward, and there is a clear push towards renewables following EU initiatives. Overall, the outlook caused by the energy transition and the market conditions is expected to serve as a founda- tion for sustained high power prices going forward, stabilizing at a level higher than before the European energy crisis in 2022. We remain positive to elevated Nordic power prices especially in the southern price areas which are connected to continental Europe through inter- connectors (Sweden: SE3&4, Norway: NO1&2&5, Denmark: DK1&2). In Norway, growth in new demand is expected to be driven primarily by emerging electrification projects and power-intensive industries. This, along with limited growth in power production capabilities is anticipated to shift the country’s expected power balance towards negative territory. Lower power surpluses will add pressure on Norwegian, and thus Nordic power prices. Please see chart on the next page for the projected power balance in Norway from Statnett. Power purchase agreements (fixed price contracts) are continuously evaluated as Cloudberry is reach- ing more stable production across several price regions in the Nordics. The overall ambition for Cloudberry is to achieve a hedge amount covering all interest expenses and overhead costs (approx. 30% hedging). This will be phased in over time. Per year end 2023, Cloudberry had the following hedges in place which represents approx. 10% compared to total estimated annual production for producing assets including under construction. Asset Contract (Annual GWh) Expiry Type NO-2 8 2024 Baseload NO-2 4 2027 Baseload DK-1 37 2027 Pay as produced DK-1 13 2023 Pay as produced DK-1 32 2026 Baseload (starting 01.01.2024) Total 94 Volumes are proportionate to Cloudberry Another important revenue stream for Cloudberry is Guarantee of Origin certificates (GOs). GOs is a rec- ognized method of proving that a unit of electricity was generated by a renewables source. One MWh of power production from a renewable power source grants one certificate. GOs are usually sold directly through bilateral process. Throughout 2023 GOs has proven to be an important source of income provid- ing prices of above EUR 5/MWh for all renewable energy production in the Nordics. 1 See chart on the next page for data from Volue. Cloudberry Annual report 2023 Introduction 16 0 40 80 120 160 2012 2014 2018 2022 20262016 2020 2024 2028 2030 Signed 3-year PPA at NOK 1.18/kWh in Q4 23 (DK1) Realized NOK 0.75/kWh in 2023 20 -5 0 5 10 15 2023 2024 2025 2026 2027 2028 Norway (all) Southern Norway Historic and forward estimates of the Nordic system price average 2012-2030 EUR/MWh (real 2023) Source: Volue Q4 2023 report (EUR/MWh, not inflation adj.) Source: https://www.statnett.no/globalassets/for-aktorer-i-kraftsystemet/ planer-og-analyser/kma/kortsiktig-markedsanalyse-kma-2023-2028.pdf Norway’s power balance soon in negative territory TWh 17Cloudberry Annual report 2023 Introduction Executive Management Anders J. Lenborg Chief Executive Officer Anders is the founder of Cloudberry. He is responsible for managing the company’s overall operations, the development and execution of the long- term strategies. Anders is an experienced lawyer within the infrastructure and renewable energy section in the Nordics. Anders was previously Partner and Head of the Energy Sector Group at DLA Piper Norway. He holds a law degree from the University of Oslo and a postgraduate diploma from King’s College in London. Christian A. Helland Chief Value Officer As CVO, Christian is responsible for the finances of the company. Since 2008, he has been a lead investor for renewable projects in the Nordics and Germany. He has 13 years of experience in the investment and finance industries. He was previously Partner and Portfolio Manager at Pareto Asset Management. Christian holds a Master’s degree in Systems Engineering from Cornell University, a Master’s degree in Business Economics from University of California and a Bachelor of Science degree in Mechanical Engineering from University of California. Ingrid Bjørdal Chief Compliance and Organization Officer Ingrid started in Cloudberry in 2022 and is responsible for compliance, ESG, organisation and communication in the Group. Ingrid has 20 years of experience from sustainability, HSE, compliance, HR and organisational development from the recycling and circular economy industry. She was SVP of Sustainability and Compliance in the Norsk Gjenvinning Group and has held the position as General Manager of two subsidiaries in the Group. She holds a Master of Science from King’s College in London and an Executive MBA from BI Norwegian Business School. 1 There will be adjustments to the Executive Management team i 1H 2024. Among the changes are a new CFO, Ole-Kristofer Bragnes, with effect from 1 July 2024 (see notification to the stock exchange 8 Feb. 2024) and a new roll for Christian Helland as Cheif Commercial Officer has been established. 1 Cloudberry Annual report 2023 Introduction 18 Charlotte Bergquist Chief Development Officer Charlotte is from 2022 responsible for the Development segment with a special emphasis on Cloudberry’s shallow-water and offshore portfolio. She is a former developer for wpd Offshore, Vice Chair of the Board at the Swedish TSO, Svenska Kraftnet, Chairperson of Power Circle and the Founder of Kraftkvinnorna. Charlotte has a Master of Business Admin. from Gothenburg School of Economics and Commercial Law. Stig J. Østebrøt Chief Technology Officer Stig has been the CEO of the Captiva Group for the last 10 years and responsible for Cloudberry’s operations segment from 2022. He is the Chairperson of Kraftanmelding, Chairperson of Fjord Energi and a former analyst from EY. Stig has an Executive MBA from Norwegian School of Economics and a Master’s degree from BI Norwegian Business School. Jon Gunnar Solli Chief Operating Officer Jon Gunnar is responsible for day-to-day operations of the Cloudberry portfolio. He is a former CFO and investment manager with more than 20 years of experience in the asset management industry. Jon Gunnar was previously a CFO/CIO at OVF, Nordea Asset Management, SpareBank 1 Livsforsikring and Storebrand. He holds a Master’s degree in Accounting & Auditing from Norwegian School of Economics (NHH) and is a state authorized Public Accountant. 19Cloudberry Annual report 2023 Introduction Board of Directors Tove Feld Chair of the Board Tove Feld has 30 years’ experience from the Energy and Infrastructure sector with a focus on Renewables. In executive positions in leading global players such as Ørsted, Siemens Gamesa, Dong Energy and DNV, she has worked with international business development and strategy. She has over 10 years of vast board experience from private and listed companies in the Nordic and the UK, incl. the current posts in TRIG, YARA, Venterra Group, Force Technology and NEXEL all supporting the green energy transition. Tove is head of the Compensation Committee and member of the Audit Committee in Cloudberry. She is a UF Engineering Graduate with a Ph.D from Aalborg University and Executive MBA from IMD. Tove Feld is a Danish citizen. Nicolai Nordstrand Board member Nicolai Nordstrand is the CEO of Havfonn AS, the family office at the Bergesen family. He has worked at Havfonn for nine years as Analyst, Investment Director and now CEO. Before joining Havfonn, he worked more than 10 years with corporate finance in PwC in Oslo and London and Sparebank 1 Markets. Nicolai is head of the Audit Committee in Cloudberry. He holds a Master of Science in Financial Economics from BI Norwegian Business School. Nicolai Nordstrand is a Norwegian citizen. Benedicte H. Fossum Board member Benedicte H. Fossum currently chairs the board of Smartfish AS and is a board member of Alliero AS, Salmo Trace AS and family offices. As one of the founders of Pharmaq AS, she has managerial experience in R&D, M&A, and regulatory affairs from the Norwegian Medicines Agency. She maintains a special interest in sustainability, combining biological and economic perspectives. Benedicte is head of the ESG Committee in Cloudberry. Benedicte is a veterinarian from the Norwegian University of Life Sciences. Benedicte H. Fossum is a Norwegian citizen. Petter W. Borg Board member Petter W. Borg has more than 35 years of experience in investment banking and asset management. He is the former CEO of Pareto Asset Management, a position he held for 18 years. Petter is the chairperson of House of Maverix. In addition, he is a member of the board of directors of Ferd Holding, Grieg Investor, Attivo Eiendom, Langfonn, Solfonn, Storstein and Nordic Aquafarms. Petter is member of the Compensation Committee and the ESG Committee in Cloudberry. He holds a degree in Economics from Handelsakademiet. Petter W. Borg is a Norwegian citizen. Cloudberry Annual report 2023 Introduction 20 Stefanie Witte Board member Stefanie Witte is a Director with responsibility for Google’s operating system in the German speaking countries, the Nordics and Poland. Over the last eleven years she has had leading positions in Google, like Head of Marketing for Android, Google’s own hardware and advertising products. Stefanie worked previously six years in leading positions at Novartis after three years as a consultant in McKinsey. She is represented at the board of several tech companies in Norway and Germany. At Cloudberry, she is a member of the Compensation Committee. Stefanie holds a M.A HSG Finance, Accounting and Controlling from the University of St. Gallen. Stefanie Witte is a German citizen. Henrik Joelsson Board member Henrik Joelsson heads his own consultancy firm and has formerly worked 13 years as an Investment Director at the listed investment firm Ratos AB. Furthermore, Henrik has 9 years of experience as a strategic consultant at Bain & Company. Henrik has broad board experience and has been an active investor, board member and consultant within the energy sector, with a specific focus on renewables. He is currently a board member of Teqnion AB and Goava Sales Intelligence AB. Henrik is member of the Audit Committee in Cloudberry. He holds a Master of Science in Business Administration and Economics from Stockholm School of Economics and a MBA from INSEAD in France. Henrik Joelsson is a Swedish citizen. Alexandra Koefoed Board member Alexandra Koefoed starts a new position as Vice President Offshore Wind Solution in Kongsberg Renewable Technologies AS in April 2024. She held the position as CEO of Fred. Olsen Windcarrier ASA from 2018-2024 and worked in various positions within renewables in the Fred. Olsen group of companies since 2010. Prior to her work for Fred. Olsen, she worked in several technical roles in Aker Marine Contractors. Alexandra’s operational, technological and commercial experience, combined with her deep knowledge of the renewable supplier industry is particularly valuable as a board member of Cloudberry. Alexandrais a member of the ESG Committee in Cloudberry. She holds MSc Ocean Engineering, Hydrodynamics, from the Norwegian University of Science and Technology (NTNU) and UC Berkeley. Alexandra Koefoed is a Norwegian citizen. 21Cloudberry Annual report 2023 Introduction We utilized existing infrastructure at Sundby wind farm to minimize footprint and maximize output. Cloudberry Annual report 2023 Board of Directors report 22 Cloudberry owns, develops, and operates hydropower plants, wind farms and solar plants in the Nordics. Over the recent years, Cloudberry has built a scalable listed Nordic renewable platform. The platform was strengthened and diversified by the transformative entry into Denmark through the Odin acquisition in 2023. Cloudberry is perfectly positioned for the energy transition with a fully financed industrial platform supported by the team and capability to executed on the projects. Cloudberry is backed by strong owners and an experienced management team, powering the transition towards a sustainable future by providing clean and renewable energy. Cloudberrys business model and strategy The Company has an integrated business model to develop, own and operate renewable assets in the Nordics. The organisation consists of three revenue generating segments: Development, Production and Operations, alongside a cost efficient Corporate segment. A sustainable and local approach is key to Cloudberry’s overall strategy, underscored by a commitment to long-term value creation for all stakeholders. Cloudberry focuses on proven and uncorrelated technologies across the Nordic countries. The follow- ing table details the strategic focus areas for both Development and Production going forward as well Board of Directors report Where to play – Proven and uncorrelated technologies Regions Hydro Wind Solar Storage Denmark DK1 & DK2 Norway NO1, NO2 & NO5 IRR driven IRR driven Sweden SE3 & SE4 IRR driven Exploring Finland FI Exploring 23Cloudberry Annual report 2023 Board of Directors report as the ongoing exploration efforts. IRR driven illus- trates that Cloudberry is evaluating these projects but have higher return requirements, particularly when compared to the same technology in other regions. The Development segment consists of green-field projects both onshore and off-shore with a solid track record of organic, in-house development of wind and hydropower assets. Cloudberry has also started process of developing solar plants in 2023. The Production segment is the owner of the oper- ating assets, with power sold in the spot market (NordPool) and under fixed price Power Purchase Agreements (PPAs). Cloudberry cultivates the portfolio to ensure a diversification and balance of risk, returns, assets and geographical areas. The Operations segment delivers services such as asset management of hydro and wind assets, including digital solutions. The services are created on a scalable operational platform, delivered to both Cloudberry and third parties. Cloudberry considers material financial, legal, market, political, ESG, and technical related factors when making strategic decisions. The company has a robust balance sheet and competitive financing in order to deliver sustainable and profitable long-term growth. Cloudberry operates in a market with unique char- acteristics when it comes to renewables; with hydro and wind resources in the Nordics being among the best in the world. The company uses its local pres- ence and the optimization of stakeholder alignment to grow through greenfield developments and acquisitions. In 2023, Cloudberry landed an ambitious “3 in 30” strategy for 2030. Our ambition is to be involved in 3 TWh in production, 3 TWh of permitted projects, and 3g CO 2 per kWh of emissions. However, while pursuing this ambition, Cloudberry remains commit- ted to capital discipline, prioritizing profitability over growth. Cloudberry believes in being local, focused, and agile. The long-term growth strategy rests upon our ability to create value for our stakeholders, using the best possible technology, ensuring cost-effective operations, and promoting sustainability. Sustainability at Cloudberry Cloudberry follows closely the developments in demands and requirements for operating in a sus- tainable way and reporting according to new and upcoming ESG standards. The Company is currently preparing to comply with the requirements of the EUs Corporate Sustainability Reporting Directive (CSRD) based on the European Sustainability Reporting Standards (ESRS). During 2023, the com- pany improved its double materiality assessment (DMA) to comply with the criteria in CSRD. The assessment discloses the material sustainability topics in Cloudberry, including our impact on the environment, people, and society, along with the financial risks and opportunities that we are exposed to. Our preparations for alignment with the CSRD will continue in 2024. At Cloudberry, we greatly value our stakeholders. Providing them with a transparent insight into how we identify and address the most material impacts of our activities, as well as the areas we need to improve, is fundamental. The following sections are a summary of Cloudberrys key performance during 2023. More detailed information describing our work with sustainability, the conducted DMA, and our ongoing efforts to enhance our practices can be found in the Sustainability report 2023. Environment Environmental concern and climate change mitigation are at the core of everything we do at Cloudberry. Our main ambition is to power the transition to renewable energy aiming to be climate and nature positive. During 2023, Cloudberry has worked to improve the monitoring and reporting procedures for our green- house gas (GHG) emissions. A gap assessment and limited assurance of the GHG emission reporting have been performed and approved by a third-party auditor. In addition to improving the completeness and transparency of Cloudberrys GHG accounting, the company has committed to near-term and long- term targets to reduce emissions in line with the Science Based Target Initiative (SBTi). The net-zero target has been approved by the SBTi and sets the foundation for Cloudberry to establish a roadmap Cloudberry Annual report 2023 Board of Directors report 24 for reducing our emissions. 2022 is set as the base year for both short-term and long-term targets, and KPIs and measures for a decarbonization plan towards the net-zero target will be integrated into all business units and reviewed by the management and the Board of Directors annually. In 2023, Cloudberry’s GHG emissions from Scopes 1, 2, and 3 were 12 891 tons CO 2 e (10 529 tCO 2 e in 2022). Additional information regarding the reporting principles, methodology, factors, and a breakdown of the GHG emissions from all business units, can be found in the Sustainability report. Cloudberry contributes positively to the energy mix by reducing GHG emissions through the production of renewable energy. The positive renewable con- tribution (also referred to as “avoided emissions” or “scope 4”) relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2023) 1 , is equivalent to a reduction of 121 836 tCO 2 e (59 496 tCO 2 e in 2022) in the electricity grid. For more information regarding Cloudberrys positive contribu- tion to the decarbonization of the energy mix, please refer to the Sustainability report. Cloudberry has conducted an assessment of all its renewable assets against the criteria in the EU Taxonomy and all assets met the requirements for alignment with the categories for ‘climate mitiga- tion’ and ‘climate adaptation’. This achievement underscores our commitment to the principles of substantial contribution, doing no significant harm, and adherence to minimum safeguards, ensuring that our assets are operated sustainably and with a minimal environmental footprint. Furthermore, the Group’s key performance indicators as outlined in the Taxonomy for eligible and aligned Turnover, Capex (capital expenditure) and Opex (operating expenses) grew in absolute and proportional terms from that reported in 2022. These results highlight the Group’s dedication to sustainability and environ- mental responsibility. Please refer to the chart on the right hand side for the full year 2023 results. Cloudberry has published a stand-alone EU Taxonomy Report for 2023 on the company’s website. In 2023 Cloudberry incorporated the newly acquired wind farm portfolio Odin in Denmark in the climate risk assessment adhering to the guidelines set forth by the Task Force on Climate-related Financial Disclosures (TCFD). A summary including the sce- nario-based climate risk assessment is described in the Sustainability report, and a more detailed TCFD report is published on our website. In organizing our efforts around biodiversity, we will use the framework from the Taskforce on Nature- related Financial Disclosures (TNFD). During 2023, Cloudberry assessed strategies and implemented measures to minimize our natural impact, enhance biodiversity, and support the local ecosystem, tailored to the unique conditions of the area and the provisions outlined in the concession and devel- opment plan. Cloudberrys biodiversity and nature policy is being integrated into all of Cloudberrys projects. Cloudberry has recently received an environmental certification from “Bra Miljöval” (Good Environmental Choice) which demonstrates that the electricity production from the Sundby wind farm meets a set of environmental criteria, including biodiversity. This allows Cloudberry to increase the value of the Guarantees of Origin (GOs), leading to increased revenues from the production of renewable energy. In addition, Cloudberry invests in initiatives through Bra Miljöval funds aimed at improving biodiversity and reducing the environmental footprint of electric- ity production. Cloudberry continues to certify more power plants in our portfolio through Bra Miljöval. 1 Adjusted according to the new factor EU-27 electricity mix 2023 Aligned Turnover NOK 333m 2022: NOK 208m Eligible - Taxonomy aligned 81% Non- Eligible 19% 81% Aligned Capex NOK 550m 2022: NOK 324m Eligible - Taxonomy aligned 95% Non- Eligible 5% 95% Aligned Opex NOK 20m 2022: NOK 12m Eligible - Taxonomy aligned 96% Non- Eligible 4% 96% 25Cloudberry Annual report 2023 Board of Directors report Social Cloudberry shall always act responsibly towards our employees and society at large, including all groups impacted by our operations, to be a preferred employer and partner in the renewable energy industry. In 2023, no incidents causing harm to peoples health or serious material damage were recorded in Cloudberrys projects. At Cloudberrys headquarters, an employee had a minor injury which implied lost time injury. The organization’s rate of absence due to illness was 3.12% (1.66%). The increase in sick leave was mainly due to one long-term sick leave which was not work related. Among the documented work-related injuries, none were categorized as severe injuries. However, at a construction site, a tree fell and landed on a parked car due to strong winds. No individuals were in the immediate vicinity and no personal injuries occurred. Our Supplier Code of Conduct (SCoC) encompasses health and safety measures to foster a shared com- mitment between Cloudberry and our suppliers and contractors and is implemented in all relevant pro- curement processes. Additionally, health and safety are outlined in our Code of Conduct, Guidelines for Responsible and Sustainable Investments, ESG due diligence guidelines, Whistleblower Policy, Suppliers declarations form, and in the Health and Safety Plan for the Work Environment. In 2023, Cloudberry facilitated two workshops for all employees centred around company behaviour, culture, values, and strategy. Cloudberry also con- ducted the annual engagement survey focusing on HMS, compliance, work-life balance, and diversity, equity, and inclusion (DEI) in the workplace. The result from the survey gave a DEI index of 5.3 and an engagement index of 5.3, where 6 is the maximum possible score. Both are improvements from 5.2 in 2022. Cloudberry is committed to fostering the development and welfare of its workforce, with the goal of not only sustaining a robust and enthusiastic team but also driving engagement and sustainability within the organization. Cloudberrys own workforce is outlined in more detail in the Sustainability report. At Cloudberry, 28% of employees are female, which is below the target of 35% in 2023. The company intends to improve the ratio to a minimum of 40% by 2025. The number of female managers is on target with 33%. The number of female board of directors is above the target and legal requirement of > 40% with 57%. Cloudberry acknowledges the importance of creating a balanced workforce and will continue to promote DEI internally and externally to improve the diversity and inclusion of all employees in Cloudberry and the renewable industry in general. Additionally, Cloudberry needs to ensure that our initiatives on the local projects not only contribute to value creation within the communities where we operate but also encompass economic contribu- tions, as well as biodiversity restoration, and environ- mental improvement. Our efforts include generating employment opportunities, collaborating with local businesses such as contractors, offering educational programs, contributing to community projects, and beyond. We strive to evaluate how local stakeholders perceive and benefit from our efforts to create value in their communities. Moving forward, a key priority will be to develop suitable key performance indica- tors for tracking and reporting the value we deliver to local communities, as well as the wider impact we make on them. Governance Cloudberry believes that responsible governance is essential for building a strong business foundation. It is our ambition to consistently uphold strong gov- ernance practices both within our organization and throughout our value chain. Commitment to sustainability begins with the company’s Board of Directors and management team. The ESG Committee serves as a preparatory and advisory body for the Board. The committee is responsible for overseeing the administration’s execution of the sustainability strategy across all business units, and to discuss and assess the companys sustainability topics. In 2023, the commit- tee held nine meetings, marking an increase of one meeting from 2022. Cloudberry’s commitment to governance and sustainability topics remains the same, with busi- ness conduct at its core. In 2023, the intensifying discussions regarding tax regulations on renewable assets led to the emergence of a new material topic: “favourable framework for renewables”. The primary governance priorities focused on fostering favourable future conditions of renewable energy development and maintaining a responsible busi- ness conduct and supply chain. Cloudberry Annual report 2023 Board of Directors report 26 There were no incidents of corruption or fraud reported in 2023. Furthermore, our renewable hydro and wind power plants experienced no incidents of concession breaches. Preventing breaches, corruption and bribery incidents is crucial for legal compliance, environmental protection, and the preservation of trust among stakeholders. Cloudberry received its first whistleblowing notifi- cation in 2023, concerning a possible discrimination case in a recruitment process. Following an inves- tigation, it was determined that the recruitment process did not involve any misconduct. Cloudberry encourages both internal and external stakeholders to report misconduct through the whistleblowing channel accessible on our website. The companys Code of Conduct is reviewed and updated regularly. The annual Code of Conduct training session for the entire workforce was con- ducted during 2023, where subjects like governance and compliance, encompassing anti-corruption initiatives and whistleblowing, were highlighted. In 2023, Cloudberry continued the important work on risk management in the supply chain. Internal routines and procedures for material procurement are being revised to include essential policies and procedures. Additionally, Cloudberry conducted the annual due diligence assessment following the OECD and UNGP Guidelines, specifically focusing on human rights and decent working conditions in the supply chain. The Transparency Act 2023 report will be published by 30 June 2024. The Supplier Code of Conduct (SCoC) outlines Cloudberry’s ethical expectations for our suppliers. All relevant suppliers must comply with the SCoC, and adherence must be implemented in the pro- curement process. Furthermore, commitments are applied within the suppliers’ operations and extended to their sub-suppliers. The SCoC under- goes periodic updates by the organization. We believe that securing responsible business con- duct, internally and in our value chain, contributes to a long-term positive reputation making Cloudberry a desirable employer and business partner. Cloudberrys key performance summary for 2023 is summarized in the table below. The company adheres to recognized governance standards and shall comply with the Norwegian Code of Practice for Corporate Governance of October 2021, issued by the Norwegian Corporate Governance Board (NUES). This includes having principles for disclosure and transparency in Cloudberrys business to provide shareholders and stakeholders with precise and accurate information concerning all aspects regarding Cloudberry. Cloudberry provides details of its sustainability work in The Annual Report and specifically in the sustainability and corporate governance sections. Cloudberry’s reporting requirements under section 3-3 a and c of the Norwegian Accounting Act are as such addressed in this section. Actual 2023 Actual 2022 Environment 1 GHG emissions avoided tCO2e 121 836 59 496 GHG emissions tCO2e 12 891 10 529 Social 2 Work injuries (incl. Sub-contractors) 1 0 Employee engagement index 5.3 5.2 Equal opportunities index 5.3 5.2 Female employees % of total 28% 24% Female BoD % in total BoD 57% 43% Sick leave own workforce 3.12% 1.66% Governance Whistle-blowing incidents 1 0 Corruption and bribery incidents 0 0 Compliance training 100% 36% Breach of concession 0 0 1 The CO2 reduction and the direct and indirect GHG emissions have been adjusted for 2023. See the Key performance summary and the Environment section for details. 2 Work injuries defined as lost time injury. See Key performance summary and the Social section for details. The results from the Employee engagement index and the Equal opportunities index originate from the latest survey in 2023. The maximum possible score is 6. See Key performance summary and the Social section for details. From 2023 the reporting covers all subsidiaries in the Group. Female employees % of total has been adjusted for 2022. 27Cloudberry Annual report 2023 Board of Directors report Financial Performance Financial summary Cloudberry witnessed significant growth in 2023, with revenues nearly tripled on the back of increased production and sustained high power prices. The group reports a robust balance sheet with low debt and a cash position of NOK 779m. Additionally, available bank facilities increased with NOK 800m in 2023 to a total of NOK 2 200m where approximately NOK 950m remains undrawn. The Production portfolio grew during 2023 primarily driven by the acquisition of the Odin portfolio in the second quarter of 2023. The acquisition more than offset the sale of three hydropower plants, which were sold at historical high prices in the Nordics. By year end, our current portfolio in production and under construction in Norway, Sweden and Denmark consists of 25 hydropower assets and 105 wind turbines (organized into six projects), wholly and partially owned. The Development segment achieved several stra- tegic milestones throughout the fiscal year. Key developments include the final investment decision on Munkhyttan I (SE-3) taken in June 2023, increasing Cloudberry’s wind power production in the attractive SE-3 area of Sweden. Project execution remains top priority, with all projects under construction pro- gressing according to time and cost targets without any safety incidents. Additionally, both the backlog and permitted projects have increased. The corporate segment had an active year in 2023. Among other activities, Cloudberry increased its credit facility by NOK 800m, acquired the remaining shares in Captiva and executed on a share buy-back program. Throughout the year, the segment main- tained a responsible approach to value creation by actively managing debt level and costs, ensuring financial flexibility for Group’s future growth. Key figures The information below describes the operations of the consolidated Group in 2023, with the corre- sponding figures for 2022 in brackets. Figures are presented in NOK million. Profit and loss Profit before tax was NOK 222m (NOK 122m). This comprises reported total revenues of NOK 610m (NOK 217m) from sale of power related products, asset management, digital- and consultancy services and other income. Operating expenses were NOK -276m (NOK -186m), share of profit from associated companies were NOK -72 (NOK 120m), depreciations, amortization and write downs were NOK -225m (NOK -35m) and net finance items were NOK 185m (NOK -6m). EBITDA was NOK 263m (NOK 151m), and EBIT was NOK 37m (NOK 116m). Profit after tax for the year was NOK 233m (NOK 122m). Other comprehensive income consists mainly of items that may subsequently be reclassified to profit Financial summary 2023 2022 Operating revenues NOK million 610 217 EBITDA NOK million 263 151 Profit for the year NOK million 233 122 Total assets NOK million 6 691 4 603 Cash NOK million 779 1 538 Net interest bearing debt NOK million 806 (1 176) Total equity NOK million 4 617 3 794 Equity share % 69% 82% Producing during the year 1 GWh 520 268 Secured portfolio (Producing and under construction) MW 294 188 Secured portfolio (construction permit) MW 60 128 Secured portfolio (Backlog) MW 625 420 1 Including proportionate share of production from associated companies. Cloudberry Annual report 2023 Board of Directors report 28 and loss and amounts to NOK -99m (NOK 101m). This relates to movements of cash flow hedges with tax effects and foreign currency translation differences. Total comprehensive income was NOK 134m (NOK 223m), of which NOK 220m was attributable to Cloudberry shareholders, while NOK -86m was attributable to non-controlling interests. The total income of NOK 134m is expected to be allocated to retained earnings. Cashflow Cash flow from operating activities for the year was NOK 224m (NOK 43m). Cash flow from investing activities was NOK -1 810m (NOK -379m). Cash flow from financing activities amounted to NOK 830m (NOK 760m). At year-end, cash and cash equivalents were NOK 779m (NOK 1 538m). For details, please see the consolidated statement of cash flows in the Group consolidated financial statements. Financial position Total assets at year-end were NOK 6 691m (NOK 4 603m). The increase from last year primarily reflects acquisitions, business combinations and debt drawdowns. Non-current assets totalled NOK 5 492m (NOK 2 821m) consisting of investments in producing assets and associated companies, while current assets were NOK 1 199m (NOK 1 782m), mainly cash, cash equivalents and other current assets. Total equity was NOK 4 617m (NOK 3 794m) at year end, corresponding to an equity ratio of 69% (82%). Total liabilities were NOK 2 075m (NOK 809m), with NOK 364m (NOK 283m) due within 12 months. Segments Cloudberry reports its operations in four seg- ments: Development, Production, Operations and Corporate. The segment reporting is based on proportionate financials. See APM chapter for definitions. Development Cloudberry Development has a significant develop- ment portfolio with renewable assets in the Nordics. Since inception, eleven projects have been fully developed and sold to infrastructure investors and European insurance companies. Going forward Cloudberry has the option to either sell, farm-down or maintain in-house projects for long-term cash flow. Key figures Development, segment 2023 2022 Total revenue NOK million 15 207 EBITDA NOK million (16) 177 Construction permits MW 60 128 Backlog MW 625 420 Key events over the year: · The final investment decision for Munkhyttan I (SE- 3) was taken in June 2023, increasing Cloudberry’s wind power production in the attractive SE3 area of Sweden. Cloudberry plans to install 18.6 MW based on three Vestas V162 turbines of 6.2 MW each with a long-term service contract with ~97% uptime guarantee from Vestas. The expected annual production is 60 GWh. The project is on time and budget, with all foundations casted and all roads constructed. Internal cable laying is well under way and transformer and station is expected to be delivered according to plan. · The construction of the Sundby Vindpark (SE-3) is on time and expected to be below budget once complete. All turbines are energized with test pro- duction having commenced. The test production was taking place under a 50/50 profit split with Vestas until the end of January 2024. Sundby has produced and sold 6 GWh of electricity in 2023. The financials are included in the Development segment and not included in the production numbers. 29Cloudberry Annual report 2023 Board of Directors report · Construction of Øvre Kvemma (NO-5) hydro power plant continued according to plan and the power plant is now completed. The powerplant will be connected to the grid before the plant can enter the commissioning period. Financial close will follow after the commissioning period, expected in 1H 2024. · Stenkalles (Vänern project, SE-3): The Stenkalles wind farm on Sweden’s largest lake, Vänern (SE-3), is a 100 MW (50 MW proportionate), 18-turbine project owned 50/50 by Hafslund and Cloudberry. In light of the increased capex for offshore wind projects, the project has evaluated the opportunity to increase the turbine size in order to improve project economics. The county (SE: Länsstyrelse) has recently rejected this possibility. Cloudberry is not compromising on return requirements and capital discipline and has decided not to move forward with the Stenkalles project in its current form. Instead, the project group is evaluating how to use the strategically positioned grid connection for a potential battery/solar project, where the associated capex has decreased. Cloudberry expects minimal development costs to capitalize on this potential opportunity. The Stenkalles project (offshore) has thus been removed as a permitted project in the project overview and included in the backlog. Based on the decision not to go forward with the current offshore wind project, Stenkalles has written down the project on its balance sheet. Cloudberry’s net P&L effect (non-cash) related to the write down of Stenkalles is a negative NOK 57 million. After the impairment there are no offshore wind assets on Cloudberry’s balance sheet. · Subsequent to the quarter, Cloudberry has through Odin Energy Holding P/S acquired the Nees Hede hybrid project comprising of 175 MW permitted solar (140 MW proportionate). Nees Hede is a climate park with a favorable ESG footprint and local acceptance, situated on the western part of Jutland in the attractive DK 1 price area. Through the acquisition of the Odin portfolio earlier in 2023, Cloudberry is well positioned to take part in further development opportunities in Denmark as shown by this project. The Nees Hede project represents an important milestone as the first project from the development agreement with Skovgaard. · Cloudberry has per year end an exclusive backlog of 625 MW (including the wind project of Nees Hede). Cloudberry is fully focused on continuing to work in close dialogue with local communities, public and private landowners to ensure efficient permitting processes, limit nature impact and gain access to additional sites. Production Cloudberry Production owns long-term yielding hydro and wind assets in Norway, Sweden and Denmark. Electricity is primarily sold through the spot market Nordpool, but also through bilateral agreements. Producing assets are entitled to electricity certifi- cates and guarantees of origin (“GOs”) which again will be sold through primarily bilateral agreements. Key figures Production, segment 2023 2022 Total revenue NOK million 655 402 EBITDA NOK million 487 262 Production (proportionate) GWh 520 268 Production capacity year-end MW 267 148 Secured portfolio (Producing & under construction) MW 294 188 Key events over the year: · Cloudberry’s proportionate power production grew 94% from 268 GWh to 520GWh during the year. The current portfolio, including projects under con- struction has an estimated annualized production of 905 GWh. · In May 2023, Cloudberry acquired 80% of the Odin portfolio from Skovgaard Energy A/S including land and a long-term development agreement. The portfolio consists of 51 high-quality wind turbines in production, with 47 turbines located in Denmark and additional 4 turbines in southern Sweden. The Odin portfolio adds 311 GWh of estimated annual produc- tion net to Cloudberry, and significantly diversifies the producing portfolio while increasing cashflow. · In June 2023 Cloudberry completed a sale of the three hydropower plants Åmotsfoss, Selselva and Nessakraft to Norsk Vannkraft, representing a total estimated annual production of 77 GWh. The transaction shows significant value creation Cloudberry Annual report 2023 Board of Directors report 30 throughout Cloudberry’s value chain, yielding an internal rate of return (IRR) of above 55% p.a. or approximately two times the booked equity. The transaction is part of the strategy to utilise accre- tive capital recycling as the backbone for growth. · The production in Odal for 2023 was affected by production stops due to primarily faults in the turbine blades. Planned production stops will continue going forward in the coming quarters as the faulty blades are repaired or exchanged under a Siemens Gamesa warranty. Lost production from the blade issues will also be covered by the availability warranty with Siemens Gamesa with the first availability period ending at the end of June 2024, one year after the takeover of the last turbine. Settlement under the availability warranty is expected to be completed in 2H 2024, once the calculation is final in accordance with market practice. There are no provisions or other financials included in the 2023 figures from Odal to reflect the lost production covered under the availability guarantees. · During the fourth quarter of 2023, Cloudberry entered into a power purchase agreement (“PPA”) in Denmark in relation to the Odin portfolio securing DKK 73 million in proportionate revenue over a three-year period. The PPA is a three-year baseload contract for a fixed annual volume of 31.5 GWh in DK-1 with a fixed power price of DKK 0.77/ kWh (NOK 1.18 per kWh); a power price above the currently seen power curves · Cloudberry realized an net power price of NOK 0.75 per kWh during 2023, compared to the Nordic system price of EUR 59/MWh (~NOK 0.65/kWh) Power production Cloudberry’s proportionate power production grew from 268 GWh to 520GWh during the year. The current portfolio, including projects under construc- tion has an estimated annualized production of 905 GWh. Operations The Operations segment represents the activities organized in the Captiva Group under the business areas: management services and digital solu- tions. Cloudberry initially acquired 60% of Captiva in January 2022. In December 2023 Cloudberry acquired the remaining 40%, making Captiva a fully integrated part of the Cloudberry group. The organ- izational integration and realization of synergies will be implemented during 1H 2024. Please see the Corporate segment for more information about the transaction. Key figures Operations, segment 2023 2022 Total revenue NOK million 38 38 EBITDA NOK million (6) 4 Asset Management & Advisory year-end MW 2 300 1 100 Key events over the year: · Alignment and integration of Captiva’s organ- isation with Cloudberry’s Development and Production segment · The digital segment will undergo a strategic review in order to best scale the business · Engaged in development and construction work on the Munkhyttan and Sundby projects · Supporting the Production segment on Odal wind farm with a task force related to the Siemens Gamesa turbines and blades. Cloudberry lever- ages on the Captiva team’s experience from other wind projects with similar issues · Increased its asset management portfolio. Amongst others, signed the Norsk Vannkraft portfolio, making it one of the largest asset man- agement clients · Involved in signing close to 40 GWh of hydro land lease agreements during 2023, adding value to Cloudberry’s pipeline of promising hydro projects · Kraftanmelding increased its trading port- folio to 3.5 TWh across more than 300 hydro plants in Norway. Cloudberry is a 51% owner of Kraftanmelding. 31Cloudberry Annual report 2023 Board of Directors report Corporate The Corporate segments represents corporate centralised functions, operated out of the Oslo office. The corporate management aims to remain a cost-effective, agile and dynamic team that the other segments can build on. By year end, there were six employees in the corporate segment. Key figures Cloudberry Corporate, segment 2023 2022 Total revenue NOK million 2 - EBITDA NOK million (64) (63) 1 Included in Corporate operating cost is NOK 23m of warrants costs which are non-cash (NOK 26m in FY2022) Key events over the year: · Cloudberry has continuous focus on optimizing liquidity in order to enhance profitability. With a strong balance sheet and a current cash position close to NOK 800m, the ongoing construction projects Sundby and Munkhyttan have both been equity financed to date, where debt will be drawn on the two projects during 1H 2024. Cloudberry fur- ther has the flexibility to utilize the available facility to draw additional debt on existing projects. · The credit facility was increased with NOK 800m over the year to a total of NOK 2 200 million with local savings banks. The agreement also includes an option for an accordion of NOK 300 million. The facility gives Cloudberry flexibility to finance and grow its renewable asset base in the Nordics at an interest margin below 2%, and further strengthens the partnership with our local savings bank syndi- cate. Approximately NOK 1 250 million was drawn at the end of the year. At present all debt drawn, except the debt in relation to the Odin transaction, is fixed at long term contracts at attractive levels over the last years (10 – 20y fixed rates). The total Odin debt exposure is ~60% secured with 5–10-year interest rate swap agreements. · Commenced a share buy-back programme based on an authorisation granted by the annual general meeting in September. In 2023 Cloudberry acquired 2 807 500 shares, equalling 0.96% of the shares in Cloudberry at an average price of NOK 10.3197. The purpose of the program has been to reduce the share capital of the company. Cloudberry will continuously evaluate buy-back of shares as a tool for creating shareholder value. · In December 2023, Cloudberry acquired the remaining 40% of the shares in Captiva Digital Services AS (“Captiva”) from CCP AS. This is according to Cloudberry’s strategic plan and will continue to strengthen the synergies between the two companies enabling further growth and development. Captiva’s external customers will remain top priority for the group, serving them with the same integrity, competence and focus as always. Since first acquiring Captiva, Captiva have added significant value to Cloudberry’s hydro and wind development, procurement & construction as well as being recognized as a high-quality asset manager for power plants in the Nordics. The Norwegian tax proposal on onshore wind: Cloudberry has spent significant time and resources to lobby and affect the proposal for resource tax for onshore wind in Norway which was introduced in 2022. In December 2023, the Norwegian govern- ment published a statement that they had reached a broad consensus on the resource rent tax on Norwegian onshore wind. The agreement between the parties has in 2024 been implemented by law. Overall, the resource rent tax (NO: Grunnrenteskatt) for Norwegian onshore wind is lowered from an effective tax rate of 40% in the original proposal to 25%. Further, the high price contribution tax (NO: høyprisbidrag) of 23% of prices above 70 øre/ kWh, introduced together with the initial resource tax proposal, was terminated from 1 October 2023. For existing wind farms, the government has also proposed changes to the transition rules which is better than their initial proposal, although not achieving full investment neutrality. The resource rent tax primarily affects the Odal Vind farm (54 MW net to Cloudberry) where the effect of the taxation is estimated to be ~NOK 1 per Cloudberry share, compared to the asset values without the taxations and the initial assessment of ~NOK 2-3 per share when the proposal was first announced in September 2022. For new wind farms the resource tax will be structured with cash payments of nega- tive resource tax, as is already implemented on large scale hydro. This represents a positive development, which makes the resource tax investment neutral for new projects. Cloudberry Annual report 2023 Board of Directors report 32 Risk Management The Group is exposed to various risks through its value chain, including strategic, operational, climate, financial and market/external risks. Cloudberry has extensive routines and policies in place to actively manage risks. Cloudberry has implemented a standardized process for risk assessment and risk mitigation in the Group with a risk management pol- icy. The process included conducting risk work shops in all segments, training the management team and key personnel in risk management, and aligning and calibrating risks across the Group. The key risks are discussed, and policies are reviewed and approved by the Audit committee and Board of Directors on a regular basis. Operational risk All processes throughout the value chain are exposed to operational risk. A key operational risk is related to the operating performance of the pro- ducing assets, another risk relates to the process of transitioning development projects from the backlog and pipeline stage to finalization. Even though the Group has a solid project pipeline, finalizing the projects depends on a number of factors such as project availability, local authority approvals, envi- ronmental impact, suppliers, financing, power prices and the regulatory framework in the relevant market. Operational risks also include health and safety hazards especially in our construction processes, and risks related to climate, nature and environment. Cloudberry manages the risk through close follow-up and monitoring of operating assets and developing projects. Procedures and guidelines for the seg- ments are implemented and reviewed regularly and include the whole value chain we are part of. Market/External/Political risk The Group is engaged in the production and sale of renewable electrical power. The power industry is highly regulated, and regulations may change over time. Further, the Groups activities are subject to the laws and regulations applied by the governmental authorities in connection with obtaining concessions and permits, government guarantees, and other obligations regulated by law in each country. The changes to the taxation of Norwegian renewables implemented in 2023 has further heightened the political risk in Norway. A number of broader regulatory changes to the electricity market, such as changes to integration of transmission allocation, changes in the tax regula- tion, changes to energy trading, potential caps on energy prices and transmission charging, are being implemented or evaluated across Europe. These changes have an impact on the electricity prices and the costs of selling electrical power, which may reduce the Group’s profitability. The ongoing war in Ukraine also represents a market risk that may continue to have effects in the future, potentially impacting the groups profitability. The power price spiked in 2022, together with gas prices, but have now come down. Cloudberry emphasises the uncer- tainty these factors have when making investment decisions and continuously monitors changes in the political landscape and includes this in the relevant discussions. The Group also has several projects under devel- opment, which require support from local and/or national authorities. Changes in the political land- scape may imply that certain of the Group’s projects under development must be abandoned due to lack of political support or regulatory changes which result in the projects no longer being expected to meet the Group’s minimum profitability requirements. Financial risk Through its business activities, Cloudberry is mainly exposed to market risks including power prices, inter- est rate risk, currency risk, credit risk and liquidity risk. Financial risk management is based on the objective of reducing negative cash flow effects and, to a lesser extent, negative accounting effects of these risks. Currency and interest rate risks are regulated by means of mandates and managed by using hedging instruments. During 2023 Cloudberry has started to introduce PPA’s. The overall ambition for Cloudberry is to achieve a hedge amount covering all interest expenses and overhead costs. This will be phased in over time. Cloudberry’s interest rate exposure is related to its debt portfolio and managed based on a balance between keeping interest cost low over time and contributing to stabilise the group’s cash flows. The construction of the Group’s projects will normally be financed with a combination of equity and debt. As a result, any increase of interest rates will lead to higher financing costs, which in turn reduces the Group’s profitability. The Group is dependent 33Cloudberry Annual report 2023 Board of Directors report on external financing. If the Group is not able to obtain required financing on a timely basis and on attractive terms, the result could be lost business opportunities, shortened lifetime of current assets and/or that the Group is forced to realise its interest in certain projects. Fluctuations in exchange rates could affect the Group’s cash flow and financial position. The Group presents its financial statements in NOK. However, power is traded at Nord Pool, where EUR is the trading currency. The Group is also exposed to DKK, SEK and EUR through its operations in Denmark, Sweden and investments in associated companies, hence the Group is exposed to currency risk through fluctuations in exchange rates between NOK, DKK, SEK and EUR. Climate risk Cloudberry faces exposure to climate change effects, including more extreme weather conditions, largely attributed to rising temperatures, extreme winds, and heavy rainfall, as well as shifting weather patterns in specific local regions. Extreme climate changes pose climate risks that could potentially damage production assets, inter- rupt the development of energy projects, escalate maintenance and other expenses, diminish produc- tion deliveries due to alterations in water flows or lack of wind, and cause other disruptions to essential operations. Cloudberry has assessed its potential climate-re- lated risks and opportunities following the recom- mendations of the Task Force on Climate-related Financial Disclosure (TCFD). The company regularly reviews and evaluates its strategy for climate-re- lated risks to identify additional risks and opportuni- ties, ensuring that it makes informed decisions and evaluations regarding the impact of climate risks on Cloudberry. Climate-related risks are incorporated into Cloudberry’s overall risk management frame- work. Further details on the climate risks can be found in the TCFD report published on our website. Outlook Entering into Denmark was an important milestone for Cloudberry, and we are pleased to see how the relationship with Skovgaard is developing and how the Odin portfolio is performing. The Nees Hede pro- ject further represents an important milestone as the first project from the Development Agreement with Skovgaard, showing the potential of our Danish entry. We have also throughout the year seen the benefit of having the competence available that sits within Captiva, and is satisfied having acquired the remain- ing 40% in order to continue to fully integrate the business areas that are core for Cloudberry. In a time with volatile power prices and capex costs, we continue to see how important it is to have a flex- ible platform and diversified portfolio of renewable technologies and development projects throughout the Nordics. As we have seen capex prices increas- ing for offshore wind, we have the ability to look towards solar where capex has decreased dramat- ically over the last quarters. This shows the effec- tiveness of our platform by shifting focus and capital between technologies and geographies. Profitable growth and capital discipline will remain key priorities going forward. Project execution is top priority for Cloudberry, and we are pleased to see that the current projects under construction are progressing according to time and cost with no safety issues. Within the backlog we have filed applications for Björnetjärnsberget with more permit filings to come. We will continue to devote time and resources in order to continue to progress the backlog projects towards permitted projects. As the resource rent tax proposal for onshore wind in Norway is now concluded, we will also continue to develop our Norwegian wind projects, although while acknowl- edging the heightened political risk in Norway requir- ing higher returns. Cloudberry will further continue to focus on the proven uncorrelated renewable technologies hydro, wind and solar in the Nordic countries as we strongly believe that development is a local game. Going forward we see positive market develop- ments, with falling capex prices and sustained higher power prices in the current forecasts on the back of what looks like interest rates having peaked. We are certain that the future is electric, and that the energy transition needs to be accelerated to reach our targets for 2030 and beyond. We believe that local focus and insight, with a portfolio of both existing production and new projects across the Cloudberry Annual report 2023 Board of Directors report 34 Nordics and across technologies will become highly attractive over the years to come. Cloudberry will continue with its uncompromised focus on value creation and local stakeholder management in the Nordics. Corporate Governance The Board of Directors has a strong commitment to maintain a high standard of corporate governance. This ensures trust, and effectively and continuously improve the communication between manage- ment, the Board of Directors, shareholders, and other stakeholders. Cloudberry complies with the Norwegian Code of Practice (NUES). The Annual Report includes a statement on Cloudberrys corporate governance principles and practices, including corporate audit, internal control of financial reporting and the work of the Board of Directors. Going concern According to Section 3-3 of the Norwegian Accounting Act, the Board of Directors confirms that the Financial Statements have been prepared under the assumption that the Cloudberry Group is a going concern, and that this assumption was appropriate at the date of approval of the Financial Statements. The consolidated Financial Statements for the Group include the operations of Cloudberry Clean Energy ASA, its subsidiaries fully consolidated and associ- ated companies, which are equity accounted. The Group reports its Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the interpretations issued by the IFRS Interpretation Committee (IFRSIC) applicable to companies reporting under IFRS and also complies with IFRS as issued by the International Accounting Standards Board (IASB). The consolidated accounts are prepared with Norwegian Kroner (NOK) as the reporting currency. Oslo, 19 March 2024 The Board of Directors of Cloudberry Clean Energy ASA Tove Feld Chair of the Board Petter W. Borg Board member Benedicte Fossum Board member Henrik Joelsson Board member Nicolai Nordstrand Board member Stefanie Witte Board member Alexandra Koefoed Board member Anders J. Lenborg CEO 35Cloudberry Annual report 2023 Board of Directors report Sustainability report What we do and why we do it 37 Highlights 38 General 40 Sustainability at Cloudberry 41 ESRS 2 Governance framework 46 ESRS 2 Preparing for the Corporate Sustainability Reporting Directive (CSRD) 48 ESRS 2 Double materiality assessment 50 Environment 66 EU Taxonomy aligned KPIs 68 ESRS E1 Climate change 72 ESRS E2 Pollution 80 ESRS E4 Biodiversity and Ecosystems 82 ESRS E5 Circular economy 86 Social 88 ESRS S1 Own workforce 90 ESRS S2 Workers in the value-chain 97 ESRS S3 Affected communities 100 Entity specific Local society 103 Governance 108 ESRS G1 Business conduct 110 Entity specific Favourable Framework for Renewables 114 Appendix 116 Cloudberry’s GHG emissions 117 ESRS index 122 Independent accountant’s assurance report 128 Cloudberry Annual report 2023 Sustainability report 36 What we do and why we do it Climate change is widely recognized as one of the most pressing global crises facing humanity today. The world is already experiencing an increase in extreme weather events such as heatwaves, hurricanes, droughts, floods, and wildfires. On a more long-term basis climate change disrupts ecosystems and biodiversity, causing shifts in species distribution, habitat loss, and increased risk of extinction. Changes in temperature and precipitation patterns lead to nature degradation and direct impact on human health, affecting vulnerable communities, and posing risks to global stability and security. Developing and operating renewable energy is a central aspect of addressing climate change, promoting sustainable development, enhancing energy security, creating economic opportunities, and improving the environment and public health. By developing and producing renewable energy today and for future generations, Cloudberry is powering the transition to a sustainable future. Cloudberry has high ambitions to increase our development and production of renewable energy in the years to come and thus contribute to the much- needed global decarbonization. As a renewable energy company, we aim to capitalize on the oppor- tunities presented by the transition to a low-carbon economy while addressing environmental concerns, enhancing energy security, and meeting market demand for clean energy solutions. At Cloudberry, we strive to balance respect for nature, biodiversity, and the well-being of our communities with sustainable growth. The value we generate is future-proof. We acknowledge and address our local footprint, taking responsibility for the impact of our physical presence. We aim for transparency regarding all our impacts, whether positive or negative. In this sustainability report, we outline Cloudberry’s contributions to the transition toward renewable energy, our impact on the envi- ronment, people, and society, as well as the financial implications. Furthermore, Cloudberry describes how we address and mitigate the material impacts, risks, and opportunities where we operate. Commitment to a sustainable impact on the environment, soci- ety, and all of our stakeholders is at the core of everything we do. 37Cloudberry Annual report 2023 Sustainability report How we create sustainable value • Achieved more than 120 000 tons of avoided CO2e emissions from our production, a doubling from 2022 • Recieved the eco-label certificate “Bra Miljöval” (Good Environmental Choice) for the Sundby wind farm. The certificate positively impacts the value of Guarantees of Orgin (GOs), leading to increased revenues from the renewable energy production • Invested in “Bra Miljöval” funds that contribute to improve biodiversity and reducing the environmental footprint of electricity production • In 2023, Cloudberry’s biodiversity assessment at the Sundby wind farm in Sweden led to prioritized conservation measures, such as insect and bumblebee habitats, setting a standard for future projects • The foundations at the Munkhyttan wind farm were built with 25% lower GHG emissions due to environmental measures • Reutilized the existing infrastructure including foundations at Sundby windfarm - the GHG emissions reduction is estimated to be 1 900 tCO2e, totaling a reduction of approx. 