GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
GCP Infrastructure Investments Limited Annual report and nancial statements 2024
About the Company
The Company seeks to provide shareholders with
regular, sustained, long-term dividend income
whilst preserving the capital value of its
investments over the long term by generating
exposure to infrastructure debt and/or similar
assets. It is currently invested in a diversied,
partially ination-protected portfolio of
investments, primarily in the renewable energy,
social housing and PPP/PFI sectors.
The Company is a FTSE 250, closed-ended
investment company incorporated in Jersey.
Itwas admitted to the Ofcial List and to
trading on the LSE’s Main Market in July 2010.
Ithad a market capitalisation of £684.7 million
at 30September 2024.
www.gcpinfra.co.uk
Strategic report
Governance
Financial statements
Read more about
strategy on page 20
Read more about
governance on page 100
Read the nancial
statements on page 134
Contents
Introduction
2 Highlights
4 At a glance
5 Our portfolio
6 Creating long-term value
16 Chairman’s statement
Strategic report
21 Strategic overview
28 Business model
30 Company impact
32 Q&A with the Investment Adviser
34 Investment Adviser’s report
44 Investment portfolio
54 Financial review
58 Sustainability
82 Stakeholders
88 Risk management
Governance
102 Governance at a glance
104 Board of Directors
106 The Investment Adviser
110 Board leadership and purpose
116 Division of responsibilities
119 Composition, succession and
performance review
122 Audit, risk and internal control
126 Remuneration
131 Directors’ report
Financial statements
136 Statement of Directors’ responsibilities
137 Independent Auditor’s report
142 Statement of comprehensive income
143 Statement of nancial position
144 Statement of changes in equity
145 Statement of cash ows
146 Notes to the nancial statements
Additional information
170 Alternative performance measures
173 Glossary of key terms
176 UN SDGs and targets
177 Shareholder information
178 Corporate information
1
Introduction
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Highlights
Portfolio valuation
£960.0m
30 September 2023: £1.0bn
Representing a mature, diversied and
operational portfolio of 50 investments across
the renewable, PPP/PFI and supported living
sectors.
Partially ination protected
47%
30 September 2023: 41%
Representing the percentage of the portfolio by
value that have some form of ination protection.
Weighted average annualised yield
7.8%
30 September 2023: 7.9%
Representing a yield on the portfolio of
investments with stable, pre-determined,
long-term, public sector backed revenues.
Dividends for the year
7.0p
30 September 2023: 7.0p
Delivering the dividend target set by the Board
for the nancial year of 7.0 pence per share.
Total shareholder return
28.4%
30 September 2023: (25.2%)
Reecting improvements in market factors and
the implementation of the capital allocation
policy.
Dividend yield
8.9%
30 September 2023: 10.3%
Representing the yield on the closing share price
of 78.60 pence per share at 30 September 2024.
NAV per share
105.22p
30 September 2023: 109.79p
Reecting downward revaluations incurred
during the year, offset by the impact of share
buybacks.
NAV total return
2.2%
30 September 2023: 3.7%
Continuing to meet its investment objective of
capital preservation, with a NAV total return of
176.6% since IPO.
Net assets
£913.1m
30 September 2023: £956.6m
Reecting disposals of assets during the year
in line with the stated aims of the Company’s
capital allocation policy.
Read more on pages 134 to 169
Financial
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
2
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Leverage
£57.0m
30 September 2023: £104.0m
Representing a signicant reduction in leverage
and an LTV
1
of 6.2%.
ESG policy
1 new
30 September 2023: None
Implemented an ESG policy to ensure investment
practices align with the Investment Adviser’s
Responsible Investment policy.
Community support
£3.9m
30 September 2023: £3.6m
Reecting the contribution to Community Benet
Funds by portfolio assets since IPO.
Disposals
£31.4m
30 September 2023: £nil
Reecting disposal of interests in Blackcraig
wind farm at a 6.4% premium to the valuation at
31March 2024.
Renewable generation
1,320 GWh
30 September 2023: 1,398 GWh
Representing renewable energy exported by
portfolio assets, equivalent to powering 488,842
average homes.
Charities supported
14
30 September 2023: 5 charities
Representing charities supported by the
Company and the Investment Adviser raising
c.£47,000 during the year.
Share buybacks
3.4m
30 September 2023: 13.6m
Totalling 17.0 million shares bought back since the
buyback programme commenced in March 2023.
SDG alignment
9 SDGs
30 September 2023: 9 SDGs
Reecting the alignment of the portfolio with
certain SDGs, as outlined by the United Nations.
Internships hosted
5
30 September 2023: 3
Continued supporting young talent through the
Investment Adviser’s paid internship scheme.
Read more on pages 58 to 81
Read more on pages 14 and 15
Capital
allocation
ESG
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
3
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
At a glance
The Company’s purpose is to invest in UK infrastructure debt and/or
similar assets to provide regular, sustained, long-term dividends and to
preserve the capital value of its investments over the long term.
1. Non-nancial objective. Further information is included on pages 58 to 81.
2. The dividend target set out above is a target only and not a prot forecast or estimate and there can be no assurance that it will be met.
3. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
4. The LSE Green Economy Mark recognises London-listed companies generating more than half their revenues from green environmental products and services.
TheCompany’s portfolio is 62% invested in the renewable energy sector.
5. The Company’s portfolio is 12% invested in supported living and 23% invested in PPP/PFI projects in the healthcare, education, waste, housing, energy efciency and justice
sectors which are measured in alignment with the UN SDGs, and 3% of the portfolio is invested in PPP/PFI leisure projects.
Dividend
income
Diversication
Capital
preservation
Sustainability
1
To provide shareholders with
regular, sustained, long-term
dividends.
To invest in a diversied
portfolio of debt and/or similar
assets secured against UK
infrastructure projects.
To preserve the capital value of
investments over the long term.
To focus on the sustainability
of the portfolio and make a
positive impact.
7.0p
Dividends paid for the year
ended 30September2024
50
Number of investments at
30 September 2024
0.41%
Aggregate downward
revaluations since IPO
(annualised)
3
62%
Portfolio contributing to
greeneconomy
4
14
Consecutive years
of dividends paid
473
Number of underlying assets in
the portfolio
105.22p
NAV per share
at 30 September 2024
38%
Portfolio that benets
endusers within society
5
Read more on pages
56 and 57
Read more on page 5 Read more on page 56 Read more on page 58
The Company paid a dividend
of 7.0 pence in respect of the
year. A dividend target
2
of 7.0
pence has been set for the
forthcoming nancialyear.
The investment portfolio is
exposed to a wide variety of
assets in terms of project type
and the source of its underlying
cash ow.
The Company has generated a
NAV total return
3
for the year
of 2.2% and 176.6% since the
Company’s IPO in 2010.
The investment portfolio
is focused on sustainable
infrastructure which has a
positive environmental and
social impact.
4
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Our portfolio
Number of assets within sector1
Area of square corresponds to valuation of sector
Percentage of portfolio
Investments contributing to the green economy
Investments that are integral to society
%
PPP/PFI
145
assets
26%
Geothermal
1
project
1%
Biomass
4
sites
10%
Wind
10
sites
13%
Supported living
905
units
12%
Anaerobic digestion
19
plants
9%
Solar
53,246
installations
25%
Hydro-electric
14
schemes
2%
Gas peaking
2
projects
1%
Electric
vehicles
250
vehicles
1%
The Company’s portfolio is comprised of loans secured against assets
in the UK which fall under the following classications:
Senior ranking security
53%
Weighted average
annualised yield
1
7.8%
Average life
11 years
Partially ination protected
47%
Read more on page 45
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
5
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Creating long-term value
Our investment case
The Company has a number of key differentiators that make it well
positioned to take advantage of attractive risk-adjusted returns.
Diversication
The Company has an explicit objective of
diversifying across a range of asset classes.
Thismeans the Investment Adviser seeks
the most attractive risk-adjusted returns as
it is not bound to invest in sectors that are
unattractive due to higher competition or
assetcharacteristics.
Scale
The Company targets smaller investment
opportunities that may be overlooked by larger
investors, such as commercial banks. This
exibility allows the Company to enter niche
markets and scale investments over time through
follow-on nancing to existing borrowers, which
supports long-term growth and enhances
returns by increasing exposure to successful
investments.
6
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Debt focus
The Company’s focus on debt provides exibility
across senior and subordinated positions,
allowing it to match investment risk with an
appropriate capital structure solution and
associated return. This approach allows the
Company to tailor investments according to risk
proles, maximising returns while managing risk
effectively.
Track record
The Company has been investing in the
infrastructure sector for over a decade. This has
allowed the Investment Adviser to develop its
expertise in several specialist asset classes, such
as anaerobic digestion and biomass. As part of
this, the Investment Adviser has a proven model
which assesses and evaluates opportunities in
new asset classes.
Sustainability
expertise
The Company’s investment philosophy is centred
on the long-term sustainability of its portfolio.
As part of this philosophy, the Board and the
Investment Adviser continually seek to improve
the way ESG criteria is embedded, integrated,
monitored and measured within the portfolio.
7
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Creating long-term value continued
Making a positive impact
The Board and the Investment Adviser work closely to ensure
the Company’s activities have a positive impact.
Sustainable Development Goals (“SDGs”)
By investing in assets that are integral to society,
including those which contribute to a greener
economy, the Company aligns with certain SDGs,
as outlined by the United Nations (“UN”). These
goals were created in 2015 by the UN to create a
better and more sustainable world by 2030. The
Company’s portfolio positively contributes to the
provision of renewable energy, the development
of infrastructure to support economic growth,
and also provides high-quality and safe buildings
for vulnerable adults, healthcare patients and
students. Furthermore, the Company’s approach
to governance, labour and health and safety
makes a positive contribution to the employees,
customers, suppliers and local communities in
which the assets operate.
8
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
SDG Innovation Accelerator
In 2024, ve employees from the Investment
Adviser participated in the SDG Innovation
Accelerator for Young Professionals. This
programme empowers young talent under the
age of 35 by driving collaborative business
innovation aligned with the UN SDGs. An
intensive, nine month programme, the Innovation
Accelerator is designed to promote sustainability
by activating the potential of future business
leaders and change makers.
Three employees participated in the programme
as ‘innovators’, seeking to identify and solve
sustainability issues within the Investment
Adviser and two senior members also
participated as a ‘mentor’ and ‘champion’, to
help guide the innovators on their sustainability
journey.
As part of the programme, the team of innovators
came up with ideas to improve the social benets
received by employees at the Investment Adviser.
The employees presented their ndings and
ideas to a group of industry professionals, as well
as the Responsible Investment committee of the
Investment Adviser.
B Corp
In April 2024, the Investment Adviser was
awarded a B Corp certication. Certied B
Corporations are leaders in the global movement
for an inclusive, equitable and regenerative
economy.
As a certied B Corp, the Investment Adviser is
part of a community of like-minded businesses
that engage with each other to share ideas and
best practice. The certication formalises the
Investment Adviser’s sustainable and long-term
business model, as well as providing a framework
to ensure it continues to operate in accordance
with the highest ESG standards.
5
Investment Adviser
employees participated
Overall B
Impact Score
99.4
Governance
Workers
Customers
Environment
Community
Based on the B Impact
Assessment, the
Investment Adviser
achieved an overall score
of 99.4. Themedian score
for ordinary businesses
whocomplete the
assessment is50.9.
99.4 The Investment Adviser’s overall B
Impact Score
80.0 Qualies for B Corp certication
50.9 Median score for ordinary businesses
Read more in the Investment Adviser’s
Responsible Investment report
The three ‘innovators’
9
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Creating long-term value continued
Clean energy infrastructure
The assets in the Company’s portfolio have
strong environmental credentials, with 62%
of the portfolio invested in renewable energy
projects that provide alternative energy sources
to fossil fuels. The Board recognises that
investing in clean energy infrastructure is one
of the main ways to protect our planet against
climate change, and the Company is committed
to nding new and innovative ways to support the
transition to net zero through its investments.
The carbon impact of infrastructure contributes
to a signicant proportion of the UK’s national
emissions from a construction, operation and
maintenance perspective. In many cases, the
UK’s existing infrastructure was not originally
designed and constructed with global warming
in mind. The Investment Adviser has sought to
introduce energy efciency projects at portfolio
assets where there were opportunities to do so.
In October 2020, the Company was awarded
the Green Economy Mark from the London
Stock Exchange. This classication recognises
companies that are driving forward the global
green economy.
Benetting the environment
The Company invests in renewable energy generation
which has a positive environmental impact.
10
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Biomass
Biomass is the term given to the organic raw
material which can be used directly in power
plants or can be used to produce biofuels.
Unlikeother renewable sources of power,
biomass can be available 24/7 and is not reliant
on the weather. It is the technology most closely
comparable to fossil fuelled power stations and,
as such, is most suited to the requirements of the
electrical grid network.
The Company was a rst mover in biomass
gasication technology in the UK through
its investment in Birmingham Bio Power Ltd.
This plant uses four gasier units fed with
up to 72,000 tonnes of waste wood per year
sourced from the West Midlands, and has been
operational since 2016. The Company also lends
to waste wood projects in Widnes and Northern
Ireland, along with smaller anaerobic digestion
plants in Scotland and Northern Ireland.
SolarCatcher
The Company has provided funding of up to
£20million to support the build-out of innovative
renewable energy infrastructure on public
sector sites, predominantly schools, across
England. Named ‘SolarCatcher’, the project
is a fresh approach to the energy transition,
as it uses existing car park infrastructure to
generate on-site renewable energy for schools
and academies, whilst providing electric vehicle
charging points for staff and visitors.
As part of the nancing, each school enters into
a power purchase agreement with SolarCatcher
under which they purchase power produced
by the solar panels for use within the school,
thereby reducing the power they need to draw
from the electricity grid. These power purchase
agreements are executed for a xed price which
is lower than the price the schools pay to their
usual supplier.
Electric vehicles
In the global push towards net-zero emissions,
decarbonisation of the transport sector is key.
The Company has nanced the acquisition of
250 zero-emission capable London black cabs
for two eet operators. These investments
have a unique nancing structure, which is
a‘pay-for-mile’ scheme managed by Zeti,
aplatform for investment in electric vehicle
eets, over a circa ve year term.
The eets benet from the maximum
low-emission vehicle plug-in Government grant
funding and from accelerated capital allowances
that result in a one year deduction against
taxable prots that are equal to the full cost
of the vehicle.
62%
of portfolio
invested in renewables
11
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Creating long-term value continued
Benetting society
The Company’s portfolio has clear benets
tocommunities and end users in society.
Infrastructure, by denition, has a core
social purpose. With long-term investment in
renewable energy, PFI assets such as schools
and hospitals, and social housing for vulnerable
adults, the Company’s portfolio has an overall
positive impact on society. By investing in the
supported living sector, the Company has funded
properties across the UK that benet vulnerable
adults. Through the company’s investments in
the PPP/PFI sector it is exposed to a number
ofsub-sectors including education, healthcare,
waste, leisure and housing. These assets are
integral to UK society and provide long-term
partnerships with the public sector.
12
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Community Benet Funds
Renewable projects not only have a positive
impact on the environment but also have wider
benets for society, improving local communities
through CBFs. A CBF is a voluntary commitment
by a developer to provide funds which are
made available to local community projects.
By way of an example, the accepted standard
commitment for a wind farm is £5,000 per MW.
These funds can be used to nance any initiative
a community deems appropriate and necessary
for their local area, including community-owned
renewable energy projects, recreational
facilities or equipment for local schools. Benets
under the protocol are negotiated directly
with host communities and tailored to their
needs to ensure a positive legacy is achieved.
TheCompany’s portfolio assets have donated
£3.9million to CBFs since its IPO.
Supported living
The Company has historically targeted
investments in the ‘supported living’ sector
through nancing the development or conversion
of accommodation to suit specic care needs
for individuals with learning, physical or mental
disabilities. One portfolio the Company has
invested in comprises 13 properties and 51 units
of supported living accommodation which are
designed to meet the individual and unique
needs of adults with disabilities and mental
health problems. The portfolio is leased to
Westmoreland Supported Housing Ltd, which
is a registered provider of social housing. The
Company supported Westmoreland over a period
of nancial distress. As a result, Westmoreland
is now in a materially better nancial position
than it was previously and continues to provide
high-quality accommodation and care for its
vulnerable tenants.
Internships
The Investment Adviser offers paid internships
to young people, prioritising those from diverse
backgrounds who may otherwise nd it difcult
to nd work experience.
This year, two paid internships were offered
to students participating in the 10,000 Black
Interns programme, which offers paid internship
opportunities across more than 25 sectors, along
with training and development opportunities.
Another two internships were offered to
students in the Young Women in Finance
programme, a not-for-prot social organisation
dedicated to the eradication of gender bias for
new graduates entering the nance industry.
One other internship was offered to an ESG
masters student.
All interns worked across different projects
at the Company, with a particular focus on the
climate risk assessment and ESG policy.
26%
Portfolio invested
in PPP/PFI
12%
Portfolio invested
insupported living
Read more on page 40
Read more on page 70
13
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Creating long-term value continued
Policy aims
In recognition of the disconnect between share
price and NAV, and the material discount at
which the shares are trading, the Company
reported that it planned to follow a progressive
capital allocation policy in its 2023 annual report.
This sought to realise £150 million of capital
through disposals or renancings to facilitate
a material reduction in its RCF, return at least
£50million to shareholders, and rebalance
underlying portfolio exposures.
The capital allocation policy has three key
priorities: a material reduction in leverage, an
improvement in the risk-adjusted return of the
existing portfolio, and facilitating the return of at
least £50million of capital to shareholders whilst
maintaining the dividend target.
The Board’s focus during the nancial year
has been on the execution of the policy. The
Investment Adviser’s focus has therefore
been on renancing loans and disposing of
investments where appropriate to achieve the
Company’s aims. The stated aims of the policy
were based on interactions with shareholders
and sought to address their concerns. This
included reducing leverage while interest rates
were high by decreasing the size of the RCF
and ultimately paying down the drawn balance.
Referto page 24 for further information.
Capital allocation policy
The Board is continuing to execute the policy
and has made progress during the year.
Targets of the policy
Reduce exposure
to merchant
electricity
prices
Reduce
leverage
Cycle out
of certain
sectors
Refocus the
portfolio
on debt
Buy back
Company
shares
Improve
risk-adjusted
return
£150m
Capital
realisation
target
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
14
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Disposals
The Investment Adviser has sought to
restructure the underlying exposures in the
portfolio and exit sectors where investors have
concerns, as well as reducing the Company’s
exposure to merchant electricity prices
and demonstrating a conservative valuation
methodology through its sales processes.
Thepolicy also involved completing buybacks
as apotential discount management tool, while
simultaneously returning capital to shareholders.
The rst transaction was completed earlier in
theyear, with the disposal of the Company’s
interest in Blackcraig wind farm. See below
forfurther information.
Blackcraig Wind Farm
In April 2024, the Company disposed of its
interest in loan notes secured against Blackcraig
Wind Farm, a 52.9MW onshore wind farm located
outside Dumfries and Galloway in Scotland, at a
6.4% premium to its valuation at 31 March 2024.
The Company originally acquired the senior
secured loan notes in 2017 from the UK Green
Investment Bank. The disposal generated net
cash proceeds of £31.4 million which included
principal and interest and were used to reduce
the drawn balance on the Company’s RCF.
Read more on page 44
Post year end, the Company completed
the disposal of a portfolio of rooftop solar
assets, generating proceeds of £6.8 million.
Further,itexpects to complete, subject to
contract, on the disposal of a portfolio of
onshore wind farms, generating proceeds of
c.£20 million. TheCompany’s disposals total
£38.2 million at the end of 2024, with a pipeline
ofadditional disposals in excess of £150 million.
The Investment Adviser has consistently
witnessed delays in transaction processes
across the market, which has slowed progress
towards achieving the stated aims of the capital
allocation policy. However, the Company expects
to complete additional disposals in 2025, and
remains committed to the capital realisation
target and stated ambitions, with the share
buyback programme recommencing imminently.
15
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Andrew Didham
Chairman
I am pleased to present the Company’s annual
reportfortheyear ended 30 September 2024.
Introduction
I am pleased to present the Company’s annual
report and nancial statements for the year
to 30 September 2024. The Company’s shares
have continued to trade at a material discount
to the NAV during the year. The impact of a
higher rate environment, combined with reduced
demand from wealth and retail investors looking
for alternative sources of income, continues to
weigh on the Company’s share price.
The current yield on 15-year gilts is similar
to where it was at the Company’s IPO. The
disconnect between the Company’s shares
trading at a premium at IPO and for the majority
of the period since, and the material discount at
which it trades today, remains. However, over this
period, it has a 14 year track record of delivering
on its objectives of income generation, capital
preservation and diversication. The Company’s
mature, diverse and operational portfolio
will continue delivering on these objectives
movingforward.
The Company remains committed to the capital
allocation policy set out in the 2023 annual
report. While progress on disposals has been
slower than expected, the Investment Adviser
continues to progress with material transactions
that will, if completed, allow the Company to
achieve the objectives set out in the previous
annual report.
As a Company that invests in UK infrastructure
that benets from public sector support, the
wider policy environment and the availability
of long-term revenue support models is
important. The new Government has adopted,
and in certain cases extended, ambitious
targets for infrastructure deployment to
address the challenges of population change,
decarbonisation and energy security, as well
as the transition to a digital economy. Ithas
been encouraging to see the growth of
the contract-for-difference scheme which
supports renewable energy generation and the
emergence of other contract-for-difference,
regulated asset base or cap and oor revenue
support models in sectors such as biomethane,
carbon, hydrogen, sustainable aviation fuels,
interconnectors and long duration energy
storage. These may present opportunities for
the Company when it resumes investing in the
future. The expected increased focus on policy
which supports new infrastructure development
across the planning process, grid connections
and the establishment of the National Wealth
Fund (previously the UK Infrastructure Bank) is
also encouraging.
Chairman’s statement
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
16
Capital allocation policy
The Board remains committed to the capital
allocation policy detailed in the Company’s 2023
annual report. Progress has been made during
the year, with further developments made post
year end, as the Company seeks to execute
on its target of releasing £150 million (c.15% of
the portfolio) to facilitate the key priorities of
thepolicy:
— reduction of leverage, reducing the drawn
balance of the RCF to zero;
— return at least £50 million of capital to
shareholders, in addition to maintaining the
Company’s dividend target; and
— rebalancing the portfolio and materially
reducing exposure to supported living, and to
merchant electricity prices, while re-focusing
the portfolio on debt.
Reduction of leverage
The Board has prioritised the reduction of
leverage whilst interest rates have been
elevated. The Company’s RCF was renanced in
March2024, with total commitments reduced
from £190 million to £150 million in line with this
stated aim. The drawn balance of the facility
has reduced from £104 million at 30September
2023 to a materially reduced level of £57 million
at year end following repayments. Subject to the
completion of a further pipeline of disposals, the
Company continues to work towards reducing
drawn balances to zero alongside the buyback
programme. Further details on the Company’s
nancing activity are provided on page 56 and
details of the RCF can be found in note 15.
