GCP Infra Inv Ltd - Annual Report and Financial Statements

RNS Number : 7683P

GCP Infrastructure Investments Ltd

12 December 2024

GCP Infrastructure Investments Ltd

("GCP Infra" or the "Company")

12 December 2024

LEI 213800W64MNATSIV5Z47

Annual report and financial statements for the year ended 30 September 2024

The Directors of the Company are pleased to announce the Company's annual results for the year ended 30 September 2024. The full annual report and financial statements can be accessed via the Company's website www.graviscapital.com/funds/gcp-infra/literature and will be posted to shareholders on 10 January 2025.

About the Company

The Company seeks to provide shareholders with regular, sustained, long-term dividend income whilst preserving the capital value of its investments over the long term by generating exposure to infrastructure debt and/or similar assets. It is currently invested in a diversified, partially inflation-protected portfolio of investments, primarily in the renewable energy, social housing and PPP/PFI sectors.

The Company is a FTSE 250, closed-ended investment company incorporated in Jersey. It was admitted to the Official List and to trading on the LSE's Main Market in July 2010. It had a market capitalisation of £684.7 million at 30 September 2024.

Highlights for the year

Financial

Portfolio valuation

£960.0m

30 September 2023: £1.0bn

Representing a mature, diversified and operational portfolio of 50 investments across the renewable, PPP/PFI and supported living sectors.

Dividends for the year

7.0p

30 September 2023: 7.0p

Delivering the dividend target set by the Board for the financial year of 7.0 pence per share.

NAV per share

105.22p

30 September 2023: 109.79p

Reflecting downward revaluations incurred during the year, offset by the impact of share buybacks.

Weighted average annualised yield¹

7.8%

30 September 2023: 7.9%

Representing a yield on the portfolio of investments with stable, pre-determined, long‑term, public sector backed revenues.

Dividend yield¹

8.9%

30 September 2023: 10.3%

Representing the yield on the closing share price of 78.60 pence per share at 30 September 2024.

Net assets

£913.1m

30 September 2023: £956.6m

Reflecting disposals of assets during the year in line with the stated aims of the Company's capital allocation policy.

Partially inflation protected

47%

30 September 2023: 41%

Representing the percentage of the portfolio, by value that have some form of inflation protection.

Total shareholder return¹

28.4%

30 September 2023: -25.2%

Reflecting improvements in market factors and the implementation of the capital allocation policy.

NAV total return¹

2.2%

30 September 2023: 3.7%

Continuing to meet its investment objective of capital preservation, with a NAV total return¹ of 176.6% since IPO.

Andrew Didham, Chairman of GCP Infra, commented:

The Company has maintained its 14-year track record of delivering on its objectives of income generation, capital preservation and diversification for its shareholders. The Company generated total profit and comprehensive income for the year of £19.5 million (30 September 2023: £30.9 million) and paid a dividend of 7.0 pence per ordinary share (30 September 2023: 7.0 pence). For the forthcoming financial year, the Company has set a dividend target¹ of 7.0 pence per share.

The impact of a higher rate environment, combined with reduced demand from wealth and retail investors looking for alternative sources of income, continues to weigh on the Company's share price. At the year end, the Company's share price was 78.90 pence, representing a 25.0% discount² to NAV (30 September 2022: 67.70 pence, representing a 38.3% discount² to NAV). The Board and the Investment Adviser are working closely to address the discount¹ at which the shares trade through the execution of the Company's capital allocation policy.

Progress has been made on executing the stated aims of the policy, including the refinancing of the Company's RCF in March 2024, which saw a reduction in total commitments by £40 million, and repayments of £47 million. Additionally, the Company disposed of its interests in Blackcraig wind farm at a 6.4% premium to the valuation as of 31 March 2024, with further disposals occurring post year end. While progress on disposals has been slower than anticipated, the Company is resuming its share buyback programme imminently and remains committed to its goal of returning at least £50 million to shareholders in the near term.

The new government's ambitious infrastructure targets, spanning decarbonisation, energy security, and the digital economy, are supported by innovative revenue models like contracts-for-difference, which offer potential opportunities for future investments. The focus on streamlining planning, grid connections, and the National Wealth Fund by the new government is also particularly encouraging. We look forward seeing how the policy environment in the UK evolves over the coming months.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Capital allocation

Leverage

£57.0m

30 September 2023: £104.0m

Representing a significant reduction in leverage and an LTV¹ of 6.2%.

Disposals

£31.4m

30 September 2023: £nil

Reflecting disposal of interests in Blackcraig wind farm at a 6.4% premium to the valuation at 31 March 2024.

Share buybacks

3.4m

30 September 2023: 13.6m

Totalling 17.0 million shares bought back since the buyback programme commenced in March 2023.

ESG

ESG policy

1 new

30 September 2023: None

Implemented an ESG policy to ensure investment practices align with the Investment Adviser's Responsible Investment policy.

Renewable generation

1,320 GWh

30 September 2023: 1,398 GWh

Representing renewable energy exported by portfolio assets, equivalent to powering 488,842 average homes.

SDG alignment

9 SDGs

30 September 2023: 9 SDGs

Reflecting the alignment of the portfolio with certain SDGs, as outlined by the United Nations.

Community support

£3.9m

30 September 2023: £3.6m

Reflecting the contribution to Community Benefit Funds by portfolio assets since IPO.

Charities supported

30 September 2023: 5 charities

Representing charities supported by the Company and the Investment Adviser raising c. £47,000 during the year.

Internships hosted

30 September 2023: 3

Continued supporting young talent through the Investment Adviser's paid internship scheme.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Read more below.

Senior ranking security

53%

Weighted average annualised yield¹

7.8%

Average life

11 years

Partially inflation protected

47%

1. APM - for definition and calculation methodology, refer to the APMs section below.

Creating long-term value

Our investment case

The Company has a number of key differentiators that make it well positioned to take advantage of attractive risk-adjusted returns.

Scale

The Company targets smaller investment opportunities that may be overlooked by larger investors, such as commercial banks. This flexibility allows the Company to enter niche markets and scale investments over time through follow-on financing to existing borrowers, which supports long-term growth and enhances returns by increasing exposure to successful investments.

Diversification

The Company has an explicit objective of diversifying across a range of asset classes. This means the Investment Adviser seeks the most attractive risk-adjusted returns as it is not bound to invest in sectors that are unattractive due to higher competition or asset characteristics.

Track record

The Company has been investing in the infrastructure sector for over a decade. This has allowed the Investment Adviser to develop its expertise in several specialist asset classes, such as anaerobic digestion and biomass. As part of this, the Investment Adviser has a proven model which assesses and evaluates opportunities in new asset classes.

Debt focus

The Company's focus on debt provides flexibility across senior and subordinated positions, allowing it to match investment risk with an appropriate capital structure solution and associated return. This approach allows the Company to tailor investments according to risk profiles, maximising returns while managing risk effectively.

Sustainability expertise

The Company's investment philosophy is centred on the long‑term sustainability of its portfolio. As part of this philosophy, the Board and the Investment Adviser continually seek to improve the way ESG criteria is embedded, integrated, monitored and measured within the portfolio.

Making a positive impact

The Board and the Investment Adviser work closely to ensure the Company's activities have a positive impact.

Sustainable Development Goals

By investing in assets that are integral to society, including those which contribute to a greener economy, the Company aligns with certain SDGs, as outlined by the United Nations ("UN"). These goals were created in 2015 by the UN to create a better and more sustainable world by 2030. The Company's portfolio positively contributes to the provision of renewable energy, the development of infrastructure to support economic growth, and also provides high-quality and safe buildings for vulnerable adults, healthcare patients and students. Furthermore, the Company's approach to governance, labour and health and safety makes a positive contribution to the employees, customers, suppliers and local communities in which the assets operate.

B Corp

In April 2024, the Investment Adviser was awarded a B Corp certification. Certified B Corporations are leaders in the global movement for an inclusive, equitable and regenerative economy.

As a certified B Corp, the Investment Adviser is part of a community of like-minded businesses that engage with each other to share ideas and best practice. The certification formalises the Investment Adviser's sustainable and long-term business model, as well as providing a framework to ensure it continues to operate in accordance with the highest ESG standards.

Read more in the Investment Adviser's Responsible Investment report.

Overall B Impact Score

Based on the B Impact Assessment, the Investment Adviser achieved an overall score of 99.4. The median score for ordinary businesses who complete the assessment is 50.9.

SDG Innovation Accelerator

In 2024, five employees from the Investment Adviser participated in the SDG Innovation Accelerator for Young Professionals. This programme empowers young talent under the age of 35 by driving collaborative business innovation aligned with the UN SDGs. An intensive, nine month programme, the Innovation Accelerator is designed to promote sustainability by activating the potential of future business leaders and change makers.

Three employees participated in the programme as 'innovators', seeking to identify and solve sustainability issues within the Investment Adviser and two senior members also participated as a 'mentor' and 'champion', to help guide the innovators on their sustainability journey.

As part of the programme, the team of innovators came up with ideas to improve the social benefits received by employees at the Investment Adviser. The employees presented their findings and ideas to a group of industry professionals, as well as the Responsible Investment committee of the Investment Adviser.

Benefitting the environment

The Company invests in renewable energy generation which has a positive environmental impact.

Clean energy infrastructure

The assets in the Company's portfolio have strong environmental credentials, with 62% of the portfolio invested in renewable energy projects that provide alternative energy sources to fossil fuels. The Board recognises that investing in clean energy infrastructure is one of the main ways to protect our planet against climate change, and the Company is committed to finding new and innovative ways to support the transition to net zero through its investments.

The carbon impact of infrastructure contributes to a significant proportion of the UK's national emissions from a construction, operation and maintenance perspective. In many cases, the UK's existing infrastructure was not originally designed and constructed with global warming in mind. The Investment Adviser has sought to introduce energy efficiency projects at portfolio assets where there were opportunities to do so.

In October 2020, the Company was awarded the Green Economy Mark from the London Stock Exchange. This classification recognises companies that are driving forward the global green economy.

SolarCatcher

The Company has provided funding of up to £20 million to support the build-out of innovative renewable energy infrastructure on public sector sites, predominantly schools, across England. Named 'SolarCatcher', the project is a fresh approach to the energy transition, as it uses existing car park infrastructure to generate on-site renewable energy for schools and academies, whilst providing electric vehicle charging points for staff and visitors.

As part of the financing, each school enters into a power purchase agreement with SolarCatcher under which they purchase power produced by the solar panels for use within the school, thereby reducing the power they need to draw from the electricity grid. These power purchase agreements are executed for a fixed price which is lower than the price the schools pay to their usual supplier.

Electric vehicles

In the global push towards net-zero emissions, decarbonisation of the transport sector is key. The Company has financed the acquisition of 250 zero-emission capable London black cabs for two fleet operators. These investments have a unique financing structure, which is a 'pay-for-mile' scheme managed by Zeti, a platform for investment in electric vehicle fleets, over a circa five year term.

The fleets benefit from the maximum low-emission vehicle plug-in Government grant funding and from accelerated capital allowances that result in a one year deduction against taxable profits that are equal to the full cost of the vehicle.

Biomass

Biomass is the term given to the organic raw material which can be used directly in power plants or can be used to produce biofuels. Unlike other renewable sources of power, biomass can be available 24/7 and is not reliant on the weather. It is the technology most closely comparable to fossil fuelled power stations and, as such, is most suited to the requirements of the electrical grid network.

The Company was a first mover in biomass gasification technology in the UK through its investment in Birmingham Bio Power Ltd. This plant uses four gasifier units fed with up to 72,000 tonnes of waste wood per year sourced from the West Midlands, and has been operational since 2016. The Company also lends to waste wood projects in Widnes and Northern Ireland, along with smaller anaerobic digestion plants in Scotland and Northern Ireland.

Benefitting society

The Company's portfolio has clear benefits to communities and end users in society.

Infrastructure, by definition, has a core social purpose. With long-term investment in renewable energy, PFI assets such as schools and hospitals, and social housing for vulnerable adults, the Company's portfolio has an overall positive impact on society. By investing in the supported living sector, the Company has funded properties across the UK that benefit vulnerable adults. Through the Company's investments in the PPP/PFI sector it is exposed to a number of sub-sectors including education, healthcare, waste, leisure and housing. These assets are integral to UK society and provide long-term partnerships with the public sector.

Community Benefit Funds

Renewable projects not only have a positive impact on the environment but also have wider benefits for society, improving local communities through CBFs. A CBF is a voluntary commitment by a developer to provide funds which are made available to local community projects. By way of an example, the accepted standard commitment for a wind farm is £5,000 per MW. These funds can be used to finance any initiative a community deems appropriate and necessary for their local area, including community-owned renewable energy projects, recreational facilities or equipment for local schools. Benefits under the protocol are negotiated directly with host communities and tailored to their needs to ensure a positive legacy is achieved. The Company's portfolio assets have donated £3.9 million to CBFs since its IPO.

Supported living

The Company has historically targeted investments in the 'supported living' sector through financing the development or conversion of accommodation to suit specific care needs for individuals with learning, physical or mental disabilities. One portfolio the Company has invested in comprises 13 properties and 51 units of supported living accommodation which are designed to meet the individual and unique needs of adults with disabilities and mental health problems. The portfolio is leased to Westmoreland Supported Housing Ltd, which is a registered provider of social housing. The Company supported Westmoreland over a period of financial distress. As a result, Westmoreland is now in a materially better financial position than it was previously and continues to provide high-quality accommodation and care for its vulnerable tenants.

Internships

The Investment Adviser offers paid internships to young people, prioritising those from diverse backgrounds who may otherwise find it difficult to find work experience.

This year, two paid internships were offered to students participating in the 10,000 Black Interns programme, which offers paid internship opportunities across more than 25 sectors, along with training and development opportunities. Another two internships were offered to students in the Young Women in Finance programme, a not-for-profit social organisation dedicated to the eradication of gender bias for new graduates entering the finance industry. One other internship was offered to an ESG masters student.

All interns worked across different projects at the Company, with a particular focus on the climate risk assessment and ESG policy.

Capital allocation policy

The Board is continuing to execute the policy and has made progress during the year.

Policy aims

In recognition of the disconnect between share price and NAV, and the material discount¹ at which the shares are trading, the Company reported that it planned to follow a progressive capital allocation policy in its 2023 annual report. This sought to realise £150 million of capital through disposals or refinancings to facilitate a material reduction in its RCF, return at least £50 million to shareholders, and rebalance underlying portfolio exposures.

The capital allocation policy has three key priorities: a material reduction in leverage, an improvement in the risk-adjusted return of the existing portfolio, and facilitating the return of at least £50 million of capital to shareholders whilst maintaining the dividend target.

The Board's focus during the financial year has been on the execution of the policy. The Investment Adviser's focus has therefore been on refinancing loans and disposing of investments where appropriate to achieve the Company's aims. The stated aims of the policy were based on interactions with shareholders and sought to address their concerns. This included reducing leverage while interest rates were high by decreasing the size of the RCF and ultimately paying down the drawn balance. Refer below for further information.

Targets of the policy - £150m Capital realisation target

· Reduce leverage

· Improve risk-adjusted return

· Buy back Company shares

· Cycle out of certain sectors

· Refocus the portfolio on debt

· Reduce exposure to merchant electricity prices

1. APM - for definition and calculation methodology, refer to the APMs section below.

Disposals

The Investment Adviser has sought to restructure the underlying exposures in the portfolio and exit sectors where investors have concerns, as well as reducing the Company's exposure to merchant electricity prices and demonstrating a conservative valuation methodology through its sales processes. The policy also involved completing buybacks as a potential discount management tool, while simultaneously returning capital to shareholders.

The first transaction was completed earlier in the year, with the disposal of the Company's interest in Blackcraig wind farm. See below for further information.

Post year end, the Company completed the disposal of a portfolio of rooftop solar assets, generating proceeds of £6.8 million. Further, it expects to complete, subject to contract, on the disposal of a portfolio of onshore wind farms, generating proceeds of c.£20 million. The Company's disposals total £38.2 million at the end of 2024, with a pipeline of additional disposals in excess of £150 million.

The Investment Adviser has consistently witnessed delays in transaction processes across the market, which has slowed progress towards achieving the stated aims of the capital allocation policy. However, the Company expects to complete additional disposals in 2025, and remains committed to the capital realisation target and stated ambitions, with the share buyback programme recommencing imminently.

Blackcraig Wind Farm

In April 2024, the Company disposed of its interest in loan notes secured against Blackcraig Wind Farm, a 52.9MW onshore wind farm located outside Dumfries and Galloway in Scotland, at a 6.4% premium to its valuation at 31 March 2024. The Company originally acquired the senior secured loan notes in 2017 from the UK Green Investment Bank. The disposal generated net cash proceeds of £31.4 million which included principal and interest and were used to reduce the drawn balance on the Company's RCF.

Chairman's statement

I am pleased to present the Company's annual report for the year ended 30 September 2024.

Andrew Didham

Chairman

Introduction

I am pleased to present the Company's annual report and financial statements for the year to 30 September 2024. The Company's shares have continued to trade at a material discount¹ to the NAV during the year. The impact of a higher rate environment, combined with reduced demand from wealth and retail investors looking for alternative sources of income, continues to weigh on the Company's share price.

The current yield on 15-year gilts is similar to where it was at the Company's IPO. The disconnect between the Company's shares trading at a premium at IPO and for the majority of the period since, and the material discount¹ at which it trades today, remains. However, over this period, it has a 14 year track record of delivering on its objectives of income generation, capital preservation and diversification. The Company's mature, diverse and operational portfolio will continue delivering on these objectives moving forward.

The Company remains committed to the capital allocation policy set out in the 2023 annual report. While progress on disposals has been slower than expected, the Investment Adviser continues to progress with material transactions that will, if completed, allow the Company to achieve the objectives set out in the previous annual report.

As a Company that invests in UK infrastructure that benefits from public sector support, the wider policy environment and the availability of long-term revenue support models is important. The new Government has adopted, and in certain cases extended, ambitious targets for infrastructure deployment to address the challenges of population change, decarbonisation and energy security, as well as the transition to a digital economy. It has been encouraging to see the growth of the contract-for-difference scheme which supports renewable energy generation and the emergence of other contract-for-difference, regulated asset base or cap and floor revenue support models in sectors such as biomethane, carbon, hydrogen, sustainable aviation fuels, interconnectors and long duration energy storage. These may present opportunities for the Company when it resumes investing in the future. The expected increased focus on policy which supports new infrastructure development across the planning process, grid connections and the establishment of the National Wealth Fund (previously the UK Infrastructure Bank) is also encouraging.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Capital allocation policy

The Board remains committed to the capital allocation policy detailed in the Company's 2023 annual report. Progress has been made during the year, with further developments made post year end, as the Company seeks to execute on its target of releasing £150 million (c.15% of the portfolio) to facilitate the key priorities of the policy:

· reduction of leverage, reducing the drawn balance of the RCF to zero;

· return at least £50 million of capital to shareholders, in addition to maintaining the Company's dividend target; and

· rebalancing the portfolio and materially reducing exposure to supported living, and to merchant electricity prices, while re-focusing the portfolio on debt.

Reduction of leverage

The Board has prioritised the reduction of leverage whilst interest rates have been elevated. The Company's RCF was refinanced in March 2024, with total commitments reduced from £190 million to £150 million in line with this stated aim. The drawn balance of the facility has reduced from £104 million at 30 September 2023 to a materially reduced level of £57 million at year end following repayments. Subject to the completion of a further pipeline of disposals, the Company continues to work towards reducing drawn balances to zero alongside the buyback programme. Further details on the Company's financing activity are provided below and details of the RCF can be found in note 15.

Return of capital

In total, 3.4 million shares were repurchased during the year under the existing share buyback authority. The repurchase of shares continues to offer attractive returns, given the current discount¹ to NAV, and the dividend yield on the share price of 8.9% at 30 September 2024. The Company's shares have traded at an average discount¹ of 32.4% during the year and an average premium¹ of 3.4% since IPO. At 30 September 2024, the share price was 78.90 pence, representing a discount¹ to NAV of 25.0%.

The Company will be recommencing the share buyback programme imminently, and remains committed to its target of returning at least £50 million to shareholders in the near term.

The method by which the Company will return £50 million of capital to shareholders remains under consideration. The Board continues to believe that the use of share repurchases is a means of addressing imbalances in supply and demand which may otherwise create volatility in the rating of the Company's shares.

Portfolio rebalancing

The focus of investment-related activity for the Investment Adviser and the Board during the year was releasing the target £150 million of capital through refinancings and disposals. The first of these occurred in April 2024, when the Company announced the disposal of its interest in loan notes secured against Blackcraig Wind Farm, a 52.9MW onshore wind farm located in Dumfries and Galloway, Scotland. The disposal generated net cash proceeds of £31.4 million which represented a 6.4% premium to the valuation of the investment at 31 March 2024.

Further transactions were completed post year end, including the disposal of a portfolio of rooftop solar assets installed on domestic properties across the UK, generating proceeds of £6.8 million. The Company expects to complete, subject to contract, on the disposal of a portfolio of two onshore wind farms in the UK, expected to generate proceeds of c.£20 million. Transactions in the supported living sector have been significantly slower moving than expected; however, there is positive momentum and the Company believes it will be able to materially reduce exposure to this sector in 2025.

The Company made one new loan of £2.6 million in the year to an existing borrower. Portfolio follow-on investments of £24.7 million made during the year were focused on restructuring and management to preserve value and potential future profitability. This was offset by repayments of £39.2 million, giving a net repayment from the existing portfolio of £11.9 million.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Financial performance

This year, financial performance continued to be driven by electricity prices and inflation. A material cooling in both factors resulted in downward revaluations during the year and had a resulting negative impact on profitability. The Company generated total profit and comprehensive income of £19.5 million (30 September 2023: £30.9 million).

The net assets of the Company decreased to £913.1 million (105.22 pence per share) from £956.6 million the previous year (109.79 pence per share). Further information on financial performance can be found below.

The Company seeks to pay regular, sustained, long-term dividends to shareholders, and paid a 7.0 pence per share dividend for the year, in line with the target for this financial year. The same target¹ is reaffirmed for the forthcoming financial year. The dividend of 7.0 pence per share for the year was 0.3 times covered on an earnings cover² basis, which includes investment revaluations in accordance with IFRS, and was 1.0 times covered on an adjusted earnings cover² basis, calculated on the Investment Adviser's assessment of adjusted net earnings² in the year. Further information can be found below.

ESG

The Company's portfolio continues to have a positive impact as it contributes to the generation of renewable energy and finances infrastructure that has clear benefits to users in society. The Board and the Investment Adviser believe that investing in assets with a positive environmental and social impact is key to protecting our planet for future generations.

The Company has made good progress this year against the ESG objectives set out in the 2023 annual report, including implementing an ESG policy to formalise ESG processes and ensure the Company's responsible investment practices align with the Investment Adviser's responsible investment policy.

The Investment Adviser obtained certification as a B Corporation during the year, formalising its sustainable and long-term business model. The certification provides a framework to ensure the Investment Adviser continues to operate in accordance with the highest sustainability standards. The Investment Adviser also improved its PRI score for the second consecutive year, highlighting its commitment to improvements in its ESG credentials. These achievements complement those of the Company, which was awarded the Green Economy Mark from the LSE in 2020 in recognition of the Company's contribution towards driving a greener economy.

More details on the Company's approach to responsible investment can be found in the sustainability section below.

Market outlook

At the time of writing, the Bank of England base rate is 4.75%, following the Bank of England's decision to cut rates by 0.25% in August 2024 and November 2024. These were the first cuts since the onset of the Covid-19 pandemic in 2020. Inflation has cooled significantly over the year compared to previous periods. CPI rose by 1.7% in the year to 30 September 2024, and then to 2.3% in the twelve months to 31 October 2024. The link between electricity prices and inflation in the UK is strong, and the Board recognises that geopolitical tensions in the Middle East and the conflict in Ukraine may impact electricity prices and have a knock-on effect on inflation going forward.

As mentioned previously, the policy backdrop for the sector has become increasingly positive. Despite this, there remains a disconnect between investment company sentiment and broader infrastructure investment. The Board and the Investment Adviser recognise there is a broad range of investment opportunities in the current market at attractive rates. However, these remain secondary to the priority of addressing the discount² and shareholder concerns.

1. The dividend target set out above is a target only and not a profit forecast or estimate and there can be no assurance that it will be met.

2. APM - for definition and calculation methodology, refer to the APMs below.

The Board also acknowledges the positive developments post year end regarding cost disclosure requirements, with HMT drafting a Statutory Instrument to remove the requirement for investment companies to publish ongoing charges, a figure widely accepted to be an inaccurate representation of the actual cost of investing in shares in an investment company. With many citing this misleading cost as a headwind for investment in the investment company sector, the potential for the cost to be removed may create demand for shares going forward. The Statutory Instrument became law on 22 November 2024. However, following this announcement, investment platforms have said they will continue requiring ongoing charges to be disclosed. The Investment Adviser is working to address this, and the Board will continue monitoring the impact of cost disclosure on the Company's share price.

The Board

The Board composition will see several changes in the year ahead to align with corporate governance best practice. Michael Gray and Julia Chapman have both served on the Board for nine years, and their retirement will be phased over the coming year. Mr Gray will retire from the Board in February 2025, and Ms Chapman will stay on the Board for a further transition period, assisting with the identification of an appropriate replacement.

I would like to take this opportunity to acknowledge the important role Mr Gray and Ms Chapman have played in the stewardship of the Company during their tenure and thank them for their invaluable contribution to the Company.

I am delighted to extend a warm welcome to Ian Brown, currently the Head of Banking and Investments at the UK's National Wealth Fund, who will be appointed to the Board subject to regulatory and shareholder approval. Mr Brown will bring a wealth of knowledge and experience in the UK lending and infrastructure sector and will greatly contribute to the Company's strategic direction.

Further information on Mr Brown, including his biography, will be included in the 2025 AGM circular and announced upon his appointment. There are no details requiring disclosure in respect of this appointment under paragraph 6.4.8 of the UK Listing Rules of the FCA.

Andrew Didham

Chairman

11 December 2024

Strategic report

Evolution of the portfolio

Since the Company's IPO in 2010, the infrastructure sector has evolved considerably, becoming a better understood and more mainstream asset class. The Company has a track record of being an early-mover, ensuring it invests into maturing sectors and captures an enhanced risk-adjusted return. With a changing landscape of Government support over the last 14 years, the Company has retained an entrepreneurial approach to identifying new investments. As such, the portfolio has evolved over time in response to changing investment opportunities and requirements.

At the Company's IPO in 2010, the Company was the first UK infrastructure debt focused investment company in the UK, with its portfolio comprising 100% subordinated PFI. The aftermath of the global financial crisis on the long-dated debt market was longer lasting than expected and therefore the Company was able to benefit from attractive investment opportunities, whilst maintaining dividend payment levels.

In 2012, the Company made its first renewable energy investment in domestic rooftop solar projects, which have now grown to c.50,000 systems. This was followed by investments in the anaerobic digestion, biomass and wind sectors, with the Company lending to the first waste wood power station to be developed in the UK. Investments in the renewable energy sector continued into 2014, with the Company making its first investment in the hydro-electric sector.

The Company then made its first investment in social housing in 2016, entering into the supported living sector. Investment in the renewable energy sector continued into 2018, when the Company made its first investment in the offshore wind sector, investing in Race Bank wind farm.

In 2021, the Company made its first investment in the Eden Geothermal project, which is the first deep geothermal well in the UK since 1986.

At the year end, the valuation of the Company's portfolio was £960 million.

Strategic overview

The market

The infrastructure market

Infrastructure comprises the fundamental physical systems that are essential to the functioning of society and its economy, covering a variety of industries and sectors. Infrastructure investments typically comprise a significant initial investment which is repaid over the life of the asset in consideration for the essential service it provides. Typically, these investments are long-term, stable and provide inflation protection, and have inherent capital protection through the physical nature of the assets.

Almost half of the Company's investments by value have some form of inflation protection. This includes direct links to inflation for supported living and certain renewable assets, as well as a mechanism that increases loan principal values based on inflation exceeding a set threshold (usually 2.75% to 3.0%).

Investors have historically valued the long lives of infrastructure assets, which often outlive political and economic cycles, and the services they provide. Increasingly, the need to decarbonise the energy sector to achieve legally binding targets and accelerating digitalisation trends has prompted further interest in the sector.

The Investment Adviser has witnessed significant early developments in new policy initiatives from the new Government since their victory in the general election in July 2024:

· planning reform was a key agenda item in the new Government manifesto, with swift changes to the National Planning Policy Framework highlighting ambitions in increased housebuilding and the development of new onshore renewable energy generation;

· the National Wealth Fund and Great British Energy have been formed with public funding to accelerate efforts to decarbonise the UK's electricity system and encourage private funding in UK infrastructure;

· mission control has been launched with Chris Stark, former Chief Executive of the Climate Change committee, in charge of tracking progress towards delivering a net zero electricity system by 2030 and co-ordinating between Government entities; and

· the merger of the National Infrastructure Commission ("NIC") and the Infrastructure Projects Authority ("IPA") into a new body, the National Infrastructure and Service Transformation Authority ("NISTA"), to better support the delivery of major capital projects.

These new policies support UK infrastructure investment, while new subsidy regimes for emerging technologies (Net Zero Hydrogen Scheme, Carbon Capture Business Model) and the expansion of existing regimes (such as the CfD scheme) offer an attractive opportunity for the UK to drastically scale up the deployment of new infrastructure.

In the Autumn Budget, announced post year end, the new Government outlined its plan to address the large deficit and the need for increased investment in the UK's distressed finances and assets. While taxes and NHS funding grabbed the initial headlines (including £1.5 billion for new hospital beds and diagnostic centres), the new Government's commitment to making the UK a clean energy superpower was a positive reinforcement. The Board believes this presents a material opportunity for investment and growth in the UK and is needed for the UK to stay on track with its decarbonisation commitments. The Board is also looking forward to the announcement of the Government's ten year infrastructure strategy to be published in spring 2025, along with the newly formed National Infrastructure and Service Transformation Authority which will be set up to oversee it.

Challenges and opportunities

The table below sets out some of the key challenges and associated opportunities for UK infrastructure investment.

		Infrastructure	Government	Investment
	Challenge	opportunities	support/intervention	characteristics
Decarbonisation	Decarbonisation of the UK economy by 2050, with intermediary targets in place such as the decarbonisation of the electricity system by 2030	· Further investment in established renewable sectors such as wind and solar · Deployment of less-established renewables across electricity, heat, transport, carbon capture and storage	· CfD, Interconnector cap and floor · Green Gas Support Scheme, Net Zero Hydrogen Scheme, Industrial Carbon Capture business model · Various grants and capital support	· Inflation-linked subsidy support but reliant on merchant prices long term · Subsidy support regimes designed to make the deployment of new technology economically viable
High energy prices	High energy prices and reliance on foreign suppliers into the energy system	· Low-marginal cost domestic renewable generators · Nuclear (including small modular reactors) · Grid infrastructure such as interconnectors · Energy storage · Energy efficiency schemes	· Price cap · Carbon pricing · Energy Profits Levy · Long Duration Energy Storage cap and floor	· Exposure to wholesale energy prices. Some contractual income (some inflation-linked) from capacity mechanism or grid service arrangements
Climate change	Climate change adaptation: increased frequency of extreme weather events in new geographies	· Flood defences · River flood mitigation measures	· The Government has a large direct investment flood defence programme · New policy initiatives set to be introduced by the new Government. See above for details	· Limited current investment opportunities, but expected to be a growth area
Ageing population	A growing and ageing population will place different demands on social infrastructure	· Housing · Healthcare and social care provision · Transport · Education · Utilities	· This remains a focus of direct Government funding, however there has been recent speculation about new private investment in public procurements	· Investment opportunities are typically in the private sector (e.g. private care homes, private schools). These have more corporate or property investment characteristics which are less attractive to the Company · Potential for new funding model for private investment into public infrastructure procurement (PFI v3.0)
Digitalisation	Digitalisation drives a greater need for access to online services	· Broadband infrastructure · Data centres and associated energy systems	· Capital support for rural deployment	· Demand-based risks and, in certain geographies, competition for customers

How the Company is responding to market opportunities and challenges:

Whilst the policy backdrop for the UK infrastructure sector is positive, there remains a disconnect between market sentiment and broader infrastructure investment. Focus remains on addressing the share price discount¹ to NAV at which the shares trade and any shareholder concerns. The Company's response to the current market environment is as follows:

1. Reduce leverage:

Central bank base rates remain at elevated levels globally, with the Bank of England's base rate currently at 4.75%. The Company's RCF incurs a margin over SONIA. As is typical with elevated base rates, this borrowing is less accretive to value than in a low interest rate environment. The Company has prioritised paying down all drawn balances under the RCF and has reduced amounts drawn by £47 million during the year.

2. Return capital to shareholders:

The Board and the Investment Adviser believe the implied yield on the Company's shares, which are trading at a significant discount¹ to NAV, is higher than the actual risk on the underlying investments given the positive ongoing performance of the portfolio. Therefore, buying back the Company's shares offers an attractive risk-adjusted return for shareholders. The Company has also committed to returning £50 million to shareholders as part of its capital allocation policy. The Company will be recommencing the buyback programme imminently, working towards satisfying this commitment.

1. APM - for definition and calculation methodology, refer to the APMs section below.

3. Adjust the underlying portfolio exposures:

The Company has committed to reducing equity risks, as well as its exposure to the supported living sector. It is intended that the portfolio will be refocused on debt investments in sectors with attractive risk-adjusted returns.

The disposal of the Company's interest in loan notes secured against Blackcraig wind farm, a 52.9MW onshore wind farm, at a 6.4% premium to the valuation at 31 March 2024, generated net cash proceeds of £31.4 million. The disposal of a c.8.3MW portfolio of domestic rooftop solar installations post year end, and the disposal of a portfolio of onshore wind assets with combined generating capacity of 28MW, subject to contract, are expected to reduce the Company's exposure to merchant electricity prices by c.£27 million.

Furthermore, active transactions in the supported living sector are expected to materially reduce the Company's exposure to this sector in early 2025.

