LEI: 213800B81BFJKWM2JV13

29 March 2023

 

OCTOPUS RENEWABLES INFRASTRUCTURE TRUST PLC 

 

Final Results to 31 December 2022

 

Strong FY performance with double digit NAV total return and significant increase in FY 2023 dividend target²

 

Octopus Renewables Infrastructure Trust plc ("ORIT" or the "Company") announces its audited results for the year from 1 January 2022 to 31 December 2022 ("FY 2022").

 

Financial Highlights

	As at 31 December 2022 (audited)	As at 31 December 2021 (audited)
NAV per Ordinary Share (p)	109.44	102.26
Ordinary Share price (p)	100.00	110.8
Dividends declared per Ordinary Share (p)2	5.24	5.00
Net asset value (£ million)	618	578
Gross asset value (£ million)1,3	1,073	738
Total value of all investments (£ million)	1,304	878
NAV total return in the year	+12.3%	+9.3%
Ongoing charges ratio1	1.12%	1.15%

 

·    Achieved strong NAV growth of +12.3% (2021: +9.3%). The NAV growth was driven primarily by rising inflation and power price assumptions, offset by an increase in the average discount rate applied in the portfolio valuations.

·    Robust total shareholder return in the period from IPO in December 2019 of +12.1% (2021: +17.7%).

·    Strong NAV total return in the period since IPO in December 2019 of +25.9% (2021: +12.1%)¹.

·    Total shareholder return in FY 2022 of -4.8% (2021: +1.6%)⁶.

·    A valuation increase of £10.7 million resulted from the unwinding of construction risk premium and development gain.

·    Strong dividend cover of 1.77x during FY2022 has been supported by the acquisition of operational portfolios as well as the successful completion of construction assets⁴.

·    In July 2022, the Company extended its RCF facility, through the accordion feature, bringing the total committed facility to £246 million.

 

Operational Highlights

 

·    The Company completed eight transactions during the period, including into a new country, Germany, committing over £350 million of capital on a GAV basis, across onshore and offshore wind, solar and battery storage, in both construction and operational assets, in addition to two developer investments.

·    At the SPV level, the Company's operational portfolio generated 1,005 GWh (2021: 348 GWh) of electricity, generating revenue of £112.0 million (2021: £38.5m), 4.5% ahead of target.

·    68% of forecast operational revenue in 2023 and 2024 is already fixed (31 December 2022: 50%), the increase driven by the acquisition of the Leeskow onshore wind farm (Germany), adding a new country to the portfolio, and investment into Lincs offshore wind farm (GB).

·    As at 31 December 2022, the portfolio comprised 36⁷ assets across seven countries (UK, France, Ireland, Finland, Poland, Sweden and Germany) and three technologies, as well as developer investments. Total capacity, excluding conditional acquisitions, of 662 MW⁷ (2021: 494 MW).

·    Once fully invested, the portfolio has the potential to power the equivalent of 522,000 homes with clean energy, an estimated 580,000 tonnes of carbon emissions avoided, up from 337,000 homes and 364,000 tonnes of carbon in 2021, respectively.

·    During the year under review, the Company committed to its first battery storage investment, a 50% stake in the 12MW, Woburn Road battery construction project in Bedfordshire, UK, growing the portfolio's technology diversification.

·    ORIT currently has 117MW of new renewable generation capacity at the construction-ready or in-construction stage.

·    In November 2022, ORIT was promoted to the FTSE250, demonstrating the strong progress made since IPO in December 2019.

 

Post Period End

 

·    Target dividend for FY 2023 increased to 5.79p for FY 2023², an increase of 10.5% over FY 2022 and in line with the Consumer Price Index (CPI), marking the second consecutive year the Company has increased its dividend target in line with inflation. ORIT's operational portfolio is forecast to generate significant cash flows (after debt service) in excess of the target dividend for FY 2023⁴. The expected dividend cover for FY2023⁴ is forecast to be 1.7x, and the average expected annual dividend cover over a 5-year period to 31 December 2027⁴ is also 1.7x. Cash flows generated by fixed or contracted sources (e.g. PPAs, CFDs, ROCs and FITs) are estimated to cover expected dividends by 1.1x over the same period⁵.

·    Extended and increased the Group's RCF, with the total committed multi-currency facility increasing to £271 million at a lower margin of 2.0% above SONIA⁹. The RCF also has an uncommitted accordion feature allowing the facility to be increased in size by up to a further £150 million.

·    ORIT successfully signed a 10-year PPA over the electricity to be generated at the Breach Solar Farm, a c.67 MW solar PV project in Cambridgeshire, UK. The solar farm will cover 14% of Iceland Foods' electricity needs for its UK stores. This will reduce Iceland's emissions by nearly 22,955 tonnes of CO2 a year.

 

Phil Austin, Chairman of Octopus Renewables Infrastructure Trust plc, commented:

 

"ORIT has achieved another strong performance with double digit NAV growth and delivering a 1.77x covered dividend, despite 2022 being a turbulent year in the energy sector, against a challenging macroeconomic backdrop.

 

We are delighted with the Company's operational performance this year, driven by our Investment Manager, whose over 100 strong team actively manage the portfolio, including successfully bringing a number of high-quality renewable energy assets through construction into operation and negotiating optimal energy pricing strategies, as well as developing our ongoing pipeline.

 

During the period, the Company made an investment in a new country in Europe, added a new technology to the portfolio and completed eight significant transactions, increasing ORIT's contribution to the green energy transition.

In a world where energy security and decarbonisation continue to rise to the top of the agenda globally, ORIT's fundamental objective is to help companies and countries transition to net zero whilst ensuring an attractive level of returns for our shareholders. We remain well positioned to take advantage of opportunities that will create a genuinely positive impact and deliver an attractive, growing dividend."

 

Results presentation today

 

There will be a presentation for sell side analysts at 9.00 a.m. today, 29 March 2023. Please contact Buchanan for details on [email protected] 

 

 

For further information please contact:

 

Octopus Energy Generation (Investment Manager) Chris Gaydon, David Bird	Via Buchanan
Peel Hunt (Broker) Liz Yong, Luke Simpson, Huw Jeremy (Investment Banking) Alex Howe, Chris Bunstead, Ed Welsby, Richard Harris, Michael Bateman (Sales)	020 7418 8900
Buchanan (Financial PR) Charles Ryland, Hannah Ratcliff, George Beale	020 7466 5000
Apex Listed Companies Services (UK) Limited (Company Secretary)	020 3327 9720

 

Notes:

1.    These are alternative performance measures. Definitions of these and other performance measures used by the Company, together with how these measures have been calculated, are set out in the Annual Report.

2.    The dividend target stated is a target only and not a profit forecast. There can be no assurance that it will be met or that the Company will make any distributions at all and it should not be taken as an indication of the Company's expected future results. Accordingly, potential investors should not place any reliance on this target in deciding whether or not to invest in the Company and should decide for themselves whether or not the target dividend is reasonable or achievable. Investors should note that references to "dividends" and "distributions" are intended to cover both dividend income and income which is designated as an interest distribution for UK tax purposes and therefore subject to the interest streaming regime applicable to investment trusts.

3.    A measure of total asset value including debt held in unconsolidated subsidiaries, but excluding any outstanding equity or debt commitments.

4.    Dividend cover is calculated on the basis of actual (in respect of FY 2022) and expected (in respect of subsequent financial years) total net operational cash flows from the portfolio after debt service and Company and intermediate holding company expenses.

5.    Dividend cover is calculated on the basis of expected net operational cash flows from the portfolio excluding uncontracted revenues (e.g. power sales linked to prevailing market prices) and after debt service and Company and intermediate holding company expenses.

6.    Total Shareholder return since IPO stated in sterling, including dividends reinvested, from 9 December 2019 to 31 December 2022.

7.   Excludes conditional acquisitions.

8.    The increase of 10.5% over FY 2022's dividend target is in line with the increase to the Consumer Price Index (CPI) for the 12 months to 31 December 2022. For FY 2023, the Company has elected to increase the target in line with CPI, rather than the lower CPIH.

9.    Or the equivalent reference rate for other currencies.

 

About Octopus Renewables Infrastructure Trust

 

Octopus Renewables Infrastructure Trust ("ORIT") is a closed-ended investment company incorporated in England and Wales focused on providing investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of renewable energy assets in Europe and Australia. ORIT's investment manager is Octopus Energy Generation. 

 

Further details can be found at  www.octopusrenewablesinfrastructure.com  

 

About Octopus Energy Generation

 

Octopus Energy Generation ("OEGEN") is driving the renewable energy agenda by building green power for the future. Its London-based, leading specialist renewable energy fund management team invests in renewable energy assets and broader projects helping the energy transition, across operational, construction and development stages. The team was set up in 2010 based on the belief that investors can play a vital role in accelerating the shift to a future powered by renewable energy. It has a 12-year track record with approximately £6 billion of assets under management (AUM) (as of January 2023) across 12 countries and total 3.2GW. These renewable projects generate enough green energy to power 2 million homes every year, the equivalent of taking over 800,000 petrol cars off the road. Octopus Energy Generation is the trading name of Octopus Renewables Limited. 

 

Further details can be found at  www.octopusenergygeneration.com

 

 

About the Company

Octopus Renewables Infrastructure Trust plc ("ORIT" or the "Company") is a closed-ended investment company incorporated in England and Wales.

The Company's purpose and investment objective is to provide investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets in Europe and Australia.

ORIT classifies itself as an impact fund with a core impact objective of accelerating the transition to net zero through its investments. ORIT's ordinary shares were admitted to the Official List of the Financial Conduct Authority and to trading on the premium listing segment of the main market of the London Stock Exchange on 10 December 2019.

ORIT is managed by one of the largest renewable energy investors in Europe, Octopus Energy Generation (the "Investment Manager").

Highlights

As at 31 December 2022

-4.8%	+12.3%	5.24p	+12.1%
Total shareholder return	NAV total return	Dividend per Ordinary	Total shareholder return
in the year1 3	in the year1  2 3	Share for FY 2022	since IPO (3.8% per
2021: (+1.6%)	2021: (+9.3%)	FY 2021: (5.0p)	annum)1 3
			2021: (+17.7%, 8.3% per annum)
+25.9% NAV total return since IPO (7.8% per annum)1 2 3 2021: (+12.1%, 5.7% per annum)	109.4p NAV per Ordinary Share2 increased by 6.9% since 2021: (102.26p)	£618m Net Asset Value ("NAV")2 2021: (£578m)	£1,073m Gross Asset Value ("GAV")1  4 increased by 45% since 2021: (£738m)
£1,304m Total value of all investments1 5 2021: (£878m)	1,740GWh Potential Renewable Electricity6 2021: (1,168 GWh)	580k Estimated tonnes of carbon avoided6 2021: (364k)	522k Equivalent homes powered by clean energy6 2021: (337k)

Alternative Performance Measures ("APMs")

The financial information and performance data highlighted in footnote 1 are the APMs of the Company. Definitions of these APMs together with how these measures have been calculated can be found in the Annual Report.

¹          These are alternative performance measures

²       The Net Asset Value (NAV) as at 31 December 2022 is calculated on the basis of 564,927,536 Ordinary Shares in issue

³       Total returns in sterling, including dividends reinvested

⁴       A measure of total asset value including debt held in unconsolidated subsidiaries

⁵       Total asset value including total debt and equity commitments

⁶       All metrics are calculated based on an estimated annual production of the whole portfolio once fully constructed and exclude conditional acquisitions

Key milestones during 2022

1

February 2022

19MW Polish onshore wind farm fully operational

 2

April 2022

Commitment into development platform focussed on Finland

 3

April 2022

Acquisition of 7.75% interest in 270MW UK operational offshore wind farm

4

June 2022

Acquisition of 67MW ready-to-build solar PV project in Cambridgeshire, UK

 5

June 2022

Conditional acquisition of 50% stake in ready-to-build battery storage project in Bedfordshire, UK

6

July 2022

Extended the RCF to a total facility of £246m

7

September 2022

Increased interest in 270MW UK offshore wind farm from 7.75% to 15.5%

8

October 2022

Acquisition of 34.6MW operational onshore wind farm in Germany

9

November 2022

24MW French onshore wind farm operational

10

November 2022

Acquired 51% stake in 46MW operational onshore wind farm in Scotland, UK

11

November 2022

Promoted to the FTSE 250, 3 years after IPO

12

December 2022

Acquired further interest in Irish based developer, Simply Blue

13

January 2023

Completed the acquisition of a 50% stake in a the ready-to-build battery storage project in Bedfordshire, UK

14

February 2023

Increased the RCF to a total facility of £271m and extended term for a further 3 years

15

March 2023

Secured 10 year PPA for 67MW UK solar PV project currently under construction

Portfolio at a glance

Technology	Country	Sites	Capacity (MW)*	Avg. asset  life remaining (years)	Status	Key information
Onshore wind	Sweden	1	48	28.5	Operational	Fully operational as of June 2021
	France	1	24	29.9	Operational	Fully operational as of November 2021
	UK	1	50	30.0	Construction, 12 turbines	Expected to be operational in Q1 2023
		1	23	28.5	Operational	Fully operational as of June 2021
	Poland	2	59	28.7	Operational	Polish CfD from Q3 2023
	Germany	1	35	29.7	Operational	German CfD
	Finland	2	71	28.8	Operational	Fully operational as of Q1 2022
Offshore wind	UK	1	42	21.0	Operational	ROC Subsidised
Solar PV	UK	8	123	25.4	Operational	ROC Subsidised
		1	67	40.0	Construction	Expected to be operational in H2 2023
	France	14	120	29.2	Operational	FiT Subsidised
	Spain	4	175	35.0	Conditional acquisition	Expected to be operational in 2024
	Ireland	5	243	40.0	Conditional acquisition	First 200MW expected to be operational by Q3 2023
Developers	Ireland	n/a	n/a	n/a	n/a	Floating offshore wind
	UK	n/a	n/a	n/a	n/a	Onshore wind
	Finland	n/a	n/a	n/a	n/a	Onshore wind/Solar PV
Battery	UK	1	6	35	Conditional acquisition	Acquisition completed in January 2023

*       Pro-rated by ownership

Total number of assets 36⁷

Total capacity 663⁷ MW

⁷       Excludes conditional acquisitions

Chair's Statement

Philip Austin MBE

Chair,

Octopus Renewables Infrastructure Trust plc

On behalf of the Board, I am pleased to present this annual report for Octopus Renewables Infrastructure Trust plc for the year ended 31 December 2022 (the "Annual Report").

2022 was a turbulent year in the energy sector, as Russia's invasion of Ukraine drove dramatic increases in power prices, which were already high, and led to government action across Europe to cap prices or impose taxes on generators. The high inflation resulting from rising energy prices has driven central banks to raise interest rates to levels not seen since 2008, which has fed through to asset valuations via increased discount rates. Despite this, the Company has delivered strong NAV growth during the period, as well as successfully bringing projects through construction into operation, and increasing dividend cover accordingly. In a world where energy security and decarbonisation are increasingly important, the Company remains well positioned to take advantage of opportunities that will create a positive impact.

Investment Activity

During 2022 the Company committed over £350 million of capital on a gross asset value basis through eight transactions, increasing the size of the portfolio to 662MW of operational and in-construction renewable projects, with a gross asset value of £1,073 million. Should the conditional acquisition of the Irish solar portfolio complete as expected in 2023, the portfolio will stand at over 900MW of capacity, with a gross asset value of approximately £1.3 billion. The Company also has the option to acquire a portfolio of solar sites in Spain with expected additional capacity of 175MW.

The investments during the year added to the strong technological diversification within the Company's portfolio of assets. This included our first battery storage investment, a 50% stake in the 12MW, Woburn Road battery construction project in Bedfordshire, UK, and our first offshore wind investment, a 15.5% stake in the 270MW operational Lincs offshore wind farm, located off the east coast of England. The portfolio also saw the addition of a new country, with the acquisition of the 35MW operational Leeskow onshore wind farm in Germany.

The other new investments in 2022 were the acquisition of a 51% stake in the 46MW operational Crossdykes wind farm in Scotland, the acquisition of the 67MW ready-to-build Breach solar farm in Cambridgeshire, UK, and an investment of up to €3.5 million (c.£2.9m) into Nordic Renewables Limited, a developer focused on renewable energy assets in Finland. The Company also invested an additional €6.25 million (c.£5.5m) into the Simply Blue Group, with a further €6.25 million expected to be provided during 2023; and increased its commitment to the Irish solar conditional acquisition to reflect the greater value associated with a long-term fixed price PPA now in place for the sites.

At a General Meeting held on 28 July 2022, Shareholders approved a change to the Company's investment policy to include offshore wind farms in the Company's core investment focus, in addition to onshore wind farms and solar PV parks. The change allows the Company slightly greater flexibility to make additional offshore wind farm investments as part of the Company's diversified portfolio of Renewable Energy Assets.

Results

During the year NAV per share increased from 102.3p to 109.4p. In combination with the dividends paid during the year this gave rise to a NAV total return of 12.3%.

The NAV growth was driven primarily by rising inflation and power price assumptions, offset by an increase in the average discount rate applied in the portfolio valuations. The Company's prudent approach to valuations, including significant haircuts to forward power prices in the June and September valuations, meant that the dramatic volatility in power prices seen throughout the year did not lead to a corresponding level of NAV volatility. In particular the haircuts applied as part of the September valuations meant that inclusion of the UK's Electricity Generator Levy and the various EU price caps did not lead to a net fall in valuations at year end.

Total shareholder return for the year was minus 4.8%, as share price falls across the sector and beyond following the mini-budget in September and the corresponding increase in bond yields outweighed the dividends paid during the year.

The Company's operating income for the year was £77.9 million, giving rise to a profit for the period of £69.8 million. This was underpinned by EBITDA from the portfolio of operational assets totalling £ 76.3 million, arising from gross revenues of £112 million.

Dividend

The Board declared dividends of 5.24p per Ordinary Share in respect of the year, achieving the target announced in February 2022. The fourth and final interim dividend of 1.31p per Ordinary Share was paid in February 2023. The total dividends of £29.6 million paid in respect of the year were 1.73 times covered by the cash generated in the portfolio of assets, after deducting holding company costs and debt service, including principal repayments on the fully amortising debt held within the portfolio of assets.

In line with the Company's progressive dividend policy, the Board announced an increase in the target dividend to 5.79p per Ordinary Share for 2023, an increase of 10.5%. This increase marks the second consecutive year the Company has increased its dividend target in line with inflation. For 2023, the Company has elected to increase the target in line with CPI, rather than the lower CPIH. The 2023 dividend target is expected to be fully covered by cashflows generated from the Company's operating portfolios.

Portfolio Performance

During the period the Company's assets generated 1,005GWh of electricity, an increase of 189% compared with the prior year. This increase was driven by the successful transition of the Kuslin, Krzecin and Cerisou projects into operation during the period, representing 83MW of new generation capacity, as well as the acquisition of the operational Lincs, Crossdykes and Leeskow wind farms. Generation was 7% below budget, principally driven by lower than average wind speeds in northern Europe.

Construction gains of £10.7 million were recognised during the year, including from the Cumberhead wind farm in Scotland, which had four turbines erected by the end of the period. The 12th and final turbine was installed in early March 2023, and the project is in the late stages of commissioning. In addition a development gain of £4.1 million was recognised following the second investment into the Simply Blue Group, reflecting the strong progress of the business since the initial investment, with the pipeline under development of 10GW. Following the end of the period Simply Blue received their first maritime consent, for the 100MW Erebus project off the coast of Wales.

Once fully constructed, ORIT's portfolio is expected to generate sufficient electricity to power 522,000 homes. This generation will avoid CO2 emissions of approximately 580,000 tonnes per annum, the equivalent of planting 2.9 million trees.

Outlook

Within the investment trust universe, most renewable infrastructure companies are now trading at discounts to NAV, restricting the ability of the Company and its peers to fund acquisitions through new equity issuance. However the Company's Investment Strategy includes a focus on funding assets at the construction ready stage to allow the opportunity for capital growth, and this is also core to our Impact Strategy. In order to ensure we can continue to access such opportunities, the Board and the Investment Manager will therefore consider opportunistic disposals where appropriate to recycle the capital into new construction projects.

This aligns with the drive from governments across the Company's target geographies to accelerate the deployment of new renewable generation and related energy transition projects. Russia's aggression in Ukraine is continuing, reinforcing the need for Europe and the UK to reduce reliance on fossil fuels to preserve energy security. Energy prices remain high and are forecast to do so for several years, even though prices have now fallen from the peaks of 2022. Decarbonisation remains an urgent priority, as extreme weather events continue to increase in frequency.

Wind and solar generation represent a key part of the solution to all three of energy security, energy affordability and decarbonisation. Furthermore, the strong support for renewable and energy transition investments in the US as part of the Inflation Reduction Act is leading to a response from Europe to increase their backing for new clean infrastructure, in order to ensure the industry remains competitive. The tailwinds behind the sector therefore remain as strong as ever, and the Company is well positioned to play a significant part in capturing those opportunities, creating positive impact whilst delivering an attractive growing dividend to investors, alongside continued capital growth.

Strategic Report

The Directors present the Strategic Report for the year ended 31 December 2022 in the Annual Report.

Business Model, Objectives and KPIs

Business Model

Octopus Renewables Infrastructure Trust plc was incorporated on 11 October 2019 as a public company limited by shares. The Company intends to carry on business as an investment trust within the meaning of section 1158 of the Corporation Tax Act 2010 and was listed on the premium segment of the main market of the London Stock Exchange on 10 December 2019. The Company holds and manages its investments through a parent holding company, ORIT Holdings II Limited and two holding company subsidiaries, ORIT Holdings Limited and ORIT UK Acquisitions Limited (together the "intermediate holding companies"), which in turn hold investments via a number of Special Purpose Vehicles ("SPVs"). The jurisdictions in which the SPVs are incorporated is typically determined by the location of the assets, and further portfolio-level holding companies may be used to facilitate debt financings.

As at 31 December 2022, the Company owns a portfolio of 36 Renewable Energy Assets (including three developer investments) totalling 662MW, 545MW of which is operational capacity and 117MW relates to assets under construction. Long-term structural debt is in place for the French solar portfolio and, as at 31 December 2022, this comprised outstanding principal amounts of €113 million provided by Allied Irish Banks, Société Générale and La Banque Postale. Cerisou Wind Farm has a €43.2 million fully amortising facility, provided by Société Générale, for the funding of the construction and commissioning of the project. The Polish wind farms have facilities in place with EBRD and Bayern LB, used to fund construction. The acquisition of the 15.5% ownership interest in the Lincs Offshore Wind Farm came with a long-term facility (£82.3 million remaining as at 31 December 2022) provided by a consortium of seven international commercial lenders and the acquisition of Leeskow Wind Farm in September 2022 included four existing long-term debt facilities of up to €61.2 million with Deutsche Kreditbank AG. Short-term debt financing is available through a £246 million Revolving Credit Facility ("RCF") held at ORIT Holdings II Limited (an intermediate holding company) and a £50 million short-term facility held at ORIT Lincs Holdings Limited (a portfolio-level holding company). As at 31 December 2022, £77 million was drawn down on the RCF and £50 million was drawn on the short-term facility.

The Company has a 31 December financial year end and announces half-year results in September and full-year results in March. The Company pays dividends quarterly, targeting payments in February, May, August and November each year.

The Company has an independent board of non-executive directors and has appointed Octopus AIF Management Limited ("OAIFM") as its Alternative Investment Fund Manager ("AIFM") to provide portfolio and risk management services to the Company. The AIFM has delegated the provision of portfolio management services to the Investment Manager, Octopus Renewables Limited, whose trading name is Octopus Energy Generation ("OEGEN"). OEGEN has day to day portfolio management responsibilities. Further information on the Investment Manager is provided in the Investment Manager's Report.

As an investment trust, the Company does not have any employees and is reliant on third-party service providers for its operational requirements. Likewise, the project companies do not have any employees and services are also provided through third-party providers. Each service provider has an established track record and has in place suitable policies and procedures to ensure they maintain high standards of business conduct and corporate governance. Simply Blue Holdings Limited, a portfolio-level holdings company, does have employees and has its own policies and procedures in place to maintain similarly high standards.

Figure 1: Company operating model

	Shareholders
Independent Board of Directors	Octopus Renewables Infrastructure Trust plc,		Company Service Providers
Day to day management subcontracted	Listed on the LSE Main Market		•     Broker: Peel Hunt •     Fund Administrator and Company Secretary: Apex Listed Companies Services •     Depository: BNP Paribas •     Registrar: Computershare •     Auditors: PWC •     PR Advisor: Buchanan •     Tax Advisor: BDO •     Legal: Gowlings WLG
AIFM Octopus AIF Management
Investment Manager Octopus Energy Generation
Debt Providers Revolving Credit Facility	ORIT Holdings ll Ltd		Key Equity Debt Services
	ORIT Holdings Ltd	ORIT UK Acquisitions Ltd
Debt Providers Short-term Facility Asset level Debt	Non-UK SPVs	UK SPVs	Asset Service Providers ·      External Asset Managers ·      Operations & Maintenance ("O&M") contractors ·      Engineering, Procurement and Construction ("EPC") contractors ·      Specialist consultants
	Portfolio investments held in SPVs*

*       Some investments in SPVs may be held indirectly through portfolio-level holding companies

Objectives and KPIs

The Company's objective is to provide investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets in Europe and Australia.

Financial Objectives

Objective	KPI	Performance commentary	Monitoring activities
Sustainable level of income returns ·      Provide investors with a dividend of 5.24 pence per Ordinary Share for FY22 ·      Generated from strong operational cashflows	5.24p dividend declared for the year, in line with target £76.3m EBITDA from operational assets	The dividend of 5.24p was fully covered by operational cashflows at the SPV level less costs at the plc and intermediate holding company level. The Company's dividend target is rising by 10.5% to 5.79 pence per Ordinary Share for FY23 (in line with CPI) and is expected to be progressive thereafter.8 9 While output was lower than expectations for the year, EBITDA from operational assets was 6% above budget, principally as a result of higher power prices achieved in Poland.	The Board monitors dividend cover and ratios at each quarterly Board meeting against the targets and makes determinations on the dividends to be paid. The Investment Manager actively manages operational performance of assets on an ongoing basis with actions taken to resolve and mitigate operational issues. Financial performance of assets is reviewed monthly by the Investment Manager. Any material issues would be highlighted to the Board without delay. Operational and financial performance is reviewed quarterly by the Board.

⁸       Investors should note that references to "dividends" and "distributions" are intended to cover both dividend income and income which is designated as an interest distribution for UK tax purposes and therefore subject to the interest streaming regime applicable to investment trusts

⁹       The dividend and return targets stated are targets only and not profit forecasts. There can be no assurance that these targets will be met, or that the Company will make any distributions at all, and they should not be taken as an indication of the Company's expected future results. The Company's actual returns will depend upon a number of factors, including but not limited to the Company's net income and level of ongoing charges. Accordingly, potential investors should not place any reliance on these targets and should decide for themselves whether or not the target dividend and target net total shareholder return are reasonable or achievable.

Objective	KPI	Performance commentary	Monitoring activities
Capital preservation with element of growth ·      Provide investors with a net total shareholder return of 7% to 8%10 per annum over the medium to long-term ·      Generated through a diversified portfolio including construction and development assets ·      Cost control and prudent financial management	109.4p NAV per Ordinary Share 12.1%, 3.8% per annum Total shareholder return since IPO 25.9%, 7.8% per annum NAV total return since IPO 410 new acquisitions delivering 167MW10 of capacity including onshore and offshore wind, solar, construction and operational assets, together with a new developer investments, all diversified across 2 new countries 1.12% Ongoing charges ratio 0.54% Transaction costs as percentage of committed acquisition spend	There was strong growth of the value of the portfolio driven by high wholesale energy price forecasts and de-risking of construction assets. The acquisitions in the year include ORIT's first offshore wind farm and battery storage project along with its first investment in Germany, increasing the diversifications of ORIT's portfolio. The ongoing charges ratio has decreased to 1.12% (FY 2021: 1.15%). Transaction costs incurred on acquisitions in the period were in line with expectations in the latest KID of 0.5%.	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 Investment Manager evaluates and selects investment opportunities to deliver against the investment strategy and policy. Company level budgets are approved annually by the Board and actual spend is reviewed quarterly. Transaction budgets are approved by the Board and potential abort exposure is carefully monitored.

¹⁰     Excludes conditional acquisition.

Impact Objectives

Our core impact objective is to accelerate the transition to net zero through our investments, building and operating a diversified portfolio of Renewable Energy Assets to help facilitate the transition to a more sustainable future. Our investments are long-term and therefore require a long-term view to be taken both in the initial investment decisions and in the subsequent asset management, adopting long-term and sustainable business practices.

Objective	KPI
Performance: Build and operate a diversified portfolio of Renewable Energy Assets, mitigating the risk of losses through robust governance structures, rigorous due diligence, risk analysis and asset optimisation activities to deliver investment return resilience	£1,304m committed into renewables 1,740GWh of potential annual renewable energy generation, 669GWh of which will be additional generation from constructing assets11 36 assets Financial return metrics are shown in the Financial Objectives table.
Planet: Consider environmental factors to mitigate risks associated with the construction and operation of assets, enhancing environmental potential where possible	580k equivalent tCO2 avoided12 8.48t CO2e per MW estimated carbon intensity (direct and indirect) 11.52t CO2e/£m weighted average carbon intensity 886t CO2e emissions offset (all direct emissions) 100% investments qualify as sustainable in line with EU Taxonomy13 87% generating sites on renewable import tariffs
People: Evaluate social considerations to mitigate risks and promote a 'Just Transition' to clean energy	0 RIDDORs or equivalent relating to injuries on people14 396 students benefitting from first social initiative

Further information on our Impact Strategy and performance against our Impact Objectives can be found in the Impact Report section of the strategic report as included the Annual Report and the Company's Impact Strategy published on our website here: www.octopusrenewablesinfrastructure.com/investors/

¹¹     Metric calculated based on an estimated annual production of the construction portfolio once fully constructed.