Return of capital
In total, 3.4 million shares were repurchased
during the year under the existing share
buyback authority. The repurchase of shares
continues to offer attractive returns, given the
current discount to NAV, and the dividend yield
on the share price of 8.9% at 30 September
2024. The Company’s shares have traded at
an average discount
1
of 32.4% during the year
and an average premium of 3.4% since IPO. At
30 September 2024, the share price was 78.90
pence, representing a discount to NAV of 25.0%.
The Company will be recommencing the share
buyback programme imminently, and remains
committed to its target of returning at least £50
million to shareholders in the near term.
The method by which the Company will return
£50million of capital to shareholders remains
under consideration. The Board continues to
believe that the use of share repurchases is a
means of addressing imbalances in supply and
demand which may otherwise create volatility
inthe rating of the Company’s shares.
Portfolio rebalancing
The focus of investment-related activity for the
Investment Adviser and the Board during the year
was releasing the target £150 million of capital
through renancings and disposals. The rst of
these occurred in April 2024, when the Company
announced the disposal of its interest in loan
notes secured against Blackcraig Wind Farm, a
52.9MW onshore wind farm located in Dumfries
and Galloway, Scotland. The disposal generated
net cash proceeds of £31.4 million which
represented a 6.4% premium to the valuation of
the investment at 31 March 2024.
Further transactions were completed post
year end, including the disposal of a portfolio
of rooftop solar assets installed on domestic
properties across the UK, generating proceeds
of £6.8 million. The Company expects to
complete, subject to contract, on the disposal of
a portfolio of two onshore wind farms in the UK,
expected to generate proceeds of c.£20 million.
Transactions in the supported living sector have
been signicantly slower moving than expected;
however, there is positive momentum and the
Company believes it will be able to materially
reduce exposure to this sector in 2025.
The Company made one new loan of £2.6 million
in the year to an existing borrower. Portfolio
follow-on investments of £24.7 million made
during the year were focused on restructuring
and management to preserve value and potential
future protability. This was offset by repayments
of £39.2 million, giving a net repayment from the
existing portfolio of £11.9 million.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Introduction
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
17
Financial performance
This year, nancial performance continued
to be driven by electricity prices and
ination. A material cooling in both factors
resulted in downward revaluations during
the year and had a resulting negative impact
on protability. The Company generated
total prot and comprehensive income of
£19.5million(30September 2023: £30.9 million).
The net assets of the Company decreased to
£913.1 million (105.22 pence per share) from
£956.6 million the previous year (109.79 pence
per share). Further information on nancial
performance can be found on pages 54 to 57.
The Company seeks to pay regular, sustained,
long-term dividends to shareholders, and paid a
7.0 pence per share dividend for the year, in line
with the target for this nancial year. The same
target is reafrmed for the forthcoming nancial
year. The dividend of 7.0 pence per share for the
year was 0.3 times covered on an earnings cover
basis, which includes investment revaluations in
accordance with IFRS, and was 1.0 times covered
on an adjusted earnings cover basis, calculated
on the Investment Adviser’s assessment of
adjusted net earnings
2
in the year. Further
information can be found on page 57.
ESG
The Company’s portfolio continues to have
a positive impact as it contributes to the
generation of renewable energy and nances
infrastructure that has clear benets to users in
society. The Board and the Investment Adviser
believe that investing in assets with a positive
environmental and social impact is key to
protecting our planet for future generations.
The Company has made good progress this year
against the ESG objectives set out in the 2023
annual report, including implementing an ESG
policy to formalise ESG processes and ensure
the Company’s responsible investment practices
align with the Investment Adviser’s responsible
investment policy.
The Investment Adviser obtained certication
as a B Corporation during the year, formalising
its sustainable and long-term business model.
The certication provides a framework to ensure
the Investment Adviser continues to operate
in accordance with the highest sustainability
standards. The Investment Adviser also improved
its PRI score for the second consecutive year,
highlighting its commitment to improvements
in its ESG credentials. These achievements
complement those of the Company, which was
awarded the Green Economy Mark from the
LSE in 2020 in recognition of the Company’s
contribution towards driving a greener economy.
More details on the Company’s approach to
responsible investment can be found in the
sustainability section on pages 64 to 67.
Market outlook
At the time of writing, the Bank of England base
rate is 4.75%, following the Bank of England’s
decision to cut rates by 0.25% in August 2024
and November 2024. These were the rst cuts
since the onset of the Covid-19 pandemic in
2020. Ination has cooled signicantly over the
year compared to previous periods. CPI rose by
1.7% in the year to 30 September 2024, and then
to 2.3% in the twelve months to 31 October 2024.
The link between electricity prices and ination
inthe UK is strong, and the Board recognises
that geopolitical tensions in the Middle East and
the conict in Ukraine may impact electricity
prices and have a knock-on effect on ination
going forward.
As mentioned previously, the policy backdrop
for the sector has become increasingly positive.
Despite this, there remains a disconnect
between investment company sentiment and
broader infrastructure investment. The Board
and the Investment Adviser recognise there
is a broad range of investment opportunities
in the current market at attractive rates.
However, these remain secondary to the priority
of addressing the discount and shareholder
concerns.
Chairman’s statement continued
1. The dividend target set out above is a target only and not a prot forecast or estimate and there can be no assurance that it will be met.
2. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
18
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Annual report and nancial statements 2024
The Board also acknowledges the positive
developments post year end regarding cost
disclosure requirements, with HMT drafting a
Statutory Instrument to remove the requirement
for investment companies to publish ongoing
charges, a gure widely accepted to be an
inaccurate representation of the actual cost of
investing in shares in an investment company.
With many citing this misleading cost as a
headwind for investment in the investment
company sector, the potential for the cost to be
removed may create demand for shares going
forward. The Statutory Instrument became law
on 22 November 2024. However, following this
announcement, investment platforms have said
they will continue requiring ongoing charges to
be disclosed. The Investment Adviser is working
to address this, and the Board will continue
monitoring the impact of cost disclosure on the
Company’s share price.
The Board
The Board composition will see several changes
in the year ahead to align with corporate
governance best practice. Michael Gray and
JuliaChapman have both served on the Board
fornine years, and their retirement will be phased
over the coming year. Mr Gray will retire from
the Board in February 2025, and Ms Chapman
willstayon the Board for a further transition
period, assisting with the identication of an
appropriate replacement.
I would like to take this opportunity to
acknowledge the important role Mr Gray and Ms
Chapman have played in the stewardship of the
Company during their tenure and thank them for
their invaluable contribution to the Company.
I am delighted to extend a warm welcome to
Ian Brown, who will be appointed to the Board
subject to regulatory and shareholder approval.
Mr Brown will bring a wealth of knowledge and
experience in the UK lending and infrastructure
sector and will greatly contribute to the
Company’s strategic direction.
Andrew Didham
Chairman
11 December 2024
For more information, please refer to
the strategic report on pages 20 to 99.
19
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Introduction
Strategic report
What’s in
the section
Strategic overview
Find out more on pages 22 to 27
Business model
Find out more on pages 28 and 29
Company impact
Find out more on pages 30 and 31
Q&A with the Investment Adviser
Find out more on pages 32 and 33
Investment Adviser’s report
Find out more on pages 34 to 43
Investment portfolio
Find out more on pages 44 to 53
Financial review
Find out more on pages 54 to 57
Sustainability
Find out more on pages 58 to 81
Stakeholders
Find out more on pages 82 to 87
Risk management
Find out more on pages 88 to 99
20
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
20
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Since the Company’s IPO in 2010, the
infrastructure sector has evolved considerably,
becoming a better understood and more
mainstream asset class. The Company has a
track record of being an early-mover, ensuring
it invests into maturing sectors and captures an
enhanced risk-adjusted return. With a changing
landscape of Government support over the
last 14 years, the Company has retained an
entrepreneurial approach to identifying new
investments. As such, the portfolio has evolved
over time in response to changing investment
opportunities and requirements.
At the Company’s IPO in 2010, the Company
was the rst UK infrastructure debt focused
investment company in the UK, with its
portfolio comprising 100% subordinated PFI.
Theaftermath of the global nancial crisis on the
long-dated debt market was longer lasting than
expected and therefore the Company was able to
benet from attractive investment opportunities,
whilst maintaining dividend paymentlevels.
In 2012, the Company made its rst renewable
energy investment in domestic rooftop solar
projects, which have now grown to c.50,000
systems. This was followed by investments in the
anaerobic digestion, biomass and wind sectors,
with the Company lending to the rst waste
wood power station to be developed in the UK.
Investments in the renewable energy sector
continued into 2014, with the Company making
itsrst investment in the hydro-electric sector.
The Company then made its rst investment
in social housing in 2016, entering into the
supported living sector. Investment in the
renewable energy sector continued into 2018,
when the Company made its rst investment in
the offshore wind sector, investing in Race Bank
wind farm.
In 2021, the Company made its rst investment in
the Eden Geothermal project, which is the rst
deep geothermal well in the UK since 1986.
At the year end, the valuation of the Company’s
portfolio was £960million.
Evolution of the portfolio
Strategic report
21
Strategic report
21
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Infrastructure comprises the fundamental physical
systems that are essential to the functioning of
society and its economy, covering a variety of
industries and sectors. Infrastructure investments
typically comprise a signicant initial investment
which is repaid over the life of the asset in
consideration for the essential service it provides.
Typically, these investments are long-term,
stable and provide ination protection, and have
inherent capital protection through the physical
nature of the assets.
Almost half of the Company’s investments by
value have some form of ination protection. This
includes direct links to ination for supported
living and certain renewable assets, as well as a
mechanism that increases loan principal values
based on ination exceeding a set threshold
(usually 2.75% to 3.0%).
Investors have historically valued the long
lives of infrastructure assets, which often
outlive political and economic cycles, and the
services they provide. Increasingly, the need
to decarbonise the energy sector to achieve
legallybinding targets and accelerating
digitalisation trends has prompted further
interest in the sector.
The Investment Adviser has witnessed signicant
early developments in new policy initiatives from
the new Government since their victory in the
general election in July 2024:
— planning reform was a key agenda item in
the new Government manifesto, with swift
changes to the National Planning Policy
Framework highlighting ambitions in increased
housebuilding and the development of
new onshore renewable energy generation;
— the National Wealth Fund and Great British
Energy have been formed with public funding
to accelerate efforts to decarbonise the UK’s
electricity system and encourage private
funding in UK infrastructure;
— mission control has been launched with Chris
Stark, former Chief Executive of the Climate
Change committee, in charge of tracking
progress towards delivering a net zero
electricity system by 2030 and co-ordinating
between Government entities; and
— the merger of the National Infrastructure
Commission (“NIC”) and the Infrastructure
Projects Authority (“IPA”) into a new body,
the National Infrastructure and Service
Transformation Authority (“NISTA”), to better
support the delivery of major capital projects.
These new policies support UK infrastructure
investment, while new subsidy regimes for
emerging technologies (Net Zero Hydrogen
Scheme, Carbon Capture Business Model) and
the expansion of existing regimes (such as the
CfD scheme) offer an attractive opportunity for
the UK to drastically scale up the deployment of
new infrastructure.
In the Autumn Budget, announced post year end,
the new Government outlined its plan to address
the large decit and the need for increased
investment in the UK’s distressed nances and
assets. While taxes and NHS funding grabbed
the initial headlines (including £1.5 billion for
new hospital beds and diagnostic centres), the
new Government’s commitment to making the
UK a clean energy superpower was a positive
reinforcement. The Board believes this presents
a material opportunity for investment and growth
in the UK and is needed for the UK to stay on
track with its decarbonisation commitments.
The Board is also looking forward to the
announcement of the Government’s ten year
infrastructure strategy to be published in spring
2025, along with the newly formed National
Infrastructure and Service Transformation
Authority which will be set up to oversee it.
Strategic overview
The infrastructure market
The market
22
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Challenges and opportunities
The table below sets out some of the key challenges and associated opportunities for UK infrastructure investment.
Challenge
Infrastructure
opportunities
Government
support/intervention
Investment
characteristics
Decarbonisation
Decarbonisation of
the UK economy by
2050, with intermediary
targets in place such as
the decarbonisation of
the electricity system
by 2030
— Further investment in
established renewable
sectors such as wind
and solar
— Deployment of less-
established renewables
across electricity,
heat, transport, carbon
capture and storage
— CfD, Interconnector
cap and oor
— Green Gas Support
Scheme, Net Zero
Hydrogen Scheme,
Industrial Carbon Capture
business model
— Various grants
and capital support
— Ination-linked subsidy support
but reliant on merchant prices
long term
— Subsidy support regimes
designed to make the deployment
of new technology economically
viable
High energy
prices
High energy prices and
reliance on foreign
suppliers into the
energy system
— Low-marginal cost domestic
renewable generators
— Nuclear (including
small modular reactors)
— Grid infrastructure
such as interconnectors
— Energy storage
— Energy efciency schemes
— Price cap
— Carbon pricing
— Energy Prots Levy
— Long Duration Energy
Storage cap and oor
— Exposure to wholesale energy
prices. Some contractual income
(some ination-linked) from
capacity mechanism or grid
service arrangements
Climate
change
Climate change
adaptation:
increased frequency
of extreme weather
events in new
geographies
— Flood defences
— River ood mitigation
measures
— The Government has a
large direct investment
ood defence programme
— New policy initiatives set
to be introduced by the
new Government. See
page 22 for details
— Limited current investment
opportunities, but expected
to be a growth area
Ageing
population
A growing and ageing
population will place
different demands
on social infrastructure
— Housing
— Healthcare and social care
provision
— Transport
— Education
— Utilities
— This remains a focus
of direct Government
funding, however
there has been recent
speculation about new
private investment
in public procurements
— Investment opportunities are
typically in the private sector
(e.g. private care homes, private
schools). These have more
corporate or property investment
characteristics which are less
attractive to the Company
— Potential for new funding model
for private investment into public
infrastructure procurement
(PFIv3.0)
Digitalisation
Digitalisation drives
a greater need for
access to online
services
— Broadband infrastructure
— Data centres and
associated energy systems
— Capital support
for rural deployment
— Demand-based risks and, in
certain geographies, competition
for customers
Strategic report
23
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Strategic overview continued
How the Company is responding to market opportunities and challenges:
The market continued
Whilst the policy backdrop for the UK
infrastructure sector is positive, there remains
adisconnect between market sentiment and
broader infrastructure investment. Focus
remains on addressing the share price discount
to NAV at which the shares trade and any
shareholder concerns. The Company’s response
to the current market environment is as follows:
1. Reduce leverage:
Central bank base rates remain at
elevated levels globally, with the Bank of
England’s base rate currently at 4.75%.
The Company’s RCF incurs a margin over
SONIA. As is typical with elevated base
rates, this borrowing is less accretive
to value than in a low interest rate
environment. The Company has prioritised
paying down all drawn balances under the
RCF and has reduced amounts drawn by
£47 million during the year.
2. Return capital to shareholders:
The Board and the Investment Adviser believe
the implied yield on the Company’s shares,
which are trading at a signicant discount
1
to NAV, is higher than the actual risk on the
underlying investments given the positive
ongoing performance of the portfolio.
Therefore, buying back the Company’s
shares offers an attractive risk-adjusted
return for shareholders. TheCompany has
also committed to returning £50 million to
shareholders as part of its capital allocation
policy. TheCompany will be recommencing
the buybackprogramme imminently, working
towards satisfying this commitment.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
24
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
3. Adjust the underlying
portfolio exposures:
The Company has committed to reducing
equity risks, as well as its exposure to the
supported living sector. It is intended that
the portfolio will berefocused on debt
investments in sectorswith attractive
risk-adjusted returns.
The disposal of the Company’s interest
in loan notes secured against Blackcraig
wind farm, a 52.9MW onshore wind farm,
at a 6.4% premium to the valuationat
31 March 2024, generated net cash
proceeds of £31.4 million. The disposal of
a c.8.3MW portfolio of domestic rooftop
solar installations post year end, and
the disposal of a portfolio of onshore
wind assets with combined generating
capacity of 28MW, subject to contract,
are expected to reduce the Company’s
exposure to merchant electricity prices
by c.£27 million.
Furthermore, active transactions in the
supported living sector are expected to
materially reduce the Company’s exposure
to this sector in early 2025.
4. Engage with shareholders:
The Company and the Investment Adviser
have sought to engage with shareholders
to better understand their concerns and
develop a strategy to address these.
This has been combined with enhanced
transparency in reporting, including a
line-by-line breakdown of the portfolio,
which is available on the Company’s
website, and broader attempts to share
new and insightful information more
frequently.
Strategic report
25
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Strategic overview continued
Investment strategy
The Company’s investment strategy is set out
in its investment objective, policy and strategy
below. It should be considered in conjunction
with the Chairman’s statement and the strategic
report which provides an in-depth review of the
Company’s performance and future strategy.
Further information on the Company’s business
model and purpose is set out on pages 28 and 29.
Investment objective
The Company’s investment objective is to provide
shareholders with regular, sustained, long-term
dividends and to preserve the capital value of its
investment assets over the long term.
Investment policy and strategy
The Company seeks to generate exposure to the
debt of UK infrastructure project companies,
their owners or their lenders and related and/
or similar assets which provide regular and
predictable long-term cash ows.
Core projects
The Company will invest at least 75% of its total
assets, directly or indirectly, in investments with
exposure to infrastructure projects with the
following characteristics (core projects):
— pre-determined, long-term, public sector
backed revenues;
— no construction or property risks; and
— benet from contracts where revenues are
availability based.
In respect of such core projects, the Company
focuses predominantly on taking debt exposure
(on a senior or subordinated basis) and may also
obtain limited exposure to shareholder interests.
Non-core projects
The Company may also invest up to an absolute
maximum of 25% of its total assets (at the time
the relevant investment is made) in non-core
projects, taking exposure to projects that have
not yet completed construction, projects in
the regulated utilities sector and projects with
revenues that are entirely demand based or
private sector backed (to the extent that the
Investment Adviser considers that there is a
reasonable level of certainty in relation to the
likely level of demand and/or the stability of the
resulting revenue).
There is no, and it is not anticipated that there
will be any, outright property exposure of the
Company (except potentially as additional
security).
Diversication
The Company will seek to maintain a diversied
portfolio of investments and manage its assets in
a manner which is consistent with the objective
of spreading risk. No more than 10% in value
of its total assets (at the time the relevant
investment is made) will consist of securities or
loans relating to any one individual infrastructure
asset (having regard to risks relating to any cross
default or cross-collateralisation provisions).
This objective is subject to the Company having
a sufcient level of investment capital from time
to time, the ability of the Company to invest its
cash in suitable investments and the investment
restrictions in respect of ‘outside scope’ projects
described above.
It is the intention of the Directors that the assets
of the Company are (as far as is reasonable in
the context of a UK infrastructure portfolio)
appropriately diversied by asset type (e.g. PPP/
PFI healthcare, PPP/PFI education, solar power,
social housing, biomass etc.) and by revenue
source (e.g. NHS Trusts, local authorities, FiT,
ROCs etc.).
Key policies
26
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Policies
Distribution
The Company seeks to provide its shareholders
with regular, sustained, long-term dividend
income.
The Company has the authority to offer a scrip
dividend alternative to shareholders. The offer
of a scrip dividend alternative was suspended
at the Board’s discretion for all dividends during
the year, due to the discount
1
between the
likely scrip dividend reference price and the
relevant quarterly NAV per share of the Company.
TheBoard intends to keep the payment of future
scrip dividends under review.
Leverage and gearing
The Company intends to make prudent
use of leverage to nance the acquisition
of investments and enhance returns for
shareholders. Structural gearing of investments
is permitted up to a maximum of 20% of the
Company’s NAV immediately following drawdown
of the relevant debt.
The calculation of leverage under the UK AIFM
Regime in note 15 to the nancial statements
includes derivative nancial instruments as is
required by the applicable regulation.
Our non-nancial objectives
The key non-nancial objectives of the
Companyare:
— to build and maintain strong relationships
with all key stakeholders of the Company,
including (but not limited to) shareholders
andborrowers;
— to continue to focus on creating a long-term,
sustainable business relevant to the
Company’s stakeholders;
— to develop and increase the understanding of
infrastructure debt as an asset class; and
— to focus on the long-term sustainability of the
portfolio and make a positive impact, through
contributing towards the generation of
renewable energy and nancing infrastructure
that is integral to society.
Read more in the Investment Adviser’s
report on pages 34 to 43.
Strategic report
27
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Board of Directors
Stewardship and oversight
Business model
The Company’s purpose is to invest in UK infrastructure debt and/or similar
assets to provide regular, sustained, long-term dividends and to preserve the
capital value of its investments over the long term.
Implementation of
investment strategy
Investment
objectives
Dividend income
To provide shareholders with
regular, sustained, long-term
dividends.
Capital preservation
To preserve the capital value of
its investment assets over the
long term.
Governance
The Company operates under a robust
governance framework. Read more on
pages 100 to 133.
Environmental
The Investment Adviser positively
screens for assets which benet the
environment. Read more on page 65.
Social
The Investment Adviser positively
screens for assets which benet society.
Read more on page 65.
Financial
The Company uses credit facilities,
hedging arrangements, cash ow
forecasts and stress scenarios to ensure
nancial viability. Read more on pages
98and 99.
Responsible
investment
Investing
The Company seeks to generate exposure to
infrastructure debt and/or similar assets in the
renewable energy, social housing and PPP/PFI
sectors.
The Investment Adviser provides advisory
services relating to the portfolio in accordance
with the Company’s investment objective
andpolicy.
Stakeholder
considerations
Financing
The Company manages its capital on a highly
conservative basis, with consideration given to
stakeholder needs.
The Investment Adviser is implementing the
Board’s capital allocation policy in order
to rebalance the portfolio and increase
shareholder returns.
Sustainability
considerations
Diversication
To invest in a diversied portfolio
of debt and/or similar
assets secured against UK
infrastructure projects.
28
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Board of Directors
Stewardship and oversight
Key performance
indicators
Dividend income
7.0p
Dividends per share paid for the year
ended 30 September 2024
Capital preservation
0.41%
Aggregate downward revaluations since
IPO (annualised)
Diversication
50
Number of investments at
30 September 2024
Governance
50%
Board positions lled with either gender
or ethnically diverse members
Environmental
1,320 GWh
Renewable energy exported
by portfolio assets
Social
801
FTEs at portfolio asset level
at 30 June 2024
2
Financial
0.32 times
3
Basic dividend cover (IFRS)
at 30 September 2024
Data
collection
Operating
The Company pays careful attention to the
control and management of the portfolio and its
operating costs.
The day-to-day provision of investment advice
and administration of the Company is provided
by the Investment Adviser and the Administrator
respectively, whose roles are overseen by
theBoard.
TCFD and
climate risk
Managing
As an investment company, the Company seeks
to take investment risk.
The Investment Adviser works alongside the
Board to manage risks and shape the risk policy
of the Company. It is also responsible for risk
monitoring, measuring and managing.
Sustainability
indicators
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
2. Twelve month period to 30 June 2024 to facilitate data inclusion in the annual report.
3. The dividend of 7.0 pence per share is fully covered by an adjusted EPS
1
of 7.09 pence per share.
Strategic report
29
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability credentials
The Company has a positive environmental
impact through its investments in renewable
energy, PPP/PFI and supported living. The Board
aims to enhance the integration of ESG criteria
in the Company’s operations, ensuring that the
portfolio not only addresses the current needs
ofstakeholders, but is also able to adapt to
future challenges.
