### 10-Year ### Anniversary Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Annual Report ## and Accounts ## 2025 ### Diversified Sustainable Income Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Our purpose ### Our purpose is to generate Company review Governance Financial statements ### attractive and sustainable Highlights 1 Board of Directors 44 Independent Auditor’s report 65 ### returns for a wide range Objectives and policies 2 The Sequoia Investment Statement of comprehensive income 73 ### of investors through Management Company team 45 SEQI’s 10-year anniversary 3 Statement of changes ### responsible and disciplined Independent Consultant 45 in Shareholders’ equity 74 Our story in numbers 4 ### investment into a growing Corporate governance 46 Statement of financial position 75 At a glance 5 ### portfolio of diverse Report of the Management Statement of cash flows 76 Why invest? 6 ### economic infrastructure Engagement Committee 50 Notes to the Financial Statements 77 ### debt. These assets would Report of the Audit Committee 51 ### otherwise be difficult for Strategic review Report of the Remuneration Additional information ### investors to access, given Chair’s statement 7 and Nomination Committee 54 Officers and advisers 107 | the specialist nature of | Market opportunity 11 | Report of the ESG and Stakeholder | | | --- | --- | --- | --- | | | | Engagement Committee 55 | Appendix – Alternative | | the origination and credit | Business model 13 | | | Performance Measures 109 Report of the Risk Committee 57 ### assessment skills needed. Investment Adviser’s report 15 Appendix – TCFD report 113 Directors’ remuneration report 58 ### Our investments support the Sustainability 26 Appendix – GHG emissions Directors’ report 60 ### provision of infrastructure Stakeholders 35 and climate scenarios methodology 122 Statement of Directors’ responsibilities 63 ### on a sustainable basis and Principal and emerging Appendix – SFDR product-level risks and uncertainties 38 periodic disclosure 124 ### create social and economic Appendix – SFDR principal ### benefits across the range adverse impact statement 130 ### of geographies in which Contacts 131 ### weinvest. | SEQI’s 10-year | Our story in | | Why invest? | | --- | --- | --- | --- | | anniversary | | numbers | Page 6 | | Page 3 | | Page 4 | | ### SEQI’s 10-Year ### Anniversary fact bar Additional information Financial statements Company review Strategic review Governance 1 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Highlights ### X Diversified portfolio of 59 investments across 8 sectors, ∆ ## £1.44bn 64.70 ### 29sub‑sectors and 10 mature jurisdictions Total net assets ESG score of the portfolio (31 March 2024: £1.52bn) (31 March 2024: 62.77) ### › 91% of investments in private debt (2024: 97%) ### › 59% fixed‑rate investments (2024: 58%), locking in current | | £92.55p | | £5.04p | | --- | --- | --- | --- | | interest rates | | 1,2 | | | | Net asset value (“NAV”) per Ordinary Share | | Earnings per share | | | (31 March 2024: £93.77p) | | (31 March 2024: £6.58p) | ### › Short weighted average life of 3.4 years (2024: 3.9 years), ### creating reinvestment opportunities ## £78.30p 6.875p 1 | › Weighted average equity cushion | of 39% (2024: 38%) | | 2 | | 3 | | --- | --- | --- | --- | --- | --- | | | | Ordinary Share price | | Dividends paid in respect of the year | | | | | (31 March 2024: £81.10p) | | (31 March 2024: £6.875p) | | 1 ### X Annualised portfolio yield‑to‑maturity of 9.9% (2024: 10.0%) ### asat31 March 2025 ## (15.4)% 8.8% 1 | X NAV total return | of 6.1% (2024: 8.1%) in the year | | 1 | | 1 | | --- | --- | --- | --- | --- | --- | | | | Ordinary Share discount to NAV | | Annualised dividend yield | | | | | (31 March 2024: (13.5)%) | | (31 March 2024: 8.3%) | | 1 ### X Share price total return of 5.3% (2024: 9.6%) in the year 1 ## X Ongoing charges ratio of 0.92% (2024: 0.95%) (calculated in £1.22bn ### accordance with AIC guidance) Market capitalisation (31 March 2024: £1.32bn) ### X Dividends totalling 6.875p per Ordinary Share (2024: 6.875p) paid ### in respect of the year in line with annual dividend targets in place 1 ### X Dividend cash cover of 1.00x (2024: 1.06x) ∆ ### X ESG score of the portfolio increased to 64.70 (2024: 62.77) ## USD66m Invested Tracy Hills Since 2017, SEQI has invested a net total of USD66 million through 1. See Appendix for Alternative Performance Measures (“APMs”) a senior secured term loan and 2. Cum dividend a revolving credit facility to Tracy 3. Includes the dividend paid in May 2025 in respect of the quarter ended 31 March 2025 and excludes the dividend paid Hills, a master-planned residential in May 2024 in respect of the quarter ended 31 March 2024 (2024: includes the dividend paid in May 2024 in respect community in Northern California. of the quarter ended 31 March 2024 and excludes the dividend paid in May 2023 in respect of the quarter ended Thefinancing supported critical 31March2023) infrastructure such as roads, water ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual and wastewater systems, enabling Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: the phased delivery ofthousands of www.seqi.fund/sustainability/publications/ homes in a high-demand region. 2017 Additional information Financial statements Company review Strategic review Governance 2 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Objectives and policies Principal activity › all or substantially all of the revenues to derive It also details how sustainability is Dividend policy from certain eligible jurisdictions, as defined in the integratedthroughout the investment process, Sequoia Economic Infrastructure Income Fund The Company’s dividend policy is to pay dividends Company’s Prospectus, provided that any such inparticular the negative and positive screening, as Limited (the “Company” or “SEQI”) invests in a in accordance with its annual dividend target. jurisdiction is rated at least BBB- by Standard & well as the proprietary ESG scoring methodology diversified portfolio of senior and subordinated Theannual dividend target is 6.875p (2024: 6.875p). Poors or Baa3 by Moody’s; that is carried out pre-investment. Once a economic infrastructure debt investments through Accordingly, in the absence of any significant › at least 40% of the portfolio to be floating rate loan is made, there are various methods of Sequoia IDF Asset Holdings S.A. (the “Luxembourg restricting factors, the Board believes the current | | or inflation-linked debt (floating rate instruments | engagement with borrowers that may feature as | | | --- | --- | --- | --- | | Subsidiary”), Yotta BidCo Limited and Gadwall | | | dividend totalling 6.875p per Ordinary Share per | | | converted to fixed-rate instruments through | part of our monitoring of assets that is given in | | | Holdings Limited (the “UK Subsidiaries”) (all together | | | annum can and will be maintained. TheCompany | | | interest rate swaps will be deemed to be | the SustainabilityPolicy. There is also discussion | | | the “Fund”). The Company controls the Subsidiaries | | | pays dividends on a quarterlybasis. | | | fixedrate); | of how the policy is governed through Board | | through holdings of 100% of their shares. For further details, please see note 4 to the oversight and delivered on by the Fund’s Investment TheCompany’s investment in the Subsidiaries › no more than 20% of the portfolio to comprise FinancialStatements. Adviser. For more detail, please refer to the website is principally achieved through the acquisition of pre-operational projects (typically projects in where the Sustainability Policy is published in full: Variable Funding Notes (“VFNs”) issued by the construction); www. seqi. fund/sustainability/publications/. Luxembourg Subsidiary. For further details of the › no single sector to represent more than 40% of structure of the group, please refer to note 1 on total assets; page 77. › no single sub-sector to represent more than 15% Investment objective of total assets, other than a major sub-sector (as The Company’s investment objective is to provide defined in the Prospectus), which may represent | investors with regular, sustained, long-term | up to 25% of total assets; | | --- | --- | | distributions and capital appreciation from a | › no more than 60% of the portfolio to be located | | diversified portfolio of senior and subordinated | inthe United States; | economic infrastructure debt investments, in › no more than 50% of the portfolio to be located accordance with the investment criteria as set inWestern Europe (ex-UK); ## outintheinvestmentpolicy. £18m › no more than 40% of the portfolio to be located | Investment policy | inthe United Kingdom; | Invested | | --- | --- | --- | | The Company’s investment policy is to invest in | › no more than 20% of the portfolio to be located | | | a portfolio of loans, notes and bonds in which no | inAustralia and New Zealand combined. | | ## 34 more than 10% by value of the Fund’s net asset Sustainability policy Locations in the UK value (at the time of investment) relates to any The Company is committed to responsible one individual infrastructure asset. In addition, the Welcome Break investing. As part of its sustainability strategy, it Company intends to only invest directly or indirectly In 2017, SEQI invested has a long-established Sustainability policy, which in investments that satisfy the following criteria, such £18million in mezzanine the Board reviews regularly and ensures is kept investments to make up a minimum of 80% by value debt to Welcome Break, up to date. The policy describes the Company’s of the portfolio at the time of investment: one of the three main sustainability principles that underpin its approach Motorway Service Area › all or substantially all of the associated underlying and the Fund’s three corresponding sustainability (“MSA”) operators in the revenues to be from business activities in goals that it measures and reports its progress UK, with 34 locations the following market sectors: transport, | | against. | situated along the most | | --- | --- | --- | | transportation equipment, utilities, power, | | profitable stretches ofthe | | renewable energy, accommodation infrastructure | | UK motorway network. | | and telecommunications, media and technology | | The investment was repaid | | infrastructure; | | in full in 2019. | 2017 Additional information Financial statements Company review Strategic review Governance 3 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # SEQI's 10-year anniversary The chart shows the growth of cumulative dividends over time ![img-0.jpeg](img-0.jpeg) 4 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Our story in numbers ## What we helped power Over the past decade, we participated in the financing of 21.5 GW of power generation capacity across North America, the UK, and Europe. To put this into context, the UK's electricity consumption in 2023 was approximately 215 TWh or the equivalent of 343 GW facilities running at full capacity for the year. On that basis, the assets we helped finance could have supplied around 60% of the UK's power demand. While we are not the subclimator in most cases, and some assets are not designed for continuous full-load operation, we believe it remains that we have made a noteworthy contribution to the provision and upkeep of energy security. Our credit investments supported the construction, acquisition, and operation of over 25 major generation facilities, including high efficiency combined cycle gas turbines (CCG) to, cogeneration units, and plaster plants – critical infrastructure underpinning system reliability during the energy transition. ### Technologies financed Combined Cycle Gas Turbines (CCGTs) Steam and Dual Fuel Plants Cogeneration (CHP) Plaster plants ### Geographies active ERODE (FUL, M4B0, ISO 9E, O4G0) Omega Inland & Open ### Highlights 21.5GW of power generation capacity across North America, the UK, and Europe 315TWh UK's electricity consumption in 2023 See the 'Energy Security and Resilience' section for more on our contribution to energy volatility during the transition. ## What we helped store One of the reasons behind surging demand for power infrastructure is the dramatic growth in data centre development, driven by the computing needs of artificial intelligence, cloud adoption, and the shift to digital-first services. In response, we have provided financing for the construction, expansion, or refinancing of 39 individual data centres, providing over 345 MW of data centre capacity, across both established and emerging digital hubs in Europe and North America. These assets include high-density hyperscale centres fully leased to Tier 1 tenants, as well as edge and regional platforms delivering hybrid-cloud services to small and mid-size companies. The digital capacity we've helped finance could house the compute equivalent of millions of consumer devices – powering everything from generation AI model training and real-time financial transactions to remote work and video conferencing across global enterprise users. ### Highlights 348MW of total capacity across US & Europe 39 data centre sites across Europe and North America Strong sponsor backing ## What we helped connect Just as data centres ensure high-capacity fibre connectivity to function, so two does the broader economy. Over the life of the Company we have helped deliver high-generation fibre infrastructure to more than 2 million premises across the UK and the United States including large cities and underserved regional communities – enabling wider access to the continuously expanding digital world. This infrastructure now delivers gigabit-capable, symmetrical fibre to the premises (FTTP) connectivity to homes, small businesses, and public institutions. These networks also support wholesale access to major telecom operations, providing the platform for competitive, future-proof broadband markets. The fibre networks we have helped finance could provide high-speed broadband to nearly 1 m 13 kW premises – roughly equivalent to every household in Greater Manchester, Birmingham, and Edinburgh combined. In addition to terrestrial fibre, we took part in the construction financing of a 14,000-kb system transcribing subway cable system, now delivering high-capacity, low-timing connectivity between major international internet enterprise. This system supports digital cloud, enterprise and research connectivity across the Pacific. ### Highlights ~2m premises provided with FTTP 14,000km subway fibre cable delivered Gigabit-capable symmetrical broadband deployed 5 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## At a glance ### Fund NAV values are reported as at calendar year end. North America UK and Europe 7 2 5 9 8 10 3 6 1 4 Top 10 assets 1 AP Wireless Junior | 2 Infinis Energy | Sector | | | --- | --- | --- | | 3 Workdry | | Utilities | | 4 Hawkeye Solar HoldCo 2030 1, 2 and 3 | | Power | | 5 Expedient Data Centers Senior Secured 2026 | | Renewables | | 6 Project Sienna | | Accommodation | | 7 Project Tyre | | Digitalisation | | 8 Sacramento Data Center Senior Secured 2028 | | Transport – vehicles | SEQI targets mature, investment-grade jurisdictions, 9 Project Nimble Transport – systems including the UK, Western Europe, North America and Australasia, ensuring strong geographic 10 Euroports 2nd Lien 2030 Other diversity and access to resilient, high-quality infrastructure credit. Additional information Financial statements Company review Strategic review Governance 6 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Why invest? ### The Company seeks Infrastructure credit Access to investment Portfolio ### to provide investors market resilience expertise diversification ### with regular, sustained, ## 1. 2. 3. ### long‑term distributions ### and capital appreciation ### from a diversified portfolio ### of senior and subordinated ### economic infrastructure debt ### investments. The Company ### is advised by Sequoia ### Investment Management SEQI’s infrastructure credit investments target resilient, SEQI benefits from a dedicated infrastructure credit SEQI’s actively managed, globally diversified portfolio Company Limited (“SIMCo”). non-cyclical, long-term cash flows from essential services manager, offering deep international expertise in private, spans sectors, geographies and credit structures, offering and evolving sectors, offering strong real asset backing illiquid markets and a strong track record of attractive time-based and thematic diversification while providing and returns distinct from broader corporate credit returns for investors. compelling risk-adjusted returns across varying market ### A focus on regular, stable markets. conditions. ### income with opportunity Find out more Find out more Find out more ### for NAV upside. SEQI has ### provided investors with Transparency Sustainability goals ### 10years of quarterly income, and liquidity ### consistently meeting its ## 4. 5. ### dividend targets from ### stableportfolio cash flows. ## 92.55p 8.8% NAV per share Dividend yield SEQI, the largest credit fund on the LSE, provides SEQI, an EU SFDR Article 8 fund, actively drives ESG leading transparency, monthly NAV reporting, FTSE 250 improvement across its portfolio, combining internal membership, broad investor support, regular analyst expertise and third-party analysis – earning SIMCo a coverage and ongoing share liquidity. global award for best ESG infrastructure investment ## 6.875p £1.44bn strategy for 2022. Target annual Total net assets dividend per share Find out more Find out more Additional information Financial statements Company review Strategic review Governance 7 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Chair's statement ![img-1.jpeg](img-1.jpeg) “ We operate in challenging times, but believe lending to infrastructure projects remains a robust, differentiated strategy that can deliver strong risk-adjusted returns for investors. James Stewart Chair "The diversification and the credit quality of the portfolio will stand us in good stead and we remain confident we will be able to meet our target returns." It is my pleasure to present to you the Annual Report and Audited Financial Statements of the Company for the financial year ended 31 March 2025. The Fund's diversified infrastructure debt portfolio continues to demonstrate its resilience by generating significant levels of cash in the face of a challenging market environment and volatile macro-economic backdrop. The Company's underlying investment portfolio has had a steady year, delivering a NAV total return of 6.1%, slightly below its target of 7-8%. The Board remains confident in the investment qualities of the infrastructure sector and infrastructure debt as an asset class. We have successfully deployed capital in accordance with our strategy of maintaining portfolio diversification and credit quality by continuing to target loan yields of 9-10%. ### NAV and share price performance Over the financial year, the Company's NAV per Ordinary Share declined from 93.77p to 92.55p, after paying dividends of 6.875p, producing a NAV total return of 6.1% (2024: 8.1%), compared to our target return of 7-8%. The change in the NAV has been largely driven by interest income during the year (8.17p per Ordinary Share) and offset by dividends (6.875p per Ordinary Share), operating costs (1.59p per Ordinary Share) and negative valuation changes (1.45p per Ordinary Share). The share buyback programme delivered a positive NAV gain of 0.70p per Ordinary Share over the year. The negative valuation movement is primarily due to a 1.45p per Ordinary Share write-down of one of our non-performing loans. Our Investment Adviser, Sequoia Investment Management Company Limited ("SIMCo"), discusses these movements in more detail in its report. Our portfolio underperformed the liquid credit markets this year, with leveraged loans and high yield bonds generating total returns of 7.5% and 7.8% respectively. We believe that this largely reflects the rapid collapse in lending rates in those markets, which has boosted the value of older loans and bonds written in the past (since they are at old and higher lending rates), even while new loans in those markets became less attractive. For example, the average BB-rated leveraged loan interest rate (on new loans) fell from SOFR=2.99% to SOFR=2.86% over the course of the financial year, meanwhile the price of the average leveraged loan decreased from 99.6% to 99.3% over the same period. ### Capital allocation During the financial year, the Company has maintained a balanced approach to capital allocation, by returning £55.9 million to Shareholders through its share buyback programme, extending £328 million of new loans (including some commitments entered into but not fully drawn by year end) and enhancing diversification across the portfolio. These new investments were predominantly senior secured loans (representing 83% of the total) in Europe and the UK collectively 72% of the total), and were well diversified, being spread across six of the Company's eight investment sectors. These new loans were largely financed by the natural recycling of maturing loans, but we have also allowed our revolving credit facility ("RCF") to be moderately utilised, with year-end leverage of £56.9 million (representing 4% of NAV). We considered that this amount of leverage was acceptable and consistent with our long-standing strategy of having no structural leverage while endeavouring to remain fully invested. We have very good visibility on loans scheduled for repayment in the near term, and therefore the drawings on the RCF can be repaid if necessary. The Board believes that, looking to the future, it is important for the Company to continue making new investments in a balanced manner to maintain an active presence in the infrastructure debt market. This will continue to enhance access to high-quality transactions alongside reputable sponsors. 1. See Appendix for Alternative Performance Measures ("APMs"). 8 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Chair’s statement continued Share price performance and the › worked with other investment companies The repayment of capitalised interest is an essential › Credit quality has improved on a number of ongoingdiscount (especially in the alternatives sector) to address component of the Company’s cash cover. However, metrics: the proportion of the portfolio invested the ongoing “cost disclosure” problem, which has given that its timing is tied to the eventual repayment in senior secured loans rose from 58.6% to The market environment has remained challenging 1 led to companies like ours being unfairly treated or sale of the Company’s assets, it is unevenly 59.9%; the weighted average “equity cushion” for all investment companies, and in particular the when compared with other types of investment distributed over the life of the Company, which (being the average amount of equity capital in alternatives sector, where most of the companies’ structures; canresult in fluctuations in the dividend cash cover. the businesses that we lend to, expressed as a shares are continuing to trade at a significant › appointed a second Broker, J.P. Morgan Thisalso affected this year’s cash cover. percentage of their total capital) rose from 38% discount to NAV. Across the infrastructure, Cazenove, to complement the services offered to 39%. renewable energy and debt sectors of investment In addition, the share buybacks, while being trusts – which includes 40 different trusts with by Jefferies and help us execute our marketing accretive to NAV, free up less cash than cash › Diversification has been maintained: the overall a combined market capitalisation of £23 billion and investor engagement strategy, particularly generated by extending new loans. number of investments increased from 55 to 59, (as at our year end) – theaverage discount has overseas; and covering eight sectors and 29 sub-sectors. The Board has also considered the ratio of increased from 20.6% at the start of the financial › an ongoing programme, working with the › Yield has been maintained: our portfolio’s dividends per share to earnings per share, which year to 22.0% at the end. Over the course of the Investment Adviser and our joint Brokers, to weighted average yield-to-maturity, which is 137% (2024: 105%). While a ratio of more than year, SEQI’s share price discount to NAV increased market the Ordinary Shares to a wider audience, measures both the income and future capital 100% is undesirable, it does not imply that the from 13.5% to 15.4%. The Company’s share price with the goal of attracting new investors. We also gains, fell slightly from 10.0% to 9.8% – a dividend is unsustainable, as the ratio is driven in fell over the year, from 81.10p to 78.30p with a extended the mandate of Kepler Trust Intelligence significantly smaller fall than for UK base rates, part by unrealised mark-to-market adjustments in share price total return of 5.3% (2024: 9.6%), to help increase our engagement with retail reflecting the high proportion of fixed-rate loans the carrying value of performing loans – this type once dividends are taken into account. Share investors. in the portfolio and the impact of the interest rate of price adjustment does not affect the long-term performance is discussed in more detail in the hedging strategy we undertook to protect the The ongoing share purchases by the Directors of income-generating ability of those loans. Moreover, Investment Adviser’s report. Company from falling interest rates. the Company and the directors of the Investment the ratio does not reflect the NAV benefits of the While emphasising we are not complacent with Adviser reflect our shared conviction in the share buyback, which creates capital value in an During the year, SEQI committed £328 million to the level of our discount, we are pleased that our investment case and the value provided by the economic sense, but this is not captured in earnings new loans, contributing to a more balanced sector discount is towards the narrow end of the market current share price. In total, 62,059 (2024: 122,656) per share. and geographic mix, as well as a more defensive range, and has been one of the least volatile in the Ordinary Shares were bought by these parties positioning through a slightly higher proportion of Paying a stable, attractive and covered dividend sector. Reducing (and eventually eliminating) the during the financial year. In addition, the Investment senior-ranked loans. is an important part of the Company’s value | discount remains a key strategic objective of the | Adviser bought 1,235,468 (2024: 1,272,199) | | | | --- | --- | --- | --- | | | | proposition to investors The Board believes that | We have made progress on our non-performing | | Board. To help achieve this, we have: | Ordinary Shares during the financial year. None of | | | | | | the current level can and will be maintained. | loans (“NPLs”), which now represent only 1.0% | these parties sold any shares in the year, bringing › an active buyback programme, with 70.4 million However, the Board is mindful of the increased risk of our NAV compared to 5.4% last year. We no their aggregate investment in the Company to shares; £55.9 million (2024: £88.2 million) environment and the fact that interest rates are longer classify our loan to Bulb Energy as an NPL 8,092,121 Ordinary Shares. repurchased over the financial year and 213.2 forecast to fall, and so will keep the level of dividend as we expect to receive back in full the amount million shares repurchased since the beginning Dividend under review to ensure that it remains affordable and lent (including accrued interest). During the year ofthe programme; sustainable. we also sold our loan backed by a property in Our dividend of 6.875p per Ordinary Share remains › a continuing active dialogue with investors and a Glasgow (originally student accommodation but cash covered at 1.00x (2024: 1.06x). The level of Portfolio performance philosophy of open and transparent dissemination re-purposed as a hotel). Thisposition has been fully cash cover is lower than the previous year, due in Our investment strategy over the financial year of information with considerable investment in exited, although we retain the right to an “earn out” part to “cash drag”, referring to cash held over the has been to maintain portfolio credit quality and online content on the Fund’s website and monthly payment based on the future performance of the year reducing the Fund’s level of investment income diversification, while targeting a portfolio yield investor reporting; asset. Shortly before the year end, we received the and less capitalised interest received. of9-10%. final, residual payment on the Salt Lake investment in Australia. 1. See Appendix for Alternative Performance Measures (“APMs”) Additional information Financial statements Company review Strategic review Governance 9 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Chair’s statement continued Portfolio performance continued Valuations of performing loans are fundamentally This methodical approach has led to a strong credit With this in mind, the Fund has continued to make simpler than valuations of equity investments. performance and low credit losses through turbulent progress on the sustainability of its own operations. Our remaining two NPLs comprise a loan backed Fora performing loan, the cash flows are typically times: the COVID-19 lockdowns and their economic This year we introduced a stand-alone Governance by a property in Washington DC that was previously known, as they are supported by contractual consequences; geopolitical events; Brexit; an energy Policy, which details the Company’s governance leased to a school (representing 0.4% of NAV) and commitments. The assessment that is required is crisis in Europe; very low interest rates followed by a structures, policies and oversight as well as the a municipal infrastructure loan (representing 0.6% limited to applying the appropriate discount rate, rapid escalation in rates; and a period of the highest Fund’s approach to assessing good governance at of NAV). The valuations for both loans have been forwhich there are many publicly available reference inflation for 40 years. It is through this turmoil that borrowers. Sustainability factors at portfolio level are written down during the year and reflect a prudent points, such as sector-specific leveraged loan one of the main attractions of infrastructure debt thoroughly assessed using SIMCo’s sustainability view on the possible outcomes. The Investment indices. By contrast, for equity investments, both becomes clear: its ability to weather the storm. framework and methodology. KPMG have again Adviser continues to work diligently to realise value the future cash flows and the discount rate need provided independent assurance over all three from these investments. We will update our investors Another important part of our strategy has been to be assessed. In summary, our NAV is calculated components of SEQI’s sustainability integration as and when we are able to. NPLs are discussed in engagement with our Shareholders. We have more frequently, more objectively and in a more processes: negative screening, thematic investing more detail in the Investment Adviser’s report. adopted a policy of high levels of disclosure through ∆ straightforward manner than many other funds in and the portfolio’s average ESG score . our website and factsheets and other forms of The Investment Adviser closely monitors each and our sector. investor reporting. We have listened to Shareholders This year also saw the weighted average ESG every loan within the portfolio. The Board reviews ∆ The first 10 years of the Company’s life and adopted our approach to reflect what is score increasing to 64.70 , largely driven by the portfolio at each quarterly Board meeting and, important to them: we were an early integrator of judicious acquisitions and active engagement in addition, undertakes a more detailed review The Company celebrated its 10th anniversary sustainability factors into our investment process work throughout the year. Our efforts in borrower semi-annually. When necessary, loans are also of listing on 3 March 2025, and this is a good and reporting; we have been able to increase our engagement are illustrated by a market-leading subject to further and enhanced scrutiny by our opportunity to look back and reflect on what has dividend over time; and we were one of the first response rate to our annual sustainability Investment Adviser. As at year end, approximately been achieved. listed alternatives funds to start buying back shares questionnaire – 93% of portfolio companies 15.0% of our portfolio (including the NPLs The IPO itself was for a moderate size of as discounts in the sector started to emerge. completed this on an almost entirely voluntary basis. mentioned above) was receiving enhanced scrutiny. £150million. What made the Company stand out In addition, sustainability-linked covenants are now This compares to 15.5% at the time of the Interim Sustainability was our clearly defined and differentiated investment in place across eight projects in the portfolio, the Financial Statements and 12.0% at the prior year strategy – providing a diversified portfolio of private In a year marked by global uncertainty and highest it has ever been. Thisreflects our growing end. The Board has closely reviewed these positions debt, backed by economic infrastructure, in intensifying scrutiny of sustainability, SEQI remains influence and the strong relationships SIMCo has and is comfortable that their current marks fairly developed markets. There remains no other fund like committed to integrating material sustainability built with our borrowers’ management teams. It reflect the current value. us, and therefore we consider that we provide our considerations into its investment approach. is this kind of impactful work that contributed to SEQI adopts a robust, independent approach to Shareholders with a risk-return proposition that they Webelieve it is the right thing to do and it is an SIMCo’s Sustainability Manager being recognised calculating the NAV of its portfolio: our approach cannot easily get elsewhere. This has enabled us to integral part of full and proper risk assessment of with two industry accolades this year. Similarly, our is to calculate and publish a monthly NAV report grow the Company through 10 subsequent capital long-term credit performance. We recognise the Shareholder engagement also intensified this year that investors can have great confidence in. raises to being a FTSE 250 company today. essential role infrastructure will play in enabling a with SEQI hosting an inaugural ESG event, at which Monthly reviews are more frequent than many of more sustainable future, and whilst SEQI is not an Of course, having a strategy is one thing; being able investors gathered for a breakfast roundtable to our peers in the listed fund sector (in particular impact fund, many of the assets it finances – across to execute it is another. The Investment Adviser discuss common ESG challenges andkey emerging for alternative investments) and additionally, the renewables, transport, digital and essential services has carefully built our portfolio based on deep due themes and opportunities. marks are independently reviewed every month by for example – are supportive of the climate transition diligence of the underlying businesses that we our valuation agent PricewaterhouseCoopers LLP and building resilient, future-proofed economies. lend to, reflecting the risks and opportunities in the (“PwC”) and audited annually by our independent markets at the time. We have been careful to avoid Auditor, Grant Thornton. “mission creep”. ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: www.seqi.fund/sustainability/publications/ Additional information Financial statements Company review Strategic review Governance 10 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Chair’s statement continued Sustainability continued Until 2024, Selina was Senior Counsel at Gibson, Webelieve that the diversification and the credit Finally, I would like to thank our Shareholders for Dunn & Crutcher where she also led the firm’s quality of the portfolio will stand us in good stead their continued support. We operate in challenging This year also marks a milestone in our climate environment, social and governance practice. and we will maintain a prudent approach to times, but we believe that lending to infrastructure reporting journey. For the first time, SEQI is able to She has extensive experience as a mergers and credit risk in our approach to new investments. projects remains a robust, differentiated strategy that disclose emissions data for the Company and the acquisitions, corporate governance, financial Oneconsequence of the heightened market volatility can deliver strong risk-adjusted returns for investors. portfolio is in alignment with all recommendations services and regulatory law adviser. Selina will is that lending terms have improved (from the of the TCFD framework, as it onboarded Altitude assume the position of Chair of the ESG and perspective of lenders) since the end of the financial by AXA Climate to assist with sourcing emissions James Stewart Stakeholder Engagement Committee. year. This means we remain confident that we will be estimates and analysis of assets under different Chair able to meet our target returns, even if interest rates climate scenarios. This enhanced capability will I was very sorry that, following a close family 24 June 2025 continue to fall. support deeper climate risk analysis and strengthen bereavement, Fiona Le Poidevin decided to step our engagement with borrowers ontheseissues down as a Director with effect from 31 March 2025. Given the high level of global demand for going forward. I am very grateful for all that Fiona contributed infrastructure capital, our Investment Adviser’s to SEQI. Margaret Stephens has taken over pipeline of opportunities remains strong and they As we look ahead, SEQI will continue to monitor as the Chair of the Audit Committee. Margaret are able to adopt a highly selective approach to the fast-evolving regulatory landscape, including is a qualified Chartered Accountant and is an investment. the FCA’s Sustainability Disclosure Requirements experienced audit committee chair with investment (“SDR”) and the International Sustainability We will also continue to monitor our share price company experience. An external independent Standards Board’s (“ISSB”) IFRS Sustainability closely and, where appropriate, engage in share ## USD131m search process was undertaken to find a suitable Disclosure Standards, while exploring how to buybacks. The rate at which we buy back shares Guernsey-resident non-executive Director to replace Invested incorporate nature and biodiversity into our will flex depending on various factors, including the Fiona. I look forward to welcoming Nicola Paul sustainability assessments. Looking back over the level of our share price discount to NAV. The Board to the board on 1 July 2025. Nicola has recently 10 years since SEQI’s IPO, we are proud of how far is not satisfied with the current share price and our retired as an associate partner of Deloitte and has a we’ve come on our sustainability journey and remain strategic goal remains to eliminate the discount. strong background in audit and control evaluation, committed to making sustainability an enduring part which will assist the Board in complying with future of our future strategy. reporting requirements. Board changes I would also like to say thank you to Kate Thurman, Generation Bridge For the last three years the Board has consisted of one of our Independent Consultants, who has Between 2022 and 2024, five members. Last autumn the Remuneration and stepped down having supported SEQI over SEQI provided a total of Nomination Committee reviewed the make-up of | | manyyears. | USD131 million across | | --- | --- | --- | | the Board and noted a substantial increase in the | | three senior secured loans | | workload and responsibilities following changes | Profiles of the Board and our Investment Adviser are | to Generation Bridge LLC, | | to reporting standards and the need to maintain | on pages 44 and 45. | a portfolio of US-based | | more active portfolio oversight and Shareholder | | peaking power plants. | Outlook engagement in an elevated market risk environment. These assets provide Our investment strategy is to maintain the level of critical, flexible capacity to The Board subsequently decided to recruit an credit quality across the portfolio, whilst targeting the electricity grid, helping additional Boardmember. | | a portfolio yield of 9-10%. We are very mindful of | to balance intermittent | | --- | --- | --- | | Following an extensive independent search, I was | the current high level of global uncertainty and the | renewable generation | | very pleased to welcome Selina Sagayam to the | | and ensure system | generally challenging economic outlook for many of reliability during periods Board on 1 April 2025. the countries that we operate in. This is discussed in of high demand. All three more detail in the Investment Adviser’s report. investments have repaid in full. 2019 Additional information Financial statements Company review Strategic review Governance 11 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Market opportunity Principal activity The Company’s investment objective is to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. The Fund principally invests in private operational businesses with a proven record and stable cash flows, spread across eight sectors and 29 sub-sectors, reducing exposure to any one sector or business cycle. It aims to capture the illiquidity premium offered by private debt investments, with select exposure to liquid, publicly traded debt being used to help to manage working capital. The majority of the Fund’s portfolio consists of bilateral loans and club deals, for which the Investment Adviser negotiated favourable terms for the Fund to enable its risk-adjusted returns. Sectors in which we invest ### Utilities Power Renewables Accommodation Digitalisation Transportation The utility industry includes companies In the power sector, the Fund mainly Over the course of the last decade, The Fund invests in infrastructure The opportunities we are seeing In the transportation sector, the that supply essential services such invests in baseload and energy renewable energy has grown providing social services and across the digital sector stem from Fund lends to owners of long-term as the distribution and transmission transition assets. Baseload generators materially as many governments accommodation, including student the exponential growth in demand assets such as roads, ports, airports of electricity, natural gas and water, such as nuclear power plants sell and investors have accepted the accommodation, healthcare and for digital connectivity and data and railways. These benefit from and their key suppliers. Utilities electricity all of the time. Energy need for sustainable energy sources. elderly care. Our main activity in this storage and processing. Technological high barriers to entry and may have serve as a public good and often transition assets include “peaker Decarbonisation plans continue, sector has been specialist healthcare, advances, such as AI, the internet quasi-monopolistic characteristics. have monopolistic characteristics, plants” and batteries, which are only despite a global pandemic and such as learning disability care homes. of things, and self-driving cars, will They are well positioned to generate and as a result, are typically highly expected to supply electricity when an economic recession. The Fund Healthcare assets are fundamental to continue to provide tailwinds to the highly predictable revenue streams. regulated. Utility companies are electricity demand and/or prices are finances a wide range of renewable societies and have a non-discretionary sector. The Fund’s experience in In some cases, these revenues are normally defensive, as the businesses high and purchase electricity when energy assets including both demand profile as governments have the sector includes hyperscale data regulated, meaning that they are are capital intensive, enjoy very high demand and/or prices are low in ground-mounted and rooftop solar a statutory duty to provide these centres with blue-chip tenants, global subject to government oversight and barriers to entry, and their revenues the case of batteries. These plants and energy from waste projects. services to their citizens. The industry portfolios of mobile phone towers pricing controls to ensure fair and are resilient through the economic may also receive capacity-related Typically, renewable energy businesses is highly regulated, non-cyclical and and an undersea data cable and equitable access to transportation cycle. Utility company revenues are standby payments from grid operators. benefit from long-term electricity has high barriers to entry. The Fund broadband. Given the essentiality services, which provides further also not normally directly linked to Energy transition businesses have purchase agreements and government also invests in selective student of digitalisation assets, these comfort around debt serviceability. commodity prices. an intrinsic sustainability strength of support schemes such as Renewable housing opportunities in countries investments typically exhibit defensive In the transport assets sector, the facilitating higher levels of renewable Obligation Certificates (“ROCs”) in where there are student housing characteristics. Fund finances rolling stock, aircraft energy. Attractive energy assets are the UK and Investment Tax Credits shortages, such as the Netherlands. and shipping. These types of assets characterised by strong asset backing (“ITCs”) in the US. typically have a high replacement and a high percentage of contracted cost and a long economic life. revenues – the Fund generally targets Inmany cases, these assets will be companies with low exposure to on long-term leases, which provides unhedged power prices. All projects are ahigh degree of certainty of income. assessed based on their competitive positioning in the merit order curve and must be able to demonstrate solid operational performance. Additional information Financial statements Company review Strategic review Governance 12 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Market opportunity continued The market environment during the year While the year started with some optimism, over Other the course of the year, and subsequent to the year The financial year saw interest rates begin to fall in The Fund also makes loans to projects and end, investors became increasingly focused on most markets, especially the Eurozone, as inflation businesses that fall outside the main economic geopolitical risks and the volatility and uncertainty started to return to normal levels. The credit markets infrastructure sectors. These investments have arising from the actions of the new Trump had a strong year, with spreads on corporate characteristics such as providing an essential Administration in the US, especially tariffs. In its bonds and leveraged loans tightening over the service, high barriers to entry, physical asset report, the Investment Adviser discusses how the course of the year. Economic growth remained backing and low market correlations. Examples Fund has fared and how the investment portfolio anaemic in Europe, but the US economy performed would include infrastructure used in the agricultural is well positioned for some of the challenges and muchbetter. sector(such as energy from biomass). opportunities that investors will face in the future. ### Swap curves (%) ## £67m Invested 1 Bannister 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Between 2019 and 2020, 6 SEQI invested £67 million of senior secured debt 5 to Bannister, a leading provider of long-term supported and residential 4 living facilities for adults with learning disabilities, such as intellectual disability, autism, 3 mental health diagnoses and acquired brain injuries with complex behavioural 2 needs. The loan was repaid in full in 2022. 2019 0 Additional information Financial statements Company review Strategic review Governance GBP swaps 2025 EUR swaps 2025USD swaps 2025 EUR swaps 2024USD swaps 2024GBP swaps 2024 13 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Business model ### Driven by our purpose Our purpose is to generate attractive and sustainable returns for a These assets would otherwise be difficult for investors to access, given the specialist nature of the necessarycredit analysis and advisory skills needed. Our investments support the provision of infrastructure ### widerange of investors through responsible and disciplined investment on a sustainable basis and create social and economic benefits across the range of geographies in which ### into a growing portfolio of diverse economic infrastructure debt. weinvest. Investment process Financial outcomes Financial ## 6.875p The Company's NAV performance The Company has paid dividends totalling anddividend cover 6.875p per Ordinary Share (2024: 6.875p) in respect of the financial year, in line with its Pages 18 to 20 | | | 6 | | 1 | | dividend target at the time. | | --- | --- | --- | --- | --- | --- | --- | | | Exit and | | Origination | | | | | redeployment | | | | | Governance | | ## £1.42bn | Details of the Company’s governance | The Fund’s investment portfolio was valued | | --- | --- | | framework and the activities of the Board | at c.£1.42 billion at the year end (2024: | | during the year | £1.38billion). | Pages 46 to 63 5 2 ## 1.00x | Acquisition | Initial | | | 1 | | --- | --- | --- | --- | --- | | | | | The Company’s cash dividend cover | for the | | andmonitoring | screening | Environmental and social | | | financial year was 1.00x (2024: 1.06x). Details of the Company’s sustainability strategy and the approach taken in applying ## its principles to its business activities are 6.1% 1 described in the sustainability section Total NAV return for the year was 6.1% (2024:8.1%). 4 3 Pages 26 to 34 Investment Detailed credit ## 5.3% approvalprocess analysis 1 Total share price return for the year was 5.3% (2024: 9.6%) 1. See Appendix for Alternative Performance See website for more details Measures (“APMs”) Additional information Financial statements Company review Strategic review Governance 14 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Business model continued ### Investment process ### Origination Initial screening Detailed credit Investment Acquisition and Exit and 1 2 3 4 5 6 ### analysis approval process monitoring redeployment › Identify market opportunities in › Eliminate assets unlikely to pass › Due diligence and credit › Full credit memorandum and › Investment Adviser executes the › The asset is exited via repayment sectors and jurisdictions with strong investment approval, including assessment valuation/yield analysis is provided trade once the recommendation or sale credit characteristics and attractive review of sustainability credentials › Site visits and meetings with to the Investment Committee for isapproved › Relationship with borrower is relative pricing › Identify strong credits for inclusion management, as appropriate review › Execution of appropriate currency maintained for future potential › Leverage relationships with lending in a shortlist for full analysis › Run proprietary analytical models › A unanimous investment decision hedge as necessary investment opportunities banks and infrastructure owners ifapplicable is required in order to make the › All ongoing credit monitoring and › Proceeds are redeployed into recommendation to the Alternative updates, including the Investment new assets or held as liquidity › Determine risk characteristics Investment Fund Manager (“AIFM”) Committee reviews, are sent to asappropriate andmitigants › Investment Committee minutes theAIFM › Ensure no diversification, and material credit documentation › Every asset is monitored concentration or other limits are submitted to the AIFM and, if semi-annually at a minimum, and arebroken appropriate, to the Board, prior to more frequently when required › Comprehensive sustainability AIFM approval and sign-off analysis, including preliminary › Semi-annually the Board ESGscoring undertakes a full portfolio review, with a separate session dedicated to focus loans (determined by risk profile), in addition to quarterly Board reviews | Risk management | | | Robust governance | | | --- | --- | --- | --- | --- | | Credit review framework | Risk Committee | Independent AIFM Risk | Effective Board oversight | Financial management | | Escalation criteria are in place | The Risk Committee is comprised of | Manager | Details of Board composition, | Details of the arrangements | | requiring Risk Committee review | independent non-executive Directors. | Detailed review of all investment | Committee structures and the | for ensuring the integrity of the | | of investments possessing certain | Read more on page 57. | recommendations and material | Company’s internal controls and risk | Company’s system of internal financial | | characteristics. AIFM has full | | developments with borrowers. | management systems are set out in | controls and financial reporting | | discretion to approve or decline | | | the corporate governance report. | processes is set out in the report | | investments. | | | | ofthe Audit Committee. | Read more on pages 38 to 42 Read more on pages 46 to 49 Read more on pages 51 to 53 Additional information Financial statements Company review Strategic review Governance 15 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Investment Adviser's report ## The Investment Adviser's objectives for the year During the financial year, Sequoia Investment Management Company Limited ("SIMCo" or the "Investment Adviser") has had the following objectives for the Fund: ![img-2.jpeg](img-2.jpeg) ### 1 Target an interest rate profile of 40% floating rate and 60% fixed-rate, to reflect the likelihood of falling interest rates The floating rate portion of the portfolio fell to 40.6% on 31 March 2025 from 42.1% a year previously. This was achieved through our loan origination activities and by the tactical use of interest rate swaps. ### 2 Timely and transparent investor reporting The Company's Factsheet, RNS NAV announcements and full portfolios have been provided monthly for full transparency. Investor engagement has continued over the financial year including a capital markets seminar, smaller bespoke investor events and a results roadshow as well. ### 3 Follow a sustainable investment strategy and continue to enhance the sustainability profile of the Company and the portfolio SEQI has increased the overall ESG score of its portfolio from 62.77 to 64.70%. SEQI refreshed its sustainability framework to align with evolving market standards and forward-looking best practices. Further details on the updated approach can be found in the sustainability section of our website: https://www.seqi.fund/sustainability/. ### 4 Dividend target of 5.875p per Ordinary Share per annum The Company paid four quarterly dividends of 1.71875p per Ordinary Share in line with its dividend target, amounting to a total of 6.875p. ### 5 Manage portfolio credit quality in the face of economic uncertainty The proportion of the portfolio invested in senior secured loans rose from 56.6% to 59.9%; the weighted average "equity cushion" rose from 38% to 39%; and NPLs have fallen from 5.4% to 1.0% of NAV. ### 6 Gross portfolio return of 8-9% The Fund is invested in a portfolio which currently yields approximately 10% and produced a NAV total return of 6.1% in the year, below the Company's target net annual return of 7-8% after approximate annual costs of 1%. The Fund maintained a disciplined focus on building and managing a diversified portfolio of private debt investments, underpinned by the strategy of delivering target returns while maintaining the credit quality of the portfolio. Steve Cook Management Head of Portfolio Management 1. See Appendix for Alternative Performance Measures (APMs) 2. APMs has issued independent limited assurance over the selected data indicated with a reference to the Cash Annual Report. The reporting of annual annual income may be based on the Sustainability Publications section of our website: www.seqi.fund/sustainability/publications/ ## Risk profile ![img-3.jpeg](img-3.jpeg) ### Sector - ● Digitalisation - ● Office - ● Power - ● Transport – vehicles - ● Renewables - ● Transport – systems - ● Accommodation This chart illustrates the portfolio's sector exposure, with bubble size reflecting allocation size and vertical positioning indicating relative risk – from highest (top) to lowest (bottom). 16 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued Overview of infrastructure debt Since the 2008 global financial crisis, traditional ### Economic infrastructure bank lending has become more constrained, The sectors applicable to this type of debt ### debt continues to stand focusing primarily on well-established sectors at includetransportation, utilities, power, renewables, ### out as a resilient and conservative leverage levels. In parallel, a structural telecommunications and social infrastructure, shift began to unfold, as governments in developed ### reliable asset class, offering often benefiting from long-term concessions, markets turned increasingly to the private sector to regulatory frameworks or usage-based revenues. ### investors access to stable, help finance expanding social programmes, driven These dynamics create structural stability and by demographic pressures and post-crisis fiscal ### long‑term income streams consistent demand, even amid market uncertainty. challenges. These sectors are typically governed by long-term ### underpinned by essential concessions or licenses, with revenues tied to In response, governments increasingly turned ### services. Itsappeal lies in a demand, usage or volume. To mitigate demand to the private sector, not only to support distinct set of characteristics: risk, economic infrastructure projects generally traditional infrastructure, but to fund the emerging employ lower leverage than availability-based social mega-sectors of energy transition and digitalisation. ### highbarriers to entry for infrastructure, maintaining larger equity cushions, While renewables initially benefited from subsidies, ### borrowers, predictable conservative credit ratios, strong covenants both sectors evolved as commercially driven, and more substantial asset backing for lenders. globally distributed opportunities. ### cash flows and strong Thisdisciplined approach has remained central to ### asset‑backed security, This marked a shift away from centralised, SEQI’s strategy throughout the year. government-funded infrastructure models ### all of which support its towardsamore fragmented, mid-market ### performance through landscape. Assetsbecame more diverse in scale and geography, often financed outside the realm ### economic cycles. of traditional institutions. At the same time, the era of large-scale Public-Private Partnerships (“PPPs”) in the UK and Europe began to wane, as public sentiment shifted and bank appetite retreated, even as those projects continued to attract higher loan-to-value financing. Additional information Financial statements Company review Strategic review Governance 17 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued Market backdrop ### Consumer price index Overnight finance rates (%) ICE BofA BB US high yield ### year-on-year (%) index option-adjusted spread (%) 5 4 8 3 2 6 1 4 0 1 0 | Mar | Aug | Jan | Jun | Nov | Apr | Sep | Feb | Mar | Jul | Nov | Mar | Jul | Nov | Mar | Jul | Nov | Mar | Apr | Apr | Apr | Apr | Apr | Apr | Apr | Apr | Apr | Apr | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 22 | 22 | 23 | 23 | 23 | 24 | 24 | 25 | 22 | 22 | 22 | 23 | 23 | 23 | 24 | 24 | 24 | 25 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | | US YoY (%) EU YoY (%) UK YoY (%) | | | | | | | | US Overnight Lending Rate (SOFR) EU Overnight Lending Rate (SOFR) | | | | | | | | | | | | | | | | | | | | What is happening? What is happening? What is happening? Inflation across all the Fund’s investment jurisdictions is abating to levels Central banks in the US, UK and Europe are continuing to implement interest While BB credit spreads remain tight, potential risks such as geopolitical approaching the respective central banks’ targets. However, renewed tariff rate cuts to overnight interest rates, following a period of stabilisation. tensions, trade policies and shifts in monetary policy could influence future activity may introduce upward inflationary pressures in the short to medium spread movements. Why this matters to the Fund term through higher import costs. While the immediate effect of tariffs may Why this matters to the Fund be an uptick in consumer prices due to higher costs for imported goods, The portfolio’s floating rate investments are beginning to de-risk, with these pressures may be temporary. Supply chains are likely to adjust over borrowing costs now past their peak and expected to decline further amid Wider credit spreads matter for the Fund by creating both risks and time, with businesses seeking alternative sources or passing on only partial early interest rate cuts and continued disinflation. As the market transitions opportunities. On the one hand, they could lead to mark-to-market declines costincreases. toward a lower-rate environment, fixed-rate loans and bonds stand to benefit on existing holdings and signal rising credit risk or market stress, potentially from an accelerated pull-to-par. At the same time, a normalising yield curve, impacting NAV and borrower fundamentals. On the other hand, wider Why this matters to the Fund 9 6 with a reduced or positive slope, may support risk appetite in the broader spreads could allow the Fund to earn higher yields on new investments and 12 As inflation gradually abates over time, the likelihood of future interest rate market, though it could temper borrower interest in locking in long-term debt. potentially take advantage of dislocations or undervalued infrastructure debt. 8 cuts increases, making alternative investments such as infrastructure more While short-term valuation pressures may emerge, a disciplined approach 10 7 attractive when compared to liquid debt. While the pace and size of interest could turn spread widening into a long-term income and return opportunity. 6 rate cuts will vary across the Fund’s different investment jurisdictions, the general consensus remains one of declining interest rates throughout the 5 year. A lower inflation environment also helps ease cost pressures during the 4 construction phase of projects, thereby reducing construction risk, all else 3 being equal. 