AQUILA EUROPEAN RENEWABLES PLC

 

Annual Report and Accounts for the year ended 31 December 2025

 

Final Results

 

We are pleased to present the results for the year ended 31 December 2025.

 

STRATEGIC REPORT

 

investment objective

The Company's Investment Objective is to realise all existing assets in the Company's portfolio in an orderly manner.

Financial Information as at 31 December 2025

Net assets (EUR million)

214.3 (2024: 320.2)

NAV per Ordinary Share (cents)¹

56.7 (2024: 84.7)

Total NAV return per Ordinary Share^1,2

(29.5%) (2024: (8.2%))

Dividends per Ordinary Share (cents)³

2.2 (2024: 5.1)

Ordinary Share price (cents)

36.5 (2024: 66.0)

Dividend yield

6.1% (2024: 7.8%)

Ordinary Share price discount to NAV¹

(35.6%) (2024: (22.1%))

Ongoing charges^1,4

1.2% (2024: 1.1%)

 

1.     This disclosure is considered to represent the Company's alternative performance measures ("APMs"). Definitions of these APMs and other performance measures used, together with how these measures have been calculated, can be found   in the Annual Report. All references to cents are in Euros, unless stated otherwise.

2.     Calculation based on NAV per Ordinary Share in Euros, includes dividends and assumes no reinvestment of dividends.

3.     Dividends paid/payable and declared relating to the period.

4.     Calculation based on average NAV over the period and regular recurring annual operating costs of the Company, further details can be found in the notes to financial statements.

 

Chronology of Events

On 28 July 2025, the Company announced the completion of the sale of its 18% interest in the Portuguese hydropower asset referred to as Sagres for a cash consideration of EUR 14.7 million.

On 11 September 2025 the Company announced the cancellation of the amount standing to the credit of its share premium account (the "Share Premium Cancellation"), as approved by Shareholders at the Annual General Meeting of the Company held on 19 June 2025 (the "AGM"). Accordingly, the amount of EUR 255.6 million previously held in the share premium account of the Company was cancelled and the distributable reserves resulting from the Share Premium Cancellation have been treated as profits available for distribution by the Company.

On 28 November 2025, the Company announced the appointment of Robert Naylor as Non-Executive Chair with effect from 28 November 2025. Mr Ian Nolan resigned from Board on 27 November 2025.

On 15 December 2025, the Company announced that the sale of the Danish wind assets (Holmen II and Svindbaek) had completed and that the Company is in receipt of sales proceeds of EUR 36.6 million. The Board continues to progress the divestment of the remainder of the Company's portfolio in accordance with its investment policy to effect a managed wind-down of its assets.

On 15 December 2025, the Board proposed using the majority of the net cash proceeds to make a first capital distribution to Shareholders and recommended adoption of B share scheme amounting to EUR 34.0 million to allow for the return of capital to Shareholders. This amount represented approximately 15 per cent of the Company's Net Asset Value ("NAV") as at 30 September 2025. The Company completed the first capital distribution through B shares redemption on 29 January 2026.

On 24 December 2025, the Company announced that Dr Patricia Rodrigues would resign from the Board with effect from 31 December 2025. The resignation was part of the Company's planned reduction in size of the Board to reflect the Company's wind-down strategy.

On 13 March 2026 the Company completed the sale of its 89% interest in Desfina, the Greek wind power investment, which resulted in the receipt of cash proceeds of EUR 26.0 million. On the same day the Company announced a second capital distribution to Shareholders under the approved B share scheme totaling approximately EUR 20.4 million, which was completed on 1 April 2026.

 

AT A GLANCE

 

PORTFOLIO BREAKDOWN⁵

 

By Technology

Wind energy - 37.4%

Solar PV - 62.6%

 

By Country

Portugal - 17.0%

Norway - 13.4%

Finland - 8.7%

Spain - 45.7%

Greece - 15.3%

 

By Status

Operating - 100%

 

WIND ENERGY - 125.0 MW

 

OLHAVA 34.6 MW

Ownership: 100.0%

 

THE ROCK 400.0 MW

Ownership: 13.7%

 

DESFINA 40.0 MW

Ownership: 89.0%⁶

 

SOLAR PV - 230.7 MWp

 

BENFICA III 19.7 MWp

Ownership: 100.0%

 

ALBENIZ 50.0 MWp

Ownership: 100.0%

 

OURIQUE 62.1 MWp

Ownership: 50.0%

 

GRECO 100.0 MWp

Ownership: 100.0%

 

TIZA 30.0 MWp

Ownership: 100.0%

 

5. Based on fair values as at 31 December 2025. Totals may not add up to 100.0% due to rounding differences.

6. Voting interest. Economic interest: 92.6%. Sale completed on 13 March 2026.

 

 

Chairman's statEment

2025 has been a challenging year and profoundly disappointing for our shareholders. Even after applying a more aggressive discount rate as at 30 June 2025, some assets have subsequently been realised below net asset value. The secondary market in these assets has been limited, with the Investment Adviser being the only buyer. The Board's priority remains to complete the managed wind-down in a disciplined way and to return capital to shareholders as efficiently as possible.

I was appointed non-executive chairman on 28 November 2025.

Managed wind-down

Aquila European Renewables plc was placed into a managed wind-down process following a shareholder vote and a change to its investment policy in late September 2024. Progress was made during 2025 in executing the managed wind-down, with the sale of the Company's Portuguese hydropower investment and its two Danish wind power investments. This followed the sale in 2024 of the Tesla wind power investment in Norway. In addition, on 13 March 2026, the Company completed the sale of its Greek wind power investment, following receipt of regulatory and other customary approvals.

These investments were sold to funds advised by Aquila Capital, the Company's investment adviser. As a result of these disposals, the Company now has two wind power investments, the 100% owned Olhava wind farm in Finland and a 13.7% shareholding in The Rock wind farm in Norway, and five solar PV investments in Iberia, comprising three 100% owned solar PV parks in Spain and two in Portugal, one 100% owned and the other 50% owned.

As referred to above, the factors impacting investment valuations in the year, including, amongst other things, the balancing mechanism in Finland and the outages on the Spanish grid, have reduced the 31 December 2025 NAV. The Company, together with its advisers, continues to explore the sale of its remaining investments. As discussed with shareholders through the year, the Board has undertaken an extensive sale process and, as a result of being in a managed wind-down, notes the disparity between indicative pricing received and the Company's NAV. Accordingly, the Board notes that there are a range of prices at which future sales could occur, and so disposals may not be achieved at NAV.

On 23 January 2026, the Company completed the first B share scheme distribution, returning EUR 34.0 million to Shareholders following receipt of proceeds from the sale of the Danish wind power investments. This represented approximately 15% of the Company's NAV as at 30 September 2025, being the latest published NAV at the time of the return of capital. An additional return of capital of EUR 20.4 million was completed on 26 March 2026 following receipt of proceeds from the sale of the Greek wind power investment.

Reflecting the managed wind down and the reducing scale of the Company, the Directors do not propose to prepare quarterly NAVs and fact sheets but rather will prepare semi-annual NAVs which will be announced to the market with any accompanying relevant commentary.

Performance

NAV reduced from EUR 320.2 million as at 31 December 2024 to EUR 214.3 million as at 31 December 2025, or from EUR 0.85 per share to EUR 0.57 per share, a decline of 32.9%. Dividends of EUR 0.03 per share were paid in 2025.

The sale of the Portuguese hydropower investment was completed in June 2025 at a price equal to its NAV as at 31 December 2024 plus interest at 6.75% p.a. from that date until completion, as adjusted for distributions received from the investment. The subsequent agreements to sell the Danish wind power investments and the Greek wind power investment were at values approximately 17% below their respective NAVs as at 30 June 2025.

The share price reduced from EUR 0.66 as at 31 December 2024 to EUR 0.37 as at 31 December 2025, with the discount to NAV widening from 22.1% to 35.6%.

Post year end the Directors distributed, by the Company's B share mechanism, approximately €34 million, being 9 cents per Ordinary Share, on 23 January 2026 and approximately €26 million, 5.4 cents per Ordinary Share, on 26 March 2026.

The valuation of the remaining investments reduced from EUR 218.8 million as at 31 December 2024 to EUR 142.5 million as at 31 December 2025, driven by a combination of factors, including: (i) an increase in the overall portfolio discount rate from 7.3% per annum as at 31 December 2024 to 10.0% per annum as at 31 December 2025 reflecting the poor performance in 2025 against forecast; and (ii) significant reductions in forecast power prices.

Over the course of the year, forecast power prices were revised down significantly across most European markets. In the short term, this decline was driven by lower commodity prices in all relevant countries. In Iberia, solar PV price forecasts were revised down materially due to higher expected capture effects, particularly in the near term, resulting from increased solar build-out and generation.

Total portfolio production for the Company's remaining investments in the year ended 31 December 2025 was 23.0% below budget. Solar PV production was 28.5% below budget, attributable in particular to curtailment of the Iberian solar PV assets due to several hours of negative electricity market prices, which prompted solar PV parks such as Albeniz, Tiza and Greco to shut down, resulting in lower production. Wind power production was 16.9% below forecast in 2025. Olhava underperformed by 29.4% in 2025, mainly due to extensive commercial curtailments, while technical losses remained low and wind conditions were normal.

Dividends

Dividends were paid in respect of the first three quarters of 2025, totalling EUR 11.4 million, or EUR 0.03 per share. Cash generated by the Company's investments and available for upstreaming to the Company came under significant pressure in the second half of 2025 due to Olhava's lender prohibiting payments to Shareholders and challenging market conditions in Spain and Portugal, which are expected to continue. Capital is therefore being retained to cover foreseeable operating costs and potential calls on the Company's capital to support investments, including possible equity cures for the Olhava investment.

Costs

Additional costs have been incurred, particularly in relation to the Company's corporate finance and legal advisers, in order to execute the managed wind-down, both for the disposal of the Company's investments and for the B share scheme redemption. As the Company's asset base reduces, costs will increase as a percentage of NAV.

Outlook

2025 was a challenging year for the renewable energy industry in Europe and for the Company's investments. There has been a focus on discount rates which is an oversimplification of a complex, often esoteric, asset class. The value of these long-life assets depends on a wide range of assumptions, including power prices, curtailment, asset life, subsidy regimes, grid outages and balancing markets. In many cases those assumptions have proved aggressive, contributing to an over-distribution of capital. The consequences are now evident. Companies are struggling to sell assets, realised values are falling below historic NAVs, and dividends are being cut.

The war in the middle-east has led to increases in commodity prices and, in particular, to wholesale gas prices, which are themselves leading to higher wholesale market prices for electricity in Europe. The Company's investments are expected to benefit from these increases to the extent that revenues are exposed to market prices (see Investment Adviser's Report for details). However, the factors in the first paragraph above are expected to continue carrying more weight in the near future.

Against this backdrop, and as the managed wind-down progresses, the Board's priority is to complete the asset sale programme efficiently, while safeguarding value and returning capital to shareholders in a timely and cost-effective manner. This may involve realising assets at prices below their contribution to 31 December 2025 net asset value.

Robert Naylor

Chairman

27 April 2026

 

INVESTMENT ADVISER'S REPORT

Investment Adviser Background¹

The Company's Alternative Investment Fund Manager ("AIFM"), FundRock Management Company (Guernsey) Limited, has appointed Aquila Capital Investmentgesellschaft mbH ("Aquila Capital") as its Investment Adviser for the Company. Aquila Capital's key responsibilities are to originate, analyse and assess suitable renewable energy infrastructure investments and advise the AIFM accordingly, as well as to provide Asset Management services.

Aquila Capital is an asset manager specialising in sustainable real asset investments. Since 2007, Aquila Capital has been providing compelling investment opportunities focused on driving the energy transition and sustainable infrastructure. The Investment Adviser's goal is to deliver resilient returns while supporting clean energy initiatives and contributing to the decarbonisation of global infrastructure.

The Investment Adviser announced a strategic partnership with Commerzbank AG ("Commerzbank") on 18 January 2024 aimed at significantly accelerating the Investment Adviser's growth into one of the leading asset managers for sustainable investment strategies in Europe. Commerzbank is a major listed European banking institution serving a diverse client base of around 26,000 corporate client groups and nearly 11 million private and corporate clients, with a global presence in more than 40 countries. As part of this partnership, Commerzbank acquired a 74.9% stake in the Investment Adviser, whilst ensuring the continued managerial independence of the Investment Adviser, which will remain autonomous in terms of operations, investment decisions, product development and brand representation. The transaction was completed following the receipt of the required regulatory approvals on 3 June 2024. On 24 April 2026 Commerzbank increased its shareholding in the Investment Adviser to 100%.

1   Figures presented in this section refer to Aquila Group.

 

Investment Portfolio

Project

Tech-nology

Country

Capacity7

Status

COD8

Asset Life from COD

Equip-ment Manu-facturer

Energy Offtaker9

Offtaker

Owner-ship  in Asset

Lever-age10

Acquisi-tion Date

Olhava

Wind energy

Finland

34.6 MW

Operational

2013-2015

30y

Vestas

Market

Finnish Energy

100.0%

23.7%

September 2019

The Rock

Wind energy

Norway

400.0 MW

Operational

2022

30y

Nordex

PPA

Alcoa

13.7%

61.7%

June 2020

Benfica III

Solar PV

Portugal

19.7 MW

Operational

2017, 2020

40y

AstroNova

Market

Axpo

100.0%

0.0%

October 2020

Albeniz

Solar PV

Spain

50.0 MW

Operational

2022

40y

Canadian Solar

PPA

Statkraft

100.0%

34.9%

December 2020

Desfina

Wind energy

Greece

40.0 MW

Operational

2020

25y

Enercon

FiP

DAPEEP

89.0%11

45.2%12

December 2020

Ourique

Solar PV

Portugal

62.1 MW

Operational

2019

40y

Suntec

Market

ENI

50.0%

0.0%

June 2021

Greco

Solar PV

Spain

100.0 MW

Operational

2023

40y

Jinko

PPA

Statkraft

100.0%

34.8%

March 2022

Tiza

Solar PV

Spain

30.0 MW

Operational

2022

40y

Canadian Solar

PPA

Axpo

100.0%

43.1%

June 2022

Total (AER Share)

355.7 MW

 

7.     Installed capacity at 100% ownership.

8.     COD = Commissioning date.

9.     PPA = Power Purchase Agreement, FiP = Feed-in premium. Further information on the contracted revenue position can be found in the Annual Report.

10.   Leverage level calculated as a percent of third party debt less cash versus enterprise value, i.e. equity value plus third party debt less cash as at 31 December 2025. Benfica III and Ourique have no third party debt.

11.   Represents voting interest. Economic interest is approximately 92.6%. This investment was sold on 13 March 2026.

12.   Calculation based on voting interest.

 

PORTFOLIO UPDATES as at 31 December 2025

As reported in the Chairman's statement, the Company disposed of its interests in the Sagres hydropower plant in Portugal and the two Danish wind power investments, Holmen II and Svindbaek during the year. In addition, the Company entered into an agreement to sell its interests in the Desfina wind power investment in Greece during the year. This transaction was completed on 13 March 2026.

Olhava

Olhava is in lock-up following debt covenant breaches driven by a combination of factors including lower than forecast realised power prices and production, elevated grid balancing costs and high debt repayment obligations, which are expected to ease during 2026. It has been necessary to make equity cure payments from the resources of the company which owns Olhava and agree that payments under the shareholder loan and dividends are suspended until the end of June 2026. In September 2025 an additional equity cure of EUR 508k was paid from the Company's resources. While asset liquidity remains stable although revenue and cost risks persist from the expiry of the feed-in tariff and elevated grid balancing reserves, constructive discussions with the bank continue in order to modify the terms of the loan, which are likely to result in the lock up period being extended. The Board and Investment Adviser continue to monitor the asset's performance closely against a background of difficult market trading conditions.

The Rock

The Rock has appointed the investment bank, that arranged the EUR 80.0 million Green Bond in 2021, to advise it further on the refinancing of this Green Bond, which matures in September 2026. Until this refinancing is resolved it is unlikely that the Company will receive cash flow from this investment.

Solar PV investments in Spain

The Company's three Solar PV investments in Spain underwent challenging market conditions in 2025. There were significant curtailments of power production at all sites, both enforced by the grid, which at times was unable to cope with peak electricity production, and voluntary due to the impact of negative wholesale power prices. These conditions are expected to continue until grid infrastructure, including investment in batteries, is improved and demand for power has increased, e.g. from data centre investments. These investments have bank debt facilities, which are non-recourse to the Company but are cross-collateralised by each of the three investments. The debt repayment obligations are a small percentage of the principal amount outstanding until the maturity date in December 2028. Nevertheless, the Albeniz/Argeo investment breached its DSCR covenant in the period ended 31 December 2025 as a result of which interest was not paid on shareholder loans provided by the Company in December 2025. The other investments achieved DSCR well in excess of the minimum level required of 1.05x and the Albeniz covenant breach is expected to be able to be rectified through an equity cure funded by the other two investments. However, the ability of the investments to make payments to the Company is less secure than in previous years.