4. Engage with shareholders:

The Company and the Investment Adviser have sought to engage with shareholders to better understand their concerns and develop a strategy to address these. This has been combined with enhanced transparency in reporting, including a line-by-line breakdown of the portfolio, which is available on the Company's website, and broader attempts to share new and insightful information more frequently.

Key policies

Investment strategy

The Company's investment strategy is set out in its investment objective, policy and strategy below. It should be considered in conjunction with the Chairman's statement and the strategic report which provides an in-depth review of the Company's performance and future strategy. Further information on the Company's business model and purpose is set out below.

Investment objective

The Company's investment objective is to provide shareholders with regular, sustained, long-term dividends and to preserve the capital value of its investment assets over the long term.

Investment policy and strategy

The Company seeks to generate exposure to the debt of UK infrastructure project companies, their owners or their lenders and related and/or similar assets which provide regular and predictable long‑term cash flows.

Core projects

The Company will invest at least 75% of its total assets, directly or indirectly, in investments with exposure to infrastructure projects with the following characteristics (core projects):

· pre-determined, long-term, public sector backed revenues;

· no construction or property risks; and

· benefit from contracts where revenues are availability based.

In respect of such core projects, the Company focuses predominantly on taking debt exposure (on a senior or subordinated basis) and may also obtain limited exposure to shareholder interests.

Non-core projects

The Company may also invest up to an absolute maximum of 25% of its total assets (at the time the relevant investment is made) in non-core projects, taking exposure to projects that have not yet completed construction, projects in the regulated utilities sector and projects with revenues that are entirely demand based or private sector backed (to the extent that the Investment Adviser considers that there is a reasonable level of certainty in relation to the likely level of demand and/or the stability of the resulting revenue).

There is no, and it is not anticipated that there will be any, outright property exposure of the Company (except potentially as additional security).

Diversification

The Company will seek to maintain a diversified portfolio of investments and manage its assets in a manner which is consistent with the objective of spreading risk. No more than 10% in value of its total assets (at the time the relevant investment is made) will consist of securities or loans relating to any one individual infrastructure asset (having regard to risks relating to any cross default or cross-collateralisation provisions). This objective is subject to the Company having a sufficient level of investment capital from time to time, the ability of the Company to invest its cash in suitable investments and the investment restrictions in respect of 'outside scope' projects described above.

It is the intention of the Directors that the assets of the Company are (as far as is reasonable in the context of a UK infrastructure portfolio) appropriately diversified by asset type (e.g. PPP/PFI healthcare, PPP/PFI education, solar power, social housing, biomass etc.) and by revenue source (e.g. NHS Trusts, local authorities, FiT, ROCs etc.).

Policies

Distribution

The Company seeks to provide its shareholders with regular, sustained, long-term dividend income.

The Company has the authority to offer a scrip dividend alternative to shareholders. The offer of a scrip dividend alternative was suspended at the Board's discretion for all dividends during the year, due to the discount¹ between the likely scrip dividend reference price and the relevant quarterly NAV per share of the Company. The Board intends to keep the payment of future scrip dividends under review.

Leverage and gearing

The Company intends to make prudent use of leverage to finance the acquisition of investments and enhance returns for shareholders. Structural gearing of investments is permitted up to a maximum of 20% of the Company's NAV immediately following drawdown of the relevant debt.

The calculation of leverage under the UK AIFM Regime in note 15 to the financial statements includes derivative financial instruments as is required by the applicable regulation.

Our non-financial objectives

The key non-financial objectives of the Company are:

· to build and maintain strong relationships with all key stakeholders of the Company, including (but not limited to) shareholders and borrowers;

· to continue to focus on creating a long‑term, sustainable business relevant to the Company's stakeholders;

· to develop and increase the understanding of infrastructure debt as an asset class; and

· to focus on the long-term sustainability of the portfolio and make a positive impact, through contributing towards the generation of renewable energy and financing infrastructure that is integral to society.

Business model

Investment objectives

Sustainability considerations

Implementation of investment strategy

Key performance Indicators

Sustainability indicators

Dividend income

To provide shareholders with regular, sustained, long‑term dividends.

Governance

The Company operates under a robust governance framework. Read more on pages 100 to 133 in the full annual report on the Company's website.

Board of Directors

Stewardship and oversight

Dividend income

7.0p

Dividends per share paid for the year ended 30 September 2024

Governance

50%

Board positions filled with either gender or ethnically diverse members

Capital preservation

To preserve the capital value of its investment assets over the long term.

Environmental

The Investment Adviser positively screens for assets which benefit the environment. Read

more below.

Investing

The Company seeks to generate exposure to infrastructure debt and/or similar assets in the renewable energy, social

housing and

PPP/PFI sectors.

The Investment Adviser provides advisory services relating to the

portfolio in accordance with

the Company's investment objective and policy.

Financing

The Company manages its capital

on a highly conservative basis, with consideration given to stakeholder needs.

The Investment Adviser is implementing the Board's capital allocation policy in order to rebalance the portfolio and increase shareholder returns.

Operating

The Company pays careful attention to the control and management of the portfolio and its operating costs.

The day-to-day provision of investment advice and administration of the Company is provided by the Investment Adviser and the Administrator respectively, whose roles are overseen by the Board.

Managing

As an investment company, the Company seeks to take investment risk.

The Investment Adviser works alongside the Board to manage risks and shape the risk policy of the Company. It is also responsible for risk monitoring, measuring and managing.

Capital preservation

0.41%

Aggregate downward revaluations since IPO¹ (annualised)

Environmental

1,320 GWh

Renewable energy exported by portfolio assets

Diversification

To invest in a diversified portfolio of debt and/or similar assets secured against UK infrastructure projects.

Social

The Investment Adviser positively screens for assets which benefit society. Read more below.

Financing

The Company manages its capital on a highly conservative basis, with consideration given to stakeholder needs.

Managing

As an investment company, the Company seeks to take investment risk.

Diversification

Number of investments at 30 September 2024

Social

801

FTEs at portfolio asset level

at 30 June 2024²

Financial

The Company uses credit facilities,

hedging arrangements, cash flow forecasts and stress scenarios to ensure financial viability. Read more below.

The Investment Adviser is implementing the Board's capital allocation policy in order to rebalance the portfolio and increase shareholder returns.

The Investment Adviser works alongside the Board to manage risks and shape the risk policy of the Company. It is also responsible for risk monitoring, measuring and managing.

Financial

0.32 times³

Basic dividend cover (IFRS)

at 30 September 2024

1. APM - for definition and calculation methodology, refer to the APMs section below.

2. Twelve month period to 30 June 2024 to facilitate data inclusion in the annual report.

3. The dividend of 7.0 pence per share is fully covered by an adjusted EPS¹ of 7.09 pence per share.

Company impact

Sustainability credentials

The Company has a positive environmental impact through its investments in renewable energy, PPP/PFI and supported living. The Board aims to enhance the integration of ESG criteria in the Company's operations, ensuring that the portfolio not only addresses the current needs of stakeholders, but is also able to adapt to future challenges.

The Investment Adviser continued its data collection project this year to collect material ESG metrics from assets in its portfolio. The data collection project enables the Investment Adviser to assess the impact portfolio assets are having on the environment and society. The process involves the Investment Adviser's portfolio management team liaising with each asset operator to obtain relevant ESG data on the underlying portfolio assets. The data points that are considered material by the Investment Adviser are detailed in the table below.

The data collection project enabled the Investment Adviser to compare data with the previous year. It was noted that the 1,320 GWh of renewable energy exported by portfolio assets marginally decreased during the year, primarily due to reduced wind power and solar irradiance. The percentage of SPVs with at least one female board member increased from 36% to 49% year-on-year, following the appointment of an additional female director to SPV boards.

Further information on the Company's data collection project can be found below.

SDG alignment of the Company's portfolio:

SDG 3 - GOOD HEALTH AND WELL-BEING		SDG 4 - QUALITY EDUCATION
UN SDG target 3.8		UN SDG target 4.1
1,649	40	49	26,196
Hospital beds provided by portfolio¹	Healthcare facilities in portfolio¹	Schools in portfolio¹	School places provided by portfolio²
2023: 1,676⁴	2023: 40⁴	2023: 49⁴	2023: 26,688⁴

SDG 5 - GENDER EQUALITY		SDG 7 - AFFORDABLE AND CLEAN ENERGY
UN SDG target 5.5		UN SDG target 7.2
50%	49%	1,320 GWh	488,842
Board gender and ethnic diversity⁵	Gender diversity of SPV company boards⁵	Renewable energy exported by portfolio assets¹	Equivalent homes powered by portfolio assets^1,7
2023: 50%⁶	2023: 36%⁶	2023: 1,398 GWh²	2023: 450,8892

SDG 8 - DECENT WORK AND ECONOMIC GROWTH		SDG 9 - INDUSTRY, INNOVATION
		AND INFRASTRUCTURE
UN SDG target 8.3		UN SDG target 9.3	UN SDG target 9.4
54,493	801	£1.7bn	21%
Number of underlying assets in portfolio⁵	FTEs at portfolio assets³	Total investment in infrastructure projects since IPO	SPVs reporting energy conservation strategies³
2023: 55,280⁶	2023: 856⁴	2023: £1.7bn⁶	2023: 42%⁴

SDG 11 - SUSTAINABLE CITIES AND COMMUNITIES		SDG 15 - LIFE ON LAND
UN SDG target 11.1		UN SDG target 15.5
£202.8m	905	64%	60%
Investment in social housing projects since IPO	Number of social housing units³	Renewables portfolio reporting habitat gain or loss³	SPVs reporting ESG as a board agenda item³
2023: £166.7m⁶	2023: 905⁴	2023: 65%⁴	2023: 60%⁴

SDG 17 - PARTNERSHIPS FOR THE GOALS
UN SDG target 17.2
£428.1m	35%
Investments in PPP/PFI since IPO	SPVs reporting local
	community initiatives³
2023: £428.1m⁶	2023: 47%⁴

1. Twelve month period to 30 June 2024.

2. Twelve month period to 30 June 2023.

3. At 30 June 2024.

4. At 30 June 2023.

5. At 30 September 2024.

6. At 30 September 2023.

7. Source: Ofgem, average gas and electricity usage.

Q&A with the Investment Adviser

Philip Kent

CEO, Investment Adviser

Capital allocation policy

Do you expect to fully execute on the targets laid out in the capital allocation policy, and what is next for the Company once it has completed its stated aims?

To facilitate the aims of the policy, the Investment Adviser has been focused on executing disposals and refinancing processes to realise the £150 million capital target. The Company's disposals total £38.2 million at the end of 2024, with a pipeline of additional disposals in excess of £150 million. We have experienced consistent delays across transactions throughout the year, with processes taking longer than expected across all sectors. However, the Board and the Investment Adviser remain committed to achieving the stated aims of the capital allocation policy as quickly as possible.

The capital allocation policy was developed in conjunction with shareholders to help address the disconnect between share price and NAV. Once the Company has executed on the stated aims of the policy, the Board will re-evaluate its position based on the price at which shares are trading. If there is a material discount¹ thereafter, the Board will evaluate the merits of continuing to return capital to shareholders against the risks of decreasing the Company's scale. Nevertheless, we, and the Board remain optimistic about future investment opportunities.

The new Government has made encouraging commitments to decarbonisation that will require significant investment across the UK. A heightened interest rate environment also offers the opportunity to take materially reduced risk to achieve the same level of return or capture elevated returns from new technologies that will form part of the Government's decarbonisation mandate.

Investment opportunities

Where does the Investment Adviser see attractive opportunities in the UK infrastructure market?

The UK infrastructure market finds itself in a far better position than it was at this time last year, with aggressive ambitions for deployment of renewables: 60GW offshore wind, 50GW solar photovoltaic, 30GW onshore wind and 10GW of low carbon hydrogen capacity, and decarbonisation of the electricity grid by 2030. This comes alongside policy support in a number of new sectors, including a cap and floor scheme for long-duration energy storage, and ambitions for four industrial carbon capture and storage clusters sequestering 20 to 30 million tonnes of carbon dioxide per year by 2030.

The Company is well placed to benefit from a transitioning subsidy landscape, and has a track record of being an early-mover in new sectors, particularly through its focus on debt. Significant policy developments will be required in the next decade to support widespread decarbonisation across existing sectors (wind and solar), but also across a broad spectrum of industries including heat, transport, industry and agriculture. There are attractive opportunities to benefit from enhanced returns in new technologies before yields compress, which is an approach the Company has a legacy of executing. Fundamentally, the ambitions stated will require levels of investment that have not previously been seen, and this will stretch liquidity in the market, providing further investment opportunities for the Company.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Share price performance

What do you believe has caused the disconnect between share price rating and NAV?

There are several reasons for the discount¹ between the share price and underlying NAV. One of the most significant reasons is the current interest rate environment, as increases in base rates have fed through to discount rates, which has caused valuations to decrease. This has increased the cost of debt, with many investment companies relying on leverage for capital deployment programmes and to enhance returns. At the same time, investors have seen an attractive opportunity to reallocate into traditional fixed income such as government and corporate debt.

We now find ourselves in a position where central banks have started to cut interest rates, and we hope that as this progresses the relative attractiveness of listed investment companies increases.

The increased interest rate environment has highlighted areas of stress within some investment companies, where shareholders have focused on valuations, highlighting a lack of uniformity in methodology. In a handful of isolated cases, flaws in certain approaches have caused contagion across a whole asset class, such as social housing and battery energy storage.

Cost disclosure

Can you explain the legacy of double counting in cost disclosure, and what recent developments mean for investment companies?

In the United Kingdom, the Financial Conduct Authority ("UK FCA") is responsible for implementing regulations to ensure a financial product is transparent when disclosing the costs associated with investing. These costs can include fees for fund management, transaction costs or the charges of underlying assets. The aim for cost disclosure is to provide investors with a clear view of how much they are paying, which allows them to make informed decisions.

In 2018, the European Union ("EU") introduced the Packaged Retail and Insurance-based Investment Products ("PRIIPs") regulation, which required investment managers to provide retail investors with a Key Information Document ("KID"), explaining a product's features, risks and all associated costs, including their ongoing charges figures ("OCFs"). This regime runs parallel to the 2009 Undertakings for the Collective Investment in Transferable Securities ("UCITS") regulation, which applies to the EU and any UK funds that market themselves to EU investors.

Following Brexit, the UK began work on updating its own PRIIPs regime, with the UK FCA reviewing and adjusting the framework to make it more relevant to the UK market. As part of this, the UK FCA implemented new cost disclosure guidance on 1 July 2022, which required closed‑ended investment companies to report in the same way as open-ended funds.

These regulations aimed to increase transparency for non-UCITS vehicles by requiring them to disclose their costs more clearly. However, as investment companies already provided detailed cost information under the former rules, institutional investors and intermediaries were made to report these costs again in their own disclosures to clients, which has resulted in double counting. As a result of the double counting, some investors have been unable to invest in investment companies or have significantly reduced their exposure.

It is broadly accepted by the industry and by the Government, that this single aggregated figure is not an accurate representation of the actual costs of investment in shares in an investment company. Following the successful campaigning of a group of parliamentarians and industry participants, HM Treasury proposed a Statutory Instrument to remove the requirement for investment companies, along with persons advising on or selling shares of investment companies, to produce a KID. Additionally, investment companies, and firms investing in them will not be required to disclose costs and charges relating to investment companies to clients, pursuant to the MiFID Org Regulation.

The Statutory Instrument became law on 22 November 2024. However, additional issues have been encountered post period end, with investment platforms continuing to require ongoing charges to be disclosed in the KID. We continue to monitor the impact of cost disclosure on the Company, and the Investment Adviser has been active in the campaign to resolve the issue.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Investment Adviser's report

Company position

The Company's portfolio remains well diversified across a wide range of operational renewable energy projects, social infrastructure (through PPP/PFI schemes) and supported living projects. The Company's explicit diversification objective has historically enabled it to adapt to developments in any one sector (such as decreasing yields and more competition) and move into other areas if a sector no longer represents attractive risk-adjusted returns.

In the 14 years since its IPO, the Company has seen this cycle play out across multiple sectors and has adapted its approach to investing as one sector matures or sought out new sectors for investment. Similarly, where there have been changes to investor sentiment around certain sectors (such as supported living) or an end to a subsidy regime (such as in PPP/PFI), the Company has been able to maintain its investment policy, objective and strategy which have been consistent since IPO.

Key investment activity

The Investment Adviser's focus for the year has been executing the Company's capital allocation policy. The first disposal contributing to the stated aims was completed in April 2024. Post year end, one additional disposal was completed, with another disposal expected to complete, subject to contract. As previously noted, there are three stated aims of the policy: reducing leverage, returning capital to shareholders, and adjusting exposure to supported living and merchant electricity prices within the portfolio.

The Company has made material progress in reducing leverage, with total commitments reduced from £190 million to £150 million in March 2024, and drawn balances reduced to £57 million at year end, down from £104 million at 30 September 2023. This represents a net debt position of £45.2 million at 30 September 2024 and an LTV of 6.2%.

Furthermore, the Company completed buybacks of 3.4 million shares for a consideration of £2.2 million.

Post year end, the rooftop solar assets disposal and the expected disposal of onshore wind assets will reduce loans with exposure to merchant electricity prices by c.£27 million. The Investment Adviser is progressing transactions which will materially reduce the Company's exposure to the supported living sector in 2025.

New investments have not been a priority for the Company due to its focus on its capital allocation policy. However, the Company has completed a handful of follow-on investments to optimise the performance of existing portfolio investments and made one new investment to support an existing borrower. A full summary of investments and repayments for the year is shown below.

Investment risk

The table below details the Investment Adviser's view of the changes to the risk ratings for sectors where changes have been observed in the past year.

Risk	Sector	Change in year	Description
Market risk The risk of an investment being exposed to changes in market prices, such as electricity prices or inflation.	Renewables (all sectors)	Decreased	Electricity prices have continued to soften over the course of 2024, with reduced levels of volatility across the sector. However, geopolitical tensions in the Middle East continue to pose a risk. The Company is exposed to electricity prices and inflation as part of its renewable energy portfolio, and the higher price environment has been beneficial to its assets. In the year, inflation has eased to a level where this is no longer an issue for borrowers, causing the risk to decrease.
	Supported living	Decreased	Inflationary increases in the interest rates on Company's loans weren't matched on a pass-through basis with increases in local authority rent payments during periods of abnormal inflation, which place the Company's borrowers under pressure.
Credit risk The risk of reliance on customers and suppliers to provide goods and/or services for a project and manage certain project risks as part of such arrangements.	Supported living	Decreased	The leases on the underlying properties have inflation linkage and, as such, the amounts charged to RPs have increased during the year. The underlying RPs have agreed to pass the increases on to local authorities. As inflation has eased, this pressure has decreased. We have also seen material progress by the RPs to improve their governance protocols to comply with the RSH's standards.
Operational risk The risk of exposure to the construction and/or operations of a project associated with the failure of people, processes and/or systems required to monetise an asset.	Renewables (all sectors)	Decreased	Operations have improved across the portfolio, with changes in the management and operational teams at certain biomass and bio-power plants having positive impacts on performance.
Legal/regulatory risk The risk associated with changes to laws and/or regulations. This covers UK-wide, non-specific risks, such as changes to the tax regime, and specific risks such as changes to a subsidy regime that a project relies on.	Renewables (all sectors)	Decreased	The UK finds itself in a very different position to this time last year, with a new Government and considerably more certainty around policy support for renewable energy. The clean energy transition is second only to economic growth in the new Government's mandate, early policy developments, and further detailed announcements as part of the Autumn Budget, suggest a supportive policy environment. Significant changes to the UK tax regime are unlikely to impact the Company's portfolio of loans.

Interest capitalised

The Company received total loan interest income of £87.3 million (30 September 2023: £80.8 million) from the underlying investment portfolio. Of this, £65.1 million was received in cash and £22.2 million was capitalised in the year (30 September 2023: £58.8 million and £22.0 million respectively). Refer to note 3 for further information. The capitalisation of interest occurs for three reasons:

1) Where interest has been paid to the Company late (often as a result of moving cash through the Company and borrower corporate structures), a capitalisation automatically occurs from an accounting point of view.

2) On a scheduled basis, where a loan has been designed to contain an element of capitalisation of interest due to the nature of the underlying cash flows. Examples include projects in construction that are not generating operational cash flows, or subordinated loans where the bulk of subordinated cash flows are towards the end of the assumed life of a project, after the repayment of senior loans. Planning future capital investment commitments in this way is an effective method of reinvesting repayments received from the portfolio back into other portfolio projects.

3) Where loans are not performing in line with financial models, resulting in:

(i) lock-up of cash flows to investors who are junior to senior lenders; and

(ii) cash generation is not sufficient to service debt.

Other unscheduled capitalisations in the year related to the re-direction of cash flows into three gas-to-grid anaerobic digestion projects in Scotland to address performance issues encountered in the year.

The table below shows a breakdown of interest capitalised during the year and amounts paid as part of final repayment or disposal proceeds:

	30 September	30 September	30 September	30 September
	2024	2024	2023	2023
	£'000	£'000	£'000	£'000
Loan interest received		65,129		58,791
Capitalised (planned)	14,868		18,253
Capitalised (unscheduled)	7,300		3,706
Loan interest capitalised	22,168		21,959
Capitalised amounts subsequently settled as a repayment	(9,297)	9,297	(10,822)	10,822
Adjusted loan interest capitalised¹	12,871		11,137
Adjusted loan interest received¹		74,426		69,613

The table below illustrates the forecast component of interest capitalised that is planned and unscheduled.

	30 September
% of total interest	2024	2025	2026	2027	2028	2029
Capitalised (planned)	19%	9%	9%	10%	14%	10%
Capitalised (unscheduled)	9%	1%	-	-	-	-

The Investment Adviser and the independent Valuation Agent review any capitalisation of interest and associated increases to borrowings to confirm that such an increase in debt, and the associated cost of interest, can ultimately be serviced over the life of the asset. To the extent an increase in loan balance is not serviceable, a downward revaluation is recognised, notwithstanding that such an amount remains due and payable by the underlying borrower and where capitalisation has not been scheduled, it attracts default interest payable.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Sector background and update

Renewables

Renewable projects generate renewable energy across the heat, electricity and transport sectors and benefit from long‑term Government subsidies.

62%

Percentage of portfolio by value

£597.8m

Valuation of sector

Background

Renewable energy comprises energy sources that naturally replenish themselves and have a positive environmental impact. The Company was an early-mover in supporting renewable energy projects in the UK. Over the last decade, it has invested in a range of technologies across the sector, initially financing a portfolio of domestic rooftop solar projects in 2011, an investment that has grown to c.50,000 systems today.

Since the Company's IPO in 2010, many subsidy support regimes have come and gone in the UK, with the portfolio benefiting from exposure to a range of subsidies. The UK has made significant progress with its decarbonisation objectives, but to fully achieve its ambitions, it needs to go further and faster.

Current position

The new Government has made the clean energy transition second only to economic growth in its mandate, showing clear conviction in introducing new policy and funding support for renewable energy. With ambitious targets for the deployment of existing mature technologies, as well as new policy support to facilitate the transition of sectors at a more nascent stage, two new funding bodies have been established, the National Wealth Fund and Great British Energy.

The CfD remains the key support mechanism for low-carbon generation and supports both mature and developing technologies. The results of the sixth allocation round were announced in September 2024, which awarded contracts for 9.6GW of capacity, a significant improvement from the previous round. The existing pool of alternate support mechanisms includes the Green Gas Support Scheme and the Net Zero Hydrogen Fund.

The UK renewable energy market remains subject to the results of the Review of Electricity Market Arrangements ("REMA"), which was launched in response to a rapidly evolving electricity system with an increasingly volatile generation mix and demand profile. The Investment Adviser hopes the aspirations of the new Government in encouraging new deployment will factor into policy considerations before sweeping changes are made.

Future outlook

Ambitious targets have been set in the UK not just for electricity generation, but across the wider energy transition, with a new framework for carbon capture clusters located across industrial clusters in the UK, as well as mandated levels of sustainable aviation fuel ("SAF") usage, and deployment of electric vehicles ("EVs"). The outlook for the renewable energy market in the UK is the most positive it has been in over a decade, and the ambitions of the new Government have the potential to significantly accelerate deployment of both mature and emerging technologies.

Reform of the planning regime in the UK is essential to facilitate the deployment of new renewable energy. The Company will continue to monitor the success of the new Government in reforming and modernising the planning process to facilitate its targets.

The Board and Investment Adviser are actively monitoring the development of new subsidy regimes in the UK, and believe the Company is well placed to benefit from new policy frameworks when it is in a position to resume investing.

Impact

1,320 GWh - Renewable energy exported by portfolio assets¹

SDG alignment

SDG 7 - AFFORDABLE AND CLEAN ENERGY

SDG 8 - DECENT WORK AND ECONOMIC GROWTH

1. Twelve month period to 30 June 2024 to facilitate inclusion in the annual report.

UBB Waste facility

UBB Waste is an energy-from-waste facility located in Gloucester. It disposes of Gloucestershire's residual waste by processing waste that remains after the residents of Gloucestershire have separated out as much of the recyclable and green waste as they can. This is waste that would otherwise go to landfill.

The facility is largely automated and combusts up to 190,000 tonnes of waste each year (approximately 75% of which is provided by Gloucestershire County Council). Heat generated from the combustion process is then converted into electricity through the application of a steam turbine. Generating more than 14.6MW, the facility produces enough electricity to power the equivalent of c.25,000 homes each year.

Construction of the facility began in August 2016 and reached completion in October 2019. The Company first invested £48 million via senior secured debt in 2017. The loan is amortising, with the interest rate set at 7.92% and the final repayment date set for 2042.

Revenue from the project comes from various sources and is highly contracted. A significant proportion comes from 'gate fees' for processing waste, which are at a fixed price and index linked through a CfD agreement with Gloucestershire County Council over a 25 year concession period.

The capacity that remains after Gloucestershire County Council has delivered all residual household waste generated within the county is serviced by processing additional waste from nearby third party commercial and industrial parties. This presents an opportunity for the Gloucestershire energy-from-waste facility to earn additional gate fees.

Another significant source of revenue comes from the electricity generated by the facility, which is sold directly into the grid via a PPA agreement at a fixed price.

As an investment, the Gloucestershire energy‑from-waste facility has several defensive characteristics. Barriers to entry in terms of construction are extremely high, it's a real asset providing a valuable service and, because the Company is invested in its debt, there's the added benefit of capital structure protection.

Sustainability indicators

Environment

65,360 MWh

Energy exported in 2023/24¹

Social

FTEs at portfolio asset level¹

Governance

ISO certifications¹

Financial

£39.7m

Valuation at 30 September 2024

1. Data at 30 June 2024 to facilitate inclusion in the annual report.

Supported living

Supported living projects create long-dated cash flows supported by the UK Government through the secured pledge of centrally funded benefits.

12%

Percentage of portfolio by value

£118.1m

Valuation of sector

Background

The Company has historically targeted a subset of social housing provision referred to as 'supported living', through financing the development or conversion of existing accommodation to suit specific care requirements of individuals with learning, physical or mental disabilities. This involves providing debt finance to entities that own and develop properties which are leased under a long-term fully repairing and insuring lease to RPs who operate and manage the properties. The RPs receive housing benefits for individuals housed in such properties. The budget for housing benefits in this sector is funded by the central Government and has historically been, and remains, highly protected and uncapped.

Current position

As the Company has reported previously, a number of RPs to which the Company's investments are exposed have historically been graded non-compliant in respect of governance and financial viability by the Regulator of Social Housing ("RSH"). During the year, new management was appointed in a number of the non-compliant RPs, with positive progress made in addressing the concerns of the RSH. The Company has agreed to a number of concessions in the contracts between RPs and borrowers which seek to enhance the financial viability of these entities and retain the long-term value of its investments.

The Investment Adviser maintains the view that the fundamentals of the sector, which is underpinned by a well‑protected housing benefit budget and a care model that has demonstrated healthcare and financial benefits for the recipients and the UK Government, remain attractive. However, listed companies specialising in the sector have faced a number of challenges, with these issues negatively impacting sentiment towards the asset class.

Future outlook

The Company is aware of the concerns of some shareholders regarding the sector and has highlighted its intention to reduce its exposure to the sector as part of its capital allocation policy. The Investment Adviser has been exploring opportunities for the Company to reduce its exposure through disposals or refinancings and expects to materially reduce investment in the sector in the future.

Impact

3,050 - People housed in supported accommodation¹

SDG alignment

SDG 9 - INDUSTRY, INNOVATION AND INFRASTRUCTURE

SDG 11 - SUSTAINABLE CITIES AND COMMUNITIES

1. Data at 30 June 2024 to facilitate data inclusion in the annual report.

Hilldale Housing Association

The Company has, since 2015, been invested in a portfolio of 20 properties which provide 94 units that are leased to Hilldale Housing Association ('Hilldale'), a not-for-profit RP of social housing in the UK and a subsidiary of Change Housing. Hilldale provides supported living accommodation to vulnerable adults with learning disabilities, mental health issues, and other physical or sensory disabilities. The Company's exposure is held through senior debt facilities extended to two underlying borrowers.

Hilldale operates under a 'lease-based' model, holding properties under long-term leases and letting them out to individuals in return for exempt rents which are claimed from local authorities. As has been highlighted previously, the specialist supported living industry has faced a number of challenges in recent years as the sector has matured and regulations and regulatory oversight have evolved. Lease-based social housing providers have faced continued scrutiny from the RSH, in particular around their financial viability given the structure under which they operate. Hilldale has not been immune from this, and has been working to stabilise the business and improve its financial position and standing with the regulator.

It has also been working through a period of increased costs driven by higher energy prices and inflationary pressures. As a result, the Company has been collaboratively working with Hilldale to ensure that support is provided both to the company itself and to its tenants.

In 2023, the Company, via its borrowers, agreed to a cap on the inflation applied to contractual lease rents due from Hilldale, limiting this to 7% compared to CPI, which has been at times in excess of 10%. In March 2024, the Company and its borrowers agreed to provide further support to Hilldale to help it achieve its long‑term financial goals, providing a minor reduction in lease rents payable and a one year break in lease rent indexation. This has allowed Hilldale to navigate the challenges above, as well as the increased costs which it has been facing. This agreement has aligned the leases with industry standards, including the timing of rental indexation and the provision of support for the improvement of EPC ratings across the portfolio.

As a result of this support, Hilldale is now in a good position and can continue with its goal of supporting vulnerable individuals. Its relationship with the Company remains a positive one.

Sustainability indicators

Environment

Average EPC rating¹

Social

FTEs at portfolio asset level¹

Governance

Governance policies implemented¹

Financial

£17.7m

Valuation at 30 September 2024

1. Data at 30 June 2024 to facilitate inclusion in the annual report.

PPP/PFI

PPP/PFI enables the procurement of private sector infrastructure financing through access to long‑term, public sector backed and availability-based payments.

26%

Percentage of portfolio by value

£244.1m

Valuation of sector

Background

Partnerships between the public and private sector to develop, build, own and operate (or a combination thereof) infrastructure have taken a number of forms, with the best known as PFI (Public Finance Initiative), which originated in the UK in the mid-1990s. Since this time, over £60 billion has been invested in the development of new projects across the healthcare, education, leisure, transport and other sectors under such schemes. The design and implementation of revenue support mechanisms such as PFI has been devolved to the Scottish, Welsh and Northern Irish administrations. The Company has exposure to a number of asset classes within the PPP/PFI sector including education, healthcare, waste, leisure and housing.

Current position

The PPP/PFI model for procuring infrastructure fell out of favour before 2020 and there are no material new projects expected to be procured this way in the medium term in England. In Scotland and Wales, the devolved administrations have designed versions of the Mutual Investment Model ("MIM") to facilitate private finance which supports major capital projects, with success developing healthcare, education and transportation projects. To date, these have been large projects benefiting from significant competition for financing and competitive rates from bank lenders.

Future outlook

There has been speculation that the new Government in the UK will develop a funding model which encourages private capital to finance new social infrastructure; however, there has not yet been any formal confirmation of this. If this were to change, it would reverse long‑standing policies against the procurement of new infrastructure using private sector finance, supported by long‑term availability‑based payments. Should there be any changes to procurement models, or attractive opportunities through the MIM regime, the Company would consider investment opportunities alongside its broader capital allocation policies.

Impact

26,196 - School places at portfolio assets¹

SDG alignment

SDG 3 - GOOD HEALTH AND WELL-BEING

SDG 4 - QUALITY EDUCATION

1. Data at 30 June 2024 to facilitate data inclusion in the annual report.

GCP Healthcare 1A

The Company has issued a loan note secured against subordinated debt in the New Queen Elizabeth II ('QEII') Hospital in Welwyn Garden City, and six Local Improvement Finance Trust ("LIFT") projects in the South East and Midlands. The primary counterparty for each project is the local Primary Care Trust ("PCT"). PCTs are statutory NHS bodies responsible for the delivery of health services. The LIFT assets are underpinned via a head lease with Community Health Partnerships ("CHP"), a Department of Health and Social Care owned company.

The New QEII hospital in Welwyn Garden City is the largest asset, a day hospital that opened in 2015 replacing the original Queen Elizabeth hospital that opened in 1963. It provides a range of outpatient clinics and services including blood tests, as well as an urgent treatment centre which is open every day.

The hospital was designed to be sustainable and environmentally friendly; the shape and layout of the building creates natural shading, the window glass prevents the building from getting too hot and a planted green roof encourages biodiversity.

The underlying loan is financed from the subordinated cash flows that arise from the projects, with the investment returning an IRR of 7.7%. The loan allows the Company to earn an attractive yield from a portfolio of mature, well‑performing PPP/PFI projects that benefit from Government-backed cash flows without taking equity risk, and therefore fits the Company's investment strategy. The nature of the underlying projects (non-acute healthcare services) is at the stable and secure end of the infrastructure spectrum of asset types.

The Company's portfolio comprises loans secured against 40 healthcare projects representing 9% of the portfolio by value.