2 0 -1 Additional information Financial statements Company review Strategic review Governance UK Overnight Lending Rate (SOFR) 18 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Investment Adviser's report continued ## Themes in the infrastructure debt market Over the course of the financial year, the Investment Adviser has identified several key themes shaping the infrastructure debt market. These themes have influenced both the types of opportunities being pursued and the way capital is being allocated within the portfolio. What follows is a summary of the most prominent developments observed. ### The three "D"s – decarbonisation, digitalisation and deglobalisation While the funding needs for building traditional infrastructure (such as transport assets and utilities) is immense – just the capital needed for the maintenance of existing stock runs to trillions of Dollars – there is currently an ever-larger funding requirement arising from the global "mega-trends" of: - Decarbonisation – including renewable energy, grid enhancement, energy storage, energy security and a host of ancillary services; - Digitalisation – including data centres, mobile phone towers, fixed line networks, data cables, satellites and broadband; and - Deglobalisation – including power, transport and logistics infrastructure being driven by orshoring of supply chains. ### Demand for private debt continues to grow Infrastructure has emerged as one of the fastest-growing asset classes globally, with assets under management ("AUM") increasing at an average annual rate of 19.7% since 2015 (Macquarie). Looking ahead, this momentum is expected to continue, as Preqin forecasts that total private infrastructure AUM will grow from USD1.17 trillion in 2023 to USD1.88 trillion by the end of 2027 (Preqin). Within this expanding asset class, infrastructure credit is gaining traction among institutional investors drawn to its defensive characteristics, consistent cash flows and attractive risk-adjusted returns. While growing investor interest may lead to increased competition for high-quality private infrastructure debt opportunities, we believe SEQI is well positioned to navigate this dynamic, as the Company benefits from its established track record, deep origination networks and the specialist expertise of its Investment Adviser. Moreover, although the supply of debt capital is growing, it is very likely that the demand for debt capital is growing at least at the same rate, cancelling out largely or entirely the effect of competition. This overall trend is also driven by a persistent funding gap in global infrastructure, particularly in sectors like energy transition and digitalisation, where private debt plays a vital complementary role to equity. As bank-reisenment continues and capital demands increase, the favourable structural tailwinds for infrastructure credit are expected to endure, supporting long-term investor appetite. ### Tariffs Recent tariff measures and trade policy shifts between the US and the rest of the world have renewed volatility in international financial markets. With these geopolitical frictions and protectionist strategies back in focus, the Investment Adviser believes prolonged tariffs could pose a drag on global economic momentum and fuel inflationary pressures across the US, UK and Eurozone in the short to medium term. ## Economic uncertainty The recent sell-off in US equity markets reflects growing investor unease over elevated valuations, persistent inflationary pressures and the rising likelihood of a recession. Should economic conditions deteriorate further, sectors with high operating leverage or consumer dependency, such as transport and social infrastructure, may face increased credit risk. While the Fund remains well diversified, the Investment Adviser continues to closely monitor these exposures and has actively tilted the portfolio towards defensive sectors such as digitalisation, accommodation, utilities and renewables, which are typically more resilient in downturn scenarios. As at 31 March 2025, 54.7% of the portfolio is invested in defensive sectors, increasing from 56.8% the previous year. The Fund's investments in defensive sectors make it well positioned to withstand economic downturns and inflationary pressures. ### NAV performance Over the last 12 months, the Company's NAV per share decreased from 93.77p per share to 92.55p per share ex-dividend driven by the effects as per the analysis in the table below. The total return on the NAV was equal to 6.1% over the period. This is below the Company's long-term return expectations of 7.8% p.a.; however, we outperformed the total return of the FTSE 200 Index by 5.0%. In comparison to credit markets, SEQI delivered returns 1.4% lower than high yield bonds, but beat 10-year gilts by 1.6% (in each case measuring the total return). | | NAV effect | | --- | --- | | Interest income on the Company's investments | 8.17p | | Portfolio valuation movements, net of foreign exchange and hedge movements | (1.45p) | | IFRS adjustment from mid-price at acquisition to bid price | (0.17p) | | Operating costs | (1.59p) | | Gains from buying back shares at a discount to NAV | 0.70p | | **Gross increase in NAV** | **5.66p** | | **Less: Dividends paid** | **(6.66p)** | | **Net decrease in NAV after payment of dividends** | **(1.22p)** | The NAV decline during the year was primarily due to reductions in carrying value of the Fund's non-performing loans (as discussed below under 'Credit performance') and the impact of higher discount rates, offset in part by pull-to-par gains over the year. 1. See Appendix for Alternative Performance Measures ("APMs") 2. Source: Bloomberg 19 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Investment Adviser's report continued ## Pull-to-par The portfolio pull-to-par, which is a measure of future NAV gains that will arise solely through the passage of time, is 4.0p per share as at 31 March 2025, decreasing marginally from 4.1p per share as at 31 March 2024. The 'pull-to-par' effect refers to the principle that a debt instrument's market value progressively approaches its notional value as it nears maturity, assuming stable credit quality and no risk of default. This occurs because the issuer is contractually obligated to repay the notional amount at redemption. As a result, the investment's market price increasingly aligns with its redemption value over time, regardless of prevailing market conditions. For example, a loan to Irfinis, a UK renewables company investing in landfill gas projects, was priced at 93.0 at year end, even though the credit is performing in line with expectations. The loan matures in 2032 and is expected to pull to par over time. As a fixed-rate and long-dated investment, its current price reflects the interest rate environment rather than any credit concerns. Over the coming years, assuming no deterioration in credit quality, its price will naturally converge toward par, contributing positively to the portfolio's NAV through the pull-to-par effect. The resulting uplift to NAV per share is illustrated in the chart below. ## Share performance As at 31 March 2025, the Company had 1,558,061,936 Ordinary Shares in issue (31 March 2024: 1,625,484,274). The closing share price on that day was 78.3p per Ordinary Share (31 March 2024: 81.1p per Ordinary Share), implying a market capitalisation for the Company of approximately £1.2 billion, a decrease of approximately £100.7 million compared to 12 months ago; approximately 45% of this decline is due to the Company's share buyback programme, with the balance due to the decline in the share price. After taking account of quarterly dividends amounting to 6.875p per Ordinary Share, the share price total return over the period was 5.3%, outperforming the FTSE 250 Index by 4.2% during the same period. A key driver of SEQI's share price discount to NAV is broader listed market sentiment towards alternative assets, such as renewable energy, private equity and private debt. Discounts across the sector have increased over the year - for example, the average discount for UK-listed renewable energy funds has increased from 29.7% to 35.1%, and for infrastructure listed funds from 17.7% to 25.0%. The sentiment reflects the lingering effects of inflation, subdued economic growth and ongoing scepticism around valuation methodologies across parts of the alternatives sector, compounded by structural market dynamics such as index rebalancing and multi-asset allocation shifts. The Investment Adviser remains focused on levers within SEQI's control and reassures investors that its valuations are subject to independent monthly review and robust processes. Unlike many private equity, infrastructure equity or real estate investment vehicles, SEQI publishes its NAV monthly, offering greater transparency and frequency of reporting. The sector-wide discount to NAV has been further pressured by capital outflows, as investors reallocated from listed alternatives into other investment types such as government bonds. This shift created pockets of forced selling, contributing to downward pressure on share prices. However, market conditions have stabilised during the financial year, as policy rates in key markets are past their peak and are anticipated to further decrease in light of the recent interest rate cuts. Also, due to the ongoing sell-off in the financial markets, analysts expect central banks to ease monetary policy by reducing interest rates more than previously expected, with bond futures pricing in the likelihood of at least two or three more rate cuts by the Federal Reserve before the end of the calendar year. The Company is well positioned to capitalise on this environment, supported by the portfolio's short weighted average maturity (3.6 years as at 31 March 2025) which has enabled the reinvestment of capital at higher prevailing rates. To enhance this strategy, the Investment Adviser amended the investment policy to allow up to 60% of assets to be held in fixed-rate instruments. One additional interest rate swap has been executed, enabling SEQI to receive fixed-rate payments while paying a floating rate - further looking in favourable yields. Both the Investment Adviser and the Board believe the current share price discount to NAV is unwarranted given the strength and resilience of the portfolio. We collectively believe that it does not accurately reflect the potential of the investment portfolio to deliver attractive risk-adjusted returns during periods of economic uncertainty, its shorter investment duration, and its robust NAV approach. ## Pull-to-par over time ![img-4.jpeg](img-4.jpeg) 1. See Appendix for Alternative Performance Measures ('APMs') 20 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Investment Adviser's report continued ## Share performance continued With this backdrop, SEQI continues to buy back its Ordinary Shares, which it considers to be undervalued, thereby providing NAV accretion for existing Shareholders. In the past 12 months alone, the Company has repurchased 70,422,338 Ordinary Shares. The share buyback programme was first announced in July 2022, and since then, the Company has bought back a total of 213,177,962 Ordinary Shares, approximately 13% of its total outstanding Ordinary Shares as at 31 March 2025. This has resulted in an increase in NAV per Ordinary Share of 1.8p since the implementation of the buyback programme. ## Dividend cash cover SEQI has paid 6.875p in dividends during the last 12 months in accordance with its target. The Company's dividend cash cover was 1.00x for the financial year. This is lower than in the previous year, for the following reasons: - a timing effect where the receipt in cash of capitalised PIK interest did not fall during the financial year; - some cash drag during the year; over the period, the Fund had an average cash balance of £59.8 million, due to a combination of de-leveraging the Company and receiving prepayments (where borrowers repay their loans earlier than scheduled). While this had been fully invested by the end of the year, the cash held over the year reduced the Fund's level of investment income. For example, had it been invested in infrastructure loans yielding 8%, the dividend cover would have been 1.00x; and - the share buyback, whilst accretive to NAV, is dilutive for dividend cash cover since, although the Company avoids paying dividends on the shares bought back, it misses out on the upfront fees normally earned by lenders. In other words, while buying back shares is accretive to the NAV, it generates less cash income than making new loans. Conversely, if the NAV gain on buying back shares at a discount were to be treated like a realised NAV gain arising from investment activities, the dividend cover would have been approximately 1.10x. Looking forward, the Investment Adviser is of the view that the dividend is sustainable and dividend cover should improve over time, reflecting the strong pipeline of investment opportunities and the yields available on private infrastructure debt. ## Portfolio overview Throughout the fiscal year, the Fund maintained a disciplined focus on building and managing a diversified portfolio of private debt investments across core infrastructure sectors in jurisdictions with low political and regulatory risk. The strategy remained centred on delivering target returns while maintaining the credit quality of the portfolio. This was achieved through a cautious approach, favouring senior secured debt, maintaining exposure to resilient sectors and steadily enhancing overall portfolio credit quality. The current highlights of the Fund's portfolio, which reflect the results of these efforts, include: ## Diversification The Fund's portfolio is well diversified across loan types, geographies, sectors and sub-sectors, supported by defined investment limits that preserve this balance. ▶ £65m invested ## ▶ Infinis Energy In 2021, SEQI invested 555 million of senior secured debt to Infinis, the UK's leading generator of electricity from landfill gas, other residual waste sources and other renewable sources. The company plays a key role in methane capture and low-carbon generation. ![img-5.jpeg](img-5.jpeg) 2021 21 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued ### The chart below illustrates the sector and ### sub‑sector allocation as at 31March 2025: 5.0% 7.1% | Utilities | 14.5% | | Digitalisation | 24.7% | | --- | --- | --- | --- | --- | | Utility services 8.0% | | | Data centres 12.6% | | | Midstream 5.3% | | 8.0% | Telecom towers 7.1% | | | Renewable electricity supply 1.2% | | | Broadband & fibre 5.0% | | 5.3% 1.2% 12.6% 5.7% ## Transport – vehicles 12.3% ## Power 14.3% Specialist shipping 6.2% Baseload 5.7% Health & safety 2.4% Other electricity generation 4.4% Rolling stock 2.2% 4.4% Standby generators 2.3% Aircraft 1.5% Energy transition 1.1% Nuclear power 0.8% 1.5% 2.3% 1.1% 2.2% 4.8% 2.4% 0.8% ## Transport – systems 8.4% Port 3.0% 4.3% 6.2% Ferries 2.9% 5.0% | | | | 2.4% | Rail 2.4% | | --- | --- | --- | --- | --- | | Renewables | 9.1% | | | | | | | 2.9% | | Road 0.1% | 0.1% Solar & wind 4.8% 1.4% 3.0% Landfill gas 4.3% 3.5% 0.4% 3.4% 0.6% 0.6% 1.8% ## Other 10.3% Waste-to-energy 3.5% Residential infra 3.4% Hospitals 1.8% | Accommodation | 6.4% | Social infra 0.6% | | --- | --- | --- | | Healthcare 5.0% | | Smart metering 0.6% | | Student housing 1.4% | | Schools 0.4% | Additional information Financial statements Company review Strategic review Governance 22 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued 1 Portfolio overview continued A focus on private debt With a weighted average yield-to-maturity of 9.9% and a portfolio pull-to-par of 4.0p per share, SEQI is structurally positioned to benefit from both sustained income and capital appreciation as assets mature. Credit quality The percentage of private debt has declined by Portfolio quality remained resilient, with NPLs declining to their lowest level since 2020. Adeliberate tilt toward 6.1% during the year to 90.8% of the portfolio › 59.9% of the portfolio is in senior secured loans senior secured and fixed-rate debt further enhanced downside protection. as at 31 March 2025. This was partly due to the and 40.1% in subordinated debt, a marginal refinancing of an OCU Group private loan to a The Investment Adviser’s active deployment of capital, including targeted secondary market investments increase from the previous fiscal year when public Term Loan B, with the Fund’s participation and strategic utilisation of the RCF, supported both diversification and liquidity. Together, these measures 58.6% of the portfolio was in senior secured loans for £45million settling during November 2024. underscore a disciplined and forward-looking investment approach that continues to deliver robust income and 41.4% in subordinated debt. OCUGroup is a leading UK infrastructure and preserve long-term Shareholder value. We acknowledge that SEQI’s share price performance has been › Continued preference for “defensive” types of engineering services provider. The Fund also less strong, which we attribute to various sector headwinds which we have faced over the last three years, infrastructure, i.e. loans to projects that provide invested an additional c.£41 million in the secondary alongside many of our peers. This is deeply frustrating to us and we are committed to working with the Board essential services, often operating within a market on bonds with Navigator Holdings Ltd (US to remedy this. regulated or contractual framework or have high specialist shipping), Techem GmbH (German smart barriers to entry. Portfolio characteristics metering) and TSM II LuxCo 21 SARL (Dutch utility › Our policy not to invest in distressed, stressed or As shown in the table on page 23, the Fund increased its number of investments from 55 to 59 over the services) to improve sector diversification and to “CCC profile” loans remains in place. 12-month period. The Investment Adviser has actively redeployed capital from maturing assets into an attractive add a further source of liquidity, whilst facilitating the › Our proportion of NPLs has fallen from 5.4% to efficient deployment of capital into seasoned assets pipeline of opportunities, while also drawing £56.9 million from the £300 million RCF with J.P. Morgan Chase 1.0%, the lowest level since 2020. with established performance histories. Bank, N.A., London Branch as at 31 March 2025, to sustain capital deployment momentum. This growth in investment activity has been carefully managed to preserve the Fund’s diversification, with continued exposure The strategy still remains anchored in private debt. Construction risk across eight sectors and a broad range of sub-sectors, from 30 in March 2024 to 29 in March2025. This focus is underpinned by the ability to capture The Fund maintains a cautious approach to an illiquidity premium (the additional yield private In addition, SEQI continues to redeploy capital towards share buybacks, taking advantage of the persistent greenfield construction projects. While it has the debt typically offers over comparable liquid bonds). discount to NAV. flexibility to allocate up to 20% of NAV to assets Given the Fund’s long-term, buy-and-hold approach, The Fund’s investment portfolio grew by approximately £42 million over the financial year, driven by renewed under construction, actual exposure stood at 12.5% accessing this premium is a deliberate and effective utilisation of the revolving credit facility. This follows the full repayment of the revolving credit facility in the previous of the portfolio as at 31 March 2025 (2024: 7.4%). strategy. Research conducted by the Investment financial year, during which SEQI had been de-leveraged. This remains below the Fund’s historical average, Adviser suggests that infrastructure private debt can reflecting a deliberately conservative stance in Over the past 12 months, the proportion of the Fund’s investment in senior secured debt has increased yield 1–2% more than publicly rated equivalents. response to a subdued growth outlook and ongoing marginally, from 58.6% in March 2024 to 59.9% in March 2025, ensuring defensive positioning. supply chain challenges. Consistent NAV returns during volatility Additionally, following a strategy to lock in currently high long-term rates, the Fund has continued its shift towards | The Fund applies a selective and disciplined | Over the past decade, SEQI has delivered an | | a higher percentage of fixed-rate assets, with 59.4% of the portfolio invested in fixed-rate assets as at year end, | | --- | --- | --- | --- | | approach to project origination, investing only where | | 1 | an increase from 57.9% as at the prior year end. | | | annualised total NAV return | of 7.3%, significantly | | | it believes the return appropriately compensates | outperforming both the FTSE 250 Index and | | | Fund performance for the construction-related risk involved. It avoids GBP-hedged high yield bonds over the same 31 March 2025 31 March 2024 31 March 2023 projects carrying both construction and demand or period, which returned 4.1% and 3.3% respectively. 1 | | | Net asset value | per Ordinary Share 92.55p 93.77p 93.26p | | | --- | --- | --- | --- | --- | | ramp-up risk, maintaining a strong focus on credit | This strong long-term track record underscores | | | | | quality and underlying borrower fundamentals. | the consistency of SEQI’s investment approach, | | | £ million 1,493.2 1,524.3 1,617.9 | even as the year unfolded against a backdrop of Cash held (including macro-economic uncertainty and elevated volatility intheSubsidiaries) £ million 35.1 99.4 68.7 in listed alternatives – and reflects the strength of Balance of RCF £ million 56.9 0.0 181.8 SEQI’s strategy in capturing risk-adjusted returns | | amid a transitioning interest rate environment. | Invested portfolio percentage of NAV 100.8% 90.6% 106.5% | | | | --- | --- | --- | --- | --- | | 1. See Appendix for Alternative Performance Measures | | | including investments | | | ("APMs") | | Total portfolio | | in settlement 109.8% 94.2% 109.6% | Additional information Financial statements Company review Strategic review Governance 23 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued 2 Portfolio characteristics Credit performance Thisdevelopment has had a material adverse 31 March 2025 31 March 2024 31 March 2023 impact on leasing negotiations with prospective Over the past financial year, the credit performance of tenants, which are predominantly educational Number of investments 59 55 68 the entire portfolio has remained resilient. Given that entities, resulting in a delay to the anticipated the portfolio is made up of high-yield debt instruments, Valuation of investments £ million 1,422.7 1,380.7 1,723.5 lease-up timeline, and as a result, the mark of the it is to be expected that a small fraction of investments ∆ loan has been reduced. The carrying value of the ESG score 64.70 62.77 62.29 might face some credit issues over their lifetime. The loan currently equals 0.4% ofNAV. Fund’s annual loss rate is 0.58%, a marginal increase Largest exposure £ million 70.3 60.6 61.0 from the previous year’s 0.53%, due to additional percentage of NAV 4.9% 4.0% 3.8% Non‑disclosed loan write-downs of non-performing loans. This compares Single largest investment £ million 61.7 60.6 61.0 well to broader credit (non-financial corporate debt) SEQI has also commenced legal proceedings on with a similar credit rating, where the historical annual an asset equal to 0.6% of NAV which is now being percentage of NAV 4.3% 4.0% 3.8% loss rates are typically a multiple of this level. classed as non-performing. The loan is backed by Average investment size £ million 23.7 22.6 25.3 arecently revalued asset and is marked in line with Lenders are, in general, obligated to maintain aconservative estimate of a recovery backed by by number of confidentiality towards the companies they lend to. that asset. The Company is unable to disclose the Sectors invested assets 8 8 8 Therefore, the Company’s policy is not to publicly loan’s identity for commercial reasons. discuss underperforming loans, except when the Sub-sectors 29 30 26 borrower has entered a public insolvency process Resolution of previous NPLs Jurisdictions 10 10 12 (such as administration in the UK or Chapter 11 intheUS). During the year, the Fund received £17 million on its percentage of loan to Bulb Energy; we no longer include it in our Private debt invested assets 90.8% 96.9% 98.1% Publicly discussing an underperforming business NPLs since we expect to make a full recovery on it, could potentially worsen its problems, for instance, by Senior debt 59.9% 58.6% 57.2% including capitalised interest. making it more difficult to retain employees or secure | Floating rate 40.6% 42.1% 58.4% | | | new contracts. | The Fund sold in full its loan backed by a property | | --- | --- | --- | --- | --- | | | 1 | | | in Glasgow. The Fund retains some “earn out” | | Construction risk | | 12.5% 7.4% 14.2% | The Fund continues to work towards maximising | | potential on the loan based upon its future value and recovery from the NPLs in the portfolio (equal to Weighted average maturity years 3.6 4.4 4.1 various performance metrics. 1.0% of NAV, down from 5.4% at the end of the prior Weighted average life years 3.4 3.9 3.5 The Fund also received the final residual payment financial year). Updates are as follows: | | 1 | | | on the Salt Lake loan that was sold in the previous | | --- | --- | --- | --- | --- | | Yield-to-maturity | | 9.9% 10.0% 11.9% | | | | | | | US educational facility | financial year. This is now fully exited. | 1 Modified duration 1.9 2.2 1.5 A loan that is collateralised by a landmark US 1. See Appendix for Alternative Performance Measures (“APMs”) educational building was adversely impacted by 2. Relates to the portfolio of investments held in the Subsidiaries government cuts which reduced the likelihood of ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual finding new tenants. In March 2025, the Department of Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: Government Efficiency (“DOGE”), under the leadership www.seqi.fund/sustainability/publications/ of Elon Musk within the Trump administration, announced plans to reduce the U.S. Department of Education’s workforce by approximately 50%, affecting around 2,200 employees and significantly reducing funding to theprovision of education in Washington DC (which is federally funded since it is not in anystate). Additional information Financial statements Company review Strategic review Governance 24 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued | Balance sheet management | Origination activities | Secondary market origination | | --- | --- | --- | | In line with its objectives, the Fund has reduced | SEQI’s investment strategy targets opportunities | While the primary market remains the Fund’s core | | its cash balance from £99.4 million (including | across both the primary and secondary debt | focus, selected investments are also sourced | | £91.9million held in the Subsidiaries) as at | markets, each offering distinct advantages. | from banks and other lenders through the | | 31March2024 to £34.9 million (including | Primary market investments allow the Fund to earn | secondary market. This approach enables the | | £27.3million held in the Subsidiaries) as at | upfront lending fees and structure transactions to | rapid deployment of capital, providing an efficient | | 31March2025, while also drawing £56.9 million | meet specific risk and return criteria. In contrast, | complement to the often more expensive and | | on its previously undrawn £300 million RCF. | secondary market acquisitions facilitate the efficient | longer execution timelines associated with primary | | While maintaining liquidity provides flexibility, it | deployment of capital into seasoned assets with | infrastructure transactions. | | also carries a high opportunity cost. As such, the | established performance histories. | | Secondary market acquisitions also contribute to Investment Adviser continues to actively originate portfolio liquidity, enhancing flexibility when greater new transactions, supported by a dynamic pipeline Primary market origination liquidity is required. In many cases, these assets exceeding £200 million in potential opportunities. The Fund maintains a strong focus on the primary benefit from improved credit profiles over time, Given the current portfolio composition, the Fund is loan market, which continues to offer compelling asinfrastructure loans tend to exhibit credit quality focused on generating new investments in sectors investment opportunities. The Investment Adviser enhancement post-origination — making them an where increased exposure is desirable, notably actively originates bilateral transactions and attractive addition to the Fund’s portfolio. renewables, power and digitalisation, as part of its participates in “club” deals involving a small group ## £58m ongoing strategy to enhance diversification. of aligned lenders. The Fund has also taken part Sequoia Investment Management Invested in selectively syndicated infrastructure loans where Alongside this selective deployment into new Company Limited appropriate. infrastructure loans, the Company remains Investment Adviser committed to its active share buyback programme. Primary market investments remain attractive due 24 June 2025 The strong cash-generative nature of infrastructure to their favourable economics, providing access debt supports this dual-track approach, enabling to upfront lending fees and greater flexibility in SEQI to pursue buybacks while continuing to deliver structuring terms. As the Fund has grown, its on its long-term investment objectives. primary market activity has expanded accordingly and now accounts for the majority of the portfolio, representing 82.4% as at 31 March 2025. Project Spinnaker In 2021, SEQI lent Spinnaker £58 million of senior secured debt, which is one of our investments in the digitalisation sector. Spinnaker is an “alt-net” provider, delivering high-speed, affordable internet connectivity across the South of England. Theloan was fully repaid in 2023. 2021 Additional information Financial statements Company review Strategic review Governance 25 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Investment Adviser’s report continued 17 projects in the portfolio support energysecurity ## >12,500MW ## Energy security total capacity of power that can be generated by portfolio assets ## and resilience 10% of new capital deployed this year went into power generation SEQI’s goals and activities relate to the following SDGs: SEQI recognises that while the shift to a lower- Natural gas is also critical during the energy Beyond land-based assets, SEQI has invested carbon future is essential, recent geopolitical events transition, especially as older coal and nuclear in FLNG infrastructure. A recent example is a have reinforced the need for secure and reliable plants are phased out. SEQI provided a €45 million USD20million participation in a USD250 million power. As renewable sources like wind and solar HoldCo loan to Project Camden – a portfolio of HoldCo facility backing a specialist FLNG provider. are intermittent, there is a vital need for dispatchable efficient Combined Cycle Gas Turbine (“CCGT”) These vessels, secured as collateral, offer generation and infrastructure to ensure grid stability plants in the Netherlands, which successfully repaid advantages such as faster deployment, lower costs, and resilience. a couple of years ago. Similarly, a USD40million and mobility. Operating under long-term tolling commitment to Project Mesquite in Texas supported contracts, they generate stable revenue and can be The Fund has long supported energy security assets the recapitalisation of two CCGT plants totalling redeployed to different gas fields over their 20-30 that complement renewables – such as nuclear, 849MW capacity. These plants operate in the year lifespan. gas-fired power, floating liquefied natural gas ERCOT market, which lacks a formal capacity (“FLNG”) facilities, and interconnectors. These play While not entirely emissions-free, many of these mechanism, and play a vital role in balancing supply akey role in meeting demand when renewables fall types of assets are cleaner and more efficient amid growing industrial demand and renewable short. This year’s case study highlights investments than legacy alternatives. Crucially, they support penetration. Strong lender protections and hedging across SEQI’s current portfolio and the past decade, a just transition by ensuring consistent, equitable programmes help mitigate risk while maintaining showcasing a commitment to infrastructure that access to power – an essential foundation for both environmental compliance. balances environmental and societal needs. environmental progress and societal resilience. Peaker plants, which provide rapid power during Nuclear power is a key part of this energy mix, demand spikes, also form part of the Company’s offering a stable, low-carbon source of baseload energy security strategy. A USD40 million loan to electricity. SEQI’s investment in Westinghouse Generation Bridge supported a mix of baseload Electric Company supports innovation in nuclear and peaking assets in New York and New England, technology, while its long-standing involvement in helping ensure regional grid stability. Exeltium, a French power purchase agreement, helps scale nuclear generation. In line with the EU’s reclassification of certain nuclear activities as sustainable, SEQI has upgraded its E score, acomponent of ESG analysis, for the sub-sector. Additional information Financial statements Company review Strategic review Governance 26 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability ### Key highlights from the year ### X First time reporting emissions metrics covering the whole portfolio ### and climate scenario analysis ### X Increase in the portfolio’s weighted average ESG score from 59.61 ∆ ### in 2020 to 64.70 in 2025 ### X Fifth year of independent limited assurance, which now covers ### SEQI’s three sustainability goals ### X Joint‑record 93% responses from portfolio companies to our ### annual borrower sustainability questionnaire ### X Eight projects in the portfolio now have sustainability‑related ### covenants in the loan documents ### X SEQI hosted an inaugural ESG Investor Breakfast event for ### investors to engage and learn from each other about key ### ESGareas ### X Published a comprehensive, stand‑alone Governance Policy ### covering the Company and our assessment of good governance ### at borrowers ### X The Company and its Investment Adviser offset their operational ### greenhouse gas (“GHG”) emissions ### X The Investment Adviser’s Sustainability Manager won the ### 2024 award for ESG Rising Star by IJ Global and was ‘Highly ### Commended’ in the Sustainable & ESG Investment Woman of the The Company’s Sustainability Policy and other publications, including the Company’s full 2025 Sustainability Report, ### Year, small and medium firms category by Investment Week areavailable here: www.seqi.fund/sustainability/publications/. These documents offer further detail on the Company’s sustainability principles, screening and scoring, integration into the ### X The Investment Adviser became a member of the UK Sustainable investment process, regulatory reporting and the various engagement strategies we deploy. ### Investment and Finance Association (“UKSIF”) and joined the PRI’s ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual ### Initiative Climat International (“iCl”) Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: www.seqi.fund/sustainability/publications/ Additional information Financial statements Company review Strategic review Governance 27 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued In a year of macro and geopolitical changes altering The Company considers the sustainability of its Notably, Leah has had a real impact through the global backdrop, major regulatory developments own operations and at investment level. This year, innovative engagement strategies and outreach ### Climate mission and uncertainties and some backlash against the in response to market feedback and in pursuit of work with our portfolio companies. This contributed This year is a milestone in our climate reporting, ESG agenda, it’s important for SEQI to restate continued improvement and enhanced reporting, significantly to the increase in the average ESG score having successfully progressed our data its position on ESG considerations. SEQI is a the Company developed a stand-alone Governance for the portfolio this year. collection and borrower engagement over the company that considers sustainability factors and Policy providing a detailed and transparent account SEQI reports as an Article 8 fund under SFDR. last few years. Having now onboarded the integrates these considerations into its investment of our governance structures, policies and practices. Altitude by AXA Climate platform to help reduce process because this analysis is a key part of fully This policy also describes how we assess good During the forthcoming year, we will continue to data challenges and gaps, we are very pleased and properly assessing risk and long-term credit governance at the Company’s borrowers. Rigorous closely follow the implementation of the ISSB’s to be able to, for the first time, report emissions performance. Climate risk, resource efficiency, labour assessment of sustainability factors at portfolio IFRS Sustainability Disclosure Standards, which metrics covering the whole portfolio made up practices, governance and other sustainability issues companies represents the most meaningful way that our progress in emissions data and scenario of reported and estimated emissions, as well directly impact an asset’s performance. Our approach the Company can apply its sustainability principles. analysis serves as helpful preparation for, as more as climate scenario analysis for the portfolio. is pragmatic and grounded in principles of being Central to this process is the IA’s proprietary ESG jurisdictions formally adopt and implement the Thedetails, including the explanation of the responsible investors and stewards of assets. While scoring methodology, which undergoes continual standards. Similarly, we will continue monitoring the apparent year-on-year increase, can be found not an impact fund, we recognise that infrastructure review. During the period, the definitions of the FCA’s Sustainable Disclosure Regime (“SDR") as inthe Company’s TCFD Report. can be a critical enabler in the global transition to a sub-sectors were refined to ensure precision and consultations continue regarding its application to more sustainable future. SEQI seeks to deliver its clarity in their application. This year marks the fifth overseas funds like SEQI. And lastly, cognisant of investment mandate in a way which is consistent with consecutive year that the ESG scores for the portfolio investor sentiment and industry attention increasingly the goal of building future-proofed economies. Many have been externally verified through independent turning focus to nature and biodiversity, we are keen of the projects we finance – whether in renewable assurance, underscoring the Company’s commitment to explore how SEQI can best start to assess and energy, transport, digital infrastructure or essential to credibility and reliable reporting. report how it and its investments impact and depend services – feature on the roadmap to achieving on natural assets and a biodiverse environment. We now have eight projects in the portfolio that have net zero and broader sustainability goals. Under sustainability-related covenants in their loan terms, More detail on the Company’s sustainability policy our investment mandate, although our assets are marking another year-on-year increase. This year, and reporting can be found here: www.seqi.fund/ generally held for less than five years, we do take a again, 93% of portfolio companies responded to the sustainability/. longer-term view on the role each infrastructure asset questionnaire on an almost entirely voluntary basis. plays in this changing world, and we consider the The responses help us to better monitor, assess contribution we can make through engagement with and progress our engagement with our borrowers. Project Sienna ## borrowers. £56m This market-leading response rate is a testament In 2023, SEQI provided Invested | We are pleased to report below on updates from | to the strong relationship our IA has built up with | £56million of senior | | --- | --- | --- | | the year. We have benefited from the advice of | the management teams at the companies we help | secured debt to Project | | SIMCo, the Company’s Investment Adviser (“IA”), | finance. | Sienna, the UK’s largest | ## 1.6m and our Independent Consultant, Andrea Finegan, biomass fuel supplier, On a related note, we are incredibly proud of our Tonnes of biomass delivering over 1.6 million with oversight by the Board’s ESG and Stakeholder Investment Adviser’s dedicated Sustainability annually tonnes annually. The Engagement Committee. Manager, Leah Dean, who this year won the award financing supported for ESG Rising Star by IJGlobal. She was also logistics and processing recognised with the Highly Commended accolade infrastructure essential in the Sustainable & ESG Investment Woman of to renewable baseload power generation. The loan the Year category for small and medium firms by continues to perform as Investment Week. expected, with long-term contracts underpinning stable cash flows. 2023 Additional information Financial statements Company review Strategic review Governance 28 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued 1 Emissions tCO 2 e Year ended Company emissions 31 March 2025 Scope 1 nil Scope 2 nil Scope 3 (operational) 44 Year ended 31 March 2024 Year ended 31 March 2025 | | | | | | Total absolute | | | | | Total absolute | | | | | | | Total absolute | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Total absolute | | | Reported | | | tCO | 2 e | Reported | | | tCO | 2 e | Estimated | | tCO | 2 | e (estimated | | Portfolio emissions | | tCO | 2 e | coverage | | (reported) | | | coverage | | (estimated) | | | | data | | | & reported) | Scope 1 5,930,417 66% 7,441,400 67% 858,141 33% 8,299,541 Scope 2 364,102 58% 309,177 61% 52,316 39% 361,493 Scope 3 437,562 39% 727,409 43% 2,349,946 57% 3,077,355 Weighted Average | | Financed | | Carbon to | | Carbon Intensity | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | emissions | | investment | | | | (“WACI”) | | SEQI Year ended 31 March 2025 | (tCO | 2 e) | (tCO | 2 e/£m) | (tCO | 2 e/£m revenue) | | 2,505 Total 1,377,745 882 (94% coverage) 1. The emissions figures have been collated from the data provided by the portfolio companies with limited independent verification. The reported coverage rate is the percentage of the portfolio that has provided emissions information and is measuredby outstanding amount as at 31 March 2025. Where the information has not been provided, the estimated data rates have been calculated with the assistance of the Altitude by AXA Climate tool. Additional information Financial statements Company review Strategic review Governance 29 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Progress report Our sustainability goals As at 31 March 2025, the three KPIs relating to the Fund’s sustainability goals have been independently assured by KPMG. The reporting criteria and KPMG’s limited assurance opinion are available in the The Fund has three sustainability goals: sustainability publications section of our website: www.seqi.fund/sustainability/publications/. 1. comply with negative screening criteria; TheInvestment Adviser’s full approach to negative screening, thematic investing and their proprietary 2. progress thematic investing (positive screening); and scoringmethodology is also published online in detail there. 3. over time, increase portfolio weighted average ESG score. ### 1. Comply with negative screeningcriteria 2. Progress thematic investing (positive screening) The negative screening criteria exclude the following During the year, the Fund did not finance any The Fund has identified three investment themes Positive screening is employed to view these sub-sectors or asset types: “transition projects” that, whilst initially may not that it believes play an important role for the types of assets more favourably in the investment meet the negative screening criteria, have a plan in environment and society: process and, where possible, increase the Fund’s › upstream infrastructure related to the exploration place to move to a more sustainable and compliant exposure to these themes, subject to existing and production of oil and gas, such as oil rigs and › renewable energy, such as solar, wind and Δ business model. There are also no projects of this concentrationlimits. platforms, fracking facilities and facilities involved geothermal generation, and directly related nature currently held in the portfolio. | in tar sands; | | businesses including companies that supply | As at 31 March 2025, thematic investing covers | | | --- | --- | --- | --- | --- | | | In addition to these negative screens, the Fund’s | renewable energy; | | ∆ | | › thermal coal mining and directly related | | | 71% | of the Fund’s investment portfolio. | | infrastructure, for example a dedicated thermal | investment criteria restrict investment to certain | › enabling the transition to a lower-carbon world, | | | KPMG have issued an independent limited coal transportation asset such as a railroad or types of infrastructure. This means many harmful such as grid stabilisation, electric vehicles, traffic assurance report over this metric. wagons; or controversial asset types are already excluded congestion reduction and the substitution of coal de facto as they are not forms of infrastructure by gas; and › power generation from coal and any asset using and therefore were also not invested in during the thermal coal, but not coking coal; and › infrastructure with social benefits, which provides year, for example: alcohol production; tobacco › permanent military infrastructure for active for basic human needs (such as clean water production; gambling operations; pornography operational forces or for military production. and food security) or brings a positive change production and adult entertainment activities; by addressing social challenges and inequalities ∆ and controversial and conventional weapons During the year, 100% of projects were (such as healthcare, education and affordable compliant with the Fund’s negative manufacturing. housing) or advancing society as a whole (such screeningcriteria. asprogressing telecommunications). KPMG have issued an independent limited assurance report over this metric. ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: www.seqi.fund/sustainability/publications/ Additional information Financial statements Company review Strategic review Governance 30 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Progress report continued ### 2. Progress thematic investing (positive screening) continued Below is the breakdown across each theme as well Enabling the transition to a ### as some current investment examples: lower-carbonworld Thematic investments (% of SEQI’s investment portfolio) Renewable energy ## 30% 72% 71% 70% ## 10% › Supply of biomass fuel from waste wood and 59% 61% by-products › US residential roof solar panel businesses › US flexible generation peaker plants and baseload › Spanish solar PV power portfolios gas plants that enable grids to transition to › Power generation from methane captured from renewables | | existing UK landfill sites with a growing solar | | | | | | | | | | | 34% | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | › Utility and energy efficiency solution providers, | | | | | | | | | 30% | | 30% | | | | | 31% | | | business | | | | | | | | | | | | | | | 28% | | | | | | such as sub-metering in Germany and building | | | | | | | 23% | 24% | | | | | 24% | | 24% | | | | Infrastructure with social benefits | | | | | | | | | | | | | 19% | | | | | | | | upgrades in the Netherlands | | | 17% | | | | | | | | | | | | | | | | | | | | | 13% 13% | 12% | | | | | | | | | | | | | | | › Long-term power contracts in France to enable | | | | | | 10% | | | | | | | | | | | | | 31% | nuclear capacity | | | | | | | | | | | | | | | | | | | › Specialist UK healthcare provider | › Grid enhancement assets that reduce waste | 0 | | | | | | | | | | | | | | | | | | | | | Total thematic | | Renewable energy Enabling the transition | | | | | | | | | Infrastructure with | | | | | | › Emergency medical vehicles and healthcare | energy | | | | | | | | | | | | | | | | | | | | | | investments | | | | | to a lower-carbon world | | | | | | social benefits | | | | | 80 | transportation in Spain | › Specialist shipping of floating liquid natural gas | | | | | | | | | | | | | | | | | | | › Provider of diagnostic imaging and radiotherapy | › Efficient transportation projects in road and rail | | | | | | | | | | | | | | | | | 70 services in Germany that reduce congestion 60 This year, the Fund invested in four different infrastructure projects that have social benefits, which › Student housing in jurisdictions across the constituted 66% of capital deployed during the year. Also during the year, new loans were made to four Netherlands 50 companies that enable the transition to a lower-carbon world, which made up 19% of the capital deployed › Essential and emergency water handling solutions to new acquisitions. 40 › Telecom towers and broadband services 30 connecting up residents and businesses from rural areas 20 10 Additional information Financial statements Company review Strategic review Governance 2021 2022 2023 2024 2025 31 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Progress report continued ### 3. Over time, increase portfolio weightedaverage ESG score ∆ Each investment in the portfolio is assessed and trajectory that a project may have when it is being The portfolio’s weighted average ESG score increased to 64.70 as at 31 March 2025. assigned an ESG score, which is largely determined constructed compared to a full operational project. KPMG have issued an independent limited assurance report over this metric. by the environmental impacts associated with the It is also therefore important to recognise that while the sub-sector in which the asset sits. The score can high-level goal is and has been to increase the average then be positively or negatively modified based on the portfolio ESG score, this will necessarily be balanced project’s current environmental, social and governance against the Company’s investment mandate to ensure ### Portfolio ESG score performance, taking into consideration the direction sufficient diversification across a range of sectors of travel where relevant. The ESG score ranges from and sub-sectors as well as project and investment 0 to 100 where, say, a renewable energy project with 64.70 stage. Diversification is key to the Company’s strategy best-in-class social and governance practices would in achieving surplus returns for its investors, which receive a score of 100, and a power plant that burns remains a priority objective for the Company. thermal coal with insufficient social or governance The framework is kept under continual review. Given 62.77 policies would receive a score of 0 (although it should that the methodology does not serve as an exhaustive 62.29 be noted that a coal-fired power plant would be 61.88 excluded under the Fund’s negative screening criteria). list for every possible sub-sector within infrastructure, this year new sub-sectors were added as the Fund The ESG score integrates a single methodology looked at opportunities and extended loans to 60.59 which is applied across all sectors and sub-sectors, new areas that it had not considered previously. 65 project stages (notably with no differentiation 59.61 Theexisting sub-sector definitions were also more between construction and operational projects) and clearly delineated, with a view to ensuring high levels of 64 investment stages. This is to allow for comparison consistency and standardisation across credit analysts between assets of the portfolio over different time and functions across all of the different teams that 63 periods. Thisapproach however does mean that are involved in working on the Fund’s investments. certain relevant factors will not be reflected in the 62 It should be noted that as part of this exercise, the scoring results, such as the variation in materiality reclassification of the sub-sector of one project had a and applicability of modifiers across different sectors 61 consequential impact on its ESG score. or material differences in environmental impact and Note, as part of a review of the methodology during the course of the prior year, the sub-sector score for nuclear increased and the modifier for water and waste management plans was split out into two. To ensure 60 ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual complete comparability, the overall portfolio ESG score for 2025 would have been 64.35 if reversing out Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: these methodological changes. 59 www.seqi.fund/sustainability/publications/ 58 Additional information Financial statements Company review Strategic review Governance 57 2020 2021 2022 20242023 2025 32 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Progress report continued ### 3. Over time, increase portfolio weightedaverage ESG score continued The chart below represents a comparison of the portfolio’s sustainability profile between 31 March 2024 Acquisitions: The effect of new investments ESG score: The effect of changes in ESG score and31March 2025: | | | › During the year, the Fund acquired over | › Changes in the ESG scores of borrowers | | --- | --- | --- | --- | | | | £300million worth of new investments in a | contributed 1.03 points to the average score | | ESG score histogram (%) | | number of different projects. The weighted | for the year. The net positive effect on ESG | | | | average ESG score of these new acquisitions was | scores came from improvements in borrower | | | 35 | 69.90, signalling positive progress in this respect | behaviour and the provision of additional evidence | | 30 | | and meaning it was the biggest contributor to the | that allowed the application of credit through | 24 21 22 21 19 increase in the average ESG score over the year. the modifiers, which ties into our ongoing 20 14 13 14 The Fund also refinanced loans to two of its high engagement work with borrowers. Uplifts to the 10 5 4 4 ESG-scoring borrowers with strong environmental ESG score were realised across 14 borrowers. 2 2 2 1 0 0 0 credentials: Project Octopus, a leading UK Portfolio weight: The effect of changes in 0 to 36 44 to 52 60 to 68 76 to 84 92 to 10036 to 44 52 to 60 68 to 76 84 to 92 multi-utility services company, and Brightline, the weights of the loans on the portfolio asustainable high-speed passenger train in the › There was a resultant 0.07 negative impact US that is expanding its rail route. that came from the increased weighting of Disposals: The effect of removing the low-ESG-scoring loans and reduced weight of The different factors driving the change in the weighted average score from 62.77 the previous year to this maturing and sold positions from the portfolio high-ESG-scoring loans. These decisions are not year’s score of 64.70 are summarised in the waterfall chart below: | | | | | | | › Since March 2024, assets totalling £210 million | made solely by reference to specific ESG factors | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | repaid or were removed from the portfolio. These | but are assessed in the context of our ongoing | | ESG score change | | | | | | had a weighted average ESG score of 66.91. | overall portfolio management which balances | | | | | | | | Most disposals had an ESG score that sat at | many factors, such as geographic exposure, | | | | | 1.03 | | | around the portfolio average, so their overall | sectoral diversification and liquidity requirements. | | 64 | 1.74 | | | (0.07) | 64.70 | | | | | | (0.78) | | | | contribution did not have a noticeable effect on | Further, fluctuations in portfolio weights come | 63 62.77 the portfolio average. The successful repayments from repayment schedules and timing, which 62 of an energy efficiency project scoring 73.125 and cannot always be controlled and isan inherent 61 | | 60 | the refinancing of Project Octopus and Brightline | part of the business. | | --- | --- | --- | --- | | 65 40 | | | | | | 59 | resulted in a 0.78 decrease in the weighted | | | | 58 | average ESG score of the portfolio for the year. | | Additional information Financial statements Company review Strategic review Governance 2024 2025 2024 Acquisitions Disposals Portfolio weightESG score 2025 33 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Engagement with borrowers Sustainability-related covenants Sample metrics from the borrower questionnaire The Fund now has eight projects in the portfolio that have sustainability-related covenants in their loan terms, marking another year-on-year increase. The new addition this year was Project Crystal, a medical General Environmental diagnostics business based in Germany. The borrower has also committed to completing the IA’s annual 1 2 1 2 Coverage Result Coverage Result sustainability questionnaire. In collaboration with other lenders on the deal pre-signing, there was agreement to adopt the SEQI questionnaire as the standard sustainability due diligence questionnaire (“DDQ”) that would be completed by the borrower and distributed to all lenders. This speaks to the comprehensive and considered nature of the questionnaire that our Investment Adviser has designed and continues to enhance. 99% 67% 100% 48% Year (as at year ended 31 March): 2020 2021 2022 2023 2024 2025 Number of projects with sustainability-related covenants in loan agreement: 2 3 3 6 7 8 The number of projects in the portfolio with sustainability-related covenants included within their loan agreements has been increasing over the years, and to the extent possible, this is a trend we seek to continue to pursue going forward. Produce sustainability reporting Have undergone full environmental due diligence Annual borrower sustainability questionnaire The Investment Adviser distributes a comprehensive sustainability questionnaire to all borrowers annually to facilitate with an assessment of their sustainability progress and to measure quantitative metrics. Social Governance Theborrowers’ responses to the sustainability questionnaire better enable us to assess each asset 1 2 1 2 according to our ESG scoring methodology. The framework requires a high bar of evidence before Coverage Result Coverage Result adjustments can be made to the ESG score in either direction. Details of how points are awarded or deducted are provided in the reporting criteria at www.seqi.fund/sustainability/publications/. This year ahandful of targeted, carefully designed questions were added (such as the impact of the EU’s Carbon Border Adjustment Mechanism (“CBAM”)) to ensure the questionnaire remains relevant but also as streamlined as possible to appropriately balance the reporting burden on borrowers. Here we highlight a 62% 29% 97% 84% fewof the sustainability KPIs we use to monitor the portfolio’s performance: Average proportion of female employees Have a whistleblowing policy 1. Coverage = the percentage of the portfolio that has provided information on the relevant metric and is measured by NAV as at the year end 2. Results = out of the companies for which we have information, the percentage that has the relevant metric in place (e.g.awhistleblowing policy). Again, this is measured by NAV as at year end. For example, we have information on 99% of the SEQI portfolio on whether the companies do or do not produce sustainability reporting. Out of these companies, 67% do currently produce sustainability reports This data was collected and reported by the IA, SIMCo Additional information Financial statements Company review Strategic review Governance 34 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Sustainability continued ### Engagement with borrowers continued Sustainability-related covenants continued Annual borrower sustainability questionnaire continued This year, we again achieved a 93% response rate, indicative of the strong relationship the Investment Adviser has built up with our borrowers, especially given the form is completed on an almost entirely voluntary basis. The responses vary in completeness due to the inapplicability of some questions to certain sectors and the unavailability of select datapoints, such as SFDR PAI metrics, for some smaller companies. We continue to work in partnership with our borrowers to expand the comprehensiveness of responses. Further, the questionnaire is not distributed to certain non-performing loans due to their distressed nature, which was relevant for two borrowers this year. Year (as at year ended 31 March): 2021 2022 2023 2024 2025 Borrower response rate to sustainability questionnaire: 51% 43% 92% 93% 93% Direct engagement with management We initiate and maintain a dialogue with the management teams of our portfolio companies to discuss relevant sustainability issues and areas featured in the portfolio companies’ action plan, led by the ## Investment Adviser’s Sustainability Manager, Leah Dean. An example is the case of a European port USD27m infrastructure company that enables the transportation of essential goods around the world. As well as Invested completing the IA’s sustainability questionnaire, the borrower shared with us a third-party sustainability due diligence report, which provided thorough insight into the quality, health and safety and environmental practices at the company. The borrower also provided numerous examples of waste management plans they have in place for their projects, terminals and company-level procedures. The business produces best-in-class reporting in their extensive annual sustainability reports, including disclosing Scope 1, 2 and 3 emissions, with peers publishing little to no public sustainability information. The freight-forwarding company has successfully been implementing initiatives that have helped to reduce their emissions and make their operations more sustainable. For instance, this year they switched to using renewable energy and alternative fuels, which was a great contributor to the progress made towards their commitment to a 40% reduction in carbon emissions by 2030, which they are on track to achieve. Atlas Air Between 2023 and 2024, SEQI invested USD27 million in senior secured debt to Atlas Air, a leading global provider of outsourced air cargo services. The company operates a large fleet of wide-body aircraft and is a key enabler of global supply chains. Notably, Atlas Air is the world’s largest operator of Boeing 747 freighters. 