Solar PV investments in Portugal

The Company's two Solar PV investments in Portugal experienced similar, but less acute, market conditions as in Spain. These investments do not have bank indebtedness. However, their revenues from power purchase agreements expired in December 2025 and are currently exposed to wholesale market power prices, which reduced significantly over the last year. Accordingly, these investments are conserving cash in order to ensure security of operations and therefore the ability of the investments to make payments to the Company is less secure than in previous years.

 

CONTRACTED REVENUE POSITION
Revenue Mix - Existing Contracts

Present Value of Revenues
(Five Years)

 

Financial Performance

Electricity Production (GWh)

		2025		2024	Variance (%)	Variance 2025 against P5016 Budget
Technology	Region
Wind energy	Finland, Norway, Greece		298.0	461.3	-11.8%	-16.9%
Solar PV	Portugal, Spain		307.1	385.1	-20.3%	-28.1%
			-----------	-----------	-----------	-----------
Total			605.1	722.8	-16.3%	-23.0%
			======	======	======	======

 

Load Factors¹⁷

Technology	2025	2024
Wind energy	27.2%	30.9%
Solar PV	15.2%	19.1%
	-----------	-----------
Total	19.4%	23.2%
	======	======

 

Technical Availability¹⁸

Technology	2025	2024
Wind energy	93.3%	93.6%
Solar PV	93.6%	99.8%
	-----------	-----------
Total	93.5%	96.7%
	======	======

 

Revenues¹⁹ (EUR million)

Technology	2025	2024	Variance (%)
Wind energy	11.5	18.1	-36.7%
Solar PV	13.8	19.5	-29.1%
	-----------	-----------	-----------
Total	25.3	37.6	-32.8%
	======	======	======

 

Note: 2025 and 2024 information is for the remaining investments as at 31 December 2025.

15.           KPI's of the underlying SPVs of the HoldCo

16.           Financial model forecasts are based on P50 production (the estimated annual amount of electricity generation that has a 50% probability of being exceeded - both in any single year and over the long term - and a 50% probability of being underachieved).

17.           The load factor of a renewable energy asset (such as wind or solar) is the ratio of its actual energy output over a given period to its maximum possible output if it operated at full capacity continuously during that period. It is typically expressed as a percentage and provides insight into the efficiency and utilization of the asset.

18.           Technical availability refers to the proportion of time a system, service, or infrastructure is fully functional and accessible for use. Average technical availability based on weighted installed capacity (AER share).

19.           Includes merchant revenue, contracted revenue and other revenue (e.g. Guarantees of Origin, Electricity Certificates).

 

2025 Monthly Production Performance vs. Budget (AER Share)

The portfolio's production was 23.0% below budget over the reporting period, primarily due to lower irradiation for the solar portfolio, curtailment of the Iberian solar PV assets due to periods of negative market prices (c. 33% below forecast) and a combination of low irradiation and a failure of a transformer in Portugal, which resulted in 2 months of reduced capacity (now resolved) at the Ourique plant (c. 25% below forecast). The production of the portfolio was also affected from poor wind conditions in Greece (17.5% below forecast) and technical availability issues such as icing in Norway & Finland (c. 14% below forecast). Due to these factors, the portfolio weighted average technical availability over the reporting period stood at 93.5% (2024: 96.7%).

If the technical availability of a plant falls below the guaranteed level, the compensation is contractually defined in the respective EPC or O&M agreement in the form of liquidated damages. However, for certain assets, this compensation is calculated based on the annual technical availability. As long as the year-end value remains above the guaranteed threshold, no liquidated damages are payable.

In Spain, technical curtailments may be compensated (real-time at spot price), while day-ahead curtailments are not. Commercial curtailments due to negative prices are not covered by PPAs and excluded from revenues. For wind assets with baseload PPAs, curtailed volumes must be bought back on the spot market, usually without compensation. By contrast, Iberian PV assets are generally contracted under pay-as-produce PPAs, which avoid market buy-back obligations in case of curtailments or low production.

Leverage²⁰

	As at 31 December 2025	As at 31 December 2024	Variance (%)
EUR million
NAV	214.3	320.2	-33.1%
Net Debt21	101.5	130.5	-22.2%
GAV (NAV + Net Debt)	315.8	450.7	-29.9%
Net Debt (% of GAV)22	32.1	29.0	10.7%
Project debt weighted average maturity (years)	5.2	10.8	-51.9%
Project Debt weighted average interest rate (%)23	3.3	3.2	10bps
	======	======	======

 

20.           Foreign currency values converted to EUR as at 31 December 2025. Data represents AER's share of debt. AER share of Desfina debt based on voting interest.

21.           Debt corresponds to third party debt secured at project level less cash.

22.           This disclosure is considered to represent the Company's alternative performance measures ("APMs"). Definitions of these APMs and other performance measures used, together with how these measures have been calculated, can be found in the Annual Report. All references to cents are in Euros, unless stated otherwise.

23.           Weighted average all in interest rate for EUR denominated debt.

 

Debt Summary as at 31 December 2025

Project	AER share	Net Debt (EUR million)	Currency	Bullet/amortising	Maturity	Hedged proportion	Type
Olhava	100.0%	4.5	EUR	Fully amortising	Dec-30/Sep-31	100%	Bank Debt
The Rock: USPP Bond (net of cash)	13.7%	24.2	EUR	Fully amortising	Sep-45	100%	Debt Capital Markets
The Rock: Green Bond	13.7%	11.0	EUR	Bullet	Sep-26	100%	Debt Capital Markets
The Rock: Lease liabilities	13.7%	1.1	EUR	Fully amortising	Nov-45	100%	Leasing
Desfina	89.0%	21.2	EUR	Fully amortising	Dec-39	100%	Bank Debt
Albeniz	100.0%	9.9	EUR	Partly amortising	Dec-28	90%	Bank Debt
Jaén	100.0%	9.9	EUR	Partly amortising	Dec-28	90%	Bank Debt
Guillena	100.0%	14.5	EUR	Partly amortising	Dec-28	90%	Bank Debt
Tiza	100.0%	7.6	EUR	Partly amortising	Dec-28	90%	Bank Debt
Benfica III	100.0%	-1.1	N/A	N/A	N/A	N/A	N/A
Ourique	50.0%	-1.3	N/A	N/A	N/A	N/A	N/A
		-----------				-----------
Total		101.5				95.8%
		======				======

 

The Company's NAV as at 31 December 2025 was EUR 214.3 million or 56.7 cents per Ordinary Share (31 December 2024: EUR 320.2 million or 84.7 cents per Ordinary Share). This represents a NAV total return of -29.5% per Ordinary Share (2024:-8.2%) including dividends.

Dividends of EUR 11.4 million (3.0 cents per Ordinary Share) were paid during the reporting year.

The main drivers of NAV movement throughout the reporting year include:

-      increase in discount rates such that average portfolio discount rate increased from 7.3% p.a. to 10.0% p.a.;

-      significant reductions in forecast power prices across all relevant markets, particularly in the next five to ten years;

-      actual performance in 2025 was substantially below the forecast; and

-      agreements to sell Holmen II and Svindbaek investments in December 2025 at discounts to their NAV as at 31 December 2024.

 

Valuation Methodology

The Company owns 100.0% of its subsidiary Tesseract Holdings Limited ("HoldCo" or "THL"). The Company meets the definition of an investment entity as described by IFRS 10. As

such, the Company's investment in the HoldCo is valued at fair value.

The Company has acquired underlying investments in SPVs through its investment in the HoldCo. The Investment Adviser has carried out fair market valuations of the SPV investments as at 31 December 2025 and the Directors are satisfied with the methodology, the discount rates and key assumptions applied, and the valuations.

All SPV investments are at fair value through profit or loss and are valued using the IFRS 13 framework for fair value measurement. The economic assumptions shown in the Annual Report were used in the valuation of the SPVs

 

Valuation Assumptions

As at 31 December 2025
Discount rates	The discount rate used in the valuations is calculated according to internationally recognised methods. Typical components of the discount rate are risk free rates, country-specific and asset-specific risk premia.
Power price	Power prices are based on power price forecasts from leading market analysts. The forecasts are independently sourced from providers with coverage in almost all European markets as well as providers with regional expertise. The approach applied to both asset classes (wind and solar PV) remains unchanged using a blend of two power price curve providers. One of the power price curve providers was replaced following a review by the Investment Adviser due to inconsistencies and differences in key long-term assumptions over the recent forecast periods.
Energy yield/load factors	Estimates are based on third party energy yield assessments, which consider historic production data (where applicable) and other relevant factors.
Inflation rates	Long-term inflation is based on the monetary policy of the European Central Bank.
Asset life	In general, an operating life of 25 to 30 years for onshore wind and 40 years for solar PV is assumed. In individual cases, a longer operating life is assumed where the contractual arrangement (i.e. O&M agreement with availability guarantee) supports such an assumption.
Operating expenses	Operating expenses are primarily based on respective contracts and, where not contracted, on the assessment of a technical adviser.
Taxation rates	Underlying country-specific tax rates are derived from due diligence reports from leading tax consulting firms.

 

Portfolio Valuation - Key Assumptions

		As at 31 December 2025	As at 31 December 2024
Metric
Discount rate	Weighted average	10.0%	7.3%
Long-term inflation	Weighted average	2.0%	2.0%
Remaining asset life24	Wind energy (years)	22	23
	Solar PV (years)	33	35
Operating life assumption25	Wind energy (years)	28	28
	Solar PV (years)	40	40
		======	======

 

24.           Remaining asset life based on net full load years. Does not consider any potential asset life extensions.

25.           Asset life assumption from date of commissioning.

 

There were significant changes in the discount rate and power price forecast assumptions compared to the previous reporting period.

-     Significant reduction in power price forecasts across all relevant markets due lower demand expectations, updated renewable deployment assumptions and downward revisions to commodity prices (-8.8 cents)

-     Increase in discount rate due to higher interest rate level driven by high volatility and uncertainty in the markets as well as increased risk premia applied to renewables in general (-6.9 cents)

-     Higher operating costs driven by increased balancing costs across all relevant markets and negative performance compared to budget throughout the year (-3.8 cents)

-     Loss from the sale of four assets throughout the year (-3.3 cents)

 

MARKET COMMENTARY AND OUTLOOK
Electricity Price Forecasts - All Assets (Weighted Average)²⁶

Valuation Sensitivities

26.           Data reflects pricing forecasts as at 31 December 2025. All power prices are in real terms as at 31 December 2025 and reflect the weighted average captured price, weighting is based on production sold at the market price

Market Power Prices

Finland power price forecasts have declined significantly over the past year, driven by more optimistic assumptions on installed capacity particularly increased wind investments and slightly weaker demand expectations. As a result, wind capture prices have fallen by 16% over the next five years and 6% over the next ten years.

In Iberia, mid and long-term power price forecasts remain broadly stable; however, short-term solar capture prices have seen a sharp decline. Spain and Portugal are experiencing solar oversupply, while demand growth has underperformed prior expectations. Although additional demand from BESS, data centres, and hydrogen is expected later in the decade, these developments are being delayed. Consequently, solar capture prices have decreased by 12% over the next five years and 4% over the next ten years.

In Norway, with a particular focus on the NO4 bidding zone, power price forecasts are materially weaker than a year ago. This is driven by (i) slower-than-expected demand growth due to significant delays in power-to-X projects (including hydrogen, heat, and data centres), and (ii) above-average hydrological conditions relative to P50 levels, leading to increased hydro generation, particularly in northern regions of Norway and Sweden.

Over the past twelve months, European power markets have become increasingly bifurcated. Continued renewable build-out has structurally reduced average wholesale prices and weakened the marginal role of gas in many hours. However, this same dynamic is driving higher intraday volatility, more frequent negative pricing and growing pressure on capture prices, particularly in markets where flexibility, storage and demand growth have lagged capacity additions.

Spain illustrates these dynamics most clearly in solar PV. Rapid capacity expansion has led to a sharp increase in cannibalisation effects, with generation heavily concentrated in midday hours. As a result, capture prices have declined materially, and zero- or negative-price periods have become increasingly frequent. While Spain remains one of Europe's lowest-cost power markets from a system perspective, the revenue outlook for standalone solar assets has become more challenging. In this environment, value is shifting towards hybridisation, storage integration and more sophisticated offtake structures.

A similar trend is emerging in Finland's wind sector. Strong capacity growth has positioned wind as a core pillar of the generation mix but has also introduced greater revenue volatility. Increasing occurrences of negative pricing, combined with regional grid constraints and limited demand-side flexibility, are weighing on realized prices. At the same time, periods of low wind continue to highlight structural supply tightness, underscoring the need for a more balanced system with dispatchable capacity and storage solutions.

More recently, geopolitical developments in the Middle East have reintroduced an additional layer of uncertainty. Disruptions to LNG supply and logistics have driven a sharp increase in European gas prices, which continues to influence power pricing during non-renewable hours. While Europe's growing renewable base has reduced overall exposure to gas, these events demonstrate that power markets remain sensitive to external shocks, particularly through fuel-linked marginal pricing.

Overall, the investment case for renewable energy remains underpinned by strong structural drivers, including electrification, decarbonisation targets and energy security considerations. However, the revenue environment is becoming more complex. Markets such as Spain and Finland highlight the importance of flexibility, portfolio diversification and active commercial management. Assets that combine high-quality resources with storage, hybrid configurations and robust offtake strategies are increasingly well positioned to navigate this evolving landscape.

Aquila Capital Investmentgesellschaft mbH

27 April 2026

 

27.           Source: European Network of Transmission System Operators for Electricity ("ENTSO-E"), 'Nordics' reflects the Nord Pool system price.

 

 

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

1. Environmental

Aquila Capital, the Investment Adviser of the Company, focuses on the investment in, and development of, essential assets. This includes clean energy (wind energy, solar PV, hydropower and battery storage), sustainable infrastructure and specialty asset classes, such as carbon forestry and energy efficiency.

In 2022, Aquila Group formalised a mission to become one of the world's leading sustainable investment and development companies for essential assets by 2030. To show commitment to the mission, it set a Group-wide goal to avoid 1.5 billion tonnes of CO₂e by 2035 in its portfolio's lifetime.

Using the appropriate tools, due-diligence procedures and experts, Aquila Group ensures it identifies, assesses and mitigates all material ESG factors, to protect investors from potential financial downside, while considering their impact on society and the environment. In this context, Aquila Group, a regulated entity, manages all relevant ESG elements using dedicated subject-matter experts. Together, we are committed to the UN Sustainable Development Goals, particularly climate action (SDG #13), clean energy (SDG #7), industry innovation, and infrastructure (SDG #9).

AER aims to invest in a diversified portfolio of renewable energy infrastructure investments, such as hydropower plants, wind and solar parks, across continental Europe and Ireland. With the objective of providing investors with a diversified portfolio of renewable assets, AER is able to deliver on its investment objectives as well as contribute towards the green economy.

AER's Contribution to the UN Sustainable Development Goals

Goal	Overview
Ensure access to affordable, reliable, sustainable and modern energy for all.	-     AER's portfolio produces renewable energy which contributes towards Europe's electricity mix. -     Renewable energy is a cost-effective source of energy compared to other options. -     AER's investments in renewable assets help support and encourage further investment in the industry.
Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.	-     AER targets renewable investments that are supported by high quality components and infrastructure to optimise the energy yield and subsequent return to investors. -     AER's investments help support the construction of shared infrastructure (e.g. substations) which enables the further expansion of renewable energy sources. -     AER's Investment Adviser is responsible for monitoring and optimising the Company's day-to-day asset performance. This process also involves actively exploring how new technologies and other forms of innovation can be utilised to enhance asset performance and sustainability (energy yield, O&M, asset life).
Take urgent action to combat climate change and its impacts.	-          The Company's 355.7 MW remaining portfolio powered approximately 168 thousand households and avoided approximately 139 thousand tonnes of CO2 emissions over the reporting year.28 -     As a signatory to the UN Principles for Responsible Investments ("UN PRI"), the Company's Investment Adviser has integrated ESG criteria all along its investment process for real assets, which includes considerations of climate change.

 

28. Actual AER contributions as at 31 December 2025. The CO₂ equivalent avoidance, the average European households supplied and household emissions are approximations and do not necessarily reflect the exact impact of the renewable energy projects. The cited sources of information are believed to be reliable and accurate, however, the completeness, accuracy, validity and timeliness of the information provided cannot be guaranteed and Aquila Capital accepts no liability for any damages that may arise directly or indirectly from the use of this information.

Environmental Initiatives

The natural environment around some of the Company's solar PV parks is the Desierto de Tabernas National Park, situated to the south east of Spain and representing the only desert in the entire European continent. This constitutes a rich biodiversity of environmental resources that is of particular geological interest. Specialist advisers have been commissioned to implement environmental measures to mitigate the impact of the solar PV plants on the environment and create habitats for flora and fauna.