The Investment Adviser continued its data
collection project this year to collect material
ESG metrics from assets in its portfolio. The
data collection project enables the Investment
Adviser to assess the impact portfolio assets
are having on the environment and society.
The process involves the Investment Adviser’s
portfolio management team liaising with each
asset operator to obtain relevant ESG data on
the underlying portfolio assets. The data points
that are considered material by the Investment
Adviser are detailed on page 67.
The data collection project enabled the
Investment Adviser to compare data with the
previous year. It was noted that the 1,320 GWh of
renewable energy exported by portfolio assets
marginally decreased during the year, primarily
due to reduced wind power and solar irradiance.
The percentage of SPVs with at least one female
board member increased from 36% to 49%
year-on-year, following the appointment of an
additional female director to SPV boards.
Further information on the Company’s data
collection project can be found on pages 66
and67.
Company impact
PPP/PFI
Supported
living
26%
12%
Renewables
62%
Sector split of the Company’s portfolio
30
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
1,320 GWh
Renewable
energyexported by
portfolio assets
1
2023: 1,398 GWh
2
488,842
Equivalent homes
powered by
portfolio assets
1,7
2023: 450,889
2
SDG alignment of the Company’s portfolio:
49
Schools in
portfolio
1
2023: 49
4
26,196
School places
provided
byportfolio
2
2023: 26,688
4
£1.7bn
Total investment
in infrastructure
projects since IPO
2023: £1.7bn
21%
SPVs reporting
energy conservation
strategies
3
2023: 42%
4
1,649
Hospital beds
provided by
portfolio
1
2023: 1,676
4
40
Healthcare
facilities
inportfolio
1
2023: 40
4
UN SDG target 3.8
UN SDG target 7.2
UN SDG target 11.1
UN SDG target 15.5
UN SDG target 17.2
UN SDG target 4.1
UN SDG target 8.3
UN SDG target 5.5
UN SDG target 9.3
UN SDG target 9.4
54,493
Number of
underlying assets
inportfolio
5
2023: 55,280
6
801
FTEs at portfolio
assets
3
2023: 856
4
50%
Board gender and
ethnicdiversity
5
2023: 50%
6
49%
Gender diversity
of SPVcompany
boards
5
2023: 36%
6
£428.1m
Investments in
PPP/PFI since IPO
2023: £428.1m
35%
SPVs reporting
local community
initiatives
3
2023: 47%
4
64%
Renewables
portfolio reporting
habitat gainorloss
3
2023: 65%
4
60%
SPVs reporting
ESGasaboard
agenda item
3
2023: 60%
4
£202.8m
Investment in
social housing
projects sinceIPO
2023: £166.7m
905
Number of social
housingunits
3
2023: 905
4
1. Twelve month period to 30 June 2024.
2. Twelve month period to 30 June 2023.
3. At 30 June 2024.
4. At 30 June 2023.
5. At 30 September 2024.
6. At 30 September 2023.
7. Source: Ofgem, average
gasandelectricity usage.
Strategic report
31
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Capital allocation policy
Q
Do you expect to fully execute on
thetargets laid out in the capital
allocation policy, and what is next for
theCompany once it has completed its
stated aims?
To facilitate the aims of the policy, the
Investment Adviser has been focused
on executing disposals and renancing
processes to realise the £150 million capital
target. The Company’s disposals total
£38.2million at the end of 2024, with a pipeline
of additional disposals in excess of £150 million.
We have experienced consistent delays across
transactions throughout the year, with processes
taking longer than expected across all sectors.
However, the Board and the Investment Adviser
remain committed to achieving the stated aims of
the capital allocation policy as quickly as possible.
The capital allocation policy was developed in
conjunction with shareholders to help address
the disconnect between share price and NAV.
Once the Company has executed on the stated
aims of the policy, the Board will re-evaluate
its position based on the price at which shares
are trading. If there is a material discount
thereafter, the Board will evaluate the merits
of continuing to return capital to shareholders
against the risks of decreasing the Company’s
scale. Nevertheless, we, and the Board remain
optimistic about future investment opportunities.
The new Government has made encouraging
commitments to decarbonisation that will
require signicant investment across the UK.
Aheightened interest rate environment also
offers the opportunity to take materially reduced
risk to achieve the same level of return or
capture elevated returns from new technologies
that will form part of the Government’s
decarbonisation mandate.
Investment opportunities
Q
Where does the Investment Adviser
see attractive opportunities in the UK
infrastructure market?
The UK infrastructure market nds itself
inafar better position than it was at this
time last year, with aggressive ambitions for
deployment of renewables: 60GW offshore wind,
50GW solar photovoltaic, 30GW onshore wind
and 10GW of low carbon hydrogen capacity, and
decarbonisation of the electricity grid by 2030.
This comes alongside policy support in a number
of new sectors, including a cap and oor scheme
for long-duration energy storage, and ambitions
for four industrial carbon capture and storage
clusters sequestering 20 to 30 million tonnes of
carbon dioxide per year by 2030.
The Company is well placed to benet from
a transitioning subsidy landscape, and has a
track record of being an early-mover in new
sectors, particularly through its focus on debt.
Signicant policy developments will be required
in the next decade to support widespread
decarbonisation across existing sectors (wind
and solar), but also across a broad spectrum of
industries including heat, transport, industry and
agriculture. There are attractive opportunities
to benet from enhanced returns in new
technologies before yields compress, which is an
approach the Company has a legacy of executing.
Fundamentally, the ambitions stated will require
levels of investment that have not previously
been seen, and this will stretch liquidity in
the market, providing further investment
opportunities for the Company.
Q&A with the
Investment Adviser
Philip Kent
CEO, Investment Adviser
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
32
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Share price performance
Q
What do you believe has caused
thedisconnect between share
priceratingand NAV?
There are several reasons for the discount
between the share price and underlying
NAV. One of the most signicant reasons is the
current interest rate environment, as increases
in base rates have fed through to discount
rates, which has caused valuations to decrease.
This has increased the cost of debt, with many
investment companies relying on leverage for
capital deployment programmes and to enhance
returns. At the same time, investors have seen
an attractive opportunity to reallocate into
traditional xed income such as government and
corporate debt.
We now nd ourselves in a position where
centralbanks have started to cut interest
rates, and we hope that as this progresses
therelative attractiveness of listed investment
companiesincreases.
The increased interest rate environment
has highlighted areas of stress within some
investment companies, where shareholders
have focused on valuations, highlighting a lack of
uniformity in methodology. In a handful of isolated
cases, aws in certain approaches have caused
contagion across a whole asset class, such as
social housing and battery energy storage.
Cost disclosure
Q
Can you explain the legacy of double
counting in cost disclosure, and
what recent developments mean for
investment companies?
In the United Kingdom, the Financial
Conduct Authority (“UK FCA”) is responsible
for implementing regulations to ensure anancial
product is transparent when disclosingthe
costs associated with investing. These costs can
include fees for fundmanagement, transaction
costs or the charges of underlying assets. The
aim for cost disclosure is to provide investors
with a clear view of how much they are paying,
which allows them to make informed decisions.
In 2018, the European Union (“EU”) introduced the
Packaged Retail and Insurance-based Investment
Products (“PRIIPs”) regulation, which required
investment managers to provide retail investors
with a Key Information Document (“KID”),
explaining a product’s features, risks and all
associated costs, including their ongoing charges
gures (“OCFs”). This regime runs parallel to the
2009 Undertakings for the Collective Investment
in Transferable Securities (“UCITS”) regulation,
which applies to the EU and any UK funds that
market themselves to EU investors.
Following Brexit, the UK began work on updating
its own PRIIPs regime, with the UK FCA reviewing
and adjusting the framework to make it more
relevant to the UK market. As part of this,
the UKFCA implemented new cost disclosure
guidance on 1 July 2022, which required
closed-ended investment companies to report
inthe same way as open-ended funds.
These regulations aimed to increase
transparency for non-UCITS vehicles by
requiring them to disclose their costs more
clearly. However, as investment companies
already provided detailed cost information under
the former rules, institutional investors and
intermediaries were made to report these costs
again in their own disclosures to clients, which
has resulted in double counting. As a result of
the double counting, some investors have been
unable to invest in investment companies or have
signicantly reduced their exposure.
It is broadly accepted by the industry and by
the Government, that this single aggregated
gure is not an accurate representation of
the actual costs of investment in shares in an
investment company. Following the successful
campaigning of a group of parliamentarians and
industry participants, HM Treasury proposed a
Statutory Instrument to remove the requirement
for investment companies, along with persons
advising on or selling shares of investment
companies, to produce a KID. Additionally,
investment companies, and rms investing in
them will not be required to disclose costs and
charges relating to investment companies to
clients, pursuant to the MiFID Org Regulation.
The Statutory Instrument became law on
22November 2024. However, additional issues
have been encountered post period end, with
investment platforms continuing to require
ongoing charges to be disclosed in the KID. We
continue to monitor the impact of cost disclosure
on the Company, and the Investment Adviser has
been active in the campaign to resolve the issue.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Strategic report
33
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Company position
The Company’s portfolio remains well diversied
across a wide range of operational renewable
energy projects, social infrastructure (through
PPP/PFI schemes) and supported living
projects. The Company’s explicit diversication
objective has historically enabled it to adapt
to developments in any one sector (such as
decreasing yields and more competition) and
move into other areas if a sector no longer
represents attractive risk-adjusted returns.
In the 14 years since its IPO, the Company has
seen this cycle play out across multiple sectors
and has adapted its approach to investing as
one sector matures or sought out new sectors
for investment. Similarly, where there have been
changes to investor sentiment around certain
sectors (such as supported living) or an end to a
subsidy regime (such as in PPP/PFI), the Company
has been able to maintain its investment
policy, objective and strategy which have been
consistent since IPO.
Key investment activity
The Investment Adviser’s focus for the year
has been executing the Company’s capital
allocation policy. The rst disposal contributing
to the stated aims was completed in April 2024.
Postyear end, one additional disposal was
completed, with another disposal expected to
complete subject to contract. Aspreviously
noted, there are three stated aims of the
policy: reducing leverage, returning capital
to shareholders, andadjusting exposure to
supported living and merchant electricity prices
within the portfolio.
TheCompany has made material progress in
reducing leverage, with total commitments
reduced from £190 million to £150 million in
March 2024, and drawn balances reduced to
£57million at year end, down from £104 million at
30 September 2023. This represents a net debt
position of £45.2 million at 30 September 2024
and an LTV of 6.2%.
Furthermore, the Company completed buybacks
of 3.4 million shares for a consideration of
£2.2million.
Post year end, the rooftop solar assets disposal
and the expected disposal of onshore wind
assets will reduce loans with exposure to
merchant electricity prices by c.£27million.
TheInvestment Adviser is progressing
transactions which will materially reduce the
Company’s exposure to the supported living
sector in 2025.
New investments have not been a priority for the
Company due to its focus on its capital allocation
policy. However, the Company has completed a
handful of follow-on investments to optimise the
performance of existing portfolio investments
and made one new investment to support an
existing borrower. A full summary of investments
and repayments for the year is shown on page 47.
Investment Adviser’s report
34
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Asset characteristics
Periodic change
(12 months)
1
Easing of ination has reduced pressure
on Registered Providers (“RPs”) associated
with rental growth
Government
with a
signicant
majority
promotes
political
stability
Renewables PPP/PFISH
Sector exposure
(by value at 30 September 2024)
26%
Credit risks
Operational risks
Overall score
Market risk
Legal/regulatory
Wind (onshore)
13% 25%
Solar
10%
Biomass
2%
Hydro
Geothermal
<1% 1%
Gas peaking
1%
Electric vehicles
12%
Supported Living
Healthcare
Leisure
Education
Waste
Low
Medium
High
Impact
Likelihood
Portfolio exposures
9%
AD
Reduction in volatility of electricity prices beneting all
renewablesectors
1. For further commentary refer to page 36.
Strategic report
35
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment risk
The table below details the Investment Adviser’s view of the changes to the risk ratings for sectors where changes have been observed in the past year.
Risk Sector Change in year Description
Market risk
The risk of an investment being exposed to
changes in market prices, such as electricity
prices or ination.
Renewables
(allsectors)
Decreased Electricity prices have continued to soften over the course
of 2024, with reduced levels of volatility across the sector.
However, geopolitical tensions in the Middle East continue
to pose a risk.
The Company is exposed to electricity prices and ination as
part of its renewable energy portfolio, and the higher price
environment has been benecial to its assets. In the year,
ination has eased to a level where this is no longer an issue
for borrowers, causing the risk to decrease.
Supported
living
Decreased Inationary increases in the interest rates on Company’s
loans weren’t matched on a pass-through basis with
increases in local authority rent payments during periods of
abnormal ination, which place the Company’s borrowers
under pressure.
Credit risk
The risk of reliance on customers and
suppliers to provide goods and/or services
for a project and manage certain project risks
as part of such arrangements.
Supported
living
Decreased The leases on the underlying properties have ination
linkage and, as such, the amounts charged to RPs have
increased during the year. The underlying RPs have agreed
to pass the increases on to local authorities. As ination
has eased, this pressure has decreased. We have also seen
material progress by the RPs to improve their governance
protocols to comply with the RSH’s standards.
Operational risk
The risk of exposure to the construction and/
or operations of a project associated with the
failure of people, processes and/or systems
required to monetise an asset.
Renewables
(allsectors)
Decreased Operations have improved across the portfolio, with
changes in the management and operational teams at
certain biomass and bio-power plants having positive
impacts on performance.
Legal/regulatory risk
The risk associated with changes to laws
and/or regulations. This covers UK-wide,
non-specic risks, such as changes to the tax
regime, and specic risks such as changes to
a subsidy regime that a project relies on.
Renewables
(allsectors)
Decreased The UK nds itself in a very different position to this time
last year, with a new Government and considerably more
certainty around policy support for renewable energy. The
clean energy transition is second only to economic growth in
the new Government’s mandate, early policy developments,
and further detailed announcements as part of the Autumn
Budget, suggest a supportive policy environment.
Signicant changes to the UK tax regime are unlikely to
impact the Company’s portfolio of loans.
Investment Adviser’s report continued
36
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Interest capitalised
The Company received total loan interest income of £87.3 million (30 September 2023: £80.8million) from the underlying investment portfolio. Of this,
£65.1million was received in cash and £22.2 million was capitalised in the year (30September 2023: £58.8 million and £22.0million respectively). Refer to
note 3 for further information. The capitalisation of interest occurs for three reasons:
1. Where interest has been paid to the Company late (often as a result of moving cash through the Company and borrower corporate structures), a
capitalisation automatically occurs from an accounting point of view.
2. On a scheduled basis, where a loan has been designed to contain an element of capitalisation of interest due to the nature of the underlying cash ows.
Examples include projects in construction that are not generating operational cash ows, or subordinated loans where the bulk of subordinated cash
ows are towards the end of the assumed life of a project, after the repayment of senior loans. Planning future capital investment commitments in this
way is an effective method of reinvesting repayments received from the portfolio back into other portfolio projects.
3. Where loans are not performing in line with nancial models, resulting in:
(i) lock-up of cash ows to investors who are junior to senior lenders; and
(ii) cash generation is not sufcient to service debt.
Other unscheduled capitalisations in the year related to the re-direction of cash ows into three gas-to-grid anaerobic digestion projects in Scotland to
address performance issues encountered in the year.
The table below shows a breakdown of interest capitalised during the year and amounts paid as part of nal repayment or disposal proceeds:
30 September
2024
£’000
30 September
2024
£’000
30 September
2023
£’000
30 September
2023
£’000
Loan interest received 65,129 58,791
Capitalised (planned) 14,868 18,253
Capitalised (unscheduled) 7,300 3,706
Loan interest capitalised 22,168 21,959
Capitalised amounts subsequently settled as a repayment (9,297) 9,297 (10,822) 10,822
Adjusted loan interest capitalised
1
12,871 11,137
Adjusted loan interest received
1
74,426 69,613
The table below illustrates the forecast component of interest capitalised that is planned and unscheduled:
30 September
% of total interest
2024 2025 2026 2027 2028 2029
Capitalised (planned) 19% 9% 9% 10% 14% 10%
Capitalised (unscheduled) 9% 1% — — — —
The Investment Adviser and the independent Valuation Agent review any capitalisation of interest and associated increases to borrowings to conrm that
such an increase in debt, and the associated cost of interest, can ultimately be serviced over the life of the asset. To the extent an increase in loan balance
is not serviceable, a downward revaluation is recognised, notwithstanding that such an amount remains due and payable by the underlying borrower and
where capitalisation has not been scheduled, it attracts default interest payable.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Strategic report
37
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment Adviser’s report continued
Sector background and update
£597.8m
Valuation of sector
62%
Percentage of portfolio byvalue
1. Twelve month period to 30 June 2024 to facilitate inclusion in the annual report.
Impact
1,320 GWh
Renewable energyexported by
portfolio assets
1
SDG alignment
Background
Renewable energy comprises energy sources
that naturally replenish themselves and have a
positive environmental impact. The Company was
an early-mover in supporting renewable energy
projects in the UK. Over the last decade, it has
invested in a range of technologies across the
sector, initially nancing a portfolio of domestic
rooftop solar projects in 2011, an investment that
has grown to c.50,000 systems today.
Since the Company’s IPO in 2010, many subsidy
support regimes have come and gone in the UK,
with the portfolio benetting from exposure to a
range of subsidies. The UK has made signicant
progress with its decarbonisation objectives,
but to fully achieve its ambitions, it needs to go
further and faster.
Renewable projects generate renewable energy across the
heat, electricity and transport sectors and benet from
long-term Government subsidies.
Renewables
Current position
The new Government has made the clean energy
transition second only to economic growth in its
mandate, showing clear conviction in introducing
new policy and funding support for renewable
energy. With ambitious targets for the deployment
of existing mature technologies, as well as new
policy support to facilitate the transition of
sectors at a more nascent stage, two new funding
bodies have been established, the National Wealth
Fund and Great British Energy.
The CfD remains the key support mechanism
for low-carbon generation and supports both
mature and developing technologies. The results
of the sixth allocation round were announced in
September 2024, which awarded contracts for
9.6GW of capacity, a signicant improvement from
the previous round. The existing pool of alternate
support mechanisms includes the Green Gas
Support Scheme and the Net Zero Hydrogen Fund.
The UK renewable energy market remains subject
to the results of the Review of Electricity Market
Arrangements (“REMA”), which was launched
in response to a rapidly evolving electricity
system with an increasingly volatile generation
mix and demand prole. The Investment Adviser
hopes the aspirations of the new Government
in encouraging new deployment will factor into
policy considerations before sweeping changes
are made.
Future outlook
Ambitious targets have been set in the UK not
just for electricity generation, but across the
wider energy transition, with a new framework
for carbon capture clusters located across
industrial clusters in the UK, as well as mandated
levels of sustainable aviation fuel (“SAF”) usage,
and deployment of electric vehicles (“EVs”).
The outlook for the renewable energy market
in the UK is the most positive it has been in
over a decade, and the ambitions of the new
Government have the potential to signicantly
accelerate deployment of both mature and
emerging technologies.
Reform of the planning regime in the UK is
essential to facilitate the deployment of new
renewable energy. The Company will continue to
monitor the success of the new Government in
reforming and modernising the planning process
to facilitate its targets.
The Board and Investment Adviser are
actively monitoring the development of new
subsidy regimes in the UK, and believe the
Company is well placed to benet from new
policy frameworks when it is in a position to
resumeinvesting.
38
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability indicators
39
1. Data at 30 June 2024 to facilitate inclusion in the annual report.
UBB Waste facility
Financial
£39.7m
Valuation at
30September 2024
Governance
3
ISO certications
1
Social
44
FTEs at portfolio
assetlevel
1
Environment
65,360 MWh
Energy exported in
2023/24
1
UBB Waste is an energy-from-waste
facility located in Gloucester. It disposes of
Gloucestershire’s residual waste by processing
waste that remains after the residents of
Gloucestershire have separated out as much of
the recyclable and green waste as they can. This
is waste that would otherwise go to landll.
The facility is largely automated and combusts
up to 190,000 tonnes of waste each year
(approximately 75% of which is provided
by Gloucestershire County Council). Heat
generated from the combustion process is
then converted into electricity through the
application of a steam turbine. Generating
more than 14.6MW, the facility produces enough
electricity to power the equivalent of c.25,000
homes each year.
Construction of the facility began in August 2016
and reached completion in October 2019. The
Company rst invested £48 million via senior
secured debt in 2017. The loan is amortising,
with the interest rate set at 7.92% and the nal
repayment date set for 2042.
Revenue from the project comes from various
sources and is highly contracted. A signicant
proportion comes from ‘gate fees’ for processing
waste, which are at a xed price and index linked
through a CfD agreement with Gloucestershire
County Council over a 25 year concession period.
The capacity that remains after Gloucestershire
County Council has delivered all residual
household waste generated within the county
is serviced by processing additional waste from
nearby third party commercial and industrial
parties. This presents an opportunity for the
Gloucestershire energy-from-waste facility to
earn additional gate fees.
Another signicant source of revenue comes
from the electricity generated by the facility,
which is sold directly into the grid via a PPA
agreement at a xed price.
As an investment, the Gloucestershire
energy-from-waste facility has several defensive
characteristics. Barriers to entry in terms of
construction are extremely high, it’s a real asset
providing a valuable service and, because the
Company is invested in its debt, there’s the added
benet of capital structure protection.
Strategic report
39
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment Adviser’s report continued
Sector background and update continued
£118.1m
Valuation of sector
12%
Percentage of portfolio byvalue
1. Data at 30 June 2024 to facilitate data inclusion in the annual report.
Impact
3,050
People housed in supported
accommodation
1
SDG alignment
Background
The Company has historically targeted a
subset of social housing provision referred
to as ‘supported living’, through nancing
the development or conversion of existing
accommodation to suit specic care
requirements of individuals with learning, physical
or mental disabilities. This involves providing
debt nance to entities that own and develop
properties which are leased under a long-term
fully repairing and insuring lease to RPs who
operate and manage the properties. The RPs
receive housing benets for individuals housed
in such properties. The budget for housing
benets in this sector is funded by the central
Government and has historically been, and
remains, highly protected and uncapped.
Supported living projects create long-dated cash ows
supported by the UK Government through the secured pledge
of centrally funded benets.
Supported living
Current position
As the Company has reported previously,
a number of RPs to which the Company’s
investments are exposed have historically been
graded non-compliant in respect of governance
and nancial viability by the Regulator of
Social Housing (“RSH”). During the year, new
management was appointed in a number of the
non-compliant RPs, with positive progress made
in addressing the concerns of the RSH. The
Company has agreed to a number of concessions
in the contracts between RPs and borrowers
which seek to enhance the nancial viability of
these entities and retain the long-term value of
its investments.
The Investment Adviser maintains the view
that the fundamentals of the sector, which
is underpinned by a well-protected housing
benet budget and a care model that has
demonstrated healthcare and nancial benets
for the recipients and the UK Government,
remain attractive. However, listed companies
specialising in the sector have faced a number
of challenges, with these issues negatively
impacting sentiment towards the asset class.
Future outlook
The Company is aware of the concerns of some
shareholders regarding the sector and has
highlighted its intention to reduce its exposure
to the sector as part of its capital allocation
policy. The Investment Adviser has been exploring
opportunities for the Company to reduce its
exposure through disposals or renancings and
expects to materially reduce investment in the
sector in the future.
