5 August 2024

LEI: 213800B81BFJKWM2JV13

Octopus Renewables Infrastructure Trust plc

("ORIT" or the "Company")

Q2 2024 Factsheet and Net Asset Value

The Board of Octopus Renewables Infrastructure Trust plc announces that the unaudited Net Asset Value ("NAV") of the Company as at 30 June 2024 on a cum-income basis increased to £592.8 million or 105.15 pence per Ordinary Share (31 March 2024: £587.0 million or 103.90 pence per Ordinary Share).

*Totals may not sum exactly due to rounding

Crossdykes PPA

During Q2 2024, as part of the Investment Manager's active asset management strategy, the Crossdykes onshore wind farm in Lanarkshire, Scotland, signed a power purchase agreement (the "PPA") with Sky UK Limited, who will purchase 69% of the output at a CPI-linked fixed price for a period of 10 years from 1 April 2025. The PPA is NAV-accretive when compared with the power price assumptions included in the NAV and resulted in an uplift of £5.5 million or +0.98 pence per Ordinary Share.

Entry into the PPA helps to maintain ORIT's high proportion of fixed or contracted revenues and ORIT continues to actively manage exposure to short-term variability in power prices. As at 30 June 2024, 84% of ORIT's revenues over a 24-month period were fixed or contracted to 30 June 2026 (31 March 2024: 84% over the 24-month period to 31 March 2026).

Power Prices and Green Certificates

Where prices are not fixed under power price agreements 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 two independent and widely used market consultants' technology-specific capture price forecasts for each asset. For wind assets, where site-level technological and geographical characteristics can contribute greatly to variability between sites, a site-specific capture price forecast is used in order to more accurately forecast expected cash generation per project.

During Q2 2024, the forecast power prices used in ORIT's portfolio increased on average leading to an increase in the portfolio valuation of £4.3 million or +0.76 pence per Ordinary Share. The increases in power price forecasts were mainly over the short-term with a slight decrease over the medium to longer term.

Updates to market forecasts for Green Certificates resulted in a net valuation uplift of £2.7 million or +0.48 pence per Ordinary Share. Whilst pricing in the near-term has decreased since the beginning of the year, demand for green certificates remains high and updating for long term forecasts resulted in a valuation increase.

The combined impact of updating Power Price and Green Certificate forecasts resulted in a valuation uplift of £7.0 million or +1.24 pence per Ordinary Share.

Inflation¹ and FX

During the quarter, inflation forecasts increased on average across markets in which ORIT's assets are located. These updates resulted in a net valuation increase of £3.1 million or +0.55 pence per Ordinary Share, mostly related to a small increase to medium term forecasts offset by a decrease to expected outturn inflation for 2024 for the markets where ORIT's assets are located. ORIT retains a high proportion of inflation-linked cash flows with 48% of revenues over a 10-year period to 30 June 2034 explicitly linked to inflation.

The Investment Manager regularly reviews the level of exposure and utilises hedges, with the objective of minimising variability in the shorter-term cash flows. During the quarter, Sterling appreciated slightly against the Euro. Without the currency hedges, the valuation impact of this movement would have been -£3.2 million, however after the impact of currency hedges held at the Company level are taken into account, the net foreign exchange impact was -£0.2 million.

The combined impact of inflation and foreign exchange movements was a valuation increase of £2.9 million or +0.51 pence per Ordinary Share.

Gain on Sale of Ljungbyholm

During July 2024, ORIT signed a conditional agreement to sell the Ljungbyholm onshore wind farm in Sweden for a consideration of approximately €74 million (the "Transaction"). The Transaction is expected to realise an IRR of approximately 11% over the lifetime of ORIT's investment, with the net proceeds expected to be used predominantly to repay part of ORIT's short-term debt facility. Completion of the Transaction is subject, inter alia, to foreign direct investment approval by the Swedish Inspectorate for Strategic Products, which is expected later this year.