15% for the project Performance and reporting structure • Cloudberry is preparing for the Corporate Sustainability Reporting Directive (CSRD) and has conducted a double materiality assessment based on CSRD guidelines • Identified a new entity specific material topic “Favourable Framework for Renewables” • A gap assessment and limited assurance of the greenhouse gas (GHG) emission reporting have been performed and approved by a third-party auditor • Cloudberry has committed to both near-term and long-term emission reductions, aligning with the Science Based Target Initiative (SBTi) • Published stand-alone Taxonomy report. All hydro and wind power plants are in alignment with the EU Taxonomy • The biodiversity and nature policy is being integrated into all of Cloudberrys projects • Enhanced procedures and policies on risk management in the supply chain, associated with human rights and decent working conditions • Introduced new thematic key performance indicators for social and governance to ensure alignment towards our sustainability ambitions Highlights Cloudberry Annual report 2023 Sustainability report 38 Our Values Be Supportive We accept everyone’s worth and dignity, respect and help each other. We encourage supportiveness and value diversity. We welcome different opinions, but always pull in the same direction towards Cloudberry’s common goals. Be Committed We work together with passion and dedication to reach our purpose and goals today and for the next generation. We engage in our work and emphasize the value of collaboration and teamwork. We operate with a long-term perspective, and sustainability is integrated in everything we do. Be Bold We believe that our mission to accelerate the transition to renewable energy requires us to be bold, go in new directions, think innovatively and differently, and think big – but always act responsibly. Be Exceptional We know that to succeed we must always perform our best. Being exceptional means valuing diversity to strengthen our ability for problem solving and value creation. We set our standards high and ensure industry-leading competence and foster a culture that values the synergies of cooperation. 39Cloudberry Annual report 2023 Sustainability report General Sustainability at Cloudberry 41 ESRS 2 Governance framework 46 ESRS 2 Preparing for the Corporate Sustainability Reporting Directive (CSRD) 48 ESRS 2 Double materiality assessment 50 Cloudberry Annual report 2023 Sustainability report 40 Sustainability at Cloudberry – Executive Summary Cloudberrys overarching purpose is to provide renewable energy today and for future generations. Everything we do is based on our desire to make a positive impact on all our stakeholders while contributing to societys transition to renewable energy. Our long-term success is linked to operating our business sustainably and profitably. To fulfill our purpose, Cloudberry believes in identifying, under- standing, and systematically managing material sustainability topics internally and in our value chain. This is of utmost importance for future long-term value creation. At the same time, we need to meet regulatory and stakeholder reporting expectations. As a result of this, we are preparing to comply with the requirements of the EUs Corporate Sustainability Reporting Directive (CSRD), and this sustainability report is a step in that direction. CSRD reporting is based on the European Sustainability Reporting Standards (ESRS), which are divided into twelve standards. Detailed descriptions regarding our work with the ESRS can be found in the section on pre- paring for CSRD. Going forward, we will further refine and develop this report on our journey to align with the CSRD requirements. Our ambitions and material topics We strive to be a driver for positive change and aim to promote a favorable framework for renewable energy, to have net-zero climate emissions, and a net positive nature impact. Environment Social Governance Sustainability ambitions To power the transition to renewable energy aiming ot be climate and nature positive To act responsibly towards our employees and society, being a preferred employer and partner To ensure solid governance internally and in our value chain at all times Material topics Climate change Pollution Biodiversity and ecosystems Circular economy Own workforce Workers in the value chain Affected communities Local society Business conduct Favorable framework for renewables Targets Net zero by 2040 Minimize and repair adverse nature impact Zero injuries Attract and retain a diverse and competent workforce Zero compliance breach internally and in the value chain Contribution to SDG targets NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 41Cloudberry Annual report 2023 Sustainability report Key performance summary Cloudberry reports on the targets and KPIs quarterly and the key performance in 2023 is summarized in the table below. Actual 2023 Actual 2022 Target 2023 Target 2025 Environment 1 GHG emissions avoided tCO2e 121 836 59 496 124 500 212 000 GHG emissions tCO2e 12 891 10 529 13 500 N/A Social 2 Work injuries (incl. Sub-contractors) 1 0 0 0 Employee engagement index 5.3 5.2   Equal opportunities index 5.3 5.2   Female employees % of total 28% 24% 35% > 40% Female managers % in mgmt. positions 33% 33% 33% > 40% Female BoD % in total BoD 57% 43% > 40% > 40% Sick leave own workforce 3.12% 1.66% < 2% < 2% Governance Whistle-blowing incidents 1 0 N/A N/A Corruption and bribery incidents 0 0 0 0 Compliance training 100% 36% 100% 100% Breach of concession 0 0 0 0 1 The CO2 reduction and the direct and indirect GHG emissions have been adjusted for 2023. See the Key performance summary and the Environment section for details. 2 Work injuries defined as lost time injury. See Key performance summary and the Social section for details. The results from the Employee engagement index and the Equal opportunities index originate from the latest survey in 2023. The maximum possible score is 6. See Key performance summary and the Social section for details. From 2023 the reporting covers all subsidiaries in the Group. Female employees % of total has been adjusted for 2022. Cloudberry’s 2023 proportionate power production totaled 520 GWh (268 GWh in 2022). The company contributes positively to the energy mix by reducing greenhouse gas emissions through our produc- tion of renewable energy. The avoided emissions relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2023) are equivalent to 121 836 tCO 2 e (59 496 tCO 2 e in 2022). The avoided emissions previously reported during 2023 are adjusted in this annual report according to the updated factor EU-27 electricity mix in 2023. The minor gap between the target and actual avoided emissions in 2023 is explained by the difference between the estimated and the actual production in 2023 caused by the changes in the operating portfolio. Please see the annual report 2023 for further information. The 2025 target is based on the expected proportionate production of renew- able energy from our operating assets as well as from the assets currently under construction. Our decarbonization of the energy mix is described in more detail in the E1 Climate change section. In 2023 Cloudberry’s total direct and indirect green- house gas (GHG) emissions from Scope 1, Scope 2, and Scope 3 were 12 891 tons CO 2 e (10 529 tCO 2 e). The previously reported GHG emissions for 2023 and 2022 have been adjusted in the 2023 report. The adjustments are minor and a result of the gap analysis on the GHG emissions reporting in 2022 to improve the 2022 and 2023 reporting. With the improvements, the 2022 GHG emissions reporting was selected as the base year for the commitment to the Science Based Target initiatives (SBTi). The GHG emissions in 2022 and 2023 now include Scope 1 emissions related to SF6 gas leakage. It also includes updated figures on Scope 3 GHG emissions related to turbine foundations at Hån wind farm. Details and adjustments are further described in the E1 Climate change section. Emission targets Cloudberry Annual report 2023 Sustainability report 42 are calculated based on Cloudberrys activities, encompassing projects for which the final invest- ment decision has already been made. Targets are set post final investment decision on development projects, which implies that we have not set emis- sions targets for 2025. However, we expect emissions from construction according to the communicated pipeline outlined in our annual report. All of Cloudberry’s hydropower and wind power plants are aligned to the criteria of the EU Taxonomy. Cloudberry released a full-year 2023 Taxonomy report outlining how our activities contribute sub- stantially to the EU Taxonomy objectives without doing any significant harm and complying with the minimum safeguards. The Environment section gives more information on the reporting according to the EU Taxonomy. The detailed report is accessible on the company’s website. In 2023 no incidents causing harm to peoples health or serious material damages were recorded in Cloudberrys projects. At Cloudberrys headquarters, an employee had a minor injury which lead to lost time. Cloudberry prioritizes health and safety above all. Cloudberry conducted the annual engagement survey focusing on HMS, compliance, work-life balance, and diversity, equity, and inclusion (DEI) in the workplace. The result from the survey gave a DEI index of 5.3 and an engagement index of 5.3, where 6 is the maximum possible score. The results are an improvement compared to 2022 (up from 5.2 on both indexes). Cloudberry is committed to fostering the development and welfare of its workforce, with the goal of not only sustaining a robust and enthusiastic team but also driving innovation and sustainability within the organization. Cloudberrys own workforce is outlined in more detail under Section S1. Gender equality and freedom from discrimination on any account is a basic human right, a legal require- ment, and a source for workplace engagement and well-being. In addition, it enables Cloudberry to attract and retain the most competent and attractive employees. The 57 % female Directors of the Board is above target and above the legal requirement of > 40 %. The number of female man- agers is on target at 33 %, while the total number of female employees at 28 % is below the target of 35 % for 2023. Cloudberry will continue to promote DEI internally and externally to improve the rate of female employees in the Group and the renewable industry in general. The organization’s rate of absence due to illness was 3.12% (1.66%). The increase in sick leave was mainly due to one long-term sick leave which was not work related. Cloudberry received its first whistleblowing notifi- cation during the first quarter of 2023, concerning a possible discrimination case in a recruitment pro- cess. Following an investigation, it was determined that the recruitment process did not involve any misconduct. Cloudberry aims to be informed about any irregularities or concerns related to our organ- ization and business operations. Details regarding Cloudberrys governance and compliance can be found in section G1 Business conduct. No incidents of corruption or fraud were reported during 2023. Furthermore, our renewable hydro and wind power plants experienced no incidents of con- cession breaches. Preventing such breaches is cru- cial for legal compliance, environmental protection, and the preservation of trust among stakeholders. During 2023 Cloudberry has organized Code of Conduct training for its entire workforce emphasiz- ing governance and compliance matters, including anti-corruption measures and whistleblowing reporting. The Code of Conduct and anti-corrup- tion training is mandatory for all employees and is embedded annually. Employees were also updated on the organization’s policies and fundamental prin- ciples regarding managing crises and emergencies, as well as other aspects related to the contingency of the companys operations. Ensuring responsible business conduct is paramount for Cloudberry and enhances credibility and trustworthiness among stakeholders. In 2023 Cloudberry continued the important work on risk management in the supply chain. The pro- cedures related to prequalifying suppliers during tender and procurement processes have been incorporated into the majority of material suppliers in Cloudberry´s new projects. We are still in the process of collecting data and will implement routines to evaluate all our current material suppliers, in addition to carrying out risk-based audits within the supply chain. The KPI for screening of suppliers is under further development and will be reported by the end of 2024. 43Cloudberry Annual report 2023 Sustainability report We invest in the energy transition. In 2023, 95% of the CAPEX in Cloudberry was Taxonomy aligned. Cloudberry Annual report 2023 Sustainability report 44 Gender equality Cloudberry contributes to improving gender balance and ensuring equal opportunities for all genders in own workforce and operations and brings the attention to recruitment agencies and contractors. Progress is measured through our social KPIs for share of female employees, -man- agement, and -the Board of Directors. Affordable and clean energy Cloudberry ensures access to affordable, reliable and sustainable renewable energy for all. This opens opportunities for new economic opportu- nities, jobs and local value creation, and contribution to climate change. Sustainable cities and communities Cloudberry contributes to the development of sustainable cities and communities by developing and operating renewable energy infrastructure. In addition, Cloudberry seeks to protect cultural and natural heritage as well as using sustainable materials and solutions, e.g., reuse materials and engage local suppliers where possible. Responsible consumption and production Cloudberry aims to act responsibly in all development projects, focusing on environ- mentally sound management of chemicals and all waste throughout the life cycle, recycled and reuse of material as well as efficient use of nat- ural resources. Secondhand furniture in own offices and improving circularity where we have an impact. Climate action Cloudberry contributes to mitigating climate change by developing and operating renewable energy with a focus on reducing our GHG emissions and minimizing our nature impact, and we have a goal of being net-zero before 2040. The effect of climate change has consequences for our operating assets therefore we consider our business planning and have assessed our climate related risks and opportunities to ensure that our assets are climate-resilient. Life on Land Cloudberry protects life on land through the company’s contributions to climate change mitigation. Additionally, Cloudberry integrates ecosystem protection and biodiversity values into our development processes, and promotes sustainable forest and biodiversity management, including protection of threatened flora and fauna. Peace, justice and strong institutions Cloudberry contributes to ensuring ethical value-chain, transparency, and includes various stakeholders in our decision making and project planning processes. We track our work through our compli- ance and anti-corruption KPIs, as well as supplier screening. NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 The Sustainable Development Goals The development of renewable energy contributes to the energy transition required to reach the net-zero targets on a national, European, and global level. We consider the following UN Sustainable Development Goals as particularly important to Cloudberry’s business and how we operate: NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: dpicampaigns@un.org Developed in collaboration with | TheGlobalGoals@trollback.com | +1.212.529.1010 45Cloudberry Annual report 2023 Sustainability report ESRS 2 Governance framework Cloudberry’s commitment to sustainability begins at the highest levels of the organization, with the com- pany’s Board of Directors and management team. The Board of Directors is responsible for Cloudberrys strategy where ESG is incorporated and the ESG ambitions, material topics, and targets. Further, the Board of Directors reviews regularly the company’s risk profile and ESG performance. Any updated ESG ambitions and material topics are anchored, and targets and KPIs for the upcoming year are approved by the Board of Directors. The targets and KPIs are then cascaded into the KPIs and action plans of the business segments. Cloudberry has a remuneration policy and relevant guidelines disclosing, among other measures, the remuneration that promotes long-term value crea- tion and sustainability ambitions. The incorporation of sustainability-related performance is reflected in the companys performance-based bonus and incentive schemes. At the management level, the Chief Executive Officer (CEO) and the Chief Compliance and Organization Officer (CCOO) monitor the imple- mentation of the sustainability strategy and ensure that environmental, social, and governance risks, including climate-related risks and opportunities, are integrated into Cloudberry’s business strategy. The CEO also oversees and reports to the Board of Directors on the management’s progress concerning Cloudberry’s key strategic sustainability and cli- mate-related topics. At the operational level, Cloudberry has weekly meetings to oversee sustainability topics and mon- itor ESG targets and performance. These meetings allow the Head of Sustainability and the CCOO to ensure the implementation of the ESG strategy in the day-to-day operations across all business units. Additionally, ESG topics are prepared for the man- agement and the Board of Directors, to ensure the promotion of ESG initiatives and externally through the quarterly and annual financial reports. The ESG Committee, a sub-committee of the Board of Directors, serves as a preparatory and advisory body for the Board. The committee consists of three Board members, the CCOO, and the Head of Sustainability. In 2023, the committee had nine meet- ings, marking an increase of one meeting from 2022. The objective of the meetings is to ensure alignment with the company’s sustainability strategy and to discuss and assess the companys ESG topics. The committee is responsible for overseeing the admin- istration’s execution of the ESG strategy across all business units. The committee conducts at least four meetings annually, in line with the quarterly reporting structure. Nevertheless in 2023, as in previous years, additional meetings were held to review relevant ESG initiatives, topics, and KPIs in line with Cloudberry’s sustainability ambitions and targets and the double materiality assessment. Incorporating sustainability in the day-to-day business and throughout the value chain is an ongoing process with a constant focus from the Committee. Cloudberrys “ESG project group” is a team of employees from various divisions in the Group who work together to create and improve ESG compli- ance methods and internal procedures across all business units. Their efforts include establishing and integrating ESG routines, in addition to organizing workshops and events centered around strategi- cally important ESG topics. In 2023, the group met bi-weekly. To promote employee engagement and ensure the integration of ESG, we have developed an ESG handbook. This handbook outlines Cloudberry’s ESG strategy and provides direction on where to find ESG policies and guidelines. Starting in 2024, we have improved the accessibility of ESG-related infor- mation within the whole group through the newly established intranet. Cloudberry emphasizes responsible business conduct throughout the group and its value chain. We are continually working to enhance policies and ensure governance compliance. Cloudberry conducts annual Code of Conduct and anti-corrup- tion training with the goal that 100 percent of our employees participate in training sessions each year. For additional information on Cloudberry’s business conduct, refer to section G1 in this report. Cloudberry Annual report 2023 Sustainability report 46 Chief Executive Officer ESG / Organization / Compliance Finance Development Production Operations (Captiva) Board of Directors General Meeting ESG Committee Audit Committee Compensation Committee Nomination Committee 47Cloudberry Annual report 2023 Sustainability report ESRS 2 Preparing for the Corporate Sustainability Reporting Directive (CSRD) The CSRD is a part of the European Green Deal – an ambitious legislative package to guide the European economy through a just transition and towards the EU’s goal of being climate-neutral in 2050. The CSRD is an integral part of this strategy, aimed at improv- ing sustainability reporting and transparency so that investors can make responsible, informed decisions which include consideration of the sustainability-re- lated impacts their investments may have as well as the sustainability risks and opportunities they will be exposed to. To ensure transparency the European Sustainability Reporting Standards (ESRS) have been published, detailing what companies must report on to comply with CSRD. The ESRSs are a complex set of requirements and include requirements for integrated reporting with the annual financial report and external assurance. ESRS is divided into sections, covering topics related to sustainability and compliance. ESRS 2 covers general information about how sustainability topics are governed by the company, including how the double materiality assessment has been conducted. ESRS E1 to ESRS E5 cover environmental topics, ESRS S1 to S4 cover social topics, and ESRS G1 covers business conduct. This sustainability report is structured based on the ESRS as a preparation for CSRD compliance, and the section headings include references to the relevant ESRS to provide context. The adoption of the CSRD has initiated the journey to put sustainability reporting on the same level as financial reporting to increase transparency and accountability of companies’ sustainability perfor- mance. CSRD compliant reporting is dependent on a significant amount of work being done by a company on beforehand to understand its impacts, risks, and opportunities and to develop a strategy to manage those that are material. Reporting standards and regulations This report is inspired by the ESRS standards and intends to be a step towards eventual CSRD com- pliance. The report addresses the material CSRD dis- closures Cloudberry currently can report on. We are working to be able to meet more disclosure require- ments going forward. We have chosen to report general information regarding our management of each of the ESRS topics (for example E1 climate change) where we have at least one material impact, risk, or opportunity. This general information includes the information we have regarding policies, strategies, and actions. We have also included the metrics and targets that cover the specific impacts, risks, and opportunities we identified in the double materiality assessment. In the appendix, an index of ESRS disclosure require- ments relevant to Cloudberry is enclosed. The index is meant as a guidance for the specific topics that are covered in the report. At this stage, Cloudberry is not compliant with all disclosures covered by the ESRSs, but as mentioned earlier, it’s a step towards becoming compliant. This report also includes greenhouse gas emissions reported in accordance with the Greenhouse Gas (GHG) Protocols Corporate Standard. Additionally, Cloudberry has published independ- ent EU Taxonomy, Norwegian Transparency Act Report, and Taskforce for Climate-Related Financial Disclosures (TCFD) reports. The contents of these reports will be summarized in the relevant sections of this sustainability report. Third-party verification Cloudberry has engaged Ernst & Young AS (“EY”) to perform a limited assurance on Cloudberrys 2023 GHG emission reporting based on the GHG Protocol’s Corporate Standard, specifically scopes 1, 2, and 3. Assurance is performed following the International Standard on Assurance Engagements ISAE 3410. The auditor’s scope of work and verifica- tion are presented in the Auditors report. Commitment to the Science Based Targets initiative In 2023 Cloudberry has committed to set near-term and long-term company-wide emission reductions in line with the Science Based Target Initiative (SBTi). Our net-zero target has been approved by the SBTi. The development of a roadmap for reducing Scope 1, Scope 2, and Scope 3 emissions, in both the near-term and the long-term is a crucial aspect of Cloudberry Annual report 2023 Sustainability report 48 creating a climate transition plan. Additional detailed information can be found within the Climate Change chapter. Improving our GHG emissions accounting To ensure full adherence to the Greenhouse Gas Protocol’s Corporate Standard, Cloudberry has undertaken a gap assessment of its GHG emission reporting. This assessment led to various adjust- ments, including a description of the organizational boundaries, detailing Scope 1, Scope 2, and Scope 3 emissions and methodologies, and developing com- prehensive in-house policies and guidelines for GHG emission reporting. Enhancing Cloudberry’s GHG emissions accounting is a crucial step in ensuring complete oversight of the company’s GHG emissions accounting and is a vital part of our preparation to establish the climate transition plan. Further details on the gap assessment and its outcomes can be found in the E1 Climate Change chapter. Transparency Act The Transparency Act (Åpenhetsloven) requires larger companies to report on the work conducted to comply with fundamental human rights and decent working conditions in the organization and the supply chain. The law gives the public the right to obtain information about a company’s handling of these matters and entered into force on 1 July 2022. Cloudberry has carried out its annual due diligence following the OECD and UNGP Guidelines for Multinational Enterprises, as well as in adherence to the International Labor Organization “ILO’s” core conventions on Fundamental Principles and Rights at Work and the International Bill of Rights, including the Norwegian Transparency Act, and identified the risks related to human rights and decent working conditions in its own business as well as in the supply chain. Following the assessment, measures have been taken to prevent, mitigate or halt adverse effects. Cloudberry has also updated and imple- mented guidelines and procedures for handling any actual and potential adverse impacts on fundamen- tal human rights and decent working conditions. In the second quarter of 2023, Cloudberry published its statement following the requirements of the Transparency Act. Section S2 Workers in the val- ue-chain describes the companys work with human and labour rights. 49Cloudberry Annual report 2023 Sustainability report ESRS 2 Double materiality assessment CSRD and the double materiality assessment The CSRD requires that Public Interest Entities and large companies publish annual reports on social and environmental topics related to their business, including their impacts as well as the risks and opportunities they are exposed to. The CSRD’s reporting requirements are detailed in the ESRS and are based on the requirement that companies conduct a double materiality assessment (DMA) to determine which topics are “material”, or rele- vant, for them. This is different from the previously standard materiality assessments – which were used to identify topics where companies had a material impact on the environment or society – in that it also requires the consideration of where the external environment or society have an impact on the company through risks and opportunities. The DMA process is described in the ESRS and includes evaluating impacts, risks, and opportunities related to a company’s business relationships and value chain, as well as in its own operations. After con- ducting the DMA, companies must report what the resulting material topics are and how they deal with the material impacts, risks, and opportunities from both strategic and operational perspectives. In 2022 Cloudberry revised the companys material topics and set our sustainability ambitions, targets, and key performance indicators, in addition to struc- turing the reporting related to Environment, Social, and Governance (ESG) sections. During 2023 we focused on preparing to eventually report in com- pliance with the Corporate Sustainability Reporting Directive (CSRD). Cloudberry conducted a new DMA following the newly finalized guidance from the European Financial Reporting Group (EFRAG), which was set up to develop the ESRS. Stakeholder dialogue is an essential part of this process, and Cloudberry made use of a mix of interviews con- ducted explicitly connected to the DMA, but also interviews that were conducted as a part of the 2022 strategy update – which was based on the materi- ality assessment guidance that was available at the time. Through the double materiality assessment, Cloudberry has identified material sustainability topics across two key dimensions: · From an Environmental and Social Materiality (inside-out) perspective, considering impact mate- riality on ESG-related topics where Cloudberry has significant external influence in the short, medium, and long-term, either directly or within the value chain · From a Financial Materiality (outside-in) perspec- tive, taking into account financial materiality on ESG-related risks and opportunities that may impact the value of Cloudberry in the short, medium, and long-term Planet and society Financial materiality (outside-in perspective) Impact materiality (inside-out perspective) Cloudberry Annual report 2023 Sustainability report 50 Water and marine resources (E3) Consumers and end-users (S4) Own workforce (S1) Affected communities (S3) Local society (Entity specific) Business conduct (G1) Favorable framework for renewables (Entity specific) Workers in the value-chain (S2) Pollution (E2) Climate change (E1) Circular economy (E5) Biodiversity and Ecosystems (E4) The ESRS sustainability topics and two entity-spe- cific topics are shown on the materiality matrix above. The impact materiality visualizes how significant our impact is on the world, while the financial materiality relates to the companys risks and opportunities. All topics that are material from an impact perspective, from a financial perspective, or from both perspectives, are considered mate- rial. Our material ESRS sustainability topics are E1 Climate Change, E2 Pollution, E4 Biodiversity and Ecosystems, E5 Circular Economy, S1 Own Workforce, S2 Value Chain workers, S3 Affected Communities, and G1 Business Conduct. In addition, we identified two material entity-specific topics, Local Society and Favorable Frameworks for Renewables. The results of our DMA, detailing the impacts, risks, and oppor- tunities for each material sustainability topic, are described in the following sections of this report. Material impacts risk and opportunities The double materiality assessment was conducted on Cloudberrys group level, including Captiva, where Cloudberry became a 100% owner at the end of 2023. The DMA was conducted using a top-down approach that began by identifying and describing all of Cloudberry’s actual and potential impacts, risks, and opportunities (IROs) related to the sub-top- ics listed in the ten topical ESRS standards covering Environment, Social, and Governance topics. Additionally, we assessed some IROs that were not connected to the ESRS topical standards, but were relevant to Cloudberry. These Entity-specific topics are Local society and Favorable framework for renewables. At this point, key stakeholders were interviewed to ensure that the identified IROs were accurate and to gain insight into their severities. We then conducted a preliminary screening and rating to determine which IROs (and sub-topics) that were immaterial and removed these from the list. Thereafter, rating workshops with key Cloudberry employees with subject matter expertise were conducted. Each IRO was rated on a scale of 1 to 5 for each of the aspects suggested in the ESRS. Environment Social Governance Entity specific Financial materiality Impact materiality Low 51Cloudberry Annual report 2023 Sustainability report E1 Climate change Material impact, risk, or opportunity Description Climate change adaptation Positive impact Development of diverse power sources A diverse energy system supported by energy generation in many locations will be more resilient in the face of the coming increase in extreme weather events and increasingly unpredictable weather patterns. We contribute to this by developing and operating independent power plants. We also contribute to adaptation through Captiva's monitoring services, which allow power producers to respond in real-time to changing weather conditions. Risk Physical climate-related risks Financial risk because of more frequent and stronger extreme weather incidents can lead to shutdowns, damage, work delays, and repair needs. There is also the risk of prolonged drought leading to reduced production, and long-term damage to hydro plants because of sediment erosion caused by increased precipitation. Wind patterns may lead to uncertainty in production estimates. Opportunity Increased energy production Increased precipitation and snowmelt will likely allow us to produce more hydropower. For impacts, this included scale (seriousness) and scope (size of area or number of beings affected). Negative impacts were also rated for remediability, and potential impacts were rated for likelihood. Risks and opportunities were rated based on their potential financial impact on Cloudberry and their likelihood. The rating workshop for impacts included Cloudberry’s Chief Compliance and Organization Officer, Head of Sustainability, Project Manager, a Captiva Asset Manager, and two external sustain- ability experts. The rating workshop for risks and opportunities included the Head of Sustainability and Chief Financial Officer and one external expert. After the ratings were complete, the threshold for materiality was set at 3.33. The double materiality assessment in 2023 largely confirmed the material ESG topics identified in Cloudberry’s 2022 assessment, with the addition of E2 – Pollution. The double materiality assessment resulted in the following ESRS topics being identified as material: E1 Climate Change, E2 Pollution, E4 Biodiversity and Ecosystems, E5 Circular Economy, S1 Own Workforce, S2 Value Chain Workers, S3 Affected Communities, and G1 Business Conduct, including the two entity-specific topics Local Society and Favorable Frameworks for Renewables reflecting our contribution. Topics related to E3 Water and Marine Resources were considered throughout the DMA, but no material IROs were identified. This is because the hydropower plants Cloudberry develops and operates are small and do not involve damming rivers. Additionally, they tend to be located along steep parts of the river and therefore do not dis- turb migrating fish or change the flow of the river. Cloudberry’s dependence on water is covered under the section E1 Climate change and is not relevant to the disclosures and subtopics related to the use of water and marine resources. The ESRS topic of S4 Consumers and End-Users, along with all the related potential IROs, was found not to be material to Cloudberry, as Cloudberry does not sell physical products to consumers or end users. Under the ESRS topics, the following impacts, risks, and opportunities were found to be material. Cloudberry Annual report 2023 Sustainability report 52 Material impact, risk, or opportunity Description Climate change mitigation Positive impact Development and production of renewable energy Increased renewable energy production contributes to climate change mitigation through the decarbonization of society and environment. Negative impact Greenhouse gas emissions, especially in the supply chain and in Scope 3 We consume energy in our daily operations, some of which come from fossil fuels. We are also responsible for a large amount of supply chain emissions, the Scope 3 emissions. Risk Transition risk that governments will not prioritize renewable energy development and production Politicians and governments may not prioritize renewable energy build-out in the coming green transition, which would lead to less growth than expected for Cloudberry and may lead to uncertainty in investment conditions for future projects. Opportunity Increased prioritization of renewable energy development An increasing focus on the development of renewable energy will create opportunities for Cloudberry and secure funding and development permits. Energy Positive impact Decarbonization of the energy system We have a positive impact by developing and producing renewable energy. Positive impact Matching energy production with demand The digital monitoring services make it easier to match electricity production with demand. Negative impact Energy consumption Our own operations energy consumption. Risk Increased power price volatility Increased power price volatility will make it harder for Cloudberry to forecast revenues. Risk Changing weather patterns Changing weather patterns will make it harder to predict the weather and will increase production volatility. Opportunity Increased demand for renewable energy Increasing demand for renewable energy will lead to increased development and production, and potentially to increased electricity prices. 53Cloudberry Annual report 2023 Sustainability report E2 Pollution Material impact, risk, or opportunity Description Pollution to air Positive impact Reducing fossil fuel use The renewable energy we develop and produce reduces the need for fossil fuel-based energy, which is highly polluting to the air. In the DMA we also considered our negative impacts related to the pollution to air, water, soil, and living organisms. These impacts were found to be immaterial due to the small amount of pollution we generate. Our impacts in these areas through the value chain were also found to be immaterial, although more relevant, due to the highly limited nature of our influence over the major suppliers we rely on. We also assessed our risks and opportunities related to pollution, and these were also found to be immaterial. Cloudberry Annual report 2023 Sustainability report 54 E4 Biodiversity and ecosystems Material impact, risk, or opportunity Description Direct impact drivers of biodiversity loss Positive impact Mitigation of climate change Our development of renewable energy contributes to the mitigation of climate change, which is a direct impact driver of biodiversity loss Risk Public opinion turns against wind/hydropower Public opinion could turn against wind and hydropower development due to the industry’s negative impacts on nature and biodiversity. Opportunity Increased interest in renewables due to climate change driving biodiversity loss Increased societal focus on climate change as a driver of biodiversity loss may create financial opportunities in the renewable energy industry. Impact on the extent and condition of ecosystems Potential positive impact Ecosystem improvement projects We have a potential positive impact when we conduct nature rehabilitation or improvement projects we have taken over from other developers or producers. Opportunity Become the preferred partner by being an industry leader in nature impact If we become an industry leader when it comes to nature impact and biodiversity we can become an attractive partner organizations and communities that are focused on reducing nature impact and biodiversity loss. Impacts and dependencies on ecosystem services Negative impact Raw material mining We have a negative impact on the supply chain, because of the mining of the materials used in the production of equipment for constructing our power plants. Risk Changing precipitation/weather patterns Changes in precipitation patterns could make hydropower less profitable. In our DMA process, we also considered the sub-topics of impact on the state of species, impact on the extent and condition of ecosystems, and impacts and dependencies on ecosystem services, but no material impacts, risks, or opportunities were identified. 55Cloudberry Annual report 2023 Sustainability report Cloudberry Annual report 2023 Sustainability report 56 E5 Resource use and circular economy Material impact, risk, or opportunity Description Resource inflows Potential positive impact Use of residual and recycled materials Our use of residual materials in concrete and of a higher than average share of recycled materials may set a higher industry standard. Negative impact Use of resource-intensive, non-recycled materials We have a high material footprint because concrete is very resource-intensive, and wind turbines are not generally made of recycled materials. Risk Logistical challenges due to increased regulation Logistical challenges caused by increasing regulation of resources we are dependent on may increase our costs. Risk Taxes or fees on specific materials Taxes or fees on specific materials we are dependent on may increase our costs. The sub-topics of outflows and waste were determined in the DMA to be not material because Cloudberry does not sell physical products, and currently has very little waste since wind and hydropower plants have long lifetimes. S1 Own workforce Material impact, risk, or opportunity Description Working conditions Positive impact Secure, year-round employment We provide our workers with stable, secure, year-round employment, social protections, and adequate wages. Equal treatment and opportunities for all Opportunity Become a preferred partner by being an industry leader Becoming an industry leader in terms of diversity, equity, and inclusion would make us an attractive partner for future projects and investors. 57Cloudberry Annual report 2023 Sustainability report S2 Workers in the value chain Material impact, risk, or opportunity Description Working conditions Positive impact Extensive working condition requirements We have extensive condition requirements for our contractors and follow-up physically on site. Opportunity Become a preferred partner by being an industry leader Being known for good working conditions would give us a competitive advantage Equal treatment and opportunities for all Positive impact Extensive requirements for contractors We have strict contractor requirements regarding equal treatment and equal opportunities, and follow up regularly S3 Aected communities Material impact, risk, or opportunity Description Communities’ economic, social and cultural rights Positive impact Contribution to the local economy We contribute to local economies by using local suppliers and employing residents whenever this is possible. Risk Failing to create value or maintain a professional reputation If we do not manage to create enough local value or maintain our professional reputation, we may lose our license to operate. Opportunity Become a preferred developer by being an industry leader We may have more opportunities in the future by improving our position as an industry leader on creating local value where we operate. Particular rights of indigenous communities Risk Lose opportunities due to bad industry reputation We may lose our license to operate due to the negative impact hydro and wind power has as industries has on human rights defenders. In our DMA process, we considered many different potential IROs related to affected communities. In particular, those related to indigenous communities were determined to be immaterial because Cloudberry does not operate in areas inhabited by indigenous communities. Additionally, much like with value-chain workers, it is difficult for Cloudberry to influence our suppliers’ impact on affected communities since we are a small entity, and our business is dependent on a limited pool of suppliers for essential compo- nents. Value-chain impacts on affected communities have therefore been determined to be immaterial. Cloudberry Annual report 2023 Sustainability report 58 Entity specific – local society Material impact, risk, or opportunity Description Local society Positive impact Stable income for landowners We provide stable income through our payments to local landowners. Positive impact Improvement of local environment We conduct improvement projects when we take over projects from other developers. Positive impact Supporting local causes We have created foundations and donated money to support local initiatives. Positive impact Providing educational opportunities We host site visits to teach people about our projects and give lectures at local schools. Opportunity Win future projects by creating local value If we cultivate a reputation for creating local value, we will be able to win more projects in the future. Cloudberry also acknowledges that our activities have some potential negative impacts on local society, although these were determined to be immaterial. Examples of negative impacts are increased traffic caused by our operations, especially in the development phase, concerns about garbage related to site development, and internal conflict. These impacts have been evaluated as immaterial because we have been able to successfully mediate them relatively easily through local engagement. 59Cloudberry Annual report 2023 Sustainability report G1 Business conduct Material impact, risk, or opportunity Description Corporate culture Positive impact Promoting responsible value chains We are committed to and emphasize responsible behavior throughout the value chain, internally and externally. Opportunity Maintaining a reputation for a good corporate culture We will be a more attractive business partner if we can maintain our reputation as a responsible actor throughout the supply chain. Protection of whistleblowers Positive impact Using standard whistleblowing practices, also in the supply chain We use standard third-party whistleblowing practices and have extended these to supply chain workers, making sure the channel is easily accessible at sites where our contractors work. Management of relationships Positive impact Emphasis on responsible business conduct and long-standing relationships We place a strong emphasis on responsible behavior and establish long-standing supplier relationships, giving us more leverage to make an impact. Risk Production delays Our dependence on specific suppliers may lead to production and work delays if there are supply chain issues. Opportunity Maintaining a good reputation Having good relationships with our suppliers may give us a competitive advantage in the future. Entity specific – Favorable Framework for Renewables Material impact, risk, or opportunity Description Favorable Framework for Renewables Positive impact Promoting renewable energy development We have a positive impact through our lobbying activity and engagement to promote favorable conditions for future renewable energy development. Opportunity Creating better conditions for future renewable energy development Improving the future conditions for renewable energy development will make it easier for us to develop more projects over time. Cloudberry Annual report 2023 Sustainability report 60 We actively involve and engage in the local communities where we operate, generating renewable energy, while fostering local value creation. 61Cloudberry Annual report 2023 Sustainability report Engaging with Stakeholders An essential part of Cloudberry’s business model is to have a positive impact on all of our stakeholders. We have important stakeholder groups, and our success is reliant on our ability to foster trust and transparency with them. It is therefore important that we maintain timely and transparent engage- ment with all our stakeholders. All stakeholder groups have emphasized that it is important that Cloudberry behaves responsibly regarding both environmental impact and social issues such as working conditions, impact on local communities, and supply chain responsibility. Our main focus areas for the stakeholder groups and how we manage our relationships with them are listed below: Stakeholder Group Purpose of engagement Methods of engagement Examples of engagement outcomes Landowners and residents • Determining the local community’s sentiment toward renewable energy and willingness to host • Addressing concerns • Answering questions • Building confidence • Promoting cooperation • Regular engagement when assessing potential new projects • Public meetings in the development phase • Continually available communication channels throughout the development and operation phases • Decision on whether or not to build • Local informational meetings • Site-specific measures (ex. traffic reduction, hiking, and biking trails, building benches) • Establishment or support of local initiatives Municipalities and politicians • Ensure value is added to local communities • Maintain professional, cooperative relationships • Dialogue and meetings with officials and politicians • Measures to address concerns • Cloudberry’s presence at local events Suppliers and consultants • Establish professional, collaborative relationships • Have transparent communication • Regular meetings • Questionnaires and declaration forms covering quality, health, safety, and environmental sustainability • Clear communication of Supplier Code of Conduct, HMS, and DEI policies • Implementation of supplier declaration • Safety walks and frequent interaction on-site • Regular on-site health and safety meetings • Project-based GHG emissions reporting NGOs • Ensure a full understanding of Cloudberry’s impact • Increase consciousness about energy issues • Find solutions for negative impacts • Meetings • Membership in associations • Biodiversity protection measures • Reuse of materials and infrastructure Investors • Ensure we meet reporting requirements • Understand expectations • Maintain good relationships to promote future projects • Regular meetings • Company presentations in investor forums • Analyst presentations • Targets and key performance indicators • Analysis of climate risks and opportunities • Quarterly GHG reporting • EU taxonomy assessment • Science Based Targets initiative • Diversifying the production portfolio Cloudberry Annual report 2023 Sustainability report 62 Stakeholder Group Purpose of engagement Methods of engagement Examples of engagement outcomes Financial institutions • Maintain good relationships • Identify opportunities • Regular meetings • Company presentations • Integration of ESG in overall governance • Local value creation Employees • Create a safe and inclusive workplace • Become an attractive employer • Gather employee input on our business and operations • Maintain high retention rates • Annual employee engagement survey • Quarterly townhall meetings • Teambuilding and workshops • Motivating to work with renewable energy and the energy transition, contributing to a sustainable society • Innovation and knowledge sharing Value-chain workers (close to us in the value-chain) • Ensuring a good, safe workplace for value-chain workers • Minimizing negative impacts • Physical presence at sites • Whistleblowing reporting channel • Building trust with contractors and workers • Better working environment Workers further out in the value- chain • Ensuring an overall positive impact • Avoiding human rights abuses • Meetings, questionnaires, and declaration forms for our suppliers addressing ethical standards • Interaction on-site with sub sub suppliers • To be addressed further Local presence is important to maintain stakeholder dialogue and it allows Cloudberry to build trust and understanding of the context in which we operate. We have had ongoing dialogue with our stakeholders throughout 2023 as part of both the ESG strategy enhancement project we began in 2022 and our preparation for meeting the Corporate Sustainability Reporting Directive (CSRD) require- ments and the double materiality assessment. Stakeholder feedback played an important role in the 2022 strategy update. Their insight coupled with our community-oriented approach, forms the cornerstone of our business management practices. The commitment to long-term value creation for all stakeholders underscores our approach to business management. The Board of Directors places significant importance on sustainability-related topics when considering business decisions. They carefully identify and assess the sustainability aspects relevant to both the company and our stakeholders. The incorpora- tion of stakeholder management and input is fully integrated into Cloudberry’s overarching business strategy and embedded within our operational principles. Stakeholder input is especially impor- tant during the greenfield phase, as Cloudberry is committed to never initiating new renewable energy projects in communities that express sig- nificant opposition. Transparency and early stake- holder engagement are key principles that guide Cloudberry’s decisions regarding advancing poten- tial projects in specific areas. The insights gained and the results from engaging with stakeholders are incorporated into all procedures that inform the management and the Board of Directors. Stakeholder input was also a part of our double materiality assessment (DMA), in which we consid- ered the stakeholder input we have been gathering since 2022. During the DMA, internal stakeholders including project managers and other key employ- ees actively identified Cloudberry’s impacts, risks, and opportunities related to ESG topics. Many impacts, risks, and opportunities were also identified from the results of the interviews we conducted 63Cloudberry Annual report 2023 Sustainability report Cloudberry Annual report 2023 Sustainability report 64 with external stakeholders in connection with our 2022 ESG strategy project. Once the impacts, risks, and opportunities had been identified and rated, the assessment was validated by selected external stakeholders including a financial institution, an investor, and an environmental NGO. At the end of the DMA, a description of the process, including the stakeholder dialogue, was presented to the ESG Committee and then presented to the Board of Directors, who voted to adopt the results. One of Cloudberry’s major investors, the Norwegian family-owned and value-driven investment com- pany Ferd, participated in the stakeholder dialogue around our DMA. In the dialogue, Ferd acknowledged the results of our assessment as relevant for a renewable energy company such as Cloudberry but emphasized the importance of continuing to work to minimize our environmental and nature impact. Ferd underscored the need to establish climate targets and develop a roadmap for achieving them in both the short term and the long term. For many years, the Södermanland Energy Association, a non-profit organization in Sweden, has been dedicated to enhancing understanding of renewable energy among its members and through- out society. During the stakeholder discussion, the association highlighted the significant value of organizing field trips to facilities like Sundby Vindpark for its members, providing them with insights into the challenges and opportunities associated with renewable energy. Additionally, they highlighted the importance of engaging with the local community members and associations as a crucial component of Cloudberry’s stakeholder management strategy. It enables the stakeholders to gain knowledge and ask questions, leading to interesting discussions like during the visit to the wind power plant. Local hearing (SE: samråd) Simpevarp Havsvindpark The offshore wind project, Simpevarp Havsvindpark, was in 2023 undergoing local con- sultations. The Cloudberry team arranged a four- day local hearing (SE: samråd), an integral part of the mandatory process. Throughout the hearing, Cloudberry engaged with over 500 individuals representing local interest groups and industry stakeholders. The stakeholders received infor- mation about the project and the permit process and were encouraged to submit statements regarding the project. Fostering local knowledge and trust through transparency is a key objective for such hearings. The sessions included an exhibition showcasing various aspects of the project and wind power production, along with a presentation and an opportunity for attendees to ask questions. Additionally, a digital meeting was conducted following the local hearing. Cloudberry’s active involvement in and arrange- ment of this hearing underscores the company’s commitment to community engagement and local stakeholder management. 65Cloudberry Annual report 2023 Sustainability report Environment EU Taxonomy aligned KPIs 68 ESRS E1 Climate change 72 ESRS E2 Pollution 80 ESRS E4 Biodiversity and Ecosystems 82 ESRS E5 Circular economy 86 Cloudberry Annual report 2023 Sustainability report 66 Concern for the environment is at the center of everything Cloudberry does. We strive to have a positive impact on the environment through our development and production of renewable energy. At the same time, we acknowledge that our activities also have a negative impact on the environment. We aim to minimize this and is committed to never exceed any legal limits on environmental impacts. We set our environmental sustainability focus areas based on the results of our 2022 strategy update and confirmed the results with our 2023 double materiality assessment – with the addition of pollution. Our material environmental topics include climate change, pollution, biodiversity and ecosys- tems, and circular economy. Our main priorities in this area have been our greenhouse gas emissions, nature impact, and biodiversity. To monitor our overall progress related to environ- mental sustainability, we have identified KPIs which we actively monitor. Sustainability ambitions To power the transition to renewable energy aiming to be climate and nature positive Key Performance Measures Actual 2023 Actual 2022 Target 2023 Target 2025 Environment 1 GHG emissions avoided tCO2e 121 836 59 496 124 500 212 000 GHG emissions tCO2e 12 891 10 529 13 500 N/A 1 The CO2 reduction and the direct and indirect GHG emissions have been adjusted for 2023. See the Key performance summary and the Environment section for details. 67Cloudberry Annual report 2023 Sustainability report EU Taxonomy aligned KPIs Cloudberry is fully committed to operating as a renewable energy company, and sustainability is at the core of our business. It is imperative for us to demonstrate our dedication to sustainability, enhance investor confidence, adhere to regulatory standards, access markets, and manage environ- mental and climate-related risks effectively. We balance respect for nature and biodiversity, with healthy community values, social safeguards, and sustainable growth. Cloudberry has conducted an alignment assess- ment of all our renewable assets with an owner- ship share above 50% under the EU Taxonomy for ‘Electricity Generation from Hydropower’ and ‘Electricity Generation from Wind Power’. This com- prehensive, bottom-up, and asset-specific assess- ment included detailed circularity and climate risk evaluations for each asset. All evaluated assets met the stringent requirements for alignment with the EU Taxonomy categories for ‘climate mitigation’ and ‘climate adaptation’. This achievement underscores our commitment to the principles of substantial contribution, doing no significant harm, and adher- ence to minimum safeguards, ensuring that our assets are operated sustainably and with a minimal environmental footprint. Full year 2023 NOK million Turnover Capex Opex Eligible - Taxonomy aligned 81% Non- Eligible 19% 333 Eligible - Taxonomy aligned 95% Non- Eligible 5% Eligible - Taxonomy aligned 96% Non- Eligible 4% Full year 2022 (revised) NOK million KPI comparison (percentage points to Prior Year) Eligible - Taxonomy aligned 74% Non- Eligible 26% 208 Eligible - Taxonomy aligned 88% Non- Eligible 12% 324 Eligible - Taxonomy aligned 88% Non- Eligible 12% 12 +7% +7% +8% 550 20 Detailed summary of results: Turnover, Capex and Opex 2023 vs. 2022 Cloudberry Annual report 2023 Sustainability report 68 Analysis The analysis serves as a foundation for calculating the Group’s key performance indicators as out- lined in the EU taxonomy: Turnover, Capex (capital expenditure), and Opex (operating expenses) deter- mined in accordance with the group’s consolidated financial results. The results of the EU Taxonomy for the assessed KPIs highlight the Group’s commitment to sustainability and environmental responsibility. The majority of Cloudberry’s activities are eligible and aligned in accordance with the EU Taxonomy. In 2023, the Group’s turnover amounted to NOK 333m, with 81% derived from Taxonomy eligible and aligned activities, marking a 7% increase in percentage points from the assessed turnover for the year 2022. This growth can be attributed to the expansion of the Group’s production portfolio, primarily the acquisition of the Odin portfolio, which added 51 wind turbines meeting the eligibility criteria. Currently, non-eligible turnover represents the revenue generated by asset management and consultancy services, as these activities are not yet directly covered by the Taxonomy. Total Capex for the Group has increased in absolute and proportional terms, totalling NOK 550m, with 95% representing eligible capital investment. This 7% increase in percentage points from 2022 is primarily due to ongoing construction projects of the two wind farms Sundby and Munkhyttan during 2023. In 2022, the majority had been related to the construction of Hån wind farm. The non-eligible Capex is mainly related to investments in intangible assets which are IT systems developed for renewable assets. The aligned Opex has increased in absolute (NOK 20m) and proportional terms (96%). This 8% increase in percentage points is mainly due to increased greenfield development of renewable projects, particularly off-shore and early-phase development, leading to higher direct non-capitalized costs. Results and KPIs Full Year 2023 NOK million Turnover Capex Opex Amount % total turnover Amount % total Capex Amount % total Opex A: Eligible- Taxonomy aligned 269 81% 524 95% 20 96% B: Non-eligible 64 19% 26 5% 1 4% Total A and B 333 100% 550 100% 20 100% Full Year 2022 (revised) NOK million Turnover Capex Opex Amount % total turnover Amount % total Capex Amount % total Opex A: Eligible- Taxonomy aligned 154 74% 285 88% 11 88% B: Non-eligible 55 26% 39 12% 2 12% Total A and B 208 100% 324 100% 12 100% 69Cloudberry Annual report 2023 Sustainability report Turnover NOK milllion Economic Activities NACE Codes Amount Turnover proportion (%) Eligible- Taxonomy aligned Electricity generation from wind power- production of electricity from renewable sources D35.12 192 58% Electricity generation from wind power- Construction of utility projects for electricity and telecommunications F42.22 2 1% Electricity generation from hydropower- production of electricity from renewable sources D35.12 75 22% Electricity generation from hydropower- Construction of water projects F42.91 0 0% Total Eligible Activities 269 81% Non-Eligible Activities 64 19% Total 333 100% Capex NOK milllion Economic Activities NACE Codes Amount Capex proportion (%) Eligible- Taxonomy aligned Electricity generation from wind power- production of electricity from renewable sources D35.12 6 1% Electricity generation from wind power- Construction of utility projects for electricity and telecommunications F42.22 517 94% Electricity generation from hydropower- production of electricity from renewable sources D35.12 1 0% Electricity generation from hydropower- Construction of water projects F42.91 0 0% Total Eligible Activities 524 95% Non-Eligible Activities 26 5% Total 550 100% Opex NOK milllion Economic Activities NACE Codes Amount Opex proportion (%) Eligible- Taxonomy aligned Electricity generation from wind power- production of electricity from renewable sources D35.12 2 11% Electricity generation from wind power- Construction of utility projects for electricity and telecommunications F42.22 15 74% Electricity generation from hydropower- production of electricity from renewable sources D35.12 2 11% Electricity generation from hydropower- Construction of water projects F42.91 0 0% Total Eligible Activities 20 96% Non-Eligible Activities 1 4% Total 20 100% Cloudberry Annual report 2023 Sustainability report 70 All of Cloudberry’s activities are linked to developing and operating sustainable renewable energy. We are committed to regularly reviewing our economic activities to align with the criteria set by the EU Taxonomy, and to reach the utmost standards of transparency and reporting, emphasizing our firm commitment to sustainability and ethical business operations. Cloudberry has released a stand-alone EU Taxonomy Report for 2023 which is accessible on the company’s website. Climate risk In the Nordic regions, climate change is expected to lead to warmer winters, increasingly extreme winds and rainfall, and sea level rise. These shifts are likely to cause flooding and other damage. In the face of escalating climate change impacts, Cloudberry recognizes that it is imperative to continually assess and disclose climate-related risks and opportunities and integrate them into the company’s strategic planning, risk management, and investment deci- sions. With our commitment to sustainability and the understanding that climate change poses both a significant risk and a substantial opportunity for Cloudberry, we have completed a scenario-based climate risk assessment adhering to the guidelines set forth by the Task Force on Climate-related Financial Disclosures (TCFD). The climate risk assessment process involved a thorough analysis of potential physical risks, such as extreme weather events and long-term climate shifts, as well as transition risks associated with the global move towards a low-carbon economy. This dual perspective ensures that Cloudberry not only mitigates risks but also capitalizes on the opportuni- ties arising from the transition, reinforcing its leader- ship position in the renewable energy market. By integrating the TCFD recommendations into our corporate governance, Cloudberry not only enhances our transparency and accountability but also strengthens our competitive edge in attracting investment and fostering trust among stakeholders. Findings from the risk assessment and strategic actions following the TCFD framework demonstrate Cloudberrys proactive approach to navigating the challenges and opportunities presented by climate change. In 2022 Cloudberry, facilitated by a third party, conducted a detailed, TCFD-aligned assessment of the climate risks facing Cloudberry’s operations. In 2023 another assessment was conducted to incor- porate the newly acquired wind farm portfolio Odin in Denmark. Every risk and opportunity has been evaluated based on its likelihood, financial impact, and time horizon. The process was further used to identify Cloudberry’s most significant financial risks, which serve as the foundation for the scenario analysis. Cloudberry assesses its risks and opportunities from short-, medium-, and long-term strategic and finan- cial perspectives, and has set threshold values for financial impact. The financial impact is defined by assessing both the actual cost of the impact as well as a consideration of frequency, with the intervals structured as below. Financial Impact Low Medium High MNOK <25 25–100 >100 Frequency <0-1 years 1-5 years >5 years The thresholds for the cost of impact and frequency of impact were then converted to a 3x3 risk matrix, ultimately leading to a single classification based on the two input variables. Cloudberry conducts an annual assessment of the climate-related risks and opportunities associated with its business operations. More detailed informa- tion including the scenario analysis is enclosed in our TCFD report. 71Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Development of diverse power sources · Development and production of renewable energy · Decarbonization of the energy system · Matching energy production with demand Negative impacts · Greenhouse gas emissions, especially in supply chain and in Scope 3 · Energy consumption Risks · Physical climate related risks · Transition risk that governments will not prioritize renewable energy development and production · Increased power price volatility · Changing weather patterns Opportunities · Increased energy production · Increased prioritization of renewable energy development · Increased demand for renewable energy ESRS E1 Climate change Sustainability is at the core of everything we do and is well-integrated into our long-term strategy. To improve our climate footprint, we must reduce our environmental impact and avoid GHG emissions wherever possible. Cloudberry Annual report 2023 Sustainability report 72 Climate change and environmental degradation are among the most critical issues facing the global community today, with many countries already experiencing their impacts. Cloudberry contributes positively to the climate by developing and producing renewable energy, yet also has a negative impact due to the environmental impact and greenhouse gas emissions during construction. Furthermore, we are aware of the risks climate change poses to our assets and overall business, and we consistently evaluate these risks to make strategic business decisions. Managing Climate Change impacts, risks and opportunities Cloudberry has always placed climate consider- ations at the center of everything we do, and we constantly address our impacts on the climate as well as our adaptation needs. Because we have always considered climate change to be a central consideration, we began reporting on our GHG emis- sions and energy consumption early on. To ensure consistent greenhouse gas reporting being up to standard, we have developed and implemented internal Greenhouse Gas Accounting Guidelines and reports on emissions quarterly, including energy consumption. We have also committed to the Science Based Targets initiatives target setting and aim to have net zero carbon emissions by 2040. To mitigate GHG emissions and meet our targets, we will implement a policy focused on addressing our greenhouse gas emissions. Currently, we do not see the necessity to develop a policy focusing on energy efficiency, as the potential for energy savings related to consumption at our operating power plants is limited. Furthermore, as Cloudberry has selected the location-based Scope 2 emissions for our targets, a policy for renewable energy use has not been emphasized. This is because the Nordic grid has a high share of renewable energy, resulting in relatively low emissions from electricity use. At the same time, our main impact on the energy grid and overall greenhouse gas emissions is our production of renewable energy, which replaces fossil fuels. This consideration is a central part of our business strategy. Although the renewable energy transition creates financial opportunities for the company, climate change is also a risk for Cloudberry. Changing precipitation patterns make wind and hydropower less reliable and predictable, and increasingly fre- quent and severe extreme weather events threaten our assets. Cloudberry has conducted thorough climate-related risk assessments and incorporated the results into our decision-making procedures. As a part of our 2022 strategy update, we strength- ened our risk strategy by including climate change and the energy transition. To reflect the analysis of the Odin wind power portfolio after its acquisition in 2023, we updated our risk strategy related to extreme rainfall and changing weather patterns. Further details are published in our TCFD and EU Taxonomy reports. Additionally, we manage climate risks within our supply chain through our Supplier Code of Conduct, integrating them into our tender- ing processes and supplier questionnaires. Our activities Cloudberry is actively involved in investing in the development, construction, and operation of renew- able energy assets. While our focus on expanding renewable energy sources results in an environmen- tal impact through greenhouse gas (GHG) emissions during the development and construction stages, our operational power plants play a vital role in reducing overall emissions by producing renewable energy. Therefore, once operational, our power plants make a positive contribution to the energy mix by mitigating greenhouse gas emissions through the generation of renewable energy. Throughout 2023, Cloudberry has been working to address all the relevant climate change-related impacts, risks, and opportunities. A major part of this effort has been working to improve our greenhouse gas emissions accounting in preparation for sub- mitting emissions reduction targets to the Science Based Targets initiative, which we did at the end of 2023. The setting of these targets and the improve- ment of our greenhouse gas emissions accounting were both done as part of the groundwork for our forthcoming climate transition plan, currently in development. 73Cloudberry Annual report 2023 Sustainability report Improvements to the GHG accounting Since 2023, Cloudberry has been publishing quar- terly reports on its greenhouse gas emissions. Throughout the year, the company has worked to improve the monitoring and reporting procedures for its greenhouse gas emissions. In 2023, Cloudberry conducted a gap assessment on the 2022 GHG emissions accounting. The gap assessment and screening were based on the GHG Protocol’s Corporate Standard. The assessment includes a description of the organizational boundaries, Scopes 1, 2, and 3 emissions and methodology, and routines for data acquisition. The insights and evaluations from the gap assessment were used to enhance the reporting level for the 2023 greenhouse gas emissions reporting. The gap assessment also served as preparation for the limited assurance of the companys greenhouse gas emissions reporting. Additionally, the improvements were integrated into the revised 2022 emissions accounting, which was utilized in Cloudberry’s commitment to SBTi, with the base year set as 2022. More details regarding the base year and SBTi are provided in the next section. Cloudberry’s auditor conducts a limited assurance of the companys greenhouse gas emission accounting and reporting against the GHG Protocol, specif- ically Scopes 1, 2, and 3. Assurance is performed following the International Standard on Assurance Engagements ISAE 3410. The auditor’s scope of work and verification are presented in the Auditors report. After conducting the gap assessment, comprehen- sive in-house policies and guidelines for greenhouse gas emission reporting are developed. These guide- lines encompass all aspects of Cloudberry’s activ- ities and the associated GHG emissions, aimed at ensuring consistency and transparency on reporting procedures throughout the organization. Additionally, the reporting routines are updated, leading to modifications in the 2022 greenhouse gas accounting. Emissions reported under Scope 3, specifically in the Capital Goods category, have been split into three categories. This enhancement allows for more refined reporting. Emissions related to transport are categorized into category 4, while emissions associated with end-of-life treatment of wind turbines are included in category 12. The adjustment is done to align with the GHG protocol standard. Furthermore, Cloudberry has enhanced its account- ing practices by incorporating SF6 gas leakage from operational power plants into Scope 1 emissions. Even though these newly included Scope 1 emissions represent only 0.05% of the overall greenhouse gas emissions, it remains imperative for Cloudberry to showcase transparency and establish reporting routines also for these emissions. Finally, to further address the gaps identified during the gap assessment, Cloudberry has provided supplementary information concerning reporting principles, input data, methodology, and emission factors utilized in its greenhouse gas reporting. This approach ensures adherence to the GHG protocol standard while enhancing transparency in our reporting practices. For more specific information, please refer to the Appendix. Our work on GHG accounting and reporting for 2023 serves as a preparation for the forthcoming regula- tory requirements outlined in the ESRS framework. Commitment to SBTi In addition to improving the completeness and transparency of our greenhouse gas accounting, Cloudberry has committed to set near-term and long-term company-wide emission reductions in line with the Science Based Target Initiative (SBTi). Our net-zero target has been approved by the SBTi. The approved target sets the foundation for Cloudberry to establish a roadmap for reducing Scope 1, Scope 2, and Scope 3 emissions, aligning with both short- term and long-term objectives and actions. These targets are compatible with limiting global warming to 1.5C and cover the greenhouse gases covered by the Kyoto Protocol: CO 2 , CH4, N2O, CFCs, HFCs, and SF6. Cloudberry is planning measures for a decar- bonization plan toward the net-zero target and the targets are as follows: · Short-term commitment: Reducing absolute Scope 1 and Scope 2 GHG emissions with 42% by 2030 · Long-term commitment: Reducing absolute Scope 1, 2, and 3 GHG emissions with 90% by 2040 Cloudberry Annual report 2023 Sustainability report 74 KPIs concerning the net-zero target will be inte- grated into all business units and will be reviewed by the management and the Board of Directors annu- ally. The selection of the 2022 base year is based on the outcomes of the gap assessment of greenhouse gas emissions reporting for 2022, together with the subsequent improvements made to the greenhouse gas emissions accounting for 2023. Given the comprehensive reporting of Scope 1, 2, and 3 green- house gas emissions in 2022, it emerged as a logical selection for the base year. Cloudberry’s GHG emissions In 2023 Cloudberry’s greenhouse gas emissions from Scope 1, Scope 2, and Scope 3 were 12 891 tons CO 2 e (10 529 tCO 2 e). Additional information regarding the reporting principles, methodology, and emission factors for each of the three scopes, along with categories within Scope 3, alongside a breakdown of greenhouse gas emissions from Cloudberrys business units, can be found in the Appendix. GHG emissions in tons for Scope 1, Scope 2 and Scope 3 Carbon Accounting Unit 2022 (Base year) 2023 Scope 1 Total tCO 2 e 2.1 1 6.5 Scope 2 Total Location-Based tCO 2 e 5 45.4 Scope 3 Total tCO 2 e 10 529 2 12 839 Total tCO 2 e 10 529 3 12 891 4 1 Adjusted from 0 as reported in the Annual Report 2022 due to the inclusion of SF6 gas leakage in the GHG accounting. 2 Adjusted from 10 723 as reported in the Annual Report 2022 due to updated figures for the emissions from the wind turbine foundations at Hån. 3 Adjusted from 10 727 as reported in the Annual Report 2022 due to the reasons mentioned above. 4 Adjusted from 12 889 in the 2023 Q4 report due to a minor correction in Scope 3 Category 3 Scope 1 covers all direct emissions sources, and Cloudberry’s Scope 1 emissions are attributed to the leakage of SF6 gas from the switchgear within Cloudberry’s wind turbines. In 2023, the total Scope 1 emissions were 6.5 tCO 2 e, which increased from 2022 due to the completion of Hån wind farm and the acquisition of the Odin portfolio. 75Cloudberry Annual report 2023 Sustainability report Scope 2 includes indirect emissions from Cloudberrys purchased energy (i.e., electricity). This includes purchased energy for offices in Oslo, Norway, and in Karlstad, Eskilstuna, and Särö, Sweden, as well as the energy used at our power plants. In 2023 Cloudberry used a total of 1 622 MWh of energy, corresponding to the emission of 45 tCO 2 e. Scope 2 emissions increased from 2022 primarily due to the acquisition of the Odin portfolio. Scope 3 comprises the reported indirect emissions resulting from Cloudberrys value chain activities. Reporting of purchased goods and services, capital goods, upstream transportation and distribution, and end-of-life treatment were identified as the most material reporting categories. The total registered emissions from Scope 3 were 12 839 tCO 2 e. Cloudberry’s scope 3 emissions will mostly depend on the number of and size of power plants under construction. Please see the Appendix for a breakdown of the included categories. In 2023, the construction of Cloudberry’s wind power plants Sundby and Munkhyttan accounted for 99% (12 750 tCO 2 e) of the emissions. Most construction-related emissions at Sundby were reported in 2023, with only minor emissions remaining in 2024 from site cleaning and final payments to the turbine manufacturer. For Munkhyttan, the GHG emissions in 2023 are related to the construction of roads and the concrete and steel used in the foundations for the turbine installa- tion, as well as the first payment made to the turbine manufacturer. Cloudberry is actively collaborating with its suppliers to ensure the delivery of reliable, high-quality input data for our greenhouse gas emission reporting. Cloudberry’s GHG intensity Cloudberrys greenhouse gas emission intensities for 2023 are shown in the table below. Going forward Cloudberry will work on and establish targets for these data points. Cloudberry’s energy intensity (Scope 1 and 2) increased in 2023 due to the increased Scope 1 and 2 emissions following the acquisition of the Odin portfolio. Furthermore, the intensity including Scope 3 decreased due to the increased energy generation in 2023. As 99% of Cloudberry’s 2023 GHG emissions come from our wind farms under construction, an intensity factor concerning these has been included. The GHG intensity (Scope 1, 2, and 3) for the con- struction projects shows the CO 2 emissions per capex spent since the final investment decision for these projects. Reduction of greenhouse gas emissions in our construction projects At Munkhyttan, three measures were taken to reduce the greenhouse gas emissions from the construction of the wind turbine foundations. The first was to use steel from Celsa in Mo i Rana in Norway for the reinforcement steel in the foundations. Based on environmental product declarations (EPDs) from the manufacturer, Cloudberry has calculated that the emissions from this were 22% lower (24 tCO 2 e) than the most cost-efficient steel supplier. Secondly, Cloudberry used eco-friendly cement with fly ash for the concrete in the foundations, which reduced the emissions by 22% (143 tCO 2 e) compared to conventional concrete. The calculation is done by comparing EPDs from the cement manufacturers. GHG intensity Carbon Accounting Unit 2022 2023 GHG intensity (Scope 1 and 2) Per energy generation gCO2e/kWh 0 0.1 Per revenue gCO2e/NOK 0 0.1 Per EBITDA gCO2e/NOK 0.1 0.2 GHG intensity (Scope 1, 2, and 3) gCO2e/kWh 39 25 Per spent capex, construction projects gCO2e/NOK - 21 Per spent capex, Sundby 1 gCO2e/NOK - 24 Per spent capex, Munkhyttan gCO2e/NOK - 21 1 Per spent capex from final investment decision in December 2022. Cloudberry Annual report 2023 Sustainability report 76 Finally, Cloudberry adopted an on-site mixing approach for the concrete. Compared to the alter- native of mixing the concrete remotely, Cloudberry has estimated that the greenhouse gas emissions for this process were reduced by approximately 70% (38 tCO 2 e). In Cloudberry’s second quarter 2023 report, Cloudberry reported that the use of eco-friendly concrete was expected to reduce CO 2 emissions by up to 50%, based on information from our suppliers. Upon further investigation, we found that this number was based on the on-site concrete mixing alone, and not accounting for the fly ash cement. All in all, the measures implemented for the foundations at the Munkhyttan wind farm resulted in approximately 25% (205 tCO 2 e) reduction in GHG emissions. Moreover, Cloudberry has applied the rock-an- chored foundation design where ground conditions made it feasible, deploying this approach for one of the three foundations on Munkhyttan. By utilizing rock-anchored foundations, which require less concrete and steel for reinforcement, Cloudberry has estimated a reduction of approximately 21% (154 tCO 2 e) in CO 2 emissions compared to using gravity-based foundations at each location. The calculation is derived from the actual emissions from steel and concrete used in the construction of the two remaining foundations, where a gravity-based design was necessary due to ground conditions. At Sundby wind farm, a substantial portion of exist- ing infrastructure, including foundations, roads, and crane supports, has been reused. Additionally, the internal cable network on site is also being reused with minimal modifications. The greenhouse gas savings in 2023 from the reuse of the foundations at Sundby wind farm are estimated to be around 1 900 tCO 2 e based on the life-cycle assessment from the wind turbine manufacturer, reducing the emissions from construction of the Sundby wind farm by approximately 15% compared to constructing new foundations. Cloudberry’s energy consumption In 2023 Cloudberry produced 520 GWh of renewable energy, comprising production from both wind and hydropower plants. Cloudberry did not generate any non-renewable energy during this period. Cloudberry’s overall energy consumption in 2023 totaled 1 622MWh, covering the electricity demand at our offices and operating power plants. The electricity consumption at our power plants primarily serves the purpose of securing essential technical functionalities during periods of low wind or water flow, ensuring uninterrupted safe operation of the power plants. Our positive contribution – decarbonization of the energy mix Cloudberry contributes positively to the energy mix by reducing greenhouse gas emissions through our production of renewable energy. The positive renewable contribution also referred to as “avoided emissions” or “scope 4”, plays a crucial role in the much-needed global decarbonization and is a direct outcome of Cloudberrys production of renewable energy. Cloudberry’s proportionate renewable energy production in 2023 totaled 520 GWh (268 GWh in 2022). The positive contribution relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2023 1), is equivalent to a reduction of 121 836 2 tCO 2 e (59 496 tCO 2 e in 2022) in the electricity grid. The reduced emissions signifi- cantly depend on the emission factor applied for the estimation; however, this provides a solid indication of Cloudberry’s positive impact on climate change. As a basis for calculating the positive contribution, Cloudberry has used the European electricity mix (EU-27). The emission factor ‘European electricity mix’ is calculated based on electricity production in the 27 EU countries. The emission factor is calculated as a weighted average based on the International Energy Association’s emissions factors for 27 countries. Cloudberry has adopted this emission factor since the company is contributing with power production within an integrated European power system operat- ing in Norway, Sweden, and Denmark. For every kWh of renewable energy produced by Cloudberry, fos- sil-based energy in the same or another European country is replaced. Consequently, Cloudberry’s production influences the energy mix in European countries comprising the ‘European electricity mix’, thereby contributing to the essential green energy transition. 1 Adjusted according to the new factor EU-27 electricity mix 2023 2 Adjusted from 115 218 in the 2023 Q4 report due to the updated factor 77Cloudberry Annual report 2023 Sustainability report Cloudberry calculated the CO 2 reduction in the grid by multiplying Cloudberry’s renewable energy production with the ‘European electricity mix’ factor. Cloudberrys positive contribution is reported quarterly as a key performance indicator for the company. The way forward In the changing climate landscape, a climate tran- sition plan is essential for addressing the intercon- nected challenges of climate change and promoting a sustainable and resilient future for current and future generations. Cloudberry will approach a climate transition plan as an essential component of our future direction, ensuring it aligns with our overarching strategic targets. Throughout 2022 and 2023, Cloudberry has made significant advancements in our GHG emissions accounting. We now have a robust foundation that enhances our understanding of the emissions, which helps us prioritize emission-reducing measures. Going forward, we will concentrate on how we can minimize our environmental impact through lowering our GHG emissions, as our commitment contributing to the much-needed mitigation of climate change. In alignment with the Science Based Targets Initiative, Cloudberry has set a net-zero target, pledging to achieve net-zero emissions no later than 2040. The approved target paves the way for Cloudberry to establish a roadmap for reducing Scope 1, Scope 2, and Scope 3 emissions. We will develop a decarbonization plan, to be included in our climate transition plan, which will help us to measure and reduce greenhouse gas emissions for both near-term and long-term objectives and actions, adhering to inventory recalculation guide- lines. Our primary focus will involve exploring various decarbonization strategies across the organization and throughout our value chain. This involves contin- ually improving our greenhouse gas accounting to more precisely evaluate the impact of our activities. Additionally, we will begin examining the effects of land use changes (ESRS E1 AR9), such as tree felling during a power plant construction. Improving our Cloudberry Annual report 2023 Sustainability report 78 data collection on climate impact is also a priority, aiming to eventually report on all relevant quantita- tive disclosures outlined in ESRS E1 Climate Change. Cloudberry is currently in the process of developing a recalculation policy to define the procedures and criteria for re-calculating the base year emissions. This policy will set guidelines for when the base year emissions should be recalculated, particularly in situations involving significant changes such as the acquisition or divestment of a power plant. While the re-calculation policy is being formulated, Cloudberry has implemented a threshold for determining when the base year emissions should be recalculated. According to this threshold, the base year shall be re-calculated if a change represents more than 5% of the total GHG emissions, according to the SBTi corporate net zero standard criteria. Cloudberry is also working actively on decarbonizing the supply chain. As a part of this effort, we will continuously improve our policies and work with key employees and stakeholders, such as suppliers, to identify and mitigate potential decarbonization levers. It is important to us that our suppliers are involved in these discussions, to ensure that we contribute to not only a green transition but a just green transition. We will also evaluate the potential effectiveness of implementing an internal carbon pricing mechanism. Cloudberry acknowledges that it may be impossible to completely decarbonize its value-chain. This means that we will have to invest in GHG removal or mitigation projects in order to offset the emissions we are not able to eliminate. As part of developing our transition plan, Cloudberry will investigate and assess potential GHG removal and mitigation pro- jects to ensure that all future projects result in lasting removal and storage of carbon in alignment with SBTi requirements and are socially responsible. Key performance indicators (KPIs) aimed at reducing greenhouse gas emissions are already embedded across all business units. Nevertheless, Cloudberry will introduce KPIs linked to the long-term net-zero target commitment, subject to annual review by both management and the Board of Directors. Furthermore, as a part of our efforts to advance towards a fully developed climate transition plan, we will formulate policies governing our role in climate change mitigation, as well as the climate-related risks and opportunities we face. We will also con- tinue to update our climate risk and vulnerability assessments on an annual basis. By comprehen- sively understanding and anticipating risks, we can implement targeted strategies to mitigate impacts effectively. We will continue our comprehensive approach towards sustainability practices, including data collection and reporting processes and ensur- ing transparency and accountability when we report on climate-related matters. 79Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Reducing fossil fuel use ESRS E2 Pollution Cloudberry is committed to thoroughly addressing all our environmental impacts. Managing pollution underscores the company’s commitment to environmental stewardship and sustainable practices in the renewable energy sector. Cloudberry not only minimizes our environmental impact but also strengthens our position as a leader in the transition to a cleaner, more sustainable energy future. Cloudberry Annual report 2023 Sustainability report 80 We recognize the environmental impacts related to pollution, acknowledging that while they may not be materially significant, they exist. Our renewable energy production offers positive environmental contributions, yet there are also negative impacts arising from construction activities and throughout our value chain. Managing pollution IROs While our direct environmental pollution was deemed not material in our DMA, Cloudberry con- sistently treats this matter with utmost seriousness. Historically, we haven’t felt compelled to establish formal policies for pollution management, largely because we operate in Norway, Sweden, and Denmark, which enforce rigorous environmental regulations. The legal pollution thresholds in these countries are determined with careful considera- tion of the overall environmental impact and local ecosystems’ and communities’ ability to absorb pollutants safely. Our commitment is to adhere to regulations and even to hold ourselves to a higher standard in some cases. Cloudberry is addressing minimizing emissions and local pollution in our Supplier Code of Conduct, however, we are open to considering the adoption of additional measures and policies if deemed necessary. Our activities Cloudberry monitors its pollution through our on-site suppliers and service providers in line with the requirements set out in our environmental permits. In 2023 we had zero polluting incidents reported. To ensure environmental safety, our wind turbines are designed with measures in place to contain any potential leaks within the turbine structure, preventing any leakage into the surrounding area. Additionally, we adhere to strict regulations when it comes to handling and managing waste products. Regarding our hydropower plants, we have estab- lished procedures for promptly addressing and cleaning any oil spills from equipment within the premises. These procedures are in place to prevent any leaks from reaching the external environment. While some minor equipment leakages have occurred, all such incidents have been effectively contained within the buildings and machinery, with no impact on the surrounding area. Lastly, to proactively address the possibility of spills at our construction sites, we have strategically placed spill kits in containers at various locations throughout the site and in large vehicles and cranes. For potential larger leaks, such as during wind turbine installation using the main crane, we utilize larger spill kits with a capacity of minimum 625 liters. These measures are implemented to effectively mitigate the impacts and swiftly respond to any potential spills that may arise during construction operations. The procedures to avoid and handle spills in the environment are included in the HSE plan of each project. The way forward Pollution is a new material topic for Cloudberry, adopted at the end of 2023. Going forward, we will consider whether we need to adopt any official policies to explicitly deal with or begin tracking it using relevant performance indicators, taking into account the fact that our only material impact under pollution is a positive one. At the same time, we will continue to strive to limit our environmental pollution and avoid exceeding pollution limits set by environ- mental permits. 81Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Mitigation of climate change · Ecosystem improvement projects (potential) Negative impacts · Raw material mining Risks · Public opinion turns against wind/ hydropower · Changing precipitation/weather patterns Opportunities · Increased interest in renewables due to climate change driving biodiversity loss · Become the preferred partner by being an industry leader in nature impact ESRS E4 Biodiversity and Ecosystems Climate change is one of the drivers for change in nature and biodiversity loss. This loss affects land- and sea use, direct exploitation of organisms, pollution, and invasion of alien species. Healthy ecosystems and the natural environment are essential to humanity’s survival, and changes in land use are what impact our ecosystems the most. Cloudberry Annual report 2023 Sustainability report 82 According to The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), 75 percent of the land surface is significantly altered. At Cloudberry, nature’s impact has always been a crucial consideration in our decision-making processes. It was officially recognized as a strate- gic ESG topic during the company’s 2022 strategy update, and “nature impact and biodiversity” became a material topic in our 2022 sustainability report. We also outlined to set a net positive impact on nature target going forward. The DMA process in 2023 has confirmed that biodiversity and ecosys- tems are important topics to focus on. Managing biodiversity and ecosystem IROs Cloudberry’s approach to nature and ecosystems in project development is guided by a structured mitigation plan that adheres to the “mitigation hierarchy”, a valuable tool that helps development projects prepare for impacts and aims to achieve no net loss of biodiversity. The plan is implemented across all the projects and outlines four principal stages as guiding principles: avoid, minimize, restore, and offset, ensuring a systematic approach to environmental impact mitigation. The first step in the hierarchy is to avoid impacting nature where possible. Where impacts are unavoid- able, we try to minimize them. The next step is to restore the damaged nature after construction, and the final step is to compensate for any remaining damage. Theoretically, a high enough level of com- pensation could lead to projects having a net-posi- tive impact on nature (biodiversity net gain). At Cloudberry, our commitment to biodiversity pro- tection starts in the permitting phase. Environmental experts carry out assessments to guide our inter- actions with nature and biodiversity in each project, offering valuable insights on how to approach nature and biodiversity in a specific area. Our main goal is to prevent any adverse effects. However, when impacts are inevitable, we plan in detail to minimize them and seek the most suitable solutions. Additionally, Cloudberry has the ambition to go beyond the basic restoration obligations required in the concession process. Thus, our project managers evaluate the feasibility of restoring the area on site after construction, aiming to leave the environment in a better state than before. By consulting further with biodiversity specialists, we identify opportunities to support and enrich natural habitats, committing to actions that promise a net positive environmental impact over time. Cloudberry is currently and persistently engaged in efforts to comprehend and manage our impacts, risks, and opportunities associated with biodiversity and ecosystems. We consider impacts on nature and biodiversity in the due diligence process before the investment decision, where how to minimize impacts is a crucial evaluation. The biodiversity and nature policy will be an integrated guideline in all of Cloudberrys projects, including a biodiversity transition plan. Nature risk and management is a part of and will be heightened in every aspect of Cloudberry’s work including the companys overall risk strategy. To structure our work with biodiversity, we will look to frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD). Nevertheless, we believe that biodiversity loss is an existential threat, and we aim to contribute to stop- ping nature and biodiversity loss and are committed to working with strategic partners to protect and strengthen nature and biodiversity wherever we can. Our activities In every development project, we assess strategies to minimize our natural impact, enhance biodiversity, and support the local ecosystem, tailored to the unique conditions of the area and the provisions outlined in the concession and development plan. In 2023 we conducted an assessment concerning bio- diversity at the Sundby wind farm project in Sweden. Cloudberry engaged a consultant to evaluate various nature conservation measures to increase biodiversity at the site. The project resulted in a list of suggested measures based on environmental effects, costs, local value creation, implementation steps, time horizon, and feasibility. As a result of this comprehensive assessment, priority measures were selected. When the construction period is finalized during the first half of 2024, and the Sundby wind farm is in operation, the prioritized measures, 83Cloudberry Annual report 2023 Sustainability report Assessing impacts in the early phase of a project Oscar Engelbrekt serves as a GIS specialist within Cloudberry’s Greenfield team. Throughout 2023, he and his team undertook the evaluation of numerous sites to deter- mine their potential as successful energy projects in the future. They assessed a variety of factors: - In the Greenfield team, our job is to identify locations that could be transformed into sustainable energy projects. We consider many factors and look at every possible source to gather data on landscape and cultural analyses, ecological significance, tourism potential, and the feasibility of connecting to the grid. We aim to reduce conflicts over land use and to prevent nega- tive environmental impacts. These topics will be thoroughly examined during the permit- ting process. At Cloudberry, evaluating the impact on nature, biodiversity, and technical considerations is crucial in the greenfield phase for all prospective projects. Cloudberry Annual report 2023 Sustainability report 84 such as insect and bumblebee nests with flowering plants around, will be considered to improve biodi- versity. The process and methodology used on the Sundby wind farm will be adopted in other projects Cloudberry develops and is included in our policy for nature and biodiversity. At Sundby Vindpark, the contractor used the land- owners’ existing facilities as site offices, instead of constructing temporary barracks. By this, we avoided unnecessary negative impacts on nature, and we avoided the use of diesel generators during the construction period. For the Sundby wind farm, Cloudberry has worked with the nature conservation association (Sw: Naturskyddsforeningen) and their environmental certification called “Bra Miljöval” (ENG: Good Environmental choice). Bra Miljöval is an independent third-party certification that helps end customers choose environmentally friendly products. For Cloudberry, this provides an opportunity to demon- strate that our power plants meet the chosen criteria, including criteria on biodiversity. Sundby was chosen as a pilot project for Cloudberry for this certification. In February 2024, Sundby received its certificate demonstrating that the electricity production from the wind farm meets the criteria in Bra Miljöval. Among other aspects, this includes our planned monitoring of impacts on bats and birds in the wind farm. In addition to receiving a quality stamp on our focus on various environmental topics, this provides an opportunity for Cloudberry by increasing the value of our Guarantees of Origin (GOs) from Sundby, leading to increased revenues. Additionally, Cloudberry invests in initiatives through Bra Miljöval funds that are dedicated to reducing the environmental footprint of electricity production. Bra Miljöval manages three distinct funds, including an environmental fund dedicated to biodiversity pro- jects, an energy fund focused on enhancing energy efficiency, and a forest fund aimed at improving biodiversity in woodland and field areas. More detailed information about specific projects can be found on Bra Miljöval’s website. Drawing insights from the process at Sundby, Cloudberry is looking to leverage its experience and potentially extend the implementation of Bra Miljöval to other power plants within our portfolio. This demonstrates Cloudberry’s commitment to acquiring knowledge and imple- menting environmentally conscious practices throughout our operations. It exemplifies how an emphasis on sustainability can generate value and profitability. The way forward Going forward we will strengthen and formalize our work with biodiversity and ecosystem protection. For example, at the Munkhyttan project, Cloudberry has initiated a project to preserve, protect, and improve the population of butterflies near the wind farm. Specifically, the measures include a plan to maintain the existing habitat during the entirety of the pro- ject’s lifetime. Additionally, Cloudberry has identified a new area that is well-suited for establishing an additional habitat. Cloudberry plans to prepare and maintain this area to expand and contribute posi- tively to the butterfly population in the area. The biodiversity and nature policy is in the process of being integrated into all of Cloudberrys projects, including a biodiversity transition plan. Nature risk and management is a part of and will be height- ened in every aspect of Cloudberry’s work including the companys overall risk strategy. In organizing our efforts around biodiversity, we will look at the Taskforce on Nature-related Financial Disclosures (TNFD). Driven by our overarching ambition to become nature-positive, we are committed to consistently developing appropriate metrics and performance indicators for biodiversity and ecosys- tems, which also will help us in our efforts to reduce the nature impact where we develop and operate renewable energy. To successfully implement the mitigation hierarchy, we need to work on relevant measurements for biodiversity and ecosystems and will look for collaboration opportunities with techni- cal specialists, such as ecology experts. All of this will contribute to our overall goal of eventually becoming nature-positive. 85Cloudberry Annual report 2023 Sustainability report ESRS E5 Circular economy There has been an increasing focus on resource use in recent years, due to both resource scarcity concerns, the environmental impacts of material extraction, and challenges in establishing and proving responsible supply chain practices when materials and equipment must be sourced from faraway places. The concept of the circular economy has therefore become increasingly central in discussions about environmental impact, with the main goal being to keep as many materials as possible in the value chain for as long as possible. As of today, circular resource use is a challenge for the renewable energy industry, Cloudberry included. Our material impacts, risks and opportunities Positive impacts · Use of residual and recycled materials (potential) Negative impacts · Use of resource-intensive, non-recycled materials Risks · Logistical challenges due to increased regulation · Taxes or fees on specific materials Cloudberry Annual report 2023 Sustainability report 86 Managing circular economy impacts, risks, and opportunities Cloudberry’s material footprint consists of the mate- rials used in our renewable energy development and production, the materials used in our offices, and the materials used in the production of all the products we use. The extraction of raw materials and sub- sequent production of windfarm and hydroelectric plant components have large, negative impacts on nature and generate significant greenhouse gas emissions. Additionally, many of these components, such as wind turbine blades, are difficult to dispose of at end of their life. Increased circular resource use is expected to reduce Cloudberry’s Scope 3 emissions and impact on nature, as well as our exposure to supply chain risks including the risk of human and workers’ rights violations. Circular economy was first identified as a strategic topic for Cloudberry in the 2022 strategy update, and its importance has been confirmed by our 2023 DMA. We are determining the most effective ways to address, monitor, and understand the impacts, risks, and opportunities related to our circular economy and resource usage. Nevertheless, taking action in this area has been challenging due to technological limitations and practical matters such as land use agreements. Thus, Cloudberry’s Supplier Code of Conduct addresses circular economy practices, resource management, and waste processing, high- lighting the importance of minimizing emissions and engaging in the recycling and disposal of suppliers’ products and materials. We always strive to lengthen the lifetimes of our assets and capital goods through re-use and repair and report on circular economy annually in our EU taxonomy report. Our activities In 2023 we constructed Sundby wind farm whilst reusing a substantial portion of existing infra- structure, including foundations, roads, and crane supports. The internal high-voltage cable network on site is also being reused with minimal modifica- tions. Additionally, we have emphasized the use of Hasopor, which is a form of recycled glass, as part of the backfilling material for the foundations at Sundby. This material has been chosen due to its beneficial drainage properties in removing water from the foundation surface. At all of our operational power plants, we comply with regulations on the handling and management of waste products. Our approach emphasizes adopting recycling practices whenever feasible and safe for the environment. Furthermore, our opera- tional assets fully meet the concession requirements associated with decommissioning plans, which includes maintaining a high recycling rate for the materials comprising the power plants. The way forward Going forward we plan to continue exploring the best way to address our resource use and waste handling. This will include developing relevant performance indicators and considering whether to establish any formal policies, targets, or action plans related to circular resource use. Additionally, we plan to further investigate how we can incorporate the use of recycled materials in our construction projects without compromising on the safety, functionality, or performance of our assets. 87Cloudberry Annual report 2023 Sustainability report Social ESRS S1 Own workforce 90 ESRS S2 Workers in the value-chain 97 ESRS S3 Affected communities 100 Entity specific Local society 103 Cloudberry Annual report 2023 Sustainability report 88 Providing renewable energy enables society’s essential energy transition, and we are determined that this is a necessary transition. In line with this, Cloudberry aims to always act responsibly towards our employees and society at large, including all groups impacted by our operations – to be a preferred employer and partner in the renewable energy industry. Our social sustainability focus areas were deter- mined through our strategy update in 2022 and confirmed by our DMA in 2023, and include our social impacts, risks, and opportunities relating to our work- force, the workers in our value chain, communities affected by our operations, and local society. Our main priorities across these groups include human and labour rights, health and safety, and fostering diversity, equity, and inclusion (DEI). To monitor our overall progress related to social sustainability, we have identified the following KPIs which we actively monitor. Sustainability ambitions To act responsibly towards our employees and society, being a preferred employer and partner Key Performance Measures Actual 2023 Actual 2022 Target 2023 Target 2025 Social 1 Work injuries (incl. Sub-contractors) 1 0 0 0 Employee engagement index 5.3 5.2   Equal opportunities index 5.3 5.2   Female employees % of total 28% 24% 35% > 40% Female managers % in mgmt. positions 33% 33% 33% > 40% Female BoD % in total BoD 57% 43% > 40% > 40% Sick leave own workforce 3.12% 1.66% < 2% < 2% 1 Work injuries defined as lost time. See Key performance summary and the Social section for details. The results from the Employee engagement index and the Equal opportunities index originate from the latest survey in 2023. The maximum possible score is 6. See Key performance summary and the Social section for details. From 2023 the reporting covers all subsidiaries in the Group. Female employees % of total has been adjusted for 2022. 89Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Secure, year-round employment Opportunities · Become a preferred partner by being an industry leader ESRS S1 Own workforce Ensuring the overall well-being of our workforce is of top priority at Cloudberry. Our commitment extends to various aspects of culture and employee well-being, encompassing health and safety, diversity, equity and inclusion, work-life balance, and job satisfaction. Cloudberry Annual report 2023 Sustainability report 90 While not every one of these aspects was deemed material in our DMA, we recognize their importance and remain dedicated to addressing them. Our approach reflects a deep understanding that foster- ing a supportive environment for our workforce goes beyond materiality thresholds, ensuring a healthy, inclusive, and satisfying work environment for all employees. Managing IROs related to own workforce At Cloudberry, we place a strong emphasis on man- aging the impacts, risks, and opportunities related to our own workforce. In recognition of the fact that our employees are our most valuable assets, we are committed to fostering a supportive and inclusive work environment. This involves implementing com- prehensive HR policies and practices that ensure safety, promote diversity and inclusion, and support professional development. We actively identify and mitigate risks related to workforce satisfaction, health, and safety, fostering diversity, equity, and inclusion (DEI), while also capitalizing on oppor- tunities to enhance employee engagement and productivity. By investing in our workforce’s growth and well-being, Cloudberry aims to not only maintain a resilient and motivated team but also to drive innovation and sustainability in the organization. At Cloudberry we consider our own workforce to be an important stakeholder in our business. For more information about how we manage our own workforce’s input as stakeholders, see the section on engaging with stakeholders under ESRS 2. Our activities Human and Labour rights We regard human and labor rights as essential pillars for safeguarding individual dignity, promoting freedom, and fostering respect within our opera- tions, among our business partners, and throughout the communities we engage with. This commitment to upholding human and labor rights is integral to our way of conducting our business, guiding our interactions and policies to ensure fair treatment, equality, and non-discrimination for all employees, contractors, and community members, as well as opposing all forms of modern slavery, forced labour and child labour. This is outlined in our Code of Conduct, Supplier Code of Conduct, Guidelines for Responsible and Sustainable Investments, ESG due diligence guidelines, Whistleblower Policy, and Suppliers declarations form. We have assessed a low risk of human and labor rights violations within our own workforce, nevertheless, the principles are embedded into our corporate culture. Policies have been created, and approved by the Board of Directors. All employees, contractors, suppliers, and business partners are covered by these policies. Cloudberry respects and has carried out human rights due diligence following the OECD and UNGP Guidelines, as well as adherence to the International Labor Organization “ILO’s” core conventions on Fundamental Principles and Rights at Work and the International Bill of Rights, including the Norwegian Transparency Act (Åpenhetsloven). Compliance with these principles and guidelines requires that under- takings prevent violations of human rights. Cloudberry actively contributes to creating a more just and equitable society, reflecting our dedication to ethical practices and social responsibility in every aspect of our work. Annually, we evaluate and revise our policies and interactions to address and mitigate any potential negative impacts on human rights, affecting our own employees, those within our value chain, or communities impacted by our operations. Health and safety Cloudberry prioritizes health and safety above all, as it is paramount to our mission of making a positive societal impact. We recognize that the health and well-being of our employees and those within our value chain are crucial for achieving a balanced life where individuals can fulfill their potential. As such, integrating a comprehensive health and safety man- agement system and cultivating a workplace culture that prioritizes the health and safety of our staff are central to our operations. We are dedicated to sustaining high employee engagement and culture, as these are essential for our success and alignment with our company values. Employee engagement surveys are conducted regularly to measure impor- tant aspects of our culture and employee wellbeing. The survey also provides a valuable measure for further work with DEI in the Cloudberry workplace. 91Cloudberry Annual report 2023 Sustainability report This and more are described in the Diversity and Inclusion section. The majority of Cloudberry’s employees work in office settings, leading to the conclusion that our most significant health and safety challenges lie with our suppliers and contractors. Given the inher- ent risks associated with construction activities, we are aware that our operations could adversely affect the health and safety of workers within our value chain. The organization’s rate of absence due to illness was 3.12% (1.66%). The increase in sick leave was mainly due to one long-term sick leave which was not work related. During 2023 no incidents causing harm to peoples health or serious material damages were recorded in Cloudberrys projects. At Cloudberrys headquar- ters, an employee had a minor injury which ended up leading to lost time. The injury was caused by a chair in the canteen run by a third party. Corrective measures have been implemented to ensure health, safety, and security. To ensure continuous improvement within health, safety, and security measures, ensuring the well-be- ing of every individual working on, or entering, our sites, Cloudberry and contractor and supplier repre- sentatives regularly conduct Safety Walks to identify and address potentially unsafe conditions, advise on safety measures, health, and safety risks, and to prepare mitigations plans when necessary. These walks aim to identify and mitigate health and safety risks, as well as address unsafe or unwanted envi- ronmental and nature-related situations. A review of the protocol from the safety walk takes place during the construction meeting, and any identified deviations are discussed and addressed. Immediate action is taken to resolve issues arising from these deviations. Cloudberry ensures that construction and oper- ation partners maintain adequate safety policies and report on various measures to safeguard the workplace during development, construction, and operation projects. Health and safety measures are of the highest importance to Cloudberry, and we constantly work to reduce risks involved during the construction of the companys projects. Our Supplier Code of Conduct (SCoC) encompasses health and safety measures to foster a shared com- mitment between Cloudberry and our suppliers and contractors. Additionally, our agreements with con- tractors require the implementation of training and awareness programs. We are dedicated to promoting employee involvement and enhancing our emphasis on activities aimed at risk reduction and prevention, including offering appropriate training to develop necessary skills. Additionally, health and safety are outlined in our Code of Conduct, Guidelines for Responsible and Sustainable Investments, ESG due diligence guidelines, Whistleblower Policy, Suppliers declarations form, and in the Health and Safety Plan for the Work Environment, a workplace accident prevention management plan at our construction sites. Section G1 Business conduct describes the companys Code of Conduct. Diversity and inclusion Diversity and inclusion lie at the core of Cloudberry’s values, reflecting our commitment to creating a dynamic and fair work environment for our employees, while also extending these values to our suppliers, business partners, and wider com- munity interactions. For our workforce, diversity and inclusion mean fostering an environment where differences are celebrated, and everyone has equal access to opportunities for growth and advance- ment. This approach not only attracts top talent from varied backgrounds but also contributes to employee satisfaction and retention by ensuring all voices are heard and respected. In dealing with suppliers and business partners, prioritizing diversity and inclusion strengthens our supply chain and part- nerships. It encourages mutual respect for ethical practices and promotes social responsibility across our business operations. By holding our suppliers and partners to these standards, we contribute to a more inclusive and sustainable business ecosystem. Cloudberry acts responsibly towards its employees and society and is dedicated to being an equal opportunity employer fostering diversity, equity, and inclusion (DEI) in the workplace. Our dedication to DEI is comprehensive, covering all dimensions of diversity such as gender identity and expression, sexual orientation, disability, ethnicity, age, personal beliefs, and religion, as well as family leave policies for childbirth and adoption and caregiving respon- sibilities. Our aims include the elimination of discrim- ination and harassment as well as the promotion Cloudberry Annual report 2023 Sustainability report 92 of equal opportunities, which are all outlined in the Code of Conduct. We value and celebrate these differences, recognizing them as not just opportu- nities for growth but as essential components of Cloudberry’s success. Cloudberry complies with standards as set out in local and international human rights law, including ILO-Conventions and the Norwegian Equality and Anti-discrimination Act including the Activity Duty, UN Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental Principles and Rights at Work, and OECD Guidelines for multina- tional enterprises. Cloudberry upholds strict standards for all employ- ees and partners to foster an inclusive culture. Cloudberry enforces a policy of zero tolerance towards discrimination, harassment, sexual har- assment, and violence. All employees, alongside our partners and stakeholders, are required to adhere to the guidelines for maintaining a respectful workplace, as detailed in Cloudberry’s Employee Handbook. Cloudberry will continue to promote DEI internally and in the renewable industry in general and aims to increase the share of both women employees in the workplace and of women in executive management positions to a minimum of 40% in 2025. In 2023 Cloudberry facilitated two workshops for all employees centered around company behavior, culture, values, and strategy. Cloudberry also con- ducted the annual engagement survey focusing on compliance, HMS, work-life balance, and DEI in the workplace. The result from the survey gave a DEI index of 5.3 and an engagement index of 5.3 (6 is the maximum score), which are slightly better than the results in 2022. The survey gives valuable insight and an opportunity for the company to learn, adjust, and implement new measures to continuously improve, and for further work with DEI in the Cloudberry workplace in 2024. Cloudberry’s commitment to diversity and inclusion is integral to building a resilient, innovative, and responsible company that is well-equipped to navi- gate and contribute positively to society. The Board 93Cloudberry Annual report 2023 Sustainability report of Directors has approved the Code of Conduct, and the Supplier Code of Conduct is incorporated into all interactions with suppliers and business partners. Additionally, Cloudberry has policies in place to prevent these negative impacts from occurring and ensure that we have a net positive impact. Engaging with own workforce We are dedicated to fostering a culture where every- one can flourish, establishing clear expectations for all employees and partners, and ensuring they can confidently and securely address significant issues. To facilitate this and encourage employee engagement, Cloudberry has developed platforms that empower our staff to be courageous, vocal, and supportive. The annual engagement survey allows employees to express their perceptions of Cloudberry as a work- place. Cloudberry uses the insights to identify new measures to initiate dialogue and identify actions to continuously improve. Progress will be measured through smaller pulse surveys. In 2023, Cloudberry gathered all employees for workshops focusing on company culture and behavior related to our values. Such events foster team collaboration and align organizational strategy and goals. Cloudberry also encourages the work- shops to serve as a platform for knowledge sharing, team building, and innovation, contributing to a more engaged and productive workforce. Additionally, Cloudberry conducts a quarterly digital town hall meeting involving all employees in the organization, to foster a culture of transparency and inclusivity at Cloudberry. This platform allows us to communicate and share insights about our work life, and provide updates on ongoing projects, company results, and future plans. It’s an opportunity for team members to voice their ideas, concerns, and sug- gestions, ensuring that everyone is aligned with our goals and feels valued and heard. Cloudberry Annual report 2023 Sustainability report 94 Cloudberry conducts annual Code of Conduct train- ing with the goal that 100 percent of our employees take the training each year. Cloudberry organized Code of Conduct training for its entire workforce in 2023. Physical workshops are arranged for our employees focusing on behavior related to company culture, values, and strategy. Through these meetings, we aim to strengthen our collective understanding and commitment to Cloudberry’s purpose, encouraging collaboration and innovation across all levels of the company. The numbers provided in the tables are current as of December 31, 2023, and encompass employees and entities in which the Group holds over 50% own- ership. Following Cloudberry’s acquisition of 100% of Captiva at the end of 2023, the tables include data from Enestor AS, Broentech Solutions AS, and Kraftanmelding AS. Gender equality represents a fundamental human right, a legal obligation, and a source for employee engagement and well-being in the workplace. Furthermore, it enables Cloudberry to attract and hire the most skilled candidates regardless of gender. 