40
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability indicators
1. Data at 30 June 2024 to facilitate inclusion in the annual report.
41
Financial
£17.7m
Valuation at
30September 2024
Governance
5
Governance policies
implemented
1
Social
14
FTEs at portfolio
assetlevel
1
Environment
D
Average EPC rating
1
The Company has, since 2015, been invested in a
portfolio of 20 properties which provide 94 units
that are leased to Hilldale Housing Association
(‘Hilldale’), a not-for-prot RP of social housing
in the UK and a subsidiary of Change Housing.
Hilldale provides supported living accommodation
to vulnerable adults with learning disabilities,
mental health issues, and other physical or
sensory disabilities. The Company’s exposure is
held through senior debt facilities extended to
two underlying borrowers.
Hilldale operates under a ‘lease-based’ model,
holding properties under long-term leases
and letting them out to individuals in return
for exempt rents which are claimed from local
authorities. As has been highlighted previously,
the specialist supported living industry has
faced a number of challenges in recent years
as the sector has matured and regulations and
regulatory oversight have evolved. Lease-based
social housing providers have faced continued
scrutiny from the RSH, in particular around their
nancial viability given the structure under which
they operate. Hilldale has not been immune
from this, and has been working to stabilise the
business and improve its nancial position and
standing with the regulator.
It has also been working through a period of
increased costs driven by higher energy prices
and inationary pressures. As a result, the
Company has been collaboratively working with
Hilldale to ensure that support is provided both
to the company itself and to its tenants.
In 2023, the Company, via its borrowers, agreed
to a cap on the ination applied to contractual
lease rents due from Hilldale, limiting this to 7%
compared to CPI, which has been at times in
excess of 10%. In March 2024, the Company and
its borrowers agreed to provide further support
to Hilldale to help it achieve its long-term
nancial goals, providing a minor reduction in
lease rents payable and a one year break in
lease rent indexation. This has allowed Hilldale
to navigate the challenges above, as well as
the increased costs which it has been facing.
This agreement has aligned the leases with
industry standards, including the timing of rental
indexation and the provision of support for the
improvement of EPC ratings across the portfolio.
As a result of this support, Hilldale is now in a
good position and can continue with its goal of
supporting vulnerable individuals. Its relationship
with the Company remains a positive one.
Hilldale Housing Association
Strategic report
41
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment Adviser’s report continued
Sector background and update continued
26%
Percentage of portfolio byvalue
£244.1m
Valuation of sector
1. Data at 30 June 2024 to facilitate data inclusion in the annual report.
Impact
26,196
School places at portfolio assets
1
SDG alignment
Background
Partnerships between the public and private
sector to develop, build, own and operate
(or a combination thereof) infrastructure
have taken a number of forms, with the best
known as PFI (Public Finance Initiative), which
originated in the UK in the mid-1990s. Since
this time, over £60billion has been invested in
the developmentof new projects across the
healthcare, education, leisure, transport and
other sectors under such schemes. Thedesign
and implementation of revenue support
mechanisms such as PFI has been devolved
to the Scottish, Welsh and Northern Irish
administrations. The Company has exposure to
a number of asset classes within the PPP/PFI
sector including education, healthcare, waste,
leisure and housing.
Current position
The PPP/PFI model for procuring infrastructure
fell out of favour before 2020 and there
are no material new projects expected to
be procured this way in the medium term in
England. InScotland and Wales, the devolved
administrations have designed versions of the
Mutual Investment Model (“MIM”) to facilitate
private nance which supports major capital
projects, with success developing healthcare,
education and transportation projects. To date,
these have been large projects benetting
from signicant competition for nancing and
competitive rates from bank lenders.
Future outlook
There has been speculation that the new
Government in the UK will develop a funding
model which encourages private capital to
nance new social infrastructure; however,
there has not yet been any formal conrmation
of this. If this were to change, it would
reverse long-standing policies against the
procurement of new infrastructure using
private sector nance, supported by long-term
availability-based payments. Should there
be any changes to procurement models, or
attractive opportunities through the MIM
regime, the Company would consider investment
opportunities alongside its broader capital
allocation policies.
PPP/PFI enables the procurement of private sector
infrastructure nancing through access to long-term,
public sector backed and availability-based payments.
PPP/PFI
42
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability indicators
43
1. Data at 30 June 2024 to facilitate inclusion in the annual report.
Financial
£2.8m
Valuation at
30September 2024
Governance
8
Governance policies
implemented
1
Environment
C
Average EPC rating
1
The Company has issued a loan note secured
against subordinated debt in the New Queen
Elizabeth II (‘QEII’) Hospital in Welwyn Garden
City, and six Local Improvement Finance Trust
(“LIFT”) projects in the South East and Midlands.
The primary counterparty for each project
is the local Primary Care Trust (“PCT”). PCTs
are statutory NHS bodies responsible for the
delivery of health services. The LIFT assets are
underpinned via a head lease with Community
Health Partnerships (“CHP”), a Department of
Health and Social Care owned company.
The New QEII hospital in Welwyn Garden City is
the largest asset, a day hospital that opened
in 2015 replacing the original Queen Elizabeth
hospital that opened in 1963. It provides a range
of outpatient clinics and services including blood
tests, as well as an urgent treatment centre
which is open every day.
The hospital was designed to be sustainable and
environmentally friendly; the shape and layout
of the building creates natural shading, the
window glass prevents the building from getting
too hot and a planted green roof encourages
biodiversity.
The underlying loan is nanced from the
subordinated cash ows that arise from the
projects, with the investment returning an IRR
of 7.7%. The loan allows the Company to earn
an attractive yield from a portfolio of mature,
well-performing PPP/PFI projects that benet
from Government-backed cash ows without
taking equity risk, and therefore ts the
Company’s investment strategy. The nature of
the underlying projects (non-acute healthcare
services) is at the stable and secure end of the
infrastructure spectrum of asset types.
The Company’s portfolio comprises loans
secured against 40 healthcare projects
representing 9% of the portfolio by value.
GCP Healthcare 1A
Strategic report
43
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Portfolio performance
The Company is exposed to a portfolio of 50
investments with a weighted average annualised
yield
1
of 7.8% and an average life of eleven years.
The portfolio has performed materially in line with
expectations during the year. The priority for
the Investment Adviser has been executing the
capital allocation policy, as it actively works to
renance or dispose of investments to achieve
its stated aims.
During the year, the Company announced the
disposal of its interest in loan notes secured
against Blackcraig Wind Farm, a 52.9MW onshore
wind farm located in Dumfries and Galloway,
Scotland. The wind farm benets from ROC
subsidy support and has been operational since
2018. The disposal occurred at a 6.4% premium
to the valuation at 31 March 2024 and generated
cash proceeds of £31.4 million.
The disposal was supportive of the Company’s
assessment of its conservation approach to
valuation methodology for the renewable energy
assets in the portfolio. In line with the objectives
of the capital allocation policy, the proceeds of
the disposal were used to prepay drawn balances
under the Company’s RCF.
From an operational perspective, the renewables
portfolio is performing in line with expectations,
with the Company benetting from diversication
in technologies across varying weather patterns.
Across renewable energy assets, wind speeds
have been below long-term averages nationwide,
combined with a number of electrical faults and
elevated curtailment in Northern Ireland, which
has impacted performance. Solar irradiance has
been below budget, as the UK has suffered from
less sunshine hours than average over the last
twelve months. The hydro portfolio beneted
fromhigher than average rainfall levels in the
winter period.
Previously, the Company reported ongoing
challenges at a portfolio of gas-to-grid
anaerobic digestion projects in Scotland.
Signicant progress has been made, completing
grid upgrade works to provide a more reliable
method of injecting biogas into the gas grid and
reducing the likelihood of curtailment. Further
development to implement carbon capture and
storage capability at the projects is in process,
with planning permission granted on two of the
three sites, and the third application submitted
for approval.
A portfolio of solar investments continues to
be exposed to the outcome of ongoing Ofgem
audits relating to the accreditation and ongoing
compliance of eight ground-mount commercial
solar projects accredited under the RO. The
Company had no further contact from Ofgem
during the year. Three projects in total in the
portfolio have had their ROCs revoked. Eleven
projects have been audited and retained their
ROCs, while a further eight remain subject to
audit.
A claim has been led in connection with the
Company’s rights under the original investment
documentation in respect of the losses it has
incurred due to the revocation. The aggregate
provisions in connection to the circumstances
relating to the audits total £6.9 million.
The Company remains condent that it will be
able to either solely or cumulatively: (i) address
Ofgem’s queries to prevent or mitigate any
negative impacts on the further eight assets that
remain under audit; (ii) successfully challenge
any adverse decision by Ofgem on other assets
under audit; or (iii) recover losses it incurs from
third parties in relation to a breach of investment
documentation across all affected assets.
The Company made follow-on investments in
respect of these assets during the year, seeking
to preserve and enhance value by performing
repowering and funding additional works
or exploration. The total quantum of these
investments was £0.75million.
Investment portfolio
44
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Portfolio by annualised yield
1
<8% 67%
8-10% 29%
>10% 4%
Portfolio by average life (years)
<10 71%
10-20 15%
>20 14%
Portfolio by investment type
Subordinated 41%
Senior 53%
Equity 6%
Portfolio by income type
SH
12%
Renewables
62%
PPP/PFI
26%
Unitary charge 21%
Gate fee
(contracted) 2%
Electricity
(xed/oor) 1%
Lease income 1%
ROC 1%
ROC 21%
Electricity (merchant) 17%
Lease income 12%
Pay per mile 1%
Embedded benets 1%
Electricity
(xed/oor) 3%
FiT 15%
RHI 3%
Gas (merchant) 1%
Portfolio by sector type
SH
12%
Renewables
62%
PPP/PFI
26%
Healthcare 9%
Waste (PPP/PFI) 4%
Education 6%
Leisure 3%
Housing (PPP) 2%
Energy efciency 1%
Justice 1%
Wind (onshore) 13%
Biomass 10%
Supported living 12%
Hydro 2%
Geothermal 1%
Gas peaking 1%
Electric vehicles 1%
Anaerobic
digestion 9%
Solar (commercial) 15%
Solar (rooftop) 10%
Portfolio summary
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Strategic report
45
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment portfolio continued
45
3
7 9 108
6
Cardale PFI Investments
1
1 PPP/PFI
2 12.7%
3 Unitary charge
GCP Bridge Holdings
1 Various
2
2 5.0%
3 ROC/Lease/PPA
Gravis Solar 1
1 Commercial solar
2 9.7%
3 ROC/PPA/FiT
GCP Green Energy 1 Ltd
1 Onshore wind/Commercial
solar
2 3.7%
3 ROC/FiT/Merchant
1 2
GCP Programme Funding S10
1 Supported living
2 4.5%
3 Lease
GCP Programme Funding S14
1 Biomass
2 5.4%
3 ROC/RHI/Merchant
Gravis Asset Holdings H
1 Onshore wind
2 4.4%
3 ROC/PPA
GCP Programme Funding S3
1 Anaerobic digestion
2 4.4%
3 ROC/RHI
GCP Biomass 2
1 Biomass
2 4.1%
3 ROC/PPA
GCP Social Housing 1 B Notes
1 Supported living
2 3.8%
3 Lease
Top ten investments
Key
1 Project type
2 % of total portfolio
3 Cash ow type
Top ten revenue counterparties % of total portfolio
Ecotricity Limited 9.2%
Viridian Energy Supply Limited 7.8%
Ofce of Gas and Electricity Markets 6.4%
NpowerLimited 6.3%
Statkraft Markets Gmbh 5.9%
Bespoke Supportive Tenancies Limited 4.6%
SmartestenergyLimited 4.5%
Total Gas & Energy Limited 4.4%
GoodEnergyLimited 4.4%
Gloucestershire County Council 4.1%
Top ten project service providers % of total portfolio
WPO UK Services Limited 21%
PSH Operations Limited 13%
Vestas CelticWindTechnology Limited 11%
Solar Maintenance Services Limited 10%
A Shade Greener Maintenance Limited 9%
2G Energy Limited 6%
Pentair 4%
Atlantic Biogas Ltd 4%
Thyson 4%
Gloucestershire County Council 4%
1. The Cardale loan is secured on a cross-collateralised basis against 18 individual operational PFI projects.
2. GCP Bridge Holdings is secured against a portfolio of six infrastructure investments in the renewable energy and PPP/PFI sectors.
Portfolio summary continued
46
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Portfolio overview
In the reporting year, the valuation of the portfolio decreased from £1,046.6 million at the prior year end to £960 million. The principal value of the portfolio
at 30 September 2024 was £965.3 million (30 September 2023: £1,001.1 million). Investments made and repayments received during the year are summarised
in the chart below:
30
20
10
0
-10
-20
-30
-40
Investments and repayments (£m)
Sector analysis (£m)
Repayments
Investments
Net investment/
(repayment)
4.8
3.7
0.4
—
—
—
—
—
—
— —
—
——
0.2
0.2
0.2
8.7
5.1
0.6
(1.9)
(5.2)
(36.9)
(1.7)
(5.0)
(6.8)
(3.6)
(1.7)
(8.2)
(0.4)
(1.4)
—
—
—
—
—
—
—
—
—
—
—
—
0.9
—
—
—
—
—
0.1
0.1
2.6
Onshore
wind
Commercial
solar
Rooftop
solar
PPP/PFI
Supported
living
Electric
vehicles
EV charging
Agriculture/
resource use
Flexible
generation
Geothermal
Hydro
Biomass
Anaerobic
digestion
New
investments
2.6
Further
advances
24.7
0.3
(2.1)
(6.8)
(8.6)
(36.6)
Scheduled
repayments
(39.2)
Unscheduled
repayments
(24.7)
Investments
Repayments Post year end
00
(£m)
(£m)
Investment analysis for year ended 30 September 2024
Strategic report
47
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Portfolio overview continued
The charts below show the projected cash ows from the investment portfolio and the principal outstanding by prepayment penalty type.
Investment portfolio continued
Principal outstanding (£m)
Spens rate (>4%) Spens rate (<2%) Prepayment with xed fee No prepaymentSpens rate (2-4%)
0
600
300
900
1,200
1,500
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
2061
2062
2063
2064
2065
2066
2067
2068
2069
2070
2071
Cash ows (£m)
Repayment
0
140
120
100
80
60
40
20
180
160
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
2061
2062
2063
2064
2065
2066
2067
2068
2069
2070
Interest Principal balance outstanding
Principal outstanding (£m)
0
400
200
600
800
1,000
1,200
Projected investment portfolio cash ow prole
1
Projected principal outstanding by prepayment penalty type
1. The bar for fourth quarter calendar period only.
48
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Average % of enterprise value by
sector at 30 September 2024
20
Subordinated
Security
Senior
Equity
Senior
Senior
Equity
Subordinated
Subordinated
Senior
Subordinated
Senior
Senior
Senior
Senior
Subordinated
0
40
60
80
100
PPP/PFI
20%
6%
7%
Anaerobic
digestion
2%
2%
1% 2%6% 4%
Biomass
8% 5%
Onshore
wind
10% 15%
Solar
Geo-
thermal
8% 4%
Social
housing
Other
Hydr o-
electric
Third party senior debtCompany exposureThird party subordinated and equity% Percentage of portfolio
Discount rates
The independent Valuation Agent carries out a fair market valuation of the Company’s investments on behalf of the Board on a quarterly basis.
Thevaluation principles used by the independent Valuation Agent are based on a discounted cash ow methodology. A fair value of each asset acquired
bythe Company is calculated by applying an appropriate discount rate (determined by the independent Valuation Agent) to the cash ow expected to arise
from each asset. Further information is included in note 19.3 to the nancial statements.
The weighted average discount rate used across the Company’s investment portfolio at 30 September 2024 was 7.95%, compared to 7.69% at
30September2023. Increases to discount rates were applied by the independent Valuation Agent during the year as a result of the changes in gilt and
wider credit markets, and with reference to market transactions. The third party independent valuation of the Company’s portfolio at 30 September 2024
was £960 million (30 September 2023: £1,046.6 million). The principal value was £965.3 million (30 September 2023: £1,001.1 million) at the year end.
The valuation of investments is sensitive to changes in discount rates and sensitivity analysis detailing this is presented in note 19.3 to the nancial
statements.
Capital structure
As part of its investment portfolio, the Company has targeted investments across a number of asset classes and within different elements of the capital
structure: senior, subordinated or equity.
The chart below shows, as a percentage of enterprise value, the average portion of the capital structure to which the Company has exposure. The dark
green areas represent the Company’s exposure in each sector, with the light green areas representing third party subordinated and equity (the rst loss
positions) and the dark grey areas representing third party senior debt positions.
Average capital structure by sector
Strategic report
49
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment portfolio continued
Performance updates
The specic factors that have impacted the valuation in the reporting year are summarised in the table below.
Valuation performance attribution
Driver Description
Impact
(£m)
Impact
(pps)
Tax computations Impact of the latest tax computations 1.1 0.13
Principal indexation Contractual inationary adjustment to loan principal 0.8 0.09
Other inationary movements Other inationary mechanics across the portfolio 3.2 0.37
Total upward valuation movements 5.1 0.59
Discount rates Increase in discount rates across the portfolio (10.6) (1.22)
Power prices Power price movements in the year (13.7) (1.58)
Energy yield assessment Updated portfolio energy yield assessment (7.8) (0.90)
Project long-term budget Updates to the long-term budget for a waste wood power station (5.6) (0.65)
Ination forecast Ination movements in the year (3.4) (0.39)
Onshore wind asset outage One-off valuation adjustment to reect an onshore wind asset outage (2.0) (0.23)
Actuals performance Impact of renewables actual generation lower than forecast (3.0) (0.35)
Other downward movements Other downward movements (3.2) (0.37)
Total downward valuation movements (49.3) (5.69)
Interest receipts Net valuation movements attributable to the timing of debt service payments
between periods
(7.6) (0.88)
Net realised gains Historic indexation realised on loan repayment
1.9 0.22
Total other valuation movements (5.7) (0.66)
Total net valuation movements before hedging (49.9) (5.76)
Commodity swap - unrealised
Derivative nancial instrument entered into for the purpose of
hedgingelectricity price movements
(0.4) (0.05)
Commodity swap - realised 0.9 0.10
Total net valuation movements after hedging (49.4) (5.71)
1. Refer to commodity swap below.
2. The derivative nancial instrument is utilised to mitigate volatility in electricity price movements as detailed above, refer to note 18 for further details.
50
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Pipeline of investment opportunities
The Company’s focus this year has been on executing its capital allocation policy, however, it continues to engage with market participants to stay
informed of transaction activity and potential investment opportunities across existing sectors and emerging technologies. With the current elevated Bank
of England base rates, the cost of debt from banks, offered at a margin over SONIA, is higher than it has been historically, which means the Company is
more competitive than it would be in a low-rate environment. Current market opportunities offer the potential to reinvest at a lower risk-adjusted return,
or to seek out signicantly higher returns. The Company also has potential follow-on investment opportunities in the existing portfolio, benetting from
the known credit of existing counterparties.
Portfolio sensitivities
This section details the sensitivity of the value of the investment portfolio to several risk factors to which it is exposed. A summary of the overall
investment portfolio risks, and the Investment Adviser’s view of the changes in risk, can be found on pages 35 and 36. Sensitivity analysis to changes in
discount rates on the valuation of nancial assets is presented in note 19.3 to the nancial statements.
Renewable valuations
The table below summarises the key assumptions used in forecasting cash ows from renewable assets in which the Company is invested, and the range
ofassumptions the Investment Adviser observes in the market.
The Investment Adviser does not consider that the market compensates such differences in assumptions by applying a higher or lower discount rate to
recognise the increased or decreased risks respectively of a valuation, resulting in potential material valuation differences. This is shown in the sensitivity
of the Company’s NAV to a variation of such assumptions in the table below, on a pence per share basis.
Assumption Company approach Lower valuations
Estimated NAV impact
(pence per share) Higher valuations
Electricity price
forecast
Futures (three years) and
Afry four quarter average
long term. Electricity
Generator Levy applied until
31 March 2028
Afry Q3 2024 Central-Low
Aurora Q3 Central
2024
Capture prices
(wind, solar)
Asset-specic curve applied
to eachproject
Higher capture prices No capture prices
Asset life
Lesser of planning, lease,
technicallife (20-25 years)
Contractual limitations
Asset life of 40 years
(solar) and 30 years
(wind)
Taxation
Long-term corporation tax
assumption of 25.0% from
1April 2023
Long-term corporation tax
assumption of 25.0% from
1April 2023
Short-term
corporation tax
assumption of 25.0%
then 19.0% thereafter
Indexation
OBR forecast in the short
term, followed by long-term
RPI of 2.5% and long-term
CPI of 2.0%
OBR forecast in the short
term, followed by long-term
RPI of 2.5% and long-term
CPI of 2.0%
0.5% increase to
ination forecasts
1. Lower valuations updated to reect the Afry Q3 2024 Central-Low curve, compared to the previous year which used the Afry Q3 2023 curve.
3.57
3.17
2.83
(0.60)
—
— 0.68
— 0.29
(3.25)
Strategic report
51
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Investment portfolio continued
Portfolio sensitivities continued
Ination
A total of 47% of the Company’s investments by value have some form of ination protection. This is structured as a direct link between the return and
realised ination (relevant to the supported living assets and certain renewable assets) and a principal indexation mechanism which increases the principal
value of the Company’s loans outstanding by a share of realised ination over a pre-determined strike level (typically 2.75% to 3.0%).
The table below summarises the change in interest accruals and potential NAV impact associated with a movement in ination.
Sensitivity applied to base case
inationforecastassumption (2.0%) (1.5%) (1.0%) (0.5%) 0% 0.5% 1.0% 1.5% 2.0%
NAV impact (pence per share) (6.09) (4.69) (3.21) (1.64) — 1.73 3.71 5.80 7.99
Electricity prices
A number of the Company’s investments rely on market electricity prices for a proportion of their revenues. Changes in electricity prices may therefore
impact a borrower’s ability to service debt or, in cases where the Company has taken enforcement action and/or has direct exposure through its
investment structure, it may impact overall returns.
The Company continues to account for the impact of the UK Government’s Electricity Generator Levy on energy generators. However, power prices have
softened signicantly since the charge was implemented and are not forecast to be greater than the benchmark level (£75 per MWh) consistently in the
future. As such, the impact on the Company’s portfolio has been minimal. More broadly, the Company’s approach of using the quoted futures price for the
three year period immediately after a valuation date, and the Afry average thereafter, has not changed year-on-year.
Over the course of the year, both near-term futures prices and longer-term Afry projections have softened, and have displayed considerably less volatility
than in recent years. In the short term, healthy European gas supplies have helped reduce price expectations, with levels signicantly more stable
than they were this time last year. In the long term, ambitious decarbonisation targets from the new Government, and the potential for new policies to
incentivise deployment, have the potential to signicantly change the future generation mix. The shift away from traditional thermal generation in the
medium to long term and decreased technology costs have reduced the margin price of the system. Recent geopolitical developments in the Middle East
and the continuing conict in Ukraine have the potential to increase oil prices, which could feed through into electricity prices.