Sustainability indicators

Environment

Average EPC rating¹

Governance

Governance policies implemented¹

Financial

£2.8m

Valuation at 30 September 2024

1. Data at 30 June 2024 to facilitate inclusion in the annual report.

Investment portfolio

Portfolio performance

The Company is exposed to a portfolio of 50 investments with a weighted average annualised yield¹ of 7.8% and an average life of eleven years. The portfolio has performed materially in line with expectations during the year. The priority for the Investment Adviser has been executing the capital allocation policy, as it actively works to refinance or dispose of investments to achieve its stated aims.

During the year, the Company announced the disposal of its interest in loan notes secured against Blackcraig Wind Farm, a 52.9MW onshore wind farm located in Dumfries and Galloway, Scotland. The wind farm benefits from ROC subsidy support and has been operational since 2018. The disposal occurred at a 6.4% premium to the valuation at 31 March 2024 and generated cash proceeds of £31.4 million.

The disposal was supportive of the Company's assessment of its conservation approach to valuation methodology for the renewable energy assets in the portfolio. In line with the objectives of the capital allocation policy, the proceeds of the disposal were used to prepay drawn balances under the Company's RCF.

From an operational perspective, the renewables portfolio is performing in line with expectations, with the Company benefiting from diversification in technologies across varying weather patterns. Across renewable energy assets, wind speeds have been below long-term averages nationwide, combined with a number of electrical faults and elevated curtailment in Northern Ireland, which has impacted performance. Solar irradiance has been below budget, as the UK has suffered from less sunshine hours than average over the last twelve months. The hydro portfolio benefited from higher than average rainfall levels in the winter period.

Previously, the Company reported ongoing challenges at a portfolio of gas-to-grid anaerobic digestion projects in Scotland. Significant progress has been made, completing grid upgrade works to provide a more reliable method of injecting biogas into the gas grid and reducing the likelihood of curtailment. Further development to implement carbon capture and storage capability at the projects is in process, with planning permission granted on two of the three sites, and the third application submitted for approval.

A portfolio of solar investments continues to be exposed to the outcome of ongoing Ofgem audits relating to the accreditation and ongoing compliance of eight ground-mount commercial solar projects accredited under the RO. The Company had no further contact from Ofgem during the year. Three projects in total in the portfolio have had their ROCs revoked. Eleven projects have been audited and retained their ROCs, while a further eight remain subject to audit.

A claim has been filed in connection with the Company's rights under the original investment documentation in respect of the losses it has incurred due to the revocation. The aggregate provisions in connection to the circumstances relating to the audits total £6.9 million, which were recognised at 30 September 2023.

The Company remains confident that it will be able to either solely or cumulatively: (i) address Ofgem's queries to prevent or mitigate any negative impacts on the further eight assets that remain under audit; (ii) successfully challenge any adverse decision by Ofgem on other assets under audit; or (iii) recover losses it incurs from third parties in relation to a breach of investment documentation across all affected assets.

The Company made follow-on investments in respect of these assets during the year, seeking to preserve and enhance value by performing repowering and funding additional works or exploration. The total quantum of these investments was £0.75 million.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Portfolio summary

Portfolio by sector type

PPP/PFI	26%
Healthcare	9%
Education	6%
Waste (PPP/PFI)	4%
Leisure	3%
Housing (PPP)	2%
Energy efficiency	1%
Justice	1%

Renewables	62%
Solar (commercial)	15%
Wind (onshore)	13%
Solar (rooftop)	10%
Biomass	10%
Anaerobic digestion	9%
Hydro	2%
Geothermal	1%
Gas peaking	1%
Electric vehicles	1%

SH	12%
Supported living	12%

Portfolio by income type

PPP/PFI	26%
Unitary charge	21%
Gate fee (contracted)	2%
Electricity (fixed/floor)	1%
Lease income	1%
ROC	1%

Renewables	62%
ROC	21%
Electricity (merchant)	17%
FIT	15%
RHI	3%
Electricity (fixed/floor)	3%
Pay per mile	1%
Embedded benefits	1%
Gas (merchant)	1%

SH	12%
Lease income	12%

Portfolio by annualised yield¹

>10%	4%
8-10%	29%
<8%	67%

Portfolio by average life (years)

>20	14%
10-20	15%
<10	71%

Portfolio by investment type

Senior	53%
Subordinated	41%
Equity	6%

1. APM - for definition and calculation methodology, refer to the APMs section below.

Top ten investments

Key

1 Project type

2 % of total portfolio

3 Cash flow type

1 Cardale PFI Investments¹

1 PPP/PFI

2 12.7%

3 Unitary charge

2 Gravis Solar 1

1 Commercial solar

2 9.7%

3 ROC/PPA/FiT

3 GCP Programme Funding S14

1 Biomass

2 5.4%

3 ROC/RHI/Merchant

4 GCP Bridge Holdings

1 Various²

2 5.0%

3 ROC/Lease/PPA

5 GCP Programme Funding S10

1 Supported living

2 4.5%

3 Lease

6 GCP Programme Funding S3

1 Anaerobic digestion

2 4.4%

3 ROC/RHI

7 Gravis Asset Holdings H

1 Onshore wind

2 4.4%

3 ROC/PPA

8 GCP Biomass 2

1 Biomass

2 4.1%

3 ROC/PPA

9 GCP Social Housing 1 B Notes

1 Supported living

2 3.8%

3 Lease

10 GCP Green Energy 1 Ltd

1 Onshore wind/Commercial solar

2 3.7%

3 ROC/FiT/Merchant

Top ten revenue counterparties	% of total portfolio	Top ten project service providers	% of total portfolio
Ecotricity Limited	9.2%	WPO UK Services Limited	21%
Viridian Energy Supply Limited	7.8%	PSH Operations Limited	13%
Office of Gas and Electricity Markets	6.4%	Vestas Celtic Wind Technology Limited	11%
Npower Limited	6.3%	Solar Maintenance Services Limited	10%
Statkraft Markets Gmbh	5.9%	A Shade Greener Maintenance Limited	9%
Bespoke Supportive Tenancies Limited	4.6%	2G Energy Limited	6%
Smartestenergy Limited	4.5%	Pentair	4%
Total Gas & Energy Limited	4.4%	Atlantic Biogas Ltd	4%
Good Energy Limited	4.4%	Thyson	4%
Gloucestershire County Council	4.1%	Gloucestershire County Council	4%

1. The Cardale loan is secured on a cross-collateralised basis against 18 individual operational PFI projects.

2. GCP Bridge Holdings is secured against a portfolio of six infrastructure investments in the renewable energy and PPP/PFI sectors.

Portfolio overview

In the reporting year, the valuation of the portfolio decreased from £1,046.6 million at the prior year end to £960 million. The principal value of the portfolio at 30 September 2024 was £965.3 million (30 September 2023: £1,001.1 million). Investments made and repayments received during the year are summarised in the chart below:

Investment analysis for year ended 30 September 2024

Investments and repayments	£m
New investments	2.6
Further advances	24.7
Scheduled repayments	(39.2)
Unscheduled repayments	(24.7)
Net investment/(repayment)	(36.6)

Sector analysis
Investments (£m)		Repayments (£m)
4.8	Anaerobic digestion	(5.2)
3.7	Biomass	(1.9)
0.4	Hydro	(1.7)
0.2	Onshore wind	(36.9)
-	Commercial solar	(5.0)
0.2	Rooftop solar	(3.6)
8.7	PPP/PFI	(8.2)
5.1	Supported living	-
0.6	Geothermal	-
0.9	Flexible generation	-
-	Electric vehicles	(1.4)
0.1	EV charging	-
2.6	Agriculture/ resource use	-

Investments and repayments post year end	£m
New investments	-
Further advances	0.3
Scheduled repayments	(2.1)
Unscheduled repayments	(6.8)
Net investment/(repayment)	(8.6)

Sector analysis post year end
Investments (£m)		Repayments (£m)
0.2	Anaerobic digestion	-
-	Biomass	-
-	Hydro	-
-	Offshore wind	-
-	Onshore wind	-
-	Commercial solar	(6.8)
-	Rooftop solar	(1.7)
-	PPP/PFI	(0.4)
-	Supported living	-
0.1	Geothermal	-
-	Flexible generation	-
-	Electric vehicles	-
-	EV charging	-
-	Agriculture/ resource use	-

Capital structure

As part of its investment portfolio, the Company has targeted investments across a number of asset classes and within different elements of the capital subordinated or equity.

Discount rates

The independent Valuation Agent carries out a fair market valuation of the Company's investments on behalf of the Board on a quarterly basis. The valuation principles used by the independent Valuation Agent are based on a discounted cash flow methodology. A fair value of each asset acquired by the Company is calculated by applying an appropriate discount rate (determined by the independent Valuation Agent) to the cash flow expected to arise from each asset. Further information is included in note 19.3 to the financial statements.

The weighted average discount rate used across the Company's investment portfolio at 30 September 2024 was 7.95%, compared to 7.69% at 30 September 2023. Increases to discount rates were applied by the independent Valuation Agent during the year as a result of the changes in gilt and wider credit markets, and with reference to market transactions. The third party independent valuation of the Company's portfolio at 30 September 2024 was £960 million (30 September 2023: £1,046.6 million). The principal value was £965.3 million (30 September 2023: £1,001.1 million) at the year end.

The valuation of investments is sensitive to changes in discount rates and sensitivity analysis detailing this is presented in note 19.3 to the financial statements.

Performance updates

The specific factors that have impacted the valuation in the reporting year are summarised in the table below.

Valuation performance attribution

		Impact	Impact
Driver	Description	(£m)	(pps)
Tax computations	Impact of the latest tax computations	1.1	0.13
Principal indexation	Contractual inflationary adjustment to loan principal	0.8	0.09
Other inflationary movements	Other inflationary mechanics across the portfolio	3.2	0.37
	Total upward valuation movements	5.1	0.59
Discount rates	Increase in discount rates across the portfolio	(10.6)	(1.22)
Power prices¹	Power price movements in the year	(13.7)	(1.58)
Energy yield assessment	Updated portfolio energy yield assessment	(7.8)	(0.90)
Project long-term budget	Updates to the long-term budget for a waste wood power station	(5.6)	(0.65)
Inflation forecast	Inflation movements in the year	(3.4)	(0.39)
Onshore wind asset outage	One-off valuation adjustment to reflect an onshore wind asset outage	(2.0)	(0.23)
Actuals performance	Impact of renewables actual generation lower than forecast	(3.0)	(0.35)
Other downward movements	Other downward movements	(3.2)	(0.37)
	Total downward valuation movements	(49.3)	(5.69)
Interest receipts	Net valuation movements attributable to the timing of debt service payments between periods	(7.6)	(0.88)
Net realised gains	Historic indexation realised on loan repayment	1.9	0.22
	Total other valuation movements	(5.7)	(0.66)
	Total net valuation movements before hedging	(49.9)	(5.76)
Commodity swap - unrealised²	Derivative financial instrument entered into for the purpose of hedging electricity price movements	(0.4)	(0.05)
Commodity swap - realised²		0.9	0.10
	Total net valuation movements after hedging	(49.4)	(5.71)

1. Refer to commodity swap below.

2. The derivative financial instrument is utilised to mitigate volatility in electricity price movements as detailed above, refer to note 18 for further details.

Pipeline of investment opportunities

The Company's focus this year has been on executing its capital allocation policy, however, it continues to engage with market participants to stay informed of transaction activity and potential investment opportunities across existing sectors and emerging technologies. With the current elevated Bank of England base rates, the cost of debt from banks, offered at a margin over SONIA, is higher than it has been historically, which means the Company is more competitive than it would be in a low-rate environment. Current market opportunities offer the potential to reinvest at a lower risk-adjusted return, or to seek out significantly higher returns. The Company also has potential follow-on investment opportunities in the existing portfolio, benefiting from the known credit of existing counterparties.

Portfolio sensitivities

This section details the sensitivity of the value of the investment portfolio to several risk factors to which it is exposed. A summary of the overall investment portfolio risks, and the Investment Adviser's view of the changes in risk, can be found above. Sensitivity analysis to changes in discount rates on the valuation of financial assets is presented in note 19.3 to the financial statements.

Renewable valuations

The table below summarises the key assumptions used in forecasting cash flows from renewable assets in which the Company is invested, and the range of assumptions the Investment Adviser observes in the market.

The Investment Adviser does not consider that the market compensates such differences in assumptions by applying a higher or lower discount rate to recognise the increased or decreased risks respectively of a valuation, resulting in potential material valuation differences. This is shown in the sensitivity of the Company's NAV to a variation of such assumptions in the table below, on a pence per share basis.

Assumption	Company approach	Lower valuations	Estimated NAV impact (pence per share)		Higher valuations
Electricity price forecast¹	Futures (three years) and Afry four quarter average long term. Electricity Generator Levy applied until 31 March 2028	Afry Q3 2024 Central-Low	(3.25)	3.57	Aurora Q3 Central 2024
Capture prices (wind, solar)	Asset-specific curve applied to each project	Higher capture prices	(0.60)	3.17	No capture prices
Asset life	Lesser of planning, lease, technical life (20-25 years)	Contractual limitations	-	2.83	Asset life of 40 years (solar) and 30 years (wind)
Taxation	Long-term corporation tax assumption of 25.0% from 1 April 2023	Long-term corporation tax assumption of 25.0% from 1 April 2023	-	0.68	Short-term corporation tax assumption of 25.0% then 19.0% thereafter
Indexation	OBR forecast in the short term, followed by long-term RPI of 2.5% and long-term CPI of 2.0%	OBR forecast in the short term, followed by long-term RPI of 2.5% and long-term CPI of 2.0%	-	0.29	0.5% increase to inflation forecasts

1. Lower valuations updated to reflect the Afry Q3 2024 Central-Low curve, compared to the previous year which used the Afry Q3 2023 curve.

Inflation

A total of 47% of the Company's investments by value have some form of inflation protection. This is structured as a direct link between the return and realised inflation (relevant to the supported living assets and certain renewable assets) and a principal indexation mechanism which increases the principal value of the Company's loans outstanding by a share of realised inflation over a pre-determined strike level (typically 2.75% to 3.0%).

The table below summarises the change in interest accruals and potential NAV impact associated with a movement in inflation.

Sensitivity applied to base case inflation forecast assumption	(2.0%)	(1.5%)	(1.0%)	(0.5%)	0%	0.5%	1.0%	1.5%	2.0%
NAV impact (pence per share)	(6.09)	(4.69)	(3.21)	(1.64)	-	1.73	3.71	5.80	7.99

Electricity prices

A number of the Company's investments rely on market electricity prices for a proportion of their revenues. Changes in electricity prices may therefore impact a borrower's ability to service debt or, in cases where the Company has taken enforcement action and/or has direct exposure through its investment structure, it may impact overall returns.

The Company continues to account for the impact of the UK Government's Electricity Generator Levy on energy generators. However, power prices have softened significantly since the charge was implemented and are not forecast to be greater than the benchmark level (£75 per MWh) consistently in the future. As such, the impact on the Company's portfolio has been minimal. More broadly, the Company's approach of using the quoted futures price for the three year period immediately after a valuation date, and the Afry average thereafter, has not changed year-on-year.

Over the course of the year, both near-term futures prices and longer-term Afry projections have softened, and have displayed considerably less volatility than in recent years. In the short term, healthy European gas supplies have helped reduce price expectations, with levels significantly more stable than they were this time last year. In the long term, ambitious decarbonisation targets from the new Government, and the potential for new policies to incentivise deployment, have the potential to significantly change the future generation mix. The shift away from traditional thermal generation in the medium to long term and decreased technology costs have reduced the margin price of the system. Recent geopolitical developments in the Middle East and the continuing conflict in Ukraine have the potential to increase oil prices, which could feed through into electricity prices.

The table below shows the forecasted impact on the portfolio of a given percentage change in electricity prices over the full life of the forecast period, the impact on hedging arrangements in the period to expiry (31 March 2025), and the subsequent net impact on a pence per share basis. Further information on the Company's hedging arrangements is detailed below and in note 18 to the financial statements.

Sensitivity applied to base case
electricity price forecast assumption	(10%)	(5%)	0%	5%	10%
Portfolio price sensitivity	(9.11)	(4.61)	-	4.46	8.92
Fixed PPA sensitivity	0.24	0.12	-	(0.12)	(0.24)
Total	(8.87)	(4.49)	-	4.34	8.68
Hedge sensitivity	0.02	0.01	-	(0.01)	(0.02)
Net sensitivity (pence per share)	(8.85)	(4.48)	-	4.33	8.66

Hedging

As further detailed in note 18 to the financial statements, the Company continues to engage in a hedging strategy, entering financial derivative arrangements to hedge a portion of its financial exposure to merchant electricity prices on a seasonal basis. The Company continues to lock in attractive electricity prices by fixing prices under PPAs at an asset level, as well as mitigating volatility through hedging arrangements at a Company level. During the year, the Company engaged with an additional hedge counterparty, diversifying its pool of potential hedge providers and optimising the rates offered.

The Investment Adviser and Board will continue to review the hedging strategy on an ongoing basis with the objective of mitigating excessive NAV volatility and managing risks relating to hedging, including credit and cash flow impacts.

Financial review

Financial performance

It has been a challenging financial year for the Company, with investment revaluations driven by electricity prices and inflation negatively impacting profitability. This year has seen a material cooling in both factors. Refer above for analysis of valuation movements.

Total income generated by the Company was £38.3 million (30 September 2023: £51.7 million), comprising loan interest of £87.3 million, net unrealised valuation losses on investments of £51.8 million, net realised gains on investment disposal of £1.9 million and other income of £0.5 million (30 September 2023: loan interest of £80.8 million, net unrealised valuation losses on investments of £51.6 million and net realised gains on investment disposal of £0.1 million). Refer to note 3 for further information.

Net gains on derivative financial instruments at year end were £0.5 million (30 September 2023: £12.9 million), reflecting the electricity price hedging arrangements which locked in attractive price levels for the Company. Refer to note 18 for further information.

Total income was offset by operating costs for the year of £11.3 million (30 September 2023: £11.4 million) which include the Investment Adviser's fees, the Administrator's fees, the Directors' fees and other third party service provider costs.

These, and other operating costs, have remained broadly in line with previous years.

The Company remains modestly geared at the year end, with a loan to value¹ of 6.2%. Finance costs have decreased year-on-year to £7.5 million (30 September 2023: £9.4 million), due to the reduction in the drawn balance of the RCF following the net repayment of £47 million during the year.

Total profit and comprehensive income has decreased from £30.9 million in the prior year to £19.5 million. As previously noted, the year‑on‑year reduction was primarily attributable to investment revaluations in the year.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Revolving credit facility

The Company has credit arrangements of £150 million across four lenders: Lloyds, AIB, Mizuho and Clydesdale. At year end, £57.0 million was drawn and the terms in place are summarised below:

Facility	Size	Margin 2024	Expiry
RCF	£150m	SONIA +2.0%	March 2027

The RCF is due to expire in March 2027. The Investment Adviser completed the refinancing of the previous facility in March 2024, reducing total commitments by £40 million, in line with the Board's stated intention to reduce leverage by the end of 2024.

The total drawn balance of the facility has reduced from £104 million at 30 September 2023 to a materially reduced level of £57 million at year end following repayments of the RCF throughout the year.

Further details are disclosed in note 15 to the financial statements.

Net assets

The net assets of the Company have decreased from £956.6 million at 30 September 2023 to £913.1 million at 30 September 2024. The Company's NAV per share has decreased from 109.79 pence at the prior year end to 105.22 pence at 30 September 2024, a decrease of 4.2%. This is primarily due to downward revaluations of investments as detailed above.

Cash generation

The Company received debt service payments of £129.0 million (30 September 2023: £136.8 million) during the year, comprising £65.1 million of cash interest payments and £63.9 million of loan principal repayments (30 September 2023: £58.8 million and £78 million). The Company paid cash dividends of £60.8 million during the year (30 September 2023: £61.8 million). The Company aims to manage its cash position effectively by minimising cash balances, whilst maintaining the financial flexibility to pursue a pipeline of investment opportunities. This is achieved through the active monitoring of cash held, income generated from the portfolio and the efficient use of the Company's RCF.

Hedging

The Company entered into two separate arrangements to hedge its financial exposure to electricity prices during the year. The Investment Adviser recommended hedging c.75% of the Company's exposure to the GB market for the summer 2024 season at a fixed price of £62 per MWh and the winter 2024/25 season at a fixed price of £82.20 per MWh. The mark‑to-market of the hedge at 30 September 2024 was a liability of £0.1 million. Further details on the Company's electricity price exposure and hedging strategy can be found above and in note 18.

Share price performance

The Company's total shareholder return¹ was 28.4% for the year (30 September 2023: -25.2%) and 101.8% since its IPO in 2010. During the year, the Company's shares have traded at a discount¹ to NAV, with an average of 32.4% for the year and a discount¹ of 25% at the year end. The shares have traded at an average premium¹ of 3.8% since IPO (30 September 2023: 7.9% premium¹ since IPO). The share price at 30 September 2024 was 78.60 pence per share (30 September 2023: 67.70 pence).

Further details on share movements are disclosed in note 16 to the financial statements.

Dividends

The Company aims to provide shareholders with regular, sustained, long-term dividends. For the year ended 30 September 2024, the Company paid a dividend of 7.0 pence per ordinary share (30 September 2023: 7.0 pence).

The Board and Investment Adviser do not believe there have been any material changes in the Company's ability to service sustained and long‑term dividends since the assessment in early 2021 that established a dividend target² of 7.0 pence per share. As such, the Company has set a target² at the same level, 7.0 pence per ordinary share, for the forthcoming financial year.

1. APM - for definition and calculation methodology, refer to the APMs section below.

2. The dividend target set out above is a target only and not a profit forecast or estimate and there can be no assurance that it will be met.

Dividend cover

In determining the dividend target¹ for the forthcoming financial year, the Board and Investment Adviser reviewed the sustainability of the dividend level against various metrics, most notably the APM based on interest income accruing to the benefit of the Company from the underlying investment portfolio, which is; loan interest accrued².

The Board recognises there are various methods of assessing dividend coverage. The Board and the Investment Adviser consider this metric to be a key measure in relation to the ongoing assessment of dividend coverage alongside earnings cover² calculated under IFRS. The loan interest accrued² metric adjusts for the impact of pull‑to‑par, which is a feature of recognising earnings from the investment portfolio presented under IFRS.

		30 September 2024		30 September 2023
Earnings cover²	Notes	£'000	pps	£'000	pps
Total profit and comprehensive income		19,514	2.25	30,905	3.50
Dividends paid in the year	9	60,750	7.00³	61,785	7.00
Earnings cover²			0.32		0.50

		30 September 2024		30 September 2023
Adjusted earnings cover^2,4	Notes	£'000	pps	£'000	pps
Loan interest accrued²		79,808	9.20	86,911	9.86
Other income	3	493	0.06	9,544	1.08
Total expenses	5, 19	(11,338)	(1.31)	(11,422)	(1.30)
Finance costs	6	(7,477)	(0.86)	(9,378)	(1.06
Adjusted net earnings²		61,486	7.09	75,655	8.58
Dividends paid in the year	9	60,750	7.00³	61,785	7.00
Adjusted earnings cover²			1.01		1.23

		30 September 2024		30 September 2023
Cash earnings cover^2,4	Notes	£'000	pps	£'000	pps
Adjusted loan interest received²		74,426	8.58	69,613	7.89
Total expenses paid²		(10,612)	(1.22)	(11,016)	(1.25)
Finance costs paid		(6,550)	(0.75)	(8,716)	(0.99)
Total net cash received²		57,264	6.61	49,881	5.65
Dividends paid during the year	9	60,750	7.00³	61,785	7.00
Cash earnings cover²			0.94		0.81

		30 September	30 September
		2024	2023
	Notes	Shares	Shares
Weighted average number of shares	10	867,940,448	881,850,353

Further analysis on dividends is shown in note 9 to the financial statements.

1. The dividend target set out above is a target only and not a profit forecast or estimate and there can be no assurance that it will be met.

2. APM - for definition and calculation methodology, refer to the APMs section below.

3. Includes 2023 fourth interim dividend of 1.75 pence per share paid in the 2024 financial year.

4. Principal repayments are excluded for the purpose of calculating dividend cover.

Sustainability

Statement from the Chair of the Sustainability committee

Dawn Crichard

Chair of the Sustainability committee

I am pleased to present the sustainability report for the Company for the year ended 30 September 2024. As Chair of the Sustainability committee, I am excited to share the progress the Board has made against the Company's ESG objectives as described in the 2023 annual report, as well as our plans for the future.

This year, the Company introduced a formal ESG policy, which formalises its ESG processes. The Investment Adviser also obtained B Corp certification, formalising its sustainable and long-term business model, and providing a rigorous framework against which to benchmark its sustainable activities. The Investment Adviser improved its PRI score for the second consecutive year, highlighting its commitment to continual improvement in its ESG focus and reporting. Both achievements complement the Company's Green Economy Mark from the LSE, which was awarded in 2020 in recognition of the Company's contribution towards driving a greener economy.

Infrastructure has a positive purpose and the Company's assets have a strong social and environmental impact. The Board aims to enhance the integration of ESG criteria in the Company's operations, ensuring that the portfolio not only addresses the current needs of stakeholders, but is also able to adapt to future challenges and needs. The Company finances infrastructure which benefits end users in society and its portfolio contributes to the generation of renewable energy. The Board is committed to creating a positive social and environmental impact through the Company's investments.

With the election of the new Government in July 2024, it is evident there may be greater opportunity for private investment in the renewable energy infrastructure sector.

The new Government has pledged to work with the private sector to double onshore wind, triple solar power and quadruple offshore wind by 2030, with increased spending across the renewable energy infrastructure sector. The Company's investments in financing renewable energy assets are pivotal to this journey, with 62% of the portfolio generating 1,320 GWh of renewable energy this year, sufficient to power 488,842 average households¹.

The Company's investments in the supported living sector provide support for vulnerable adults, helping those in the community that need it the most. These properties blend specially adapted residences with purpose-built facilities, facilitating the delivery of high-quality supported living services.

PPP/PFI assets in the Company's portfolio are integral to the functioning of UK society, and provide long-term partnerships with the public sector. Within this sector, the Company's investments span education, healthcare, waste, leisure and housing. Highlights include investments secured against 49 schools which offer 26,196 school places and 40 healthcare facilities providing beds for 1,649 patients.

There is no doubt that investing in clean energy infrastructure is key to protecting our planet from climate change. The Company aims to build a sustainable and positive future through its investments in renewable energy, supported living and PPP/PFI projects. This is a future that combines social responsibility with environmental stewardship.

1. Source: Ofgem, average gas and electricity usage.

ESG policy

The Company has strong ESG credentials, demonstrated through the positive impact of its portfolio. The Company invests in assets that are integral to society, including those that contribute to a greener economy. As a result, the Company aligns with certain SDGs, which promote sustainable development globally through social, economic and environmental initiatives.

This year, the Company implemented an ESG policy to formalise its ESG processes and ensure its responsible investment practices align with the Investment Adviser's Responsible Investment policy.

The ESG policy addresses three key areas, outlined below:

Investment policy

The Company seeks investment opportunities which generate sustainable returns whilst simultaneously having a positive environmental and social impact. This is achieved through positive and negative ESG screening, detailed ESG due diligence and comprehensive ongoing monitoring and engagement.

Corporate governance

The Board is committed to undertaking its activities in a carbon-neutral manner, utilising carbon offsetting measures where necessary.

The Board seeks to govern the Company in accordance with all applicable laws, rules and regulations, as well as corporate governance best practice.

The Board has established a Sustainability committee responsible for developing, implementing and monitoring the Company's ESG policies and procedures.

The Board aims to fully comply with the recommendations of the TCFD and consider other similar initiatives.

Activities of key service providers

The Company seeks to influence its main service providers to ensure they are following best practice regarding ESG matters.

The ESG policy is split into seven sections, covering screening, ESG due diligence, monitoring and engagement, corporate governance, modern slavery, corporate ESG initiatives and ESG frameworks.

The ESG policy can be found on the Company's website.

Q&A with Dawn Crichard, Chair of the Sustainability committee

How does the Company approach climate change risk, and what specific measures has it taken to reduce the carbon footprint of its portfolio?

The Company includes climate change risks within the emerging risks category of its risk management framework. Climate change risks are both physical and transitional, and the Board considers climate change risks a long-term issue. The impact of climate change on the Company's portfolio is monitored by the Board, the Sustainability committee and the Investment Adviser. This includes monitoring and assessing the impact of changing Government policies on the investment portfolio and the Company as a whole. The Investment Adviser, on behalf of the Company, carries out an annual climate risk assessment for each underlying portfolio asset to assess the actual and potential impact of climate-related risks across the portfolio. The analysis considers both physical and transition risks for each asset and is supported by expert third party consultants.

The Investment Adviser has sought to encourage energy efficiency projects at portfolio assets where there are opportunities to do so; for example, the Company's 'SolarCatcher' initiative supported the installation of solar panels and electric vehicle charging points at schools in England to help reduce energy costs and incentivise increased electric vehicle uptake among employees.

As the Company is a debt provider that doesn't own or control 94% of assets in the portfolio, there are certain limitations in the Company's influence on portfolio assets. As such, the Company is limited in its capacity to reduce the carbon emissions of its assets but it can influence them by supporting energy-saving schemes.

What steps has the Sustainability committee taken to promote diversity, equity and inclusion ("DEI")? How does it maintain progress in these areas?

The Board considers DEI an important factor in ensuring all Board members have the right balance of skills, experience and independence to make informed and knowledgeable decisions. The right blend of perspectives is critical to ensuring the success of the Company. The Board monitors the DEI criteria of the companies it invests in through its annual data collection project.

The Board maintains 50% gender and ethnic diversity, with 49% gender diversity of SPV company boards, increasing from 36% in the previous year. The Board and the Investment Adviser recognise that gender diversity is a challenge in the investment industry, and that a concerted and collaborative effort is required to make the financial services sector more open and attractive for women at all levels of seniority. As such, the Investment Adviser supports the Young Women Into Finance Scholarship programme, a not-for-profit social organisation dedicated to the eradication of gender bias for new graduates entering the finance industry.

The Investment Adviser also participated in the 10,000 Black Interns programme this year for the second year, which offers paid internship opportunities across more than 25 sectors, along with training and development opportunities.

This commitment to paid internships reflects the Investment Adviser's passion for inspiring change and helping young people achieve a career in the investment industry.

What are the Board's expectations regarding ESG reporting and transparency from portfolio companies? How does the Investment Adviser ensure companies are meeting these standards and the data they provide is reliable?

The Investment Adviser carries out an annual data collection project to collect material ESG metrics from the underlying portfolio. The process involves the Investment Adviser's portfolio management team liaising with each asset operator to obtain relevant ESG data on the underlying portfolio assets. In addition, key relevant ESG indicators are monitored by the Investment Adviser's portfolio management team. The Investment Adviser seeks to engage with equity owners and/or operators of projects to understand the ESG factors relevant to those projects or properties, and, where possible, use influence as a lender of capital or investor to manage exposure to ESG risks.

This year, GHG emissions verified data was 74%, compared to 53% in the prior year. This increase in supporting evidence for Scope 1, 2 and 3 suggests that, with the support of the Investment Adviser, underlying assets are becoming more familiar with the data collection project. Changes in carbon footprint data are monitored over time and reported on in the annual report.

For the second year, the Company utilised the services of Aardvark, an independent external ESG certification service who provide independent and impartial auditing and certification services. Aardvark reviewed the outputs from the data collection project, verifying the calculated carbon emissions were correct and provided limited assurance. As part of this, Aardvark reviewed primary evidence supporting the data collection and, where this was absent, they reviewed the reliability of secondary data. Aardvark have also made recommendations on how the Company can improve its data collection so that it can prepare for a reasonable assurance process in future.

The Company engaged Terra Instinct, a sustainability advisory firm, to perform a gap analysis on the Company's TCFD disclosures and climate risk assessment. The gap analysis examined the Company's current approach to the disclosures and climate risk assessment, identifying specific areas for recommendations on how it could be improved.

In addition, new investments provide the opportunity to include data requirements as part of the loan documentation.

How does the Sustainability committee and the Investment Adviser ensure that the Company is capitalising on Government policy initiatives that support increased investment in sustainability?

Government policy supporting infrastructure investment is likely to grow with the new Government's ambitious decarbonisation targets. The new Government has ambitions to accelerate the deployment of renewable energy, which is expected to involve a massive overhaul of the UK renewable energy sector and is set to increase incentives for private investment in renewable energy infrastructure. As an experienced infrastructure provider, the Company is well placed to capitalise on Government policies that incentivise this investment.

As such, increased Government policy support in this area may incentivise the Company to expand into new areas for investment, and as part of this, the Sustainability committee works with the Investment Adviser to incorporate and monitor sustainability considerations into the investment process. In addition, the Investment Adviser is an experienced investor in new and existing green technologies and opportunities. This experience enables the Company to react quickly to new Government initiatives and the Board regularly reviews and monitors these opportunities.

What metrics or benchmarks does the Board use to measure the success of its ESG policies over time?

As the Company invests in infrastructure that is integral to society, the Company's activities align with certain SDGs, as outlined by the UN. When developing the Company's focus areas, the Board considered the SDGs that have the highest materiality to the Company and sector and the SDGs that it may have an impact on, as well as those that have the highest impact on stakeholders. The SDGs are important to investors and there is a strong business case for investing in sectors aligned with the SDGs. The Company reports its alignment with the SDGs to highlight its responsible investment efforts. This reporting is key to building trust, transparency and accountability with stakeholders. The Investment Adviser also reports its responsible investment activities to the PRI through its annual assessment process. The PRI reporting process is the largest global reporting project on responsible investment. This year, the Investment Adviser improved its PRI assessment score, scoring an average of 80 points out of 100, with scores higher than the median in each category. Refer below for more information.

ESG integration

The Company and the Investment Adviser have made considerable progress with integrating ESG considerations across the Company.

Governance

2023

· The Sustainability committee reviewed and updated the Company's Modern Slavery statement.

· Blackcraig Wind Farm achieved a GRESB rating of four green stars and 90 out of 100 points.