2023 Additional information Financial statements Company review Strategic review Governance 35 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Stakeholders Stakeholders, business relationships and Sustainability factors are considered when assessing Long‑term decisions In addition, even though the Company has no socially responsible investment recipients of the Fund's capital. For instance, premises or employees, it has estimated the The Board takes into consideration the likely theFund has previously requested information quantum of carbon emissions caused by its Whilst directly applicable to companies incorporated long-term consequences to all stakeholders as part on suppliers' sustainability policies and offsetting Directors, consultants and personnel employed in the UK, the Board recognises the intention of the of its routine decision-making process. TheBoard, initiatives. The interests of borrowers, sponsors byits Investment Adviser and smaller service Association of Investment Companies (“AIC”) Code supported by the Company’s key service providers and relevant intermediaries involved in the credit providers in the fulfilment of their respective roles that matters set out in section 172 of the Companies routinely engaging with the Company’s key process are also discussed during scheduled Board relating to management, direction and governance Act 2006 are reported. The Board strives to stakeholders, monitors the outcome of decisions, meetings and in detail during the Board’s portfolio of the Company. It strives to offset its emissions understand the views of the Company’s key and feedback is considered as part of the Board’s review sessions. from operations through its purchase of appropriate stakeholders and to take these into consideration as standing meeting schedule, as part of the annual offsetting measures. For further details please part of its discussions and decision-making process. The relationship with the providers of the strategy day, or as otherwise necessary. refer to the Sustainability Report published on As an investment company, the Company does not Company’s RCF is managed by the Company’s ourwebsite. have any employees and conducts its core activities service providers. Regular updates are provided The interests of the Company's employees through third-party service providers. Each provider on developments concerning the Fund, including The Company has no direct employees and The desirability of the Company maintaining has an established track record and is required any public announcements, in addition to monthly maintains close working relationships with the a reputation for high standards of business to have in place suitable policies and procedures reporting of compliance with portfolio covenants. employees of the Investment Adviser, Investment conduct to ensure it maintains high standards of business Manager and the Administrator who undertake The Board respects and welcomes the views of conduct, treats customers fairly and employs The Chair is responsible for setting expectations the Company's main functions. Refer to the report all stakeholders. Any queries or areas of concern corporate governance best practice. concerning the Company’s culture and the Board of the Management Engagement Committee on regarding the Fund’s operations can be raised with ensures that its core values of integrity and Whilst the primary duty of the Directors is owed to page50 for further information. the Administrator. accountability are demonstrated in all areas of the the Company as a whole, all Board discussions Section 172 statement Company’s operation. involve careful consideration of the longer-term The impact of the Company’s operations on consequences of any decisions and their Although the Company is not domiciled in the UK, the community and the environment For further information on Board values and culture, implications for all key stakeholders. Particular through adopting and reporting against the best please refer to page 47 of the corporate governance The Company recognises that the biggest impact consideration is given to the continued alignment practice principles set out in the AIC Code, the statement. it has on the community and the environment is of interests between the activities of the Company Company is voluntarily meeting obligations under through its investing activities. As such, sustainability and those that contribute to delivering the Board’s the UK Corporate Governance Code, including The need to act fairly between Shareholders considerations are integrated into its investing, strategy, which include the Investment Manager, the section 172 of the Companies Act 2006. of the Company monitoring and management processes, including Investment Adviser, the Administrator, recipients of assessments of a credit’s contribution to climate The Directors recognise their individual and The Board, in conjunction with the Investment the Company’s capital and providers of long-term change and engagement with local communities. collective duty to act in good faith and in a way Adviser and Brokers, engages actively with debt finance. In addition, the Board has an ESG and Refer to the sustainability report on pages 26 to 34 that is most likely to promote the success of the Shareholders to understand their views and to Stakeholder Engagement Committee, which reviews for further information. Company for the benefit of its members as a whole, ensure their interests are taken into consideration the effectiveness of the Company’s mechanisms for whilst also having regard, amongst other matters, when determining the Company’s strategic direction. stakeholder engagement. The need to foster the Company’s business to the Company's key stakeholders and the likely consequences of any decisions taken during the relationships with suppliers and others The Board’s commitment to maintaining high standards of corporate governance; its policy for year, as set out below: The Board maintains close working relationships active Shareholder engagement, combined with the with all key suppliers and those responsible for Directors’ duties enshrined in Company law; the delivering the Company’s strategy. Thecontractual | constitutional documents; the Disclosure Guidance | relationship with each supplier and their | | --- | --- | | and Transparency Rules; and the Market Abuse | performance is formally reviewed each year. Refer | | Regulation, ensure that Shareholders are provided | to the report of the Management Engagement | | with frequent and comprehensive information | Committee on page 50 for further information. | concerning the Company and its activities. Additional information Financial statements Company review Strategic review Governance 36 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Stakeholders continued ### Shareholders Why engage? All of which, in addition to other relevant information Steve Cook, Head of Portfolio Management at the During the year, the Board has resolved to continue concerning the Company, are made available on the IA, gave an overview of the history and direction the buyback programme in light of the continuing As the principal source of capital, Shareholder Company’s website. of SEQI’s approach to integrating sustainability share price discount, as it believes this has been a capital is deployed by the Company in pursuit of within the investment process, before opening up key contributor to the Company’s discount being its investment objective which, in turn, generates The Chair, the Senior Independent Director the floor to discussion of ESG trade-offs as well as consistently one of the narrowest in the sector over income for the Company which is used primarily (“SID”) and individual Directors are willing to meet views on an exclusions-based approach and the the preceding 18 months. For further details of the to benefit Shareholders through the payment of Shareholders to discuss any particular items of nuances around certain sectors. Leah Dean, the buyback programme please refer to the ‘Share dividends. concern or to understand their views on governance IA’s Sustainability Manager, then led a discussion performance’ section of the Investment Adviser’s and the performance of the Company. General The Board recognises the importance of active on responding to the fast-moving regulatory report and the share buybacks section of the queries can also be submitted to the Board via the Shareholder engagement to ensure there exists a and reporting landscape. Andrea Finegan, the Directors’ report. Administrator at the Company’s registered office. continued alignment of interests with the objectives Board’s Independent Consultant on sustainability, of the Company and those of Shareholders, and to posed questions on the future direction of ESG. Dividend reinvestment scheme Capital markets day inform the Board’s future decision making. Margaret Stephens, as then Chair of the ESG and With effect from the Company’s Q3 2023 dividend During the year, the Company held an online capital How the Company engages Stakeholder Engagement Committee, was also in paid in November 2023, the Board introduced the markets seminar, featuring two guest speakers and attendance and found it of great value to engage The Board, alongside the Investment Adviser and option for Shareholders to invest their dividend in the Investment Adviser’s wider team, with Q&A directly with many of our sustainability-minded the Brokers, maintains an ongoing programme of adividend reinvestment plan (“DRIP”). Participation sessions following each discussion. The aim of the investors and other stakeholders. investor engagement which includes investor and in the DRIP is optional and does not affect event was to provide investors with an insight into analyst presentations, regular announcements on Shareholders’ cash dividends unless they elect international infrastructure and credit investment Share buyback programme material developments affecting the Company, and to participate; however, as purchases under the themes and an update on the positioning of the offers to meet with key institutional Shareholders. Since July 2022, and in response to the DRIP are not subject to stamp duty reserve tax, Fund against the market backdrop. Feedback from these and other relevant channels macro-economic headwinds faced by alternative the DRIP provides Shareholders with a cost- of communication forms part of the Board’s income investment funds from rising interest effective means of increasing their shareholding in ESG roundtable decision-making process when determining the rates, acting under appropriate advice the Board the Company over time whilst also benefiting from Along with its ongoing communication with future strategy of the Company and taking decisions has exercised the authority granted annually by compoundingreturns. investorsand other stakeholders, the Company which may impact Shareholders. Shareholders for the Company to acquire its hosted an inaugural ESG Investor Breakfast own shares in the market. Whilst the programme Shareholders are invited to attend and vote at event in September 2024. At this roundtable, operates as a mechanism for addressing any all general meetings where significant decisions ESG and Stakeholder Engagement Committee imbalance in the demand and supply of Ordinary affecting the Company are taken; in particular the members, members of the IA and Shareholders in Shares in the market, it also underlines the Board’s AGM, where Shareholders may discuss the activities the Fund gathered to discuss keycomponents of confidence in the net asset value of the Company of the Company, its governance and strategy, and sustainability grouped into threeareas. and provides an element of value accretion to raise any issues or concerns directly with the Board. existing Shareholders. Routine updates are also provided to Shareholders through the provision of monthly investment update factsheets and net asset value reports, annual and half-yearly financial statements and regulatory news announcements. Additional information Financial statements Company review Strategic review Governance 37 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Stakeholders continued ### Borrowers Suppliers Lenders Society Why engage? Why engage? Why engage? Why engage? Engagement with borrowers and gaining an The Company’s suppliers include third-party service The Company’s lender, J.P. Morgan (“JPM”), The Fund’s investing activities contribute to the understanding of their needs is fundamental to providers engaged to provide the core investment provides a revolving credit facility (“RCF”) which societies in which its borrowers operate through ensuring an appropriate lending structure is put in advisory, management and administrative tasks. is used for efficient deployment into credit providing funding for crucial services and facilities, place that accurately reflects the risks associated Each of these providers is essential in ensuring opportunities and to mitigate the impact on for example healthcare providers. The Fund applies with the borrower’s operations. Through ongoing the ongoing operational performance of the performance of cash drag. its sustainability approach during the due diligence monitoring, the Investment Adviser provides updates Company. The Company relies on the performance stage prior to any new investment as well as How the Company engages to the Board on any changes in their circumstances of thirdparty service providers to undertake all of part of its monitoring process. This encapsulates The Company’s relationship with JPM is managed and this also informs decision making on matters of itsmain activities. considerations around the borrower’s impact on the by the Investment Adviser and is overseen by the portfolio risk. local society, which can play a role in ensuring the How the Company engages Investment Manager. The Investment Adviser is Fund’s own long-term success. How the Company engages The Board maintains close working relationships responsible for notifying JPM of relevant business How the Company engages The Investment Adviser monitors the performance with all of its key suppliers and regularly engages developments and for preparing compliance of borrowers on an ongoing basis and routine onmatters relevant to the Company’s activities. certificates on a monthly basis which confirm the Economic infrastructure is infrastructure that reporting to the Risk Committee measures borrower Company’s adherence to debt covenants. promotes economic activity, including transport, Acting through the Management Engagement performance against a combination of generic transportation equipment, utilities, power, renewable Committee, the Board oversees and monitors the The Company’s funding requirements are reviewed and borrower-specific key performance indicators. energy, accommodation and telecommunications performance and contractual relationships with at least quarterly, which includes consideration of Thisregular interaction with borrowers is supported infrastructure. each supplier. A detailed annual assessment is amounts drawn on the RCF and the Investment by all ongoing credit monitoring and updates and undertaken of each supplier to ensure they continue Adviser’s business development pipeline. These The Fund has a long history of investing in Investment Committee reviews being provided to to perform their duties to a high standard and that factors form part of the Board’s decision-making infrastructure with social benefits and views the AIFM. their terms of engagement remain appropriate. process concerning the operation of the RCF and these type of assets favourably in the investment All borrowers are screened and their eligibility This process informs the Board’s decision making the Company’s capital management strategy. process; these include assets that provide for is assessed against the Fund’s sustainability with regard to the continuing appointment of key basic human needs (such as clean water and food framework which is designed to encourage suppliers. security) or bring a positive change by addressing sustainability and mitigate or limit negative impacts social challenges and inequalities (such as The Management Engagement Committee met from corporate activity on the environment and the healthcare, education and affordable housing) or twice during the year, in December 2024 and March communities in which they operate. Borrowers are advancing society as a whole (such as progressing 2025, and reviewed the performance and continued sent annual sustainability questionnaires to facilitate telecommunications). The Investment Adviser may engagement of all key suppliers. A further qualitative with an assessment of their sustainability progress also engage more broadly with borrowers and assessment was undertaken in respect of the and measure quantitativemetrics. those responsible for managing the project on their Investment Adviser and with reference to various relationship with local populations. | A detailed monitoring review report is prepared | assessment criteria recommended by the AIC. | | --- | --- | | for every asset at least every six months and | Referto the report of the Management Engagement | | more frequently if required depending on risk | Committee on page 50 for further information. | characteristics or material developments. TheBoard and all key advisers annually undertake a detailed review of all positions in the portfolio, with a separate session dedicated to certain focus or underperforming loans based on their risk profile. Additional information Financial statements Company review Strategic review Governance 38 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Principal and emerging risks and uncertainties ### The Risk Committee is responsible for reviewing Risk classification and review process Principal risks the Company’s overall risks and monitoring the The Company maintains a risk register that maps risk control activity designed to mitigate these all the identified risks that can potentially impact ### risks. The Risk Committee has carried out a robust Geopolitical Macro strategy the Company’s performance. This risk register also assessment of the principal and emerging risks ### maintains a list of risks that have the potential to risk risk facing the Company, including those that would threaten the business in the future but are not yet threaten the Company’s business model, future entirely clear in terms of their nature or impact. Jurisdictional risk Infrastructure debt availability performance, reputation, solvency or liquidity. These risks are referred to as emerging risks. Unexpected and significant political, economic or Not having access to a wide enough range of suitable Further details of the Risk Committee, its duties and social events that can impact the performance of the investment opportunities to support the investment All key risks are rated by four factors: likelihood activities undertaken during the year can be found in Fund’s portfolio. strategy’s required level of portfolio diversification and of occurrence, potential impact, pre-mitigation the report of the Risk Committee on page 57. targeted return. risk and post-mitigation risk. Key risks scoring As the Company is an externally managed non-EU high combinations of likelihood of occurrence and AIF for the purposes of the Alternative Investment probability of impact are identified as potential Fund Managers Directive (“AIFMD”), the Directors principal risks. An additional screen removes from Mitigation Mitigation have appointed FundRock Management Company the list risks that have been rated as having a very (Guernsey) Limited (“FRMCG” or the “Investment › Investment is restricted to countries in Western Europe, › The Investment Adviser has extensive experience and low level of risk post-mitigation. The resulting list Manager”) as AIFM to the Company to provide risk USA, Canada, Australia and New Zealand, limiting the a strong track record in sourcing infrastructure loans of principal risks is highlighted below along with possibility of surprising and unfavourable changes arising andbonds. management services compliant with AIFMD and major mitigants. Also included are ‘direction of that could adversely affect asset quality. › The Fund’s ongoing need for assets is only a small to prepare the relevant disclosures to be made to travel’ arrows and text indicating why risk levels are › Portfolio diversification requirements limit potential percentage of the overall infrastructure debt market. investors and regulators. On 30 January 2015, the believed to have changed over the past 12 months. exposure to individual jurisdictions. › The wide range of eligible jurisdictions sectors and risk Financial Conduct Authority (“FCA”) confirmed that The Company’s risk register is a live document profiles maximises the universe of potential targets. the Company was eligible to be marketed via the and is updated annually or as required by the Risk Evolution FCA’s National Private Placement Regime and the Committee with new key and emerging risks added › Mitigation actions did not contemplate the US being a Evolution Company has complied with Articles 22 and 23 of and existing key risks re-rated based on current significant potential source of geopolitical risk. › The sharp rise in political and macro-economic uncertainty the AIFMD for the year ended 31 March 2025. circumstances. › The surprising nature of the current US administration’s may limit the supply of infrastructure-backed debt by Under the instruction of the Risk Committee, new economic policies and its approach to reducing investors’ willingness to commit equity to new FRMCG is responsible for the implementation of implementation has damaged confidence in the projects or suppressing M&A activity. a risk management policy and for ensuring that predictability of US decision making and significantly › The Trump administration’s focus on traditional appropriate risk mitigation processes are in place: increased perceived levels of risk across all markets. carbon-based energy could reduce the number of new for monitoring risk exposure; preparing quarterly › The simultaneous imposition by the US of tariffs on all US-based opportunities in the alternative energy sector. risk reports to the Risk Committee; and otherwise countries worldwide has limited the benefits derived › On the positive side, if sustained, credit spread reporting on an ad hoc basis to the Board as fromgeographic diversification. wideninglinked to recent US economic policy changes necessary. should make it easier to source investments that meet risk/return targets. Kate Thurman (until her retirement on 4March2025) and Andrea Finegan, Independent Consultants to the Company, provide guidance to the Board on the overall approach to risk management across the Fund’s portfolio. Part of their focus has been to assist the Investment Manager in scrutinising certain of the Investment Adviser’s credit evaluations. Additional information Financial statements Company review Strategic review Governance 39 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Principal and emerging risks and uncertainties continued ### Principal risks continued ### Macro strategy Investment strategy Investment strategy Capital markets ### risk execution risk execution risk risk Competing investments Investment allocation Loan underwriting process Targeted dividend A significant increase in returns available from other Poor allocation decisions between different jurisdictions Use of inaccurate or fraudulent data, over‑optimistic Setting the dividend target too low can make the investment options (typically due to an increase in and sectors can negatively impact the Company’s projections or poor decision making during the Company’s shares look unattractive. Setting it too high interest rates) or a decrease in the attractiveness of performance. underwriting process can lead to higher‑than‑expected can increase the risk of the Company’s dividend cash investment companies backed by alternative asset Failure to consider the relative attractiveness of default rates and credit losses. coverage falling below 1x. classes may make the Company’s shares lookrelatively share buybacks versus new investments may lead unattractive. tosub‑optimal returns. Mitigation Mitigation Mitigation Mitigation › The Company’s attractiveness is monitored relative › Portfolio diversification requirements provide a first layer › Due diligence and underwriting are performed by an › The dividend target set by the Company is only a to its peers and other investment opportunities on an of protection against sub-optimal allocation decisions experienced team of credit analysts with a strong target; however, extensive modelling is undertaken ongoingbasis. between different jurisdictions and sectors. trackrecord. to understand the quantum and volatility of cash flow › In higher interest rate environments, the Company’s › Within the diversification framework, the Company’s › Reputable third-party experts are hired if needed to vet available in future periods so that it can be set at a interest income is likely to increase, which may allow the Investment Adviser uses its experience to help avoid borrowers’ assumptions and projections, or to provide level the Board believes can be met under normal Company to either increase its dividend or enjoy NAV investing in sectors susceptible to underperformance. specialist input (e.g. engineering reports). circumstances. growth. In falling rate environments, a proactive duration › Portfolio and sector performance is reviewed regularly › All loans require approval from the Investment Adviser’s › The dividend is set as favourably as possible versus management programme can use duration management at Board meetings. Future direction is debated and Head of Risk and Investment Committee, and the AIFM. competing investment products while ensuring the tools to help preserve income levels. modified if required. On high-risk loans, the AIFM solicits and considers the availability of a reasonable cushion to protect against › A history of strong performance, active investor views of the Risk Committee prior to providing a final dips in performance. › Weighing returns available from share buybacks vs engagement and support for Shareholders, in the form new investments is included as part of the investment decision. for example of buyback programmes, can help position Evolution process. Potential costs associated with any shrinkage the Company positively relative to other investment of the portfolio are taken into consideration (e.g. reduced Evolution › Cash coverage decreased over the course of the | companies. | diversification). | | | | --- | --- | --- | --- | | | | › The risk remains unchanged as the Investment Adviser | year due to cash drag from uninvested funds and | | | | will incorporate current economic realities including | slower-than-expected receipt of PIK interest (1.00x | | Evolution | Evolution | | in2025 vs 1.06x in 2024). | greater uncertainty and volatility into the existing robust › Heightened uncertainty brought on by unexpected › New trade policies and increased macro-economic underwriting and structuring processes. › The decision taken later in the year to use part of the US economic policies may trigger a rotation out of volatility will widen the range of operating performances RCF to ensure full investment is expected to increase investment companies into investment classes viewed across different sectors, heightening the importance of cash income available going forward. as safer and more liquid. Infrastructure debt’s historical asset allocation decisions. › If interest rates fall, cash income from floating rate assets outperformance would help to mitigate this trend. will drop, however interest rate swaps used to manage › The widening of the share discount to NAV over the past › Another year of discounts to NAV for investment 12 months has increased the significance of the buyback the portfolio’s duration will help to mitigate the impact. companies backed by alternative assets has not helped vs investment decision. › Increased macro-economic and trade-related uncertainty to improve the market’s perception of the sector. may hurt some borrowers’ operating performance › SEQI, however, continued to outperform and make meeting scheduled interest payments more alternatives-backed investment company peers on challenging. adiscount to NAV basis. Additional information Financial statements Company review Strategic review Governance 40 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Principal and emerging risks and uncertainties continued ### Principal risks continued ### Capital markets Capital markets Capital markets Macro-economic ### risk risk risk risk Inability to raise new capital Non-credit related NAV volatility Share price discount to NAV Macro-economic factors Not being able to access capital to grow the Company Assets in the portfolio are valued monthly, as debt Trading at a discount to NAV for a sustained period Movements in macro‑economic factors including diminishes its market relevance and reduces its ability to products, movements in interest rates, foreign canlimit the ability of the Company to raise new interest rates, FX, commodity prices and inflation generate incremental returns linked to making new loans. exchange (“FX”) and credit spreads can lead to a capital, lead to investor dissatisfaction and trigger can impact the pricing and credit quality of individual Performance can be further impacted if share buybacks significant change in NAV unrelated to the actual corporate actions that may not be in the best interests infrastructure investments as well as the Company’s lead to lower portfolio diversification and higher creditperformance of the underlying assets. of all Shareholders. other assets and liabilities including hedges, swaps costratios. andborrowings. Mitigation Mitigation Mitigation Mitigation › The Company looks to carefully balance the use of its › Portfolio duration is kept low to avoid significant swings › The Company is highly focused on its share price › The Company considers the potential impact of significant available cash, including proceeds from loan repayments, in NAV due to interest rate movements. The Fund targets discount to NAV and actively seeks out views on the movements in macro-economic factors on the credit of between new originations and share buybacks, a minimum 40% holding of floating rate assets (including issue from Shareholders and other market participants. its borrowers during the underwriting process and builds recognising that portfolio shrinkage comes at a cost. interest rate swaps), and the maturities of fixed-rate loans › The Company has taken steps to broaden distribution protections into loan structures. › New investments are selected and structured to mitigate and bonds are kept relatively short. by hiring Kepler to increase demand from retail and › Counterparty credit exposure to macro-economic the impact of any potential reduction in portfolio size. › NAV volatility due to movements in benchmark smaller wealth management accounts, and J.P. Morgan factors is mitigated at the portfolio level by diversification › Most costs are variable which largely protects the credit spreads is mitigated by limiting the portfolio’s Cazenove as joint Broker to complement the services constraints and concentration limits. Company from portfolio shrinkage. However, service spreadduration. offered by Jefferies and help execute marketing and › The cap on leverage and relatively short duration of provider performance is monitored closely as reduced › Volatility due to FX rates is minimal due to the Company’s investor engagement strategy. the portfolio limits NAV movements due to interest absolute fees may lead to operational challenges. extensive hedging programme. › While the Company is under no obligation to buy back ratechanges. › Note: Changes in value due to interest rate and generic shares, in the past it has done so to signal support for › FX hedges protect the Company from pricing movements Evolution credit spread movements are reversed as the assets the investment strategy, help absorb excess supply in linked to assets denominated in non-Sterling currencies. approach maturity (pull-to-par). the market and, depending on the size of the discount, › Investment companies, including SEQI, continue to be › Derivative contracts are structured to minimise the provide investors with attractive returns. locked out of the capital markets as discounts remained potential impact of margin calls linked to interest rate and in place throughout the year. Evolution FX movements as witnessed in the recent sell-off in the Evolution US Dollar. › Volatility in rates, FX and benchmark credit spreads increased significantly at year end in response to › Share discounts on investment companies backed by the surprising nature of the new US administration’s alternative asset classes have continued to grow over Evolution economic policies. the past year and recent general market turmoil has not › The volatility of all macro-economic factors increased helped the situation. › Any loss of confidence in the stability of the US Dollar significantly at year end due to the unexpected and or the Treasury market may further increase the risk of › Activist Shareholders are starting to focus on investment disruptive nature of the current US administration’s significant movements in rates and FX going forward. companies and have acted in specific cases. new economic policies and a tentative challenge to the › On a relative basis, SEQI continues to outperform its independence of the Federal Reserve. peers on a share discount to NAV basis. Additional information Financial statements Company review Strategic review Governance 41 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Principal and emerging risks and uncertainties continued ### Principal risks continued Key risks Along with the principal risks discussed above, the Company is highly focused on several other ### Counterparty Service provider Liquidity groups of key risks in the risk register. In general, ### credit risk risk risk these risks have very low probabilities of occurrence and therefore do not make the principal risk list. Borrower counterparty credit Investment Adviser key-man/team Liquidity However, many of them do score very highly Credit‑based borrower underperformance on individual The departure from the Investment Adviser of a Insufficient liquidity available to pay contractual on potential impact and consequently receive assets can lead to a loss of capital and income, a single key person or small group of individuals could obligations when due, or to fund non‑binding but significantattention. drop in NAV and reputational damage due to negative negatively impact the Company’s prospects. expected corporate actions (e.g., dividend payments, headlines. share buybacks) is a risk. Mitigation Mitigation Mitigation › The Investment Adviser has extensive experience › Key-man and succession risk at the Investment › Liquidity is monitored by the Company on an ongoing underwriting and managing infrastructure debt. Adviser is discussed regularly in annual meetings and basis with cash flow and dividend cover projections › A detailed credit review and underwriting process reviews with the Chairman, Management Engagement presented and discussed at quarterly Board meetings. requiring multiple levels of approval is in place with Committee and Audit Committee. › Cash flow modelling looks at stressed scenarios to additional input provided from the Board on higher-risk › The Investment Adviser continues to develop its human estimate the amount of liquidity needed at any point to loans. resources and has a talent pool capable of assuming, satisfy demand. › All assets are monitored semi-annually by the Investment ifnecessary, the roles currently held by the Partners and › Headroom under the RCF and a minimum percentage Adviser, AIFM and Board. Loans having credit issues or Chief Risk Officer. of liquid assets are maintained to supplement balance of particular interest are placed under an enhanced level › Key team members are managed proactively and are sheet cash. of surveillance. provided with a Long-Term Incentive Plan (“LTIP”) and an › The relatively short-dated debt portfolio is highly cash › While tariffs are still a moving target, the portfolio has equity retention plan. generative as most of the assets pay cash interest and been reviewed to identify credits that are the most likely typically a certain number are repaid within any given to be negatively impacted by recent events. Evolution three-month period. › Another year of experience for key team members Evolution below the partner level has helped to reduce the risk of Evolution › Depending on final details, several borrowers in the disruption caused by senior level departures. › The ability to predict sources of cash income has portfolio could be negatively affected by the US › An up-tick in origination activity and a new senior decreased somewhat due to the more volatile and administration’s new tariff policy. employee equity retention plan have helped to keep the potentially challenging period that we have entered into › Supply chain issues linked directly to tariffs and big team focused and motivated. forsome borrowers. moves in macro-economic factors may create operating › The increased use of the RCF has reduced one of the challenges for some borrowers. Company’s sources of liquidity. By design, headroom › Second order tariff-related consequences such as drops will be maintained under the facility and other sources of in demand driven by consumer boycotts and falls in funds, such as cash deposits and liquid assets, remain cross border travel may negatively impact others. in place. › At a minimum, higher costs will need to be paid by all borrowers and other market participants to manage increased market uncertainty. Additional information Financial statements Company review Strategic review Governance 42 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Principal and emerging risks and uncertainties continued ### Key risks continued Emerging risks The Company is constantly alert to the possibility of emerging risks. Once the Company identifies a new Key risk: Legal structure Key risk: Cyber, IT failure, money Key risk: Board governance risk, it will assess the likelihood and impact of that Changes to laws, regulations and tax rules governing laundering, fraud Failure to promote the sustainable success of the Company, risk and will discuss and agree appropriate strategies the structure employed by the Company to carry on its The Board remains vigilant to the prevalence and trajectory ensure that necessary resources and controls are in place, to mitigate and/or manage it. Emerging risks are business could impact the viability of the investment of risks associated with cyber attacks, IT failures, money and maintain an effective engagement with Shareholders listed in the Company’s risk register and managed strategy by reducing the returns available and/or limiting laundering and fraud that could lead to reputational damage, and service providers, while ensuring that the Company’s the ability of investors to hold shares. The Company’s own policies, practices and behaviours are aligned with its through discussion of their likelihood and impact at legal liability or financial losses due to disruption of the AIFM, Investment Adviser, Administrator, Brokers, legal Company’s continued operations, including the loss or release purpose, values and strategy can impact the performance of Risk Committee meetings, Board meetings and Board advisers and accountants in place in the UK, Guernsey of commercial or personal data into the public domain. the Company. In response to market feedback and in pursuit of strategy days as appropriate. Should an emerging and Luxembourg screen the market continually to identify Aspecialist provider supports the IT environment for the Board continued improvement and enhanced reporting, the Company risk be determined to have any potential impact on potential changes to local tax and regulatory rules that and ensures that the environment is managed and monitored, has developed a stand-alone governance policy providing the Company, appropriate mitigating measures and may have an impact on the Company. The Board reviews and threats are mitigated. Priorto the engagement of all a detailed and transparent outline of governance structures controls are agreed. Earlier in the year, the rumoured the structure on an ongoing basis and regularly engages key service providers, the Board seeks assurance regarding andpolicies. new US tariff policy was added to the risk register a third-party adviser to formally confirm the continued the adequacy of the processes and the controls in place to Over the course of the year, one Board member departed as an emerging risk. Now that some of the specifics suitability of the organisational structure put in place by the mitigate the risks associated with their service delivery to the for personal reasons. For each Board vacancy a formal and of the policy are known, the risk has been moved to Company to carry out its business. This year, following a Company. The Board monitors the effectiveness of the internal rigorous search is undertaken, with careful consideration Board-led review of our tax structure, the governance of our the register under the geopolitical risk section and control environment of key service providers through the given to the appropriate balance of skills, knowledge, Luxembourg Subsidiary was improved by the engagement provision of periodic reporting and formally through an annual portfolio screening and monitoring actions have been experience, independence, time availability and diversity. This of a new Luxembourg-based independent director with a review process. enables the Directors to discharge their respective duties and undertaken by the Investment Adviser. strong background in accounting and risk management. responsibilities to a high standard and to contribute positively Recently, the independence of the Federal Reserve to overall Board effectiveness. Board performance continues to and the Big Beautiful Bill are items that have been be evaluated by an independent third party on a regular basis. added to our emerging risks list, along with multiple The last review occurred in 2023. Going forward, to meet Key risk: Service providers Key risk: Sustainability risk geopolitical situations including the conflicts in Russia/ the increasing demands on time, due to mounting risk and regulatory control responsibilities, a decision has been taken Ukraine, India/Pakistan and Israel/Palestine, US/Iran The Company has no employees and must therefore rely Shareholders, regulators and the market in general are on the performance of third-party service providers. Failure increasingly focused on sustainability-related issues. Failing toincrease the Board from five to six Directors. nuclear talks and US territorial interest in Greenland to carry out their obligations to the Company in accordance to meet and maintain the standards and objectives set and Panama. with the terms of their appointments or the failure of their by the Board on sustainability-related matters, report and In general, the current isolationist America First policy systems and processes could impact the Company’s disclose as required under increasing applicable regulations is being monitored closely to identify any new risks performance. Due diligence is undertaken before contracts and directives, and screen and monitor investments to avoid emerging from a potential reordering of global political are entered into. Thereafter, service provider oversight is adding undesirable assets can lead to reputational damage, conducted through ongoing interaction with the Management legal liability and loss of income. The Company established the and economic alliances and the loss of US soft power. Engagement and Audit Committees, who review control ESG and Stakeholder Engagement Committee to promote the Whilst the Company recognises climate risk as an reports provided by service providers throughout the year. Company’s stated sustainability objectives, monitor progress investment theme, it is also identified as a broad risk At year end, the Management Engagement Committee and verify that reporting and disclosure requirements are being covering transitional and physical risks, the impact reviews each service provider’s overall performance, including met. At the portfolio level, sustainability considerations have and timing of which is uncertain. On the regulation a review of the contractual terms upon which the service been fully integrated into the Investment Adviser’s screening, providers perform their services. underwriting and portfolio management processes. Actions front, proposals on ongoing costs disclosure rules, include the implementation of an independently audited ESG sustainability-related disclosures and UK ISA eligibility scoring methodology designed to help evaluate individual criteria are areas of focus. assets and track portfolio sustainability performance over A detailed review of the main financial risks faced by time. As there is increased scrutiny on climate risk, this year the Company, and how they are managed or mitigated, additional work has been undertaken on climate scenarios, which is being reported on in the Sustainability Report for the is set out in note 5 to the Financial Statements. first time this year. Additional information Financial statements Company review Strategic review Governance 43 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Governance Governance Board of Directors 44 The Sequoia Investment Management Company team 45 Independent Consultant 45 Corporate governance 46 Report of the Management Engagement Committee 50 Report of the Audit Committee 51 Report of the Remuneration and Nomination Committee 54 Report of the ESG and Stakeholder Engagement Committee 55 Report of the Risk Committee 57 Directors’ remuneration report 58 Directors’ report 60 Statement of Directors’ responsibilities 63 Additional information Financial statements Company review Strategic review Governance 44 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Board of Directors Key A Audit Committee R Risk Committee E ESG and Shareholder Engagement Committee N Remuneration and Nomination Committee ### The Directors of the Company, all of whom are ### non‑executive and independent, are as follows: M Management Engagement Committee Chair James Stewart Tim Drayson Margaret Stephens Paul Le Page Selina Sagayam Chair Non-executive Director Non-executive Director Non-executive Director Non-executive Director E R A M ER A E NM M M N A R AN N | Over 30 years of leadership experience | Over 30 years of experience in US and | Over 30 years of experience in M&A, tax | Over 20 years of board-level experience in | Over 30 years of corporate finance legal | | --- | --- | --- | --- | --- | | in infrastructure across public and private | European debt capital markets. | advisory and infrastructure investment. | investment funds. | experience in M&A, capital markets and | | sectors. | Global Head of Corporate Sales and Deputy | Tax partner in financial services asset | Executive director and senior portfolio manager | governance. | | Chair of KPMG Global Infrastructure; non- | Head of European Corporate Loan and DCM | management at KPMG; leadership roles in | at FRM Investment Management (Man Group). | Senior Counsel and Chair of ESG Practice | | executive member of KPMG LLP Board. | Platform at BNP Paribas. | Global Infrastructure and Investments Practice. | Non-executive director of TwentyFour Income | atGibson, Dunn & Crutcher. | | Chief Executive of Infrastructure UK and | Global Head of Securitization at BNP Paribas, | Founder and chair of KPMG’s Global | Fund; interim chair of NextEnergy Solar Fund. | Secretary to the UK Panel on Takeovers | | Partnerships UK. | managing all origination and infrastructure | SovereignWealth, Pensions and Infrastructure | Audit chair of RTW Biotech Opportunities. | andMergers. | | 16 years in investment banking focused on | structuring teams. | Funds Group. | | Expert in public M&A, corporate governance | Former audit chair of Bluefield Solar, UK infrastructure lending, equity and advisory. Senior roles at Morgan Stanley as Head of Audit chair of the UK Government Nuclear Mortgages and other listed funds. and ESG. Currently Chair of Agilia Infrastructure Partners; Securitized Products Syndication and at Liability Fund; trustee and director until Non-executive director of The Renewables Chartered engineer with MBA from Heriot trustee of the Shaw Trust; chair and trustee of PaineWebber trading mortgage products. January2024. Infrastructure Group; chair of ESG Committee. WattUniversity. Power for the People. Member of BNP Paribas Fixed Income Board roles at VH Global Sustainable Energy Former non-executive director of Hastings Transaction Approval Committee. Opportunities and AVI Japan Opportunity Trust. Group and risk committee chair of Hastings Member of the Institute of Chartered Insurance; vice chair of Refuge. Accountants of Scotland. Additional information Financial statements Company review Strategic review Governance 45 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## The Sequoia Investment Independent ## Management Company team Consultant Sequoia Investment Management Company Limited (“Sequoia”) is an experienced investment adviser which has acted as Investment Adviser to the Company from its inception. Sequoia’s management team and Investment Committee are as follows: | Randall Sandstrom | Steve Cook | Dolf Kohnhorst | Anurag Gupta | Andrea Finegan | | --- | --- | --- | --- | --- | | Director and CEO/CIO | Director and Head | Director and Co-Head | Chief Risk Officer (“CRO”) | | | | of Portfolio Management | of Infrastructure Debt | | | | 30 years of experience in the international and | Over 20 years of infrastructure experience. | 38 years of experience in investment banking, | Over 20 years of experience in project finance, | Over 20 years in infrastructure fund | | domestic credit markets and infrastructure | European Head of Whole Business | debt capital markets and project finance | infrastructure investment and appraisal, risk | management. | | debt markets. | Securitisation and CMBS and Co-Head of | commercial lending. | management, M&A and financial advisory. | Non-executive director and chair of | | Has managed global high yield and investment | Infrastructure Finance at UBS. | Head of Société Générale’s Financial | Extensive transactional experience across | Sustainability Committee at Pantheon | | grade bonds, leveraged loans, ABS and money | Head of European Corporate Securitisation at | Institutions Group covering UK, Irish, | infrastructure sectors such as transportation, | Infrastructure. | | market securities. | Morgan Stanley with lending and balance sheet | Benelux and Scandinavian banks, insurance | power and utilities, renewables, digitalisation | Independent chair of Schroders Greencoat | | Board of Directors, LCF Rothschild and MD of | responsibility. | companies, pension funds and investment | and social infrastructure. | Valuation Committee. | | Structured Finance. Former CEO/CIO, Eiger | | management companies. | Former KPMG in Canada Infrastructure | | | | Wide variety of infrastructure projects in the UK | | | Former COO at Greencoat; led establishment | | Capital. | and across Europe as a lender, arranger and | 16 years at Morgan Stanley heading Benelux | Advisory Partner and Global Sector Head of | of listed and unlisted infrastructure funds. | | Head of Euro Credit Market Strategy, Morgan | adviser. | and Scandinavian sales teams and DCM | Power within the KPMG Global Infrastructure | | Previous senior roles at Climate Change Stanley. Institutional Investors “All-American” Structured Solutions Group. Practice; previous infrastructure industry roles Capital and ING Infrastructure Funds. senior Industrial Credit Analyst, CS First Boston Commercial lending to shipping, construction in both public and private sectors in multiple Holds MBA in Strategic Carbon Management. (energy and transportation). Has worked in and project finance sectors. geographies. London, New York and Tokyo. MBA (Tulane University, USA), Bachelors in Mechanical Engineering (Engineering Council, UK) and BSc (Calcutta University, India). Additional information Financial statements Company review Strategic review Governance 46 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Corporate governance Compliance In particular, all of the Company’s day-to-day Selina Sagayam was appointed to the Board on In accordance with the AIC Code, all Directors are management and administrative functions are 1April 2025, and on that date was also appointed subject to re-election annually by Shareholders. The Board places a high degree of importance on outsourced to third parties, and as a result, the as Chair of the ESG and Stakeholder Engagement The Board has adopted a policy on tenure that it ensuring that high standards of corporate governance Company has no executive directors, employees or Committee. considers appropriate for an investment company. are maintained and has considered andadopted internal operations and therefore has not reported in The Board does not consider length of service by the principles and provisions of the 2019 AIC Code An external executive search consultancy firm, respect of provisions concerning the role of the chief itself to be a factor impairing Director independence. of Corporate Governance (the “AIC Code”), which Sapphire Partners, was engaged in relation to the executive, the remuneration of executive directors, can be found at https:// www.theaic.co.uk. The appointment of Selina Sagayam. Sapphire Partners However, the Board’s tenure and succession or the internal audit function due to the controls Company has not early adopted the 2024 edition has no other connection to the Company. policy, applied to all non-executive Directors, seeks frameworks and assurance processes in place at of the AIC Code, which is effective for accounting to ensure that the Board remains well balanced each of the Company’s key service providers. Sandra Platts served as the SID and Chair of the periods commencing on or after 1 January 2025. and that the skills, knowledge and experience of Management Engagement Committee and the The AIC Code addresses all the principles set out Composition of the Board and the Board are refreshed at appropriate intervals. Remuneration and Nomination Committee until her in the UK Code of Corporate Governance (the “UK independence of Directors Fouryears ago, the Board recognised that the retirement from the Board on 7 June 2024. Code”) in addition to setting out additional principles original four Directors were coming towards the end As at 31 March 2025, the Board of Directors and provisions on issues relevant to listed investment Fiona Le Poidevin served as Chair of the Audit of their terms and so implemented a transition plan. comprised five (2024: five) non-executive and funds. The Board considers that reporting against the Committee until her retirement on 31 March 2025. Theretirement of Sandra Platts on 7 June 2024 independent Directors as set out below. The principles and provisions of the AIC Code will provide marked the end of this transition plan. Company has no executive Directors or any No Director has a service contract with the the most appropriate information to Shareholders, employees. The Chair and all Directors are Company. The terms of appointment for each The Board believes that all of the Directors have and during the year the Board has reviewed its considered independent of the Investment Adviser, non-executive Director are set out in writing adequate time and resources to fulfil their duties policies and procedures against the AICCode. the Investment Manager and the Administrator. between each individual and the Company. Copies to the Company and are not over-committed in The Board has also taken note of the Finance The Directors consider that there are no factors, of the appointment letters are available for review by accordance with the published Glass-Lewis policy Sector Code of Corporate Governance issued by as set out in the AIC Code, which compromise the Shareholders at the Company’s registered office. on overboarding. the Guernsey Financial Services Commission (the Directors’ independence and that they all contribute As Chair, James Stewart is responsible for Board diversity “Guernsey Code”). The Guernsey Code provides positively to Board effectiveness. The Board leading the Board of Directors and for ensuring its a governance framework for Guernsey Financial reviews the independence of all Directors annually. The Board supports the recommendations of the effectiveness in all aspects of its role. The specific Services Commission (“GFSC”) licensed entities, TheDirectors’ biographies are disclosed on page 44. Davies Report and notes the recommendations duties of the Chair include setting the Board’s authorised and registered collective investment of the Parker review into ethnic diversity and the James Stewart is the Chair of the Board and served agenda, expectations concerning the Company’s schemes. Companies reporting against the UK Code Hampton-Alexander review on gender balance in as Chair of the ESG and Stakeholder Engagement culture, ensuring the Board has in place effective or the AIC Code are deemed to satisfy the provisions FTSE leadership. The Board supports the widening Committee until 7 June 2024. decision-making processes which are supported of the Guernsey Code. of its diversity, whilst ensuring the capabilities, by accurate and high-quality information, and Tim Drayson is the Chair of the Risk Committee. experience and background of each member For the year ended 31 March 2025, the Company demonstrating ethical leadership and promoting the remain appropriate to the Company and continue has complied with the provisions of the AIC Code Margaret Stephens served as Chair of the ESG highest standards of integrity, probity and corporate tocontribute to overall Board effectiveness. and the relevant provisions of the UK Code. Issues and Stakeholder Engagement Committee with governance throughout the Company. The Board’s that are not reported on in detail here are excluded effect from 7 June 2024 until 1 April 2025. She was annual performance evaluation is led by the Chair, As at 31 March 2025, the Board was 60% male because they have been assessed as not being appointed Chair of the Audit Committee with effect with the support from the SID, and it will take and 40% female. Following the retirement of Fiona applicable or relevant to the Company, being an from 1 April 2025. action as appropriate based on the results of that Le Poidevin, and the subsequent appointment on externally managed investment company. evaluation. 1 April 2025 of Selina Sagayam, the Board remains Paul Le Page was appointed to the Board 60% male and 40% female. | on 7June2024, and on that date was also | The responsibilities of the SID include being available | | --- | --- | | appointed as Chair of the Management | to Shareholders as an additional point of contact | | Engagement Committee and of the Remuneration | or to communicate any concerns to the Board, | | and Nomination Committee. With effect from | and working closely with the Remuneration and | | 9 December 2024, he was appointed Senior | Nomination Committee to develop the Board’s | | Independent Director (“SID”). | succession planning. | Additional information Financial statements Company review Strategic review Governance 47 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Corporate governance continued Board diversity continued The Directors undertake, on an annual basis, an TheBoard recognises the value and importance assessment of the effectiveness of the Board, to all stakeholders of organisations incorporating In compliance with Listing Rule 9.8.6 (“LR 9.8.6”), the Company provides information, set out in the tables particularly in relation to its oversight and monitoring effective environmental, social and governance below, on its progress against the following targets on Board diversity: of the performance of the Investment Manager, policies as part of its day-to-day operations; refer › at least 40% of the Board is female; | | | | | | | | Investment Adviser and other key service providers. | to pages 35 to 37 for additional information. In | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | › at least one senior position on the Board is held by a woman; and | | | | | | | The evaluations consider the balance of skills, | the furtherance of the Company’s sustainability | | › at least one individual on the Board is from a minority ethnic background. | | | | | | | experience, independence and knowledge of the | aspirations and the increased importance to | | | | | | | | | Company. The Board also evaluates the effectiveness | stakeholders of these matters, the Board operates | | | | Number of | | % of | | Number of senior | | | | | | | | | | | of each of the Directors. | a dedicated committee with the delegated | | Gender identity | Board members | | the Board | | positions on the Board | | | | responsibility for addressing relevant matters An externally facilitated Board effectiveness Male 3 60 3 of stakeholder engagement and guiding the review is undertaken every three years, in line Female 2 40 2 Company’s sustainability strategy. The report of the with the recommendations of the AIC Code and ESG and Stakeholder Engagement Committee can in substitution to the Board’s internal evaluation Number of % of Number of senior be found on pages 55 and 56. process. The last externally facilitated review was | Ethnic background | Board members | the Board | positions on the Board | | | | --- | --- | --- | --- | --- | --- | | | | | | undertaken during the 2023 financial year and the | Through designing an effective sustainability | | White British or other White | | | | findings were formally considered by the Board | policy which reflects the Board’s core values and | | (including minority white groups) 5 100 5 | | | | in June 2023. The findings from the independent | the alignment of this with the Fund’s business | | | | | | performance evaluation concluded that the | operations, the Board seeks to promote a culture | Black/African/Caribbean/Black British — — — Company maintained high standards of corporate of openness and constructive challenge amongst Other ethnic group — — — governance practice and, in the context of the those responsible for taking key decisions. The Company, the main principles of the AIC Code findings from the most recent internal and external continued to be applied effectively. performance evaluation endorsed the quality of As at 31 March 2025, none of the Board was from a The Board has satisfied the requirements of LR boardroom debate and high levels of collaboration minority ethnic background; however, with effect from 9.8.6 in respect of gender; however, following the The Board remains cognisant of the need to between all parties as key contributors to a the appointment of Selina Sagayam on 1April2025, retirement of Sarika Patel from the Board on 2 anticipate and respond to evolving challenges, and highly effective decision-making process. This is this target was met. August2023, and until the recruitment of Selina therefore the governance framework in place by the underpinned by a robust corporate governance Sagayam with effect from 1 April 2025, the Board did Company is subject to regular review to ensure it The data shown in the above tables reflect the framework which seeks to align the Company’s not have at least one individual from a minority ethnic remains appropriate in the context of the Company. gender and ethnic background of the Board, and purpose, values and strategy with the culture set background. In all its recruitments, the Board ensures The next externally facilitated Board effectiveness were collected on the basis of self-reporting by by the Board through active engagement with the that it is presented with a diverse set of candidates, review will be carried out in relation to the financial the individuals concerned. The questions asked Company’s key service providers. from which it appoints the candidate best suited to year ending 31 March 2026. were “Which ethnicity category best describes your the role. Directors’ remuneration background?” and “What is the gender in which you Following the changes during the year to the composition of the Board and the various roles of It is the responsibility of the Remuneration and wish to be categorised?”