¹²     Metrics based on an estimated annual production of the whole portfolio once fully constructed. Carbon avoided is calculated using the International Financial Institution's approach for harmonised GHG accounting.

¹³     100% of investments are significantly contributing to climate change mitigation.

¹⁴     RIDDOR stands for the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 and these are reportable incidents to the UK Health and Safety Executive. In the period there was 1 reported RIDDOR associated with technical equipment.

Investment Strategy and Policy

Investment Strategy

The Company will seek to achieve its objectives in four ways:

·      Diversification: The Company's Investment Policy includes a broad mandate to invest across different renewable technologies and in different geographies, reducing concentration of risk in particular to power markets, regulatory change or weather conditions as well as allowing the Company to access investments from a large set of opportunities originated by the Investment Manager.

·      Inclusion of construction and development: The Company has a diversified portfolio of operational assets, which generate income, supporting the Company's dividend. Also investing into Renewable Energy Assets at the construction ready stage allows the opportunity for greater capital growth through the successful management of construction risks and delivery of the asset into operations, as well as increasing the ability to influence social and environmental benefits. Investments into development stage Renewable Energy Assets are limited to 5% of GAV and allows the Company access to a wider range of renewable energy asset investment opportunities.

·      Active construction and asset management: The Company, via the Investment Manager, takes an active role in ensuring site safety, in managing construction risks and in seeking to enhance the value of the portfolio through maximising generation, optimising the price received for generation, dynamic risk management and controlling costs as well as longer term value enhancements such as equipment upgrades or life extension.

·      Embedding impact into investments: As an Impact Fund the Company ensures that social and environmental benefits are considered and maximised alongside financial returns, both at the time of initial investment and throughout the ongoing management of the portfolio.

Investment Policy

The Company will seek to achieve its investment objective through investment in renewable energy assets in Europe and Australia, comprising (i) predominantly assets which generate electricity from renewable energy sources, with a particular focus on onshore and offshore wind farms and photovoltaic solar ("solar PV") parks, and (ii) non-generation renewable energy related assets and businesses (together "Renewable Energy Assets").

The Company may invest in operational, in-construction, construction ready or development Renewable Energy Assets. In-construction or construction ready Renewable Energy Assets are assets that have in place the required grid access rights, land consents, planning and regulatory consents. Development Renewable Energy Assets comprise projects that do not yet have in place the required grid access rights, land consents, planning and regulatory consents, as well as investments into development pipelines and developers ("Development Renewable Energy Assets").

The Company intends to invest both in a geographically and technologically diversified spread of Renewable Energy Assets and, over the long-term, it is expected that investments: (i) located in the UK will represent less than 50 per cent. of the total value of all investments, (ii) in any single country other than the UK will represent no more than 40 per cent. of the total value of all investments, (iii) in onshore or offshore wind farms will not exceed 60 per cent. of the total value of all investments, and (iv) in solar PV parks will not exceed 60 per cent. of the total value of all investments. For the purposes of this paragraph, investments shall (i) be valued on an unlevered basis, (ii) include amounts committed but not yet incurred and (iii) include Cash and Cash Equivalents to the extent not already included in the value of investments or amounts committed but not yet incurred.

The Company may acquire a mix of controlling and non-controlling interests in Renewable Energy Assets and may use a range of investment instruments in the pursuit of its investment objective, including but not limited to equity and debt investments. A controlling interest is one where the Company's equity interest in the Renewable Energy Asset is in excess of 50 per cent.

In circumstances where the Company does not hold a controlling interest in the relevant investment, the Company will secure its shareholder rights through contractual and other arrangements, to, inter alia, ensure that the Renewable Energy Asset is operated and managed in a manner that is consistent with the Company's investment policy.

Investments may be made into Development Renewable Energy Assets, which may be developers, portfolios and/or pipelines of Development Renewable Energy Assets, where the relevant investment: (i) includes limited exposure to Renewable Energy Assets outside Europe and Australia, which at the time of investment comprises both a minority of the assets in the relevant developer, portfolio or pipeline by number and value and is less than 1 per cent. of Gross Asset Value, and/or (ii) may include indirect exposure to ancillary assets and/or businesses unrelated to renewable energy whose value is de minimis as at the time of investment. The Company may retain an interest in any such assets and/or businesses following achievement of construction ready status.

Investment Restrictions

The Company aims to achieve diversification principally through investing in a range of portfolio assets across a number of distinct geographies and a mix of wind, solar and other technologies.

The Company will observe the following investment restrictions when making investments:

·      the Company may invest up to 32.5 per cent. of Gross Asset Value in one single asset, up to 27.5 per cent. of Gross Asset Value in a second single asset, and the Company's investment in any other single asset shall not exceed 20 per cent. of Gross Asset Value, in each case calculated immediately following each investment.

·      the Company's portfolio will comprise no fewer than ten Renewable Energy Assets.

·      no more than 20 per cent. of Gross Asset Value, calculated immediately following each investment, will be invested in Renewable Energy Assets which are not onshore or offshore wind farms and solar PV parks.

·      no more than 25 per cent. of Gross Asset Value, calculated immediately following each investment, will be invested in assets in relation to which the Company does not have a controlling interest.

·      no more than 5 per cent. of Gross Asset Value, calculated immediately following each investment, will be invested in Development Renewable Energy Assets.

·      the Company will not invest in other UK listed closed-ended investment companies.

·      neither the Company nor any of its subsidiaries will conduct any trading activity which is significant in the context of the Group as a whole; and

·      no investments will be made in fossil fuel assets.

Compliance with the above restrictions will be measured at the time of investment and non-compliance resulting from changes in the price or value of assets following investment will not be considered as a breach of the investment restrictions.

In addition to the above investment restrictions, following the Company becoming fully invested and substantially fully geared (meaning for this purpose borrowings by way of long-term structural debt of 35 per cent. of Gross Asset Value) at the time of an investment or entry into an agreement with an Offtaker, the aggregate value of the Company's investments in Renewable Energy Assets under contract to any single Offtaker will not exceed 40 per cent. of Gross Asset Value.

The Company will hold its investments through one or more special purpose vehicles owned in whole or in part by the Company either directly or indirectly which will be used as the project company for the acquisition and holding of a Renewable Energy Asset (an "SPV") and the investment restrictions will be applied on a look-through basis.

For the purposes of the investment policy, "Gross Asset Value" means the aggregate of (i) the fair value of the Company's underlying investments (whether or not subsidiaries), valued on an unlevered basis, (ii) the Company's proportionate share of the cash balances and cash equivalents of assets and non-subsidiary companies in which the Company holds an interest and (iii) other relevant assets and liabilities of the Company (including cash) valued at fair value (other than third-party borrowings) to the extent not included in (i) or (ii) above.

Borrowing Policy

The Company may make use of long-term limited recourse debt to facilitate the acquisition or construction of Renewable Energy Assets to provide leverage for those specific investments. The Company may also take on long-term structural debt provided that at the time of drawing down (or acquiring) any new long-term structural debt (including limited recourse debt), total long-term structural debt will not exceed 40 per cent. of Gross Asset Value immediately following drawing down (or acquiring) such debt. For the avoidance of doubt, in calculating gearing, no account will be taken of any investment in Renewable Energy Assets that are made by the Company by way of a debt investment.

In addition, the Company may make use of short-term debt, such as a revolving credit facility, to assist with the acquisition or construction of suitable opportunities as and when they become available. Such short-term debt will be subject to a separate gearing limit so as not to exceed 25 per cent. of Gross Asset Value immediately following drawing down (or acquiring) any such short-term debt.

The Company may employ gearing at the level of an SPV, any intermediate subsidiary of the Company or the Company itself, and the limits on total long-term structural debt and short-term debt shall apply on a consolidated basis across the Company, the SPVs and any such intermediate holding entities (but will not count any intra-Group debt).

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

Currency and Hedging Policy

The Company can enter into hedging transactions for the purpose of efficient portfolio management. In particular, the Company may engage in currency, inflation, interest rates, electricity prices and commodity prices (including, but not limited to, steel and gas) hedging. Any such hedging transactions will not be undertaken for speculative purposes.

Cash Management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include short-term investments in money market type funds ("Cash and Cash Equivalents").

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position. For the avoidance of doubt, the restrictions set out above in relation to investing in UK listed closed-ended investment companies do not apply to money market type funds.

Changes to and Compliance with the Investment Policy

Any material changes to the Company's investment policy set out above will require the approval of shareholders by way of an ordinary resolution at a general meeting and the approval of the FCA.

In the event of a breach of the investment guidelines and the investment restrictions set out above, the AIFM shall inform the Board upon becoming aware of the same and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service.

Investment Manager's Report

Octopus Energy Generation, part of the Octopus Energy Group, is a specialist clean energy investment manager with a mission to accelerate the transition to a future powered by renewable energy.

Since 2010, Octopus Energy Generation has, on behalf of its clients, invested in a diverse portfolio of assets with a capacity of over 3GW and is now the largest commercial solar investor in Europe and a leading UK investor in onshore wind, with assets under management valued at c.£5.0 billion. Of those investments c. £2.4 billion has been invested in solar and wind assets at construction stage. Octopus Energy Generation has over 100 employees in the UK across five teams: Investments and Development; Fund Management, Finance & Operations; Asset Management; and Risk and Compliance. Octopus Energy Generation is the trading name of Octopus Renewables Limited.

£5.0bn OEGEN Assets under Management as at 31 December 2022

The Investment Manager has established a robust investment and due diligence process to ensure that each of the investments acquired by ORIT complies with the Company's investment policy and its impact metrics that include Performance, Planet and People objectives. This includes an assessment against the Company's ESG Policy to ensure consideration is given to the wider stakeholder impacts and risks inherent in the Company's investments and decision making.

Whilst ORIT benefits from the breadth of the Investment Manager's whole team of over 100 professionals and a range of external professional advisors, within the Investment Manager, Chris Gaydon and David Bird are the named Fund Managers for ORIT.

"ORIT has continued to add high quality assets to its diverse portfolio during 2022, with over 900MW* of capacity now operational or in construction. As governments seek to stimulate acceleration of the energy transition, we look forward to bringing more green generation onto the system in the coming years."

Chris Gaydon

Investment Director

Chris joined Octopus Energy Generation as an investment director in 2015, is a long-standing member of the OEGEN's Investment Committee and a director of several of OEGEN's wind and solar special purpose vehicles.

Chris originated and led one of the largest wind farm portfolio acquisitions in the UK valued at c.£320 million and led the transaction team that delivered over £1 billion of debt and equity transactions. Chris now focuses on the origination of acquisition opportunities and fundraising, as well as strategic investments in related sectors.

Prior to joining the Octopus Group, Chris was a business development director at Falck Renewables where he had a range of roles, including in M&A and leading greenfield development in France and Poland. Chris holds a Bachelor of Commerce (Finance) degree and a Bachelor of Engineering (Chemical) degree from the University of Sydney.

"2022 was a dramatic year in the energy sector and in financial markets, however ORIT's portfolio has proven resilient, delivering NAV total return of 12.3% in the year. We have successfully completed construction on the Cerisou, Krzecin and Kuslin wind farms, with Cumberhead commencing operations after period end."

David Bird

Investment Director

David is an investment director who joined the Octopus Energy Generation team in 2014 and works full-time on fund management for ORIT. As well as working in the transaction team leading acquisitions and project finance debt raising in the UK, France and Ireland, David has previously led the team responsible for the management of Octopus Energy Generation's bioenergy investments and has represented Octopus Energy Generation on a number of industry panels convened by Ofgem, the GB energy regulator.

Prior to joining the Octopus Group, David was a director at Walbrook Capital, a boutique investment manager with a particular focus on renewables. He is a chartered accountant having qualified at EY, and holds a Masters in Mathematics from Oxford University.

*       Including the conditional acquisition of the Irish solar assets

Investments

8 Investments made during the year

£205m Total allocated capital to (new investments includes future construction) commitments

£1,304m Total value of all investments

Company Developments in 2022

During the year, the Company announced eight investments including its first investments in offshore wind and battery storage. Shareholders also approved an amendment to the Investment Policy to include investments into offshore wind as part of the Company's core wind investment allocation.

In April 2022 the Company announced that it had committed to invest up to €3.5 million (c. £2.9m) to set up and fund Nordic Renewables Limited, a new development platform focused on renewable energy assets in Finland. Nordic Renewables Limited will initially target the development over the next 3-5 years of onshore wind farms and solar PV assets in Finland with a potential combined capacity of approximately 400MW.

Later in April 2022 the Company announced that it had entered into an agreement to acquire a 7.75% ownership interest in the Lincs Offshore Wind Farm, a 270MW operational wind farm located off the east coast of England. Lincs Offshore Wind Farm benefits from the UK's ROC regime, receiving 2 ROCs per megawatt hour of electricity generation during the first 20 years of operation. This acquisition completed in May 2022.

In June 2022 the Company announced that it had acquired the Breach Solar Farm, a c.67MW ready-to-build solar PV project in Cambridgeshire, UK, from AGR Renewables. The total cost of acquisition and construction of the solar PV project is expected to be approximately £50 million. The acquisition also gives the Company the right to construct a battery storage project which is expected to be ready-to-build later in 2023, with a capacity of 50MW/100MWh.

In June 2022, the Company agreed to amend the terms of its conditional acquisition of five solar PV sites in Ireland, to permit the sites to enter into a long-term fixed price PPA with an AAA-rated Offtaker. The higher price received under the PPA is expected to lead to an increase in purchase consideration to between approximately €169 million and €193 million (approximately £144m and £165m respectively).

Also in June 2022, the Company announced that it had entered into an agreement to acquire a 50% stake in a 12MW/24MWh ready-to-build battery storage project in Bedfordshire, UK, from Gridsource. The acquisition completed post period end once the lease agreement for the project site came into effect in January 2023 and was made alongside another Octopus Managed Fund. The consideration for the Company's share of future construction costs is expected to be approximately £4 million.

At a General Meeting held on 28 July 2022, shareholders approved a change to the Company's investment policy to include offshore wind farms in the Company's core investment focus, in addition to onshore wind farms and solar PV parks. The change moves offshore wind from the non-core technology allocation, which is limited to 20% of Gross Asset Value, to the core wind allocation, which is expected, over the long-term, to make up less than 60% of the total value of all investments. The change allows the Company slightly greater flexibility to make additional offshore wind farm investments as part of the Company's diversified portfolio of Renewable Energy Assets.

In July 2022, the Company extended its revolving credit facility ("RCF") by utilising the accordion feature, bringing the total committed facility to £246 million. ORIT's increased RCF was entered into under the same terms as the existing facility.

In August 2022, the Company entered into an agreement to acquire a 51% ownership interest in the Crossdykes Onshore Wind Farm ("Crossdykes"). The remaining 49% is being acquired by another Octopus Managed Fund. Crossdykes, located in southern Scotland, was developed by Muirhall Energy and has been operational since June 2021. It is amongst the largest unsubsidised wind farms in operation in the UK, with a total capacity of 46MW, made up of 10 Nordex turbines. The wind farm currently benefits from fixed pricing through its PPA until March 2025. Completion of the acquisition occurred in November 2022 once all regulatory consents were received.

In September 2022, the Company acquired a further 7.75% ownership interest in the Lincs Offshore Wind Farm, from a fund managed by Macquarie Asset Management. This follow-on investment adds to the original 7.75% stake in this wind farm that ORIT acquired earlier this year.

Also in September 2022, the Company agreed to acquire the Leeskow Onshore Wind Farm, a 34.6MW operational wind farm located in Brandenburg, north-east Germany. Leeskow Onshore Wind Farm benefits from a government backed floor price for twenty years under the German EEG regime and is therefore not exposed to movements in or caps of wholesale power prices in the short to medium-term. Leeskow Onshore Wind Farm has existing long-term debt funding with fixed interest rates. Completion of the acquisition occurred in October 2022.

In connection with the Lincs and Leeskow acquisitions, a subsidiary of ORIT entered into a £50 million debt facility with existing lender NatWest in September 2022.

In November 2022, the Company invested an additional €6.25 million (c.£5.5m) into Simply Blue Holdings Limited, the parent company of the Simply Blue Group ("SBG"), an Irish developer of predominantly floating offshore wind projects. Following this investment, ORIT's ownership interest in SBG has increased to c.15.5%. The Company also agreed to provide a further investment of up to €6.25m which is expected to be drawn in 2023, and which would increase ORIT's ownership interest to c.19%.

Portfolio Breakdown (as at 31 December 2022)

The Company's portfolio of assets is not segmented by technology, phase or jurisdiction for the Company's reporting purposes.

Technology	Country	Site name	Capacity (MW)	Phase	Start of operations	Remaining asset life	Stake %
Onshore wind	UK	Cumberhead	50	Construction	-	30	100%
	France	Cerisou	24	Operational	15/11/2022	30	100%
	Sweden	Ljungbyholm	48	Operational	30/06/2021	28	100%
	Poland	Krzecin	19	Operational	08/02/2022	28	100%
		Kuslin	40	Operational	31/12/2022	29	100%
	Finland	Saunamaa	28	Operational	28/08/2021	29	100%
		Suolokangas	43	Operational	29/12/2021	29	100%
	Germany	Leeskow	35	Operational	30/09/2022	30	100%
	UK	Crossdykes	46	Operational	30/06/2021	28	51%
Offshore wind	UK	Lincs	270	Operational	31/10/2013	26	15.5%
Solar	UK	Wilburton 2	19	Operational	29/03/2014	21	100%
		Abbots Ripton	25	Operational	28/03/2014	31	100%
		Ermine Street	32	Operational	29/07/2014	22	100%
		Penhale	4	Operational	08/03/2013	30	100%
		Chisbon	12	Operational	03/05/2015	28	100%
		Westerfield	13	Operational	25/03/2015	22	100%
		Wiggin Hill	11	Operational	10/03/2015	17	100%
		Ottringham	6	Operational	07/08/2013	32	100%
		Breach	67	Construction	-	40	100%
	France	Charleval	6	Operational	26/03/2013	30	100%
		Cuges	7	Operational	17/04/2013	30	100%
		Istres	8	Operational	18/06/2013	30	100%
		La Verdière	6	Operational	27/06/2013	30	100%
		Brignoles	5	Operational	26/06/2013	30	100%
		Saint Antonin du Var	8	Operational	28/11/2013	31	100%
		Chalmoux	10	Operational	01/08/2013	31	100%
		lovi 1	6	Operational	17/07/2014	32	100%
		lovi 3	6	Operational	17/07/2014	32	100%
		Fontienne	10	Operational	02/07/2015	32	100%
		Ollieres 1	12	Operational	19/03/2015	32	100%
		Ollieres 2	11	Operational	19/03/2015	32	100%
		Arsac 2	12	Operational	05/03/2015	19	100%
		Arsac 5	12	Operational	30/01/2015	19	100%
	Ireland	Ireland 1	56	Conditional acquisition	-	40	100%
		Ireland 2	68	Conditional acquisition	-	40	100%
		Ireland 3	47	Conditional acquisition	-	40	100%
		Ireland 4	30	Conditional acquisition	-	40	100%
		Ireland 5	42	Conditional acquisition	-	40	100%
	Spain	Spain 1	44	Conditional acquisition	-	35	100%
		Spain 2	44	Conditional acquisition	-	35	100%
		Spain 3	44	Conditional acquisition	-	35	100%
		Spain 4	44	Conditional acquisition	-	35	100%
Developer	UK (HQ)	Wind2	-	Developer	-	-	25%
	Ireland (HQ)	Simply Blue	-	Developer	-	-	15.5%
	Finland (HQ)	Norgen	-	Developer	-	-	50%
Battery	UK	Woburn Road	12	Conditional acquisition	-	35	50%

Portfolio composition broken down by total invested basis in accordance with the Company's investment policy (including the amounts committed to the conditional acquisitions of the Spanish and Irish solar PV assets and Woburn Road Battery.¹⁵

¹⁵     Portfolio composition on a total invested basis in line with the Company's investment policy (including the amount committed to the conditional acquisition of the Spanish and Irish solar PV assets and Woburn Road Battery) as at 31 December 2022. The investments are valued on an unlevered basis and including amounts committed but not yet incurred.

Country

UK: 37%

France: 14%

Ireland: 11%

Finland: 11%

Poland: 9%

Sweden: 7%

Germany: 6%

Spain: 3%

Developer: 2%

Technology

Onshore wind: 46%

Solar: 39%

Offshore wind: 13%

Developer: 2%

Battery: 0.2%

 

Asset phase

Operational: 86%

Construction: 12%

Developer: 2%

Portfolio composition broken down by MW of installed capacity on a current invested basis (and therefore exclude the Spanish and Irish solar PV assets and Woburn Road Battery).¹⁶

¹⁶     Portfolio composition by MW on a current invested basis (and therefore exclude the amount committed to the conditional acquisition of the Spanish and Irish solar PV assets and Woburn Road Battery) as at 31 December 2022.

Country

UK: 46%

France: 22%

Finland: 11%

Poland: 9%

Sweden: 7%

Germany: 5%

Technology

Onshore wind: 47%

Solar: 47%

Offshore wind: 6%

Asset phase

Operational: 82%

Construction: 18%

Portfolio Performance

Technical and Financial Performance

In the financial year ending 31 December 2022, the Company's operational portfolio generated 1,005GWh of electricity, 7% below budget largely due to low wind speeds and grid curtailment impacting the performance of the Company's wind assets. Revenues of £112.0 million were generated in the year (2021: £38.5m), 4.5% above expectations, as high power prices partially offset the impact of reduced output, leading to total EBITDA generated across ORIT's operational portfolio of £76.3 million (2021: £29.9m).

1,005GWh                           £112.0m                                £35.7m                             £76.3m

Output (2021: 348GWh)        Revenue +4.5% vs budget     Opex +1% vs budget        EBITDA +6% vs budget

UK Solar

Output for the 8 site, 123MW UK operational solar portfolio was 122.7GWh for the year. The portfolio over performed by 10.5% against budget, largely driven by higher irradiance. Generation was 1.3GWh higher than in the same period in the previous year, equating to a 12% increase in renewable energy generated.

The portfolio generated revenues of £17.3 million (2021: £14.2m), a 18% increase to budget due to both the technical overperformance and high pricing. Operational expenditure for the year totalled £3.6 million (2021: £3.1m), 1.8% above budget primarily the result of increased electricity consumption costs and additional surveillance costs following a CCTV upgrade across the portfolio. EBITDA for the UK portfolio for the year ending 31 December 2022 was £13.7 million (2021: £11.1m), 22.7% up on budget for the year.

French Solar

Performance of the 14 site, 120MW French operational solar portfolio was in line with budget, with the portfolio producing 170GWh for the year. Irradiance was 4% above budget, however output was impacted by lower than expected availability across three sites (partly covered by contractual recoveries for lost revenue) and underperformance at one site, the 8MW Saint-Antonin-du-Var, where a number of panels were disconnected during the year due to a technical fault. The rectification costs associated with this issue are expected to be covered by manufacturer warranties.

The portfolio generated revenues of €19.3 million (2021: €18.7m) in line with the budget for the year. Operational expenditure for the period totalled €5.5 million (2021: €4.9m), 2.7% less than budget primarily due to compensation received to cover the availability losses at the three underperforming sites, resulting in EBITDA of €13.8 million (2021: €13.8m), 1% above budget.

Saunamaa and Suolakangas Wind Farms (Finland)

The assets completed the commissioning phase during Q1 2022 and are operating under a long-term operations and maintenance agreement with Vestas, the turbine supplier. Output for the period was 252.1GWh, 8% below budget driven primarily by wind speeds (5% down on budget) and lower than expected availability across the sites. Losses in relation to these availability issues are expected to be covered by the warranties in the Vestas contracts.

Revenues for the Saunamaa and Suolakangas wind farms totalled €22.0 million (2021¹⁷: €7.3m) for the year, a 2% increase to budget, driven largely by high pricing despite output being below expectations. Operational expenditure totalled €3.3 million (2021¹⁷: €1.4m), a 16% increase to the budget, largely due to increased electricity consumption costs. EBITDA for the year was in line with budget and totalled €18.7 million (2021¹⁷: €6.2m).

¹⁷     2021 comparatives for a 6 month period from locked box date of 1 July 2021

Lincs (UK)

On 26 April 2022 the Company agreed to acquire a 7.75% ownership stake in Lincs offshore wind farm, and the acquisition was completed in early May. The Company acquired an additional 7.75% ownership interest in Lincs offshore wind farm in September 2022, increasing the stake in the asset to 15.5%. Lincs is located off the east coast of England and has produced 954.6GWh of electricity since the locked box date of 31 December 2021. Production over the year was 3.7% below budget due to an outage on the main cable in July and unexpected component replacements required on a few turbines over the summer.

In 2022, Lincs wind farm generated £54.0 million of revenue and EBITDA of £14.2 million for ORIT in line with investment case as high price indexation offset lower output.

Crossdykes (UK)

In September 2022, the Company acquired a 51% ownership interest in the Crossdykes Onshore Wind Farm, a 46MW operational wind farm in southern Scotland. The asset generated 112.7GWh since 31 December 2021, the locked box date of the transaction, 22% below investment case expectations. This is largely because the site was curtailed off during the year under the Balancing Mechanism administered by NGESO and will be compensated for lost production.

Since the locked box date, Crossdykes Onshore Wind Farm has generated revenues of £13.5 million, in line with investment case expectations after including Balancing Mechanism revenues. EBITDA was £9.8 million for the year, 7% below investment case due to higher than expected operating expenditure, primarily due to fluctuations in network charges such as BSUoS and TNUoS.

Ljungbyholm Wind Farm (Sweden)

Output at the Ljungbyholm wind farm was 10% below budget with the wind farm producing 134.8GWh of electricity during the year. The site had budgeted for 150GWh, however wind speeds were down by 10.5%.

Ljungbyholm wind farm generated revenues of €11.4 million (2021: €6.3m), 51% below budget. This is as a result of the power prices captured in the Swedish market being significantly below those budgeted with actual power prices achieved averaging at 84 €/MWh versus budgeted prices of 156 €/MWh. The FY22 budget was based on forward prices which proved to be much higher than the market out-turn price over the same period. During the year the site benefited from the corporate PPA with an innovative structure executed in late 2021, that allows for the asset to benefit from higher market prices while providing a degree of revenue certainty. See the Annual Report for further details.

Operational expenditure totalled €1.3 million (2021: €1.2m), 36% under budget largely due to lower variable costs associated with the decreased revenue, and EBITDA for the year was €10.2 million (2021: €5.1m), 52% below budget.

Krzecin and Kuslin Wind Farms (Poland)

Construction of the Krzecin Wind Farm in the north-west of Poland and the Kuslin Wind Farm in western Poland commenced in Q4 2020, with the Krzecin Wind Farm achieving operational status during Q1 2022 and the Kuslin Wind Farm becoming operational in September 2022¹⁸.

Since achieving operational status, the Krzecin and Kuslin wind farms generated 92.1GWh, 10.9% below budget in the year to 31 December 2022, driven largely by lower wind speeds. Over the same period the wind farms generated revenues of PLN 71.2 million, 33% above budget and driven by high power prices. Over the year, average power prices of PLN 756/MWh were achieved compared to budget prices of PLN 512/MWh. Operational expenditure for the period totalled PLN 7.6 million, 25% favourable to the budget, mainly due to operating costs not incurred whilst the sites remained under construction. As a result, EBITDA for year was 46% above budget totalling PLN 63.6 million.

¹⁸     Full commercial operations under the construction contracts occurred in December 2022, following completion of all required tests.

Leeskow (Germany)

Leeskow was acquired towards the end of the year, representing the Company's first investment in Germany. Since the locked box date of 30 June 2022, the asset produced a total of 16.6GWh, compared to a budgeted 28.4GWh. This is partly due to the fact that the site was commissioned slightly later than planned (3.2GWh), site curtailment in the period (1.1GWh) and lower than expected wind speeds (7.5GWh). The team is collaborating with the newly onboarded asset manager to reduce curtailment on site, following a change in German legislation to boost wind energy production in response to the European energy security crisis.

Since the locked box date, Leeskow onshore wind farm has generated €1.4 million of revenue and EBITDA of €0.8 million, 55% below investment case predominantly as a result of the reduced output.

Cerisou Wind Farm (France)

Construction at Cerisou Wind Farm started in August 2021 and completed in line with expected timelines, with the site generating its first revenues in Q3 2022 and becoming fully operational in Q4 2022. The 24MW wind farm, made up of 8 turbines, has now formally entered the French Contract for Difference ("CfD") regime under which it will receive fixed, index-linked revenues for twenty years.

Since achieving operational status the French wind portfolio generated an output of 12 GWh, 12% below budget due to technical underperformance. Three turbines experienced outages as a result of recabling, and converter/hub issues. This downtime is covered by the availability warranty in the O&M contract. Despite this, Cerisou Wind Farm generated revenues of €1.8 million, 6% above budget for the year as output generated before the CfD started on 1^st November 2022 sold at higher than forecast market prices. Operational expenditure for the period totalled €0.3 million, 8% favourable to budget mainly the result of certain site works being pushed back into next year, resulting in EBITDA of €1.5 million, 9% above budget.

Cumberhead Wind Farm (UK)

Construction at the onshore wind farm project in Scotland commenced in January 2022. All major civil works are complete and all turbines are now erected, with site energisation achieved in December 2022. All 12 turbines are expected to be energised and producing energy by 31 March 2023 with full commercial operations expected to be achieved in Q2 2023 once all testing is complete. The Group has entered into a 10-year fixed price virtual PPA with Kimberley Clark Limited and a physical PPA with EDF.

Breach Solar Farm (UK)

The total investment in the 67MW construction ready solar farm is c.£50 million which will be disbursed as the construction progresses. Construction began in November 2022 and is expected to complete in H2 2023. Subject to updates to the grid connection agreement and planning consent, the site has the potential to add a 50MW/100MWh battery project co-located to the solar project.

Revenues

Figure 3 presents the Company's forecast revenues, categorised by price structure, through to 2050. The portfolio's exposure to wholesale power prices is limited due to fixed price PPAs (with corporate and utility offtakers) which the Investment Manager has originated, as well as government-backed subsidies across GB, France, Germany and Poland.