· The Investment Adviser achieved its aim of carbon neutrality by 2023.

· The Investment Adviser considered the application of the SFDR to the Company and undertook training on the topic.

2024

· The Company formalised and published an ESG policy, which encompasses all aspects of responsible investment.

· The Investment Adviser achieved B Corp certification with a score of 99.4.

· Biodiversity and DEI considerations were added to the ESG due diligence process, as well as a climate risk assessment for all new investments.

· The Investment Adviser began a process which ensures each potential asset undergoes a credit risk assessment that incorporates ESG risk.

2025 (and further)

· The Company and Investment Adviser to apply lessons learnt and best practice across the portfolio where appropriate.

· Work with borrowers to understand where the Company can support them in their diversity ambitions.

· The Company to consider further initiatives to reduce carbon emissions across the portfolio and at the Investment Adviser.

· Continue to embed ESG considerations into the investment process more broadly, utilising third party consultants as appropriate.

· The Company to consider publishing a separate Human Rights policy.

· The Investment Adviser to continue reviewing responsible investment practices to improve its B Corp score over time.

Reporting

2023

· The Company continued to develop its data collection project, and collection of ESG metrics and targets.

· The Company appointed an external consultant to review carbon emissions data.

· The Investment Adviser expanded its Responsible Investment report to include additional information under TCFD.

· The Company broadened its TCFD reporting to include a partial 2ºC warming scenario under strategy c) disclosures.

· The Company expanded its climate risk assessment to include opportunities and a partial 2ºC climate scenario.

· The Investment Adviser reviewed the potential biodiversity impact for two portfolio assets and undertook training on biodiversity net gain opportunities.

2024

· Engaged Terra Instinct to perform a gap analysis on the Company's climate risk assessment.

· Expanded TCFD reporting to include all physical risks in a 2°C global warming scenario.

· Continued to work with Aardvark to review the data collection project and verify the calculated carbon emissions data, working towards reasonable assurance in the future.

· Analysed the UK's SDR and investment label rules.

· Engaged Terra Instinct to perform a gap analysis on the Company's TCFD disclosures.

· Terra Instinct undertook analysis to prepare the Company for future reporting under the ISSB published standards.

2025 (and further)

· The Company to consider further ESG metrics and targets and improve data collection coverage and quality.

· The Company to continue its project to obtain reasonable assurance over its carbon emissions data.

· Continue to prepare to report under new ISSB standards that are applicable to the Company.

· Consider recommendations from the ESG consultants with a view to implementing in future years.

· Consider material and relevant specific ESG targets for the Company under TCFD metrics and targets c) disclosures.

· The Company to continue developing its climate risk assessment in line with best practice recommendations.

· Assess the feasibility of making the data collection process a half-yearly exercise and develop training in this area.

· Consider reporting under SDR when the Company is brought into scope.

Awareness

2023

· The Investment Adviser introduced biodiversity considerations into its investment process and ran biodiversity training for staff members.

· The Investment Adviser funded three ESG‑focused internships to support the work on the Company's ESG strategy and to assist with the data collection project.

2024

· The Investment Adviser continued its involvement with the 10,000 Black Interns programme and the Young Women Into Finance programme.

· The Investment Adviser participated in a mid-term review by Investors in People to review its status.

· The Investment Adviser expanded its charity of the year scheme to include more charities and continued to offer paid volunteering days to employees.

2025 (and further)

· The Company to implement biodiversity net gain reporting for portfolio assets.

· The Company to produce a separate ESG report.

· Improve the coverage of the Company's data collection project.

· Continue to work with partners to offer further internships with the Investment Adviser.

· The Investment Adviser to introduce a formal recruitment policy which incorporates DEI criteria where possible.

Responsible Investment

Investment process

The Investment Adviser has been a signatory to the PRI since 2019. The PRI, established in 2006, is a global collaborative network of investors working together to put the six principles of the PRI into practice. The Investment Adviser recognises that applying these principles better aligns its investment activities with the broader interests of society and has committed to their adoption and implementation. ESG considerations are integrated into the Company's investment decisions and are led by the investment team.

As part of its responsibilities as a signatory to the PRI, the Investment Adviser is required to report publicly on its responsible investment activities each year. In turn, it receives a PRI assessment report. The assessment uses the reported information of signatories and outlines how signatories' responsible investment practices compare year-on-year, across asset classes, and with peers at a local and global level.

This year, the Investment Adviser improved its PRI assessment score, scoring an average of 80 points out of 100 and four out of five stars for each category. Areas of improvement from this year's score were policy, governance and strategy, which improved by a total of nine points, and fixed income, which also increased by nine points. This was an improvement on 2022's score of an average of 76 points.

The Investment Adviser continued to score higher than the median in each category. The chart on page 64 of the full annual report on the Company's website provides further information on the Investment Adviser's results.

Investment Adviser PRI scorecard - year to 31 December 2023.

AUM coverage

Policy governance and strategy | 89%

Direct - Listed equity - Active fundamental >50% | 73%

Direct - Fixed income - Corporate >+10 and <=50% | 79%

Confidence building measures | 80%

Responsible Investment policy

The Investment Adviser's Responsible Investment policy is integrated into investment management processes and incorporates pre-investment, active ownership and governance processes, as detailed below.

Pre-investment		Active ownership
Deal screening	ESG due diligence processes	Monitoring and engagement	Reporting
Investment management processes positively screen for investments that promote sustainability, conform with the Investment Adviser's values and benefit society, including, but not limited to, the areas of climate change mitigation and adaptation, energy transition, critical infrastructure, decarbonising transportation, affordable living, social housing, education and healthcare. The screening excludes investments which focus on non‑medical animal testing, armaments, alcohol production, pornography, tobacco, coal production and power, and nuclear fuel production. Investments with ongoing or persistent involvement in human rights abuses are also excluded.	Prior to a new investment being approved, the relevant investment team assess how the investment fares against key relevant ESG criteria and includes an assessment of ESG characteristics in every investment proposal submitted to the Company's Investment committee for approval. The assessment typically covers ESG-related risks and opportunities, and, to the extent applicable, relevant policies and procedures, alignment with industry or investment‑specific standards and ratings, and compliance with relevant ESG‑related regulation and legislation. This year, the Company added biodiversity to the ESG due diligence process, as well as DEI. A climate risk assessment was also added for all new investments.	Following execution and investment, key relevant ESG indicators are monitored by the Investment Adviser's portfolio management team. The Investment Adviser seeks to engage with equity owners and/or operators of projects to understand the ESG factors relevant to those projects or properties, and, where possible, use influence as a lender of capital or investor to manage exposure to ESG risks.	The Investment Adviser reports on an annual basis, with its Responsible Investment report published each year. The Responsible Investment report sits alongside a PRI report, which summarises the Investment Adviser's responsible investment activities. The Investment Adviser applies the recommendations of the TCFD in its own reporting and encourages the application of the TCFD framework, in its funds, in line with reporting requirements.
Governance and responsibilities
The Investment Adviser operates a Responsible Investment committee which comprises senior personnel from across the business, including two representatives from the team that provide investment advice to the Company. The committee is responsible for all aspects of the Investment Adviser's Responsible Investment policy, including oversight of ESG initiatives, reporting, regulatory compliance, staff training and making recommendations to the board of the Investment Adviser. The Investment Adviser has a clearly defined governance structure with detailed processes that cover business operations, including investment management and portfolio monitoring and reporting.		In addition to its board, the Investment Adviser employs a team of professionals with in-depth experience in the investment industry and asset classes. The Investment Adviser's approach to stewardship and engagement is based on the Principles of the UK Stewardship Code 2020 and is in line with its philosophy on responsible investing.

Portfolio governance

Governance at the Company level is clearly managed and articulated to achieve the Company's investment strategy, including managing risks and creating a positive environmental and social impact. The Investment Adviser engages with the underlying assets' boards to enhance governance at the portfolio level. Investment documentation issued by the Company includes standard provisions to ensure effective governance within investee companies including compliance by these companies with applicable environmental, health and safety, anti-money laundering, know your customer and employment requirements.

During the year, the Investment Adviser continued to develop its climate risk assessment process for each underlying portfolio asset. The process assesses the actual and potential impacts of climate‑related risks and opportunities across the portfolio and considers both physical and transition risks and transition opportunities for each asset. Further information can be found below.

The directors and employees of the Investment Adviser sit on the boards of, and control, the SPVs through which the Company invests. The Company has delegated the day-to-day operations of these SPVs to the Investment Adviser through the Investment Advisory Agreement. The Company collects diversity data on new investment opportunities and the Investment Adviser includes diversity data in its responsible investment checklist, collecting data from potential borrowers that approach the Company. Diversity data is also collected from borrowers as part of the data collection project.

The Board and the Investment Adviser value relationships with borrowers, ensuring time is spent building and maintaining these relationships. Engagement takes the form of regular interaction with the borrowers by the portfolio management teams, including periodic site visits to the underlying assets and their managers. Site visits are an important aspect of the portfolio management role and have both technical and commercial benefits. They allow the Investment Adviser to assess the performance of both asset and contractor and investigate any important project issues that arise.

Furthermore, site visits give the Investment Adviser the opportunity to understand the operations and relationships important to each project and its long-term success. Where the Company is exposed to RPs that have been graded as non-compliant in respect of governance, the Investment Adviser has been working with the RPs to improve processes, people and systems in seeking to address the RSH's governance concerns. Refer above for further information.

In the financial year, 22 site visits were conducted, representing 25% of the portfolio by value and 24% of all SPV companies, including visits to the UBB Waste project (refer above), and renewables and PPP/PFI assets in various UK locations.

SDR

During the year, the Company analysed the new Policy Statement on Sustainability Disclosure Requirements ("SDR") and investment labels. This Policy Statement sets out the UK FCA's final rules on anti-greenwashing, a new labelling regime, naming and marketing rules, product and entity-level disclosures, as well as distributor obligations. As the Company is domiciled in Jersey, it is a non-UK AIF and is therefore unable to use a sustainability label at present. If HMT extends the SDR regime to overseas funds, the Company will consider the implementation of a label. The Company is currently in compliance with the anti-greenwashing rules issued under SDR.

Data collection project

This year, the Investment Adviser continued to improve its data collection project to collect material ESG metrics from the underlying portfolio for the twelve month period to 30 June 2024¹.

The process involves the Investment Adviser's portfolio management team liaising with each asset operator to obtain relevant ESG data on the underlying portfolio assets. The data points that are considered material by the Investment Adviser are detailed in the table below.

This year, environmental coverage increased from 72% in the prior year to 77% this year. This was primarily due to an increased response rate from borrowers.

Several challenges continued to be faced in respect of the availability of the data requested, insofar as the Company is a debt provider and does not own or control 94% of assets in the portfolio.

In the drive for increased transparency in reporting across the industry, the Company has actively sought to improve its data collection project by obtaining limited assurance of its carbon footprint data for the second consecutive year. The Company continued its engagement with Aardvark, an external ESG certification service who provide independent and impartial auditing and certification services. Aardvark reviewed the outputs from the data collection project, verifying the emissions calculations and data for covering Scope 1 and 2 with the inclusion of Scope 3 as far as is practically possible. It was found that a total of 74% of the assets by value had emissions calculations that were supported by primary or secondary evidence.

1. Period chosen to facilitate data inclusion in the annual report.

This was a marked improvement from the previous reporting year where just 53% of the portfolio-level emissions were supported by primary and/or secondary evidence. As part of this, Aardvark reviewed where the use of estimated data for the missing data would be useful or potentially inaccurate.

The Company continues to prepare for a reasonable assurance process in the future, with the assistance of Aardvark, who have provided valuable feedback regarding the Company's carbon emission metrics over the last two years, supporting ongoing enhancement.

Whilst 26% of the emissions data cannot be verified at this stage, the reporting and verification process by Aardvark has led to the development and identification of further steps the Company can take to improve this process in future reporting periods.

The Company also worked with Terra Instinct, an independent external consultant, to advise on the data collection project. This included advice on the ESG data collection approach based on industry frameworks.

They also conducted an independent review of the Company's TCFD disclosures for any significant inconsistencies and provided recommendations for areas where additional data could be presented.

Portfolio data coverage¹

Environmental 5%²

2024 77%

2023 72%

Social (1)%³

2024 73%

2023 74%

Governance (6%)⁴

2024 80%

2023 86%

Carbon footprint⁵

2024

Primary and secondary data 74%

Estimated data 0%

No data 26%

2023

Primary and secondary data 53%

Estimated data 31%

No data 16%

Impact (2%)⁶

2024 94%

2023 92%

1. Percentage of data entries for applicable KPIs per ESG area weighted by portfolio value.

2. Air pollutants emitted, water consumption, waste generated/disposed, energy conservation strategies and net habitat gain or loss.

3. Total FTEs, hours worked, satisfaction surveys, absenteeism rates, H&S metrics, community benefit fund contribution and key engagement initiatives with local community/stakeholders.

4. Gender diversity, Board reporting, ISO alignment/certification, green building certificates, governance and regulatory policies in place and audited accounts.

5. Fuel combusted, imported energy use, water, waste, biogenic emissions, mitigated emissions (landfill), renewable energy and biogas exported, buildings' EPC ratings and energy efficiency plans.

6. People housed, school places, hospital beds and renewable energy and biogas exported.

Corporate ESG initiatives

The Board promotes a positive dialogue with its key service providers regarding social and environmental areas. All key service providers, including the Investment Adviser and the Administrator, regularly report on their efforts and progress in areas such as diversity, the environment and social impact. Service provider initiatives include policies such as promoting paid rather than unpaid internships, charitable donations, volunteering days and encouraging low carbon office environments as well as business travel.

B Corp

In April 2024, the Investment Adviser was awarded a B Corp certification. This involved the Investment Adviser undergoing a 'B Impact Assessment', which measures a company's entire ESG performance. To achieve certification, B Corps must score at least 80 points, with the assessment evaluating a company's practices and outputs across five categories: governance, workers, community, the environment and customers. The Investment Adviser started the process in 2022 and received B Corp certification in April 2024, with a score of 99.4.

Carbon emissions

The Company and the Investment Adviser run their operations on a carbon-neutral basis to support the transition to net zero. As part of its corporate social responsibility, the Board supports the local Jersey charity, Jersey Trees for Life as well as using their scheme to offset its carbon emissions from flights to and from the UK. Whilst not a verified carbon offsetting assurance scheme, the offsetting benefits Jersey Trees for Life, which is the only charity that is dedicated solely to the protection and preservation of trees in Jersey. The charity's aim is to encourage the protection, preservation and planting of trees, and to foster an appreciation of trees through community education for their amenity, ecological preservation and social importance.

The Investment Adviser's premises in London hold a BREEAM 'Excellent' rating, meaning it scored over 70% in a BREEAM assessment, which measures the sustainability performance of buildings. The Investment Adviser encourages the use of public transport and minimisation of flight travel in its business travel policy and operates an electric vehicle scheme and a bike to work scheme.

The Investment Adviser fully offsets its carbon emissions by contributing to a portfolio which is run by provider Climate Impact Partners, whose aim is to reduce one billion tonnes of CO₂ by 2030.

Whilst the Board and the Investment Adviser do not consider offsetting to be by any means a perfect solution to the impact its activities have on the environment, both parties believe it is a useful starting point. The aim is to reduce emissions with the intention of continuing to investigate and follow best practice in this area.

Investors in People

In 2022, the Investment Adviser was awarded an 'Investors in People' accreditation. The Investment Adviser has committed to working with Investors in People over a three year time frame, with the aim of improving its accreditation level over that time. It encourages everyone in the business to reach their potential and provides regular training to staff, including funding for specific industry qualifications. The Investment Adviser also operates a range of measures to support the physical and mental health of its employees, including a private healthcare package and guidance on healthy working practices.

This year, the Investment Adviser held two training sessions for employees on improving mental health at work. It also offers hybrid working arrangements for all employees.

Investors in People carried out a review of the Investment Adviser's progress this year, which involved conducting a business-wide employee feedback survey and holding focus groups with a sample of 13 employees across the business. The survey had a participation rate of 82%. Feedback from the review indicated a positive shift in transparency across the business, as well as improvements in leadership. The review also provided the Investment Adviser with an action plan which identified areas of improvement and actions that can be taken to implement this over time.

Volunteering initiatives

The Investment Adviser operates a volunteering initiative which encourages employees to volunteer for charitable or not‑for-profit purposes by giving an additional two days' paid leave plus two days' unpaid leave per year. It continues to operate its charity of the year scheme, and engage with fundraising, events and through volunteering. This year, the charity of the year scheme was split between charities, including Street Child, Guide Dogs, and Trees for Cities. A total of 19 employees participated with more than 102 hours spent volunteering. This provided employees with an opportunity to work as a team and engage with the local community. The total amount raised for charities this year was almost £47,000.

Diversity, equity and inclusion

The Investment Adviser has a formal diversity policy, and holds diversity and equality training for all employees. The Investment Adviser also carries out an anonymous questionnaire to help understand the makeup of its workforce. This means the data can be monitored over time as the Investment Adviser strives for improvements in DEI, while also considering specific areas of focus.

Internships

The Investment Adviser also continued its participation in the 10,000 Black Interns programme this year, which offers paid internship opportunities across more than 25 sectors, along with training and development opportunities.

The Investment Adviser offered two paid internships as part of the programme, with both interns working across the Company. It also facilitated two paid internships for students as part of the Young Women in Finance programme, as well as hosting two students for work experience placement as part of the programme. Young Women in Finance is an organisation dedicated to the eradication of gender bias for new graduates entering the finance industry, with a goal of achieving a 50/50 gender split in graduate recruitment figures by 2030. One other internship was offered to an ESG masters student. The interns worked across teams at the Investment Adviser with a particular focus on the Company's climate risk assessment.

Employees volunteered

102

Hours spent volunteering

£47,000

Raised for charity

Gender diversity¹

Gender of employees

Female 38.9%

Male 55.6%

Prefer not to say 5.5%

Ethnic diversity¹

Ethnic group

White British 58.3%

Ethnic minority 36.1%

Prefer not to say 5.6%

1. As at 31 March 2024.

A day in the life of an intern

Morning:

As an intern at the Investment Adviser, my mornings are usually occupied with tasks like summarising initial investment opportunities and participating in team calls and meetings. These tasks offer a first-hand glimpse into the world of infrastructure investment, which I find very exciting. Occasionally, I get the chance to visit the Company's assets, which adds a different dimension to my experience.

Skill building:

Financial modelling is a critical skill in finance, and the Investment Adviser has a structured modelling programme in place for interns. This includes a financial modelling exercise that I work on week-by-week. It's a hands-on way to enhance my financial analysis skills and gain practical experience in asset management.

The team:

One of the highlights of my internship is informal coffee meetings with team members. These conversations not only allow me to understand their career paths and roles within Gravis but also provide opportunities to assist with any tasks they might need help with. It's a dual-purpose opportunity - learning and contributing simultaneously.

Regular check-ins:

I have regular catch-up meetings with my supervisor, where we discuss my current work, address any questions or challenges I'm facing, and delve into career-related advice. It's a mentorship opportunity that helps me navigate my internship and future career prospects effectively.

Presentation:

Towards the end of my internship, I was allocated time to work on a presentation for the team. The presentation centred around a regulatory update that had significant implications for asset managers, particularly regarding disclosure requirements.

In the last week of my internship, I presented to the entire infrastructure team in a collaborative session with several questions from the team. This experience was the highlight of my internship, as it offered a practical application of my skills, and allowed me to showcase my contribution to the team's knowledge and efforts in this area. I also introduced myself to the Board of the Company and explained what I had been working on, which included presenting my findings.

Governance

Disclose the organisation's governance around climate‑related risks and opportunities.

Compliance statement

The Company has voluntarily and partially reported against all four core elements of the TCFD and the eleven recommended disclosures, taking into account the TCFD 'Guidance for All Sectors', as well as the supplemental guidance for the financial sector.

This year, the Company has partially reported against 'Strategy (c)' in respect of different climate‑related scenarios, including developing its 2ºC or lower scenario, and has included more physical risks and improved its data sources.

The Company has omitted to report against 'Metrics and Targets (c)' as the Company continues to develop and refine its data collection exercise this year, including the use of external consultants. As a debt fund, the Board is committed to a thoughtful process of establishing material, accurate and relevant climate-related metrics and targets. It intends to continue developing its approach in the coming years, including its aim of obtaining reasonable assurance over its ESG metrics.

For this reason, the Company is not in full compliance with the TCFD requirements at this stage. It will continue to work towards full compliance.

A. The Board's oversight of climate‑related risks and opportunities

The Board is responsible for setting and monitoring the Company's strategy, which includes consideration of climate‑related risks and opportunities.

The Board is informed about relevant climate‑related issues as part of the quarterly reporting cycle by the Investment Adviser and the Company's own committees.

The Company's committees contribute as follows:

· Audit and Risk committee: responsible for climate‑related disclosures and sustainability risk assessment

· Sustainability committee: developing, implementing and monitoring ESG policies and activities

· Investment committee: considering ESG impacts during the investment due diligence process

· Management Engagement committee: ensuring key suppliers operate in a socially responsible manner

The Sustainability committee formally meets once a year and engages informally with the Investment Adviser and other service providers regularly, including participating in briefings and new initiatives. It formally reports to the Board at each quarterly Board meeting. This quarterly engagement includes relevant training and ESG updates for the Board, both regulatory and Company specific.

The Investment Adviser utilises external consultants as appropriate, and acquires expertise where needed, including through recruitment. This year, the Investment Adviser funded five ESG-focused internships to support the work the Board is doing as part of its ESG processes and to assist the Investment Adviser with the climate risk assessment and ESG policy. The internships enabled the Company to benefit from a fresh, more diverse perspective with enthusiasm and expertise across environmental matters.

B. Describe management's role in assessing and managing climate‑related risks and opportunities

The Investment Adviser has over a decade of experience in identifying assets with a core environmental and/or social benefit for the Company. The Investment Adviser's in-house expertise includes a Head of Private Credit who has significant experience in incorporating ESG factors into credit ratings. Members of the investment team also have significant experience in sustainable investing. Responsible investment processes are overseen by the Responsible Investment committee, which reports to the board of the Investment Adviser. Further information is provided on pages 106 to 109 in the full annual report on the Company's website.

Climate risks are considered at each stage of the investment process, including the initial deal screening of opportunities and investment due diligence processes. Risk assessment takes the form of both quantitative analysis and qualitative assessments which look at the ESG approach of investee companies.

Environmental impact assessments are carried out where appropriate as part of the due diligence process to identify potential transition and physical short, medium and long-term impacts on costs and viability across service providers and investments.

ESG risks are also incorporated in the credit risk management process. The Investment Adviser identifies relevant ESG risks which could materially impact the credit quality of borrowers. The relevance and materiality of those ESG risks are identified, recorded and assessed. The Investment Adviser assigns an ESG risk (low, medium and high) to each loan to reflect ESG risks potentially impacting the ability and willingness of the borrower to meet its financial obligations on a timely basis. The risk of an asset becoming obsolete because of the energy transition or physical climate risk (such as flooding or drought) or governance without the necessary controls in place, would be categorised as loans with a high ESG risk.

This information is presented to the Investment committee as part of the investment approval process with the Board directly or indirectly addressing climate-related risks and opportunities when evaluating and approving new investments. The Investment Adviser provides fortnightly, ad hoc and quarterly updates to the Board on asset performance, including the response of assets to climate events.

Following execution and investment, key relevant ESG indicators are monitored by the portfolio management teams. The Investment Adviser seeks to engage with investors to understand relevant ESG factors and to manage exposure to risks.

Strategy

Disclose the actual and potential impacts of climate‑related risks and opportunities on the organisation's businesses, strategy and financial planning where such information is material.

A. Describe the climate‑related risks and opportunities the organisation has identified over the short, medium and long term

The Investment Adviser, through its climate risk assessment, has identified, based on current climate conditions, that the portfolio is exposed to physical risks arising from extreme weather events; examples include Storm Eunice in February 2022, which caused damage to solar panels at a solar farm in the portfolio, and increased rainfall leading to flooding at an anaerobic digestion plant in the portfolio, which negatively impacted production at the plant until the end of 2023. However, the overall financial impact of these physical risks to the Company is not material and various mitigants are in place such as comprehensive insurance policies which cover physical damage due to weather‑related events. It is recognised, however, that such insurance policies may not always be available at a reasonable cost or at all and physical resilience or protection of assets is kept under review and action is taken when it is appropriate.

The Company defines short, medium and long‑term risk time horizons as follows: short term: zero to three years; medium term: four to eight years; long term: more than eight years. When considering materiality, the Investment Adviser considered the financial impact each risk could potentially have on the asset if it were to materialise. Further information can be found below.

The main short-term physical risk exposures for the portfolio are water damage and heat stress. However, there are mitigants in place.

For example, the likelihood of these assets experiencing damage at the same time is low due to their geographical dispersion.

The Investment Adviser has also implemented mitigation plans to strengthen the weather resistance of certain assets during the year. These involved improving drainage across anaerobic digestion sites and solar farms in the portfolio to avoid flooding risks. The portfolio assets have general maintenance regimes in place for assets to mitigate the impact of weather, which include applying galvanic paint to prevent rusting on steel structures. In addition, the Investment Adviser switched the fuel supply of a bio-power asset, meaning it can now source fuel from different waste transfer station locations to mitigate the impact of a climate event in one location impacting supply. The Investment Adviser will continue to monitor and review mitigation plans to avoid physical damage to the portfolio assets.

Medium to long term, more frequent extreme weather may place significant pressure on energy infrastructure, including renewables, and could cause damage to components, power lines and transmission grids, including potential disruption to supply chains. Significant impacts may arise in the social infrastructure sector, leading to localised strain on public services, and the potential closure of facilities. Higher temperatures may also impact key components of renewables projects and could also lead to the overheating of buildings, which can adversely impact vulnerable people.

The Company is also exposed to transition risks in the short term from sudden and unexpected changes to Government policy. An example of this is the Electricity Generator Levy in the UK, which taxes certain renewable energy generating assets until 2028.

In the medium to long term, any policy changes to the MEES would impact properties in the social housing sector. The ability to claim MEES exemption caps the maximum exposure to £10,000 per property. Overall, 49% of the social housing portfolio has an EPC rating equal to a C or above, whilst 36% has an EPC rating of D or below, with the remainder either unavailable or unrated. The obligation to improve the energy efficiency of the properties below a 'C' rating sits with the third party RPs under fully repairing and insuring leases, and this will be closely monitored with borrowers.

An increased focus on the ESG aspects of the investment process presents significant opportunities for the Company. At IPO, ESG considerations were not as prominent for investors as they have become in recent years.

Whilst many investment funds and companies are seeking to quantify and reduce their negative environmental and social impact, the Company finds itself in a position where all its investments have a positive environmental or social contribution, meaning sustainability is inherent in the Company's portfolio.

As the UK embarks on the largest transformation of its infrastructure in recent history as part of the transition to net zero, there will be a significant private sector investment requirement to support this, and public sector support will be needed across a range of asset classes. The new Government has pledged to work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030, with increased spending across the renewable energy infrastructure sector. The new Government's Green Prosperity Plan is set to 'partner with businesses' to invest in 'industries of the future', with the aim of creating 650,000 jobs.

B. Describe the impact of climate‑related risks and opportunities on the organisation's businesses, strategy and financial planning

The primary physical impact of climate change on the business will be experienced by the Project Companies the Company lends to: firstly, by increased operating costs or reduced revenues due to physical risks materialising.

In many cases, physical mitigation measures exist and there is a degree of contractual protection built into loan agreements from these increased costs.

Secondly, the credit quality of the Project Companies may deteriorate. For example, extreme weather events might materially increase the cost of insuring some assets, or they might make some assets uninsurable. These impacts, if material, may lead to a reduction in the valuation of the portfolio.

Regarding the Company's strategy, the portfolio benefits from its geographic, technological and market diversification. Conversely, opportunities may arise which enable the Company to deploy capital to a wider range of asset classes, providing further diversification into new sectors and thereby increasing revenues.

For financial planning, one potential transitional impact of climate change arises from the increased deployment of renewable power generation reducing the marginal cost of electricity and impacting revenue. A mitigating factor for this is the increased use of direct PPAs, which will thereby secure steady revenue streams. The Investment Adviser, on behalf of the Company, has successfully implemented a number of these agreements. Further information on the Company's electricity price exposure can be found above. Based on the climate risk analysis undertaken, referred to below, the Investment Adviser does not currently propose to make any changes to financial forecasts due to climate risk.

C. Describe the resilience of the organisation's strategy, taking into consideration different climate‑related scenarios, including a 2ºC or lower scenario

The climate change risk assessment carried out by the Investment Adviser has concluded that the Company's strategy is resilient to both the physical and transition risks associated with climate change. This year, the Investment Adviser increased the scope of its 2ºC or lower scenario to include analysis of changes in physical risks. In doing so, it has noted resilience to the identified physical risks associated with climate change, with heat stress the only score that increases in a 2ºC or lower global warming scenario. The other physical risk scores remained the same. Transition risks were not included in the assessment, due to difficulty in obtaining independent data points. However, the Investment Adviser will look to include these in future climate risk assessments as it works towards the Company achieving full compliance with TCFD.

The results of the assessment demonstrated that whilst there are physical and transitional risks in the context of the Company's diversified portfolio, the financial impacts were not material. For example, a storm might generate strong winds which could have a negative impact on revenue from wind turbines, causing them to shut down in stormy conditions, but would not necessarily have an adverse impact on other assets in the portfolio, illustrating the resilience of a diversified portfolio.

Risk management

Disclose how the organisation identifies, assesses and manages climate‑related risks.

A. Describe the organisation's processes for identifying and assessing climate‑related risks

The Board of Directors directly or indirectly addresses climate-related risks and opportunities when evaluating and approving new investments, including a climate risk assessment for each new investment.

As part of the Investment Adviser's due diligence process, climate risk assessments are carried out on each portfolio asset where appropriate. The Investment Adviser also carries out ongoing performance monitoring, including asset site visits by experienced personnel; further information is given above. Fortnightly updates and quarterly detailed reports on asset performance are also provided to the Board.

Climate change has become a key risk faced by infrastructure investors. The Company continues to focus on the potential impacts of climate change and the risk factors associated with rising global temperatures. As such, the Investment Adviser has conducted a detailed portfolio-wide climate risk assessment across each of the 473 individual assets in the portfolio. This risk assessment includes an analysis of the impact of a 2ºC or lower global warming scenario.

The risk assessment considers nine risk factors divided between physical and transition risks:

· Physical risks: these are events that are driven by a shift in temperatures and weather patterns. The assessment considers five risks: flood risk; heat stress; water stress; fires and wildfires; severe winds and storms. These events have been chosen based on their materiality to the overall portfolio. Refer to the table below for further detail on materiality.

· Transition risks: these are the risks related to the transition to a low-carbon economy. Four areas were considered: policy or regulatory; technological; market; and reputational risks.

External and internal data points were used to assess assets in the portfolio. Historic weather data was used to inform heat stress, water stress and severe wind. UK Government databases were used to obtain data for flood risk and wildfire data for all available sites in the portfolio. IPCC data was used to determine heat stress, water stress and severe winds in the 2ºC warming scenario. The Beaufort wind scale was used to assess the threshold at which wind speeds are considered high. EPC ratings were obtained from UK Government databases.

An asset-by-asset assessment was undertaken internally by the Investment Adviser's portfolio management team to consider the specifics of each investment and to understand the overall exposure to climate change and any mitigating factors. The results from the risk assessment form part of the portfolio management decision-making process and help identify further mitigation strategies, informing whether any changes are required to the underlying financial forecasts of the Company.

The climate risk assessment was completed by evaluating the impact and likelihood of a climate change event happening within the remaining lifetime of each asset, divided between physical and transition risks. The risk assessment scores were calculated by multiplying impact and likelihood metrics to form a total score for each asset.

For physical and transition risk, the impact metric indicates the financial impact each risk could potentially have on the asset. This metric is scored on a scale of 1 to 5, with 5 being the highest and 1 having a lower impact.

Each score indicates a specific financial impact as shown in the table below:

Score	Materiality	Impact
5	Significant	>£5 million
4	Major	£2 million - £5 million
3	Moderate	£501,000 - £2 million
2	Minor	£51,000 - £500,000
1	Negligible	<£50,000

The likelihood score for physical risk is based on past Met Office data to determine the probability of a specific weather event happening, based on the specific location of the asset.

For transition risk, the likelihood score was rated between 0% and 100% based on the probability of a climate event happening within the remaining lifetime of the asset. This probability was converted to a score between 1 and 5 to keep consistency between the physical and transition risk likelihood scores, seen in the table below:

Probability	Score
<5%	1
5% - 15%	2
15% - 25%	3
25% - 35%	4
>35%	5

The impact and likelihood metrics were multiplied with each other to give a score for each risk identified, which led to each physical and transition risk metric being given a total rating out of 25. These individual ratings were then weighted by the portfolio valuation of each asset to give an aggregated score by sub-sector and sector. A final rating between 0 and 225 was obtained by combining total physical and transition risks scores.

The chart based on the weighted average rating for each sector on page 78 of the full annual report on the Company's website shows the output of this process, indicating the sectors that are most vulnerable to climate change. The placement of each sector highlights its risk exposure, with a low risk between 0-33%, medium risk between 33-66% and high risk between 66-100%. Each sector is plotted based on the risk percentage for each physical and transition risk.

Under physical risks, the biggest exposure is to fires/wildfires and water stress. An increase in the frequency of fires/wildfires is most likely to impact the social housing sector, while an increase in water stress is most likely to impact the renewables sector.

Wildfires are becoming a bigger threat in the UK, with England averaging 30,000 wildfires a year, according to data from the Forestry Commission. Water stress is also becoming a bigger issue, with global warming causing higher rainfall in the UK and making rising water levels a bigger threat globally. This year, the Investment Adviser refined its water stress analysis by mapping assets to their water providers to see if they were in an area of stress.