. Directors’ performance evaluation the Directors, a review will be undertaken within Nomination Committee to debate and make The Listing Rules specify the positions of CEO, CFO, The Board has established a system for the thenext year. recommendations to the Board in relation to the Chair and SID as being senior positions. The Board evaluation of its own performance and that of the Directors’ remuneration, having regard to the level notes that, as an externally-managed investment Company’s individual Directors, which is led by Board values and culture of fees payable to non-executive Directors in the company, with a Board comprised entirely of non- the Chair and, as regards the Chair’s performance The Chair is responsible for setting the standards industry generally, the role that individual Directors fulfil executive Directors, it does not have the roles of evaluation, by the SID. It considers this to be and values expected of the Board, and the Board in respect of Board and Committee responsibilities a chief executive officer or chief finance officer as appropriate having regard to the non-executive role operates with the Company’s core values of and the time committed to the Company’s affairs. envisaged in LR 9.8.6, and therefore for the purpose of the Directors and the significant outsourcing of integrity, transparency and accountability with an NoDirector who is a member of the Committee takes of the above targets, it considers the senior positions services by the Fund to external providers. aim of maintaining a reputation for high standards in part in decisions relating to their own remuneration. on the Board to include the roles of Chair, SID and all areas of the Company’s activities. Chair of any permanent Committee of the Board. Additional information Financial statements Company review Strategic review Governance 48 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Corporate governance continued Directors’ remuneration continued Directors’ and officers’ liability insurance Board responsibilities Although no formal training is given to Directors by the Company unless specifically requested, the The Directors periodically benchmark the remuneration The Company maintains insurance in respect of The Board meets formally on a quarterly basis Directors are kept up to date on various matters such policy of the Company against comparable information directors’ and officers’ liability in relation to the to review the overall business activities of the as corporate governance issues through bulletins and on listed investment companies, particularly those Directors’ actions on behalf of the Company. Company and any matters specifically reserved training materials provided from time to time bythe operating in similar or adjacent market sectors, for its consideration. Standing agenda items Relations with Shareholders Administrator, the AIC and professional firms. The in addition to giving due regard to the individual considered at all quarterly Board meetings cover The Board believes that the maintenance of good Directors are asked to comment on training as part of circumstances of the Company which may warrant portfolio performance, capital allocation and relations and understanding the views of Shareholders the Board’s self-evaluation process and are responsible a departure from industry norms. The last externally deployment, sustainability matters, NAV and share is important to the long-term sustainable success of for their own training, in respect of which they are facilitated remuneration review was commissioned by price performance, Shareholder return metrics, the Company, and since launch the Board has adopted asked to provide logs of their continuing professional the Renumeration and Nomination Committee in 2020, reviewing changes to the risk environment including a policy of actively engaging with major Shareholders development (“CPD”) to the Company annually. subsequent to which internal remuneration reviews the assessment of emerging risks, marketing and through a variety of means. Further information on how have been conducted annually. investor relations, peer group information and industry Board Committees the Company engages with Shareholders can be found issues. Consideration is also given to administration No Director has a service contract with the Company Each of the Board’s formally constituted committees in the stakeholders section on pages 35 to 37. and corporate governance matters, legislative and details of the Directors’ remuneration, and changes operates within clearly defined terms of reference Directors’ meetings and attendance developments and, where applicable, reports are thereto reflecting the increased time commitment which are considered and are then referred to received from the Board’s formally constituted required of the Board, can be found in theDirectors’ The table below shows the Directors’ attendance at the Board for approval. A copy of each terms of committees. remuneration report on pages 58 and 59. Board and Committee meetings during the 2024/25 reference is available on the Company’s website annual Board cycle. The Directors also review the Fund’s activities orupon request from the Administrator. every quarter to ensure that the Fund adheres to its investment policy. Additional ad hoc reports are Audit Committee Number of James Tim Margaret Paul Fiona Sandra received as required and Directors have access at all The Audit Committee is responsible for ensuring Committee meetings held Stewart Drayson Stephens Le Page Le Poidevin Platts times to the advice and services of the Administrator, the accuracy of the Company’s financial reporting, Board – scheduled 4 4 (4) 4 (4) 4 (4) 4 (4) 3 (4) – (–) who is responsible for ensuring that the Board maintaining a relationship with the Auditor and procedures are followed, and that applicable rules facilitating an assessment of their independence and Board – ad hoc 7 7 (7) 7 (7) 7 (7) 7 (7) 5 (7) 1 (1) and regulations are complied with. The Board has the effectiveness of the audit, and, in conjunction Audit 4 N/A 4 (4) 4 (4) 4 (4) 3 (4) – (–) adopted a schedule of matters specifically reserved with the Risk Committee, keeping under review the for its decision making and distinguishing these Risk 4 4 (4) 4 (4) N/A 4 (4) N/A N/A adequacy of the effectiveness of the Company’s from matters it has delegated tothe Company’s key internal financial controls and internal control and Remuneration and Nomination 2 2 (2) 2 (2) 2 (2) 2 (2) 1 (2) – (–) service providers. risk management systems. Further details are set Management Engagement 2 2 (2) 2 (2) 2 (2) 2 (2) 1 (2) – (–) The Board actively monitors the level of the share out in the report of the Audit Committee on pages price premium or discount to determine what action, 51 to 53. ESG and Stakeholder if any, is required. The Board continues to closely Engagement 3 3 (3) N/A 3 (3) N/A 2 (3) – (–) Risk Committee monitor the rating of the Company’s shares. The responsibility of the Risk Committee is to identify, The numbers in brackets indicate the number of meetings held during the tenure of the Director or their The Board also meets at least once a year outside assess, monitor and, where possible, oversee the membership of the specified committee. Paul Le Page joined the Board with effect from 7 June2024, formal Board meetings to discuss and review the management of risks to which the Fund’s investments Sandra Platts retired with effect from 7 June 2024 and Fiona Le Poidevin retired with effect from Company’s strategy. These meetings are also are exposed, principally to enable the Company to 31March2025. normally attended by some of the Company’s achieve its target investment objective of regular, advisers. sustained, long-term distributions over the planned life During the year Kate Thurman (until her retirement on 4 March 2025) and Andrea Finegan, the Company’s Independent Consultants, attended a number of Risk Committee, Board and other meetings with the of the Company, with regular reporting to the Board. Directors during the year. Further details are set out in the principal and emerging risks and uncertainties section on pages 38 to 42. Additional information Financial statements Company review Strategic review Governance 49 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Corporate governance continued ## Board Committees continued ### Management Engagement Committee The Management Engagement Committee is responsible for the regular review of the terms of the Investment Advisory and Investment Management Agreements, along with the performance of the Administrator, Investment Adviser and the Investment Manager and the Fund's other key service providers to ensure a continued alignment of interest, and that their engagement remains in the best interest of the Company. Further details are set out in the report of the Management Engagement Committee on page 50. ### Remuneration and Nomination Committee The Remuneration and Nomination Committee is responsible for reviewing the structure, size and composition of the Board, maintaining the Board's succession plan; reviewing the leadership needs of the organisation and identifying candidates for appointment to the Board, including the need to continually review the diversity of the Board; considering the remuneration of the Directors; and determining the Company's remuneration policy. Further details are set out in the report of the Remuneration and Nomination Committee on page 54, and in the Directors' remuneration report on pages 58 and 59. ### ESG and Stakeholder Engagement Committee The ESG and Stakeholder Engagement Committee is responsible for supporting the Board in monitoring the effectiveness of the Company's engagement with key stakeholders and to set the Company's environmental, social and governance objectives and to review the performance of the Company against those objectives. Further details are set out in the report of the ESG and Stakeholder Engagement Committee on pages 55 and 56. ## Management arrangements ### Investment Manager and Investment Adviser The Directors are responsible for the determination of the Fund's investment policy and have overall responsibility for the Company's activities. The Company has entered into an Investment Management Agreement with the Investment Manager with effect from 28 January 2015. On the same date, the Investment Manager, with the consent of the Company, entered into an Investment Advisory Agreement with the Investment Adviser to manage the assets of the Fund in accordance with the Fund's investment policy. The Investment Adviser is responsible for the day-to-day management of the Fund's portfolio and the provision of various other management services to the Fund. The Directors consider that the interests of Shareholders, as a whole, are best served by the continued appointment of the Investment Manager and the Investment Adviser to achieve the Fund's investment objectives. ### Custody arrangements The Fund's assets are held in custody by The Bank of New York Mellon (the "Custodian") pursuant to a Custody Agreement dated 27 February 2015. The Fund's assets are registered in the name of the Custodian within a separate account designation and may not be appropriated by the Custodian for its own account. The Board conducts an annual review of the custody arrangements as part of its general internal control review and is pleased to confirm that the Fund's custody arrangements continue to operate satisfactorily. The Board also monitors the credit rating of the Custodian, to ensure the financial stability of the Custodian is being maintained to acceptable levels. As at 31 March 2025, the long-term credit rating of the Custodian as reported by Standard and Poor's is AA- (2024: AA-), which is deemed to be an acceptable level. Ongoing monthly calls are maintained between the Custodian and the Administrator to discuss any performance issues that may arise. ### Administrator Administration and Company Secretarial services are provided to the Company by Apex Fund and Corporate Services (Guernsey) Limited (the "Administrator"). The Administrator also assists the Company with AIPMD, CRS and FATCA reporting. A summary of the terms of appointment of the Investment Manager, Investment Adviser, Custodian and Administrator, including details of applicable fees and notice of termination periods, is set out in note 10 to the Financial Statements. ### Internal control review and risk management system The Board of Directors is responsible for putting in place a system of internal controls relevant to the Company and for reviewing the effectiveness of those systems. The review of internal controls is an ongoing process for identifying and evaluating the risks faced by the Company, and which are designed to manage risks rather than eliminate the risk of failure to achieve the Company's objectives. It is the responsibility of the Board to undertake risk assessment and review of the internal controls in the context of the Company's objectives that cover business strategy, operational, compliance and financial risks facing the Company. These internal controls are implemented by the Company's four main service providers: the Investment Adviser, the Investment Manager, the Administrator and the Custodian. The Board receives periodic updates from these main service providers at the quarterly Board meetings of the Company. The Board is satisfied that each service provider has effective systems in place to control the risks associated with the services that they are contracted to provide to the Company and are therefore satisfied with the internal controls of the Company. The Board of Directors considers the arrangements for the provision of Investment Advisory, Investment Management, Administration and Custody services to the Company on an ongoing basis, and a formal review is conducted annually. As part of this review, the Board considered the quality of the personnel assigned to handle the Company's affairs, the investment process and the results achieved to date. The Board has noted the changes introduced by the FRC to Provision 29 of their 2024 edition of the UK Code, applicable to accounting periods beginning on or after 1 January 2026, relating to the effectiveness of material internal controls. It has taken steps during the period towards enhancing its existing processes for assessing internal controls in order to comply with the revised Provision 29 no later than the effective date and to provide the required declaration of effectiveness of internal controls in the relevant annual report. The Directors will keep this under review in conjunction with the corresponding changes to provision 34 of the AIC Code introduced by the AIC in August 2024, which are effective for accounting periods commencing on or after 1 January 2026. 1. Effective 31 January 2025, Sanne Fund Services (Guernsey) Limited completed an amalgamation of corporate bodies pursuant to Part VI of the Companies (Guernsey) Law, 2008 with Apex Fund and Corporate Services (Guernsey) Limited (the "Amalgamation"). As a result of the Amalgamation, the name of the Administrator changed to Apex Fund and Corporate Services (Guernsey) Limited. There are no further material changes arising from the Amalgamation and all pre-existing contractual arrangements in place between the Company and the Administrator remain in force. 50 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the Management Engagement Committee Chair and membership This includes reviewing the overall basis of The Committee also worked with the Investment remuneration for the Investment Adviser, particularly Adviser to oversee a tender process for the The Management Engagement Committee was to ensure it does not encourage excessive risk appointment of a second broker, with the intention chaired by Sandra Platts until her retirement from taking, but rewards demonstrable superior of expanding the international distribution of the Board on 7 June 2024, and thereafter by Paul performance and continues to motivate and the Company’s shares. The process led to the Le Page, with James Stewart, Fiona Le Poidevin incentivise the level of performance expected of appointment of J.P. Morgan Cazenove as a joint (until her retirement with effect from 31 March 2025), theInvestment Adviser. corporate broker on 26 February 2025. Margaret Stephens (with effect from 7 June 2024) and Tim Drayson (with effect from 7 June 2024) as The Directors recognise the importance of Investment Adviser Committee members. The Committee meets at least maintaining strong and effective business Overall, the Committee remains pleased with the once annually. relationships with the Company’s operational overall level of performance of the Investment counterparties and that high-quality interaction The Committee is responsible for the regular Adviser and the steps taken to remain resilient with these stakeholders is an important success review of the terms of the Investment Advisory and to the market volatility and the macro-economic factor for delivering the Board’s strategy. Theannual Investment Management Agreements, along with headwinds faced by alternative income fund performance assessment conducted by the the performance of the Administrator, Investment managers in recent years. The Committee remains Management Engagement Committee seeks to Adviser and the Investment Manager and the Fund’s confident in the strength of the investment pipeline, ensure that: other key service providers. The membership of and that the interests of the Investment Adviser the Committee and its terms of reference are kept › the terms of engagement remain fair and remain aligned with the Directors’ objective of Paul Le Page underreview. reasonable and reflective of the services creating sustainable value for existing investors, Management Engagement performed in the context of the nature, scale and evidenced by the Investment Adviser’s commitment Committee Chair Duties complexity of the Company; to the share buyback programme. Currently, the Through the Committee, the Directors continually Board does not consider it necessary to obtain an › strong congruence exists between the objectives monitor the performance and the continued independent appraisal of the Investment Adviser’s of the counterparty and those of the Company; appointment of all key service providers and a services, and the continued retention of the formal, detailed assessment of the performance › they have not been the subject of any adverse Investment Adviser’s services is considered to be in and the terms of engagement of the Company’s key event which may present additional risk to the Shareholders’ best interests. service providers is undertaken on at least an annual Company; Terms of reference of the Management Service provider performance assessment basis to ensure each remains fair and reasonable › they remain appropriately incentivised to perform Engagement Committee can be and that their continued engagement remains in the their duties to a high standard; and The results of the performance evaluations were foundhere best interests of the Company. This annual review discussed and evaluated by the Committee. › their continued engagement remains in the best process includes two-way feedback, which provides Itwas determined that the overall performance interests of the Company as a whole. the Board with an opportunity to understand the of the Company’s service providers had been of Main activities during the year views, experiences and any significant issues an acceptable standard during the year, with no encountered by service providers during the year. In During the year, the Committee undertook a thorough material concerns or issues arising. The standard of addition, the Management Engagement Committee and robust review of all service providers, which services provided by each of the suppliers had either is actively involved in reviewing the contractual included receiving formal presentations from the met or exceeded expectations, and the Committee relationship with the Investment Adviser, scrutinising Investment Adviser, the Investment Manager and did not believe it necessary to recommend any their performance and ensuring the contractual the Administrator at the Committee’s meeting in changes to the contractual terms of engagement terms remain aligned with the objectives of the March2025. The Committee has also considered the ofany provider. Company and the interests of Shareholders. level of the Investment Adviser’s fee, benchmarked against the peer group and arranged a performance Paul Le Page review visit to the Subsidiary Administrator in Management Engagement Committee Chair Luxembourg, which was undertaken in May 2025. 24 June 2025 Additional information Financial statements Company review Strategic review Governance 51 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the Audit Committee Chair and membership The Audit Committee gives full consideration and The Company’s investment in the Subsidiaries had recommendation to the Board for the approval of a fair value of £1,479,215,419 as at 31 March 2025 The Audit Committee comprises Tim Drayson, the contents of the Interim and Annual Financial (2024: £1,493,171,675), representing a substantial Margaret Stephens, Paul Le Page (from his Statements of the Company, which includes proportion of the gross assets of the Company, appointment as a Director on 7 June 2024) and reviewing the Auditor’s report. and as such is the biggest factor in relation to the Selina Sagayam (from her appointment as a Director accuracy of the Financial Statements. PwC was on 1 April 2025). The Committee was chaired by The other principal duties of the Committee are to engaged to carry out an independent fair market Fiona Le Poidevin until her retirement as a Director consider the appointment of the Auditor; to discuss valuation review of the Subsidiaries’ investments on on 31 March 2025, whereupon Margaret Stephens and agree with the Auditor the nature and scope of a monthly basis. Draft pricing for the Subsidiaries’ was appointed as Chair. The Committee met four the audit; to keep under review the scope, results investments is provided by the Investment Adviser times during the year. The Board considers that the and effectiveness of the audit and the independence to PwC, who in turn produces a final valuation Audit Committee members have sufficient relevant and objectivity of the Auditor; and to review the report for review by the Investment Manager. The sector experience to enable the Committee to Auditor’s letter of engagement, planning report responsibility for establishing the valuation of the discharge its duties effectively, and, in accordance for the financial period and management letter, as Subsidiaries’ investments rests with the Investment with the provisions of the AIC Code, at least one applicable. Manager, subject to final approval by the Board. member of the Committee has recent and relevant The Audit Committee is responsible for monitoring This report is then submitted to TMF Luxembourg financial experience. the financial reporting process and the effectiveness S.A. (the “Sub-Administrator”) for inclusion in the All members of the Committee are independent of the Company’s internal control and risk Subsidiaries’ NAV. Margaret Stephens Directors; have no present links with Grant Thornton management systems. The Audit Committee Audit Committee Chair The Audit Committee actively engages with the Limited, the Company’s Independent Auditor (the also focuses particularly on compliance with legal Investment Adviser and Investment Manager “Auditor” or “Grant Thornton”); and are independent requirements, accounting standards and the relevant on the methodologies and processes used of the Investment Manager and Investment Listing Rules and ensuring that an effective system for valuing investments. It also meets with the Adviser. The membership of the Audit Committee of internal financial control is maintained. independent valuation agent, PwC, to discuss its and its terms of reference are kept under review. The Audit Committee also considers reports from work on the valuations and broader considerations Therelevant qualifications and experience of each the independent valuation agent, PwC. impacting these. The Audit Committee has also member of the Audit Committee are detailed on considered the Auditor’s approach to their audit page 44 of these Financial Statements. TheAudit Financial reporting and audit Terms of reference of the Audit of the valuation of the Subsidiaries’ investments Committee’s intention is to meet at least three times The Audit Committee has an active involvement Committee can be found here and discussed with the Auditor their approach a year and to meet with the Auditor as appropriate. and oversight in the preparation of both the Interim to testing the appropriateness and robustness of Duties and Annual Financial Statements and in doing so is the valuation methodologies applied. The Auditor responsible for the identification and monitoring of The Audit Committee’s main role and responsibility is has not reported any material differences between the principal risks associated with the preparation to provide advice to the Board on whether the Annual the valuations used and the results of the work of the Financial Statements and other risks and Report and Audited Financial Statements, taken as performed during their testing process. uncertainties identified by the Board. The principal a whole, are fair, balanced and understandable and risk identified in the preparation of these Financial Based on the review and analysis described provide the information necessary for Shareholders to Statements is the valuation of the Company’s above, the Audit Committee is satisfied that, assess the Company’s performance, business model investments in Sequoia IDF Asset Holdings S.A., as at 31March2025, as stated in the Financial and strategy. Yotta BidCo Limited and Gadwall Holding Limited, Statements, the fair values of the Company’s its subsidiary companies (the “Subsidiaries”), which investments in the Subsidiaries are reasonable. hold all of the underlying investments. Additional information Financial statements Company review Strategic review Governance 52 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Report of the Audit Committee continued ## Financial reporting and audit continued The Committee considered the Company's financial requirements for the next 12 months and concluded that it had sufficient resources to meet its commitments as they fall due. Consequently, the Financial Statements have been prepared on a going concern basis. The Committee also considered the longer-term viability statement within the Annual Report, covering a four-year period, and the underlying factors and assumptions which contributed to the Committee deciding that four years was an appropriate length of time to consider the Company's long-term viability. The Committee received the 2024 ESG Assurance Report from KPMG LLP. The Audit Committee reviewed the Company's accounting policies applied in the preparation of the Annual Financial Statements, together with the relevant critical judgements, estimates and assumptions made by the Board and, having discussed matters with the Auditor, determined that these were in compliance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and were reasonable. The Audit Committee reviewed the materiality levels applied by the Auditor to the Financial Statements as a whole and was satisfied that these materiality levels were appropriate. The Auditor reports to the Audit Committee all material corrected and uncorrected differences. The Auditor explained the results of their audit and that on the basis of their audit work, there were no adjustments proposed that were material in the context of the Financial Statements as a whole. The Audit Committee also reviews the Company's financial reports as a whole to ensure that such reports appropriately describe the Company's activities and that all statements contained in such reports are consistent with the Company's financial results and projections. Accordingly, the Audit Committee was able to advise the Board that the Annual Report and Audited Financial Statements are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's performance, business model, financial position and strategy. ## Financial Reporting Council ("FRC") review of the Company's 2024 Financial Statements During the year, the FRC's Corporate Reporting Review team undertook a review of the Company's Financial Statements for the year ended 31 March 2024. Following the completion of this review, the FRC wrote to the Company in February 2025 to raise a query in relation to the determination of the net gains on non-derivative financial assets at fair value through profit or loss recognised in the Company's statement of comprehensive income. Following the Company's response in April 2025, the FRC was able to close its enquiries. The FRC intends to publish the Company's name, together with the fact that it has undertaken a review, on its website on 27 June 2025. 1. The FRC's review is based on the Company's Annual Report and Accounts and does not benefit from detailed knowledge of the Company's business or an understanding of the underlying transactions entered into. It is, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The correspondence between the FRC and the Company provides no assurance that the Company's Annual Report and Accounts are correct in all material respects; the FRC's role is not to verify the information provided to it but to consider compliance with reporting requirements. The FRC's letters are written on the basis that the FRC (which includes its officers, employees and agents) accepts no liability for reliance on them by the Company or any third party, including but not limited to investors and Shareholders. ## External Auditor The Audit Committee has responsibility for making a recommendation on the appointment, reappointment or removal of the Auditor. The Company intends to conduct a tender process at least every 10 years as required under the UK Code and to rotate auditor at least every 20 years, as recommended by the UK Statutory Auditors and Third Country Auditors Regulations 2016. Grant Thornton was appointed as Auditor in December 2021 and the current audit partner has served throughout the period from appointment to date. During the year, the Audit Committee received and reviewed the audit plan and report from Grant Thornton. To assess the effectiveness of the Auditor, the Audit Committee reviewed: - the Auditor's fulfilment of the agreed audit plan and variations from it, if any; - the Auditor's assessment of its objectivity and independence as auditor of the Company; - the Auditor's report to the Audit Committee highlighting their significant areas of focus in the conduct of their audit and findings thereon that arose during the course of the audit; and - feedback from the Investment Manager, Investment Adviser and Administrator evaluating the performance of the audit team. For the year ended 31 March 2025, the Audit Committee was satisfied that there had been appropriate focus and challenge on the primary areas of audit risk and assessed the quality of the audit process as good. Where non-audit services are to be provided to the Company by the Auditor, full consideration of the financial and other implications on the independence of the Auditor arising from any such engagement will be considered before proceeding. All non-audit services are pre-approved by the Audit Committee if it is satisfied that relevant safeguards are in place to protect the Auditor's objectivity and independence. To fulfil its responsibility regarding the independence of the Auditor, the Audit Committee considered: - a report from the Auditor describing its arrangements to identify, report and manage any conflicts of interest; and - the extent of non-audit services provided by the Auditor. During the year ended 31 March 2025, non-audit services were provided by Grant Thornton in the form of the interim review. The following table summarises the remuneration paid to Grant Thornton for audit and non-audit services. | | Year ended 31 March 2025 £ | Year ended 31 March 2024 £ | | --- | --- | --- | | Annual audit of the Company | 197,950 | 182,480 | | Annual audit of the Luxembourg Subsidiary | 80,300 | 84,575 | | Interim review of the Company | 37,800 | 37,800 | | | 316,050 | 304,855 | 53 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the Audit Committee continued External Auditor continued These systems are designed to ensure proper The Committee and the Board will keep this under It reaches this conclusion through a process of accounting records are maintained, that the financial review in conjunction with the corresponding review of the Annual Report and enquiries to the The Committee receives an annual assurance information on which business decisions are made changes to provision 34 of the AIC Code introduced various parties involved in the production of the from the Auditor that its independence is not and which is used in publications is reliable, and that by the AIC in August 2024, which are effective Annual Report. The Audit Committee reported its compromised by the provision of such non-audit the assets of the Company are safeguarded. Such a for accounting periods commencing on or after conclusions to the Board. services. The Committee is satisfied that the Auditor’s system of internal financial controls can only provide 1January 2026. objectivity and independence is not impaired by the reasonable and not absolute assurance against performance of the interim review, which it is generally Reappointment of the Auditor Margaret Stephens misstatement or loss. expected would be carried out by the incumbent Audit Committee Chair Following consideration of the performance of auditor, and that the Auditor has fulfilled its obligations In accordance with the “Guidance on Risk the Auditor, the services provided in the year and 24 June 2025 to theCompany and its Shareholders. Management, Internal Control and Related Financial a review of its independence and objectivity, the and Business Reporting” published by the Financial Internal controls Committee has recommended to the Board the Reporting Council (the “FRC”) in September 2014, reappointment of Grant Thornton as the Auditor As the Company’s investment objective is to invest which integrated the earlier guidance of the Turnbull to the Company. The Auditor has indicated its all of its assets into the Subsidiaries, the Audit Report, the Audit Committee has reviewed the willingness to continue in office. Accordingly, Committee, after consultation with the Investment Company’s internal control procedures. These resolutions to reappoint Grant Thornton as Manager, Investment Adviser and Auditor, considers internal controls are implemented by the Company’s Auditor to the Company and authorising the Audit the key risk of misstatement in its Financial four main service providers: the Investment Committee to determine its remuneration will be ## Statements to be the valuation of its non-derivative €50m Manager, the Investment Adviser, the Administrator proposed at the Annual General Meeting. financial assets at fair value through profit or loss, i.e. and the Custodian. The Board’s service provider Mezzanine debt invested its investments in the Subsidiaries, but is also mindful Fair, balanced and understandable review, undertaken by the Management of the risk of the override of controls by its service Engagement Committee, includes an assessment The Audit Committee has concluded that the Annual providers, the Investment Manager, the Investment of internal controls. From this, the Audit Committee Report for the year ended 31 March 2025, taken Adviser, theAdministrator and the Sub-Administrator. has reviewed the internal financial control systems as a whole, is fair, balanced and understandable The Investment Manager, Investment Adviser and and risk management systems in place by service and provides the information necessary for the Administrator together maintain a system of internal providers during the year and is satisfied with the Shareholders to assess the Company’s position control on which they report to the Board. TheBoard internal financial control systems of the Company. andperformance, business model and strategy. has reviewed the need for an internal audit function The Committee and the Board have noted the and has decided that the systems and procedures changes introduced by the FRC to Provision 29 employed by the Investment Manager, Investment of their 2024 edition of the UK Code, applicable Adviser and Administrator provide sufficient to accounting periods beginning on or after assurance that a sound system of risk management 1January2026, relating to the effectiveness and internal control, which safeguards Shareholders’ of material internal controls. It has taken steps investment and the Company’s assets, is maintained. during the period towards enhancing its existing Euroports An internal audit function specific to the Company is processes for assessing internal controls in order In 2024, SEQI provided therefore considered unnecessary. to comply with the revised Provision 29 no later €50million of mezzanine The Audit Committee is responsible for reviewing and than the effective date, and to provide the required debt to Euroports, a monitoring the effectiveness of the internal financial declaration of effectiveness of internal controls in pan-European port logistics control systems and risk management systems on therelevant annual report. operator. Euroports is one of Europe’s leading port which the Company is reliant. infrastructure operators, offering comprehensive maritime supply chain solutions. 2024 Additional information Financial statements Company review Strategic review Governance 54 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the Remuneration and Nomination Committee Chair and membership The Remuneration and Nomination Committee met Thesearch was implemented by Sapphire Partners. formally twice during the financial year and held TheCommittee was delighted to announce at the The Remuneration and Nomination Committee several ad hoc discussions to finalise recruitment end of the year the appointment of Selina Sagayam waschaired during the year, and until her retirement specifications and to review candidate CVs. as a non-executive Director and Chair of the ESG from the Board on 7 June 2024, by Sandra Theprincipal matters considered included, but were and Stakeholder Engagement Committee with effect Platts, with James Stewart, Fiona Le Poidevin not limited to: from 1 April 2025. Selina led the ESG practice at (until her retirement as a Director with effect Gibson, Dunn & Crutcher, is currently the chair of the from 31March2025) and Margaret Stephens as › the remuneration of the Directors and the ESG Committee for the Renewables Infrastructure Committee members. Paul Le Page was appointed Company’s remuneration policy; Group, a FTSE 250 company, and has extensive as Chair of the Committee and Tim Drayson as › consideration of potential candidates for Board corporate finance experience. a member of the Committee on 7 June 2024. succession and recommendation to the Board; TheCommittee meets at least once annually. The Committee was pleased to be able to support › the Company’s policy on diversity, ensuring this the Guernsey Training Agency’s non-executive Duties remained aligned with the Company’s strategy director (“NED”) Development Programme for The main roles and responsibilities of the and objectives; the first time this year. This programme provides Remuneration and Nomination Committee are to: › Director succession planning, with reference unremunerated board placements for aspiring NEDs to the Board’s skills matrix and giving full › consider the remuneration of the Directors and from diverse ethnic, social and career backgrounds. consideration to the expected future leadership determine the Company’s remuneration policy; Programme participants sign non-disclosure Paul Le Page needs of the Company; › regularly review the structure, size and agreements and participate in a non-voting capacity Remuneration and Nomination › consideration of the optimal size of the Board; in board meetings, discussions and events. The composition of the Board and make Committee Chair programme is designed to improve governance by recommendations to the Board with regard to any › the time requirements and independence of changes; Directors; and expanding the pool of available NEDs in Guernsey and giving boards fresh perspectives. The Board › give full consideration to succession planning › consideration and agreement of the terms of was delighted to welcome Kin Tang, who has a for Directors, taking into account the challenges reference of the Committee for approval by background in family office management, to join our and opportunities facing the Company and the theBoard. Board meetings with effectfrom December 2024. skills and expertise needed on the Board in the The retirement of Sandra Platts on 7 June 2024 | | future;and | | Following a review of the Board’s commitments and | | --- | --- | --- | --- | | Terms of reference of the | | marked the end of a transition plan, in which the | | | Remuneration and Nomination | › lead the process for appointments and be | | responsibilities, and third-party evidence for 2024, | terms of the original four Directors ended and Committee can be found here responsible for identifying and nominating, for the the Committee determined during the year that replacement Board members were appointed. approval of the Board, candidates to fill Board Directors’ fees should be increased with effect from Following the retirement of Sandra, the Committee vacancies as and when they arise. 1 January 2025, following a freeze on remuneration noted a substantial increase in the time in the prior year. For details, please refer to the The Remuneration and Nomination Committee commitments and responsibilities of the Chairs of Directors’ remuneration report on pages 58 and 59. reports formally to the Board on its proceedings the Board’s ESG, Risk and Audit Committees due on all matters within its duties and responsibilities to increased regulation, economic uncertainty and Paul Le Page and on how it has discharged its responsibilities. market volatility. Remuneration and Nomination All members of the Board have the right to attend To help manage the additional regulatory workload CommitteeChair Committee meetings. However, other individuals associated with the adoption of IFRS Sustainability and external advisers may be invited to attend for 24 June 2025 Standards, the Committee led an extensive all or part of any meeting, as and when appropriate independent search for a high-calibre director with and necessary. strong sustainability and governance knowledge. Additional information Financial statements Company review Strategic review Governance 55 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the ESG and Stakeholder Engagement Committee Chair and membership The ESG and Stakeholder Engagement Committee › enhancing the stakeholder engagement plan also monitors reporting against sustainability to bolster forward planning of the Company’s During the year, the ESG and Stakeholder objectives and KPIs and, working with the Audit engagement activities; Engagement Committee comprised James Committee, oversees the reporting of these › the impact of upcoming regulatory developments Stewart, Fiona Le Poidevin (until her retirement objectives and the preparation of the Company’s including SDR, the Taskforce on Nature-related asa Director with effect from 31 March 2025) and ESG and sustainability reports and disclosures. Financial Disclosures (“TNFD”) and ISSB Margaret Stephens. The Committee was chaired by James Stewart until 7 June 2024, when Margaret In relation to stakeholder engagement matters: standards; Stephens took over as Chair until 1 April 2025. to identify each of the Company’s key stakeholders › reviewing SEQI’s position and disclosures as an On1 April2025, Selina Sagayam was appointed and the Company’s engagement mechanisms and “Article 8” fund under the EU Sustainable Finance as Chair of the Committee upon her appointment to report in the Annual Report on engagement Disclosure Regulation (“SFDR”); and as a Director. Sandra Platts served as a member of activity and key strategic decisions taken by the › agreement of the terms of reference of the the Committee until her retirement from the Board Board impacting the relevant stakeholder group. Committee for approval by the Board. on 7 June 2024. The Committee meets at least The ESG and Stakeholder Engagement Committee twiceannually. Notably, during the year the Committee also is also responsible for keeping under review the onboarded AXA Climate’s Altitude platform to effectiveness of the Company’s mechanisms The Committee’s key responsibilities are to support assist with sourcing emissions estimates and for stakeholder outreach, monitoring trends in the Board in monitoring the effectiveness of the analysis of assets under different climate scenarios. stakeholder sentiment, and receiving feedback from Company’s engagement with key stakeholders, Selina Sagayam Thishas allowed the Company to further enhance the Directors and advisers on investor relations setting the Company’s environmental, social ESG and Stakeholder Engagement its climate reporting and marks a key milestone activity, Shareholder sentiment and their views on and governance objectives and reviewing the Committee Chair for the Company. The Committee members also governance and performance against the Fund’s performance of the Company against those received sustainability training in October 2024, investment objective and investment policy. objectives. The membership of the Committee and covering reporting best practices, theregulatory its terms of reference are kept under review. Main activities during the year landscape and emerging sustainability trends to Duties The ESG and Stakeholder Engagement keep underreview. Committee met three times during the financial The duties of the Committee, include, but are not During the year, the Committee played a key year. Theprincipal matters considered included, limited to, those summarised below. role in the development of the Company’s Terms of reference of the ESG and butwerenot limited to: comprehensive, stand-alone Governance Policy, | Stakeholder Engagement Committee | In relation to sustainability matters: to guide, | | | | --- | --- | --- | --- | | | | › KPMG’s 2024 ESG Assurance Report and | which details both governance at the Company | | can be found here | supervise and support the Investment Adviser in the | | | | | | feedback report for continuous improvement; | level and its assessment of good governance at the | development of the sustainability policies and the businesses it lends to. This new policy is available screening criteria applied to the Fund’s investment › updating and reviewing the 2024 Sustainability on our website: www.seqi.fund/sustainability/ portfolio, and to oversee the overall sustainability Report for the Company; publications/. strategy, objectives and KPIs of the Company and › updating and reviewing the overall Sustainability the policies aimed at mitigating the environmental Policy, including scoring methodologies, to ensure impact of the Company’s own activities. they remain fit for purpose in the context of the TheCommittee also assesses sustainability risks Company, emerging sustainability themes and the and opportunities for the Company and, with input environment; from the Risk Committee and Investment Adviser, › reviewing the Company’s carbon offsetting their impact on the investment portfolio and the programme; deploymentpipeline. Additional information Financial statements Company review Strategic review Governance 56 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the ESG and Stakeholder Engagement Committee continued Main activities during the year continued Further details of the ESG and sustainability activities of the Company are set out in the Sustainability Alongside ongoing communications with investors Report, which is published separately on the and other stakeholders in relation to ESG and Company’s website: www.seqi.fund/sustainability/ sustainability matters, the Company hosted an publications/, with a summary of this set out on inaugural ESG Investor Breakfast roundtable event pages 26 to 34. in September 2024. At the roundtable, Committee members, members of the Investment Adviser As incoming Chair of the Committee, I have been and Shareholders discussed SEQI’s evolving briefed by members of the Committee on its sustainability framework, the fast-moving regulatory activities during the year. environment and future sustainability themes, risks and opportunities that are coming into increasing Selina Sagayam focus. This was a prime opportunity to exchange ESG and Stakeholder Engagement insights and gain feedback on these issues that the Committee Chair Committee continues to consider moving forward. 24 June 2025 The Committee has been monitoring the rollout of the FCA’s Sustainable Disclosure Requirements (“SDR”). As the product is based overseas, SEQI is ## £40m not subject to UK sustainable investment labelling Invested and disclosure requirements. Nonetheless, we expect the regulation will be extended to overseas funds in due course. The Committee spent time this year considering the practical implications of the SDR if it were to apply to SEQI and SEQI’s strategy around this. It should also be noted the Company acknowledges and is complying with the FCA’s Anti-Greenwashing Rule under this regulation. OCU Term Loan B In 2024, SEQI invested £40 million of senior secured debt in OCU Group, a UK-based utility infrastructure services provider supporting the rollout of fibre, energy and water networks. The company plays a pivotal role in enabling the UK’s transition to a low-carbon and digitally connected economy 2024 Additional information Financial statements Company review Strategic review Governance 57 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Report of the Risk Committee Chair and membership › provide the AIFM with views on potential new The Committee further noted that two further NPLs originations considered high risk to help inform had been exited during the year. The Risk Committee comprises Tim Drayson, the AIFM in its final approval process; | JamesStewart, Fiona Le Poidevin (until her | | Other key matters considered by the Committee | | --- | --- | --- | | retirement with effect from 31 March 2025) and | › consider the remit of the risk management | during the year included the following: | | Paul Le Page (with effect from 7 June 2024) and | function, ensuring it has adequate resources | | › consideration of risk management and is chaired by Tim Drayson. The Committee meets and access to information to enable it to perform counterparty risk assessments carried out by the at least quarterly and has been supported during its function effectively, and that it operates with Investment Manager; the year by Kate Thurman (until her retirement independence; on 4March 2025) and Andrea Finegan as › undertaking reviews of credit risk, liquidity targets, › work with the ESG and Stakeholder Engagement IndependentConsultants. cash flow projection methods and swap duration Committee on their assessment of sustainability management; risks and opportunities, including the assessment The Risk Committee works closely with the of climate change risks; and › undertaking reviews of the Risk Matrix; Investment Manager and, as required, the Independent Consultants, and provides oversight › work with the Audit Committee in keeping under › undertaking a review of key-man risk and of the Company’s risk management function. review the adequacy and effectiveness of the succession planning of the Investment Adviser The Committee has direct contact with Anurag Company’s risk management systems and the in conjunction with the Management and Gupta, Chief Risk Officer (“CRO”) to the Investment procedures to mitigate the Company’s principal Engagement Committee; Adviser, and engages routinely with Mr Gupta risks and to evaluate the principal risks to be › undertaking a review of the tax position and Tim Drayson on the Investment Adviser’s risk management taken into account by the Board when assessing valuation policies of the Company; Risk Committee Chair framework, the due diligence process employed by the Company’s prospects and the associated › design and implementation of policies covering the Investment Adviser and on broader portfolio risk stress testing. the management of derivative counterparty and matters. duration management risk; and The Risk Committee reports formally to the Board Duties on its proceedings on all matters within its duties › consideration and agreement of the terms of and responsibilities and on how it has discharged its reference of the Committee for approval by The main roles and responsibilities of the Risk responsibilities. All members of the Board have the theBoard. Committee are to: right to attend Committee meetings. However, other › advise the Board on the risk strategy of the individuals and external advisers may be invited to Terms of reference of the Risk Tim Drayson Company, including the risk appetite, tolerance attend for all or part of any meeting, as and when Committee can be found here Risk Committee Chair and principal and emerging risks the Company is appropriate and necessary. willing to take in order to achieve its objectives; 24 June 2025 The Risk Committee met four times during the › oversee the current risk exposures of the financial year under review and a number of matters Company and future risk strategy; required extensive liaison between key advisers to › keep under review the Company’s overall risk assess emerging risks and to agree appropriate assessment processes that inform the Board’s mitigating actions. This was particularly evident in decision making and the parameters and the case of the Bulb Energy restructuring, where methodology used in the process; considerable resources of the Investment Adviser › review the Company’s capability to identify and were committed in order to protect the Company’s manage new risk types; interests during negotiations and to implement the › provide oversight of the AIFM on matters of resulting holding structure. portfolio risk, monitoring material developments with high-risk credits and receiving periodic reports from the AIFM on their activities; Additional information Financial statements Company review Strategic review Governance 58 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Directors’ remuneration report The Company’s policy in regard to Directors’ An independent benchmarking exercise was carried The Remuneration and Nomination Committee remuneration is to ensure that the Company out, with the help of the Company’s Broker and reviewed the Directors’ remuneration during the year maintains a transparent and competitive fee the Trust Associates survey, to ensure the fees that and determined that, with effect from 1 January2025, structure in order to recruit, retain and motivate were proposed were fair compared to companies fees should be increased as follows: non-executive Directors of excellent quality in the of similar scale and complexity. The Committee › Chair of the Board: £90,000 per annum (2024: overall interests of Shareholders and the long-term noted that a variety of fee structures were adopted £78,000 per annum); success of the Company. No element of the within the infrastructure sector, with some entities › Base Director’s fee: £55,000 per annum (2024: Directors’ remuneration is performance related, nor paying additional fees for Committee membership £50,000 per annum); does any Director have any entitlement to pensions, in addition to Committee Chair fees and some share options or any long-term incentive plans from entities paying no additional Committee Chair fees › Senior Independent Director: £5,000 per annum the Company. whatsoever. It was decided to operate a more (2024: £4,000 per annum); transparent fee structure, with a base fee and Chair › Chair of the Audit Committee: £13,000 per annum The Remuneration and Nomination Committee fees that reflected the average annual workload (2024: £10,000 per annum); completed a remuneration review in December of the respective Committee Chairs. Theresulting 2024, as Directors’ fees had been frozen whilst › Chair of the Risk Committee: £7,500 per annum structure effectively recognises that the Audit, ESG the Board refreshment programme was being (2024: £6,300 per annum); and Stakeholder Engagement and Risk Chairs completed. The Committee held discussions on › Chair of the ESG and Stakeholder Engagement have a substantial recurring workload, whereas the the workload and responsibilities of the Board Committee: £7,500 per annum (2024: £6,300 workloads of the Remuneration and Nomination Paul Le Page members and Committee Chairs. The Committee perannum); Chair and Management Engagement Chair tend to Remuneration and Nomination noted a substantial increase in the workload and › Chair of the Management Engagement Committee: be more episodic. Committee Chair responsibilities of the Board Chair and the Chairs of £3,750 per annum (2024: £5,000 perannum); and the ESG and Stakeholder Engagement, Risk and The fees that were recommended by the › Chair of the Remuneration and Nomination Audit Committees following changes to reporting Remuneration and Nomination Committee were Committee: £3,750 per annum (2024: £5,000 standards and the need to maintain more active then implemented on 1 January 2025. perannum). portfolio oversight and Shareholder engagement in an elevated market risk environment. This exercise | led to an increase in the fees recommended for | The Directors received the following remuneration in the form of Directors’ fees during the year: | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | the Chair and three senior Committee Chair roles, | | | Year ended | | | Year ended | | | which was partially funded by a reduction in the | | 31 March 2025 | | | 31 March 2024 | | | | | | | | £ | | | £ | fees payable to the other Committee Chairs and the retirement of a paid external risk consultant. James Stewart 81,000 61,725 An increase in the Director base fee was also Fiona Le Poidevin 62,000 56,667 recommended, to reflect the increased time Margaret Stephens 57,850 12,500 commitment of all Board members in a challenging climate for investment, and investment companies Tim Drayson 57,850 56,300 in particular. Paul Le Page 50,656 — Sandra Platts 11,894 64,000 Robert Jennings — 58,500 Sarika Patel — 20,000 321,250 329,692 Additional information Financial statements Company review Strategic review Governance 59 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Directors’ remuneration report continued | James Stewart served as Chair of the Board | Tim Drayson and James Stewart were appointed | The amounts payable to Directors as at | | --- | --- | --- | | throughout the year. | as non-executive Directors with effect from | 31March2025 are shown in note 10 to the | | | 1January2022. Margaret Stephens was appointed | Financial Statements and related to services | Fiona Le Poidevin served as Chair of the Audit as a non-executive Director with effect from provided as non-executive Directors. No Director Committee during the year until her retirement on 1January 2024. Paul Le Page was appointed as a has a service contract with the Company, nor are 31March 2025. non-executive Director with effect from 7 June 2024. any such contracts proposed. Margaret Stephens served as Chair of the ESG and Selina Sagayam was appointed as a non-executive Stakeholder Engagement Committee during the Director with effect from 1 April 2025. Paul Le Page year until 31 March 2025, when she was appointed Each Director’s appointment letter provides that, Remuneration and Nomination Chair of the Audit Committee with effect from upon the termination of their appointment, they must CommitteeChair 1April2025. resign in writing and all records remain the property 24 June 2025 Tim Drayson served as Chair of the Risk Committee of the Company. The Directors’ appointments can throughout the year. be terminated in accordance with the Company’s Articles of Incorporation (the “Articles”) and without Paul Le Page was appointed as a Director compensation. The notice period for the removal on 7June2024 and served as Chair of the of Directors is two months as specified in each Management Engagement Committee and of Director’s appointment letter. The Articles provide the Remuneration and Nomination Committee ## 60% that the office of director shall be terminated with effect from that date. He was appointed by, among other things: (a) written resignation; Rolling stock Senior Independent Director with effect from (b)unauthorised absences from Board meetings 1January2025. for twelve months or more; (c) unanimous written Sandra Platts served as Chair of the Management request of the other Directors; and (d) an ordinary Engagement Committee and of the Remuneration resolution of the Company. and Nomination Committee and as Senior Under the terms of their appointment, each Director Independent Director until her retirement on was subject to re-election at the first AGM and 7June2024. annually thereafter. The Company may terminate the Selina Sagayam was appointed as a Director and appointment of a Director immediately on serving Chair of the ESG and Stakeholder Engagement written notice and no compensation is payable upon Committee with effect from 1 April 2025. termination of office as a Director of the Company During the year, all Directors have contributed 