28 % of employees are female, which is below the target of 35 % in 2023. The company intends to increase the percentage to a minimum of 40 % by 2025. The number of female managers is on target with 33 %, whilst 57 % of the female board of directors is above target and the legal requirement of > 40 %. Cloudberry acknowledges the importance of creating a balanced workforce and will continue to promote DEI internally and externally to improve the rate of female employees in Cloudberry and the renewable industry in general. Number of employees (headcount) Gender FY 2023 FY 2022 Male 50 47 Female 19 15 Other - - Not reported - - Total employees 69 62 Number of employees (headcount) Country FY 2023 FY 2022 Norway 52 50 Sweden 15 10 Switzerland 2 2 Total employees 69 62 As a company operating in the Nordic, most of our workers are covered by collective bargaining agree- ments, as shown below. Collective bargaining agreements Collective bargaining coverage Social Dialogue Coverage - - 0-19% 20.3 - 20-39% - - 40-59% - - 60-79% - - 80-100% - - All of Cloudberry’s employees are paid an ade- quate wage, and according to the Company’s Remuneration policy the wages shall be competitive but not industry leading. An annual assessment of Number of employees (head count or FTE) Employment type by gender Female Male Other Not disclosed Total Permanent employees (headcount or FTE) 17 50 - - 67 Temporary employees (headcount or FTE) 2 - - - 2 Non-guaranteed hours employees (headcount or FTE) - - - - - Total employees 19 50 - - 69 95Cloudberry Annual report 2023 Sustainability report wages is conducted to ensure market-based and equal pay for employees in similar positions and scope of responsibility. Every Cloudberry employee benefits from social protection covering significant income loss due to illness, unemployment, disability, injury, parental leave, and retirement, through the public social security in Norway and Sweden in addition to gener- ous health and life insurance and pension schemes. For Cloudberry, health and safety is a significant area of focus, though it holds less relevance for our workforce, which primarily consists of office personnel. We aim for a zero-incident rate regarding injuries that result in work absences and strive for no incidents causing any form of harm. All of Cloudberry’s employees are covered if they need to take family related leave. In 2023 4.3% of Cloudberry’s employees were entitled to family leave, of which 4.3% took family leave. Of our employ- ees that took family leave, 67% were female and 33% were male. The way forward As we move forward, our commitment to our own workforce will be integrated into every aspect of our work, with a strong emphasis on fostering work-life balance and promoting diversity and inclusion. We will continue to develop measures and policies, such as a DEI policy, aimed at creating a supportive and inclusive environment, where every employee feels valued and respected. Risks associated with workplace culture will be actively managed through annual employee engagement surveys, reviews, and updates to our policies and routines, ensuring they remain relevant and effective. The employee handbook, along with the compensation and benefits guidelines, will be revised to ensure con- sistency throughout the organization’s policies and practices. Additionally, we will prioritize open and transparent communication, encouraging feedback and dialogue to continuously improve our workplace environment and address the needs and well-being of our employees. With the newly introduced intranet in the organization, we aim to create a more con- nected, efficient, and engaged workplace that sup- ports our strategic targets and operational needs, enhancing internal communication, collaboration, and overall efficiency within the organization. Healt and safety Employees Non-employees Percentage % of own workforce covered by health and safety management system based on legal requirements and/or recognized standards or guidelines 100% N/A Number of fatalities as a result of work related injuries and work related ill health 0 0 Number of recordable work-related accidents 0 0 Rate of recordable work-related accidents 0 0 Number of cases of recordable work related ill health 0 0 Number of days lost to work related injuries and fatalities from work-related accidents, work-related ill health and fatalities from ill health 0 0 Cloudberry Annual report 2023 Sustainability report 96 Our material impacts, risks and opportunities Positive impacts · Extensive working condition requirements · Extensive requirements for contractors Opportunities · Become a preferred partner by being an industry leader ESRS S2 Workers in the value-chain Cloudberry engages contractors for the construction of hydro and wind power plants. Like our approach with our own employees, we strive to positively influence those within our value chain. We address health and safety, along with diversity, equity, and inclusion when we interact with our suppliers and business partners in the value chain. 97Cloudberry Annual report 2023 Sustainability report Cloudberry expects that our business partners and suppliers uphold the same ethical standards with their suppliers and subcontractors that we demand from them. It’s essential for us to uphold labor and human rights in all our activities and to minimize the likelihood of negatively affecting individuals within our value chain. Managing the impacts, risks, and opportunities related to our value chain workers Cloudberry is committed to conducting business responsibly, ethically, and prudently – upholding our obligation to respect human and labor rights, safeguard health and safety, manage environmental and natural resources conscientiously, prevent cor- ruption, and support local communities. Cloudberry aims to have an overall positive impact on workers across our value chain and dedicates significant resources to make this a reality as much as possible. We enforce a strict Supplier Code of Conduct (SCoC) to ensure safe working conditions for value chain workers, as well as outlining a minimum standard to establish a baseline of expected behavior. This ensures that our business partners and suppliers consistently apply diligence and adhere to the requirements and intentions of the SCoC. Our activities Human and labour rights Given that Cloudberry is a relatively small company and engages with major suppliers, we have a limited ability to affect their value chains. Our efforts are primarily concentrated on our direct and material suppliers, where we possess a genuine capacity to make an impact. However, we are aware of the potential of our activities to negatively affect workers deeper within the value chain, over whom we have minimal control, such as large-scale component manufacturers. We nonetheless remain attentive, and our objective is to consistently contribute posi- tively and to reduce any adverse effects. Cloudberry conducts annual due diligence following the OECD and UNGP Guidelines for Multinational Enterprises, as well as adherence to the International Labor Organization “ILO’s” core conven- tions on Fundamental Principles and Rights at Work and the International Bill of Rights, and identifies risks associated with human rights and decent working conditions both within our operations and through- out our supply chain. We have implemented actions to prevent, mitigate, or halt adverse effects, and have revised and put into practice guidelines and procedures to address any real or possible negative impacts on essential human rights and decent work- ing conditions. To involve ourselves proactively, we have initiated and conducted the following actions: · Assessment of fundamental human rights and decent working conditions is an integral compo- nent of the supplier prequalification process and the ESG due diligence procedure before making final investment decisions. · The Supplier Code of Conduct is revised annually ensuring our practices remain aligned with the latest legal standards. · Training programs for project managers, with a strong emphasis on upholding fundamental human rights and ensuring decent working conditions. · Educate own workforce and suppliers in gov- ernance and compliance matters, including anti-corruption measures and whistleblowing, and of their right and responsibility to notify possible misconduct, with guidance on how such notifica- tion should be made. · Furthermore, Cloudberry has dedicated significant attention to evaluating risks and opportunities in supply chains outside the EU, with a special focus on identifying mitigating measures to ensure sufficient oversight within the value chain. · Cloudberry has also a widely promoted third- party whistleblower reporting channel, allowing workers at any of our sites to submit complaints anonymously. Cloudberry has published a Transparency Act report 2022 following the requirements of the Transparency Act. Cloudberry expects compliance with the require- ments of ethical and sustainable practices, including safeguarding basic human rights and decent work- ing conditions. The SCoC obliges our suppliers to carry out due diligence assessments following OECD and UNGP Guidelines, as well as adherence to the International Labor Organization “ILO’s” core conven- tions on Fundamental Principles and Rights at Work and the International Bill of Rights. The companys management of relationships with suppliers is also described in the G1 Business Conductance section of this report. We consistently evaluate the effects our decisions will have on workers within our value chain, and, wherever feasible, we take all these factors into account before entering into an agreement with suppliers. Cloudberrys commitment to respecting Cloudberry Annual report 2023 Sustainability report 98 human and labour rights is outlined in the Supplier Code of Conduct, Guidelines for Responsible and Sustainable Investments, ESG due diligence guide- lines, Whistleblower Policy, and Suppliers decla- rations form. In section S1 on the companys own workforce, more information is available regarding our activities and work on human and labour rights. Section G1 on our business conduct describes the companys Code of Conduct. Health and safety Cloudberry has continued the important work on risk management in the supply chain, including health and safety risks. Further routines and procedures in our operation have been developed or enhanced to ensure that suppliers comply with the companys expectations regarding environmental, social, and governance topics. To identify and mitigate risks associated with our suppliers, we met with contrac- tors and turbine suppliers to identify and address health, safety, and environmental (HSE) topics, as well as any adverse impacts on the environment and communities, such as human rights violations and environmental degradation. Additionally, safety training is conducted at the power plants with workers, covering general operation, maintenance, and HSE compliance. For more information on how we address health and safety risks, go to section S1 on Cloudberrys own workforce. In 2023, at the construction site of Munkhyttan, a tree fell and landed on a parked car due to strong winds. No individuals were in the immediate vicinity and no personal injuries occurred. In response, Cloudberry took measures to ensure the safety of the surround- ing areas other trees, reducing the risk of similar incidents. Cloudberry works continuously to prevent incidents that negatively affect the health and safety of individuals or result in significant material or environmental damage. Cloudberry will continue gathering data from suppli- ers, and holding meetings with key suppliers will be a part of the risk-based audits conducted regularly moving forward. This effort is aimed at enhancing the collection of insightful information about workers within the value chain. Engaging with value-chain workers Cloudberry is committed to enhancing our engage- ment with value-chain workers, with a focus on iden- tifying and mitigating risks within our supply chain. We maintain a consistent onsite presence of Project Managers at our construction sites. During safety walkarounds, we engage with workers from high- risk suppliers, especially those involving significant manual labor. Through conversations with onsite HSE managers from turbine, grid, and electrical installa- tion suppliers, we gain insights into the experiences of potentially vulnerable and marginalized workers, such as migrant workers and minorities. When we identify any gaps, Cloudberry collaborates with the supplier to implement appropriate measures, ensur- ing a safer and more inclusive working environment. Furthermore, to emphasize the significance of engag- ing value-chain workers, Cloudberry holds informal site assessment meetings with key suppliers, to facilitate a collaborative dialogue on identifying and mitigating risks concerning onsite workers and those within the value chain. Supplier dialogue is described in more detail in section G1 on business conduct. Additionally, Cloudberry put up posters with QR codes for Cloudberry’s whistleblowing channel at the sites. For instance, at the Munkhyttan and Sundby wind farms, the workers can easily access the whistleblowing policy and report any noted misconduct. The way forward Going forward, our approach to addressing val- ue-chain workers will remain focused on human and labour rights, health and safety, and the workers’ well-being. We will implement measures to identify and mitigate risks, ensuring our policies and routines foster a transparent and open line of communi- cation. This will include regular assessments and dialogues with relevant stakeholders to continuously improve labor practices and working conditions. We will continue the regular onsite presence of project managers and performance of safety walkarounds. Additionally, we are committed to developing and enforcing robust safety protocols and training programs, coupled with a strong emphasis on respecting workers’ rights throughout our supply chain. In the tendering process, we will proactively encourage suppliers to avoid using subcontractors in areas where there’s a risk to human rights and decent working conditions. We plan to distribute questionnaires to our current material suppliers and conduct annual risk-based audits. Should any con- cerns arise from these assessments, screenings, or audits, we will implement response plans to address any instances of misconduct. By integrating these principles into our operations, we aim to create a more sustainable and responsible value chain that benefits all parties involved. 99Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Contribution to the local economy Risks · Failing to create value or maintain a professional reputation · Lose opportunities due to bad industry reputation Opportunities · Become a preferred developer by being an industry leader ESRS S3 Affected communities To have a successful transition to renewable energy, the development of renewable energy resources must benefit both people and local communities, while also minimizing or addressing any potential negative social or human rights consequences. It is particularly crucial to strive for a net-positive impact on the communities we serve, taking into account vulnerable populations and the effects our operations have on them. Cloudberry Annual report 2023 Sustainability report 100 We recognize that the success of our business is dependent on engaging meaningfully with commu- nities impacted by our operations to cultivate local support and collaboration. It is only through this approach that we can gain valuable insights into the knowledge and desires of the communities affected by our projects. Cloudberrys projects must be not only environmentally sustainable but also socially sustainable. Managing our material impacts, risks, and opportunities on affected communities In our DMA process, we considered several differ- ent potential impacts, risks, and opportunities on affected communities in the regions of our opera- tions. Impacts related to indigenous communities were determined to be immaterial as Cloudberry’s operations are not located in regions historically occupied by indigenous populations. Furthermore, given Cloudberry’s position as a smaller entity with reliance on a narrow selection of suppliers for components, influencing our suppliers’ effects on impacted communities poses a challenge. Consequently, the impact on affected communi- ties in our value chain has been assessed as an immaterial topic to Cloudberry. Cloudberry is committed to always delivering a net positive impact and acting with responsibility towards the communities in which we operate. Our approach involves avoiding, mitigating, and addressing negative impacts in the affected communities, with an emphasis on sustainable and responsible influence. This includes transparent communication, providing regular information, and having a local presence. Before making decisions, we carefully evaluate the social and environmental consequences on local communities, engaging in meaningful conversations with residents, land- owners, political figures, and various stakeholders. Managing impacts, risks, and opportunities in the communities in which we operate, is outlined in the companys Code of Conduct, Supplier Code of Conduct, Guidelines for Responsible and Sustainable Investments, and in the ESG due dili- gence guidelines. Affected communities may raise concerns through the companys whistle-blower channel. Our activities In some areas where we operate, we impact local communities through the presence of our power Stakeholder dialogue and engagement In the greenfield phase of a project, and before a site is selected for further develop- ment, Cloudberry places great emphasis on social dimensions. By initiating early conversa- tions with landowners and affected commu- nities, Cloudberry seeks to secure widespread support for the projects. – Each new project brings its own set of unique and unforeseen challenges, and we are committed to being open and transparent about our approach to addressing these chal- lenges. During 2023 we participated in various meetings and dialogues with landowners and local communities to understand their needs. We met with many representatives from the public and civic society, the local business community, politicians, and local stakehold- ers. In the meetings, we shared information regarding the project and gained valuable insight on how to safeguard and ensure that our projects are socially sustainable, says Sofia Dahlgren, Project Manager at the green- field team in Cloudberry. 101Cloudberry Annual report 2023 Sustainability report plants. Wind power plants may impact communities through noise, shadow flicker, or the change in light- ing due to the aviation lights on our wind turbines. Cloudberry meets the regulatory requirements to ensure compliance and minimize the impact on the affected communities. Nevertheless, we engage in open dialogue with local environmental offices and listen to the opinions and complaints voiced by the communities. Understanding and being transpar- ent towards affected communities is crucial when dealing with topics and concerns that affect the communities in which we operate. During the construction phase of a project, we acknowledge that we have an impact on the nearby communities. In our commitment to responsible practices, we take proactive measures to establish trust, and we invite to an open dialogue with the affected communities. To facilitate communication and engagement, Cloudberry provides our contact details and encourages community members to notify us regarding specific concerns or suggestions for improving our operations. Through these efforts, we aim to understand their concerns and identify ways to minimize any potential negative impact during construction. The Sundby wind farm, situated near a population center, attracted a high number of visitors seeking access to the site during construction. Cloudberry observed that the safety signs at the site entrances were insufficient to keep neighbors and other locals away from the construction areas. In response to this, to reduce the risk of visitors entering the site during construction and to safeguard the affected communities, Cloudberry strengthened safety measures to minimize trespassing at the construc- tion site. Measures included additional signs dis- playing security information and providing a link to the project website at the three site entrances. The signs specifically address and make people aware of the dangers and measures on-site. By actively involving the communities where we operate, Cloudberry strives to ensure that the voices of the community are heard. Throughout the stages of project development, construction, and operation, engagement is carried out, utilizing varied forms and frequencies of interaction. This addresses our ongoing efforts to enhance the overall impact of our activities. The way forward Early stakeholder dialogue in affected communi- ties is a fundamental pillar of social sustainability, paving the way for more meaningful interactions that actively involve local stakeholders from the beginning. Cloudberry is dedicating more atten- tion to landscape analysis, allowing for a deeper understanding of the local use and perceptions of the landscape, extending beyond the project’s immediate impacts to consider broader implications of various energy choices. The approach fosters an inclusive and trustworthy process, vital for achieving social sustainability. By prioritizing early conversa- tions, projects are designed with an awareness of local conditions, ensuring that the concerns and inputs of local stakeholders are integrated from the start. This not only boosts community engagement but also reinforces the democratic process, enhanc- ing the project’s social legitimacy. Emphasizing and engaging dialogues throughout the stages of development, construction, and oper- ation as a strategy for social sustainability marks a significant move towards more inclusive and partici- patory planning. Additionally, it ensures that projects are not only technically and environmentally sound but also enjoy the backing and confidence of those communities most affected. This commitment to early and ongoing dialogue ensures that our projects contribute positively to both global green goals and local well-being, embodying the principles of social sustainability. Cloudberry Annual report 2023 Sustainability report 102 Our material impacts, risks and opportunities Positive impacts · Stable income for landowneres · Improvement of local environment · Supporting local causes · Providing educational opportunities Opportunities · Win future projects by creating local value Entity specific Local society For Cloudberry, the topic of local society holds significant importance as it embodies the communities and environments in which we operate. Our commitment to sustainable development extends beyond environmental considerations, recognizing that the prosperity and well-being of local societies are integral to our success. Usma hydropower plant 103Cloudberry Annual report 2023 Sustainability report It is crucial for Cloudberry that our local initiatives generate value creation locally and, in the com- munities, where we operate. This encompasses economic contributions as well as biodiversity restoration and improving the local environment. Following the DMA process, Cloudberry identified “Local Society” as an entity-specific material topic based on stakeholder feedback, with a particular emphasis on local value creation and the effects on communities in our operational areas. The impact on local communities is a material topic in the strategy, and we are committed to acting responsibly within the societies where we develop and operate renewable energy projects. Cloudberry is aware that our construction activities can lead to certain negative impacts on local com- munities, such as waste management challenges and internal conflicts arising from construction-re- lated disturbances like noise and increased traffic. Within our DMA, these issues have been consid- ered minor, thanks to our commitment to actively engage with and address the concerns of local communities effectively. Managing our local society’s impacts, risks, and opportunities At Cloudberry, managing the impacts, risks, and opportunities related to local societies involves a comprehensive approach that prioritizes active engagement and responsible practices. We strive to identify and mitigate any potential negative impacts through early and ongoing dialogue with community members, while also seeking opportu- nities to contribute positively to local development. This includes investing in local infrastructure, supporting educational initiatives, and creating job opportunities. By closely collaborating with local stakeholders, we ensure that our projects not only align with our sustainability goals but also bring tangible benefits to the communities in which we operate, fostering a harmonious and mutually beneficial relationship. An essential aspect of our approach is that we involve dedicated units responsible for community relations for all our projects, meaning having a robust local presence during the development, construction, and operational phases of our projects. This strategy facilitates consistent A valuable collaboration Cloudberry acquired the Usma hydropower plant from the Norwegian foundation Thomas Angells Stiftelser. The Director of the founda- tion, Ingrid Finboe Svendsen, describes the sales process as thorough and successful. Cloudberry’s visits and genuine interest in the local community played a crucial role in establishing trust with the landowners. The mutual respect and the sense of being heard were pivotal in reaching the agreement. All landowners positively welcomed the deal, and Svendsen acknowledged Cloudberry for its successful realization. Most importantly, the foundation has a longstanding commitment to environmental, social, and local concerns. From the project’s initiation phase, the foundation dedicated significant attention to the preservation of biodiversity and red-listed species, actively supporting nature conservation wherever needed. As a result, ensuring the well-being of reindeer herders respectfully was in the mutual interest of both parties. Ingrid explains: “Negotiating an agreement with reindeer herders presented certain challenges. We firmly believed it was essential to prioritize the well-being of reindeer and calving, making every possible effort to address the needs of the herders. Our aspiration was to develop the hydropower plant in the utmost respectful manner, taking into consideration the welfare of people, nature, and animals in the area”. Cloudberry and Thomas Angells Stiftelser share common values, emphasizing the importance of addressing environmental and social topics. The interaction between Cloudberry and landowners, fostered by trust and local engagement, is crucial for securing the success of a long-term collaboration. Cloudberry Annual report 2023 Sustainability report 104 communication and lays the groundwork for coop- eration with local stakeholders, being available for them, enabling us to assess impacts, address challenges, and evaluate emerging risks effectively. Cloudberry strongly focuses on always considering our activities impacts, both positive and negative, on communities where we have our operations. This is outlined in our Code of Conduct and Supplier Code of Conduct, in which we address care for local com- munities and guidelines on how we value partner- ships with local communities and develop projects with a commitment to ensure trust and legitimacy and generate positive spin-offs locally. Our activities At Cloudberry, we are committed to supporting local communities through targeted initiatives that aim to improve and positively impact the areas where we operate. Our efforts include generating employment opportunities, collaborating with local businesses such as contractors, offering educational programs, contributing to community projects, and beyond. In the Sundby project, located in Eskilstuna, Cloudberry has prioritized utilizing local resources for construction-related activities, ensuring that our spending benefits the region. However, this does not extend to the procurement of wind turbines and substations, as there are no local manufacturers for these components in Eskilstuna. Nevertheless, Cloudberry has successfully employed local com- munity members, including civil contractors and electrical workers, for about 90% of the remaining project scope, ensuring the expenses are allocated within the local economy. Consequently, with the local business partners carrying out significant work towards completing the construction of the Sundby wind farm, a substantial portion of the revenue goes into the local Eskilstuna community. For the Björnetjärnsberget wind farm development project, Cloudberry supported and sponsored the local celebration of Edakalaset family day in Eda municipality. At the event, Cloudberry shared insights into wind power development and operations, while also providing entertaining giveaways for children. This involvement underscores Cloudberry’s commit- ment to community engagement and local stake- holder relations. At the Sundby Vindpark, at the start of the construc- tion phase, Cloudberry organized a kick-off event, bringing together landowners, suppliers, construc- tion workers, and Cloudberry’s team on site. The event took place at the landowners’ facilities, whose buildings were being leased by the main contractor for use as site offices, to avoid temporary barracks. This interaction with landowners, local community members, and suppliers is a key component of Cloudberry’s approach to stakeholder management. Sharing information and being transparent, commu- nicating and interacting with the landowners, locals, suppliers, and other stakeholders are important parts of Cloudberrys stakeholder management. Cloudberry initiates meetings with the landown- ers at the wind farm projects. At Duvhällen and Sundby Vindpark, the stakeholders were updated on the further development and construction of the wind parks. The meetings were held in our office in Eskilstuna, Sweden, near the project sites. Cloudberry also engaged in informal meetings with politicians and landowners and invited neighbors to the site at Sundby wind farm, where the dialogue focused on the progress of the project. Politicians from The Environmental Party in Sweden initiated a meeting to learn more about on- and offshore wind energy projects. An introduction to Sundby Vindpark was held on-site to promote knowledge and political engagement to raise the importance of more efficient concession/permitting processes. At the offshore wind project, Simpevarp Havsvindpark, Cloudberry conducted a comprehen- sive four-day local consultation session (SE: Samråd). We shared detailed information about the project and its permitting process with over 500 partici- pants, including representatives from local interest groups, industry sectors, landowners, and additional stakeholders. Afterwards, participants were invited to submit their feedback on the project. This pro- cess provided Cloudberry with valuable insight for future planning and reinforced our commitment to positively influencing social, environmental, and economic outcomes through active community engagement. The Hån wind farm commenced operations in 2022. In 2023 the official opening of the Unionsläden bike 105Cloudberry Annual report 2023 Sustainability report trail at the border between Norway and Sweden was organized. This trail, which was once a narrow road between the two countries used during the con- struction of the Hån wind farm, has been repurposed into a cycling path. The inauguration event was attended by proud politicians from both Norwegian and Swedish municipalities, celebrating the achieve- ments of local stakeholders and Cloudberry and our contributions to the communities. Cloudberry actively participates in local educational programs focused on renewable energy and the broader energy transition to nurture a deeper under- standing and appreciation of sustainable practices within communities. By doing so, Cloudberry aims to inspire and empower future generations with the knowledge and skills needed to drive and support the global shift towards a more environmentally friendly and energy-efficient future. This engage- ment reflects our commitment to not only invest in renewable energy infrastructure but also in the societal shift towards sustainability, ensuring that the communities we operate in are well-informed and positively impacted by the advancements in green technology. At the Sundby construction site, we welcomed a group of students from a university in Eskilstuna. The students made a field trip to the wind farm as part of their education in renewable energy. Cloudberry presented the project to the students, providing insights into various aspects of wind power within a broader context. The tour included a discussion about Sundby as a development and construction project, operational considerations of wind farms, and Cloudberry’s commitment to nature, biodiversity, and community impact. In the local area of the Munkhyttan wind farm, Cloudberry actively engages in continuous con- versations with high school students specializing in diverse fields of education, including construc- tion, technology, electricity, and nature studies. Cloudberry visited the school to give lectures on wind power and renewable energy. Additionally, the students participated in a field trip to the Cloudberry Annual report 2023 Sustainability report 106 Munkhyttan site, where they gained insights into the impacts on nature, sustainable use of materials, and the construction of foundations for the turbines. Throughout the site tour, significant emphasis was placed on conveying the strict adherence to envi- ronmental, health, and safety measures that apply during a construction project. Furthermore, Cloudberry conducted educational sessions at a high school in Karlstad, engaging technical students with comprehensive insights into wind energy. These sessions covered the journey from obtaining permits to the construction of wind farms and included interactive activities to enhance learning. The way forward Cloudberry is committed to engaging with and addressing the concerns of the community in which we operate, providing arenas for stakeholders to engage in dialogue and feedback, and maintain- ing open lines of communication during both the development and production phases. Understanding the perspectives of local communities is essential for gaining their support and involvement. We will con- tinue organizing public meetings and consultations, aiming to foster strong partnerships that benefit the community. Initiatives like community benefit funds, sponsorships, contributions to community projects, and mitigation measures on environmental impacts, are some of Cloudberrys positive contributions to value local society in a sustainable way. We can only be a preferred employer and business partner when we create value together, and share the result of our efforts, with the communities in which we operate. We remain focused on assessing the success and reception of our local value-creation efforts by local stakeholders. A key priority moving forward will be the formulation of appropriate key performance indicators for tracking and reporting the value we contribute to local communities and the broader impact we have on them. Our commitment to acting responsibly towards our employees and society is closely linked with our engagement in the local communities where we conduct our operations. Cloudberry & Save the Children: A Partnership for a Sustainable Future Cloudberry’s partnership with Save the Children (Redd Barna in Norway) over the past years has been a testament to our commitment to social and environmental sustainability. This collaboration aligns with our strategic objectives, strengthens our culture of sustainability, and builds on our local engagement. “This partnership goes beyond just donating to a good cause. It is about creating a sustainable future for all, especially for children, and making a positive impact on society. Cloudberry is powering the transition to a sustainable future. To do that we need to ensure a safe society and a healthy planet for our children”, says CEO Anders Lenborg.” Cloudberry supports the critical efforts of Save the Children in ensuring children’s survival, education, and safety. We look forward to continuing this partnership, focusing on both global and local topics. 107Cloudberry Annual report 2023 Sustainability report Governance ESRS G1 Business conduct 110 Entity specific Favourable Framework for Renewables 114 Cloudberry Annual report 2023 Sustainability report 108 Cloudberry’s efforts to develop and produce renewable energy are dependent on our continued license to operate, which is in turn dependent on our ability to earn and maintain society’s trust. An integral part of earning this trust is maintaining good governance. We aim to have a positive impact through our governance practices internally and in the value chain. We set our governance focus areas based on the results of our 2022 strategy update and con- firmed the results with our 2023 double materiality assessment with the addition of a new material topic. Given the heightened discussions around tax regulations on renewable assets throughout 2023, Cloudberry has introduced “favorable framework for renewables” as a new entity-specific material topic, in addition to the identified material topics in the ESRS standards. In 2023, our main governance priorities were ensuring a responsible supply chain and working to create favorable future conditions for the further development of renewable energy. Sustainability ambitions To ensure solid governance internally and in our value chain at all times Key Performance Measures Actual 2023 Actual 2022 Target 2023 Target 2025 Governance Whistle-blowing incidents 1 0 N/A N/A Corruption and bribery incidents 0 0 0 0 Compliance training 100% 36% 100% 100% Breach of concession 0 0 0 0 109Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Promoting responsible value chain · Using standard whistleblowing practices, also in the supply chain · Emphasis on responsible business conduct and long-standing relationships Risks · Production delays Opportunities · Maintaining a reputation for good corporate culture ESRS G1 Business conduct At Cloudberry, our ambition is to uphold good governance both internally and throughout our value chain, as responsible, effective governance is foundational and is a license to operate. Cloudberry Annual report 2023 Sustainability report 110 The 2022 strategy update identified value-chain management and responsible business conduct as material focus areas, and these findings were con- firmed with the 2023 double materiality assessment. Managing our business conduct impacts, risks, and opportunities Responsible business conduct is fundamental across our entire organization and within our value chain. We require that all representatives of the company uphold stringent ethical standards as we strive to minimize business risks to protect our reputation. We prioritize ethical practices and transparency, ensuring that our corporate culture reflects values of integrity and sustainability. This commitment extends to our interactions with suppliers, and to our efforts to mitigate the risks associated with value chain disruptions. By fostering a culture of responsibility and accountability, we mitigate risks associated with non-compliance and unethical practices, while seizing opportunities to enhance our reputation and operational efficiency. This comprehensive management strategy supports our aim to create a sustainable and resilient busi- ness model that positively impacts our stakeholders and the environment, and the approach positions Cloudberry as a preferred partner, paving the way for future business prospects. Our activities Corporate culture Cloudberry continued its focus on improving prac- tices and internal processes for ESG compliance across all its business units. Tools and templates have been further developed and updated to ensure the incorporation and operationalization of the ESG standards and objectives we’ve established in every project and throughout the organization. The Code of Conduct has been reviewed and updated as part of its yearly update process, with necessary modifications made. We have incor- porated a new section on the rights of indigenous peoples, inspired by human rights conventions and international standards. Furthermore, the section on biodiversity has been enhanced, and key rights under the Equality and Anti-Discrimination law have been emphasized. In the annual Code of Conduct training session for the entire workforce, subjects like governance and compliance, encompassing anti-corruption and anti- bribery initiatives, and whistleblowing, were highlighted. An awareness training with all employees present was also conducted addressing the importance of compliance and adherence to the ethical guidelines. Additionally, employees were briefed on the organization’s policies and fundamen- tal principles for handling crises and emergencies, along with other aspects related to the contingency planning of the companys operations. Cloudberry received its first whistleblowing notifi- cation in 2023. The report was submitted anony- mously through the whistleblowing channel, and the incident related to potential discrimination in a recruitment process. The company investigated the incident and conducted a third-party verification. The investigation concluded that there was no mis- conduct in the recruitment process. Nevertheless, the procedure aligned with the company’s ambitions and targets to increase female representation within the organization. For any breach or suspected breach of the Code of Conduct, any potential violation of the law, or any violation of the generally accepted ethical norms within Cloudberry, we strongly encourage both inter- nal and external stakeholders to report through the whistleblowing channel. Cloudberrys commitment to business integrity is outlined in the companys whistleblower policy, Code of Conduct, and the Supplier Code of Conduct. At the construction sites, Cloudberry displays printed materials featuring links to Cloudberry’s whistleblowing policy and reporting channel on the walls of the site offices. The whistle- blowing reporting channel and whistleblowing policy are available on our website. Notifications can be made anonymously, and the reporting channel is managed by an independent third party. Cloudberry strives for zero whistleblowing incidents in the future, yet we are committed to being informed of all irreg- ularities or concerns related to our organization and business activities. No incidents of corruption or fraud were reported during 2023, and we paid no fines. We conduct our business ethically and transparently, adhering to all relevant laws, regulations, and ethical standards. Cloudberry enforces zero tolerance for bribery and corruption throughout every aspect of its business. Bribery and corruption are consistently included in routine risk evaluations, and guidelines are outlined in the Code of Conduct, and the Supplier Code of 111Cloudberry Annual report 2023 Sustainability report Conduct. Cloudberry integrates the adoption of anti-corruption and anti-bribery measures within the procurement phases and partnering agreements to minimize risks and uphold the utmost standards of integrity and compliance. In instances of corruption or bribery, these matters will be addressed by the management group and subsequently reported to the Board of Directors. There were no incidents of breach of concessions on our renewable hydro and wind power plants during 2023. Avoiding breaches of concession is funda- mental to ensuring legal compliance, protecting the environment, and maintaining stakeholder trust. For Cloudberry, maintaining responsible business conduct is crucial and strengthens credibility and trust among the stakeholder groups. Furthermore, it helps preserve a positive reputation within the communities and environments where we operate. Management of relationships with suppliers Cloudberry continuously advances our efforts to identify and minimize risks within the supply chain. At the end of 2023, Cloudberry conducted the annual due diligence assessment following the OECD and UNGP Guidelines specifically focusing on human rights and decent working conditions in the supply chain. A workshop was conducted with relevant key personnel within the organization, where risks and measures were assessed. They are described in the S2 section of this report on value chain workers. Simultaneously, internal routines and procedures for material procurement are being revised to include essential guidelines and policies, including a purchasing policy and the updated Supplier Code of Conduct (SCoC). The objective is to mitigate adverse impacts on the environment and communities, with a specific focus on addressing issues like human rights violations, decent working conditions, and environmental degradation. The efforts involving risks and measures related to human rights and decent working conditions will be disclosed in the 2023 annual Transparency Act report. All suppliers must comply with the Supplier Code of Conduct, and adherence is implemented in the procurement stage. We expect that our suppliers and partners will maintain the standards outlined in the SCoC and that they will implement their policies, statements, and commitments in their operations, as well as those of their sub-suppliers. The SCoC undergoes an annual review to integrate any rele- vant advancements. In 2023 Cloudberry continued the important work on risk management in the supply chain. The pro- cedures related to prequalifying suppliers during tender and procurement processes have been incorporated into a majority of material suppliers in Cloudberry´s new projects. Cloudberry is in the pro- cess of collecting data and will implement routines to evaluate our current material suppliers, in addition to carrying out risk-based audits within the supply chain. We have not yet achieved our 2023 target of screening 50% of suppliers; however, prioritizing this goal will be our focus moving forward. To ensure that suppliers comply with expectations regarding environmental, social, and governance Anti-corruption and bribery training All employees Management Training coverage: Total receiving training 100% 100% Frequency: How often training is required Annually Annually Topics covered: Definition of corruption Yes Yes Policy Yes Yes Procedures on suspicion/detection Yes Yes Cloudberry Annual report 2023 Sustainability report 112 topics, and to identify and mitigate risks associated with Cloudberrys suppliers, Cloudberry met with contractors and turbine suppliers on-site to dis- cuss supply chain risks. Such important meetings are conducted to assist Cloudberry in identifying and addressing health, safety, and environmental (HSE) topics, as well as any adverse impacts on the environment and communities, such as human rights violations and environmental degradation. Cloudberry focuses on material suppliers being significant in our operation and supply chain and is still in the process of collecting data. Meetings with material suppliers will be a part of the risk- based audits that will be conducted regularly going forward. Cloudberry relies on an extensive network of suppli- ers. Since its inception, Cloudberry has continuously pursued its social responsibility objectives. We col- laborate with our suppliers and business partners to foster social responsibility, and to create sustainable value chains. ESG considerations are integrated into the due diligence process before making financial investment decisions, with mitigation strategies applied when necessary. Both the positive and neg- ative impacts must be evaluated and documented before any final investment decision is made. The preliminary screenings of new suppliers and part- ners are based on essential ESG criteria, ensuring a commitment to sustainability throughout the value chain. The way forward For Cloudberry, conducting business responsibly within the organization and throughout the value chain is paramount. We are committed to enhancing our internal compliance procedures and routines, as well as refining our processes for evaluating material suppliers before making investment decisions. To ensure that Cloudberry’s suppliers comply with our standards for environmental, social, and govern- ance issues, we continue to improve routines and policies aimed at our suppliers. We are currently gathering data and will establish processes to evaluate our current material suppliers, in addition to conducting risk-based audits on material suppliers moving forward. This is to ensure all aspects of a business’s supply chain, from sourcing materials to delivering products, and to adhere to ethical, environmental, and social standards, prioritizing sustainability, respecting human rights, and fostering positive impacts on communities and ecosystems involved. Additionally, the risk-based audits will address anti-corruption and anti-bribery concerns. The KPI for supplier screening is currently being refined and is scheduled for reporting by the end of 2024. The practices for whistleblowing reports encompass workers within the supply chain, and we are commit- ted to applying the whistleblowing reporting policy across all projects. This includes ensuring informa- tion on how the whistleblowing channel is accessible from locations where our contractors are operating. Upholding our reputation as a responsible par- ticipant across the supply chain will enhance our appeal as a business partner. By emphasizing eth- ical behavior and building lasting relationships with suppliers, we increase our ability to drive positive change. Strong relationships with our suppliers may provide us with a competitive advantage moving forward. Company culture plays a crucial role in shaping the ethical landscape of an organization. In Cloudberry we conduct employee awareness and training ses- sions on ethical guidelines regarding a wide range of topics including anti-corruption practices and whistleblowing mechanisms. We consistently strive to ensure a thorough understanding of our ethical business conduct principles. We annually update our Code of Conduct and Supplier Code of Conduct. We believe that securing responsible business conduct, internally and in our value chain, contributes to a long-term positive reputation making Cloudberry a desirable employer and business partner. 113Cloudberry Annual report 2023 Sustainability report Our material impacts, risks and opportunities Positive impacts · Enabling development and production of renewable energy Opportunities · Creating better conditions will accelerate the transition to renewable energy Entity specific Favourable Framework for Renewables Following the DMA process, Cloudberry identified “Favourable Framework for Renewables” as a new entity-specific material topic based on stakeholder feedback and the Company’s risk assessment. Cloudberry Annual report 2023 Sustainability report 114 As we navigate the critical path toward a sustain- able future, the transition to renewable energy sources stands at the forefront. A robust and supportive framework is necessary to accelerate this shift, foster innovation, and achieve our climate goals. A favorable regulatory environment is for instance essential to ensure investor interest in renewable energy projects. Predictable tax regu- lations and streamlined permitting processes give confidence that a country is safe to make large infrastructure investments in. Further, governmental support is necessary to accel- erate the transition away from fossil fuels. Every new megawatt of renewable energy generated contributes to reducing greenhouse gas emissions. Therefore, support from local and national politicians and effective concession processes is key to achiev- ing important climate goals. Managing our Favourable Framework for Renewables’ impacts, risks, and opportunities At Cloudberry, managing the impacts, risks, and opportunities related to frameworks involves primar- ily the Board of Directors and the top management team. Stable, long-term, and favorable frameworks are identified as one of the biggest risks and oppor- tunities for the Company. Monitoring and managing these areas is therefore of the highest priority to the Company. The establishment of favorable conditions for renewable energy in the future is dependent on regulatory and political developments. The increas- ing energy demand in the Nordics will create the need for a more stable and favorable framework. Cloudberry follows this closely and works to ensure that relevant decision-makers, such as government officials, get the necessary insights into the renew- able energy industry. The introduction of carbon taxes and incentives to reach the EU’s Fit for 55 and Paris-agreement targets will in a mid- to long-term perspective support the development of renewable energy. Our activities We pay close attention to the local and national energy politics in the Nordic countries. Monitoring the development of politics and public opinion is done through media, dialogue with politicians, industry networks, social media, newsletters from national authorities, and the EU among others. Further, we spend much time to inform and educate our stakeholders through dialogue. This covers meetings with politicians from all relevant parties represented in the Parliament and municipal coun- cils, local municipal administrations, energy directo- rates, etc. We also participate in industry organizations rep- resenting the renewable sector, participate and present at industry conferences, and participate in the media dialogue regarding the framework for renewables. The way forward Political engagement and lobbying is a new material topic for Cloudberry and was particularly relevant for us in 2023 because of our ongoing and intense political engagement around the Norwegian gov- ernment’s new ground rent tax for onshore wind farms. This means that we do not yet have standard procedures, policies, or performance indicators tracking this topic but will continue to work actively to influence the frameworks for renewables in the Nordics. Contact person for this sustainability report: Suna F. Alkan Head of Sustainability sa@cloudberry.no 115Cloudberry Annual report 2023 Sustainability report Appendix Cloudberry Annual report 2023 Sustainability report 116 Cloudberry’s GHG emissions Cloudberrys carbon inventory is divided into three main scopes of direct and indirect emissions according to the GHG protocol. In 2023 Cloudberry’s reported GHG emissions from Scope 1, Scope 2, and Scope 3 were 12 891 tons CO 2 e (10 529 tCO 2 e). Scope 1 covers all direct emissions sources, including the use of fossil fuels for stationary combustion (predominantly diesel generators) and transporta- tion. Cloudberry’s Scope 1 emissions are related to the leakage of SF6 gas from high-voltage breakers in Cloudberry’s operational power plants. In 2023, the total Scope 1 emissions were 6.5 tCO 2 e. Scope 2 includes indirect emissions from Cloudberrys purchased energy (i.e., electricity and heating/cooling). This includes purchased energy for Cloudberrys offices in Oslo, Norway, and in Karlstad, Eskilstuna, and Särö, Sweden, as well as the energy used at our production sites. In 2023 Cloudberry used a total of 1 622 MWh of energy, corresponding to the emission of 45 tCO 2 e. Scope 3 comprises the reported indirect emissions resulting from Cloudberrys value chain activities. Reporting of purchased goods and services, capital goods, upstream transportation and distribution, and end-of-life treatment were the most material reporting categories. The total registered emissions from Scope 3 were 12 839 tCO 2 e. Table 1 below shows Cloudberry’s GHG emissions for 2023 per category compared to the Base Year of 2022. A breakdown of each category, including the reporting principles and methodology, is included below. Principles on reporting emissions Cloudberry reports the company’s emissions according to the GHG Protocol, specifically scope 1, 2 and 3. For GHG accounting, Cloudberry uses the same principles as for financial reporting. Cloudberry reports on two reporting principles: group Table 1 Cloudberrys GHG emissions Carbon Accounting Unit 2022 (Base year) 2023 Scope 1 tCO2e 2.1 1 6.5 SF6 leakage tCO2e 2.1 2 6.5 Scope 2 (Location-Based) tCO2e 4.7 45.4 Electricity consumption (location-based) tCO2e 4.7 45.4 Electricity consumption (market-based) tCO2e 48.6 454.8 Scope 3 tCO2e 10 522 3 12 838.6 1 Purchased Goods and Services) tCO2e 6.0 298.3 2 Capital goods tCO2e 11 700 4 15 081.9 3 Fuel-and-energy-related activities tCO2e 1.4 27.6 4 Upstream transportation tCO2e 711 5 1 378 5 Waste Management tCO2e 6.0 6 2 6 Business Travel tCO2e 11.1 15.1 12 End-of-life treatment tCO2e -1 916 7 -3 980 15 Investments tCO2e 2.5 15.8 Total GHG emissions tCO2e 10 529 8 12 890.5 Total Energy MWh 183 1 622 1 Adjusted from 0 as reported in the Annual Report 2022 due to the inclusion of SF6 gas leakage in the GHG accounting. 2 Adjusted from 0 as reported in the Annual Report 2022 due to the inclusion of SF6 gas leakage in the GHG accounting. 3 Adjusted from 10 723 as reported in the Annual Report 2022 due to updated figures for the emissions from the wind turbine foundations at Hån. 4 Adjusted from 10 693 as reported in the Annual Report 2022 due to a re-categorization/split between categories 2, 4, and 12. 5 Adjusted from 0 as reported in the Annual Report 2022 due to a re-categorization/split between categories 2, 4, and 12. 6 Adjusted from 9 as reported in the Annual Report 2022 due to an error in one of the emission factors used. 7 Adjusted from 0 as reported in the Annual Report 2022 due to a re-categorization/split between categories 2, 4, and 12. 8 Adjusted from 10 727 as reported in the Annual Report 2022 due to the reasons mentioned above. 117Cloudberry Annual report 2023 Sustainability report consolidated financial statements in accordance with IFRS and supplementary proportionate financials. The GHG emissions are reported as Cloudberry’s equity share based on ownership in each project. Emissions from power plants in operation where Cloudberry does not have financial control (minority ownership) are reported proportionate under Scope 3 Category 15 Investments. Power plants in operation where Cloudberry has financial control are reported proportionate under Scope 1, 2 and 3. In-house development projects: Cloudberry reports emissions on in-house development projects from the final investment decision (FID) and the starting point of the construction. Projects under construction: Where Cloudberry is the legal owner and initiator of the construction, the company will report emissions from the construction start. On assets under construction where Cloudberry has entered into an agreement to buy the power plant and is the legal owner after the construction is com- pleted and the commissioning period is approved, Cloudberry reports emissions from the takeover. Producing assets: Cloudberry reports its emissions on producing assets and from take-over (additional- ity principle). Cloudberry applies estimates for non-significant emissions (less than 1% of the total GHG emissions) such as business travel, office electricity and waste use in Sweden, and travel concerning service on operational power plants. By using estimates, the reporting process is streamlined without using unnecessary resources to get the actual consump- tion figures. Scope 1 breakdown Cloudberry’s Scope 1 emissions come from leakage of SF6 gas contained within high-voltage breakers in Cloudberry’s operational power plants. The annual leakage of SF6 gas from all of Cloudberry’s SF6 insu- lated breakers is estimated using leakage rates and volumes from ABB SafePlus breakers. Furthermore, the emissions from the SF6 leakage are calculated using an emission factor from DEFRA (2023). This accounted for 6.5 tCO 2 e in 2023. Scope 2 breakdown Cloudberry’s scope 2 emissions are tied to electricity consumption at Cloudberry’s offices as well as electricity used by Cloudberry’s operational power plants. The total electricity used in 2023 is 1 622 MWh. 98.4% of the electricity use is based on metered data from either Elhub, invoices, or other systems used by the balancing parties. The remaining 1.6% is estimated due to either lack of data or metering issues in certain quarters. The electricity consump- tion from the Swedish offices is also estimated based on previous years to streamline the reporting process. To calculate the location-based emissions from electricity use, Cloudberry has applied the IEA (2023) Emission Factor (weighted average 4 Nordic countries). The location-based emissions accounted for 45 tCO 2 e in 2023. To calculate the market-based emissions, Cloudberry has applied an emission factor based on the shares of renewables in the purchased energy and IEA 2023. The electricity purchased for the Oslo office is 100% covered by renewable energy sources. Cloudberry is in the process of mapping the renewable share for the remainder of the electricity consumption and has assumed a 0% renewable share for the remaining consumption to be conserv- ative. In reality, we believe the renewable share is higher. When using the market-based approach, the emissions from electricity use were 455 tCO 2 e. Scope 3 breakdown Category 1 (purchased goods and services) Category 1 emissions include the transportation between service providers’ locations and the loca- tions of hydro plants and wind farms that received service. This was a total of 152 130 km, which is in large part estimated based on the number of site visits and average driving distance. When calculat- ing the emissions from driving of service personnel, Cloudberry has assumed all vehicles are diesel cars and applied the corresponding emission factor from DEFRA 2023. This accounted for 26 tCO 2 e in 2023. In addition, Category 1 emissions comprise diesel and petrol used by construction machinery at Cloudberry’s construction projects. In 2023, a total of 130 396 liters of diesel and 1 205 liters of petrol were consumed when building Sundby and Munkhyttan wind power plants. Cloudberry’s reporting system aims to include irregular emissions, such as those from the onsite works and unplanned maintenance of roads. For example, 1 350 liters of diesel used Cloudberry Annual report 2023 Sustainability report 118 during unplanned maintenance using tractors at Hån and Røyrmyra has been included in 2023. The emissions from these activities have been calcu- lated using emission factors from DEFRA 2023 and Drivmedel 2023. This accounted for 273 tCO 2 e in 2023. Category 2 (capital goods) In Category 2, all depreciated assets are included. This includes machinery such as wind turbines in addition to steel, copper, and concrete in wind turbine foundations as well as high-voltage cables and equipment. When calculating the emissions related to the construction of wind turbines, Cloudberry uses the Life-Cycle-Assessment (LCA) from the wind turbine manufacturer. However, the LCA is made based on a generic site with generic assumptions. To obtain site-specific numbers, Cloudberry adjusts the LCA numbers to better fit the actual parameters for each wind farm. The adjustments include site-specific wind conditions, hub height, lifetime adjustment from 20 to 30 years, removal of lifetime SF6 emissions (since these are reported annually) and replacing generic foundations with actual foundation designs and their associated construction emissions for each site. Cloudberry also split the emissions calculated from the LCA into three categories: Category 2 for physical assets, Category 4 for transportation, and Category 12 for end-of-life treatment. For Sundby, the LCA for the Vestas V126 3.3MW turbine has been used to match the turbines on site. On Munkhyttan the LCA for the Vestas V162 6.2MW has been used. The emissions calculated from the LCA are reported quarterly based on the payments made to the wind turbine supplier except for the ini- tial payment under the supplier agreements, as the carbon emissions will occur at a later stage in the production cycle of the machinery. For Munkhyttan, 25% of the total payments to the turbine manufac- turer were made in 2023, while for Sundby, 98% of the payments were made 1 . In total, this accounted for 14 292 tCO 2 e in 2023. In total from both construction projects, 64 089kg of steel was reported. This included reinforcement steel for the substation at Sundby and anchor cages for the wind turbine foundations at Munkhyttan. To calculate the emissions from these amounts of steel, Cloudberry has applied the emission factor “Steel, hot dip galv. (EU avg.), EPD, 2016”. Furthermore, 220 ton steel from Celsa’s factory in Mo i Rana has been used for reinforcement in the wind turbine founda- tions at Munkhyttan. To calculate the emissions from this reinforcement steel, Cloudberry has used the EPD from the manufacturer, Celsa. The combined emission from steel accounted for 247 tCO 2 e in 2023. 