Comparing with 12 months prior, despite a commodities market which has surged following Russia's invasion of Ukraine, the Investment Manager has increased ORIT's proportion of near-term forecast fixed revenues. The acquisitions of the Leeskow onshore wind farm (Germany) and investment into Lincs offshore wind farm (GB) have positively contributed to this outcome. In addition to this, the Investment Manager's active approach to hedging has secured further fixed revenues, most notably for hedges executed for the Saunamaa and Suolokangas (Finland) wind farms, whose PPA has been structured in a way that enables a flexible approach to hedging the assets' wholesale power price exposure.

As at 31 December 2022, 68% of ORIT's forecast revenues over the period to 31 December 2024 (2021: 50% to 31 December 2023) are fixed. Fixed-price revenues arise from either subsidies, such as ROCs or power prices fixed under PPAs.

Furthermore, approximately 53% of the revenues forecast in the period to 31 December 2032 are now explicitly inflation linked (with reference to UK RPI, French inflation and Polish CPI). This high proportion of inflation-backed revenues provides a natural hedge to the Company from rising interest (and discount) rates.

Figure 4: Fixed vs Unfixed revenues: period to 31 Dec 24

Fixed: 68%
Variable: 32%

Market Outlook

The energy generation industry as a whole continues to navigate through a challenging period, with the effects of the Russia-Ukraine war looking set to continue for some time and beyond. The most obvious impacts have been supply chain problems, rising inflation, upwards pressure on interest rates and abnormally high power prices (which are clearly inter‑related). The intrinsic linkage of power prices to gas prices under the current market system in the UK has meant that day-ahead electricity prices saw a 72% increase in 2022 compared to 2021, and they were around four times pre‑pandemic levels. European prices have also been abnormally high. In the long-term we are likely to see system re‑designs in order to remove the linkage between gas and power prices for renewable generators, but for now short-term solutions have been put in place through price caps (in Europe) and the Electricity Generator Levy (in the UK). Whilst these measures reduce the returns available to investors and asset owners, the finalisation of their details gives the market clarity in this area after a period of uncertainty in Q4 2022. As a result, we expect the slow-down in transaction activity seen towards the end of 2022 to recede, and for a broad increase in investor activity to emerge as we move through the coming months.

Following three prime ministers in 2022, the political uncertainty in the UK has calmed and the future now looks brighter for the development of new projects: solar looks to have escaped a risk of changes to land-classification rules that would have hampered planning permissions, the long-standing ban on onshore wind is expected to be lifted, and Contracts for Difference ("CfD") auction frequency has been increased to once per year starting in 2023. We can therefore expect healthy development and construction pipelines to emerge which will provide a home for capital looking for new renewable generation projects.

Whilst there is now more certainty on revenues, high inflation rates (expected to remain for some time) mean increasing construction costs, and price caps or windfall taxes mean that returns available to developers may come under pressure. To compound this, the increases in base interest rates have led to higher discount rates for projects. However, we expect project valuations to be supported by a healthy amount of competition for assets from investors seeking attractive projects. Grid access challenges have become increasingly prevalent across several geographies. We are seeing projects coming to market with grid connection dates in the late 2020s and beyond, due to aging networks and the need for capacity upgrades, and at this stage there is little clarity on how and when this will be resolved.

Newer technologies are gathering further momentum, especially the growing trend for battery storage, but also hydrogen and floating offshore wind, which saw its first CfD contract awarded in 2022.

In Europe there has been much focus on responding to the US Inflation Reduction Act, in order to ensure the continued competitiveness of European industry throughout the energy transition. The EU had already earmarked billions of Euros of funding, including through REPowerEU, but has now responded to the Inflation Reduction Act with measures to give member states more freedom to support industry, and to accelerate permitting and access to funding for relevant projects.

Power prices

2022 has been another extraordinary year for electricity markets. The market was already stressed at the start of the year due to the ongoing impacts from strong post-covid demand for LNG from Asia, and droughts in China and Brazil compounding this effect.

Over time, Europe's economy has grown heavily reliant on the supply of cheap Russian gas. Flows on the Nord Stream pipeline had been reduced since mid-2021, and Russia's invasion of Ukraine in February 2022 caused markets to react dramatically to expected Western sanctions and the resulting accelerated reductions in supply. Power prices and volatility surged as a result.

To compound things, the discovery of corrosion and micro-cracks across France's aging nuclear fleet triggered a series of inspections across the fleet. This sent nuclear output to a 30 year low and European power prices even higher. Usually Europe's largest exporter of power, the nuclear outages turned France into a net importer, no longer able to play the same role in stabilising power prices for neighbouring markets, such as GB.

As wholesale prices continued to increase, late summer saw dramatic events as liquidity in power markets fell sharply as a result of rapid increases in the cost of meeting margin calls and posting collateral for trades. The market then became dominated by utilities managing their margin call exposure rather than following market fundamentals.

Weather also continued to play an important role, with droughts impacting Nordic and Alpine hydroelectricity production across the summer and autumn, exacerbating the crisis. The winter months then saw unexpectedly mild weather bring prices down from the highs seen earlier in the year.

Russia's invasion of Ukraine is likely to leave long-lasting effects on energy markets. Government responses and market intervention will also be a key determinant of outcomes, with the UK and the EU considering longer term reforms. Whatever the precise outcome however, one thing which remains clear is that the tailwinds behind renewable generation are as strong as ever. With wind and solar being the cheapest form of electricity generation, and inherently domestic, renewables offer the solution not only to decarbonisation, but also to the current affordability and energy security crises.

Counterparty Risk

As detailed in the Annual Report, reliance on third-party counterparties is a principal risk to the Company. In the current economic climate, there is an increased risk associated with service providers defaulting on contractual obligations or suffering an insolvency event, and this can impact the performance of the portfolio of assets and ultimately the Company. The Investment Manager monitors this risk closely and carries out qualitative and quantitative due diligence on counterparties before they are appointed and, where possible, seeks to obtain extensive warranty protection on all contracts. Exposure to counterparties is reviewed by the Investment Manager on a quarterly basis. The graphs below illustrate the Company's exposure to offtakers and O&M providers as at 31 December 2022.

Offtaker by GAV ^19,20

CPPA (Various): 27%

EDF: 18%

British Gas: 13%

Esti Energi: 11%

NEXT: 9%

Npower/Axpo: 7%

Alpix: 6%

N/A: 4%

OE: 4%

O&M by GAV

Nordex: 25%

Vestas: 17%

Orsted: 13%

Statkraft: 11%

Engie: 10%

PSH: 6%

Res: 5%

N/A: 4%

SGRE: 4%

Goldbeck: 3%

BayWa 1%

¹⁹     Graph details the current offtaker weighted by overall GAV. The NPV will vary over the lifetime.

²⁰     Sites sell ROCs and power to NPower but also have a price-fixing arrangement with Axpo.

Financing

More favourable debt terms tend to be available for assets with government-backed fixed revenues in stable jurisdictions. Borrowing in euros, secured against assets whose revenue is euro denominated, provides a natural hedge against foreign exchange movements. Therefore, the Investment Manager has prioritised securing long-term structural debt against the non-Sterling assets.

The acquisition of the 15.5% ownership interest in the Lincs Offshore Wind Farm came with leverage of 56%. This long‑term, non-recourse debt is provided by a consortium of seven international commercial lenders and is expected to stay in place until 2033 when the ROC revenues expire.

In August 2022, the Company extended its revolving credit facility ("RCF") by utilising the accordion feature, bringing the total committed facility to £246 million. ORIT's increased RCF was entered into under the same terms as the existing facility. In addition, in September 2022, the Company's subsidiary ORIT Lincs Holdings Limited, entered into a new £50 million short-term facility with NatWest, maturing in November 2023.

The acquisition of Leeskow Wind Farm in September 2022 included four existing long-term debt facilities of up to €61.2 million with Deutsche Kreditbank AG. These 20-year facilities have a weighted average fixed interest rate of 1.27% and were substantially fully drawn as at 31 December 2022 with the final amount remaining to be drawn in 2023.

Post period end the Company's direct subsidiary ORIT Holdings II Limited secured an amendment and extension to the existing RCF from a group of four lenders with the total committed facility increasing to £271 million. The three-year multi currency facility is provided by National Australia Bank, NatWest, Santander and Allied Irish Bank and has an interest margin of 2.0% and commitment fees of 0.7%. The RCF includes an additional uncommitted accordion, allowing the facility to be increased by up to £150 million without requiring the consent of any existing lenders not participating in the increase.

	Short Term				Long Term
Asset	HoldCo	HoldCo	FR Solar	FR Wind	IRE Solar	POL Wind	GER Wind	UK Offshore Wind
Debt Terms
Currency	GBP or EUR	GBP or EUR	EUR	EUR	EUR	PLN	EUR	GBP
Term loan	£ 271.0m	£ 50.0m	€ 125.7m	€ 43.2m	€ 91.0m	PLN 318.8m	€ 61.0m	£ 110.5m
Drawn at signing date	£ 95.6m	£ 50.0m	€ 113.4m	€ 43.2m	-	PLN 282.3m	€ 59.3m	£ 82.3m
Drawn at signing date £m	£ 95.6m	£ 50.0m	£ 100.6m	£ 38.3m	-	£ 53.3m	£ 52.6m	£ 82.3m
Initial Term (yrs)	3	1	18	20	20	18	18	15
Expiry Date	Nov-23	Nov-23	Dec-38	Sep-42	Jun-42	Aug-38	Mar-41	Sep-32
Facility date	Nov-20	Sep-22	Jan-21	Apr-21	Jul-21	Sep-21	Sep-22	Dec-17
					Y1-5 1.30%	Construction: 2.65%		2017 - 2022: 1.45%;
Margin	2.0%	2.50%	1.25%	1.30%	Y6-10 1.40%	CfD period: 2.65%	0.83% - 1.75%	2023 - 2027: 1.65%
					Y10+ 1.65%	Post CfD period: 2.85%		2028 - 2032: 1.85%
Variable interest %	SONIA	SONIA	EURIBOR	EURIBOR	EURIBOR	WIBOR	EURIBOR	SONIA
Hedging
% hedged	-	-	85%	90%	n/a	75%	100%	85%
Swap rate	n/a	n/a	-0.12%	0.51%	n/a	2.03%	0.12%	1.27%

Portfolio Valuation

Regular valuations are undertaken for the Company's portfolio of assets. The process follows International Private Equity Valuation Guidelines using a discounted cashflow ("DCF") methodology. DCF is deemed the most appropriate methodology where a detailed projection of likely future cash flows is possible. Due to the asset class, availability of market data and the ability to project the asset's performance over the forecast horizon, a DCF valuation is typically the basis upon which renewable assets are traded in the market. Key macroeconomic and fiscal assumptions for the valuations are set out in Note 9 to the financial statements. As such the sensitivities also do not capture any potential benefit of a portfolio effect through non-correlation of technologies or energy markets.

The fair value of the Company's portfolio of assets as at 31 December 2022 was £743.7 million, reflecting acquisitions and capital injections during the year of £209.7 million alongside changes to economic, wholesale energy and asset specific assumptions and the return on the portfolio net of distributions. Including the Company's and its intermediate holding companies' other liabilities of £125.4 million, the total portfolio value as at 31 December 2022 is £618.3 million or 109.4 pence per Ordinary Share.

	Year ended 31 December 2022 (£m)
Investment value at 31 December 2021	483.5
Acquisitions in the year	209.7
Distributions paid out of the portfolio of assets	(40.1)
Changes in economic assumptions	75.5
Changes in wholesale energy price forecasts	27.9
Construction and risk premium and development gain	10.7
Change in discount rates	(54.5)
Balance of portfolio return	31.0
Fair value of the portfolio of assets	743.7
ORIT and intermediate holding company net assets	(125.4)
Audited net asset value	618.3

Investments in the year

During the year, the Company made several investments across wind and solar technologies.

In April, the Company agreed to provide up to €3.5 million (c. £2.9m) of funding into a new development platform, Nordic Renewables Limited, focused on onshore wind farms and solar PV assets in Finland.

The Company acquired Breach Solar Farm in June, committing a total of £50 million to fund the acquisition and construction of the asset. The transaction also gives the Company the right to construct a battery storage project in the UK, with a capacity of 50MW/100MWh.

In June, the Company acquired a 7.75% stake in the Lincs Offshore Wind Farm, located off the east coast of England. In September, the Company acquired a further 7.75% stake.

In October, the Company acquired Leeskow Onshore Wind Farm from German developer UKA. The site benefits from the government backed floor price for twenty years under the German EEG regime.

In November, the Company acquired 51% ownership in Crossdykes Onshore Wind Farm in Scotland. Investment costs have totalled approximately £41 million. The remaining 49% was acquired by a fund managed by the Octopus Energy Group.

In November, the Company invested a further €6.25 million (£5.5m) into a developer of sustainable marine projects focused on floating offshore wind, Simply Blue Holdings Limited. The amount is expected to be drawn in 2023 and will increase the Company's stake to c.19%.

Following the end of the period, after agreeing the lease for the site, the Company completed the acquisition of a 50% stake in a 12MW/24MWh ready-to-build battery storage project in Bedfordshire, UK.

Elsewhere in the portfolio, capital injections and construction payments of £40.1 million were made in relation to the Cumberhead wind farm in the UK.

Distributions paid out of the portfolio of assets

This relates to the amount of cash paid out of the portfolio of assets and received by the Company or its intermediate holding companies in the year ending 31 December 2022.

Economic assumptions

The main economic assumptions used in the portfolio valuation are inflation rates, interest rates, foreign exchange rates and tax rates.

 

Since the end of 31 December 2021, inflation forecasts for 2022 and 2023 have increased significantly across the markets where the Company's portfolio of assets is located, resulting in a valuation uplift of £60.0 million. The inflation inputs used to calculate the NAV per Ordinary Share as at 31 December 2022 have been sourced from: (i) recent consensus UK inflation forecasts published by Her Majesty's Treasury (November 2022); and (ii) inflation forecasts for European countries published by the European Commission (November 2022).

Per the enactment of the Finance Act 2021, the rate of UK corporation tax is set to increase from 19% to 25% with effect from April 2023. The calculation of the audited NAV as 31 December 2022 was based on an assumption that this increased rate remained in place for three years, before trending down by 1% per year until reduced to the current level of 19% long-term. The change in assumption to a flat UK corporation tax rate of 25% from April 2023 for the lifetime of the portfolio reduced NAV by approximately £4.8 million or 0.8 pence per Ordinary Share.

During the year, sterling depreciated against the euro by 5.3%, leading to a positive valuation impact of £20.2 million. Euro-denominated investments comprised 59% of the portfolio at the year end. The Investment Manager regularly reviews the level of euro exposure and utilises hedges, with the objective of minimising variability in shorter term cash flows. After the impact of currency hedges held at Company level are taken into account, the gain on foreign exchange reduces to £9.5 million.

Power prices

Unless fixed under PPAs or otherwise hedged, the power prices used in the valuations are based on market forward prices in the near term, followed by an equal blend of up to three independent and widely used market consultants' technology-specific capture price forecasts for each asset.

Further detailed in the Market Outlook section, commodity prices have increased dramatically in 2022 as a result of Russia's invasion of Ukraine, sending price forecasts higher in the near and medium-term. In the longer-term, elevated commodities price forecasts exert upwards pressure on power price forecasts. This is partially offset by the downwards pressure exerted by increased renewable build-out forecasts, as governments react to the ongoing gas crisis with heightened decarbonisation ambitions.

During H2 2022, governments announced plans to mitigate the effect of rising energy prices on consumers and businesses, including through price caps, windfall taxes or generation levies. Key announcements affecting renewable energy generators include the European Commission's proposal to introduce revenue caps of €180/MWh or lower and the UK Government proposal for a "cost-plus revenue limit" on renewable energy companies. At the time of determining the Q3 NAV there was significant uncertainty surrounding both the level of mitigation measures that would be introduced by governing bodies as well as ambiguity regarding the practical application of such measures. As a result, the Board and Investment Manager considered it appropriate to include a material discount to power market forwards of approximately 70% in 2022, reducing to 50% by 2025, in the valuation as at 30 September 2022.

During Q4 2022, governments across the UK and Europe confirmed their approach to tackle and resolve the impact of rapidly increasing energy prices and these policies have been incorporated into the valuation as at 31 December 2022 and therefore, the material discounts to prevailing market forwards, which were incorporated into the Q3 valuations predominantly in anticipation of these changes have been reduced significantly. The net impact of applying the government measures and removing the conservative discounts between Q3 and Q4 was NAV accretive.

Application of the Electricity Generator Levy or "EGL" for the UK and the emergency measure price cap in Poland, resulted in a decrease in the valuations in these countries as at 31 December 2022 when compared to the Q3 NAV. The assets in ORIT's portfolio located in France, Germany, Ireland, Sweden and Finland are not expected to be impacted by these caps due either to being exempt via enrolment in government-backed initiatives, such as CfD or FiT schemes, because the revenue that is subject to price cap rules is fixed at levels below the announced cap, or because the transaction structure does not include exposure to revenues above the level of the government scheme.

Whilst government announcements over energy policies are now clearer, given volatility in power prices exhibited over 2022 and the general downward trend in pricing over Q4, the Board and the Investment Manager still consider it appropriate to include a modest discount to the prevailing forward prices of 20% over the 2023 to 2025 period, in addition to the normal discounts to reflect the lower prices typically captured by wind and solar generators.

Overall, the net impact of these updates has led to a £27.9 million increase in the value of the portfolio as at 31 December 2022.

The portfolio's forecasted power only generation weighted prices ("Power only GWP") and the generation weighted prices including subsidies and additional benefits ("Total GWP") for the period from 2023 to 2050 are shown in the graph above. The curves are blended across the markets in which the portfolio's generation assets are located, weighted by the portfolio generation mix and converted into £/MWh using the FX spot rate as at 31 December 2022. On average, the graph shows Power only GWP of £74.47/MWh in the period 2023-2027 and £41.55/MWh in the period 2028-2050.

Construction risk premium and development gain

Total construction risk premium and development gain realised during the year amounted to +£10.7 million. A valuation increase of £6.6 million resulted from the unwind of the remaining construction risk premium included in the discount rate applied to the Kuslin and Krzecin wind farms in Poland and the Cerisou wind farm in France, as well as a portion of the premium included for the Cumberhead wind farm in the UK, recognising the significant construction progress made by the end of the period.

As at 31 December, the Kuslin, Krzecin and Cerisou wind farms are now fully operational. For the remaining portfolio under construction (Cumberhead wind farm and Breach solar farm), it is estimated that further value will be crystallised as the projects becomes substantially de-risked through the completion of construction milestones.

Following ORIT's follow-on investment into SBG, an Irish developer of floating offshore wind, ORIT's ownership interest has increased to c.15.5%. The follow-on investment was calculated based on an increased valuation of the Company, implying a development gain on ORIT's original stake of £4.1 million.

Change in discount rates

A range of discount rates are applied in calculating the fair value of the investments, considering the location, technology and lifecycle stage of each asset as well as leverage and the split of fixed and variable revenues. The weighted average discount rate as at 31 December 2022 is 7.5%, an increase of 0.7% since 31 December 2021.

The increase in discount rate over the course of the year, reflects that, whilst bond yields have fallen since the highs of September 2022, they remain significantly higher than they were at the start of 2022. Competition for renewable assets has remained high, dampening the extent to which benchmark rate rises have fed through into asset discount rates. Nevertheless, the Board and the Investment Manager consider it appropriate to reflect an increase in the discount rates applied to certain assets, particularly those in the UK and Poland where rates have risen further than in the rest of Europe. The increases to these discount rates resulted in a decrease of -£54.5 million in the portfolio valuation, or -9.6 pence per Ordinary Share.

Balance of portfolio return

This refers to the balance of valuation movements in the year excluding the factors noted above and represents a net increase of £27.9 million.

Of this, £35.4 million reflects the net present value of future cashflows being brought forward from 31 December 2021 to 31 December 2022. A net uplift of £1.0 million was recognised due to financial and technical performance during the period not captured in the movements due to changes in power price and macroeconomic assumptions during the period, and a further £3.7 million resulted from the implementation of power purchase agreements or decisions to exercise options in existing power price agreements to fix prices for a given period.

	31-Dec-21	30-Jun-22	31-Dec-22
UK Assets
Leveraged IRR	5.8%	5.9%	485.4
Gross Asset Value (GAV)	174	256	440
Leveraged %GAV	0%	15%	19%
European Assets
Leveraged IRR	7.2%	6.8%	7.5%
Gross Asset Value (GAV)	564	568	633
Leveraged %GAV	28%	32%	40%
Total Portfolio
Leveraged IRR	6.8%	6.5%	7.5%
Gross Asset Value (GAV)	738	824	1,073
Leverage %GAV	22%	24%	31%
Leveraged %GAV (plc)	22%	24%	42%

The valuation uplift was partially offset by increased capital expenditure related to the construction of Cumberhead wind farm (total expenditure is still within initial forecast including contingency) and lost revenues due to minor construction delays at the Cumberhead and Kuslin wind farm. The impact of these adjustments resulted in a decrease in valuation of £5.0 million. Recoveries are currently under negotiation with the relevant contractors, with some of this impact expected to be recaptured in future valuation cycles.

The remaining £4.1 million decrease related to minor assumption updates across the portfolio, including a decrease of £2.4 million related to an increase in forecast decommissioning costs.

Portfolio valuation sensitivities

The sensitivities are based on the existing portfolio of assets as at 31 December 2022 as well as cash flows of conditional acquisitions, and as such may not be representative of the sensitivities once the Company is fully invested and geared. For each of the sensitivities shown, it is assumed that potential changes occur independently with no effect on any other assumption. As such the sensitivities also do not capture any potential benefit of a portfolio effect through non-correlation of technologies or energy markets.

Discount rate

A range of discount rates are applied in calculating the fair value of the investments, considering the location, technology and lifecycle stage of each asset as well as leverage and the split of fixed and variable revenues. A 50bps increase in the levered cost of equity of the portfolio equates to an increase in the implied WACC of 0.29%, holding the cost of debt and leverage % constant.

The weighted average discount rate as at 31 December 2022 is 7.5% (2021: 6.8%).

Volumes

Each asset's valuation assumes a "P50" level of electricity output based on yield assessments prepared by technical advisors. The P50 output is 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. The P50 provides an expected level of generation over the long-term.

The P90 (90% probability of exceedance over a 10-year period) and P10 (10% probability of exceedance over a 10-year period) sensitivities reflect the future variability of wind speed and solar irradiation and the associated impact on output, along with the uncertainty associated with the long-term data sources used to calculate the P50 forecast. The sensitivities shown assume that the output of each asset in the portfolio is in line with the P10 or P90 output forecast respectively for each year of the asset life.

Power price curve

As described above the power price forecasts for each asset are based on a number of inputs. The sensitivity assumes a 10% increase or decrease in power prices relative to the base case for each year of the asset life.

Inflation

The sensitivity assumes a 0.5% increase or decrease in inflation relative to the base case for each year of the asset life.

Foreign exchange

The Company seeks to manage its exposure to foreign exchange movements to ensure that (i) the sterling value of known future construction commitments is fixed; (ii) sufficient near term distributions from non-sterling investments are hedged to maintain healthy dividend cover; (iii) the volatility of the Company's NAV with respect to foreign exchange movements is limited; and (iv) all settlements and potential mark-to-market payments on instruments used to hedge foreign exchange exposure are adequately covered by the Company's cash balances and undrawn credit facilities.

Of the portfolio as at 31 December 2022, 59% of the NAV is euro denominated. Hedges are in place for all non-sterling construction payments as well as forecast cash generation from all Euro based investments for the first three years of operations. The sensitivity highlighted in Figure 6 shows the impact on NAV per Ordinary Share of a +/- 10% movement in the GBP: EUR exchange rate.

Financial Review

The financial statements of the Company for the year ended 31 December 2022 are set out in the Annual Report. These financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and the applicable legal requirements of the Companies Act 2006. In order to continue providing useful and relevant information to its investors, the financial statements also refer to the "intermediate holding companies", which comprise the Company's wholly owned subsidiary, ORIT Holdings II Limited and its indirectly held wholly owned subsidiaries ORIT UK Acquisitions Limited and ORIT Holdings Limited.

Basis of accounting

The Company applies IFRS 10 and Investment Entities: Amendments to IFRS 10, IFRS 12 and IAS 28, which state that investment entities should measure all of their subsidiaries that are themselves investment entities at fair value. The Company accounts for its interest in its wholly owned direct subsidiary, ORIT Holdings II Limited as an investment at fair value through profit or loss.

The primary impact of this application, in comparison to consolidating subsidiaries, is that the cash balances, the working capital balances and borrowings in the intermediate holding companies are presented as part of the Company's fair value of investments.

Results as at/for the year ended 31 December

	2022 £m	2021 £m
Net asset value	618.3	577.7
Fair value of Company's investments	608.8	485.4
Net assets per share	109.44p	102.26p
Investment income from portfolio	40.3	31.8
Gains on fair value of investments	37.6	8.6
Profit for the year	69.8	34.8

Net assets

Net assets have increased from £577.7 million at 31 December 2021 to £618.3 million at 31 December 2022 principally driven by changes in wholesale energy price forecasts and macro-economic assumptions such as inflation and FX.

The net assets comprise the fair value of the Company's investments of £608.8 million (2021: £485.4m) and the Company's cash balance of £10.6 million (2021: £93.9m), offset by £1.1 million (2021: £1.6m) of Company net liabilities.

Included in the fair value of the Company's investments are liabilities of £135.0 million (2021: assets of £1.9m) held in the intermediate holding companies. These comprise cash of £4.5 million (2021: £1.3m) and amortised transaction costs associated with bank loans of £2.0 million (2021: £1.4m), offset by the principal and interest outstanding on the bank loans of £128.0 million (2021: £nil), the negative mark-to-market value of the FX hedges taken out to minimise the volatility of cashflows associated with non-UK portfolios of £8.0 million (2021: £2.3m asset) and other liabilities of £5.5 million (2021: £3.1m) predominantly relating to accrued transaction costs not yet paid and outstanding VAT liabilities.

Results as at 31 December

	2022	2021
	£m	£m
Fair value of portfolio of assets	743.7	483.5
Cash held in intermediate holding companies	4.5	1.3
Bank loans and accrued interest held in the intermediate holding companies	(128.0)	-
Fair value of other net (liabilities)/assets in intermediate holding companies	(11.4)	0.6
Fair value of Company's investments	608.8	485.4
Company's cash	10.6	93.9
Company's other liabilities	(1.1)	(1.6)
Net asset value as at 31 December	618.3	577.7
Number of shares	564.9	564.9
Net asset value per share (pence)	109.44	102.26

Income

In accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued in July 2022 by the Association of Investment Companies ("AIC"), the statement of comprehensive income differentiates between the 'revenue' account and the 'capital' account, and the sum of both items equals the Company's profit for the year. Items classified as capital in nature either relate directly to the Company's investment portfolio or are costs deemed attributable to the long‑term capital growth of the Company (such as a portion of the Investment Manager's fee).

In the financial year ending 31 December 2022, the Company's operating income was £77.9 million (2021: £40.4m), including interest income of £23.1 million (2021: £12.7m), dividends received of £17.3 million (2021: £19.2m) and net gains on the movement of fair value of investments of £37.6 million (2021: £8.6m). The operating expenses included in the statement of comprehensive income for the year were £8.1 million (2021: £5.6m). These comprise £5.7 million Investment Manager fees (2021: £4.1m), transaction and abort costs of £1.3 million (2021: £nil) and other operating expenses of £1.1 million (2021: £1.5m). The details on how the Investment Manager's fees are charged are set out in Note 17 to the financial statements.

Ongoing charges

The ongoing charges ratio ("OCR") is a measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running the Company. It has been calculated and disclosed in accordance with the AIC methodology, as annualised ongoing charges (i.e. excluding acquisition costs and other non-recurring items) divided by the average published undiluted Net Asset Value in the year. For the year ended 31 December 2022, the ratio was 1.12% (2021: 1.15%).

Dividends

During the year, interim dividends totalling £29.3 million were paid (1.25p per share paid in respect of the quarter to 31 December 2021 in March 2022 and 1.31p per share paid in respect of the first three quarters of 2022 in May 2022, August 2022 and November 2022 respectively).

Post year end, a further interim dividend of 1.31p per share was paid on 24 February 2023 in respect of the quarter ending 31 December 2022 to shareholders recorded on the register on 10 February 2023. As such, dividends totalling £29.6 million have been paid in respect of the 12-month period under review.

For the year ending 31 December 2022, the portfolio of assets generated operational cash flows of £76.3 million, paid interest of £4.0 million and made repayments of £10.2 million on external debt. Company and intermediate holding company expenses for the year totalled £9.6 million (after commitment fees and interest payable on the RCF and the short-term facility) and therefore total net cash flows from operating activities for the year were £52.5 million, leading to an operational dividend cover of 1.77x the total dividend payable for the year.

The strong dividend cover of 1.77x during FY22 has been supported by the acquisition of operational portfolios as well as the successful completion of construction assets¹. ORIT's operational portfolio is forecast to generate significant cash flows (after debt service) in excess of the target dividend of 5.79 pence per ordinary share for FY23²¹. The average expected annual dividend cover over a 5-year period to 31 December 2027 is 1.7x²¹. Cash flows generated by fixed or contracted sources (e.g. PPAs, CFDs, ROCs and FITs) are estimated to cover expected dividends by 1.1x over the same period²².²³

²¹ Dividend cover is calculated on the basis of actual (in respect of FY22) and expected (in respect of subsequent financial years) total net operational cash flows from the portfolio after debt service and Company and intermediate holding company expenses.

²² Dividend cover is calculated on the basis of expected net operational cash flows from the portfolio excluding uncontracted revenues (e.g. power sales linked to prevailing market prices) and after debt service and Company and intermediate holding company expenses.