1% becoming effective. of their fees to support the Company’s carbon offsetting initiatives. Madrid Metroline Directors’ and officers’ liability insurance cover The rolling stock comprises around 60% of what is maintained by the Company on behalf of the currently runs on the metro Directors. network. Metro de Madrid benefits from the option to purchase the rolling stock at the end of the leases. Flexrail is sponsored by a French private equity firm with extensive experience in leasing transactions. Additional information Financial statements Company review Strategic review Governance 60 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Directors’ report The Directors of Sequoia Economic Infrastructure These proposals may or may not involve winding As a result of this review, the Directors have The viability modelling incorporates sensitivity Income Fund Limited (the “Company”) are pleased up the Company and, accordingly, failure to pass a concluded that it is appropriate to adopt the going analysis flexing a number of main assumptions to submit their Annual Report and the Audited Continuation Resolution will not necessarily result in concern basis in preparing the Financial Statements, underlying the forecast. This analysis is carried out Financial Statements (the “Financial Statements”) the winding up of the Company. Should the failure as the Company, despite the current challenging to evaluate the potential impact of the Company’s forthe year ended 31 March 2025. of a Continuation Resolution result in a winding up economic environment, retains a strong balance principal risks actually occurring, including the of the Company, it is likely that such winding up sheet and adequate financial resources to continue following key stresses: Results and dividends would in any case take longer than 12 months. in operational existence for at least 12 months from › a 15% shock to the value of Sterling, which The results for the year are shown in the statement The last Continuation Resolution was proposed in the date of approval of these Financial Statements would increase mark-to-markets to be settled of comprehensive income on page 73. August2024 and was passed by an overwhelming and to meet its liabilities as they fall due. by the Company with its FX counterparties. The Directors have declared and paid dividends majority. Viability statement This is broadly similar to the decline in Sterling of £109,035,152 during the year ended The Directors have reviewed the Fund’s holdings in immediately following the UK’s exit from the The Directors have carried out a robust assessment 31March2025 (2024: £115,825,192). Further cash and cash equivalents and investments, including European Union or the announcement in of the viability of the Company over a four-year details of dividends declared or paid are detailed in a consideration of the impact on the portfolio of September 2022 of controversial fiscal policies period to March 2029, taking account of the note 4 to the Financial Statements. the market uncertainty related to the conflicts in by the UK. This led to high volatility in the foreign Company’s current position and the potential impact The Company’s dividend policy, in the absence of Ukraine, the Middle East and India/Pakistan, and of exchange market, and we therefore believe of the principal and emerging risks outlined in this any significant restricting factors, is to pay dividends the foreign and economic policies of the current US it is prudent to assume one might happen in statement. totalling 6.875p per Ordinary Share per annum for administration. The Directors have also considered thefuture; In making this statement, the Directors have the foreseeable future. The Company pays dividends the potential impact on the Company’s liquidity arising › a 10% haircut to the portfolio’s income. considered the resilience of the Company, taking on a quarterly basis. from margin calls relating to the Company’s forward Thiswould simulate an increase in the level into account its current position, the principal and foreign exchange positions. of defaulted or non-performing assets in the Independent Auditor emerging risks facing the Company in severe but In conducting this review, the Board has also portfolio; and A resolution to reappoint Grant Thornton Limited as reasonable scenarios and the effectiveness of any considered the sustainability of the environmental and › a decrease in short-term interest rates. Since Auditor will be put to the forthcoming AGM. mitigating actions. This assessment has considered social impact of the Fund’s activities. TheCompany around 40% of the portfolio consists of floating the potential impacts of these risks on the business Directors and Directors’ interests has a strong balance sheet, with a very low level rate loans, decreasing interest rates negatively model, future performance, solvency and liquidity The Directors who served during the year, all of of gearing. The higher interest rate environment affect the portfolio’s income generation. It seems over the period. whom are independent and non-executive, are of recent years has impacted on the fair values of likely that interest rates will fall in the future in the The Directors have determined that the four-year listedon page 44. fixed-rate investments, however such losses as key currencies of US Dollar, Euro and Sterling, period to March 2029 is an appropriate period | | have been incurred – which have and will reverse | | and a 3% decrease in cash margins has been | | --- | --- | --- | --- | | The Directors’ interests in the shares of the | | over which to provide its viability statement as | | | | as the investments move closer to maturity and | | applied to these assets. | | Company are disclosed in note 10. | | this extends past the average maturity of the | | their valuations accrete to par – are unrealised, and Fund’s portfolio of investments of 3.6 years Going concern therefore have no direct effect on the solvency of the and substantially all of the Company’s hedging business. The Company has been incorporated with an portfolio, and also past the date of the Company’s unlimited life. In accordance with the Company’s The risk of realised losses arising through loans next continuation resolution. In making their Articles, the Directors are required to propose an defaulting is limited to a few specific investments, assessment, the Directors have taken into account ordinary resolution (the “Continuation Resolution”) representing a small proportion of the Fund’s the Company’s NAV, net income, cash flows, every three years. Should a Continuation Resolution investment portfolio. The Directors also note that the dividend cover, regulatory compliance, the outlook not be passed, the Directors are required, within interest income cash flow of the Fund continues to for the economy and key financial ratios over the six months, to put forward proposals for the be sufficient to cover operating costs and to pay the period. The Directors have also assumed that the reconstruction or reorganisation of the Company to Company’s target dividend; and that the Company Investment Adviser remains in place throughout the the Shareholders for their approval. was able to refinance its RCF with a new lender on viability period. more favourable terms during theyear. Additional information Financial statements Company review Strategic review Governance 61 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Directors’ report continued Viability statement continued › the Company’s existing target dividend is Listing requirements Alternative Investment Fund Managers covered without the sale of illiquid investments Directive The viability model also includes projections for Since its listing on the Main Market of the London throughout the viability period due to the highly the continuing deployment of capital into new Stock Exchange and admission to the premium The Company is categorised as a non-EU cash-generative nature and short average life of target investments. These projections amount segment of the Official List of the UK Listing Alternative Investment Fund (“AIF”). The AIFMD the portfolio and the Company’s low cost base. to approximately £511 million in the downside Authority, the Company has complied with the seeks to regulate managers of AIFs, such as the In extremis, the dividend could be cut in order to scenarios, whilst still supporting the Company’s Listing Rules, the Prospectus Rules, the FCA Company. It imposes obligations on AIFMs who preserve the Company’s solvency, however this target dividend and meeting its financial targets. Disclosure Guidance and Transparency Rules manage AIFs in a member state of the European would also affect the ability to raise debt and equity (“DTR”), ESMA guidance and the European Union’s Economic Area (“EEA state”), or who market shares No specific stresses have been run around the capital, so would be avoided wherever possible. Market Abuse Regulation (as implemented in the in AIFs to investors who are domiciled, or with a Company’s ability to refinance the RCF, which The Directors have also considered the possibility UK through the Financial Services and Markets Act registered office, in an EEA state. Under the AIFMD, matures in July 2027. In the case that the Company that the Continuation Resolution, to be proposed 2000 (Market Abuse) Regulations 2016). There are an AIFM must be appointed and must comply with is unable to refinance the RCF at maturity, it at the 2027 AGM, may not be passed by no matters that require disclosure under FCA Listing various organisational, operational and transparency would be able to cover the repayment with cash Shareholders. Following discussions with the Rule 9.8.4R relating to arrangements made with a requirements. and selectively selling some of the more liquid | | Company’s Brokers, Investment Adviser and a | controlling Shareholder, waivers of Directors’ fees or | | | --- | --- | --- | --- | | investments. | | | On 28 January 2015, the Company appointed the | | | number of significant Shareholders, and in light | long-term incentive schemes in force. | | Investment Manager to act as AIFM on behalf of the The key outputs of the viability testing include the of the overwhelming majority votes in favour of Foreign Account Tax Compliance Act Company. The Investment Manager is responsible following: previous Resolutions proposed in 2016, 2018, 2021 for fulfilling the role of the AIFM and ensuring the The Foreign Account Tax Compliance Act (“FATCA”) › the Company has sufficient resources for full debt and 2024, the Board believes that the Continuation Company complies with the AIFMD requirements. became effective on 1 January 2013. Thelegislation repayment at maturity; Resolution is likely to be passed. Details of the total amount of remuneration for is aimed at determining the ownership of US › the Company has positive intra-month liquidity Based on this assessment, the Directors have a the financial year, split into fixed and variable assets in foreign accounts and improving US throughout the viability period, indicating it has reasonable expectation that the Company will be remuneration, paid by the AIFM to its staff, and tax compliance with respect to those assets. adequate resources to cover all of its liabilities, able to continue in operation and meet its liabilities the number of beneficiaries, are made available to On13December 2013, the States of Guernsey including hedge mark-to-market settlements, as they fall due over the period to March 2029. Shareholders on request to the Investment Manager. entered into an intergovernmental agreement finance costs and operational expenses; and (“IGA”) with US Treasury in order to facilitate the Share buybacks requirements of FATCA. The Company registered The Company is authorised to make market Substantial shareholdings with the Internal Revenue Service (“IRS”) on acquisitions of its own Ordinary Shares under a 25February 2015 as a Foreign Financial Institution As at 31 March 2025, the Company had the following shareholdings in excess of 5% of the issued special resolution approved by Shareholders on (“FFI”) and aSponsoringEntity. | sharecapital: | | | | 1August 2024. | | --- | --- | --- | --- | --- | | | | Number of | Common Reporting Standard | | | Name | Ordinary Shares Percentage | | | When appropriate, the Directors consider the | | | | | The Common Reporting Standard (“CRS”), | acquisitions of Ordinary Shares as part of its | | Investec Wealth & Investment 131,729,616 8.47% | | | formerly the Standard for Automatic Exchange of | | discount control policy, in order to address possible Financial Account Information, became effective on imbalances in the demand and supply of Ordinary Evelyn Partners 94,647,305 6.09% 1January 2016, and is an information standard for Shares in the market. This could include when Related parties the automatic exchange of information developed the Company’s Ordinary Shares have traded at a by the Organisation for Economic Co-operation significant discount to NAV for a prolonged period Details of transactions with related parties are disclosed in note 10 to the Financial Statements. and Development (“OECD”). CRS is a measure of time. Conversely, shorter periods of market to counter tax evasion, and it builds upon other disruption may also create an imbalance in the information sharing legislation, such as FATCA and demand and supply of Ordinary Shares in the the European Union Savings Directive. market, and the Company may consider the use ofshare buybacks to signal the confidence it has in the value of its underlying assets. Additional information Financial statements Company review Strategic review Governance 62 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Directors’ report continued Share buybacks continued Criminal Finances Act In advance of any share buybacks, the Board The Board has a zero-tolerance commitment to considers: (i) whether the Company is technically preventing persons associated with it from engaging able to repurchase its own shares at that point in criminal facilitation of tax evasion and will not work in time (including closed period and regulatory with any service provider who does not demonstrate considerations); (ii) the Company’s available cash the same commitment. The Board has satisfied resources after supporting the dividend; (iii) the itself in relation to its key service providers that they Board’s view of the prevailing value of the Fund’s have reasonable provisions in place to prevent the net assets; and (iv) other relevant circumstances. criminal facilitation of tax evasion by their own staff Purchases are only made through the market for or any associated persons. cash at prices below the estimated prevailing NAV UK Modern Slavery Act per Ordinary Share where the Directors believe such The Board acknowledges the requirement to provide purchases will result in an increase in the NAV per information about human rights in accordance with Ordinary Share. the UK Modern Slavery Act. The Board conducts During the year, the Company has bought back the business of the Company ethically and with 70,422,338 of its Ordinary Shares at a cost of integrity and has a zero-tolerance policy towards £55,858,674 (2024: 109,335,279 of its Ordinary modern slavery in all its forms. As the Company has Shares at a cost of £88,170,418), representing a no employees, all its Directors are non-executive discount to NAV that has been accretive to NAV per and all its functions are outsourced, there are Ordinary Share for remaining Shareholders. no further disclosures to be made in respect of Anti-bribery and corruption employees and human rights. The Board acknowledges that the Company’s Market Abuse international operations may give rise to possible The Board and relevant personnel of our Investment claims of bribery and corruption. In consideration Adviser and our other advisers acknowledge and of The Bribery Act 2010, enacted in the UK, at the adhere to the UK Market Abuse Regulation. date of this report the Board had conducted an By order of the Board assessment of the perceived risks to the Company arising from bribery and corruption to identify aspects of business which may be improved to James Stewart Scandlines mitigate such risks. The Board has adopted a zero- Director The ferry operator serves tolerance policy towards bribery and has reiterated a strategic connection 24 June 2025 its commitment to carry out business fairly, honestly between Scandinavia and openly. and Germany, which in the absence of better land route alternatives represents a “floating highway”. Scandlines has a strong track record of disciplined investment and traffic management through competitive pricing and targeted marketing programmes. Additional information Financial statements Company review Strategic review Governance 63 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Statement of Directors’ responsibilities The Directors are responsible for preparing The Directors are responsible for the maintenance The Directors consider that the Annual Report, the Annual Report and Financial Statements in and integrity of the corporate and financial comprising the Financial Statements and the accordance with applicable law and regulations. information included on the Company’s website. management report, taken as a whole, is fair, TheCompanies (Guernsey) Law, 2008 (the Legislation in the United Kingdom and Guernsey balanced and understandable and provides the “Company law”) requires the Directors to prepare governing the preparation and dissemination of information necessary for Shareholders to assess financial statements for each financial year. The financial statements may differ from legislation in the Company’s position and performance, business Directors are required to prepare the Financial other jurisdictions. model and strategy. Statements in accordance with IFRS Accounting The Directors who hold office at the date of approval Standards as issued by the IASB and applicable law. of the Directors’ report confirm that, so far as they James Stewart Under the Company law, the Directors must not are aware, there is no relevant audit information of Director approve the Financial Statements unless they are which the Company’s Auditor is unaware, and that 24 June 2025 satisfied that they give a true and fair view of the each Director has taken all the steps they ought state of affairs of the Company and its profit or loss to have taken as a director to make themselves for that year. aware of any relevant audit information and for establishing that the Company’s Auditor is aware of In preparing these Financial Statements, the that information. Directors are required to: Responsibility statement of the Directors › select suitable accounting policies and apply inrespect of the Annual Report them consistently; Each of the Directors who served during the year, › make judgements and estimates that are who are listed on page 44, confirms to the best of reasonable, relevant and reliable; and their knowledge and belief that: › state whether applicable accounting standards have been followed, subject to any material › the Financial Statements, prepared in accordance departures disclosed and explained in the with IFRS Accounting Standards as issued by Financial Statements. the IASB, give a true and fair view of the assets, liabilities, financial position and profit of the The Directors are responsible for keeping proper Company, as required by DTR 4.1.12R; and accounting records that are sufficient to show and › the management report (comprising the Chair’s explain the Company’s transactions and disclose statement, the Investment Adviser’s report, the with reasonable accuracy at any time the financial sustainability report, the strategic report, the position of the Company and to enable them to Directors’ report and other Committee reports) ensure that the Financial Statements comply with includes a fair review of the development and the Company law. They are responsible for such performance of the business during the year, and internal control as they determine is necessary to the position of the Company at the end of the enable the preparation of financial statements that year, together with a description of the principal are free from material misstatement, whether due risks and uncertainties that the Company faces, to fraud or error, and have general responsibility for as required by DTR 4.1.8R and DTR 4.1.9R. 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. Additional information Financial statements Company review Strategic review Governance 64 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Financial ## statements Financial statements Independent Auditor’s Report 65 Statement of comprehensive income 73 Statement of changes in Shareholders’ equity 74 Statement of financial position 75 Statement of cash flows 76 Notes to the Financial Statements 77 Additional information Financial statements Company review Strategic review Governance 65 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report to the members of Sequoia Economic Infrastructure Income Fund Limited Opinion Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: We have audited the financial statements of Sequoia Economic Infrastructure Income Fund Limited (the ‘Company’) for the year ended 31 March 2025, which comprise the Statement of Comprehensive Income, › We obtained the cash flow forecasts on top of discussions made with the Investment Adviser on their the Statement of Changes in Shareholders’ Equity, the Statement of Financial Position, the Statement assessment of going concern. The going concern assessment included a three-scenario analysis, with of Cash Flows and notes to the financial statements, including material accounting policy information. a ‘Base Case’ and two ‘Downside Cases’, the ‘Base Case’ being considered by the Directors to be the The financial reporting framework that has been applied in their preparation is applicable law and IFRS most likely scenario; Accounting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). › We ascertained that the going concern assessment covered a period up until 24 June 2026, 12 months In our opinion, the financial statements: from the date of approval of the Financial Statements; › We reviewed the arithmetical accuracy of the ‘Base Case’ and ‘Downside Cases’ analysis and challenged › give a true and fair view of the state of the Company’s affairs as at 31 March 2025 and of its profit for the the appropriateness of the inputs used by assessing historical forecasting accuracy, challenging year then ended; management’s consideration of downside sensitivity analysis by applying further sensitivities to understand › have been properly prepared in accordance with IFRSs as issued by the IASB; and the impact on the liquidity or a covenant breach; › comply with the Companies (Guernsey) Law, 2008. › We considered the estimation uncertainty of the prior year’s most likely scenario by comparing it to the Company’s actual performance to date, discussed material movements with the Board and the Basis for opinion Investment Adviser, and obtained the required supporting documentation; We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) › We held discussions with the Audit Committee and Investment Adviser to determine whether, in their and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s opinion, there is any material uncertainty regarding the Company’s ability to pay liabilities and dividends responsibilities for the audit of the financial statements’ section of our report. We are independent of as they fall due. Through these discussions, we considered and challenged the options available to the the Company in accordance with the ethical requirements that are relevant to our audit of the financial Company if it were in a stressed scenario. These options included but were not limited to the use of statements in Guernsey, including the FRC’s Ethical Standard as applied to listed entities, and we have creditfacilities; fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit › We performed procedures over the Continuation Resolution, such as analysing movements in top evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. shareholdings and reviewing forums and blogs for investors sentiment. These procedures were performed as top-up procedures as we acknowledge that the Continuation Resolution is approximately 2 years Conclusions relating to going concern away from the audit report date and failure to pass the Continuation Resolution in 2 years’ time will not We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis necessarily result in the winding up of the Company. Given the above assessment, we assessed that the of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related Continuation Resolution does not have a significant impact on the Company’s ability to continue as a to events or conditions that may cast significant doubt on the Company’s ability to continue as a going going concern; hence, this has not been reported as key audit matter in our current year’s report. concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report › We considered whether the Directors’ assessment of going concern as included in the Annual Report is to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the appropriate and consistent with the disclosures made in the Viability Statement; and auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Company to cease to continue as a going concern. › We evaluated the disclosures made in the Annual Report and Financial Statements regarding the going concern to ascertain that they are in accordance with IAS 1 ‘Presentation of Financial Statements’ and have complied with, or explained reasons for non-compliance, with all the AIC Code of Corporate Governance provisions. In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the Company’s business model including effects arising from macro-economic uncertainties such as the continuing conflicts in Ukraine and the Middle East and of the economic policies of the current US administration, together with the potential impact of margin calls relating to the Company’s forward foreign exchange positions. We assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the Company’s financial resources or ability to continue operations over the going concern period. Additional information Financial statements Company review Strategic review Governance 66 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of Key audit matters accounting in the preparation of the financial statements is appropriate. Key audit matters are those matters that, in our Based on the work we have performed, we have not identified any material uncertainties relating to events professional judgement, were of most significance or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue in our audit of the financial statements of the current Audit Description as a going concern for a period of at least twelve months from when the financial statements are authorised period and include the most significant assessed Response for issue. risks of material misstatement (whether or not due to fraud) that we identified. These matters included In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have those that had the greatest effect on: the overall KAM nothing material to add or draw attention to in relation to the directors’ statement in the financial statements audit strategy; the allocation of resources in the about whether the directors considered it appropriate to adopt the going concern basis of accounting. audit; and directing the efforts of the engagement Our responsibilities and the responsibilities of the directors with respect to going concern are described in team. These matters were addressed in the context Disclosures Our results the relevant sections of this report. of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not Our approach to the audit provide a separate opinion on these matters. In the graph below, we have presented the key audit matters, significant risks and other risks relevant to theaudit. Overview of our audit approach Valuation of non-derivative The materiality that we used for the financial statement audit was £28.8 million, through profit or loss which was determined on the basis of approximately 2% of the Company’s net Key audit Materiality Management override matters assets at 31 March 2025. of controls Potential Key audit matters were identified as: financial Scoping › Valuation of non-derivative financial assets at fair value through profit or loss impact (same as previous year). Our auditor’s report for the year ended 31 March 2024 included a key audit matter in relation to the ability of the Company to continue as a going concern impacted by the continuation resolution, that has not been reported as key audit Low matter in our current year’s report. Low Extent of management judgement Based on the outcome at the Annual General Meeting held on 1 August 2024, the Continuation Resolution presented by the Directors was passed, with an High overwhelming majority from the shareholders who voted in favour of it. The next financial assets at fair value continuation vote is only due in approximately two years from the audit report date. As a result, this area is not considered to be a key audit matter for the audit year ended 31 March 2025. Our audit approach was a risk-based substantive audit focused on the statement Company's investment activities. There has been no change in the audit scope from the prior year. Additional information Financial statements Company review Strategic review Governance High Significant risk & Key audit matter Significant risk 67 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited ### Key Audit Matter description How our scope addressed the matter Valuation of non-derivative financial assets at fair value through profit or In responding to the key audit matter, we performed the following audit procedures: loss £1,479 million (2024: £1,493 million) Valuation of the Portfolio › We obtained and inspected the valuation calculations, read the valuation report and held discussions with the Investment Adviser and Valuation Agent We identified the valuation of non-derivative financial assets at fair value through profit or loss to understand the scope of their work, the performance of the Company and its Portfolio, as well as assess whether the data used in the valuation as one of the most significant assessed risks of material misstatement due to fraud and error. calculations was appropriate and relevant. The Company invests principally through its Luxembourg-domiciled subsidiary, Sequoia › We assessed the independence, competence and objectivity of the Company’s Valuation Agent. IDF Asset Holdings S.A. (the “Luxembourg Subsidiary”), and two established subsidiaries domiciled in the United Kingdom, Yotta Bidco Limited and Gadwall Holdings Limited (the “UK › We engaged our internal valuation experts to assist us in performing the testing of the valuations performed by the Investment Adviser (and reviewed Subsidiaries”) (together “the Subsidiaries”). These investments in the Subsidiaries (further by the Valuation Agent), which included the following: referred to in this report as the “Investments”) are classified and measured at fair value through › Assessed whether the valuation methodologies applied to estimate the fair values of the non-derivative financial assets at fair value through profit or profit or loss under the Financial Statement line item ‘Non-derivative financial assets at fair loss were consistent with methods usually used by market participants by comparing them with similar types of instruments. value through profit or loss’. Through the Subsidiaries, the Company invests in a diversified › Held discussions with both the Investment Adviser and the Valuation Agent to understand how the underlying assets were performing relative to the portfolio of senior and subordinated economic infrastructure loans, bonds, and equity assumptions underpinning their valuation models and to identify credit and operational issues, if any, that could have impacted the valuation of the investments (further referred to in this report as the “Portfolio”), by principally issuing Variable Portfolio. Funding Notes (“further referred to in this report as “VFNs”) to the Luxembourg Subsidiary. › Used our internal valuation expert’s knowledge of the market to assess, challenge, and corroborate management’s valuation by reference to prices The investment in the Luxembourg Subsidiary represents a significant proportion of the from pricing vendors. Where the pricing information was not available, derived an independent mark-to-market valuation based on inputs for Company’s net assets. The Luxembourg Subsidiary’s net asset value (after the conversion comparable instruments with similar structural and credit characteristics. from Luxembourg GAAP to IFRS) reflects its fair value, of which the most significant component is its underlying Portfolio. › For the performing Portfolio, we: VFN interest pertains to interest on VFNs issued by the Luxembourg Subsidiary which is › Tested the mathematical accuracy of the discounted future cash flows provided by the Investment Adviser. paid to the Company on a quarterly basis. VFN interest is adjusted by an “Equalisation › Agreed the contractual terms, such as coupon and repayment terms, to supporting evidence (i.e. loan investment agreement and credit memos) Adjustment” which pertains to the net remaining profit or loss in the Luxembourg Subsidiary obtained from the Investment Adviser. after accounting for all revenue and expenses, including Luxembourg GAAP impairment › Compared our calculations based on the contractual terms to actual cash received and evaluated the Investment Adviser’s credit memorandums to adjustments. assess whether there have been specific credit events that could have impacted the Portfolio’s fair value. Every six months, the Directors together with Sequoia Investment Management Company › Performed research on publicly available information to corroborate and assess for any contradictory evidence of specific credit events that would Limited (“Investment Adviser”) review the portfolio’s credit ratings to determine whether have impacted the Portfolio’s fair value. investments within the Portfolio are performing or nonperforming. Investments identified as non-performing will be valued on a modified basis (i.e., on the net present value of future › Inquired with the Investment Adviser about whether there were any changes to relevant inputs used in the valuation models and corroborated this estimated cash flows based on the median outcome and discount rate that reflects the market against supporting documentation (i.e., loan investment agreements, credit memos and the Valuation Agent’s reports). yield of distressed/defaulted loans or bonds). › For the Non-Performing and Under-Performing Portfolio, we: The Portfolio is principally valued on a discounted cash flow basis. The Company engages › Tested the mathematical accuracy of the net present value of future cash flows provided by the Investment Adviser. a third-party valuation expert (the “Valuation Agent”) to review the valuation calculations performed by the Portfolio’s Investment Adviser. Certain portfolio are valued using broker › Tested the reasonableness of assumptions used (i.e. distressed rate, discount rate, probability of collection) by obtaining supporting documents for quotes from pricing syndicate desks. Where such market information is not externally the basis of assumptions and comparing it to market data. available, the valuations are based on yields derived from comparable loans and bonds, › Performed research on publicly available information to corroborate the facts and circumstances set out in the valuation report used by management takinginto consideration the instrument’s project type and structural and credit characteristics. as a basis for the valuation. › For level 2 non-derivative investments, we obtained prices from independent pricing vendors or, where this pricing information was not available, we derived an independent mark to model valuation (using an appropriate platform supported by our internal valuation experts) based on market inputs for comparable instruments with similar structural and credit characteristics. Additional information Financial statements Company review Strategic review Governance 68 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited ### Key Audit Matter description How our scope addressed the matter Valuation of non-derivative financial assets at fair value through profit or › We assessed whether the fair value disclosures in the financial statements are appropriate, complete and in accordance with the IFRS 13 Fair Value loss £1,479 million (2024: £1,493 million) continued Measurement requirements. The valuation of the Portfolio involves complexity and subjective management judgements Equalisation adjustment and VFN interest and estimates. The magnitude of the amounts involved means that there is the potential for material misstatement, which gives rise to a higher risk of misstatement and requires special › We issued audit instructions to the Grant Thornton Luxembourg audit team (“Subsidiary Auditor”) to assist us in performing procedures on significant audit consideration. Since the valuation of the Portfolio is the primary driver of the Company’s balances in the Luxembourg Subsidiary financial statements factored into the determination of the Equalisation Adjustment. net asset value, this is an area of focus for stakeholders and a significant audit risk area. › We reviewed in detail the work performed by the Subsidiary Auditor, in order to ascertain that the Equalisation Adjustment and VFN interest have been Accordingly, the valuation of non-derivative financial assets at fair value through profit or loss appropriately calculated. Our review included: required significant auditor attention and has been reported as a Key Audit Matter. › Ensuring that the VFN interest income and VFN interest receivable/payable were correctly calculated, using the inputs that are in line with the terms of the relevant agreement, and compared the recalculated amount to the amount recorded in their financial statements, whilst also ensuring that amount accrued was in line with the requirements of IFRS 9 Financial Instruments. › Ensuring that the impairment recognised by the Luxembourg Subsidiary was in accordance with the requirements of Luxembourg GAAP. › Ensuring that any material balances in the Luxembourg Subsidiary accounts which are factored into the determination of the Equalisation Adjustment, have been reviewed and are in line with IFRSs. › Comparing the Equalisation Adjustment recognised between the Luxembourg Subsidiary and the Company to ensure the accuracy of the recordedamount. Relevant disclosures in the Annual Report and Audited Our results FinancialStatements › Our testing did not identify material misstatements in relation to the valuation of non-derivative financial assets at fair value through profit or loss. › Report of the Audit Committee on pages 51 to 53; › Note 2 (Non-Derivative financial instruments – fair value and subsequent measurement); › Note 3 (Use of Judgements and Estimates); › Note 5 (Financial Risk Management); and › Note 6 (Non-derivative financial assets at fair value through profit or loss). Additional information Financial statements Company review Strategic review Governance 69 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Independent Auditor's Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited ## Our application of materiality We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor's report. Materiality was determined as follows: ### Materiality measure #### Materiality for financial statements as a whole Materiality threshold Significant judgements made by auditor in determining materiality #### Performance materiality used to drive the extent of our testing Performance materiality threshold Significant judgements made by auditor in determining performance materiality #### Specific materiality Specific materiality #### Communication of misstatements to the audit committee Threshold for communication ### Company We define materiality as the magnitude of misstatement in the financial statements that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of these financial statements. We use materiality in determining the nature, timing and extent of our audit work. £26.8 million (2024: £30.5 million), which represents 2% of the Company's net assets as at 31 March 2025. In determining materiality, we considered Net Assets as the most appropriate benchmark as the Company's primary performance measures for internal and external reporting are based on net assets. Materiality for the current year is lower than the level that we determined for the year ended 31 March 2024 due to the reductions in carrying value of the Fund's non-performing loans and the impact of higher discount rates, offset in part by pull-to-par gains over the year. We set performance materiality at an amount less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole. £21.6 million (2024: £22.9 million), which is 75% (2024: 75%) of financial statement materiality. In determining performance materiality, we made the following significant judgements: Performance materiality was set at 75% of materiality based on the quality of internal control at the Company and Investment Adviser level, stability of the business, low level of corrected and uncorrected misstatements identified in the prior year and willingness of management to correct errors identified We determine specific materiality for one or more particular classes of transactions, account balances or disclosures for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. We determined a lower level of specific materiality for related party transactions, including directors' remuneration and related disclosures. We determine a threshold for reporting unadjusted differences to the audit committee. £1.4 million (2024: £1.5 million), which represents 5% of financial statement materiality, and misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. ![img-6.jpeg](img-6.jpeg) 70 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited Our application of materiality continued › For subjective estimates made by management on valuing non-derivative financial assets at fair value through profit or loss, we engaged an internal expert to confirm the appropriateness of the valuation The graph below illustrates how performance materiality interacts with our overall materiality and the methodology used with consideration to valuation techniques routinely used by market participants to threshold for communication to the audit committee. value similar instruments and to value non-derivative financial assets at fair value through profit or loss held at year-end; FSM: Financial statement materiality, › For judgements made by the Directors on assessing the appropriateness of preparing the financial PM: Performance statements on a going concern basis, we challenged management’s cash flow forecasts by applying materiality, further sensitivities to the downside sensitivity analysis made by them. TfC: Threshold for communication to the Changes in approach from previous period Audit Committee There have been no changes in the scope of the current year’s audit from the previous year. Other information The other information comprises the information included in the annual report and audited financial Net asset value, £1,439.2 million FSM PM TfC FSM £28.8 million, 2% £28.8 million £21.6 million £1.4 million statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report and audited financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. An overview of the scope of our audit Our responsibility is to read the other information and, in doing so, consider whether the other information We performed a risk-based audit that requires an understanding of the Company’s business and in particular is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise matters related to: appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement of the financial Understanding the Company, its environment, including controls statements themselves. If, based on the work we have performed, we conclude that there is a material › The processing and recording of investment activities. The day-to-day management of the Company’s misstatement of this other information, we are required to report that fact. investment portfolio, the custody of its investments and the maintenance of the Company’s accounting We have nothing to report in this regard. records are outsourced to third-party service providers. Accordingly, our audit work is focused on obtaining an understanding of and evaluating, internal controls at the Company and the third-party service Matters on which we are required to report by exception providers, and inspecting records and documents held by these third-party service providers. In addition, We have nothing to report in respect of the following matters in relation to which the Companies (Guernsey) the Company engages an investment manager, FundRock Management Company (Guernsey) Limited Law, 2008 requires us to report to you if, in our opinion: to manage the investment portfolio, which in turn engages Sequoia Investment Management Company Limited (Investment Adviser) to manage the investment portfolio. We interacted with the Investment › proper accounting records have not been kept by the Company; or Manager and the Investment Adviser in completing aspects of our audit work. › the Company’s financial statements are not in agreement with the accounting records; or › we have not obtained all the information and explanations, which to the best of our knowledge and belief, Work to be performed on financial information of the Company (including how it addressed are necessary for the purposes of our audit. the key audit matters) › We undertook substantive testing on material transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls over individual systems and the management of specific risks; › The majority of our substantive testing focused on the audit of the underlying investment portfolio held through the wholly owned subsidiary and associated disclosures as at the reporting date and the movement in investment holdings during the year; Additional information Financial statements Company review Strategic review Governance 71 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited Corporate governance statement Auditor’s responsibilities for the audit of the financial statements We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of Our objectives are to obtain reasonable assurance about whether the financial statements as a whole the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that Corporate Governance Code specified for our review by the Listing Rules. includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements, or our Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, knowledge obtained during the audit: they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. › the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 60; Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to › the Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment which our procedures are capable of detecting irregularities, including fraud, is detailed below: covers and why the period is appropriate set out on pages 60 and 61; › We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the › the Directors’ statement on whether they have a reasonable expectation that the Company will be able to industry in which it operates. We determined that the following laws and regulations were most significant: continue in operation and meets its liabilities set out on page 60; IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), › the Directors’ statement on fair, balanced and understandable set out on page 63]; the Companies (Guernsey) Law, 2008, as amended, the Registered Collective Investment Schemes Rules and Guidance 2021, the Association of Investment Companies (AIC) Code of Corporate Governance, › the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks Alternative Investment Fund Managers Directive (“AIFMD”), FCA Disclosure Guidance and Transparency set out on page 38; Rules, European Securities and Markets Authority (“ESMA”), EU Market Abuse Regulations, Task Force on › the section of the annual report that describes the review of the effectiveness of risk management and Climate-Related Financial Disclosures (“TCFD”), Sustainable Finance Disclosure Regulation (“SFDR”), and internal control systems set out on page 49; and the relevant tax compliance regulations in the jurisdictions in which the Company operates. In addition, › the section describing the work of the audit committee set out on pages 51 to 53. we concluded that there are certain significant laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements and those laws and regulations Responsibilities of the directors relating to health and safety, employee matters, and bribery and corruption practices; As explained more fully in the Statement of Directors’ Responsibilities set out on page 63, the directors are › We obtained an understanding of how the Company is complying with those legal and regulatory responsible for the preparation of the financial statements and for being satisfied that they give a true and frameworks by, making inquiries to management, and those responsible for legal and compliance fair view, and for such internal control as the Directors determine is necessary to enable the preparation of procedures. We corroborated our inquiries through our review of Board minutes and papers provided financial statements that are free from material misstatement, whether due to fraud or error. tothe Audit Committee. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to › Our work to identify non-compliance with the laws and regulations which were enumerated above continue as a going concern, disclosing, as applicable, matters related to going concern and using the included: going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease › reviewing the Company’s compliance reports obtained from the compliance officer to identify operations, or have no realistic alternative but to do so. non-compliance with laws and regulations; and › completing the required checklists to ensure that all areas are considered when checking that the entity complied with the requirements of the related laws and regulations. Additional information Financial statements Company review Strategic review Governance 72 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Independent Auditor’s Report continued to the members of Sequoia Economic Infrastructure Income Fund Limited Auditor’s responsibilities for the audit of the financial statements continued › the adequacy of procedures for authorisation of transactions, internal review procedures over the Company’s compliance with regulatory requirements; › We assessed the susceptibility of the Company’s financial statements to material misstatement, includinghow fraud might occur by evaluating management’s incentives and opportunities for › the authority of, and resources available to the compliance officer; and manipulation of the financial statements. This included an evaluation of the risk of management override › procedures to ensure that possible breaches of requirements are appropriately investigated and ofcontrols. Audit procedures performed by the engagement team included: reported. › evaluation of the design and implementation of controls that management has put in place to prevent A further description of our responsibilities for the audit of the financial statements is located on the Financial and detect fraud; Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our › challenging assumptions and judgements made by management in its significant accounting estimates; auditor’s report. and Other matters which we are required to address › identifying and testing journal entries that exhibit certain risk characteristics determined by the engagement team and corroborating to supporting documents to understand management’s rationale We were appointed by the Board on 8 December 2021 to audit the financial statements for the year and economic substance. ending 31 March 2022. Our total uninterrupted period of engagement is 4 years, covering the years ended 31March 2022 to 31 March 2025. › These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we than the risk of not detecting one resulting from error and detecting irregularities that result from remain independent of the Company in conducting our audit. fraud is inherently more difficult than detecting those that result from error, as fraud may involve Our audit opinion is consistent with the additional report to the Audit Committee. collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial Use of our report statements, the less likely we would become aware of it; This report is made solely to the Company’s members, as a body, in accordance with section 262 of the › The engagement partner’s assessment of the appropriateness of the collective competence and Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the capabilities of the engagement team included consideration of the engagement team’s: Company’s members those matters we are required to state to them in an auditor’s report and for no other › understanding of, and practical experience with, audit engagements of a similar nature and complexity, purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other through appropriate training and participation; than the Company and the Company’s members as a body, for our audit work, for this report, or for the › knowledge of the industry in which the Company operates; and opinions we have formed. › understanding of the legal and regulatory frameworks applicable to the Company. Cyril Swale › We communicated relevant laws and regulations and potential fraud risks to all engagement team for and on behalf of Grant Thornton Limited members, including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Chartered Accountants St Peter Port › In assessing the potential risks of material misstatement, we obtained an understanding of: Guernsey › the Company’s operations, including the nature of its revenue sources, products and services and Date: 24 June 2025 its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement; › the applicable statutory provisions; and › the Company’s control environment, including: › the policies and procedures implemented to comply with the requirements of its regulator, includingthe adequacy of the training to inform staff of the relevant legislation rules and other regulations of the regulator; Additional information Financial statements Company review Strategic review Governance 73 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Statement of comprehensive income for the year ended 31 March 2025 | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | | | 31 March 2025 | | | 31 March 2024 | | | | Note | | | £ | | | £ | Revenue Net (losses)/gains on non-derivative financial assets at fair value through profit or loss 6 (4,073,438) 70,975,563 Net gains on derivative financial assets at fair value through profit or loss 7 21,885,607 40,756,355 Investment income 9 78,766,311 20,023,606 Net foreign exchange gains 2,588,001 161,656 Total revenue 99,166,481 131,917,180 Expenses Investment Adviser’s fees 10 9,837,744 9,937,332 Investment Manager’s fees 10 427,098 401,973 Directors’ fees and expenses 333,969 367,726 Administration fees 10 505,738 504,656 Auditor’s fees 246,112 210,700 1 Legal and professional fees 1,850,074 2,523,484 Valuation fees 725,500 733,100 Custodian fees 219,056 231,465 Listing, regulatory and statutory fees 167,894 142,101 Other expenses 720,827 512,949 Total operating expenses 15,034,012 15,565,486 Loan finance costs 15 4,332,589 5,926,840 Total expenses 19,366,601 21,492,326 Profit and total comprehensive income for the year 79,799,880 110,424,854 Basic and diluted earnings per Ordinary Share 13 5.04p 6.58p 1. Legal and professional fees include an amount of £1,025,463 (2024: £1,237,263) in respect of fees relating to the Fund’s investment in Bulb Energy All items in the above statement are from continuing operations. The accompanying notes on pages 77 to 105 form an integral part of the Financial Statements. Additional information Financial statements Company review Strategic review Governance 74 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Statement of changes in Shareholders’ equity for the year ended 31 March 2025 | | Share | | Retained | | | | | --- | --- | --- | --- | --- | --- | --- | | | capital | | losses | | Tot al | | | Year ended 31 March 2025 Note | | £ | | £ | | £ | At 1 April 2024 1,720,452,093 (196,169,547) 1,524,282,546 Ordinary Shares buybacks during the year 12 (55,858,674) — (55,858,674) Total comprehensive income for the year — 79,799,880 79,799,880 Dividends paid during the year 4 — (109,035,152) (109,035,152) At 31 March 2025 1,664,593,419 (225,404,819) 1,439,188,600 | | Share | | Retained | | | | | --- | --- | --- | --- | --- | --- | --- | | | capital | | losses | | Total | | | Year ended 31 March 2024 Note | | £ | | £ | | £ | At 1 April 2023 1,808,622,511 (190,769,209) 1,617,853,302 Ordinary Shares buybacks during the year 12 (88,170,418) — (88,170,418) Total comprehensive income for the year — 110,424,854 110,424,854 Dividends paid during the year 4 — (115,825,192) (115,825,192) At 31 March 2024 1,720,452,093 (196,169,547) 1,524,282,546 The accompanying notes on pages 77 to 105 form an integral part of the Financial Statements. Additional information Financial statements Company review Strategic review Governance 75 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Statement of financial position for the year ended 31 March 2025 | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | | | 31 March 2025 | | | 31 March 2024 | | | | Note | | | £ | | | £ | Non-current assets Non-derivative financial assets at fair value through profit or loss 6 1,479,215,419 1,493,171,675 Current assets Cash and cash equivalents 8 7,523,136 7,507,495 Trade and other receivables 14 2,411,179 602,507 Derivative financial assets at fair value through profit or loss 7 17,669,291 28,098,804 Total current assets 27,603,606 36,208,806 Total assets 1,506,819,025 1,529,380,481 Current liabilities Trade and other payables 16 3,596,055 4,322,344 Derivative financial liabilities at fair value through profit or loss 7 7,181,087 775,591 Total current liabilities 10,777,142 5,097,935 Non-current liabilities Loan payable 15 56,853,283 — Total liabilities 67,630,425 5,097,935 Net assets 1,439,188,600 1,524,282,546 Equity Share capital 12 1,664,593,419 1,720,452,093 Retained losses (225,404,819) (196,169,547) Total equity 1,439,188,600 1,524,282,546 Number of Ordinary Shares 12 1,555,061,936 1,625,484,274 Net asset value per Ordinary Share 92.55p 93.77p The Financial Statements on pages 73 to 105 were approved and authorised for issue by the Board of Directors on 24 June 2025 and signed on its behalf by: James Stewart Chair The accompanying notes on pages 77 to 105 form an integral part of the Financial Statements. Additional information Financial statements Company review Strategic review Governance 76 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Statement of cash flows for the year ended 31 March 2025 | | | | Year ended | | Year ended | | | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 31 March 2025 | | | 31 March 2024 | | | | 31 March 2025 | | | 31 March 2024 | | | | | Note | | | £ | | £ | | Note | | | £ | | | £ | | Cash flows from operating activities | | | | | | | Cash flows from financing activities | | | | | | | | | Profit for the year 79,799,880 110,424,854 | | | | | | | Proceeds from loan drawdowns 15 92,493,120 77,384,713 | | | | | | | | | Adjusted for: | | | | | | | Loan repayments 15 (35,538,975) (256,710,836) | | | | | | | | | Net losses/(gains) on non-derivative financial | | | | | | | Payment of loan finance costs 15 (5,030,210) (4,810,404) | | | | | | | | assets at fair value through profit or loss 6 4,073,438 (70,975,563) Ordinary Share buybacks (57,033,497) (87,992,882) Net gains on derivative financial assets at fair Dividends paid (109,035,152) (115,825,192) value through profit or loss 7 (21,885,607) (40,756,355) Net cash outflow from financing activities (114,144,714) (387,954,601) Investment income (78,766,311) (20,023,606) Net (decrease)/increase in cash and cash Net foreign exchange gains (2,588,001) (161,656) equivalents (1,927,224) 2,450,624 Loan finance costs 15 4,332,589 5,926,840 Cash and cash equivalents at beginning (Increase)/decrease in trade and other ofyear 7,507,495 7,363,120 receivables (excluding prepaid finance costs Effect of foreign exchange rate changes on and investment income) 14 (59,360) 52,156 cash and cash equivalents during the year 1,942,865 (2,306,249) Decrease in trade and other payables (excluding Cash and cash equivalents at end of year 7,523,136 7,507,495 accrued finance costs, investment income and Ordinary Share buybacks) 16 (58,883) (546,980) (15,152,255) (16,060,310) Cash received on settled forward contracts 36,116,611 31,086,892 Cash paid on settled forward contracts (1,682,966) (25,459,874) Cash investment income received 107,906,897 131,219,401 Cash received on disposal of interest rate swaps 7 5,323,394 — Interest rate swap interest paid 7 (1,036,423) — Purchases of investments 6 (304,401,710) (349,917,050) Sales of investments 6 285,143,942 619,536,166 Net cash inflow from operating activities 112,217,490 390,405,225 The accompanying notes on pages 77 to 105 form an integral part of the Financial Statements. Additional information Financial statements Company review Strategic review Governance 77 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements for the year ended 31 March 2025 ## 1. General information Sequoia Economic Infrastructure Income Fund Limited (the "Company") was incorporated and registered in Guernsey under the Companies (Guernsey) Law, 2008 on 30 December 2014. The Company's registration number is 56596 and it is regulated by the Guernsey Financial Services Commission as a registered closed-ended collective investment scheme under The Registered Collective Investment Scheme Rules and Guidance 2021. The Company is listed and began trading on the Main Market of the London Stock Exchange and was admitted to the premium segment of the Official List of the UK Listing Authority on 3 March 2015. The Company makes its investments principally through its subsidiary domiciled in Luxembourg, Sequoia IDF Asset Holdings S.A. (the "Luxembourg Subsidiary"). The Company controls the Luxembourg Subsidiary through a holding of 100% of its shares. The Company further invests in the Luxembourg Subsidiary through the acquisition of Variable Funding Notes ("VFNs") issued by the Luxembourg Subsidiary. The Luxembourg Subsidiary has established three Delaware-domiciled investment holding entities (the "Underlying Subsidiaries"), which it controls through holdings of 100% of their shares, as follows: - ▶ Fussell Circus Capital, Inc. - ▶ Mears Square Advisors, Inc. - ▶ Bajtos Lane Management, Inc. The Company has also established two subsidiaries domiciled in the United Kingdom, Yotta Bistco Limited and Gadwall Holdings Limited (the "UK Subsidiaries"). Gadwall Holdings Limited was incorporated during the year in order to hold an equity stake arising from the restructuring of a borrower group in which the Luxembourg Subsidiary had invested. The Company controls the UK Subsidiaries through holdings of 100% of their shares. Through the Luxembourg Subsidiary and the UK Subsidiaries (together "the Subsidiaries"), the Company invests in a diversified portfolio of senior and subordinated economic infrastructure debt investments. With effect from 28 January 2015, Sequoia Investment Management Company Limited (the "Investment Adviser") was appointed as the Investment Adviser and FundRock Management Company (Guernsey) Limited (the "Investment Manager") was appointed as the Investment Manager. ## 2. Material accounting policies ### Statement of compliance The Annual Financial Statements (the "Financial Statements"), which give a true and fair view, have been prepared in accordance with IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and are in compliance with the Companies (Guernsey) Law, 2008, the Listing Rules and the FCA Disclosure Guidance and Transparency Rules. ### Basis of preparation The Company's Financial Statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of financial instruments measured at fair value through profit or loss. The preparation of financial statements in conformity with IFRS as issued by the IASB requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and judgements are discussed in note 3. The principal material accounting policies adopted are set out below. The Directors believe that the Annual Report and Financial Statements contain all of the information required to enable Shareholders and potential investors to make an informed appraisal of the investment activities and profits and losses of the Company for the year to which it relates and does not omit any matter or development of significance. In accordance with the investment entities exemption contained in IFRS 10, "Consolidated Financial Statements", the Board has determined that the Company satisfies the criteria to be regarded as an investment entity and that the Company provides investment-related services. As a result, the Company is required to only prepare separate Financial Statements under IFRS as issued by the IASB and measures its investment in its Subsidiaries at fair value. This determination involves a degree of judgement (see note 3 for further details). ### Going concern The Company has been incorporated with an unlimited life. In accordance with the Company's Articles, the Directors are required to propose an ordinary resolution (the "Continuation Resolution") every three years. Should a Continuation Resolution not be passed, the Directors are required, within six months, to put forward proposals for the reconstruction or reorganisation of the Company to the Shareholders for their approval. These proposals may or may not involve winding up the Company and, accordingly, failure to pass a Continuation Resolution will not necessarily result in the winding up of the Company. Should the failure of a Continuation Resolution result in a winding up of the Company, it is likely that such winding up would in any case take longer than 12 months. The last Continuation Resolution was proposed in August 2024 and was passed by an overwhelming majority. 