18 m 3 concrete was used in the substation founda- tion at Sundby, and the corresponding emissions were calculated using the emission factor “NEPD- 1487-500-NO, Fabrikkbetong B30 M60” from Unicon AS. In the foundations at Munkhyttan, an on-site mixed concrete with fly ash has been used. A total volume of 1914m 3 concrete has been poured into the three wind turbine foundations. To calculate the emissions, Cloudberry has applied the EPD from the cement manufacturer in combination with a sepa- rate estimation for the on-site concrete mixing. The combined emission from concrete accounted for 542 tCO 2 e in 2023. At Munkhyttan and Sundby combined, 539 kg copper has been used for the earthing systems. To calculate the emissions from the copper, the emission factor EPD Genius Copper Wire Rod according to EN 1977 standard, LaFarga, has been applied. The total emis- sions from copper accounted for 0.6 tCO 2 e in 2023. Category 3 (Fuel-and-energy related activities) In line with the GHG protocol, Cloudberry reports the well-to-tank and transmission & distribution emissions related to the electricity use at the power plants and offices (1622 MWh). To calculate the emissions from these, Cloudberry has used an emission factor from IEA 2023 (weighted average for 4 Nordic countries) of 0.017 kgCO 2 e/kWh. In total, this accounted for 28 tCO 2 e. Category 4 (Upstream transportation) Cloudberry reports transportation concerning the construction of its power plants. In 2023, the trans- portation is tied to the construction of Sundby and Munkhyttan wind farms – and more specifically transportation of wind turbine components from the factories to the construction site. The emissions from transportation are calculated using the LCA from the turbine manufacturer, Vestas. For Sundby, the LCA for the Vestas V126 3.3MW turbine has been used 1 The initial payment for Sundby was made in 2022. However, the emissions for this payment were not reported – in line with Cloudberry’s principles, as no physical emissions had taken place at that point. 119Cloudberry Annual report 2023 Sustainability report to match the turbines on site, and on Munkhyttan the LCA for the Vestas V162 6.2MW has been used. Transportation accounted for 1 378 tCO 2 e in 2023. Category 5 (Waste management) Cloudberry reports on waste management from our offices, projects under construction, and power plants under operation. The waste at Cloudberry’s Oslo office is being reported by the facility manager each quarter, including types and amounts of waste. For the remaining offices, the waste consumption is estimated based on the Oslo office and scaled with the number of employees. The total waste reported in 2023 is as follows: · Organic waste: 2 643 kg · Hazardous waste: 59 kg · Wood waste: 1 400 kg · Paper waste: 1 265 kg · Residual waste: 3 065 kg · Plastic waste: 27 kg · Glass waste: 300 kg To calculate the emissions from Cloudberry’s waste consumption in 2023, Cloudberry has applied emission factors from DEFRA 2023 and Ecoinvent 3.9. Combined, all of Cloudberry’s waste management contributed to 2 tCO 2 e. Category 6 (business travel) Cloudberry reports emissions from air travel, rental cars, and mileage allowance. Cloudberry has in 2022 and 2023 gathered information about travel dis- tances for all of its offices. Based on this, travel rates per number of employees have been calculated to streamline the reporting process. The travel rates are being revised annually based on Cloudberry’s activities and geographical presence. In 2023, the estimated travel distances are: · Electric car: 92 761 km · Diesel car: 7 608 km · Petrol car: 7 247 km · Train (Sweden): 44 102 km Furthermore, emissions from air travel are estimated to be 12 tCO 2 e. To calculate the emissions from busi- ness travel, Cloudberry has applied emission factors from OFV, IEA 2023, DEFRA 2023 and SJ AB Års- och hållbarhetsredovisning 2022. In total, business travel accounted for 15 tCO 2 e in 2023. Category 12 (end-of-life treatment) According to the GHG protocol, Cloudberry reports emissions from end-of-life treatment of the wind turbines constructed in 2023. In 2023, the end-of-life treatment is tied to Sundby and Munkhyttan wind farms. The emissions from this are calculated using the Life-Cycle-Assessment (LCA) from the turbine manufacturer, Vestas. For Sundby, the LCA for the Vestas V126 3.3MW turbine has been used to match the turbines on site. On Munkhyttan the LCA for the Vestas V162 6.2MW has been used. In Vestas’ end- of-life treatment, a high recycling rate is assumed (ref. section 3.4.4 of the LCA) and full credits are given for the material recovered, which is based on the “avoided impacts approach” where materials are re-used in new products. This ”avoided impacts approach” (also called closed-loop approach) is supported by the metals industry (Atherton, 2007), and is consistent with ISO 14044 and for purposes of environmental modeling, decision-making, and policy discussions involving the recycling of metals. Category 15 (investments) In Category 15, Cloudberry reports the equity share of Scope 1 and 2 emissions from power plants where Cloudberry holds minority ownership, in line with Cloudberry’s reporting principles. In 2023, this included leakage of SF6 leakage from the Odal wind farm, where the company has 33% ownership. The emissions from SF6 leakage have been estimated using the same method as described above with leakage rates and emission factors. SF6 leakage from Odal accounted for 1.5tCO 2 e in 2023. In addition, Cloudberry owns diesel generators for backup power at the substations located in the Odal wind farm. These generators undergo regular testing, and the resulting emissions from these tests are accounted for within Category 15. In 2023, testing of the diesel generators is esti- mated to have used 33 liters (proportionate share) of diesel. The emissions from this have been calculated using emission factors from DEFRA 2022. In total, the diesel generators accounted for 0.1 tCO 2 e in 2023. Odal wind farm had an electricity consumption of 337 494 kWh (proportionate share) in 2023. The hydropower plants in Forte Energy Norway AS used a total of 128 744 kWh (proportionate share) in 2023. The electricity use at Odal and Forte is based on metered data. In addition to this, Cloudberry reports electricity use from its subsidiaries Kraftanmelding, Broentech, and Enestor . The total electricity use from these three companies has been estimated using the metered electricity use at the Oslo office and the number of employees in each subsidiary. In Cloudberry Annual report 2023 Sustainability report 120 total, the three subsidiaries consumed an estimated amount of 39 811 kWh (proportionate share). To cal- culate the emissions from electricity use, Cloudberry has applied the IEA (2023) Emission Factor (weighted average 4 Nordic countries). In total, the electricity use under Category 15 accounted for 14.2 tCO 2 e in 2023. Forest, Land and Agriculture (FLAG) emissions At present, Cloudberry’s GHG accounting does not incorporate the potential impacts of land use changes, such as the removal of trees to facilitate the construction of wind turbines. However, moving forward, Cloudberry plans to further assess these impacts (ESRS E1 AR9) within our projects. This initiative aims to enhance our understanding and identify opportunities to improve and mitigate any associated environmental effects. Summary of GHG emissions from each unit The total registered emissions from Scope 1, 2, and 3 were 12 889tCO 2 e in 2023. Table 2 below shows the Scope 1, Scope 2, and Scope 3 emissions from each of the power plants and offices included in the GHG accounting according to Cloudberry’s reporting principles. Estimate Uncertainties Cloudberry’s emissions primarily rely on life-cycle assessments provided by the turbine manufacturer, with modifications made to accommodate site-spe- cific factors at each construction site. Specifically, this relates to the emissions under Scope 3 Category 2, 4, and 12 associated with Sundby and Munkhyttan. For more information about the methodology, please refer to the section with Scope 3 breakdown above. While this general life-cycle assessment approach is adopted, it introduces some uncertainties in the reported emissions figures. Moving forward, Cloudberry aims to enhance the accuracy of our reporting by refining the input data and, where possible, incorporating Environmental Product Declarations (EPDs) obtained from our manufactur- ers. This approach will further improve the transpar- ency and reliability of our emissions reporting. Table 2 Cloudberrys GHG emissions per unit Total emissions per unit Unit Scope 1 Scope 2 1 Scope 3 Total Develop tCO2e 0.1 - 12 750.3 12 750.4 Sundby tCO2e 0.1 - 10 483.7 10 483.8 Munkhyttan tCO2e - - 2 266.5 2 266.5 Admin tCO2e - 7 21.6 28.6 Norwegian offices tCO2e - 6.6 19.5 26.1 Swedish offices tCO2e - 0.4 2.1 2.5 Production tCO2e 6.4 38.4 66.7 111.6 Åmotsfoss tCO2e - - 0.4 0.4 Bjørgelva tCO2e - 0.2 0.2 0.3 Bøen tCO2e - 0.1 1.2 1.3 Finnesetbekken tCO2e - - 0.1 0.1 Flatestøl (Skåråna) tCO2e - 0.5 0.3 0.8 Forte Energy tCO2e - - 3.6 3.6 Hån tCO2e 0.6 4 6.4 11 Nessakraft tCO2e - 1 0.6 1.7 Odal tCO2e - - 11 11 Odin tCO2e 5.4 30.3 38.8 74.5 Ramsliåna tCO2e - 0.3 1.1 1.3 Røyrmyra tCO2e 0.4 0.2 1.4 2 Selselva tCO2e - - - - Steinbergdalen (Skåråna) tCO2e - 0.2 0.3 0.5 Tinnkraft tCO2e - 0.2 0.2 0.4 Usma tCO2e - 1.5 1 2.5 Total GHG emissions tCO2e 6.5 45.4 12 838.6 12 890.5 1 These subsidiaries are owned through Captiva. As Cloudberry bought the final 40% of Captiva in late December 2023, these subsidiaries will be reported under Scope 2 going forward, as the ownership is increased above 50%. 121Cloudberry Annual report 2023 Sustainability report ESRS index Cloudberry is currently preparing to comply with the requirements of the Corporate Sustainability Reporting Directive (CSRD), and is therefore not in compliance with CSRD for 2023. This index has been created for the sake of transparency and indicates only whether or not Cloudberry has written about the topic in the sustainability report. A section heading or page number listed next to a disclosure requirement does not, therefore, mean that we have reported all the information required by ESRS under that disclosure. ESRS Disclosure requirement Section Page ESRS 2 General disclsoures BP-1 General basis for preparation of the sustainability statement – – BP-2 Disclosures in relation to specific circumstances – – GOV-1 The role of the administrative, management and supervisory bodies Governance Framework 46-47 GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies Governance Framework 46 GOV-3 Integration of sustainability-related performance in incentive schemes Governance Framework 46 GOV-4 Statement on sustainability due diligence Preparing for the Corporate Sustainability Reporting Directive (CSRD) 41, 48-49 GOV-5 Risk management and internal controls over sustainability reporting – – SBM-1 Strategy, business model and value chain – – SBM-2 Interests and views of stakeholders Preparing for the Corporate Sustainability Reporting Directive (CSRD) 62-65 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model – – IRO-1 Description of the process to identify and assess material impacts, risks and opportunities Double materiality assessment 50-52 IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement Index in appendix 122-127 Cloudberry Annual report 2023 Sustainability report 122 ESRS Disclosure requirement Section Page ESRS E1 Climate change ESRS 2, GOV-3 Integration of sustainability-related performance in incentive schemes – – E1-1 Transition plan for climate change mitigation Climate Change 72-77 ESRS 2, SBM-3 Material impacts, risks and opportunities, and their interaction with strategy and business model – – ESRS 2, IRO-1 Description of the processes to identify and assess material climaterelated impacts, risks and opportunities Double materiality assessment 50-52 E1-2 Policies related to climate change mitigation and adaptation Climate Change 72-79 E1-3 Actions and resources in relation to climate change policies – – E1-4 Targets related to climate change mitigation and adaptation Climate Change 78-79 E1-5 Energy consumption and mix Climate Change 77, 117 E1-6 Gross Scopes 1, 2, 3 and total GHG emissions Climate Change 75-76, 117-121 E1-7 GHG removals and GHG mitigation projects financed through carbon credits – – E1-8 Internal carbon pricing Not material – E1-9 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities – – ESRS E2 Pollution ESRS 2 IRO-1 Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks, dependencies and opportunities Double materiality assessment 50-52 E2-1 Policies related to pollution Pollution 80-81 E2-2 Actions and resources related to pollution – – E2-3 Targets related to pollution Not material – E2-4 Pollution of air, water and soil Not material – E2-5 Substances of concern and substances of very high concern Not material – E2-6 Anticipated financial effects from pollution-related impacts, risks and opportunities – – 123Cloudberry Annual report 2023 Sustainability report ESRS Disclosure requirement Section Page ESRS E4 Biodiversity and ecosystems E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model – – ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model – – ESRS 2, IRO-1 Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks, dependencies and opportunities Double materiality assessment 50-52 E4-2 Policies related to biodiversity and ecosystem Biodiversity and ecosystems 82-85 E4-3 Actions and resources related to biodiversity and ecosystems Biodiversity and ecosystems 82-85 E4-4 Targets related to biodiversity and ecosystems Biodiversity and ecosystems 82-85 E4-5 Impact metrics related to biodiversity and ecosystems change – – E4-6 Anticipated financial effects from biodiversity and ecosystems-related risks and opportunities – – ESRS E5 Resource use and circular economy ESRS 2, IRO-1 Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities Double materiality assessment 50-52 E5-1 Policies related to resource use and circular economy Resource use and circular economy 86-87 E5-2 Actions and resources related to resource use and circular economy Resource use and circular economy 86-87 E5-3 Targets related to resource use and circular economy – – E5-4 Resource inflows Not material – E5-5 Resource outflows Not material – E5-6 Anticipated financial effects from material resource use and circular economy-related risks and opportunities – – Cloudberry Annual report 2023 Sustainability report 124 ESRS Disclosure requirement Section Page ESRS S1 Own workforce ESRS 2, SBM-2 Interests and views of stakeholders Engaging with Stakeholders 62-65 ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model – – S1-1 Policies related to own workforce Own workforce 90-96 S1-2 Processes for engaging with own workers and workers’ representatives about impacts Own workforce 90-96 S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns Business conduct 108-112 S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions – – S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities – – S1-6 Characteristics of the undertaking’s employees Own workforce 90-96 S1-7 Characteristics of non-employee workers in the undertaking’s own workforce – – S1-8 Collective bargaining coverage and social dialogue Own workforce 95 S1-9 Diversity metrics Own workforce 95 S1-10 Adequate wages Own workforce 95-96 S1-11 Social protection Own workforce 95-96 S1-12 Persons with disabilities – – S1-13 Training and skills development metrics – – S1-14 Health and safety metrics Own workforce 95-96 S1-15 Work-life balance metrics Own workforce 93 S1-16 Compensation metrics (pay gap and total compensation) Own workforce 96 S1-17 Incidents, complaints and severe human rights impacts Own workforce 91-96 125Cloudberry Annual report 2023 Sustainability report ESRS Disclosure requirement Section Page ESRS S2 Workers in the value chain ESRS 2, SBM-2 Interests and views of stakeholders Engaging with Stakeholders 62-65 ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model – – S2-1 Policies related to value chain workers Workers in the value chain 97-99 S2-2 Processes for engaging with value chain workers about impacts Workers in the value chain 97-99 S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns Business conduct 111-113 S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions – – S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities – – ESRS 3 Affected communities ESRS 2, SBM-2 Interests and views of stakeholders Engaging with Stakeholders 62-65 ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model – – S3-1 Policies related to affected communities Affected communities 100-102 S3-2 Processes for engaging with affected communities about impacts Engaging with Stakeholders 62-65 S3-3 Processes to remediate negative impacts and channels for affected communities to raise concerns Affected communities 100-102 S3-4 Taking action on material impacts on affected communities, and approaches to managing material risks and pursuing material opportunities related to affected communities, and effectiveness of those actions Affected communities 100-102 S3-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities – – Cloudberry Annual report 2023 Sustainability report 126 ESRS Disclosure requirement Section Page ESRS G1 Business conduct ESRS 2, GOV-1 The role of the administrative, supervisory and management bodies Governance Framework 46-47 ESRS 2, IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities Double materialtiy assessment 50-52 G1-1 Business conduct policies and corporate culture Business conduct 110-112 G1-2 Management of relationships with suppliers Business conduct 112-113 G1-3 Prevention and detection of corruption and bribery Business conduct 110-112 G1-4 Incidents of corruption or bribery Business conduct 110-112 G1-5 Political influence and lobbying activites Favourable framework for renewables 114-115 G1-6 Payment practices – – 127Cloudberry Annual report 2023 Sustainability report Statsautoriserte revisorer Ernst & Young AS Stortorvet 7, 0155 Oslo Postboks 1156 Sentrum, Oslo Norway Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 www.ey.no Medlemmer av Den norske Revisorforening A member firm of Ernst & Young Global Limited INDEPENDENT ACCOUNTANT’S ASSURANCE REPORT To the board of directors in Cloudberry Clean Energy ASA Scope We have been engaged by Cloudberry Clean Energy ASA to perform a limited assurance engagement, as defined by International Standards on Assurance Engagements, to report on Cloudberry Clean Energy ASA ’s Greenhouse Gas reporting as defined and specified in Appendix, Table 1 Cloudberry’s GHG emissions in Cloudberry Clean Energy ASA’s Sustainability Report for 2023 (the “Subject Matter”) as for the year then ended. Other than as described in the preceding paragraph, which sets out the scope of our engagement, we did not perform assurance procedures on the remaining information included in the Sustainability Report, and accordingly, we do not express a conclusion on this information. Criteria applied by Cloudberry Clean Energy ASA In preparing Subject Matter, Cloudberry Clean Energy ASA applied the definitions for scope 1, scope 2 and the various categories of scope 3, set by the Greenhouse Gas Corporate Standard (the “Criteria”). The Criteria can be accessed at ghgprotocol.org and are available to the public. Such Criteria were specifically designed for companies and other organizations preparing a corporate-level GHG emissions inventory. As a result, the Subject Matter information is not be suitable for another purpose. Cloudberry Clean Energy ASA responsibilities The Board of Directors and Chief Executive Officer are responsible for selecting the Criteria, and for presenting the Subject Matter in accordance with that Criteria, in all material respects. This responsibility includes establishing and maintaining internal controls, maintaining adequate records and making estimates that are relevant to the preparation of the Subject Matter, such that it is free from material misstatement, whether due to fraud or error. EY’s responsibilities Our responsibility is to express a conclusion on the presentation of the Subject Matter based on the evidence we have obtained. We conducted our engagement in accordance with the International Standard for Assurance Engagements on Greenhouse Gas Statements (‘ISAE 3410’). This standard requires that we plan and perform our engagement to obtain limited assurance about whether, in all material respects, the Subject Matter is presented in accordance with the Criteria, and to issue a report. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risk of material misstatement, whether due to fraud or error. We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion. Our Independence and Quality Control We are independent of the Company and the Group in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Cloudberry Annual report 2023 Sustainability report 128 2 Independent accountant’s attestation report – Cloudberry Clean Energy ASA 2023 A member firm of Ernst & Young Global Limited Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. EY also applies International Standard on Quality Management 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services engagements, which requires that we design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Description of procedures performed Procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained if a reasonable assurance engagement had been performed. Our procedures were designed to obtain a limited level of assurance on which to base our conclusion and do not provide all the evidence that would be required to provide a reasonable level of assurance. Although we considered the effectiveness of management’s internal controls when determining the nature and extent of our procedures, our assurance engagement was not designed to provide assurance on internal controls. Our procedures did not include testing controls or performing procedures relating to checking aggregation or calculation of data within IT systems. The Greenhouse Gas quantification process is subject to scientific uncertainty, which arises because of incomplete scientific knowledge about the measurement of GHGs. Additionally, quantification of GHG’s is subject to estimation (or measurement) uncertainty resulting from the measurement and calculation processes used to quantify emissions within the bounds of existing scientific knowledge. A limited assurance engagement consists of making enquiries, primarily of persons responsible for preparing the Subject Matter and related information and applying analytical and other appropriate procedures. Our procedures included: Interviews with key personnel to understand the business and the reporting process Interviews with key personnel to understand the process for collecting, collating and reporting the Subject Matter during the reporting period Test on a sample basis the calculation Criteria against the methodologies outlined in the Criteria Analytical review procedures of the data Test of assumptions supporting the calculations Comparison, on a sample basis, the underlying source information We believe that our procedures provide us with an adequate basis for our conclusion. We also performed such other procedures as we considered necessary in the circumstances. Conclusion Based on our procedures and the evidence obtained, we are not aware of any material modifications that should be made to the Subject Matter as of 31 December 2023 and for the year then ended in order for it to be in accordance with the Criteria. Oslo, 19 March 2024 E RNST &YOUNG AS Asbjørn Ler State Authorised Public Accountant (Norway) 129Cloudberry Annual report 2023 Sustainability report 1. Implementation and reporting on corporate governance This report has been prepared by the Board of Directors of Cloudberry Clean Energy ASA (“Cloudberry” or the “Company”) and presents the corporate governance of the Company. Cloudberry is incorporated and registered in Norway and is subject to Norwegian law. The Company is listed on Oslo Stock Exchange. Cloudberry considers good corporate governance to be the foundation for value creation and trustworthiness, and it is integrated in our approach to sustainability where we focus on environmental, social and governance topics (ESG). As a public limited liability company listed on Oslo Stock Exchange, the Company must comply with the Norwegian Securities Trading Act and Regulation, the Issuer Rules for Companies Listed on Oslo Stock Exchange, the Norwegian Public Limited Liability Companies Act, and all other applicable laws and regulations. Further, Cloudberry endorses the Norwegian Code of Practice for Corporate Governance (the “Corporate Governance Code”), last revised on 14 October 2021, which is available at the web site of the Norwegian Corporate Governance Board www. Corporate Governance report The Company’s corporate governance structure can be illustrated as follows: Chief Value Officer Chief Compliance & Organisation Officer Chief Development Officer Chief Technology Officer Board of Directors General Meeting Chief Executive Officer Chief Operating Officer Cloudberry Annual report 2023 Corporate Governance 132 nues.no. Deviations from the Corporate Governance Code must be justified and explained. In this report, deviations are discussed under the relevant sec- tions. As a general rule, the Board will only approve deviations the Board believes are in the best interest of the Company and its stakeholders. To secure strong and sustainable corporate gov- ernance, it is essential that Cloudberry practices a transparent and healthy business with reliable finan- cial reporting compliant with legislation and regu- lations. Governing structures and guidelines help Cloudberry to ensure that the Company is operating in a manner that is justifiable and profitable for the employees, shareholders, partners, other stakehold- ers, and the society. References to specific policies are included in this corporate governance report where relevant. Cloudberry’s corporate governance is based on openness, trustful communication, and cooperation between the Company and all its stakeholders, and the principle of equal treatment of shareholders. The report also outlines the Company’s policies and practices for corporate governance, in accordance with Section 3-3b of the Norwegian Accounting Act. In 2023, the Company’s executive management team consisted of following six members: Chief Executive Officer, Chief Value Officer, Chief Compliance & Organisation Officer, Chief Operating Officer, Chief Development Officer and Chief Technology Officer and together the team covers the whole value chain in Cloudberry. The Company’s Chief Executive Officer oversees the daily conduct of business, including the effectuation, implementation and follow-up of the objectives and strategies set by the Board of Directors. Chief Executive Officer supervises that Cloudberry’s accounts are in accordance with laws and regula- tions and provides the Board of Directors with the necessary information to carry out its administration and supervision tasks in a proper manner. 2. Business Cloudberry is an independent power producer, developing, owning and operating renewable assets in the Nordics. The Company has an integrated business model across the life cycle of renewable power plants (hydro, wind and solar) including project development, financing, construction (normally outsourced), ownership, management, and operations. Cloudberry’s operations comply with the objective defined in Section 3 of the Company’s articles of association (“Articles of Association”) which states that “the company’s purpose as the parent com- pany of a group is to engage in investment activities in the energy sector, including developing and operating the production of renewable energy and activities naturally connected with this”. Cloudberry’s purpose is to power the transition to a sustainable future by providing renewable energy today and for future generations. We do this the Cloudberry way by taking the local perspective in our project developments, creating value for our stake- holders, and placing sustainability at the core of what we do. The Company’s corporate strategy is to deliver on this purpose, with targets to align strategy execution across the group for the long term. Cloudberry’s success factor is its continuous ability to grow and mature an in-house development port- folio and identifying attractive and strategic acquisi- tions and growth opportunities. The Company has a solid development track record and a large produc- tion portfolio with both hydro and wind assets. As of 2023, the Company has expanded its development portfolio to include solar projects as well. Cloudberry’s integrated business model is based on a partnering model for construction, operations, and maintenance to ensure risk-sharing, quality, cost and capital efficiency across the value chain. A sustainable and local approach is distinctive for our ownership, development and operations and goes hand in hand with a commitment to long- term value creation for all stakeholders. The power we produce and transfer to the transmission and distribution network equals in all material respects our sales volume. Cloudberry’s revenue streams are predominantly determined by power sales volume and actual power price achieved in the spot market (Nord Pool). Over time, Cloudberry seeks a balanced mix between spot pricing and favourable long-term fixed purchase price agreements (PPAs) where the first initiatives have been taken in 2023. Cloudberry cultivates its portfolio to ensure a diversification and balance of risk, returns, asset- and geographical mix. 133Cloudberry Annual report 2023 Corporate Governance Cloudberry considers ESG related factors relevant and important when making business decisions, and the Board of Directors identifies and assesses which aspects of sustainability are relevant and material to the Company. Cloudberry builds robustness through a diversified and balanced portfolio and uses com- petitive financing to deliver sustainable, profitable, and long-term growth. Cloudberry has defined its purpose, and the values and commitments define the Company’s way of working. In combination with the Company’s culture, this forms the fundamental structure on which the Board and the Management believe Cloudberry should be managed. Cloudberry’s value-based culture is the key premise for the behaviour of the Company and the Company’s employees. The core values are: Be Supportive, Be Committed, Be Excellent, and Be Bold. Cloudberry aims to always maintain high ethical standards, and the employees must comply with its guidelines for ethics and cor- porate social responsibility describing the principles for business practices and personal behaviour within Cloudberry. The employees must comply with Cloudberry’s principles on issues such as human and labour rights, diversity, equity and inclusion, health and safety, business ethics, legal compliance, insider trading, whistleblowing and other relevant issues related to the Company’s operations and adhere to the Company’s Code of Conduct. Sustainability is a rapidly developing field, and ensuring sustainable business operations is an ongoing and integrated process. Cloudberry fol- lows the developments and changes in reporting standards closely, in addition to new demands due to growth and changes in the Company. In 2023 Cloudberry took a further step towards eventually aligning the Company’s reporting according to the Corporate Sustainability Reporting Directive (CSRD) and updated and improved the double materiality assessment. The process of preparing the reporting according to CSRD will continue in 2024. In addition, the Company published the first stand-alone EU Taxonomy report in 2023 and did a third-party gap analysis and limited assurance of the greenhouse gas emission reporting. Cloudberry has described its approach, activities taken place in 2023, ambitions and way forward related to the identified sustain- ability topics for the Company in the Sustainability report for 2023. Deviations from Section 2 of the Corporate Governance Code: None 3. Equity and dividends Capital adequacy The Company’s management and Board of Directors monitor the Company’s capital structure on a contin- uous basis, including equity and liquidity, to ensure that the level of equity and liquidity, are appropriate for the Company’s objectives, strategy, and risk profile. As of 31 December 2023, Cloudberry’s equity amounted to NOK 4 617 million, equivalent to 69% of the company’s total assets. Cash equivalents and current financial investments amounted to NOK 779 million. Dividend policy The Company, in the short to medium term, intends to use its profit for both organic growth and acqui- sitions and consequently will not make payment of dividend. The Company will continuously evaluate share buy-back as an option. The Company’s long-term objective is to repay shareholders either through share buy-backs and/or cash dividends. However, there can be no assurance that in any given year a dividend will be proposed or declared, or if proposed or declared, that the dividend will be as contemplated by the policy. Any future dividend proposed by the Board will be presented to the general meeting for approval. The Company does not hold any authorisation to resolve dividend distributions. Authorisations to the Board of Directors to purchase treasury shares, and increase the share capital The Company’s annual General Meeting held 27 April 2023, granted the Board of Directors the following authorisations to increase the Company’s share capital: · The Board of Directors is authorised to increase the Company’s share capital with up to NOK 18 206 244 by issuance of up to 72 824 976 new shares each with a nominal value of NOK 0.25. The purpose with the authorisation was to ensure flexibility to finance potential acquisitions and otherwise strengthen the company’s equity. The authorisation has not been utilised. · Authorisation to increase the company’s share capital by NOK 100 000.00 by issuance of up to 400 000 new shares each with a nominal value of NOK 0.25. The authorisation is reserved to the share purchase programme for the members of the Board of Directors. NOK 17 549.75has been utilised. Cloudberry Annual report 2023 Corporate Governance 134 · As the Company is in a growth phase, the Board of Directors will generally propose that the General Meeting grants the Board of Directors an authori- zation to increase the share capital with up to 25% of the share capital. Such authorisations will be reserved for use in relation to financing of strategic growth opportunities and will only be valid until the earliest of (i) the next annual General Meeting or (ii) 30 June the next year. The Company hosted an extraordinary General Meeting on 28 September 2023 to grant a board authorization to acquire own shares for subsequent cancellation. · The Board is authorized to acquire up to 7 000 000 own shares in the market with an aggregate nom- inal value of up to NOK 1 750 000. The purchase price shall be minimum NOK 0.25 and maximum NOK 14.60 per share. Within these limits, the Board may decide on which terms and at what time such acquisitions shall take place. The authorization is valid until the next annual General Meeting, but no later than 30 June 2024. Cloudberry has acquired 2 807 500 shares under this authorization at an average price of NOK 10.3197 per share. Deviations from Section 3 of the Corporate Governance Code: None 4. Equal treatment of shareholders Cloudberry has one share class and each share in the Company carries one vote at the Company’s general meeting. All shares carry equal rights, includ- ing the right to participate in general meetings. The Company’s shareholders have pre-emption rights in share offerings according to the Public Limited Liability Companies Act. Such pre-emption rights may however be set aside, either by the General Meeting or by the Board of Directors if the General Meeting has granted a Board authorisation which allows this. Any resolution proposed by the Board to set aside pre-emption rights will be objectively justifiable taking into consideration the common interests of the Company and its shareholders, and the basis for such deviation will be publicly disclosed through a stock exchange notice from the Company. Deviations from Section 4 of the Corporate Governance Code: None 5. Shares and negotiability The Company’s shares are listed on Oslo Stock Exchange and are freely transferable. The Company’s Articles of Association do not place any restrictions on owning, trading or voting for shares in the Company. Deviations from Section 5 of the Corporate Governance Code: None 6. General Meetings Notices convening the Company’s General Meetings are submitted and announced in accordance with applicable law and stock exchange regulations. Comprehensive documentation relating to the items on the agenda is prepared and made available on the Company’s website no later than 21 days prior to the General Meeting. Shareholders who wish to participate in the General Meeting must notify the Company within the deadline specified in the notice. The deadline is set as close to the date of the General Meeting as possible, but not earlier than 5 days before the date of the General Meeting. In accordance with new regulations in the Public Limited Liability Companies Act which entered into force from 1 July 2023, the Company amended its Articles of Association at he the General Meeting 27 April 2023 so the deadline for notifying the Company cannot be earlier than 2 busi- ness days prior to the date of the General Meeting. In accordance with the rules of the Public Limited Liability Companies Act, Cloudberry will facilitate for electronic participation in General Meetings, unless the Board has a justifiable cause to resolve otherwise. In accordance with the Articles of Association, the Board of Directors may resolve that shareholder may cast their votes in writing prior to the company’s General Meetings. Such votes can also be casted by use of electronic communication. The permission to cast an advance vote requires the presence of an adequate method for authenticating the sender. The Board of Directors determines whether an adequate method is present prior to each General Meeting. The Board of Directors may adopt more detailed guidelines for advance voting. It will be stated in the notice of each General Meeting whether advance voting is permitted and which guidelines, if any, are resolved for such voting. 135Cloudberry Annual report 2023 Corporate Governance Shareholders who are unable to attend general meetings may vote by proxy. A dual language proxy form covering each individual matter on the agenda is included in the notice convening the general meeting. The Company offers shareholder who are not able to attend the general meeting the possi- bility of issuing a proxy to the chairperson who will then represent and vote for the shareholder at the general meeting. According to the Corporate Governance Code, the Board should ensure that the general meeting elects an independent person to chair the meeting. Cloudberry will facilitate this in the general meetings. Cloudberry intends to have representatives of the Board of Directors present at the Company’s General Meetings. However, the Company will normally not have the entire Board of Directors participate as this is considered unnecessary. This represents a deviation from the Corporate Governance Code which states that arrangements shall be made to ensure participation by all directors. The chairperson of the nomination committee (or a delegated member of the committee) will be present at the Company’s General Meetings where matters prepared by the nomination committee will be dealt with. Cloudberry facilitates that shareholders may cast votes for each individual matter on the agenda, including each individual candidate nominated for election. Deviations from Section 6 of the Corporate Governance Code: The Corporate Governance Code recommends that all members of the Board attend the general meetings of the Company. Not all board members are present at every general meeting of the Company. 7. Nomination committee Section 8 of the Articles of Association prescribes that the Company shall have a nomination com- mittee. The nomination committee is elected by the General Meeting for a period of two years unless the General Meeting decides on a shorter period. The members of the nomination committee may be re-elected. The current members of the nomination committee are: · Morten S. Bergesen (chairperson) · Joakim Gjersøe · Henrik Lund The composition of the nomination committee shall reflect the interests of all shareholders and ensure independence from the Board of Directors and the executive management. Pursuant to the Corporate Governance Code adopted 14 October 2021, the nomination committee shall not include any execu- tive personnel or member of the Company’s Board of Directors. No executive personnel or members of the Board of Directors in Cloudberry are members of the Company’s nomination committee. The remuneration of the nomination committee is determined by the General Meeting.The nomination committee shall submit its recommendations to the General Meeting regarding election of the chair- person and shareholder elected members to the Board of Directors, as well as remuneration to the members of the Board of Directors. The nomination committee’s recommendations shall address how each of the recommended candidates will attend to the Company’s interests, including with respect to qualifications, capacity, and independence. The objectives, responsibilities, and functions of the committee are further described in the “The Nomination Committee Policy”, which was adopted by the general meeting on 17 June 2020. The policy is available on the Company’s website. Information about the composition of the nomina- tion committee and the deadline for shareholders to propose candidates for election, is communicated to the Company’s shareholders at www.cloudberry.no. Deviations from Section 7 of the Corporate Governance Code: None 8. Board of directors: Composition and independence Pursuant to Section 5 of the Articles of Association, the Company’s Board of Directors shall consist of between three and eight shareholder elected mem- bers. The current Board of Directors of Cloudberry has seven members, consisting of four women and three men. Cloudberry Annual report 2023 Corporate Governance 136 All members are elected for a term of one year and may be re-elected. The chairperson is elected by the General Meeting. Cloudberry encourages the Board members to hold shares of the Company and has established a separate share purchase program for this purpose. According to the program the Board members use 30% of the fixed gross remuneration (prior to tax) per year to acquire shares in the Company. The shareholdings of members of the Board as of 31 December 2023 are set out in note 25 of Cloudberry’s consolidated financial statements (“Financial Statements”). Further, the composition of the Board of Directors, and information about the Board members’ back- ground and qualifications are detailed in the section “Board of Directors” of the annual report for 2023. The composition of the Board of Directors ensures that it can attend to the common interest of all shareholders and meets the Company’s need for expertise, capacity and diversity. The Board of Directors evaluates its own work on an annual basis to ensure that it functions efficiently. Detailed infor- mation regarding meeting attendance, see section 9 (The work of the Board of Directors) in this report. All shareholder elected members are considered independent of executive management and mate- rial business contacts (excluded shareholders). Further, 6 of 7 members of the Board are independ- ent of the Company’s main shareholders. Nicolai Nordstrand is the general manager of Havfonn AS and Snefonn AS, which as of 31 December 2023 controlled 8.5% and 5.56% respectively of the shares and votes of Cloudberry. At the same time, Havfonn AS, jointly with its parent company Snefonn AS, con- trolled 14.06 % of the share and votes of Cloudberry. None of the members of the Board of Directors are part of Cloudberry’s executive management team, but the Chief Executive Officer, Chief Value Officer and Chief Compliance & Organisation Officer regu- larly attend the Board of Directors’ meetings. Deviations from Section 8 of the Corporate Governance Code: None 9. The work of the Board of Directors The Board of Directors emphasises maintaining a high standard of corporate governance. The Board of Directors is responsible for the overall management of the Company and supervises the Company’s day-to-day activities. The Board of Directors has implemented a sepa- rate “Instructions for the Board of Directors” and “Instructions for the CEO”. These instructions provide detailed and clear allocation of the responsibilities and duties of the Board of Directors and the Chief Executive Officer. The meetings of the Board of Directors have agenda items covering the Company’s activities, position, financial, operational and sustainability develop- ments, and objectives of the Company with its strategy and implementation. The Board of Directors has established an annual meeting schedule based on quarterly milestones and duties. The Board of Directors also prepares for general meetings. The Board of Directors had 15 meetings during 2023. To secure an independent discussion and valuation without related parties on Board issues, members of the Board of Directors who are related to topics being discussed will be excused from the board meeting. There were no such incidents in 2023. The Board of Directors’ performance is evaluated annually, and the evaluation is made available to the nomination committee. Transactions with close associates The Board of Directors shall ensure that all transac- tions between the Company and close associates are approved by the Board and are in compliance with Sections 3-8 and 3-9 of the Public Limited Liability Companies Act. Any such agreements must be balanced and not give concern for potential conflicts of interests with the Company. If the Company enters into any agreement exceed- ing a fair market value of NOK 100 000 with a share- holder, a shareholder’s parent company, members of the Board of Directors, executive personnel, or any of their close associates an independent third-party valuation shall be obtained. Any transactions with close associates shall be described in the director’s annual report. 137Cloudberry Annual report 2023 Corporate Governance The audit committee: The Company’s audit committee is governed by the Norwegian Public Limited Liability Companies Act and a separate instruction adopted by the Board of Directors. The members of the audit committee are appointed by and among the members of the Board of Directors and consist of three members. A new chair of the committee was appointed in 2023. The majority of the members of the audit committee are independent. The committee performs tasks related to financial reporting, the annual accounts and internal control. The audit committee has contact with the Company’s auditor, which in 2023 attended four out of six meetings. It will be held a minimum of five audit committee meetings per year. The compensation committee: The compensation committee is appointed by and among the members of the Board of Directors and consists of three members. In 2023 there were changes to the members of the committee and a new chair of the committee was appointed. All its members are independent of the Company’s executive management. The compensation commit- tee recommends and oversees compensation and benefits of the Company’s executive management.. The Environmental, Social and Governance Committee (ESG) committee: The ESG committee is appointed by and among the members of the Board of Directors and consists of three Board members, an increase from two in 2022. All its members are independent of the Company’s executive management. The committee’s purpose is to guide and support the Company’s work, anchor its commitment, and ensure high standards on both strategic and operational levels within environmen- tal, social, and governance aspects. Code of Conduct: Cloudberry’s Code of Conduct is the basis for the Company’s ethical culture. Its purpose is to ensure that the Company’s business and investments are conducted in a highly ethical manner. The Code of Conduct is revised and audited by the Board of Directors regularly. The Code of Conduct applies to all employees in the Cloudberry group, the Board of Directors, and other representatives of the Company. Every employee of Cloudberry shall act in compliance with the Code of Conduct. The Code of Conduct shall inter alia ensure that the Board members and the executive personnel act accord- ing to good governance and make the Company aware of any material matters to be considered by the management and/or Board. Cloudberry is committed to achieving a sustain- able development in our operations in all general terms. Business opportunities aimed at promoting a sustainable future shall be a part of Cloudberry’s strategic assessments, and we will leverage our competence and expertise towards contributing to developing a sustainable future. Deviations from Section 9 of the Corporate Governance Code: None 10. Risk management and internal control The Board of Directors is responsible for the Company’s risk management and internal control systems, so they are appropriate in relation to the extent and nature of the Company’s activities. Both the Board of Directors and the management of the Company focus on risk management and internal controls. In 2023, the executive management continued the integrating the Company’s policy and procedures for risk management and internal control. The aim was to heighten the knowledge and awareness of risk, to standardize the process and ensure a com- mon framework and definition throughout the Group and the different risk processes. Risk assessments shall be updated on a quarterly basis in the business units (segments) and is con- solidated for the Company. However, if there are major events influencing the Group’s risk situation materially the Company will update the risk assess- ment immediately. The highest risks, calculated by considering probability and consequence, and the mitigating actions are discussed in the manage- ment team in Cloudberry, with the audit committee and annually with the Board of Directors unless the situation requires more frequent updates. Prior to every Board meeting and otherwise when needed, the CEO reports in writing to the Board of Directors on the Company’s position, financial sta- tus, and performance. Through the CEO, the Board of Directors is ensuring risk and corporate manage- ment, and that Cloudberry complies with the Public Limited Liability Companies Act and other applicable Cloudberry Annual report 2023 Corporate Governance 138 laws and regulations in the regions Cloudberry oper- ates, according to sound ethical principles in terms of administrative, technical, business and personnel matters. Cloudberry manages the risk through close follow-up and monitoring of operating assets and develop- ment projects. Procedures and guidelines for the business are implemented and reviewed regularly. In the annual reporting, the Board of Directors reviews the Company’s risk areas. The annual review pays attention to inter alia: · Financial risks, including liquidity, interest and foreign exchange rate, inflation and cost control · Political risk and changes in laws and regulations · Volatile energy prices and revenue exposure · IT/digital risk, including IT fraud and hacker attacks · ESG risks, including climate, nature and biodiversity risks · Operational risks, including technological, con- struction, HSE and development risk Deviations from Section 10 of the Corporate Governance Code: None 11. Remuneration of the Board of Directors Cloudberry has established guidelines for salary and other remuneration for executive personnel, which also covers guidelines for remuneration to the Board of Directors. The guidelines have been prepared in accordance with Section 6-16a of the Public Limited Liability Companies Act. The remuneration of the Board of Directors is resolved by the Company’s General Meeting and should reflect the Board of Directors’ responsibility, experience, time spent and the complexity of the Company’s activities. The Board of Directors’ remu- neration is not linked to the performance and the Board of Directors hold no options in the Company. The Board of Directors members who participate in the audit committee, the compensation committee and the ESG committee receive separate compen- sation for these appointments, which are approved separately by the Company’s General Meeting. Detailed information on the remuneration of the Board of Directors can be found in the Financial Statements, note 25. As the main rule, the members of the Board of Directors shall not have any specific assignments for the Company in addition to their appointment as members of the Board of Directors. Deviations from Section 11 of the Corporate Governance Code: None. 12. Salary and other remuneration for executive personnel Cloudberry has established guidelines for salary and other remuneration for executive personnel. The guidelines have been prepared in accordance with Section 6-16a of the Public Limited Liability Companies Act, with applicable regulations on guidelines and reporting of remuneration for leading personnel. The main purpose of the guidelines is to allow shareholders to influence the parameters determining salary and other kinds of remuneration to executive personnel and to create a culture for remuneration that promotes the Company’s long- term interests, strategy and the Company’s financial sustainability. Remuneration means all benefits received by an individual, including fixed salary, performance-based pay (short and long term) and other benefits. The remuneration guidelines for leading personnel is based on attracting and retaining relevant expertise to further develop the Company. The guideline sets out an absolute limit for performance-related remuneration. More detailed information about the individual remu- neration of the CEO and other leading personnel is provided in the Company’s annual report note 11. Employee benefits and share based payments and the Company’s guidelines on the salary and other remuneration for executive personnel (Remuneration report 2023) will be published in relation to the annual General Meeting in 2024. Deviations from Section 12 of the Corporate Governance Code: None 13. Information and communications The Board of Directors adopted an investor relations policy with a description of the Company’s investor information and investor relations policy. The policy clarifies roles and responsibilities related to financial reporting and contact with the shareholders and the 139Cloudberry Annual report 2023 Corporate Governance investor market. This is to ensure transparency and equal treatment of the stakeholders. Cloudberry publishes its financial calendar annually with a list of dates for important events such as annual General Meetings and financial reports. The Company practises a silent period of two weeks ahead of publication of financial statements. Cloudberry provides all stock exchange announce- ments, financial reports and presentations, and other IR information at the Company’s web site www.cloudberry.no and the information is also posted at Oslo Stock Exchanges’ official news channel www.newsweb.oslobors.no. Cloudberry gives presentations in connection with the financial reporting, and these presentations are broadcasted digitally. Deviations from Section 13 of the Corporate Governance Code: None 14. Take-overs The instructions of the Board of Directors of Cloudberry contain guidelines on how the Board of Directors shall act in the event of a take-over bid. In such case, the Board of Directors shall ensure that the shareholders’ interests are safeguarded and that all shareholders are treated equally, and that the Company’s activities are not unnecessarily inter- rupted. The Board of Directors shall further ensure that all shareholders receive sufficient information and are given sufficient time to assess the relevant offer. The Board of Directors shall not prevent or oppose any takeover bids for the Company’s activ- ities or shares but make a recommendation to the shareholders. Deviations from Section 14 of the Corporate Governance Code: None 15. Auditor The Company’s external auditor is Ernst & Young AS. The Board of Directors requires the Company’s auditor to annually present to the audit committee the main features of the plan for the audit of the Company. The auditor participates in meetings of the Board of Directors and the audit committee when the annual accounts is an item. At these meetings the auditor reports on any material changes in the Company’s accounting principles and key aspects of the audit, comments on any material estimated accounting figures and reports all material matters on which there has been disagreement between the auditor and the Company’s executive management. Further, the Board of Directors has an annual review of the Company’s internal control procedures with the auditor, including identified weaknesses and proposals for improvement. The Board of Directors has established guidelines in respect of the use of the auditor by the executive management for services other than audit. The remuneration to the auditor is subject to approval by the annual General Meeting. The Board of Directors will report to the General Meeting details of fees for audit work and any fees for other assignments. Deviations from Section 15 of the Corporate Governance Code: None Cloudberry Annual report 2023 Corporate Governance 140 Consolidated financial statements Group Consolidated statement of profit or loss 144 Consolidated statement of comprehensive income 145 Consolidated statement of financial position 146 Consolidated statement of cash flows 148 Consolidated statement of changes in equity 149 Notes to the Consolidated financial statements Group 150 General 150 Note 1 General information 150 Note 2 General accounting policies and principles 150 Note 3 Key accounting estimates and judgements 151 Note 4 Operating segments 152 Note 5 Business combinations 154 Note 6 Acquisition of 40% shares in Captiva Digital Services AS 158 Note 7 Disposal of assets 158 Financial risk management 159 Note 8 Key risks and financial instruments 159 Note 9 Hedge activities and derivatives 169 Cloudberry Annual report 2023 Financial statements 142 Statement of profit or loss and comprehensive income 172 Note 10 Sales revenues and other operating income 172 Note 11 Employee benefits and share-based payments 174 Note 12 Other operating expenses 177 Note 13 Financial items 178 Note 14 Tax 179 Statement of financial position 181 Note 15 Property, plant and equipment 181 Note 16 Intangible assets and goodwill 184 Note 17 Inventory 185 Note 18 Impairment 186 Note 19 Investments in associated companies and joint ventures 192 Note 20 Cash, cash equivalents and corporate funding 195 Note 21 Share capital and shareholder information 196 Note 22 Interest-bearing debt and debt facilities 198 Note 23 Provisions, guarantees and other contractual obligations 200 Other information 202 Note 24 Earnings per share 202 Note 25 Transactions with related parties 203 Note 26 List of subsidiaries and equity accounted companies 205 Note 27 Subsequent events 207 143 Cloudberry Annual report 2023 Financial statements Consolidated statement of profit or loss 1 January - 31 December NOK million Note FY2023 FY2022 Sales revenue 10 333 208 Other income 10 277 9 Total revenue 610 217 Cost of goods sold (26) (14) Salary and personnel expenses 11 (119) (91) Other operating expenses 12 (130) (81) Operating expenses (276) (186) Net income/(loss) from associated companies and JV 4,19 (72) 120 EBITDA 263 151 Depreciation 15 (109) (27) Amortization 16 (18) (8) Impairment 18 (99) - Operating profit (EBIT) 37 116 Financial income 8,13 306 67 Financial expenses 8,13 (121) (61) Profit/(loss) before tax 222 122 Income tax expense 14 11 - Profit/(loss) after tax 233 122 Profit/(loss) attributable to: Equity holders of the parent 272 118 Non-controlling interests (39) 3 Earnings per share (NOK): Continued operation - Basic 24 0.93 0.47 - Diluted 24 0.93 0.47 Cloudberry Annual report 2023 Financial statements 144 Consolidated statement of comprehensive income 1 January - 31 December NOK million Note FY2023 FY2022 Profit for the year 233 122 Other comprehensive income Items which may be reclassified over profit and loss in subsequent periods Net movement of cash flow hedges 9 (44) 91 Income tax effect 9 10 (20) Exchange differences on translation of foreign operations (64) 30 Net other comprehensive income (99) 101 Total comprehensive income/(loss) for the year 134 223 Total comprehensive income/(loss) attributable to: Equity holders of the parent company 220 219 Non-controlling interest (86) 3 145Cloudberry Annual report 2023 Financial statements Consolidated statement of financial position NOK million Note 31.12.2023 31.12.2022 ASSETS Non-current assets Property, plant and equipment 15 3 997 1 597 Intangible assets 16 24 86 Goodwill 16 206 143 Investment in associated companies and JVs 19 1 175 890 Financial assets and other assets 8 91 105 Total non-current assets 5 492 2 821 Current assets Inventory 17 99 106 Accounts receivables 8 61 52 Other assets 8 260 86 Cash and cash equivalents 20 779 1 538 Total current assets 1 199 1 782 TOTAL ASSETS 6 691 4 603 Cloudberry Annual report 2023 Financial statements 146 Consolidated statement of financial position NOK million Note 31.12.2023 31.12.2022 EQUITY AND LIABILITIES Equity Share capital 21 73 73 Share premium 21 3 496 3 495 Total paid in capital 3 569 3 568 Other equity 362 146 Non-controlling interests 685 80 Total equity 4 617 3 794 Non-current liabilities Interest-bearing loans and borrowings 9,22 1 507 327 Lease liabilities 30 36 Provisions 23 115 36 Deferred tax liabilities 14 59 127 Total non-current liabilities 1 710 526 Current liabilities Interest-bearing loans and borrowings 22 78 12 Other financial liabilities 57 - Lease liabilities 7 7 Accounts payables and other liabilities 8 147 135 Provisions 23 76 129 Total current liabilities 364 283 Total liabilities 2 075 809 TOTAL EQUITY AND LIABILITIES 6 691 4 603 Oslo, 19 March 2024 The Board of Directors of Cloudberry Clean Energy ASA Tove Feld Chair of the Board Petter W. Borg Board member Benedicte Fossum Board member Henrik Joelsson Board member Nicolai Nordstrand Board member Stefanie Witte Board member