Several visits per month are made to implement the measures, monitor their evolution and make necessary adjustments. Below is a selection of closely monitored measures implemented across some of the Company's solar PV parks for local flora and fauna.

Flora

-     Translocation of rain-fed olive trees.

-     Planting of broom and palmetto trees to promote landscape integration and the creation of biotopes appropriate for local species.

-     Clearing of vegetation through sheep grazing.

-     Regular maintenance measures and monitoring.

Fauna

-     Drinking troughs, feeding troughs and perches were installed in order to suit the local fauna.

-     A hunting fence was installed to protect wildlife.

-     Bird nest boxes were installed, specifically for the nesting of the lesser kestrel, common kestrel, barn owl and little owl species.

-     A study commissioned to analyse the degree of adaptation of bird species to the study commissioned to analyse the degree of adaptation of bird species to the presence of the solar PV parks, with special emphasis on the lesser kestrel and Montagu's harrier species.

-     Stands for wild rabbits built to help the breeding and survival of this species.

-    

2. Social

Renewable energy projects can have an inherent major positive impact on the environment with their ability to decarbonise the energy sector, aiding the Company in the transition to a low-carbon economy. In light of the European Green Deal boosting renewable energy projects, investment into clean-energy assets has accelerated over recent years. As renewable energy deployment increases, pressure on land is growing. The need to protect biodiversity may result in conflicts over agricultural and renewable energy land usage. Conflicts can arise when new renewable projects compete against other types of land usage, such as residential housing, recreational areas, agriculture and nature conservation, or when they cause landscape disruptions. Engagement with local communities is an integral part of the Company's investment philosophy. The assets continue to support communities by contracting local service providers, paying local taxes, and lease payments for use of the land.

3. Governance

Independent Board of Directors

The independent Board of Directors is responsible for AERʼs governance and sustainability policy and its implementation, with the daily operations being delegated to its independent AIFM, FundRock Management Company (Guernsey) Limited ("FundRock"). FundRock monitors environmental, social and governance risks, which are fully integrated across every single stage of its investment process. The Aquila Group publishes its own Sustainability Report, describing the Investment Adviser's approach to sustainability within the investment process. Aquila Capital regards integrity and diversity as key pillars in its governance and it has been vital for the growth and success of the Company. The Investment Adviser is fully regulated and supervised by the Federal Financial Supervisory Authority in Germany.

Board and Employee Diversity

The Board of Directors is appointed based on expertise and merit, being mindful of the benefits generated by diversity. The Board comprises members with different skills and experiences, while endeavouring to comply with the Listing Rules on diversity. The current Board comprises three men and one woman, all non-executive Directors who have a significant number of years of experience in their relevant fields. Additionally, the Investment Adviser is also mindful of the benefits provided by diversification, both in culture (some 29 nationalities are represented among its employees), and in gender (its gender ratio is 64% male and 36% female).

 

investment policy and key performance indicators

At a General meeting held on 30 September 2024, Aquila European Renewables PLC ("AER" or "Company") adopted the following Investment Policy:

Investment Policy

The Company will pursue its investment objective by effecting an orderly realisation of its assets in a manner that seeks to achieve a balance for Shareholders between maximising the value received from those assets and making timely returns of capital to Shareholders.

This process might include a sale of all of the assets, groups of assets (such as specific geographic or technological portfolios), individual assets of the Company or a combination thereof.

The Company will cease to make any new Renewable Energy Infrastructure Investments. Capital expenditure will be permitted where it is deemed necessary or desirable by the Board in connection with the realisation, primarily where such expenditure is necessary to protect or enhance an investment's realisable value.

Investment Restrictions

The net proceeds from realisations will be used to repay borrowings and make timely returns of capital to Shareholders (net of provisions for the Company's costs and expenses) in such manner as the Board considers appropriate.

Changes to the Investment Policy

The Directors do not currently intend to propose any material changes to the Company's Investment Policy. Any material changes to the Company's Investment Policy set out above will only be made with the approval of the Financial Conduct Authority and the Shareholders by way of an ordinary resolution.

Hedging

The Company does not intend to use hedging or derivatives for investment purposes but may from time to time use derivative instruments such as futures, options, futures contracts and swaps (collectively "Derivatives") to protect the Company from fluctuations of interest rates or electricity prices.

The Derivatives must be traded on a regulated market or by private agreement entered into with financial institutions or reputable entities specialising in this type of transaction.

Liquidity Management

The AIFM will ensure a liquidity management system is employed for monitoring the Company's or its subsidiary, Tesseract Holdings Limited's (the "Group") liquidity risks. The AIFM will ensure, on behalf of the Group, that the Group's liquidity position is consistent at all times with its investment policy, liquidity profile and distribution policy. Any cash received by the Group as part of the realisation process (net of any transaction costs and repayment of borrowings) will be held by the Group as cash on deposit and/or will be invested in cash equivalents, near cash instruments, bearer bonds and money market instruments pending its return to Shareholders.

Borrowing Limits

It is not anticipated that the Company will take on any new borrowings, but may do so for the efficient management of the Company where such borrowings are necessary to protect or enhance an investment's realisable value as part of the orderly realisation of the Company's assets.

At the time of entering into (or acquiring) any new long-term structural debt (including limited recourse debt), total long-term structural debt will not exceed 50% of the prevailing Gross Asset Value. For the avoidance of doubt, in calculating gearing, no account will be taken of any Renewable Energy Infrastructure Investments that are made by the Company by way of a debt or a mezzanine investment. In addition, total short-term debt will be subject to a separate gearing limit so as not to exceed 25% of the Gross Asset Value at the time of entering into (or acquiring) any such short-term debt.

In circumstances where these aforementioned limits are exceeded as a result of gearing of one or more Renewable Energy Infrastructure Investments the Company has a non-controlling interest in, the borrowing restrictions will not be deemed to be breached. However, in such circumstances, the matter will be brought to the attention of the Board who will determine the appropriate course of action.

Dividend Policy

As announced on 13 February 2025, the Board implemented a change in the Company's future dividend policy. Following the shareholder vote to approve a Managed Wind-Down of the Company, it is the Board's intention to continue paying dividends covered by earnings and taking into account the Company's liquidity position, in order to maintain the Company's investment trust status. As such, the Board will no longer be able to provide forward guidance as to the level of dividend for the year ahead. Shareholders should also note that the Board will no longer seek to smooth the level of dividend over a financial year to reduce the impact of the seasonality of earnings and that, in addition the level of dividend payments are expected to decline as assets are realised. In this context, the realisation of Holmen II, Svindbaek and Sagres had a significant impact on the cash generation from the Company's investment, as gearing is reduced and capital is returned to Shareholders.

The Company will declare dividends in Euros and Shareholders will, by default, receive dividend payments in Euros. Shareholders may, by completing a dividend election form, elect to receive dividend payments in sterling (at their own exchange-rate risk). The date the exchange rate between Euro and sterling is set will be announced when the dividend is declared. A further announcement will be made once the exchange rate has been set. Dividend election forms will be available from the Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or by telephone 0370 707 1346.

 

KEY PERFORMANCE INDICATORS ("KPIS")
The Board measures the Company's success in achieving its investment objective by reference to the following KPIs:

(i) Achievement of NAV and Share Price Growth since IPO¹ (June 2019)
(34.9%) 2025
2024: (8.4%)

The Board monitors both the NAV and share price performance and compares with other similar investment trusts. A review of performance is undertaken at each quarterly Board meeting and the reasons for relative under and over-performance against various comparators is discussed. The Company's NAV total return¹ and total share price return since IPO¹ (June 2019) to 31 December 2025 was -13.0% and -34.9% (2024: +12.6% and -8.4%) respectively. The Company's NAV total return¹ and share price total return¹ for the year to 31 December 2025 was -29.5% and -40.1% (2024: -8.2% and -8.6%) respectively. On an annualised basis, the NAV total return¹ per Ordinary Share is -2.1% (2024: +2.2%) since IPO.

The Chairman's Statement incorporates a review of the highlights during the year. The Investment Adviser's Report highlights investments made and the Company's performance during the year.

(ii) Maintenance of a Reasonable Level of Premium or Discount of Share Price to NAV¹
(35.6%) 2025
2024: (22.1%)

The Company's Broker monitors the premium or discount on an ongoing basis and keeps the Board updated as and when appropriate. At quarterly Board meetings, the Board reviews the premium or discount in the year since the previous meeting, in comparison with other investment trusts with a similar mandate. The share price closed at a 35.6% discount to the NAV as at 31 December 2025 (2024: 22.1% discount).

Now that the Company has entered Managed Wind-Down, the Board has paused the buyback program as it is no longer considered appropriate and is continuing to explore options to return capital to Shareholders.

1.    This disclosure is considered to represent the Company's alternative performance measures ("APMs"). Definitions of these APMs and other performance measures used, together with how these measures have been calculated, can be found in the Annual Report. All references to cents are in euros, unless stated otherwise.

(iii) Maintenance of a Reasonable Level of Ongoing Charges¹

The Board receives management accounts containing an analysis of expenditure which it reviews at its quarterly Board meetings. The Board reviews the ongoing charges¹ quarterly and considers these to be reasonable in comparison with its peers.

Based on the Company's average net assets during the year ended 2025, the Company's ongoing charges figure was 1.2% (2024: 1.1%) calculated in accordance with the Association of Investment Companies ("AIC") methodology.

 

(iv) To Meet its Target Total Dividend in each Financial Year (cents per share)

Following the shareholder vote to approve a Managed Wind-Down of the Company, it is the Board's intention to continue paying dividends covered by earnings and taking into account the Company's liquidity position, in order to maintain the Company's investment trust status.

1.    This disclosure is considered to represent the Company's alternative performance measures (APMs). Definitions of these APMs and other performance measures used, together with how these measures have been calculated, can be found in the Annual Report. All references to cents are in euros, unless stated otherwise.

 

section 172

Section 172(1) of the Companies Act 2006 requires the Board to act in a way it considers would most likely promote the success of the Company for the benefit of all stakeholders, taking into account the interests of stakeholders and the environment in its decision-making, and to share how this duty has been discharged.

The Board's values - integrity, accountability and transparency - mean that the Board has always worked hard to communicate effectively with the Company's stakeholders.

This is a two-way process and the feedback received from the Company's stakeholders is highly valued and factored into the Board's decision-making process. The Company has a range of stakeholders, and this section maps out who they are, what the Board believes their key interests to be, how the Company enables engagement with stakeholders and highlights the key results that have consequently arisen during the year.

Company Sustainability and Stakeholders

As an externally managed investment company, the Company does not have any employees. Its main stakeholders are as set out in the diagram below, which explains the relationship between the Company and each of its stakeholders.

Company's Operating Model

The Company was listed on the Main Market of the London Stock Exchange on 5 June 2019 and listed on the EuronextGrowth Dublin Exchange on 2 October 2023. On 16 January 2026, the Company cancelled the listing of its ordinary shares on Euronext Growth Dublin. The delisting does not affect the Company's listing on the Official List of the Financial Conduct Authority trading on the Main Market of the London Stock Exchange.

At the General Meeting held on 30 September 2024 Shareholders voted in favour of a change in Investment policy in order to facilitate a managed wind-down. The Company's investments are held via its sole subsidiary, Tesseract Holdings Limited, which, in turn, holds the investment portfolio via a number of Special Purpose Vehicles ("SPVs").

Engagement with Stakeholders

The Board is aware of the need to foster the Company's business relationships with suppliers, customers and other key stakeholders through its stakeholder engagement activities. These activities include meetings, annual reviews, presentations and publications and enable the Board to ensure it fulfils its strategies and discharges its duties under section 172(1) of the Act.

The Board carried out an annual review of its key service providers, including the Investment Adviser, to understand the culture of its service providers, and to ensure that they and the Company can maintain high standards of business conduct. The annual review process involves assessing the service providers' policies and control environments to ensure their continued competitiveness and effectiveness.

Shareholder - Monitoring

As a public company listed on the London Stock Exchange, the Company is subject to the UK Listing Rules and the Disclosure Guidance and Transparency Rules. It is a regulatory requirement for the Board to act fairly between Shareholders. The Board ensures the Company complies with the UK Listing Rules at all times and seeks the advice of the Company Secretary, lawyers and corporate broker in its dealings.

At its quarterly Board meetings, the Board reviews and discusses detailed reports from the Company's broker and media PR consultants in relation to the Company's share performance, trading and liquidity as well as the composition of, and changes to, the register of Shareholders. Shareholders' views are also considered by the Board at those meetings to assist the Board's decision-making process.

Details of the decisions taken by the Board during the year can be found below under 'Key Decisions made During the Year'.

Shareholder - Communication

To help the Board in its aim to act fairly between the Company's members, it seeks to ensure effective communication is provided to all Shareholders. The Board encourages Shareholders to attend the Annual General Meeting or General Meetings, where Directors and representatives of the Investment Adviser are available to meet Shareholders in person and answer questions. The Annual Report and half-yearly financial statements are distributed to the Company's Shareholders and made available on the Company's website. The quarterly factsheet is also available on the Company's website.

The Company's website - www.aquila-european-renewables.com is considered an essential communication channel and information hub for Shareholders. As such, it includes full details of the investment objective, supporting philosophy and investment process and performance along with news, opinions, disclosures, results and key information documents. It also presents information about the Board, its committees and other governance matters. Shareholders are encouraged to view the website in order to better understand the Company.

With the support of the Company's brokers, the Chairman and key Board members met many of the Company's key investors to gauge their views on the Company's progress since IPO and since the Board announced that it was considering the broader options for the future of the Company.

Separately, the Investment Adviser participated in a roadshow to meet with the Company's key investors. The Board discussed the outcome of these meetings and, as a consequence of these meetings, and to better align the Company with its Shareholders, a number of initiatives were undertaken as detailed in the Key Decisions in the Annual Report.

Following extensive discussions with the Company's Shareholders and advisers and having explored options open to the Company, the Board proposed that the Company enter Managed Wind-Down and that the Company adopt revised Investment Object and Policy to facilitate this which was approved by Shareholders at a General Meeting held on 30 September 2024, together with the discontinuation of the Company.

Service Providers

As an externally managed investment trust, the Company conducts all its business through its key service providers. The Board believes that maintaining positive relationships with each of the Company's service providers is important to support the Company's long-term success.

In order to ensure strong working relationships, the Company's key service providers (the Investment Adviser, AIFM, Company Secretary, Administrator) are invited to attend quarterly Board meetings to present their respective reports. This enables the Board to exercise effective oversight of the Company's activities. During the year, the Board spent a considerable amount of time between Board meetings engaging with the Company's key service providers to continue to develop strong working relationships and to determine good working practices to ensure the smooth operational function of the Company. The Board and its advisers seek to maintain constructive relationships with the Company's key service providers on behalf of the Company through the annual review process, regular communications, meetings and the provision of relevant information.

Alternative Investment Fund Manager ("AIFM")

The AIFM (FundRock Investment Management Company (Guernsey) Limited) is an important service provider. The AIFM has engaged Aquila Capital Investmentgesellschaft mbH ("Aquila Capital") to act as the Company's Investment Adviser for the purpose of providing investment advisory services to the Company. The AIFM is responsible for reviewing each investment opportunity prior to it being presented to the Board. In addition to the reports the Board receives from the Investment Adviser, it also receives quarterly reports from the AIFM. The Board maintains regular contact with the AIFM in order to foster a constructive working relationship. Additionally, the AIFM is responsible for monitoring the risks faced by the Company and these are regularly discussed at meetings of the Audit and Risk Committee.

Investment Adviser

The Investment Adviser is the most significant service provider to the Company and a description of its role can be found in the Annual Report. The performance of the Investment Adviser is determined by the quality of the Investment Adviser's management team and their ability to source high quality assets at attractive prices.

The Board closely monitors the Company's investment performance in relation to its objectives, investment policy and strategy. To assist the Board, the Investment Adviser provides monthly reports. Additionally, the Investment Adviser presents its quarterly production and operational update reports at each quarterly Board meeting. The Board maintains constructive dialogue with the Investment Adviser between meetings.

On a periodic basis, the Board visits the Investment Adviser at its Hamburg office, the site of one of the portfolio assets or one of its other offices, so it can gain a better understanding of the Investment Adviser, to meet key members of the team and gain further insight into the operation of each asset.

The Investment Adviser's remuneration is based on the NAV of the Company. From IPO until 30 June 2023 the Investment Adviser's fees were paid in shares, which aligned the Investment Adviser's interests with those of the Company's Shareholders. Since that date, the Investment Adviser's fees have been paid in cash.

Portfolio Investments

At its quarterly board meetings, the Board considers the performance of the Company's portfolio of assets. In its deliberations it considers:

-      potential revenue generated by each asset for each quarter against the forecasted amount;

-      any community and environmental issues associated with each asset;

-      geopolitical risk;

-      the length of tenure of each asset;

-      hedging aspects to limit risk; and

-      funding requirements, including the use of gearing, which has been limited now that the Company has entered Managed Wind-Down and the Company is reducing its debt.