78 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 2. Material accounting policies continued The amendments to IFRS 7 and IFRS 9 were published in May 2024 and relate to the classification and measurement of financial instruments. Going concern continued The Directors have reviewed the Fund’s holdings in cash and cash equivalents and investments, including The Directors do not anticipate that the adoption of these amended standards in future periods will have a a consideration of the impact on the portfolio of the market uncertainty related to the continuing conflicts in material impact on the financial statements of the Company. Ukraine and the Middle East and of the economic policies of the current US administration. The Directors IFRS 18 sets out requirements for the presentation and disclosure of information in financial statements to have also considered the potential impact on the Company’s liquidity arising from margin calls relating to the help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity, Company’s forward foreign exchange positions. income and expenses. In conducting this review, the Board has also considered the sustainability of the environmental and In addition, the ISSB published the following Sustainability Disclosure Standards in June 2023, effective for social impact of the Fund’s activities. The Company has a strong balance sheet, with a very low level of accounting periods commencing on or after 1January2024: gearing. The higher interest rate environment of recent years has impacted on the fair values of fixed-rate › IFRS S1, “General Requirements for Disclosure of Sustainability-related Financial Information”; and investments, however such losses as have been incurred – which have and will reverse as the investments move closer to maturity and their valuations accrete to par – are unrealised, and therefore have no direct › IFRS S2, “Climate-related Disclosures”. effect on the solvency of the business. The risk of realised losses arising through loans defaulting is limited to IFRS S1 sets out overall requirements with the objective to require an entity to disclose information about its a few specific investments, representing a small proportion of the Fund’s investment portfolio. The Directors sustainability-related risks and opportunities. also note that the interest income cash flow of the Fund continues to be sufficient to cover operating costs and to pay the Company’s target dividend; and that the Company was able to refinance its revolving credit IFRS S2 sets out the requirements for identifying, measuring and disclosing information about climate-related facility with a new lender on more favourable terms during the year. risks and opportunities. As a result of this review, the Directors have concluded that it is appropriate to adopt the going concern The purpose of both standards is to provide information that is useful to primary users of general purpose basis in preparing the Financial Statements, as the Company, despite the current challenging economic financial reports in making decisions relating to providing resources to the entity. environment, retains a strong balance sheet and adequate financial resources to continue in operational These standards have not been formally endorsed by Guernsey, the UK or the EU and have therefore not yet existence for at least 12 months from the date of approval of these Financial Statements and to meet its been adopted by the Company. The Directors are currently assessing the impact that the adoption of these liabilities as they falldue. three new standards in future periods will have on the Financial Statements of the Company. New and amended accounting standard effective and adopted Investment income › IAS 1 (amended), “Presentation of Financial Statements” (amendments regarding the classification of debt Investment income includes interest income from the Company’s investment in VFNs issued by the with covenants, effective for periods commencing on or after 1 January 2024). Luxembourg Subsidiary and from cash and cash equivalents. The adoption of this amended standard has had no material impact on the Financial Statements of the VFN interest Company. VFN interest is recognised on an accruals basis, and is calculated as the net remaining profit or loss in the Luxembourg Subsidiary after accounting for all revenue and realised gains receivable deriving from its New and amended accounting and sustainability standards applicable to future investments and cash and cash equivalents, less any realised losses or impairments on investments and reportingperiods expenses due or payable. The following relevant IFRSs, which have not been applied in these Financial Statements, were in issue at Interest on VFNs issued by the Luxembourg Subsidiary is paid to the Company on a quarterly basis. the reporting date but not yet effective: TheVFN interest receivable recognised in the Company’s statement of comprehensive income comprises › IFRS 7 (amended), “Financial Instruments: Disclosures” (effective for accounting periods commencing on the quarterly cash payments received from the Luxembourg Subsidiary, adjusted by the accrued balances of or after 1 January 2026); VFN interest brought forward at the start of the year and carried forward at the year end. For details, please › IFRS 9 (amended), “Financial Instruments” (effective for accounting periods commencing on or after refer to note 9. 1January 2026); and › IFRS 18, “Presentation and Disclosures in Financial Statements” (effective for accounting periods commencing on or after 1 January 2027). Additional information Financial statements Company review Strategic review Governance 79 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 2. Material accounting policies continued Financial instruments Net gains/(losses) on financial assets at fair value through profit or loss Classification Net gains/(losses) on financial assets at fair value through profit or loss consists of realised and unrealised The Company classifies its financial assets and financial liabilities into categories in accordance with IFRS 9, gains and losses on both non-derivative and derivative financial assets at fair value through profit or loss, and “Financial Instruments”. are recognised in profit or loss in the statement of comprehensive income. Gains or losses on non-derivative Financial assets and liabilities at fair value through profit and loss financial instruments are calculated as described in the section “Non-derivative financial instruments - fair Financial assets and liabilities classified in this category are designated by management on initial recognition value and subsequent measurement” within this note; gains or losses on derivative financial instruments as part of a group of financial assets and/or liabilities which are managed and their performance evaluated are calculated as described in the section “Derivative financial instruments – fair value and subsequent on a fair value basis, in accordance with a documented investment strategy. This category includes the measurement” within this note. Company’s non-derivative financial assets (investment in shares and VFNs issued by the Subsidiaries) and derivative financial assets and liabilities (forward foreign exchange contracts and interest rate swaps). Share‑based payments (equity‑settled) Theinvestment entities exception to consolidation in IFRS 10, “Consolidated Financial Statements” requires Services received in exchange for the grant of any share-based payments are measured at the fair value of subsidiaries of an investment entity to be accounted for at fair value through profit or loss in accordance the services received. Share-based payments are recognised as an expense in profit or loss of the statement withIFRS 9. of comprehensive income and in equity as an increase in share capital. Non-derivative financial assets at amortised cost In accordance with the terms of the Investment Advisory Agreement, one-tenth of the Investment Adviser’s This category comprises cash and cash equivalents and trade and other receivables, other than fee is settled through the issue of Ordinary Shares in the Company, subject to market conditions. However, prepaidexpenses. during the current and prior years, due to the discount of the Company’s Ordinary Share price to NAV, the Investment Adviser’s fees have been paid entirely in cash, with an obligation on the part of the Investment Non-derivative financial liabilities at amortised cost Adviser to use one-tenth of the fee to acquire Ordinary Shares in the market (see note 10). This category comprises loans payable and trade and other payables. As a result, there have been no share-based payments made during the current or prior years. Recognition and initial measurement Financial assets and financial liabilities at fair value through profit or loss are measured initially at fair value, Expenses being the transaction price, on the trade date. Transaction costs on financial assets at fair value through Expenses of the Company are recognised in profit or loss of the statement of comprehensive income on an profit or loss are expensed immediately. Financial assets or financial liabilities not at fair value through accruals basis. profit or loss are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue. Ordinary Shares The Ordinary Shares of the Company are classified as equity based on the substance of the contractual Non-derivative financial instruments - fair value and subsequent measurement arrangements and in accordance with the definition of equity instruments under IAS 32. The proceeds from After initial measurement, the Company measures non-derivative financial assets classified at fair value the issue of Ordinary Shares are recognised in the statement of changes in shareholders’ equity, net of through profit or loss at their fair values. Changes in fair value are recorded within “Net gains/(losses) on issuecosts. non-derivative financial assets at fair value through profit or loss” in the statement of comprehensive income. This account includes foreign exchange differences. Cash and cash equivalents “Fair value” is the price that would be received to sell an asset or paid to transfer a liability in an orderly Cash comprises current deposits with banks. Cash equivalents are short-term, highly liquid investments transaction between market participants at the measurement date in the principal or, in its absence, the that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value most advantageous market to which the Company has access at that date. The fair value of a liability and are held for the purpose of meeting short-term cash commitments rather than for investments or other reflects its non-performance risk. purposes. Certain amounts of the Company’s cash may be held as collateral against the Company’s forward If there is no quoted price in an active market, the Company uses valuation techniques that maximise foreign exchange trading facilities (see note 8). the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. Please refer to note 6 for further details. Additional information Financial statements Company review Strategic review Governance 80 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 2. Material accounting policies continued Foreign currency Financial instruments continued Functional and presentation currency Non-derivative financial instruments – amortised cost measurement The Financial Statements of the Company are presented in the currency of the primary economic environment in which the Company operates (its functional currency). The Directors have considered After initial measurement, other financial liabilities are measured at amortised cost using the effective interest the primary economic currency of the Company; the currency in which the original finance was raised; rate method. The amortised cost of a financial asset or financial liability is the amount at which the financial the currency in which distributions will be made; and ultimately what currency would be returned to asset or financial liability is measured on initial recognition, minus principal repayments, plus or minus the Shareholders if the Company was wound up. The Directors have also considered the currency to which the cumulative amortisation using the effective interest method of any difference between the initial amount Company’s investments are exposed. On balance, the Directors believe that Sterling best represents the recognised and the maturity amount, minus any allowance for expected credit losses. functional currency of the Company during the year. Therefore, the books and records are maintained in At each reporting date, the Company measures the loss allowance on financial assets carried at amortised Sterling and, for the purpose of the Financial Statements, the results and financial position of the Company cost at an amount equal to the lifetime expected credit losses, if the credit risk has increased significantly are presented in Sterling, which has been selected as the presentation currency of the Company. since initial recognition. If, at the reporting date, the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit Transactions and balances losses. The expected credit losses are estimated based on the Company’s historical credit loss experience, Foreign currency transactions are translated into the functional currency using the exchange rates prevailing adjusted for factors that are specific to the financial asset, general economic conditions and an assessment at the dates of the transactions. Foreign currency balances at the year end are translated into the functional of both the current as well as the forecast direction of conditions at the reporting date, including the time currency at the exchange rates prevailing at the year-end date. Foreign exchange gains and losses resulting value of money where appropriate. from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss of the statement of The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. comprehensive income. the magnitude of the loss if there is a default) and exposure at the default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information. Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction. Non-monetary items measured at fair value are translated using the exchange rates at the date As at 31 March 2025 and 31 March 2024, the carrying amount of the short-term receivables and payables when fair value was determined. approximate their fair value. Derivative financial instruments – fair value and subsequent measurement Dividends The Company holds derivative financial instruments to minimise its exposure to foreign exchange risks (in Interim dividends paid to Shareholders are recorded through the statement of changes in Shareholders’ the form of forward foreign exchange contracts) and to minimise its exposure to interest rate risks (in the equity when they are declared to Shareholders. Final dividends are recorded through the statement of form of interest rate swaps). Derivatives are classified as financial assets or financial liabilities (as applicable) changes in Shareholders’ equity when they are approved by Shareholders. The payment of any dividend at fair value through profit or loss and are initially recognised at fair value; attributable transaction costs by the Company is subject to the satisfaction of a solvency test as required by the Companies (Guernsey) are recognised in profit or loss in the statement of comprehensive income when incurred. Subsequent Law,2008. to initial recognition, derivatives are measured at fair value and changes thereto are recorded within “Netgains/(losses) on derivative financial instruments at fair value through profit or loss” in the statement Segmental reporting ofcomprehensive income. This account includes foreign exchange differences but excludes interest income. The Chief Operating Decision Maker, which is the Board, is of the opinion that the Company is engaged The fair values of derivative transactions are measured using their market prices at the reporting date. in a single segment of business, through its investment in the Subsidiaries, being investment in senior and subordinated infrastructure debt instruments and related and/or similar assets, with the aim of providing Derecognition sustained long-term distributions and capital appreciation. The financial information used by the Chief A financial asset is derecognised when the contractual rights to the cash flows from the financial asset Operating Decision Maker to manage the Company presents the business as a single segment. expire, or when the financial asset and substantially all the risks and rewards thereof are transferred. Segment information is measured on the same basis as that used in the preparation of the Company’s A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Financial Statements. The Company receives no revenues from external customers. Other than the UK Subsidiaries, which are United Kingdom companies, the Luxembourg Subsidiary, which is a Luxembourg company, and its underlying subsidiaries, which are Delaware companies, the Company holds no non-current assets in any geographical area other than Guernsey. Additional information Financial statements Company review Strategic review Governance 81 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 3. Use of judgements and estimates The Company has three direct investments – the Luxembourg Subsidiary and the two UK Subsidiaries – ineachof which it holds 100% of the equity, however its investments in the Subsidiaries are used to acquire The preparation of Financial Statements in accordance with IFRS as issued by the IASB requires the Board exposure to a portfolio comprising a large number of investments. The fair value method is used to represent to make judgements, estimates and assumptions that affect the application of policies and the reported the Subsidiaries’ performance in its internal reporting to the Board, and to evaluate the performance of the amounts of assets and liabilities and income and expenses. The estimates and associated assumptions are Subsidiaries’ investments and to make investment decisions for mature investments. Those investments based on various factors that are believed to be reasonable under the circumstances, the results of which have documented maturity/redemption dates or will be sold if other investments with better risk/reward form the basis of making the judgements about carrying values of assets and liabilities that are not readily profiles are identified, which the Directors consider demonstrates a clear exit strategy. apparent from other sources. Actual results may differ from these estimates. The Subsidiaries serve as asset holding companies and do not provide investment-related services. The estimates and underlying assumptions are reviewed on a semi-annual basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, Accordingly, when the Subsidiaries are assessed based on the structure of the Company and its or in the period of the revision and future periods if the revision affects both current and future periods. Subsidiaries as a whole as a means of carrying out activities, the Board has concluded that the Company satisfies sufficient of the criteria above to meet the definition of an investment entity. As a result, under the The principal judgements and estimates are as follows: terms of IFRS 10, the Company is not permitted to consolidate the Subsidiaries, but must measure its investments in the Subsidiaries at fair value through profit or loss. The Company has determined that the Judgements fair values of the Subsidiaries are the Subsidiaries’ net asset values and has concluded that the Subsidiaries Functional currency meet the definition of unconsolidated subsidiaries under IFRS 12 and has made the necessary disclosures. Refer to note 2 “Functional and presentation currency”. Estimates Going concern Fair value of non-derivative and derivative financial instruments at fair value through Refer to note 2 “Going concern”. profitor loss Investment entity The Company records its investment in the Subsidiaries and in forward foreign exchange contracts and The Board has determined that the Company has all the elements of control as prescribed by IFRS 10 in interest rate swaps at fair value. Details of the valuation methodologies applied in determining the fair value relation to the Subsidiaries and the Underlying Subsidiaries, as the Company owns 100% of the equity of the Subsidiaries and its underlying infrastructure investments are disclosed in note 6. The valuations of of each of the Subsidiaries (and the Luxembourg Subsidiary owns 100% of the equity of the Underlying forward foreign exchange contracts are prepared with reference to prevailing exchange rates. Valuations of Subsidiaries), is exposed and has rights to the returns of the Subsidiaries and the Underlying Subsidiaries, the interest rate swaps are provided by the counterparty, with reference to prevailing levels of interest rates. and has the ability either directly or through the Investment Adviser to affect the amount of its returns from The Directors consider that these valuations represent the best estimate of the fair values of the Company’s the Subsidiaries and Underlying Subsidiaries. investments in the Subsidiaries and their underlying infrastructure investments and in forward foreign The Company provides investment management services and has a number of investors who pool their exchange contracts and interest rate swaps. funds to gain access to these services and investment opportunities that they might not have had access to individually. The Company, being listed on the Main Market of the London Stock Exchange, obtains funding from a diverse group of external Shareholders, to whom it has committed that its business purpose is to invest funds solely for the returns from capital appreciation and investment income. Additional information Financial statements Company review Strategic review Governance 82 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 4. Dividends In the absence of any significant restricting factors, the Board expects to pay dividends totalling 6.875p per Ordinary Share per annum. The Company pays dividends on a quarterly basis. The Company declared and paid the following dividends on its Ordinary Shares during the year ended 31 March 2025: Dividend rate per Net dividend Ordinary Share payable Period to Payment date (p) (£) Record date Ex-dividend date 31 March 2024 23 May 2024 1.71875 27,754,247 26 April 2024 25 April 2024 30 June 2024 23 August 2024 1.71875 27,344,422 26 July 2024 25 July 2024 30 September 2024 22 November 2024 1.71875 27,058,301 25 October 2024 24 October 2024 31 December 2024 28 February 2025 1.71875 26,878,182 31 January 2025 30 January 2025 On 17 April 2025, the Company declared an interim dividend of 1.71875p per Ordinary Share in respect of the quarter ended 31 March 2025. The dividend was paid on 30 May 2025. The Company paid the following dividends on its Ordinary Shares during the year ended 31 March 2024: Dividend rate per Net dividend Ordinary Share payable Period to Payment date (p) (£) Record date Ex-dividend date 31 March 2023 26 May 2023 1.71875 29,662,764 28 April 2023 27 April 2023 30 June 2023 25 August 2023 1.71875 29,140,324 28 July 2023 27 July 2023 30 September 2023 24 November 2023 1.71875 28,675,830 27 October 2023 26 October 2023 31 December 2023 29 February 2024 1.71875 28,346,274 26 January 2024 25 January 2024 Under Guernsey law, the Company can pay dividends in excess of its retained earnings provided it satisfies the solvency test prescribed by the Companies (Guernsey) Law, 2008. The solvency test considers whether the Company is able to pay its debts when they fall due, and whether the value of the Company’s assets is greater than its liabilities. The Company satisfied the solvency test in respect of all dividends declared or paid in theyear. The Directors are authorised to offer Shareholders a scrip dividend alternative instead of cash. However, during the current and prior years, due to the continuing discount of the Company’s Ordinary Share price to the NAV, no scrip dividends were paid. 5. Financial risk management The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Company’s activities. Below is a non-exhaustive summary of the risks that the Company is exposed to as a result of its use of financial instruments. It should be noted that, whilst the non-derivative financial instruments recognised in the Company’s statement of financial position principally comprise its investments in the Subsidiaries, much of the following analysis focuses on the underlying assets and liabilities held within the Subsidiaries, as this is where the financial risks faced by the Company principally arise. The following table provides a reconciliation of the financial assets at fair value through profit or loss of the Subsidiaries to the Company’s financial assets at fair value through profit or loss: | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 31 March 2025 | | | 31 March 2024 | | | | | | £ | | | £ | Subsidiaries’ non-derivative financial assets at fair value through profit or loss 1,423,647,101 1,380,690,694 Subsidiaries’ net current assets 55,568,318 112,480,981 Company’s non-derivative financial assets at fair value through profit or loss 1,479,215,419 1,493,171,675 Additional information Financial statements Company review Strategic review Governance 83 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 5. Financial risk management continued ### Market risk Market risk is the risk that changes in market factors such as foreign exchange rates, interest rates and equity prices will affect the Company's income and/or the value of its holdings in financial instruments. The Company's exposure to market risk comes mainly from movements in the value of its investment in the Subsidiaries and on a look-through basis to the underlying investments in the Subsidiaries' portfolios. Changes in credit spreads (in the case of bond or loan investments) or in discount rates (in the case of private equity investments) may further affect the Subsidiaries' net equity or net income, and hence the value of the Company's investment in the Subsidiaries. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return on risk. The Company's strategy for the management of market risk is driven by its investment objective to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure investments, which are held in portfolios by the Subsidiaries. The various components of the Company's market risk are managed on a daily basis by the Investment Manager in accordance with policies and procedures in place, as detailed below. In addition, the Company, through its Subsidiaries, intends to mitigate market risk generally by not making investments that would cause it to have exposure to any one individual infrastructure asset exceeding 10% of the Fund's investments at the time of investment. The Subsidiaries' market positions are monitored on a quarterly basis by the Board of Directors and by the Investment Manager at the point of investment and on an ongoing basis. ### Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Subsidiaries' interest-bearing financial assets and liabilities expose them to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on their financial position and cash flows. The Company is exposed to cash flow interest rate risk in respect of its cash and cash equivalents and the floating rate debt investments held by the Subsidiaries and to fair value interest rate risk in respect of the fixed-rate debt investments held by the Subsidiaries. As the Company and the Subsidiaries have no investment restrictions which would confine their investment universe to short-dated issues, the Investment Manager is mindful that fixed interest portfolios with longer durations may be subject to relatively greater adverse effects of a rising interest rate environment and inflationary considerations. Interest rate risk is mitigated through the diversification of assets by duration and jurisdiction and the use of interest rate swaps. Interest receivable on bank deposits or payable on loans or bank overdraft positions will be affected by fluctuations in interest rates. Interest rate risk on cash and cash equivalents and loans payable is not considered significant. The following table shows the interest rate profile of the Subsidiaries' investment portfolios: | | 31 March 2025 | | 31 March 2024 | | | --- | --- | --- | --- | --- | | | Range of interest rates | £ | Range of interest rates | £ | | Investments with floating interest rates | 0.00% to 18.68% | 667,191,402 | 0.00% to 21.93% | 645,860,368 | | Investments with fixed interest rates | 0.00% to 12.00% | 736,848,296 | 0.00% to 12.00% | 704,147,820 | | Non-interest-bearing investments | N/A | 19,607,403 | N/A | 30,682,506 | | **Financial assets at fair value through profit or loss (note 6)** | | **1,423,647,101** | | **1,380,690,694** | 84 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 5. Financial risk management continued ### Market risk continued #### Interest rate risk continued The following table shows the Directors' best estimate of the sensitivity of the Company's interest rate swaps and the portfolios of fixed-rate and floating rate investments held within the Subsidiaries to stressed changes in interest rates, with all other variables held constant. The table assumes parallel shifts in the respective forward yield curves and is based on the modified duration of the assets. | Possible reasonable change in interest rate | 31 March 2025 effect on net assets and profit or loss £ | 31 March 2024 effect on net assets and profit or loss £ | | --- | --- | --- | | Fixed-rate investments +3% | (69,640,307) | (74,954,049) | | Floating rate investments +3% | 24,985,824 | 23,044,283 | | Interest rate swaps +3% | (12,945,299) | (8,452,793) | | | (57,599,782) | (60,362,559) | | Fixed-rate investments -3% | 80,467,416 | 86,699,146 | | Floating rate investments -3% | (23,787,614) | (22,779,112) | | Interest rate swaps -3% | 8,825,683 | 8,452,793 | | | 65,505,485 | 72,372,827 | The possible change in the interest rate of 3% (2024: 3%) is regarded as reasonable in the context of the current economic environment and the levels of global interest rates during the year. The sensitivity analysis relating to the fixed-rate investments and the interest rate swaps represents a measure of the fair value interest rate risk attached to the Subsidiaries' investments, based on changes in the discount rates used to value the investments, whilst the sensitivity analysis relating to the floating rate investments represents a measure of the cash flow interest rate risk, based on changes in base rates or other interest rate benchmarks attached to the investments. Under the terms of the Prospectus, the Company is permitted to use interest rate hedging instruments to protect against exposure to interest rate risk. During the year, the Company entered into interest rate swap transactions to look in current levels of interest rates for a period of seven years (see note 7). ## Currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is directly exposed to currency risk in respect of its cash and cash equivalents and derivatives denominated in currencies other than Sterling, and indirectly through its investment in the Luxembourg Subsidiary. The functional and presentational currency of the Company is Sterling. The Company invests in its Luxembourg Subsidiary through VPNs denominated in various currencies other than the functional currency, currently US Dollar, Euro, Australian Dollar and Swiss Franc (2024: US Dollar, Euro, Australian Dollar and Swiss Franc). The Luxembourg Subsidiary in turn invests in financial instruments and enters into transactions that are denominated in currencies other than the functional currency. Consequently, the Company is exposed to risk that the exchange rate of its functional currency relative to other foreign currencies may change in a manner that has an adverse effect on the fair value or future cash flows of the Company's financial assets or liabilities. The Investment Manager monitors the exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager measures the risk of the foreign currency exposure by considering the effect on the net asset value and income of a movement in the rates of exchange to which the assets, liabilities, income and expenses are exposed. A currency hedging programme is in place at the Company level, in line with the intentions stated in the Prospectus, to protect against the effects of currency exposure on the future income arising from the underlying portfolio of investments held by the Luxembourg Subsidiary. The total net foreign currency exposure of the Company and the Subsidiaries combined at the year end was as detailed in the following table. These figures have been presented on a combined basis, as there exist foreign currency assets and liabilities in both the Company and the Luxembourg Subsidiary, and the forward foreign exchange contracts held at the Company level (see note 7) are taken out to hedge currency exposure existing at the Luxembourg Subsidiary level. 85 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 5. Financial risk management continued Market risk continued Currency risk continued | | 31 March 2024 E | | --- | --- | | **USD exposure** | | | Financial assets at fair value through profit or loss | 615,774,220 | | Forward foreign exchange contracts | (636,971,441) | | Cash and cash equivalents | 12,775,520 | | Trade and other receivables | 8,562,036 | | Loan payable | (36,414,349) | | **Net USD exposure** | **(36,274,014)** | | **EUR exposure** | | | Financial assets at fair value through profit or loss | 429,951,408 | | Forward foreign exchange contracts | (452,021,628) | | Cash and cash equivalents | 6,101,515 | | Trade and other receivables | 13,763,567 | | Trade and other payables | (264,071) | | Loan payable | (20,438,934) | | **Net EUR exposure** | **(22,908,143)** | | **CHF exposure** | | | Financial assets at fair value through profit or loss | 39,418,360 | | Forward foreign exchange contracts | (42,014,453) | | Cash and cash equivalents | 769,899 | | Trade and other receivables | 8,194 | | **Net CHF exposure** | **(1,818,000)** | | **AUD exposure** | | | Cash and cash equivalents | 352,583 | | **Net AUD exposure** | **352,583** | | **Total exposure** | **(60,647,574)** | | | 31 March 2024 E | | --- | --- | | **USD exposure** | | | Financial assets at fair value through profit or loss | 685,957,857 | | Forward foreign exchange contracts | (738,617,469) | | Cash and cash equivalents | 74,744,708 | | Trade and other receivables | 5,303,610 | | **Net USD exposure** | **27,388,706** | | **EUR exposure** | | | Financial assets at fair value through profit or loss | 328,439,367 | | Forward foreign exchange contracts | (372,470,134) | | Cash and cash equivalents | 3,512,871 | | Trade and other receivables | 8,611,982 | | Trade and other payables | (296,898) | | **Net EUR exposure** | **(32,202,812)** | | **CHF exposure** | | | Financial assets at fair value through profit or loss | 39,546,533 | | Forward foreign exchange contracts | (41,965,053) | | Cash and cash equivalents | 888,908 | | Trade and other receivables | 39,480 | | **Net CHF exposure** | **(1,510,132)** | | **AUD exposure** | | | Financial assets at fair value through profit or loss | 1,300,532 | | Forward foreign exchange contracts | (1,499,018) | | Cash and cash equivalents | 1,658 | | Trade and other receivables | 515,327 | | **Net AUD exposure** | **318,499** | | **Total exposure** | **(6,005,739)** | 86 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 5. Financial risk management continued Market risk continued Currency risk continued | | | | | | 31 March 2025 | | | | | | | | 31 March 2024 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 31 March 2025 | | effect on net assets | | | Possible reasonable | | | 31 March 2024 | | effect on net asset | | | | | Possible reasonable | net exposure | | | and profit or loss | | | | change in | net exposure | | and profit or loss | | | | change in exchange rate | | | £ | | | £ | | exchange rate | | | £ | | | £ | USD/GBP +/- 10% (36,274,014) -/+ 3,627,401 +/- 10% 27,388,706 +/- 2,738,871 EUR/GBP +/- 10% (22,908,143) -/+ 2,290,814 +/- 10% (32,202,812) -/+ 3,220,281 CHF/GBP +/- 10% (1,818,000) -/+ 181,800 +/- 10% (1,510,132) -/+ 151,013 AUD/GBP +/- 10% 352,583 +/- 35,258 +/- 10% 318,499 +/- 31,850 The possible change in exchange rates of 10% (2024: 10%) is regarded as reasonable, due to the increased volatility during the year of Sterling against the major currencies to which it is exposed. The following table details the split of currencies based on fair value of bonds and loans in the Subsidiaries’ investment portfolios: 31 March 2025 31 March 2024 Currency £ £ Sterling 338,503,113 325,446,405 US Dollar 615,774,220 685,957,857 Euro 429,951,408 328,439,367 Swiss Franc 39,418,360 39,546,533 Australian Dollar — 1,300,532 Total 1,423,647,101 1,380,690,694 Additional information Financial statements Company review Strategic review Governance 87 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 5. Financial risk management continued ### Credit and counterparty risk Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company or one of the Subsidiaries or a vehicle in which the Company or one of the Subsidiaries invests, resulting in a financial loss to the Company. It arises principally from debt securities held, and also from derivative financial assets and cash and cash equivalents. For risk management reporting purposes, the Company considers and aggregates all elements of credit risk exposure (such as individual obligation default risk, country risk and sector risk). In respect of the debt investments, credit risk is the risk that the fair value of a loan (or more generally, a stream of debt payments) will decrease due to a change in the borrower's ability to make payments, whether that change is an actual default or a change in the borrower's probability of default. The Investment Manager's management of the Subsidiaries' portfolios is underpinned by the ongoing monitoring and mitigation of credit risk in the portfolio to ensure that any credit events or institutional ratings changes are identified in a timely manner. Gains or losses arising in the Subsidiaries will be reflected in an increase or decrease in the amount of VFN interest receivable recognized in the Company. The following table analyses the external ratings of the Subsidiaries' portfolio investments, calculated using all available ratings for the portfolio investments from Standard and Poor's, Moody's and Fitch. | Standard & Poor's rating (or equivalent) | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | BB- to BB+ | 21,548,307 | 54,494,305 | | B- to B+ | 141,355,748 | 62,405,933 | | Unrated | 1,260,743,046 | 1,263,790,456 | | | 1,423,647,101 | 1,380,690,694 | Prior to any investment purchase, the Investment Adviser provides a credit memorandum to the Investment Manager which includes a Sequoia credit rating (based on an in-house rating system, which takes into account certain facets of the investment, including the issuer's security, financial statements, debt covenants and the type of debt) for the debt investment, along with a recommendation to purchase the asset. The Investment Manager eats the recommendation and raises with the Risk Committee where appropriate. The mitigation of credit risk starts with the Investment Adviser's Investment Committee, which monitors risks associated with potential debt investments and makes recommendations for acquisitions whilst allocating a Sequoia credit rating. The Investment Adviser formally performs credit reviews of the full portfolio at least semi-annually or as and when a particular "Credit Event" occurs. No investments were downgraded during the current or prior years. The table below analyses the Company's maximum exposure to credit risk for the components of the statement of financial position. | | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | Non-derivative financial assets at fair value through profit or loss | 1,479,215,419 | 1,493,171,675 | | Cash and cash equivalents | 7,523,136 | 7,507,495 | | Derivative financial assets at fair value through profit or loss | 17,669,291 | 28,098,804 | | | 1,504,407,846 | 1,528,777,974 | In line with the Company's original Prospectus, a Cash Management Policy has been put in place. Cash deposits will only be placed with banks that hold a short-term rating of at least A-1, P-1 or F1 from Standard and Poor's, Moody's or Fitch respectively and no more than 40% of net assets may be placed with any one bank at any time. The Investment Manager carefully manages this process ensuring uninvested cash is dispersed to adequately rated banks whilst maximising interest received. The Bank of New York Mellon, as Custodian, holds cash in relation to the portfolio operations and in order to settle investment transactions. At the year end the Standard and Poor's short-term credit rating of Bank of New York Mellon was A-1+ (2024: A-1+). For operational purposes, the Company's policy is to utilise banks with an investment grade rating or higher (A-3, P-3 or F3 from Standard and Poor's, Moody's or Fitch respectively). The Company's operational cash is held with The Royal Bank of Scotland International Limited ("RBSI"). During the year, the Company has used ING Bank ("ING"), Macquarie Bank Limited ("Macquarie"), Morgan Stanley, Nomura Bank International ("Nomura"), Goldman Sachs International ("GSI") and RBSI to undertake forward foreign exchange and interest rate swap transactions. Hedging collateral may be held with these institutions if required. At the year end the short-term credit ratings of these institutions were as follows (Standard & Poor's unless otherwise specified): GSI: A-1; ING: A-1; Macquarie: A-1; Morgan Stanley: A-2; Nomura: A-2; and RBSI: A-1 (2024: GSI: A-1; IBCI: F2 (Fitch); ING: A-1; Macquarie: A-1; Morgan Stanley: A-2; Nomura: A-2; and RBSI: A-1). Bankruptcy or insolvency of any of the above financial institutions may cause the Company's rights with respect to the cash held to be delayed or limited. The Company monitors its risk by regularly monitoring the credit ratings of these financial institutions. Credit risk arising on debt securities held by the Subsidiaries is constantly monitored by the Investment Manager. Credit risk is mitigated by the diversification of assets by maturity profile and jurisdiction. 88 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 5. Financial risk management continued ### Credit and counterparty risk continued The Subsidiaries' exposure to credit risk in respect of their investments, based on the country of registration, is summarised below: | | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | United States of America/Canada | 647,674,936 | 730,024,524 | | Europe | 407,670,076 | 308,077,649 | | United Kingdom | 368,302,089 | 341,287,989 | | Australia | — | 1,300,532 | | **Subsidiaries' non-derivative financial assets at fair value through profit or loss (note 6)** | **1,423,647,101** | **1,380,690,694** | The table below summarises the Subsidiaries' portfolio concentrations: | | Largest portfolio holding of a single asset % of total portfolio | Average portfolio holding % of total portfolio | | --- | --- | --- | | **31 March 2025** | **4.34** | **1.69** | | | Largest portfolio holding of a single asset % of total portfolio | Average portfolio holding % of total portfolio | | **31 March 2024** | **4.39** | **1.82** | The following table summarises the Subsidiaries' exposure to market risk, based on its concentration by industry: | | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | Accommodation | 89,768,829 | 44,955,066 | | Power | 201,636,778 | 287,231,944 | | Renewable energy | 127,693,512 | 139,598,873 | | Digitalisation | 349,605,969 | 356,776,337 | | Transport | 118,892,647 | 101,637,884 | | Transportation equipment | 174,637,095 | 122,892,333 | | Utilities | 205,966,206 | 158,707,627 | | Other | 155,446,065 | 168,890,630 | | **Subsidiaries' non-derivative financial assets at fair value through profit or loss (note 6)** | **1,423,647,101** | **1,380,690,694** | Activities undertaken by the Company and the Subsidiaries may give rise to settlement risk. Settlement risk is the risk of loss due to the failure of an entity to honour its obligations to deliver cash, securities or other assets as contractually agreed. For the majority of transactions, settlement risk is mitigated by conducting settlements through a broker to ensure that a trade is settled only when both parties have fulfilled their contractual settlement obligations. Settlement limits form part of the credit approval and limit monitoring processes. The Investment Manager also conducts reviews of the settlement process and the Custodian to ensure a stringent settlement process is in place. ### Liquidity risk Liquidity risk is the risk that the Company or the Subsidiaries will encounter difficulty in meeting the obligations associated with their financial liabilities that are settled by delivering cash or another financial asset. The Company's policy and the Investment Manager's approach to managing liquidity risk in both the Company and the Subsidiaries is to ensure, as far as possible, that they will always have sufficient liquidity to meet their liabilities when due, under both normal and stress conditions, without incurring unacceptable losses or risking damage to the Company's reputation. In accordance with the Alternative Investment Fund Managers Directive ("AIFMD"), the Company has implemented a liquidity policy that is consistent with its underlying obligations and redemption policy. In accordance with the requirements relating to quantitative and qualitative risk limits and which considers both funding and trading liquidity. 89 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 5. Financial risk management continued Operational risk Liquidity risk continued Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the processes, technology and infrastructure supporting the Company’s activities relating to financial The Investment Manager manages the Company’s liquidity risk by taking into account the liquidity profile instruments, either internally or on the part of service providers, and from external factors other than credit, and strategy of the Company and at the level of the Subsidiaries primarily through investing in a diverse market and liquidity risks such as those arising from legal and regulatory requirements and generally portfolio of assets. Liquidity risk mitigation will be sought through careful selection of assets, asset duration, accepted standards of investment management behaviour. asset liquidity profiling through loan market interaction, geographical focus, currency allocations, cash management and other Company considerations. Operational risk is managed so as to balance the limiting of financial losses and reputational damage with achieving the investment objective of generating returns to investors. Given the Company’s permanent capital structure as a closed-ended fund, it is not exposed to redemption risk. However, the financial instruments of the Company and the Subsidiaries include derivative contracts The Investment Manager works with the Board to identify the risks facing the Company and the Subsidiaries. traded over-the-counter and debt investments, which are not traded in an organised public market and The key risks are documented and updated in the Risk Matrix by the Investment Manager. which may be illiquid. The primary responsibility for the development and implementation of controls over operational risk rests The overall liquidity risk of the Company and the Subsidiaries is monitored on a quarterly basis by the with the Board. This responsibility is supported by the development of overall standards for the management Board of Directors and on an ongoing basis by the Investment Manager. Shareholders will have no right of of operational risk, which encompasses the controls and processes at the service providers and the redemption and must rely, in part, on the existence of a liquid market in order to realise their investment. establishment of service levels with the service providers. There are no Company assets subject to special arrangements arising from their illiquid nature. The Directors’ assessment of the adequacy of the controls and processes in place at service providers with respect to operational risk is carried out through having discussions with and reviewing reports from the The following table details the undiscounted contractual cash flows arising from the Company’s financial Investment Manager, who conducts regular discussions with the service providers. liabilities, based on the remaining period from the year-end date to the contractual maturity date. Less than Between Capital management 1 year 1 and 3 years Tot al The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market As at 31 March 2025 £ £ £ confidence and to sustain future development of the Company. Capital is managed in accordance with the Derivative financial liabilities at fair investment policy, in pursuit of its investment objectives. Share buybacks have been utilised during the year value through profit or loss 2,449,176 4,731,911 7,181,087 to manage the discount of share price to NAV. There are no duration restrictions on the investments acquired 1 by the Subsidiaries. Target annual returns for investors in the Company are an income return of 6% to 7% Loan payable 3,163,539 60,952,882 64,116,421 and a capital return of 1% to 2%. Trade and other payables 3,596,055 — 3,596,055 The Company may employ leverage for short-term liquidity or investment purposes. During the year, the Total financial liabilities 9,208,770 65,684,793 74,893,563 Company has maintained a revolving credit facility. Until 17 July 2024, the facility was £325 million (with an additional £75 million accordion facility) with a consortium of four banks led by the Royal Bank of Scotland | | Less than | | | | Between | | | | International Limited (see note 15). On that date, a new facility of £300 million (with a £50 million accordion | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 1 year | | 1 and 3 years | | | Total | | facility) was agreed with J.P. Morgan Chase Bank, N.A., London Branch. | | As at 31 March 2024 | | | £ | | | £ | | £ | | Derivative financial liabilities at fair value through profit or loss 586,348 189,243 775,591 Trade and other payables 4,322,344 — 4,322,344 Total financial liabilities 4,908,692 189,243 5,097,935 1. See Appendix for Alternative Performance Measures ("APMs") Additional information Financial statements Company review Strategic review Governance 90 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 6. Non-derivative financial assets at fair value through profit or loss The following table provides a reconciliation of the financial assets at fair value through profit or loss of the Subsidiaries to the Company’s financial assets at fair value through profit or loss: The Company’s non-derivative assets at fair value through profit or loss comprise the following: | | | | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 31 March 2025 | | 31 March 2024 | | | | | | | | | | | | | 31 March 2025 | | | 31 March 2024 | | | | | £ | | £ | | | | | | | | | | | | | | £ | | | £ | VFNs issued by the Luxembourg Subsidiary 1,572,602,915 1,579,044,726 Subsidiaries’ non-derivative financial assets at fair value Luxembourg subsidiary equity at fair value through through profit or loss 1,423,647,101 1,380,690,694 profit or loss 104,402,452 83,743,399 Subsidiaries’ net current assets 55,568,318 112,480,981 UK Subsidiaries equity at fair value through profit or loss 967,088 — Company’s non-derivative financial assets at fair VFN interest paid in advance by the Luxembourg value through profit or loss 1,479,215,419 1,493,171,675 Subsidiary to the Company (198,757,036) (169,616,450) None of the Subsidiaries’ non-derivative financial assets at fair value through profit or loss is subject to any Non-derivative financial assets at fair value special arrangements arising from their illiquid nature. through profit or loss at the end of the year 1,479,215,419 1,493,171,675 The Company’s net (losses)/gains on non-derivative financial assets at fair value through profit or loss in the year comprises the following: The following table provides a reconciliation of the movements in non-derivative assets at fair value through profit or loss during the year: | | | | | | | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | 31 March 2025 | | | 31 March 2024 | | | | | | Year ended | | Year ended | | | | | | | | | | | | | | | | | | | £ | | | £ | | | 31 March 2025 | | | 31 March 2024 | | | | | | | | | | | | | £ | | £ | Unrealised foreign exchange losses on VFNs (23,699,579) (31,814,258) | | | | | | | | Cost at the start of the year 1,505,935,819 1,775,554,935 | | | | | | Unrealised gains on revaluation of the Subsidiaries 19,626,141 102,789,821 | | | | | | | | VFNs purchased during the year 302,401,710 349,917,050 | | | | | | Net (losses)/gains on non-derivative financial | | | | | | | assets at fair value through profit or loss (4,073,438) 70,975,563 VFNs redeemed during the year (285,143,942) (619,536,166) Investment in UK Subsidiary 2,000,000 — Cost at the end of the year 1,525,193,587 1,505,935,819 Cumulative net unrealised losses of the Fund on non-derivative financial assets at the end of the year (see table on page 91) (45,978,168) (12,764,144) Non-derivative financial assets at fair value through profit or loss at the end of the year 1,479,215,419 1,493,171,675 Additional information Financial statements Company review Strategic review Governance 91 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 6. Non-derivative financial assets at fair value through profit or loss continued On a look-through basis, the Fund's cumulative net losses on non-derivative financial assets at fair value through profit or loss as at 31 March 2025 comprises the following: | | Year ended 31 March 2025 £ | Year ended 31 March 2024 £ | | --- | --- | --- | | **Subsidiaries** | | | | Investment income during the year | 121,564,594 | 146,519,383 | | Net return on financial assets and liabilities during the year, including foreign exchange and VFN interest payable | (142,086,376) | (163,069,527) | | Net other income during the year | 11,007,337 | 8,144,170 | | Subsidiaries' losses during the year | (9,514,445) | (8,405,974) | | Subsidiaries' losses brought forward | (85,873,052) | (77,467,078) | | **Subsidiaries' losses carried forward at the end of the year** | **(95,387,497)** | **(85,873,052)** | | **Company** | | | | Unrealised foreign exchange gains on VFNs brought forward | 73,108,908 | 104,923,166 | | Unrealised foreign exchange losses on VFNs during the year | (23,699,579) | (31,814,258) | | **Net losses on non-derivative financial assets at fair value through profit or loss carried forward at the end of the year** | **(45,978,168)** | **(12,764,144)** | ## Fair value measurement IFRS 13 requires that a fair value hierarchy be established that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under IFRS 13 are as follows: - Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments; - 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). This category includes instruments valued using, quoted market prices in active markets for similar instruments; quoted for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data; - Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instruments' valuations. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement requires judgement, considering factors specific to the asset or liability. The determination of what constitutes "observable" requires the exercise of judgement. Observable data is considered to be market data that is readily available, regularly distributed or updated, reliable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The Company's investment in the Subsidiaries, through the acquisition of shares and the issue of VFNs, is classified within Level 3, as it is not traded and contains unobservable inputs. The Board considers that the NAVs of the Subsidiaries are representative of their fair value. 92 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 6. Non-derivative financial assets at fair value through profit or loss continued Fair value measurement continued | 31 March 2025 | Level 1 E | Level 2 E | Level 3 E | Total E | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Non-derivative financial assets at fair value through profit or loss | — | — | 1,479,215,419 | 1,479,215,419 | | Derivative financial assets at fair value through profit or loss | — | 17,669,291 | — | 17,669,291 | | **Total** | — | 17,669,291 | 1,479,215,419 | 1,496,884,710 | | **Liabilities** | | | | | | Derivative financial liabilities at fair value through profit or loss | — | 7,181,087 | — | 7,181,087 | | **Total** | — | 7,181,087 | — | 7,181,087 | | 31 March 2024 | Level 1 E | Level 2 E | Level 3 E | Total E | | **Assets** | | | | | | Non-derivative financial assets at fair value through profit or loss | — | — | 1,493,171,675 | 1,493,171,675 | | Derivative financial assets at fair value through profit or loss | — | 28,098,804 | — | 28,098,804 | | **Total** | — | 28,098,804 | 1,493,171,675 | 1,521,270,479 | | **Liabilities** | | | | | | Derivative financial liabilities at fair value through profit or loss | — | 775,591 | — | 775,591 | | **Total** | — | 775,591 | — | 775,591 | During the year there have been no transfers between levels of the fair value hierarchy. Such transfers are recognised at the end of the reporting period in which the change has occurred. 