²³ The dividend target stated is a targets only and not a profit forecast. There can be no assurance that the target will be met, or that the Company will make any distributions at all and it should not be taken as an indication of the Company's expected future results. The Company's actual returns will depend upon a number of factors, including but not limited to the Company's net income and level of ongoing charges. Accordingly, potential investors should not place any reliance on this target and should decide for themselves whether or not the target dividend is reasonable or achievable. Investors should note that references to "dividends" are intended to cover both dividend income and income which is designated as an interest distribution for UK tax purposes and therefore subject to the interest streaming regime applicable to investment trusts.

Dividend cover - operational cash flows (portfolio level)

Year ended 31 December

	2022 £m	2021 £m
Operational cash flows
UK Solar	13.7	11.1
French Solar	11.7	11.9
Swedish Wind	8.8	4.4
Finnish Wind	15.9	5.3
Polish Wind	12.1	-
French Wind	1.3	-
German Wind22	0.7	-
UK Wind23	5.0	-
UK Offshore Wind24	7.1	-
	76.3	32.7
Interest payable on external debt
French Solar	(1.1)	(1.1)
Polish Wind	(2.1)	-
French Wind	(0.4)	-
German Wind	(0.4)	-
Operational cash flow pre debt amortisation	72.3	31.6
Company and intermediate holding company level expenses25	(9.6)	(5.3)
Net cash flow from operating activities pre debt amortisation	62.7	26.3
Dividends paid in respect of year	29.6	23.8
Portfolio level operational cash flow dividend cover pre debt amortisation	2.1x	1.1x
External debt amortisation
French Solar	(9.0)	(2.1)
Polish Wind	(1.2)	-
Net cash flow from operating activities	52.5	24.2
Dividends paid in respect of year	29.6	23.8
Portfolio level operational cash flow dividend cover	1.77x	1.02x

²⁴ Includes all operational cash generated from 30 June 2022 (the locked-box date)

²⁵ Includes all operational cash generated from 31 December 2021 (the locked-box date)

²⁶ As a minority interest this includes equity cash flows (after interest and amortisation) generated from 31 December 2021 (the locked-box date)

²⁷  Includes crystalised FX gains recognised in the Company and intermediate holding companies

Company level dividend cover ratios are also shown below.

Dividend cover - P&L (Company level)

	2022 £m	2021 £m
Profit for the year	69.8	34.8
Adjustments for:
Unrealised gains on fair value of investments	(37.6)	(8.6)
Realised profit for the year	32.2	26.2
Dividends paid in respect of year	29.6	23.8
Company level P&L dividend cover	1.09	1.10x

Dividend cover - operational cash flows (Company level)

	2022 £m	2021 £m
Profit for the year	69.8	34.8
Adjustments for:
Unrealised gains on fair value of investments	(37.6)	(8.6)
Transaction costs	0.4	-
Investment income	(40.3)	(31.8)
Changes in working capital	(0.5)	(0.3)
	(8.2)	(5.9)
Distributions received from investments	38.1	26.2
Net cash flow from operating activities	29.9	20.3
Dividends paid in respect of year	29.6	23.8
Company level operational cash flow dividend cover	1.01x	0.85x

Impact Report

As at 31 December 2022

£1,304m	1,740GWh	522k
Total value of sustainable investments - 100% of all investments	Potential Renewable Electricity	Equivalent homes powered by clean energy25
2021: (£878m)	2021: (1,168GWh)	2021: (337k)

 

580k	2.9m	318k
Estimated tonnes of carbon avoided26	Equivalent new trees required to avoid same carbon27	Equivalent cars off the road required to avoid same carbon28
2021: (364k)	2021: (1.8m)	2021: (200k)

All metrics are calculated based on an estimated annual production of the whole portfolio once fully constructed (excluding conditional acquisitions).

²⁸ Homes powered is based on latest regional average household consumption in the region of production

²⁹ Carbon avoided is calculated using the International Financial Institution's approach for harmonised GHG accounting

³⁰ Trees equivalent is based on UK Woodland and Peatland carbon statistics

³¹ Equivalent cars is calculated using a factor for displaced cars derived for the UK government GHG Conversion Factors for Company reporting.

Foreword

In a year of unprecedented climate disasters and energy security risks ignited by Russia's war in Ukraine, the urgent need to accelerate the sustainable energy transition is ever clearer. Positively, 2022 saw a record-setting $1.1 trillion of investment into low-carbon energy technologies and, for the first time, solar and wind power overtook fossil fuel gas as Europe's main source of electricity generation²⁹. Pivoting investment towards low-carbon industries and technologies is critical for addressing the challenges ahead, but an annual funding gap remains. The magnitude of investment required is still over three times the capital that was invested in 2022 and that gap needs to be closed to achieve a pathway consistent with net zero.

A radical transformation of the current energy sector is also key in mitigating the threats of climate change and energy security. Our Investment Manager is part of an Energy Group with a unique perspective and resources to support this necessary disruption. The knowledge, expertise, resource and ambition is applied to enable the convergence of renewable generation with storage whilst also championing electrification and demand side management. Bringing this together with ORIT's capital securely positions ORIT to enable investors to contribute to these objectives.

To fulfil ORIT's mission to accelerate the net zero transition, the Board and Investment Manager have continued to build on ORIT's diversified portfolio of Renewable Energy Assets. A key step to ensuring a "Just Transition" is to consider environmental and social impacts throughout the whole lifecycle of a project. By increasing investments in development and construction phase projects, ORIT is not only adding new renewable capacity to the grid and helping countries meet their net zero targets, but also ensuring that responsible investment practices are implemented at the earliest possible stage of an asset's lifetime.

ESG is embedded into all aspects of the investment process, and the strategy captures ORIT's desire to incorporate biodiversity and social benefits alongside its investments. This year, the Investment Manager continued to monitor the ESG risks faced by the sector and ORIT's portfolio, ensuring robust mitigation measures were in place. This included measures to protect ORIT's solar supply chain from human rights risks through the adoption of a new procurement policy and through collaboration with industry bodies and expert auditing parties. ORIT has been classified as a dark green (Article 9) fund under the new Sustainable Finance Disclosure Regulation ("SFDR") and all investments are considered 100% EU Taxonomy-aligned, further demonstrating the ambition of its sustainable investment objective.

Under the backdrop of global climate concerns, ensuring ORIT's resilience to future climate changes is of the utmost importance. ORIT undertook in-depth climate risk assessments over the last year to better understand potential physical and transition risks - and opportunities - across its portfolio, the results of which are discussed in this year's enhanced Task Force on Climate-related Disclosures ("TCFD") report. ORIT welcomes the addition of future regulatory disclosures that support "anti-greenwashing" efforts such as the Taskforce for Nature Related Disclosures and the UK's Sustainable Disclosure Requirements ("SDR").

The IEA's 2022 World Energy Outlook distinguishes technologies accelerating the transition as the solution to the energy and climate crises³⁰. Noting the clear contribution that ORIT provides to various global goals coupled with the reinforced assurances from ORIT's ESG disclosures, ORIT's stakeholders can be certain of ORIT's critical role within this transition.

Phil Austin MBE
Chair

³²     https://www.weforum.org/agenda/2023/02/low-carbon-investment-record-2022/

³³     https://www.iea.org/reports/world-energy-outlook-2022/key-findings

Impact Strategy

ORIT is an impact fund with a core impact objective to accelerate the transition to net zero through its investments, building and operating a diversified portfolio of Renewable Energy Assets.

ORIT enables individuals and institutions to engage with the energy transition and invest directly into a portfolio of Renewable Energy Assets which generates a yield through renewable energy generation. The renewable energy generated supports the transition to net zero by replacing unsustainable energy sources with clean power. This intended outcome is the Company's core impact objective.

The ability to invest in Renewable Energy Assets is a powerful tool, which not only enables people to invest in line with their values, but also drives necessary change, facilitating the transition to a more sustainable future. More information on this "Theory of Change" can be found in the Company's Impact Strategy, published separately on the Company's website https://octopusrenewablesinfrastructure.com/.

The Impact Strategy considers all of ORIT's culture, values and activities through three lenses: Performance, Planet and People - to ensure that our activities integrate ESG risks and bring to life additional impact opportunities. The Impact Strategy defines ESG and Impact as:

•     ESG - a vital risk management approach across Environmental, Social and Governance factors to identify and mitigate a range of potential issues to protect, and hopefully enhance, the long-term value of our investments

•     Impact - what an investment does to the environment or society. Our aim is to minimise our principal adverse impacts and to seek opportunities to enhance positive impacts where possible.

The Company makes long-term investments that require a long-term view to be taken both in initial investment decisions and in subsequent asset management; adopting lasting and sustainable business practices. Beyond the core objective of accelerating the transition to net zero, ORIT seeks to generate additional impact through Performance, Planet and People impact initiatives.

More details and background information related to the Company's Impact Strategy including information on our four impact themes of Stakeholder engagement, Equality and wellbeing, Innovation and Sustainable momentum can be found in the separately published Impact Strategy.

Stewardship and Engagement

"Stewardship is the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society."³¹

The Investment Manager manages ORIT's investments in line with its Engagement and Stewardship Policy. Where ORIT has 100% ownership stakes, the Investment Manager has direct control of the underlying assets, usually through directorship services. In these cases, rights do not need to be "exercised" as the Investment Manager directly controls the Investee Companies' strategy, financial and non-financial performance, risk, capital structures, social and environmental impact, corporate governance as well as the appointment of third party operators of the assets. As well as decision making oversight, the Investment Manager carries out service reviews on each material third-party service provider. Where service providers fail to meet the standards set, particularly with regard to HSE, ORIT will use its contractual rights to first look to improve the service provision, and if that is unsuccessful, terminate the service provider.

In circumstances where ORIT does not hold a controlling interest in the relevant Investee Company, the Investment Manager will secure shareholder rights through contractual and other arrangements, to, inter alia, ensure that the renewable energy asset or portfolio company is operated and managed in a manner that is consistent with ORIT's investment and ESG Policy. The Investment Manager will always take up portfolio investment Board seats, attend Board meetings and will directly use their influence to monitor and support investee companies on relevant matters to galvanise other shareholders in line with ORIT's ESG Policies.

Regardless of the percentage of ownership, it is the Company's aim to provide investment specific active stewardship. ORIT always exercises its shareholder rights in relation to approval rights and investment reserved matters. Regular reporting data is provided to the ORIT Board on investee performance, including any environmental or social issues or risks. The Investment Manager also engages on market wide industry specific risks alongside different stakeholders in the market to drive towards positive stewardship outcomes.

The initiatives and case studies presented in the Impact Report provides examples of the application of the Engagement and Stewardship policy.

The Investment Manager's full Engagement and Stewardship Policy can be viewed here: https://octopusrenewablesinfrastructure.com

³⁴     UK Stewardship Code 2020's definition to Stewardship

Performance

Impact Objective: Build and operate a diversified portfolio of Renewable Energy Assets, mitigating the risk of losses through robust governance structures, rigorous due diligence, risk analysis and asset optimisation activities to deliver investment return resilience and the maximum amount of green energy.

£1,304m	1,740GWh	36
Total value of sustainable investments - 100% investments committed into renewables32	of potential annual renewable energy generation, 669MWh of which has and will be additional generation from construction assets33	Assets

Delivering the investment objective

The Board views the Impact Strategy as integral to the delivery of the core investment objective, and not as a cost to the Company. ESG processes and policies are a prudent risk management tool that improve the financial performance of the Company while reducing risks. The ultimate aim is to increase capacity to produce green power and maximise the green electrons produced by the operational portfolio.

Integration into the investment cycle

Every investment the Company makes is assessed against our Performance, Planet and People framework through an ESG scoring matrix. This ensures that our investments adhere to ORIT's ESG Policy and minimum scoring threshold for investment approval, which all transactions met in the year.

³⁵ Total asset value including total debt and equity commitments

³⁶ Metric calculated based on an estimated annual production of the construction portfolio once fully constructed (excluding conditional acquisitions).

The Investment Manager considers ESG risks at each stage of the investment cycle through this ESG scoring matrix. It is used as a tool to drive ESG engagement and ensure that ESG risks are promptly identified, appropriately investigated, and carefully mitigated where necessary.

Materiality of risks included in the ESG matrix is determined using guidance from the Sustainability Accounting Standards Board ("SASB") framework that identifies financially material ESG risks by asset class. The ESG Risk Matrix contains sections on Planet (environmental factors, such as biodiversity, water and waste) and People (social and employee matters, human rights, anti-corruption and anti-bribery matters). It aims to ensure that any potential adverse impacts are mitigated such that the investment is sustainable. At the post-completion stage, the Investment Manager carries out an onboarding process to ensure that its Asset Management team continue to oversee any residual ESG risks.

Anti-bribery and corruption

It is the Company's policy to conduct all of its business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates.

Service Providers (including Directors of the Company):

1.   Must not promise, offer, give, request, agree to receive or accept a financial or other advantage in return for favourable treatment, to influence a business outcome or to gain any business advantage on behalf of themselves or of the Company.

2.   Must follow all the anti-bribery and corruption laws to which the Company and Company Directors/Service Providers are subject.

3.   Are liable to disciplinary action, dismissal, legal proceedings and possibly imprisonment if they are involved in bribery and corruption. Appropriate action will be taken against those who fail to comply.

The Company has obtained a copy of the Investment Manager's, Company Secretary's, Administrator's and Broker's anti-bribery policies and procedures and is satisfied that these are adequate for the purposes of the Company. The Investment Manager seeks to ensure asset level service providers have appropriate policies in place and conduct due diligence as appropriate as part of completing the ESG Matrix. Anti-bribery, equal opportunities, modern slavery, whistle blowing policies and supplier code of conducts are all reviewed as part of this process.

Further information in relation to Conflicts of Interest can be found within the Corporate Governance Statement of the Annual Report.

Regulatory Disclosures

Task Force on Climate-related Financial Disclosures

ORIT is a supporter of the recommendations of the Task Force on Climate-related Financial Disclosures. Whilst ORIT is not yet in scope to make mandatory TCFD-aligned disclosures, the Company has voluntarily began to make TCFD‑aligned disclosures as it believes that the effects of climate change should become routinely considered in business and investment decisions.

The TCFD disclosures can be found in the Risk and Risk Management Statement section of the Annual Report .

Sustainable Finance Disclosure Regulation ("SFDR")

ORIT is classified as an Article 9 product under the EU SFDR regulation.

Please refer to the Annual Report and to the ORIT website for ORIT's SFDR disclosures.

Future regulatory disclosures

A number of other regulatory frameworks aimed at increasing transparency in environmental and social factors are in development. This includes the Taskforce for Nature Related Financial Disclosures ("TNFD"), the UK's Sustainable Disclosure Requirements ("SDR") and the Task Force for Inequality Related Financial Disclosures ("TIFD"). The Investment Manager is keeping up with recent consultations and continues to evaluate likely impacts for ORIT's investments. ORIT's Impact Strategy is already well positioned to support the aims of the TNFD. The TNFD will provide a framework for corporates and financial institutions to assess, manage and report on their dependencies and impacts on nature's ecological services, helping redirect global financial flows towards nature-positive outcomes. ORIT's existing consideration of potential biodiversity impact and its desire to maximise biodiversity through additional initiatives at its sites speaks clearly to ORIT's ambition to use space intelligently to protect ecological services. ORIT's existing partnership with SUGi exhibits how ORIT's goal of protecting biodiversity extends beyond the borders of its sites.

The Company supports "anti-greenwashing" efforts and expects to start making the necessary disclosures in relation to SDR from 30 June 2024. The Company will assess the appropriate label to associate itself with once finalised (in mid‑2023). Whilst the SDR and SFDR disclosures will need to be separate, we expect the Company to be well positioned to start adopting the regime.

The Company is also aware of the UK Green Taxonomy disclosures. The UK Government has established a Green Technical Advisory Group ("GTAG") to advise on the development of the UK Green Taxonomy. Once developed it is likely that SDR will take this into consideration.

Performance initiatives

Delivering investment performance is fundamental to the Impact Strategy, to supporting the transition to net zero and to being an impact fund. Asset optimisation initiatives and robust ESG risk management aim to improve financial resilience and overall performance of the Company, maximising the amount of green electricity the Company generates.

Projects

Our Investment Manager works with key partners to mitigate production risks and maximise performance of ORIT's operational assets. Production losses are investigated through a root cause analysis, delivering appropriate actions that improve technical performance. This active management approach has mitigated potential performance risks for ORIT over this period.

Project	Outcome
Transformer and Inverter refurbishments: Application of an effective interim solution and a resourceful use of existing parts to reduce carbon footprint and CAPEX in context of high inflation and global supply chain constraints.	A refurbished module was creatively sourced through refurbishment of equipment at a solar site where it was no longer required. This was utilised at Ottringham after an inverter module failure, avoiding a prolonged outage as the manufacturer was unable to ship parts to the UK. Similarly, a transformer at Ermine Street was refurbished whilst using a hired part in the interim to ensure continued contribution of green electrons to the grid. These actions successfully prevented months of business interruption at both sites (4 months at Ottringham which is equivalent to a 6% loss of generation and revenue, and 6  months at Ermine which is equivalent to 3% loss at Ermine) and enabled the reduction of the sites' carbon footprint by minimising waste materials and eliminating the need for copper extraction. Sustainable Momentum
Innovative Drones: Using innovative drone technology, heat mapping of all the UK solar sites was conducted to identify areas of stress on the solar panels which can cause inefficiencies.	Early identification of stress areas allows the Investment Manager to ensure that preventative measures are put in place to optimise performance of the modules and mitigate losses. Innovation
Proactive Switchgear improvements: A proactive initiative to upgrade the switchgear across multiple sites is 42% complete, with the remaining 58% scheduled for completion in Q1.	This preventative measure reduces the health and safety risk associated with potentially faulty switchgear and optimises the efficiency of generation. Equality and Wellbeing Innovation
Settlement reached for Finnish Wind Foundations: successful negotiations with foundation contractor on warranty and bond cover for turbine foundations.	This settlement provides enhanced protection to the project SPV with not only the 5-year warranty expected on civil work, but an additional bond covering the foundations for 8 years. Stakeholder Engagement
Doubling wind: The Investment Manager strengthened ORIT's wind portfolio with wind acquisitions, construction management and operational management.	ORIT has made a significant number of wind acquisitions over the period. The number of operational wind sites on the ORIT portfolio has more than doubled from last year, increasing from 4 sites to 9 resulting in a 348MW operational wind portfolio. Wind asset construction significantly progressed over the period. Turbines are now erected at Cumberhead, with full operations expected end of March 2023. ORIT entered the offshore wind market, with a minority stake in the 270MW Lincs Wind Farm and expanded its geographical footprint managing 59MW of operational wind farms in Poland.
Curtailment reduction at Leeskow wind farm: A proposal has been made to reduce curtailment on site in collaboration with the German authorities.	The proposal has been made in response to the German government's policies to strengthen energy security following the Ukraine invasion. The site is expected to benefit from an increase in performance and therefore revenue once the curtailment is lifted. Stakeholder Engagement Sustainable Momentum
PPA innovation: Creation of bespoke PPA structure for Saunamaa and Suolokangas onshore wind farms (Finland) and an innovative PPA structure for Ljungbyholm onshore wind farm (Sweden).	The Investment Manager developed a bespoke PPA structure which enables hedging to take place periodically across the contract tenor, rather than having to decide whether or not to hedge at the point of contract signature. We estimate that the bespoke PPA structure delivered a 16% uplift in the assets' 2022 fixed price revenues. The Investment Manager originated and executed a corporate PPA with an innovative structure for its Ljungbyholm wind farm. The structure allows the asset to benefit from higher market prices while providing a degree of revenue certainty. Compared with if Ljungbyholm had entered into a vanilla fixed price corporate PPA, we estimate that this contract structure delivered a revenue uplift across 2022 of 139%34. Innovation

³⁷     Calculated based on third-party estimates of Swedish onshore wind CPPA prices at the time that Ljungbyholm's CPPA was signed.

Case Study:

Additionality with investment into Simply Blue Group

ORIT first invested in Simply Blue Group ("SBG") in August 2021 for a c.12% stake and following the latest investment, ORIT's ownership interest in SBG has increased to c.15.5%. The Company also agreed to provide a further investment of up to €6.25 million which is expected to be drawn in 2023 which would increase ORIT's ownership interest to c.19%. SBG is the leading developer for floating offshore wind. SBG's goal is to develop floating wind projects that will make a valuable contribution to Europe's electricity demand, making the most of the huge offshore wind potential there is across the global oceans to help create a clean, sustainable future for everyone.

Offshore wind has become a favoured form of renewable energy generation. It is expected to produce 7% - 11% of the EU's electricity demand by 2030. Up to 45% of this energy is identified as coming from floating wind. Floating wind foundations are normally used in deep waters where fixed foundations are no longer economically feasible. Space for fixed foundations is scarce in many countries (including the UK) as development of fixed wind projects has been occurring for the last 15 years. Floating offshore sites also benefit from high wind potentials allowing for greater wind energy production.

Investment into the development of these projects allows regions across Europe to maximise the financial benefit of its strong offshore wind resources and to generate long-term jobs for its local communities, while contributing to European and the UK governments' net zero targets.

Since ORIT's investment, SBG has been able to make huge strides towards harnessing the wind potential across Europe. With ORIT's initial investment in August 2021, SBG was able to increase its specialist team by 50% and enter new markets in Poland, Spain, Portugal, Sweden, Finland, and Italy. With a second investment in November 2022 SBG was able to continue to grow its global pipeline of projects to 10GW. More general support from the Investment Manager has helped to develop SBG's capabilities and shape future decisions.

Additionality is a concept within renewable energy that refers to organisations directly adding new capacity for renewable energy to the national grid. Organisations can achieve additionality by committing to and investing in green power generators in a way that allows them to fund new renewable power generation³⁵

³⁸     https://www.igniteenergy.co.uk/news/additionalityand-ppas

Impact tracker

Who? Environment (United Kingdom, Ireland, Sweden, US, Spain, Portugal, Finland and Italy)

How much? 10 GW in pipeline 50% increase in team 6 new markets

What? Invested to receive a 15.5% stake in their business, helping them to drive into new markets and grow the team.

Impact Theme Equality and Wellbeing Sustainable Momentum Stakeholder Engagement

Case Study:

Strengthening ORIT's Climate Resilience

Climate change and the effort to mitigate it is impacting every aspect of our economy. Whilst renewable energy is a solution to help address climate change, renewable energy sites and businesses are not themselves exempt from the potential physical impacts of climate change. Climate change impacts can be categorised as physical climate risks or transitional climate risks.

·      Physical hazards can have immediate impacts, defined as "acute". An example is severe weather event damaging infrastructure. Changes can also develop over longer time horizons, defined as "chronic", and these impacts vary in their intensity and frequency. An example is changing weather patterns affecting long-term asset performance.

·      Transitional climate risks are those relating to business risks that follow societal and economic shifts toward a low‑carbon and more climate-friendly future. Examples are changes in government policies and tax to accelerate the transition to net zero.

As part of ORIT's TCFD disclosure requirements and a wider Investment Manager-led exercise to better understand ORIT's climate change resilience, the Investment Manager engaged on a joint project with one of ORIT's energy market advisors, Baringa, to investigate the potential impacts of climate change to renewable energy companies.

European countries boast favourable energy policies for renewable energy projects. Alongside supporting financial mechanisms and leading technological innovation, transition measures are opportunities rather than risks for renewable energy companies. The financial risks and opportunities arising from policy measures targeting mitigation of climate change, for example, high CO₂ market price, low-carbon generation mix, are already accounted for in the wholesale energy price curves of our advisors and therefore considered in our asset valuations.

Physical impacts of climate change are less defined in these models for different climate scenarios. In this project, Baringa were engaged to carry out a scenario analysis research project on the financial impacts of physical climate change impacts, with a particular focus on wind generators, considering the potential impacts of (i) physical climate change on power price and (ii) on generation.

(i) Physical climate impact on power price:

The study concluded that the impact of physical changes in climate on long-term EU power price forecasts is relatively small compared to other drivers of power price.

Physical changes in climate may impact power price by affecting energy production and consumption. For example, an increase in precipitation and temperature in the UK may affect the energy demand for heating and the efficiency of certain energy generation technologies. Whilst these impacts are possible, the overall direction of impact remains uncertain with both upward and downward potential impacts on power prices. Power prices can also be impacted by other factors such as commodity prices for natural gas and CO₂ emissions allowances.

To understand the relative significance of climate change as a driver of power price, Baringa compared the impact of year-to-year variations in weather with the impact of projected changes in commodity prices to power market revenues.

Baringa created economic models for Poland, France, Great Britain and Ireland to investigate this further. The results show that in 2035, commodity prices impact annual revenue +/- 32% compared to year-to-year variations in weather having a +/- 5% impact on annual revenue.

By 2050, the impact of commodity prices is reduced to +/- 9%, whereas the growing share of weather-dependent generation has increased the impact of weather to +/- 12%. This means that in the long-term, power price is not driven directly by the gas price but by the cost of the renewable generation that replaces it.

Considering the lifetime of ORIT's assets, the most material drivers on power price remain the commodity prices that are already considered in existing power price curves and our valuation models. Further consideration of this risk should be evaluated when assessing extending the life of assets or investment decisions in future years where asset lives push beyond 2050 where physical climate risks could have a more material impact on forecast power prices.

(ii) Physical climate impact on generation:

Given the immaterial overall impact of climate on forecast power prices, the main factor to consider that could have a material financial impact within ORIT's own investments is asset generation P50 assumptions that are used in valuations. Baringa used climate models to quantify the expected changes in average annual yield for GB and EU wind.³⁶

Method:

·      11 combinations of climate models (using a mixture of both regional climate and global circulation models)

·      3 combinations of climate models

·      Time horizon: 1990 to 2050

·      Scenario comparison: RCP2.6 vs RCP8.5

·      @100m altitude, 3hr temporal granularity

³⁹     RCP refers to the Representative Concentration Pathway - a greenhouse gas concentration (not emissions) trajectory adopted by the IPCC

Results

Finding 1:

·      In Great Britain there is no trend in wind speed, either upwards or downwards, indicating rapidity of climate change is not a driving trend.

·      Power yield - assuming a cubed relationship between wind speed and yield - confirms the stable outlook projected in the IPCC Special Report of +/-7%

·      Similar results found in other EU countries.

Results

Finding 2:

·      The number of years with significantly higher and lower yields than normal increases in the future projections, meaning that the variability of annual output for wind generation is expected to increase

·      With a stable average output, there is no direct financial impact of this observation Similar results found in other EU countries.

High Level Conclusion: There is a risk that variability may impact in-year generation and ability to capture price forecasts. This may result in overperformance and underperformance over short-term time horizons. However, average annual wind generator yield is not negatively impacted by climate change in a way that is material to the valuation of wind generation assets in the countries where the fund operates. Therefore, current valuation methods based on historical P50s are still a good predictor of long-term production and continue to be valid.

The disclosure of financial risks and opportunities relating to climate change form part of ORIT's TCFD disclosures in the Annual Report .

UN SDG specific contributions

9. Industry, Innovation and Infrastructure

9.2 & 9.4 - Promote sustainable industrialization and upgrade/ retrofit infrastructure to make them sustainable:

Investment into development, operational and construction assets have helped support jobs. Site upgrades and works have significantly reduced production losses, actively supporting the production of more green power and helping ORIT's assets perform more efficiently.

13. Climate Action

13.1 - Strengthen resilience and adaptive capacity to climate related hazards and natural disasters:

Technical due diligence carried out on all new investments. Biodiversity and habitat management plans proposed for most sites as planning requirement. Physical climate change risks considered and mitigated (e.g. flood risk mitigation strategy) and transition risks forecasted (e.g. low power price scenarios).

17. Partnership for the Goals

17.17 - Encourage and promote effective partnerships, building on the experience and resourcing strategies of partnerships:

Shared knowledge with key counterparties to ensure continued compliance with the ESG policy and drive improvements to ESG land management practices.

www.un.org/sustainabledevelopment/

Planet

Impact Objective: Consider environmental factors to mitigate risks associated with the construction and operation of assets, enhancing environmental potential where possible.

 

580k Equivalent tCO2 avoided37	8.48t CO2e per MW estimated carbon intensity (direct and indirect)	886t CO2e emissions offset (all direct emissions)
100% investments qualify as sustainable in line with EU Taxonomy38	87% Generating sites on renewable import tariffs	0 Environmental incidents

Maximise our positive environmental impact

ORIT recognises the critical role that renewable energy plays in meeting net zero emissions targets, with an inherently positive impact on the environment.

Investing in Renewable Energy Assets enables investors to engage with and generate returns from this transition to a cleaner future and directly support climate change ambitions.

On admission to the London Stock Exchange ("LSE"), ORIT was awarded the LSE's Green Economy Mark, recognising the Company as a significant contributor to the transition to a zero-carbon economy. The Green Economy Mark identifies London-listed companies and funds that generate between 50% and 100% of total annual revenues from products and services that contribute to the global green economy.

⁴⁰     Metrics based on an estimated annual production of the whole portfolio once fully constructed. Carbon avoided is calculated using the International Financial Institution's approach for harmonised GHG accounting.

⁴¹     100% of investments are significantly contributing to climate change mitigation.

Whilst the Company's positive contribution has been recognised, ORIT commits to being transparent, measuring and reporting both positive and negative impacts on the planet. By reflecting on potential negative impacts rather than ignoring them, the Company can create meaningful targets for improvement and maximise the positive impact of investments. As part of this approach, ORIT will review and adopt relevant industry standards alongside initiatives to reduce its own carbon footprint.

Carbon measurement and reporting

Electricity generated by wind and solar resources prevents harmful emissions from other sources such as coal powered electricity. However, there are still emissions incurred in the manufacturing and transportation of the solar panels and wind turbines through the supply chain.

In 2022 the Investment Manager on behalf of the Company engaged with Altruistiq to help calculate and validate the Greenhouse Gas ("GHG") emissions footprint for ORIT.