Liquidity Considerations

Additionally at its quarterly meetings, the Board considers the liquidity of the Company and the HoldCo. As at 31 December 2025, the Company and the HoldCo had EUR 50.0 million of liquidity consisting of EUR 47.2 million in cash on hand. EUR 2.8 million of cash is held as collateral for guarantees issued to support dismantling obligations of the Spanish SPVs.

Portfolio Sale

Prior to being presented to the Board of HoldCo, the Company's wholly owned subsidiary, the Company's Board is presented with potential transactions that have been identified by Rothschild or the Investment Adviser and which have undergone a process of analysis and challenge by the AIFM.

The Board considers each proposal against the Company's investment objective, investment policy and strategy as disclosed in the Annual Report. In considering each potential transaction, the Board considers each offer to ensure it represents the best sales price achievable in the market.

Society and the Environment

The Company is an investor in renewable energy assets and is acutely aware of its impact on the environment. The Company has an ESG policy and climate risk strategy which ensure that society and the environment are considered when implementing its investment strategy. The ESG policy is available on request from the Company Secretary. Further details of matters relating to ESG can be found in the Annual Report or on the Company's website at https://www.aquila-european-renewables.com.

Key Decisions made During the Year

Decisions Relating to the Company's Portfolio of Assets

On 28 July 2025, the Company announced the completion of the sale of its 18% interest in the Portuguese hydropower asset referred to as Sagres for a cash consideration of EUR 14.7 million.

On 15 December 2025, the Company announced the completion of the sale of its Danish assets (Holmen II and Svindbaek) and the Company is in receipt of sales proceeds of EUR 36.6 million.

On 13 March 2026, the Company completed the sale of Desfina, its Greek wind power investment, following receipt of regulatory and other customary approvals for a total consideration of approximately EUR 26 million.

The Board continues to progress the divestment of the remainder of the Company's portfolio in accordance with the Company's managed wind-down investment policy.

Decisions Relating to the Managed Wind-Down Process

On 11 September 2025 the Company announced the cancellation of the amount standing to the credit of its share premium account (the "Share Premium Cancellation"), approved by Shareholders at the AGM of the Company held on 19 June 2025. Accordingly, the amount of EUR 255,642,627.68 previously held in the share premium account of the Company has been cancelled and the distributable reserves resulting from the Share Premium Cancellation can be treated as profits available for distribution by the Company.

Following completion of the Sagres disposal in July 2025 for EUR 14.7 million and the Holmen II and Svindbaek disposals for EUR 36.6 million in December 2025, the Board announced a first capital distribution to Shareholders under the approved B Share Scheme totaling approximately EUR 34 million (the "Initial Return of Capital"). The Initial Return of Capital represented approximately 15% of the Company's Net Asset Value as at 30 September 2025.

Dividend

The cash generated by the Company's investments, available for upstreaming was under significant pressure in the second half of 2025. This was due to Olhava's lender prohibiting payments to Shareholders and challenging market conditions in Spain and Portugal.

Now that the Company has entered Managed Wind-Down, the Board has proposed that the dividends are paid in order to maintain investment trust status which require the Company to pay out 85% of qualifying revenue every year.

risk and risk management

Principal Risks and Uncertainties

During the year the Company has carried out a rigorous assessment of its principal and emerging risks, and the procedures in place to identify any emerging risks are described below.

Procedures to Identify Principal or Emerging Risks

The Board regularly reviews the Company's risk matrix, with a focus on ensuring that the appropriate controls are in place to mitigate each risk. The experience and knowledge of the Board is important, as is advice received from the Board's service providers, specifically the AIFM, who is responsible for the risk and portfolio management services and outsources the portfolio management to the Investment Adviser.

1.  Investment Adviser: the Investment Adviser provides a report to the Board quarterly, or periodically as required, on industry trends, insight to future challenges in the renewable sector including the regulatory, political and economic changes likely to affect the renewables sector;

2.  Alternative Investment Fund Manager: following advice from the Investment Adviser and other service providers, the AIFM maintains a register of identified risks including emerging risks likely to affect the Company;

3.  Broker: provides advice periodically, specific to the Company, on the Company's sector, competitors and the investment company market, while working with the Board and Investment Adviser to communicate with Shareholders;

4.  Company Secretary: briefs the Board on forthcoming governance changes that might affect the Company; and

5.  Financial Adviser: Rothschild & Co provide advice on the Managed Wind-Down process and highlight any risks associated with the process in advance to provide the Board with an opportunity to take appropriate action.

Procedure for oversight

The Audit and Risk Committee undertakes a regular review of the Company's risk matrix, and a formal review of the risk procedures and controls in place at the AIFM and other key service providers, to ensure emerging (as well as known) risks are adequately identified and, so far as is practicable, mitigated.

Principal Risks

The Board considers the following to be the principal risks faced by the Company along with the potential impact of these risks and the steps taken to mitigate them.

Economic, Political and Market

Risks	Potential Impact/Description	Mitigation
1. Electricity Prices	The income and value of the Company's investments may be affected by future changes in the market price of electricity. While some of the revenues of the Company's investments benefit from fixed prices, they are also partly dependent on the wholesale market price of electricity, which is volatile and is affected by a variety of factors, including: -     market demand; -     generation mix of power plants; -     government support for various forms of power generation; -     fluctuations in the market price of commodities; and -     foreign exchange. There is a risk that the actual prices received vary significantly from the model assumptions, leading to a shortfall in anticipated revenues by the Company. Increased EU goals to push green economies will lead to a ramp up of renewables and capacities, with potential to lead to grid oversupply issues resulting in pricing pressures. The current energy geopolitical situation globally is continuing to lead to uncertainty and potential volatility in energy prices, which in turn may have an impact on performance.	The Company holds a mix of investments that benefit from government subsidies as well as long-term fixed price PPAs.  Following the sale of the Desfinas investment on 13 March 2026 the Company no longer benefits from revenues based on government subsidies. The Investment Adviser retains the services of market leading energy consultants to assist with determining future power pricing for the respective regions. The underlying SPV companies may use derivative instruments such as futures, options, futures contracts and swaps to protect from fluctuations in future electricity prices. The Investment Adviser models and monitors power price curves on an ongoing basis and will recommend appropriate action. In addition, the Investment Adviser has a dedicated team which is responsible for the originating, negotiating and executing of all PPAs. The Investment Adviser reviews the hedging strategy on an ongoing basis. Should changes be required to the hedging strategy, these will be recommended to the AIFM and Board.
2. Equity Market Volatility and Shareholder Pressure	Volatility can allow significant equity positions to be built and the risk that a sole shareholder increases its ownership to such an extent that they are able to exert significant influence over the Company and decisions made by the Board.	Shareholder analysis is obtained regularly enabling monitoring of the Company's largest Shareholders. The views of the larger Shareholders can be monitored by the Company and any concerns managed appropriately.
3. Change in Political Sentiment	A change in political direction or regulation in one of the countries in which the Company targets investment could lead to changes, reductions, caps or withdrawals of government support arrangements, a windfall tax or potentially the nationalisation of investments. This could have a material impact on the valuation of the investments and the Company's net asset value. Environmental groups may put pressure on the government in relation to its renewables ambitions and permits due to environmental concerns and impact on the projects.	The AIFM, advised by the Investment Adviser with its 9 offices in 8 countries, continuously monitors all jurisdictions the Company invests. The Investment Adviser has significant experience in these assets and performs ongoing monitoring of these risks. Regulatory changes at the SPV level are monitored by the Investment Adviser and reported to the Board/AIFM on an ongoing basis.
Operational
Risks	Potential Impact/Description	Mitigation
4. Counterparty Risk	The majority of the operational risk in the Company's investments is retained by the counterparty or its subcontractors. Failure to properly operate and maintain assets may result in reduction of revenues and value of assets. However, some risks will remain within the investment. Poor performance by a subcontractor may lead to the need for a replacement, which could have cost implications, impacting the performance of the investment and potentially distributions to the Company until the issue is resolved. The value of the Company's investments and the income they generate may be affected by the failure of counterparties to comply with their obligations under a PPA.	Operation and maintenance ("O&M") of assets are subcontracted to a counterparty who is responsible for ensuring effective continuing operation and maintenance of that asset. The Investment Adviser ensures each such counterparty has the experience and resources to comply with its obligations and monitors compliance on an ongoing basis. Constant monitoring of the investments and the counterparties or service providers allows the Investment Adviser to identify and address risks early. Diversification of counterparties and service providers ensures any impact is limited. The Investment Adviser assesses the credit risk of companies by defined criteria before they become counterparties to PPAs, EPCs and TSA providers.
5. Performance of the Investment Adviser	Aquila Group manages over EUR 15.4 billion for clients worldwide. There is a risk that sufficient resources and personnel are not allocated to the Company. The Investment Adviser employs experienced executives to manage the Company's investments. There is a risk that a key person leaves the Investment Adviser.	The strength and depth of the Investment Adviser's resources mitigate the risk of a key person's departure. Service level reviews are carried out by the Board to ensure they are satisfied with the performance of Investment Adviser resources.
6. IT Security	A hacker or third party could obtain access to the Investment Adviser or any other service provider and destroy data or use it for malicious purposes. Data records could be destroyed, resulting in an inability to make investment decisions and monitor investments. Risk that the emergence of increasingly advanced AI will lead to new risks to the Company, including, but not limited to, decline in human autonomy, increased cybersecurity vulnerabilities, data loss, impersonation for the purposes of extracting information or money. The pandemic and, more recently the Russian/Ukraine conflict and wars in the Middle East, have increased IT security concerns and threats being posed to the Company and operating structure by hackers that may lead to loss of information or even a cash loss.	Service providers have been carefully selected for their expertise and reputation in the sector. Each service provider has provided assurances to the AIFM and the Company on their cyber policies and business-continuity plans, along with external audit reviews of their procedures where applicable. The Investment Adviser and key service providers have information-security policies in place, and have appointed IT security officers whose tasks are to provide support for emergency events and crises, the monitoring of the resumption, and repair of the IT security measures after completion of a disturbance or incident, and the ongoing development of improvements to the IT security concept. The Investment Adviser's in-house Asset Management team has reviewed the protective measures taken by the counterparties and has further increased the vigilance against cyber-attacks that could affect the performance and infrastructure of the investments. Insurance is in place to cover potential losses from direct attacks. For indirect attacks (e.g. against grid operation or transmission system) the various administrators, operation and maintenance providers are required to maintain sufficient insurance coverage to mitigate possible damages.

 

Risks	Potential Impact/Description	Mitigation
7. Climate-related risks	Climate-related risks can be categorised as physical or transitional risks. Physical risks are those associated with the physical effects of climate change. They can be event-based (acute), such as cyclones, hurricanes, wildfires, heatwaves, pandemics, droughts and floods; or longer-term (chronic) shifts in climate patterns, such as sustained higher temperatures with melting of glaciers and ice sheets causing sea-level rise, permafrost melting, chronic heatwaves and desertification, extreme variability in precipitation, land degradation and changes in air quality. Transitional risks are those that arise as economies move towards less-polluting, greener solutions. These include externally imposed risks such as the effect of legal and regulatory requirements or policy changes, changes in societal demands, advances in technologies, market changes and the consequent business decisions taken to respond to such changes. Transitional risks have the potential to crystallise suddenly, for example as a result of policy changes. Physical or transitional climate-related risks could affect the operation of the Company's assets and hence the production or revenue generated by the portfolio assets.	The Company should be sufficiently protected through hedging of price risks in the event of unforeseen changes in regulatory requirements related to climate change. Insurance is usually in place in the event of acute climate risks such as physical damage due to floods, or wildfires resulting in production losses. Financial model forecasts are based on P50 production (the estimated annual amount of electricity generation that has a 50% probability of being exceeded - both in any single year and over the long term - and a 50% probability of being underachieved) data sourced from energy yield assessments provided by external service providers. The Company also mitigates the frequency of both physical and transitional risks through extensive geographical diversification of its portfolio.
8. Global Conflict	As evidenced with the ongoing war in Ukraine, the various restrictions imposed, as well as the conflict in Gaza and the conflicts in the Middle East, acts of war and resulting sanctions can lead to O&M supply delays, volatile energy markets and general uncertainty. This can also lead to short-term price increases and more focus on renewable energy infrastructure and increased competition for assets. In addition, there is the increased possibility of a trade war following the implementation of tariffs imposed by the US administration, and other implications of changes and, particularly the foreign policy of the US administration.	The Investment Adviser, using its extensive experience, constantly monitors geopolitical and macro-economic developments. Where required, it undertakes external geopolitical and risk analysis. The Company does not have any direct exposure to Ukraine, Russia, Israel, Gaza or the Middle East. There are also no direct business relations with counterparties from these countries. The Company has limited exposure to supply chain risk. The Broker, Administrator, AIFM and Company advisers monitor and inform the Board as soon as they are aware of any developments that may impact the Company or its business.

 

Financial
Risks	Potential Impact/Description	Mitigation
9. Risks associated with the Managed Wind-down process	There are several risks associated with the Company's Managed Wind-down process as follows: 1.  The Board may not be able to achieve the best price for the Company's assets. 2.  The Managed Wind-Down process may take longer than expected which could prove detrimental to the sales price achievable if the market were to take a downturn. 3.  An orderly Wind-Down is reliant on a willingness to transact from potential buyers, confirmation that they have funding sources available and the completion of due diligence/relevant legal documentation.	The Board engaged Rothschild & Co as the Company's financial adviser to help with the sales process. Rothschild is one of the most experienced advisors in the sector, with deep credentials in selling renewables in the private markets.
10. Portfolio Valuation	There is a risk the Company's asset valuations and underlying assumptions, such as future electricity prices and discount rates, are not a fair reflection of the market, meaning the investment portfolio could be over or under-valued which could impact the Managed Wind-down process and the Company's need to achieve the best price possible for the Company's assets.	The principal component of the Company's balance sheet is its portfolio of renewable investments. Each quarter, the AIFM is responsible for preparing a fair market value of the investments, with input and guidance from the Investment Adviser. These valuations and the key underlying assumptions are reviewed and interrogated by the Board before being approved. The Investment Adviser has a strong track record of undertaking valuations of renewable assets built up over the years since it was founded in 2001. The Investment Adviser and broker monitor market competitors and provide feedback on valuation methodologies and assumptions to the valuation team.
11. Leverage Risk/ Interest Risk	The use of leverage creates risks including: -      exposure to interest rates, which can fluctuate; -      covenant breaches; -      liquidity risks; -      enhanced loss on underperforming investments; and -      the ability to refinance assets impacts asset returns and cash flows. Fluctuations in interest rates may affect discount rates applied to the portfolio valuations, as well as affecting cost of debt in both the underlying SPVs and the Company.	Now that the Company is in Managed Wind-Down, it is not anticipated that the Company will take on any new borrowings, but may do so for the efficient management of the Company. The Company's investment policy restricts the use of leverage to: -  short-term debt: 25% of the prevailing GAV; and -  long-term structural debt: 50% of the prevailing GAV. As at 31 December 2025, the Company's subsidiary, Tesseract Holdings Limited, had 0% of short-term debt and at SPV level there was 32.1% of long-term structured debt as a percentage of GAV. The AIFM monitors all debt levels to these policy restrictions and reports them to the Board quarterly. The Investment Adviser provides updates on the covenant compliance to the AIFM and to the Board periodically and looks at refinancing as early as possible. Interest rate risk on bank debt at the asset level is mitigated by the use of hedging instruments. Liquidity and forward looking cash flow management is monitored by the Investment Adviser and AIFM. The majority of the Company's long-term structural debt is non-recourse, largely fixed interest rates and fully amortising.
Compliance, Tax and Legal
Risks	Potential Impact/Description	Mitigation
12.  Changes to Tax Legislation or Rates	Changes in tax legislation, base erosion and profit shifting rules, substance, withholding tax rules and rates, could result in tax increases, resulting in a decrease in income received from the Company's investments. A windfall tax on profits from an investment could be levied by government.	The corporate structure of the Company is reviewed periodically by the Company and its advisers. The Board has been kept informed on a timely basis of the recent introduction of the windfall (and other tax arrangements) taxes introduced across Europe to curb profits of energy providers, and has carefully considered the impact on the Company's portfolio, which is further discussed in the Investment Adviser's Report. The Investment Adviser works closely with tax and industry experts before providing structuring recommendations to the Company prior to investment and on an ongoing basis.
13. Regulatory and Compliance Changes	The Company fails to comply with section 1158 of the Corporation Tax Act to ensure maintenance of investment trust status, UK Listing Authority regulations including Listing Rules, Foreign Account Tax Compliance Act and Alternative Investment Fund Managers Directive ("AIFMD"). The Company fails to comply with relevant ESG rules and regulations and fails to monitor those such as the SFDR, changing disclosure requirements and greenwashing risks. Failure to comply with the relevant rules and obligations may result in reputational damage to the Company or have a negative financial impact. Possible uncertainty remains with post-Brexit negotiations and eventual trade deals agreed. Additionally, the Company operates in multiple markets throughout Europe, and some have shown signs of changes or potential changes in regulation as a response to high power prices.	The Board has sought guidance from its advisors on the Board's obligation to ensure the Company complies with Section 1158 of the Corporate Tax Act, particularly during the Managed Wind-down process. All service providers, including the broker, Company Secretary, Administrator, Investment Adviser and AIFM, are experienced in these areas and provide comprehensive reporting to the Board and on compliance with these regulations. The AIFM is experienced in compliance with the AIFMD reporting obligations and reports at least quarterly to the Board. The Investment Adviser monitors changes in regulation across the markets the Company operates. The Company complies with article 8 of the SFDR and, as noted under "ESG", looks to comply with local requirements, to mitigate potential risks.