The table below shows the forecasted impact on the portfolio of a given percentage change in electricity prices over the full life of the forecast period, the
impact on hedging arrangements in the period to expiry (31 March 2025), and the subsequent net impact on a pence per share basis. Further information on
the Company’s hedging arrangements is detailed on page 56 and in note 18 to the nancial statements.
Sensitivity applied to base case
electricity price forecast assumption (10%) (5%) 0% 5% 10%
Portfolio price sensitivity (9.11) (4.61) — 4.46 8.92
Fixed PPA sensitivity 0.24 0.12 — (0.12) (0.24)
Total (8.87) (4.49) — 4.34 8.68
Hedge sensitivity 0.02 0.01 — (0.01) (0.02)
Net sensitivity (pence per share) (8.85) (4.48) — 4.33 8.66
Hedging
As further detailed in note 18 to the nancial statements, the Company continues to engage in a hedging strategy, entering nancial derivative
arrangements to hedge a portion of its nancial exposure to merchant electricity prices on a seasonal basis. The Company continues to lock in attractive
electricity prices by xing prices under PPAs at an asset level, as well as mitigating volatility through hedging arrangements at a Company level. During the
year, the Company engaged with an additional hedge counterparty, diversifying its pool of potential hedge providers and optimising the rates offered.
The Investment Adviser and Board will continue to review the hedging strategy on an ongoing basis with the objective of mitigating excessive NAV volatility
and managing risks relating to hedging, including credit and cash ow impacts.
52
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The charts below show the Company’s nancial valuation exposure to the GB market and the Irish single electricity market (“SEM”), alongside the
offsetting xed price hedges entered into as part of asset-level PPAs and the Company’s commodity swap arrangement for the winter 2024/25 period with
resulting net exposure positions.
The Investment Adviser and Board will continue to review the hedging strategy on an ongoing basis with the objective of mitigating excessive NAV volatility
and managing risks relating to hedging, including credit and cash ow impacts, and any required responses to the implementation of a price cap.
MWh exposure (’000)
20
40
0
60
80
(80)
(60)
(40)
(20)
GB exposure
GB PPA hedges GB CfD hedge GB net exposure
Sep 24
Mar 25
Sep 25
Mar 26
Sep 26
Mar 27
Sep 27
Mar 28
Sep 28
Mar 29
Sep 29
Mar 30
Sep 30
Mar 31
Sep 31
Mar 32
Sep 32
Mar 33
Sep 33
Mar 34
Sep 34
Mar 35
Sep 35
Mar 36
Sep 36
Mar 37
Sep 37
Mar 38
Sep 38
Mar 39
Sep 39
Mar 40
Sep 40
Mar 41
Sep 41
Mar 42
Sep 42
Mar 43
Sep 43
Mar 44
Sep 44
Mar 45
Sep 45
Mar 46
Sep 46
Mar 47
Sep 47
Mar 48
Sep 48
Mar 49
Sep 49
Mar 50
Sep 50
Mar 51
Sep 51
Mar 52
Sep 52
MWh exposure (’000)
40
60
80
Sep 24
Mar 25
Sep 25
Mar 26
Sep 26
Mar 27
Sep 27
Mar 28
Sep 28
Mar 29
Sep 29
Mar 30
Sep 30
Mar 31
Sep 31
Mar 32
Sep 32
Mar 33
Sep 33
Mar 34
Sep 34
Mar 35
Sep 35
Mar 36
Sep 36
Mar 37
Sep 37
Mar 38
Sep 38
Mar 39
Sep 39
Mar 40
Sep 40
Mar 41
Sep 41
Mar 42
Sep 42
Mar 43
Sep 43
Mar 44
Sep 44
Mar 45
Sep 45
Mar 46
Sep 46
Mar 47
Sep 47
Mar 48
Sep 48
Mar 49
Sep 49
Mar 50
Sep 50
Mar 51
Sep 51
Mar 52
Sep 52
SEM exposure SEM PPA hedges SEM net exposure
20
0
(40)
(20)
(60)
(80)
Electricity price exposure – GB market
Electricity price exposure – SEM market
Strategic report
53
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Financial review
Financial performance
It has been a challenging nancial year for the
Company, with investment revaluations driven
by electricity prices and ination negatively
impacting protability. This year has seen a
material cooling in both factors. Refer to page 50
for analysis of valuation movements.
Total income generated by the Company was
£38.3 million (30 September 2023: £51.7 million),
comprising loan interest of £87.3 million, net
unrealised valuation losses on investments of
£51.8 million, net realised gains on investment
disposal of £1.9 million and other income of
£0.5million (30 September 2023: loan interest of
£80.8 million, net unrealised valuation losses on
investments of £51.6 million and net realised gains
on investment disposal of £0.1 million). Refer to
note 3 for further information.
Net gains on derivative nancial instruments at
year end were £0.5 million (30 September 2023:
£12.9 million), reecting the electricity price
hedging arrangements which locked in attractive
price levels for the Company. Refer to note 18 for
further information.
Total income was offset by operating costs for
the year of £11.3 million (30 September 2023:
£11.4million) which include the Investment
Adviser’s fees, the Administrator’s fees, the
Directors’ fees and other third party service
provider costs.
These, and other operating costs, have remained
broadly in line with previous years.
The Company remains modestly geared at
the year end, with a loan to value
1
of 6.2%.
Finance costs have decreased year-on-year to
£7.5million (30 September 2023: £9.4 million),
due to the reduction in the drawn balance of the
RCF following the net repayment of £47 million
during theyear.
Total prot and comprehensive income has
decreased from £30.9 million in the prior
year to £19.5 million. As previously noted, the
year-on-year reduction was primarily attributable
to investment revaluations in the year.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
54
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Loan
interest
Income (£’000)
Income (£’000)
Net gains
on
derivatives
Net realised
gains on
disposal
Unrealised
losses
Unrealised
gains
Other unrealised
movements
Downward
movements
in valuation
Upward
movements
in valuation
Net
unrealised
movement
Total
income
Other
income
Operating
costs
Finance
expenses
Prot and
comprehensive
income
Net
contribution
to earnings
87,297
5,112
(49,341)
(7,616)
(51,845)
4961,888
13,549
(65,394)
493 38,329
(11,338)
(7,47 7)
19,514
(60,750) (41,236)
60,000
40,000
100,000
80,000
20,000
Dividends
0
-20,000
-40,000
0
-75,000
-25,000
-50,000
25,000
For further infomation on valuation movements during the year refer to page [•].
Income analysis – year ended 30 September 2024
Strategic report
55
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Revolving credit facility
The Company has credit arrangements of
£150million across four lenders: Lloyds, AIB,
Mizuho and Clydesdale. At year end, £57 million
was drawn and the terms in place are summarised
below:
Facility Size Margin 2024 Expiry
RCF £150m
SONIA
+2.0%
March
2027
The RCF is due to expire in March 2027. The
Investment Adviser completed the renancing
of the previous facility in March 2024, reducing
total commitments by £40 million, in line with the
Board’s stated intention to reduce leverage by
the end of 2024.
The total drawn balance of the facility has reduced
from £104 million at 30September2023 to a
materially reduced level of £57 million at year end
following repayments of the RCF throughout
theyear.
Further details are disclosed in note 15 to the
nancial statements.
Net assets
The net assets of the Company have decreased
from £956.6 million at 30 September 2023
to £913.1 million at 30 September 2024. The
Company’s NAV per share has decreased from
109.79 pence at the prior year end to 105.22
pence at 30 September 2024, a decrease
of 4.2%. This is primarily due to downward
revaluations of investments as detailed on
page50.
Cash generation
The Company received debt service payments of
£129.0 million (30 September 2023: £136.8million)
during the year, comprising £65.1 million of
cash interest payments and £63.9 million of
loan principal repayments (30 September 2023:
£58.8million and £78 million). The Company paid
cash dividends of £60.8 million during the year
(30 September 2023: £61.8 million). The Company
aims to manage its cash position effectively by
minimising cash balances, whilst maintaining
the nancial exibility to pursue a pipeline of
investment opportunities. This is achieved
through the active monitoring of cash held,
income generated from the portfolio and the
efcient use of the Company’s RCF.
Hedging
The Company entered into two separate
arrangements to hedge its nancial exposure
to electricity prices during the year. The
Investment Adviser recommended hedging
c.75% of the Company’s exposure to the
GB market for the summer 2024 season at
a xed price of £62 perMWh and the winter
2024/25 season at a xed price of £82.20 per
MWh. Themark-to-market of the hedge at
30September 2024 was a liability of £0.1 million.
Further details on the Company’s electricity price
exposure and hedging strategy can be found on
pages 52 and 53 and in note 18.
Share price performance
The Company’s total shareholder return
1
was
28.4% for the year (30 September 2023: -25.2%)
and 101.8% since its IPO in 2010. During the year,
the Company’s shares have traded at a discount
1
to NAV, with an average of 32.4% for the year and
a discount of 25% at the year end. The shares
have traded at an average premium of 3.8% since
IPO (30 September 2023: 7.9% premium
1
since
IPO). The share price at 30 September 2024 was
78.60 pence per share (30 September 2023: 67.70
pence).
Further details on share movements are
disclosed in note 16 to the nancial statements.
Dividends
The Company aims to provide shareholders with
regular, sustained, long-term dividends. For the
year ended 30 September 2024, the Company
paid a dividend of 7.0 pence per ordinary share
(30 September 2023: 7.0 pence).
The Board and Investment Adviser do not believe
there have been any material changes in the
Company’s ability to service sustained and
long-term dividends since the assessment in
early 2021 that established a dividend target
2
of
7.0 pence per share. As such, the Company has
set a target at the same level, 7.0 pence per
ordinary share, for the forthcoming nancial year.
Financial review continued
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
2. The dividend target set out above is a target only and not a prot forecast or estimate and there can be no assurance that it will be met.
56
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
30 September 2024 30 September 2023
Earnings cover
2
Notes £’000 pps £’000 pps
Total prot and comprehensive income 19,514 2.25 30,905 3.50
Dividends paid in the year 9 60,750 7.00 61,785 7.00
Earnings cover
2
0.32 0.50
30 September 2024 30 September 2023
Adjusted earnings cover
2,4
Notes £’000 pps £’000 pps
Loan interest accrued
2
79,808 9.20 86,911 9.86
Other income 3 493 0.06 9,544 1.08
Total expenses 5, 19 (11,338) (1.31) (11,422) (1.30)
Finance costs 6 (7,477) (0.86) (9,378) (1.06
Adjusted net earnings
2
61,486 7.09 75,655 8.58
Dividends paid in the year 9 60,750 7.00 61,785 7.00
Adjusted earnings cover
2
1.01 1.23
30 September 2024 30 September 2023
Cash earnings cover
2,4
Notes £’000 pps £’000 pps
Adjusted loan interest received
2
74,426 8.58 69,613 7.89
Total expenses paid
2
(10,612) (1.22) (11,016) (1.25)
Finance costs paid (6,550) (0.75) (8,716) (0.99)
Total net cash received
2
57,264 6.61 49,881 5.65
Dividends paid during the year 9 60,750 7.00 61,785 7.00
Cash earnings cover 0.94 0.81
Notes
30 September
2024
Shares
30 September
2023
Shares
Weighted average number of shares 10 867,940,448 881,850,353
Further analysis on dividends is shown in note 9 to the nancial statements.
1. The dividend target set out above is a target only and not a prot forecast or estimate and there can be no assurance that it will be met.
2. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
3. Includes 2023 fourth interim dividend of 1.75 pence per share paid in the 2024 nancial year.
4. Principal repayments are excluded for the purpose of calculating dividend cover.
Dividend cover
In determining the dividend target
1
for the forthcoming nancial year, the Board and Investment Adviser reviewed the sustainability of the dividend level
against various metrics, most notably the APM based on interest income accruing to the benet of the Company from the underlying investment portfolio,
which is loan interest accrued
2
.
The Board recognises there are various methods of assessing dividend coverage. The Board and the Investment Adviser consider this metric to be a key
measure in relation to the ongoing assessment of dividend coverage alongside earnings cover
2
calculated under IFRS. The loan interest accrued
2
metric
adjusts for the impact of pull-to-par, which is a feature of recognising earnings from the investment portfolio presented under IFRS.
Strategic report
57
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
58
Sustainability
Dawn Crichard
Chair of the Sustainability committee
I am pleased to present the sustainability
report for theCompany for the year ended
30September 2024. As Chair of the Sustainability
committee, I am excited to share the progress
the Board has made against the Company’s
ESG objectives as described in the 2023 annual
report, as well as our plans for the future.
This year, the Company introduced a formal
ESG policy, which formalises its ESG processes.
The Investment Adviser also obtained B Corp
certication, formalising its sustainable and
long-term business model, and providing a
rigorous framework against which to benchmark
its sustainable activities. The Investment
Adviser improved its PRI score for the second
consecutive year, highlighting its commitment
to continual improvement in its ESG focus and
reporting. Both achievements complement the
Company’s Green Economy Mark from the LSE,
which was awarded in 2020 in recognition of
the Company’s contribution towards driving a
greener economy.
Infrastructure has a positive purpose and the
Company’s assets have a strong social and
environmental impact. The Board aims to enhance
the integration of ESG criteria in the Company’s
operations, ensuring that the portfolio not only
addresses the current needs of stakeholders,
but is also able to adapt to future challenges
and needs. The Company nances infrastructure
which benets end users in society and its
portfolio contributes to the generation of
renewable energy. The Board is committed to
creating a positive social and environmental
impact through the Company’s investments.
With the election of the new Government in
July 2024, it is evident there may be greater
opportunity for private investment in the
renewable energy infrastructure sector.
The new Government has pledged to work with
the private sector to double onshore wind,
triple solar power and quadruple offshore wind
by 2030, with increased spending across the
renewable energy infrastructure sector. The
Company’s investments in nancing renewable
energy assets are pivotal to this journey, with
62% of the portfolio generating 1,320 GWh of
renewable energy this year, sufcient to power
488,842 average households
1
.
The Company’s investments in the supported
living sector provide support for vulnerable
adults, helping those in the community that need
it the most. These properties blend specially
adapted residences with purpose-built facilities,
facilitating the delivery of high-quality supported
living services.
PPP/PFI assets in the Company’s portfolio
are integral to the functioning of UK society,
and provide long-term partnerships with the
public sector. Within this sector, the Company’s
investments span education, healthcare,
waste, leisure and housing. Highlights include
investments secured against 49 schools which
offer 26,196 school places and 40 healthcare
facilities providing beds for 1,649 patients.
There is no doubt that investing in clean energy
infrastructure is key to protecting our planet
from climate change. The Company aims to build
a sustainable and positive future through its
investments in renewable energy, supported
living and PPP/PFI projects. This is a future that
combines social responsibility with environmental
stewardship.
Statement from the Chair of
theSustainability committee
1. Source: Ofgem, average gas and electricity usage.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
59
The Company has strong ESG credentials,
demonstrated through the positive impact of
its portfolio. The Company invests in assets
that are integral to society, including those
thatcontribute to a greener economy. As a
result, the Company aligns with certain SDGs,
which promote sustainable development
globallythrough social, economic and
environmental initiatives.
This year, the Company implemented an ESG
policy to formalise its ESG processes and
ensureits responsible investment practices
align with the Investment Adviser’s Responsible
Investment policy.
The ESG policy addresses three key areas,
outlined below:
Investment policy
The Company seeks investment opportunities
which generate sustainable returns whilst
simultaneously having a positive environmental
and social impact. This is achieved through
positive and negative ESG screening, detailed
ESG due diligence and comprehensive ongoing
monitoring and engagement.
Corporate governance
The Board is committed to undertaking its
activities in a carbon-neutral manner, utilising
carbon offsetting measures where necessary.
The Board seeks to govern the Company in
accordance with all applicable laws, rules and
regulations, as well as corporate governance
best practice.
The Board has established a Sustainability
committee responsible for developing,
implementing and monitoring the Company’s
ESGpolicies and procedures.
The Board aims to fully comply with the
recommendations of the TCFD and consider
other similar initiatives.
Activities of key service providers
The Company seeks to inuence its main service
providers to ensure they are following best
practice regarding ESG matters.
The ESG policy is split into seven sections,
covering screening, ESG due diligence,
monitoring and engagement, corporate
governance, modern slavery, corporate ESG
initiatives and ESG frameworks.
The ESG policy can be found on the
Company’swebsite.
ESG policy
Strategic report
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability continued
Q&A with Dawn Crichard, Chair
oftheSustainability committee
Q
How does the Company approach
climate change risk, and what specic
measures has it taken to reduce the carbon
footprint of its portfolio?
The Company includes climate change risks
within the emerging risks category
of its risk management framework. Climate
change risks are both physical and transitional,
and the Board considers climate change risks a
long-term issue. The impact of climate change
on the Company’s portfolio is monitored by the
Board, the Sustainability committee and the
Investment Adviser. This includes monitoring and
assessing the impact of changing Government
policies on the investment portfolio and the
Company as a whole. The Investment Adviser,
on behalf of the Company, carries out an annual
climate risk assessment for each underlying
portfolio asset to assess the actual and potential
impact of climate-related risks across the
portfolio. The analysis considers both physical
and transition risks for each asset and is
supported by expert third party consultants.
The carbon impact of infrastructure contributes
to a signicant proportion of the UK’s national
emissions from a construction, operation and
maintenance perspective. In many cases, the
UK’s existing infrastructure was not originally
designed and constructed with global warming
in mind.
The Investment Adviser has sought to encourage
energy efciency projects at portfolio assets
where there are opportunities to do so; for
example, the Company’s ‘SolarCatcher’ initiative
supported the installation of solar panels and
electric vehicle charging points at schools
in England to help reduce energy costs and
incentivise increased electric vehicle uptake
among employees.
As the Company is a debt provider that doesn’t
own or control 94% of assets in the portfolio,
there are certain limitations in the Company’s
inuence on portfolio assets. As such, the
Company is limited in its capacity to reduce
the carbon emissions of its assets but it can
inuence them by supporting energy-saving
schemes.
Q
What steps has the Sustainability
committee taken to promote diversity,
equity and inclusion (“DEI”)? How does it
maintain progress in these areas?
The Board considers DEI an important
factor in ensuring all Board members
have the right balance of skills, experience
and independence to make informed and
knowledgeable decisions. The right blend of
perspectives is critical to ensuring the success
of the Company. The Board monitors the DEI
criteria of the companies it invests in through its
annual data collection project.
The Board maintains 49% gender diversity of
SPV company boards, increasing from 36% in
the previous year. The Board and the Investment
Adviser recognise that gender diversity is a
challenge in the investment industry, and that a
concerted and collaborative effort is required to
make the nancial services sector more open and
attractive for women at all levels of seniority. As
such, the Investment Adviser supports the Young
Women Into Finance Scholarship programme, a
not-for-prot social organisation dedicated to
the eradication of gender bias for new graduates
entering the nance industry.
The Investment Adviser also participated in the
10,000 Black Interns programme this year for
the second year, which offers paid internship
opportunities across more than 25 sectors, along
with training and development opportunities.
This commitment to paid internships reects the
Investment Adviser’s passion for inspiring change
and helping young people achieve a career in the
investment industry.
Q
What are the Board’s expectations
regarding ESG reporting and
transparency from portfolio companies?
How does the Investment Adviser ensure
companies are meeting these standards
and the data they provide is reliable?
The Investment Adviser carries out an
annual data collection project to
collect material ESG metrics from the underlying
portfolio. The process involves the Investment
Adviser’s portfolio management team liaising with
each asset operator to obtain relevant ESG data
on the underlying portfolio assets. In addition,
key relevant ESG indicators are monitored by
the Investment Adviser’s portfolio management
team. The Investment Adviser seeks to engage
with equity owners and/or operators of projects
to understand the ESG factors relevant to those
projects or properties, and, where possible, use
inuence as a lender of capital or investor to
manage exposure to ESG risks.
60
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
This year, GHG emissions veried data was
74%, compared to 53% in the prior year. This
increase in supporting evidence for Scope
1, 2 and 3 suggests that, with the support of
the Investment Adviser, underlying assets are
becoming more familiar with the data collection
project. Changes in carbon footprint data are
monitored over time and reported on in the
annual report.
For the second year, the Company utilised
the services of Aardvark, an independent
external ESG certication service who
provide independent and impartial auditing
and certication services. Aardvark reviewed
the outputs from the data collection project,
verifying the calculated carbon emissions were
correct and provided limited assurance. As part
of this, Aardvark reviewed primary evidence
supporting the data collection and, where
this was absent, they reviewed the reliability
of secondary data. Aardvark have also made
recommendations on how the Company can
improve its data collection so that it can prepare
for a reasonable assurance process in future.
The Company engaged Terra Instinct, a
sustainability advisory rm, to perform a gap
analysis on the Company’s TCFD disclosures
and climate risk assessment. The gap analysis
examined the Company’s current approach to
the disclosures and climate risk assessment,
identifying specic areas for recommendations
on how it could be improved.
In addition, new investments provide the
opportunity to include data requirements as part
of the loan documentation.
Q
How does the Sustainability committee
and the Investment Adviser ensure
that the Company is capitalising on
Government policy initiatives that support
increased investment in sustainability?
Government policy supporting
infrastructure investment is likely to grow
with the new Government’s ambitious
decarbonisation targets. The new Government
has ambitions to accelerate the deployment
of renewable energy, which is expected to
involve a massive overhaul of the UK renewable
energy sector and is set to increase incentives
for private investment in renewable energy
infrastructure. As an experienced infrastructure
provider, the Company is well placed to capitalise
on Government policies that incentivise this
investment.
As such, increased Government policy support in
this area may incentivise the Company to expand
into new areas for investment, and as part of
this, the Sustainability committee works with the
Investment Adviser to incorporate and monitor
sustainability considerations into the investment
process. In addition, the Investment Adviser is an
experienced investor in new and existing green
technologies and opportunities. This experience
enables the Company to react quickly to new
Government initiatives and the Board regularly
reviews and monitors these opportunities.
Q
What metrics or benchmarks does the
Board use to measure the success of
its ESG policies over time?
As the Company invests in infrastructure
that is integral to society, the Company’s
activities align with certain SDGs, as outlined by
the UN. When developing the Company’s focus
areas, the Board considered the SDGs that have
the highest materiality to the Company and
sector and the SDGs that it may have an impact
on, as well as those that have the highest impact
on stakeholders. The SDGs are important to
investors and there is a strong business case for
investing in sectors aligned with the SDGs. The
Company reports its alignment with the SDGs to
highlight its responsible investment efforts. This
reporting is key to building trust, transparency
and accountability with stakeholders. The
Investment Adviser also reports its responsible
investment activities to the PRI through its
annual assessment process. The PRI reporting
process is the largest global reporting project on
responsible investment. This year, the Investment
Adviser improved its PRI assessment score,
scoring an average of 80 points out of 100, with
scores higher than the median in each category.
Refer to page 64 for more information.
Strategic report
61
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Sustainability continued
Reporting
ESG integration
202320242025 (and further)
Governance
The Sustainability
committee
reviewed and
updated the
Company’s Modern
Slavery statement.
Blackcraig Wind
Farm achieved a
GRESB rating of
four green stars
and 90 out of 100
points.
The Investment
Adviser achieved
its aim of carbon
neutrality by 2023.