Under transition risks, the portfolio is most exposed to policy/regulatory change, as well as technological change. Within the renewables portfolio, biomass projects account for some 10% of portfolio value and are most likely to be influenced by regulatory and market changes. While the Investment Adviser views the biomass sector as well placed to benefit from the transition to net zero as a form of low-carbon baseload power, uncertainty around the possible participation in the UK ETS along with future power price caps for renewable generators, is reflected in the regulatory and technological risk scores. While the new Government included some provisions in their Autumn Budget for the introduction of the UK ETS, there is still some uncertainty about the impact it will have on portfolio assets.

The Investment Adviser also undertook the analysis of a 2ºC or lower global warming scenario on assets in the portfolio. This analysis concluded that the Company's strategy is relatively resilient to the physical risks associated with climate change.

In the 2ºC scenario, the Investment Adviser considered changes in the likelihood of the occurrence of physical climate risks and focused on the impact of a 2ºC change in likelihood scores in the physical risk section. Transition risks were not included due to difficulty in obtaining independent data points, as well as the assumption that transition risks will not be impacted in the same way as physical risks in a 2ºC warming scenario. The Company recognises it has further to go in achieving full compliance with a 2ºC increased temperature scenario because of this and is committed to including transition risk data points in future years.

The likelihood score for heat stress, water stress, severe winds and wildfires in a 2ºC temperature increase scenario was based on the probability of each metric occurring, using past Met Office data and UK Government data to determine the probability of a specific weather event and applying a multiplier for each physical risk. This multiplier was based on data from the IPCC, which is the United Nations body for assessing climate change. The Investment Adviser acknowledges this is a different data source than was used in last year's assessment; however, it considers it a more reliable data source from which to obtain future weather projections.

After running the 2ºC scenario, it was determined that physical risks mostly remained the same, with the exception of heat stress, which increased by 0.4 rating points. This has led the Investment Adviser to conclude the Company's strategy is relatively resilient to both the physical and transition risks associated with climate change.

The Investment Adviser and the Board recognise that the prioritisation of climate change requires a change of Government approach, primarily through regulation.

Regulatory changes through mechanisms such as the UK ETS, power price caps, energy efficiency standards and windfall taxes on renewable energy generators may further impact the portfolio.

Based on the analysis undertaken, the Investment Adviser does not currently propose to make any changes to its financial forecasts due to climate risk. As detailed above, in the medium to long term, any changes to MEES for buildings could impact certain assets, and these will be closely monitored with borrowers. The Investment Adviser also intends to closely monitor the impact of rising global temperatures on its investments, as the increasing likelihood of rising temperatures could impact the portfolio, as evidenced in a 2ºC rising temperature scenario. The Investment Adviser intends to update the climate risk assessment on an annual basis.

This year, the Company engaged Terra Instinct, a sustainability advisory firm, to perform a review of the Company's TCFD disclosures and climate risk assessment. The review examined the Company's current approach to the climate risk assessment, providing recommendations on how it could be improved.

By partially implementing the recommendations, the Investment Adviser improved the reliability of its data source for the multiplier in the 2ºC warming scenario analysis in this year's reporting. The Investment Adviser will continue to work towards implementing further recommendations in future years.

For details on the portfolio exposures - climate change risk - refer to page 78 of the full annual report on the Company's website.

The Company will continue to refine its approach to materiality as the availability, completeness and accuracy of data improves over time.

Whilst the Investment Adviser has concluded that the portfolio is exposed to low physical and transition risk, the climate opportunities for each asset have not been quantified in this exercise. This is an area that will be considered further in future assessments.

The Investment Adviser has identified several transition opportunities for the Company. These surround optimisation, expansion and life extension opportunities for the portfolio following growing demand for renewable energy and energy security. This is expected to cause renewable energy demand to increase, driven by the decarbonisation of transport and heating amongst other factors.

While opportunities related to physical and transition risks have not been quantified to date, the Board and the Investment Adviser hope to include these in future reports.

The Investment Adviser aims to continue improving all areas of its climate risk assessment, including the data collection process, controls around this process and creating meaningful disclosures in order to help monitor and mitigate exposure to climate change. Areas identified for improvement include:

· including transition risks in a 2ºC or lower scenario;

· implementing further recommendations from Terra Instinct; and

· combining climate opportunities into the assessment.

B. Describe the organisation's processes for managing climate‑related risks

The portfolio is diversified across a number of asset classes and ESG processes are embedded into investment decision making. The importance of the Investment Adviser's engagement and influence in helping portfolio companies improve their ESG performance is crucial. Further information is given in the risk section below.

C. Describe how processes for identifying, assessing and managing climate‑related risks are integrated into the organisation's overall risk management

The way in which the Company manages risk and principal risks and uncertainties is described below. The Board does not consider climate‑related risk a principal risk, however it does recognise climate-related risk as an emerging risk. Refer below for further information.

Metrics and targets

Disclose the metrics and targets used to assess and manage the relevant climate‑related risks and opportunities where such information is material.

A. Disclose the metrics used by the organisation to assess climate‑related risks and opportunities in line with its strategy and risk management process

The Investment Adviser includes an assessment of ESG characteristics in every investment proposal submitted to the Company's Investment committee for approval. Prior to the approval of a new investment, the Investment Adviser assesses how the investment rates against relevant ESG criteria, laid out in an ESG checklist tailored to the Company. The checklist typically covers the counterparty's commitment and capability to effectively identify, monitor and manage potential ESG-related risks and opportunities and, to the extent applicable, the availability of relevant policies and procedures, alignment with industry or investment-specific standards and ratings, and compliance with relevant ESG‑related regulation and legislation. Each asset undergoes a credit risk assessment that incorporates ESG risk, which reflects the potential for ESG risks to impact the ability and willingness of the borrower to meet their financial obligations in a timely basis.

During the year, the Investment Adviser carried out a climate risk assessment for each underlying asset. Further information on the methodology used to complete the climate risk assessment is included above.

B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas emissions and the related risks

As an investment company, the Company does not have a significant environmental impact by itself.

With no employees or property and an outsourced services model, there are no Scope 1 (direct) and Scope 2 (indirect through power demand) climate‑related emissions to report, and as an investment fund specifically, its Scope 3 (other indirect) emissions fall under two categories within Scope 3 as defined by the GHG Protocol:

Category 1: Purchased goods and services

The emissions from services provided by the Company's top ten third party service providers and emissions from travel of the Board. The top ten third party service providers represent 92% of the annual expenditure of the Company and therefore these were deemed the most material in the context of the Company's outsourced service model.

The Company used a supplier-specific approach whereby expenditure for each service provider is multiplied by the service provider's organisational carbon footprint intensity in tCO₂e (market‑based Scope 1 and 2 plus upstream Scope 3 emissions) as disclosed through publicly available data. Using this approach, the Company was able to report attributable supplier emissions covering 98% of its annual spend across nine of its top ten suppliers.

Category 15: Investments

The emissions of the underlying portfolio. As this is only the third year a detailed data collection exercise has been undertaken, there are still plenty of challenges faced in respect to the availability of the data requested, insofar as the Company is a debt provider and does not own or control 94% of assets in the portfolio.

As such, emissions data points were obtained from 74% of portfolio assets by value. Estimated emissions data was not used this year, due to the increase in emissions data collected directly from portfolio assets. Further steps will be taken to improve this process in future reporting periods.

The Investment Adviser will continue to liaise with asset operators to improve and refine the availability of future ESG data which will continue to be collected and reported on an annual basis. Further information on the data collection exercise can be found above.

The Company has measured and disclosed the emissions from its underlying portfolio in accordance with the GHG Protocol. Emissions from investments (Category 15) comprise proportional Scope 1 and Scope 2 and limited Scope 3 emissions of the underlying portfolio and have been allocated based on the Company's proportional share of total enterprise value (total equity plus debt) in accordance with the guidance for debt investments and project finance.

The Company has not reported total projected lifetime Scope 1 and Scope 2 emissions of any new projects financed during the year. It will seek to include this information for future years where possible.

Greenhouse gas emissions

The Company has measured its emissions in accordance with the GHG Protocol. An operational control approach was used to define the organisational boundary and responsibility for GHG emissions. Emissions have been measured over the twelve month period to 30 June 2024. The period chosen was to facilitate data inclusion in the Company's annual report.

		Year ended 30 September 2024¹		Year ended 30 September 2023¹
		Year ended 30 September 2024¹		Year ended 30 September 2023¹
		Absolute	Attributable	Absolute	Attributable
		emissions	emissions	emissions	emissions
		tCO₂e	tCO₂e	tCO₂e	tCO₂e
		Portfolio	Portfolio	Portfolio	Portfolio
		Scope 1, 2 & 3	Scope 1, 2 & 3	Scope 1, 2 & 3	Scope 1, 2 & 3
	GHG emissions
Scope 1	Direct GHG emissions - occur from sources that are owned or controlled by the organisation	-	-	-	-
Scope 2	Indirect GHG emissions - occur from the generation of purchased electricity, heating, cooling and steam	-	-	-	-
	Energy consumption used to calculate above emissions: /(kWh)	-	-	-	-
	Total gross Scope 1 and Scope 2 emissions /tCO₂e	-	-	-	-
Scope 3	Category 1, emissions from indirect purchased goods and services	171	171	124	124
	Category 15, emissions from investments	43,136	15,948	36,752	13,030
	Total gross Scope 3 emissions /tCO₂e	43,307	16,119	36,876	13,154
	Total gross Scope 1, Scope 2 and Scope 3 emissions /tCO₂e	43,307	16,119	36,876	13,154

C. Describe the targets used by the organisation to manage climate‑related risks and performance against targets

The Board and the Investment Adviser are committed to improving the Company's data capture and disclosure to help drive more consistent reporting across the industry. The Company has continued to make progress towards achieving full compliance with TCFD and has expanded its reporting this year to include more physical risks in its 2ºC or lower global warming scenario, as well as improving the reliability of the data used in its 2ºC or lower scenario.

The Company intends to continue to develop its approach in relation to targets. However, given that the Company does not own or control 94% of the assets in the portfolio, certain challenges remain around setting climate-related targets at a portfolio level.

The Company has thoroughly considered the implementation of the SBTi, particularly regarding target setting.

However, there is currently no existing guidance from the SBTi on the infrastructure sector which assists with formulating targets. Formally submitting targets comes at a cost to the Company and it is therefore important to ensure it is good value for stakeholders. The first step is to establish internal targets, and the Company is in the process of ensuring robust and reliable data to establish a target base year.

The data collection exercise undertaken this year continues to provide the Company with useful portfolio-level data. This allows the Board and the Investment Adviser to focus on areas that are material. The data will also assist the Board in selecting relevant targets to manage risk and performance and inform other mitigations such as regular engagement, oversight and review.

The Company also engaged Aardvark, an independent and external provider, to advise on potential next steps to enable it to extend its reasonable assurance to commission independent assurance of its ESG data collection process in future years.

In addition, the Company engaged Terra Instinct to perform a review of the Company's TCFD disclosures and climate risk assessment, with the aim of the Investment Adviser implementing further recommendations for future periods.

The Investment Adviser runs its operations on a carbon-neutral basis. The Company is committed to achieving carbon neutrality by offsetting emissions generated by business travel, therefore supporting the transition to net zero.

1. 12 month period to 30 June 2023 or 2024 to facilitate data inclusion in the Company's annual report.

Stakeholders

Introduction

Stakeholders are integral to the long‑term success of the Company. They include shareholders, borrowers, lenders, the public sector, suppliers and local communities.

As a member of the AIC, the Company reports against the AIC Code on a comply or explain basis. Whilst the Company is not domiciled in the UK, by reporting against the AIC Code, the Company voluntarily meets the obligations under section 172 of the UK Companies Act 2006.

The Directors seek to understand the needs and priorities of the Company's stakeholders in accordance with the UK Companies Act 2006. All Board discussions involve careful consideration of the longer‑term consequences of any decisions and their implications for stakeholders.

The Board believes that the Company's key stakeholders comprise shareholders, borrowers, lenders, the public sector, suppliers and local communities. This section sets out why and how the Company engages with these stakeholders and the actions taken by it to ensure that their interests are considered by the Board.

The Board always aims to be fair and balanced in its approach. The needs of different stakeholders are considered as well as the consequences of any long-term decisions.

The stakeholder model below demonstrates how the Company interacts with its stakeholders. These relationships provide the foundation for the Company's longevity, which is beneficial to all parties. The Board understands the value of maintaining a high standard of business conduct and stakeholder engagement, whilst also ensuring the Company positively impacts the environment in which it operates.

The Directors recognise that, both individually and collectively, their overarching duty is to act in good faith and in a way that promotes the success of the Company as set out in section 172 of the UK Companies Act 2006. The Directors act for the benefit of shareholders and in the interests of stakeholders as a whole, having regard, amongst other matters, for the likely consequences of any decision in the long term on the following considerations.

Section 172:

Promoting the success of the Company

The Board of Directors consider, both individually and together, that they have acted in a way they consider, in good faith, is likely to promote the success of the Company for the benefit of its members as a whole in the decisions taken during the year as set out below.

The interests of the Company's employees

The Company has no employees but has close working relationships with the employees of the Investment Adviser and the Administrator to which it outsources its main functions.

Refer to the stakeholder engagement section below and to the governance section on pages 100 to 133 of the full annual report on the Company's website.

The need to foster the Company's business relationships with suppliers, customers and others

The Board has a close working relationship with all its advisers and regularly engages with all parties.

Refer to the stakeholder engagement section below.

The impact of the Company's operations on the community and the environment

The Company's activities are beneficial to the environment as they comprise, in part, renewable energy investments that positively impact the environment and climate change, regulatory and UK Government targets.

Refer to the sustainability section above.

The desirability of the Company maintaining a reputation for high standards of business conduct

Under the leadership of the Chairman, the Board operates with the core values of integrity and impartiality and the aim of maintaining its reputation for high standards in all areas of the business it conducts.

Refer to Board values and culture in the governance section on page 111 in the full annual report on the Company's website.

The need to act fairly between shareholders of the Company

The Board actively engages with shareholders and considers their interests when setting the Company's strategy.

This section sets out why and how the Company engages with stakeholders and the actions taken to ensure that their interests are taken into account in the Board's decision making.

Stakeholders: Why and how we engage

Shareholders

All investors in the Company, be they institutional, such as pension funds or wealth managers, or retail, such as private individuals.

Why engage

The Company generates earnings that benefit shareholders through dividend income. The Board and the Investment Adviser recognise the importance of engaging with shareholders on a regular basis to maintain a high level of transparency and accountability, acting fairly and to inform the Company's decision making and future strategy.

How the Company engages

The Company, primarily through its Investment Adviser and brokers, engages in ongoing communication with its shareholders via market interactions, analyst and marketing presentations who regularly provide feedback to the Board. The feedback received from shareholders during the course of these interactions is taken into consideration when setting the future strategy of the Company and any Board decisions which impact shareholders.

The Board encourages shareholders to attend and vote at general meetings of the Company so that they may discuss governance and strategy with them and understand their issues and concerns. The Chairman of the Board and the Chair of each committee attend general meetings of the Company to answer any questions posed by shareholders.

The Board recognises that the Company is required to have its formal shareholder meetings in Jersey, which may preclude shareholders from attending. To address this issue, the Company, together with the Investment Adviser, annually host a 'Capital Markets Day' in London.

This year the event was held in January 2024 and provided an opportunity for investors to meet the Board, the Investment Adviser and investee companies, as well as hearing in greater detail the work being undertaken to drive value within the portfolio.

Further information is provided on page 113 in the full annual report on the Company's website and the presentation from the event is available on the Company's website. The Investment Adviser is planning to hold the next Capital Markets Day in January 2025. Further information will be published by the Company in due course.

Further communication with shareholders is achieved through the annual and half‑yearly reports, news releases via the LSE and the Company's website. This information is supplemented by the quarterly calculation and publication of the NAV per share on the LSE and the publication of a quarterly factsheet by the Investment Adviser.

The Company's annual report is dispatched to shareholders by post (where requested) and is also available to download from the Company's website, together with the half-yearly report. In the annual report, the Directors seek to provide shareholders with sufficient information to allow them to obtain a reasonable understanding of developments affecting the business and the prospects for the Company in the year ahead.

Refer above and below for further information. Up-to-date information is provided on the Company's website.

Borrowers

Owners of the Project Companies to which the Company advances loans.

Why engage

The Company values its relationships with borrowers, ensuring time is spent building and maintaining these relationships. By engaging with borrowers and understanding their needs, the Company can build long-lasting relationships that are beneficial to both parties. Borrower contact enables direct feedback and informs strategic decision making at the Board level.

How the Company engages

The Company has been able to advance a further £27.3 million to existing borrowers in the financial year under review with a further £0.3 million post year end.

The Investment Adviser closely engages with borrowers on an ongoing basis. Engagement takes the form of regular interaction with the borrowers by its dedicated portfolio management team.

Refer above for further details and information about site visits carried out during the year.

The Board takes advantage of all available opportunities to engage with borrowers. This includes participating in site visits led by the Investment Adviser.

Suppliers

Suppliers across the UK and Jersey who provide administrative services to the Company.

Why engage

The Company's suppliers include third party service providers engaged to provide corporate or administrative services, in addition to the investment advisory services provided by the Investment Adviser. These services are critical to the ongoing operational performance of the Company. It relies on the performance of third party service providers to perform its main functions.

How the Company engages

The Board has a close working relationship with all its advisers and regularly engages with all parties. The Management Engagement committee regularly monitors the performance and reviews the terms of each service contract. This informs decision making at the Board level in regard to the continuing appointment of service providers.

The Audit and Risk committee also conducts an annual review of the internal controls of the Investment Adviser and the Administrator; this includes a visit to the offices of both service providers. Refer below for further details.

Public sector

Organisations owned and operated by the UK Government that exist to provide public services for society.

Why engage

Governments and regulators play a central role in shaping renewable energy, PFI and social housing sector policy. Changes in UK Government policy may adversely affect the ability of the Company to successfully pursue its investment policy and meet its investment objective or provide favourable returns to shareholders.

How the Company engages

The Company engages with local government and regulatory bodies at regular intervals and participates in focus groups and research projects on the infrastructure sector through the Investment Adviser. UK infrastructure policy informs strategic decision making at a Board level with consideration given to the impact the Company has on the sector.

Cost disclosure requirements have impacted the Company this financial year; however, positive developments have been made, with a Statutory Instrument to remove the requirement for investment companies to publish ongoing charges, becoming law on 22 November 2024. The Investment Adviser has been heavily involved in the campaign to resolve the cost disclosure issue, and it has been a significant area of engagement for the Company.

The Company has historically benefitted from co-investment alongside public bodies seeking to 'crowd-in' private sector capital and will continue to seek and evaluate such opportunities. In addition, the Company supports efforts to mobilise private capital to promote decarbonisation efforts.

The introduction of a new Government this year has meant increased focus on the UK's decarbonisation targets. In their first Budget, announced post year end in October 2024, the new Government announced their commitment to make the UK a clean energy superpower. This is beneficial for the Company, as the Investment Adviser has an extensive track record in the renewable energy sector, as well as the proven ability to target emerging sectors. This means the Company is well placed to benefit from increased investment opportunities associated with the energy transition.

Society

The Company makes a positive impact through its investments in renewables and assets such as schools and hospitals which are integral to society.

Why engage

Through its investments in renewable energy projects and assets such as schools and hospitals, the Company's activities indirectly impact the lives of thousands of people across the UK. The Company is committed to being socially responsible and the Directors consider community involvement to be an important part of that responsibility.

How the Company engages

The Company indirectly provides benefits to society through its investment activities, as it contributes to the generation of renewable energy and provides financing for infrastructure that has clear benefits to end users in society.

Investing in renewables, PPP/PFI and social housing projects indirectly creates job opportunities in supply chains that benefit local communities across the UK.

Renewables projects not only have a positive impact on the environment but also have wider benefits for society, for example, improving local communities through Community Benefit Funds.

The Company's investments in supported living have funded various social housing projects across the UK, offering high-quality accommodation for vulnerable people. The Investment Adviser is focused on operating to the highest ethical standard in this area due to the vulnerability of stakeholders.

Lenders

Financial institutions and providers of the Company's credit facilities.

Why engage

The Company's facilities are used to make investments in accordance with its investment policy. These arrangements provide the Company with access to flexible debt finance, enabling it to take advantage of investment opportunities as they arise as opposed to holding cash which is awaiting investment. Access to these facilities is vital for the efficient capital management of the Company.

How the Company engages

Lenders are financial institutions that provide debt finance in the form of an RCF. The Company, through its Investment Adviser, engages with its lenders on a regular basis, and there is a strong, supportive long‑standing relationship. The Investment Adviser, on behalf of the Company, has engaged positively with its lenders during the year.

The Company has in place an RCF with a total commitment of £150 million, following the refinance of the previous facility in March 2024, where commitments were reduced from £190 million in line with the Board's stated intention of reducing leverage.

The new facility will expire in March 2027. These arrangements are anticipated to provide the Company with continued access to flexible debt finance, enabling it to take advantage of investment opportunities as they arise, and may also be used to manage the Company's working capital requirements from time to time.

Further details on the Company's RCF can be found in note 15 to the financial statements.

Information on key Board decisions during the year and their impact on stakeholders can be found in the governance section on pages 114 to 115 in the full annual report on the Company's website.

Risk management

The Board and the Investment Adviser recognise that risk is inherent to the operation of the Company and are committed to effective risk management to protect and maximise shareholder value.

Approach to risk management

The Board has the ultimate responsibility for risk management and internal controls within the Company. The Board has adopted a risk management framework to govern how it identifies existing and emerging risks, determines risk appetite, identifies mitigation and controls, and how it assesses, monitors and measures risk and reports on risk.

Risk review process

The Board, with the assistance of the Audit and Risk committee, undertakes a formal risk review twice a year to assess the effectiveness of the Company's risk management process and internal control systems. During the year, the Board continued to track its most material risks ('A' risks) on a risk matrix showing relative probability and impact. This allowed the Board to identify the twelve principal risks facing the Company, as described below. Additional, less material, risks ('B' risks) are monitored by the Board on a watchlist.

In addition to the Audit and Risk committee, the Company's Investment committee, Management Engagement committee and Sustainability committee have a key role and contribute to the overall risk management and governance structure. Consideration is given to the materiality of risks in designing systems of internal control; however, no system of control can provide absolute assurance against the incidence of risk, misstatement or loss.

The following are the key components the Company has in place to provide effective internal control:

Execution risk

· The Board and the Investment committee have agreed clearly defined investment criteria, which specify investment characteristics, authority and exposure limits.

· The Board and the Audit and Risk committee receive and review assurance reports on the controls of the Investment Adviser and Administrator undertaken by a professional third party service provider.

· The contractual agreements with the Investment Adviser and other third party service providers, and their adherence and ongoing performance, are regularly reviewed by the Board and at least annually by the Management Engagement committee.

Portfolio risk

· The Investment Adviser prepares quarterly reports which allow the Board to assess the performance of the Company's portfolio and more general market conditions.

Financial risk

· The Investment Adviser and the Administrator prepare financial projections and financial information which allow the Board to assess the Company's activities and review its financial performance.

· The Company has policies and procedures in place to ensure compliance with legal and regulatory requirements which are monitored by the Board.

Other risks

· The Board monitors the outputs from the Company's and the Investment Adviser's compliance officers.

Emerging risks

· Emerging risks are a standard item on the Board's agenda with a continual focus and scanning of the regulatory horizon to ensure early awareness and engagement.

· Climate risk is now a key consideration for the stability of future risk-adjusted financial returns, with both physical and transition risks considered.

· The Board, through its Sustainability committee, directly or indirectly addresses climate-related risks and opportunities when evaluating and approving new investments, including an ESG risk and impact assessment completed for each new investment.

· More details on how the Board of Directors identifies, assesses and manages emerging risks, including climate change risk, is provided below.

Risk appetite

As an investment company, the Company seeks to take investment risk. The Company's investment policy above sets out the key components of its risk appetite. The Company and the Board seek to manage investment risk within set risk and return parameters. Information on the Investment Adviser's view on current asset risk characteristics for each risk sector is included in the Investment Adviser's report above.

Role of the AIFM

The Investment Adviser is the appointed AIFM to the Company and is required to operate an effective and suitable risk management framework to allow the identification, monitoring and management of the risks to which the Investment Adviser and the AIFs under its management are exposed.

The Investment Adviser's permanent risk management function has a primary role alongside the Board in shaping the risk policy of the Company. It also has responsibility for risk monitoring and risk measuring to ensure that the risk level complies with the Company's risk profile on an ongoing basis.

The principal risks faced by the Company detailed below are categorised under the headings of execution risk, portfolio risk, financial risk¹ and other risks.

Category 1: Execution risk
Risk	Impact	How the risk is managed	Change in residual risk over the year
1 Investment due diligence Investment due diligence may not reveal all the facts relevant to an investment and may not highlight issues that could affect that investment's performance. This risk is likely to be greater in new investment sectors such as geothermal, hydrogen storage, forestry and electric vehicles. Link to strategy: 1, 3	If an investment underperforms relative to expectations, the interest and principal received on the investment may be lower than envisaged, negatively impacting the performance of the Company.	In addition to due diligence carried out by the Investment committee of the Board and the Investment Adviser, various third party financial, technical, insurance and legal experts are engaged to advise on specific project risks.	Stable The current macro-economic environment is uncertain, and the future outlook for inflation and interest rates is difficult to predict with accuracy; however, the Board does not intend to increase this risk from its existing heightened level.
2 Availability of suitable investments and reinvestment risk There is no guarantee that the Company will be able to identify suitable investments with risk and return characteristics that fit within the investment strategy of the Company. Where suitable investments can be identified, the Company may face competition in closing a transaction. This is a risk when raising capital and reinvesting capital repaid to the Company under existing loan agreements. Link to strategy: 1, 2, 3	If the Company cannot invest capital in suitable assets in a timely and appropriate manner, the uninvested cash balance will have a negative impact on the Company's returns. If the only available investments with an appropriate risk profile yield lower rates of return than have historically been achievable, the Company's overall returns may be adversely affected. Furthermore, if loans are prepaid earlier than expected, the repayment of capital is accelerated, leading to a potential cash drag. Ultimately, this risks the sustainability of the dividend.	The Investment Adviser is constantly engaging with the market, seeking new deals, and building a specifically identified investment pipeline before the Company seeks to raise additional capital in order to ensure that it is deployed in a timely fashion. Consideration is also given to any scheduled capital repayments.	Increased Notwithstanding the current capital allocation policy, the Investment Adviser continues to explore future investment opportunities, and the value of the pipeline has increased relative to available funds.

1. The principal financial risks, the Company's policies for managing these risks and the policy and practice with regard to financial instruments are summarised in note 19.

Risk

Impact

How the risk is managed

Change in residual risk over the year

3 Reliance on the Investment Adviser

The Company is heavily reliant on third party service providers

to carry out its main functions.

In particular, the Company depends on the Investment Adviser and the expertise of

its key personnel and staff to implement the Company's strategy and investment policy,

to deliver its objectives and to maintain sufficient day-to-day oversight of investments.

Should any key personnel leave the employment of the Investment Adviser and it is unable to recruit other individuals of similar experience and credibility, this may have a negative impact on the performance of both the Investment Adviser and the Company.

The Company is also reliant on the effectiveness of the Investment Adviser's control environment.

Link to strategy: 1, 3

Failure by the Investment

Adviser to carry out its

obligations in accordance

with the terms of its

appointment, or to exercise

due skill and care, could have

a material effect on the Company's performance.

Any poor performance, misconduct or misrepresentation by the Investment Adviser may manifest itself in direct financial losses or result in damage to

the Company's reputation,

having longer-term financial consequences on the

Company's performance.

The performance of the Investment Adviser is monitored closely by the Board. In addition, the Management Engagement committee performs a formal review process at least once a year, which considers the ongoing performance of the Investment Adviser. The Audit and Risk committee also conducts an annual control review.

The Investment Adviser has industry and asset knowledge

of specific use and importance

to the Company. The Company has entered into a contractual agreement with the Investment Adviser on terms that it

considers to be mutually fair

and reasonable. The Investment Adviser monitors its key personnel to ensure that their experience fits the role and proper training is provided for continued professional development.

The Investment Adviser obtains assurance of its controls processes annually through the completion of an ISAE 3402 audit by external auditor, Deloitte LLP.

Stable

The Investment Adviser continues to provide adequate resources and act with due skill, care and diligence in its responsibilities as Investment Adviser and AIFM to the Company.

The Company's shares continue to trade at a significant discount¹ to NAV, in line with the wider market, which means that new investment deals are not being prioritised. The Investment Adviser is following the Board's capital allocation policy before considering new investments.

The relationship between the Investment Adviser and the Board remains strong, open and collaborative and the Directors gain additional comfort from the fact that the Investment Adviser is part of the wider ORIX Corporation group, a global financial services company.

1. APM - for definition and calculation methodology, refer to the APMs section below.

Category 2: Portfolio risk
Risk	Impact	How the risk is managed	Change in residual risk over the year
4 Changes in laws, regulations and/or UK Government policy impacting investments Changes in laws, regulations and/or UK Government policy, in particular those relating to the PPP/PFI and renewable energy markets, may have an adverse effect on the Company. Link to strategy: 1, 2, 3	Potential adverse effect on the performance of the Company's investment portfolio and the returns achieved by the Company. Price capping or other intervention in the energy market may impact returns. Reduced support for private sector finance of infrastructure and/or a material change in the approach to infrastructure delivery (such as nationalisation) represent risks to the Company's ability to reinvest capital.	Any changes in laws, regulations and/or policy, or the application thereof, are monitored by the Board on an ongoing basis. The Investment Adviser engages with industry bodies to understand and influence Government policy options. Given the UK Government's reliance on private capital for, inter alia, the funding of new social and economic infrastructure and renewable energy projects, it is the view of the Investment Adviser and the Board that, despite potential short-term intervention in the energy market, the risk of any future significant changes in policy is low and is more likely to have a prospective impact rather than a retrospective effect.	Stable The implementation of the Electricity Generator Levy in January 2023 has impacted the short-term profitability of certain assets in the portfolio. The levy will be in place until 31 March 2028. The new Government is expected to increase action around climate policy as it prioritises decarbonisation and the transition to net zero.
5 Performance of, and reliance on, subcontractors The performance of the Company's investments is typically dependent on the performance of subcontractors, most notably facilities managers and operations and maintenance subcontractors. The Company is heavily reliant on subcontractors to carry out their obligations in accordance with the terms of their appointment and to exercise due skill and care. Link to strategy: 1, 2	If a key subcontractor was to be replaced due to the insolvency of that subcontractor or for any other reason, the replacement subcontractor may charge a higher price for the relevant services than previously paid. The resulting increase in costs may result in the Company receiving lower interest and principal payments than envisaged.	The competence and financial strength of subcontractors, as well as the terms and feasibility of their engagement, are a key focus of investment due diligence. The Board and the Investment Adviser monitor the Company's exposure to any given subcontractor and ensure that the risk of underperformance is mitigated through diversification.	Stable The concentration of credit risk to any individual project did not exceed 10% of the Company's portfolio at the year end, which is the maximum amount permissible per the Company's investment policy. Notwithstanding these issues, there has been no evidence of insolvency indicators in the subcontractor group.

Risk

Impact

How the risk is managed

Change in residual risk over the year

6 Technological, operational or construction issues

The Company's investments

are exposed to construction and/or operational risks or utilise relatively new or developing technologies and may not perform as expected. Over the life of a project, components of a project may need to be replaced or undergo a major refurbishment; these costs may be higher than projected. Operational risks also include cyber risks.

In addition, climate change, in the form of changes to weather patterns, can also have an impact on assets in relation to their operation and/or construction, especially in relation to wind and solar assets.

Link to strategy: 1, 3

In the event of material operational or construction issues, the interest and

principal payments received

by the Company may be

lower than expected or

forecast and/or additional

costs may be incurred.

The Investment Adviser undertakes extensive due diligence on all projects

regarding expected performance. A full package of insurance

and manufacturer guarantees

is put in place to protect the Company from unforeseen events. The Board ensures that the Company has security over the assets against which it is lending, so in the instance of a borrower default it can enforce security over the assets and implement performance improvement plans.

The Investment Adviser's dedicated portfolio management team monitors the performance of investments on an ongoing basis. Monitoring takes the form of regular interaction with borrowers, including periodic site visits to the underlying assets. The Investment Adviser reports to the Board on asset performance on a quarterly basis.

Increased

The Company continues to face challenges in its gas-to-grid anaerobic digestion projects in Scotland, representing 4.4% of the portfolio. Significant progress has been made, completing grid upgrade works to provide a more reliable method of injecting biogas into the gas grid and reducing the likelihood of curtailment.

Construction exposure was 1% at 30 September 2024 (30 September 2023: 1%).

Category 3: Financial risk

Risk

Impact

How the risk is managed

Change in residual risk over the year

7 Valuation

The value of the investments made by the Company will change from time to time according to a variety of factors, including actual and anticipated movements in energy prices, interest rates, inflation and/or discount rates and general market pricing of similar investments.

The Company makes investments which rely on detailed financial models based on certain assumptions, estimates and projections of

each investment's future cash flow. Such assumptions include, inter alia, inflation, power prices, interest rates, feedstock costs, asset productivity, taxation, lifecycle and insurance costs. There is a risk these assumptions may be incorrect.

Link to strategy: 3

Such changes to valuations

may negatively impact the

value of the Company's investment portfolio.

There can be no assurance

that assumptions will turn out

to be accurate, and actual data could have an adverse impact

on the performance of the Company's investments.

Errors may occur in the calculation of an investment valuation with a potential corresponding impact upon

the Company's published financial statements.

The Company's infrastructure investments are generally low volatility investments with

stable, pre-determined, long‑term, public sector

backed revenues. Nearly half

of the Company's investment portfolio is exposed to some

form of inflation protection mechanism. The Company's investments are valued by an independent Valuation Agent

with reference to duration-matched interest rates,

typically between 15 and 25

year rates. The discount rates currently used to value the Company's investments

include a premium to the risk-free rate that offers protection in the event of rate rises.