 

Viability Statement

In accordance with the UK Corporate Governance Code and the Listing Rules, the Directors are required to assess the prospects of the Company over a longer period than the 12 months required by the 'Going Concern' provision.

Following the change in investment policy approved by Shareholders at the General Meeting held on 30 September 2024, the Company entered a managed wind-down, meaning that it is not making any new investments and its investing activity is solely in respect of funding legal commitments to existing investments (the "Managed Wind-Down"). The Board will continue to review strategic options in respect of the Company's assets to realise the maximum value for Shareholders in the shortest possible time, recognising the inherent difficulties in the construction of the portfolio, including the number of investments, multiple geographies and long tenors. While the Company is continuing to explore strategic options there remains no certainty that any of these options will materialise and be put to Shareholders for consideration. Accordingly, the Directors recognise that these conditions indicate the existence of material uncertainty which may cast significant doubt about the Company's viability over the viability period (the 'Period').

Although the Company is in a Managed Wind-Down, the Board believes that the Period, being two years, is an appropriate time horizon over which to assess the viability of the Company. In considering the prospects of the Company, the Directors looked at the key risks facing the Company,HoldCo and the SPVs, focusing on the likelihood and impact of each risk as well as any key contracts, future events or timescales that may be assigned to each key risk outlined in the Annual Report.

The Directors have a reasonable expectation that the Company has adequate resources to: continue in operation; realise the Company's assets in an orderly manner; and meet its liabilities as they fall due, over the Period.

The Company's subsidiary, Tesseract Holdings Limited, and its SPVs have a modest gearing level representing 32.1% as at 31 December 2025 of the Company's Gross Asset Value,comprised of non-recourse debt net of cash, at the asset level of EUR 101.5 million. The Board recently decided to allow Tesseract Holdings Limited's RCF to expire on 18 April 2025, given the Company's focus on the Managed Wind-Down process and subsequent change in investment policy, whilst also minimising fees and expenses. The revolving credit facility had a drawn balance of zero, whilst approximately EUR 2.8 million had been utilised to issue bank guarantees in relation to the Company's Spanish solar PV portfolio. To accommodate the expiry of the RCF and maintain compliance with the facility agreement, Tesseract Holdings Limited committed approximately EUR 2.8 million to cash cover the bank guarantees.

The Company (via its subsidiaries, where applicable) complies with its covenants related to the non-recourse debt. As part of their analysis, the Board was mindful that the Company's portfolio of assets, held via its subsidiary, Tesseract Holdings Limited, are predominantly fully constructed and operating renewable electricity generating facilities with asset lives significantly in excess of the period under consideration.

This assessment also included a detailed review of the issues arising following the war in Ukraine, the ongoing conflict involving Iran and broader geopolitical tensions across the Middle East, conflict between Israel and Hamas in Palestine, tariffs in USA, potential trade war, high volatility in commodity prices, the windfall revenue clawback on inframarginal technologies (e.g. solar PV, wind, nuclear, hydro) and other taxes that currently face the Company's assets as disclosed in the Principal Risk section and Investment Adviser's Report in the Annual Report.

The Board has also considered the impact of climate related events on the Company's assets and on its ability to continue to produce electricity.

In considering the prospects of the Company, the Directors looked at the key risks facing the Company, HoldCo and the SPVs, focusing on the likelihood and impact of each risk as well as any key contracts, future events or timescales that may be assigned to each key risk. The Directors are satisfied that the Company will continue to remain viable under downside scenarios, including a decline in long-term production and power price forecasts, taking into account tax implications and regulatory changes imposed on renewables and on those in the electricity generation market in certain jurisdictions across Europe. These risks, together with the mitigating factors of each, are shown in the Principal Risk section in the Annual Report.

The internal control framework of the Company is subject to a formal review on at least an annual basis. On a regular basis, the Board reviews the risk report prepared by the AIFM.

The Directors do expect there will be a material increase in the expenses of the Company over the Period in relation to Company's corporate finance and legal advisers in order to execute the managed wind-down, both for the disposal of the Company's investments and for B share scheme redemption.

Outlook

The outlook for the Company, including the future development and performance of the Company, is discussed in the Chairman's Statement and the Investment Adviser's Report.

Strategic Report

The Strategic Report was approved by the Board of Directors on 27 April 2026.

For and on behalf of the Board,

Robert Naylor

Chairman of the Board

27 April 2026

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the financial statements in accordance with UK‑adopted international accounting standards and the requirements of the Company's Act 2006, as applicable to companies reporting under these standards. Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.

In preparing the financial statements, the Directors are required to:

-     select suitable accounting policies and then apply them consistently;

-     state whether they have been prepared in accordance with UK‑adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements;

-     make judgements and accounting estimates that are reasonable and prudent; and

-     prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business.

The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps to prevent and detect fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose, with reasonable accuracy at any time, the financial position of the Company. The accounting records should also enable them to ensure the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and Article 4 of the IAS Regulation.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' Confirmations

Each of the Directors, whose names and functions are listed in the Corporate Governance section, confirm that, to the best of their knowledge:

-     the Company financial statements, which have been properly prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position, and profit or loss of the Company; and

-     the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties it faces.

For and on behalf of the Board

David MacLellan

Director

27 April 2026

 

 

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

 

		For the year ended 31 December 2025			For the year ended 31 December 2024
	Notes	Revenue (EUR '000)	Capital (EUR '000)	Total  (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Losses on investments	4	-	(101,224)	(101,224)	-	(39,443)	(39,443)
Net foreign exchange gains/(losses)		-	13	13	-	(29)	(29)
Income	5	15,250	-	15,250	13,679	-	13,679
Investment Advisory fees	6	(1,929)	-	(1,929)	(2,331)	-	(2,331)
Other expenses	7	(1,268)	(5,300)	(6,568)	(1,615)	-	(1,615)
		-----------	-----------	-----------	-----------	-----------	-----------
Profit/(loss) on ordinary activities before finance costs and taxation		12,053	(106,511)	(94,458)	9,733	(39,472)	(29,739)
		-----------	-----------	-----------	-----------	-----------	-----------
Finance costs	8	(2)	-	(2)	(2)	-	(2)
Profit/(loss) on ordinary activities before taxation		12,051	(106,511)	(94,460)	9,731	(39,472)	(29,741)
Taxation	9	-	-	-	-	-	-
		-----------	-----------	-----------	-----------	-----------	-----------
Profit/(loss) on ordinary activities after taxation		12,051	(106,511)	(94,460)	9,731	(39,472)	(29,741)
		=======	=======	=======	=======	=======	=======
Return per Ordinary Share - Diluted and Undiluted (cents)	10	3.19	(28.17)	(24.98)	2.57	(10.44)	(7.87)
		=======	=======	=======	=======	=======	=======

 

The total column of the Statement of Comprehensive Income is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

Profit/(loss) on ordinary activities after taxation is also the "Total comprehensive income for the year".

The notes are an integral part of these financial statements.

 

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2025

	Notes	As at 31 December 2025 (EUR '000)	As at 31 December 2024 (EUR '000)
Non-current assets
Investments at fair value through profit or loss	4	208,676	320,432
Current assets
Trade and other receivables	11	54	29
Cash and cash equivalents		9,721	1,168
		-----------	-----------
Total current assets		9,775	1,197
		-----------	-----------
Total Assets		218,451	321,629
		======	======
Current liabilities
Trade and other payables	12	(4,118)	(1,397)
		-----------	-----------
Total Liabilities		(4,118)	(1,397)
		======	======
Net assets		214,333	320,232
Capital and reserves: equity
Share capital	13	4,082	4,082
Share premium account		-	255,643
Special reserve	14	327,749	75,087
Capital reserve		(122,064)	(15,553)
Revenue reserve		4,566	973
		-----------	-----------
Total Shareholders' funds		214,333	320,232
		======	======
Net assets per Ordinary Share (cents)	15	56.68	84.69
		======	======

 

The financial statements were approved by the Board of Directors on 27 April 2026 and signed on its behalf by:

David MacLellan

Director

Company number 11932433 

 

The notes are an integral part of these financial statements.

 

 

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Notes	Share capital (EUR '000)	Share premium account (EUR '000)	Special reserve (EUR '000)	Capital reserve (EUR '000)	Revenue reserve (EUR '000)	Total (EUR '000)
Opening equity as at 1 January 2025		4,082	255,643	75,087	(15,553)	973	320,232
Strategic review costs			-	-	-	-	-
Profit/(loss) for the year		-	-	-	(106,511)	12,051	(94,460)
Share premium cancellation		-	(255,643)	255,643	-	-	-
Dividends paid	16	-	-	(2,981)	-	(8,458)	(11,439)
		-----------	-----------	-----------	-----------	-----------	-----------
Closing equity as at 31 December 2025		4,082	-	327,749	(122,064)	4,566	214,333
		======	======	======	======	======	======

 

	Notes	Share capital (EUR '000)	Share premium account (EUR '000)	Special reserve (EUR '000)	Capital reserve (EUR '000)	Revenue reserve (EUR '000)	Total (EUR '000)
Opening equity as at 1 January 2024		4,082	255,643	87,717	23,919	1,180	372,334
Strategic review costs		-	-	(928)	-	-	(928)
Profit/(loss) for the year		-	-	-	(39,472)	9,731	(29,741)
Share premium cancellation		-	-	-	-	-	-
Dividends paid	16	-	-	(11,702)	-	(9,938)	(21,640)
		-----------	-----------	-----------	-----------	-----------	-----------
Closing equity as at 31 December 2024		4,082	255,643	75,087	(15,553)	973	320,232
		======	======	======	======	======	======

 

The notes are an integral part of these financial statements.

 

 

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2025

	Notes	Year ended 31 December 2025 (EUR '000)	Year ended 31 December 2024 (EUR '000)
Operating activities
Loss on ordinary activities before finance costs and taxation		(94,458)	(29,739)
Adjustment for:
Unrealised losses on investments		98,160	39,443
Finance costs paid	8	(2)	(2)
Strategic review costs		-	(928)
(Increase)/decrease in trade and other receivables		(25)	67
Increase/(decrease) in trade and other payables		2,721	(93)
		-----------	-----------
Net cash flow from operating activities		6,396	8,748
		======	======
Investing activities
Loan principal repayment received	4	13,596	12,528
		-----------	-----------
Net cash flow from investing activities		13,596	12,528
		======	======
Financing activities
Dividends paid	16	(11,439)	(21,640)
		-----------	-----------
Net cash flow used in financing activities		(11,439)	(21,640)
		-----------	-----------
Increase/(decrease) in cash		8,553	(364)
		-----------	-----------
Cash and cash equivalents at start of year		1,168	1,532
		-----------	-----------
Cash and cash equivalents at end of year		9,721	1,168
		======	======

 

The notes are an integral part of these financial statements.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1. General Information

Aquila European Renewables Plc ("AER", 'the Company') is a public company limited by shares, incorporated in England and Wales on 8 April 2019 with registered number 11932433. The Company is domiciled in England and Wales. The Company is a closed‑ended investment company with an indefinite life. The Company commenced its operations on 5 June 2019 when the Company's Ordinary Shares were admitted to trading on the London Stock Exchange. The Directors intend, at all times, to conduct the affairs of the Company so as to enable it to qualify as an investment trust for the purposes of section 1158 of the Corporation Tax Act 2010, as amended.

The registered office and principal place of business of the Company is 4th Floor, 140 Aldersgate St, London, EC1A 4HY.

At a General Meeting held on 30 September 2024, shareholders approved a change in the Company's Investment Objective and Investment Policy. The new Investment Objective is to realise all existing assets in the Company's Portfolio in an orderly manner. The previous Investment Objective was to generate stable returns, principally in the form of income distributions, by investing in a diversified portfolio of renewable energy infrastructure investments.

The Company's Investment Adviser is Aquila Capital Investmentgesellschaft mbH, authorised and regulated by the German Federal Financial Supervisory Authority.

FundRock Management Company (Guernsey) Limited acts as the Company's Alternative Investment Fund Manager for the purposes of Directive 2011/61/EU of the Alternative Investment Fund Managers Directive.

Apex Listed Companies Services (UK) Limited provides administrative and company secretarial services to the Company under the terms of an administration agreement between the Company and the Administrator.

2. Basis of Preparation

The financial statements have been prepared in accordance with UK‑adopted international accounting standards and the requirements of the Companies Act 2006, as applicable to companies reporting under those standards. The financial statements have also been prepared as far as is relevant and applicable to the Company in accordance with the Statement of Recommended Practice with the latest applicable version for the financial year in question issued by the AIC in July 2022. The financial statements are prepared on the historical cost basis, except for the revaluation of certain financial instruments at fair value through profit or loss. The principal accounting policies adopted are set out below. These policies are consistently applied.

The functional currency of the Company is euros as this is the currency of the primary economic environment in which the Company operates. Accordingly, the financial statements are presented in euros, rounded to the nearest thousand euros, unless otherwise stated. The EUR/ GBP exchange rate as of 31 December 2025 was 0.8724 (2024: 0.8267).

Accounting for Subsidiary

The Company owns 100.0% of its subsidiary Tesseract Holdings Limited ("THL" or "HoldCo"), whose registered office and principal place of business is Leaf B, 20th Floor, Tower 42, Old Broad Street, London, England, EC2N 1HQ. The Company has acquired Renewable Energy Infrastructure Investments (the SPVs) through its investment in the HoldCo. The Company finances the HoldCo through a mix of loan investments and equity. The loan investment finance represents Shareholder loans (the "Shareholder loans" or "SHL") provided by the Company to HoldCo. The Company meets the definition of an investment entity as described by IFRS 10. Under IFRS 10, an investment entity is required to hold subsidiaries at fair value through profit or loss and therefore does not consolidate the subsidiary. The HoldCo is an investment entity, and as described under IFRS 10, values its SPV investments at fair value through profit or loss. SPV investments are investments held at Holdco. Further details of the HoldCo and SPV structure and investment can be found in note 20.

Characteristics of an Investment Entity

Under the definition of an investment entity, the Company should satisfy all three of the following tests:

I.   Company obtains funds from one or more investors for the purpose of providing those investors with investment management services;

II.  Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

III. Company measures and evaluates the performance of substantially all its investments on a fair value basis.

In assessing whether the Company meets the definition of an investment entity set out in IFRS 10 the Directors note that:

I.   the Company has multiple investors and obtains funds from a diverse group of Shareholders who would otherwise not have access individually to investing in renewable energy infrastructure investments due to high barriers to entry and capital requirements;

II.  The Company amended its investment policy to realise all existing assets in the Company's portfolio in an orderly manner, thus continues to be committed to generating returns from capital appreciation and in the meantime, investment income with the renewable energy infrastructure investments expected to generate renewable energy output over their life. The Directors believe the Company is able to generate returns to the investors during the Company's managed run off period; and III.                the Company measures and evaluates the performance of all its investments, held via HoldCo, on a fair value basis which is the most relevant for investors in the Company. Management use fair value information as a primary measurement to evaluate the performance of all the investments and in decision-making.

The Directors are of the opinion that the Company meets all the typical characteristics of an investment entity and therefore meets the definition set out in IFRS 10. The Directors are satisfied that investment entity accounting treatment appropriately reflects the Company's activities as an investment trust.

The Directors have also satisfied themselves that Tesseract Holdings Limited meets the characteristic of an investment entity. Tesseract Holdings Limited has one investor, Aquila European Renewables Plc; however, in substance Tesseract Holdings Limited is investing the funds of the investors of Aquila European Renewables Plc on its behalf and is effectively performing investment management services on behalf of many unrelated beneficiary investors.

The Directors believe the treatment outlined above provides the most relevant information to investors.

Going Concern

As at the date of this report the Directors are required to consider whether they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of twelve months from the date of the signing of these financial statements (the "going concern period"). Following the General Meeting held on 30 September 2024 at which shareholders unanimously voted in favour of the discontinuation of the Company and a change in the Company's Objective and Investment Policy in order to facilitate the Managed Wind-Down of the Company, the process for an orderly realisation of the Company's assets and a return of capital to shareholders has begun and is expected to conclude over a number of years. The Company is preparing its financial statements on a going concern basis, although it is recognised that there is material uncertainty over whether the Company will be in existence in its current form twelve months from the date of signing of these financial statements, based on whether the Managed Wind-Down process were to conclude during the going concern period. These events therefore indicate "the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company were unable to continue as a going concern.