The Company has quantified and reported organisational GHG emissions in alignment with the World Resources Institute's Greenhouse Gas Protocol 'Corporate Accounting and Reporting Standard' and 'Corporate Value Chain (Scope 3) Standard'. This approach consolidates the organisational boundary according to the operational control approach. The GHG sources that constituted the Company's operational boundary for the reporting year are:

·      Scope 1: No relevant emissions sources apart from fugitive emissions

·      Scope 2: Purchased electricity - market-based

·      Scope 3: Purchased Goods and Services, Investments, Business Travel, Waste and Fuel-and-Energy-Related Activities ("FERA")

Given the nature of the Company, ORIT's Scope 1 emissions are negligible. Scope 2 emissions account for 11.27% of ORIT's total emissions footprint. The majority of the Scope 2 emissions come from one single asset (Kuslin wind farm) that was consuming large amounts of electricity as a result of ongoing construction that was finished in August³⁹. Kuslin's contribution to Scope 2 emissions is compounded by the carbon intensive nature of the Polish grid. Now operational, Kuslin will consume less electricity and will help reduce the carbon intensity of the grid through the provision of green electrons. ORIT has offset its direct Scope 1 and Scope 2 emissions. See the Annual Report for more details.

Scope	Emissions (t CO2e)	% of Total
1 - Direct Emissions (fugitive emissions)	0.59	0.01%
2 - Indirect Emissions (Purchased electricity - market-based)40	885.24	11.27%

The Scope 3 Categories that were identified and calculated account for 88.72% of the total emissions footprint:

Scope 3 Category	Emissions (t CO2e)	% of Total
Fuel & Energy Related Activities	3,730.9	47.5
Purchased Goods and Services	1,823.6	23.2
Business Travel	761.4	9.7
Investments	648.0	8.3
Waste	4.0	0.1

Absolute emissions for ORIT will continue to increase as it invests into more assets. The increase in "Fuel and Energy Related Activities" category is a result of the stationary combustion required during the period to power construction-related equipment at ORIT's construction assets.

ORIT's overall carbon intensity was calculated to be 8.48 tCO₂e per MW. ORIT's weighted average carbon intensity ("WACI") for the period was calculated to be 11.52 tCO₂e/£m revenue⁴¹.

⁴²        Kuslin's electricity consumption contributes to 91% of the Scope 2 emissions (10.2% of ORIT's overall footprint).

⁴³     A market-based approach was used to calculate purchased electricity emissions and this is the figure reported as Scope 2. Location-based purchased electricity emissions were calculated to be 1,026.9t CO₂e. Total energy consumption for Scope 2 was calculated to be 4,293MWh.

⁴⁴     A market-based approach as used to calculate the WACI. The WACI using a location-based approach is equal to 15.65 tCO₂e/£m revenue.

The following table separates ORIT's carbon emissions into UK and non-UK based emissions in line with the Streamlined Energy and Carbon Reporting framework ("SECR").

		2022		2021		2020
		UK Emissions	Non-UK Emissions	UK Emissions	Non-UK Emissions	UK Emissions	Non-UK Emissions
Scope 1	(tCO2e)	0.0	0.6	0.0	0.0	0.0	0.0
Scope 2	Market based (tCO2e)	0	885.2	0.0	5.0	0.0	18.5
	Location based (tCO2e)	190.4	836.5	192.2	62.4	220.0	68.1
	Energy consumption (MWh)	1,568.4	2,724.9	905.2	1,150.5	943.6	1,287.9
Scope 3	(tCO2e)	5,706.4	1,261.4	710.9	1,500.7	1,209.2	1,561.3

ORIT recognises the challenges in measuring its GHG emissions for all sites and activities.

·      Quality and availability of data collected for conversion calculations can significantly impact accuracy of final emissions output. For example, during the period the availability of data relating to Scope 3 category "Purchased goods and services" was low.

·      The specificity of the emission factors used to convert data into related emissions can also impact validity of final emissions output.

The Investment Manager has disclosed the different categories of data points used to calculate the Company's carbon footprint to transparently convey both the quality and accuracy of the carbon footprint reported.

The investment manager defines the different data points used as:

1)   "Real data"

a.   "Actual activity data". This is real activity data received directly from counterparties on activities. undertaken during the period, for example, litres of fuel used for transport.

b.   "Actual spend data". Real spend data received, for example, money spent on fuel use for transport.

2)   "Estimated activity data". Estimated activity data received directly from counterparties on activities undertaken during the period, for example estimated litres of fuel used for transport.

3)   "Proxy data". This is data calculated by applying intensity metrics calculated from other similar solar or wind sites.

a.   "Proxy activity data". For example, litres of fuel used for transport calculated by use of an intensity metric for fuel use from another site.

b.   "Proxy spend data". For example, money spent on fuel use for transport calculated by use of an intensity metric for money spent from another site.

The table below shows the split between the defined categories of data:

Real data	Estimated activity data	Proxy data
(22.5% total)	(52.5% total)	(25% total)
Actual activity data = 18.9%	52.5%	Proxy activity data = 8%
Actual spend data = 3.6%		Proxy spend data = 17%

Quality of data provided

22.5% of total data used to calculate the carbon footprint of ORIT was "real data". The Investment Manager has high confidence in the quality of the estimated activity data given the extensive engagement undertaken with ORIT's suppliers to understand how the estimates were finalised. Consequently, together with real data, the investment manager has a high confidence in 75% of the data points provided.

The remaining 25% of the data points were provided as proxy data calculated from intensity metrics from other similar sites. Whilst a recognised approach, assets of a similar size and the same phase can still have large differences in the scale of its operations. Consequently, the Investment Manager has low confidence in the quality of the proxy data used to calculate these emissions.

There is higher confidence in the quality of data for Scope 1 and Scope 2 emission figures compared to the Company's indirect Scope 3 emissions that arise primarily from the Company's supply chain. One of the considerable challenges facing every industry and business is the visibility and quantification of supply chain emissions, which may require transparency across different regions and countries. Given the difficulties to capture all emissions, the Investment Manager is pursuing a more iterative approach to improve the accuracy of its Scope 3 reporting by collecting more granular and accurate data for emission hotspots. The Investment Manager will continue to develop and refine the methodology to capture these emissions working with external asset managers and O&M contractors and reduce the reliance on estimated activity data and proxy data. Improved data quality is likely to impact the share of categories in Scope 3. However, it is expected the split of proportions between Scope 1, 2 and 3 will remain largely similar.

Accuracy of carbon conversions

There are also differences in the levels of confidence held in the accuracy of carbon emission factors, specifically between the conversion factors used on activity-based data and spend-based data. Spend-to-emission conversion factors are considered to be least accurate and as the Investment Manager determined, the least conservative. (See below case study for more information).

During the period 20.6% of total data was spend based data. This included both real spend data and proxy spend data.

Case study comparing activity-data and spend-data

The Investment Manager compared two different approaches for calculating Scope 3 emissions to determine which was the most accurate and most conservative.

·      The first approach (the "activity first based approach") considered all activity data first before resorting to spend data for activities where activity data was not available. Activity data used emission factors specific to the stated activity to calculate emissions and the residual spend data used spend-to-emission factors.

·      The second approach (the "spend-based only approach") only considered the spend data provided from the asset's financial year end accounts and used spend-to-emission conversion factors.

It was found that there was significant variation between the two approaches across all sites, with a trend of the spend‑based approach under-reporting emissions compared to the activity-based approach. The Investment Manager determined that Scope 3 emissions should be reported in line with the activity first-based approach rather than the spend‑based approach. This conclusion was made because of the lack of specific spend-to-emission conversion factors that likely impacted accuracy of the conversions and the lower total emissions calculated under a spend-based approach that suggested it was the least conservative approach.

The Investment Manager will continue to engage with external asset managers and O&M contractors and reduce the reliance on spend data.

Carbon reduction

As the ORIT portfolio grows, it is the Company's aim to reduce its emissions through stakeholder engagement and proactive management of its assets, especially for sites under construction.

The carbon intensity metric reported for ORIT has increased since last period but remains in line with the reported intensity of 2020.

2022	2021	2020
8.48 tCO2/MW	5.23 tCO2/MW	9.6 tCO2/MW

These changes are dependent on factors such as the operational and construction split of assets, whereby construction assets typically display higher carbon footprints than operational assets. The increase in carbon intensity from last year can be attributed to the higher proportion of construction assets held by ORIT throughout the year compared to last year. It is also important to note that even within construction projects of a similar size, there may be still large variations in related carbon emissions. Factors such as foundation type, location and supplier can have very significant implications on an asset's footprint.

Carbon offsetting

Whilst carbon reduction remains the priority in ORIT's carbon strategy, ORIT does still commit to offsetting any residual direct emissions relating to its Scope 1 and 2 emissions.

The Company's chosen route for offsetting is through the purchase of verified carbon units. ORIT's direct emissions were much higher in 2022 compared to previous years given the high electricity consumption at Kuslin wind farm and the high carbon intensity of the Polish grid.

This year, ORIT has purchased a total of 886 carbon units. This is equivalent to offsetting ORIT's Scope 1 and Scope 2 emissions of 885.24 tonnes of CO₂.

Securing ORIT's future carbon offsets

ORIT has purchased 400 tonnes worth of carbon in "Pending Issuance Units". These units have been secured both to future-proof ORIT's carbon units in light of increasing prices and low availability of "Woodland Carbon Units" and also to support new woodland creation in the UK.

A Woodland Carbon Unit ("WCU") is a tonne of CO₂e which has been sequestered in a Woodland Carbon Code-verified woodland. It has been independently verified, is guaranteed to be there, and can be used by companies to report against emissions or to use in claims of carbon neutrality or Net Zero emissions.

A Pending Issuance Unit ("PIU") is effectively a 'promise to deliver' a Woodland Carbon Unit in future, based on predicted sequestration. It is not 'guaranteed' and cannot be used to report against UK-based emissions until verified. However, it allows companies to plan to compensate for future emissions or make credible statements in support of woodland creation.

Supporting the planting of new UK woodland helps plant new trees today, but these woodlands do not deliver "offset" credits immediately. Only once the woodland biomass has grown sufficiently will its carbon credits be verified and converted from ex-ante PIUs to ex-post WCUs. Only then can only then be used as official offsets.

In recognition of the carbon impact of ORIT's operations, ORIT has decided to invest in a UK woodland carbon project that will capture 400 tonnes worth of CO₂ over the next 32 years. The units are derived from a "Forest Carbon" project in Acheilidh, Tain, Highlands. The new native broadleaf woodland is expected to deliver all 400 tonnes of carbon by 2055 and 75% of its carbon units by 2050. It is expected that Scope 2 emissions will significantly reduce next period, as the Investment Manager ensures renewable energy tariffs for ORIT's assets. Given ORIT's projected low annual direct carbon emissions, the Board expect these 400 units to help ORIT's Scope 1 and Scope 2 emissions to meet a 2050 net zero target. The Board will reassess if the purchase of additional PIUs will be necessary on a year-to-year basis.

The growing trees will also provide wider co-benefits beyond climate mitigation, including water quality improvements, habitat creation, employment, and cleaner air. Through ORIT's support for UK woodland creation, the Company is helping the country to meet its long-term international climate targets in a way that also benefits wider society.

EU Taxonomy for Sustainable Finance

The EU Taxonomy is a classification system for sustainable activities designed to help investors identify "green" environmentally friendly activities. This is aimed to demonstrate investments that are sustainable; ones that make a substantial contribution to climate change mitigation or adaptation, while avoiding significant harm to other environmental objectives and complying with minimum safeguarding standards.

An initial analysis of ORIT's investments against the EU taxonomy classification suggests that 100% of assets directly contribute to or enable climate change mitigation.

·      All of ORIT's operational and construction portfolio directly contribute to climate change mitigation according to the EU Taxonomy's criteria; "Construction or operation of electricity generation facilities that produce electricity from wind power or from using solar photovoltaic (PV) technology."

·      ORIT's investments into development platforms and development projects (investments into Simply Blue, NorGen and Wind2 pipelines) are considered enabling activities under the regulation. They contribute to the "Installation, maintenance and repair of renewable energy technologies" through their provision of architectural services, engineering services, drafting services, building inspection services and surveying and mapping services involved in the development of their renewable energy projects.

The Investment Manager has undertaken due diligence to confirm that all of ORIT's investments are in line with the "Do No Significant Harm" ("DNSH") technical screening criteria for Climate Change Adaptation, Circular Economy, and Biodiversity. This due diligence is part of the minimum requirements criteria set out in the ESG scoring matrix. Environmental objectives for Water and Pollution Prevention were categorised as not applicable under the EU Taxonomy criteria for ORIT's investments.

Climate Change Adaptation

Under the criteria for DNSH to climate adaptation, investee companies are required to identify their material climate risks by performing a climate risk and vulnerability assessment. Companies are also encouraged to create adaptation plans which identify solutions, prioritising those that mitigate the most material risks. ORIT's approach to climate risks is laid out in its TCFD disclosure in the Annual Report .

None of the adaptation solutions implemented or proposed would be expected to adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities. The adaptation solutions are also not expected to conflict with local, sectoral, regional or national adaptation strategies and plans. Overall, the renewable energy generated via ORIT's investments is expected to positively contribute to these adaptation strategies and plans through increased clean energy use and decreased reliance on emissions-based electricity generation.

Biodiversity

Under the criteria for DNSH to biodiversity, investee companies are required to demonstrate protection and restoration of biodiversity and ecosystems. This involves confirmation that; an environmental impact assessment or screening has been completed, that required mitigation and compensation measures suggested have been implemented and, for areas located in or near biodiversity sensitive areas, that an appropriate assessment and mitigation plan has been conducted with necessary mitigations implemented.

Where applicable, all of ORIT's investments adhere to this criteria. ORIT considers potential adverse impact on biodiversity as a key ESG risk during the investment cycle, and projects are required to evidence environmental screening, an impact assessment and a habitat management plan to pass minimum ESG criteria. The Investment Manager works closely with ORIT's asset managers to improve the biodiversity capital of its sites, for example through the development of best guidance criteria for land management and also the delivery of additional biodiversity initiatives that go above the proposed mitigation measures (e.g., wildflower meadows and pond formation).

Circular Economy

The lifetime of ORIT's investments is expected to be long (average lifetime of assets in the portfolio is 29 years). It is typical for renewable energy projects to have a decommissioning plan in place that encompasses the disposal and recycling of the waste materials. Many of ORIT's assets' materials can already be re-used and recycled using current technologies.

For example, the materials that represent the biggest part by weight of a wind turbine are concrete, steel, and other metals. Concrete can be crushed into aggregate and re-used in-construction projects. The steel and other metals in wind turbines are recyclable and can be re-used domestically within Europe. Whilst ORIT's investments already align with the generic criteria for DNSH to the transition to circular economy, we do expect the recyclability of these parts to increase over the coming years as more research is conducted on the sustainable disposal of renewable energy technologies.

The Investment Manager can also confirm that all investments are in line with the minimum safeguards criteria.

The energy sector (like every other sector) could be subject to human rights abuse that needs to be mitigated and the Investment Manager ensures appropriate due diligence is performed, and that human rights, equality, anti-bribery and corruption, taxation, and fair competition policies and/or processes are in place for portfolio companies and service providers alongside the Investment Manager's own policies and processes. This ensures that investments are aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on fundamental Principles and Rights at Work and the International Bill of Human Rights. This is primarily achieved by only working with suppliers who align to a supplier code of conduct.

All of ORIT's investee companies align to a supplier code of conduct and we can confirm for each investee company that:

·      there is no clear indication that the investee company does not adequately implement human rights due diligence resulting in human rights abuses (the Company nor its top management has not been convicted on a breach of human rights due diligence laws, the Company has not been approached by an OECD NCP or been involved in an allegation on the Business and Human Rights Resource Centre digital platform).

·      the Company has not been finally convicted for tax evasion or for breaking competition laws.

·      the senior management of investee companies have not been finally convicted of bribery.

Alignment Overview:

Revenues £111.5m	100% Aligned	0% Not Aligned	0% Not Eligible
CapEx £209.7m	100% Aligned	0% Not Aligned	0% Not Eligible
OpEx £35.0m	100% Aligned	0% Not Aligned	0% Not Eligible

Planet initiatives

Maximising the Company's positive contribution to the environment is core to the Impact Strategy. Planet initiatives contribute to solutions to combat climate change. Projects undertaken in the period are outlined in the table below.

Project	Outcome
Land Management: Enhanced engagement with Landowners as well as Asset Managers and Operations & Maintenance (O&M) contractors to ensure continued improvements to ESG land management practices.	A key focus area that the Investment Manager tasked the Asset Manager of the UK solar sites with was the enhancement of their engagement with the Landowners of ORIT's sites. Improved Stakeholder management with the Landowners has many benefits including; the avoidance of lease issues, access to local knowledge of the site for management, the promotion of local economy and jobs through their involvement in site management and also increased landowner engagement on the biodiversity enhancement projects that ORIT proposes. Please see case study for more information. Stakeholder Engagement
Rewilding: Continued partnership with SUGi, an organisation that "brings people closer to nature" by planting richly biodiverse pocket forests. More information on ORIT's partnership can be found here: https://www.sugiproject.com/partnerships/octopus-renewables	Following on from 2 successful projects in 2021, ORIT has funded another pocket forest in France (Agora Forest), and a further two in Cornwall bringing ORIT's pocket forests to a total of 5. Please see case study for more information. Sustainable Momentum Stakeholder Management Innovation
Conservation and local youth partnership: Ecologist company in charge of ORIT's solar farm's reptilian shelters partnered with a local youth organisation to teach them about biodiversity.	In September, an educational and biodiversity programme started at ORIT's French Solar site, Cuges‑les-Pins in partnership with AGIR ecologique (the organisation currently responsible for the maintenance of the 5 reptile shelters on site) and ADDAP13 (an association focused on economic integration of excluded young people into society). Cuges-des-pins has 5 reptilian shelters. The local youth association ADDAP13 volunteered some of its members to learn about and participate in the maintenance of the reptile shelters. A group (6 teenagers and 2 supervisors) accompanied a member of AGIR écologique to refurbish the reptile shelters and the plant 30 shrubs on site. ORIT plans to continue to volunteer its sites for these types of educative experiences on biodiversity conservation management. Innovation

Case Study:

Propagating pocket forests with SUGi

The Investment Manager continues to develop its partnership with SUGi to plant pocket forests across Europe and the UK. SUGi helps deliver ecological restoration projects around the world. SUGi "Forest Makers" follow a Japanese technique called the Miyawaki Method to create ultra-dense, biodiverse forests of native species. SUGi has a strong community focus, involving organisations, schools and communities in the planting and maintenance of the projects. Their biophilic approach brings nature closer to people, helping to educate communities of the importance of biodiversity and inspiring the next generation to take a more active stance in its restoration.

ORIT has now planted a total of 5 pocket forests made up of 63 different species of trees across the UK and in France. With over 7,725 new trees planted, ORIT is making significant contributions in restoring biodiversity in these biodiversity‑barren areas. Through this initiative ORIT is channelling capital into nature related projects and ensuring that opportunities are taken to use space more intelligently to maximise ecological benefit.

This case study re-visits some of the forests planted last year (Castle Green Forest II, UK and Rion Des Landes College, France) and introduces the new "Agora" pocket forest planted in Bezange-La-Petite in France and the two pocket forests planted in Cornwall, UK.

Castle Green Forest II Project:

An urban forest to mitigate pollution and bring biodiversity

1,400	400	24	160cm
Trees	Square meters	Native species	Average of tallest 3 trees

Field Notes

"This forest is doing well at 1 years old, having adapted well to the exposed conditions in the park, and is bringing a visible change to this former biodiversity desert. The sounds of bugs and birds can be heard as you stand by the forest, a welcome counterbalance to the busy traffic of the Ripple road nearby."

Rion Des Landes College Project:

Cultivating greenery and tranquillity for children in a treeless environment.

600	200	29	125cm
Trees	Square meters	Native species	Average of tallest 3 trees

Field Notes

This forest is thriving at 1 year old - both in terms of its growth and its impact on the Rion des Landes College community. The pocket forest has an exceptional survival rate of 98%, particularly considering the summer heatwave and drought of this year. The tallest species is currently the chestnut tree (Castanea sativa). Flat mushrooms are growing around one of the hazeltrees (Corylus avellana), a sign of important initial fungal colonisation in the soil. 180 children at the school have been involved in the maintenance of the forest.

Agora Forest, Bezange-La-Petitie:

Reviving a pocket in a vast sea of agriculture.

The Agora Forest was planted over 3 days on the edge of Bezange-La-Petite, reviving a pocket of land that had become a biodiversity desert surrounded by intensively-managed agricultural land.

4,500 trees were planted over 1,500 sqm, involving 180 local volunteers of which 115 were children. It was a true 'community' planting; volunteers of all ages attended. Many local families got involved, as did the local school who sent four classes out to plant. There was a BBQ and hot drinks organised by a local team, which contributed to the community feel and made it a particularly joyful event.

30 native species were planted including the small-leaved lime (Tilia cordata), field maple (Acer campestre) and silver birch (Betula pendula). Agora Forest will be a vibrant community hub; including pathways and seating areas so that locals, young and old, can socialise, learn and enjoy the restorative benefits of nature. Agora Forest aims to set an example for other communities in the region, both urban and rural, highlighting the immense environmental, health, social and wellbeing benefits of such a project.

Trevisker Forest and St Kew's Forest, Cornwall:

Restoring endangered temperate rainforests.

Trevisker Forest and St Kew's Forest will provide outdoor classrooms for the children of Trevisker and St Kew's Primary, small schools in rural Cornwall. The projects create critical pockets of temperate rainforest, a now fragmented and rare ecosystem that once predominated along the west coast of the UK. It thrived thanks to the Gulf Stream, which provides mild, damp conditions that are ideal for rainforest biodiversity to flourish. These forests will forge a connection between hundreds of school children and nature, supporting their wellbeing along with that of the planet.

1,225 trees were planted over 350 sqm, involving 180 local children from the schools. It was a great hands-on opportunity for the school children to learn more about plant growth and the benefits they provide to human communities.

Impact tracking

Who?	How much?	What?	Impact Theme
1 Planet London, UK Cornwall, UK Rion Des Landes, France Bezange-La-Petite, France	5 forests 495 children 7,725 trees 2,450 square meters	63 native species planted using the Miyawaki method Pollution mitigation Biodiversity enhancement Education	Sustainable momentum Innovation Stakeholder Engagement

Case Study:

Stakeholder Management Landowner case study

The Investment Manager treats maintaining good Landowner relationships on sites under their management as a top priority. As ORIT's Asset Managers to its UK solar portfolio, Quintas Energy's Land & Property team have been tasked with enhancing Landowner engagement on sites in 2022. The objective of this engagement was to improve communication between site stakeholders, to benefit from Landowner's local knowledge for site management and to engage them on upcoming biodiversity enhancement schemes.

We are pleased to report that Quintas have successfully established working relationships with the landowners on ORIT sites, including Penhale, Chisbon, Wiggin Hill, Ottringham and Ermine Street. Several site meetings with the landowners have been conducted through the course of the year with positive results. A good example of successfully enhancing the relationship with the Landowner is Chisbon. Quintas have had two formal meetings with the Landowner followed by phone calls and email exchanges. The Landowner has permitted bees to be located on site, assisting with appropriately locating the hives and now in 2023, wishes to become involved in further biodiversity enhancement projects. As the landowner is also the grounds maintenance contractor on the site, he will be key in ensuring the management and future success of site initiatives. The benefits of having a working partnership with Landowners are plentiful enabling "multi-use" of sites and this has been fostered through dedicated resource as part of the ORIT's fund daily asset management service.

Who?	How much?	What?	Impact Theme
ORIT Landowners	5 solar sites	Enhanced Landowner relationship and improved site management	Stakeholder Engagement

UN SDG specific contributions

www.un.org/sustainabledevelopment/

7 Affordable and clean energy	7. Affordable and clean energy 7.2 & 7a - Increase renewable energy in the mix and stimulate investments into the renewable sector: Provided renewable energy to the grid and provided renewable investment opportunities. Construction underway to add renewable energy capacity.
12 Responsible Consumption and Production	12. Responsible Consumption & Production 2.4 & 12.2 - Promote proportion of areas under sustainable agricultural practices and promote sustainable management and efficient use of natural resources: Partnerships with landowners, local beekeepers and local shepherds to take advantage of the empty spaces of solar farms for their agricultural use and to optimize biodiversity on site.
15 Life on Land	15. Life on Land 15.1 & 15.5 Conserve ecosystems and threatened species and take action to reduce the loss of biodiversity and degradation of habitats: Threatened and non-threatened species monitored through ecological surveys and biodiversity plans. Additional biodiversity initiatives implemented beyond planning requirement. Biodiverse pocket forests planted in partnership with SUGi to restore native biodiversity in urban areas and biodiversity-barren areas.

www.un.org/sustainabledevelopment/

People

Impact Objective: Evaluate social considerations to mitigate risks and promote a 'Just Transition' to clean energy.

396	7,536	1
Students benefitting from social initiatives	direct beneficiaries from the projects funded through the BizGive platform.	RIDDORS (or equivalent)

Managing our impact on society

Investing in renewable energy has natural positive impacts on people and for the wider society by benefitting the economy. By channelling capital towards "homegrown renewables" ORIT is also contributing to energy security, preventing future energy crises resulting from reliance on unsustainable global fossil fuel markets.

It is also vital the Company mitigates any possible negative impacts and risks to people as the Company invests, constructs, and operates our portfolio of renewable assets. ORIT has clear policies and governance structures to achieve this. Some social factors that ORIT and our Investment Manager consider to be the most important during due diligence and ongoing monitoring of assets include:

·      Health and safety

·      Social licence

·      Local employment

·      Diversity and inclusion

Health and Safety Approach

ORIT recognises its health and safety responsibilities and keeping people safe remains its highest priority. ORIT has put arrangements in place with its Investment Manager to ensure that health and safety risks are managed effectively.

Our Investment Manager employs specialist HSE consultants and additionally has employed a Head of Health and Safety to ensure that health and safety procedures are embedded into our model of investing and managing assets.

This integration is achieved through:

·      Technical Compliance Standards

·      Diligence and benchmarking of contractors

·      Audits and ongoing oversight

·      Continuous Improvement

Our Investment Manager actively tracks and monitors various accident and incident classifications from events where there is a statutory requirement to report to the UK Health & Safety Executive (RIDDORs) or other local government bodies. This includes incidents classified as accidents, near misses, dangerous occurrences, and general safety observations.

RIDDORs	Lost time injuries (>7 days)	Near misses	Personal injuries	Minor equipment damage incidents
1	0	12	2	11

In the period of this annual report, there were zero lost time injuries (> 7 days), two personal injuries and one RIDDOR across the portfolio. The first personal injury related to an operative working on the Cumberhead wind construction site in Scotland using a remote-control crane who tripped on a load awaiting lifting and cut his knee. The injury was minor and was first aid treated on site and he returned to work.

The second personal injury related to an operative working on the Lincs offshore wind project (in which ORIT holds a minority stake). The injured party was working on a turbine, caught his foot and fell, cutting his knee. The injury was minor, and the affected person was able to return to work. The RIDDOR related to the statutory reporting of a 'dangerous occurrence'; an electrical fire caused by a short-circuit in an inverter leading to the generating station Abbots Ripton Solar Farm to come offline for >24h. Nobody was hurt and there has been no follow-up from the HSE.

Furthermore, there were 12 near misses, 11 incidents causing minor equipment damage only and 0 environmental incidents. All incidents have been satisfactorily closed out and where appropriate lessons learned. Each incident generated an incident report which was audited and closed by the appropriate director.

Promoting a "Just Transition"

Just Transition refers to the movement that encourages wider and fairer distribution of benefits as the world switches to clean energy.

ORIT actively engages with local communities, workers and customers and favours investments where there are opportunities to give fair access to affordable green energy, to share benefits with the community and to create local jobs. ORIT aims to give local communities a voice on projects in support of creating a Just Transition.

Workers - Job Creation

ORIT's partners and subcontractors commit to standards promoting equal opportunities, ensuring workplace best practice standards are upheld and encouraging diversity and inclusion. By doing so, ORIT aims to increase social economic distribution and equity throughout the job opportunities it creates. The Investment Manager engages key counterparties to understand what schemes they already have in place, and encourages the use of local labour (roughly within 30km radii of sites) on construction sites.

Community - Engagement and giving a voice

ORIT has committed to demonstrating a tangible benefit to the local communities of each of its portfolios. The Investment Manager is exploring other ways to give communities nearby a say in the transition. This may be through sharing profits via community benefit schemes, creating educational opportunities for local schools via workshops and site visits or providing funding for local charities that are fulfilling a need in the local area. As the portfolio continues to grow, ORIT's impact partnerships will help ORIT reach and create lasting impact for a broader range of beneficiaries. Applicability of community initiatives will be determined on a portfolio-by-portfolio basis. By engaging communities and local stakeholders early on, ORIT is also ensuring that social licence is generated for our investments, in particular where the Company looks to extend the years an asset can operate for.

Customers - Affordable green energy

ORIT provides clear benefits to wider society through the provision of cheaper, cleaner energy to the grid. This will help reduce energy bills and also improve energy security in the countries where ORIT's assets are located. In the past year, ORIT's assets have helped power an equivalent of 270,500 homes.

This year, ORIT has also focused on providing additional support via fuel poverty charities and organisations, to help individuals suffering under fuel poverty. See case study for more information.

ORIT also supports projects that improve socio-economic distribution and equity more widely through the organisations it partners with through BizGive. For example, ORIT is working with Generation to deliver Green Retrofit Workshops. Generation is a charity that runs employment programmes to prepare, place, and support people into life-changing careers that would otherwise be inaccessible to them.

Diversity and Inclusion

Equality and wellbeing are fundamental to ORIT's impact ambitions. This is reflected in our Company policies and in the way that the Company operates externally, through understanding third-party providers approach to diversity and inclusion and suggesting ways to improve this where possible.

The Company's Board is made up of a complementary mixture of backgrounds with a gender composition of an equal 50/50 split between men and women, in line with the view that gender diversity delivers better company performance than if the Board was dominated by one gender. The Board is seeking to appoint a fifth Director to the Board to bring a senior operational perspective and to improve its ethnic representation. The Board is committed to ensuring that its composition reflects ethnic diversity, and it is looking to make meaningful progress on this front through this appointment. It welcomes applications from everyone regardless of age, gender, ethnicity, sexual orientation, belief or disability. All appointments will be made on merit, following a fair and transparent process.