When modelling future cash flows and structuring debt profiles, the Investment Adviser uses assumptions considered to be conservative by third party experts. The Investment Adviser constantly monitors the actual performance of projects and takes action where appropriate.

Stable

The Company is exposed to a number of shareholder interests, 6% of the portfolio by value (a reduction of 3% compared to the prior year) either as a result of the specific targeting of these positions or through enforcing its security as a result of the occurrence of defaults. Such exposures are more sensitive to changes in market factors, such as electricity prices, and the operational performance of projects, and are therefore likely to result in increased volatility in the valuation of the portfolio.

Risk

Impact

How the risk is managed

Change in residual risk over the year

8 Company liquidity and balance sheet risk

The Company requires cash flows from investment income and loan repayments to fund

its investment activities.

The Company utilises borrowing facilities to finance and/or part‑finance further acquisitions

in accordance with the Company's investment policy. However, there can be no guarantee that any such facility will be available to the Company on commercially acceptable terms or at all.

Link to strategy: 1

If the Company is unable to secure borrowing facilities

this may adversely affect the Company's investment returns and may have a material

adverse effect on the

Company's financial position

and its operating results.

The RCF has historically been

in place to fund potential investments in the near term

and to avoid holding material amounts of uninvested cash awaiting investment. Consideration may also be

given to other forms of credit

as part of the Company's

future funding strategy.

Through the use of forecasting and modelling techniques,

the Investment Adviser has

the capability to plan in

advance the sale of assets

if required for liquidity purposes.

Decreased

The Board and the Investment Adviser continue to pay close attention to cash flow modelling and cash cover to finance acquisitions and to pay dividends.

During the year, the Company disposed of its interest in loan notes secured against Blackcraig Wind Farm. The disposal occurred at a 6.4% premium to the valuation of the project at 31 March 2024. The Investment Adviser, on behalf of the Company, continues to progress a number of additional disposal opportunities.

The Company reduced its RCF from £190 million to £150 million and has repaid amounts of £47 million in line with the Board's stated intention to reduce leverage by the end of 2024.

Category 4: Other risks
Risk	Impact	How the risk is managed	Change in residual risk over the year
9 Litigation or legal risk Litigation or legal action either by the Company or against it or its assets, which involve legal costs, management time and resources with potential asset impairment consequences, notwithstanding possible mitigation through insurance schemes. The Company is required to disclose material litigation to shareholders and/or the Company's regulators. Link to strategy: 1, 3	Any material legal claims or regulatory action against the Company or its underlying assets may adversely damage the Company's reputation and affect the Company's ability to successfully pursue its investment policy, meet its investment objective and/or provide favourable returns to shareholders.	The Board is kept informed by the Investment Adviser regarding any litigation or regulatory action relating to the portfolio. If necessary, a sub‑committee of the Board is constituted to oversee a specific matter. Insurance regarding representations and warranties is considered on its merits by the Investment Adviser for each transaction.	Stable Previously disclosed litigation and regulatory proceedings regarding a number of solar assets have continued to progress during the year. Further details are set out in the Investment Adviser's report above.
10 Geopolitical	Impacts on supply chains, inflation, interest rates, and adverse exchange rate movements. Potential volatility on long-term power prices affecting the Company's exposure to shareholder interests. Increase in the volume of capital flowing into infrastructure and renewable projects creating downward pressure on yields and difficulty in sourcing investments within the required risk return parameters of the Company's investment strategy. Potential for increased uncertainty around investment valuations if Government subsidy or support is unpredictable.	Regular engagement with the public sector through the Investment Adviser. The Investment Adviser conducts quarterly reviews on important and/or emerging topics for the Board's consideration. Monitoring of key emerging issues is undertaken by the Directors on an ongoing basis.	Stable The world remains turbulent, with the ongoing war in Ukraine and unrest in the Middle East. This is balanced by a new Government in the UK who are committed to making the UK a clean energy superpower as set out in their Autumn Budget. This is set to increase energy security in the UK and promote investment in the renewable energy sector. The Board does not consider that this risk needs to be increased from its existing heightened level. The Board, along with the Investment Adviser, continues to closely monitor the impact of these issues on the portfolio.
Risk of a sustained shift in the geopolitical environment. For instance, international conflict, a winding back of globalisation, trade wars and the desire to be more self-sufficient in energy, and increased migrant flows. Link to strategy: 1, 2, 3

Risk

Impact

How the risk is managed

Change in residual risk over the year

11 Share price discount¹ or

premium¹ to NAV

The Company's share price discount¹ to NAV will persist

and widen to a significant level,

or will remain at an insufficiently large or consistent premium¹.

Link to strategy: 1, 2, 3

A significant discount1 may prevent the Company raising more capital. If the Company

is unable to secure further

capital for investment, this

may adversely affect the Company's ability to achieve

its investment policy and

strategy and/or maintain a diversified portfolio of investments.

The level of discount¹ that the Company's shares are trading

at has meant that buybacks

have become an attractive

option from an investment

point of view relative to other opportunities. Consequently, during the year, the Company has continued its share

buyback programme. The decision to buy back shares

is subject to ongoing evaluation by the Board of the Company's share price, the investment pipeline and the available cash resources of the Company. The level of discount¹ relative to the NAV per share is closely monitored by the Board.

Stable

The Company's shares have traded at an average discount¹ of 32.4% during the year and an average premium¹ of 3.8% since IPO. The level of share price discount¹ is closely monitored by the Board.

The Company is executing on its capital allocation policy with progress made to date, which is expected to enhance earnings per share and dividend cover going forward.

12 Strategic positioning

The Company's shares are trading at a persistent discount¹ to NAV. In this environment

there is a strong argument to prioritise de-levering and buying back shares over making any new investments. The Board has to determine the right balance and set the strategy accordingly. Shareholders may disagree with the strategy, or it may not work as intended.

Link to strategy: 1, 2, 3

Implementation of the wrong strategy or poor execution of

it will damage sentiment in the Company, exacerbating the discount¹.

The Board is prioritising the allocation of capital to pay

down the balance drawn under

its RCF alongside the buyback

of shares. Select sales of

portfolio assets are also under consideration. At the same time, the Investment Adviser continues to develop a pipeline of new investment opportunities and is considering the refinance of existing positions to improve returns and/or reduce risk, whilst acknowledging the current high hurdle for new investment.

Stable

The Board and the Investment Adviser are working closely to address the discount¹ at which the shares trade through the execution of the capital allocation policy.

Key to strategy references

1 - Dividend income

2 - Diversification

3 - Capital preservation

1. APM - for definition and calculation methodology, refer to the APMs section below.

Emerging risks

Emerging risks need to be managed differently than 'business as usual' risks. Emerging risks are, by their nature, more challenging to identify, assess and manage. There is a lack of data to assess and to base the risk response on. The relevant emerging risks for the Company are described below. Emerging risks is an area the Board will continue to consider.

Emerging risks

Risk

Impact

How the risk is managed

Change in residual risk over the year

1 Climate change

a) Physical

Higher frequency and severity

of extreme weather conditions, for example intense heat waves, storm surges and higher water levels on coasts.

If renewable assets are

damaged by extreme weather events, with the subsequent inability to connect to the grid,

or suffer reduced availability,

this would impact revenue.

The portfolio is diversified

across a number of asset

classes and physical locations and ESG processes are embedded in investment

decision making.

The Investment Adviser has a Responsible Investment policy and a Responsible Investment committee to monitor and implement ESG initiatives. Environmental impact assessments are carried out

as part of the due diligence process. The Investment

Adviser also carries out

ongoing performance

monitoring, including site visits

by experienced personnel. Regular fortnightly updates,

ad hoc and quarterly detailed reports on asset performance

are provided to the Board.

Stable

The Board considers this a long-term issue; the impact of climate change on the Company's portfolio will continue to be closely monitored by the Board, the ESG committee and the Investment Adviser.

During the year, the Investment Adviser carried out a climate risk assessment for each underlying portfolio asset as part of its TCFD disclosures to assess the actual and potential impacts of climate‑related risks and opportunities across the portfolio. The analysis considered both physical and transition risks for each asset. Further information is given above.

2 Climate change

b) Transition

Risks associated with the long‑term trends arising from climate change and the energy transition it requires. This includes increasing regulation, insurance availability and price, government inertia or over‑reaction, failure of

business models, and

changing consumer and

business preferences.

Increased focus on

sustainability and ESG

factors amongst governments, regulators, shareholders and

the wider community. Any associated consequences

arising from

this risk, such as regulatory

or legal sanctions including financial and reputational damage. Governmental availability, sufficiency and consistency of support mechanisms to enable the transition to a low carbon economy. Potential increase in costs to the Company.

The Board is focused on this area. Compliance with both

new and existing reporting requirements and best practice

is managed by the Investment Adviser and monitored by the Audit and Risk committee and

the Sustainability committee.

Stable

The new Government is expected to increase action around climate policy as it prioritises decarbonisation and the transition to net zero.

However, Government climate policy, transition planning frameworks, and standards of best practice are all nascent and will continue to evolve for some time.

The Sustainability committee and the Investment Adviser will continue to monitor and assess the impact of these policies on the investment portfolio and the Company as a whole.

Going concern assessment and viability statement

Going concern

The Directors have considered the financial prospects of the Company for the next twelve months and made an assessment of the Company's ability to continue as a going concern. The Directors' assessment included consideration of the availability of the Company's RCF, hedging arrangements, cash flow forecasts and stress scenarios.

The Directors are satisfied that the Company has the resources to continue in business for the foreseeable future and are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.

Viability statement

At least twice a year, the Board carries out a robust assessment of the principal and emerging risks facing the Company, including those that may threaten its business model, future performance, solvency and liquidity.

The Directors have considered each of the Company's principal risks, detailed above, that could materially affect the cash flows of the underlying projects that support the Company's investments.

The potential impact of a further increase in power prices and, in particular, the consequent cash requirements of the Company's hedging programme, have been considered in the context of each project in the portfolio.

The Directors also considered the Company's policy for monitoring, managing and mitigating its exposure to these risks.

The Directors have assessed the prospects of the Company over a longer period than the twelve months from the date of signing the report required by the going concern provision. The Board has conducted this review for a period covering the next five years as, over this period, it believes the risk of changes in UK Government policy that would result in retrospective adjustments to public sector backed cash flows is low.

This assessment involved an evaluation of the potential impact on the Company of these risks occurring. Where appropriate, the Company's financial model was subject to a sensitivity analysis involving flexing a number of key assumptions in the underlying financial forecasts in order to analyse the effect on the Company's net cash flows and other key financial ratios. The assumptions used to model these scenarios included:

· an increase in the cost of debt by 3% over the all-in margin or operating expenses of 50%;

· the impact of a significant proportion of the portfolio, 50%, not yielding, which is a worst case scenario and would require a number of the principal risks materialising in parallel; and

· the potential impact of a short-term increase in electricity prices over the period to maturity of the financial derivatives by a 99% worst case scenario and, in particular, the consequent cash requirements of the Company's hedging programme.

Alongside this analysis, reverse stress testing was carried out in order to further assess the Company's viability.

The sensitivity analysis was based on a number of assumptions, including that the Company's RCF is refinanced in advance of the date of expiry if required, and it remains in place to provide short-term finance.

Given the projects that the Company's investments are secured against are all UK infrastructure projects that generate long-dated, public sector backed cash flows, the Board considers the revenue of the Company over that period to be dependable. This is supported by a diversified portfolio of investments, reducing exposure to risks affecting a single sector.

Additionally, the Company primarily invests in long-dated UK infrastructure debt that earns a fixed rate of interest and is repaid over time according to a pre-determined amortisation schedule. As such, assuming that the underlying projects perform as expected, the Company's cash inflows are predictable.

Based on this assessment of the principal risks facing the Company, stress testing and reverse stress testing undertaken to assess the Company's prospects, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of assessment.

Approval

The strategic report has been approved by the Board and signed on its behalf by:

Andrew Didham

Chairman

11 December 2024

1. APM - for definition and calculation methodology, refer to the APMs section below.

Financial statements

Autumn Budget 2024

The Autumn Budget was eagerly anticipated. While taxes and NHS funding grabbed the initial headlines (including £1.5 billion for new hospital beds and diagnostic centres), the new Government's commitment to making the UK a clean energy superpower is increasingly positive. The Board believes this presents a material opportunity for investment and growth in the UK and is vital for achieving the UK's decarbonisation commitments.

Commitments to hire 300 more planners and work with the National Energy System Operator ("NESO") and Ofgem to accelerate grid connections are welcome to unlocking development. A commitment to reform relevant National Policy Statements within twelve months also recognises the need for planning reform.

Other infrastructure and clean energy pledges included £8 billion for carbon capture, usage and storage infrastructure and include eleven green hydrogen projects.

There was also support for four new electrolytic hydrogen projects across Scotland and Wales, £200 million for electric vehicle charging infrastructure, support for port infrastructure to facilitate floating offshore wind (£134 million), the rollout of broadband through Project Gigabit and shared rural networks (£500 million) and £125 million for Great British Energy in 2025/26 (£100 million of capital and £25. million of establishment costs).

In relation to core infrastructure, the Chancellor built on the new Government's manifesto commitments and announced £5 billion to meet their commitment of delivering 1.5 million new homes, £1.4 billion to rebuild schools, and £1.2 billion to deliver extra prison services.

The Board is looking forward to the announcement of the ten year infrastructure strategy which will be published in the spring of 2025 and a 'Clean Power 2030 Action Plan' which the new Government have also committed to. Both are expected to contain more detail than was provided in the Autumn Budget on the new Government's commitment to decarbonise the electricity grid by 2030, and how it will support wider infrastructure deployment.

Statement of Directors' responsibilities

In respect of the annual report and financial statements

The Directors are responsible for preparing the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under Jersey Company Law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and applicable law.

Under Jersey Company Law, the 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 these financial statements, the Directors are required to:

· select suitable accounting policies and apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

· assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

· use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with Jersey Company Law. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions where the financial statements are published on the internet.

Directors' responsibility statement

In accordance with the UK FCA's Disclosure Guidance and Transparency Rules, each of the Directors on the Board at the date of this report, whose names are set out on page 116 in the full annual report on the Company's website, confirms that to the best of his or her knowledge:

· the financial statements have been prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

· the strategic report, including the Directors' report, includes a fair, balanced 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 the Company faces.

The annual report and financial statements, taken as a whole, are considered by the Board to be fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board

Andrew Didham

Chairman

11 December 2024

Independent Auditor's report

To the members of GCP Infrastructure Investments Limited

Our opinion is unmodified

We have audited the financial statements of GCP Infrastructure Investments Limited (the "Company"), which comprise the statement of financial position as at 30 September 2024, the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information.

In our opinion, the accompanying financial statements:

· give a true and fair view of the financial position of the Company as at 30 September 2024, and of the Company's financial performance and cash flows for the year then ended;

· are prepared in accordance with International Financial Reporting Standards as adopted by the EU; and

· have been properly prepared in accordance with the Companies (Jersey) Law, 1991.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed entities. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Key audit matters: our assessment of the risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our audit opinion above, the key audit matter was as follows (unchanged from 2023):

Key audit matters	The risk	Our response
Valuation of financial assets at fair value through profit or loss	Basis:	Our audit procedures included:
£960,023,000 or 98.8% of total assets; (2023: £1,046,568,000 or 98.3% of total assets) Refer to the Audit and Risk Committee Report (above), note 2.2 - significant accounting judgements and estimates, and note 11 - financial assets at fair value through profit or loss, and note 19 - financial instruments	98.8% of the Company's total assets is represented by the fair value of a portfolio of unquoted infrastructure investments domiciled in the United Kingdom (the 'Investments'). The Company's estimation of the fair value of the Investments primarily involves using a discounted cash flow methodology, where the inputs and assumptions, such as the amounts and timings of cash flows, the use of appropriate discount rates and the selection of appropriate assumptions surrounding uncertain future events are subjective.	Internal Controls: We tested the design and implementation of the controls adopted by the Company over the valuation of the Investments. Evaluating experts engaged by management: We performed enquiries of the Investment Adviser and Valuation Agent to update our knowledge of the valuation process and methodology and reassessed its appropriateness against industry practice and IFRS. We evaluated the competency of the Company's third party Valuation Agent in the context of their ability to appropriately challenge and review the fair value of the Investments prepared by the Company, by assessing their professional qualifications, experience and independence from the Company. Use of KPMG Specialists: We challenged, with the support of our KPMG valuation specialist, the reasonableness of discount rates applied in the valuation by comparing these to independent market data including discount rates used by peers, recent market transactions and our KPMG valuation specialist's experience in valuing similar investments.
	Risk: There is a risk of error associated with: · estimating the timing and amounts of long-term forecasted cash flows; and · the selection and application of appropriate assumptions, such as discount rates and other inputs. Changes to long-term forecasted cash flows and/or the selection and application of different assumptions and inputs may result in a materially different fair value being attributed to the Investments	Challenging managements' assumptions and inputs: We performed substantive procedures in relation to the Company's determination of fair value on a risk based selection of Investments, which included: · for new Investments during the year, compared the long‑term forecasted cash flows included in the discounted cash flow model to the terms of the loan agreements, such as the repayment profile, prepayment premium, loan term and the coupon; · assessed the recoverability of outstanding cash flows by considering financial performance of underlying assets, the general economic environment and reviewing the repayment history; · assessed the reasonableness of key general and project‑specific inputs and assumptions into the cash flow projections for equity linked loan notes, to corroborate key revenues and costs with reference to relevant market data, underlying contracts, agreements and management information; and · assessed the reliability of the Company's cash flow forecasts included in the valuation models by appraising the completeness and accuracy of the retrospective review analysis performed by the Investment Adviser. Assessing disclosures: We considered the adequacy of the Company's disclosures in note 19.3 in respect of the fair value of Investments for compliance with IFRS, specifically the estimates and judgements made by the Company in arriving at that fair value and the disclosure of the degree of sensitivity of the fair value to a reasonably possible change in the discount rate.

Our application of materiality and an overview of the scope of our audit

Materiality for the financial statements as a whole was set at £10,000,000, determined with reference to a benchmark of total assets of £971,915,000, of which it represents approximately 1.0% (2023: 1.0%).

In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Performance materiality for the Company was set at 75% (2023: 75%) of materiality for the financial statements as a whole, which equates to £7,500,000. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk.

We reported to the Audit and Risk Committee any corrected or uncorrected identified misstatements exceeding £500,000, in addition to other identified misstatements that warranted reporting on qualitative grounds.

Our audit of the Company was undertaken to the materiality level specified above, which has informed our identification of significant risks of material misstatement and the associated audit procedures performed in those areas as detailed above.

Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (the "going concern period").

In our evaluation of the directors' conclusions, we considered the inherent risks to the Company's business model and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to affect the Company's financial resources or ability to continue operations over this period were:

· availability of capital to meet operating costs and other financial commitments;

· availability of credit facilities and the ability of the Company to comply with debt covenants; and

· the recoverability of financial assets subject to credit risk.

We considered whether these risks could plausibly affect the liquidity in the going concern period by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Company's financial forecasts.

We considered whether the going concern disclosure in note 2.1 to the financial statements gives a full and accurate description of the directors' assessment of going concern.

Our conclusions based on this work:

· we consider that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate;

· we have not identified, and concur with the directors' assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period; and

· we have nothing material to add or draw attention to in relation to the directors' statement in the notes to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Company's use of that basis for the going concern period, and that statement is materially consistent with the financial statements and our audit knowledge.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

Fraud and breaches of laws and regulations - ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

· enquiring of management as to the Company's policies and procedures to prevent and detect fraud as well as enquiring whether management have knowledge of any actual, suspected or alleged fraud;

· reading minutes of meetings of those charged with governance; and

· using analytical procedures to identify any unusual or unexpected relationships.

As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries. On this audit we do not believe there is a fraud risk related to revenue recognition because the Company's revenue streams are simple in nature with respect to accounting policy choice, and are easily verifiable to external data sources or agreements with little or no requirement for estimation from management. We did not identify any additional fraud risks.

We performed procedures including

· Identifying journal entries and other adjustments to test based on risk criteria and comparing any identified entries to supporting documentation; and

· incorporating an element of unpredictability in our audit procedures.

Identifying and responding to risks of material misstatement due to non‑compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience and through discussion with management (as required by auditing standards), and from inspection of the Company's regulatory and legal correspondence, if any, and discussed with management the policies and procedures regarding compliance with laws and regulations. As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity's procedures for complying with regulatory requirements.

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

The Company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or impacts on the Company's ability to operate. We identified financial services regulation as being the area most likely to have such an effect, recognising the regulated nature of the Company's activities and its legal form. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of management and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remains a higher risk of non-detection of fraud, as this may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Disclosures of emerging and principal risks and longer term viability

We are required to perform procedures to identify whether there is a material inconsistency between the directors' disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. we have nothing material to add or draw attention to in relation to:

· the directors' confirmation within the Going Concern Assessment and Viability Statement (above) that they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity;

· the emerging and principal risks disclosures describing these risks and explaining how they are being managed or mitigated;

· the directors' explanation in the Going Concern Assessment and Viability Statement (above) as to how they have assessed the prospects of the Company, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

We are also required to review the Going Concern Assessment and Viability Statement, set out on page 98 under the Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a material inconsistency between the directors' corporate governance disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit knowledge:

· the directors' statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy;

· the section of the annual report describing the work of the Audit and Risk Committee, including the significant issues that the audit and risk committee considered in relation to the financial statements, and how these issues were addressed; and

· the section of the annual report that describes the review of the effectiveness of the Company's risk management and internal control systems.

We are required to review the part of Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.

We have nothing to report on other matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the Company; or

· the Company's financial statements are not in agreement with the accounting records; or

· we have not received all the information and explanations we require for our audit.

Respective responsibilities

Directors' responsibilities

As explained more fully in their statement set out above, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC's website at www.frc.org.uk/auditorsresponsibilities.

The purpose of this report and restrictions on its use by persons other than the Company's members as a body

This report is made solely to the Company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991 and, in respect of any further matters on which we have agreed to report, on terms we have agreed with the Company. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Quinn

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognized Auditors Jersey

11 December 2024

Statement of comprehensive income

For the year ended 30 September 2024

		Year ended	Year ended
		30 September	30 September
		2024	2023
	Notes	£'000	£'000
Income
Net income/gains on financial assets at fair value through profit or loss	3	37,340	29,301
Net gains on derivative financial instruments at fair value through profit or loss	3	496	12,860
Other income	3	493	9,544
Total income		38,329	51,705
Expenses
Investment advisory fees	20	(8,300)	(8,670)
Operating expenses	5	(3,038)	(2,752)
Total expenses		(11,338)	(11,422)
Total operating profit before finance costs		26,991	40,283
Finance costs	6	(7,477)	(9,378)
Total profit and comprehensive income for the year		19,514	30,905
Basic and diluted earnings per share (pence)	10	2.25	3.50

All of the Company's results are derived from continuing operations.

The accompanying notes below form an integral part of these financial statements.

Statement of financial position

As at 30 September 2024

		As at	As at
		30 September	30 September
		2024	2023
	Notes	£'000	£'000
Assets
Cash and cash equivalents	14	11,755	16,867
Other receivables and prepayments	12	137	575
Derivative financial instruments at fair value through profit or loss	18	-	265
Financial assets at fair value through profit or loss	11, 19	960,023	1,046,568
Total assets		971,915	1,064,275
Liabilities
Other payables and accrued expenses	13	(2,885)	(4,048)
Derivative financial instruments at fair value through profit or loss	18	(110)	-
Interest bearing loans and borrowings	15	(55,790)	(103,674)
Total liabilities		(58,785)	(107,722)
Net assets		913,130	956,553
Equity
Share capital	16	8,678	8,712
Share premium	16	858,965	861,118
Capital redemption reserve	17	101	101
Retained earnings		45,386	86,622
Total equity		913,130	956,553
Ordinary shares in issue (excluding treasury shares)	16	867,812,650	871,232,650
NAV per ordinary share (pence per share)		105.22	109.79

The financial statements were approved and authorised for issue by the Board of Directors on 11 December 2024 and signed on its behalf by:

Andrew Didham
Chairman

Steven Wilderspin FCA
Director

The accompanying notes below form an integral part of these financial statements.

Statement of changes in equity

For the year ended 30 September 2024

				Capital
		Share	Share	redemption	Retained	Total
		capital	premium¹	reserve	earnings	equity
	Notes	£'000	£'000	£'000	£'000	£'000
At 1 October 2022		8,848	871,606	101	117,502	998,057
Total profit and comprehensive income for the year		-	-	-	30,905	30,905
Share repurchases	16	(136)	(10,467)	-	-	(10,603)
Shares repurchase costs	16	-	(21)	-	-	(21)
Dividends	9	-	-	-	(61,785)	(61,785)
At 30 September 2023		8,712	861,118	101	86,622	956,553
Total profit and comprehensive income for the year		-	-	-	19,514	19,514
Share repurchases	16	(34)	(2,149)	-	-	(2,183)
Shares repurchase costs	16	-	(4)	-	-	(4)
Dividends	9	-	-	-	(60,750)	(60,750)
At 30 September 2024		8,678	858,965	101	45,386	913,130

1.The share premium reserve is a distributable reserve in accordance with Jersey Company Law. Refer to note 9 for further information.

The accompanying notes below form an integral part of these financial statements.

Statement of cash flows

For the year ended 30 September 2024

		Year ended	Year ended
		30 September	30 September
		2024	2023
	Notes	£'000	£'000
Cash flows from operating activities
Total operating profit before finance costs		26,991	40,283
Adjustments for:
Loan interest income	3	(87,297)	(80,750)
Net losses on financial assets at fair value through profit or loss	3	49,957	51,449
Net gains on derivative financial instruments at fair value through profit or loss	3	(496)	(12,860)
Decrease in other payables and accrued expenses		(1,097)	(33)
Decrease/(increase) in other receivables and prepayments		436	(390)
Total		(11,506)	(2,301)
Loan interest received	3	65,129	58,791
Purchase of financial assets at fair value through profit or loss	11	(5,133)	(66,739)
Repayment of financial assets at fair value through profit or loss	11	63,889	78,012
Proceeds on derivative financial instruments at fair value through profit or loss	3	871	8,734
Net cash flows generated from operating activities		113,250	76,497
Cash flows from financing activities
Proceeds from revolving credit facility	15	18,147	55,000
Repayment of revolving credit facility	15	(67,022)	(50,000)
Share repurchases	16	(2,183)	(10,090)
Share repurchase costs	16	(4)	(20)
Dividends paid	9	(60,750)	(61,785)
Finance costs paid		(6,550)	(8,716)
Net cash flows used in financing activities		(118,362)	(75,611)
Net (decrease)/increase in cash and cash equivalents		(5,112)	886
Cash and cash equivalents at beginning of the year		16,867	15,981
Cash and cash equivalents at end of the year	14	11,755	16,867
Net cash flows generated by operating activities includes:
Loan fee income	3	61	9,143
Deposit interest received	3	432	401

The accompanying notes below form an integral part of these financial statements.

Notes to the financial statements

For the year ended 30 September 2024

1. General information

GCP Infrastructure Investments Limited is a public company incorporated and domiciled in Jersey on 21 May 2010 with registration number 105775. The Company is governed by the provisions of Jersey Company Law and the CIF Law.

The Company is a closed-ended investment company and its ordinary shares are traded on the Main Market of the LSE.

The Company makes infrastructure investments, typically by acquiring interests in debt instruments issued by infrastructure Project Companies, their owners or their lenders and related and/or similar assets which provide regular and predictable long‑term cash flows.

2. Material accounting policy information

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies, except for the changes discussed in this note, have been consistently applied throughout the years presented.

2.1 Basis of preparation

These financial statements are prepared in accordance with IFRS as adopted by the EU. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities held at fair value through profit or loss.

New standards, amendments and interpretations adopted in the year

In the current year the Company has applied amendments to IFRS issued by the IASB. These include annual improvements to IFRS, changes in standards, legislative and regulatory amendments, changes in disclosure and presentation requirements.

The new IFRS that will apply for reporting periods beginning 1 January 2027 is as follows:

· presentation and disclosure in financial statements (introduction of IFRS 18).

Under current IFRS accounting standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies.

IFRS 18 promotes a more structured income statement. In particular, it introduces a newly defined 'operating profit' subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company's main business activities.

The Directors are still assessing the impact of IFRS 18, but at present do not anticipate it to have a material impact on the financial statements. Other than those detailed above, there are no new IFRS or IFRIC interpretations that are issued but not effective that are expected to have a material impact on the Company's financial statements.

Classification and measurement of financial instruments

Amendments to IFRS 7 and 9 effective on or before 1 January 2026, over the following 12 months an assessment will be conducted on the impact of IFRS 7 and 9 which relate to settlement of liabilities through electronic payment systems and the classification of financial assets with ESG and similar features. The Company has elected not to early adopt the amendments to IFRS 7 and 9.

Functional and presentation currency

Items included in the financial statements of the Company are measured in the currency of the primary economic environment in which the Company operates. The financial statements are presented in Pound Sterling and all values have been rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

Going concern

The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the Company has the resources to continue in business for the foreseeable future and for a period of at least twelve months from the date of the authorisation of these annual financial statements.

The Investment Adviser has prepared cash flow forecasts which were challenged and approved by the Directors and included consideration of the availability of the Company's RCF, hedging arrangements, cash flow forecasts and stress scenarios.

The Directors are not aware of any material uncertainties that cast doubt upon the Company's ability to continue as a going concern. Therefore, the financial statements have been prepared on a going concern basis.

2.2 Significant accounting judgements and estimates

The preparation of financial statements in accordance with IFRS requires the Directors of the Company to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts recognised in the financial statements.

However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability in the future.

(a) Critical accounting estimates and assumptions

Fair value of instruments not quoted in an active market

The valuation process is dependent on assumptions and estimates which are significant to the reported amounts recognised in the financial statements taking into account the structure of the Company and the extent of its investment activities (refer to note 19 for further information).

(b) Critical judgements

Assessment of non-current assets held for sale

The Directors have determined that at the date of the report, none of the Company's assets fulfil the classification criteria prescribed by IFRS 5. This determination has been made with consideration to the Company's capital allocation policy and the relative progress of various sales processes. This process requires judgement in assessing a complex range of commercial factors in the context of the purpose, objectives and operational norms of the Company and its sector, and the application of the objective and scope of the standard. Factors considered include: the probability of completing a sale within a specified timeframe, the status of commercial negotiations and related agreements, the relative strength of obligations or disincentives for non‑performance, and the possibility of impediments to completion or a change in terms.

Assessment as an investment entity

The Directors have determined that the SPVs through which the Company invests fall under the control of the Company in accordance with the control criteria prescribed by IFRS 10 and therefore meet the definition of subsidiaries. In addition, the Directors continue to hold the view that the Company meets the definition of an investment entity and therefore can measure and present the SPVs at fair value through profit or loss. This process requires a significant degree of judgement taking into account the complexity of the structure of the Company and the extent of investment activities (refer to note 11 for further information).

Segmental information

For management purposes, the Company is organised into one main operating segment. All of the Company's activities are interrelated and each activity is dependent on the others. Accordingly, all significant operating decisions by the Board (as the chief operating decision maker) are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole. The following table analyses the Company's underlying operating income per geographical location. The basis for attributing the operating income is the place of incorporation of the underlying counterparty.

	30 September	30 September
	2024	2023
	£'000	£'000
Channel Islands	432	401
United Kingdom	37,897	51,304
Total	38,329	51,705

3. Operating income

The table below analyses the Company's operating income for the year by investment type:

	30 September	30 September
	2024	2023
	£'000	£'000
Interest received on cash and cash equivalents	432	401
Loan fee income¹	61	9,143
Other income	493	9,544
Net changes in fair value of financial instruments at fair value through profit or loss	37,836	42,161
Total	38,329	51,705

1.Includes prepayment fee of £61,000 (30 September 2023: prepayment fees of £8,715,000 and restructuring fee income of £375,000).

The table below analyses the Company's net changes in fair value of financial assets and financial liabilities at fair value through profit or loss:

	30 September	30 September	30 September	30 September
	2024	2024	2023	2023
	£'000	£'000	£'000	£'000
Loan interest received	65,129		58,791
Loan interest capitalised	22,168		21,959
Total loan interest income		87,297		80,750
Unrealised gains on financial assets at fair value through profit or loss	13,549		15,017
Unrealised losses on financial assets at fair value through profit or loss	(65,394)		(66,603)
Total net unrealised losses on financial assets at fair value through profit or loss	(51,845)		(51,586)
Net realised gains on disposal of financial assets at fair value through profit or loss	1,888		137
Total net losses on financial assets at fair value through profit or loss		(49,957)		(51,449)
Total net income/gains on financial assets at fair value through profit or loss		37,340		29,301
Unrealised (losses)/gains on derivative financial instruments at fair value through profit or loss	(375)		4,126
Realised gains on settlement of derivative financial instruments at fair value through profit or loss	871		8,734
Total net gains on derivative financial instruments at fair value through profit or loss		496		12,860
Net changes in fair value of financial instruments at fair value through profit or loss		37,836		42,161

Accounting policy

Interest income and interest expense, other than interest income received on financial assets at fair value through profit or loss, are recognised on an accrual basis in the statement of comprehensive income. Interest income on financial assets is included in net income/gains on financial assets at fair value through profit or loss in the statement of comprehensive income.

Gains or losses on disposals of financial assets at fair value through profit or loss represent the difference between the proceeds received on the repayment of loan notes and the carrying value of loan notes at the time of sale or disposal. Net gains or losses on disposal of financial assets at fair value through profit or loss are included in net income/gains on financial assets at fair value through profit or loss in the statement of comprehensive income.

Other operating income includes unscheduled (early) prepayment fees which are recognised in the financial statements when the contractual provisions are met and the amounts become due.

The Company holds derivative financial instruments comprising a commodity swap to hedge its exposure to the volatility of the electricity prices in the market. It is not the Company's policy to trade in derivative financial instruments. Commodity swaps are held at fair value through profit or loss, being the difference between the fixed legs with a fixed price and floating legs that are indexed. The Company does not apply hedge accounting and consequently all gains or losses in the fair value of the derivative financial instruments are recognised in the statement of comprehensive income, refer to note 18.