The Investment
Adviser considered
the application of the
SFDR to the Company
and undertook
training on the topic.
The Investment
Adviser achieved B
Corp certication
with a score of
99.4.
Biodiversity and DEI
considerations were
added to the ESG due
diligence process, as
well as a climate risk
assessment for all
new investments.
The Company formalised and published an
ESG policy, which encompasses all aspects
of responsible investment.
The Investment Adviser began a process
which ensures each potential asset
undergoes a credit risk assessment that
incorporates ESGrisk.
The Company and
Investment Adviser
to apply lessons
learnt and best
practice across
the portfolio
where appropriate.
Work with
borrowers to
understand where
the Company can
support them in
their diversity
ambitions.
The Company to consider further initiatives to
reduce carbon emissions across the portfolio
and at the Investment Adviser.
Continue to embed ESG considerations
into the investment process more broadly,
utilising third party consultants as
appropriate.
The Company to
consider publishing
a separate Human
Rights policy.
The Investment
Adviser to continue
reviewing responsible
investment practices
to improve its B Corp
score over time.
The Company
continued to
develop its data
collection project,
and collection of
ESG metrics and
targets.
The Company
appointed an
external consultant
to review carbon
emissions data.
The Company
broadened its
TCFD reporting to
include a partial 2ºC
warming scenario
under strategy c)
disclosures.
The Company
expanded its
climate risk
assessment
to include
opportunities and a
partial 2ºC climate
scenario.
The Investment Adviser expanded its
Responsible Investment report to include
additional information under TCFD.
The Investment Adviser reviewed the
potential biodiversity impact for two
portfolio assets and undertook training on
biodiversity net gain opportunities.
The Company to
consider further
ESG metrics and
targets and improve
data collection
coverage and
quality.
The Company
to continue its
project to obtain
reasonable
assurance over its
carbon emissions
data.
Consider material
and relevant
specic ESG targets
for the Company
under TCFD metrics
and targets c)
disclosures.
The Company
to continue
developing its
climate risk
assessment in line
with best practice
recommendations.
Engaged Terra
Instinct to perform
a gap analysis on the
Company’s climate
risk assessment.
Expanded TCFD
reporting to include
all physical risks in a
2°C global warming
scenario.
Analysed the UK’s
SDR and investment
label rules.
Engaged Terra
Instinct to perform
a gap analysis on
the Company’s
TCFD disclosures.
Continued to work with Aardvark to review
the data collection project and verify the
calculated carbon emissions data, working
towards reasonable assurance in the future.
Terra Instinct undertook analysis to prepare
the Company for future reporting under the
ISSB published standards.
Continue to
prepare to report
under new ISSB
standards that are
applicable to the
Company.
Consider
recommendations
from the ESG
consultants with a
view to implementing
infuture years.
Assess the feasibility
of making the data
collection process a
half-yearly exercise
and develop training
in this area.
Consider reporting
under SDR when
the Company is
brought into scope.
62
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Reporting
202320242025 (and further)
Awareness
The Investment Adviser introduced
biodiversity considerations into its
investment process and ran biodiversity
training for staff members.
The Investment Adviser funded three
ESG-focused internships to support the
work on the Company’s ESG strategy and
toassist with the data collection project.
The Investment Adviser
continued its involvement
with the 10,000 Black
Interns programme and the
Young Women Into Finance
programme.
The Investment Adviser
participated in a mid-term
review by Investors in
People to review its status.
The Investment Adviser
expanded its charity
of the year scheme to
include more charities
and continued to offer
paid volunteering days to
employees.
The Company to implement
biodiversity net gain
reporting for portfolio
assets.
The Company to produce a
separate ESG report.
Improve the coverage of the
Company’s data collection
project.
Continue to work with
partners to offer further
internships with the
Investment Adviser.
The Investment Adviser
to introduce a formal
recruitment policy which
incorporates DEI criteria
where possible.
The Company
continued to
develop its data
collection project,
and collection of
ESG metrics and
targets.
The Company
appointed an
external consultant
to review carbon
emissions data.
The Company
broadened its
TCFD reporting to
include a partial 2ºC
warming scenario
under strategy c)
disclosures.
The Company
expanded its
climate risk
assessment
to include
opportunities and a
partial 2ºC climate
scenario.
The Investment Adviser expanded its
Responsible Investment report to include
additional information under TCFD.
The Investment Adviser reviewed the
potential biodiversity impact for two
portfolio assets and undertook training on
biodiversity net gain opportunities.
The Company to
consider further
ESG metrics and
targets and improve
data collection
coverage and
quality.
The Company
to continue its
project to obtain
reasonable
assurance over its
carbon emissions
data.
Consider material
and relevant
specic ESG targets
for the Company
under TCFD metrics
and targets c)
disclosures.
The Company
to continue
developing its
climate risk
assessment in line
with best practice
recommendations.
Engaged Terra
Instinct to perform
a gap analysis on the
Company’s climate
risk assessment.
Expanded TCFD
reporting to include
all physical risks in a
2°C global warming
scenario.
Analysed the UK’s
SDR and investment
label rules.
Engaged Terra
Instinct to perform
a gap analysis on
the Company’s
TCFD disclosures.
Continued to work with Aardvark to review
the data collection project and verify the
calculated carbon emissions data, working
towards reasonable assurance in the future.
Terra Instinct undertook analysis to prepare
the Company for future reporting under the
ISSB published standards.
The Company and the Investment Adviser have
made considerable progress with integrating ESG
considerations across the Company.
Continue to
prepare to report
under new ISSB
standards that are
applicable to the
Company.
Consider
recommendations
from the ESG
consultants with a
view to implementing
infuture years.
Assess the feasibility
of making the data
collection process a
half-yearly exercise
and develop training
in this area.
Consider reporting
under SDR when
the Company is
brought into scope.
Strategic report
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Annual report and nancial statements 2024
Investment process
The Investment Adviser has been a signatory to
the PRI since 2019. The PRI, established in 2006,
is a global collaborative network of investors
working together to put the six principles of
the PRI into practice. The Investment Adviser
recognises that applying these principles
better aligns its investment activities with
the broader interests of society and has
committed to their adoption and implementation.
ESG considerations are integrated into the
Company’s investment decisions and are led by
the investmentteam.
As part of its responsibilities as a signatory to the
PRI, the Investment Adviser is required to report
publicly on its responsible investment activities
each year. In turn, it receives a PRI assessment
report. The assessment uses the reported
information of signatories and outlines how
signatories’ responsible investment practices
compare year-on-year, across asset classes,
andwith peers at a local and global level.
This year, the Investment Adviser improved its
PRI assessment score, scoring an average of
80 points out of 100 and four out of ve stars
for each category. Areas of improvement from
this year’s score were policy, governance and
strategy, which improved by a total of ninepoints,
and xed income, which also increased by
ninepoints. This was an improvement on 2022’s
score of an average of 76 points.
The Investment Adviser continued to score
higher than the median in each category.
Thechart below provides further information
ontheInvestment Adviser’s results.
Sustainability continued
Investment Adviser PRI scorecard - year to 31 December 2023
Responsible Investment
25%0%AUM coverage 40% 65% 90%
Module score star score
Condence building measures
Direct - Fixed income - Corporate
>+10 and <=50%
Direct - Listed equity - Active fundamental
>50%
Policy governance and strategy
89%
73%
79%
80%
PRI median Module score
64
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Annual report and nancial statements 2024
Responsible Investment policy
The Investment Adviser’s Responsible Investment policy is integrated into investment management processes and incorporates pre-investment, active
ownership and governance processes, as detailed below.
Governance and responsibilities
Pre-investment Active ownership
The Investment Adviser operates a Responsible Investment committee
which comprises senior personnel from across the business, including
two representatives from the team that provide investment advice to the
Company. The committee is responsible for all aspects of the Investment
Adviser’s Responsible Investment policy, including oversight of ESG
initiatives, reporting, regulatory compliance, staff training and making
recommendations to the board of the Investment Adviser.
The Investment Adviser has a clearly dened governance structure with
detailed processes that cover business operations, including investment
management and portfolio monitoring and reporting.
In addition to its board, the Investment Adviser employs a team of
professionals with in-depth experience in the investment industry and
asset classes.
The Investment Adviser’s approach to stewardship and engagement is
based on the Principles of the UK Stewardship Code 2020 and is in line
with its philosophy on responsible investing.
Deal screening
Investment management processes
positively screen for investments
that promote sustainability,
conform with the Investment
Adviser’s values and benet
society, including, but not limited
to, the areas of climate change
mitigation and adaptation, energy
transition, critical infrastructure,
decarbonising transportation,
affordable living, social housing,
education and healthcare.
The screening excludes
investments which focus on
non-medical animal testing,
armaments, alcohol production,
pornography, tobacco, coal
production and power, and nuclear
fuel production. Investments with
ongoing or persistent involvement
in human rights abuses are also
excluded.
ESG due diligence
processes
Prior to a new investment
being approved, the relevant
investment team assess how
the investment fares against
key relevant ESG criteria and
includes an assessment of
ESG characteristics in every
investment proposal submitted
to the Company’s Investment
committee for approval.
The assessment typically
covers ESG-related risks and
opportunities, and, to the extent
applicable, relevant policies and
procedures, alignment with industry
or investment-specic standards
and ratings, and compliance with
relevant ESG-related regulation and
legislation.
This year, the Company added
biodiversity to the ESG due
diligence process, as well as DEI.
Aclimate risk assessment was also
added for all new investments.
Monitoring and
engagement
Following execution and
investment, key relevant ESG
indicators are monitored
by the Investment Adviser’s
portfolio management team.
The Investment Adviser seeks
to engage with equity owners
and/or operators of projects
to understand the ESG factors
relevant to those projects or
properties, and, where possible,
use inuence as a lender of capital
or investor to manage exposure to
ESG risks.
Reporting
The Investment Adviser reports
on an annual basis, with its
Responsible Investment report
published each year. The
Responsible Investment report
sits alongside a PRI report, which
summarises the Investment
Adviser’s responsible investment
activities.
The Investment Adviser applies
the recommendations of the
TCFD in its own reporting and
encourages the application of the
TCFD framework in it’s funds, in
line with reporting requirements.
65
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Annual report and nancial statements 2024
Strategic report
Sustainability continued
Responsible Investment continued
Portfolio governance
Governance at the Company level is clearly
managed and articulated to achieve the
Company’s investment strategy, including
managing risks and creating a positive
environmental and social impact. The Investment
Adviser engages with the underlying assets’
boards to enhance governance at the portfolio
level. Investment documentation issued by the
Company includes standard provisions to ensure
effective governance within investee companies
including compliance by these companies with
applicable environmental, health and safety,
anti-money laundering, know your customer
andemployment requirements.
During the year, the Investment Adviser
continued to develop its climate risk assessment
process for each underlying portfolio
asset. The process assesses the actual and
potential impacts of climate-related risks and
opportunities across the portfolio and considers
both physical and transition risks and transition
opportunities for each asset. Further information
can be found on pages 74 to 79.
The directors and employees of the Investment
Adviser sit on the boards of, and control, the
SPVs through which the Company invests.
The Company has delegated the day-to-day
operations of these SPVs to the Investment
Adviser through the Investment Advisory
Agreement. The Company collects diversity
data on new investment opportunities and the
Investment Adviser includes diversity data in
its responsible investment checklist, collecting
data from potential borrowers that approach the
Company. Diversity data is also collected from
borrowers as part of the data collection project.
The Board and the Investment Adviser value
relationships with borrowers, ensuring time
is spent building and maintaining these
relationships. Engagement takes the form of
regular interaction with the borrowers by the
portfolio management teams, including periodic
site visits to the underlying assets and their
managers. Site visits are an important aspect of
the portfolio management role and have both
technical and commercial benets. They allow the
Investment Adviser to assess the performance
of both asset and contractor and investigate any
important project issues that arise.
Furthermore, site visits give the Investment
Adviser the opportunity to understand the
operations and relationships important to
each project and its long-term success. Where
the Company is exposed to RPs that have
been graded as non-compliant in respect of
governance, the Investment Adviser has been
working with the RPs to improve processes,
people and systems in seeking to address the
RSH’s governance concerns. Refer to pages 40
and 41 for further information.
In the nancial year, 22 site visits were
conducted, representing 25% of the portfolio
by value and 24% of all SPV companies, including
visits to the UBB Waste project (refer to
page39), and renewables and PPP/PFI assets
invarious UK locations.
SDR
During the year, the Company analysed the new
Policy Statement on Sustainability Disclosure
Requirements (“SDR”) and investment labels.
This Policy Statement sets out the UK FCA’s
nal rules on anti-greenwashing, a new labelling
regime, naming and marketing rules, product and
entity-level disclosures, as well as distributor
obligations. As the Company is domiciled in
Jersey, it is a non-UK AIF and is therefore unable
to use a sustainability label at present. If HMT
extends the SDR regime to overseas funds,
theCompany will consider the implementation
ofa label. The Company is currently in compliance
with the anti-greenwashing rules issued
underSDR.
Data collection project
This year, the Investment Adviser continued to
improve its data collection project to collect
material ESG metrics from the underlying
portfolio for the twelve month period to
30June2024
1
.
The process involves the Investment Adviser’s
portfolio management team liaising with each
asset operator to obtain relevant ESG data on
the underlying portfolio assets. The data points
that are considered material by the Investment
Adviser are detailed in the table on page 67.
This year, environmental coverage increased
from 72% in the prior year to 77% this year. This
was primarily due to an increased response rate
from borrowers.
Several challenges continued to be faced in
respect of the availability of the data requested,
insofar as the Company is a debt provider and
does not own or control 94% of assets in the
portfolio.
In the drive for increased transparency in
reporting across the industry, the Company has
actively sought to improve its data collection
project by obtaining limited assurance of
its carbon footprint data for the second
consecutive year. The Company continued its
engagement with Aardvark, an external ESG
certication service who provide independent
and impartial auditing and certication services.
Aardvark reviewed the outputs from the data
collection project, verifying the emissions
calculations and data for covering Scope 1
and 2 with the inclusion of Scope 3 as far as is
practically possible. It was found that a total
of 74% of the assets by value had emissions
calculations that were supported by primary or
secondary evidence.
1. Period chosen to facilitate data inclusion in the annual report.
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GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
This was a marked improvement from the
previous reporting year where just 53% of the
portfolio-level emissions were supported by
primary and/or secondary evidence. As part
of this, Aardvark reviewed where the use of
estimated data for the missing data would be
useful or potentially inaccurate.
The Company continues to prepare for a
reasonable assurance process in the future, with
the assistance of Aardvark, who have provided
valuable feedback regarding the Company’s
carbon emission metrics over the last two years,
supporting ongoing enhancement.
Whilst 26% of the emissions data cannot
be veried at this stage, the reporting and
verication process by Aardvark has led to the
development and identication of further steps
the Company can take to improve this process in
future reporting periods.
The Company also worked with Terra Instinct, an
independent external consultant, to advise on
the data collection project. This included advice
on the ESG data collection approach based on
industry frameworks.
They also conducted an independent review
of the Company’s TCFD disclosures for any
signicant inconsistencies and provided
recommendations for areas where additional
data could be presented.
1. Percentage of data entries for applicable KPIs per ESG area weighted by portfolio value.
2. Air pollutants emitted, water consumption, waste generated/disposed, energy conservation strategies and net habitat gain or loss.
3. Total FTEs, hours worked, satisfaction surveys, absenteeism rates, H&S metrics, community benet fund contribution and key engagement initiatives with local
community/stakeholders.
4. Gender diversity, Board reporting, ISO alignment/certication, green building certicates, governance and regulatory policies in place and audited accounts.
5. Fuel combusted, imported energy use, water, waste, biogenic emissions, mitigated emissions (landll), renewable energy and biogas exported, buildings’ EPC ratings and
energy efciency plans.
6. People housed, school places, hospital beds and renewable energy and biogas exported.
Portfolio data coverage
1
Environmental
2
2023
1
72%
2024
1
77%
5%
Social
3
2023
1
74%
2024
1
73%
(1)%
Governance
4
2023
1
86%
2024
1
80%
(6)%
Impact
6
2023
1
92%
2024
1
94%
2%
Carbon footprint
5
2024
Primary and
secondary data
Estimated data
74%
0%
2023
Primary and
secondary data
53%
Estimated data
31%
No data
26%
No data
16%
67
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Strategic report
Sustainability continued
Responsible Investment continued
The Board promotes a positive dialogue with its key service
providers regarding social and environmental areas. All key
service providers, including the Investment Adviser and the
Administrator, regularly report on their efforts and progress
in areas such as diversity, the environment and social
impact. Service provider initiatives include policies such as
promoting paid rather than unpaid internships, charitable
donations, volunteering days and encouraging low carbon
ofce environments as well as business travel.
B Corp
In April 2024, the Investment Adviser was awarded a B
Corp certication. This involved the Investment Adviser
undergoing a ‘B Impact Assessment’, which measures a
company’s entire ESG performance. To achieve certication,
B Corps must score at least 80 points, with the assessment
evaluating a company’s practices and outputs across
ve categories: governance, workers, community, the
environment and customers. The Investment Adviser started
the process in 2022 and received B Corp certication in April
2024, with a score of 99.4.
Carbon emissions
The Company and the Investment Adviser run their
operations on a carbon-neutral basis to support the
transition to net zero. As part of its corporate social
responsibility, the Board supports the local Jersey charity,
Jersey Trees for Life as well as using their scheme to
offset its carbon emissions from ights to and from the
UK. Whilst not a veried carbon offsetting assurance
scheme, the offsetting benets Jersey Trees for Life,
which is the only charity that is dedicated solely to the
protection and preservation of trees in Jersey. The charity’s
aim is to encourage the protection, preservation and
planting of trees, and to foster an appreciation of trees
through community education for their amenity, ecological
preservation and social importance.
The Investment Adviser’s premises in London hold a BREEAM
‘Excellent’ rating, meaning it scored over 70% in a BREEAM
assessment, which measures the sustainability performance
of buildings. The Investment Adviser encourages the use
of public transport and minimisation of ight travel in its
business travel policy and operates an electric vehicle
scheme and a bike to work scheme.
The Investment Adviser fully offsets its carbon emissions by
contributing to a portfolio which is run by provider Climate
Impact Partners, whose aim is to reduce one billion tonnes
ofCO
2
by 2030.
Whilst the Board and the Investment Adviser do not consider
offsetting to be by any means a perfect solution to the
impact its activities have on the environment, both parties
believe it is a useful starting point. The aim is to reduce
emissions with the intention of continuing to investigate and
follow best practice in this area.
Corporate ESG initiatives
68
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Annual report and nancial statements 2024
Investors in People
In 2022, the Investment Adviser was awarded an ‘Investors
in People’ accreditation. The Investment Adviser has
committed to working with Investors in People over a three
year time frame, with the aim of improving its accreditation
level over that time. It encourages everyone in the business
to reach their potential and provides regular training to
staff, including funding for specic industry qualications.
The Investment Adviser also operates a range of measures
to support the physical and mental health of its employees,
including a private healthcare package and guidance on
healthy working practices.
This year, the Investment Adviser held two training sessions
for employees on improving mental health at work. Italso
offers hybrid working arrangements for all employees.
Investors in People carried out a review of the Investment
Adviser’s progress this year, which involved conducting a
business-wide employee feedback survey and holding focus
groups with a sample of 13 employees across the business.
Thesurvey had a participation rate of 82%. Feedback from
the review indicated a positive shift in transparency across
the business, as well as improvements in leadership. The
review also provided the Investment Adviser with an action
plan which identied areas of improvement and actions that
can be taken to implement this over time.
69
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Strategic report
Sustainability continued
Responsible Investment continued
Volunteering initiatives
The Investment Adviser operates a volunteering initiative
which encourages employees to volunteer for charitable
or not-for-prot purposes by giving an additional two days’
paid leave plus two days’ unpaid leave per year. It continues
to operate its charity of the year scheme, and engage with
fundraising, events and through volunteering. This year,
the charity of the year scheme was split between charities,
including Street Child, Guide Dogs, and Trees for Cities.
A total of 19 employees participated with more than 102
hours spent volunteering. This provided employees with an
opportunity to work as a team and engage with the local
community. The total amount raised for charities this year
was almost £47,000.
Diversity, equity and inclusion
The Investment Adviser has a formal diversity policy, and
holds diversity and equality training for all employees.
The Investment Adviser also carries out an anonymous
questionnaire to help understand the makeup of its
workforce. This means the data can be monitored over time
as the Investment Adviser strives for improvements in DEI,
while also considering specic areas of focus.
Internships
The Investment Adviser also continued its participation in the
10,000 Black Interns programme this year, which offers paid
internship opportunities across more than 25 sectors, along
with training and development opportunities.
The Investment Adviser offered two paid internships as part
of the programme, with both interns working across the
Company. It also facilitated two paid internships for students
as part of the Young Women in Finance programme, as well
as hosting two students for work experience placement
as part of the programme. Young Women in Finance is an
organisation dedicated to the eradication of gender bias
for new graduates entering the nance industry, with a goal
of achieving a 50/50 gender split in graduate recruitment
gures by 2030. One other internship was offered to an ESG
masters student. The interns worked across teams at the
Investment Adviser with a particular focus on the Company’s
climate risk assessment.
Interns conducting a
site visit at Birmingham
Biopower ltd.
Corporate ESG initiatives continued
Ethnic diversity
1
Ethnic group
Prefer not to say 5.6%
Ethnic minority 36.1%
White British 58.3%
Prefer not to say 5.6%
Ethnic minority 36.1%
White British 58 .3%
Gender diversity
1
Gender of employees
Prefer not to say 5.5%
Male 55.6%
Female 38.9%
Prefer not to say 5.5%
Male 55.6%
Female 38.9%
102
Hours spent volunteering
£47,000
Raised for charity
19
Employees volunteered
1. As at 31 March 2024.
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Annual report and nancial statements 2024
Morning:
As an intern at the Investment Adviser, my
mornings are usually occupied with tasks like
summarising initial investment opportunities and
participating in team calls and meetings. These
tasks offer a rst-hand glimpse into the world
of infrastructure investment, which I nd very
exciting. Occasionally, I get the chance to visit
the Company’s assets, which adds a different
dimension to my experience.
Skill building:
Financial modelling is a critical skill in nance,
and the Investment Adviser has a structured
modelling programme in place for interns. This
includes a nancial modelling exercise that I
work on week-by-week. It’s a hands-on way
to enhance my nancial analysis skills and gain
practical experience in asset management.
The team:
One of the highlights of my internship is informal
coffee meetings with team members. These
conversations not only allow me to understand
their career paths and roles within Gravis but
also provide opportunities to assist with any
tasks they might need help with. It’s a dual-
purpose opportunity – learning and contributing
simultaneously.
Regular check-ins:
I have regular catch-up meetings with my
supervisor, where we discuss my current work,
address any questions or challenges I’m facing,
and delve into career-related advice. It’s a
mentorship opportunity that helps me navigate
my internship and future career prospects
effectively.
Presentation:
Towards the end of my internship, I was allocated
time to work on a presentation for the team.
The presentation centred around a regulatory
update that had signicant implications for asset
managers, particularly regarding disclosure
requirements.