The Board will seek to realise all of the Company's assets in a manner that achieves a balance between maximising the proceeds received by the Company from the sale of those and making timely returns to Shareholders.

The Directors are satisfied that the Company has adequate resources to continue in operation throughout the Managed Wind-Down period and to meet all liabilities as they fall due. No material adjustments to accounting policies or the valuation methodology have arisen as a result of entering Managed Wind-Down.

Critical Accounting Judgements, Estimates and Assumptions

The preparation of financial statements in accordance with UK adopted international accounting standards requires management to make judgements, estimates and assumptions in certain circumstances that affect reported amounts. These are judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities.

Key Judgements

As disclosed above, the Directors have concluded that the Company and HoldCo meet the definition of an investment entity as defined in IFRS 10. This conclusion involved a degree of judgement and assessment as to whether the Company and Holdco met the criteria outlined in IFRS 10.

The Company classifies its investments (held via the Holdco) based on its business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of assets is managed, and performance is evaluated on a fair value basis.

The Holdco is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions.

The contractual cash flows of the Holdco's Shareholder loans are solely principal and interest, however, these securities are not held for the purpose of collecting contractual cash flows. The collection of contractual cash flows is only incidental to achieving the Holdco's business models objective. Consequently, all investments are measured at fair value through profit or loss. The Holdco considers the equity and Shareholder loan investments to share the same investment characteristics and risks and they are therefore treated as a single unit of account for fair value purposes (IFRS 13) and a single class for financial instrument disclosure purposes (IFRS 9).

As a result, the evaluation of the performance of the Holdco's investments is done for the entire portfolio on a fair value basis, as is the reporting to the key management personnel and to the investors. In this case, all equity and Shareholder loan investments form part of the same portfolio for which the performance is evaluated on a fair value basis together "and reported to the key management personnel in its entirety.

Estimates: Investments at Fair Value Through Profit or Loss

The key assumptions that have a significant impact on the carrying value of the Company's underlying investments in SPVs through Holdco are the discount rates, useful lives of the assets, the rate of inflation, the price at which the power and associated benefits can be sold, the amount of electricity the assets are expected to produce and operating costs of the SPVs. The discount rates are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different value. The discount rates applied to the cash flows are reviewed annually by the Investment Adviser to ensure they are at the appropriate level. The Investment Adviser will take into consideration market transactions, which are of similar nature, when considering changes to the discount rates used. The weighted average discount rate applied in the December 2025 valuation was 10.0% (2024: 7.3%). The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the fair value of the investments as disclosed in note 4 to the financial statements under sensitivities.

Useful lives are based on the Investment Adviser's estimates of the period over which the assets will generate revenue, which are periodically reviewed for continued appropriateness. The assumption used for the useful life of the wind assets is 25 to 30 years and solar PV is 40 years. The actual useful life may be a shorter or longer period depending on the actual operating conditions experienced by the asset.

Climate risks can also impact the carrying value of the Company's underlying investments. The Company relies (via the HoldCo or relevant SPVs) on third party technical advisers to consider the impact of climate risks when assessing P50 production forecasts. The price at which the output from the generating assets is sold is a factor of both wholesale electricity prices and the revenue received from the government support regime. Future power prices are estimated using external third-party forecasts which take the form of specialist consultancy reports. The future power price assumptions are reviewed as and when these forecasts are updated. There is an inherent uncertainty in future wholesale electricity price projection. Long-term power price forecasts are provided by a leading market consultant, updated quarterly, and may be adjusted by the Investment Adviser where more conservative assumptions are considered appropriate.

Specifically commissioned external reports are used to estimate the expected electrical output from the wind and hydropower farm and solar PV assets, taking into account the expected average wind speed at each location and generation data from historical operation. The actual electrical output may differ considerably from that estimated in such a report mainly due to the variability of actual wind to that modelled in any one period. Assumptions around electrical output will be reviewed only if there is good reason to suggest there has been a material change in this expectation.

The P50 level of output is the estimated annual amount of electricity generation (in MW) that has a 50.0% probability of being exceeded both in any single year and over the long term and a 50.0% probability of being under achieved.

The operating costs of the SPV companies are frequently partly or wholly subject to inflation and an assumption is made that inflation will increase at a long-term rate. The SPV's valuation assumes long-term inflation "of 2.0% (2024: 2.0%). The impact of physical and transition risks associated with climate change is assessed on a project by project basis and factored into the underlying cash flows as appropriate.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the fair value of the investments as disclosed in note 4 to the financial statements under sensitivities.

New Standards, Interpretations and Amendments Adopted from 1 January 2025

A number of new standards and amendments to standards are effective for the annual periods beginning after 1 January 2025. None of these have a significant effect on the measurement of the amounts recognised in the financial statements of the Company.

New Standards and Amendments Issued but not yet Effective

The relevant new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed as follows.

Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 (effective for annual periods beginning on or after 1 January 2026)

On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:

•    clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

•    clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

•    add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and

•    update the disclosures for equity instruments designated at fair value through other comprehensive income ('FVOCI').

The Company does not expect these amendments to have a material impact on its operations or financial statements.

IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)

IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of comprehensive income and providing management-defined performance measures within the financial statements.

Management is currently assessing the detailed implications of applying the new standard on the Company's financial statements. From the high-level preliminary assessment performed, the following potential impacts have been identified:

•    Although the adoption of IFRS 18 will have no impact on the Company's net profit, the Company expects that grouping items of income and expenses in the statement of comprehensive income into the new categories will impact how operating profit is calculated and reported. From the high-level impact assessment that the Company has performed, the following might potentially impact operating profit:

•    Foreign exchange differences currently aggregated in the line item 'Net foreign exchange gains/(losses)' in operating profit might need to be disaggregated, with some foreign exchange gains or losses presented below operating profit.

•    The line items presented on the primary financial statements might change as a result of the application of the concept of 'useful structured summary' and the enhanced principles on aggregation and disaggregation.

•    The Company does not expect there to be a significant change in the information that is currently disclosed in the notes because the requirement to disclose material information remains unchanged; however, the way in which the information is grouped might change as a result of the aggregation/disaggregation principles. In addition, there will be significant new disclosures required for:

o     management-defined performance measures;

o     a break-down of the nature of expenses for line items presented by function in the operating category of the statement of comprehensive income - this break-down is only required for certain nature expenses; and

o     for the first annual period of application of IFRS 18, a reconciliation for each line item in the statement of comprehensive income between the restated amounts presented by applying IFRS 18 and the amounts previously presented applying IAS 1.

•    From a cash flow statement perspective, there will be changes to how interest received and interest paid are presented. Interest paid will be presented as financing cash flows and interest received as investing cash flows.

The Company will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and so the comparative information for the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.

3. Material Accounting Policies

Financial Instruments

Financial Assets

The Company's financial assets principally comprise of investments held at fair value through profit (Shareholder loan and equity investments) and trade and other receivables.

The Company's Shareholder loan and equity investments in HoldCo are held at fair value through profit or loss. Gains or losses resulting from the movements in fair value are recognised in the Company's Statement of Comprehensive Income at each measurement point. Where there is sufficient value within HoldCo, the Company's Shareholder loans are fair valued at their redeemable amounts and the residual fair value reflected within the Company's equity investments.

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

Financial Liabilities

The Company's financial liabilities include trade and other payables, and other short-term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method.

Recognition, Derecognition and Measurement

Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

A financial liability (in whole or in part) is derecognised when the Company has extinguished its contractual obligations, it expires or is cancelled. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Gains and losses resulting from the movement in fair value are recognised in the Statement of Comprehensive Income. Financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Taxation

Investment trusts which have approval under section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains. Shortly after listing, the Company received an approval as an investment trust by HMRC. Current tax is the expected tax payable on the taxable income for the year, using tax rates that have been enacted or substantively enacted at the date of the Statement of Financial Position.

Deferred Taxation

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited to the Statement of Comprehensive Income except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off tax assets against tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Segmental Reporting

The Chief Operating Decision Maker ("CODM"), which is the Board, is of the opinion that the Company is engaged in a single segment of business, being investment in renewable energy infrastructure assets to generate investment returns whilst preserving capital. The financial information used by the CODM to manage the Company presents the business as a single segment.

Income

Income includes investment income from financial assets at fair value through profit or loss and bank interest income.

Investment income from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income within investment income when the Company's right to receive income is established.

Interest earned on shareholder loans is recognised on an accruals basis. Dividend income is recognised when the right to receive it is established.

Expenses

All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items presented within the Statement of Comprehensive Income, all expenses are presented as revenue as it is directly attributable to the operations of the Company.

Foreign Currency

Transactions denominated in foreign currencies are translated into euros at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the period end are reported at the rates of exchange prevailing at the period end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss to capital or revenue in the Statement of Comprehensive Income as appropriate. Foreign exchange movements on investments are included in the Statement of Comprehensive Income within gains on investments.

Cash and Cash Equivalents

Cash and cash equivalents includes deposits held at call with banks and other short-term deposits with original maturities of three months or less.

Share Capital, Special Reserve and Share Premium Account

Ordinary Shares are classified as equity. Costs directly attributable to the issue of new shares (that would have been avoided if there had not been a new issue of new shares) are recognised against the value of the Ordinary Share premium account.

Repurchases of the Company's own shares are recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments. Any expenses in relation to these repurchases are recognised directly in equity.

 

4. Investments Held at Fair Value Through Profit or Loss

	As at 31 December 2025	As at 31 December 2024
	(EUR '000)	(EUR '000)
(a) Summary of valuation
Analysis of closing balance:
Investments held at fair value through profit or loss	208,676	320,432
	------------	------------
Total investments	208,676	320,432
	=======	=======
(b) Movements during the year
Opening balance of investments, at cost	335,887	348,415
Repayments during the year	(13,596)	(12,528)
	------------	-----------
Cost of investments	322,291	335,887
	=======	=======
Revaluation of investments to fair value:
Unrealised movements in fair value of investments	(113,615)	(15,455)
Balance of capital reserve - investments held	(113,615)	(15,455)
Fair value of investments	208,676	320,432
Movement in unrealised revaluation of investments held	(98,160)	(39,443)
Losses on disposals	(3,064)	(39,443)
	------------	-----------
Losses on investments	(101,224)	-
	=======	=======

 

The fair value of the Companyʼs equity and the Shareholder loans investment in HoldCo are determined by the underlying fair values of the SPV investments, which are not traded and contain unobservable inputs. As explained in Note 2, the Company has made a judgement to fair value both the equity and shareholder loan investments together. As such, the Companyʼs equity and the Shareholder loans investments in HoldCo have been classified as Level 3 in the fair value hierarchy.

Fair Value Measurements

IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following 3 levels:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

Level 2

Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

The classification of the Company's investments held at fair value is detailed in the table below:

	As at 31 December 2025				As at 31 December 2024
	Level 1 (EUR '000)	Level 2 (EUR '000)	Level 3 (EUR '000)	Total (EUR '000)	Level 1 (EUR '000)	Level 2 (EUR '000)	Level 3 (EUR '000)	Total (EUR '000)
Investments at fair value through profit and loss	-	-	208,676	208,676	-	-	320,432	320,432
	------------	------------	------------	------------	------------	------------	------------	------------
	-	-	208,676	208,676	-	-	320,432	320,432
	=======	=======	=======	=======	=======	=======	=======	=======

 

Due to the nature of the investments, they are always expected to be classified as level 3. There have been no transfers between levels during the period ended 31 December 2025 (31 December 2024: none).

The movement on the Level 3 unquoted investments during the year is shown below:

	Year ended 31 December 2025 (EUR '000)	Year ended 31 December 2024 (EUR '000)
Opening balance	320,432	372,403
Repayments during the year	(13,596)	(12,528)
Unrealised losses on investments adjustments	(98,160)	(39,443)
	------------	------------
Closing balance	208,676	320,432
	=======	=======

 

Valuation Methodology

The Company owns 100.0% of its subsidiary Tesseract Holdings Limited ("HoldCo" or "THL"). The Company meets the definition of an investment entity as described by IFRS 10. As such, the Company's investment in the HoldCo is valued at fair value.

The Company has acquired underlying investments in SPVs through its investment in the HoldCo. The Investment Adviser has carried out fair market valuations of the SPV investments as at 31 December 2025 and the Directors are satisfied with the methodology, the discount rates and key assumptions applied, and the valuations.

All SPV investments are at fair value through profit or loss and are valued using the IFRS 13 framework for fair value measurement. The following economic assumptions were used in the valuation of the SPVs.

Valuation Assumptions

As at 31 December 2025

Discount rates	The discount rate used in the valuations is calculated according to internationally recognised methods. Typical components of the discount rate are risk free rates, country-specific and asset-specific risk premia.
Power price	Power prices are based on power price forecasts from leading market analysts. The forecasts are independently sourced from providers with coverage in almost all European markets as well as providers with regional expertise. The approach applied to both asset classes (wind and solar PV) remains unchanged using a blend of two power price curve providers. One of the power price curve providers was replaced following a review by the Investment Adviser due to inconsistencies and differences in key long-term assumptions over the recent forecast periods.
Energy yield/load factors	Estimates are based on third party energy yield assessments, which consider historic production data (where applicable) and other relevant factors.
Inflation rates	Long-term inflation is based on the monetary policy of the European Central Bank.
Asset life	In general, an operating life of 25 to 30 years for onshore wind and 40 years for solar PV is assumed. In individual cases, a longer operating life is assumed where the contractual arrangement (i.e. O&M agreement with availability guarantee) supports such an assumption.
Operating expenses	Operating expenses are primarily based on respective contracts and, where not contracted, on the assessment of a technical adviser.
Taxation rates	Underlying country-specific tax rates are derived from due diligence reports from leading tax consulting firms.

 

Valuation Sensitivities

The fair value of the Company's investment in HoldCo is ultimately determined by the underlying fair values of the SPV investments. As such sensitivity analysis is produced to show the impact of changes in key assumptions adopted to arrive at the SPV valuation.

In light of the uncertainty over the direction of power prices as a result of continue global unrest and disruption in commodity markets, and the impact on ongoing curtailments driven by factors such as changing subsidy regimes (as referenced in the notes to the accounts under Post Balance Sheet Events), the spread of values for the key assumptions below indicate that there is a wider range of reasonable inputs that could be used in generating a fair value of the investment at 31 December 2025.

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

The NAV per share impacts from each sensitivity is shown below.

(i) Discount Rates

The weighted average valuation discount rate applied to calculate the SPV valuation is 10.0% at 31 December 2025 (31 December 2024: 7.3%). Discount rates are inherently judgemental, and as seen in the movement within the year, there is a wide range of discount rates that could reflect a reasonable estimate of fair value at 31 December 2025. An increase or decrease in this rate by 2.0% at project level has the following effect on valuation.

	Negative impact			Positive impact
Discount rate	NAV per share impact in (EUR cents)	NAV Impact (EUR '000)	Total NAV value (EUR '000)	NAV Impact (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025 (+/-2%)	(6.3)	190,549	214,334	247,209	8.7
	=======	=======	=======	=======	=======

 

(ii) Power Price

Long-term power price forecasts are provided by leading market consultants and are updated quarterly. The sensitivity below assumes a 10%% increase or decrease in merchant power prices relative to the base case for every year of the asset life. The sensitivity considers a flat 10% movement in power prices for all years, i.e. the effect of adjusting the forecast electricity price assumptions in each of the jurisdictions applicable to the SPV down by 10% and up by 10% from the base case assumptions for each year throughout the operating life of the SPV.

Note the Company intends to renew power price hedges (e.g. in the form of PPAs or other mechanisms) before the existing contracts (PPAs and government regulated tariffs) expire.

A change in the forecast electricity price assumptions by plus or minus 10% has the following effect on valuation, as shown below:

	-10% Change			+10% Change
Power price	NAV per share impact (EUR cents)	NAV Impact (EUR '000)	Total NAV value (EUR '000)	NAV Impact (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025	(6.4)	190,241	214,334	237,370	6.1
	=======	=======	=======	=======	=======

 

(iii) Energy Yield

The base case assumes a "P50" level of output. The P50 output is the estimated annual amount of electricity generation (in MWh) that has a 50% probability of being exceeded both in any single year and over the long term and a 50% probability of being under achieved. Hence the P50 is the expected level of generation over the long term. The sensitivity illustrates the effect of assuming "P90 10 years" (a downside case) and 'P10 10 years' (an upside case) energy production scenarios. A P90 10 years downside case assumes the average annual level of electricity generation that has a 90% probability of being exceeded over a 10 year period. A P10 10 years upside case assumes the average annual level of electricity generation that has a 10% probability of being exceeded over a 10 year period. This means that the SPV aggregate production outcome for any given 10 year period would be expected to fall somewhere between these P90 and P10 levels with an 80% confidence level, with a 10% probability of it falling below that range of outcomes and a 10% probability of it exceeding that range. The sensitivity does not include the portfolio effect which would reduce the variability because of the geographical diversification. The sensitivity is applied throughout the next 10 years.