The Investment Manager shares ORIT's values and places diversity and inclusion at the heart of them, and this is demonstrated through the initiatives implemented. The Investment Manager provides directors to the underlying subsidiary companies and ensures diversity is considered when appointing them.

Further detail can be found in the Impact Strategy.

People initiatives

Alongside keeping people safe, ORIT considers its potential impact on people. People initiatives contribute to solutions to engage communities and promote a "Just Transition" to clean energy.

Projects

ORIT exhibits a variety of social considerations across its assets and beyond, utilising the experience and approach developed by our Investment Manager to maximise benefits.

Project	Outcome
Social Supply Chain Analysis: Developing robust methodology to mitigate supply chain modern slavery risk.	The Investment Manager has developed a strong Modern Slavery Policy and Panel procurement policy to help mitigate the risks of modern slavery in the global solar supply chain. See case study for more information Equality & Wellbeing
Local Community Education Initiatives: ORIT continues its partnership with Earth Energy Education and the Good Bee Company to deliver school visits, workshops and webinars.	Preparatory work is underway for more site visits and workshops for communities. These projects are expected to be carried out in the Spring and Summer months of 2023. Stakeholder Management Equality & Wellbeing
Fuel Poverty: Fighting fuel poverty through investment into renewables and partnership with fuel poverty charities.	ORIT has supported charities and organisations that provide vulnerable people with fuel poverty support. See case study for more information. Sustainable Momentum Innovation Stakeholder Management Stakeholder Engagement
Just Transition through BizGive organisations: further collaboration, engagement and impact, aligned to the UN's SDG framework and ORIT's impact objectives.	ORIT has granted a total of £70k to charities and community interest groups that have applied for funding on ORIT's BizGive Programme. Projects supported drive STEM learning, climate action, biodiversity conservation, and community renewables. Innovation Equality & Wellbeing

Case Study:

Tackling fuel poverty in times of crisis

Rising gas prices, low incomes and energy-inefficient homes are leading more and more people across Europe into the grip of fuel poverty. As society navigates through these challenging times, ORIT is well positioned to contribute to solutions. By channelling capital towards sustainable outcomes that mitigate climate change ORIT is also contributing to European energy security, and to preventing future energy crises resulting from reliance on unsustainable global fossil fuel markets. As laid out in ORIT's Impact Strategy, ORIT also incorporates social benefits in all its investments. Given the challenging back drop of the energy crisis, the ORIT Board decided to commit a significant proportion of its additional impact fund to support charities focused on tackling fuel poverty during the period.

Green Doctors, Groundwork:

ORIT has made a donation of £12.5k to Green Doctors to help upskill some of their project officers to "Green Doctors" across England and Wales, particularly in North East, North West, West Midlands, South Wales and London. Green Doctors offer free and impartial energy advice across the UK to help residents reduce their energy bills, improve their wellbeing, and save energy for example through draught proofing.

The increase in cost of living and energy price cap are deeply affecting vulnerable households, and Groundwork continues to move quickly to meet this demand. ORIT's funding has also been allocated to facilitate more senior upskilling for experienced Green Doctors so that they can deliver full retrofitting assessment and coordination. ORIT is helping to create lasting positive impact in these regions, with this funding supporting the upskilling of around 12 Green Doctors‑each delivering an upwards of 500 visits a year. On average the households they visit save £350 a year. With the average annual shortfall that places a household into fuel poverty being £333, the Green Doctor service is effectively lifting thousands of households out of fuel poverty every year.

Energie Solidaire:

ORIT has made a €12.5k donation to Energie Solidaire's Endowment Fund. Energie Solidaire supports local associations across France who in turn try to lift the most vulnerable households out of fuel poverty. The organisation's commitment committee selects the charity groups that are likely to make the most impact and works with them over a couple of years. Typical charities selected to take part include those that carry out minor renovation projects on energy inefficient homes and provide energy advice. ORIT's donation will be distributed to the charities by Energie Solidaire in the coming year.

Zink Energy Advice and Support:

ORIT has made a £2,900 donation to Zink. Zink is a community organisation that provides services to people and families in the rural Highpeak and Derbyshire Dales areas of the UK. Their holistic approach to supporting people towards better futures focuses on long-term resolutions rather than short-term quick fixes. Their services are tailored to the specific needs of the individual and can range from the provision of emergency food parcels to access to energy advice workers, work coaches and wellbeing activities. ORIT's contribution has gone towards the delivery of 160 energy advice appointments, providing 160 individuals with the tools they need to step out of energy poverty. A portion of these individuals may seek further help from Zink's work coaches, food banks and wellbeing services but it is expected that 140 issues will be resolved in the long-term, removing the demand of Zinc's emergency food parcels.

Home Energy for New Scots, The Welcoming:

ORIT has made a £9,524 donation to The Welcoming's "Home Energy for New Scots Project". This project aims to tackle and prevent fuel poverty and associated risks by providing energy advice and support to "New Scots" (refugees, asylum seekers and migrants) in Edinburgh. The Welcoming currently has over 1500 registered members who regularly attend activities - with an average of 160 new registrations every month. Their service users come from all over the world with the top 7 nationalities being: Syrian, Ukrainian, Afghan, Chinese, Sudanese, Polish and Spanish. Upon arrival in Edinburgh, they face significant language, cultural and financial barriers to social and economic integration. ORIT's donation has been allocated to support over 6 months' worth of weekly energy advice surgeries and one-to-one appointments, helping project participants to control their energy consumption, access financial support and adopt behavioural changes that will improve the energy efficiency of their homes.

To all the staff and volunteers at Zink, I just want to let you know how grateful I am to you all for all your hard work and help you have given me since I started coming to Zink over six months ago. I just wished I'd started coming sooner. Some people don't realise how lucky we are to have Zink to fall back on in bad times."

A Zink Energy Advice and Service client

Impact tracker

 

Who?	How much?	What?	Impact Theme
People in fuel poverty, refugees, asylum seekers and migrants	£25k € 12.5k	Energy advice Renovation works Fuel poverty packages Wellbeing services Long-term support	Sustainable momentum Innovation Stakeholder Engagement

Case Study:

Human Rights in the Supply Chain

ORIT is committed to acting ethically and with integrity in all its business dealings and relationships. ORIT recognises its responsibility specifically with regard to its supply chain and the Investment Manager is dedicated to taking the necessary steps to engage with and influence its supply chain to prevent any potential risks relating to human rights.

The solar sector could present a significant risk due to its connections to forced labour violations at the polysilicon level of its supply chain. The lack of traceability and transparency at this level of the global supply chain and the surrounding geopolitical challenges has lead the Investment Manager to develop a tailored risk management strategy to mitigate risks and build a more resilient supply chain for ORIT. The Investment Manager's goal is to eliminate this risk through increased transparency in the supply chain enabling evidence-based purchasing decisions and through actively engaging, lobbying, and driving change in the solar industry. As an investor and working with development and construction partners, ORIT believes that this approach will help influence what is considered acceptable in the industry and lead to meaningful improvements in global solar supply chain sustainability.

Investment manager actions for mitigating human right risks:

•     The Investment Manager has put in place a strengthened due diligence framework made up of ESG-related policies, supplier code of conducts and due diligence questionnaires to help ensure all activities and business conducted in ORIT's supply chain seek to be in line with international labour standards⁴². More information can be found in the Investment Manager's "Modern Slavery Statement".

•     The Investment Manager has worked with an external auditing partner (Clean Energy Associates) to develop a new procurement policy and an allow/deny list for equipment suppliers. The policy requires suppliers to provide written confirmations statements as well as evidence (for example through audits) that their business practices do not support forced labour. As co-authors of the Solar Energy Industries Association's ("SEIA") Traceability Protocol, Clean Energy Associates is well placed to carry out ORIT's auditing requirements.

•     The Investment Manager is working to promote collective action from the industry by working on collaborative initiatives to increase traceability and responsible production of solar products. Given the systemic nature of the issue, efforts from industry bodies, regulators, expert advisors, NGOs as well as from ORIT's suppliers will be required to fully address the risks. The Investment Manager has been a long-term supporter of and sponsor of Solar Energy UK's and Solar Power Europe's Solar Stewardship Initiative, formally launched to the public in October 2022. This initiative works with stakeholder input from across the sector to establish new and improved standards for the solar supply chain.

For more information see:

https://a.storyblok.com/f/154679/x/f6a5ac9c32/oegen_modern_slavery_statement_092022.pdf https://www.cea3.com/traceability-audits-for-pv-energy-storage
https://solarstewardshipinitiative.org/

⁴⁵     For example the labour standards laid out in the UN Global Compact, the UN Guiding Principles for Business and Human Rights and the OECD Guidelines for Multinational Enterprises.

UN SDG specific contributions

4 Quality Education

4. Quality Education 4.1 & 4.7 - Provide free, quality education leading to relevant and effective learning outcomes that can also promote sustainable development: Partnership with the Good Bee Company and Earth Energy Education to provide free education programmes and site visits to local schools. Funding of multiple charities through BizGive supporting projects that drive STEM learning, climate action, biodiversity conservation, and community renewables.

8 Decent Work and Economic Growth

8. Decent Work and Economic Growth 8.5 - Provide full and productive employment and decent work for all: Extensive Health and Safety measures ensures employees are not exposed to risk. Supply chain analysis and strengthened policies to ensure labour rights upheld across ORIT's suppliers.

www.un.org/sustainabledevelopment/

Risk and Risk Management

Risk Appetite

The Board is ultimately responsible for defining the level and types of risk that the Company considers appropriate. In the context of the Company's strategy, risk appetite is aligned to the Investment Policy and this provides the framework for how capital will be deployed to meet the Company's investment objective. The limits set out in the Investment Policy represent the amount of risk the Company is willing to take and the constraints that the Board determines that the Investment Manager must adhere to on behalf of the Company. This covers the principal risks the Company faces including, amongst other things, the level of exposure to power prices, financing risks and investment risks. Beyond this, risk limits and tolerances are monitored and set by the AIFM as part of the AIFM's risk management services. These are documented in the AIFM's Risk Management Policy for the Company covering credit, liquidity, counterparty, operational and market risks. Adherence to these risk limits is reported regularly to the Board through the quarterly AIFM risk management report.

Principal risks and uncertainties

The Company has carried out a robust assessment of its principal and emerging risks and the procedures in place to identify any emerging risks are described below.

Procedures to identify principal or emerging risks:

Well managed risks are key to generating long-term shareholder returns. The purpose of the risk management framework and policies adopted by the Company is to identify risks and enable the Board to respond to risks with mitigating actions to reduce the potential impacts should the risk materialise.

The Board regularly reviews the Company's risk matrix, with a focus on ensuring appropriate controls are in place to mitigate each risk. The experience and knowledge of the Board is important, as is advice received from the Company's service providers.

The following is a description of the procedures for identifying principal risks that each service provider highlights to the Board on a regular basis.

1.   Alternative Investment Fund Manager ("AIFM"): The Company has appointed Octopus AIF Management Limited to be the Alternative Investment Fund Manager of the Company (the "AIFM") for the purposes of UK AIFM Directive. Accordingly, the AIFM is responsible for the portfolio management of the Company and for exercising the risk management function in respect of the Company. As part of this the AIFM has put in place a Risk Management Policy which includes stress testing procedures and risk limits. As part of this risk management function, the AIFM maintains a register of identified risks including emerging risks likely to impact the Company. This is updated quarterly following discussions with the Investment Manager and highlighted to the Board.

2.   Investment Manager: Portfolio Management has been delegated by the AIFM to the Investment Manager. There is a comprehensive due diligence process in place to ensure that potential investments are screened against the Company's objectives, and that financial and economic analysis is conducted alongside a full risk analysis. Any potential transaction must be granted approval in principle ("AIP") by the Octopus Energy Generation Investment Committee ("OEGEN IC") and the due diligence budget signed off by the Board. Once due diligence and negotiations of final terms are substantially complete, the final proposal including the risk analysis will be presented to OEGEN IC for a decision on whether the Company should proceed with investment, subject to approval from the Board. The Investment Manager also provides a report to the Board at least quarterly on asset level risks, industry trends, insight to future challenges in the renewable sector including the regulatory, political and economic changes likely to impact the renewables sector.

3.   Broker: The Broker provides regular updates to the Board on Company performance advice specific to the Company's sector, competitors and the investment company market whilst working with the Board and Investment Manager to communicate with shareholders.

4.   Company secretary and auditors: Brief the Board on forthcoming legislation/regulatory change that might impact on the Company. The auditors also have specific briefings at least annually.

Procedure for oversight

The Audit and Risk Committee undertakes a review at least twice a year 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 that emerging (as well as known) risks are adequately identified and - so far as practicable - mitigated.

During the year, the Audit and Risk Committee have added additional principal risks covering Board effectiveness and compensation, contractor default and trading at a discount to NAV. The Audit and Risk Committee has also deemed that the risks associated with the UK Trade Deal are no longer significant to classify as a principal risk to the Company.

Principal risks

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

Economic, political and climate risks - income and value of the Company's investments may be affected by future changes in the economic and political environment, alongside risks associated with climate change.

Risk	Potential Impact	Mitigation
Inflation and interest rates	The revenue and expenditure of the Company's investments are frequently partially index-linked and therefore any discrepancy with the Company's inflation expectations could impact positively or negatively on the Company's cashflows. Changes in interest rates may affect the valuation of the investment portfolio by impacting the valuation discount rate and could also impact returns on cash deposits and the cost of borrowing. In the event that actual inflation differs from forecasts or projected levels, the profitability of the Company may be impaired leading to reduced returns to shareholders. Increased inflation and a higher cost of living can adversely impact investor appetite.	Inflation and interest rate assumptions are reviewed and monitored regularly by the AIFM and the Investment Manager in the valuation process. Assumptions are set by the Valuations Consistency Group and valuations approved by the AIFM. It is expected that a natural hedge may occur where higher interest rates are also accompanied by higher inflation rates due to subsidies being inflation linked. The Company can utilise interest rate swaps or fixed rate financing to mitigate interest rate risks.
Foreign currency	The Company's functional currency is Sterling, but some of the Group's investments are based in countries whose local currency is not Sterling. Therefore, changes in foreign currency exchange rates may affect the value of the investments due to adverse changes in currencies.	The principal mitigation is through the Company's hedging policy which seeks to minimise the volatility of cash flows in non‑GBP currencies. The RCF can also be drawn in multiple currencies to allow the matching of debt and the underlying assets. The Investment Manager monitors foreign exchange exposures using short and long-term cash flow forecasts. The Company's portfolio concentrations and currency holdings are monitored regularly by the Board, the AIFM and the Investment Manager. All FX hedges are held within the intermediate holding companies.
Government policy changes	The Company's investments in Renewable Energy Assets are remunerated by both government support schemes and private PPAs - the terms of these may be impacted by government changes or policy or even terminated in certain circumstances. This would adversely impact the value of the Company's investments.	The Company holds a diversified portfolio of Renewable Energy Assets and so it is unlikely that all assets will be impacted equally by a change in legislation. There is also strong public demand for support of the renewables market to hit "net zero" carbon emission targets.
Geopolitical risks	Events in Ukraine and the impact of sanctions placed on Russia and affiliated countries may impact the target returns of the Company. The Company engages third-party contractors to oversee the day to day operations of the assets. If any of these contractors are impacted by the events in Russia and Ukraine, or by the current sanctions imposed on Russia, this may impact the performance of the assets, and ultimately the target returns of the Company. Assets located in nearby jurisdictions may be impacted by the conflict. The conflict may lead to increased volatility of power prices and hence valuations. Heightened power prices may lead to an increased risk of political intervention to regulate prices or impose windfall taxes. The conflict may lead to an increased risk of cyber attacks.	The Investment Manager undertakes extensive due diligence on all counterparties prior to conducting business with them and will fully comply with all sanctions. As part of this review, all counterparty due diligence has been reviewed and confirmed that the Group's current counterparties are not materially impacted by recent events or by the new sanctions. The Investment Manager will remain agile to the changing geopolitical environment and will continue to evolve and reassess appropriate mitigation strategies. Mitigations for power prices as well as for cyber security are described below.
Risks associated with climate change	Climate related risks relate to transition risks and physical risks. The prominent transition risk relates to oversupply of renewables over time, which may cause downward pressure on long-term power price forecasts setting lower capture prices, including the risks associated with periods of negative power prices and power price volatility. This could ultimately lead to a shortfall in anticipated revenues to the Company. The prominent physical risks relate to long‑term changes to weather patterns, which could cause a material adverse change to an asset's energy yield from that expected at the time of investment. Physical risks associated with acute and chronic temperature change could lead to flooding, storms, and high winds. This could damage equipment and force operational downtime resulting in reduced revenue capability and profitability of the portfolio of assets.	The Investment Manager is actively engaging with third party advisors on how climate related risks are being modelled in long-term power price forecasts. There are likely to be opportunities associated with the transition to a low carbon future including growth in the market, government interventions and technology advancements that could counterbalance the transition risks of climate change on the Company. The Board and the Investment Manager periodically assess the Company's portfolio of assets for potential transition risks within the jurisdictions that it currently operates. The Investment Manager works with third-party asset managers to ensure an appropriate level of equipment spares to minimise downtime associated with damaged equipment. There is growing demand for consistent, comparable, reliable, and clear climate related financial disclosure from many participants in financial markets. The Board, AIFM and Investment Manager have included TCFD as part of the Company's Impact Strategy.

Company: operational risks - risk that target returns and Company objectives are not met over the longer term.

Risk	Potential Impact	Mitigation
Deployment	A deterioration of the investment pipeline may impact the ability to commit and deploy capital into suitable opportunities in the expected time frame. Competition in the infrastructure market remains strong which could limit the ability of the Company to acquire assets in line with target returns or incur abort costs where transactions are unsuccessful. Both deployment risks could ultimately impact shareholder returns.	The Company has an experienced Investment Manager with good presence and strong relationships in the renewables market. The investment mandate is diversified giving a broad landscape of opportunities. The Board and Investment Manager oversee the investment pipeline and abort exposure and frequently monitor its progress in relation to Company targets.
Reliance on third-party service providers	The Board has contractually delegated to third-party service providers day to day management of the Company. A deterioration in the performance of any of the key service providers including the Investment Manager, AIFM and Administrator could have an impact on the Company's performance and there is a risk that the Company may not be able to find appropriate replacements should the engagement with the service providers be terminated.	Each contract was entered into after full and proper consideration of the quality and cost of services offered, including the financial control systems in operation in so far as they relate to the affairs of the Company. All of the above services are subject to ongoing oversight by the Board and, where applicable, the AIFM and the performance of the key service providers is reviewed on a regular basis. The Board, through the Management Engagement Committee monitors key personnel risks as part of its oversight of the AIFM and Investment Manager and the Company's key service providers report periodically to the Board on their control procedures.
Valuations	Valuation of the portfolio of assets is based on financial projections and estimations of future results. Actual results may vary significantly from the projections, which may reduce the profitability of the Company leading to reduced returns to shareholders.	The Investment Manager has significant experience in the valuation of renewable assets and conducts a quarterly valuations process. The AIFM has a valuations committee separate to the Investment Manager to provide valuations consistency on macro assumptions and to provide oversight and challenge to the valuations. The Board and AIFM review the valuations provided quarterly and they are audited annually. Dividend cover and ratios monitored by the Investment Manager and reported to the AIFM.
ESG policy	Material ESG risks may arise such as slave labour in the supply chain, health and safety, unfair advantage, bribery, corruption and environmental damage. If the Company fails to adhere to its public commitments as stated in its ESG Policy and Impact Strategy, this could result in shareholder dissatisfaction and adversely affect the reputation of the Company.	ESG is embedded in the investment cycle with a formal ESG matrix including a minimum target ESG score required for approval of any new investments. Ongoing operational and construction ESG risk management is reviewed periodically by the Investment Manager, who work closely with service providers on ESG and impact standards reporting. ESG Policy signed off and reviewed by the Board.
Conflicts of interest	The appointment of the AIFM is on a nonexclusive basis and each of the AIFM and Investment Manager manages other accounts, vehicles and funds pursuing similar investment strategies to that of the Company. This has the potential to give rise to conflicts of interest. Board and counterparties conflicts.	The AIFM and Investment Manager have clear conflicts of interest and allocation policies in place. Transactions where there may be potential conflicts of interest are overseen by the Investment Manager's conflicts committee, an independent fairness opinion on valuation is commissioned, and as with all transactions, the Board has final approval rights. The Board, AIFM and Investment Manager are responsible for establishing and regularly reviewing procedures to identify, manage, monitor and disclose conflicts of interests relating to the activities of the Company. These procedures are more fully described in the Company's prospectus dated 10 June 2021. Conflict of interest policies in place both at Board level and under the Listing Rules.
Board effectiveness and compensation	Inappropriate or inadequate Board composition left unidentified through a poor Board evaluation process could lead to poor decision making and adversely affect the reputation of the Company or result in a financial loss. Board compensation structures may encourage risk taking that is not aligned to Company strategy and risk appetite or may lead to an inability to retain knowledgeable Board members.	The Broker and Investment Manager were involved in the initial selection of the Board. The Nomination Committee is responsible for ongoing monitoring of Board composition. Board effectiveness is also reviewed externally every 3 years. External benchmark surveys are undertaken on Board remuneration via the Remuneration Committee and ratified at the Annual General Meeting.
Trading at a discount to NAV	The Ordinary Shares may trade at a discount to NAV and shareholders may be unable to realise their investments through the secondary market at NAV which could lead to a loss of market confidence in the Board and/or Investment Manager. A failure to adapt to changing investor demands could reduce the demand for shares and widen the discount further.	The Company's Broker monitors the market situation and reports regularly on the status, along with demographics and changes in shareholder register. Regular shareholder communications and marketing roadshows undertaken to ensure updated information is available to the market/shareholders. The Board has put in place a discount control policy and has the option of a share buyback if the Board believes it to be in shareholders' interests as a means of correcting any imbalance between the supply of and demand for the Ordinary Shares. The Company also has the ability to hold treasury shares to mitigate this risk.
Cyber security	Attempts may be made to access the IT systems and data used by the Investment Manager, Administrator and other service providers through a cyber-attack or malicious breaches of confidentiality that could impact the Company reputation or result in financial loss.	Cyber security policies and procedures implemented by key service providers are reported to the Board and AIFM periodically to ensure conformity. The Investment Manager has a robust 3 lines of defence risk model in place in place to implement, check and audit technology controls. Thorough third-party due diligence is carried out on all suppliers engaged to service the Company. All providers have processes in place to identify cyber security risks and apply and monitor appropriate risk plans.

Portfolio of assets: operational risks - risk that the portfolio underperforms and, as a result, the target returns, and Company objectives are not met over the longer-term.

Risk	Potential Impact	Mitigation
Power prices	The income and value of the Company's investments may be adversely impacted by changes in the prevailing market prices of electricity and prices achievable for off-taker contracts. There is a risk that the actual prices received vary significantly from the model assumptions, leading to a shortfall in anticipated revenues to the Company.	The Investment Manager has a specific Energy Markets Team that monitors energy price forecasts and puts in place mitigating strategies. This could be through the use of short-term PPA contracts to fix the electricity prices where possible, or to hedge the exposure of fluctuating electricity prices through derivative instruments. Model assumptions are based on quarterly reports from a number of independent established market consultants to inform on the electricity prices over the longer-term.
Construction	Construction project risks associated with the risk of inaccurate assessment of a construction opportunity, delays or disruptions which are outside the Company's control, changes in market conditions, and the inability of contractors to perform their contractual commitments could impact Company performance.	The Investment Manager monitors construction carefully and reports frequently to the Board and AIFM. The Investment Manager undertakes extensive due diligence on construction opportunities and has in place clear approval processes for any material construction cost overruns and contingency spend.
Development	Development project risks associated with delays, increases in costs or ultimate failure to deliver the expected assets to construction ready status.	The Company's maximum exposure to development is limited to 5% of GAV. The Investment Manager monitors progress of development projects carefully and ensures all costs are managed appropriately. A clear approval processes is in place for any material project cost overruns and contingency spend. Cost and progress analysis of development projects is reported frequently to the Board and AIFM. The Investment Manager also monitors exposure to any one developer to ensure this is kept within reasonable limits.
Asset-specific risks, including production and HSE risks	Circumstances may arise that adversely affect the performance of the relevant renewable energy asset. These include health and safety, grid connection, material damage or degradation, equipment failures and environmental risks.	The Company's experienced Investment Manager oversees and manages asset and site level issues. Third-party O&M contractors are engaged to carry out regular preventative maintenance and a level of spares is maintained from diversified manufacturers. The Investment Manager uses established relationships with relevant DNOs and works closely with them to maintain grid connection. A SH&E Director is employed by the Investment Manager to oversee and advise on the HSE system for renewable assets. The Company has in place insurance to cover certain losses and damage.
Contractor default risk	In the current economic climate, there is also an increased risk that service providers default on their contractual obligations or suffer an insolvency event.	The Company and the Investment Manager will seek to mitigate the Company's exposure to contract default risk through carrying out qualitative and quantitative due diligence on counterparties.

Compliance and regulatory risks - failure to comply with relevant regulatory changes, tax rules and obligations may result in reputational damage to the Company or have a negative financial impact.

Risk	Potential Impact	Mitigation
Noncompliance with FCA, Listing Rules, UK AIFM Directive, MAR and investment trust eligibility conditions	Failure to comply with any relevant regulatory rules including Section 1158 of the Corporation Tax Act, the rules of the FCA, including the Listing Rules and the Prospectus Rules, Companies Act 2006, MAR, UK AIFM Directive, Accounting Standards, GDPR and any other relevant regulations could result in financial penalties, loss of investment trust status, legal proceedings against the Company and/or its Directors or reputational damage.	The Board monitors compliance and regulatory information provided by the Company Secretary, the AIFM and Investment Manager on a quarterly basis and the assessment of regulatory risks forms part of the Board's risk management framework. All parties are appropriately qualified professionals and ensure that they keep informed with any developments or updates to the legislation.

Financial risks - various types of risk associated with financing and liquidity. Further financial risks are detailed in Note 16 of the financial statements.

Risk	Potential Impact	Mitigation
Risks associated with borrowing can impact on Company performance	The Company's investment policy involves the use of long-term and short-term debt. The use of leverage may increase the volatility of the Net Asset Value, may significantly increase the Company's investment risk and could lead to an inability to meet financial obligations. The Company may be unable to obtain borrowing facilities at appropriate levels impacting returns. Risks include refinancing risk, covenant breaches, poor management of assets and liabilities, over-gearing and possible enhanced loss on poor performing assets.	The Board monitors debt covenants, gearing limits appropriate to the Company and reviews any debt facilities before financial close.  Portfolio allocations are monitored on an ongoing basis by the AIFM to ensure compliance with borrowing policy and limits stated in the investment policy. The Company has the ability to enter into hedging transactions in relation to interest rates for the purpose of efficient portfolio management to protect the Company from fluctuations of interest rates. Read more above in interest rate, currency and power price risks.

The Board are of the opinion that these are the principal risks, but mindful of their obligations under the changes made to the AIC Code of Corporate Governance issued in February 2019, the Board has also considered emerging risks which may impact the forthcoming six-month period. There are no additional risks to note as a result of this review.

Task Force on Climate-related Financial Disclosures ("TCFD")

The TCFD, established in December 2015 by the Financial Stability Board, was tasked with reviewing how the financial sector could take account of climate related issues. In 2017, the TCFD published its recommendations for consistent climate-related financial risk disclosures across Governance, Strategy, Risk Management, and Targets & Metrics. Eleven recommendations across these four pillars were prescribed for companies to provide information to investors, lenders, insurers, and other stakeholders. The TCFD recommends that all organisations provide climate-related disclosures in their annual report and accounts, providing a framework to help companies assess the risks and opportunities associated with climate change.

Following this, the Financial Conduct Authority ("FCA") issued a rule, effective for periods beginning on or after January 2021, for UK premium listed companies to start to report against the TCFD, with other companies to follow. Whilst not currently mandated to make a TCFD disclosure, being excluded as an Investment Trust, ORIT supports the TCFD's aims and objectives and has decided to voluntarily report in line to adopt best practice disclosures. Material climate-related financial disclosures can help support investment decisions as we move towards a low-carbon economy. The Company is acutely aware of the risks of climate change and through its investment mandate, believes it is well placed to contribute to solutions and harness the opportunities that arise from a transition to net zero. However, no company is isolated from climate change, and the disclosures below outline the climate-related risks ORIT faces.

Statement of Compliance

The Company is pleased to confirm that it has included climate-related financial disclosures aligned with the four recommendations and the eleven recommended disclosures provided in the TCFD's 2021 report 'Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures', which included additional guidance for Asset Owners and Asset Managers.

Governance

Oversight and management of climate-related risks and opportunities is integrated within the Governance framework of the Company, illustrated in the diagram below.

Statement of Directors' Responsibilities

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.

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 the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:

•     select suitable accounting policies and then apply them consistently; 

•     state whether applicable UK-adopted international accounting standards have been followed, 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 responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom 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 Statement confirm that, to the best of their knowledge:

•     the Company financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit 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 that it faces. 

For and on behalf of the Board

Philip Austin MBE

Chair

28 March 2023

Financial Statements

Statement of Comprehensive Income

		Year ended 31 December 2022			Year ended 31 December 2021
	Note	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment income	4	40,307	-	40,307	31,829	-	31,829
Movement in fair value of investments	9	-	37,603	37,603	-	8,561	8,561
Total net income		40,307	37,603	77,910	31,829	8,561	40,390
Investment management fees	5	(4,284)	(1,428)	(5,712)	(3,108)	(1,036)	(4,144)
Other expenses	5	(1,132)	(1,280)	(2,412)	(851)	(584)	(1,435)
Net finance income		51	-	51	5	-	5
Net foreign exchange losses		-	(1)	(1)	-	(27)	(27)
Profit before taxation		34,942	34,894	69,836	27,875	6,914	34,789
Taxation	6	(515)	515	-	312	(312)	-
Profit and total comprehensive income for the year		34,427	35,409	69,836	28,187	6,602	34,789
Earnings per Ordinary share (pence) - basic and diluted	8	6.09p	6.27p	12.36p	6.65p	1.55p	8.20p

The 'Total' column of this statement is the profit and loss account of the Company and the 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies. All expenses are presented as revenue items except 25% of the investment management fee, which is charged as a capital item within the Statement of Comprehensive Income. Costs incurred on aborted transactions and investment acquisitions are charged as capital items within the Statement of Comprehensive Income.