Alexandra Koefoed Board member Anders J. Lenborg CEO 147Cloudberry Annual report 2023 Financial statements Consolidated statement of cash flows NOK million Note FY2023 FY2022 Cash flow from operating activities Profit/(loss) before tax 222 122 Net gain from sale of PPE and project inventory (272) (9) Depreciations and amortization 15, 16 126 35 Impairment 16, 18 99 - Net income from associated companies and JV's 4, 19 72 (120) Share-based payments - non-cash to equity 24 26 Net interest paid/received 28 12 Unrealised effect from change in fair value derivatives (12) - Unrealised foreign exchange (gain)/loss (56) 1 Change in accounts payable 7 88 Change in accounts receivable 4 (25) Change in other current assets and liabilities (18) (88) Net cash flow from operating activities 224 43 Cash flow from investing activities Interest received 13 23 10 Investment and capitalization projects (14) (44) Investments in PPE and intangible assets 15, 16 (535) (304) Net proceeds from sale of PPE and project inventory 7 684 60 Investment in business comb. net of cash acquired 5 (2 010) (51) Payment for increase in controlling interest 6 (23) - Investment in asset acquisitions, net of cash acquired - (19) Investments in associated companies and JV's 5, 19 - (31) Net cash flow from loans to associated companies and JV's (20) (33) Distributions from associated companies and JV's 19 85 31 Net cash flow from (used in) investing activities (1 810) (379) Cash flow from financing activities Payment to escrow account (3) (14) Transfer from escrow account - 82 Proceeds from new term loans 22 1 200 116 Payment of capitalised borrowing costs (8) - Repayment of term loan 22 (207) (151) Repayment of current interest-bearing liabilities 22 (54) (13) Interest paid on loans and borrowings 13 (55) (22) Payment on lease liabilities - interest (2) (1) Repayment on lease liabilities (6) (3) Share capital increase 21 1 767 Payment for shares bought back 21 (29) - Dividends paid to NCI (7) - Net cash flow from financing activities 830 760 Total change in cash and cash equivalents (756) 424 Effect of exchange rate changes on cash and cash equivalents (3) (1) Cash and cash equivalents at start of period 1 538 1 115 Cash and cash equivalents at end of period 779 1 538 Cloudberry Annual report 2023 Financial statements 148 Consolidated statement of changes in equity Attributable to parent company equity holders Paid in capital Other Equity Share capital Share premium Treasury shares Share based payment Cash flow hedge reserves Foreign currency translation reserve Retained earnings Total other equity Total Non- controlling interests Total equity Equity as at 01.01 2022: 59 2 676 - 6 3 (12) (96) (99) 2 636 - 2 636 Profit/Loss for the period - - - - - - 118 118 118 3 122 Other comprehensive income - - - - 71 30 - 101 101 - 101 Total comprehensive income - - - - 71 30 118 219 219 3 223 Share capital increase 14 819 - - - - - - 833 - 833 Repurchase own shares - - - - - - - - - - - Share based payments in the year - - - 26 - - - 26 26 - 26 Transaction with non-controlling interest - - - - - - - - - - - Transaction with non-controlling interest from business combinations - - - - - - - - - 77 77 Transfer to other equity - - - - - - - - - - - Equity as at 31.12 2022 73 3 495 - 31 74 18 22 146 3 714 80 3 794 Equity as at 01.01 2023: 73 3 495 - 31 74 18 22 146 3 714 80 3 794 Profit/Loss for the period - - - - - - 272 272 272 (39) 233 Other comprehensive income - - - - (35) (18) - (53) (53) (47) (99) Total comprehensive income - - - - (35) (18) 272 220 220 (86) 134 Share capital increase - 1 - - - - - - 1 - 1 Repurchase own shares - - (29) - - - - (29) (29) - (29) Share based payments in the year - - - 24 - - - 24 24 - 24 Transaction with non-controlling interest - - - - - - 2 2 2 (32) (30) Transaction with non-controlling interest from business combinations - - - - - - - - - 723 723 Transfer to other equity - - - - - - - - - - - Equity as at 31.12 2023 73 3 496 (29) 55 39 1 296 362 3 931 685 4 617 149Cloudberry Annual report 2023 Financial statements Notes to the Consolidated financial statements Group General Note 1 General information Corporate information Cloudberry Clean Energy ASA (“the Company”), its subsidiaries (wholly and partly owned) and invest- ments in associated companies and joint ventures (“the Group” or “Cloudberry”) is an independent power producer, developing, owning and operating renewable assets in the Nordics. The Company has an integrated business model across the life cycle of renewable power plants including project development, financing, construction (normally out- sourced), ownership, management, and operations. Cloudberry Clean Energy ASA is incorporated and domiciled in Norway. The address of its registered office is Frøyas gate 15, NO-0273 Oslo, Norway. Cloudberry Clean Energy ASA was established on 10 November 2017. The Company is listed on Oslo Stock Exchange main list (ticker: CLOUD). Note 2 General accounting policies and principles Basis for preparation The Group’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations from International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU. The Group’s consolidated financial statement is prepared on a going concern basis. These consolidated financial statements for the full year 2023 have been approved for issuance by the Board of Directors on 19 March 2024 and are subject to approval by the Annual General Meeting on 16 April 2024. The consolidated financial accounts are presented in Norwegian Krone (NOK). Amounts are rounded to the nearest million, unless otherwise stated. As a result of rounding adjustments, amounts and percentages may not add up to the total. Basis for measurement The consolidated financial statements have been prepared on a historical cost basis, except that certain financial instruments and derivatives are recognised at fair value, please see note 8 Key risks and financial instruments. Historical cost is generally based on the fair value of the consideration given when acquiring assets and services. Basis and principles for consolidation The consolidated financial statements comprise the financial statements of the parent company Cloudberry Clean Energy ASA and its subsidiaries, see note 26 List of subsidiaries and equity accounted companies. Subsidiaries are all entities (including structured entities) over which the Group has control. Upon the acquisition of new entities, development or producing projects, single or groups, manage- ment assess whether the acquisition constitutes a Cloudberry Annual report 2023 Financial statements 150 business combination in accordance with IFRS 3, or whether it is considered to be an asset acquisition, see note 5 Business combinations. Foreign currency translation Functional and presentation currency The functional currency of the companies in the Group is determined based on the nature of the primary economic environment in which the com- pany operates. The functional currency of the parent company Cloudberry Clean Energy ASA and the presentation currency of the Group is Norwegian krone (NOK). Principles of cash flow statement The cash flow statement has been prepared using the indirect method. Operating activities: changes in working capital comprise of current interest-free receivables and current interest-free liabilities. Effects related to capital expenditures, inventory investments, unreal- ised changes or reclassifications are not included in changes in working capital. Investing activities: acquisition/divestment of shares includes cash and cash equivalents in the investee that are recognised/divested at the transaction date. Hence, this is presented net together with the cash consideration paid or received. Capitalized costs related to project inventory are presented together with project investments. Financing activities: interest payments from interest rate derivatives, which are used to manage the Group’s debt portfolio, are presented as a part of interests paid. Note 3 Key accounting estimates and judgements Significant estimates The most critical assumptions used by management in making business decisions such as merger and acquisitions is the long-term price forecast for power and the related market developments together with the applied weighted average cost of capital (WACC) in discounted cash flow (DCF) models. These assumptions are also critical input for man- agement related to financial statement processes such as: · Allocation of fair value in business combination transactions related to PPE, investment in asso- ciates and JV’s and inventory, and goodwill. See note 5 Business combinations. · Impairment testing of goodwill, PPE and investment in associates and JV’s. See note 18 Impairment. Long term price forecast for power Management use two providers for forward power price curve estimates, Volue and Thema, each with their own base case for long term power price forecasts. As an input into decision making the base case of the two providers are averaged in order to provide an average power curve between two different and independent providers. Volue and Thema are external sources of information which ensures an unbiased estimate. Management utilises a consistent policy to base decision-making on third party independent power curves and may in the future also include other international pro- viders to average out different power curve thesis. Management review and update the forecast con- tinuously based on the latest available power curves. The utilised providers are continuously assessed. Weighted average cost of capital (WACC) The weighted average cost of capital (WACC) is a key input into the financial statements with regards to the mentioned items above. Management utilises a WACC based on market indicators externally observed to utilise an unbiased WACC. The cost of debt is calculated based on market risk-free rate with a market-based margin; both dependent on rel- evant country where the investment is taking place. The cost of equity is based on the risk-free rate and market risk premium for respective region and adjusted with an equity beta derived from a listed peer group to the relevant investment. The equity beta is based on the unlevered beta from the peer 151Cloudberry Annual report 2023 Financial statements group, and re-levered to reflect the leverage ratio utilised for the relevant investment. The WACC is always updated to reflect the relevant period when it is being used as an input to the sections mentioned above. Significant judgements Due to the Group’s business activities, management must apply judgement in determining the appropri- ate accounting policies in many areas, and for some the application of the Group’s accounting may have a material impact on the accounting treatment in the financial statements. Significant judgement includes areas such as: · Assessment of business combination or asset acquisition: note 5 and 15 · Assessment of control over investments: note 5 · Classification of developing projects: note 15 and 17 · Assessment of impairment indicators: note 18 Note 4 Operating segments Accounting principles The Group manages and reports its operations in four operating segments; · Production is an active owner of renewable power assets in the Nordics. · Development is a green-field developer of hydro, wind and solar projects and has a solid track record of organic, in-house developments of wind and hydropower assets in Norway, Sweden & Denmark · Operations is an asset manager and operator of renewable power assets, that also delivers indus- trial digital solutions, · Corporate is a cost-efficient segment that over- sees management tasks for the Group like financ- ing, marketing, reporting and other corporate activities. The Company has established that the board of directors act as the chief operating decision-maker. The segments are determined based on the differ- ences in the nature of their operations. The main performance indicator for segment reporting is EBITDA. The Group’s segment financials are reported on a proportionate 1 basis, a standard practice in the renewable energy market where assets are often partially owned. This approach helps manage risks, diversify investments, and address the industry’s capital-intensive nature. As such the chief operating decision maker utilises this reporting basis to under- stand the Group’s investment exposure by consid- ering it’s proportionate share in different assets or companies. The key differences between the proportionate and the consolidated IFRS financials are that all entities are included with the respective ownership share in each accounting line by the Group. Associated com- panies and joint ventures are included in the finan- cial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share. While in the consol- idated financials associated companies and joint ventures are consolidated with the equity method. Subsidiaries that have non-controlling interests are in the proportionate reporting presented with only the Group’s ownership share, while in the consolidated financials they are included with 100%. Production The Production segment owns and manages renewable power assets with long-term yield in the Nordics. Revenues come mostly from power pro- duction sold on a continuous basis through bilateral agreements or through the spot market, Nordpool. The Odin portfolio acquired in June 2023 was allocated to the Production segment as it consisted of a portfolio of producing wind power assets mostly located in Denmark in DK1 price area. The acquisition increased producing MW by ~70% in the Production segment. Production is also the local manager and delivers management services to the portfolio of power plants owned by Forte Energy Norway AS, see note 19 Investments in associated companies and joint ventures. 1 APM, see section Alternative performance measure for further definition. Cloudberry Annual report 2023 Financial statements 152 Development The Development segment has a significant development portfolio with renewable assets in the Nordics. Development is responsible for development of hydro, wind and solar power assets from early stage until the projects receive construction permits. Cloudberry is fully focused on continuing to work in close dialogue with local communities, public and private landowners to ensure efficient permitting processes, limit nature impact and gain access to additional sites. Operations (Captiva) The Operations segment includes the activities organized in the Captiva Group under the business areas management services and digital solutions. Captiva is an asset manager and operator of renew- able power assets in the Nordics with more than 15 years of history. Cloudberry has been a 60% owner of Captiva, and acquired the remaining 40% on 19 December 2023. Since first acquiring Captiva, Captiva have added significant value to Cloudberry’s hydro and wind development, procurement & construction as well as being recognized as a high-quality asset manager for power plants in the Nordics. Through the acquisition, Cloudberry will be able to further integrate the business areas within Captiva that are core for Cloudberry in order to scale these in the best manner possible. Please see note 6 Acquisition of 40% of Captiva Digital Services AS. Corporate Corporate consists of the activities of corporate services, management, and group finance. Group management sits within this segment and amongst other activities the Corporate segment manages and allocates the group capital towards different investments opportunities. The segment is also responsible for managing Cloudberry’s balance sheet and capital needs. Key investment and oper- ational decisions, including handling the majority of the M&A activities, also lies under the corporate segment with input and contribution from the relevant segments. Further the segment handles all reporting to external stakeholders. The corporate management aims to remain a cost-effective, agile and dynamic team providing best in class group functions that the other segments can build on. By year end, there were six employees in the corporate segment. Proportionate financials 1 The table shows the segment reporting for 2023 (with reconciliation to reported Group consolidated IFRS) and with comparable figures for 2022 in lower table: Residual FY 2023Elimination ownership Total Group of equity consoli-Total Develop-Proportio-elimi-accounted dated Consoli-NOK million Productionment Operations Corporatenate nationsentitiesentitiesdatedTotal revenue 655 15 38 2 711 (22) (159) 80 610Operating expenses (168) (31) (44) (67) (310) 20 75 (61) (276)Net income/(loss) from - - - - - - (72) - (72)associated companies and JV'sEBITDA 487 (16) (6) (64) 401 (1) (156) 19 263Depreciation and amortisation (134) (72) (63) (3) (272) - 116 (69) (225)Operating profit (EBIT) 353 (88) (69) (67) 129 (1) (40) (50) 37Net financial items (51) 21 (1) 192 162 - 25 (2) 185Profit/(loss) before tax 303 (66) (70) 124 291 (1) (15) (52) 222Total assets 5 720 924 184 536 7 363 (264) (723) 315 6 691Interest bearing debt 2 088 - 10 - 2 098 - (626) 112 1 585Cash 277 (67) 45 543 797 - (80) 62 779Net interest-bearing debt (NIBD) 1 812 67 (35) (543) 1 301 - (546) 50 806 1 APM, see section Alternative performance measure for further definition. 153Cloudberry Annual report 2023 Financial statements Residual FY 2022Elimination ownership Total Group of equity consoli-Total Develop-Proportio-elimi-accounted dated Consoli-NOK million Productionment Operations Corporatenate nationsentitiesentitiesdatedTotal revenue 402 207 38 - 646 (218) (254) 43 217Operating expenses (139) (30) (33) (63) (265) 25 94 (40) (186)Net income/(loss) from - - - - - - 120 - 120associated companies and JV'sEBITDA 262 177 4 (63) 381 (193) (40) 3 151Depreciation and amortisation (38) - (6) (3) (48) - 18 (5) (35)Operating profit (EBIT) 224 177 (2) (66) 333 (193) (22) (2) 116Net financial items (19) (9) - 43 15 - (10) 2 6Profit/(loss) before tax 204 168 (2) (22) 348 (193) (33) - 122Total assets 3 132 381 179 2 178 5 870 (695) (595) 23 4 603Interest bearing debt 865 55 6 - 926 - (591) 4 339Cash (131) (21) 34 1 704 1 587 - (122) 73 1 538Net interest bearing debt (NIBD) 996 76 (28) (1 704) (661) - (469) (69) (1 200) Please refer to note 10 Sales revenues and other income for information about external sales revenue per product and services and information about geographical area. Please refer to the section Alternative Performance Measure for definitions and further details regarding reconciliations between the Group IFRS reported figures and proportionate segment reporting. Note 5 Business combinations Accounting principle Business combinations are accounted for using the acquisition method in accordance with IFRS 3. When the Group acquires a business, a purchase price allocation is carried out, and assets and liabilities are valued at their fair value at the time of the acquisition. If the acquisition cost (including any non-controlling interests) exceeds the fair value of identifiable net assets acquired, this is recognised as goodwill. In accordance with IFRS 3, the estimation of fair value and goodwill may be adjusted up to 12 months after the takeover date if new information has emerged about the facts and circumstances that existed at the time of takeover. Acquisition related costs, except costs related to issue of debt or equity securities, are recognised as operating expenses. Significant estimates The purchase price allocation includes allocation of the purchase price to the underlying assets and liabilities on their estimated fair value. Estimated fair value of renewable power projects (development or producing) is based on discounted cash flow models. There is an inherent uncertainty related to manage- ment’s assessment of significant assumptions such as cash flow estimates, which for renewable power assets are highly dependent on long term power price curves. discount rate (WACC), and useful life of the assets. These estimates impact the split of the fair value which is allocated to PPE and investment in associates and JVs. The valuation model, which is a discounted cash flow model makes use of significant estimates, please see note 3 for information related to how management applies judgement and consistent use of estimates in the DCF models. Cloudberry Annual report 2023 Financial statements 154 Significant judgements Significant management judgement is required in the assessment of a business combination. This includes determining if an acquisition is a business combination or an asset acquisition, determining the acquiring part and determining the allocation of fair value of assets and liabilities acquired. A specific assessment is made for each acquisition to decide whether it is a business combination or an asset acquisition. If an acquisition is regarded as a business combination IFRS 3 Business combi- nations will be applied, while if it is regarded as an asset acquisition, it will be either IAS 2 inventory, IAS 38 Intangible assets or IAS 16 Property plant and equipment that will be applied. The latter relates to the type of assets being acquired. For acquisitions that consist of a single development project, single power plant ready to construct or assets that do not have any clearly defined input or output, the acquisition will often be accounted for as an asset acquisition. Acquisitions that consist of producing assets, projects organized with key employees, business processes in place and defined inputs and outputs from the processes, will often be accounted for as a business combination. However, a specific assessment will be needed to conclude on the treatment for each acquisition. The purchase price allocation is by nature judge- mental as it includes allocation of the purchase price to the underlying assets and liabilities on their underlying estimated fair value. Significant manage- ment judgement is applied about valuation method, estimates and assumptions. When acquiring an entity with partial ownership management applies significant judgement as to whether Cloudberry has control of the entity and can be classified as a subsidiary, or if it has joint control or significant influence and should classify it as an investment in a joint venture or an associated company. Related to the Odin acquisition Cloudberry holds a majority shareholding, 80% voting rights, the majority of appointed Board of Directors, including chair position, Cloudberry comprise the executive man- agement and decision making. This gives Cloudberry the ability to direct the relevant activities of Odin and thus represents power. The list of reserved matters in the shareholder agreement has been assessed related to control, but all are in line with the intent of the transaction and does not give Skovgaard the power of control. The Odin portfolio consist primarily of producing wind turbine assets. Therefore, the model for valua- tion of the turbines and the assessment of account- ing method has significant management judgement. Business combinations in 2023 Acquisition of 80% of the Odin Portfolio / Odin Group On 31 May Cloudberry Production Aps (fully owned by Cloudberry Production AS) completed the acqui- sition of 80% of the shares in Odin Energy Holding P/S (“the Odin portfolio” or “Odin Group”). The sale and purchase agreement was signed on 10 February and the agreement secured Cloudberry a majority stake in a portfolio consisting of 51 high-quality wind turbines in production, with 47 turbines located in Denmark and an additional 4 turbines in southern Sweden. The Odin portfolio is located primarily in the DK-1 price area and adds up to 311 GWh of estimated annual production net to Cloudberry. The transaction was subject to approval from the Danish authorities due to the assets being classi- fied as critical infrastructure and the approval was obtained on 14 April. The transaction was structured with all business (organized in SPV’s) transferred to a newly estab- lished holding company: Odin Energy Holding Aps. Odin Energy Holding Aps is the owner of Odin Invest I P/S, which wholly owns producing wind turbines, Odin Invest II P/S, which owns majority shares in seven Danish entities/subsidiaries and minority shares in nine Danish entities (associates/JV’S), and Odin Invest III P/S, which owns shares in two Swedish joint ventures. These companies comprise the Odin Group. The acquisition includes the wind turbine assets, land rights, re-powering options and a well anchored partnership with Skovgaard on asset management and development. The team is local and highly successful. In the transaction, Odin entered into an agreement with Skovgaard concerning the payment of a difference between Odin’s realized power price for 2023 and a 2023 reference price from the November 155Cloudberry Annual report 2023 Financial statements 2022 power curve. If the realized price is below the reference price, Skovgaard would cover the differ- ence multiplied by the production and vice versa. The payment was limited to EUR 6 million and was paid in full in Q1 2024. With the power curve at trans- action the date, it was expected a full pay-out, and a receivable was recognized (in other current asset) in the purchase price allocation. All acquired entities are reported under the Production segment in the segment reporting, see note 4 Operating segments. The total purchase price of DKK 1278m was set- tled with a cash payment of DKK 1265m and the remaining DKK 13m assumed through debt take over. The cash settlement was financed in part with exist- ing cash and a draw-down on the SR bank facility of DKK 532m. Cash in the acquired companies was DKK 18m at acquisition, net cash outflow was DKK 1247m (NOK 2010m). The acquisition is accounted for as a business combination and the Odin Group was consolidated in the Group from 31 May 2023. A preliminary purchase price allocation was first performed at acquisition, and this was subsequently updated per year end 2023. The final purchase price allocation is presented in the tables below: 1NOK million FY 2023 FY 2022Acquisition date 31.05.2023Voting rights/shareholding acquired through the acquisition 80%Total voting rights after the acqusition 80%Non-controlling interests 20%ConsiderationCash 2 061 168Shares - 67Total acquisition cost 2 061 235Book value of net assets (see table below) Identification of excess value attributable to:Intagible assets 7 47Property, plant and equipment 1 546 174Investment in associates and JV's 234 -Short-term assets 68 2Other liabilities (60) -Gross excess value 1 794 224Deferred tax on excess value 10 (49)Net excess value 1 804 175Fair value of net acquired assets excluding goodwill 2 688 210Of which:Non-controlling interest 723 35Controlling interests 1 965 174Total acquisition cost 100% 2 784 235Goodwill (controlling interest) 95 62Goodwill (non-controlling interest) - 41Goodwill (100%) 95 103Total non-controlling interest 723 77 Cloudberry Annual report 2023 Financial statements 156 Book value of net acquired assets 1NOK million FY 2023 FY 2022Property, plant and equipment 1 026 63Intangible assets - 27Goodwill - 2Investment in associates and JV's 106 -Other non-current assets 18 7Other current assets 128 39Cash and cash equivalents 29 177Acquired assets 1 307 316Non-current interest-bearing debt to financial institutions 336 63Other non-current debt 46 23Current liabilities 41 193Deferred tax liability - (1)Other - 3Net asset value acquired assets 884 35Total acquisition cost 2 061 235Non cash consideration 21 67Cash consideration 2 039 168Cash in acquired company (29) (177)Net cash outflow at acquisition 2 010 (9) 1 Acquisitions in 2022 related to the Cativa Group acquired in January 2022, Tinnkraft AS in February 2022, Bøen Kraft in June 2022 and an increase in the investment share in Enestor AS by Captiva in June 2022. Other financial figures The acquired subsidiaries in the Odin portfolio are consolidated in the Group accounts from the acquisition date. The table below shows the total revenue and total profit or loss that is included in the Group accounts for 2023: NOK million Total Acquisition date 31.05.2023Gross revenue from acqusition date until 31.12.23 138Pofit or loss total from acqusition date until 31.12.23 (2) The table below show the pro-forma revenues and net profit or loss if the acquired companies had been consolidated from 1 January 2023. Pro forma Group figures 2023Cloudberry Odin Pro-forma NOK millionGroup reportedPortfolio Group figures Total revenues 610 163 773Total profit or loss 233 120 353 157Cloudberry Annual report 2023 Financial statements Note 6 Acquisition of 40% shares in Captiva Digital Services AS On 20 December 2023 Cloudberry announced that it has acquired the remaining 40% shares in Captiva Digital Services AS (Captiva) from CCP AS. The first 60% was acquired in January 2022 and was a business combination in 2022. The purchase price for the shares was NOK 23m and settled as a cash payment. The related non-controlling interest in Captiva that was acquired had a pre-transaction book value of NOK 25m. With the purchase price of NOK 23m, a loss of NOK 2mwas recognized for the NCI in the statement of equity. The acquisition is accounted for as a transaction with non-controlling interest and is presented in the statement for equity. Please note that the investments in Enestor AS, Kraftanmelding AS and Broentech AS remain with the same ownership share for Captiva and non-con- trolling interest in these investments amounts to NOK 5m per year end for the Group. The seller and owner of the shares, CCP AS, are the previous management team in Captiva, of which many are still employees in the Group and are therefore assessed as a related party of the Group. Please see note 25 Transactions with related parties for information about principles for related party transactions. Impairment In the fourth quarter the Group prepared the annual impairment assessment for impairment indicators of intangible assets and the annual review of goodwill. At the same time, related to the acquisition of the 40% shares in Captiva Digital Services AS, a valua- tion of the separate cash generating units in Captiva was prepared by management. The valuation was supported through a fairness opinion by a reputable third party. The valuation was used as a basis for the transaction price and therefore also the basis for the recoverable amount attributable to intangible assets and goodwill. Because it was confirmed through the transaction, the valuation was considered to be at market terms and is assessed as fair value of the assets. Therefore, the Group recognized an impairment loss related to intangible assets and goodwill of NOK -74m and NOK -25m respectively. Also, a tax income of NOK 10m from reversal of deferred tax was recog- nized. The net PL effect of the write downs were NOK 89m for the Group. Note 7 Disposal of assets Sale of three hydropower plants: Nessakraft, Selselva and Åmotsfoss On 16 June Cloudberry Production signed a share sale and purchase agreement with Norsk Vannkraft AS for the sale of 100% of the shares in Nessakraft AS, Selselva AS and Åmotsfoss AS. The transaction was completed on 30 June 2023. The companies represent three hydropower plants with a total estimated annual production of 77 GWh located in NO-2, NO-3 and NO-5. The total transaction value was NOK 703m on a debt and cash-free basis. Total settlement for the sale of shares was NOK 511m, settlement of internal long-term debt was NOK 216m. Total cash proceeds received were NOK 727m, with total cash in the disposed companies being NOK 43m, resulting in a net cash inflow to the Group of NOK 684m. At the time of the sale, Cloudberry Production AS settled the related bank debt to SR bank with a total of NOK 207m. Net cash to Cloudberry from the transaction was NOK 477m. The total gain recognized from the sale of these three assets was NOK 259m and is presented as other income in the statement of profit or loss. All related assets and liabilities were deconsolidated as of 30 June 2023. The sold assets were all reported under the produc- tion operating segment. Cloudberry Annual report 2023 Financial statements 158 Financial risk management Note 8 Key risks and financial instruments Through its business activities, the Group is exposed to various risks and has engaged in various financial instruments. This note together with note 9 Hegde activities and derivatives outlines the key risks and management activities undertaken to manage the Group’s exposure to financial and other risks. The Group focuses on the following risk categories: market risk, operational risk, ESG risk and financial risk. Guidelines for risk management and strategy for handling and using financial instruments as a part of the business activities and handling risks have been approved by the Board of Directors. The Group’s overall risk management programme seeks to mini- mize the potential for adverse effects on the Group’s performance. The Group uses derivative financial instruments to hedge certain risk exposures. For full disclosure of the Group’s ESG risk reporting see the Group’s Sustainability report 2023. 8.1 Market risks Price risk The profitability of the Group’s producing power plants depends on the volume and relevant price of the electricity produced. Most the Group’s sales will be exposed to price risk related to electricity sold at spot rates. The Group’s production volume sold in the spot market is consequently exposed to fluctuations in the market prices for electricity, unless new fixed term agreements are entered into. Electricity prices are inter alia dependent on substi- tute or adjacent commodity prices such as e.g. oil, gas and coal prices, but also dependent on metro- logical conditions, CO 2 pricing and other supply and demand factors going into the clearing of the market price of electricity. Further, massive climate goal subsidy schemes may put downward pressure on revenues (i.e. electricity prices) of non-subsidized existing assets. The Group considers subsidized offshore wind power as the most likely threat. As sale of electricity constitutes a material share of the Group’s revenues, the price risks related to electricity prices could result in reduced revenue and profitability for the Group and also reduce the fair market value of the Group’s assets. Electricity price risks are mainly hedged by entering exchange traded electricity derivatives contracts (NordPool/Nasdaq OMX Commodities), as well as derivative contracts directly with industry counter- parties (bilateral contracts). The Group’s hedging strategies are continuously evaluated as electricity market prices, the hydrological balance and other relevant parameters change. For further information on hedging and outstanding derivative contracts see details under note 9 Hedge activities and derivatives. Sensitivity analysis The table below is calculated based on the Group’s electricity position (i.e. derivatives) as of 31 December 2023 and illustrates the potential impact on the income statement and equity. The sensitivity analysis includes only the market risks arising from derivatives i.e. the underlying physical electricity sales and purchases are not included. The analysis is based on the assumption that the forward price quotations of electricity would change +/-10%, flat in the time period that the Group is exposed with PPA’s, with all other variables held constant. The forward price quotation is defined as a significant estimate, please see note 3 for information. 159Cloudberry Annual report 2023 Financial statements The sensitivity is what management assumes may be a reasonable change: +10% change in electricity forward price quatations 2023 2022 Effect on profit before income tax (1) (2) Effect on equity (2) (5) -10% change in electricity forward price quatations 2023 2022 Effect on profit before income tax 1 2 Effect on equity 2 5 The basis for the sensitivity analysis is the price curves published closest to year end closing date. Inflation risk does not have a direct impact on the Groups financial position, but inflation and related price risk may have an adverse impact on the Group’s projects under development, accounted as inventory. The Group’s development projects are capital intensive and increasing commodity prices will result in higher capital expenditures to develop and construct the projects (i.e. due to higher con- struction costs and turbine costs). High inflation may carve out the value of the expected cash flows from the Group’s development projects relative to the up-front investments. Further, high inflation is expected to lead to higher short and long-term interest rates, affecting the financial costs for the Group’s development projects. These factors and uncertainties may result in lower expected profitabil- ity from projects under development and ultimately that projects under development are postponed or abandoned leading to an impairment loss. Conversely, high inflation may be caused by higher energy prices, and thus power prices which can act as a counterweight to the risk. Political and regulatory risk The power industry is a highly regulated sector and thus subject to political and tax risk The power industry is publicly regulated, and regu- lations may change over time. Thus, there is political risk of investments in the renewable and infrastruc- ture industries in the Nordic countries. The changes to the taxation of Norwegian renewables imple- mented in 2023 has further heightened the political risk in Norway. Changes in tax laws of any jurisdiction in which the Group operates, or any failure to comply with applicable tax legislation, may have a material adverse effect for the Group. The Group is subject to prevailing tax legislation, treaties and regulations in the jurisdictions in which it is operating, and the interpretation and enforcement thereof. The Group’s income tax expenses are based upon its interpre- tation of the tax laws in effect at the time that the expense is incurred. If applicable laws, treaties or regulations change, or if the Group’s interpretation of the tax laws is at variance with the interpretation of the same tax laws by tax authorities, this could have a material adverse effect on the Group’s business, results of operations or financial condition. The guarantee of origin scheme is subject to political risk In accordance with EU legislation, power plants in the EEA may get approval for guarantees of origin for five years at a time. Energy suppliers may buy such guarantees of origin from the power producer in order to guarantee its customers that the deliv- ered energy is produced from renewable sources. The future of the scheme is thus subject to political risk. The renewable sector is still under development Unexpected success in other areas of renewable energy may reduce the pressure on the author- ities to allow for development of wind parks and hydropower plants. This may affect the Group’s future investment opportunities and reduce the second-hand value of its power plants. The same may also hold true for non-renewable or currently unknown energy technologies. The uncertainties associated with the development of the renewable sector, as well as the emergence of other technol- ogies, are factors which could adversely affect the Group’s business and growth opportunities. Changes in laws and regulations Changes in laws and regulations may affect the Group’s operations, increase the Group’s operating costs, and reduce demand for its services. It could also increase compliance costs, mandate significant and costly changes to the way the Group imple- ments its services and solutions and threaten the Group’s ability to continue to serve certain markets. For some power plants, license fees and Cloudberry Annual report 2023 Financial statements 160 concessionary power must be paid or transferred to the municipality, county, or state. Often, such power plants must deliver 10-15% of their power production as concessionary power. The power plant must in such cases sell the concession power at the expected “cost price”. These are changes in regula- tions that would affect the Group’s profitability. 8.2 Operational risks Power plants are highly technical Investments in power generation and energy-related infrastructure involve technical and operational risks. The Group will seek to invest in power plants of expected good technical standard to reduce the technical risk of the investment. The Group will prioritize technical solutions that are well-proven and delivered by reputable suppliers, so that any repairs can be made within reasonable timeframes and at reasonable cost, and to achieve attractive insurance terms. Despite the aim of choosing sound solutions, technical problems may occur meaning possible stops in production or costly reinvestments that reduce the Group’s profitability and/or financial position. Risks related to costs of transmission and distribution Increases in charges relating to the connection to and use of the electricity transmission and distribu- tion networks and relating to balancing of electricity supply and demand, and/or restrictions on the capacity in such networks available for use by the Group’s power plants, may result in higher operating costs, lower revenues and fewer opportunities for growth. Risks related to development projects For the development projects, there are project related risks with regards to reaching final invest- ment decision. The Group must inter alia negotiate and conclude agreements related to construction, maintenance and operation of the plants, obtain financing and secure the necessary grid capacity and permits. If the Group fails to realize all or some of the development projects, the Group may have to write off the investments made into the project(s). Risks related to construction projects For projects under construction, both current and future, the construction phase is linked to risk of overruns and delays. The construction of power plants differs from project to project, and several aspects may cause delays or budget overruns. During construction of renewable projects related to wind, hydro, solar and storage, challenges related to foundations or roads may lead to delays, weather conditions such as heavy winds or rainfall can delay installations, distress in global supply chain may delay certain components and increase costs and causing project delays and subsequently cost overruns. 8.3 ESG risks Risks related to new sustainability regulations All industries are subject to much stricter laws and regulations related to sustainability, taking place now and in the years to come. This is based on the fact that financial markets, creditors and investors need consistent, comparable and high-quality informa- tion on the impacts of environment and climate change on businesses. The Corporate Sustainability Reporting Directive (CSRD) came into force in 2023 and will apply for the first group of companies from the 2024 financial year. Cloudberry is expected to comply with CSRD reporting requirements for the 2025 financial year. Further, the Task Force on Climate-related Financial Disclosure (TCFD) devel- oped recommendations to improve and standardize the reporting of climate-related financial information and to enhance market transparency and stability. A similar set of recommendations has been devel- oped for nature-related risks, called the Taskforce on Nature-related Financial Disclosures (TNFD). In addi- tion, reporting according to the EU Taxonomy, which 161Cloudberry Annual report 2023 Financial statements is a classification system to help direct and scale up investments into sustainable activities, continues to increase its scope and importance. Climate change related risks Climate change itself is a risk for the Group, although society’s climate change mitigation efforts create business opportunities for us. Climate change can imply altering the precipitation patterns we are used to, which makes hydropower a less dependable source of energy production than in the past. Additionally, climate change is increasing the frequency and severity of extreme weather events, which pose threats to the Group’s assets. The risk assessment and management related to climate risk, is both a specific process in the Group and integrated in the general risk management activities. The Group assesses its risks and oppor- tunities through a doble materiality assessment. Risks and opportunities are considered in a short-, medium-, and long-term strategic and financial per- spective, and have set threshold values for financial impact. The Company identifies the potential finan- cial impact from the risks and opportunities and their significance for the Group. The financial impact is defined by assessing both the actual cost of the impact as well as a consideration of frequency, with the intervals structured as below. Financial Impact Low Medium HighMNOK <25 25–100 >100Frequency <0-1 years 1-5 years >5 years Risk related to changing weather patterns The metrological conditions (rain and wind) at the particular sites at which the Group’s power plants are located can vary materially from season to season and from year to year. Changes in average temperatures will impact the metrological conditions. Overall warmer climates can lead to increased rainfall, increased wind, and longer periods of drought. Potential consequences include flooding at hydro plants resulting in less production, severe winds exceeding a wind turbines capacity leading to production stops, and droughts leading to low water levels and forcing the company to reduce or even fully stop the electricity production. Also, if a site proves to have lower resources than anticipated in the Group’s business model or suffers a sustained decline in metrological conditions, such power plants are likely to generate lower electricity volumes and lower revenue than anticipated, which could have a material adverse effect on the Group’s business. For more information about climate related risk, see the Group’s separate TCFD-report and Sustainability report 2023. 8.4 Financial risks The Group’s overall financial risk management focuses primarily on maintaining a financial risk profile that provides flexibility as well as optimising return on assets. Financial risk management is coordinated and managed centrally at Group level. Guidelines for risk management and strategy for handling and using financial instruments as a part of the business activities and handling risks have been approved by the Board of Directors. The Group uses derivatives, such as interest rate swaps, power purchase agreements and currency forward contracts to manage its exposure to certain risks as described in this section. To reduce volatility in the statement of profit or loss the Group applies hedge accounting. Refer to Note 9 Hedge activities and derivatives for further information. Interest rate risk The Group is exposed to interest rate risks through funding and cash management activities. Cloudberry Annual report 2023 Financial statements 162 The Group’s underlying assets will normally be loan-financed with long term debt obligations with floating rates, which is exposed to the risk of changes in market interest rates. An increase in interest rates will lead to higher financing costs and interest payments, which reduces the Group’s profitability. Changes in interest rates also expose the Group to changes in the fair value of interest rate derivatives (fair value risk). Management seeks to minimize the interest rate risk together with borrowing costs. The Group manages the borrowing cost and interest risk by either using long-term financing at fixed rates or using floating to fixed interest swaps. All debt denominated in EUR, NOK and partially DKK has been swapped to fixed interest rates for periods exceeding 10 years. The profit or loss statement and future cash flows related to existing debt are there- fore limitedly sensitive to changes in interest rates. Sensitivity analysis The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected, after the impact of hedge accounting. With all other variables held constant, the Group’s profit before income tax and equity is affected through the impact on floating rate borrowings, as follows: 1%-point increase in floating interest rate 2023 2022Effect on profit before income tax 1 -Effect on equity 86 27 1%-point decrease in floating interest rate 2023 2022Effect on profit before income tax (1) -Effect on equity (79) (25) Currency risk The Group presents its financial statements in NOK. However, Norwegian power companies sell the power through Nord Pool where EUR is the official trading currency. Electricity Certificates are traded in SEK. The Group has also invested in a large portfolio in Denmark which reports in DKK. Several of the Group’s development projects in Sweden have costs which are denominated in SEK. Further, the Group’s investment in Odal Vind AS and Forte Energy Norway AS is exposed to EUR in its entirety. Consequently, the Group is exposed to currency risk. Any fluctu- ations in exchange rates between NOK, SEK, DKK and EUR could materially and adversely affect the Group’s business, results of operations, cash flows, financial condition and/or prospects. The Group is also exposed to currency risk by having employees and operations in Sweden. Any fluctua- tions in exchange rates between NOK and SEK could materially and adversely affect the Group’s business, results of operations, cash flows, financial condition and/or prospects. The Group has significant contractual cash flow obligations in other currencies, especially related to investments or capital expenditures on power plants under construction, these are either in EUR (turbine suppliers) or in the local currency where the invest- ment or construction project is located. The Group seeks to minimize the risk related to these cash flows by entering currency forward contracts that match the contractual cash out flows or buying/swapping the necessary amount to the relevant currency so that the risk of change in FX rate have limited impacts of the investment/project profitability. The Group holds deposits in local currency (NOK, SEK, DKK and EUR) in order to match future obliga- tions and can enter future currency swap contracts for the larger obligations to limit the exposure to future exchange rate fluctuations. 163Cloudberry Annual report 2023 Financial statements Sensitivity analysis The Group has performed a sensitivity analysis, whereby the sensitivity of financial instruments for reasonably possible changes in exchange rates is assessed. The analysis has been performed for the main currencies to which the Group entities are exposed, namely: SEK, DKK and EUR exchange rate. The table below shows the sensitivity to a reason- able change in the Group’s consolidated financial assets and liabilities. Currency gains and losses on monetary items in foreign currency are recognised in the income statement of the Group. NOK million 2023 2022Change in SEK (5%) (5%)Effect on cash and cash equivalents (2) (4)Effect on long-term debt - -Effect on group receivables and liabilities (28) (14)Change in DKK (5%) (5%)Effect on cash and cash equivalents 1 -Effect on long-term debt 39 -Effect on group receivables and liabilities (44) -Change in EUR (5%) (5%)Effect on cash and cash equivalents (3) (1)Effect on long-term debt 10 -Effect on group receivables and liabilities (10) - Liquidity risk The Group manages liquidity risk by regularly review- ing future commitments and the liquidity reserves which consist of cash (see note 20 Cash, cash equivalents and corporate funding) and borrowing facilities (see note 22 Interest-bearing debt and debt facilities). Management prepares minimum quarterly cash flow forecasts extending at least 24 months ahead to handle the liquidity risk. When taking business decisions and entering into contracts the Group evaluates the liquidity needs and makes sure the liquidity levels needed are in place before entering into contracts. As of 31 December 2023, the Group has a total of approximately NOK 426 million in contractual commitments, in addition to the current payables which are recognised in the Groups balance sheet. The obligation does not include regular employee expenses or other day-to-day costs. See note 15 Property, plant and equipment and note 23 Provisions, guarantees and other contractual obligations. Cloudberry Annual report 2023 Financial statements 164 The following table shows the maturity for nominal cash outflow for the contractual obligations as per 31 December 2023: Carrying Less than NOK million amounta year 2025 2026 2027 2028+ Total Bank loan (incl. interest payments) 1 547 185 180 174 1 205 131 1 876Lease liabilities 36 7 8 7 6 16 44Accounts payable 147 147 - - - - 147Total non-derivatives 1 729 339 187 181 1 211 147 2 066Net-settled derivatives 44 17 10 10 5 2 44Total financial liabilities and derivatives 1 774 349 191 185 1 215 169 2 109 Per 31 December 2022: Carrying Less than NOK million amounta year 2024 2025 2026 2027+ Total Bank loan (incl. interest payments) 338 37 26 26 230 75 394Lease liabilities 43 7 7 8 7 24 53Accounts payable 135 135 0 0 0 0 135Total non-derivatives516179343323799582Net-settled derivatives 25 17 7 0 0 0 25Total financial liabilities and derivatives541196413323799607 Credit risk The Group is exposed to third party credit risk in several instances including off-take partners who have committed to buying electricity produced by or on behalf of the Group, suppliers with prepayments, banks providing financing and guarantees of the obligations of other parties, insurance companies providing coverage against various risks applicable to the Group’s assets, and other third parties who may have obligations towards the Group includ- ing warranties provided under share purchase agreements. The Group’s main credit risks arise from credit exposures with deposits with financial institutions and other short-term receivables. Counterparties in derivative contracts and financial deposits are limited to financial institutions with high creditworthiness. The Group’s account receivables have low credit risk and all receivables over the past several years have been collected in full and on time. At year end Management has evaluated the account receiva- bles credit risk to be insignificant and the account receivables are therefore recognised in the financial statements at face value. 165Cloudberry Annual report 2023 Financial statements 8.5 Financial instruments Accounting principle Financial assets The Group classifies its financial assets in the follow- ing measurement categories: · Financial assets measured at amortised cost, and · Financial assets measured at fair value (either through profit or loss, or through OCI) The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows. The Group’s cash and cash equivalents, accounts receivables and other financial receivables are measured at amortised cost. The interest income from these financial assets is included in finance income using the effective interest method. For impairment losses on the accounts receivables, the Group applies the simplified approach as per- mitted in IFRS 9 and presents the Impairment losses as a separate line item in the statement of profit or loss. The Group’s derivative financial instruments with a positive fair value are recognised as financial assets and initially measured at fair value, with transac- tion costs expensed in the income statement. The method of recognising changes in the fair value of these financial assets depends on whether the derivatives are designated as hedging instruments and the nature of risks being hedged. See note 9 Hedge activities and derivatives for further details on the Group’s hedging activities. Fair value gains or losses for derivatives that are not designated as hedging instruments are recognised through profit or loss as finance income or finance expenses. Fair value gains for derivatives that are designated as hedging instruments in an effective hedge position are recognised through other com- prehensive income as net movements in cash flow hedges. Financial assets are derecognised on the date on which the Group commits to sell the asset (trade date). Any gains or losses arising on derecognition are recognised directly in profit or loss and pre- sented in other gains/ (losses) together with foreign exchange gains and losses. Financial liabilities The group classifies its financial liabilities in the following measurement categories: · Financial liabilities at amortised cost, and · Financial liabilities at fair value (either through profit and loss, or through OCI) All of the Group’s financial liabilities (except deriv- ative liabilities) are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method. Interest incurred on these financial liabilities is recognised as finance expenses in the income statement, except for borrowing costs directly attributable to project development, which are capitalised to the cost of those project assets. The Group’s derivative financial liabilities are initially measured at fair value, with changes in the fair value recognised through profit or loss (not designated as hedging instruments), or other comprehensive income (designated as hedging instruments in an effective hedge position). See note 9 Hedge activi- ties and derivatives for further details on the Group’s hedging activities. Financial liabilities are derecognised when the obligation under the liability is discharged, cancelled, or expires. The carrying amount for financial assets and finan- cial liabilities measured at amortised cost is believed to be approximate to fair value. Cloudberry Annual report 2023 Financial statements 166 Financial instruments The table below shows the Groups financial instruments with their carrying amounts recognised in the consolidated financial position on 31 December 2023: Financial FY 2023liabilities at Financial Financial Fianancial assets amortised assets - fair liabilities - fair NOK million Noteat amortised costcostvaluevalue Total Financial investments 13 - - - 13Derivative financial instrument - - 45 - 45Other non-current assets 33 - - - 33Total non-current financial assets 45 - 45 - 91Accounts receivables 61 - - - 61Other assets 260 - - - 260Cash and cash equivalents 20 779 - - - 779Total current financial assets 1 100 - - - 1 100Lease liability - (7) - - (7)Interest-bearing loans and borrowings 22 - (78) - - (78)Derivative financial instrument - - - (6) (6)(included in current provisions)Accounts payables and other liabilities - (147) - - (147)Total current financial liabilities - (231) - (6) (237)Lease liability - (30) - - (30)Interest-bearing loans and borrowings 22 - (1 469) - - (1 469)Derivative financial instrument 22 - - - (39) (39)(included in non-current provisions)Total non-current financial liabilities - (1 498) - (39) (1 537)Net financial assets (liabilities) 1 146 (1 729) 45 (44) (583) Other current assets of NOK 261m primarily consists of NOK 174m receivable from previous owners of the Odin portfolio: Skovgaard, NOK 39m in restricted cash, NOK 23m in a VAT receivable on project investments at the Sundy Vindpark, and NOK 25m related to other accruals. 167Cloudberry Annual report 2023 Financial statements Table per 31 December 2022: Financial FY 2022liabilities at Financial Financial Fianancial assets amortised assets - fair liabilities - fair NOK millionat amortised costcostvaluevalue Total Financial investments 57 - - - 57Derivative financial instrument - - 39 - 39Other non-current assets 9 - - - 9Total non-current financial assets 66 - 39 - 105Accounts receivables 52 - - - 52Other assets 86 - - - 86Cash and cash equivalents 1 538 - - - 1 538Total current financial assets 1 676 - - - 1 676Lease liability - (7) - - (7)Interest-bearing loans and borrowings - (12) - - (12)Derivative financial instrument - - - - -(included in current provisions)Accounts payables and other liabilities - (135) - - (135)Total current financial liabilities - (154) - - (154)Lease liability - (36) - - (36)Interest-bearing loans and borrowings - (327) - - (327)Derivative financial instrument - - - (25) (25)(included in non-current provisions)Total non-current financial liabilities - (362) - (25) (388)Net financial assets (liabilities) 1 742 (516) 39 (25) 1 239 Fair value measurement The Group’s derivative financial instruments are measured at fair value in the statement of financial position and are classified using a fair-value hier- archy (level 1, 2 or 3) that reflects the significance of the lowest level inputs used in the valuation, in accordance with IFRS 13. The group primarily utilises interest rate swaps, power purchase agreements (PPAs) and currency forward contracts as derivative financial instruments. Valuation techniques, inputs, and processes All derivative financial instruments held at reporting date derive their fair value primarily from market-re- lated inputs. The measurement of these instruments is therefore classified within level 2 of the fair-value hierarchy. · Interest rate swaps: fair value is measured at the present value of the estimated future cash flows based on observable yield curves, determined by external banks. · Power purchase agreements (PPAs): fair value is measured as the present value of the net differ- ence in megawatt-hour of forward energy prices determined on the inception date as well as the observed energy prices on the date of valuation. Changes in fair value relate to daily changes in market prices of the derivative contracts and the volume of contracts. Some power purchase agreements that the Group has entered into and continues to hold, are for the purpose of delivering electricity in accordance with Cloudberry’s expected sale requirements (fixed contract prices and contract volumes). These agree- ments meet the “own use” contract exemption and the Group elects to account for them in accordance with IFRS 15 Revenue from contracts, and not accord- ing to the financial instrument scope of IFRS 9. Cloudberry Annual report 2023 Financial statements 168 The fair value hierarchy for assets and liabilities measured at fair value is presented in the following table: Level 1 Level 2 Level 331.12.2023 31.12.2022 31.12.2023 31.12.2022 31.12.2023 31.12.2022Derivative assets– Interest rate derivatives - - 35 36 - -– Commodity derivatives (power) - - 10 2 - -Derivative liabilities– Interest rate derivatives - - (39) (1) - -– Interest rate derivatives - - - - - -– Commodity derivatives (power) - - (6) (24) - -Fair value - - 1 14 - - The fair value change of the interest rate derivative held by an associated company- Forte is included in the carrying amount of the equity accounted company. The fair value movement per 31 December 2023 is NOK -11m and is measured within level 2 of the fair-value hierarchy. There were no transfers between fair-value hierarchy levels as of 31 December 2023 (or the prior year). The Group’s interest rate derivatives and a PPA agreement are held for hedging purposes, see note 9 Hedge activities and derivatives for further detail. Note 9 Hedge activities and derivatives Accounting principle The Group utilises derivative financial instruments to hedge its market and financial risk exposures, which are primarily risks related to interest rate movements, electricity price movements and foreign currency exchange rates. The Group manages its interest rate exposure from borrowings by entering into interest rate swaps, its electricity price risk exposure by entering into PPAs and foreign currency rate exposure by entering into foreign currency forward swaps. The hedging derivative instruments that the Group holds are designated as either: · Hedging instruments in a hedge accounting relationship, or · Hedging instruments not in a hedge relationship At inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it applies hedge accounting and the risk management objective and strategy for the undertaking. Hedging instruments that the Group holds which meet all the qualifying criteria for hedge accounting, are accounted for, as described below under ‘Cash flow hedges’. Hedge accounting Cash Flow Hedges If a derivative financial interest is designated as a cash flow hedge instrument, the effective portion of the changes in the fair value of the derivative are rec - ognised in other comprehensive income and accumu- lated separately in equity (cash flow hedge reserve). The gain or loss from fair value change related to the ineffective portion is recognised immediately in the income statement. Subsequently, the cumulative of the effective portion is transferred to the statement of profit or loss when the underlying forecast transaction is recognised in the income statement. 