Technical curtailment assumptions have been incorporated into the valuation process on a project-specific basis. For the available nodes, forecasts have been sourced from third-party advisors; for uncovered nodes, assumptions have been developed by the internal power markets team. Curtailments driven by low or negative prices (market or economic curtailment) are excluded, as their impact is already reflected in the forecast power prices provided by market advisors.

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

Energy yield	NAV per share impact (EUR cents)	P90 10 years (EUR '000)	Total NAV value (EUR '000)	P10 10 years (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025	(4.9)	195,958	214,334	231,971	4.7
	=======	=======	=======	=======	=======

 

(iv) Inflation Rates

The projects' income streams are principally a mix of government regulated tariffs, fixed-price PPAs and merchant revenues. Government regulated tariffs and fixed-price PPAs tend not to be inflation linked, whilst merchant revenues are generally subject to inflation. The current contractual life of government regulated tariffs and fixed-price PPAs are shorter than their respective asset lives, meaning from a valuation perspective, the assets are more exposed to merchant revenues in the late asset life. As described earlier, the Company intends to renew power price hedges (e.g. in the form of PPAs or other mechanisms) before the existing contracts (PPAs and government regulated tariffs) expire. This rolling hedge strategy is not reflected in the sensitivities illustrated above. The projects' management and maintenance expenses typically move with inflation, however debt payments are fixed. This results in the SPV returns and valuation being positively correlated to inflation. The SPVs valuation assumes long-term inflation of 2.0% p.a.

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

Inflation rates	NAV per share impact (EUR cents)	-0.5% (EUR '000)	Total NAV value (EUR '000)	+0.5% (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025	(2.1)	206,469	214,334	222,427	2.1
	=======	=======	=======	=======	=======

 

(v) Asset Life

In general, an operating life of 25 years for onshore wind and 40 years for Solar PV is assumed. In individual cases a longer operating life is assumed where the contractual set-up (i.e. O&M agreement with availability guarantee) supports such an assumption.

The sensitivity below shows the valuation impact from a one year adjustment to the asset life across the portfolio.

Asset life	NAV per share impact (EUR cents)	-1 year (EUR '000)	Total NAV value (EUR '000)	+1 year (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025	(0.4)	212,959	214,334	215,633	0.3
	=======	=======	=======	=======	=======

 

(vi) Operating Expenses

The sensitivity shows the effect of a 10.0% decrease and a 10.0% increase to the base case for annual operating costs for the SPV.

An increase or decrease in operating expenses by 10% at SPV level has the following effect on valuation, as shown below.

Operating expenses	NAV per share impact (EUR cents)	-10.0% (EUR '000)	Total NAV value (EUR '000)	+10.0% (EUR '000)	NAV per share impact in (EUR cents)
Valuation as of 31 December 2025	(2.9)	203,359	214,334	225,113	2.9
	=======	=======	=======	=======	=======

 

 

5. Income

Income from investments	For the year ended 31 December 2025 (EUR '000)	For the year ended 31 December 2024 (EUR '000)
Interest income from Shareholder loans	15,186	13,647
Bank and deposit interest income	45	18
Other income	19	14
	------------	------------
Total Income	15,250	13,679
	=======	=======

 

6. Investment Advisory Fees

	For the year ended 31 December 2025			For the year ended 31 December 2024
	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Investment advisory fees	1,929	-	1,929	2,331	-	2,331
	=======	=======	=======	=======	=======	=======

 

 

Under the Investment Advisory Agreement, the following fee is payable to the Investment Adviser:

0.75% per annum of NAV (plus VAT) of the Company up to €300 million;

0.65% per annum of NAV (plus VAT) of the Company between €300 million and €500 million; and

0.55% per annum of NAV (plus VAT) of the Company above €500 million.

The Investment Adviser is also entitled to be reimbursed for certain expenses under the Investment Advisory Agreement. These include out-of-pocket expenses properly incurred by the Investment Adviser in providing services, including transactional, organisational, operating and/or travel expenses.

7. Other Expenses

	For the year ended 31 December 2025			For the year ended 31 December 2024
	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Expenses charged to revenue:
AIC fees and other regulatory fees	25	-	25	33	-	33
AIFM fees	135	-	135	149	-	149
Auditor's fees:
- statutory audit of the Company1,2	475	-	475	341	-	341
- statutory audit of Holdco2	29	-	29	27	-	27
Broker retainer	85	-	85	57	-	57
Directors' fees	185	-	185	192	-	192
Directors' other employment costs	55	-	55	66	-	66
FCA and listing fees	40	-	40	115	-	115
Legal fees	1	-	1	190	-	190
Marketing fees	67	-	67	116	-	116
Registrar's fees	19	-	19	29	-	29
Secretary and administrator fees	181	-	181	198	-	198
Tax compliance	25	-	25	21	-	21
Sundry expenses3	(54)	-	(54)	81	-	81
	------------	------------	------------	------------	------------	------------
Total revenue expenses	1,268	-	1,268	1,615	-	1,615
	=======	=======	=======	=======	=======	=======
Expenses charged to capital:
Managed Wind-Down costs	-	5,300	5,300	-	-	-
	------------	------------	------------	------------	------------	------------
Total Other expenses	1,268	5,300	6,568	1,615	-	1,615
	=======	=======	=======	=======	=======	=======

 

1.     There are no non-audit services in relation to the current year or prior year.

2.     Fees payable for the audit of Holdco are borne by the Company. The GBP equivalent of the statutory audit fees was GBP 402,120 (2024: GBP 304,025) including VAT of GBP 67,020 (2024: GBP 50,671). For the year to 31 December 2025, the statutory audit fees payable to the Company's auditors for the audit of the Company and Holdco were £285,500 (2024: £326,600) excluding VAT. Included in the above audit fees are overruns relating to the previous year's audit.

3.     Sundry expenses include printing fee, publication fee, subscription costs, website fee, other miscellaneous expenses and prior year over accrual of intercompany payable written off.

 

Other operating expenses have been analysed and presented by nature.

8. Finance Costs

	For the year ended 31 December 2025			For the year ended 31 December 2024
	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Bank charges	2	-	2	2	-	2
	------------	------------	------------	------------	------------	------------
Total	2	-	2	2	-	2
	=======	=======	=======	=======	=======	=======

 

 

9. Taxation

(a) Analysis of Tax Charge in the Year

 

	For the year ended 31 December 2025			For the year ended 31 December 2024
	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Corporation tax	-	-	-	-	-	-
	------------	------------	------------	------------	------------	------------
Total tax charge for the year (see note 9(b))	-	-	-	-	-	-
	=======	=======	=======	=======	=======	=======

 

(b) Factors Affecting Total Tax Charge for the Year

The effective UK corporation tax rate applicable to the Company for the year is 25.0% (2024: 25.0%). The tax charge differs from the charge resulting from applying the standard rate of UK corporation tax for an investment trust company.

The differences are explained below:

	For the year ended 31 December 2025			For the year ended 31 December 2024
	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)	Revenue (EUR '000)	Capital (EUR '000)	Total (EUR '000)
Profit/(loss) on ordinary activities before taxation	12,051	(106,511)	(94,460)	9,731	(39,472)	(29,741)
Corporation tax at 25.0% (2024: 25.0%)	3,013	(26,628)	(23,615)	2,433	(9,868)	(7,435)
Effects of:
(Gains)/losses on investments held at fair value not (taxable)/allowable	-	25,306	25,306	-	9,861	9,861
Foreign exchange (gains)/losses not (taxable)/allowable	-	(3)	(3)		7	7
Expenditure not deductable for tax purposes	-	1,325	1,325	48	-	48
Movement in management expenses that no deferred tax asset is recognised on	(336)	-	(336)	18	-	18
Impact of tax deductible interest distributions	(2,677)	-	(2,677)	(2,499)	-	(2,499)
	------------	------------	------------	------------	------------	------------
Total tax charge for the year	-	-	-	-	-	-
	=======	=======	=======	=======	=======	=======

 

Investment companies which have been approved by the HM Revenue & Customs under section 1158 of the Corporation Tax Act 2010 are exempt from tax on capital gains. Due to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided for deferred tax on any capital gains or losses arising on the revaluation of investments.

The Company has no unrelieved excess management expenses for the year ended 31 December 2025 (2024: EUR 1,345,619). It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and therefore no deferred tax asset has been recognised. The unrecognised deferred tax asset calculated using a tax rate of 25% (2024: 25%) amounts to EUR Nil (2024: EUR 336,405).

10. Return per Ordinary Share

	For the year ended 31 December 2025	For the year ended 31 December 2024
Revenue return after taxation (EUR '000)	12,051	9,731
Capital return after taxation (EUR '000)	(106,511)	(39,472)
Total net return (EUR '000)	(94,460)	(29,741)
Weighted average number of Ordinary Shares	378,122,130	378,122,130
	=======	=======

 

11. Trade and Other Receivables

	As at 31 December 2025 (EUR '000)	As at 31 December 2024 (EUR '000)
Interest due from deposits	3	-
Prepaid expenses	51	29
	-------------	--------------
Total	54	29
	=======	=======

 

12. Trade and Other Payables

	As at 31 December 2025 (EUR '000)	As at 31 December 2024 (EUR '000)
Accrued expenses	4,118	1,290
Deferred consideration payable	-	107
	-------------	--------------
Total	4,118	1,397
	=======	=======

 

13. Share Capital

	As at 31 December 2025				As at 31 December 2024
	No. of Ordinary Shares	No. of Treasury Shares	Total no. of Shares in issue	(EUR '000)	No. of Ordinary Shares	No. of Treasury Shares	Total no. of Shares in issue	(EUR '000)
Allotted, issued and fully paid:
Redeemable Ordinary Shares of 1 cent each ('Ordinary Shares')	378,122,130	30,103,575	408,225,705	4,082	378,122,130	30,103,575	408,225,705	4,082
Total	378,122,130	30,103,575	408,225,705	4,082	378,122,130	30,103,575	408,225,705	4,082

 

The Ordinary Shares shall carry the right to receive the profits of the Company available for distribution and determined to be distributed by way of interim or final dividends at such times as the Directors may determine in accordance with the Articles of the Company. The holders of Ordinary Shares have the right to receive notice of, and to attend and vote at, General Meetings of the Company.

There were no Ordinary Shares issued or buybacks during the year to 31 December 2025 (2024: none).

At the year end, the Company's issued share capital comprised 408,225,705 Ordinary Shares (2024: 408,225,705), of which 30,103,575 Ordinary Shares were held in Treasury and there were 378,122,130 Ordinary Shares in circulation.

Each Ordinary Share held entitles the holder to one vote. All Ordinary Shares carry equal voting rights and there are no restrictions on those voting rights. Voting deadlines are stated in the Notice of Meeting and Form of Proxy and are in accordance with the Companies Act 2006.

14. Special Distributable Reserve

As indicated in the Company's prospectus dated 10 May 2019, following admission of the Company's Ordinary Shares to trading on the London Stock Exchange, the Directors applied to the Court and obtained a judgement on 30 July 2019 to cancel the amount standing to the credit of the share premium account of the Company. The amount of the share premium account cancelled and credited to a special distributable reserve was EUR 149,675,608.

On 11 September 2025, the Company announced the cancellation of the amount standing to the credit of its share premium account (the "Share Premium Cancellation"), approved by shareholders at the AGM of the Company held on 19 June 2025. Accordingly, the amount of EUR 255,642,627.68 previously held in the share premium account of the Company was cancelled and the distributable reserves resulting from the Share Premium Cancellation have been treated as profits available for distribution by the Company.

As at 31 December 2025, the balance of Special Distributable Reserve was EUR 327,749,000 (2024: EUR 75,087,000).

15. Net Assets per Ordinary Share

Net assets per Ordinary Share as at 31 December 2025, is based on EUR 214,333,000 (31 December 2024: EUR 320,231,508) of net assets of the Company attributable to the 378,122,130 (31 December 2024: 378,122,130) Ordinary Shares in issue as at 31 December 2025.

16. Dividend

The Company has paid the following interim dividends in respect of the year under review:

	For the year ended 31 December 2025		For the year ended 31 December 2024
Total dividends paid in the year	Cents per Ordinary Share	Total (EUR '000)	Cents per Ordinary Share	Total (EUR '000)
31 December 2024 interim - Paid 18 March 2025 (2024: 18 March 2024)	0.7900c	2,981	1.3775c	5,211
31 March 2025 interim - Paid 13 June 2025 (2024: 14 June 2024 )	0.7900c	2,988	1.4475c	5,479
30 June 2025 interim - Paid 5 September 2025 (2024: 6 September 2024)	0.7934c	3,007	1.4475c	5,475
30 September 2025 interim - Paid 12 December 2025 (2024: 9 December 2024)	0.6500c	2,463	1.4475c	5,475
	-------------	-------------	-------------	-------------
Total	3.0234c	11,439	5.7200c	21,640
	========	========	========	========

 

The dividend relating to the year ended 31 December 2025, which is the basis on which the requirements of Section 1159 of the Corporation Tax Act 2010 are considered is detailed below.

	For the year ended 31 December 2025		For the year ended 31 December 2024
Total dividends declared in the year	Cents per Ordinary Share	Total (EUR '000)	Cents per Ordinary Share	Total (EUR '000)
31 March 2025 interim - Paid 13 June 2025 (2024: 14 June 2024 )	0.7900c	2,988	1.4475c	5,479
30 June 2025 interim - Paid 5 September 2025 (2024: 6 September 2024)	0.7934c	3,007	1.4475c	5,475
30 September 2025 interim - Paid 12 December 2025 (2024: 9 December 2024)	0.6500c	2,463	1.4475c	5,475
31 December 2025 interim - No dividend paid (2024: 18 March 2025)	-1	-1	0.7900c	2,987
	-------------	-------------	-------------	-------------
Total	2.2334c	8,458	5.1325c	19,416
	========	========	========	========

¹ In order to retain Investment Trust status it may be necessary to declare and pay an additional dividend in respect of 2025 earnings of approximately EUR 1.3 million. The Company as at the date of signing these accounts has sufficient cash to make such a payment.

17. Financial Risk Management

The Investment Adviser, AIFM and the Administrator report to the Board on a quarterly basis and provide information to the Board which allows it to monitor and manage financial risks relating to its operations. The Company's activities expose it to a variety of financial risks: market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk. These risks are monitored by the AIFM. Each risk and its management is summarised below.

Market Risk

The value of the investments will be a function of the discounted value of their expected future cash flows, and as such will vary with, inter alia, movements in interest rates, market prices and the competition for such assets. The Investment Adviser carries out a full valuation on a quarterly basis, which takes into account market risks. The sensitivity of the investment valuation due to market risk is shown in note 4.

(i) Currency Risk

Foreign currency risk is defined as the risk that the fair values of future cash flows will fluctuate because of changes in foreign exchange rates. The Company's financial assets and liabilities are denominated in Euro and substantially all of its revenues and expenses are in Euro. The Company is not considered to be materially exposed to foreign currency risk.

(ii) Interest Rate Risk

The Company's interest rate risk on interest bearing financial assets is limited to interest earned on shareholder loans. The Board considers that, as shareholder loans investments bear interest at a fixed rate, they do not carry any interest rate risk.

The Company's interest and non-interest bearing assets and liabilities as at 31 December 2025 are summarised below:

Assets	Interest bearing (EUR '000)	Non-interest bearing (EUR '000)	Total (EUR '000)
Cash and cash equivalents	18	9,703	9,721
Trade and other receivables	-	54	54
Investments at fair value through profit or loss	207,764	912	208,676
	--------------	--------------	--------------
Total assets	207,782	10,669	218,451
	========	========	========
Liabilities
Trade and other payables	-	(4,118)	(4,118)
	--------------	--------------	--------------
Total liabilities	-	(4,118)	(4,118)
	========	========	========

 

The Company's interest and non-interest bearing assets and liabilities as at 31 December 2024 are summarised below:

Assets	Interest bearing (EUR '000)	Non-interest bearing (EUR '000)	Total (EUR '000)
Cash and cash equivalents	4	1,164	1,168
Trade and other receivables	-	29	29
Investments at fair value through profit or loss	221,360	99,072	320,432
	--------------	--------------	--------------
Total assets	221,364	100,264	321,629
	========	========	========
Liabilities
Trade and other payables	-	(1,397)	(1,397)
	--------------	--------------	--------------
Total liabilities	-	(1,397)	(1,397)
	========	========	========

 

(iii) Price Risk

Price risk is defined as the risk that the fair value of a financial instrument held by the Company will fluctuate. Investments are measured at fair value through profit or loss. As of 31 December 2025, the Company held investments with an aggregate fair value of EUR 208,500,000 (2024: EUR 320,432,000). All other things being equal, the effect of a 10% increase or decrease in the valuation of the investments held at the year end would have been an increase or decrease of EUR 20,850,000 (2024: EUR 32,043,200) in the loss after taxation for the year ended 31 December 2025 and the Company's net assets at 31 December 2025. The sensitivity of the investment valuation due to price risk is shown further in note 4.