All revenue and capital items in the above statement derive from continuing operations.

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

Statement of Financial Position

	Note	As at 31 December 2022 £'000	As at 31 December 2021 £'000
Non-current assets
Investments at fair value through profit or loss	9	608,799	485,417
Current assets
Trade and other receivables	10	775	450
Cash and cash equivalents		10,603	93,946
		11,378	94,396
Current liabilities: amounts falling due within one year
Trade and other payables	11	(1,917)	(2,124)
		(1,917)	(2,124)
Net current assets		9,461	92,272
Net assets		618,260	577,689
Capital and reserves
Share capital	12	5,649	5,649
Share premium account	12	217,283	217,283
Special reserve	13	339,500	339,500
Capital reserve		37,915	2,506
Revenue reserve		17,913	12,751
Equity attributable to owners of the Company		618,260	577,689
Net assets per Ordinary Share (pence)	14	109.44p	102.26p

The financial statements in the Annual Report were approved by the Board of Directors and authorised for issue on 28 March 2023 and were signed on its behalf by:

Philip Austin MBE

Chair

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

Incorporated in England and Wales with registered number 12257608

Statement of Changes in Equity

Year ended 31 December 2022

	Note	Share capital £'000	Share premium account £'000	Special reserve £'000	Revenue reserve £'000	Capital reserve £'000	Total shareholders' funds £'000
Opening equity as at 1 January 2022		5,649	217,283	339,500	12,751	2,506	577,689
Profit and total comprehensive income for the year		-	-	-	34,427	35,409	69,836
Dividends paid	7	-	-	-	(29,265)	-	(29,265)
Closing equity as at 31 December 2022		5,649	217,283	339,500	17,913	37,915	618,260

Year ended 31 December 2021

	Note	Share capital £'000	Share premium account £'000	Special reserve £'000	Revenue reserve £'000	Capital reserve £'000	Total shareholders' funds £'000
Opening equity as at 1 January 2021		3,500	-	339,500	5,023	(4,096)	343,927
Profit and total comprehensive income for the year		-	-	-	28,187	6,602	34,789
Shares issued in the year	12	2,149	221,763	-	-	-	223,912
Share issue costs		-	(4,480)	-	-	-	(4,480)
Dividends paid	7	-	-	-	(20,459)	-	(20,459)
Closing equity as at 31 December 2021		5,649	217,283	339,500	12,751	2,506	577,689

The Company's distributable reserve consists of the special reserve, capital reserve attributable to realised gains and revenue reserve.

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

The issued capital and reserves are fully attributable to the shareholders of the Company.

Statement of Cash Flows

	Note	Year ended 31 December 2022 £'000	Year ended 31 December 2021 £'000
Operating activities cash flows
Profit before taxation		69,836	34,789
Adjustments for:
Movement in fair value of investments	9	(37,603)	(8,561)
Investment income from investments	4	(40,307)	(31,829)
Share issue abort costs		404	-
Operating cash flow before movements in working capital		(7,670)	(5,601)
Changes in working capital:
Increase in trade and other receivables		(325)	(323)
(Decrease)/increase in trade payables		(207)	59
Distributions from investments	9	38,108	26,169
Net cash flow generated from operating activities		29,906	20,304
Investing activities cash flows
Costs associated with acquiring the portfolio of assets	9	(83,580)	(212,516)
Net cash flow used in investing activities		(83,580)	(212,516)
Financing activities cash flows
Dividends paid to Ordinary Shareholders	7	(29,265)	(20,459)
Proceeds from issue of share capital during the year		-	223,912
Costs in relation to issue of shares		(404)	(4,480)
Net cash flow (used in)/generated from financing activities		(29,669)	198,973
Net (decrease)/increase in cash and cash equivalents		(83,343)	6,761
Cash and cash equivalents at start of year		93,946	87,185
Cash and Cash equivalents at end of year		10,603	93,946

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

Notes to the Financial Statements

For the year ended 31 December 2022

1. General information

Octopus Renewables Infrastructure Trust plc ("ORIT" or the "Company") is a Public Company Limited by Ordinary Shares incorporated in England and Wales on 11 October 2019 with registered number 12257608. The Company is a closed-ended investment company with an indefinite life. The Company commenced its operations on 10 December 2019 when the Company's Ordinary Shares were admitted to trading on the premium segment of the main market of the London Stock Exchange. The Directors intend, at all times, to conduct the affairs of the Company 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 6th Floor, 125 London Wall, London, EC2Y 5AS.

The Company's investment objective is to provide investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets in Europe and Australia.

The audited financial statements of the Company (the "financial statements") are for the year ended 31 December 2022 and comprise only the results of the Company, as all of its subsidiaries are measured at fair value following the amendment to IFRS 10 as disclosed in Note 2. The comparatives shown in these financial statements refer to the year ended 31 December 2021.

The Company has appointed Octopus AIF Management Limited to be the alternative investment fund manager of the Company (the "AIFM") for the purposes of Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers. Accordingly, the AIFM is responsible for the portfolio management of the Company and for exercising the risk management function in respect of the Company. The AIFM has delegated portfolio management services to Octopus Renewables Limited (trading as Octopus Energy Generation), the Company's Investment Manager (the "Investment Manager").

Apex Listed Companies Services (UK) Limited (the "Administrator") provides administrative and company secretarial services to the Company under the terms of the Administration Agreement between the Company and the Administrator. During the year, Apex Group plc acquired Sanne Fund Services (UK) Limited and subsequently the name of the Company's Administrator and Company Secretary changed from Sanne Fund Services (UK) Limited to Apex Listed Companies Services (UK) Limited.

2. Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and the applicable requirements of the Companies Act 2006. On 31 December 2020, IFRSs as adopted by the European Union at that date were brought into UK law and became UK-adopted international accounting standards, with future changes being subject to endorsement by the UK Endorsement Board. The Company transitioned to UK-adopted international accounting standards in its financial statements on 1 January 2021. There was no impact or change in accounting policies from the transition.

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: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued in July 2022 by the Association of Investment Companies ("AIC").

The financial statements are prepared on the historical cost basis, except for the revaluation of investments measured at fair value through profit or loss. The principal accounting policies adopted are set out below. These policies are consistently applied.

The financial statements are presented in Sterling, which is the Company's functional currency and are rounded to the nearest thousand, unless otherwise stated. They have been prepared on the basis of the accounting policies, significant judgements, key assumptions and estimates as set out below.

Going concern

The Directors, in their consideration of going concern, have reviewed comprehensive cash flow forecasts prepared by the Company's Investment Manager which are based on market data and believe, based on those forecasts, the assessment of the Company's subsidiary's banking facilities and the assessment of the principal risks described in this report, that it is appropriate to prepare the financial statements of the Company on the going concern basis.

In arriving at their conclusion that the Company has adequate financial resources, the Directors were mindful that the Group had unrestricted cash of £11 million as at 31 December 2022 (2021: £94m) and available headroom on its revolving credit facility ("RCF") of £169 million (2021: £150m). The Company's net assets at 31 December 2022 were £618 million (2021: £578m) and total expenses for the year ended 31 December 2022 were £8.0 million (2021: £5.6m), which represented approximately 1.3% (2021: 1.3%) of average net assets during the year. At the date of approval of this document, based on the aggregate of investments and cash held, the Company has substantial operating expenses cover.

The Company receives revenue in the form of dividends and interest from its portfolio of assets. These revenues are derived from the sale of electricity through power purchase agreements in place with large and reputable providers of electricity to the market. A prolonged and deep market decline could lead to falling values to the underlying business or interruptions to cashflow, however the Directors do not foresee any immediate material risk to the Company's investment portfolio and income from underlying assets. The Directors are also satisfied and are comfortable that the Company would continue to remain viable under downside scenarios, including a decline in long-term power price forecasts.

In instances where underlying investments have external debt finance, the covenants associated with these facilities have been tested and are not expected to be breached, even in downside scenarios.

The major cash outflows of the Company are the payment of dividends, commitments payable for construction projects and contingent acquisitions and the repayment of the short-term facility which expires in November 2023. Post year end, the Company's intermediate holding company successfully refinanced its RCF to an increased facility of £270.8 million and extended its term to February 2026. The covenants of the RCF have been tested and are not expected to be breached, even in downside scenarios. Plausible downside scenarios include a decrease in wholesale energy prices, or a decrease in output. While in some downside scenarios, the headroom available on the RCF will be lower, the Directors remain confident that the Company has sufficient cash balances, and headroom in the RCF held by an intermediate holding company in order to fund the commitments detailed in note 19 to the financial statements, should they become payable.

Having performed the assessment of going concern, the Directors considered it appropriate to prepare the financial statements of the Company on a going concern basis. The Company has sufficient financial resources and liquidity and is well placed to manage business risks in the current economic environment and can continue operations for a period of at least 12 months from the date of these financial statements.

Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed regularly on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Significant estimates, judgements and assumptions for the period are set out as follows:

Key estimation and uncertainty: Fair value estimation for investments at fair value

The Company's investments at fair value are not traded in active markets. Fair value is calculated by discounting at an appropriate discount rate future cash flows expected to be received by the Company's intermediate holdings. The discounted cashflow models use observable data, to the extent practicable. However, the key inputs require management to make estimates. Changes in assumptions about these factors could affect the reported fair value of investments.

The discount rates used in the valuation exercise represent the Investment Manager's and the Board's assessment of the rate of return in the market for assets with similar characteristics and risk profile. The discount rates are reviewed quarterly and updated, where appropriate, to reflect changes in the market and in the project risk characteristics.

Unless fixed under PPAs or otherwise hedged, the power prices used in the valuations are based on market forward prices in the near term, followed by an equal blend of up to three independent and widely used market consultants' technology-specific capture price forecasts for each asset. Power prices are updated quarterly in line with the release of updated forecasts. There is an inherent uncertainty in future wholesale electricity price projection.

Electricity output is based on specifically commissioned yield assessments prepared by technical advisors. Each asset's valuation assumes a "P50" level of electricity output, which is 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. The P50 provides an expected level of generation over the long-term.

Short to medium-term inflation assumptions used in the valuations are based on third party forecasts. In the longer-term, an assumption is made that inflation will increase at a long-term rate. The estimates and assumptions that are used in the calculation of the fair value of investments is disclosed in Note 9.

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. Further details can be found in the Impact Report.

Further considerations on currency risks, interest rate risks, power price risks, credit risks, and liquidity risks are detailed in Note 16.

Key judgement: Equity and debt investment in ORIT Holdings II Limited

The Company classifies its investments 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 Company is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions. The Company has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. The contractual cash flows of the Company's debt securities 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 Company's business model's objective. Consequently, all investments are measured at fair value through profit or loss.

The Company considers the equity and 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 Company'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, derivatives and debt 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.

Key judgement: Basis of non-consolidation

The Company has adopted the amendments to IFRS 10 which states that investment entities should measure all of their subsidiaries that are themselves investment entities at fair value (in accordance with IFRS 9 Financial Instruments: Recognition and Measurement, and IFRS 13 Fair Value Measurement).

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

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

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

In assessing whether the Company meet 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 invest in renewable energy infrastructure investments due to high barriers to entry and capital requirements;

ii.    the Company intends to hold its investments for the remainder of their useful lives for the purpose of capital appreciation and investment income. The portfolio of assets are expected to generate renewable energy output for 30 to 40 years from their relevant commercial operation date and the Directors believe the Company is able to generate returns to the investors during that period; and

iii.   the Company measures and evaluates the performance of all of its investments 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 of 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 the Company's wholly owned direct subsidiary, ORIT Holdings II Limited, meets the characteristics of an investment entity. ORIT Holdings II Limited has one investor, ORIT, however, in substance ORIT Holdings II Limited is investing the funds of the investors of ORIT on its behalf and is effectively performing investment management services on behalf of many unrelated beneficiary investors.

Being investment entities, ORIT and its wholly owned direct subsidiary, ORIT Holdings II Limited are measured at fair value as opposed to being consolidated on a line-by-line basis, meaning their cash, debt and working capital balances are included in the fair value of investments rather than the Group's current assets.

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

New standards, interpretations and amendments

A number of new standards, amendments to standards are effective for the annual periods beginning after 1 January 2023. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company. The Company intends to adopt the standards and interpretations in the reporting period when they become effective and the Board does not anticipate that the adoption of these standards and interpretations in future periods will materially impact the Company's financial results in the period of initial application although there may be revised presentations to the financial statements and additional disclosures.

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 below. These standards are not expected to have a material impact on the entity in future reporting periods and on foreseeable future transactions.

Amendment to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction

In May 2021, the IASB issued amendments that require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Amendment to IFRS 16 - Leases on sale and leaseback

In September 2022 the IASBs issued amendments for companies to include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction.

Amendment to IAS 1 - Non current liabilities with covenants

In November 2022 the IASBs issued amendments for companies to clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

3. Significant accounting policies

a) Financial instruments

Financial assets and financial liabilities are recognised on the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred, and the transfer qualifies for derecognition in accordance with IAS 39 Financial Instruments: Recognition and Measurement.

Financial assets

As an investment entity, the Company is required to measure its investments its wholly owned direct subsidiaries at FVTPL. As explained in note 2, the Company has made a judgement to fair value both the equity and debt investment in its subsidiary together. Subsequent to initial recognition, the Company measures its investments on a combined basis at fair value in accordance with IFRS 9 Financial Instruments: Recognition and Measurement and IFRS 13 Fair Value Measurement.

Trade receivables, loans and other receivables that are non-derivative financial assets and that have fixed or determinable payments that are not quoted in an active market are classified as financial assets at amortised cost. These assets are measured at amortised cost using the effective interest method, less allowance for expected credit losses. The Company has assessed IFRS 9's expected credit loss model and does not consider any material impact on these financial statements.

They are included in current assets, except where maturities are greater than 12 months after the year end date in which case they are classified as non-current assets.

Regular purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at FVTPL are initially recognised at fair value. Transaction costs are expensed as incurred within the Statement of Comprehensive Income. 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, all financial assets and financial liabilities at FVTPL are measured at fair value.

Gains and losses arising from changes in the fair value of the 'financial assets at FVTPL' category are presented in the Statement of Comprehensive Income within investment income in the period in which they arise.

Income from financial assets at FVTPL is recognised in the Statement of Comprehensive Income within investment income when the Company's right to receive payments is established.

Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

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.

Financial liabilities are initially measured at fair value, net of transaction costs. Financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest rate method.

The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or they expire.

Ordinary shares are classified as equity. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. Direct issue costs are charged against the value of ordinary share premium.

b) Taxation

Investment trusts which have approval under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains. The Company has successfully applied and has been granted approval as an Investment Trust by HMRC.

Irrecoverable withholding tax is recognised on any overseas income on an accrual basis using the applicable rate of taxation for the country of origin.

The underlying intermediate holding companies and project companies in which the Company invests provide for and pay taxation at the appropriate rates in the countries in which they operate. This is taken into account when assessing the value of the subsidiaries.

c) Segmental reporting

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 Board to manage the Company presents the business as a single segment.

d) Investment income

Investment income comprises interest income and dividend income received from the Company's subsidiaries. Interest income is recognised in the Statement of Comprehensive Income using the effective interest method. Dividend income is recognised when the Company's entitlement to receive payment is established.

e) Expenses

All expenses are accounted for on an accrual basis. In respect of the analysis between revenue and capital items presented within the Statement of Comprehensive Income, all expenses are presented as revenue items except as follows:

Investment Management fees

As per the Company's investment objective, it is expected that income returns will make up the majority of ORIT's long-term return. Therefore, based on the estimated split of future returns (which cannot be guaranteed), 25% of the investment management fee is charged as a capital item within the Statement of Comprehensive Income.

Abort costs

Costs incurred on aborted transactions are charged as capital items within the Statement of Comprehensive Income.

f) Foreign currency

Functional currency and presentation currency

The financial statements are presented in Pounds Sterling which is the Company's functional and presentation currency. The Board of Directors considers Sterling the currency that most faithfully represents the economic effect of the underlying transactions, events and conditions. Sterling is the currency in which the Company measures its performance and reports its results, as well as the currency in which it receives subscriptions from its investors.

Transactions and balances

Transactions denominated in foreign currencies are translated into Sterling 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 Capital account of the Statement of Comprehensive Income.

g) Cash and Cash Equivalents

Cash and cash equivalents includes deposits held with banks and other short-term deposits with original maturities of three months or less. It is a highly liquid investment and readily convertible to a known amount of cash, and carries an insignificant risk of changes in value.

h) Dividends payable

Dividends payable to equity shareholders are recognised in the financial statements when they have been approved by shareholders and become a liability of the Company. Interim dividends payable are recognised in the period in which they are paid.

4. Investment income

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Dividend income from investments	17,250	-	17,250	19,169	-	19,169
Interest income from investments	23,057	-	23,057	12,660	-	12,660
Total investment income	40,307	-	40,307	31,829	-	31,829

5. Operating expenses

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Investment management fees	4,284	1,428	5,712	3,108	1,036	4,144
Directors' fees	186	-	186	141	-	141
Company's auditors' fees:
- in respect of audit services	190	-	190	86	-	86
- in respect of audit-related assurance services	-	-	-	-	-	-
Other operating expenses	756	1,280	2,036	624	584	1,208
Total operating expenses	5,416	2,708	8,124	3,959	1,620	5,579

Further details on the Investment Manager's agreement have been provided in Note 17.

In addition to the fees disclosed above, £210,100 (2021: £88,000) is payable to the Company's auditors in respect of audit services provided to unconsolidated subsidiaries and therefore is not included within the Company's expenses above.

Included within other operating costs is an amount of £1,280,000 relating to transaction costs associated with the acquisition of portfolio of assets and abort costs.

The Company has no employees. Full detail on Directors' fees is provided in Note 17. The Directors' fees exclude employer's national insurance contribution which is included as appropriate in other operating expenses. There were no other emoluments.

6. Taxation

(a) Analysis of charge/(credit) in the year

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Corporation tax	515	(515)	-	312	(312)	-
Tax charge/(credit) for the year	515	(515)	-	312	(312)	-

(b) Factors affecting total tax charge/(credit) for the year:

The effective UK corporation tax rate applicable to the Company for the period is 19% (2021: 19%). The tax charge/(credit) differs from the charge/(credit) resulting from applying the standard rate of UK corporation tax for an investment trust company. The differences are explained below:

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Profit/(loss) before taxation	34,942	34,894	69,836	27,875	6,914	34,789
Corporation tax at 19%	6,639	6,630	13,269	5,296	1,314	6,610
Effects of:
Expenses not deductible for tax purposes	-	(7,145)	(7,145)	-	(1,626)	(1,626)
Income not taxable	(3,278)	-	(3,278)	(3,642)	-	(3,642)
Dividends designated as interest distributions	(2,852)	-	(2,852)	(1,342)	-	(1,342)
Movement in deferred tax not recognised	6	-	6	-	-	-
Total tax charge/(credit) for the year	515	(515)	-	312	(312)	-

The Directors are of the opinion that the Company has complied with the requirements for maintaining investment trust status for the purposes of section 1158 of the Corporation Tax Act 2010. This allows certain capital profits of the Company to be exempt from UK tax. Additionally, the Company may designate dividends wholly or partly as interest distributions for UK tax purposes. Interest distributions are treated as tax deductions against taxable income of the Company so that investors do not suffer double taxation on their returns.

The financial statements do not directly include the tax charges for any of the Company's intermediate holding companies or subsidiaries as these are held at fair value. Each of these companies are subject to taxes in the countries in which they operate.

The Company has an unrecognised deferred tax asset of £8,117 (2021: £882) based on the excess unutilised operating expenses of £32,470 (2021: £3,528) at the prospective UK corporation tax rate of 19%. A deferred tax asset has not been recognised in respect of these operating expenses and will be recoverable only to the extent that the Company has sufficient future taxable revenue.

7. Dividends

The dividends reflected in the financial statements for the year are as follows:

	Year ended 31 December 2022			Year ended 31 December 2021
	Pence per Ordinary Share	Revenue reserve £'000	Total £'000	Pence per Ordinary Share	Revenue reserve £'000	Total £'000
Q4 2021 Dividend - paid 4 March 2022 (2021: 5 March 2021)	1.25	7,062	7,062	1.06	3,710	3,710
Q1 2022 Dividend - paid 27 May 2022 (2021: 7 June 2021)	1.31	7,401	7,401	1.25	4,375	4,375
Q2 2022 Dividend - paid 26 August 2022 (2021: 27 August 2021)	1.31	7,401	7,401	1.25	6,187	6,187
Q3 2022 Dividend - paid 25 November 2022 (2021: 26 November 2021)	1.31	7,401	7,401	1.25	6,187	6,187
Total	5.18	29,265	29,265	4.81	20,459	20,459

The dividend relating to the year/period, which is the basis on which the requirements of Section 1159 of the Corporation Tax Act 2010 are considered is detailed below:

	Year ended 31 December 2022				Year ended 31 December 2021
		Pence per Ordinary Share	Revenue reserve £'000	Total £'000	Pence per Ordinary Share	Revenue reserve £'000	Total £'000
Q1 2022 Dividend - paid 27 May 2022 (2021: 7 June 2021)		1.31	7,401	7,401	1.25	4,375	4,375
Q2 2022 Dividend - paid 26 August 2022 (2021: 27 August 2021)		1.31	7,401	7,401	1.25	6,187	6,187
Q3 2022 Dividend - paid 25 November 2022 (2021: 26 November 2021)		1.31	7,401	7,401	1.25	6,187	6,187
Q4 2022 Dividend - paid 24 February 2023 (2021: 17 February 2022)		1.31	7,401	7,401	1.25	7,062	7,062
Total		5.24	29,604	29,604	5.00	23,811	23,811

On 31 January 2023 the Company declared an interim dividend of 1.31p per Ordinary Share in respect of the three months to 31 December 2022, a total of £7.4 million. The ex-dividend date was 9 February 2023, the record date was 10 February 2023, and the dividend was paid on 24 February 2023.

8. Earnings per Ordinary Share

Earnings per Ordinary Share is calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of Ordinary Shares in issue during the year/period as follows:

	Year ended 31 December 2022			Year ended 31 December 2021
	Revenue	Capital	Total	Revenue	Capital	Total
Profit attributable to the equity holders of the Company (£'000)	34,427	35,409	69,836	28,817	6,602	34,789
Weighted average number of Ordinary Shares in issue (000)	564,928	564,928	564,928	424,089	424,089	424,089
Earnings per Ordinary Share (pence) - basic and diluted	6.09p	6.27p	12.36p	6.65p	1.55p	8.20p

There is no difference between the weighted average Ordinary or diluted number of Shares.

9. Investments at fair value through profit or loss

As set out in Note 2, the Company accounts for its interest in its wholly owned direct subsidiary as an investment at fair value through profit or loss.

a) Summary of valuation

	Year ended 31 December 2022 £'000	Year ended 31 December 2021 £'000
Opening balance	485,417	258,680
Portfolio of assets acquired	79,194	207,487
Additional investment in intermediate holding companies	4,386	5,029
Distributions received from investments	(38,108)	(26,169)
Investment income	40,307	31,829
Movement in fair value of investments	37,603	8,561
Total investments at the end of the year	608,799	485,417

The additional investment in the intermediate holding companies include acquisition costs associated with the purchase of the portfolio of assets totalling £3.2 million (2021: £2.2m), which have been expensed to the profit and loss in these companies and £1.2 million (2021: £nil) of other expenses paid by the Company on behalf of the intermediate holding companies. In the prior year, this cost included an amount of £1.2 million associated with the RCF in ORIT Holdings II Limited and an additional investment of £1.6 million following the completion of asset life extensions on the UK Solar portfolio.

b) Reconciliation of movement in fair value of the Company's investments

The table below shows the movement in the fair value of the Company's investments. These assets are held through intermediate holding companies.

	Year ended 31 December 2022 £'000	Year ended 31 December 2021 £'000
Opening balance	485,417	258,680
Portfolio of assets acquired	209,666	209,965
Distributions received	(40,129)	(26,668)
Movement in fair value	88,760	41,554
Fair value of portfolio of assets at the end of the year	743,714	483,531
Cash held in intermediate holding companies	4,509	1,293
Bank loans held in intermediate holding companies	(127,200)
Fair value of other net (liabilities)/assets in intermediate holding companies	(12,224)	593
Fair value of Company's investments at the end of the year	608,799	485,417

c) Investment gains in the year

	Year ended 31 December 2022 £'000	Year ended 31 December 2021 £'000
Movement in fair value of investments	37,603	8,561
Gains on investments	37,603	8,561

Of the total distributions received from investments, £10.7 million (2021: £7.9m) relates to income originated from the Company's UK investments and £29.4 million (2021: £18.3m) relates to income originated from its European investments.

Fair value of portfolio of assets

The Investment Manager has carried out fair market valuations of the investments as at 31 December 2022.

The Directors have satisfied themselves as to the methodology used, the discount rates applied and the valuation. All investments are in renewable energy assets and are valued using a discounted cash flow methodology. As explained in note 3a, the equity and debt instruments are valued as a whole. This is done using a blended discount rate and the value attributed to debt investments represents their face value, with the residual value attributed to equity investments. The weighted average costs of capital applied to the portfolio of assets ranges from 5.5% to 9.6%.

The following assumptions were used in the discounted cash flow valuations:

	As at 31 December 2022	As at 31 December 2021
UK - long-term inflation rate	6.7% during 2023, declining to 3.00% in 2027 and then to 2.25% from 2030 onwards.	3.00% to April 2030; 2.25% thereafter.
UK - corporation tax rate	19.00% to April 2023; 25.00% thereafter.	19.00% to April 2023; 25.00% for next three years; and then reducing by 1.00% annually until 19.00%.
Sweden - long-term inflation rate	2.00%	2.00%
Sweden - corporation tax rate	20.60%	20.60%
France - long-term inflation rate	2.00%	2.00%
France - corporation tax rate	25.00%	25.00%
Poland - long-term inflation rate	2.50%	2.5%
Poland - corporation tax rate	19.00%	19.00%
Finland - long-term inflation rate	2.00%	2.00%
Finland - corporation tax rate	20.00%	20.00%
Euro/sterling exchange rate	1.1277	1.1907
Zloty/sterling exchange rate	5.3009	5.4702
Energy yield assumptions	P50 case	P50 case

As at 31 December 2022, the fair value of the Crossdykes onshore wind farm in the UK and the Leeskow onshore wind farm in Germany is deemed approximate to cost given the close proximity of these acquisitions to the year end.

The fair value of the investments in development assets held through joint venture arrangements by ORIT JV Holdings 2 Limited and ORIT JV Holdings 3 Limited is also deemed to be equal to cost due to the nature of these investments.

Other key assumptions include:

Power Price Forecasts

The power price forecasts used in the valuations are based on market forward prices in the near-term, followed by an equal blend of up to three independent and widely used market expert consultants' relevant technology-specific capture price forecasts for each asset. Whilst government announcements over energy policies are now clearer, given volatility in power prices exhibited over 2022 and the general downward trend in pricing over Q4, the Board and the Investment Manager still consider it appropriate to include a modest discount to the prevailing forward prices of 20% over the 2023 to 2025 period, in addition to the normal discounts to reflect the lower prices typically captured by wind and solar generators.

Asset Lives

The length of the period of operations assumed in the valuation is determined on an asset-by-asset basis taking into account the lease agreements, permits or planning permissions in place as well as any extension rights, renewal regimes or wider policy considerations, together with the technical characteristics of the asset.

Decommissioning Costs

Where applicable, the present value of the estimated costs to restore the land back to its original use are included in the valuations as a cash outflow at the end of the asset life.

Fair value of intermediate holding companies

The assets in the intermediate holding companies substantially comprise working capital balances, therefore the Directors consider the fair value to be equal to the book values.

The sensitivity to unobservable inputs is based on management's expectation of reasonable possible shifts in these inputs. The valuation sensitivity of each assumption is shown in Note 15.

Please see details of the valuation process outlined in the Annual Report.

10. Trade and other receivables

	As at 31 December 2022 £'000	As at 31 December 2021 £'000
Accrued interest receivable	-	1
Other receivables	775	449
Total	775	450

11. Trade and other payables

	As at 31 December 2022 £'000	As at 31 December 2021 £'000
Accrued expenses	1,917	2,124
Total	1,917	2,124

12. Share capital

	Year ended 31 December 2022		Year ended 31 December 2021
Allotted, issued and fully paid:	Number of shares	Nominal value of shares (£)	Number of shares	Nominal value of shares (£)
Opening balance	564,927,536	5,649,275	350,000,000	3,500,000
Allotted following admission to LSE
Share issue raised pursuant to the Placing, Open Offer, Offer for Subscription and Intermediaries Offer	-	-	144,927,536	1,449,275
Share issue raised pursuant to the Placing and the REX Retail Offer	-	-	70,000,000	700,000
Closing balance	564,927,536	5,649,275	564,927,536	5,649,275

On 9 July 2021 the Company issued 144,927,536 shares at an issue price 103.5 pence, raising gross proceeds of approximately £150 million pursuant to the Placing, Open Offer, Offer for Subscription and Intermediaries Offer.

On 7 December 2021 the Company issued 70,000,000 shares at an issue price 105.5 pence, raising gross proceeds of approximately £73.9 million pursuant to the Placing and REX Retail Offer.

As at 31 December 2022, the Company had total share premium of £217,283,000 (2021: £217,283,000).

13. Special reserve

As indicated in the Company's prospectus dated 19 November 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 18 February 2020 to cancel the amount standing to the credit of the share premium account of the Company.