4. Auditor's remuneration

	30 September	30 September
	2024	2023
	£'000	£'000
Audit fees	182	169
Non-audit fees - review of half‑yearly report and financial statements	50	47
Total	232	216

5. Operating expenses

	30 September	30 September
	2024	2023
	£'000	£'000
Corporate administration and Depositary fees	1,008	1,034
Legal and professional fees	49	18
Independent Valuation Agent fees	260	260
Directors' remuneration and expenses¹	451	432
Advisory fees	229	114
Registrar fees	67	74
Other expenses	974	820
Total	3,038	2,752

1.Refer to note 7 for further information.

Key service providers other than the Investment Adviser (refer to note 20 for disclosures in respect of the Investment Adviser)

Administrator and Company Secretary

The Company has appointed Apex Financial Services (Alternative Funds) Limited as Administrator and Company Secretary. Fund accounting, administration services and company secretarial services are provided to the Company pursuant to an agreement dated 31 January 2014 and amended and restated on 20 November 2023. All Directors have access to the advice and services of the Company Secretary, who provides guidance to the Board, through the Chairman, on governance matters. The fee for the provision of administration and company secretarial services during the year was £724,000 (30 September 2023: £735,000), of which £172,000 remains payable at year end (30 September 2023: £182,000).

Depositary

Depositary services are provided to the Company by Apex Financial Services (Corporate) Limited pursuant to an agreement dated 21 July 2014. The fee for the provision of these services during the year was £284,000 (30 September 2023: £299,000) of which £70,000 remains payable at year end (30 September 2023: £74,000).

Accounting policy

All operating expenses are charged to the statement of comprehensive income and are accounted for on an accrual basis.

6. Finance costs

	30 September	30 September
	2024	2023
	£'000	£'000
Finance costs	7,477	9,378

Accounting policy

Finance expenses in the statement of comprehensive income comprise loan arrangement fees, loan commitment fees, loan interest expense and agency fees which are accounted for on an accruals basis along with interest accrued on the facility incurred in connection with the borrowing of funds. Arrangement fees are amortised over the life of the facility.

7. Directors' remuneration

The Directors of the Company are remunerated on the following basis:

	30 September	30 September
	2024	2023
	£'000	£'000
Andrew Didham	96	92
Ian Reeves CBE¹	-	5
Julia Chapman	61	58
Michael Gray	76	72
Steven Wilderspin	74	70
Dawn Crichard	73	70
Alex Yew	63	55
	443	422
Directors' expenses	8	10
Total	451	432

1. Ian Reeves CBE stepped down as Chairman of the Company effective from 20 June 2022 and retired from the Board on 31 October 2022.

Full details of the Directors' remuneration policy can be found on page 130 in the full annual report on the Company's website.

8. Taxation

Profits arising in the Company for the year ended 30 September 2024 are subject to tax at the standard rate of 0% (30 September 2023: 0%) in accordance with the Income Tax (Jersey) Law 1961, as amended.

9. Dividends

Dividends for the year ended 30 September 2024 were 7.0 pence per share (30 September 2023: 7.0 pence per share) as follows:

			30 September	30 September
			2024	2023
Quarter ended	Dividend	Pence	£'000	£'000
Current year dividends
30 September 2024¹	2024 fourth interim dividend	1.75	-	-
30 June 2024	2024 third interim dividend	1.75	15,186	-
31 March 2024	2024 second interim dividend	1.75	15,187	-
31 December 2023	2024 first interim dividend	1.75	15,187	-
Total		7.0	45,560	-
Prior year dividends
30 September 2023	2023 fourth interim dividend	1.75	15,190	-
30 June 2023	2023 third interim dividend	1.75	-	15,365
31 March 2023	2023 second interim dividend	1.75	-	15,452
31 December 2022	2023 first interim dividend	1.75	-	15,484
Total		7.0	15,190	46,301
30 September 2022	2022 fourth interim dividend	1.75	-	15,484
Dividends in statement of changes in equity			60,750	61,785
Dividends settled in shares			-	-
Dividends in cash flow statement			60,750	61,785

For the forthcoming financial year, the Directors have concluded the Company will target² a dividend of 7.0 pence per share.

The Board, at its discretion, has suspended the scrip dividend alternative as a result of the likely discount³ between any scrip dividend reference price of the shares and the NAV per share of the Company. The Board intends to keep the offer of future scrip dividends under review.

Accounting policy

In accordance with the Company's constitution, in respect of the ordinary shares, the Company will distribute the income it receives to the fullest extent that is deemed appropriate by the Directors.

In declaring a dividend, the Directors consider the payment based on a number of factors, including accounting profit, fair value treatment of investments held, future investments, buybacks, reserves, cash balances and liquidity. The payment of a dividend is considered by the Board and is declared on a quarterly basis. Dividends are a form of distribution and, under Jersey Company Law, a distribution may be paid out of capital. Therefore, the Directors consider the share premium reserve to be a distributable reserve. Dividends due to the Company's shareholders are recognised when they become payable.

1. On 24 October 2024, the Company declared a fourth interim dividend of 1.75 pence per share amounting to £15.2 million, which was paid on 29 November 2024 to ordinary shareholders on the register at 1 November 2024.

2. The dividend target set out above is a target only and not a profit forecast or estimate and there can be no assurance that it will be met.

3. APM - for definition and calculation methodology, refer to the APMs section below.

10. Earnings per share

Basic and diluted earnings per share are calculated by dividing total profit and comprehensive income for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

		Weighted
		average
	Total profit	number of	Pence per
	£'000	ordinary shares	share
Year ended 30 September 2024
Basic and diluted earnings per ordinary share	19,514	867,940,448	2.25
Year ended 30 September 2023
Basic and diluted earnings per ordinary share	30,905	881,850,353	3.50

11. Financial assets at fair value through profit or loss

The table below analyses the movements in financial assets at fair value through profit or loss during the year by the type of movement:

	30 September	30 September
	2024	2023
	£'000	£'000
Opening balance	1,046,568	1,087,331
Purchases of financial assets at fair value through profit of loss	27,301	138,698
Repayments of financial assets at fair value through profit of loss	(63,889)	(128,012)
Net realised gains on disposal of financial assets at fair value through profit or loss¹	1,888	137
Unrealised gains on financial assets at fair value through profit or loss²	13,549	15,017
Unrealised losses on financial assets at fair value through profit or loss	(65,394)	(66,603)
Closing balance	960,023	1,046,568

1. Gains in the current year relate to the sale of Blackcraig wind farm, gains in the prior year relate to principal indexation on realised assets.

2. Includes principal indexation of £0.8 million (30 September 2023: £4.0 million) applied to certain loans.

All portfolio assets are held as security against the RCF (refer to note 15).

The tables below show the reconciliation of purchases and repayments of financial assets at fair value through profit or loss to the statement of cash flows:

	30 September	30 September
	2024	2023
Purchases	£'000	£'000
Purchases of financial assets at fair value through profit or loss	(27,301)	(138,698)
Loan interest capitalised	22,168	21,959
Non-cash internal transfers	-	50,000
Purchases of financial assets at fair value through profit or loss in statement of cash flows	(5,133)	(66,739)

	30 September	30 September
	2024	2023
Repayments	£'000	£'000
Repayments of financial assets at fair value through profit or loss	63,889	128,012
Non-cash internal transfers	-	(50,000)
Repayments of financial assets at fair value through profit or loss in statement of cash flows	63,889	78,012

Accounting for subsidiaries

The Company's investments are made through a number of SPVs (refer to note 23) which are domiciled in the UK. The Company owns 100% of the loan notes issued by the SPVs with the exception of GCP Rooftop Solar 6 plc (37.1%), GCP Rooftop Solar Finance plc (31.1%) and FHW Dalmore (Salford Pendleton Housing) plc (13.8%).

The Directors have made an assessment in regard to whether the Company, as an investor, controls or has significant influence in the SPVs under the criteria within IFRS 10 and IAS 28, and whether the SPVs meet the definition of subsidiary or associate companies in accordance with IFRS 10 and IAS 28.

The Directors are of the opinion that the Company demonstrates all three of the criteria for all SPVs to be considered subsidiary companies within the definition of control in IFRS 10, with the exception of GCP Rooftop Solar 6 plc, GCP Rooftop Solar Finance plc and FHW Dalmore (Salford Pendleton Housing) plc, which are considered to be associates within the definition of IAS 28, as the Company has significant influence over the relevant activities of the SPVs through similar arrangements. Associates are measured at fair value through profit or loss, as permitted by IAS 28.

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their investments in subsidiaries at fair value through profit or loss rather than consolidate the subsidiary companies. The criteria which define an investment entity are as follows:

· an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

· an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and

· an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Directors have concluded that the Company continues to meet the characteristics of an investment entity, in that it has more than one investor and its investors are not related parties; it holds a portfolio of investments, predominantly in the form of loan securities which generate returns through interest income and capital appreciation; and the Company reports to its investors via quarterly investor information and to its management, via internal management reports, on a fair value basis.

Accounting policy

The loan notes held by the Company are shown as financial assets at fair value through profit or loss in the statement of financial position, which in the opinion of the Directors represents the fair value of the SPVs, as any other net assets held in the SPVs at year end are immaterial.

Principal indexation is applied to certain loan notes where applicable.` The indexation is a contractually allowable inflationary adjustment to loan principal calculated where permitted by a predefined mechanism in a loan agreement. The effect of the adjustment is to increase or decrease the fair value of certain loan notes in line with the indexation factor which takes account of the rate of inflation against a stipulated inflation threshold of each relevant loan.

The Company recognises a financial asset or a financial liability when, and only when, it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset. A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised where:

· the rights to receive cash flows from the asset have expired;

· the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and

· either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When the Company transfers a portion of its rights to receive cash flows from an asset or has entered into a pass-through arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company's continuing involvement in the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired.

Financial assets and financial liabilities at fair value through profit or loss are recorded in the statement of financial position at fair value. All transaction costs for such instruments are recognised directly in the statement of comprehensive income.

After initial measurement, the Company measures financial instruments which are classified as fair value through profit or loss at fair value. Subsequent changes in the fair value of those financial instruments are recorded in profit or loss in the statement of comprehensive income.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques used by the independent Valuation Agent include using recent arm's length market transactions, referenced to appropriate current market data, and discounted cash flow analysis, at all times making as much use of available and supportable market data as possible.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in note 19.

12. Other receivables and prepayments

	30 September	30 September
	2024	2023
	£'000	£'000
Other receivables and prepayments	137	575

Accounting policy

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. The Company recognises a loss allowance for expected credit losses on other receivables where necessary.

13. Other payables and accrued expenses

	30 September	30 September
	2024	2023
	£'000	£'000
Investment advisory fees	2,062	2,132
Other payables and accrued expenses	823	1,916
Total	2,885	4,048

Accounting policy

Payables are recognised initially at fair value including transaction costs and subsequently measured at amortised cost using the effective interest method.

14. Cash and cash equivalents

Cash held by financial institutions at the year end is shown in the table below:

	30 September	30 September
	2024	2023
	£'000	£'000
Barclays account	2,436	8,482
BONY account	527	-
Lloyds Money Market Call account	-	-
RBSI Capital and Interest account¹	6,700	4,435
RBSI Cash Management account	2,092	3,950
Total	11,755	16,867

1. For the year ended 30 September 2024, capital and interest received on 30 September 2024 was transferred to the Barclays account on 1 October 2024. In the prior year, the same occurred on 29 September 2023 and 2 October 2023, respectively.

Cash is held at a number of financial institutions in order to spread credit risk. Cash awaiting investment is held on behalf of the Company at banks carrying a minimum rating of A-1, P-1 or F1 from Standard & Poor's, Moody's or Fitch respectively, or in one or more similarly rated money market or short-dated gilt funds. Cash is generally held on a short-term basis, pending subsequent investment. The amount of working capital that may be held at RBSI is limited to the higher of £4 million or one quarter of the Company's running costs. Any excess uninvested/surplus cash is held at other financial institutions with minimum credit ratings described above. The maximum amount to be held at any one of these other financial institutions is £25 million or 25% of total cash balances, whichever is the larger. It is also recognised that with the advent of the ring-fenced bank concept, it has become more difficult to interact with sufficiently well-rated counterparty banks.

Accounting policy

Cash and cash equivalents in the statement of financial position and statement of cash flows comprise cash on hand, demand deposits, short-term deposits in financial institutions with original maturities of three months or less and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

15. Interest bearing loans and borrowings

	30 September	30 September
	2024	2023
	£'000	£'000
Revolving credit facility	57,000	104,000
Unamortised arrangement fees	(1,210)	(326)
Total	55,790	103,674

The table below analyses the movement for the year:

	30 September	30 September
	2024	2023
	£'000	£'000
Balance at the start of the year	103,674	98,009
Changes from cash flows
Proceeds from revolving credit facility	18,147	55,000
Repayment of revolving credit facility	(67,022)	(50,000)
Drawdown for RCF refinancing fees	1,875	-
Non-cash changes
Amortisation of loan arrangement fees	644	665
Commitment and other capitalised fees	(1,528)	-
Balance at the end of the year	55,790	103,674

Revolving credit facility

Expired facility

Previously, the Company had secured an RCF of £190 million with Royal Bank of Scotland International, AIB (UK) plc, Lloyds Bank plc, Clydesdale Bank plc (trading as Virgin Money) and Mizuho Bank Limited. The RCF was secured against underlying assets held by the Company. Interest on amounts drawn under the facility were charged at SONIA plus 2.0% per annum. A commitment fee was payable on undrawn amounts of 0.7%.

At the beginning of the year, £104 million was drawn. On 16 February 2024, the facility was repaid as part of refinancing and entering into a new RCF.

New facility

On 16 February 2024, the Company entered into a new secured RCF of £150 million with AIB (UK) plc, Lloyds Bank plc, Clydesdale Bank plc (trading as Virgin Money) and Mizuho Bank Limited. The RCF is secured against the portfolio of underlying assets held by the Company. The facility is repayable in March 2027. Interest on amounts drawn under the facility is charged at SONIA plus 2.0% per annum. A commitment fee of 0.7% per annum is payable on undrawn amounts. At 30 September 2024, the total amount drawn on the RCF was £57 million.

All amounts drawn under the RCF may be used in or towards the making of investments in accordance with the Company's investment policy, with additional flexibility to allow the Company to enhance its working capital management. The facility provides the Company with continued access to flexible debt finance, allowing it to take advantage of investment opportunities as they arise, and may also be used to manage the Company's working capital requirements from time to time.

The RCF includes loan to value¹ and interest cover¹ covenants that are measured at the Company level. The Company has maintained sufficient headroom against all measures throughout the financial period and is in full compliance with all loan covenants at 30 September 2024.

Leverage

For the purposes of the UK AIFM Regime, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its NAV and is calculated under the gross and commitment methods, in accordance with the UK AIFM Regime.

The Company is required to state its maximum and actual leverage levels, calculated as prescribed by the UK AIFM Regime, at 30 September 2024.The figures are as follows:

		30 September	30 September
		2024	2023
	Maximum	Actual	Actual
Leverage exposure	limit	exposure	exposure
Gross method	1.20	1.05	1.10
Commitment method	1.20	1.07	1.11

The leverage figures disclosed above represent leverage calculated under the UK AIFM Regime methodology as follows:

	30 September	30 September	30 September	30 September
	2024	2024	2023	2023
	Gross	Commitment	Gross	Commitment
	£'000	£'000	£'000	£'000
Financial assets at fair value through profit or loss	960,023	960,023	1,046,568	1,046,568
Cash and cash equivalents	-	11,755	-	16,867
Derivative financial instruments at fair value through profit or loss²	1,099	1,099	2,324	2,324
Total exposure under the UK AIFM Regime	961,122	972,877	1,048,892	1,065,759
Total shareholders' funds (net assets)	913,130	913,130	956,553	956,553
Leverage (ratio)	1.05	1.07	1.10	1.11

The Company's leverage limit under the UK AIFM Regime is 1.20, which equates to a gearing limit of 20%. The Company has maintained sufficient headroom against the limit throughout the year.

1. APM - for definition and calculation methodology, refer to the APMs section below.

2. Refer to note 18 for further information on derivative financial instruments at fair value through profit or loss.

Accounting policy

Borrowings are recognised initially at fair value, less attributable costs. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method. Transaction costs are spread over the term of the RCF.

16. Authorised and issued share capital

	30 September 2024		30 September 2023
	Number		Number
Share capital	of shares	£'000	of shares	£'000
Ordinary shares issued and fully paid
Opening balance	884,797,669	8,848	884,797,669	8,848
Total shares in issue	884,797,669	8,848	884,797,669	8,848
Treasury shares
Opening balance	(13,565,019)	(136)	-	-
Shares repurchased	(3,420,000)	(34)	(13,565,019)	(136)
Total shares repurchased and held in treasury	(16,985,019)	(170)	(13,565,019)	(136)
Total ordinary share capital excluding treasury shares	867,812,650	8,678	871,232,650	8,712

Share capital represents the nominal amount of the Company's ordinary shares in issue.

The Company is authorised in accordance with its Memorandum of Association to issue 1.5 billion ordinary shares, 300 million C shares and 300 million deferred shares, each having a par value of one pence per share.

	30 September	30 September
	2024	2023
Share premium	£'000	£'000
Premium on ordinary shares issued and fully paid
Opening balance	861,118	871,606
Premium on equity shares issued through:
Share repurchases	(2,149)	(10,467)
Share repurchase costs	(4)	(21)
Total	858,965	861,118

Share premium represents amounts subscribed for share capital in excess of the nominal value less associated costs of the issue, less dividend payments charged to premium as and when appropriate. Share premium is a distributable reserve in accordance with Jersey Company Law.

The Company's share capital is represented by one class of ordinary shares. Quantitative information about the Company's share capital is provided in the statement of changes in equity.

At 30 September 2024, the Company's issued share capital comprised 884,797,669 ordinary shares (30 September 2023: 884,797,669), of which 16,985,019 (30 September 2023: 13,565,019) were held in treasury, and there were no C shares or deferred shares in issue.

The ordinary shares carry the right to dividends out of the profits available for distribution attributable to each share class, if any, as determined by the Directors. Each holder of an ordinary share is entitled to attend meetings of shareholders and, on a poll, to one vote for each share held.

Accounting policy

The Directors of the Company continually assess the classification of the ordinary shares. If the ordinary shares cease to have all the features or meet all the conditions set out to be classified as equity, they will be reclassified as financial liabilities and measured at fair value at the date of reclassification, with any differences from the previous carrying amount recognised in equity. Transaction costs incurred by the Company in issuing, acquiring or reselling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. No gain or loss is recognised in the statement of comprehensive income on the purchase, sale, issuance or cancellation of the Company's own equity instruments.

17. Capital redemption reserve

	30 September	30 September
	2024	2023
	£'000	£'000
Capital redemption reserve	101	101

The Company is required by Jersey Company Law to establish and maintain this reserve on the redemption of its own shares.

18. Derivative financial instruments at fair value through profit or loss

On 27 March 2024, the Company entered into a commodity swap agreement with Axpo under the ISDA Master Agreement for risk management purposes, which includes full right of set off. The derivative financial instrument comprises a commodity swap on electricity/baseload for the purpose of hedging electricity price market movements, in cases where the Company has stepped into projects and/or has direct exposure through its investment structure. The commodity swap agreement expired on 30 September 2024 and was settled in October 2024 in line with the contractual terms.

On 27 September 2024, the Company entered into a new commodity swap agreement with LBCM under the ISDA Master Agreement framework for risk management purposes, which includes full right of set off. The derivative financial instrument comprises a commodity swap on baseload electricity for the purpose of hedging market movements in electricity prices, in cases where the Company has stepped into projects and/or has direct exposure through its investment structure. The commodity swap agreement is due to expire on 31 March 2025.

The table below sets out the valuation of the swap held by the Company at year end provided by Axpo and LBCM:

		Total	Notional
		notional	quantity
Derivative	Maturity	quantity	per hour
Commodity swap - electricity/baseload 'summer 2023'	30 September 2023	26,352 MWh	6 MW
Commodity swap - electricity/baseload 'winter 2023/24'	31 March 2024	21,960 MWh	5 MW
Commodity swap - electricity/baseload 'summer 2024'	30 September 2024	35,136 MWh	8 MW
Commodity swap - electricity/baseload 'winter 2024/25'	31 March 2025	13,104 MWh	3 MW

		30 September	30 September
		2024	2023
		£'000	£'000
Fixed
Fixed price:
Summer 2023 (maturity 30 September 2023)	£140.5/MWh	-	607
Winter 2023/24 (maturity 31 March 2024)	£106.5/MWh	-	2,339
Summer 2024 (maturity 30 September 2024)	£62.0/MWh	357	-
Winter 2024/25 (maturity 31 March 2025)	£82.2/MWh	1,077	-
Floating
Commodity Reference Price Index: summer 2023	Electricity N2EX UK Power Index Day Ahead	-	(357)
Commodity Reference Price Index: winter 2023/24	Electricity N2EX UK Power Index Day Ahead	-	(2,324)
Commodity Reference Price Index: summer 2024	Electricity N2EX UK Power Index Day Ahead	(445)	-
Commodity Reference Price Index: winter 2024/25	Electricity N2EX UK Power Index Day Ahead	(1,099)	-
Fair value		(110)	265

Accounting policy

Recognition of derivative financial assets and liabilities takes place when the derivative contracts are entered into. They are initially recognised and subsequently measured at fair value; transactions costs, where applicable, are included directly in finance costs. The Company does not apply hedge accounting and consequently all gains or losses are recognised in the statement of comprehensive income in net gains/(losses) on derivative financial instruments at fair value through profit or loss.

19. Financial instruments

The table below sets out the classifications of the carrying amounts of the Company's financial assets and financial liabilities into categories of financial instruments under IFRS 9. The carrying amount of the financial assets and financial liabilities at amortised cost approximates their fair value.

		30 September	30 September
		2024	2023
	Notes	£'000	£'000
Financial assets
Cash and cash equivalents	14	11,755	16,867
Other receivables and prepayments	12	137	575
Financial assets at amortised cost		11,892	17,442
Financial assets at fair value through profit or loss	11	960,023	1,046,568
Derivative financial instruments at fair value through profit or loss	18	-	265
Total		971,915	1,064,275
Financial liabilities
Other payables and accrued expenses	13	(2,885)	(4,048)
Interest bearing loans and borrowings	15	(55,790)	(103,674)
Financial liabilities measured at amortised cost		(58,675)	(107,722)
Derivative financial instruments at fair value through profit or loss	18	(110)	-
Total		(58,785)	(107,722)

19.1 Capital management

The Company is funded from equity balances, comprising issued ordinary share capital as detailed in note 16, and retained earnings, in addition to an RCF, as detailed in note 15.

The Company may seek to raise additional capital from time to time to the extent that the Directors and the Investment Adviser believe the Company will be able to make suitable investments, with consideration also given to the alternatives of share buybacks and a reduction in leverage. The Company may borrow up to 20% of its NAV at the time any such borrowings are drawn down. At the year end, the Company remains modestly geared with a loan to value¹ of 6% (30 September 2023: 11%).

19.2 Financial risk management objectives

The Company has an investment policy and strategy, as summarised above, that sets out its overall investment strategy and its general risk management philosophy and has established processes to monitor and control these in a timely and accurate manner. These guidelines are the subject of regular operational reviews undertaken by the Investment Adviser to ensure that the Company's policies are adhered to as it is the Investment Adviser's duty to identify and assist in the control of risk. The Investment Adviser reports regularly to the Directors, who have ultimate responsibility for the overall risk management approach.

The Investment Adviser and the Directors ensure that all investment activity is performed in accordance with investment guidelines. The Company's investment activities expose it to various types of risks that are associated with the financial instruments and markets in which it invests. Risk is inherent to the Company's activities and it is managed through a process of ongoing identification, measurement and monitoring. The financial risks to which the Company is exposed include market risk (which includes other price risk) and interest rate risk, credit risk and liquidity risk. Furthermore, the Company is exposed to a number of shareholder interests, 6% of the portfolio by value, either as a result of the specific targeting of these positions or through enforcing its security as a result of the occurrence of defaults. Such exposures are more sensitive to changes in market factors, such as electricity prices, and the operational performance of projects and are therefore likely to result in increased volatility in the valuation of the portfolio.

Geopolitical and market uncertainties

During the year, market conditions have improved for the Company. Falling inflation has been met by interest rate cuts, with the Bank of England announcing a further interest rate cut of 25 basis points in November 2024. However, following the announcement of the new Government's Budget at the end of October, there are concerns that inflation will creep higher as the new Government growth policy is set to have a knock-on effect on prices.

The war in Ukraine and the Israel-Hamas conflict continue to be monitored by the Board and the Investment Adviser; however, both believe the effect on energy prices and market volatility has subsided. The Israel-Hamas war in the Middle East is of particular concern to the Company, as there is a possibility for sanctions to be implemented, which could have a knock-on effect on global energy markets. However, the Company's infrastructure investments are generally low-volatility investments with stable, pre-determined, long-term, public sector backed revenues.

There is also uncertainty regarding potential future Government intervention in the energy market, which may lead to forecast power prices not being realisable in reality. The implementation of the Electricity Generator Levy in January 2023 impacted the short-term profitability of certain assets in the portfolio in the 2023 financial year; however, there has been no impact in the current financial year. The levy will be in place until 31 March 2028.

Climate risk

For the third consecutive year, the Investment Adviser carried out a climate risk assessment for each underlying portfolio asset to assess the actual and potential impacts of climate-related risks and opportunities across the portfolio. The analysis considered both physical and transition risks for each asset. The data collected was based upon IPCC, UK Government and publicly available data, supplemented by data inputs from the Investment Adviser's portfolio management team and its investment management team. Further information is given above. Based on the climate risk analysis undertaken, the Investment Adviser does not currently propose to make any material changes to financial forecasts due to climate risk.

1. APM - for definition and calculation methodology, refer to the APMs section below.

19.3 Market risk

There is a risk that market movements in interest rates, credit markets and observable yields may decrease or increase the fair value of the Company's financial assets without regard to the assets' underlying performance. The fair value of the Company's financial assets is measured and monitored on a quarterly basis by the Investment Adviser with the assistance of the independent Valuation Agent.

The valuation principles used are based on a discounted cash flow methodology, where applicable. A fair value for each asset acquired by the Company is calculated by applying a relevant market discount rate to the contractual cash flows expected to arise from each asset. At the year end, all investments were classified as Level 3; refer to note 19.7 for additional information.

The independent Valuation Agent determines the discount rates that it believes the market would reasonably apply to each investment taking into account, inter alia, the following significant inputs:

· Pound Sterling interest rates;

· movements of comparable credit markets; and

· observable yields on other comparable instruments.

In addition, the following are also considered as part of the overall valuation process:

· general infrastructure market activity and investor sentiment; and

· changes to the economic, legal, taxation or regulatory environment.

The independent Valuation Agent exercises its judgement in assessing the expected future cash flows from each investment. Given that the investments of the Company are generally fixed-income debt instruments (in some cases with elements of inflation protection) or other investments with a similar economic effect, the focus of the independent Valuation Agent is on assessing the likelihood of any interruptions to the debt service payments, in light of the operational performance of the underlying asset as confirmed by the Investment Adviser. Where appropriate, the independent Valuation Agent will also consider long-term assumptions that have a direct impact on valuation, such as electricity prices, inflation and availability. Given fluctuating electricity prices, the Investment Adviser has continued with a hedging programme to reduce volatility in the portfolio. Further information can be found above.

The table below shows how changes in discount rates affect the changes in the valuation of financial assets at fair value through profit or loss. The range of discount rates used reflects the Investment Adviser's view of a reasonable expectation of valuation movements across the portfolio in a twelve month period.

30 September 2024
Change in discount rates	0.50%	0.25%	0.0%	(0.25%)	(0.50%)
Value of financial assets at fair value (£'000)	931,236	945,386	960,023	975,173	990,866
Change in valuation of financial assets at fair value through profit or loss (£'000)	(28,787)	(14,637)	-	15,150	30,843

At 30 September 2024, the discount rates used in the valuation of financial assets ranged from 6.58% to 13.00%, with a rate of 20.00% being applied to one financial asset due to changes in the perceived risk associated with one project, representing 0.63% of the portfolio.

30 September 2023
Change in discount rates	0.50%	0.25%	0.0%	(0.25%)	(0.50%)
Value of financial assets at fair value (£'000)	1,016,759	1,031,449	1,046,568	1,062,134	1,078,166
Change in valuation of financial assets at fair value through profit or loss (£'000)	(29,809)	(15,119)	-	15,566	31,598

At 30 September 2023, the discount rates used in the valuation of financial assets ranged from 6.58% to 13.00%, with a rate of 20.00% being applied to one financial asset due to changes in the perceived risk associated with one project, representing 0.58% of the portfolio.

19.4 Interest rate risk

Interest rate risk has the following effect:

Fair value of financial assets

Interest rates are one of the factors which the independent Valuation Agent takes into account when valuing financial assets. Interest rate risk is incorporated by the independent Valuation Agent into the discount rate applied to the financial assets at fair value through profit or loss. Discount rate sensitivity analysis is disclosed in note 19.3.

Future cash flows

The Company primarily invests in senior and subordinated debt instruments of infrastructure Project Companies. The financial assets have fixed interest rate coupons, albeit with some inflation protection and, as such, movements in interest rates will not directly affect the future cash flows payable to the Company.

Interest rate hedging may be carried out to seek protection against falling interest rates in relation to assets that do not have a minimum fixed rate of return acceptable to the Company in line with its investment policy and strategy. No interest rate hedging was undertaken at year end.

Where the debt instrument is subordinated, the Company is indirectly exposed to the gearing of the infrastructure Project Companies. The Investment Adviser ensures as part of its due diligence that the Project Company debt ranking senior to the Company's investment has been, where appropriate, hedged against movement in interest rates, through the use of interest rate swaps. At 30 September 2024, the Company had not entered into any interest rate swap contracts (30 September 2023: none).

Borrowings

Details of the RCF are given in note 15.

The new facility has a three year term and was refinanced on similar terms to the previous RCF, with the most notable amendment being the introduction of additional flexibility in utilisations and repayments to allow the Company to enhance its working capital management.

The drawn amount under the RCF at 30 September 2024 was £57 million (30 September 2023: £104 million).

The following tables show an estimate of the sensitivity of the drawn amounts under the RCF to interest rate changes of 100, 200 and 300 basis points in a twelve month period, with all other variables held constant.

30 September 2024
Change in interest rates	3.0%	2.0%	1.0%	0.0%	(1.0%)	(2.0%)	(3.0%)
Value of interest expense (£'000)	5,683	5,113	4,543	3,973	3,403	2,833	2,263
Changes in interest expense (£'000)	1,710	1,140	570	-	(570)	(1,140)	(1,710)

30 September 2023
Change in interest rates	3.0%	2.0%	1.0%	0.0%	(1.0%)	(2.0%)	(3.0%)
Value of interest expense (£'000)	10,594	9,554	8,514	7,474	6,434	5,394	4,354
Changes in interest expense (£'000)	3,120	2,080	1,040	-	(1,040)	(2,080)	(3,120)

Other financial assets and liabilities

Bank deposits are exposed to and affected by fluctuations in interest rates. However, the impact of interest rate risk on these assets and liabilities is not considered material.

19.5 Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The assets classified at fair value through profit or loss do not have a published credit rating; however, the Investment Adviser monitors the financial position and performance of the Project Companies on a regular basis to ensure that credit risk is appropriately managed.

The Company is exposed to differing levels of credit risk on all its assets. Per the statement of financial position, the Company's total exposure to credit risk is £972 million (30 September 2023: £1,064 million) being the balance of total assets less prepayments. As a matter of general policy, cash is held at a number of financial institutions to spread credit risk, with cash awaiting investment being held on behalf of the Company at banks which carry a minimum rating of A-1, P-1 or F1 from Standard & Poor's, Moody's or Fitch respectively or in one or more similarly rated money market or short-dated gilt funds. Cash is generally held on a short-term basis, pending subsequent investment. The amount of working capital that may be held at RBSI is limited to the higher of £4 million or the value of one quarter of the Company's running costs. Any excess uninvested/surplus cash is held at other financial institutions with the minimum credit ratings described above. The maximum amount to be held at any one of these other financial institutions is £25 million or 25% of total cash balances, whichever is the larger. It is also recognised by the Board that the arrival of ring-fenced banking has impacted the availability of A-rated banks.

Before an investment decision is made, the Investment Adviser performs extensive due diligence complemented by professional third party advisers, including technical advisers, financial and legal advisers, and valuation and insurance experts. After an investment is made, the Investment Adviser primarily uses detailed cash flow forecasts to assess the continued creditworthiness of Project Companies and their ability to pay all costs as they fall due. The forecasts are regularly updated with information provided by the Project Companies in order to monitor ongoing financial performance.

The Project Companies receive a significant proportion of revenue from Government departments and public sector or local authority clients.

The Project Companies are reliant on their subcontractors, particularly facilities managers, continuing to perform their service delivery obligations such that revenues are not disrupted. The credit standing of each significant subcontractor is monitored by the Investment Adviser on an ongoing basis, and significant exposures are reported to the Directors on a quarterly basis.

The concentration of credit risk to any individual project did not exceed 10% of the Company's portfolio at the year end, which is the maximum amount permissible per the Company's investment policy. The Investment Adviser regularly monitors the concentration of risk based upon the nature of each underlying project to ensure appropriate diversification and risk remains within acceptable parameters.

The concentration of credit risk associated with counterparties is deemed to be low due to asset and sector diversification. The underlying counterparties are typically public sector entities which pay pre-determined, long-term, public sector backed revenues in the form of subsidy payments for renewables transactions (i.e. FiT and ROCs payments), unitary charge payments for PFI transactions and lease payments for social housing projects. In the view of the Investment Adviser and the Board, the public sector generally has both the ability and willingness to support the obligations to these entities.