93 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 6. Non-derivative financial assets at fair value through profit or loss continued Fair value measurement continued Movements in the Company’s Level 3 financial instruments during the year were as follows: | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | | | 31 March 2025 | | | 31 March 2024 | | | | Currency | | | £ | | | £ | Opening balance 1,493,171,675 1,803,011,023 Purchases of VFNs 302,401,710 349,917,050 Sales of VFNs (285,143,942) (619,536,166) Investment in UK Subsidiary 2,000,000 — Net (losses)/gains on non-derivative financial assets in the year (4,073,438) 70,975,563 Movement in VFN interest balance during the year (29,140,586) (111,195,795) Closing balance 1,479,215,419 1,493,171,675 The investments held by the Subsidiaries in the underlying portfolios are classified within the fair value hierarchy as follows: Level 1 Level 2 Level 3 Tot al 31 March 2025 £ £ £ £ Assets Non-derivative financial assets at fair value through profit or loss — 130,364,306 1,293,282,795 1,423,647,101 Level 1 Level 2 Level 3 Total 31 March 2024 £ £ £ £ Assets Non-derivative financial assets at fair value through profit or loss — 43,145,201 1,337,545,493 1,380,690,694 The Subsidiaries’ Level 3 investment valuations are calculated by discounting future cash flows at a yield appropriate to comparable infrastructure loans or bonds (with such yield assessed primarily from publicly available sources and secondarily in consultation with brokers and syndicate desks). Spread data will also be cross-referenced to recently priced primary market transactions if possible. When identifying comparable loans or bonds, for the purpose of assessing market yields, structural and credit characteristics and project type are also considered. The equity investments arising from the restructuring of a borrower group have been fair valued principally on a discounted cash flow basis. During the year, no investments were transferred between levels of the fair value hierarchy (2024: 10 investments with a value of £288,086,219 were transferred from Level 2 to Level 3 of the fair value hierarchy). Suchtransfers are recognised at the end of the reporting period in which the change has occurred. The following table summarises the significant unobservable inputs the Company used to value its Subsidiaries’ underlying investments categorised within Level 3 at 31 March 2025. The table is not intended to be all-inclusive but instead captures the significant unobservable inputs relevant to our determination of fair values. Additional information Financial statements Company review Strategic review Governance 94 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 6. Non-derivative financial assets at fair value through profit or loss continued Fair value measurement continued | 31 March 2025 Type | Sector | Fair value £ | Primary valuation technique | Significant unobservable inputs | Range input | | --- | --- | --- | --- | --- | --- | | Private debt | Accommodation | 96,574,073 | Discounted cash flow | Discount rate | 6.6%-20.0% | | Private debt | Power | 201,636,778 | Discounted cash flow | Discount rate | 4.6%-27.4% | | Private debt | Renewable energy | 127,693,512 | Discounted cash flow | Discount rate | 4.5%-9.9% | | Private debt | Digitalisation | 349,605,969 | Discounted cash flow | Discount rate | 4.8%-10.3% | | Private debt | Transport | 84,887,844 | Discounted cash flow | Discount rate | 5.7%-7.1% | | Private debt | Transport assets | 143,326,643 | Discounted cash flow | Discount rate | 5.2%-7.3% | | Private debt | Utilities | 148,481,370 | Discounted cash flow | Discount rate | 4.8%-15.0% | | Private debt | Other | 139,076,606 | Discounted cash flow | Discount rate | 4.4%-12.0% | | | | 1,293,282,795 | | | | 95 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 6. Non-derivative financial assets at fair value through profit or loss continued Fair value measurement continued 31 March 2024 Fair value Primary valuation Significant Type Sector £ technique unobservable inputs Range input Private debt Accommodation 44,955,066 Discounted cash flow Discount rate 7.1%-15.0% Private debt Power 253,346,143 Discounted cash flow Discount rate 3.8%-10.9% Pricing of index with Private debt Power 14,236,838 similar credit quality Index price N/A Private debt Renewable energy 139,598,873 Discounted cash flow Discount rate 4.5%-10.2% Private debt Digitalisation 356,776,337 Discounted cash flow Discount rate 5.8%-11.7% Private debt Transport 101,637,884 Discounted cash flow Discount rate 6.0%-7.7% Private debt Transport assets 99,396,095 Discounted cash flow Discount rate 5.3%-7.7% Private debt Utilities 128,025,121 Discounted cash flow Discount rate 4.7%-15.0% Private equity Utilities 30,682,506 Discounted cash flow Discount rate 15.0% Private debt Other 98,119,006 Discounted cash flow Discount rate 7.0%-12.0% Private debt Other 48,937,300 Underlying property valuation Property valuation N/A Private debt Other 21,834,324 Non-binding offer received Offer value N/A 1,337,545,493 The following table shows the Directors’ best estimate of the sensitivity of the Subsidiaries’ Level 3 investments to changes in the principal unobservable input, with all other variables held constant. | | | 31 March 2025 | | | 31 March 2024 | | | --- | --- | --- | --- | --- | --- | --- | | | effect on net assets | | | effect on net assets | | | | Possible reasonable | | and profit or loss | | | and profit or loss | | | change in interest rate | | | £ | | | £ | Fixed-rate investments +3% (62,809,544) (70,665,404) Floating rate investments +3% 23,044,469 22,454,106 (39,765,075) (48,211,298) Fixed-rate investments -3% 72,608,289 81,700,946 Floating rate investments -3% (21,846,259) (22,188,935) 50,762,030 59,512,011 Additional information Financial statements Company review Strategic review Governance 96 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 6. Non-derivative financial assets at fair value through profit or loss continued ### Fair value measurement continued The sensitivity analysis assumes a change in the level of interest rates of 3% (2024: 3%), with all other variables unchanged. This possible change in the interest rate is regarded as reasonable in the context of the current economic environment and the levels of global interest rates during the year. The sensitivity analysis relating to the fixed-rate investments represents a measure of the fair value interest rate risk attached to the Subsidiaries' Level 3 investments, based on changes in the discount rates used to value the investments, whilst the sensitivity analysis relating to the floating rate investments represents a measure of the cash flow interest rate risk, based on changes in base rates or other interest rate benchmarks attached to the investments. ### Valuation techniques for the investment portfolio of the Subsidiaries With effect from 18 April 2017, the Company engaged PwC as Valuation Agent, with responsibility for reviewing the valuations applied by the Investment Adviser in relation to the acquisition of loans and bonds on a monthly basis. The principles and techniques utilised by the Investment Adviser and reviewed by PwC during the year in calculating the valuations are described below. ### Performing portfolio assets Valuations of performing portfolio loans and bonds are based on actual market prices (bid-note prices) obtained from third-party brokers and syndicate desks if available (such brokers to be agreed with the Investment Adviser). If such prices are not available, then valuations are calculated by discounting future cash flows at a yield appropriate to comparable infrastructure loans or bonds (with such yield assessed primarily from publicly available sources and secondarily in consultation with brokers and syndicate desks). Spread data will also be cross-referenced to recently priced primary market transactions if possible. When identifying comparable loans or bonds, for the purpose of assessing market yields, the following will be taken into account: - project type: jurisdiction, sector, project status, transaction counterparties such as construction companies, facility management providers; - structural characteristics: maturity and average life, seniority, secured/unsecured, amortisation profile, cash sweeps, par versus discount; and - credit characteristics: credit ratios (e.g. equity cushion, asset cover/LTV, debt service coverage ratios or equivalent, debt/EBITDA), ratings and ratings trajectory. In calculating the net present value of future cash flows on loans with uncertain cash flows (such as cash-sweep mechanisms), "banking base case" cash flows are used unless there is clear evidence that the market is using a valuation based upon another set of cash flows. In the case of discount loans with step-up margins, the assumption will be that market discounts are calculated on a yield-to-worst basis, unless there is clear evidence that the market convention for that loan is different. For variable rate loans and bonds, for the purposes of projecting cash flows, the market convention of simple compounding to the next interest payment date is used and swap rates for subsequent interest payments, unless there is clear evidence that the market convention for that loan or bond is different. The equity investments arising from the restructuring of a borrower group during the year have been fair valued principally on a discounted cash flow basis. ### Non-performing portfolio assets Valuations of non-performing portfolio loans and bonds are based on actual market prices obtained from third-party brokers if available, otherwise the net present value of future expected loan cash flows will be calculated, estimated on the basis of the median outcome and discount rate that reflects the market yield of distressed/defaulted loans or bonds. In assessing the median outcome cash flows, a project/corporate model that reflects the distressed state of the project will be used in order to assess a range of potential outcomes for expected future cash flows with regards to, for example, interest or principal recoveries and timing. The Investment Adviser will work closely with the Valuation Agent and they will have access to the Investment Adviser's own model, analysis and internal valuations. These valuations are subject to a high degree of management oversight and ultimate approval by the Investment Manager. In the opinion of the Investment Adviser, as at 31 March 2025, there are two non-performing assets in the portfolio (2024: four), with a total value of £15.1 million (2024: £81.8 million). ### Finalising the net asset value Once the appropriate position price has been determined to be applied to each investment, the calculation of the Subsidiaries' net asset values is finalised through the following steps: - conversion of each investment into GBP based on month-end foreign exchange rates; - reconciliation of any interest accrued since issue of the most recent coupon; and - aggregation of the investments into a single Fund NAV position statement (clean and dirty price). ## 7. Derivative financial assets/(liabilities) at fair value through profit or loss The Company's derivative financial instruments at fair value through profit or loss comprise the following assets and liabilities: | | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | Forward foreign exchange contract assets | 17,669,291 | 25,537,739 | | Interest rate swap assets | — | 2,561,065 | | Total derivative assets at fair value through profit or loss | 17,669,291 | 28,098,804 | | Forward foreign exchange contract liabilities | (4,034,017) | (775,591) | | Interest rate swap liabilities | (3,147,070) | — | | **Net derivative assets at fair value through profit or loss** | **10,488,204** | **27,323,213** | 97 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 7. Derivative financial assets/(liabilities) at fair value through profit or loss continued Forward foreign exchange contracts As at 31 March 2025, the Company had the following outstanding commitments in respect of open forward foreign exchange contracts, by currency and by counterparty. | | | Buying | | | GBP | | Unrealised | | | Unrealised | | | Net unrealised | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Currency | currency | | amount | | | | gains | | | losses | | | gains | | | 31 March 2025 | amount | | £ | | | £ | | | £ | | | £ | | | £ | Selling currency USD 824,300,000 GBP 644,694,641 8,157,535 (2,818,277) 5,339,258 EUR 539,500,000 GBP 467,266,108 8,812,181 (1,215,740) 7,596,441 CHF 45,000,000 GBP 42,014,453 595,663 — 595,663 1,153,975,202 17,565,379 (4,034,017) 13,531,362 Buying currency USD 10,000,000 GBP 7,723,200 21,138 — 21,138 EUR 18,300,000 GBP 15,244,480 82,774 — 82,774 22,967,680 103,912 — 103,912 1,131,007,522 17,669,291 (4,034,017) 13,635,274 Unrealised Unrealised Net unrealised gains losses gains/(losses) Counterparty £ £ £ GSI 633,368 (24,957) 608,411 ING 4,044,472 — 4,044,472 Macquarie 2,311,174 (911,224) 1,399,950 Morgan Stanley 1,287,100 (1,431,474) (144,374) Nomura 8,087,388 — 8,087,388 RBSI 1,305,789 (1,666,362) (360,573) 17,669,291 (4,034,017) 13,635,274 Additional information Financial statements Company review Strategic review Governance 98 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 7. Derivative financial assets/(liabilities) at fair value through profit or loss continued Forward foreign exchange contracts continued | | Currency | | Buying | | GBP | | Unrealised | | | Unrealised | | | Net unrealised | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | amount | | currency | | amount | | | gains | | | losses | | gains/(losses) | | | 31 March 2024 | | £ | | £ | | £ | | | £ | | | £ | | £ | Selling currency USD 953,900,000 GBP 769,979,369 16,409,587 (701,837) 15,707,750 EUR 421,600,000 GBP 372,470,134 7,700,216 (70,716) 7,629,500 CHF 45,000,000 GBP 41,985,053 1,270,727 — 1,270,727 AUD 2,900,000 GBP 1,499,018 — (3,038) (3,038) 1,185,933,574 25,380,530 (775,591) 24,604,939 Buying currency USD 39,500,000 GBP 31,361,900 157,209 — 157,209 31,361,900 157,209 — 157,209 1,154,571,674 25,537,739 (775,591) 24,762,148 Unrealised Unrealised Net unrealised gains losses gains Counterparty £ £ £ GSI 221,055 (55,596) 165,459 ING 1,064,155 (298,785) 765,370 Macquarie 5,822,510 — 5,822,510 Morgan Stanley 9,363,285 (70,716) 9,292,569 Nomura 4,120,824 — 4,120,824 RBSI 4,945,910 (350,494) 4,595,416 25,537,739 (775,591) 24,762,148 All forward foreign exchange positions at the year end were held with Goldman Sachs International, ING Bank, Macquarie Bank Limited, Morgan Stanley, Nomura Bank International or the Royal Bank of Scotland International, as noted above. There are no master netting arrangements in place. The forward foreign exchange positions at the year end have various maturity dates ranging from 10 April 2025 to 10 February 2027 (2024: 4 April 2024 to 9 March 2026). Additional information Financial statements Company review Strategic review Governance 99 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 7. Derivative financial assets/(liabilities) at fair value through profit or loss continued 8. Cash and cash equivalents Interest rate swaps 31 March 2025 31 March 2024 On 23 October 2023, the Company entered into an interest rate swap transaction with Macquarie £ £ Bank Limited to receive a fixed-rate of 4.512% on an amount of USD 90 million against 3-month CME Cash held on call or overnight deposit accounts 7,523,136 7,507,495 Term SOFR, commencing on 29 December 2023 and continuing quarterly until the termination date of 7,523,136 7,507,495 20October2030. On 7 May 2024, the Company entered into an additional interest rate swap transaction with Macquarie Under the terms of its forward foreign exchange trading agreements with Goldman Sachs International, to receive a fixed-rate of 4.320% on an amount of £30 million against 3-month compounded SONIA, ING Bank, Macquarie Bank Limited, Morgan Stanley, Nomura International and the Royal Bank of Scotland commencing on 30 June 2024 and continuing quarterly until the termination date of 7 November 2030. International, the Company may be required in certain circumstances to retain balances in collateral Thepreviously placed USD 90 million 3-month CME Term SOFR interest rate swap has been repriced accounts representing the applicable margin on each facility. As at 31 March 2025, £Nil (2024: £Nil) on 17 September 2024, with the Company receiving 2.948% as a fixed-rate. The repricing included a washeld in collateral accounts. USD7.07million (£5,323,394) mark-to-market settlement in favour of the Company. 9. Investment income On 28 March 2025, the Company entered into a new interest rate swap transaction with Macquarie to receive a fixed-rate of 3.617% on USD 70 million against weighted average SOFR, commencing on 31 March 2025 31 March 2024 30June2025 and continuing quarterly until the termination date of 31 March 2032. £ £ As at 31 March 2025, the interest rate swaps were valued at -£3,147,070, in accordance with valuations Investment income on financial assets atamortisedcost provided by the counterparty. Cash and cash equivalents 250,320 317,457 The net gains/(losses) on derivative financial assets in the year comprises both realised and unrealised gains Investment income on the Company’s non-derivative and losses as follows: financial assets at fair value through profit and loss | | | Year ended | | Year ended | | Cash VFN interest income received 107,656,577 130,901,944 | | | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 March 2025 | | | 31 March 2024 | | | | | | | | £ | | £ | Movement in VFN interest balance (see note 6) (29,140,586) (111,195,795) | | | Net realised gains on forward foreign exchange | | | | | | | 78,515,991 19,706,149 | contracts 34,433,645 5,627,018 78,766,311 20,023,606 Net unrealised (losses)/gains on forward foreign The Company’s investment income on non-derivative financial assets at fair value through profit or loss (VFN exchange contracts (11,126,874) 32,568,272 interest) is derived from its investment in VFNs issued by its Luxembourg Subsidiary and comprises the Realised gain on interest rate swap 5,323,394 — net of the Luxembourg Subsidiary’s revenue (principally interest on loans and bonds) and realised gains on investments, less expenses, realised investment losses and investment book cost impairment losses. Unrealised (losses)/gains on interest rate swaps (5,708,135) 2,561,065 During the current and prior years, year-end impairments in the Luxembourg Subsidiary to the book Interest rate swap interest paid (1,036,423) — costs of certain non-performing and underperforming loans have negatively impacted the amount of VFN Net gains on derivative financial instruments interest income recognised in the books of the Company. It should be noted however that such book cost during the year 21,885,607 40,756,355 impairments have no effect on the Company’s NAV – as all of the Subsidiaries’ investments are measured at fair value – nor on the VFN interest cash flows arising on the Company’s investments in the VFNs. Additional information Financial statements Company review Strategic review Governance 100 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 10. Related parties and other material contracts Investment Manager FundRock Management Company (Guernsey) Limited (the “Investment Manager”) was appointed as the Transactions with Investment Manager and Investment Adviser Investment Manager with effect from 28 January 2015. With effect from 1 December 2016, the Investment Investment Adviser Manager was entitled to receive a management fee for AIFM services calculated as follows: Sequoia Investment Management Company Limited (the “Investment Adviser”) was appointed as the › if the Company’s NAV is less than £200 million, 0.075% per annum of the value of the Company’s Investment Adviser with effect from 28 January 2015. With effect from 1 September 2018, the Investment NAV;plus Adviser is entitled to receive from the Company a base fee calculated as follows: › if the Company’s NAV is more than £200 million and less than £400 million, 0.05% per annum of the › 0.74% of the market value of the investments (excluding committed but not yet invested investments and Company’s NAV not included above; plus cash) owned by the Subsidiaries up to £1 billion; plus › if the Company’s NAV is more than £400 million and less than £500 million, 0.04% per annum of the › 0.56% of the market value of the investments (excluding committed but not yet invested investments and Company’s NAV not included above; plus cash) owned by the Subsidiaries in excess of £1 billion. › if the Company’s NAV is more than £500 million, 0.015% per annum of the Company’s NAV not included All such fees are payable quarterly. Subject to market conditions, 10% of the Investment Adviser’s fee is above. applied in subscribing for Ordinary Shares in the Company, which the Investment Adviser shall retain with The fee is subject to an annualised minimum of £80,000 applied on a monthly basis and is payable monthly a three-year rolling lock-up (such that those Ordinary Shares may not be sold or otherwise disposed of by in arrears. With effect from 2 May 2017, the management fee was capped at £320,000 per annum, subject the Investment Adviser without the prior consent of the Company before the third anniversary of the date of to an annual inflation-linked increase (with effect from 1 May 2025: £436,440; with effect from 1 May 2024: issue of the relevant Ordinary Shares). However, during the current and prior years, due to the discount of £420,463). the Company’s Ordinary Share price to NAV, the Investment Adviser’s fees have been paid entirely in cash, with an obligation on the part of the Investment Adviser to use one-tenth of the fee to acquire Ordinary The Investment Management agreement can be terminated by either party giving not less than six months’ Shares in the market. written notice. On 15 April 2024, the Investment Adviser acquired 300,000 Ordinary Shares in the market in relation to fees payable for the quarter ended 31 March 2024. On 15 July 2024, the Investment Adviser acquired 314,588 Ordinary Shares in the market in relation to fees payable for the quarter ended 30 June 2024. On 22 October 2024, the Investment Adviser acquired 306,410 Ordinary Shares in the market in relation to fees payable for the quarter ended 30 September 2024. On 20 January 2025, the Investment Adviser acquired 314,470 Ordinary Shares in the market in relation to fees payable for the quarter ended 31 December 2024. On 28 April 2025, the Investment Adviser acquired 318,381 Ordinary Shares in the market in relation to fees payable for the quarter ended 31 March 2025. The Investment Advisory agreement can be terminated by either party giving not less than six months’ written notice. The Investment Adviser’s appointment will be automatically terminated upon termination of the Investment Manager’s appointment under the Investment Management agreement. Additional information Financial statements Company review Strategic review Governance 101 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 10. Related parties and other material contracts continued ### Ordinary Shares held by related parties The shareholdings of the Directors in the Company were as follows: | Name | As at 31 March 2025 | | As at 31 March 2024 | | | --- | --- | --- | --- | --- | | | Number of Ordinary Shares | Percentage of Ordinary Shares in Issue | Number of Ordinary Shares | Percentage of Ordinary Shares in Issue | | James Stewart (with his spouse) | 80,815 | 0.01% | 43,275 | 0.00% | | Tim Drayson | 207,000 | 0.01% | 207,000 | 0.01% | | Margaret Stephens | 24,519 | 0.00% | — | — | | Paul Le Page | — | — | — | — | | Fiona Le Poidevin | N/A | N/A | — | — | | Sandra Platts (in a family RATS) | N/A | N/A | 27,953 | 0.00% | As at 31 March 2025, the Investment Adviser held an aggregate of 6,944,131 Ordinary Shares (2024: 5,708,663 Ordinary Shares), which is 0.45% (2024: 0.35%) of the issued share capital. As at 31 March 2025, the members of the Investment Adviser's founding team held an aggregate of 835,656 Ordinary Shares (2024: 835,656 Ordinary Shares), which is 0.05% (2024: 0.05%) of the issued share capital. As at 31 March 2025, the Investment Manager held an aggregate of 50,000 Ordinary Shares (2024: 50,000 Ordinary Shares), which is 0.00% (2024: 0.00%) of the issued share capital. ### Directors' fees The Directors of the Company receive fees for their services as Directors. During the year, the Directors received fees of £321,250 (2024: £329,692). As at 31 March 2025, there were no Directors' fees outstanding (2024: £NII). For details of the structuring of the Directors' remuneration, please refer to the Directors' remuneration report on pages 58 and 59. ### Administrator With effect from 28 January 2015, Apex Fund and Corporate Services (Guernsey) Limited (the "Administrator") was appointed as the Administrator. With effect from 1 June 2016, the Administrator is entitled to receive from the Company a base fee calculated as follows and payable monthly: - If the Company's NAV is less than £300 million, 0.07% per annum of the value of the Company's NAV; plus - If the Company's NAV is more than £300 million and less than £400 million, 0.05% per annum of the Company's NAV not included above; plus - If the Company's NAV is more than £400 million, 0.04% per annum of the Company's NAV not included above. The base fee is subject to a minimum of £95,000 applied on a monthly basis and was capped at £300,000 per annum, subject to an annual inflation-linked increase (with effect from 1 May 2025: £400,366; with effect from 1 May 2024: £375,556). The Administrator is also entitled to a fee for company secretarial services based on time costs. The Administration agreement can be terminated by either party giving not less than 90 days' written notice. 1. See footnote on page 49 102 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 | 10. Related parties and other material contracts continued | | Charge for | | Amounts outstanding | | | | --- | --- | --- | --- | --- | --- | --- | | | | the year | | | at 31 March 2024 | | | Other material contracts | Year ended 31 March 2024 | | £ | | | £ | Subsidiary Administrator Investment Adviser’s fees 9,937,332 2,456,473 With effect from 28 January 2015, TMF Luxembourg S.A. (the “Subsidiary Administrator”) was appointed Administration fees 401,973 30,000 as the Administrator of the Luxembourg Subsidiary. During the calendar year 2025, the Subsidiary Administrator will receive an estimated amount in recurring and ad hoc fees from the Luxembourg Subsidiary Investment Manager’s fees 504,656 — of €92,545 per annum (£77,521) (2024: €90,288 per annum (£77,209) during the calendar year 2024). Directors’ fees and expenses 367,726 — Custodian 1 Sub-administration fee 104,615 2,541 With effect from 27 February 2015, The Bank of New York Mellon (the “Custodian”) was appointed as the 1 Fees payable to the Custodian 868,559 141,780 Custodian. The Custodian is entitled to receive fees, as agreed from time to time, for services provided as portfolio administrator, depositary, calculating agent, account bank and custodian. 12,184,861 2,630,794 The Custodian agreement can be terminated by either party giving not less than 60 days’ written notice. 1. Includes expenses of both the Company and the Subsidiaries The amounts charged for the above-mentioned fees during the year ended 31 March 2025 and outstanding Loan collateral at 31 March 2025 are as follows: With effect from 17 July 2024, security for a revolving credit facility of £300 million (see note 15) with JPMorgan Chase Bank, N.A., London Branch was provided by, inter alia, a charge over the bank accounts | | Charge for | | Amounts outstanding | | | | | --- | --- | --- | --- | --- | --- | --- | | | the year | | | at 31 March 2025 | | of the Company, a charge over the shares in the Subsidiaries held by the Company and a charge on the | | Year ended 31 March 2025 | | £ | | | £ | assets of the Company. | Investment Adviser’s fees 9,837,744 2,445,667 11. Tax status Administration fees 505,738 20,000 The Company is exempt from Guernsey income tax and is charged an annual exemption fee of £1,600 Investment Manager’s fees 427,098 — (2024: £1,600) under The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989. Directors’ fees and expenses 333,969 — 12. Share capital 1 Sub-administration fee 117,515 780 The Company’s Ordinary Shares and C shares are classified as equity. Incremental costs directly attributable 1 to the issue of Ordinary Shares and C shares are recognised as a deduction in equity and are charged to the Fees payable to the Custodian 335,905 143,362 relevant share capital account. 11,557,969 2,609,809 The Company undertakes that it shall ensure that its records and bank accounts are operated in such a way that the assets attributable to the Ordinary Shares and the C shares can be separately identified. Onthe conversion of C shares to Ordinary Shares, C Shareholders shall be allocated an appropriate number of Ordinary Shares, calculated by reference to the conversion ratio. The authorised share capital of the Company is represented by an unlimited number of shares of nil par value, to which the following rights are attached: a) dividends: Ordinary Shareholders and C Shareholders are entitled to receive, and participate in, any dividends or other distributions resolved to be distributed from their respective pools of assets in respect of any accounting period or other period, provided that no calls or other sums due by them to the Company are outstanding; Additional information Financial statements Company review Strategic review Governance 103 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes to the Financial Statements continued for the year ended 31 March 2025 12. Share capital continued Subsequent to the year end, the Company has bought back a further 11,004,912 Ordinary Shares at a cost of £8,465,682. b) winding up: On a winding up, the Ordinary Shareholders and C Shareholders shall be entitled to the surplus assets remaining in their respective pools of assets after payment of creditors; and 13. Basic and diluted earnings per share c) voting: Ordinary Shareholders have the right to receive notice of and to attend, speak and vote at general meetings of the Company and each holder being present in person or by proxy shall upon a show of Year ended Year ended hands have one vote and upon a poll one vote in respect of every Ordinary Share held. C Shareholders 31 March 2025 31 March 2024 Issued share capital £ £ have no right to attend or vote at any meeting of the Company, except that the consent of C Shareholders is required for any alteration to the Memorandum or Articles of the Company; for the passing of any Profit for the year £79,799,880 £110,424,854 resolution to wind up the Company; and for the variation or abrogation of the rights attached to the Weighted average number of Ordinary Shares 1,582,817,987 1,679,167,955 Cshares. Basic and diluted earnings per Ordinary Share 5.04p 6.58p The Company may acquire its own Ordinary Shares, up to a maximum number of 14.99%. perannum of the Ordinary Shares in issue. The weighted average number of Ordinary Shares is based on the number of Ordinary Shares in issue during the year under review, excluding Ordinary Shares held in treasury, as detailed in note 12. There were no C shares in issue during either the current or prior years. There were no dilutive financial instruments in issue during the years ended 31 March 2025 or | | 31 March 2025 | | 31 March 2024 | | 31March2024. | | --- | --- | --- | --- | --- | --- | | | Ordinary Shares | | Ordinary Shares | | | | Issued share capital | | Number | | Number | | 14. Trade and other receivables Share capital at the beginning of the year 1,625,484,274 1,734,819,553 | | | | 31 March 2025 | | 31 March 2024 | | | --- | --- | --- | --- | --- | --- | --- | | Share buybacks (70,422,338) (109,335,279) | | | | £ | | £ | | | 1,555,061,936 1,625,484,274 | Prepaid finance costs 2,293,151 543,839 | | | | | Other prepaid expenses 118,028 58,668 | | 31 March 2025 | | 31 March 2024 | | 2,411,179 602,507 | | --- | --- | --- | --- | --- | --- | | | Ordinary Shares | | Ordinary Shares | | | | Issued share capital | | £ | | £ | | 15. Loan payable Share capital at the beginning of the year 1,720,452,093 1,808,622,511 During the year, the Company successfully refinanced its existing multi-currency revolving credit facility Share buybacks (55,858,674) (88,170,418) (“RCF”) of £325 million, which was previously held with the Royal Bank of Scotland International Limited (“RBSI”) as lead arranger and was due to mature on 12 November 2024. 1,664,593,419 1,720,452,093 The new multi-currency RCF of £300 million is provided by JPMorgan Chase Bank, N.A., London Branch The number of Ordinary Shares in issue disclosed in the above table excludes Ordinary Shares bought back (“JPM”), has an accordion facility of £50 million and matures in July 2027. The proceeds of the loan are to be into treasury. used in or towards the making of investments in accordance with the Company’s investment policy. On 29 April 2024, the Company announced that 154,046,443 Ordinary Shares previously bought back into The loan imposes an interest cover test and is secured by, inter alia, a charge over the bank accounts of the treasury had been cancelled. As at 31 March 2025, the Company had a total of 1,614,192,555 Ordinary Company, a charge over the shares in the Subsidiaries held by the Company and a charge on the assets Shares in issue (2024: 1,768,238,998), of which 59,130,619 Ordinary Shares were held in treasury (2024: of the Company. In accordance with the Company’s investment policy, any borrowings undertaken by the 142,754,724). Company will not exceed 20% of the value of the assets of the Company less its liabilities. Should the value During the year, no Ordinary Shares have been issued to the Investment Adviser in relation to fees payable of the underlying assets held in the Subsidiaries fall below a certain level, further margin calls may be made (2024: no Ordinary Shares issued). by JPM, however no margin calls were made during the current period. During the year, no Ordinary Shares were issued in respect of scrip dividends (2024: no Ordinary Sharesissued). Additional information Financial statements Company review Strategic review Governance 104 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 15. Loan payable continued The following table represents a reconciliation of the liabilities arising from financing activities during the year, as required by IAS 7. | For the year ended 31 March 2025 | EUR facility £ | GBP facility £ | USD facility £ | Total £ | | --- | --- | --- | --- | --- | | **RBSI RCF** | | | | | | Balance brought forward | — | — | — | — | | Cash flows | | | | | | Drawdowns | — | 15,000,000 | — | 15,000,000 | | Repayments | — | (15,495,491) | — | (15,495,491) | | Non-cash changes | | | | | | Capitalised interest and loan fees | — | 495,491 | — | 495,491 | | **Closing balance** | — | — | — | — | | **JPM RCF** | | | | | | Cash flows | | | | | | Drawdowns | 40,408,753 | — | 37,084,367 | 77,493,120 | | Repayments | (20,043,484) | — | — | (20,043,484) | | Non-cash changes | | | | | | Capitalised interest and loan fees | 47,320 | — | — | 47,320 | | Foreign exchange revaluations | 26,345 | — | (670,018) | (643,673) | | **Balance carried forward** | 20,438,934 | — | 36,414,349 | 56,853,283 | | For the year ended 31 March 2024 | | GBP facility £ | USD facility £ | Total £ | | **RBSI RCF** | | | | | | Balance brought forward | | 79,742,568 | 102,046,294 | 181,788,862 | | Cash flows | | | | | | Drawdowns | | — | 77,384,713 | 77,384,713 | | Repayments | | (79,742,568) | (176,968,268) | (256,710,836) | | Non-cash changes | | | | | | Foreign exchange revaluations | | — | (2,462,739) | (2,462,739) | | **Balance carried forward** | | — | — | — | 106 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Notes to the Financial Statements continued for the year ended 31 March 2025 ## 15. Loan payable continued Interest on the loan is charged at a rate of SONIA (for Sterling), SOFR (for US Dollars) or EURISOR (for Euro) (in equivalents) plus 1.9% per annum (2024: SONIA (in equivalent) plus 2.0% per annum). Loan interest of £3,022,961 (2024: £4,944,143) and upfront and facility fees of £1,309,688 (2024: £982,697) have been charged on the loans during the year. A total of £5,030,210 (2024: £4,810,404) was paid in cash during the year in respect of upfront and facility fees and interest. The carrying value of the loan is considered to be a reasonable approximation of its fair value. ## 16. Trade and other payables | | 31 March 2025 £ | 31 March 2024 £ | | --- | --- | --- | | Investment Adviser's fee payable | 2,445,667 | 2,456,473 | | Ordinary Share buybacks payable | — | 1,174,823 | | Loan interest payable | 800,362 | 292,945 | | Other payables | 350,026 | 398,103 | | **Balance carried forward** | **3,596,055** | **4,322,344** | ## 17. Commitments As at 31 March 2025, £193.4 million (2024: £54.7 million) was committed by the Subsidiaries to new or existing investments. These commitments will be settled from the existing cash reserves of the Company and the Subsidiaries and through drawdowns from the Company's revolving credit facility. ## 18. Subsequent events On 1 April 2025, Selina Sagayam was appointed as a non-executive Director of the Company. On 17 April 2025, the Company declared a dividend of 1.71875p per Ordinary Share in respect of the quarter ended 31 March 2025. The dividend was paid on 30 May 2025. Subsequent to the year end, the Company has bought back a further 11,004,912 Ordinary Shares at a cost of £8,465,682. On 19 June 2025, the Company announced the appointment of Nicola Paul as a non-executive Director of the Company, effective 1 July 2025. There have been no significant events since the year end which would require revision of the figures or disclosures in the Financial Statements. 106 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Additional ## information Additional information Officers and advisers 107 Appendix – Alternative performance measures 109 Appendix – TCFD report 113 Appendix – GHG emissions and climate scenarios methodology 122 Appendix – SFDR product-level periodic disclosure 124 Appendix – SFDR principal adverse impact statement 130 Contacts 131 Additional information Financial statements Company review Strategic review Governance 107 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Officers and advisers | Directors | Investment Adviser | Joint Broker | Communications Adviser | | --- | --- | --- | --- | | James Stewart | Sequoia Investment Management Company | Jefferies International Limited | Teneo | | (Independent non-executive Chair) | Limited | | | | | | 100 Bishopsgate | 85 Fleet Street | | Tim Drayson | Kent House, 6th Floor | London EC2N 4JL | London EC4Y 1AE | | (Independent non-executive Director) | 14-17 Market Place | | | | | London W1W 8AJ | Joint Broker | Registrar | Margaret Stephens (with effect from 25 February 2025) Computershare Investor Services (Guernsey) (Independent non-executive Director) Investment Manager J.P. Morgan Cazenove Limited Paul Le Page FundRock Management Company 25 Bank Street 1st Floor Tudor House (Independent non-executive Director, (Guernsey) Limited Canary Wharf Le Bordage appointed 7 June 2024) | | 1 Royal Plaza | London E14 5JP | St Peter Port | | --- | --- | --- | --- | | Fiona Le Poidevin | Royal Avenue | | Guernsey GY1 1DB | | (Independent non-executive Director, | St Peter Port | Subsidiary Administrator | | | retired 31 March 2025) | Guernsey GY1 2HL | | Independent Consultants | TMF Luxembourg S.A. Selina Sagayam Andrea Finegan 46A, Avenue JF Kennedy Independent Auditor (Independent non-executive Director, Kate Thurman (until 4 March 2025) L-1855 Luxembourg appointed 1 April 2025) Grant Thornton Limited St James Place Legal Adviser (as to Guernsey Law) Registered Office St James Street Mourant 1 Royal Plaza St Peter Port Royal Chambers Royal Avenue Guernsey GY1 2NZ St Julian’s Avenue St Peter Port St Peter Port Guernsey GY1 2HL Administrator Guernsey GY1 4HP Apex Fund and Corporate Services Custodian 1 (Guernsey) Limited Legal Adviser (as to UK Law) Bank of New York Mellon (previously Sanne Fund Services Cameron McKenna Nabarro Olswang LLP 1 Canada Square (Guernsey)Limited) London E14 5AL 78 Cannon Street 1 Royal Plaza London EC4N 6AF Royal Avenue St Peter Port Valuation Agent Guernsey GY1 2HL PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT 1. See footnote on page 49 Additional information Financial statements Company review Strategic review Governance 108 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Officers and advisers continued Disclosure of directorships in public companies listed on recognised stock exchanges The Directors who held office during the year and to the date of signing these Financial Statements have held the following directorships in other public companies during the year: Director Company name Stock exchange James Stewart None Sandra Platts (retired 7 June 2024) Taylor Maritime Investments Limited London Stock Exchange – Main Market Marble Point Loan Financing Limited London Stock Exchange – SFS Tim Drayson None Fiona Le Poidevin (retired 31 March 2025) ICG-Longbow Senior Secured UK Property Debt Investments Limited London Stock Exchange – Main Market Doric Nimrod Air Two Limited (until delisting on 21 January 2025) London Stock Exchange – SFS Doric Nimrod Air Three Limited London Stock Exchange – SFS Margaret Stephens VH Global Sustainable Energy Opportunities plc London Stock Exchange – Main Market AVI Japan Opportunity Trust plc London Stock Exchange – Main Market Paul Le Page (appointed 7 June 2024) TwentyFour Income Fund Limited London Stock Exchange – Main Market NextEnergy Solar Fund Limited London Stock Exchange – Main Market RTW Biotech Opportunities Limited London Stock Exchange – Main Market Selina Sagayam (appointed 1 April 2025) The Renewables Infrastructure Group Limited London Stock Exchange – Main Market Additional information Financial statements Company review Strategic review Governance 109 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Appendix – Alternative Performance Measures used in the Annual Report ## NAV per Ordinary Share NAV per Ordinary Share is a calculation of the Company's NAV divided by the number of Ordinary Shares in issue and provides a measure of the value of each Ordinary Share in issue. | | 31 March 2025 | 31 March 2024 | | --- | --- | --- | | NAV | £1,439,188,600 | £1,524,282,546 | | Number of Ordinary Shares in issue | 1,555,061,936 | 1,625,484,274 | | **NAV per Ordinary Share** | **92.55p** | **93.77p** | ## Ordinary Share (discount)/premium to NAV Ordinary Share (discount)/premium to NAV is the amount by which the Ordinary Share price is lower/higher than the NAV per Ordinary Share, expressed as a percentage of the NAV per Ordinary Share, and provides a measure of the Company's share price relative to the NAV. | | 31 March 2025 | 31 March 2024 | | --- | --- | --- | | NAV per Ordinary Share | 92.55p | 93.77p | | Closing Ordinary Share price | 78.30p | 81.10p | | **Ordinary Share discount** | **(15.4)%** | **(13.5)%** | ## Total NAV/share price return Total NAV return/total share price return are calculations showing how the NAV/share price per share has performed over a period of time, taking into account dividends paid to Shareholders. It is calculated on the assumption that dividends are reinvested at the prevailing NAV/share price on the last day of the month that the shares first trade ex-dividend. This provides a useful measure to allow Shareholders to compare performances between investment funds where the dividend paid may differ. | Year ended 31 March 2025 | Total NAV return | Total share price return | | --- | --- | --- | | Opening NAV/share price per share | 93.77p | 81.10p | | Closing NAV/share price per share | 92.55p | 78.30p | | Dividends paid during the year | 6.875p | 6.875p | | Weighted average NAV/share price per share | 93.74p | 78.48p | | Dividend adjustment factor | 1.0754 | 1.0906 | | Adjusted closing NAV/share price per share | 99.53p | 85.39p | | **Total NAV/share price return** | **6.1%** | **5.3%** | 110 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – Alternative Performance Measures continued used in the Annual Report Total NAV/share price return continued Total NAV Total share Year ended 31 March 2024 return price return Opening NAV/share price per share 93.26p 80.40p Closing NAV/share price per share 93.77p 81.10p Dividends paid during the year 6.875p 6.875p Weighted average NAV/share price per share 91.53p 79.81p Dividend adjustment factor 1.0751 1.0861 Adjusted closing NAV/share price per share 100.81p 88.09p Total NAV/share price return 8.1% 9.6% Cash dividend cover Cash dividend cover is the ratio of operating cash flow divided by total dividend payments, and is used as a measure of the extent to which a company is able to generate sufficient cash flow to pay its dividends. The dividend cash cover calculation reflects the cash movements of the entire Fund, including the Subsidiaries, and will therefore not reconcile to figures stated in the Company’s statement of cash flows on page 76). | | | Year ended | | Year ended | | --- | --- | --- | --- | --- | | | 31 March 2025 | | 31 March 2024 | | | Item | | Amount (£m) | | Amount (£m) | Cash interest received 117.46 132.69 Consent fees received in cash 0.53 1.98 Prepayment fees 0.73 1.76 Upfront fees/discounts amortised 8.77 9.80 Cash expenses (18.41) (23.21) Net cash income 109.08 123.02 Dividends paid 109.04 115.80 Dividend cash cover 1.00x 1.06x Additional information Financial statements Company review Strategic review Governance 111 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Appendix – Alternative Performance Measures continued used in the Annual Report ## Annualised dividend yield The dividend yield of a company can provide a useful measure of the income yield of an investment in the company, and is calculated by dividing the total annualised dividends per share paid in the period by the company's current share price. The Company's annualised dividend yield for the year ended 31 March 2025 was as follows: | | Year ended 31 March 2025 | Year ended 31 March 2024 | | --- | --- | --- | | Dividends per share paid in the year | 6.875p | 6.875p | | Share price at the end of the year | 78.30p | 81.10p | | **Annualised dividend yield** | **8.8%** | **8.5%** | ## Portfolio yield-to-maturity/Gross portfolio return The yield-to-maturity of an individual debt instrument is calculated using a formula involving its annual interest pay-out, face value, current price and number of years to maturity. Portfolio yield-to-maturity is the weighted average of these yields-to-maturity, or total annualised returns, in a portfolio of interest-bearing investments, discounted for the time value of money and based on the assumption that the investments are held to their maturity. This provides a useful measure of likely projected returns on a portfolio. This measure is applied in this Annual Report to the portfolio of investments held in the Subsidiaries. ## Construction risk Construction risk is the proportion by value of investments held in a portfolio that relate to construction projects. This provides a useful measure of the degree of exposure of the Fund to the increased risk associated with lending to projects that are pre-operational. This measure is applied in this Annual Report to the portfolio of investments held in the Subsidiaries. | | 31 March 2025 | 31 March 2024 | | --- | --- | --- | | Investments exposed to construction risk | £176,222,310 | £102,558,615 | | Total investments held in the Subsidiaries | £1,423,647,101 | £1,380,690,694 | | **Construction risk** | **12.4%** | **7.4%** | ## Average equity cushion An equity cushion exists in relation to a debt investment if there is collateral within the borrower available to the lender that exceeds the amount of the outstanding debt. The average equity cushion percentage of the portfolio of investments held in the Subsidiaries is the percentage of the total excess borrower collateral available divided by the total outstanding portfolio debt. This is a useful quantification of the degree of security available to the Fund in case of default by borrowers. | | 31 March 2025 | 31 March 2024 | | --- | --- | --- | | Total excess borrower collateral available | £548,826,768 | £521,965,025 | | Total investments held in the Subsidiary | £1,423,647,101 | £1,380,690,694 | | **Equity cushion** | **39%** | **38%** | 112 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Appendix – Alternative Performance Measures continued used in the Annual Report ## Modified duration The modified duration of a debt instrument provides a useful measure of the sensitivity of the debt instrument's value to changes in interest rates, and is calculated by dividing the instrument's price by the change in the instrument's yield caused by a 1% change in interest rates. This measure is applied in this Annual Report to the portfolio of investments held in the Subsidiaries. The modified duration of the portfolio of 1.9 (2024: 2.2) indicates that a 1% increase in interest rates would cause the value of the portfolio to fall by 1.9% (2024: 2.2%). ## Ongoing charges ratio ("OCR") The ongoing charges ratio of an investment company is the annual percentage reduction in shareholder returns as a result of recurring operational expenditure. Ongoing charges are classified as those expenses which are likely to recur in the foreseeable future, and which relate to the operation of the company, excluding investment transaction costs, financing charges and gains or losses on investments. The OCR is calculated as the total ongoing charges for a period divided by the average net asset value over that period. | Year ended 31 March 2025 | The Company £ | The Subsidiaries £ | Total £ | | --- | --- | --- | --- | | Total expenses | 19,366,601 | 1,141,047 | 20,507,648 | | Non-recurring and excluded expenses | (6,084,616) | (699,287) | (6,783,903) | | Total ongoing expenses | 13,281,985 | 441,760 | 13,723,745 | | Average NAV | | | 1,490,819,836 | | **Ongoing charges ratio (using AIC methodology)** | | | **0.92%** | | Year ended 31 March 2024 | The Company £ | The Subsidiaries £ | Total £ | | Total expenses | 21,492,326 | 1,555,246 | 23,047,572 | | Non-recurring and excluded expenses | (8,231,680) | — | (8,231,680) | | Total ongoing expenses | 13,260,646 | 1,555,246 | 14,815,892 | | Average NAV | | | 1,559,771,323 | | **Ongoing charges ratio (using AIC methodology)** | | | **0.95%** | 113 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report Our progress against the TCFD recommendations The Company’s Board members have a wealth of experience and expertise related to the oversight of climate issues as well as other sustainability areas more broadly. For instance, Selina Sagayam, the incoming In line with the current UK Listing Rules requirements, our TCFD-aligned disclosures take into account Chair of the ESG and Stakeholder Engagement Committee, brings deep corporate finance (public company the implementation recommendations in the 2017 TCFD Annex and the 2021 TCFD Annex. Having made transactional and corporate governance legal experience) and sustainability expertise from international significant strides in our borrower engagement and now onboarded Altitude by AXA Climate to help law firm Gibson, Dunn & Crutcher where she led the firm’s global ESG practice and advised asset owners, to address data challenges and gaps, we are very pleased to be able to this year report total absolute managers and investors on a range of ESG and sustainability issues. Selina also chaired Gibson Dunn’s UK emissions for the Company and full portfolio, along with the following greenhouse gas (“GHG”) metrics Diversity & Inclusion Committee and sat on its Global Diversity Committee. She is a trustee and Vice Chair for the portfolio: financed emissions, carbon to investment and weighted average carbon intensity. of the charity Refuge (and previously chaired its People, Nomination and Remuneration Committee), is a TheCompany has been able to conduct and report here for the first time climate scenario analysis of member of the AIC’s ESG forum and is a non-executive director and the inaugural ESG Committee Chair of physical and transition risksfor the portfolio in line with TCFD recommendations. The Renewables Infrastructure Group, a FTSE 250-listed alternatives investment fund. Governance Margaret Stephens has been a Director and Chair of the Audit Committee of VH Global Sustainable Energy Opportunities Fund Plc (“GSEO”), which is classified as an SFDR Article 9 fund, since IPO in 2021. GSEO’s Disclose the organisation’s governance around climate-related risks and opportunities. sustainable energy infrastructure investments aim to support and accelerate the energy transition towards a net zero carbon world. The investment process uses the UN Sustainable Development Goals (“SDGs”) TCFD recommended disclosures as the framework to achieve these objectives and it seeks to be leader in adopting sustainability reporting A. The Board’s oversight of climate‑related risks and opportunities. standards and requirements. The whole Board is responsible for setting the strategy for the Company, including in relation to James Stewart, Chair of the Board, served as Chief Executive of Infrastructure UK; in 2010 he was climate-related risks and opportunities. The Board meets at least quarterly, during which they, together responsible for developing the first UK National Infrastructure Plan, which had a strong sustainability focus. with their Independent Consultants and the IA, review the sustainability risks and opportunities facing the Since then, his global role at KPMG allowed him to promote sustainability principles in infrastructure around portfolio, including in relation to climate change. As part of this review, the IA prepares a sustainability report the world. More recently, James chaired the project team responsible for developing the UNECE’s PPP each quarter for the Board. The Company has a number of Committees, which are tasked with focusing on Evaluation Methodology for the SDGs. various elements of climate-related risks and opportunities. Below are highlighted some of the focus areas of the Committees, but they work in tandem with cross-functional co-ordination and alignment to ensure a Fiona Le Poidevin, a member of the Board and of the ESG and Stakeholder Engagement Committee until unifiedstrategy: her retirement on 31 March 2025, was involved in promoting ESG and sustainable investment for over a decade. In 2018, she led the launch of The International Stock Exchange’s first green finance market › the ESG and Stakeholder Engagement Committee reviews, approves and monitors performance against segment for companies, bonds and funds creating a positive environmental impact. the Company’s Sustainability Policy. In furtherance of the Company’s sustainability aspirations and the increased attention from stakeholders on these matters, the Board formed this dedicated committee with Paul Le Page was the Audit and Risk Committee Chair for Bluefield Solar Investment Fund Limited (“BSIF”), delegated responsibility for addressing key sustainability-related matters. The Board recognises the value one of the first LSE-listed investment companies to achieve Guernsey Green Fund status and has been and importance to all stakeholders of organisations implementing effective environmental, social and externally validated as an Article 8 fund under SFDR. He has recently retired from BSIF and is currently the governance policies; Interim Chair for NextEnergy Solar Fund Limited (“NESF”). NESF is classified as an Article 9 fund under SFDR and is advised by the award-winning ESG team at NextEnergy Capital. › the Management Engagement Committee is responsible for monitoring, and where practicable, encouraging the Company’s key service providers in their efforts to minimise their avoidable GHG Andrea Finegan is an Independent Consultant to the Board and the ESG and Stakeholder Engagement emissions and offset unavoidable emissions, thereby helping to minimise the Company’s Scope 3 Committee. Sheisa Non-Executive Director and Chair of the Pantheon Infrastructure PLC’s Sustainability emissions; Committee. Andrea has experience in and expertise on climate change, in particular in the renewables › the Audit Committee assists with oversight of climate-related regulatory disclosures including Sustainable sector. She is currently the independent chair of the Schroders Greencoat Valuation Committee, having Finance Disclosures Regulation (“SFDR”), TCFD and the Sustainable Disclosure Requirements (“SDR”) previously served as COO of Greencoat. Prior to this, Andrea was responsible for similar management Anti-Greenwashing Rule. The Company’s SFDR disclosures are also made available on the website: functions at Climate Change Capital. www.seqi.fund/sustainability/publications/; and › the Risk Committee oversees and advises the Board on its risk strategy and exposure including sustainability risks. Additional information Financial statements Company review Strategic review Governance 114 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Governance continued › The IA joined the PRI-supported Initiative Climat International (“iCl”), a global community of investors driving private market action on climate change, with a collective commitment to understand and reduce TCFD recommended disclosures continued carbon emissions of private markets-backed companies and secure sustainable investment performance. B. Describe management’s role in assessing and managing climate‑related risks and SIMCo also became a member of UK Sustainable Investment and Finance Association (“UKSIF”), a opportunities. leading network championing responsible finance in the UK, advocating for policies and practices that Sustainability, including climate-related risks and opportunities, is embedded in the IA’s approach to drive sustainable outcomes. Membership provides access to current sustainable finance insights, industry infrastructure debt. best practices and collaboration opportunities, supporting our IA in ongoing efforts to enhance its sustainability integration and stay ahead of emerging sustainability trends and regulatory developments. Climate risks are considered at each stage of the investment process, including the initial screening of This is bolstered by the IA’s Sustainability Manager having been elected to serve on UKSIF’s Membership opportunities (where positive and negative screening are applied, as outlined in the Sustainability Policy) and Committee by the IA’s Investment Committee. Risk assessment takes the form of both quantitative analysis (such as › The IA’s Sustainability Manager is involved with assessing and managing climate-related risks and calculation of an ESG risk score) and qualitative assessments (such as of the quality and experience of the opportunities at portfolio companies, for instance through devising and then delivering on bespoke action management of investee companies). plans for assets and engaging with the borrowers’ management teams on these key risk or opportunity After an investment has been made, the IA continues to monitor it for changes to its climate-related risk areas. This year, she was recognised with two industry awards: ESG Rising Star by IJGlobal and the profile. Primarily this is undertaken through regular discussion with, and information gathering from, the Highly Commended accolade in the Sustainable & ESG Investment Woman of the Year category for small borrowers that the Fund has lent to. This is further enhanced in some cases by bespoke climate-related and medium firms by Investment Week covenants and undertakings included within loan agreements. The IA also considers climate-related risks not only in relation to individual investments but also aggregated Strategy at the portfolio level where possible and relevant. Specifically, the IA endeavours to identify and assess Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s correlations of climate-related risks: for example, geographical concentrations in areas that may be prone businesses, strategy and financial planning where such information is material. tocoastal flooding. TCFD recommended disclosures Key developments A. Describe the climate‑related risks and opportunities the organisation has identified over › This year the Company developed and published a stand-alone Governance Policy, providing a detailed the short, medium and long term. and transparent account of its governance structures, policies and practices. This policy also describes Based on the scenario analysis detailed below, the Altitude platform has identified the highest physical how the Company assesses good governance of the Company’s borrowers risks to the portfolio to be water stress, extreme heat, storm, flood and landslide over the three different › For the fifth year, the Company engaged KPMG to provide independent limited assurance under ISAE timehorizons. (UK) 3000 on the ESG scores for the portfolio. We understand that we were the first FTSE 250 investment fund to undertake such a process in relation to sustainability matters The analysis also identified increased cost of raw materials, regulation on energy efficiency and certification and increased pricing of GHG emissions as the biggest transition risks posed to the portfolio over all › For the second period running, for 2024/25 financial year, the scope of KPMG’s assurance was extended ∆ timespans. The top three transition opportunities identified for the portfolio comes in the form of expansion to cover the Company’s negative screening and thematic investing (positive screening) activities of low-emissions goods and services, shift in customer preferences and use of lower-emissions sources › The ESG and Stakeholder Engagement Committee, established in March 2022, met three times ofenergy. over the 2024/25 financial year. The topics that were addressed by the Committee this year included the sustainability regulatory landscape developments, approach to climate scenarios, Shareholder engagement plans and a review and update of the Company’s existing sustainability processes and policies. TheBoard received external training on the regulatory ESG landscape and emerging sustainability trends ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: www.seqi.fund/sustainability/publications/ Additional information Financial statements Company review Strategic review Governance 115 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Strategy continued C. Describe the resilience of the organisation’s strategy, taking into consideration different climate‑related scenarios, including a 2°C or lower scenario. TCFD recommended disclosures continued Given the nature of our business, with no direct employees or physical assets, the climate impacts on the B. Describe the impact of climate‑related risks and opportunities on the organisation’s Company’s operations are limited, with the key indirect risks presented to companies that the Fund lends to. businesses, strategy and financial planning. If certain climate risks materialise, it could impact borrower revenues, OpEx and CapEx requirements, and There are two potential impacts of climate-related risk on the Fund. Firstly, some sectors within the thus their ability to repay lenders including the Fund. If such material climate risks were to play out across infrastructure market may become uninvestable in the future, for example assets in the hydrocarbon value numerous companies in the portfolio, then the Fund’s performance and ability to generate income and chain such as coal-fired power stations or upstream oil and gas assets. This is especially likely to be the case deliver return to our investors may be adversely affected under certain scenarios. in low temperature increase scenarios, where the economy has transitioned rapidly to a low-carbon state. SEQI is using the Altitude platform by AXA Climate to support its analysis of the physical and transition risks Currently, under its Sustainability Policy, the Fund is avoiding those sectors where there is a near-term or and opportunities of its portfolio under different forward-looking climate scenarios, with the aim to monitor medium-term high-level risk of them becoming uninvestable. Therefore, this potential impact of more sectors and improve its understanding of the climate resilience of its portfolio. Explanation of the methodology becoming unviable for the Fund can be considered long term. Should it happen, the Fund’s portfolio might over used for climate scenario analysis is provided in the Appendix. Our relative credit position as lenders should time become further and prematurely less diversified; however, in the opinion of the IA, this risk is more than also be taken into account when considering the