As stated by the Institute of Chartered Accountants in England and Wales ("ICAEW") and the Institute of Chartered Accountants in Scotland ("ICAS") in the technical release TECH 02/17BL, The Companies (Reduction of Share Capital) Order 2008 SI 2008/1915 ("the Order") specifies the cases in which a reserve arising from a reduction in a company's capital (i.e., share capital, share premium account, capital redemption reserve or redenomination reserve) is to be treated as a realised profit as a matter of law. The Order also disapplies the general prohibition in section 654 on the distribution of a reserve arising from a reduction of capital. The Order provides that if a limited company having a share capital reduces its capital and the reduction is confirmed by order of court, the reserve arising from the reduction is treated as a realised profit unless the court orders otherwise.

The amount of the share premium account cancelled and credited to the Company's Special reserve is £339,500,000, which can be utilised to fund distributions by way of dividends to the Company's shareholders.

14. Net asset per Ordinary Share (pence)

	As at 31 December 2022	As at 31 December 2021
Total shareholders' equity (£'000)	618,260	577,689
Number of Ordinary Shares in issue ('000)	564,928	564,928
Net asset value per Ordinary Share (pence)	109.44p	102.26p

15. Financial instruments by category

	As at 31 December 2022
	Financial  assets at amortised cost £'000	Financial assets at fair value through profit or loss £'000	Financial liabilities at amortised cost £'000	Total £'000
Non-current assets
Investments at fair value through profit or loss	-	608,799	-	608,799
Current assets
Trade and other receivables	775	-	-	775
Cash and cash equivalents	10,603	-	-	10,603
Total assets	11,378	608,799	-	620,177
Current liabilities
Trade and other payables	-	-	(1,917)	(1,917)
Total liabilities	-	-	(1,917)	(1,917)
Net assets	11,378	608,799	(1,917)	618,260

As explained in Note 3a, the Company values its investments as a whole. In the tables above of the total figure of £608,799,000 for financial assets at fair value through profit or loss, £506,482,000 relates to the face value of debt investments.

	As at 31 December 2021
	Financial assets at amortised cost £'000	Financial assets at fair value through profit or loss £'000	Financial liabilities at amortised cost £'000	Total £'000
Non-current assets
Investments at fair value through profit or loss	-	485,417	-	485,417
Current assets
Trade and other receivables	450	-	-	450
Cash and cash equivalents	93,946	-	-	93,946
Total assets	94,396	485,417	-	579,813
Current liabilities
Trade and other payables	-	-	(2,124)	(2,124)
Total liabilities	-	-	(2,124)	(2,124)
Net assets	94,396	485,417	(2,124)	577,689

As explained in Note 3a, the Company values its investments as a whole. In the table above of the total figure of £485,417,000 for financial assets at fair value through profit or loss, £421,203,000 relates to the face value of debt investments.

In the tables above, the fair value of the financial instruments that are measured at amortised cost do not materially differ from their carrying values.

IFRS 13 requires the Company to classify its investments in a fair value hierarchy that reflects the significance of the inputs used in making the measurements. IFRS 13 establishes a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The three levels of fair value hierarchy under IFRS 13 are as follows:

Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: fair value measurements are those derived from valuation techniques that include inputs to the asset or liability that are not based on observable market data (unobservable inputs)

 

	As at 31 December 2022
	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets
Investments at fair value through profit or loss	-	-	608,799	608,799
Total financial assets	-	-	608,799	608,799
	As at 31 December 2021
	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets
Investments at fair value through profit or loss	-	-	485,417	485,417
Total financial assets	-	-	485,417	485,417

There were no Level 1 or Level 2 assets or liabilities during the year. There were no transfers between Level 1 and 2, Level 1 and 3 or Level 2 and 3 during the year.

Included within investments at fair value through profit or loss is an amount of £5.0 million (2021: £1.7m) relating to two derivative options (associated with the conditional acquisitions in Spain and Ireland) recognised in an intermediate holding company.

Reconciliation of Level 3 fair value measurement of financial assets and liabilities

An analysis of the movement between opening to closing balances of the investments at fair value through profit or loss (all classified as Level 3) is given in Note 9.

The fair value of the investments at fair value through profit or loss includes the use of Level 3 inputs. Refer to Note 9 for details on the valuation methodology.

Valuation Sensitivities

Discount rate

The discount rate is considered the most significant unobservable input through which an increase or decrease would have a material impact on the fair value of the investments at fair value through profit or loss.

An increase of 0.5% in the discount rate (levered cost of equity) would cause a decrease in total portfolio value of 6.9p per Ordinary Share and a decrease of 0.5% in the discount rate would cause an increase in total portfolio value of 7.4p per Ordinary Share.

Inflation rate

The sensitivity of the investments to movement in inflation rates is as follows:

A decrease of 0.5% in inflation rates would cause a decrease in total portfolio value of 6.0p per Ordinary Share and an increase of 0.5% in inflation rates would cause an increase in total portfolio value of 6.5p per Ordinary Share.

Power price

Wind and solar assets are subject to movements in power prices. The sensitivities of the investments to movement in power prices are as follows:

A decrease of 10% in power price would cause a decrease in the total portfolio value of 13.7p per Ordinary Share and an increase of 10% in power price would cause an increase in the total portfolio value of 13.6p per Ordinary Share.

Generation

Wind and solar assets are subject to power generation risks. The sensitivities of the investments to movement in level of power output are as follows:

The fair value of the investments is based on a "P50" level of power output being the expected level of generation over the long-term. An assumed "P90" level of power output (i.e. a level of generation that is below the "P50", with a 90% probability of being exceeded) would cause a decrease in the total portfolio value of 23.6p per Ordinary Share and an assumed "P10" level of power output (i.e. a level of generation that is above the "P50", with a 10% probability of being achieved) would cause an increase in the total portfolio value of 22.4p per Ordinary Share.

Foreign exchange

The sensitivity of the investments to movement in FX rates is as follows:

An increase of 10% in FX rates would cause a decrease in total portfolio value of 2.1p per Ordinary Share and a decrease of 10% in inflation rates would cause an increase in total portfolio value of 2.1p per Ordinary Share.

Of the portfolio as at 31 December 2022, 59% (2021: 46%) of the NAV is denominated in non-sterling currencies.

16. Financial risk management

The Company's activities expose it to a variety of financial risks; including foreign currency risk, interest rate risk, power price risk, credit risk and liquidity risk. The Board of Directors has overall responsibility for overseeing the management of financial risks, however the review and management of financial risks are delegated to the AIFM. Each risk and its management are summarised below.

(i) Currency risk

Foreign currency risk is defined as the risk that the fair values of future cashflows will fluctuate because of changes in foreign exchange rates. The Company seeks to minimise the volatility of cash flows in non-GBP currencies over the short to medium-term through its foreign exchange hedging policy; which requires a minimum of 50% of all forecasted distributions denominated in foreign currencies to be hedged over 5 years in order to give the Company some certainty over the future cashflows and reduce its exposure to foreign exchange risk. The Company also has the ability to hedge a portion of value thereafter so as to limit volatility of the Company's NAV to foreign exchange risk.

The portfolio of assets in which the Company invests all conduct their business and pay interest, dividends and principal in sterling, with the exception of the euro-denominated investments which at 31 December 2022 comprised 48% (2021: 53%) of the portfolio by value on an invested basis and 53% (2021: 54%) of the portfolio by value on a committed basis; and zloty-denominated investments which at 31 December 2022 comprised 11% (2021: 11%) of the portfolio by value on an invested basis and 9% (2021: 9%) of the portfolio by value on a committed basis. The valuation sensitivity to FX rates is shown in Note 15.

(ii) Interest rate risk

The Company's interest rate risk on interest bearing financial assets is limited to interest earned on cash and loan investments into project companies, which yield interest at a fixed rate. The portfolio's cashflows are continually monitored and reforecast, both over the near future and the long-term, to analyse the cash flow returns from investments.

The Group may use borrowings to finance the acquisition of investments and the forecasts are used to monitor the impact of changes in borrowing rates against cash flow returns from investments as increases in borrowing rates will reduce net interest margins. The Group's policy is to ensure that interest rates are sufficiently hedged to protect the Group's net interest margins from significant fluctuations when entering into material medium/ long-term borrowings. This includes engaging in interest rate swaps or other interest rate derivative contracts.

The Company's interest and non-interest bearing assets and liabilities are summarised below:

	As at 31 December 2022
	Interest	Non-interest
	bearing	bearing	Total
Assets	£'000	£'000	£'000
Cash and cash equivalents	-	10,603	10,603
Trade and other receivables	-	775	775
Investments at fair value through profit or loss	506,482	102,317	608,799
Total assets	506,482	113,695	620,177
Liabilities
Trade and other payables	-	(1,917)	(1,917)
Total liabilities	-	(1,917)	(1,917)
	As at 31 December 2021
	Interest	Non-interest
	bearing	bearing	Total
Assets	£'000	£'000	£'000
Cash and cash equivalents	64,963	28,983	93,946
Trade and other receivables	-	450	450
Investments at fair value through profit or loss	421,203	64,214	485,417
Total assets	486,166	93,647	579,813
Liabilities
Trade and other payables	-	(2,124)	(2,124)
Total liabilities	-	(2,124)	(2,124)

In the tables above, the interest bearing asset value for investments at fair value through profit or loss relates to the face value of debt investments.

(iii) Power Price risk

The wholesale market price of electricity and gas is volatile and is affected by a variety of factors, including market demand for electricity and gas, the generation mix of power plants, government support for various forms of power generation, as well as fluctuations in the market prices of commodities and foreign exchange. Whilst some of the Company's renewable energy projects benefit from fixed prices, others have revenue which is in part based on wholesale electricity and gas prices. The Investment Manager continually monitors energy price forecast and aims to put in place mitigating strategies, such as hedging arrangements or fixed PPA contracts to reduce the exposure of the Company to this risk.

Further information on the impact of power prices over the year is provided in the Portfolio Valuation section of the Investment Manager's report in the Annual Report .

(iv) Credit risks

Credit risk is the risk that a counterparty of the Group will be unable or unwilling to meet a commitment that it has entered into with the Group. The credit standing of subcontractors is reviewed, and the risk of default estimated for each significant counterparty position. Monitoring is on-going, and year end positions are reported to the Board on a quarterly basis. The Group's largest credit risk exposure to a project at 31 December 2022 was to Goldbeck Solar Limited on Breach Solar representing 6% of the portfolio by value (2021: Nordex SE on the Cumberhead project: 6%).

The Company's investments enter into Power Price Agreements ("PPA") with a range of providers through which electricity is sold. The largest PPA provider to the portfolio at 31 December 2022 was EDF who provided PPAs to projects in respect of 18% of the portfolio by value (2021: Npower: 18%).

Credit risk also arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions. The Company and its subsidiaries mitigate their risk on cash investments and derivative transactions by only transacting with major international financial institutions with high credit ratings assigned by international credit rating agencies.

The Company has assessed IFRS 9's expected credit loss model and does not consider any material impact on these financial statements. No trade and other receivables balances are credit-impaired at the reporting date.

The Company's commitment in respect of its conditional acquisition is accounted for as a derivative option in an intermediate holding company.

(v) Liquidity risks

Liquidity risk is the risk that the Group may not be able to meet its financial obligations as they fall due. The AIFM and the Board continuously monitor forecast and actual cashflows from operating, financing, and investing activities to consider payment of dividends, repayment of trade and other payables or funding further investing activities. The Group ensures it maintains adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Group's investments are generally in private companies, in which there is no listed market and therefore such investment would take time to realise, and there is no assurance that the valuations placed on the investments would be achieved from any such sale process.

Financial assets and liabilities by maturity at the year are shown below:

	31 December 2022
	Less than 1		More than 5
	year	1-5 years	years	Total
	£'000	£'000	£'000	£'000
Assets
Investments at fair value through profit
or loss	-	-	608,799	608,799
Trade and other receivables	775	-	-	775
Cash and cash equivalents	10,603	-	-	10,603
Liabilities
Trade and other payables	(1,917)	-	-	(1,917)
	9,461	-	608,799	618,260
	31 December 2021
	Less than 1		More than 5
	year	1-5 years	years	Total
	£'000	£'000	£'000	£'000
Assets
Investments at fair value through profit or loss	-	-	485,417	485,417
Trade and other receivables	450	-	-	450
Cash and cash equivalents	93,946	-	-	93,946
Liabilities
Trade and other payables	(2,124)	-	-	(2,124)
	92,272	-	485,417	577,689

Capital management

The Company's capital management objective is to ensure that the Company will be able to continue as a going concern while maximising the return to equity shareholders. The Company's investment objective is to provide investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets in the UK, Europe and Australia.

The Company considers its capital to comprise ordinary share capital, special reserve and retained earnings. The Company is not subject to any externally imposed capital requirements. The Company's total share capital and reserves shown in the Statement of Financial Position are £618,260,000 (2021: £ 577,689,000).

The Company has implemented an efficient financing structure that enables it to manage its capital effectively. The Company's capital structure comprises equity only (refer to the statement of changes in equity).

The Company's direct subsidiary, ORIT Holdings II Limited, has a £246 million revolving credit facility with Banco de Sabadell, Intesa Sanpaolo, National Australia Bank, NatWest and Santander. The facility was £77.2 million drawn at 31 December 2022 (2021: £nil).

The Board, with the assistance of the Investment Manager, monitors and reviews the Company's capital on an ongoing basis.

·      Share capital represents the 1p nominal value of the issued share capital.

·      The share premium account arose from the net proceeds of issuing 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.

17. Related party transactions

During the year, interest totalling £23,057,000 (2021: £12,660,000) was earned, in respect of the long-term interest‑bearing loan between the Company and its subsidiaries. At the period end, no interest earned was outstanding.

AIFM and Investment Manager

The Company has appointed Octopus AIF Management Limited to be the Alternative Investment Fund Manager of the Company (the "AIFM") for the purposes of Directive 2011/61/EU of the European Parliament and of the Council on Alternative Investment Fund Managers. Accordingly, the AIFM is responsible for the portfolio management of the Company and for exercising the risk management function in respect of the Company. The AIFM has delegated portfolio management services to Octopus Renewables Limited (trading as Octopus Energy Generation), the Company's Investment Manager.

The AIFM is entitled to a management fee of 0.95% per annum of Net Asset Value of the Company up to £500 million and 0.85% per annum of Net Asset Value in excess of £500 million, payable quarterly in arrears. No performance fee or asset level fees are payable to the AIFM under the Management Agreement.

During the year, the Investment management fee charged to the Company by the AIFM was £5,712,000 (2021: £4,144,000), of which £1,451,000 (2021: £1,364,000) remained payable at the year end date.

Directors

The Company is governed by a Board of Directors (the "Board"), all of whom are independent and non-executive. During the period, the Board received fees for their services of £186,000 (2021: £141,000) and were paid £7,900 (2021: £2,700) in expenses. As at the period end, there were no outstanding fees payable to the Board.

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

	Ordinary Shares  as at date of  this report	Ordinary Shares as at 31 December 2022	Ordinary Shares as at 31 December 2021
Philip Austin MBE	165,518	165,518*	108,867*
James Cameron	65,306	65,306	65,306
Elaina Elzinga	-	-	-
Audrey McNair	51,383	51,383	51,383

*   with effect from 23 November 2021, Mr. Austin's shares have been held jointly with Mrs. J Austin, a PCA of Mr. Austin

18. Subsidiaries, joint ventures and associates

As a result of applying Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), no subsidiaries have been consolidated in these financial statements. The Company's subsidiaries are listed below:

		Place of	Registered	Ownership
Name	Category	business	Office*	interest
ORIT Holdings	Limited Intermediate Holdings	UK	A	100%
ORIT Holdings II Limited	Intermediate Holdings	UK	A	100%
ORIT UK Acquisitions Limited	Intermediate Holdings	UK	A	100%
Abbots Ripton Solar Energy Limited	Project company	UK	A	100%
Chisbon Solar Farm Limited	Project company	UK	A	100%
Jura Solar Limited	Project company	UK	A	100%
Mingay Farm Limited	Project company	UK	A	100%
NGE Limited	Project company	UK	A	100%
Sun Green Energy Limited	Project company	UK	A	100%
Westerfield Solar Limited	Project company	UK	A	100%
Wincelle Solar Limited	Project company	UK	A	100%
Heather Wind AB	Project company	Sweden	B	100%
Solstice 1A GmbH	Portfolio-level Holdings	Germany	C	100%
SolaireCharleval SAS	Project company	France	D	100%
SolaireIstres SAS	Project company	France	D	100%
SolaireCuges-Les-Pins SAS	Project company	France	D	100%
SolaireChalmoux SAS	Project company	France	D	100%
SolaireLaVerdiere SAS	Project company	France	D	100%
SolaireBrignoles SAS	Project company	France	D	100%
SolaireSaint-Antonin-du-Var SAS	Project company	France	D	100%
Centrale Photovoltaique de IOVI 1 SAS	Project company	France	D	100%
Centrale Photovoltaique de IOVI 3 SAS	Project company	France	D	100%
Arsac 2 SAS	Project company	France	D	100%
Arsac 5 SAS	Project company	France	D	100%
SolaireFontienne SAS	Project company	France	D	100%
SolaireOllieres SAS	Project company	France	D	100%
Eylsia SAS	Portfolio-level Holdings	France	E	100%
CEPE Cerisou	Project company	France	F	100%
Cumberhead Wind Energy Limited	Project company	UK	A	100%
ORIT Irish Holdings 2 Limited	Portfolio-level Holdings	UK	A	100%
ORIT Irish Holdings Limited	Portfolio-level Holdings	UK	A	100%
Copernicus Windpark Sp. Z.o.o	Project company	Poland	G	100%
Forthewind Sp. Z.o.o	Project company	Poland	G	100%
Nordic Power Development Limited	Portfolio-level Holdings	UK	A	100%
Saunamaa Wind Farm Oy	Project company	Finland	H	100%
Vöyrinkangas Wind Farm Oy	Project company	Finland	H	100%
ORI JV Holdings Limited	Portfolio-level Holdings	UK	A	50%
ORI JV Holdings 2 Limited	Portfolio-level Holdings	UK	A	50%
Simply Blue Energy Holdings Limited	Portfolio-level Holdings	Ireland	I	15.5%
South Kilbraur Wind Farm Limited	Project company	UK	J	25%
Windburn Wind Farm Limited	Project company	UK	J	25%
Wind 2 Project 2 Limited	Project company	UK	J	25%
Wind 2 Project 5 Limited	Project company	UK	J	25%
Wind 2 Project 3 Limited	Project company	UK	J	25%
Kirkton Wind Farm Limited	Project company	UK	J	25%
Bwlch Gwyn Wind Farm Limited	Project company	UK	J	25%
Wind 2 Project 6 Limited	Project company	UK	J	25%
Wind 2 Project 4 Limited	Project company	UK	J	25%
ORI JV Holdings 3 Limited	Portfolio-level Holdings	UK	A	50%
Nordic Renewables Limited	Portfolio-level Holdings	UK	A	50%
Nordic Renewables Holdings 1 Limited	Portfolio-level Holdings	UK	A	50%
ORI JV Holdings 4 Limited	Portfolio-level Holdings	UK	A	50%
ORI JV Holdings 5 Limited	Portfolio-level Holdings	UK	A	51%
ORI JV Holdings 5 Holdco Limited	Portfolio-level Holdings	UK	A	51%
ORI JV Holdings 6 Limited	Portfolio-level Holdings	UK	A		50%
ORIT Lincs Holdco Limited	Portfolio-level Holdings	UK	A	100%
ORI Lincs Holdings Limited	Portfolio-level Holdings	UK	A	67%
Clyde SPV Limited	Portfolio-level Holdings	UK	K	50%
Blota Germany GmbH	Portfolio-level Holdings	Germany	L	100%
Blota GP GmbH	Portfolio-level Holdings	Germany	L	100%
UKA Windenergie Leeskow GmbH	Portfolio-level Holdings	Germany	M	100%
UGE Leeskow GmbH & Co. KG	Project company	Germany	M	100%
Umweltgerechte Energie Infrastrukturgesellschaft Leeskow mbH & Co. KG	Project company	Germany	M	100%
Burwell 11 Solar Limited	Project company	UK	A	100%
Crossdykes WF Limited	Project company	UK	N	51%
UK Green Investment Lyle Limited	Portfolio-level Holdings	UK	K	50%
Lincs Wind Farm (Holding) Limited	Portfolio-level Holdings	UK	O	15.5%
Lincs Wind Farm Limited	Project company	UK	P	15.5%

*       Registered offices:

A -   6th Floor, 33 Holborn, London, EC1N 2HT, England

B -   Lilla Nygatan 1, 111 28 Stockholm, Sweden

C -  Maximilianstraße, 3580539 München, Germany

D -  52 Rue de la Victoire 75009, Paris, France

E -   4 Rue de Marivaux, 75002 Paris, France

F -   Z.I de Courtine, 330 rue du Mourelet, 84000. Avignon, France

G -  Wojska Polskiego 24-26, 75-712 Koszalin,

H -  Teknobulevardi 3-5, 01530 Vantaa, Finland

I -    Woodbine Hill, Kinsalebeg, Youghal, Co. Cork, Ireland

J -   Wind 2 Office, 2 Walker Street, Edinburgh, Scotland, EH3 7LB

K -   8 White Oak Square, London Road, Swanley, Kent, United Kingdom, BR8 7AG

L -   c/o Ashurst LLP, OpernTurm, Bockenheimer Landstraße 2-4, 60306 Frankfurt

M -  Dorfstraße 20a, 18276 Lohmen

N -  58 Morrison Street, Edinburgh, United Kingdom, EH3 8BP

O - 5 Howick Place, London, United Kingdom, SW1P 1WG

P - 13 Queens Road, Aberdeen, Scotland, AB15 4YL

As shown in Annual Report, ORIT Holdings II Limited is the only direct subsidiary of the Company. All other subsidiaries are held indirectly.

19. Guarantees and other commitments

The Company guarantees the foreign exchange hedges entered into by its intermediate holding companies to enable it to minimise its exposure to changes in underlying foreign exchange rates.

As at 31 December 2022, the Company has guarantees in respect of the future investment obligations associated with the Breach Solar plant totalling £41.5 million (2021: £nil).

As at 31 December 2022 the Company's subsidiaries had future investment obligations totalling £111.2 million (2021: £141.7m) relating to its wind farms currently undergoing construction and its conditional acquisitions in Spain and Ireland. The intermediate holding companies have provided guarantees in respect of these commitments.

20. Contingent acquisition

On 30 September 2020 an intermediate holding company, ORIT Holdings Limited, entered into a Share Purchase Agreement ("SPA") for the acquisition of a 100% interest in a portfolio of solar PV assets located in southern Spain. The purchase price will be based on the MWp of the portfolio and will only become payable once the assets become ready to build. With the exception of the initial payment, no other assets or liabilities have been recognised in respect of this transaction as at 31 December 2022. If the conditions of the sale are not satisfied, the initial payment of £1.8 million is fully refundable and backed by a Bank Guarantee.

On 26 July 2021 an intermediate holding company, ORIT Holdings Limited, entered into a Share Purchase Agreement ("SPA") for the acquisition of a 100% interest in a portfolio of five solar PV assets in Ireland. Completion of the acquisition is conditional upon four of the sites becoming fully operational, which is expected to occur in H2 2023. Total consideration for the acquisition is expected to be between approximately €169 million and €193 million (approximately £144m to £165m) which will, apart from any deferred consideration in respect of the fifth site, be payable on completion. The Company has secured a fully amortising debt facility of up to €88 million (approximately £76m) from Allied Irish Banks plc and La Banque Postale to part finance the acquisition of the operational sites. A derivative asset of £3.3 million (2021: £nil) has been recognised in respect of this transaction as at 31 December 2022 in an intermediate holding company. Post year end, the Company has committed to the fifth site.

On 17 June 2022, an intermediate holding company, ORIT Holdings Limited, entered into an agreement to acquire a 50% stake in a 12MW/24MWh ready-to-build battery storage project in Bedfordshire, UK, from Gridsource. The acquisition was made alongside another Octopus Managed Fund and completed post period end in January 2023 conditional upon the lease agreement for the project site coming into effect.

21. Post period end events

On 20 January 2023, and having agreed the lease for the site, the Company has completed the acquisition of a 50% stake in a 12MW/24MWh ready-to-build battery storage project in Bedfordshire, UK. The consideration for the acquisition and the Company's share of future construction costs is expected to be approximately £4 million.

On 31 January 2023 the Company declared an interim dividend in respect of the three months ended 31 December 2022 of 1.31p per Ordinary Share for £7.4 million based on a record date of 10 February 2023 and ex-dividend date of 9 February 2023 and the number of Ordinary Shares in issue being 564,927,536. This dividend was paid on 24 March 2023.

On 27 February 2023 the Company announced that ORIT Holdings II Limited had refinanced and increased its multi‑currency RCF. The committed £270.8m RCF (which was previously £150.0m committed, pre-accordion) has a three year term to 24 February 2026 and can be drawn in GBP, EUR, AUD and USD. The RCF has an interest rate of 2.0% above SONIA (or equivalent reference rate for other currencies) and an improved margin compared with the previous facility's margin of 2.3%. It also has an uncommitted accordion feature allowing the facility to be increased in size by up to a further £150m. The facility has been provided by a group of four lenders: National Australia Bank, NatWest, Santander and Allied Irish Banks.

On 2 March 2023, the contingent acquisition in the portfolio of Spanish PV assets was re-negotiated. From this date, the Company no longer has an obligation to acquire the assets once they reach ready to build status, but instead has the option to acquire them.

There are no other events after the balance sheet date which are required to be disclosed.

Other Information

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:

Gross asset value (GAV)

The Company's gross assets comprise the net asset values of the Company's Ordinary Shares and the debt held in unconsolidated subsidiaries

			As at	As at
			31 December 2022	31 December 2021
			£million	£million
NAV	a		618.3	577.7
Debt	b		454.3	160.5
Total GAV	a + b		1,072.6	738.2

Total value of all investments

A measure of committed asset value including total debt and equity commitments

			As at	As at
			31 December 2022	31 December 2021
			£million	£million
GAV	a		1,072.6	738.2
Commitments on existing portfolio	b		68.3	38.2
Commitments on conditional acquisitions	c		177.0	206.6
Total value of all assets plus commitments	(a+b+c) = d		1,317.9	983.0
Less Company and holding company assets	e		(1.7)	(94.2)
Less asset level cash	f		(15.5)	(11.2)
Total value of all investments	d - e - f		1,304.2	877.6

Total return since IPO

A measure of performance since IPO 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.

31 December 2022			Share price	NAV
Value at IPO (10 December 2019) - pence	a		100.00	98.00
Value at 31 December 2022 - pence	b		100.00	109.44
Benefits of reinvesting dividends - pence	d		‑	1.8
Dividends paid since IPO - pence	c		12.11	12.11
Total return	(b+c+d)÷a)-1		12.1%	25.9%
Annualised total return			3.8%	7.8%

 

31 December 2021			Share price	NAV
Value at IPO (10 December 2019) - pence	a		100.00	98.00
Value at 31 December 2021 - pence	b		110.80	102.26
Benefits of reinvesting dividends - pence	d		0.06	0.62
Dividends paid since IPO - pence	c		6.93	6.93
Total return	(b+c+d)÷a)-1		17.7%	12.1%
Annualised total return			8.3%	5.7%

Total return for the year

A measure of performance for the year 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.

31 December 2022			Share price	NAV
Value at 1 January 2022 - pence	a		110.80	102.26
Value at 31 December 2022 -pence	b		100.00	109.44
Benefits of reinvesting dividends - pence	d		0.35	0.26
Dividends paid in the year - pence	c		5.18	5.18
Total return	(b+c+d) ÷a)-1		-4.8%	12.3%
31 December 2021			Share price	NAV
Value at 1 January 2021 - pence	a		113.80	98.26
Value at 31 December 2021 -pence	b		110.80	102.26
Benefits of reinvesting dividends - pence	d		0.05	0.37
Dividends paid in the year - pence	c		4.81	4.81
Total return	(b+c+d)÷a)-1		1.6%	9.3%

Discount)/Premium to NAV

The amount, expressed as a percentage, by which the share price is less or more than the NAV per Ordinary Share.

			As at	As at
			31 December 2022	31 December 2021
NAV per Ordinary Share - pence	a		109.44	102.26
Share price - pence	b		100.00	110.80
(Discount)/Premium	(b÷a)-1		(8.6%)	8.4%

Ongoing charges ratio

A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running the Company per Ordinary Share. This has been calculated and disclosed in accordance with the AIC methodology.

			Year ended	Year ended
			31 December 2022	31 December 2021
			£'000	£'000
Average NAV	a		611,342	437,480
Annualised expenses	b		6,844	5,022
Ongoing charges ratio	(b÷a)		1.12%	1.15%

FINANCIAL INFORMATION

This announcement does not constitute the Company's statutory accounts.  The financial information for 2022 is derived from the statutory accounts for 2022, which will be delivered to the registrar of companies.  The statutory accounts for 2021 have been delivered to the registrar of companies. The auditors have reported on the 2021 and 2022 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 2022 was approved on 28 March 2023.  The full Annual Report can be accessed via the Company's website at: https://octopusrenewablesinfrastructure.com/investors/

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.

 

ANNUAL GENERAL MEETING ("AGM")

The AGM of Octopus Renewables Infrastructure Trust plc will be held at 6th Floor, 125 London Wall, London, EC2Y 5AS on 16 June 2023 at 10.00 a.m.

Even if shareholders intend to attend the AGM, all shareholders are encouraged to cast their vote by proxy and to appoint the "Chair of the Meeting" as their proxy. Details of how to vote, either electronically, by proxy form or through CREST, can be found in the Notes to the Notice of AGM in the Annual Report.

Shareholders are invited to send any questions for the Board or the Investment Manager in advance by email to [email protected] by close of business on 14 June 2022.

 

29 March 2023

 

For further information contact:

 

Secretary and registered office:

Apex Listed Companies Services (UK) Limited

6th Floor, 125 London Wall, London, EC2Y 5AS

Tel: 020 3327 9720