There continues to be volatility in electricity market prices following the Russian invasion of Ukraine in 2022. These dynamics have resulted in the collapse of some energy suppliers. The Company has exposure to certain electricity suppliers through offtake arrangements with renewable project borrowers. To date, the Company has not been directly impacted by suppliers that have collapsed.

Through its usual systems and processes, the Investment Adviser monitors the credit standing of all customers and suppliers and believes that where offtakers have supply businesses they remain in a strong position to continue such arrangements. In any case, the Investment Adviser considers the offtake market for renewable projects to be a liquid and competitive sector, meaning any arrangements that are terminated as part of an offtake collapse could be easily replaced by a new third party.

The credit risk associated with each Project Company is further mitigated because the cash flows receivable are secured over the assets of the Project Company, which in turn has security over the assets of the underlying projects. The debt instruments in the portfolio are held by the Company at fair value, and the credit risk associated with these investments is one of the factors which the independent Valuation Agent takes into account when valuing the financial assets.

Changes in credit risk affect the discount rates. The sensitivity of the fair value of the financial assets at fair value through profit or loss is disclosed in note 19.3. The Directors have assessed the credit quality of the portfolio at the year end and based on the parameters set out above, are satisfied that the credit quality remains within an acceptable range for long-dated debt.

The Company has not been required to post collateral in respect of the commodity swap agreement. There is potential for credit risk in relation to the arrangement depending on whether the arrangement is an asset or a liability at any point in time. At the date of this report, the Company's exposure to credit risk relating to the commodity swap agreement is a £38,000 liability. LBCM is a subsidiary of Lloyds Banking Group plc, and the non-ring-fenced bank of Lloyds Banking Group plc. LBCM has more than 1,200 employees providing banking, financing and risk management services to its customers. The Directors are satisfied that the credit risk associated with this entity as a counterparty is minimal and remains within the Company's risk appetite.

Further information on derivative financial instruments is given in note 18.

19.6 Liquidity risk

Liquidity risk is defined as the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility that the Company could be required to pay its liabilities earlier than expected. The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and interest-bearing loans and borrowings.

The table below analyses the Company's financial assets and liabilities in relevant maturity groupings based on the remaining period from the period end to the contractual maturity date. The Directors have elected to present both assets and liabilities in the liquidity disclosure to illustrate the net liquidity exposure of the Company.

All cash flows in the table below are on an undiscounted basis.

	Less than	One to	Three to	Greater than
	one month	three months	twelve months	twelve months	Total
30 September 2024	£'000	£'000	£'000	£'000	£'000
Non-derivative financial assets
Cash and cash equivalents	11,755	-	-	-	11,755
Other receivables and prepayments	-	-	137	-	137
Financial assets at fair value through profit or loss	12,594	37,137	95,661	1,945,835	2,091,227
Derivative financial assets at fair value through profit or loss
Inflows	357	545	532	-	1,434
Outflows	(445)	(537)	(562)	-	(1,544)
Total financial assets	24,261	37,145	95,768	1,945,835	2,103,009
Financial liabilities
Other payables and accrued expenses	-	(2,885)	-	-	(2,885)
Interest bearing loans and borrowings	(393)	(733)	(3,458)	(63,372)	(67,956)
Total financial liabilities	(393)	(3,618)	(3,458)	(63,372)	(70,841)
Net exposure	23,868	33,527	92,310	1,882,463	2,032,168

	Less than	One to	Three to	Greater than
	one month	three months	twelve months	twelve months	Total
30 September 2023	£'000	£'000	£'000	£'000	£'000
Non-derivative financial assets
Cash and cash equivalents	16,867	-	-	-	16,867
Other receivables and prepayments	-	-	575	-	575
Financial assets at fair value through profit or loss	-	3,498	107,523	1,785,689	1,896,710
Derivative financial assets at fair value through profit or loss
Inflows	607	-	2,339	-	2,946
Outflows	(357)	-	(2,324)	-	(2,681)
Total financial assets	17,117	3,498	108,113	1,785,689	1,914,417
Financial liabilities
Other payables and accrued expenses	-	(4,048)	-	-	(4,048)
Interest bearing loans and borrowings	-	(2,040)	(105,951)	-	(107,991)
Total financial liabilities	-	(6,088)	(105,951)	-	(112,039)
Net exposure	17,117	(2,590)	2,162	1,785,689	1,802,378

19.7 Fair values of financial assets and financial liabilities

Basis of determining fair value

Loan notes

The independent Valuation Agent carries out quarterly valuations of the financial assets of the Company. These valuations are reviewed by the Investment Adviser and the Directors. The subsequent NAV produced is reviewed and approved by the Directors on a quarterly basis.

The basis for the independent Valuation Agent's valuation is described in note 19.3.

Derivative financial instruments

The valuation principles used are based on inputs from observable market data, being a commonly quoted electricity price index, which most closely reflects a Level 2 input. The fair value of the derivative financial instrument is derived from its mark-to-market ("MTM") valuations provided by Axpo and LBCM on a quarterly basis. The MTM value is calculated based on the fixed leg of the commodity swap offset by the market price of the floating leg which is indexed to the 'Electricity N2EX UK Power Index Day Ahead'. The Investment Adviser monitors the exposure internally using its own valuation system. Further information on derivative financial instruments is given in note 18.

Fair value measurements

Investments measured and reported at fair value are classified and disclosed in one of the following fair value hierarchy levels depending on whether their fair value is based on:

· Level 1: quoted prices in active markets for identical assets or liabilities;

· Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

An investment is always categorised as Level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for an investment may use a number of different inputs that fall into different levels of the fair value hierarchy. In such cases, an investment level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgement and is specific to the investment.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting year during which the change has occurred.

The table below analyses all investments held by the level in the fair value hierarchy into which the fair value measurement is categorised:

		30 September	30 September
	Fair value	2024	2023
	hierarchy	£'000	£'000
Financial assets at fair value through profit or loss
Loan notes	Level 3	960,023	1,046,568
Derivative financial instruments at fair value through profit or loss	Level 2	-	265
Financial liabilities at fair value through profit or loss
Derivative financial instruments at fair value through profit or loss	Level 2	(110)	-

Discount rates between 6.58% and 13.00%, with a rate of 20.00% being applied to one financial asset due to changes in the perceived risk associated with one project, representing 0.63% of the portfolio (30 September 2023: 6.58% and 13.00%, with a rate of 20.00% being applied to one financial asset due to changes in the perceived risk associated with one project, representing 0.58% of the portfolio) were applied to the investments categorised as Level 3.

The Directors have classified financial instruments depending on whether or not there is a consistent data set comparable and observable transactions and discount rates. The Directors have classified all loan notes as Level 3. No transfers were made between levels in the year.

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and end of the year:

	30 September	30 September
	2024	2023
	£'000	£'000
Opening balance	1,046,568	1,087,331
Purchases of financial assets at fair value through profit or loss¹	27,301	138,698
Repayments of financial assets at fair value through profit or loss¹	(63,889)	(128,012)
Net realised gains on disposal of financial assets at fair value through profit or loss	1,888	137
Unrealised gains on financial assets at fair value through profit or loss	13,549	15,017
Unrealised losses on financial assets at fair value through profit or loss	(65,394)	(66,603)
Closing balance	960,023	1,046,568

1.Refer to note 11 for a reconciliation to the statement of cash flows.

For the Company's financial instruments categorised as Level 3, changing the discount rates used to value the underlying instruments alters the fair value. A change in the discount rate used to value the Level 3 investments would have the effect on the valuation as shown in the table in note 19.3. Refer to note 11 for movements in financial assets at fair value through profit or loss throughout the year.

In determining the discount rates for calculating the fair value of financial assets at fair value through profit or loss, movements in Pound Sterling, interest rates, comparable credit markets and observable yield on comparable instruments could give rise to changes in the discount rate.

The Directors considered the inputs used in the valuation of investments and the appropriateness of their classification in the fair value hierarchy. Should the valuation approach change, causing an investment to meet the characteristics of a different level of the fair value hierarchy, it will be reclassified accordingly in the appropriate period.

20. Related party disclosures

As defined by IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

Directors

The non-executive Directors of the Company are considered to be the key management personnel of the Company. Directors' remuneration including expenses for the year totalled £451,000 (30 September 2023: £432,000). At 30 September 2024, liabilities in respect of these services amounted to £111,000 (30 September 2023: £106,000).

At 30 September 2024, the Directors, together with their family members, held the following shares in the Company:

	30 September 2024		30 September 2023
	Shares	% of total	Shares	% of total
Director	held	voting rights	held	voting rights
Andrew Didham	146,345	0.017	93,024	0.011
Julia Chapman	60,446	0.007	60,446	0.007
Steven Wilderspin	15,000	0.002	15,000	0.002
Dawn Crichard	80,463	0.009	75,261	0.009
Alex Yew	75,000	0.009	20,000	0.002

Andrew Didham is an executive vice chairman at Rothschild & Co, presently on a part-time basis. Rothschild & Co is engaged by the Company to provide ongoing investor relations support. The Company and Rothschild & Co maintain procedures to ensure that Mr Didham has no involvement in either the decisions concerning the engagement of Rothschild & Co or the provision of investor relations services to the Company.

Investment Adviser

The Company is party to an Investment Advisory Agreement with the Investment Adviser, which was most recently amended and restated on 26 January 2023, pursuant to which the Company has appointed the Investment Adviser to provide advisory services relating to the management of assets on a day‑to‑day basis in accordance with its investment objectives and policies, subject to the overall supervision and direction of the Board of Directors. As a result of the responsibilities delegated under this agreement, the Company considers it to be a related party by virtue of being 'key management personnel'.

Under the terms of the Investment Advisory Agreement, the notice period of the termination of the Investment Adviser by the Company is 24 months. The remuneration of the Investment Adviser is set out below.

For its services to the Company, the Investment Adviser receives an annual fee at the rate of 0.9% (or such lesser amount as may be demanded by the Investment Adviser at its own absolute discretion) multiplied by the sum of:

· the NAV of the Company; less

· the value of the cash holdings of the Company pro rata to the period for which such cash holdings have been held.

The Investment Adviser is also entitled to claim for expenses arising in relation to the performance of certain duties and, at its discretion, 1% of the value of any transactions entered into by the Company (where possible, the Investment Adviser may seek to charge this fee to the borrower).

The Investment Adviser receives a fee of 0.25% of the aggregate gross proceeds from any issue of new shares in consideration for the provision of marketing and investor introduction services.

The Company's Investment Adviser is authorised as an AIFM by the UK FCA under the UK AIFM Regime. The Company has provided disclosures on its website incorporating the requirements of the UK AIFM Regime. The Investment Adviser receives an annual fee of £70,000 in relation to its role as the Company's AIFM, increased annually at the rate of the RPI. The fee paid to the Investment Adviser for the year was £89,000 (30 September 2023: £83,000).

During the year, the Company expensed £8,300,000 (30 September 2023: £8,670,000) in respect of investment advisory fees, marketing fees and transaction management and documentation services, and £53,000 (30 September 2023: £17,000) in respect of expenses. At 30 September 2024, liabilities in respect of these services amounted to £2,062,000 (30 September 2023: £2,132,000).

The directors and employees of the Investment Adviser also sit on the boards of, and control, several SPVs through which the Company invests. The Company has delegated the day-to-day operations of these SPVs to the Investment Adviser through the Investment Advisory Agreement.

While not related parties under IAS 24 Related Party Disclosures, for transparency, the Investment Adviser has disclosed the shareholdings of key management personnel. At 30 September 2024, the key management personnel of the Investment Adviser, together with their family members, directly or indirectly held 935,268 ordinary shares in the Company, equivalent to 0.106% of the issued share capital (30 September 2023: 1,017,800 ordinary shares, 0.115% of the issued share capital).

21. Subsequent events after the report date

The Company declared, on 24 October 2024, a fourth interim dividend of 1.75 pence per ordinary share, amounting to £15.2 million, which was paid on 29 November 2024 to ordinary shareholders who were recorded on the register at the close of business on 1 November 2024.

Post year end, the Company made two further advances totalling £0.3 million. The Company received repayments totalling £8.9 million in respect of eight investments, including £6.8 million in respect of the disposal of a portfolio of rooftop solar assets installed on domestic properties across the UK.

Post year end, the Company drew down an amount of £8 million and repaid an amount of £4 million on the RCF, resulting in a total drawn amount of £61 million.

22. Ultimate controlling party

It is the view of the Directors that there is no ultimate controlling party.

23. Non-consolidated SPVs

The following SPVs have not been consolidated in these financial statements due to the Company meeting the criteria of an investment entity and therefore, applying the exemption to consolidation under IFRS 10, it has measured its financial interests in these SPVs at fair value through profit or loss.

Refer to note 11 for the details of contractual arrangements between the Company and the SPVs and to the risk disclosures in note 19 for details of events or conditions that could expose the Company to losses.

During the year and prior year, the Company did not provide financial support to the unconsolidated SPVs.

All of the below non-consolidated SPVs are incorporated and domiciled in the United Kingdom.

	30 September 2024		30 September 2023
SPV company name	Ownership interest in loan notes	Classification¹	Ownership interest in loan notes	Classification¹
GCP Cardale PFI Limited	100%	Subsidiary	100%	Subsidiary
FHW Dalmore (Salford Pendleton Housing) plc	13.8%	Associate	13.6%	Associate
GCP Asset Finance 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Biomass 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Biomass 2 Limited	100%	Subsidiary	100%	Subsidiary
GCP Biomass 3 Limited	100%	Subsidiary	100%	Subsidiary
GCP Bridge Holdings Ltd	100%	Subsidiary	100%	Subsidiary
GCP Education 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Green Energy 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Healthcare 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Onshore Wind 3 Limited	100%	Subsidiary	100%	Subsidiary
GCP Programme Funding 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP RHI Boiler 1 Limited	100%	Subsidiary	100%	Subsidiary
GCP Rooftop Solar 5 Limited	100%	Subsidiary	100%	Subsidiary
GCP Rooftop Solar 6 plc	37.1%	Associate	37.2%	Associate
GCP Rooftop Solar Finance plc	31.1%	Associate	30.8%	Associate
GCP Social Housing 1 Limited	100%	Subsidiary	100%	Subsidiary
Gravis Asset Holdings Limited	100%	Subsidiary	100%	Subsidiary
Gravis Solar 1 Limited	100%	Subsidiary	100%	Subsidiary
Gravis Solar 2 Limited	100%	Subsidiary	100%	Subsidiary
GCP Geothermal Funding 1 Limited	100%	Subsidiary	100%	Subsidiary

1. Refer to note 11 for further details.

Alternative performance measures

The Board and the Investment Adviser assess the Company's performance using a variety of measures that are not defined under IFRS and are therefore classed as alternative performance measures ("APMs").

Where possible, reconciliations to IFRS are presented from the APMs to the most appropriate measure prepared in accordance with IFRS. All items listed below are IFRS financial statement line items unless otherwise stated.

APMs should be read in conjunction with the statement of comprehensive income, statement of financial position, statement of changes in equity and statement of cash flows, which are presented in the financial statements section of this report. The APMs may not be directly comparable with measures used by other companies.

Adjusted earnings cover

Ratio of the Company's adjusted net earnings¹ per share to the dividend per share. This metric seeks to show the Company's right to receive future net cash flows by way of interest income from the portfolio of investments, by removing: (i) the effect of pull-to-par and; (ii) any upward or downward revaluations of investments, which are functions of accounting for financial assets at fair value under IFRS 9, and that do not contribute to the Company's ability to generate cash flows.

	30 Sep	30 Sep
	2024	2023
	Pence	Pence
Adjusted earnings per share¹	7.09	8.58
Dividend per share	7.0	7.0
Times covered	1.01	1.23

Adjusted earnings per share

The Company's adjusted net earnings¹ divided by the weighted average number of shares.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Adjusted net earnings¹	61,486	75,655
Weighted average number of shares	867,940,448	881,850,353
Adjusted earnings per share (pence)	7.09	8.58

Adjusted loan interest capitalised

In respect of a period, a measure of loan interest capitalised adjusted for amounts subsequently paid as part of repayments.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Capitalised (planned)	14,868	18,253
Capitalised (unscheduled)	7,300	3,706
Loan interest capitalised	22,168	21,959
Capitalised amounts subsequently settled as part of repayments	(9,297)	(10,822)
Adjusted loan interest capitalised	12,871	11,137

Adjusted loan interest received

In respect of a period, a measure of loan interest received adjusted for loan interest capitalised and subsequently paid as part of repayments or disposal proceeds.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Loan interest received	65,129	58,791
Capitalised amounts subsequently settled as part of repayments	9,297	10,822
Adjusted loan interest received	74,426	69,613

Adjusted net earnings

In respect of a period, a measure of loan interest accrued² by the portfolio less total expenses and finance costs. This metric is used in the calculation of adjusted earnings cover¹.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Total profit and comprehensive income/loss	19,514	30,905
Less: income/gains on financial assets at fair value through profit or loss	(37,340)	(29,301)
Less: gains on derivative financial instruments at fair value through profit or loss	(496)	(12,860)
Add: loan interest accrued	79,808	86,911
Adjusted net earnings	61,486	75,655

Aggregate downward revaluations since IPO (annualised)

A measure of the Company's ability to preserve the capital value of its investments over the long term. It is calculated as total aggregate downward revaluations divided by total invested capital since IPO expressed as a time weighted annual percentage.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Total aggregate downward revaluations since IPO	(109,492)	(88,996)
Total invested capital since IPO	1,947,454	1,920,237
Percentage (annualised)	(0.41)	(0.36)

1. APM - refer to relevant APM above for further information.

2. APM - refer to relevant APM below for further information.

Average NAV

The average of the twelve net asset valuations calculated monthly over the financial year.

Cash earnings cover

Ratio of total net cash received per share to the dividend per share.

	30 Sep	30 Sep
	2024	2023
	Pence	Pence
Total net cash received per share¹	6.61	5.65
Dividend per share	7.00	7.00
Times covered	0.94	0.81

Discount

The price at which the shares of the Company trade below the NAV per share.

Dividend yield

A measure of the quantum of dividends paid to shareholders relative to the market value per share. It is calculated by dividing the dividend per share for the year by the share price at the year end.

Earnings cover

Ratio of the Company's earnings per share to the dividend per share.

	30 Sep	30 Sep
	2024	2023
	Pence	Pence
Earnings per share	2.25	3.50
Dividend per share	7.00	7.00
Times covered	0.32	0.50

Interest cover

The ratio of total loan interest income to finance costs expressed as a percentage.

Loan interest accrued

The measure of the value of interest accruing on a loan in respect of a period, calculated based on the contractual interest rate stated in the loan documentation.

Loan interest accrued¹ differs from net income/gains on financial assets at fair value through profit or loss, as recognised under IFRS 9, as loan interest accrued² is not impacted by movements of:

· the impact of realised and unrealised gains and losses on financial assets at fair value through profit or loss;

· the impact of 'pull-to-par' in the unwinding of discount rate adjustments over time (where the weighted average discount rate used to value financial assets differs from the interest rate stated in the loan documentation);

· the impact of cash flows from loan interest received;

· the impact of loan interest capitalised; and

· the impact of loan principal indexation applied.

This metric is used in the calculation of adjusted net earnings³.

Loan to value

A measure of the indebtedness of the Company at the year end, expressed as interest bearing loans and borrowings as a percentage of net assets.

NAV total return

A measure showing how the NAV per share has performed over a period of time, taking into account both capital returns and dividends paid to shareholders, expressed as a percentage.

It assumes that dividends paid to shareholders are reinvested at NAV at the time the shares are quoted ex-dividend. This is a standard performance metric across the investment industry and allows comparability across the sector.

Source: Investment Adviser

1. APM - refer to relevant APM below for further information.

2. APM - refer to relevant APM above for further information.

3. APM - refer to relevant APM above for further information.

Premium

The price at which the shares of the Company trade above the NAV per share.

Total expenses paid

In respect of the year, the cash outflows from the Company in order to settle operating costs. This metric is used in the calculation of total net cash received.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Total expenses per statement of comprehensive income	11,338	11,422
Adjustment for expense accruals	(726)	(406)
Total expenses paid	10,612	11,016

Total net cash received

In respect of a period, the cash inflows from investments, comprising adjusted loan interest received¹ less total expenses paid and finance costs paid. This metric is used in the calculation of cash earnings cover².

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Adjusted loan interest received	74,426	69,613
Total expenses paid³	(10,612)	(11,016)
Finance costs paid	(6,550)	(8,716)
Total net cash received	57,264	49,881

Total net cash received per share

The Company's total net cash received³ divided by the weighted average number of shares.

	30 Sep	30 Sep
	2024	2023
	£'000	£'000
Total net cash received³	57,264	49,881
Weighted average number of shares	867,940,448	881,850,353
Total net cash received per share (pence)	6.61	5.65

Total shareholder return

A measure of the performance of a Company's shares over time. It combines share price movements and dividends to show the total return to the shareholder expressed as a percentage. It assumes that dividends are reinvested in the shares at the time the shares are quoted ex‑dividend.

This is a standard performance metric across the investment industry and allows comparability across the sector.

Source: Bloomberg

Weighted average annualised yield

The weighted average yield on the investment portfolio calculated based on the yield of each investment weighted by the principal balance outstanding on such investment, expressed as a percentage. It is calculated including borrower company leverage but before any Company level leverage.

The yield forms a component of investment cash flows used for the valuation of financial assets at fair value through profit or loss under IFRS 9.

1. APM - refer to relevant APM above for further information.

2. APM - refer to relevant APM above for further information.

3. APM - refer to relevant APM above for further information.

Glossary of terms

Adjusted earnings cover

Refer to APMs section above

Adjusted loan interest capitalised

Refer to APMs section above

Adjusted loan interest received

Refer to APMs section above

Adjusted net earnings

Refer to APMs section above

Aggregate downward revaluations since IPO (annualised)

Refer to APMs section above

AGM

The Annual General Meeting of the Company

AIB

AIB Group (UK)

AIC

Association of Investment Companies

AIC Code

AIC Corporate Governance Code

AIF

Alternative Investment Fund

AIFM

Alternative Investment Fund Manager

APMs

Alternative performance measures

Average life

The weighted average term of the loans in the investment portfolio

Axpo

Axpo Solutions AG

Borrower

Owners of the Project Companies to which the Company advances loans

Capture price

The actual electricity price achieved by a generator in the market

Cash earnings cover

Refer to APMs section above

CBF

Community Benefit Fund

CfD

Contract-for-difference

CIF Law

Collective Investment Funds (Jersey) Law 1988

Clydesdale

Clydesdale Bank plc (trading as Virgin Money)

Company

GCP Infrastructure Investments Limited

C shares

A share class issued by the Company from time to time. Conversion shares are used to raise new funds without penalising existing shareholders. The funds raised are ring-fenced from the rest of the Company until they are substantially invested

Deferred shares

Redeemable deferred shares of £0.01 each in the capital of the Company arising from C share conversion

Discount

Refer to APMs section above

Dividend cover

Earnings (under IFRS, adjusted or cash) for the year compared to the dividend for the year

Dividend yield

Refer to APMs section above

Earnings cover

Refer to APMs section above

EEA

European Economic Area

EPC

Energy Performance Certificate

ESG

Environmental, social and governance

European Union

FCA

Fellow Chartered Accountant

FiT

Feed-in tariff

FRC

Financial Reporting Council

FTE

Full-time equivalent

GB market

UK electricity market

GCP Asset Backed

GCP Asset Backed Income Fund Limited

GHG Protocol

Greenhouse gas protocol

GRESB

Global Real Estate Sustainability Benchmark

GWh

Gigawatt hours

HMT

His Majesty's Treasury

IFRS

International Financial Reporting Standards

Interest cover

Refer to APMs section above

IPCC

Intergovernmental Panel on Climate Change

IPO

Initial public offering

IRR

Internal rate of return

ISDA

International Swaps and Derivatives Association

ISO

International Organisation for Standardisation

ISSB

International Sustainability Standards

Jersey Company Law

The Companies (Jersey) Law 1991 (as amended)

JFSC

Jersey Financial Services Commission

KPIs

Key performance indicators

KPMG

KPMG Channel Islands Limited

LBCM

Lloyds Bank Corporate Markets plc

Lloyds

Lloyds Group plc

Loan interest accrued

Refer to APMs section above

Loan to value

Refer to APMs section above

LSE

London Stock Exchange

MEES

Minimum Energy Efficiency Standards

Mizuho

Mizuho Bank

Megawatt

NAV

Net asset value

NAV total return

Refer to APMs section above

NED

Non-executive Director

OBR

The Office for Budget Responsibility

Official List

The Official List of the UK FCA

Ordinary shares

The ordinary share capital of the Company

PFI

Private finance initiative

PPA

Power purchase agreement

PPP

Public-private partnership

PPS

Pence per share

Premium

Refer to APMs section above

PRI

Principles for Responsible Investment

Project Company

A special purpose company which owns and operates an asset

Public sector backed

All revenues arising from UK central Government or local authorities or from entities themselves substantially funded by UK central Government or local authorities, obligations of NHS Trusts, UK registered social landlords and universities and revenues arising from other Government-sponsored or administered initiatives for encouraging the usage of renewable or clean energy in the UK

Pull-to-par

The effect on income recognised in future periods from the application of a new discount rate to an investment

RBSI

Royal Bank of Scotland International Limited

RCF

Revolving credit facility with AIB (UK) plc, Lloyds Bank plc, Clydesdale Bank plc (trading as Virgin Money) and Mizuho Bank Limited (formerly with RBSI, AIB Group (UK) plc, Lloyds Group plc, Clydesdale Bank plc and Mizuho Bank)

Rental indexation

Annual rent increase by an amount specified in the lease

RHI

Renewable heat incentive

RNS

Regulatory News Service

ROCs

Renewable obligation certificates

Rothschild & Co

NM Rothschild and Sons Ltd

RPs

Registered Providers

RSH

Regulator of Social Housing

SBTi

Science Based Targets initiative

SEM

Irish Single Electricity Market

Senior ranking security

Security that gives a loan priority over other debt owed by the issuer in terms of control and repayment in the event of default or issuer bankruptcy

SFDR

The Sustainable Finance Disclosure Regulation

SONIA

Sterling Overnight Interbank Average rate

SPV

Special purpose vehicle through which the Company invests

TCFD

Task Force on Climate-related Financial Disclosures

Total expenses paid

Refer to APMs section above

Total net cash received

Refer to APMs section above

Total shareholder return

Refer to APMs section above

UK AIFM Regime

Together, The Alternative Investment Fund Managers Regulations 2013 (as amended by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019) and the Investment Funds sourcebook forming part of the UK FCA Handbook, as amended from time to time

UK Code

UK Corporate Governance Code

UK ETS

UK Emissions Trading Scheme

UK FCA

Financial Conduct Authority

UN SDGs

United Nations Sustainable Development Goals

Weighted average annualised yield

Refer to APMs section above

Weighted average discount rate

A rate of return used in valuation to convert a series of future anticipated cash flows to present value under a discounted cash flow approach. It is calculated with reference to the relative size of each investment

UN SDGs and targets

SDG 3

Good health and well-being

UN SDG target 3.8

Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services and access to safe, effective, quality and affordable essential medicines and vaccines for all.

SDG 4

Quality education

UN SDG target 4.1

By 2030, ensure that all girls and boys complete free, equitable and quality primary and secondary education leading to relevant and effective learning outcomes.

SDG 5

Gender equality

UN SDG target 5.5

Ensure women's full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.

SDG 7

Affordable and clean energy

UN SDG target 7.2

By 2030, increase substantially the share of renewable energy in the global energy mix.

SDG 8

Decent work and economic growth

UN SDG target 8.3

Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalisation and growth of micro, small and medium-sized enterprises, including through access to financial services.

SDG 9

Industry, innovation and infrastructure

UN SDG target 9.3

Increase the access of small-scale industrial and other enterprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets.

UN SDG target 9.4

By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource‑use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities.

SDG 11

Sustainable cities and communities

UN SDG target 11.1

By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.

SDG 15

Life on land

UN SDG target 15.5

Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity and, by 2020, protect and prevent the extinction of threatened species.

SDG 17

Partnerships for the goals

UN SDG target 17.17

Encourage and promote effective public, public‑private and civil society partnerships, building on the experience and resourcing strategies of partnerships.

Shareholder information

Key dates for 2025

February

Annual General Meeting

March

Company's half-year end

Payment of first interim dividend

June

Half-yearly results announced

Payment of second interim dividend

September

Company's year end

Payment of third interim dividend

December

Payment of fourth interim dividend

December

Annual results announced

Frequency of NAV publication

The Company's NAV is released to the LSE via RNS on a quarterly basis and is published on the Company's website.

Sources of further information

Copies of the Company's annual and half‑yearly reports, stock exchange announcements, investor reports and further information on the Company can be obtained from the Company's website.

Warning to users of this report

This report is intended solely for the information of the person to whom it is provided by the Company, the Investment Adviser or the Administrator. This report is not intended as an offer or solicitation for the purchase of shares in the Company and should not be relied on by any person for the purpose of accounting, legal or tax advice or for making an investment decision. The payment of dividends and the repayment of capital are not guaranteed by the Company. Any forecast, projection or target is indicative only and not guaranteed in any way, and any opinions expressed in this report are not statements of fact and are subject to change, and neither the Company nor the Investment Adviser is under any obligation to update such opinions.

Past performance is not a reliable indicator of future performance, and investors may not get back the original amount invested. Unless otherwise stated, the sources for all information contained in this report are the Investment Adviser and the Administrator. Information contained in this report is believed to be accurate at the date of publication, but neither the Company, the Investment Adviser nor the Administrator gives any representation or warranty as to the report's accuracy or completeness. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. Neither the Company, the Investment Adviser nor the Administrator accept any liability whatsoever for any loss (whether direct or indirect) arising from the use of this report or its contents.

Corporate information

The Company

GCP Infrastructure Investments Limited

IFC 5

St Helier

Jersey JE1 1ST

Contact: jerseyinfracosec@apexgroup.com

Corporate website: www.gcpinfra.co.uk

Directors

Andrew Didham (Chairman)

Julia Chapman (Senior Independent Director)

Michael Gray

Steven Wilderspin

Dawn Crichard

Alex Yew

Administrator, Company Secretary and Registered Office of the Company

Apex Financial Services (Alternative Funds) Limited

IFC 5

St Helier

Jersey JE1 1ST

Tel: +44 (0)1534 722787

Adviser on English law

Stephenson Harwood LLP

1 Finsbury Circus

London EC2M 7SH

Adviser on Jersey Company Law

Carey Olsen Jersey LLP

47 Esplanade

St Helier

Jersey JE1 0BD

Depositary

Apex Financial Services (Corporate) Limited

IFC 5

St Helier

Jersey JE1 1ST

Financial adviser and joint brokers

Stifel Nicolaus Europe Limited

150 Cheapside

London EC2V 6ET

Tel: +44 (0)20 7710 7600

RBC Capital Markets

100 Bishopsgate

London EC2N 4AA

Independent Auditor

KPMG Channel Islands Limited

37 Esplanade

St Helier

Jersey JE4 8WQ

Investment Adviser, AIFM and Security Trustee

Gravis Capital Management Limited

24 Savile Row

London W1S 2ES

Tel: +44 (0)20 3405 8500

Operational bankers

Barclays Bank PLC, Jersey Branch

13 Library Place

St Helier

Jersey JE4 8NE

BNY Mellon

1 Piccadilly Gardens

Manchester M1 1RN

Lloyds Bank International Limited

9 Broad Street

St Helier

Jersey JE4 8NG

Royal Bank of Scotland International Limited

71 Bath Street

St Helier

Jersey JE4 8PJ

Public relations

Burson Buchanan Limited

107 Cheapside

London EC2V 6DN

Registrar

Link Market Services (Jersey) Limited

IFC 5

St Helier

Jersey JE1 1ST

Valuation Agent

Forvis Mazars LLP

Tower Bridge House

St Katharine's Way

London E1W 1DD

For further information, please contact:

Gravis Capital Management Limited Philip Kent Max Gilbert	+44 (0)20 3405 8500

RBC Capital Markets Matthew Coakes Elizabeth Evans	+44 (0)20 7653 4000

Stifel Nicolaus Europe Limited Edward Gibson-Watt Jonathan Wilkes-Green	+44 (0)20 7710 7600

Buchanan Buchanan Limited Helen Tarbet Samuel Adams Henry Wilson	+44 (0)20 7466 5000

Notes to the Editor

About GCP Infra

GCP Infra is a closed-ended investment company and FTSE-250 constituent, its shares are traded on the main market of the London Stock Exchange. The Company's objective is to provide shareholders with regular, sustained, long-term distributions and to preserve capital over the long term by generating exposure to UK infrastructure debt and related and/or similar assets.

The Company primarily targets investments in infrastructure projects with long term, public sector-backed, availability-based revenues. Where possible, investments are structured to benefit from partial inflation protection. GCP Infra is advised by Gravis Capital Management Limited.

GCP Infra has been awarded with the London Stock Exchange's Green Economy Mark in recognition of its contribution to positive environmental outcomes.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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Dividend income	Diversification	Capital preservation	Sustainability¹
To provide shareholders with regular, sustained, long-term dividends.	To invest in a diversified portfolio of debt and/or similar assets secured against UK infrastructure projects.	To preserve the capital value of investments over the long term.	To focus on the sustainability of the portfolio and make a positive impact.
The Company paid a dividend of 7.0 pence in respect of the year. A dividend target² of 7.0 pence has been set for the forthcoming financial year.	The investment portfolio is exposed to a wide variety of assets in terms of project type and the source of its underlying cash flow.	The Company has generated a NAV total return³ for the year of 2.2% and 176.6% since the Company's IPO in 2010.	The investment portfolio is focused on sustainable infrastructure which has a positive environmental and social impact.
7.0p	50	0.41%	62%
Dividends paid for the year ended 30 September 2024	Number of investments at 30 September 2024	Aggregate downward revaluations since IPO (annualised)³	Portfolio contributing to green economy⁴
14	473	105.22p	38%
Consecutive years of dividends paid	Number of underlying assets in the portfolio	NAV per share at 30 September 2024	Portfolio that benefits end users within society⁵
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