169Cloudberry Annual report 2023 Financial statements Hedge accounting is discontinued when the hedg- ing instrument expires, is terminated, exercised or no longer qualifies for hedge accounting. · Interest rate swaps: The interest rate swaps are a risk management tool to reduce the exposure to cash flow volatility arising from interest rate fluctuations, by swapping from floating to fixed interest rates for all long-term debt related to power plants, see note 22 Interest- bearing debt and debt facilities. The Group uses these swaps to hedge the cash flow variability due to changes in benchmark rates attributable to movements in the three-month IBOR rate (e.g. NIBOR, EURIBOR or CIBOR respectively) and by so doing, realise the desired matching of derivative results with the hedged interest rate payments. Cash flow hedge accounting is applied, as the swaps hedge interest rate payments that are expected to occur with a high degree of probability from the currently held debt facilities. The derivatives are carried on the balance sheet and their effectiveness monitored quarterly, noting that hedge ineffectiveness can arise from changes in counterparty credit risk. · Power purchase agreements (PPAs): The Group enters into long-term, fixed price contracts to reduce the effect of electricity price fluctuations by locking in highly probable future sales of power at fixed prices per megawatt-hour of power. The volume of power is usually set at a low % of total production, shortfall exposure at a minimal, and guarantees revenue at a fixed price. Cash flow hedge accounting is applied as the PPAs hedge payments to be received from highly probable sale transactions. The derivatives are held on the balance sheet and their effectiveness monitored quarterly in relation to production volume movements. As of 31 December 2023, the Group had the below interest rate swaps and PPAs which it accounts for as hedging instruments designated in a hedge accounting relationship: Carrying amount of the hedging instrumentsWeighted Maturity average Nominal 1amount2Risk and hedging instruments(months)rate/priceAssets LiabilitiesCash flow hedgesInterest rate risk - borrowings 3Interest rate swap (IRS) - NOK25-160 1 820% 355 531 834 33 (39)Interest rate swap (IRS) - EUR 343 2 930% 200 642 925Interest rate swap (IRS) - DKK 58-116 3 270% 602 023 167Commodity price risk – Forecast transactionsFixed price PPA 48 133 21 10 - 1 The weighted average prices for commodity hedges are presented as the price per megawatt hour for electricity (EUR/MWh) 2 Nominal amount is the nominal value converted into NOK using the exchange rate at year end. 3 Changes in the fair value of a PPA and 2 interest rate derivatives with hedge ineffectiveness have been accounted for through profit and loss. Related to the sale of Selselva (a hydropower plant sold on 30 June 2023- see note 7 Disposal of assets) and settlement of related bank debt, two interest rate derivatives previously accounted for as cash flow hedges were no longer qualified for hedge accounting. The Group took the decision to then close these hedges and the cumulative fair value change previously in OCI was immediately transferred to profit and loss. Upon closing of the hedge, the Group realised a fair value gain of NOK 2m as of 31 December 2023. This gain is recognised as part of finance income in profit and loss. Cloudberry Annual report 2023 Financial statements 170 As of 31 December 2023, the movement of the cash flow hedge effect for the interest rate swap in the equity accounted entity: Forte, of NOK 4m and related tax effect of NOK -0.8m was recognised in other comprehen- sive income. Cash flow hedge accounting impact to reserves in other comprehensive income: NOK million 2023 2022Opening balance 74 3Net change in value of effective derivative hedging instruments (44) 91Interest rate swap (IRS) - NOK (41) 32Fixed price PPA 8 2Interest rate swap (IRS) - NOK Forte (11) 57Deferred tax/tax credit 10 (20)Total movement (35) 71Closing balance 40 74 Hedge ineectiveness The Group has a PPA related to Bøen Kraft and two NOK interest rate swaps that are accounted for as cash flow hedges, where the hedge has been assessed as being in an ineffective hedge position. The changes in fair value of these derivatives are recognised directly in profit and loss and as of 31 December 2023 amounted to a gain of NOK 20m for the PPA and NOK 3m for the interest swaps, recognised in finance income in profit and loss. During the year, the Group settled all foreign exchange forward contracts it previously held related to expected EUR capex at Sundby Vindpark and DKK expenditure for the acquisition of the Odin portfolio. The Group realised a fair value gain of NOK 100m upon settlement, recognised as finance income in profit and loss. 171Cloudberry Annual report 2023 Financial statements Statement of profit or loss and comprehensive income Note 10 Sales revenues and other operating income Accounting principle The Group accounts for revenue in accordance with IFRS 15 Revenue from Contracts with Customers and applies the five-step method to all revenue streams. Revenue The Group derives its revenue from the three seg- ments that develop (Development), own (Production) and operate (Operations) hydropower plants and wind farms in Norway, Denmark, and Sweden. The three segments provide the group with multiple revenue streams, categorized as follows: 1. Power related products: the sale of hydro and wind generated electricity in the spot market, through the sale of electricity certificates, and guarantees of origin; 2. Asset management: the sale of commercial and technical management services for hydro and wind power plants; 3. Project development services: the sale of man- agement services for development of hydro and wind assets; 4. Consultancy services: the sale of consultancy with accounting and IT management services 5. Digital services; and 6. Agency fee power trade Revenue from power-related products is recognized at the spot price, regulated price or fixed contract price when or as the power or power related prod- ucts are delivered; applying the practical expedient available, to recognize the revenue to the extent that the Group has a right to invoice. Revenue from management, project development, consultancy and digital services is recognized at the fixed contract price, when the services are rendered, and the Group has an unconditional right to the consideration settlement. Agency fees from power sales are recognized at the fixed fee amount, at an agreed frequency with the power producers, as and when the power is deliv- ered to customers on their behalf. The Group makes use of the practical expedient available, where the transaction price is not adjusted for the financing component if the period between the transfer for the goods or services and payment is less than a year. Other income Sale of development projects and producing assets (PPE) The Development segment is an in-house developer for renewable power projects, held with the intention to develop and operate them as power producing assets. Where the segment identifies investment opportunities that represent a more advantageous strategy, the projects are sold off to other group entities or external parties. The Group enters into sale agreements of ready- to-build development projects and sometimes producing assets (PPE) and assesses these sale agreements as opportunistic decisions for the group which are not in the ordinary course of business. Therefore, the proceeds from the sales of this nature are recognized as net gains or losses in accordance with IFRS 10 and not IFRS 15. Government grants Government grants are received conditional to gen- erating power using certain technologies, including electricity certificates and guarantees of origin (GOs). The right to receive the grants is obtained at the time of generation of power, at the value of 1 GO per megawatt hour of electricity produced. At grant time, electricity certificates and GOs are measured at nil and income recognized when the sale takes place. Cloudberry Annual report 2023 Financial statements 172 Total revenue The total sales revenue and other operating income are presented in the table below: NOK million 2023 2022Power related products 273 152Asset Management 27 28Project development services 3 4Consultancy services 17 12Digital Services 2 2Agency fee power trade 10 11Other revenue 1 1Sales revenues 333 208Net gain sale of PPE and project inventory 271 8Public grants 6 -Other - -Other income 277 8Total revenue610217 Other income for the year is primarily made up of the gain (NOK 258m) recognized on the sale of three hydropower plants, which was concluded on 30 June 2023. Please see note 7 Disposal of assets for further details on the sale. Sales revenue and other operating income per country In presenting information based on geographical areas, external revenues and other income from customers will be attributed to the country of the underlying legal entity recognising the sale. For information about the revenue split between business segments, see note 4 Operating segments. The total sales revenue and other operating income per country are presented in the table below: NOK million 2023 2022Norway 468 215Denmark 138 -Sweden 3 2Switzerland 1 1Total revenue 610 217 173Cloudberry Annual report 2023 Financial statements Note 11 Employee benefits and share-based payments Accounting principle Share-based compensation The Group has an equity incentive plan for top management and key employees. The programme includes the issue of warrants for shares in the Company. The Group applies the Black and Scholes model based on the market price to determine the fair value at the grant date. The grant date is determined by the Board of Directors. Employee benefits The table below shows the employee benefits accrued in the period and the capitalized costs related to development projects. NOK million 2023 2022Salaries 90 67Social security tax 16 9Pension costs 4 3Share based payments 23 26Other benefits 3 2Gross personnel expenses 136 106Capitalized development costs (project inventory) (17) (15)Total personnel expenses 119 91Average number of full-time equivalents (FTEs) 65 55Number of full-time equivalents as 31.12 (FTEs) 67 62 Included in salaries are remuneration to board members, see note 25 Transactions with related parties. Pension The Group has an established pension scheme that is classified as a defined contribution plan. The pension scheme is in line with the requirements of the law. Contributions to the defined contribution scheme are recognised in the consolidated statement of profit or loss in the period in which the contribution amounts are earned by the employees. The defined contribution plan does not commit the Group beyond the amounts contributed. Remuneration of Executive Group management The remuneration of the Executive Group Management is based on a fixed salary, including personal benefits such as free telephone and health insurance, a variable group performance bonus scheme, pension bene- fits, and a long-term share-based incentive program. Cloudberry Annual report 2023 Financial statements 174 The table below shows the remuneration in 2023 Anders Christian Jon Gunnar Charlotte Stig J. Ingrid FY 2023Lenborg Helland Solli Bergqvist Østebrøt Bjørdal NOK million(CEO) (CVO) (COO) (CDO) (CTO) (CCOO) Total Salary 4.0 3.0 2.0 1.3 2.8 2.1 15.1Bonus 1.9 0.9 0.6 0.4 - 0.6 4.4Pension costs 0.1 0.1 0.1 0.3 0.1 0.1 0.8Share-based payments 7.3 5.4 2.3 2.1 - 0.6 17.6Total reportable benefits 13.2 9.4 5.0 4.1 2.9 3.3 38.0 The table below shows the remuneration in 2022 Anders Christian Jon Gunnar Charlotte Stig J. Ingrid FY 2022 1Lenborg Helland Solli Bergqvist Østebrøt BjørdalNOK million (CEO) (CVO) (COO) (CDO) (CTO) (CCOO) Total Salary 3.3 2.6 1.9 1.0 2.5 0.7 12.0Bonus 1.7 0.9 0.6 0.4 - 0.2 3.8Pension costs 0.1 0.1 0.1 0.5 0.1 - 0.9Share-based payments 6.2 4.8 2.1 0.8 - - 13.9Total reportable benefits 11.3 8.4 4.7 2.7 2.6 0.9 30.5 1 Ingrid Bjørdal was hired 1.9.2022, the salary represents 4 months. Total shares, remuneration and warrants for top management per year end: Warrants Total Warrants granted FY 2023Shares pr remun-granted Warrants pr total pr Warrants NOK million Holding Company 31.12.23aration 202301.01.202331.12.23exercisedAnders Lenborg (CEO) Lenco AS 1 403 546 13 3 700 000 3 395 000 7 095 000 -Christian Helland (CVO) Amandus Invest AS 301 758 9 2 700 000 2 550 000 5 250 000 -Jon Gunnar Solli (COO) Lotmar Invest AS 626 323 5 1 100 000 1 150 000 2 250 000 -Charlotte Bergqvist (CDO) - 4 1 100 000 600 000 1 700 000 -Stig J. Østebrøt (CTO) 45 000 3 - - - -Ingrid Bjørdal (CCOO) 80 000 3 600 000 - 600 000 -38 9 200 000 7 695 000 16 895 000 - Warrants Total Warrants granted FY 2022Shares pr remun-granted Warrants pr total pr Warrants NOK million Holding Company 31.12.22aration 202201.01.202231.12.22exercisedAnders Lenborg (CEO) Lenco AS 1 363 546 11 700 000 2 695 000 3 395 000 -Christian Helland (CVO) Amandus Invest AS 452 758 8 550 000 2 000 000 2 550 000 -Jon Gunnar Solli (COO) Lotmar Invest AS 613 723 5 250 000 900 000 1 150 000 -Charlotte Bergqvist (CDO) - 3 600 000 - 600 000 -Stig J. Østebrøt (CTO) 25 000 3 - - - -Ingrid Bjørdal (CCOO) 40 000 1 - - - -312 100 0005 595 0007 695 000- 175Cloudberry Annual report 2023 Financial statements Share based payments and long-term incentive program In accordance with the terms adopted by the General Meeting of the Company on 21 March 2020, and updated by the General Meeting on 27 April 2023, the Board of Directors has established a share incentive scheme for the executive managers and key employees of the Group. The key conditions are as follows: The equity incentive plan may cover up to 10% of the issued shares in the Company from time to time. Allocations are proposed by the Board and subject to shareholder approval. The exercise price for the warrants is determined by the Board at its reasonable discretion, considering based the fair market value of the Shares on the date of the Board of Director’s proposed allocation of warrants under the program. The determined exercise price is subject to approval by the general meeting in relation with issuance of warrants. The duration of the warrants from grant date is 5 years. The vesting period is 3 years from the grant date. The value of the warrants in the accounts are calculated at the grant date given a fair value using the Black and Scholes model. The key assumptions applied for the grants in 2023 is a 40% volatility (based on listed peer with 3 years historical data and updated with historic volatility for the Company from listing on the Main List Oslo Børs to the grant date in April 2023), 3.25% interest rate and approx. 0% dividend yield. Other inputs to the model are current stock price, exercise price and expected life of option (vesting period + one year). The table shows the outstanding warrants as of 1 January 2023 and 31 December and movements in the year: FY 2022 Outstanding warrants 01.01. 10 500 000Granted in 2023 12 700 000Exercised in 2023 -Expired in 2023 (300 001)Outstanding warrants 31.12. 22 899 999Vested 31.12.2023 6 766 662Charged to profit and loss during year (NOK million ) 24Charged to equity during year (NOK million ) 24 FY 2022 Outstanding warrants 01.01. 7 700 000Granted in 2022 3 000 000Exercised in 2022 -Expired in 2022 (200 000)Outstanding warrants 31.12. 10 500 000Vested 31.12.2022 3 299 995Charged to profit and loss during year (NOK million ) 25Charged to equity during year (NOK million ) 26 Cloudberry Annual report 2023 Financial statements 176 As of the date of the annual report the following warrants have been issued: Weighted Average Share remaining Weighted Vested Weighted Price FY 2022contractual Average instruments Average (grant NOK million # Warrants Grant date Expiry datelifeStrike Price31.12.2023Strike Pricedate) Warrant package #1 775 000 20.03.2020 20.03.2025 1.2 11.1 775 000 11.1 11.1Warrant package #2 1 425 000 25.09.2020 25.09.2025 1.7 12.2 1 425 000 12.2 13.1Warrant package #3 5 266 666 17.06.2021 17.06.2026 2.5 12.5 3 566 665 12.5 14.7Warrant package #4 2 933 333 15.06.2022 28.04.2027 3.3 17.4 999 997 17.4 16.0Warrant package #5 12 500 000 27.04.2023 26.04.2028 4.3 12.6 - - 10.422 899 9996 766 662 Per 31 December 2023, the equity incentive plan covers 7.9% of the issued shares in the Company. Note 12 Other operating expenses The table shows the breakdown of other operating expenses in FY 2023 and FY 2022. NOK million 2023 2022Lease short-term, low value and variable 23 28External accounting and auditing fees 10 8Legal and other fees 30 22Operating and maintenance power plants 38 2Project costs 2 4Insurance premiums 4 3Municipal property tax 6 3Other 16 11Total other operating expenses 130 81 Expenses related to statutory audit and other auditor services is presented below: NOK million 2023 2022Statutory audit 7 3Tax counselling - -Other assurance services - 1Total auditor costs74 177Cloudberry Annual report 2023 Financial statements Note 13 Financial items The table shows the breakdown of financial income and financial expense in FY 2023 and FY 2022. Financial income NOK million 2023 2022Interest income 28 11Other financial income 148 13Exchange differences 130 44Total financial income 306 67 Financial expense NOK million 2023 2022Interest expense (61) (22)Guarantees and commitment fees - (1)Other financial expense (1) (5)Exchange differences (62) (45)Capitalized interest 3 12Total financial expense (121) (61) Financial Income Other financial income of NOK 148m relates to a gain on currency swap agreements of NOK 100m, gain on power price agreement swaps (PPA derivatives) of NOK 18m and the remainder mainly from money market fund remeasurements. Exchange difference gains in financial income for the year amount to NOK 130m, of which NOK 68m relates to internal debt and receivables, and NOK 62m relates to bank deposits and foreign currency. The cash effect of interest received amounts to NOK 23m. Financial Expenses Exchange losses in financial expenses for the year amount to NOK -62m, of which NOK -55m relates to inter- nal debt and receivables, and NOK -7m relates to bank deposits and debt in foreign currency. The cash effect of interest payments and commitment fees relating to interest-bearing debt and debt facilities was NOK -55m. Cloudberry Annual report 2023 Financial statements 178 Note 14 Tax Accounting principle Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. New tax legislations In December 2023 the Norwegian government published a statement that they had reached a broad con- sensus on the resource rent tax on Norwegian onshore wind. The agreement between the parties has in 2024 been implemented by law and the resource rent tax (NO: Grunnrenteskatt) for Norwegian onshore wind is implemented with an effective tax rate of 25%. For existing wind farms, the government has proposed tran- sition rules which is better than their initial proposal, although not achieving full investment neutrality. For new wind farms the resource tax will be structured with cash payments of negative resource tax, as is already implemented on large scale hydro, which makes the resource tax investment neutral for new projects. In the consolidated reporting only Røyrmyra is affected, while for equity accounted entities Odal wind is affected. For 2023 the effect on the Group tax expense is related to change in deferred tax liability. This amounts to NOK 3m for Røyrmyra. The high price contribution tax (NO: høyprisbidrag) of 23% of prices above 70 øre/kWh was introduced together with the initial resource tax proposal. This was terminated from 1 October 2023 and 2023 costs are included in opex. Cloudberry is not within the scope of the Pilar 2 rules. Tax expense and deferred tax The table below show the tax expense in the income statement NOK million 2023 2022Tax expense in the income statementIncome tax payable - 1Change in deferred tax related to recource tax (3) -Change in deferred income tax 14 (1)Tax expense in the income statement11- Reconciliation of nominal tax rate and effective tax rateProfit before income tax 222 122Nominal tax rate 22% 22%Expected tax expense (49) (27) Effect on taxes of:Permanent differences 39 34Unrecognized tax asset related to tax losses carried forward 25 (7)Changes related to deferred tax on excess values - (3)Changes related to other deferred tax - 2Implementing resource tax and effect on deferred tax (3) -Tax expense in the income statement 11 - 179Cloudberry Annual report 2023 Financial statements The appropriate tax rate in Norway/Denmark and Sweden is 22% and 20.6% respectively. Resource rent tax rate on Norwegian wind is 25%. The table shows the deferred tax asset and liability in the balance sheet. NOK million 2023 2022Temporary differences deferred tax asset:Property, plant and equipment 2 (22)Derivatives 78 24Other receivables 31 (3)Tax loss carried forward 456 326Subtotal 566 325Of which not recognised as tax asset (156) (192)Basis for deferred tax asset 410 133Deferred tax asset 90 29 Temporary differences deferred tax liability:Inventory valuation (69) (83)Property, plant and equipment (592) (542)Intangible assets (7) (53)Derivatives (45) (38)Other 14 4Resource rent tax calculations (12) -Subtotal (711) (711)Of which not recognised 99 -Basis for deferred tax liability (612) (711)Deferred tax liability (135) (156) Reconciliation to the statement of financial position Net deferred tax asset presented in the statement of financial position 15 -Net deferred tax liabilities presented in the statement of financial position (59) (127)Total net deferred tax (44) (127) As per 31 December 2023 the Group has recorded a valuation allowance of net NOK 57m (NOK 192m) related to tax losses carried forward, which is not included as a recognised deferred tax asset. The table below show the movement in the deferred tax liability in the statement of financial position from 1 January 2023 to 31 December 2023. NOK million 2023 2022Deferred tax libility at 01.01 (127) (83)Change in deferred tax (in profit or loss statement) 14 1Change in deferred tax (recognised in other comprehensive income) - (8)Acquisitions and disposals of subsidiaries 56 (41)Other and currency translation differences 1 3Change in deferred tax realted to resource tax (3) -Deferred tax libility at 31.12 (59) (127) Cloudberry Annual report 2023 Financial statements 180 Statement of financial position Note 15 Property, plant and equipment Accounting principle Property, plant and equipment (PPE) are measured using the cost method of IAS 16 and capitalisation of borrowing costs is accounted for in accordance with IAS 23. Estimated useful life of power plants The estimated useful life of power plants is based on assumptions on expected usage, expected wear and tear, potential technical or commercial obsoles- cence, legal or other regulatory limitations, and lease expiry. The power plants currently in operation have an expected useful life between 20-60 years. Significant estimates and judgement Assessment of asset acquisition or business combination Material management judgement is necessary to determine whether an acquired project or power plant constitutes a business combination or an asset acquisition. This assessment is conducted individually for each acquisition. If the acquisition is identified as a business combination, IFRS 3 Business combinations will be applied, while for asset acqui- sitions, either IAS 2 inventory or IAS 16 Property plant and equipment will be applied. Acquisitions that consist of a single power plant ready to construct are typically considered asset transactions. Conversely, acquisitions comprising operational (producing) assets are typically accounted for as business combinations. Nevertheless, each acquisition undergoes a distinct assessment to determine the appropriate account- ing treatment. Impairment Producing power plants and power plants under construction undergo impairment testing whenever events or changes in circumstances indicate a potential impairment, see note 18 Impairment for further details. Property, plant and equipment The table below shows the split of PPE into produc- ing power plants, power plants under construction, equipment and right-to-use lease assets. 181Cloudberry Annual report 2023 Financial statements Producing Power Right to FY 2023power plant under use - lease NOK millionplantsconstruction Equipmentasset Total Accumulated cost 1.1.2023 1 542 118 4 46 1 710Additions from bus.comb. and acquisitions during the year 2 453 - - 163 2 616Additions during the year - 522 - 2 524Transfer between groups - - - - -Transfer from inventory - 26 - - 26Cost of disposed assets (485) - - (1) (487)Effects of movements in foreign exchange (138) 19 1 - (118)Accumulated cost at 31.12.2023 3 372 684 5 209 4 271Accumulated depreciations and impairment losses at 1.1.2023 106 - 2 5 113Accumulated depreciations acquired assets during the year 37 - 7 44Depreciations for the year 94 - 1 13 109Impairment losses - - - - -Accumulated depreciations and impairment losses disposed (4) - - - (4)assetsEffects of movements in foreign exchange 10 - - 3 13Accumulated depreciations and impairment losses at 243 - 3 28 27431.12.2023Carrying amount at 31.12.2023 3 129 684 2 182 3 997Carrying amount beginning of period 1 437 118 2 40 1 597Estimated useful life (years) 25-60 5-10 5-10Producing Power Right to FY 2022power plant under use - lease NOK millionplantsconstruction Equipmentasset Total Accumulated cost 1.1.2022 819 255 2 6 1 082Additions from bus.comb. and acquisitions during the year 303 - 1 24 328Additions during the year 6 278 1 21 306Transfer between groups 427 (427) - - -Transfer from inventory - 16 - - 16Cost of disposed assets (16) - - (5) (22)Effects of movements in foreign exchange 3 (4) - - (1)Accumulated cost at 31.12.2022 1 542 118 4 46 1 710Accumulated depreciations and impairment losses at 1.1.2022 70 - 1 2 73Accumulated depreciations acquired assets during the year 13 - 1 - 14Depreciations for the year 22 - 1 5 28Impairment losses - - - - -Accomulated depreciations and impairment losses disposed - - - (2) (2)assetsEffects of movements in foreign exchange - - - - -Accumulated depreciations and impairment losses at 106 - 2 5 11331.12.2022Carrying amount at end of period 1 437 118 2 40 1 597Carrying amount beginning of period 749 255 1 4 1 009Estimated useful life (years) 25-60 5-10 5-50 Cloudberry Annual report 2023 Financial statements 182 During the year, the Group saw a significant expansion in the number of producing power plants through the acquisition of the Odin portfolio, amounting to NOK 2 572m. See further information on the acquisition in note 5 Business combinations. Other additions to PPE related to power plants under construction on projects: Sundby (NOK 426m), Munkhyttan (NOK 95m) and other smaller projects. The project Munkhyttan was transferred from inven- tory (NOK 26m) when the final investment decision was taken on 1 June 2023. During the year, the Group also disposed of three producing hydropower plants: Nessakraft, Selselva and Åmotsfoss, reducing the PPE by NOK 481m. See further information on the disposal in note 7 Disposal of assets. Producing power plants are pledged as security for long term debt, see note 22 Interest-bearing debt and debt facilities. The contractual obligations at Sundby amount to EUR 50m of which EUR 47m is included in the table above, and the remaining capex is EUR 3m. The total contractual obligation related to Munkhyttan is slightly above EUR 30m, of which EUR 6m is included in the table above and the remaining obligation is EUR 24m. The obligation related to Øvre Kvemma is a total investment of NOK 124m (enterprise value). The investment is expected to be financed with 50% debt. See note 23 Provisions, guarantees and con- tractual obligations. 183Cloudberry Annual report 2023 Financial statements Note 16 Intangible assets and goodwill Accounting principle Intangible assets are recognised in accordance with the cost method of IAS 38. Intangible assets and goodwill Intangible NOK million Goodwill assetsAccumulated cost 1.1.2023 143 95Additions from business combinations and acquisitions during the year 95 7Additions during the year - 25Effects of movements in foreign exchange (8) (1)Accumulated cost at 31.12.2023 231 126Accumulated amortizations and impairment losses at 1.1.2023 - 9Accumulated amortizations acquired assets during the year - -Amortizations for the year - 18Impairment losses 25 74Effects of movements in foreign exchange - 1Accumulated amortizations and impairment losses at 31.12.2023 25 101Carrying amount at end of period 206 24Estimated useful life (years) N/A 5-10 Intangible assets are made up of the internally developed software systems within our Operations segment, commercially operating as Captiva. The primary software systems comprise the Captiva Portal, Krasys (used in Kraftanmelding AS) and Rexonomy (a new tool for taxonomy assessment of renewable assets). Intangible assets with definite useful life (the Group does not have any with indefinite useful life) are assessed for impairment indications. The impairment losses of (NOK 74m) on intangible assets are related to the Tyde system and the Captiva portal, see further detail in note 18 Impairment. Goodwill additions of NOK 95m from business combinations relate to the acquisition of the Odin portfolio. The goodwill identified was associated with the portfolio having strong producing assets in the attractive DK-1 price area, along with access to development projects within the Danish market through the Skovgaard partnership. Goodwill is tested annually for impairment. The impairment losses of (NOK 25m) relate to goodwill that was recognised on acquisition of Captiva in 2022, see further details in note 18 Impairment. Cloudberry Annual report 2023 Financial statements 184 Note 17 Inventory Accounting principle Inventories consist of development projects and government grants of el-certificates and guarantees of origin (GoOs). Inventories are accounted for in accordance with IAS 2 Inventories. Significant estimates and judgements Development projects Development costs for work the Group has technical capability, commercial viability, and resources to com- plete are accounted for in accordance with IAS 2. Capitalized development costs consist of external development costs, capitalized salaries for internal employees and capitalized interest costs related to project funding. The development projects are part of the Development operating segment and are primarily held as project opportunities and where investment opportunities arise for projects to be retained as a long-term asset; they are reclassified as held for own use. Once a project is ready for construction, and the Group makes the final investment decision (FID), the project will be reclassified from inventory to property, plant, and equipment, and accounted in accordance with IAS 16. Inventory per year end NOK million 31.12.2023 31.12.2022Projects 99 106Government grants - -Total 99 106 The table below shows the split of project inventory in projects with construction permit and project backlog. FY 2022 Projects - with Projects - NOK millionconstruction permitBacklog TotalProject inventory 01.01.2023 65 40 106Acqusitions during the year 4 3 7Capitalization (salary, borrowing cost, other expenses) 5 4 9Realized - - -Transfer to PPE (26) - (26)Write down current year - - -Effects of movements in foreign exchange 2 1 3Project inventory 31.12.2023514899 185Cloudberry Annual report 2023 Financial statements FY 2022 Projects - with Projects - NOK millionconstruction permitBacklog TotalProject inventory 01.01.2022 118 35 153Acqusitions during the year 29 4 33Capitalization (salary, borrowing cost, other expenses) 41 2 42Realized (104) - (104)Transfer to PPE (16) - (16)Write down current year - - -Effects of movements in foreign exchange (2) - (3)Project inventory 31.12.2022 65 40 106 Projects with a construction permit comprise of the wind project Duvhällen, located in the Swedish SE-3 price area. Project Munkhyttan, for which a final investment decision was taken in second quarter has been transferred from Inventory to Property, Plant and Equipment (NOK 26m) for the commencement of its construction. Please see note 15 Property, plant and equipment. Note 18 Impairment Accounting principle Goodwill is tested annually towards the end of the fiscal year for impairment or whenever there is an indication that the goodwill may be impaired. Intangible assets, property, plant and equipment (PPE) and investment in associated companies or JV’s are tested for impairment whenever there is an objective evidence or indication that these assets may be impaired. An impairment loss is recognised when the recover- able amount is below carrying amount. The recov- erable amount is the higher of fair value less cost of disposal and value in use. The value in use calculation is based on discounted cash flow model (DCF) for power plants assets, while for the Operations segment the approach is a fair value model (recent transaction with valuation based on multiples and future cash flows) less cost of disposal. Key estimates and assumptions Future cash flows include several estimates related to future market conditions, discount rates and use of judgement for useful life and other technical assumptions. The significant estimates which are further defined in note 3, is the long-term power price curve and the WACC. In the impairment these estimates are used in the test of Goodwill (related to producing power plants) and in identifying impairment indicators for PPE and investments in associated companies and JV’s. For more information about haw manage- ment apply these estimates, please see note 3 Key accounting estimates and judgements. The estimates applied are consistent with what is used in the Group’s budgets and long-term outlook approved by management. Cloudberry Annual report 2023 Financial statements 186 Annual impairment test of Goodwill Goodwill is recognised separately as an intangible asset and is allocated to each of the Group’s cash-gen- erating-units (CGU) expected to benefit from synergies arising from the business combination. Goodwill has been allocated to the following segments: NOK million 2023 2022Goodwill Development 37 37Goodwill Production 89 1Goodwill Operations 80 105Total 206 143 For the purpose of impairment testing of goodwill, the recoverable amount for these assets has been deter- mined estimating the value in use or estimating a fair value of the assets and comparing against the carry- ing value of the CGU’s. The below table summarize the method for valuation/goodwill testing per segment and the key assumptions and estimates in the calculations: Segment Recovarable amout based on Key assumptionsDevelopement Discounted CF model - Value in use Price pr MV ' and discount rate 1Production Discounted CF model - Value in use Long term power price curve, change in discount rate, estimated production volumesOperations Fair Value less cost of disposal Recent transaction 40% shares 1 Average of Volue and Thema base case Goodwill Development Goodwill related to the Development segment origins from the acquisition in February 2020 of Scanergy AS, which represent the development CGU in Cloudberry. The goodwill was determined to be related to the large pipeline of project prospects within wind on land and shallow water, the know- how and business connections (employees), the record of accomplishments over the past 10 years for the company acquired, as well as synergies. The model for impairment testing of goodwill related to the Development segment is based om the same model as for impairment testing projects, which is value in use based on a discounted cash flow model. The impairment test is sensitive to the following key assumptions: · future cash flows with price per MW/GWh for development projects · Timing of project development and concession grant, · Discount rate of 15% applied from date to expected concession/construction permit grant. The Group is of the view that no reasonable possible change in the key assumptions listed above would cause the carrying value to materially exceed the recoverable amount for the CGU. No impairment loss has been recognised as the recoverable amounts exceed the carrying amount. Goodwill Production Goodwill related to the Production segment origins from the acquisition of the Odin portfolio in Denmark in May 2023. The acquisition represents the entry into the Danish price area for Cloudberry and estab- lishing a partnership with Skovgaard Energy, a well reputed developer of renewable assets in the Nordic. The goodwill was determined to be related to the following; 187Cloudberry Annual report 2023 Financial statements · Acquiring a large portfolio of assets vs acquiring one by one. When acquiring a group compared to single assets, it is often paid a premium. The premium can be explained by both control and that acquiring one by one would increase the transaction costs. · Entering the Danish market to diversify total Group portfolio risk. By entering a new market, price area, currency and balancing technology, it will further reduce the current Group risk. · Entering the Danish market with an established and reputable partner, Skovgaard, both on the owner side, as an asset manager with core knowl- edge of the portfolio and local developer gives expected opportunities and a potential larger deal flow in the same area. · The value of the option to repower is not identified separately for each project, but because it is likely that some of the projects in the portfolio will be repowered this value is included as goodwill. The model for impairment testing of goodwill related to the Production segment is based on the same model for value in use and a discounted cash flow model. The expected cash flow from the Odin port- folio has been assessed in the valuation model used in the purchase price allocation. The model is sensitive to the following key assumptions: · Discount rate (WACC applied is 5.75%) · Future cash flows (dependent on future power price curves and expected production volumes). When assessing the DCF from the portfolio com- pared with the book values of the underlying assets including goodwill, there are no impairment indica- tors (see section for PPE impairment indicators), and therefor on the producing assets in the CGUs are concluded to support the goodwill. Other factors that support the goodwill in the Production segment: · Signing Nees Hede development project. · In October Skovgaard and Cloudberry signed a term-sheet agreement that Odin will acquire the Nees Hede project, a 210 MW (168 MW proportion- ate) solar and potential wind hybrid project. The Nees Hede project represents an important mile- stone as the first project from the development agreement with Skovgaard. The transaction illustrates that Cloudberry through the acquisition of the Odin portfolio, is perfectly positioned to take part in further development opportunities in Denmark as shown by this project. · Other factors such as the diversification to Danish price areas and portfolio premium, is still highly relevant and supporting of the valuation. Since the valuation of the portfolio concludes that is does not have any impairment indicator, this supports that there is no impairment of the premium. Sensitivity; the Group is of the view that no reason- able possible change in the assumptions related to WACC (+- 0.5%) would cause the carrying value to materially exceed the recoverable amount for the CGU. For the assumptions related to the long-term power price curve a change of (+-5%, assumed as a reasonable change) would cause an impairment of goodwill of DKK 1m. No impairment has been recognized to goodwill related to the Odin portfolio in the Production segment. Goodwill Operations Goodwill of NOK 96m was recognized related to the acquisition of 60% of Captiva in January 2022 and at the same time establishing the Operations segment in Cloudberry. The goodwill was related to a long record of accom- plishments, business know-how, reputation and established business related to development within hydro-projects, advisory within asset management, and financial services. IT support and general opera- tional intelligence business systems integrated in the Captiva Group, and the competence and experi- ence of consultants within the renewable energy industry. The identified separate CGU’s in the acquisition of Captiva was as follows: (allocation of related excess value in bracket): · Asset management including financial services (GW) · Project development and inventory of projects (GW and project inventory) · Consultancy services, incl investments in Enestor and Proxima Hydrotech (GW) Cloudberry Annual report 2023 Financial statements 188 · Digital services with the following separate under- lying CGU’s · Digital Solutions/Captiva portal (intangible assets) · Broentech (intangible assets) · Kraftanmelding (intangible assets) The Operations segment was established from the business of the Captiva group. Within the Captiva segment the following separate CGUs are identified to support the goodwill of the segment: · Asset management services and financial ser- vices (ARR) · Project Development · Consultancy services The CGU related to software services had allocated the values to separate intangible assets and IT systems in the initial purchase price allocation. This was the Captiva portal and Tyde. Goodwill from the acquisition was not allocated to these CGU’s. Kraftanmelding is a separate CGU’s with NOK 2m in goodwill from the Captiva acquisition. The activity in Captiva is closely connected to Cloudberry’s existing business (Cloudberry is cus- tomer of IT services and project development and management services and asset management service), and it is expected to generate synergies of know-how related to both Captiva and Cloudberry from closer cooperation, this is especially related to the interaction of asset management services, project development services and project manage- ment services. In December 2023 Cloudberry acquired the remain- ing 40% shares in Captiva Digital Services AS (buy out of non-controlling interests in Captiva), the annual impairment test of goodwill in the Operations segment is therefore based on the transaction values which represent fair value of the assets. The transaction of acquiring the remaining 40% shares in Captiva Digital Services AS was as follows: · The purchase price for the shares was NOK 22.8m. · The purchase price was based on an enterprise value of NOK 107m on 100% basis. · Net debt in the company was MOK 50m, which equals an equity value of NOK 57m on 100% basis The recoverable amount which the carrying value is compared with is the fair value based on the transaction, which is NOK 107m corresponding to the enterprise value. The valuation, and enterprise value, was based on identifying and valuing the separate independent revenue streams in the Captiva business segment. Each of the revenue streams’ starting points were the latest business plans (three-year sales budget, based on the assumptions that Captiva is in a ramp up phase), and for each revenue stream the appro- priate valuation method was applied which gave a starting point for the valuation. The final valuation and transaction values for each of the revenue streams were an outcome of this input and negotia- tions with the sellers. The valuation and transaction price were allocated to the underlying CGU’s. The carrying value of GW related to Captiva core (asset management, development and consultancy) was NOK 95.5m + NOK 7.4m related to further step up in Enestor. The allocated enterprise value of the CGUs supporting the Goodwill is NOK 84m. Other assets related to the CGS have a net book value of NOK 6m. An impairment loss of goodwill of NOK 25m is recognized to the segment. The carrying values of goodwill related to Kraftanmelding is less that the valuation allocated (including other assets), and no impairment of GW is recognized. Impairment test of other assets For the purposes of assessing impairment losses, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units (CGUs)). The Group has identified the following CGUs: Property plant and equipment (power producing assets) · Hydropower: Power plants sharing the same water flow and/or being subject to the same infrastruc- ture limitation are managed together to optimise power generation. · Wind farms: The individual wind farm. 189Cloudberry Annual report 2023 Financial statements Inventory of projects · The individual project with construction permit · Groups of similar projects that are in concession process and are connected in progress Equity accounted companies · The individual associated company or joint venture Intangible assets · Captiva portal and related digital services · Tyde system with related digital services · Krasys system with related power trade agent services Management have applied significant judgement to decide on and assess relevant impairment indicators. Factors that trigger impairment testing include, but is not limited to, changes in long power price estimates, political changes, underperforming power plants in terms of production, changes in the Group’s strategy or macroeconomic fluctuations. For intangible assets impairment indicators may be underperforming sales or negative development in market conditions. Value in use calculation is based on a discounted cash flow model. The future cash flows in the model are based on a number of significant estimates and assumptions such as future market conditions, discount rates and estimated useful life and market price for development projects with construction permit, or sales volume for services. For further infor- mation about how management applies significant estimates, see note 3 Key accounting estimates and judgements. The estimates are based on the Group’s budgets and long-term outlooks approved by management. The Group monitors changes in government leg- islations and regulations on a continuous basis, changes may impact key assumptions in the value in use calculations in future periods. Property plant and equipment (PPE, producing and under construction power plants) The Group uses an internal valuation model based on external input as the impairment indicator for PPE. This model makes use of and combines the most relevant internal and external input factors, such as long-term power price estimates, interest rate level, tax and regulatory changes and asset performance. For all the producing power plants the valuation model concluded that there was no impairment indi- cator observed and no further impairment testing to calculate recoverable amount for the power plants was performed. The impairment indicator applied was based on updated long-term power prices, new/existing tax proposal, and increased interest rate levels which increases WACC. Other observations The final outcome of the Norwegian tax proposal was settled in December, the impairment indicator model has included the new tax in in the model, (resource tax in model for Røyrmyra and Odal of 25% implemented from 2024). No impairment indicator was observed for these assets despite new regula- tions implemented. For producing and under construction power plants there is an active market. In June 2024 Cloudberry sold three hydro power plants to an external party with a valuation slightly above NOK 9kr pr KWh. This can also be used as a reference for fair value and again serve as supporting documentation for the carrying value of the power plants in PPE. Investments in associated companies and joint ventures With application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associated companies. At each reporting date, the Group determines whether there is an impairment indicator observed which indicates the need for impairment testing. If so, the Group calculates the amount of impairment as the difference between the recovera- ble amount of the associate and the carrying value, and then recognises the loss as “net income/loss” from associated companies and joint ventures in the statement of profit or loss. The same method as for recoverable amount and value in use is used as for producing/ under construction power plants or project inventory is applied. For the investments related to producing power plants, there was no relevant impairment indicator observed, and no further impairment testing was performed. Cloudberry Annual report 2023 Financial statements 190 Intangible assets The Group’s intangible assets are related to IT systems and customer portfolio. The IT systems are related to the Captiva portal, TYDE and Krasys, a software developed and used in Kraftanmelding AS. The valuation model applied for these software sys- tems are software as a service and annual recurring revenue multiples with future sales estimates and discounted cash flow models. Relevant impairment indicators which would trigger impairment testing include significant fall in observed market multiples, underperformance in sales compared with fore- casts, IT system development delays. During the 2023 the mentioned multiples have fallen, and hence an objective impairment indicator was observed, and the Group has therefore tested the intangible assets for impairment. The model for impairment testing is based on a mul- tiple valuation for software as a service and annual recurring revenue. The impairment test is sensitive to the following key assumptions and estimates: · Software as a service and annual recurring revenue multiples are used as impairment indica- tors and as a valuation method. The multiples are based on a peer of comparable companies. · Applied future sales forecast for three years, and the multiple valuations is based on the second year. After the updated assessment an impairment loss on NOK 74m has been recognized and the book value is now the recoverable amount. For the Captiva portal this is NOK 10m, while for Tyde system the amount is NOK nil. No impairment loss is recognised for Krasys. Inventory (development projects) For project inventory impairment is performed if net sales value is less than the carrying value of the asset. The Group has a quarterly routine to go through all projects to secure satisfying progress and attention. If a project does not qualify for internal prioritization, but the projects is put on hold or discontinued, the book value is impairment tested and a sales value is assessed. If the sales value, less cost of disposal is less than book value, an impair- ment loss classified as a write down is recognized over the profit or loss statement. Net realizable amount for projects with construction permit is set to an estimated market price per MW or per GWh that is reasonable to expect if the projects was to be sold. The price is compared with recent observable market transactions. No impairment loss is recognized for development projects per 31 December 2023. Projects are reported in the Development segment. 191Cloudberry Annual report 2023 Financial statements Note 19 Investments in associated companies and joint ventures Accounting principle Investments in associated companies and joint arrangements are accounted for using the equity method in accordance with IAS 28. Accounting policies of equity accounted investees have been changed were necessary to ensure consist- ency with the policies adopted by the Group. Associates and joint ventures The table shows the summarized investments classified as associated companies and joint ventures as of 31 December 2023: Consolidated economic Name of Entity Place of interest per business31.12.23 Segment Princippal ActivitiesForte Energy Norway AS with SPV's. Associated company Norway 34.0% Production Hydro powerOdal Vind AS Associated company Norway 33.4% Production Wind power Odin portfolio (80% ownership):Fåre Vindmøllelaug I/S Associated company Denmark 47.5% Production Wind power Fløvej 33 I/S Joint Venture Denmark 50.0% Production Wind power Nørgaard Vind I/S Joint Venture Denmark 50.0% Production Wind power Østergaard Vindkraft I/S Associated company Denmark 20.0% Production Wind power P/S Tændpibe Vind Associated company Denmark 15.0% Production Wind power Stakroge Vindkraft I/S Associated company Denmark 25.9% Production Wind power Stakroge VM4 I/S Joint Venture Denmark 50.0% Production Wind power Vindtved Vindkraft I/S Associated company Denmark 37.6% Production Wind power Volder Mark Vindkraft I/S Associated company Denmark 15.8% Production Wind power Orreholmen Vindkraft AB Joint Venture Sweden 50.0% Production Wind power Vetteberget Vindkraft AB Joint Venture Sweden 50.0% Production Wind power Fossum Sol AS Associated company Norway 33.3% Development Solar power in construction permit processStenkalles Holding AS Joint Venture Sweden 50.0% Development Development project Simpevarp AB Joint Venture Sweden 50.0% Development Development projectProxima Hydrotech AS Associated company Norway 33.3% Operations Management hydro Forte Energy Norway AS (Forte) Forte was acquired by the Group in November 2020. Forte owns 14 producing hydro power assets and one power offtake agreement in Norway, with a combined normalized annual production of 87 GWh net to Cloudberry. The hydro power assets have an average license life of minimum 50 years. Cloudberry Production is the local manager of the Forte portfolio and delivers management services, which for 2023 amounted to NOK 3m. Cloudberry Annual report 2023 Financial statements 192 Odal Vind AS (Odal) Odal was first acquired in December 2020 with 15% ownership, and Cloudberry further increased its own- ership to 33.4% in July 2021. The other owners of Odal Vind AS are Akershus Energi Vind AS and KLP, owning 33.4% and 33.2% respectively. Odal windfarm was constructed during 2021 and 2022, and all turbines have been taken over by Odal in 2023. The windfarm has a normalized annual production of 176 GWh net to Cloudberry and the remaining concession is 27 years. Odin portfolio of JV and associated companies (Odin portfolio) The Odin portfolio of joint ventures and associated entities includes producing power plants that represent only the entities within the larger acquired Odin portfolio that we do not own a controlling share. We therefore account for their results using the equity accounting method in the consolidated Group accounts. Of the total 311 GWh proportionate share from the total Odin portfolio net to Cloudberry, these entities represent approximately 49 GWh proportionate to Cloudberry. Stenkalles Holding AS (Stenkalles project) The Stenkalles project was a 100MW (50MW) proportionate, 18-turbine offshore project on Sweden’s largest lake, Vänern (SE-3), owned 50/50 by Hafslund and Cloudberry. The parties have decided not to move forward with the Stenkalles project in its current form, and the book values related to the development of the offshore wind project have been impaired in 2023. Instead, the project group is evaluating how to use the strategically positioned gird connection for a potential battery/solar project, where the associated capex costs have decreased. The remining book values in the project are related to a transformer under construction. The Stenkalles project is included in “Other” in the reported figures in this note. The table show the summarised financial information in the Group accounts for equity accounted companies. FY 2023Forte Energy Odal Vind Odin 1NOK millionNorway ASASPortfolio OtherTotal Book value beginning of year 317 555 - 18 890Additions of invested capital - - - - -Conversion of debt to equity - - - 84 84Additions from business combinations - - 339 - 339Share of profit/loss for the year 2 (10) 13 (67) (62)Depreciation of excess value (3) (1) (5) (1) (10)Dividend paid to the owners - (73) (12) - (85)Correction from previous years result - - - - -Currency translation differences 8 40 (22) - 26Items charged to equity (9) - - - (9)Book value at reporting date 316 511 313 35 1 175Excess value beginning of year 134 19 - 1 154Excess value 31 December 2023 131 18 217 - 366Book value of equity at 31 December associated company/JV 185 494 96 35 809 The cash paid for the acquisition of the associated companies and joint ventures within the Odin portfolio was paid as part of the total purchase price for the entire business combination transaction. Of the total purchase price of NOK 1278m, NOK 339m was attributable to the investment in associates and joint ventures. See note 5 Business combinations for further details. 193Cloudberry Annual report 2023 Financial statements FY 2022Forte Energy Odal Vind Odin 1NOK millionNorway ASASPortfolio OtherTotal Book value beginning of year 254 423 - - 677Additions of invested capital - 31 - 19 50Conversion of debt to equity - - - - -Additions from business combinations - - - - -Share of Profit/loss for the year 41 74 - - 114Depreciation of excess value (3) - - - (3)Dividend paid to the owners 9 - - - 9Correction from previous years result (31) - - - (31)Currency translation differences 2 27 - - 29Items charged to equity 45 - - - 45Book value at reporting date317555-18890Excess value beginning of year 137 19 - - 156Excess value 31 December 2022 134 19 - 1 154Book value of equity at 31 December associated company/JV 183 536 - 17 736 1 ’Other’ in the prior year consisted of the financial information for Stenkalles Holding AS and Proxima Hydrotech AS, which were presented separately and in the current year whose results are presented in summary with information for Fossum Sol AS and Simpevarb AB. The tables below show the summarized financial information for Forte, Odal and the Odin portfolio of asso- ciates and joint ventures respectively. The figures represent 100% of the companies’ reporting in the first two columns (FY2023 and FY2024 respectively) and the two columns to the right (FY 2023 and FY 2022 respec- tively) show Cloudberry’s share of the summarized financial information (excluding excess values and related depreciation) on a line-by-line basis: ForteBased on 100% Cloudberry shareNOK million 2023 2022 2023 2022Revenue 117 337 40 114EBITDA 62 170 21 58Profit for the period 5 153 2 52Total assets 1 329 1 468 452 499Total cash and cash equivalents 134 242 45 82Non-current Interest-bearing loans and borrowings 704 687 239 234Total equity 543 538 185 183 OdalBased on 100% Cloudberry shareNOK million 2023 2022 2023 2022Revenue 270 405 90 135EBITDA 129 307 43 102Profit for the period (26) 219 (9) 73Total assets 2 615 2 717 873 908Total cash and cash equivalents 66 83 22 28Non-current Interest-bearing loans and borrowings 952 907 318 303Total equity 1 476 1 604 493 536 Cloudberry Annual report 2023 Financial statements 194 Odin Portfolio - Associates and joint ventures Based on 100% Cloudberry shareNOK million 2023 2022 2023 2022Revenue 105 - 25 -EBITDA 88 - 20 -Profit for the period 59 - 11 -Total assets 552 - 144 -Total cash and cash equivalents 3 - 1 -Non-current Interest-bearing loans and borrowings 170 - 57 -Total equity 352 - 78 - Note 20 Cash, cash equivalents and corporate funding Accounting principle Cash and cash equivalents consist of bank deposits and money market funds. The Group considers all highly liquid investments such as deposits with an original or remaining maturity of three months or less to be cash equivalents. Restricted cash is not considered as cash and cash equivalents but is classified as other current assets. The Group has a corporate account agreement with SpareBank 1 SR-Bank for the Norwegian companies. This agreement includes a credit facility, however, a larger facility has been established with SpareBank 1 SR-Bank, see note 22 Interest-bearing debt and debt facilities. NOK million 2023 2022Bank deposits 468 541Money market funds 311 998Total cash and cash equivalents 779 1 538 Investments in money market funds consist of investments in KLP fund and Fondsforvaltning. These place- ments are short term placements and readily convertible to cash. Of the total bank deposits, NOK 81m (NOK 96m) relate to Kraftanmelding AS, which is a company owned 50.1% in the Operations segment. The company is a power trade agent and receives settlements from spot sales before it settles with power producers. Therefore, the cash position must be seen in relation to other short- term positions, current accounts payable, current provisions and other current debt and assets. 195Cloudberry Annual report 2023 Financial statements Note 21 Share capital and shareholder information Share capital The table below show the share capital, share premium and number of shares as of 31 December 2023: NOK million 2023 2022Share capital 73 73Share premium 3 496 3 495Share capital and premium at 31 December 3 569 3 568Number of shares at 31 December 291 467 341 291 299 905 The shares are at par value of NOK 0.25. Cloudberry has one share class and each share in the Company carries one vote at the Company’s general meeting. All shares carry equal rights, including the right to participate in general meetings. The following capital increases has taken place in 2023:Number Share NOK Dateof sharescapitalNumber of shares 1 January 2023 291 299 905 72 824 976Capital increase 11.05.2023 70 199 17 550Number of shares and share capital 31 December 2023291 370 10472 842 526 Share buy-back program The Group initiated a share buy-back program to repurchase up to 3 000 000 of its shares in order to enhance shareholder value by returning capital to shareholders. The buy-back program was authorized by the board of directors at the general meeting held on 28 September 2023 for the purchase of up to NOK 14.60 per share. During the fourth quarter, The Group acquired 2 807 500 shares at an average price of NOK 10.32 per share. The total cost of ~NOK 29m was deducted from shareholder equity and presented as treasury shares in the statement of changes in equity. Given the potential value creation in the Nees Hede project (fully financed 140 MW solar net to Cloudberry), the buy-back program has not at present been prolonged into 2024 for capital preservation purposes. However, going forward Cloudberry sees share buy backs as an effective and accretive tool for value crea- tion which will be continuously evaluated based on inter alia current market price and market opportunities. It is expected that Cloudberry will ask the general meeting in 2024 for a prolongation of a share buy-back authorization. Cloudberry Annual report 2023 Financial statements 196 The table below show the 20 largest shareholders of Cloudberry as of 31 December 2023: Number of Share of Share of sharesownershipvoting rightsFerd AS 35 454 343 12.2% 12.2%Joh Johannson Eiendom AS 29 512 098 10.1% 10.1%Havfonn AS (Bergesen family) 24 761 554 8.5% 8.5%Snefonn AS (Bergesen family) 16 203 725 5.6% 5.6%The Northern Trust Comp, London 15 749 182 5.4% 5.4%HSBC Continental Europe 14 321 384 4.9% 4.9%Farvatn Capital As 10 007 145 3.4% 3.4%Clearstream Banking S.A. 9 565 686 3.3% 3.3%Caceis Bank 8 061 534 2.8% 2.8%State Street Bank and Trust Comp (Swedbank Robur) 8 002 590 2.7% 2.7%Skandinaviska Enskilda Banken AB 7 000 000 2.4% 2.4%Danske Invest Norge Vekst 6 207 098 2.1% 2.1%Morgan Stanley & Co. Int. Plc. 5 536 352 1.9% 1.9%Citibank Europe plc 5 371 077 1.8% 1.8%CCPARTNER AS 4 212 412 1.4% 1.4%Gjensidige Forsikring ASA 4 023 469 1.4% 1.4%Verdipapirfondet Storebrand Norge 3 902 320 1.3% 1.3%J.P. Morgan SE 3 628 482 1.2% 1.2%MP Pensjon PK 2 996 230 1.0% 1.0%Cloudberry Clean Energy ASA 2 502 000 0.9% 0.9%Other 74 351 423 25.5% 25.5%Total number of shares 291 370 104 100.0% 100.0% Cloudberry Clean Energy ASA acquired 2 807 500 shares in 2023. The difference to the number in the over- view above does not show up at list due to the trade taking place at or about the latest trade date in 2023 and is first settled in 2024 through delivery vs payment at t+2 as is customary. 