analysis, as this often comes with barriers of protection outweighed by the new and developing investment opportunities describedabove. against the financial effects of certain risks manifesting. Further, the average life of our loans is around 3.4 Secondly, the credit quality of some of the borrowers that the Fund lends to might deteriorate. For example, years, which means the portfolio will have experienced significant churn prior to the 2030, 2040 and 2050 extreme weather events might materially increase the cost of insuring some assets, or they may not be time horizons considered for this analysis. The IA will seek to further explore mitigating measures already in insurable without investing in asset hardening. This risk is mitigated in a number of ways: place by our borrowers and engage with them where more work may be needed to address notable risks › each of the borrowers has equity capital at risk ahead of the loan. This acts as a “shock absorber” in that identified to improve the accuracy of the different analyses. the equity capital would need to be lost before the Fund as lender can lose money; › the Fund’s loans are typically short dated. The majority are due to be repaid within five years, that is, before many of the most serious climate risks are likely to manifest; and › the IA undertakes thorough due diligence on each borrower that the Fund lends to, and assessing their exposure to climate risk is part of the diligence process. In other words, the Fund is taking steps with the aim to avoid making a loan to a business that has poor resilience to climate change risk. The investment portfolio is highly diversified in terms of the location of its borrowers and the sectors and sub-sectors they operate in. This will reduce the effect of many risks, such as technological disruption or unexpected adverse domestic regulation or legislation. The impact of the climate-related opportunities identified is that the Fund is expected to be able to deploy capital on attractive terms to a wider range of sectors and sub-sectors than it does currently, such as towards battery storage, carbon capture, grid enhancement and energy efficiency projects. This will increase the diversification of the portfolio and help it to deliver an attractive risk-adjusted return to Shareholders. Conversely, avoiding sectors where there is an unduly high level of climate-related risk, or even limiting the Fund’s exposure to sectors where there is some climate-related risk, will decrease the portfolio’s diversification. The Investment Adviser’s view is that, between these two factors, there will be a net benefit for the Fund’s strategy. This is because the Fund is already avoiding the most at-risk sectors and is at the early stages of identifying the full range of opportunities that are likely to arise. The Fund takes the view that avoiding borrowers with a high degree of climate-related risk is simply prudent lending, which it would seek to do regardless of implementation of its Sustainability Policy. One of the purposes of the Fund’s ESG scoring methodology is to help track resilience to climate change. A goal for the Fund, taking account of the spread of its investments, is to improve the portfolio’s weighted average ESG score over time, and improving the portfolio’s resilience to climate change risks will contribute to this goal. Additional information Financial statements Company review Strategic review Governance 116 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Strategy continued 2030 2050 TCFD recommended disclosures continued SSP1-2.6 SSP2-4.5 SSP5-8.5 SSP1-2.6 SSP2-4.5 SSP5-8.5 C. Describe the resilience of the organisation’s strategy, taking into consideration different Acute risks climate‑related scenarios, including a 2°C or lower scenario. continued Extreme heat Physical risks Extreme cold SEQI is using the Altitude platform to assess the physical risk for its portfolio as Low, Medium or High risk (as relevant). The physical risks to the portfolio have been assessed for two future time periods (2030 and 2040) Wildfire and under three different IPCC warming scenarios: Tropical cyclone › SSP1-2.6 – Optimistic Scenario: the optimistic scenario of global temperature warming stabilising to Storm 1.8°C above pre-industrial levels by 2100 › SSP2-4.5 – Middle of the Road Scenario: the realistic scenario of temperature rising 2.7°C by 2100 Drought › SSP5-8.5 – High-Reference Scenario: the pessimistic scenario of temperature rising 4.4°C by 2100 Extreme precipitation The IA then overlaid its own analysis to refine some of the automated outputs using their detailed Flood understanding of relevant assets and nature of their respective businesses. For example, the “Medium” Landslide risk of landslide flagged for one of our rail assets was reclassified to “Low” risk because the project actually leases out its rolling stock and the current contract is to a rail system that operates underground with Earthquake mitigating measures like protective tunnel linings, retaining structures, and drainage systems that reduce Subsidence vulnerability to surface hazards like landslides. Note, these expert-driven refinements had no effect on the overall resultant portfolio-level risk classifications. The analysis has identified there is a risk of flooding present to some of the assets owned by our borrowers due to their coastal locations, such as Brightline East LLC Holdco, a privately owned passenger rail 2030 2050 project in Florida. Extreme heat could impact the cooling systems at some of our data centre positions SSP1-2.6 SSP2-4.5 SSP5-8.5 SSP1-2.6 SSP2-4.5 SSP5-8.5 and the electrical efficiency of the panels in our Spanish solar portfolios, which are inherent risks to the asset classes. Storm could damage the physical infrastructure at some of our European companies, Chronic risks but we consider that the impacts of these are unlikely to materially compromise the borrowers’ ability to Changing air temperature repay our loan, particularly for the services companies that have less of a physical presence than tangible infrastructureprojects. Changing wind patterns Changing precipitation patterns Water stress Sea level rise Soil erosion Risks heatmap Low Medium High Additional information Financial statements Company review Strategic review Governance 117 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Strategy continued 2030 2040 TCFD recommended disclosures continued Net Zero Delayed Net Zero Delayed 2050 Transition NDC 2050 Transition NDC C. Describe the resilience of the organisation’s strategy, taking into consideration different climate‑related scenarios, including a 2°C or lower scenario. continued Technology Transition risks and opportunities Cost to transition to The Company is using Altitude’s tool to assess transition risks and opportunities for the Fund’s portfolio. lower-emission alternatives Altitude uses TCFD’s recommended categories of transition risks and opportunities and identifies those that Increased cost of raw materials are potentially material for each portfolio company. These risks and opportunities are then modelled at 2020, 2030 and 2040 under three different forward-looking climate scenarios: Increased energy/electricity prices › Net Zero 2050 – Orderly Scenario of global warming being limited to 1.5°C by 2100 through stringent policies and innovation and reaching net zero by 2050 Market › Delayed Transition – Disorderly Scenario assuming annual emissions do not decrease until 2030 and Shift in customer preferences strong policies are needed to limit global warming to below 2°C by 2100 Reputation › Nationally Determined Contributions – Business-As-Usual Scenario based on the current pledgedpolicies Increased stakeholder concerns For every borrower in the portfolio, Altitude applies a Low, Medium or High score (as applicable) for material The high risk of increasing raw materials costs mainly stems from SEQI’s renewables exposure. As demand transition risks and material transition opportunities. for renewables grows, this strains the demand for the minerals and metals, such as lithium, copper, nickel, manganese and cobalt, that will be crucial to the energy transition. This is a global issue, but also one that Transition risks: our renewables borrowers should seek to address through their own supply chain management, contracts 2030 2040 and practices. The infrastructure asset class, by its nature, includes high-emitting, hard-to-abate sectors that are exposed to increased carbon pricing. The Fund seeks to gain a deeper understanding of the implications | | Net Zero | Delayed | Net Zero | Delayed | | | --- | --- | --- | --- | --- | --- | | | 2050 | Transition NDC | 2050 | Transition NDC | of volatile raw materials and carbon pricing on its borrowers and portfolio. | | Policy & legal | | | | | Lastly, adherence to compliance with regulations and availability of compliance certifications is an important | constituent of the due diligence undertaken by the IA and is an area we intend to continue to manage Increased pricing of GHG diligently. emissions Mandates on and regulation of existing products and services Regulation on energy efficiency & certification Exposure to litigation Emerging regulation on reporting requirements Risks heatmap Low Medium High Additional information Financial statements Company review Strategic review Governance 118 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Strategy continued 2030 2040 TCFD recommended disclosures continued Net Zero Delayed Net Zero Delayed 2050 Transition NDC 2050 Transition NDC C. Describe the resilience of the organisation’s strategy, taking into consideration different climate‑related scenarios, including a 2°C or lower scenario. continued Reputation Transition opportunities: Increased stakeholder concerns 2030 2040 As economies transition towards lower-emission goods and services and consumer preferences follow, the Net Zero Delayed Net Zero Delayed Fund plans to continue to explore and pursue related investment opportunities, which would be aligned 2050 Transition NDC 2050 Transition NDC with the Fund’s investment theme of “Enabling the transition to a lower-carbon world”. Such thematic investments from the current portfolio include the likes of service providers that support utility and energy Policy & legal efficiency and assets that improve grid capacity to enable the rising electricity demands. Similarly, the Favourable regulatory frameworks platform has identified investment opportunities as the world generally moves towards lower-emission and public incentives sources of energy. This is an opportunity the Company has already been focusing on through positively screening for “Renewable energy” thematic investments. Technology Promote more efficient buildings Key developments and operations › This year the Company is pleased to have been able to conduct climate scenario analysis for the portfolio, Use of more efficient modes which marks a real milestone for the Company’s climate reporting following critical foundational work oftransport over some time. This analysis was delivered through the third party Altitude by AXA Climate platform. The IA undertook a careful assessment of various providers and products before presenting a shortlist of Use of more efficient production three solution providers for the Board’s consideration. The Board in turn evaluated the different platforms and distribution process based on a number of factors such as the accuracy in emissions estimates when compared to calculated Use of lower-emission sources and verified numbers provided by borrowers, transparency of methodologies, integration of biodiversity of energy metrics and value relative to costs. As such, the Fund is now better able to assess physical and transition climate-related risks presented to assets and the portfolio as a whole under different climate scenarios Use of recycling and time horizons Resource substitution › This year, the number of projects in the portfolio with sustainability-related covenants in the loan ordiversification documents increased. These covenants are generally designed with the aim of either managing or monitoring risks or helping to capture opportunities related to material sustainability areas. Asat Market 31March2025, there were eight projects in the portfolio with sustainability-related covenants Access to new markets incorporated in the loans. This number has been increasing over the years: two (2020), three (2021), three(2022), six(2023), seven (2024), and is atrend we seek to continue to target Increased reliability of supplychain › Sectors that are overly exposed to climate-related risks, such as thermal coal, continued to be excluded ∆ through the Fund’s negative screening criteria, with 100% compliance throughout 2024/25 as assured Expansion of low-emission byKPMG goods and services Shift in customer preferences Opportunity score ∆ KPMG has issued independent limited assurance over the selected data indicated with a reference in the 2025 Annual Low Report. The reporting criteria and assurance opinion are available in the Sustainability Publications section of our website: Medium www.seqi.fund/sustainability/publications/ High Additional information Financial statements Company review Strategic review Governance 119 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Strategy continued Similarly, if a sector or sub-sector is beginning to experience higher levels of climate-related risks, the IA willavoid making new loans in it. Given the relatively short maturity of many of the loans in the portfolio, › Two of the Fund’s positive investment themes are focused on climate-related opportunities: “Renewable thiscan rapidly decrease the Fund’s exposure to that sector. energy” assets and “Enabling the transition to a lower-carbon world”. One new investment the Fund made during the year was to Techem, a leading provider of energy efficiency solutions for residential C. Describe how processes for identifying, assessing and managing climate‑related risks and commercial buildings, with operations across Europe and beyond. Techem’s services include smart areintegrated into the organisation’s overall risk management. metering, energy billing and heating and water consumption monitoring, which enable building owners and tenants to better understand and manage their energy usage. By promoting behavioural change, efficiency Climate risk is integrated into the entire investment and risk management process. upgrades and tracking data, Techem contributes to improving building energy efficiency and reducing At an early stage, when considering whether to dedicate further resources to assess a potential new loan, energy consumption and emissions in the built environment. During the year, the Fund extended four loans the IAwill apply negative and positive screening and estimate the borrower’s ESG score. Some potential to borrowers that, like Techem, seek to enable the transition to a lower-carbon world, with these thematic investments will be rejected at this stage if the climate-related risks are likely to be unacceptably high. investments representing in aggregate nearly 19% of the capital deployed to new investments in the year Following the due diligence process, the Investment Committee will consider sustainability matters as a part ofits deliberations. The investment’s ESG score will be agreed upon by the Committee. Risk management Subsequently, the investment is considered by the Investment Manager and in some cases the Risk Committee Disclose how the organisation identifies, assesses and manages climate-related risks. of the Board, who will assess both credit quality and sustainability profile, including, where appropriate, resilience to climate change. The Risk Committee carries out a regular assessment of the Fund’s risks, including TCFD recommended disclosures sustainability risks, with certain credit risks being escalated to it by the Investment Manager for approval. ESG A. Describe the organisation’s processes for identifying and assessing climate‑relatedrisks. scores for investments that are <50 automatically trigger further scrutiny by the Risk Committee. Climate-related risks are primarily assessed at the level of each investment, and individual asset level of a The ESG and Stakeholder Engagement Committee is responsible for overseeing the Company’s overall borrower where possible, and form part of the IA’s due diligence process. sustainability strategy. Typically, third-party expert reports will be commissioned to assess key risks. For example, engineers might Finally, each quarter, the Investment Adviser prepares a sustainability report for the Board, which includes a review the physical condition of the borrower’s assets, including their exposure and resilience to extreme review of the overall portfolio. weather risk. This will then be analysed in tandem with a review of the borrower’s insurance policy and any other resources to cover uninsured risks. Key developments Climate-related risks are thus identified, and where possible quantified, in the due diligence phase of an › The Company has a comprehensive framework to identify and assess climate change risk. This is fully investment and discussed by the Investment Committee. Risks that are unacceptably high will result in an integrated into its loan approval, monitoring and risk management processes. This framework is kept investment not being made. under regular review. Given that the methodology does not incorporate an exhaustive list for every possible sub-sector within infrastructure, this year new sub-sectors were added as the Fund looked at B. Describe the organisation’s processes for managing climate‑related risks. opportunities and extended loans to areas that it had not actively considered previously. The existing The Investment Adviser monitors each loan at least twice a year and more frequently if considered necessary. sub-sector definitions were also more clearly delineated with a view to ensuring high levels of consistency This includes a review not just of credit quality, but also of the borrower’s sustainability profile, including and standardisation across credit analysts and the functions across all of the different teams that are climate-related factors. To assist in this oversight, each borrower is sent annually a detailed questionnaire involved in work on the Fund including qualitative and quantitative topics which will assist the Investment Adviser in updating its analysis. › This year, the IA again conducted two firm-wide internal training sessions on sustainability. The aim of The Investment Adviser then creates an action plan which is used for ongoing engagement with the these was to help to promote a consistent process and approach across the team as well as keeping all borrowers. functions of the firm abreast of the latest sustainability trends and developments A range of steps can be taken as a result of this ongoing monitoring of investments. For example, the internal › Following subscription to the AXA Climate Altitude platform, the Board is exploring how to extract further credit rating assigned may be adjusted, the loan may be considered for disposal, or the decision may be value from this tool to enhance risk management through due diligence screenings. This should enable made not to participate in a refinancing of the loan when it comes to its maturity date. Ultimately, if it becomes the Fund to gain a deeper understanding of an asset’s exposure to physical and transition risks as well clear that a borrower’s resilience to climate change is deteriorating, the Fund may choose to dispose of as its carbon emissions profile before an investment decision is made. As we work to fully integrate the theloan. tool into existing processes, we look to develop this potential value-add Altitude may bring to our risk management over the forthcoming year Additional information Financial statements Company review Strategic review Governance 120 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued 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. TCFD recommended disclosures A. Disclose the metrics used by the organisation to assess climate‑related risks and opportunities in line with its strategy and risk management process. Currently, the ESG score is the key metric for assessing the sustainability profile of the Fund’s investments, including on environmental matters. This ESG scoring framework helps the allocation of capital between projects and to measure its progress over time in a quantitative way. The methodology blends the “E”, “S” and “G” components without allowing strength in one area to offset entirely weakness in another. For example, a polluting company will always get a poor score, even if it has excellent social and governance policies. Moreover, the policy is not to lend to companies with a very low E score, of less than one, regardless of the overall ESG score. Going forward, the Company is looking to widen its range of metrics used, including potentially GHG emissions. Whilst the Company measures its own and its portfolio emissions to the fullest extent possible, currently this is not used as a KPI or target as the data that is available, in the context of a private debt portfolio, is not considered wholly reliable and relies on unverified reported data and third-party estimates of varying degrees ofquality. B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the relatedrisks. Company operational emissions | | | | tCO | 2 e | | | tCO | 2 e | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Year ended | | | | Year ended | | | | Company emissions | 31 March 2024 | | | | 31 March 2025 | | | | Scope 1 nil nil Scope 2 nil nil Scope 3 (operational) 44 44 Due to the nature of Company’s business, it produces no Scope 1 or 2 emissions. The Company’s Scope 3 operational emissions have been estimated in consultation with a specialist adviser and are intentionally conservative by design. These have been offset by the Company through the purchase of carbon offsets. Many of the Company’s suppliers already have their own emissions reduction and offsetting programmes in place. Company Scope 3 portfolio emissions The following TCFD-recommended GHG emissions metrics have been estimated for the Fund’s portfolio in line with the Partnership for Carbon Accounting Financials (“PCAF”) standards: › total absolute emissions of portfolio companies; › financed emissions; › carbon to investment; and › Weighted Average Carbon Intensity (“WACI”). Explanation of the calculation and methodology used for GHG emissions metrics is provided in the Appendix. Year ended 31 March 2024 Year ended 31 March 2025 | | | | | | Total absolute | | | | | Total absolute | | | | | | Total absolute | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Total absolute | | | Reported | | | tCO | 2 e | Reported | | | tCO | 2 e | Estimated | | tCO 2 | e (estimated | | Portfolio emissions | | tCO | 2 e | coverage | | (reported) | | | coverage | | (estimated) | | | | data | | & reported) | Scope 1 5,930,417 66% 7,441,400 67% 858,141 33% 8,299,541 Scope 2 364,102 58% 309,177 61% 52,316 39% 361,493 Scope 3 437,562 39% 727,409 43% 2,349,946 57% 3,077,355 Additional information Financial statements Company review Strategic review Governance 121 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – TCFD report continued Metrics and Targets continued C. Describe the targets used by the organisation to manage climate‑related risks and performance against targets. TCFD recommended disclosures continued The Fund has three sustainability goals: to comply with its negative screening criteria, to progress thematic B. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the relatedrisks. investing (positive screening) and to improve the portfolio’s weighted average ESG score over time. continued | Company Scope 3 portfolio emissions continued | | | | | Key developments | | --- | --- | --- | --- | --- | --- | | | | | Weighted Average | | › Last year the Company reported absolute emissions of the portion of the portfolio for which reliable | | | Financed | Carbon to | Carbon Intensity | | information on the borrower was available. In the first instance, this was made possible by the significant | | | emissions | investment | | (“WACI”) | | progress we supported through our borrower engagement. Since then, further advancements have been SEQI Year ended 31 March 2025 (tCO 2 e) (tCO 2 e/£m) (tCO 2 e/£m revenue) made as the Company onboarded Altitude by AXA Climate to help address data challenges and gaps. 2,505 Asa result, for the first time this year, we have been able to report total portfolio emissions as well as Total 1,377,745 882 (94% coverage) GHGmetrics for the portfolio, namely: financed emissions, carbon to investment and WACI › A sustainability questionnaire is sent to our portfolio companies annually, which includes requesting Due to the diverse nature of the Fund’s investments, it would not have been accurate to extrapolate reported quantitative data, such as Scope 1, Scope 2 and Scope 3 GHG emissions. This year we received a emissions numbers to the rest of the portfolio. Instead, for the year ended 31 March 2025, the Fund has joint-record response rate to our questionnaire from 93% of borrowers. We obtained reported Scope 1 been able to derive an estimate for each borrower for which it lacked data. To assist with this, the Company emissions data for 69% of portfolio companies and Scope 2 emissions of 60% of the portfolio (in each has utilised Altitude by AXA Climate, a software solutions platform to support climate risk management, case calculated by reference to outstanding amounts as at 31 March 2025) which has been designed with inputs from various sectors, including finance, infrastructure and industry. This platform has enabled estimates for GHG metrics to be generated for the whole of the Fund’s portfolio. › The Fund has improved its average portfolio ESG score from 62.77 last year to 64.70 as at Itshould be noted that these figures are overestimates as, where emissions for specific or individual projects/ 31March2025, largely as a result of its sustainability-focused investment strategy and active engagement assets being financed by the Fund were unavailable, total emissions for the portfolio company borrower have work with companies that resulted in 14 existing positions increasing their ESG scores during the period. been used. Thismeans that the emissions specifically attributable to the Fund’s financing activities would be This marks a notable improvement since the Company started calculating and measuring the portfolio’s less than the reported figures provided. As our internal capacities evolve, we look to refine this methodology ESG score in 2020 which was 59.61 for this first reporting year to improve the accuracy of GHG emissions data reported going forward. The apparent increase in reported absolute emissions produced by portfolio companies is largely attributable to new reporting by one of the assets. As SEQI is now able to estimate the remainder of the portfolio, this short-term anomaly in reporting should smooth out over time. It should also be noted that as there is meaningful regular portfolio churn/movements, the absolute emissions produced by borrowing entities may vary significantly year-on-year and should not be interpreted as providing a definitive indication of emission performance at a portfolio company level. Also of note is that the WACI number excludes pre-revenue assets as the WACI calculation is based on the portfolio company’s revenues and accordingly cannot be reliably computed for companies without revenues. In this regard, the WACI number covers 94% of the portfolio by outstanding amount as at 31 March 2025. Additional information Financial statements Company review Strategic review Governance 122 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – GHG emissions and climate scenarios methodology There are some potential limitations of the report and its use. While we have been working hard to improve Estimated emissions by Altitude: the quality and quantity of emissions data, we are unable to verify either reported or estimated emissions Altitude’s GHG calculation tool has been developed following the guidance from the Greenhouse Gas numbers. We have endeavoured to provide transparent and comprehensive detail on the methodology and Protocol, developed by the World Resources Institute and the World Business Council for Sustainable assumptions used in order to support the assessment of data set out in this report. There are also limitations Development and establishing comprehensive global standardised frameworks to measure and manage inherent in climate scenario analysis itself due to the outsourcing of climate modelling, including reliance GHG emissions from private and public sector operations. The calculation approach is based on on third-party processes, as well as complexity, uncertainty, lack of consistency and varying levels of data Environmentally Extended Input Output (“EEIO”) models. The resulting EEIO emission factors can be used quality and availability. We remain committed to engaging with portfolio companies and our supplier, Altitude to estimate GHG emissions for a given industry or product category. EEIO models are derived by allocating by AXA Climate, with a view to continue refining our approach to scenario analysis going forward. national GHG emissions to groups of finished products based on economic flows between industry sectors. Altitude considers the EXIOBASE dataset, which provides extensive geographical and sectorial coverage GHG emissions (49 regions across 163 industry classifications). However, it should be noted that the level of granularity is Total absolute emissions: relatively low compared to other sources of data. The Partnership for Carbon Accounting Financials (“PCAF”) emissions Data Quality Score for the portfolio Altitude provides a breakdown of estimates in terms of Scope 1, Scope 2 and upstream (“cradle to gate”) is 2.25. This average takes into account the data quality score for each borrower, weighted by the total Scope 3 through a preliminary screening approach based on proxy data and financial inputs. This allows for outstanding loan amount per company. The Fund has verified emissions based on physical data for six the assessment of the GHG footprint. portfolio companies, as some borrowers have had their emissions externally verified (earning a PCAF Data Altitude also benchmarks certain elements of the estimated carbon intensity of portfolio companies against Quality Score 1). The remainder of the portfolio has either reported some or all of their Scope 1-3 emissions that of prominent global companies in a similar sector of activity (by reference to Scopes 1, 2 and 3 on an unverified basis (assigned PCAF Data Quality Score 2), or (in the case of 16 borrowers in the portfolio) upstream). As with all benchmarking exercises, the results should be interpreted with appropriate contextual had their Scope 1, 2 and/or 3 emissions estimated based on sector and turnover using the third-party data caution. However, the Fund considers that this data still provides additional useful insights to support provider Altitude by AXA Climate (PCAF Data Quality Score 4). transaction due diligence assessments. Reported emissions: Our understanding of Altitude’s methodology and the composition of their tool is based on information Where data for the specific project/asset being financed by the Fund was unavailable, company-level provided to us by Altitude. information has been used. For instance, the emissions specific to the project SEQI finances may be unknown by certain borrowers, however they are able to provide total emissions for their company; in these cases the borrower’s total emissions reported for the whole company have been used in our calculations. This means that the total emissions and associated GHG metrics reported by SEQI have beenoverestimated and are higher than the actual emissions attributable to SEQI. As our internal capacities evolve, we look to refine this methodology to improve the accuracy of GHG emissions data going forward. The total absolute reported emissions data covers the most recent calendar year to the fullest extent possible, i.e. our total year ended 31 March 2025 number refers to emissions produced by portfolio companies from 1 January to31 December. Where this is unavailable, the latest available company datahasbeen used. The coverage rate for the year ended 31 March 2025 indicates the percentage of the portfolio that has provided emissions information and is measured by outstanding loan amounts as at 31 March 2025. Thecoverage rate for the year ended 31 March 2024 is measured by net asset value (“NAV”) as at 31March2024, as this was the principal valuation metric used throughout SEQI’s financial and sustainable reporting and at the time the Company did not runcalculations of emissions metrics using outstanding borrowed amount. Additional information Financial statements Company review Strategic review Governance 123 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – GHG emissions and climate scenarios methodology continued GHG emissions continued Weighted Average Carbon Intensity (“WACI”): Financed emissions: This metric represents the portfolio’s exposure to carbon-intensive companies. It is calculated as the sum of each company’s carbon intensity (emissions per unit of revenue) weighted by the proportion that This is the carbon footprint of the Fund, i.e. the total absolute emissions of all the companies in the portfolio each company represents of the portfolio. As this metric is not appropriate for pre-revenue companies, based on the extent to which SEQI finances the activities of these borrowers. n pre-revenue investments have been excluded from the calculation. ### Financed emissions = ∑ Attribution factor × Total emissions p/c p/c n Outstanding amount Total emissions p/c p/c p/c WACI = X ## ∑ ( ) p = project, c = investee company/borrower which was used where the specific emissions for the project being financed Total AuM Revenue p/c p/c were unknown The vast majority of the portfolio comprises loans with a known use of proceeds, which uses the following Climate scenario analysis attribution factor: Physical risks Attribution factor Altitude evaluates climate physical risks of real assets using the asset type and their geolocation. p/c ### Attribution factor = ∑ Total equity + Total debt Therisksare a function of three pillars as defined by IPCC (hazard, vulnerability and exposure) and come p/c p/c in 16 different types that can either be defined as acute or chronic. For every asset, Altitude calculates The same attribution factor is used for the small number of bonds in the portfolio as they are made to private a risk score for each material physical hazard. For companies with multiple assets, the asset-level risks companies. On the small number of occasions where the Fund has ended up with an equity stake in a are aggregated. The overall company scores are then aggregated and weighted to produce consolidated position, this has been factored into the calculation of the “outstanding amount”. portfolio-level risks that are classified as: Low, Medium or High. Materiality is assessed based on the asset type, which is informed by AXA Climate’s expertise and dataset, and geolocation, where each hazard peril In line with PCAF standards, for all carbon metrics the outstanding debt amounts have been used and the is evaluated using one or more metrics derived from Global Climate Models and additional specialised figure used for the total AUM takes the sum of these. This differs from the valuation, AUM figures and other resources for separate hazards. financial metrics reported elsewhere by SEQI, which use NAV. Whilst we consider NAV to better reflect the relative exposure of the Fund based on fair market valuation, in order to align with best practices advised by The evolution of climate hazards over time are modelled using the 30-year averages (monthly, seasonally, PCAF and TCFD and to allow for comparability and consistency across products and financial institutions, yearly) around 2000, 2020, 2030 and 2050. SEQI has used outstanding debt amounts instead of NAV. For completeness, SEQI has calculated carbon metrics using both outstanding debt amounts and NAV and found minimal difference in the carbon to Transition risks and opportunities investment and WACI metrics, with an approximate 10% differential in the financed emissions number. Material transition risks and opportunities are identified per sector and geography using AXA Climate’s Specifically, NAV-based financed emissions were lower than the financed emissions calculated using in-house expertise. Risk levels (low, medium, high) are calculated using their Network for Greening outstanding debt amount. Hence, the reported headline figures above could be interpreted as conservative the Financial System (“NGFS”) proxy models, which are weighted by a carbon factor representing the overestimated figures. carbon intensity of the sector in a specific geography relative to all other carbon intensities in the world. TheNGFS proxies then model the identified risks and opportunities in 2020, 2030 and 2040 under the Carbon to investment: three forward-looking scenarios. If no proxies are available, targeted literature reviews and CDP datasets This is the amount of GHG emissions produced by the portfolio’s companies relative to the amount of money areconsulted. invested in those companies, which therefore provides a representation of how much carbon is emitted for A risk is considered material if it can have a significant impact on the company under consideration based each million GBP deployed by SEQI. on a qualitative assessment of potential impacts on revenues, OpEx and CapEx of portfolio companies. Financed emissions Carbon to investment = Total AuM Additional information Financial statements Company review Strategic review Governance 124 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – SFDR product‑level periodic disclosure Sustainable investment Template periodic disclosure for the financial products referred to in Article Sustainability indicators Deriving from the above criteria, the Fund seeks to promote sustainability means an investment measure how the 8, paragraphs 1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first characteristics, with a focus on environmental, by applying the following: in an economic activity environmental or social paragraph, of Regulation (EU) 2020/852 | that contributes to an | | characteristics promoted | 1. excluding certain positions determined to cause negative or adverse | | --- | --- | --- | --- | | environmental or social | Product name: Sequoia Economic Infrastructure Income Fund | by the financial product are | environmental impact based on negative screening; | | objective, provided that | | attained. | | | | Legal entity identifier: 2138006OW12FQHJ6PX91 | | 2. assessing the underlying asset’s capability to contribute towards determined | the investment does not positive sustainability themes; and significantly harm any Environmental and/or social characteristics 3. making investment decisions that can increase the portfolio’s overall weighted environmental or social objective and that the average ESG score. investee companies follow Did this financial product have a sustainable investment objective? The Fund’s investment policy precludes investing in companies with a very low good governance practices. X Escore (<1), irrespective of the overall ESG score. The sustainability principles were applied to the portfolio in order to meet our The EU Taxonomy is a It promoted Environmental/Social It made sustainable investments with classification system laid (E/S) characteristics and while it did three sustainability goals: 1) Comply with negative screening criteria, 2) Progress an environmental objective: ___% not have as its objective a thematic investing (positive screening) and 3) Over time, increase portfolio down in Regulation (EU) sustainable investment, it had a in economic activities that weighted average ESGscore. 2020/852, establishing proportion of ___% of sustainable qualify as environmentally a list of environmentally investments sustainable under the The sustainability characteristics promoted by the Fund were met as the sustainable economic EU Taxonomy with an environmental exclusions continued to be fully applied and the average ESG score for the activities. That Regulation objective in economic in economic activities that portfolio increased this year. The percentage of thematic investments show a does not lay down a list activities that qualify as do not qualify as of socially sustainable environmentally sustainable small increase year-on-year. environmentally under the EU Taxonomy economic activities. sustainable under the Sustainable investments EU Taxonomy with an environmental How did the sustainability indicators perform? with an environmental objective in economic activities that do not qualify For the reference period 1 April 2024 to 31 March 2025, 100% of projects objective might be aligned as environmentally were compliant with the Fund’s negative screening criteria. During the period, with the Taxonomy or not. sustainable under the EU Taxonomy the Fund did not finance any projects that initially do not meet the negative screening criteria but have the aim of transitioning to a more sustainable and with a social objective compliant business model. It promoted E/S characteristics, As at 31 March 2025, thematic investing covered 71% of the Fund’s It made sustainable investments X but did not make any sustainable with a social objective: ___% investmentportfolio. investments ___% As at 31 March 2025, the average weighted ESG score for the Fund’s portfolio was 64.70. To what extent were the environmental and/or social characteristics KPMG provided independent limited assurance under ISAE (UK) 3000 over promoted by this financial product met? these three KPIs. This confirmation is contained in the Company’s 2024/25 The Sequoia Economic Infrastructure Income Fund (“SEQI”, the “Fund”) Annual Report. The reporting criteria and KPMG’s limited assurance opinion incorporates the three following criteria in the selection of underlying assets for areavailable in the Sustainability Publications section of our website: its portfolio: www. seqi. fund/sustainability/publications/. › negative screening; › thematic investing (positive screening); and › ESG scoring. Additional information Financial statements Company review Strategic review Governance 125 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – SFDR product‑level periodic disclosure continued Performance in line with these sustainability indicators does not necessarily align Principal adverse How did the sustainable investments that the financial product with a guaranteed year-on-year increase in the ratio of investments that promote impacts are the most partially made not cause significant harm to any environmental or significant negative impacts sustainability characteristics. social sustainable investment objective? of investment decisions Sequoia Economic Infrastructure Income Fund does not commit to make on sustainability factors …and compared to previous periods? relating to environmental, “sustainable investments” within the definition of Article 2(17) of Regulation (EU) The process of reducing the exposure to assets not permitted under the social and employee 2019/2088 (SFDR) or the definition set out by the EU Taxonomy. negative screening, through disposal of assets and planned repayments of loans matters, respect for human started in 2021 was completed by 31 March 2022. Since then the Fund reached rights, anti-corruption and How were the indicators for adverse impacts on sustainability factors anti-bribery matters. full compliance with the negative screening criteria and has maintained 100% taken into account? compliance since, including throughout the year ended 31 March 2025. Principal adverse impacts (“PAIs”) on sustainability factors have not been taken The portion of the portfolio covered by thematic investing is measured as at into account for this financial product. The Fund is not subject to mandatory 31March each year. This had consistently increased: 59% (2021), 61% (2022), consideration and disclosure of principal adverse impacts under Article4(1)(a) 72% (2023), until a small dip last year: 70% (2024). The portion of thematic ofSFDR. investments this year was 71%, a small year-on-year increase as the number has likely reached its natural roof. Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business The weighted average ESG score for the Fund’s portfolio measured as at and Human Rights? Details: 31March each year has consistently increased: 59.61 (2020), 60.59 (2021), The UN Guiding Principles on Business and Human Rights and OECD 61.88 (2022), 62.29 (2023), 62.77 (2024). Guidelines for Multinational Enterprises have not been formally embedded into 31 Mar 31 Mar 31 Mar 31 Mar the Fund’s investment process, but the negative screening and ESG scorecards 2022 2023 2024 2025 will have gone some way in excluding companies that might be in breach of international norms described in the OECD Guidelines for Multinational Negative screening 100% 100% 100% 100% Enterprises and the UN Guiding Principles on Business and Human Rights. Thematic investing 61% 72% 70% 71% The Fund ensured that all companies are compliant with minimum human rights Weighted average portfolio and labor standards. ESG score 61.88 62.29 62.77 64.70 How did this financial product consider principal adverse impacts on What were the objectives of the sustainable investments that the sustainability factors? financial product partially made and how did the sustainable The Fund does not consider the principal adverse impacts (“PAIs”) of its investment contribute to such objectives? investment on sustainability factors. The Fund does not commit to make Sequoia Economic Infrastructure Income Fund does not commit to make “sustainable investments” per the definition of Article 2(17) of Regulation (EU) “sustainable investments” within the definition of Article 2(17) of Regulation (EU) 2019/2088 (SFDR) and, as such, does not calculate or report the principal 2019/2088 (SFDR) or the definition set out by the EU Taxonomy. adverse impact indicators for the Fund. Additional information Financial statements Company review Strategic review Governance 126 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – SFDR product‑level periodic disclosure continued What were the top investments of this financial product? Largest investments Sector % Assets Country 1 Renewables 4.35 UK 2 Digitalisation 4.33 US 3 Utility 4.00 UK Asset allocation describes the share of investments in 4 Renewables 3.75 US specific assets. 5 Digitalisation 3.61 US 6 Transport – vehicles 3.60 US 7 Power 3.41 Germany 8 Power 3.26 US 9 Digitalisation 3.16 US 10 Digitalisation 3.10 Holland 11 Transport – systems 3.02 Belgium 12 Transport – systems 2.94 Denmark 13 Other 2.86 US 14 Digitalisation 2.83 Switzerland 15 Digitalisation 2.77 US These percentages have been calculated by averaging the exposure as at each quarter end for the reference period. What was the proportion of sustainability‑related investments? Sequoia Economic Infrastructure Income Fund does not commit to a minimum proportion of investments of the financial product used to meet environmental or social characteristics promoted by the Fund in accordance with the binding elements of the investment strategy. Note, there were no sovereign exposures. What was the asset allocation? The list includes the investments constituting The Fund invests in economic infrastructure private loans and bonds across a range of industries in stable, low-risk jurisdictions, creating equity-like returns with the protections of debt. It is the the greatest proportion only UK-listed fund investing exclusively in economic infrastructure debt. of investments of the financial product during the reference period which is: 1 April 2024 to31March2025 Additional information Financial statements Company review Strategic review Governance 127 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Appendix – SFDR product-level periodic disclosure continued ![img-7.jpeg](img-7.jpeg) In which economic sectors were the investments made? | Sector | | Sub-sector | | | --- | --- | --- | --- | | Accommodation | 6.63% | Health care | 5.22% | | | | Student housing | 1.42% | | Other | 11.52% | Agricultural infra | 0.06% | | | | Hospitality | 0.52% | | | | Hospitals | 0.92% | | | | Schools | 1.92% | | | | Smart metering | 0.30% | | | | Social infra | 0.89% | | | | Residential infra | 3.07% | | | | Waste-to-energy | 3.78% | | Sector | | Sub-sector | | | --- | --- | --- | --- | | Power | 15.89% | Baseload | 6.82% | | | | Energy efficiency | 0.68% | | | | Energy transition | 1.05% | | | | Nuclear power | 0.69% | | | | Other electricity generation | 5.02% | | | | Power services | 0.82% | | | | Standby generators | 0.80% | | Renewables | 9.52% | Landfill gas | 4.35% | | | | Solar & wind | 5.17% | | Digitalisation | 22.82% | Broadband & fibre | 3.01% | | | | Data centres | 12.70% | | | | Telecom towers | 7.10% | | Transport – systems | 8.60% | Ferries | 2.04% | | | | Port | 3.02% | | | | Rail | 2.50% | | | | Road | 0.13% | | Transport – vehicles | 10.30% | Aircraft | 1.60% | | | | Health & safety | 1.19% | | | | Rolling stock | 2.20% | | | | Specialist shipping | 5.32% | | Utility | 14.73% | Renewable electricity supply | 1.56% | | | | Midstream | 5.37% | | | | Utility services | 7.81% | These percentages have been calculated by averaging the exposure as at each quarter end for the reference period. During the reference period, the Fund had eight investments across four companies which derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels. This averaged at 13.4% of the portfolio NAV over the year. Note, this includes for instance a port company that represents on average 3.02% of the portfolio; the company derive –2.5% of their revenues from customers that use them to handle/store a limited amount of cost. There were no new investments in these type of companies during the year. 128 Sequoia Economic Infrastructure Income Fund Annual Report and Accounts 2025 Company review Strategic review Governance Financial statements Additional information # Appendix – SFDR product-level periodic disclosure continued Taxonomy-aligned activities are expressed as a share of: - turnover reflects the "greenness" of investee companies today. - capital expenditure ("CapEx") shows the green investments made by investee companies, relevant for a transition to a green economy. - operational expenditure ("OpEx") reflects the green operational activities of investee companies. To comply with the EU Taxonomy, the criteria for fossil gas include limitations on emissions and switching to fully renewable power or low-carbon fuels by the end of 2025. For nuclear energy, the criteria include comprehensive safety and waste management rules. Enabling activities directly enable other activities to make a substantial contribution to an environmental objective. Transitional activities are economic activities for which low-carbon alternatives are not yet available and that have greenhouse gas emission levels corresponding to the best performance. To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy? Sequoia Economic Infrastructure Income Fund does not commit to a minimum share of "sustainable investments" with an environmental objective aligned with the EU Taxonomy. Did the financial product invest in fossil gas and/or nuclear energy - related activities complying with the EU Taxonomy? ☐ Yes: In fossil gas ☐ In nuclear energy ☐ ☒ No Whilst the financial product makes investments related to fossil gas and nuclear energy, the Fund does not measure or track investments in activities that comply with the EU Taxonomy. The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to determine the Taxonomy alignment of sovereign bonds*, the first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the financial product other than sovereign bonds. | 1 Taxonomy alignment of investments including sovereign bonds* | 2 Taxonomy alignment of investments excluding sovereign bonds* | | --- | --- | | Turnover 100% | Turnover 100% | | CapEx 100% | CapEx 100% | | OpEx 100% | OpEx 100% | | ● Taxonomy-aligned fossil gas ● Taxonomy-aligned Nuclear ● Taxonomy-aligned (no gas & nuclear) ● Non-Taxonomy-aligned | ● Taxonomy-aligned fossil gas ● Taxonomy-aligned Nuclear ● Taxonomy-aligned (no gas & nuclear) ● Non-Taxonomy-aligned The graph represents 95% of the total investments | 1. Fossil gas and/or nuclear-related activities will only comply with the EU Taxonomy where they contribute to limiting climate change ("climate change mitigation") and do no significant harm to any EU Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214. What was the share of investments made in transitional and enabling activities? Sequoia Economic Infrastructure Fund does not measure its share investments in "transitional" and "enabling" activities as per the definition under the EU Taxonomy. How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods? N/A What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? Sequoia Economic Infrastructure Income Fund does not commit to a minimum share of "sustainable investments" with an environmental objective that are not aligned with the EU Taxonomy. What was the share of socially sustainable investments? Sequoia Economic Infrastructure Income Fund does not commit to a minimum share of "socially sustainable investments". What investments were included under "other", what was their purpose and were there any minimum environmental or social safeguards? The "#2 Other" investments includes the lowest quartile of ESG scores, which represented 25% of the Fund's portfolio by NAV as at 31 March 2025. The Fund aims to increase the portfolio's average ESG score over time, whilst anticipating natural fluctuations and recognising this may not always be possible given market circumstances. Further, when considering disposals, we will look at the lower-scoring assets as a priority, whilst taking disposal decisions based on financial metrics. The purpose of these investments is diversification. As specified in the investment criteria, the Fund will invest across different sectors and sub-sectors to ensure the portfolio is sufficiently diversified. Naturally, certain sectors and sub-sectors are more aligned with environmental characteristics than others, as a result there will always be a spread in ESG scores within the portfolio. 129 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – SFDR product‑level periodic disclosure continued Compliance with minimum environmental or social safeguards cannot be reliably Borrowers were asked to complete annual post-investment sustainability measured, due to the lack of data and evidence to do so since many of the questionnaires. These cover quantifiable sustainability metrics/KPIs when investee companies lack the sufficient resources and/or capabilities to be able appropriate, CO emissions, health and safety records, etc. as well as 2 toensure compliance with minimum safeguards throughout their value chains. confirmation of the borrower’s overall sustainability policies and procedures. are sustainable investments TheFund requires supporting documentation and/or external verification with an environmental Nonetheless, all assets undergo our three-part process of negative screening, to evidence borrowers’ sustainability claims. Action plans are created for objective that do not thematic investing (positive screening) and ESG scoring, as described in the all assets,which identify areas of improvement in borrowers’ sustainability take into account the Fund’s Sustainability Policy. This means that assets not meeting the Fund’s credentials and/or the additional evidence that would be required to be criteria for environmentally investment criteria and negative screening criteria will be excluded, thus sustainable economic able to fully assess certain indicators within the ESG scoring framework. making an investment in an asset not meeting minimum environmental or social activities under Regulation These lists of actionable areas formed the basis of the ongoing engagement safeguards unlikely. (EU) 2020/852. with theborrowers over the course of the year with the aim of making Furthermore, where appropriate, loan terms will include covenants or improvements,collecting more evidence of initiatives that are said to repeated representations to ensure that the borrower complies with its stated beinplaceor mitigating risks. sustainability objectives and to encourage it to improve its standards over time. The environmental characteristics of the Fund and sustainability indicators used These could include obligations to meet minimum environmental safeguards. to measure this were met through a combination of investing in higher scoring Borrower engagement on sustainability matters is part of the ongoing monitoring opportunities, disposing of lower-scoring opportunities and using a range of process. For example, annual sustainability questionnaires are sent to all engagement strategies with borrowers. borrowers, which includes questions related to the maintenance of minimum safeguards. How did this financial product perform compared to the referencebenchmark? What actions have been taken to meet the environmental and/or Sequoia Economic Infrastructure Income Fund does not use a specific index social characteristics during the reference period? designated as a reference benchmark to determine whether the product is The Fund continued to make investment decisions this year in line with its three aligned with the environmental and/or social characteristics it promotes. sustainability goals. Based on the Fund’s investment strategy, when evaluating Reference benchmarks potential investments, the Investment Adviser prioritised new transactions with are indexes to measure How does the reference benchmark differ from a broad market whether the financial higher ESG scores, and when considering the potential disposal of investments, index? product attains the the Investment Adviser prioritised transactions with lower ESG scores, whilst environmental or social N/A taking disposal decisions based on financial metrics. characteristics that they The Investment Adviser continued to take a proactive approach to managing the promote. How did this financial product perform with regard to the loan book and engage with borrowers in relation to sustainability-related topics sustainability indicators to determine the alignment of the reference on a regular basis as per the Fund’s Sustainability Policy. The Fund’s range benchmark with the environmental or social characteristics of engagement strategies are designed to encourage and promote positive promoted? behaviour in the companies that it lends to, and some of those that were N/A employed during this reference period are described below. Where appropriate, loan terms included covenants or repeated representations How did this financial product perform compared with the reference to ensure that the borrower complies with its stated sustainability objectives benchmark? and to encourage it to improve its standards over time. In addition, where N/A appropriate, loan terms included an obligation on the borrower to report suitable sustainability metrics on a best-efforts basis. How did this financial product perform compared with the broad market index? N/A Additional information Financial statements Company review Strategic review Governance 130 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Appendix – Principal adverse sustainability impacts statement The Sequoia Economic Infrastructure Fund (“SEQI”, “the Fund”) does not consider the principal adverse impacts (“PAIs”) of its investment on sustainability factors. The Fund does not commit to make “sustainable investments” per the definition of Article 2(17) of Regulation (EU) 2019/2088 (SFDR) and, as such, does not calculate or report the PAI indicators for the Fund. Nonetheless, the Fund recognises the importance of considering PAIs and is taking reasonable steps on making progress in the measurement of these metrics at the Fund level. The Fund’s ability to measure and thus consider the adverse impacts is highly dependent on the availability and accuracy of data from third parties. We request relevant data from our investee companies upon origination and annually thereafter and embed covenants into loans, where possible, to mandate the provision of certain datapoints. However, we invest predominantly in private debt with a skew towards smaller and mid-sized companies and a sizeable proportion of the portfolio is US based. Given the asset class and nature of our investments, the collection and reporting of PAI data at our investee companies are limited. The integration of PAIs is further impaired by the current absence of reliable benchmarks or external data sources that could be used to reliably generate estimated data specific to our portfolio to comply with the PAI technical reporting requirements. We cannot yet commit to a date by which we will be able to adequately consider such PAIs. Additional information Financial statements Company review Strategic review Governance 131 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Contacts For further information, please contact: Sequoia Investment Management Company Limited +44 (0)20 7079 0480 Steve Cook Dolf Kohnhorst Randall Sandstrom Anurag Gupta Jefferies International Limited (Joint Corporate Broker & Financial Adviser) +44 (0)20 7029 8000 Gaudi le Roux Stuart Klein J.P. Morgan Cazenove (Joint Corporate Broker & Financial Adviser) +44 (0)20 7742 4000 William Simmonds Jeremie Birnbaum Teneo (Financial PR) +44 (0)20 7353 4200 Elizabeth Snow Faye Calow Apex Fund and Corporate Services (Guernsey) Limited (Administrator) +44 (0)20 3530 3667 Aoife Bennett About Sequoia Economic Infrastructure Income Fund Limited The Company is a Guernsey-registered closed-ended investment company that seeks to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. The Company is advised by Sequoia Investment Management Company Limited. LEI: 2138006OW12FQHJ6PX91 Additional information Financial statements Company review Strategic review Governance 132 Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 ## Notes Additional information Financial statements Company review Strategic review Governance Designed and produced by www.lyonsbennett.com The FSC label on this Report ensures responsible use of the world’s forest resources ® This Report has been printed on Nautilus SuperWhite, made from 100% post-consumer recycled waste, Compliant with ISO 9001, ISO 9706, ISO 14001 This product is made of material from well-managed ® FSC -certified forests, recycled materials, and other controlled sources. Printed by L&S using vegetable-based inks and is certified carbon neutralfor scope 1&2 under the PAS 2060 standard. Sequoia Economic Infrastructure Income FundAnnual Report and Accounts 2025 1 Royal Plaza Royal Avenue St Peter Port Guernsey GY1 2HL ### www.seqi.fund