In the last week of my internship, I presented to
the entire infrastructure team in a collaborative
session with several questions from the
team. This experience was the highlight of my
internship, as it offered a practical application
of my skills, and allowed me to showcase my
contribution to the team’s knowledge and
efforts in this area. Ialso introduced myself to
the Board of the Company and explained what I
had been working on, which included presenting
myndings.
A day in the life of an intern
71
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Strategic report
Sustainability continued
A. The Board’s oversight of
climate-relatedrisks and opportunities
The Board is responsible for setting and
monitoring the Company’s strategy, which
includes consideration of climate-related risks
and opportunities.
The Board is informed about relevant
climate-related issues as part of the quarterly
reporting cycle by the Investment Adviser and
the Company’s own committees.
The Company’s committees contribute as follows:
— Audit and Risk committee: responsible for
climate-related disclosures and sustainability
risk assessment
— Sustainability committee: developing,
implementing and monitoring ESG policies and
activities
— Investment committee: considering ESG
impacts during the investment due diligence
process
— Management Engagement committee:
ensuring key suppliers operate in a socially
responsible manner
The Sustainability committee formally meets
once a year and engages informally with the
Investment Adviser and other service providers
regularly, including participating in briengs and
new initiatives. It formally reports to the Board
at each quarterly Board meeting. This quarterly
engagement includes relevant training and ESG
updates for the Board, both regulatory and
Company specic.
The Investment Adviser utilises external
consultants as appropriate, and acquires
expertise where needed, including through
recruitment. This year, the Investment Adviser
funded ve ESG-focused internships to support
the work the Board is doing as part of its ESG
processes and to assist the Investment Adviser
with the climate risk assessment and ESG policy.
The internships enabled the Company to benet
from a fresh, more diverse perspective with
enthusiasm and expertise across environmental
matters.
Disclose the organisation’s governance around
climate-related risks and opportunities.
Governance
Compliance statement
The Company has voluntarily and partially
reported against all four core elements of
the TCFD and the eleven recommended
disclosures, taking into account the TCFD
‘Guidance for All Sectors’, as well as the
supplemental guidance for the nancial
sector.
This year, the Company has partially
reported against ‘Strategy (c)’ in respect
of different climate-related scenarios,
including developing its 2ºC or lower
scenario, and has included more physical
risks and improved its data sources.
The Company has omitted to report
against ‘Metrics and Targets (c)’ as the
Company continues to develop and rene
its data collection exercise this year,
including the use of external consultants.
As a debt fund, the Board is committed
to a thoughtful process of establishing
material, accurate and relevant climate-
related metrics and targets. It intends
to continue developing its approach in
the coming years, including its aim of
obtaining reasonable assurance over its
ESG metrics.
For this reason, the Company is not in full
compliance with the TCFD requirements at
this stage. It will continue to work towards
full compliance.
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Annual report and nancial statements 2024
B. Describe management’s role in
assessingand managing climate-related
risks and opportunities
The Investment Adviser has over a decade of
experience in identifying assets with a core
environmental and/or social benet for the
Company. The Investment Adviser’s in-house
expertise includes a Head of Private Credit
who has signicant experience in incorporating
ESG factors into credit ratings. Members of the
investment team also have signicant experience
in sustainable investing. Responsible investment
processes are overseen by the Responsible
Investment committee, which reports to the
board of the Investment Adviser. Further
information is provided on pages 106 to 109.
Climate risks are considered at each stage of
the investment process, including the initial deal
screening of opportunities and investment due
diligence processes. Risk assessment takes the
form of both quantitative analysis and qualitative
assessments which look at the ESG approach of
investee companies.
Environmental impact assessments are carried
out where appropriate as part of the due
diligence process to identify potential transition
and physical short, medium and long-term
impacts on costs and viability across service
providers and investments.
ESG risks are also incorporated in the credit
risk management process. The Investment
Adviser identies relevant ESG risks which
could materially impact the credit quality of
borrowers. The relevance and materiality of
those ESG risks are identied, recorded and
assessed. The Investment Adviser assigns an
ESG risk (low, medium and high) to each loan
to reect ESG risks potentially impacting the
ability and willingness of the borrower to meet
its nancial obligations on a timely basis. The
risk of an asset becoming obsolete because of
the energy transition or physical climate risk
(such as ooding or drought) or governance
without the necessary controls in place, would
becategorised as loans with a high ESG risk.
This information is presented to the
Investmentcommittee as part of the
investmentapproval process with the Board
directly or indirectly addressing climate-related
risks and opportunities when evaluating and
approvingnewinvestments. The Investment
Adviser provides fortnightly, ad hoc and
quarterlyupdates to the Board on asset
performance, including the response of
assetstoclimate events.
Following execution and investment, key relevant
ESG indicators are monitored by the portfolio
management teams. The Investment Adviser
seeks to engage with investors to understand
relevant ESG factors and to manage exposure
torisks.
73
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Annual report and nancial statements 2024
Strategic report
A. Describe the climate-related risks
and opportunities the organisation has
identied over the short, medium and
longterm
The Investment Adviser, through its climate risk
assessment, has identied, based on current
climate conditions, that the portfolio is exposed
to physical risks arising from extreme weather
events; examples include Storm Eunice in February
2022, which caused damage to solar panels
at a solar farm in the portfolio, and increased
rainfall leading to ooding at an anaerobic
digestion plant in the portfolio, which negatively
impacted production at the plant until the end
of 2023. However, the overall nancial impact
of these physical risks to the Company is not
material and various mitigants are in place such
as comprehensive insurance policies which
cover physical damage due to weather-related
events. It is recognised, however, that such
insurance policies may not always be available at
a reasonable cost or at all and physical resilience
or protection of assets is kept under review and
action is taken when it is appropriate.
The Company denes short, medium and
long-term risk time horizons as follows: short
term: zero to three years; medium term: four to
eight years; long term: more than eight years.
When considering materiality, the Investment
Adviser considered the nancial impact each risk
could potentially have on the asset if it were to
materialise. Further information can be found on
pages 76 to 79.
The main short-term physical risk exposures for
the portfolio are water damage and heat stress.
However, there are mitigants in place.
For example, the likelihood of these assets
experiencing damage at the same time is low due
to their geographical dispersion.
The Investment Adviser has also implemented
mitigation plans to strengthen the weather
resistance of certain assets during the year.
Theseinvolved improving drainage across
anaerobic digestion sites and solar farms in the
portfolio to avoid ooding risks. The portfolio
assets have general maintenance regimes in place
for assets to mitigate the impact of weather,
which include applying galvanic paint to prevent
rusting on steel structures. In addition, the
Investment Adviser switched the fuel supply of a
bio-power asset, meaning it can now source fuel
from different waste transfer station locations
to mitigate the impact of a climate event in
one location impacting supply. TheInvestment
Adviserwill continue to monitor and review
mitigation plans to avoid physical damage to the
portfolio assets.
Medium to long term, more frequent extreme
weather may place signicant pressure on
energy infrastructure, including renewables,
and could cause damage to components, power
lines and transmission grids, including potential
disruption to supply chains. Signicant impacts
may arise in the social infrastructure sector,
leading to localised strain on public services,
and the potential closure of facilities. Higher
temperatures may also impact key components
of renewables projects and could also lead to
the overheating of buildings, which can adversely
impact vulnerable people.
The Company is also exposed to transition risks
in the short term from sudden and unexpected
changes to Government policy. An example of this
is the Electricity Generator Levy in the UK, which
taxes certain renewable energy generating assets
until 2028.
In the medium to long term, any policy changes
to the MEES would impact properties in the
social housing sector. The ability to claim MEES
exemption caps the maximum exposure to £10,000
per property. Overall, 49% of the social housing
portfolio has an EPC rating equal to a C or above,
whilst 36% has an EPC rating of D or below, with
the remainder either unavailable or unrated. The
obligation to improve the energy efciency of the
properties below a ‘C’ rating sits with the third
party RPs under fully repairing and insuring leases,
and this will be closely monitored with borrowers.
Sustainability continued
Disclose the actual and potential impacts of climate-related risks
and opportunities on the organisation’s businesses, strategy and
nancial planning where such information is material.
Strategy
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Annual report and nancial statements 2024
An increased focus on the ESG aspects of
the investment process presents signicant
opportunities for the Company. At IPO, ESG
considerations were not as prominent for
investors as they have become in recent years.
Whilst many investment funds and companies are
seeking to quantify and reduce their negative
environmental and social impact, the Company
nds itself in a position where all its investments
have a positive environmental or social
contribution, meaning sustainability is inherent
inthe Company’sportfolio.
As the UK embarks on the largest transformation
of its infrastructure in recent history as part
of the transition to net zero, there will be a
signicant private sector investment requirement
to support this, and public sector support will
be needed across a range of asset classes. The
new Government has pledged to work with the
private sector to double onshore wind, triple solar
power, and quadruple offshore wind by 2030, with
increased spending across the renewable energy
infrastructure sector. The new Government’s
Green Prosperity Plan is set to ‘partner with
businesses’ to invest in ‘industries of the future’,
with the aim of creating 650,000 jobs.
B. Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy
andnancial planning
The primary physical impact of climate change on
the business will be experienced by the Project
Companies the Company lends to: rstly, by
increased operating costs or reduced revenues
due to physical risks materialising.
In many cases, physical mitigation measures
existand there is a degree of contractual
protection built into loan agreements from
theseincreased costs.
Secondly, the credit quality of the Project
Companies may deteriorate. For example,
extreme weather events might materially
increase the cost of insuring some assets,
orthey might make some assets uninsurable.
These impacts, if material, may lead to a
reduction in the valuation of the portfolio.
Regarding the Company’s strategy, the portfolio
benets from its geographic, technological and
market diversication. Conversely, opportunities
may arise which enable the Company to deploy
capital to a wider range of asset classes,
providing further diversication into new
sectorsand thereby increasing revenues.
For nancial planning, one potential transitional
impact of climate change arises from the
increased deployment of renewable power
generation reducing the marginal cost of
electricity and impacting revenue. A mitigating
factor for this is the increased use of direct
PPAs, which will thereby secure steady revenue
streams. The Investment Adviser, on behalf of
the Company, has successfully implemented
a number of these agreements. Further
information on the Company’s electricity price
exposure can be found on pages 52 and 53.
Basedon the climate risk analysis undertaken,
referred to on pages 76 to 79, the Investment
Adviser does not currently propose to make
anychanges to nancial forecasts due to
climaterisk.
C. Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2ºC or lower scenario
The climate change risk assessment carried
out by the Investment Adviser has concluded
that the Company’s strategy is resilient to both
the physical and transition risks associated
with climate change. This year, the Investment
Adviser increased the scope of its 2ºC or lower
scenario to include analysis of changes in
physical risks. In doing so, it has noted resilience
to the identied physical risks associated
with climate change, with heat stress the only
score that increases in a 2ºC or lower global
warming scenario. The other physical risk scores
remained the same. Transition risks were not
included in the assessment, due to difculty in
obtaining independent data points. However,
the Investment Adviser will look to include these
in future climate risk assessments as it works
towards the Company achieving full compliance
with TCFD.
The results of the assessment demonstrated
that whilst there are physical and transitional
risks in the context of the Company’s diversied
portfolio, the nancial impacts were not material.
For example, a storm might generate strong
winds which could have a negative impact on
revenue from wind turbines, causing them to
shut down in stormy conditions, but would not
necessarily have an adverse impact on other
assets in the portfolio, illustrating the resilience
of a diversied portfolio.
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Annual report and nancial statements 2024
Strategic report
A. Describe the organisation’s
processes for identifying and assessing
climate-related risks
The Board of Directors directly or indirectly
addresses climate-related risks and
opportunities when evaluating and approving new
investments, including a climate risk assessment
for each new investment.
As part of the Investment Adviser’s due diligence
process, climate risk assessments are carried
out on each portfolio asset where appropriate.
The Investment Adviser also carries out ongoing
performance monitoring, including asset
site visits by experienced personnel; further
information is given on page 66. Fortnightly
updates and quarterly detailed reports on asset
performance are also provided to the Board.
Climate change has become a key risk faced
by infrastructure investors. The Company
continues to focus on the potential impacts of
climate change and the risk factors associated
with rising global temperatures. As such, the
Investment Adviser has conducted a detailed
portfolio-wide climate risk assessment across
each of the 473 individual assets in the portfolio.
This risk assessment includes an analysis of the
impact of a 2ºC or lower global warming scenario.
The risk assessment considers nine risk factors
divided between physical and transition risks:
— Physical risks: these are events that are
driven by a shift in temperatures and weather
patterns. The assessment considers ve
risks: ood risk; heat stress; water stress;
res and wildres; severe winds and storms.
These events have been chosen based on
their materiality to the overall portfolio.
Refer to the table below for further detail on
materiality.
— Transition risks: these are the risks related to
the transition to a low-carbon economy. Four
areas were considered: policy or regulatory;
technological; market; and reputational risks.
External and internal data points were used to
assess assets in the portfolio. Historic weather
data was used to inform heat stress, water stress
and severe wind. UK Government databases were
used to obtain data for ood risk and wildre
data for all available sites in the portfolio. IPCC
data was used to determine heat stress, water
stress and severe winds in the 2ºC warming
scenario. The Beaufort wind scale was used to
assess the threshold at which wind speeds are
considered high. EPC ratings were obtained from
UK Government databases.
An asset-by-asset assessment was undertaken
internally by the Investment Adviser’s portfolio
management team to consider the specics of
each investment and to understand the overall
exposure to climate change and any mitigating
factors. The results from the risk assessment
form part of the portfolio management
decision-making process and help identify
further mitigation strategies, informing whether
any changes are required to the underlying
nancial forecasts of the Company.
The climate risk assessment was completed by
evaluating the impact and likelihood of a climate
change event happening within the remaining
lifetime of each asset, divided between physical
and transition risks. The risk assessment
scores were calculated by multiplying impact
and likelihood metrics to form a total score for
eachasset.
For physical and transition risk, the impact
metric indicates the nancial impact each risk
could potentially have on the asset. This metric
is scored on a scale of 1 to 5, with 5 being the
highest and 1 having a lower impact.
Each score indicates a specic nancial impact
as shown in the table below:
Score Materiality Impact
5 Signicant >£5 million
4 Major £2 million – £5 million
3 Moderate £501,000 – £2 million
2 Minor £51,000 – £500,000
1 Negligible <£50,000
Sustainability continued
Disclose how the organisation identies, assesses and
manages climate-related risks.
Risk management
76
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The likelihood score for physical risk is based on
past Met Ofce data to determine the probability
of a specic weather event happening, based on
the specic location of the asset.
For transition risk, the likelihood score was rated
between 0% and 100% based on the probability
of a climate event happening within the remaining
lifetime of the asset. This probability was
converted to a score between 1 and 5 to keep
consistency between the physical and transition
risk likelihood scores, seen in the table below:
Probability Score
<5% 1
5% - 15% 2
15% - 25% 3
25% - 35% 4
>35% 5
The impact and likelihood metrics were multiplied
with each other to give a score for each risk
identied, which led to each physical and
transition risk metric being given a total rating
out of 25. These individual ratings were then
weighted by the portfolio valuation of each
asset to give an aggregated score by sub-sector
and sector. A nal rating between 0 and 225
was obtained by combining total physical and
transition risks scores.
The chart on page 78 shows the output of this
process, indicating the sectors that are most
vulnerable to climate change. The placement of
each sector highlights its risk exposure, with a
low risk between 0-33%, medium risk between
33-66% and high risk between 66-100%. Each
sector is plotted based on the risk percentage
for each physical and transition risk.
The chart is based on the weighted average
rating for each sector.
Under physical risks, the biggest exposure is to
res/wildres and water stress. An increase in
the frequency of res/wildres is most likely
to impact the social housing sector, while an
increase in water stress is most likely to impact
the renewables sector.
Wildres are becoming a bigger threat in the UK,
with England averaging 30,000 wildres a year,
according to data from the Forestry Commission.
Water stress is also becoming a bigger issue, with
global warming causing higher rainfall in the UK
and making rising water levels a bigger threat
globally. This year, the Investment Adviser rened
its water stress analysis by mapping assets to
their water providers to see if they were in an
area of stress.
Under transition risks, the portfolio is most
exposed to policy/regulatory change, as well as
technological change. Within the renewables
portfolio, biomass projects account for some
10% of portfolio value and are most likely to be
inuenced by regulatory and market changes.
While the Investment Adviser views the biomass
sector as well placed to benet from the
transition to net zero as a form of low-carbon
baseload power, uncertainty around the possible
participation in the UK ETS along with future
power price caps for renewable generators, is
reected in the regulatory and technological
risk scores. While the new Government included
some provisions in their Autumn Budget for the
introduction of the UK ETS, there is still some
uncertainty about the impact it will have on
portfolio assets.
The Investment Adviser also undertook the
analysis of a 2ºC or lower global warming
scenario on assets in the portfolio. This analysis
concluded that the Company’s strategy is
relatively resilient to the physical risks associated
with climate change.
In the 2ºC scenario, the Investment Adviser
considered changes in the likelihood of the
occurrence of physical climate risks and focused
on the impact of a 2ºC change in likelihood
scores in the physical risk section. Transition
risks were not included due to difculty in
obtaining independent data points, as well as
the assumption that transition risks will not be
impacted in the same way as physical risks in a
2ºC warming scenario. The Company recognises
it has further to go in achieving full compliance
with a 2ºC increased temperature scenario
because of this and is committed to including
transition risk data points in future years.
The likelihood score for heat stress, water stress,
severe winds and wildres in a 2ºC temperature
increase scenario was based on the probability
of each metric occurring, using past Met Ofce
data and UK Government data to determine
the probability of a specic weather event and
applying a multiplier for each physical risk. This
multiplier was based on data from the IPCC,
which is the United Nations body for assessing
climate change. The Investment Adviser
acknowledges this is a different data source than
was used in last year’s assessment; however, it
considers it a more reliable data source from
which to obtain future weather projections.
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Annual report and nancial statements 2024
Strategic report
A. Describe the organisation’s
processes for identifying and assessing
climate-related risks continued
After running the 2ºC scenario, it was determined
that physical risks mostly remained the same,
with the exception of heat stress, which
increased by 0.4 rating points. This has led the
Investment Adviser to conclude the Company’s
strategy is relatively resilient to both the physical
and transition risks associated with climate
change.
The Investment Adviser and the Board recognise
that the prioritisation of climate change requires
a change of Government approach, primarily
through regulation.
Regulatory changes through mechanisms such as
the UK ETS, power price caps, energy efciency
standards and windfall taxes on renewable energy
generators may further impact the portfolio.
Based on the analysis undertaken, the
Investment Adviser does not currently propose
to make any changes to its nancial forecasts
due to climate risk. As detailed on page 74, in the
medium to long term, any changes to MEES for
buildings could impact certain assets, and these
will be closely monitored with borrowers. The
Investment Adviser also intends to closely monitor
the impact of rising global temperatures on its
investments, as the increasing likelihood of rising
temperatures could impact the portfolio, as
evidenced in a 2ºC rising temperature scenario.
The Investment Adviser intends to update the
climate risk assessment on an annual basis.
This year, the Company engaged Terra Instinct,
asustainability advisory rm, to perform a review
of the Company’s TCFD disclosures and climate
risk assessment. The review examined the
Company’s current approach to the climate risk
assessment, providing recommendations on how
it could be improved.
By partially implementing the recommendations,
the Investment Adviser improved the reliability
of its data source for the multiplier in the 2ºC
warming scenario analysis in this year’s reporting.
The Investment Adviser will continue to work
towards implementing further recommendations
in future years.
Sustainability continued
Risk management continued
High
risk
Physical risk Transitional risk
Medium
risk
Low
risk
Flood
risk
Policy/
regulatory
Technology Market Reputation Total
transitional
risk rating
Total
overall
risk rating
Heat
stress
Water
stress
Fires/
wildres
Severe
winds
Total
physical
risk rating
Renewables PPP/PFI Social housing
0%
33%
66%
100%
13.0%
Portfolio physical
risk rating: 13.0%
Portfolio transitional
risk rating: 15.3%
Overall portfolio
risk rating: 13.6%
10.0%
13.0%
17.0%
11.0%
13.0%
21.0%
13.0%
12.0%
Portfolio exposures - climate change risk
78
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The Company will continue to rene its approach
to materiality as the availability, completeness
and accuracy of data improves over time.
Whilst the Investment Adviser has concluded
that the portfolio is exposed to low physical and
transition risk, the climate opportunities for each
asset have not been quantied in this exercise.
This is an area that will be considered further in
future assessments.
The Investment Adviser has identied several
transition opportunities for the Company.
These surround optimisation, expansion and
life extension opportunities for the portfolio
following growing demand for renewable energy
and energy security. This is expected to cause
renewable energy demand to increase, driven
by the decarbonisation of transport and heating
amongst other factors.
While opportunities related to physical and
transition risks have not been quantied to date,
the Board and the Investment Adviser hope to
include these in future reports.
The Investment Adviser aims to continue
improving all areas of its climate risk assessment,
including the data collection process, controls
around this process and creating meaningful
disclosures in order to help monitor and mitigate
exposure to climate change. Areas identied for
improvement include:
— including transition risks in a 2ºC or lower
scenario;
— implementing further recommendations from
Terra Instinct; and
— combining climate opportunities into the
assessment.
B. Describe the organisation’s processes
for managing climate-related risks
The portfolio is diversied across a number of
asset classes and ESG processes are embedded
into investment decision making. The importance
of the Investment Adviser’s engagement and
inuence in helping portfolio companies improve
their ESG performance is crucial. Further
information is given in the risk section on page97.
C. Describe how processes for identifying,
assessing and managing climate-related
risks are integrated into the organisation’s
overall risk management
The way in which the Company manages
risk andprincipal risks and uncertainties is
describedon pages 88 to 96. The Board does
not consider climate-related risk a principal
risk, however it does recognise climate-related
riskasan emerging risk. Refer to page 97 for
further information.
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Annual report and nancial statements 2024
Strategic report
A. Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy and
risk management process
The Investment Adviser includes an assessment
of ESG characteristics in every investment
proposal submitted to the Company’s Investment
committee for approval. Prior to the approval of a
new investment, the Investment Adviser assesses
how the investment rates against relevant ESG
criteria, laid out in an ESG checklist tailored to
the Company. The checklist typically covers the
counterparty’s commitment and capability to
effectively identify, monitor and manage potential
ESG-related risks and opportunities and, to the
extent applicable, the availability of relevant
policies and procedures, alignment with industry
or investment-specic standards and ratings, and
compliance with relevant ESG-related regulation
and legislation. Each asset undergoes a credit
risk assessment that incorporates ESG risk, which
reects the potential for ESG risks to impact the
ability and willingness of the borrower to meet their
nancial obligations in a timely basis.
During the year, the Investment Adviser carried
out a climate risk assessment for each underlying
asset. Further information on the methodology
used to complete the climate risk assessment is
included on pages 76 to 79.
B. Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse gas
emissions and the related risks
As an investment company, the Company does not
have a signicant environmental impact by itself.
With no employees or property and an outsourced
services model, there are no Scope 1 (direct)
and Scope 2 (indirect through power demand)
climate-related emissions to report, and as an
investment fund specically, its Scope 3 (other
indirect) emissions fall under two categories within
Scope 3 as dened by the GHG Protocol:
Category 1: Purchased goods and services
The emissions from services provided by the
Company’s top ten third party service providers
and emissions from travel of the Board. The top
ten third party service providers represent 92%
of the annual expenditure of the Company and
therefore these were deemed the most material
in the context of the Company’s outsourced
service model.