(iv) Credit Risk

Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Company is exposed to credit risk in respect of trade and other receivables and cash at bank. The Company's credit risk exposure is minimised by dealing with financial institutions with investment grade credit ratings and making Shareholder loan investments which are equity in nature. The Company's Shareholder loan investments in HoldCo are secured by underlying renewal investments and as such these Shareholder loans are not exposed to credit risk. No balances are past due or impaired.

	As at 31 December 2025 (EUR '000)	As at 31 December 2024 (EUR '000)
Trade and other receivables	54	29
Cash and cash equivalents	9,721	1,168
	--------------	--------------
Total	9,775	1,196
	========	========

 

The table below shows the cash balances of the Company and the credit rating for each counterparty:

	S&P Rating	Fitch Rating	As at 31 December 2025 (EUR '000)	As at 31 December 2024 (EUR '000)
Royal Bank of Scotland	BBB/A-2	AA-/F1+	425	132
EFG International AG - Daily liquidity fund	N/a	A	9,278	1,032
Royal Bank of Scotland International	BBB/A-2	AA-/F1+	18	4
			--------------	--------------
Total			9,721	1,168
			========	========

 

(v) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Adviser, AIFM and the Board continuously monitor forecast and actual cash flows from operating, financing and investing activities to consider payment of dividends, repayment of the Company's shareholder loans or further investing activities.

Financial liabilities by maturity as at 31 December 2025 are shown below. The amounts disclosed in the table are the contractual undiscounted cash flows.

Liabilities	Less than 1 year (EUR '000)	1-5 years (EUR '000)	5+ years (EUR '000)	Total (EUR '000)
Trade and other payables	(4,118)	-	-	(4,118)
	--------------	--------------	--------------	--------------
Total	(4,118)	-	-	(4,118)
	========	========	========	========

 

 

Financial liabilities by maturity as at 31 December 2024 are shown below. The amounts disclosed in the table are the contractual undiscounted cash flows.

Liabilities	Less than 1 year (EUR '000)	1-5 years (EUR '000)	5+ years (EUR '000)	Total (EUR '000)
Trade and other payables	(1,397)	-	-	(1,397)
	--------------	--------------	--------------	--------------
Total	(1,397)	-	-	(1,397)
	========	========	========	========

 

(vi) Capital and Risk Management

The Company's capital management objectives are to ensure that the Company will be able to continue as a going concern while maximising the return to equity Shareholders.

The Company considers its capital to comprise Ordinary Share capital, distributable reserves and retained earnings. The Company is not subject to any externally imposed capital requirements. The Company's share capital and reserves that are shown in the Statement of Financial Position total EUR 214,333,000 (2024: EUR 320,232,000).

The Board, with the assistance of the Investment Adviser, monitors and reviews the Company's capital on an ongoing basis. Use of distributable reserves is disclosed in note 19.

Share capital represents the 1 cent nominal value of the issued share capital. The share premium account arose from the net proceeds of new shares.

The capital reserve reflects any increases and decreases in the fair value of investments which have been recognised in the capital column of the Statement of Comprehensive Income.

18. Transactions with the Investment Adviser and Related Party Transactions

AIFM fees for the year ended 31 December 2025 amount to EUR 135,000 (2024: EUR 149,000). As at 31 December 2025, the fee outstanding to the AIFM was EUR nil (2024: EUR 26,000). The AIFM, Company Secretary and Administrator are part of Apex Group.

The Company Secretary and Administrator fees for the year ended 31 December 2025 amount to EUR 181,000 (2024: EUR 198,000) and the total fees paid to Apex Group amount to EUR 316,000 (2024: EUR 347,000).

Fees payable to the Investment Adviser are shown in the Statement of Comprehensive Income. As at 31 December 2025, the fee outstanding to the Investment Adviser was EUR 405,000 (2024: EUR 600,269).

During the year, the Company received repayments of its Shareholder loans to HoldCo of EUR 13,596,000 (2024: EUR 12,528,000). The Shareholder loans, including accrued interest outstanding at year end were EUR 207,764,000 (2024: EUR 221,360,000).

Fees are payable to the Directors at an annual rate of EUR 75,000 to the Chairman, EUR 52,500 to the Chair of the Audit and Risk Committee and EUR 135,450 to the other Directors. Directors' fees paid during the year were EUR 263,970 (2024: EUR 262,950).

On 28 July 2025, the Company announced the completion of the sale of its 18% interest in the Portuguese hydropower asset referred to as Sagres for a cash consideration of EUR 14.7 million. On 15 December 2025, the Company announced that the sale of the Danish wind assets (Holmen II and Svindbaek) had completed and that the Company is in receipt of sales proceeds of EUR 36.6 million. These sales were made to funds managed and/or advised by the Investment Adviser.

	For the year ended 31 December 2025 (EUR)	For the year ended 31 December 2024 (EUR)
Ian Nolan1	69,480	75,000
Robert Naylor2	6,540	n/a
David MacLellan	52,500	52,500
Kenneth MacRitchie	45,150	45,150
Patricia Rodrigues3	45,150	45,150
Myrtle Dawes	45,150	45,150
	========	========

 

1. Resigned on 27 November 2025.

2. Appointed on 28 November 2025.

3. Resigned on 31 December 2025.

 

The Directors had the following shareholdings in the Company, all of which were beneficially owned.

	Ordinary Shares At 31 December 2025	Ordinary Shares At 31 December 2024
Ian Nolan1	150,000	150,000
Robert Naylor2	5,110,000	n/a
David MacLellan	125,000	125,000
Kenneth MacRitchie	50,000	50,000
Patricia Rodrigues	50,000	50,000
Myrtle Dawes	Nil	Nil
	========	========

 

1. The holdings are shown as at the date of resignation on 27 November 2025.
2. Ordinary Shares held indirectly through Achilles Investment Company Limited.

19. Distributable Reserves

The Company's distributable reserves consists of the special reserve and revenue reserve. Capital reserve represents unrealised investments and as such is not distributable.

The revenue reserve is distributable. The amount of the revenue reserve that is distributable may not necessarily be the full amount of the reserve as disclosed within these financial statements of EUR 4,566,000 as at 31 December 2025 (2024: EUR 973,000).

20. Unconsolidated Subsidiaries, Joint Venture and Associate

The following tables show subsidiaries, the joint venture and the associate of the Company. As the Company is regarded as an investment entity, as referred to in note 2, these subsidiaries have not been consolidated in the preparation of the financial statements.

Subsidiary entity Name and registered address	Effective ownership %	Investment	Country of incorporation	Profit/(loss) for the year ended 31 December 2025 (EUR million)	Profit/(loss) for the year ended 31 December 2024 (EUR million)	Total assets balances as at 31 December 2025 (EUR million)	Total assets balances as at 31 December 2024 (EUR million)
Tesseract Holdings Limited Leaf B, 20th Floor, Tower 42, Old Broad Street London EC2N 1HQ	100.0	HoldCo subsidiary entity, owns underlying SPV investments	United Kingdom	(98.2)	(39.4)	208.7	320.8
	========			========	========	========	========

 

 

The following table shows the investments held via SPVs which are held by Tesseract Holdings Limited, the Company's wholly owned subsidiary.

Subsidiary entity Name and registered address	Effective ownership %	Investment	Country of incorporation	Profit/(loss) for the year ended 31 December 2025 (EUR million)	Profit/(loss) for the year ended 31 December 2024 (EUR million)	Total assets balances as at 31 December 2025 (EUR million)	Total assets balances as at 31 December 2024 (EUR million)
Aalto Wind No 2 Ltd. Oy c/o Intertrust (Finland) Oy Bulevardi 1, 6th floor FI-00100 Helsinki, Finland	100.0	Subsidiary entity, owns investment in Olhava	Finland	0.9	0.9	36.7	41.6
Prettysource Lda Avenida Fontes Pereira de Melo, n.º 14 11.º floor, 1050 121 Lisbon	100.0	Subsidiary entity, owns investment in Benfica III	Portugal	(0.2)	(0.1)	4.1	4.1
Astros Irreverentes Unipessoal Lda Avenida Fontes Pereira de Melo, n.º 14 11.º floor, 1050 121 Lisbon	100.0	Subsidiary entity, owns investment in Benfica III	Portugal	(0.2)	(0.1)	4.1	4.1
Contrate o Sol Unipessoal Lda Rua Filipe Folque no. 10J, 2 Dto, 1050-113 Lisbon	100.0	Subsidiary entity, owns investment in Benfica III	Portugal	(0.1)	0.1	2.0	1.9
Argeo Solar S.L. Paseo de la Castellana 259D, 14S-15, Madrid Spain	100.0	Subsidiary entity, owns investment in Albeniz	Spain	(4.0)	(2.7)	34.5	36.1
Vector Aioliki Desfinas S.A. Salaminos Str. 20 15124 Maroussi Attica, Greece	89.0	Subsidiary entity, owns equity investment in Desfina	Greece	1.4	3.1	48.3	50.6
Ega Suria S.L. Paseo de la Castellana 259D Floors 14 and 15 28046 Madrid	100.0	Subsidiary entity, owns investment in Tiza	Spain	(0.1)	(0.2)	28.9	31.0
Azalent Investment SL Paseo de la Castellana 259D Floors 14 and 15 28046 Madrid	100.0	Subsidiary entity, owns investment in Greco	Spain	0.1	(0.4)	72.5	77.9
	========			========	========	========	========

 

The following table shows the joint venture and the associate of the Company. The Company's investments in associates are held through HoldCo.

Subsidiary entity Name and registered address	Effective ownership %	Investment	Country of incorporation	Profit/(loss) for the year ended 31 December 2025 (EUR million)	Profit/(loss) for the year ended 31 December 2024 (EUR million)	Total assets balances as at 31 December 2025 (EUR million)	Total assets balances as at 31 December 2024 (EUR million)
Palea Solar Farm Ourique S.A. Avenida Fontes Pereira de Melo, no. 14, 11. Andar 1050-121 Lisbon Portugal	50.0	Joint venture entity, owns equity investment in Ourique	Portugal	(3.0)	(0.9)	39.9	42.1
	========			========	========	========	========

 

As disclosed in note 4, the Company finances the HoldCo through a mix of Shareholder loans and equity. In 2023 a new Master Shareholder Loan was agreed between the Company and its subsidiary with the interest rate of 7.0%.

HoldCo finances its SPV investments through a mix of shareholder loans and equity. The shareholder loans accrue at an interest rate range of 2.5% to 9.75%.

There are no restrictions on the ability of the Company's subsidiaries and associate's entities to transfer funds in the form of interest and dividends.

21. Post Balance Sheet Events

B Share Scheme First Distribution

On 13 January 2026, the Company announced its B Share Scheme First Distribution. The B Shares of one cent each has been paid up from the Company's special distributable reserve and issued to all Shareholders by way of a bonus issue on the basis of 9 B Shares for every one Ordinary Share held at the Record Date of 21 January 2026. The Ex-Date was 20 January 2026. The B Shares was issued on 23 January 2026 and immediately redeemed at one cent per B Share.

B Share Scheme Second Distribution

On 13 March 2026, the Company announced its B Share Scheme Second Distribution. The B Shares of one cent each has been paid up from the Company's special distributable reserve and issued to all Shareholders by way of a bonus issue on the basis of 54 B Shares for every 10 Ordinary Share held at the Record Date of 24 March 2026. The Ex-Date was 23 March 2026. The B Shares was issued on 26 March 2026 immediately redeemed at one cent per B Share.

Update on disposal of Greek wind asset

On 13 March 2026, the Company completed the sale of its Greek asset, Desfina, for a total consideration of approximately €26 million, following receipt of regulatory and other customary approvals in February 2026.

Geopolitical events

Uncertainty over the direction of power prices as a result of continue global unrest, disruption in commodity markets, and the impact on ongoing curtailments driven by factors such as changing subsidy regimes continues to influence corporate strategies and financial markets. These challenges are further compounded by growing geopolitical tensions, particularly the ongoing war in Ukraine, the Israel-Hamas conflict in the Middle East and the conflict in Iran.

The estimates and assumptions underlying these financial statements are based on data available as of the date of signing of the financial statements, as relevant to conditions that existed at the balance sheet date, including judgements about the economic and financial market conditions that may evolve over time.

Update on Managed Wind-Down

On 24 October 2024, the Company announced that the Board has appointed Rothschild & Co as the financial advisor in relation to the Managed Wind-Down process. This process to identify buyers has continued post year end. The objective - very clearly and unambiguously - is to complete the sale process as quickly as possible, providing liquidity to shareholders at a premium to the share price, through realising assets at prices as close as possible to their contribution to the reported Net Asset Value. The Board has undertaken an extensive sale process and, as a result of being in a managed wind-down, notes the disparity between indicative pricing received and the Company's NAV. Accordingly, the Board notes that there are a range of prices at which future sales could occur, and so disposals may not be achieved at NAV.

 

 

ALTERNATIVE PERFORMANCE MEASURES

In reporting financial information, the Company presents alternative performance measures ("APMs"), which are not defined or specified under the requirements of IFRS. The Company believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the Company. The APMs presented in this report are shown below:

Discount

The amount, expressed as a percentage, by which the share price is less than the Net Asset Value per Ordinary Share.

			As at 31 December 2025	As at 31 December 2024
NAV per Ordinary Share (cents)	a		56.7	84.7
Share price (cents)	b		36.5	66.0
Discount	(b÷a)-1		35.6%	22.1%
			========	========

 

Gearing

The Company's gearing is calculated as total debt as a percentage of the gross asset value.

			As at 31 December 2025	As at 31 December 2024
Gross asset value (EUR '000)	a		315,850	472,219
Net Debt at the SPV level (EUR '000)	b		101,517	151,988
Gearing ratio	(b÷a)		32.1%	32.2%
			========	========

 

Gross Asset Value

The Company's gross assets comprise the net asset values of the Company's Ordinary Shares, the Net Debt and net of cash at the underlying SPV level, with the breakdown as follows.

			As at 31 December 2025	As at 31 December 2024
Net Asset Value (EUR '000)	a		214,333	320,232
Debt at the SPV level (EUR '000)	b		101,517	151,988
			--------------	--------------
Gross asset value (EUR '000)	a+b		315,850	472,219
			========	========

 

Ongoing Charges

A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company.

			Year ended 31 December 2025	Year ended 31 December 2024
Average NAV (EUR '000)	a		258,162	337,705
Annualised expenses (EUR '000)	b		3,103	3,548
Ongoing charges	(b÷a)		1.2%	1.1%
			========	========

 

Total Return

A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends paid out by the Company into the Ordinary Shares of the Company on the ex-dividend date.

Year ended 31 December 2025			Share price	NAV
Opening at 1 January 2025 (cents)	a		66.0	84.7
Dividend adjustment (cents)	b		3.0234	3.0234
Closing at 31 December 2025 (cents)	c		36.5	56.7
Total return	((c+b)÷a)-1		-40.1%	-29.5%
			========	========

 

Year ended 31 December 2024			Share price	NAV
Opening at 1 January 2024 (cents)	a		78.5	98.5
Dividend adjustment (cents)	b		5.7	5.7
Closing at 31 December 2024 (cents)	c		66.0	84.7
Total return	((c+b)÷a)-1		-8.6%	-8.2%
			========	========

 

Year ended 31 December 2025			Share price	NAV
Opening at IPO	a		100.0	98.0
Dividend adjustments (cents)	b		28.6	28.6
Closing at 31 December 2025 (cents)	c		36.5	56.7
Total return since IPO	((c+b)÷a)-1		-34.9%	-13.0%
			========	========

 

Year ended 31 December 2024			Share price	NAV
Opening at IPO	a		100.0	98.0
Dividend adjustment (cents)	b		25.6	25.6
Closing at 31 December 2024 (cents)	c		66.0	84.7
Total return since IPO	((c+b)÷a)-1		-8.4%	12.6%
			========	========

 

n/a = not applicable.

 

Annual general meeting

In line with the requirements of the Companies Act 2006, the Company will hold an Annual General Meeting of Shareholders to consider the resolutions laid out in the notice of meeting. Notice is hereby given that the Annual General Meeting of Aquila European Renewables Plc will be held at 1:00 p.m. on 17 June 2026 at the

offices of Harwood Capital Management Ltd 6 Stratton St, London W1J 8LD.

 

Publication of Annual Report and Financial Statements

This announcement does not constitute the company's statutory accounts as defined in the Companies Act 2006. The financial information for the year to 31 December 2025 will be filed with the Registrar of Companies.

 

The figures shown above for the year to 31 December 2024 was derived from the 2024 statutory accounts which was approved on 24 April 2024 and delivered to the Registrar of Companies. The auditors reported on the 2024 statutory accounts; their reports were unqualified and did not include a statement under section 498(2) or (3) of the companies act 2006.

 

The Annual Report for the year ended 31 December 2025 was approved on 27 April 2025. It will be made available on the Company's website at https://www.aquila-european-renewables.com/.

 

The Annual Report will be submitted to the national storage mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

 

This announcement contains regulated information under the disclosure guidance and transparency rules of the FCA.