The valuation of Ljungbyholm has been updated in line with the agreed sales price, which was known as at 30 June 2024. This represents a valuation uplift of £0.8 million or +0.14 pence per Ordinary Share above the Investment Manager's internal valuation as at 30 June 2024, which includes the latest macroeconomic and power price assumptions available as at that date which are consistent with the assumptions used in the valuations of ORIT's other portfolio of assets.

ORIT acquired the 48MW wind farm at pre-construction stage in March 2020, investing c. €68 million in the project. The Investment Manager, Octopus Energy Generation managed the construction phase, successfully bringing the wind farm into operation in June 2021.

The Transaction forms part of the Company's capital recycling programme, and follows the sale of two Polish onshore wind assets in December 2023 and the divestment of an option over a Spanish solar PV project in January 2024. Upon completion of the Transaction, the capital recycling programme will have generated approximately £159 million.  Other capital recycling projects are in progress and the Company will provide further updates when appropriate.

Dividend²

The interim dividend (£8.5 million or 1.50 pence per Ordinary Share) in respect of Q1 2024 was paid in the quarter, in line with the Company's stated dividend target for the financial year from 1 January 2024 to 31 December 2024 of 6.02 pence per Ordinary Share.

Share Buybacks

In Q1 2024, the Company announced that it had initiated a share buyback programme with an initial tranche of up to £10 million. As at 30 June 2024, the Company held 1,200,962 shares in Treasury, which were bought by ORIT for c. £0.9 million at an average price of 73.48 pence per Ordinary Share.

Since the start of the buyback programme, the repurchases of Ordinary Shares at a discount to NAV has resulted in an increase in NAV per Ordinary Share of +0.07 pence per Ordinary Share.

Other movements

A slight decrease of £1.0 million or 0.18 pence per Ordinary Share was recorded from other valuation movements. Of this movement, the majority reflects an uplift of £11.5 million related to the expected return on the assets, being the net present value of future cashflows being brought forward from 31 March 2024 to 30 June 2024. This was offset by performance of the portfolio during Q2 2024 being below budget, a refresh of future Capex assumptions for some sites, and fund level costs, which mostly reflects the Company's operating and transaction costs including RCF interest.

Gearing

As at 30 June 2024, ORIT had total gearing (total debt drawn as a % of Gross Asset Value ("GAV"³) of 46.0% (46.6% as at 31 March 2024). Following the sale of the Ljungbyholm wind farm, total gearing is expected to reduce to 42.8%.⁴

Notes

1              The unaudited 30 June 2024 valuation includes (i) recent consensus UK inflation forecasts published by HM Treasury in May 2024; and (ii) inflation forecasts for the relevant European countries published by the European Commission in May 2024.

2              The dividend target stated in this announcement is a target only and not a profit forecast. There can be no assurance that this 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 in this announcement 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              "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 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.

4              Prior to approximately £30 million of committed investments due to be made in 2024, the majority of which relates to the acquisition of the fifth site at the Ballymacarney solar complex in Ireland

Factsheet

The Company's Q2 2024 factsheet has been published today and is available to download at:

https://www.octopusrenewablesinfrastructure.com/all-reports-publications

For further information please contact:

Notes to editors

About Octopus Renewables Infrastructure Trust

Octopus Renewables Infrastructure Trust ("ORIT") is a London-listed, 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. As an impact fund, ORIT is helping accelerate the transition to net zero by investing in green energy, whilst also contributing to a broader set of UN Sustainable Development Goals through its impact initiatives. ORIT's investment manager is Octopus Energy Generation.  

Further details can be found at www.octopusrenewablesinfrastructure.com 

About Octopus Energy Generation

Octopus Energy Generation is driving the renewable energy agenda by building green power for the future. Its 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 13-year track record with approximately £6.7 billion of assets under management (AUM) (as of 31 March 2024) across 20 countries and total 4.0GW. These renewable projects generate enough green energy to power 2.5 million homes every year, the equivalent of taking over 1.5 million 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