197Cloudberry Annual report 2023 Financial statements Note 22 Interest-bearing debt and debt facilities The Group has the following interest-bearing loans and borrowings as per 31 December 2023: NOK million 31.12.2023 31.12.2022Non-current interest-bearing debt and borrowings 1 469 327Non-current derivative liability related to hedge accounting 39 (1)Total non-current interest-bearing loans and borrowings 1 507 326Current interest-bearing loans and borrowings 78 12Total interest-bearing loand and borrowings to banks 1 585 338 The table below shows a reconciliation of opening balance, movements and closing balance of the interest-bearing loans and borrowings for the year 2023: NOK million In cash flow statementOpening balance interest-bearing loans and borrowings 01.01.23 338Debt take over in acqusitions non-cash 336Repayment of term loan cash outflow (207)Drawn from new facility cash inflow 1 200Downpayments cash outflow (54)Change in interest swap derivatives non cash 39Effects of movements in foreign exchange non-cash (67)Closing balance interest-bearing debt and borrowings 31.12.23 1 585Of which:Drawn from new facility with refinanced 1 200Proceeds from new term loans 20231 200Repayment of term loan (207)Downpayments (54)Total repayment of term loan 2023 (261) In July 2023 the Group increased its credit facility with a bank syndicate comprising Sparebank 1 SR-Bank, Sparebank 1 Nord-Norge and Sparebank 1 Østlandet, securing an additional NOK 800m. As of reporting date, the total facility stands at NOK 2 200m, with the potential to increase it by an additional NOK 300m. The facility can be utilized for both construction and producing assets in Norway, Sweden and Denmark. The remaining consolidated debt is held within the Danish companies acquired under the Odin portfolio with local banks. The total amount drawn from the term loan facility as of 31 December 2023 is a total of NOK 1 250m. The interest rate on the term loans has a margin of less than 2% plus the benchmark rate (NIBOR/STIBOR/ CIBOR). The Group has a strategy to enter into interest swap agreements, swapping floating rates to fixed. All debt denominated in EUR, NOK and partially DKK has been swapped to fixed interest rates for periods generally at or above 10 years. As of reporting date DKK loans amounting to a consolidated debt of DKK 312m remain on floating rates. The Group applies hedge accounting to account for its interest rate derivatives, see note 9 Hedge activities and derivatives. Cloudberry Annual report 2023 Financial statements 198 The term loan with the bank syndicate in Cloudberry Production AS is subject to the following financial covenants and collateral: 1. Group consolidated equity ratio: minimum 30% Cloudberry Production AS equity ratio: minimum 30% Minimum Group equity: NOK 1 800m Minimum equity Cloudberry Production AS: NOK 900m 2. Liquidity reserves Group level: minimum NOK 80m consolidated, of which NOK 70m will have to be in the SR Bank cash pool. 3. Minimum secured 75% share of principal per loan of 5 years. 4. Main securities granted under the credit facility: Pledge related to Cloudberry Production AS: Pledge in shares in all subsidiaries with producing assets (SPV’s). Pledge in shares in associated companies. Pledge in cash, inventory and receivables. Pledge applied for subsidiaries with producing assets: Pledge in cash and bank accounts. Pledge in property plant and equipment. Pledge in inventory and receivables. Pledge in lease agreements for land and water/fall rights. Pledge in shares in Cloudberry Development AS The Group was not in any breach of covenants as per 31 December 2023. 199Cloudberry Annual report 2023 Financial statements Note 23 Provisions, guarantees and other contractual obligations Accounting principle The Group recognises an obligation to dismantle and remove hydro and wind power plants and to restore the site after the concession period is over. Long term provisions The Group has NOK 114m in long term provisions, of which NOK 64m relates to asset retirement obligations, and the remainder NOK 50m to other general long-term provisions. Asset retirement obligation relates to Hån Vindpark, Sundby Vindpark, Røymyra Vindpark, and entities within the Odin portfolio, and all payable between 15-30 years. Current liabilities and provisions NOK million 2023 2022Accounts payables 142 131Advance tax withholdings and taxes payable 5 4Total account payables and other liabilities 147135Accrued salary and bonus 15 14Provision for project costs 6 5Public duties payable 6 3PPA contract termination 5 5Accrued fall lease 24 48Derivative financial instrument- current liability 6 -Other 14 55Total Provisions 76 129 Of the total Accounts payables, NOK 94m is related to Kraftanmelding, as a power trade agent that receives settlements from spot sales before it settles with power producers. See also note 20 Cash, cash equivalents and corporate funding for additional information on cash movements within Kraftanmelding. Cloudberry Annual report 2023 Financial statements 200 Guarantees and other contractual obligations The Group has the following guarantees and bank deposits: Balance NOK millionsheet item Maturity date 2023 2022Sundby wind farm Parent guarantee off-balance Q1 2024 11 311to supplierMunkhyttan wind farm Parent guarantee off-balance H2 2024 191 -to supplierStenkalles Vind AB Parent guarantee off-balance Q2 2024 5 -Guarantee Hån wind farm Bank deposit other current asset FY 2051 3 3restrictedGuarantee Munkhyttan wind farm Bank deposit other current asset FY 2053 3 -restrictedGuarantees for office rent Escrow account non-current financial asset February 2029 2 2Total guarantees and deposits 215 316 The Sundby and Munkhyttan guarantees pertain to Vesta’s, securing the respective wind turbines. The Group has as of 31 December 2023 signed a sale and purchase agreement for the acquisition of the Øvre Kvemma power plant: l Expected Equity Debt NOK millionsettlementfinancedFinanced TotaØvre Kvemma Kraftverk H1 2024 62 62 124Total 6262124 The power plant is under construction and risk of the assets has not yet transferred to the Group. As the risk is not transferred and there are conditions precedent until the takeover, such as ensuring that the power plant operate as per agreements, the assets and the obligations are not recognised on the balance sheet. 201Cloudberry Annual report 2023 Financial statements Other information Note 24 Earnings per share Earnings per share is calculated as profit/(loss) attributable to the equity holders of the parent company divided by the number of shares outstanding. Diluted earnings per share is affected by the warrant program for equity settled share-based payments transactions, see note 11 Employee benefits and share based payments. NOK million 2023 2022Profit/(loss) attributable to the equity holders of the company 272 118Weighted average number of shares outstanding for the purpose of basic earnings per share 291 342 409 253 292 752Earnings per share for income attributable to the equity holders of the company - basic NOK 0.93 0.47Effect of potential dilutive shares Weighted average number of shares outstanding for the purpose of diluted earnings per share 291 917 409 254 067 752Earnings per share for income attributable to the equity holders of the company - diluted NOK 0.93 0.47 For information about share capital on 31 December see note 21 Share capital and shareholder information. Cloudberry Annual report 2023 Financial statements 202 Note 25 Transactions with related parties The Group’s related parties include the Company and its subsidiaries, as well as members of the Board of Directors, members of Management and their related parties. Related parties also include companies in which the individuals mentioned in this paragraph have significant influence. All transactions are at arm’s length basis and done in the ordinary course of business. In 2023 there was one new agreement entered into with a related party. The sellers of the remaining shares of Captiva Digital Services AS, of which the owners of the seller, CCP AS are many of the current employees in Captiva, see note 6 Acquisition of 40% shares in Captiva Digital Services AS for further information about the transaction. There have been no other new related party agreements entered in 2023. The Board of Directors ensures that any material transaction between the Company and Shareholders, a Shareholder’s parent company, members of the Board of Directors, executive personnel, or close associates of any such parties will be entered into on arm’s length terms. The Board of Directors has adopted rules of procedures for the Board of Directors which inter alia includes guidelines for notification by members of the Board of Directors and executive management if they have any material direct or indirect interest in any transaction entered into by the Company. Balances and transactions between the Company and its subsidiaries have been eliminated on consolida- tion and are eliminated in the consolidated accounts. The Group has had transactions with the following related parties: NOK million Related party Relation for Cloudberry Nature of transaction 2023 2022CCP AS Owners are employees in the Acqusition of 40% of 23 -Group Captiva GroupBergehus Holding AS Board member and indirect Office lease 4 3shareholderForte Energy Norway AS Associated company Management fee revenue 3 3CCPartners AS Chairman of the Board Acqusition of 60% of - 33Captiva Group 1 Captiva Asset Management AS part of Cloudbery Group from 07 January 2022. Intercompanmy transactions are eliminated in group accounts. See note 11 Employee benefits and share based payment for information about management remuneration. See note 19 Investments in associated companies and JV’s for information about management fee to Forte. As per 31 December there were no employee or shareholder loans. 203Cloudberry Annual report 2023 Financial statements Remuneration to the Board of Directors Remun-FY 2022eration Served Term paid in Warrants Shares pr Holding Company/ Functionsinceexpires2023 (NOK)pr 31.12.2331.12.23Associated CompanyTove Feld Chairperson of 2023 2024 - - 19 188the BoardPetter W. Borg Board Member 2019 2024 361 500 - 2 262 547 Caddie Invest AS /Kewa ASBenedicte H. Fossum Board Member 2020 2024 329 500 - 145 344 Mittas AS/ Jeshol ASStefanie Witte Board Member 2022 2024 319 500 - 9 044Henrik Joelsson Board Member 2022 2024 332 500 - 49 044 HJ Business Development ABNicolai Nordstrand Board Member 2022 2024 332 500 - 41 019 323 Havfonn AS/ Snefonn ASAlexandra Koefoed Board Member 2023 2024 - - 9 594Frank J Berg Past 2020 2023 645 000 - 4 212 412 CCPartner ASChairperson - no longer BoD member after 2023 AGMLiv E. Lønnum No longer BoD 2020 2023 319 500 - 7 765member after 2023 AGM2 640 000 - 47 734 261Remun-FY 2022eration Served Term paid in Warrants Shares pr Functionsinceexpires2022 (NOK)pr 31.12.2231.12.22 Holding CompanyFrank J Berg Chairman of 2020 2023 260 000 - 3 202 040 CCPartner ASthe BoardPetter W. Borg Board Member 2019 2023 257 500 - 2 253 503 Caddie Invest AS & Kewa ASBenedicte H. Fossum Board Member 2020 2023 245 000 - 100 103 Mittas ASLiv E. Lønnum Board Member 2020 2023 205 000 - 7 765Stefanie Witte Board Member 2022 2023 - - 0Henrik Joelsson Board Member 2022 2023 - - 0Nicolai Nordstrand Board Member 2022 2023 - - 31 264Morten S. Bergesen Board Member 2019 2022 255 000 - 40 965 279 Havfonn AS & Snefonn AS1 222 500 - 46 559 954 The remuneration to the Board is proposed by the nomination committee to the Company general meeting. The remuneration is paid after the next Company general meeting when the remuneration is earned. The remuneration for the period 2022/2023 was paid in April 2023. Due to change in routines, the remunera- tion for 2020/2021 was paid in 2022 (while the remuneration for the period 2021/2022 was paid in 2021). The remuneration for the period 2023/2024 will be paid after the Company general meeting in April 2023. The Group have a share purchase program for Board members implemented by the Company general meeting in 2021. The Board members shall use 30% of the fixed gross remuneration (prior to tax) per year to acquire shares in the Company, until the value of the shares of each individual member reaches a threshold of two years of board remuneration. The Board members shall after the threshold of two years board remu- neration has been achieved, be offered to use up to 30% of the gross board remuneration (prior to tax) to acquire shares. Please refer for further information to the Remuneration report for 2023 that will be presented at the annual Company general meeting and published on the website. Cloudberry Annual report 2023 Financial statements 204 Note 26 List of subsidiaries and equity accounted companies The following companies are fully consolidated (subsidiaries) or accounted for using the equity method (associated companies or joint ventures) as per 31 December 2023. Consolidated economic Place of interest per Part of Group Name of Entity Accouned asbusiness31.12.23from date SegmentCloudberry Clean Energy ASA Parent company Norway 100% 24.11.2017 CorporateCloudberry Production AS Subsidiary Norway 100% 15.02.2020 Production Røyrmyra Vindpark AS Subsidiary Norway 100% 15.02.2020 Production Finnesetbekken Kraftverk AS Subsidiary Norway 100% 15.02.2020 Production Hån Vindpark AB Subsidiary Sweden 100% 15.02.2020 Production Hån 22kV AS Subsidiary Norway 100% 15.02.2020 Production Forte Energy Norway AS Associated Company Norway 34% 15.11.2020 Production Odal Vind AS Associated Company Norway 33.4% 23.12.2020 Production Skåråna Kraft AS Subsidiary Norway 100% 24.02.2021 Production Bjørgelva Kraft AS Subsidiary Norway 100% 30.06.2021 Production Usma Kraft AS Subsidiary Norway 100% 20.08.2021 Production Tinnkraft AS Subsidiary Norway 100% 01.02.2022 Production Ramsliåna Kraftverk AS Subsidiary Norway 100% 31.03.2022 Production Re Energi AS Subsidiary Norway 100% 31.03.2022 Production Bøen Kraft AS Subsidiary Norway 100% 10.06.2022 Production Cloudberry Production Holding Subsidiary Denmark 100% 31.05.2023 Production ApSCloudberry Production Aps Subsidiary Denmark 100% 31.05.2023 Production Odin Energy Holding P/S Subsidiary Denmark 80% 31.05.2023 Production Odin Energy General Partner Subsidiary Denmark 80% 31.05.2023 Production ApSOdin Invest I P/S Subsidiary Denmark 80% 31.05.2023 Production Odin Invest II P/S Subsidiary Denmark 80% 31.05.2023 Production Odin Invest III P/S Subsidiary Denmark 80% 31.05.2023 Production Lem Kær Vindkraft I/S Subsidiary Denmark 61% 31.05.2023 Production Nørh-Hjortmose Vind 11 I/S Subsidiary Denmark 72% 31.05.2023 Production Skræddergaard Vindkraft I/S Subsidiary Denmark 48% 31.05.2023 Production Tornbygård Vindkraft I/S Subsidiary Denmark 65% 31.05.2023 Production Trikelshøj Vindkraft I/S Subsidiary Denmark 48% 31.05.2023 Production Vemb Vindkraft I/S Subsidiary Denmark 43% 31.05.2023 Production Volder Mark M5 Erhverv I/S Subsidiary Denmark 68% 31.05.2023 Production Fåre Vindmøllelaug I/S Assosiated company Denmark 38% 31.05.2023 Production Fløvej 33 I/S Joint Venture Denmark 40% 31.05.2023 Production Nørgaard Vind I/S Joint Venture Denmark 40% 31.05.2023 Production Stakroge Vindkraft I/S Assosiated company Denmark 21% 31.05.2023 Production Stakroge VM4 I/S Joint Venture Denmark 40% 31.05.2023 Production Østergaard Vindkraft I/S Assosiated company Denmark 16% 31.05.2023 Production Vindtved Vindkraft I/S Assosiated company Denmark 30% 31.05.2023 Production P/S Tændpibe Vind Assosiated company Denmark 12% 31.05.2023 Production Volder Mark Vindkraft I/S Assosiated company Denmark 13% 31.05.2023 Production Orreholmen Vindkraft AB Joint Venture Sweden 40% 31.05.2023 Production Vetteberget Vindkraft AB Joint Venture Sweden 40% 31.05.2023 Production 205Cloudberry Annual report 2023 Financial statements Consolidated economic Place of interest per Part of Group Name of Entity Accouned asbusiness31.12.23from date SegmentCloudberry Develop AS Subsidiary Norway 100% 15.02.2020 DevelopmentCloudberry Utveckling AB Subsidiary Sweden 100% 15.02.2020 DevelopmentCloudberry Utveckling II AB Subsidiary Sweden 100% 15.02.2020 DevelopmentCloudberry Utveckling III AB Subsidiary Sweden 100% 15.02.2020 DevelopmentCloudberry Wind AB Subsidiary Sweden 100% 15.02.2020 DevelopmentCloudberry Offfshore Wind AB Subsidiary Sweden 100% 15.02.2020 DevelopmentRewind Offshore AB Subsidiary Sweden 100% 15.02.2020 DevelopmentCloudberry Projekt AB Subsidiary Sweden 100% 15.02.2020 DevelopmentKånna Vindpark AB Subsidiary Sweden 100% 15.02.2020 DevelopmentLjunga Vindpark AB Subsidiary Sweden 100% 15.02.2020 DevelopmentDuvhällen Vindpark AB Subsidiary Sweden 100% 15.02.2020 DevelopmentSkogvind AS Subsidiary Norway 100% 31.08.2020 DevelopmentSundby Vindpark AB Subsidiary Sweden 100% 21.12.2021 DevelopmentMunkhyttan Vindkraft AB Subsidiary Sweden 100% 03.02.2022 DevelopmentStenkalles Holding AS Joint Venture Norway/Sweden 50% 19.09.2022 DevelopmentFossum Sol AS Assosiated company Norway 33% 15.03.2023 DevelopmentBjornejarnsberget Vindpark AB Subsidiary Sweden 100% 01.04.2023 DevelopmentSimpevarp Havsvindpark AB Joint Venture Sweden 50% 03.10.2023 DevelopmentCaptiva Digital Services AS Subsidiary Norway 100% 07.01.2022 OperationsCaptiva Asset Management AS Subsidiary Norway 100% 07.01.2022 OperationsCaprtiva Financial Services AS Subsidiary Norway 100% 07.01.2022 OperationsCaptiva Digital Services GmbH Subsidiary Switzerland 100% 07.01.2022 OperationsCaptiva Digital Solutions AS Subsidiary Norway 100% 07.01.2022 OperationsKraftanmelding AS Subsidiary Norway 50% 07.01.2022 OperationsBroentech Solutions AS Subsidiary Norway 56% 07.01.2022 OperationsCaptiva Energi AS Subsidiary Norway 100% 07.01.2022 OperationsCaptiva Digital Solutions AB Subsidiary Sweden 100% 01.04.2023 OperationsEnestor AS Subsidiary Norway 51% 01.06.2022 Operations Acqusitions with takeover in 2023/2024 Consolidated economic Place of interest per Part of Group Name of Entity Accouned asbusiness31.12.23from date SegmentØvre Kvemma Kraftverk AS Subsiduary Norway 100% H1-2024 Production Cloudberry Annual report 2023 Financial statements 206 Note 27 Subsequent events Subsequent to year end 2023, Cloudberry through its subsidiary Odin Energy Holding P/S acquired Nees Hede project comprising of 175 MW permitted solar capacity (140 MW proportionate). Nees Hede is a climate park with a favorable ESG footprint and local acceptance, situated on the western part of Jutland in the attractive DK 1 price area. Given the rapid decline in the capex for solar panels and hence the favorable project economics, Cloudberry will push towards an FID for the solar project which can be taken as soon as in 2024. The project is expected to be financed through existing cash at hand and project debt. The purchase price of the project is agreed to be EUR 8m, where EUR 1.6m was paid at closing of the trans- action in February 2024, while EUR 4.8 million and EUR 1.6 million is payable at FID and COD respectively - all numbers proportionate to Cloudberry. 207Cloudberry Annual report 2023 Financial statements Parent company financial statements Statement of profit or loss 211 Statement of financial position 212 Statement of cash flows 214 Notes to the parent company financial statements 215 Note 1 General information 215 Note 2 General accounting policies and principles 215 Note 3 Sales revenues and other operating income 217 Note 4 Employee benefits and share based payments 217 Note 5 Other operating expenses 221 Note 6 Financial items 222 Note 7 Income tax expense 223 Note 8 Property, plant and equipment 224 Note 9 Subsidiaries and investment in associated companies 224 Note 10 Cash, cash equivalents and corporate funding 225 Note 11 Equity capital, share capital and shareholder information 225 Note 12 Short term debt and provisions 227 Note 13 Earnings per share 227 Note 14 Intercompany items between companies in the same group 228 Note 15 Subsequent events 228 Cloudberry Annual report 2023 Financial statements 210 Statement of profit or loss 1 January - 31 December NOK 1 000 Note FY 2023 FY 2022 Revenue 3 2 401 - Total revenue 2 401 - Cost of goods sold - - Salary and personnel expenses 4 (53 248) (51 124) Other operating expenses 5 (18 884) (19 509) EBITDA (69 732) (70 633) Depreciation and amortizations 8 (279) (233) Operating profit (EBIT) (70 010) (70 867) Financial income 6 236 774 113 221 Financial expenses 6, 14 (72 121) (19 844) Profit/(loss) before tax 94 642 22 511 Income tax expense 7 - - Profit/(loss) after tax 94 642 22 511 Allocation of profit/(loss) for the period Transfer to/(from) other equity 94 642 22 511 Total allocation of profit/(loss) for the period 94 642 22 511 211Cloudberry Annual report 2023 Financial statements Statement of financial position NOK 1 000 Note 31.12.2023 31.12.2022 ASSETS Non-current assets Property, plant and equipment 8 769 1 022 Investment in subsiduaries 9 2 445 602 1 363 441 Other non current receivables 2 496 2 478 Loan to group companies 14 609 715 508 907 Total non-current assets 3 058 581 1 875 848 Accounts recivables 2 999 - Other current assets 132 1 328 Receivables group companies 14 189 611 348 113 Cash and cash equivalents 10 403 587 1 404 638 Total current assets 596 329 1 754 078 TOTAL ASSETS 3 654 910 3 629 926 Cloudberry Annual report 2023 Financial statements 212 Statement of financial position NOK 1 000 Note 31.12.2023 31.12.2022 EQUITY AND LIABILITIES Equity Share capital 11 72 843 72 825 Other paid-in capital 11 3 495 220 3 495 270 Total paid in capital 3 568 063 3 568 095 Other equity 11 70 009 (19 921) Total equity 3 638 071 3 548 173 Current liabilities Interest-bearing short term liabilities 12, 14 - 56 932 Accounts payable 12, 14 2 286 14 036 Public duties payable 12 1 695 1 251 Other current liabilities 12 12 858 9 534 Total current liabilities 16 839 81 753 Total liabilities 16 839 81 753 TOTAL EQUITY AND LIABILITIES 3 654 910 3 629 926 Oslo, 19 March 2024 The Board of Directors of Cloudberry Clean Energy ASA Tove Feld Chair of the Board Petter W. Borg Board member Benedicte Fossum Board member Henrik Joelsson Board member Nicolai Nordstrand Board member Stefanie Witte Board member Alexandra Koefoed Board member Anders J. Lenborg CEO 213Cloudberry Annual report 2023 Financial statements Statement of cash flows NOK 1 000 Note FY 2023 FY 2022 Cash flow from operating activeties Profit/(loss) before tax 94 642 22 511 Depreciation 8 279 233 Write-down of long-term investments 66 708 - Net interest paid/received (69 014) (26 529) Share based payment - non cash to equity 19 483 25 773 Change in accounts payable 12 (11 750) (9 322) Change in accounts receivabe (2 999) - Change in other accruals 4 564 19 591 Net cash flow from operating activities 101 913 32 258 Cash flow from investing activeties Intrest received 6 73 749 31 105 Investments in property, plant and equipment 8 (25) (338) Acquisition of shares in subsidiaries, net liquidity outflow 9 (1 148 869) (101 037) Net increase loans to subsidiaries 62 210 (401 912) Net cash flow from (used in) investing activities (1 012 935) (472 181) Cash flow from financing activeties Net cash from change in short term intrestbearing debt 12 (56 932) 56 932 Interest paid 6 (4 735) (4 576) Share capital increase 11 670 833 208 Payment for shares bought back (29 031) - Net cash flow from financing activities (90 028) 885 564 Total change in cash and cash equivalents (1 001 050) 445 640 Effect of exchange rate changes on cash and cash equivalents - - Cash and cash equivalents at start of period 10 1 404 638 958 998 Cash and cash equivalents at end of period 10 403 587 1 404 638 Cloudberry Annual report 2023 Financial statements 214 Notes to the parent company financial statements Note 1 General information Corporate information Cloudberry Clean Energy ASA, “the Company” is incorporated and domiciled in Norway. The address of its registered office is Frøyas gate 15, NO-0273 Oslo, Norway. Cloudberry Clean Energy ASA was established on 10 November 2017. The Company is listed on Oslo Børs’ Main List with ticker CLOUD. Cloudberry Clean Energy ASA (“the Company”), its subsidiaries (wholly and partly owned) and invest- ments in associated companies and joint ventures (“the Group” or “Cloudberry”) is an independent power producer, developing, owning and operating renewable assets in the Nordics. The Company has an integrated business model across the life cycle of renewable power plants including project develop- ment, financing, construction (normally outsourced), ownership, management, and operations. The financial statement of the Company and the consolidated statements of the Group, presented earlier in this report, was approved by the Board of Directors on 19 March 2024. The statements have been prepared under the assumption that the Cloudberry Group is a going concern, and that this assumption was appropriate at the date of approval of the Financial Statements. Note 2 General accounting policies and principles Statement of compliance The financial statements of Cloudberry Clean Energy ASA are prepared in accordance with the Norwegian Accounting Act of 1998 and Norwegian Generally Accepted Accounting Principles (NGAAP). Basis for preparation The financial statements have been prepared on a historical cost basis. Accounting estimates and judgements In preparing the financial statements, assumptions and estimates that have had effect on the amounts and presentation of assets and liabilities, income and expenses and contingent liabilities must be made. Actual results could differ from these assumptions and estimates. Foreign currency translation The functional currency and presentation cur- rency of the Company is Norwegian kroner (NOK). Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical cost expressed in a foreign currency are translated into NOK using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated using the exchange rate applicable on the balance sheet date. Employee benefits Wages, salaries, bonuses, pension and social security contributions, paid annual leave and sick leave are accrued in the period in which the asso- ciated services are rendered by employees of the Company. The Company has pension plans for employees that are classified as defined contri- bution plans. Contributions to defined contribution 215Cloudberry Annual report 2023 Financial statements schemes are recognized in the statement of profit or loss in the period in which the contribution amounts are earned by the employees. Cloudberry has an equity incentive plan for top management and key employees. The programme includes the issue of warrants for shares in the company. Interest income and expenses Interest income and expenses are recognized in the income statement as they are accrued, based on the effective interest method. Income tax expense The tax charge in the profit or loss account consists of tax payable for the period and the change in deferred tax. Deferred tax is calculated at the tax rate at 22 % on the basis of tax-reducing and tax- increasing temporary differences that exist between accounting and tax values, and the tax loss carried forward at the end of the accounting year. Tax- increasing and tax-reducing temporary differences that reverse or may reverse in the same period are set off and entered net. The net deferred tax receiv- able is entered on the balance sheet to the extent that it is likely that it can be utilised. Classification and valuation of fixed assets Fixed assets consist of assets intended for long- term ownership and use. Fixed assets are valued at acquisition cost less depreciation and write-downs. Long-term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Plant and equipment is capitalised and depreciated over the economic lifetime of the asset. Significant items of plant and equipment that consist of several material components with different lifetimes are broken down in order to establish different depreci- ation periods for the different components. Direct maintenance of plant and equipment is expensed on an ongoing basis under operating costs, while additions or improvements are added to the asset’s cost price and depreciated in line with the asset. Plant and equipment is written down to the recover- able amount in the event of a fall in value that is not expected to be temporary. The recoverable amount is the higher of the net sales value and the value in use. Value in use is the present value of future cash flows related to the asset. The write-down is reversed when the basis for the write-down is no longer present. Classification and valuation of current assets and liabilities Current assets and short-term liabilities consist normally of items that fall due for payment within one year of the balance sheet date, as well as items related to the stock cycle. Current assets are valued at the lower of acquisition cost and fair value. Short- term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Subsidiaries and investment in associated companies Subsidiaries and associated companies are valued using the cost method in the company accounts. The investment is valued at acquisition cost for the shares unless a write-down has been necessary. A write- down to fair value is made when a fall in value is due to reasons that cannot be expected to be temporary and such write-down must be considered as necessary in accordance with good accounting practice. Write- downs are reversed when the basis for the write-down is no longer present. Dividends, group contributions and other distri- butions from subsidiaries are posted to income in the same year as provided for in the distributor’s accounts. To the extent that dividends/ group contri- butions exceed the share of profits earned after the date of acquisition, the excess amounts represent a repayment of invested capital, and distributions are deducted from the investment’s value in the balance sheet of the parent company. Receivables Receivables from customers and other receivables are entered at par value after deducting a provision for expected losses. The provision for losses is made on the basis of an individual assessment of the respective receivables. Short term investments Short-term investments (shares and interests valued as current assets) are valued at the lower of acqui- sition cost and fair value on the balance sheet date. Dividends and other distributions received from the companies are posted to income under other financial income. Cloudberry Annual report 2023 Financial statements 216 Statement of cash flow The cash flow statement has been prepared using the indirect method. Cash and cash equivalents consist of cash, bank deposits and other short-term, liquid investments. Events after the reporting period New information on the Company’s financial position on the end of the reporting period which becomes known after the reporting period, is recorded in the annual accounts. Events after the reporting period that do not affect the Company’s financial position on the end of the reporting period, but which will affect the Company’s financial position in the future, are disclosed if significant. Note 3 Sales revenues and other operating income NOK 1 000 2023 2022 Income from sub lease of offices 2 401 - Total revenue 2 401 - Note 4 Employee benefits and share based payments Employee benefits are accrued in the period in which the associated services are rendered by the employees of the Company. The table below shows the employee benefits accrued in the period NOK 1 000 2023 2022 Salaries (25 432) (23 824) Social security tax (5 893) (1 563) Pension costs (827) (724) Share based payment (19 483) (24 504) Other benefits (1 612) (509) Total personell expenses (53 248) (51 124) Average number of full-time equivalents (FTEs) 8 8 Number of full-time equivalents as 31.12 (FTEs) 8 9 Included in salaries are fees to board members. Pension The Company has an established pension scheme that is classified as a defined contribution plan, the pen- sion scheme is in line with the requirements of the law. Contributions to the defined contribution schemes are recognised in the consolidated statement of profit and loss in the period in which the contribution amounts are earned by the employees. The defined contribution plan does not commit the Company beyond the amounts contributed. 217Cloudberry Annual report 2023 Financial statements Remuneration of Executive Group management The renumeration of the Executive Group Management is based on a fixed salary, including personal benefits such as free telephone and health insurance, a variable group performance bonus scheme, pension benefits, and a share-based long term incentive program. The table below shows the renumeration in 2023 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Jon Gunnar Solli (COO) Ingrid Bjørdal (CCOO) Total Salary 4 000 3 000 2 000 2 050 11 050 Bonus 1 860 900 600 615 3 975 Pension costs 105 98 97 103 403 Other 4 4 4 4 16 Share based payment 7 276 5 431 2 326 551 15 584 Total reportable benefits 2023 13 245 9 433 5 027 3 322 31 027 The table below shows the remuneration in 2022 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Jon Gunnar Solli (COO) Ingrid Bjørdal 1 (CCOO) Total Salary 3 300 2 600 1 900 650 8 450 Bonus 1 650 867 633 216 3 366 Pension costs 100 90 90 3 283 Share based payment 6 235 4 812 2 050 - 13 097 Total reportable benefits paid 2022 11 285 8 369 4 673 869 25 196 1 Ingrid Bjørdal was hired 1 September, the remuneration represent 4 months’ salary. The Board of Directors have set the target KPI for the group performance bonus scheme that was applicable for achievements in 2023. The Group has a compensation committee which will set the targets for 2024. Total remuneration, warrants and shares for top management Executive group management FY 2023 NOK 1 000 Holding Company Shares pr 31.12.23 Total remun- eration Warrants granted 2023 Warrants pr 01.01.23 Warrants granted total pr 31.12.23 Warrants exercised Anders Lenborg (CEO) Lenco AS 1 403 546 13 245 3 395 000 3 700 000 7 095 000 - Christian Helland (CVO) Amandus Invest AS 301 758 9 433 2 550 000 2 700 000 5 250 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 626 323 5 027 1 150 000 1 100 000 2 250 000 - Ingrid Bjørdal (CCOO) 80 000 3 322 - 1 100 000 1 100 000 - 31 027 7 095 000 8 600 000 15 695 000 - FY 2022 NOK 1 000 Holding Company Shares pr 31.12.22 Total remun- eration Warrants granted 2022 Warrants pr 01.01.22 Warrants granted total pr 31.12.22 Warrants exercised Anders Lenborg (CEO) Lenco AS 1 323 546 11 285 700 000 2 695 000 3 395 000 - Christian Helland (CVO) Amandus Invest AS 452 758 8 369 550 000 2 000 000 2 550 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 600 498 4 673 250 000 900 000 1 150 000 - Ingrid Bjørdal 1 (CCOO) 40 000 869 - - - - 25 196 1 500 000 5 595 000 7 095 000 - 1 Ingrid Bjørdal was hired 1 September, the remuneration represent 4 months’ salary. Cloudberry Annual report 2023 Financial statements 218 Board of Directors FY 2023 NOK 1 000 Function Served since Term expires Remun- eration in 2023 Warrants pr 31.12.23 Shares pr 31.12.23 Holding Company Tove Feld Chairperson of the Board 2023 2024 - - 19 188 Petter W. Borg Board Member 2019 2024 361 500 - 2 262 547 Caddie Invest AS /Kewa AS Benedicte H. Fossum Board Member 2020 2024 329 500 - 145 344 Mittas AS/ Jeshol AS Alexandra Koefoed Board Member 2023 2024 - - 9 594 Stefanie Witte Board Member 2022 2024 319 500 - 9 044 Henrik Joelsson Board Member 2022 2024 332 500 - 49 044 HJ Business Development AB Nicolai Nordstrand Board Member 2022 2024 332 500 - 41 019 323 Havfonn AS/ Snefonn AS Frank J Berg Past Chairperson - no longer BoD member after 2023 AGM 2020 2023 645 000 - 4 212 412 CCPartner AS Liv E. Lønnum No longer BoD member after 2023 AGM 2020 2023 319 500 - 7 765 2 640 000 - 47 734 261 FY 2022 NOK 1 000 Function Served since Term expires Remun- eration in 2022 Warrants pr 31.12.22 Shares pr 31.12.22 Holding Company Frank J Berg Chairperson of the Board 2020 2023 260 000 - 3 202 040 CCPartner AS Petter W. Borg Board Member 2019 2023 257 500 - 2 253 503 Caddie Invest AS & Kewa AS Benedicte H. Fossum Board Member 2020 2023 245 000 - 100 103 Mittas AS Liv E. Lønnum Board Member 2020 2023 205 000 - 7 765 Stefanie Witte Board Member 2022 2023 - - - Henrik Joelsson Board Member 2022 2023 - - - Nicolai Nordstrand Board Member 2022 2023 - - 31 264 Morten S. Bergesen Board Member 2019 2022 255 000 - 40 965 279 Havfonn AS & Snefonn AS 1 222 500 - 46 559 954 In 2023 the renumeration to the Board of Directors was paid amounting to a total of NOK 2.6m (NOK 1.2m). The nomination committee will propose the renumeration for the board members for 2024 at the Company general meeting in April 2024. 219Cloudberry Annual report 2023 Financial statements Share based payments and long-term incentive program In accordance with the terms adopted by the General Meeting of the Company on 21 March 2020, the Board of Directors has established a share incentive scheme for the executive managers and key employees of the Group. The key conditions are as follows: The equity incentive plan may cover up to 10% of the issued shares in the Company from time to time. Allocations are proposed by the Board and subject to shareholder approval. The exercise price for the war- rants is determined by the Board in its reasonable discretion based on fair market value of the Shares on the date of the Board of Directors proposed allocation of warrants under the program. The determined exercise price is subject to approval by the general meeting in relation with issuance of warrants. The duration of the warrants from grant date is 5 years. The vesting period is 1-3 years from the grant date. The value of the warrants in the accounts are calculated at the grant date given a fair value using the Black and Scholes model. The key assumptions applied for the grants in 2023 are 40% volatility (based on listed peer with 3 years historical data and updated with historic volatility for the Company from listing on the Main List Oslo Børs to the grant date in April 2023), 3.25% interest rate and approx. 0% dividend yield. Other inputs to the model are current stock price, exercise price and expected life of option (vesting period + one year). The table shows the outstanding warrants as of 1 January 2023 and 31 December and movements in the year: FY 2023 Outstanding warrants 01.01. 10 500 000 Granted in 2023 12 700 000 Exercised in 2023 - Expired in 2023 (300 001) Outstanding warrants 31.12. 22 899 999 Exircisable 31.12. 6 766 662 Charged to profit and loss statement 2023 (NOK million ) 19 483 Charged to equity 2023 (NOK million ) 23 616 The table shows the outstanding warrants as of 1 January 2022 and 31 December 2022 and movements in the year: FY 2022 Outstanding warrants 01.01. 7 700 000 Granted in 2022 3 000 000 Exercised in 2022 - Expired in 2022 (200 000) Outstanding warrants 31.12. 10 500 000 Exircisable 31.12. 3 299 995 Charged to profit and loss statement 2022 (NOK million ) 24 780 Charged to equity 2022 (NOK million ) 25 780 Cloudberry Annual report 2023 Financial statements 220 As of the date of the annual report the following warrants have been issued: FY 2023 NOK million # Warrants Grant date Expiry date Weighted Average remaining contractual life Weighted Average Strike Price Vested instruments 31.12.2023 Weighted Average Strike Price Share Price (grant date) Warrant package #1 775 000 20.03.2020 20.03.2025 1.2 11.1 775 000 11.1 11.1 Warrant package #2 1 425 000 25.09.2020 25.09.2025 1.7 12.2 1 425 000 12.2 13.1 Warrant package #3 5 266 666 17.06.2021 17.06.2026 2.5 12.5 3 566 665 12.5 14.7 Warrant package #4 2 933 333 15.06.2022 28.04.2027 3.3 17.4 999 997 17.4 16.0 Warrant package #5 12 500 000 27.04.2023 26.04.2028 4.3 12.6 - - 10.4 10 399 999 6 766 662 Note 5 Other operating expenses The table shows the breakdown on other operating expenses in 2023 and 2022. NOK 1 000 2023 2022 Rental of office and equipment (5 171) (2 509) External accounting and auditing fees (3 192) (3 899) Legal and other fees (6 198) (8 245) Other (4 323) (4 857) Total other operating expenses (18 884) (19 509) Expenses related to statutory audit and other auditor services is presented below: NOK 1 000 2023 2022 Statutory audit (2 724) (2 641) Other assuranse services - (610) Total auditor costs (2 724) (3 251) 221Cloudberry Annual report 2023 Financial statements Note 6 Financial items Financial income NOK 1 000 2023 2022 Income from subsidiaries 39 235 50 904 Interest income from subsidiaries 34 988 27 217 Intrest income 38 761 3 889 Other financial income and exchange differences 123 790 17 801 Increase in market value of financial current assets - 15 597 Total financial income 236 774 115 407 Financial expense NOK 1 000 2023 2022 Write-down of long-term investments (66 708) - Interest expense (786) (893) Interest expense - group companies (3 949) (3 683) Other financial expense and exchange differences (678) (15 267) Total financial expense (72 121) (19 844) Cloudberry Annual report 2023 Financial statements 222 Note 7 Income tax expense NOK 1 000 2023 2022 Tax expense in the income statement Changes in deferred tax assets - - Tax expense on ordinary profit/loss - - Taxable income: Ordinary result before tax 94 642 22 511 Permanent differences (43 447) (9 048) Changes in temporary differences 7 (3 549) Received group constubution 39 235 - Use of tax losses (90 436) (9 914) Taxable income - - Payable tax in the balance: Payable tax on this year's result - - Payable tax on received Group contribution - - Total payable tax in the balance - - The tax effect of temporary differences and loss to be carried forward that has formed the basis for deferred tax and deferred tax advantages, specified on type of temporary difference. NOK 1 000 2023 2022 Difference Deferred tax asset Property, plant and equipment - 6 6 Other 583 3 099 2 516 Accumulated tax loss carried forward (45 573) (136 009) (90 436) Not included in the deferred tax calculation 44 990 139 114 94 124 Basis for deferred tax asset in the balance sheet - 6 210 6 210 Basis for calculation of deferred tax asset - - (6 210) Deferred tax asset - - 1 366 Deferred tax asset is not recognised in the balance sheet. 223Cloudberry Annual report 2023 Financial statements Note 8 Property, plant and equipment NOK 1 000 Equipment Total Accumulated cost 1.1.2022 1 049 1 049 Additions during the year 338 338 Accumulated cost at 31.12.2022 1 387 1 387 Accumulated depreciations and impairment losses at 1.1.2022 132 132 Depreciations for the year 233 233 Accumulated depreciations and impairment losses at 31.12.2022 365 365 Carrying amount at 31.12.2022 1 021 1 021 Estimated useful life (years) 3-5 NOK 1 000 Equipment Total Accumulated cost 1.1.2023 1 387 1 387 Additions during the year 26 26 Accumulated cost at 31.12.2023 1 413 1 413 Accumulated depreciations and impairment losses at 1.1.2023 365 365 Depreciations for the year 279 279 Accumulated depreciations and impairment losses at 31.12.2023 644 644 Carrying amount at 31.12.2023 769 769 Estimated useful life (years) 3-5 Note 9 Subsidiaries and investment in associated companies The following subsidiaries are fully consolidated in the financial statement as of 31 December 2023 Name of Entity Place of business Owner share Share of votes Purchase cost (NOK 1 000) Equity (NOK 1 000) Profit (NOK 1 000) Cloudberry Production AS Subsiduary Oslo, Norway 100% 100% 2 182 922 2 546 772 367 382 Cloudberry Develop AS Subsiduary Oslo, Norway 100% 100% 205 465 217 502 117 450 Captiva Digital Services AS Subsiduary Oslo, Norway 100% 100% 57 215 8 876 66 Total 2 445 602 2 773 150 484 898 Cloudberry Annual report 2023 Financial statements 224 Note 10 Cash, cash equivalents and corporate funding NOK 1 000 2022 2021 Free cash 92 787 407 018 Money market funds 310 801 997 620 Total cash 403 587 1 404 638 Placement in money market fund is a short-term placement. The placement is made to receive interest and is cash equivalent. Cash deposits for tax deduction account (restricted funds) and deposit for rent are not included as cash. Note 11 Equity capital, share capital and shareholder information The table below show the changes in equity in 2023 and 2022: NOK 1 000 Share capital Share premium Total paid in capital Other Equity Retained earnings Total other equity Total equity capital Equity as at 01.01 2022: 58 811 2 676 075 2 734 886 5 639 (73 844) (68 205) 2 666 681 Sharecapital increase 14 014 819 194 833 208 - - - 833 208 Profit/(Loss) for the period - - 833 208 22 511 22 511 22 511 Share based payment - - 833 208 25 773 25 773 25 773 Equity as at 31.12 2022 72 825 3 495 270 3 568 095 31 412 (51 333) (19 921) 3 548 174 Equity as at 01.01 2023: 72 825 3 495 270 3 568 095 31 412 (51 333) (19 921) 3 548 174 Sharecapital increase 18 653 671 - - - 671 Profit/(Loss) for the period - - - - 94 642 94 642 94 642 Share based payment - - - 23 616 - 23 616 23 616 Repurchase own shares - (703) (703) (28 329) - (28 329) (29 032) Equity as at 31.12 2023 72 843 3 495 220 3 568 062 26 700 43 309 70 009 3 638 071 The table below show the share capital, share premium and number of shares as of 31 December 2023 and 31 December 2022. NOK 1 000 2023 2022 Share capital 72 843 72 825 Share premium 3 495 220 3 495 270 Share capital and premium at 31 December 3 568 062 3 568 095 Number of shares at 31 December 291 370 044 291 299 905 The shares are at par value NOK 0.25. 225Cloudberry Annual report 2023 Financial statements The following capital increases has taken place in 2023 NOK 1 000 Date Number of shares Share capital Number of shares 1 January 2023 291 299 905 72 824 976 Capital increase 11.05.2023 70 199 17 550 Number of shares and share capital 31 December 2023 291 370 104 72 842 526 The table below show the largest shareholders of Cloudberry as of 31 December 2023 20 largest shareholders as of 31 December Number of Shares Share of ownership Share of voting rights Ferd AS 35 454 343 12.2% 12.2% Joh Johannson Eiendom AS 29 512 098 10.1% 10.1% Havfonn AS (Bergesen family) 24 761 554 8.5% 8.5% Snefonn AS (Bergesen family) 16 203 725 5.6% 5.6% The Northern Trust Comp, London 15 749 182 5.4% 5.4% HSBC Continental Europe 14 321 384 4.9% 4.9% Farvatn Capital As 10 007 145 3.4% 3.4% Clearstream Banking S.A. 9 565 686 3.3% 3.3% Caceis Bank 8 061 534 2.8% 2.8% State Street Bank and Trust Comp (Swedbank Robur) 8 002 590 2.7% 2.7% Skandinaviska Enskilda Banken AB 7 000 000 2.4% 2.4% Danske Invest Norge Vekst 6 207 098 2.1% 2.1% Morgan Stanley & Co. Int. Plc. 5 536 352 1.9% 1.9% Citibank Europe plc 5 371 077 1.8% 1.8% CCPARTNER AS 4 212 412 1.4% 1.4% Gjensidige Forsikring ASA 4 023 469 1.4% 1.4% Verdipapirfondet Storebrand Norge 3 902 320 1.3% 1.3% J.P. Morgan SE 3 628 482 1.2% 1.2% MP Pensjon PK 2 996 230 1.0% 1.0% Cloudberry Clean Energy ASA 1 2 502 000 0.9% 0.9% Other 74 351 423 25.5% 25.5% Total number of shares 291 370 104 100.0% 100.0% 1 Fotnote? Cloudberry Annual report 2023 Financial statements 226 Note 12 Short term debt and provisions NOK 1 000 2023 2022 Interest-bearing short term liabilities - 56 932 Trade creditors 2 286 14 036 Accrued salary and bonus 8 560 8 808 Public duties payable 1 695 1 251 Other 4 299 726 Total short term debt provisions 16 839 81 753 Note 13 Earnings per share Earnings per share is calculated as profit/(loss) attributable to the equity holders of the Company divided by the number of shares outstanding. Diluted earnings per share is affected by the warrant program for equity settled share-based payments transactions, see note 4 Employee benefits NOK 1 000 2023 2022 Profit/(loss) attributable to the equity holders of the company 94 642 22 511 Wheighted average number of shares outstanding for the purpose of basic earnings per shaer 291 342 409 253 292 752 Earnings per share for income attributable to the equity holders of the company - basic NOK 0.32 0.09 Effect of potential dilutive shares Wheighted average number of shares outstanding for the purpose of diluted earnings per share 291 917 409 254 067 752 Earnings per share for income attributable to the equity holders of the company - diluted NOK 0.32 0.09 For information about share capital at 31 December see note 11 Equity capital, share capital and shareholder information. 227Cloudberry Annual report 2023 Responsibility statement Note 14 Intercompany items between companies in the same group The Company has the following balance sheet item related to group companies NOK 1 000 2023 2022 Receivabls Loans to companies in the same group 609 715 508 907 Other short-term receivables within the group 189 611 348 113 Total 799 326 857 020 Liabilities Other short-term liabilities within the group - 56 931 Total - 56 931 As per 31 December there were no employee or shareholder loans. Note 15 Subsequent events There are no material events subsequent to 31 December 2023 per reporting date. Cloudberry Annual report 2023 Financial statements 228 Responsibility statement We declare to the best of our knowledge that · the Cloudberry Clean Energy ASA consolidated financial statements for 2023 have been prepared in accordance with IFRS and IFRICs as adopted by the European Union, and additional Norwegian disclo- sure requirements in the Norwegian Accounting Act, and that · the financial statements for the parent company, Cloudberry Clean Energy ASA, for 2023 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that · the information presented in the financial state- ments gives a true and fair view of the assets, liabilities, financial position and results for Cloudberry Clean Energy ASA and the Cloudberry Group for the period as a whole, and that · the Board of Directors’ Report includes a true and fair view of the development, performance and financial position of Cloudberry Clean Energy ASA and the Cloudberry Group, together with a descrip- tion of the principal risks and uncertainties that they face Oslo, 19 March 2024 The Board of Directors of Cloudberry Clean Energy ASA Tove Feld Chair of the Board Petter W. Borg Board member Benedicte Fossum Board member Henrik Joelsson Board member Nicolai Nordstrand Board member Stefanie Witte Board member Alexandra Koefoed Board member Anders J. Lenborg CEO 229Cloudberry Annual report 2023 Responsibility statement Alternative performance measures The alternative performance measures (abbreviated APMs) that hereby are provided by Cloudberry are a supplement to the financial statements that are prepared in accordance with IFRS. This is based on the Group’s experience that APMs are frequently used by analysts, investors, and other parties for supplement information. The purpose of the APMs, both financial and non- financial, is to provide an enhanced insight to the operations, financing, and future prospect for the Group. Management also uses these measures internally for key performance measures (KPIs). They represent the most important measures to support the strategy goals. Financial APMs should not be considered as a substitute for measures of performance in accordance with IFRS. APMs are calculated consistently over time and are based on financial data presented in accordance with IFRS and other operational data as described below. The Group uses the following financial APMs: Financial APMs Measure Description Reason for including EBITDA EBITDA is net earnings before interest, tax, depreciation, amortisation & impairments. Shows performance regardless of capital structure, tax situation or effects arising from different depreciation methods. Management believes the measurement enables an evaluation of operating performance. EBIT EBIT is net earnings before interest and tax. Shows performance regardless of capital structure and tax situation. Management believes the measurement enables an evaluation of operating performance. Net interest-bearing debt (NIBD) Net interest-bearing debt is interest-bearing debt, less cash and cash equivalents. IFRS 16 leasing liabilities are not included in the net interest-bearing debt. Shows the interest-bearing debt position of the company adjusted for the cash position. Management believes the measure provides an indicator of net indebtedness and risk. Equity ratio Equity ratio equals total equity divided by total assets Shows the equity relative to the assets. Management believes the measurement enables an evaluation the financial strength and an indicator of risk. Cloudberry Annual report 2023230 Alternative performance measures Reconcilliation of financial APMs (consolidated figures) NOK million FY 2023 FY 2022 EBITDA 263 151 EBIT 37 116 Equity ratio 69% 82% Net interest bearing debt (NIBD) 806 (1 200) NOK million FY 2023 FY 2022 Non-current Interest-bearing loans and borrowings 1 507 327 Current interest-bearing financial liabilities 78 12 Cash and cash equivalent (779) (1 538) Net interest bearing debt (NIBD) 806 (1 200) NOK million FY 2023 FY 2022 Operating profit (EBIT) 37 116 Depreciations and amortizations 225 35 EBITDA 263 151 Reconcilliation of financial APMs (proportionate figures) NOK million FY 2023 FY 2022 Interest bearing debt 2 098 926 Cash and cash equivalent (797) (1 587) Net interest bearing debt (NIBD) 1 301 (661) NOK million FY 2023 FY 2022 Total revenue 711 646 Operating expenses (310) (265) EBITDA 401 381 231Cloudberry Annual report 2023 Alternative performance measures Proportionate Financials The Group’s segment financials are reported on a proportionate basis. The Group introduces Proportionate Financials, as the Group is of the opinion that this method improves transparency and earnings visibility, and also aligns with internal management reporting. The key differences between the proportionate and the consolidated IFRS financials are that all entities are included with the Group respective ownership share: · Associated companies (ownership between 20%- 49%) or joint ventures (ownership 50%) are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share. In the consolidated financials associated companies and joint ventures are consolidated with the equity method. · Subsidiaries that have non-controlling interests (ownership between 50%-99%) are presented with only the Group controlled ownership share, while in the consolidated financials they are included with 100%. · Group internal revenues, expenses and profits are eliminated in the consolidated financial statements, while in the proportionate financials, internal revenue and expenses, are retained. · Proportionate interest-bearing debt and NIBD does not include shareholder loans From the consolidated IFRS reported figures, to arrive at the proportionate figures for the respective periods the Group has: “Other eliminations group”: · Added back eliminated internal profit or loss items and internal debt and assets. “Elimination of equity accounted entities”: · Replaced the equity accounted net profit from associated companies in the period. / Replaced the investment in shares in associated companies including historical share of profit or loss (asset value) with balance sheet items. · Reclassified excess value items included in the equity method to the respective line in the Profit or loss statement, and in the balance sheet. · Included the proportionate share of the line in the profit or loss statement items (respectively: revenues, operating expenses, depreciations and amortizations and net finance items) and the balance sheet items (total assets, interest bearing debt and cash) for the respective associated company. “Residual ownership”: · Excluded residual ownership share related to non-controlling interest in the respective account- ing lines. Cloudberry Annual report 2023232 Alternative performance measures The tables below reconcile the consolidated Group figures with the proportionate financial for the periods FY 2023 and FY 2022: FY 2023 NOK million Total Consolidated Other eliminations group Proportionate share of line items ass. comp. Residual ownership fully consolidated entitied Total proportionate Total revenue 610 22 159 (80) 711 Operating expenses ex depreciations and amortisations (276) (20) (75) 61 (310) Net income/(loss) from associated companies (72) - 72 - - EBITDA 263 1 156 (19) 401 Depreciation and amortisation (225) - (116) 69 (272) Operating profit (EBIT) 37 1 40 50 128 Net financial items 185 - (25) 2 162 Profit/(loss) before tax 222 1 15 52 291 - Total assets 6 691 264 723 (315) 7 363 Interest bearing debt 1 585 - 626 (112) 2 098 Cash 779 - 80 (62) 797 Net interest bearing debt (NIBD) 806 - 546 (50) 1 302 FY 2022 NOK million Total Consolidated Other eliminations group Proportionate share of line items ass. comp. Residual ownership fully consolidated entitied Total proportionate Total revenue 217 218 254 (43) 646 Operating expenses ex depreciations and amortisations (186) (25) (94) 40 (265) Net income/(loss) from associated companies 120 - (120) - - EBITDA 151 193 40 (3) 381 Depreciation and amortisation (35) - (18) 5 (48) Operating profit (EBIT) 116 193 22 2 333 Net financial items 6 - 10 (2) 14 Profit/(loss) before tax 122 193 32 1 348 Total assets 4 603 695 595 (23) 5 870 Interest bearing debt 339 - 591 (4) 926 Cash 1 538 - 122 (73) 1 587 Net interest bearing debt (NIBD) (1 200) - 469 69 (661) 233Cloudberry Annual report 2023 Alternative performance measures Non-financial APMs Measure Description Reason for including Power Production Power delivered to the grid over the defined time period (one year). Units are measured in GWh. Example A typical 4 MW turbine produces 3 000 full-load hours during a year. 4 MW x 3 000 hours = 12 000 MWh or 12 GWh. For illustration, according to the International Energy Agency 1 (“IEA”) the electrical power consumption per capita in Europe is approximately 6 MWh per year. For power production estimates it is used normalized annual level of power production (GWh). This may deviate from actual production within a single 12-month period but is the best estimate for annual production over a period of several years. Defined as “Normalized production”. Shows Cloudberry’s total production in GWh for the full year including the proportionate share of the production from Cloudberry’s associated companies. Production & under construction, secured At the time of measure, the estimated power output of the secured production and under construction portfolio. The measure is at year-end. Units are measured in MW. Shows Cloudberry’s total portfolio of secured projects that are either producing or under construction. Construction Permits At the time of measure, the estimated total power output to be installed in projects with construction permit. Construction Permit is at the stage when concession has been granted, but before a final investment decision has been made. The measure is at year-end. Units are measured in MW. Shows Cloudberry’s total portfolio of projects with construction permit. Backlog At the time of measure, the estimated total effect to be installed related to projects that are exclusive to the Group and in a concession application process. The measure is at year-end. Units are measured in MW Shows Cloudberry’s portfolio of project where Cloudberry has an exclusive right to the projects. The projects are still under development. Direct emissions Measure in tons of CO2 equivalents. The use of fossil fuels for transportation or combustion in owned, leased or rented assets. It also includes emission from industrial processes. Shows Cloudberry’s direct emissions (Scope 1, GHG emissions) for the full year. Indirect emissions Measure in tons of CO2 equivalents. Related to purchased energy; electricity and heating/cooling where the organisation has operational control. The electricity emission factors used are based on electricity production mixes from statistics made public by the IEA. Emissions from value chain activities are a result of the Group’s upstream and downstream activities, which are not controlled by the Group. Examples are consumption of products, business travel, goods transportation and waste handling. Shows Cloudberry’s indirect emissions (Scope 2 and Scope 3, GHG emissions) for the full year. CO 2 reduction Refers to the reduction of greenhouse gas emissions relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2020 2) . Shows Cloudberry’s reduction of greenhouse gases for the full year relative to the European Electricity mix after the direct and indirect emissions from Cloudberry’s operation is subtracted  https://www.iea.org/data-and-statistics/?country=WEOEUR&fuel=Energy%20consumption&indicator=ElecConsPerCapita (accessed 14 June 2021).  https://www.iea.org/data-and-statistics/charts (accessed 6 May 2021). Cloudberry Annual report 2023234 Alternative performance measures Auditor’s report 235Cloudberry Annual report 2023 Auditor’s report Cloudberry Annual report 2023236 Auditor’s report 237Cloudberry Annual report 2023 Auditor’s report Cloudberry Annual report 2023238 Auditor’s report 239Cloudberry Annual report 2023 Auditor’s report About the report Principles for reporting The enclosed Financial Statements and Board of Directors’ report, together with the accompanying notes, fulfills Cloudberry Clean Energy ASA’s Norwegian statutory requirements for annual reporting. Regarding our ESG reporting, Cloudberry Clean Energy ASA aims to provide its key stakeholders insight into its ESG management and performance, and the Company strives to be consistent and transparent in this reporting. Cloudberry is preparing for the European Sustainability Reporting Standards (ESRS) required by the Corporate Sustainability Reporting Directive (CSRD) and the report is inspired by the standard. The standard is based on the ESG structure Environment, Social and Governance. Including an updated report on the Company`s performance in implementing the Task Force on Climate-related Financial Disclosures (TCFD). Cloudberry Annual report 2023240 Design and production: Artbox AS Cloudberry Clean Energy ASA Frøyas gate 15 0273 Oslo, Norway contact@cloudberry.no www.cloudberry.no 549300VUALPJQLAH7B562023-01-012023-12-31549300VUALPJQLAH7B562022-01-012022-12-31549300VUALPJQLAH7B562023-12-31549300VUALPJQLAH7B562022-12-31549300VUALPJQLAH7B562021-12-31549300VUALPJQLAH7B562021-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562022-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562021-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562022-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562021-12-31ifrs-full:TreasurySharesMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:TreasurySharesMember549300VUALPJQLAH7B562022-12-31ifrs-full:TreasurySharesMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562022-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562022-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562021-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562022-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562021-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562022-01-012022-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562022-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562021-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562022-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562023-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562023-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:TreasurySharesMember549300VUALPJQLAH7B562023-12-31ifrs-full:TreasurySharesMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562023-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562023-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562023-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562023-01-012023-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562023-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562023-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:NOKiso4217:NOKxbrli:shares