The Company used a supplier-specic approach
whereby expenditure for each service provider is
multiplied by the service provider’s organisational
carbon footprint intensity in tCO
2
e (market-based
Scope 1 and 2 plus upstream Scope 3 emissions)
as disclosed through publicly available data. Using
this approach, the Company was able to report
attributable supplier emissions covering 98% of its
annual spend across nine of its top ten suppliers.
Category 15: Investments
The emissions of the underlying portfolio. As this
is only the third year a detailed data collection
exercise has been undertaken, there are still
plenty of challenges faced in respect to the
availability of the data requested, insofar as the
Company is a debt provider and does not own or
control 94% of assets in the portfolio.
As such, emissions data points were obtained
from 74% of portfolio assets by value. Estimated
emissions data was not used this year, due to the
increase in emissions data collected directly from
portfolio assets. Further steps will be taken to
improve this process in future reporting periods.
The Investment Adviser will continue to liaise
with asset operators to improve and rene the
availability of future ESG data which will continue
to be collected and reported on an annual basis.
Further information on the data collection
exercise can be found on pages 66 to 67.
The Company has measured and disclosed
the emissions from its underlying portfolio in
accordance with the GHG Protocol. Emissions
from investments (Category 15) comprise
proportional Scope 1 and Scope 2 and
limited Scope 3 emissions of the underlying
portfolio and have been allocated based on
the Company’sproportional share of total
enterprisevalue (total equity plus debt)
in accordance with the guidance for debt
investments and project nance.
The Company has not reported total projected
lifetime Scope 1 and Scope 2 emissions of any
new projects nanced during the year. It will
seekto include this information for future years
where possible.
Sustainability 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.
80
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Annual report and nancial statements 2024
Greenhouse gas emissions
The Company has measured its emissions in accordance with the GHG Protocol. An operational control approach was used to dene the organisational
boundary and responsibility for GHG emissions. Emissions have been measured over the twelve month period to 30 June 2024. The period chosen was
tofacilitate data inclusion in the Company’s annual report.
Year ended
30 September 2024
1
Year ended
30 September 2023
1
GHG emissions
Absolute
emissions
tCO
2
e
Portfolio
Scope 1, 2 & 3
Attributable
emissions
tCO
2
e
Portfolio
Scope 1, 2 & 3
Absolute
emissions
tCO
2
e
Portfolio
Scope 1, 2 & 3
Attributable
emissions
tCO
2
e
Portfolio
Scope 1, 2 & 3
Scope 1
Direct GHG emissions – occur from sources that are owned or
controlled by the organisation — — — —
Scope 2
Indirect GHG emissions – occur from the generation of purchased
electricity, heating,cooling and steam — — — —
Energy consumption used to calculate above emissions: /(kWh) — — — —
Total gross Scope 1 and Scope 2 emissions /tCO
2
e — — — —
Scope 3
Category 1, emissions from indirect purchased goods and services 171 171 124 124
Category 15, emissions from investments 43,136 15,948 36,752 13,030
Total gross Scope 3 emissions /tCO
2
e 43,307 16,119 36,876 13,154
Total gross Scope 1, Scope 2 and Scope 3 emissions /tCO
2
e 43,307 16,119 36,876 13,154
C. Describe the targets used by the
organisation to manage climate-related
risks and performance against targets
The Board and the Investment Adviser are
committed to improving the Company’s data
capture and disclosure to help drive more
consistent reporting across the industry. The
Company has continued to make progress
towards achieving full compliance with TCFD
and has expanded its reporting this year to
include more physical risks in its 2ºC or lower
global warming scenario, as well as improving
the reliability of the data used in its 2ºC or lower
scenario.
The Company intends to continue to develop its
approach in relation to targets. However, given
that the Company does not own or control 94%
of the assets in the portfolio, certain challenges
remain around setting climate-related targets at
a portfolio level.
The Company has thoroughly considered the
implementation of the SBTi, particularly regarding
target setting.
However, there is currently no existing guidance
from the SBTi on the infrastructure sector
which assists with formulating targets. Formally
submitting targets comes at a cost to the
Company and it is therefore important to ensure
it is good value for stakeholders. The rst step
is to establish internal targets, and the Company
is in the process of ensuring robust and reliable
data to establish a target base year.
The data collection exercise undertaken this year
continues to provide the Company with useful
portfolio-level data. This allows the Board and
the Investment Adviser to focus on areas that
are material. The data will also assist the Board
in selecting relevant targets to manage risk and
performance and inform other mitigations such
as regular engagement, oversight and review.
The Company also engaged Aardvark, an
independent and external provider, to advise
on potential next steps to enable it to extend
its limited assurance to commission reasonable
assurance of its ESG data collection process in
future years.
In addition, the Company engaged Terra Instinct
to perform a review of the Company’s TCFD
disclosures and climate risk assessment, with
the aim of the Investment Adviser implementing
further recommendations for future periods.
The Investment Adviser runs its operations on a
carbon-neutral basis. The Company is committed
to achieving carbon neutrality by offsetting
emissions generated by business travel,
therefore supporting the transition to net zero.
1. 12 month period to 30 June 2023 or 2024 to facilitate data inclusion in the Company’s annual report.
81
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Annual report and nancial statements 2024
Strategic report
Introduction
Stakeholders are integral to the long-term
success of the Company. They include
shareholders, borrowers, lenders, the public
sector, suppliers and local communities.
As a member of the AIC, the Company reports
against the AIC Code on a comply or explain
basis. Whilst the Company is not domiciled in
the UK, by reporting against the AIC Code, the
Company voluntarily meets the obligations under
section 172 of the UK Companies Act 2006.
The Directors seek to understand the needs
and priorities of the Company’s stakeholders in
accordance with the UK Companies Act 2006. All
Board discussions involve careful consideration
of the longer-term consequences of any
decisions and their implications for stakeholders.
The Board believes that the Company’s key
stakeholders comprise shareholders, borrowers,
lenders, the public sector, suppliers and local
communities. This section sets out why and how
the Company engages with these stakeholders
and the actions taken by it to ensure that their
interests are considered by the Board.
The Board always aims to be fair and balanced in
its approach. The needs of different stakeholders
are considered as well as the consequences of
any long-term decisions.
The stakeholder model on page 83 demonstrates
how the Company interacts with its stakeholders.
These relationships provide the foundation for
the Company’s longevity, which is benecial to
all parties. The Board understands the value
of maintaining a high standard of business
conduct and stakeholder engagement, whilst
also ensuring the Company positively impacts the
environment in which it operates.
The Directors recognise that, both individually
and collectively, their overarching duty is to act
in good faith and in a way that promotes the
success of the Company as set out in section 172
of the UK Companies Act 2006. The Directors
act for the benet of shareholders and in the
interests of stakeholders as a whole, having
regard, amongst other matters, for the likely
consequences of any decision in the long term
onthe following considerations.
Stakeholders
Section 172:
Promoting the success of the Company
The interests of the Company’s employees
The Company has no employees but has close working
relationships with the employees of the Investment
Adviser and the Administrator to which it outsources its
main functions.
Refer to the
stakeholder
engagement
section on pages
83 to 87 and to
the governance
section on pages
100 to 133.
The need to foster the Company’s business
relationships with suppliers, customers
andothers
The Board has a close working relationship with all its
advisers and regularly engages with all parties.
Refer to the
stakeholder
engagement
section on pages
83 to 87.
The impact of the Company’s operations on
the community and the environment
The Company’s activities are benecial to the environment
as they comprise, in part, renewable energy investments
that positively impact the environment and climate change,
regulatory and UK Government targets.
Refer to the
sustainability
section on pages
58 to 81.
The desirability of the Company maintaininga
reputation for high standardsof business
conduct
Under the leadership of the Chairman, the Board operates
with the core values of integrity and impartiality and the
aim of maintaining its reputation for high standards in all
areas of the business it conducts.
Refer to Board
values and culture
in the governance
section on
page111.
The need to act fairly between shareholders
of the Company
The Board actively engages with shareholders and
considers their interests when setting the Company’s
strategy.
Refer to the
stakeholder
engagement
section on pages
83 to 87.
The Board of Directors consider, both individually and together, that they have acted in a way
they consider, in good faith, is likely to promote the success of the Company for the benet of its
members as a whole in the decisions taken during the year as set out below.
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GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
This section sets out why and how the Company engages with
stakeholders and the actions taken to ensure that their interests
are taken into account in the Board’s decision making.
Stakeholder model
Equity
Total returns
Interest
Capital
Products
Payment
Interest Debt nance Project
nance
Financial
guarantees
Society
The Company makes a positive impact through its investments in renewables and assets such as schools
and hospitals which are integral to society.
Shareholders
All investors in the Company,
be they institutional, such
as pension funds or wealth
managers, or retail, such as
private individuals.
Borrowers
Owners of the Project
Companies to which the
Company advances loans.
Public sector
Organisations owned
and operated by the UK
Government that exist to
provide public services
forsociety.
Lenders
Financial institutions and
providers of the Company’s
credit facilities.
Suppliers
Suppliers across the UK
and Jersey who provide
administrative services to
theCompany.
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Stakeholders continued
Why engage
The Company generates earnings that benet shareholders through dividend income. The Board and the
Investment Adviser recognise the importance of engaging with shareholders on a regular basis to maintain a
high level of transparency and accountability, acting fairly and to inform the Company’s decision making and
future strategy.
How the Company engages
The Company, primarily through its Investment
Adviser and brokers, engages in ongoing
communication with its shareholders via market
interactions, analyst and marketing presentations
who regularly provide feedback to the Board.
The feedback received from shareholders during
the course of these interactions is taken into
consideration when setting the future strategy of
the Company and any Board decisions which impact
shareholders.
The Board encourages shareholders to attend and
vote at general meetings of the Company so that
they may discuss governance and strategy with
them and understand their issues and concerns.
The Chairman of the Board and the Chair of each
committee attend general meetings of the Company
to answer any questions posed by shareholders.
The Board recognises that the Company is required
to have its formal shareholder meetings in Jersey,
which may preclude shareholders from attending.
Toaddress this issue, the Company, together with
the Investment Adviser, annually host a ‘Capital
Markets Day’ in London.
This year the event was held in January 2024 and
provided an opportunity for investors to meet
the Board, the Investment Adviser and investee
companies, as well as hearing in greater detail the
work being undertaken to drive value within the
portfolio.
Further information is provided on page 113 and
the presentation from the event is available on
the Company’s website. The Investment Adviser
is planning to hold the next Capital Markets Day in
January 2025. Further information will be published
by the Company in duecourse.
Further communication with shareholders is
achieved through the annual and half-yearly reports,
news releases via the LSE and the Company’s
website. This information is supplemented by the
quarterly calculation and publication of the NAV per
share on the LSE and the publication of a quarterly
factsheet by the Investment Adviser.
The Company’s annual report is dispatched to
shareholders by post (where requested) and is also
available to download from the Company’s website,
together with the half-yearly report. In the annual
report, the Directors seek to provide shareholders
with sufcient information to allow them to obtain
a reasonable understanding of developments
affecting the business and the prospects for the
Company in the year ahead.
Refer to pages 20 to 99 for further information.
Up-to-date information is provided on the
Company’s website.
Shareholders
All investors in the Company,
be they institutional, such
as pension funds or wealth
managers, or retail, such as
private individuals.
Stakeholders: Why and how we engage
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Why engage
The Company values its relationships with borrowers, ensuring time is spent building and maintaining these
relationships. By engaging with borrowers and understanding their needs, the Company can build long-lasting
relationships that are benecial to both parties. Borrower contact enables direct feedback and informs
strategic decision making at the Board level.
How the Company engages
The Company has been able to advance a further
£27.3 million to existing borrowers in the nancial
year under review with a further £0.3 million post
yearend.
The Investment Adviser closely engages with
borrowers on an ongoing basis. Engagement takes
the form of regular interaction with the borrowers
byits dedicated portfolio management team.
Refer to page 66 for further details and information
about site visits carried out during the year.
The Board takes advantage of all available
opportunities to engage with borrowers.
Thisincludes participating in site visits led by
theInvestment Adviser.
How the Company engages
The Board has a close working relationship with all
its advisers and regularly engages with all parties.
The Management Engagement committee regularly
monitors the performance and reviews the terms
of each service contract. This informs decision
making at the Board level in regard to the continuing
appointment of service providers.
The Audit and Risk committee also conducts
an annual review of the internal controls of the
Investment Adviser and the Administrator; this
includes a visit to the ofces of both service
providers. Refer to page 125 for further details.
Why engage
The Company’s suppliers include third party service providers engaged to provide corporate or administrative
services, in addition to the investment advisory services provided by the Investment Adviser. These services
are critical to the ongoing operational performance of the Company. It relies on the performance of third
party service providers to perform its main functions.
Borrowers
Owners of the Project
Companies to which the
Company advances loans.
Suppliers
Suppliers across the UK
and Jersey who provide
administrative services to
theCompany.
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Stakeholders continued
Society
The Company makes a positive
impact through its investments
in renewables and assets such
as schools and hospitals which
are integral to society.
Why engage
Through its investments in renewable energy projects and assets such as schools and hospitals, the
Company’s activities indirectly impact the lives of thousands of people across the UK. The Company is
committed to being socially responsible and the Directors consider community involvement to be an important
part of that responsibility.
How the Company engages
The Company indirectly provides benets to society
through its investment activities, as it contributes
to the generation of renewable energy and provides
nancing for infrastructure that has clear benets
to end users in society.
Investing in renewables, PPP/PFI and social housing
projects indirectly creates job opportunities in
supply chains that benet local communities across
the UK.
Renewables projects not only have a positive impact
on the environment but also have wider benets for
society, for example, improving local communities
through Community Benet Funds.
The Company’s investments in supported living
have funded various social housing projects across
the UK, offering high-quality accommodation
for vulnerable people. The Investment Adviser
is focused on operating to the highest ethical
standard in this area due to the vulnerability of
stakeholders.
Why engage
Governments and regulators play a central role in shaping renewable energy, PFI and social housing sector
policy. Changes in UK Government policy may adversely affect the ability of the Company to successfully
pursue its investment policy and meet its investment objective or provide favourable returns to shareholders.
How the Company engages
The Company engages with local government
and regulatory bodies at regular intervals and
participates in focus groups and research projects
on the infrastructure sector through the Investment
Adviser. UK infrastructure policy informs strategic
decision making at a Board level with consideration
given to the impact the Company has on the sector.
Cost disclosure requirements have impacted the
Company this nancial year; however, positive
developments have been made, with a Statutory
Instrument to remove the requirement for
investment companies to publish ongoing charges
becoming law on 22 November 2024. The Investment
Adviser has been heavily involved in the campaign to
resolve the cost disclosure issue, and it has been a
signicant area of engagement for the Company.
The Company has historically benetted from
co-investment alongside public bodies seeking to
‘crowd-in’ private sector capital and will continue to
seek and evaluate such opportunities. In addition,
the Company supports efforts to mobilise private
capital to promote decarbonisation efforts.
The introduction of a new Government this year has
meant increased focus on the UK’s decarbonisation
targets. In their rst Budget, announced post
year end in October 2024, the new Government
announced their commitment to make the UK a
clean energy superpower. This is benecial for
the Company, as the Investment Adviser has an
extensive track record in the renewable energy
sector, as well as the proven ability to target
emerging sectors. This means the Company is
well placed to benet from increased investment
opportunities associated with the energy transition.
Public sector
Organisations owned
and operated by the UK
Government that exist to
provide public services for
society.
Stakeholders: Why and how we engage continued
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Why engage
The Company’s facilities are used to make investments in accordance with its investment policy. These
arrangements provide the Company with access to exible debt nance, enabling it to take advantage of
investment opportunities as they arise as opposed to holding cash which is awaiting investment. Access to
these facilities is vital for the efcient capital management of the Company.
How the Company engages
Lenders are nancial institutions that provide debt
nance in the form of an RCF. The Company, through
its Investment Adviser, engages with its lenders on
a regular basis, and there is a strong, supportive
long-standing relationship. The Investment Adviser,
on behalf of the Company, has engaged positively
with its lenders during the year.
The Company has in place an RCF with a total
commitment of £150 million, following the renance
of the previous facility in March 2024, where
commitments were reduced from £190 million in
line with the Board’s stated intention of reducing
leverage.
The new facility will expire in March 2027. These
arrangements are anticipated to provide the
Company with continued access to exible debt
nance, enabling it to take advantage of investment
opportunities as they arise, and may also be used to
manage the Company’s working capital requirements
from time to time.
Further details on the Company’s RCF can be found
in note 15 to the nancial statements.
Lenders
Financial institutions and
providers of the Company’s
credit facilities.
Information on key Board decisions during the year and their impact on stakeholders can be found in the
governance section on pages 114 to 115.
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Risk management
Approach to risk management
The Board has the ultimate responsibility for
risk management and internal controls within
the Company. The Board has adopted a risk
management framework to govern how it
identies existing and emerging risks, determines
risk appetite, identies mitigation and controls,
and how it assesses, monitors and measures risk
and reports on risk.
Risk review process
The Board, with the assistance of the Audit
and Risk committee, undertakes a formal risk
review twice a year to assess the effectiveness
of the Company’s risk management process
and internal control systems. During the year,
the Board continued to track its most material
risks (‘A’risks) on a risk matrix showing relative
probability and impact. This allowed the Board
to identify the twelve principal risks facing
the Company, as described on pages 89 to 96.
Additional, less material, risks (‘B’ risks) are
monitored by the Board on a watchlist.
In addition to the Audit and Risk committee, the
Company’s Investment committee, Management
Engagement committee and Sustainability
committee have a key role and contribute to
the overall risk management and governance
structure. Consideration is given to the
materiality of risks in designing systems of
internal control; however, no system of control
can provide absolute assurance against the
incidence of risk, misstatement or loss.
The following are the key components the
Company has in place to provide effective
internal control:
Execution risk
— The Board and the Investment committee have
agreed clearly dened investment criteria,
which specify investment characteristics,
authority and exposure limits.
The Board and the Investment Adviser recognise that risk is inherent
to the operation of the Company and are committed to effective risk
management to protect and maximise shareholder value.
— The Board and the Audit and Risk committee
receive and review assurance reports on
the controls of the Investment Adviser and
Administrator undertaken by a professional
third party service provider.
— The contractual agreements with the
Investment Adviser and other third party
service providers, and their adherence and
ongoing performance, are regularly reviewed
by the Board and at least annually by the
Management Engagement committee.
Portfolio risk
— The Investment Adviser prepares quarterly
reports which allow the Board to assess the
performance of the Company’s portfolio and
more general market conditions.
Financial risk
— The Investment Adviser and the Administrator
prepare nancial projections and nancial
information which allow the Board to assess
the Company’s activities and review its
nancial performance.
— The Company has policies and procedures
in place to ensure compliance with legal and
regulatory requirements which are monitored
by the Board.
Other risks
— The Board monitors the outputs from the
Company’s and the Investment Adviser’s
compliance ofcers.
Emerging risks
— Emerging risks are a standard item on the
Board’s agenda with a continual focus and
scanning of the regulatory horizon to ensure
early awareness and engagement.
— Climate risk is now a key consideration for
the stability of future risk-adjusted nancial
returns, with both physical and transition risks
considered.
— The Board, through its Sustainability
committee, directly or indirectly addresses
climate-related risks and opportunities when
evaluating and approving new investments,
including an ESG risk and impact assessment
completed for each new investment.
— More details on how the Board of Directors
identies, assesses and manages emerging
risks, including climate change risk, is provided
on page 97.
Risk appetite
As an investment company, the Company seeks to
take investment risk. The Company’s investment
policy on pages 26 and 27 sets out the key
components of its risk appetite. The Company
and the Board seek to manage investment
risk within set risk and return parameters.
Information on the Investment Adviser’s view on
current asset risk characteristics for each risk
sector is included in the Investment Adviser’s
report on pages 35 and 36.
Role of the AIFM
The Investment Adviser is the appointed AIFM
to the Company and is required to operate
an effective and suitable risk management
framework to allow the identication, monitoring
and management of the risks to which the
Investment Adviser and the AIFs under its
management are exposed.
The Investment Adviser’s permanent risk
management function has a primary role
alongside the Board in shaping the risk policy of
the Company. It also has responsibility for risk
monitoring and risk measuring to ensure that the
risk level complies with the Company’s risk prole
on an ongoing basis.
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Annual report and nancial statements 2024
Category 1: Execution risk
Risk Impact How the risk is managed
Change in residual
riskover the year
1
Investment due diligence
Investment due diligence may
not reveal all the facts relevant
to an investment and may not
highlight issues that could affect
that investment’s performance.
This risk is likely to be greater in
new investment sectors such as
geothermal, hydrogen storage,
forestry and electric vehicles.
Link to strategy:
1
3
If an investment underperforms
relative to expectations, the
interest and principal received
on the investment may be lower
than envisaged, negatively
impacting the performance of
the Company.
In addition to due diligence
carried out by the Investment
committee of the Board and
the Investment Adviser, various
third party nancial, technical,
insurance and legal experts are
engaged to advise on specic
project risks.
Stable
The current macro-economic
environment is uncertain, and
the future outlook for ination
and interest rates is difcult to
predict with accuracy; however,
the Board does not intend to
increase this risk from its existing
heightened level.
2
Availability of suitable
investments and reinvestment risk
There is no guarantee that the
Company will be able to identify
suitable investments with risk
and return characteristics that
t within the investment strategy
of the Company. Where suitable
investments can be identied, the
Company may face competition in
closing a transaction. This is a risk
when raising capital and reinvesting
capital repaid to the Company
under existing loan agreements.
Link to strategy:
1
2
3
If the Company cannot invest
capital in suitable assets in a
timely and appropriate manner,
the uninvested cash balance
will have a negative impact on
the Company’s returns. If the
only available investments with
an appropriate risk prole yield
lower rates of return than have
historically been achievable,
the Company’s overall returns
may be adversely affected.
Furthermore, if loans are
prepaid earlier than expected,
the repayment of capital is
accelerated, leading to a
potential cash drag. Ultimately,
this risks the sustainability of
the dividend.
The Investment Adviser is
constantly engaging with the
market, seeking new deals, and
building a specically identied
investment pipeline before
the Company seeks to raise
additional capital in order to
ensure that it is deployed in a
timely fashion. Consideration
is also given to any scheduled
capital repayments.
Increased
Notwithstanding the current
capital allocation policy, the
Investment Adviser continues
to explore future investment
opportunities, and the value
of the pipeline has increased
relative to available funds.
The principal risks faced by the Company detailed below are categorised under
theheadings of execution risk, portfolio risk, nancial risk
1
and other risks.
1. The principal nancial risks, the Company’s policies for managing these risks and the policy and practice with regard to nancial instruments are summarised in note 19.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
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Annual report and nancial statements 2024
Category 1: Execution risk continued
Risk Impact How the risk is managed
Change in residual
riskover the year
3
Reliance on the
InvestmentAdviser
The Company is heavily reliant on
third party service providers to
carry out its main functions. In
particular, the Company depends
on the Investment Adviser and the
expertise of its key personnel and
staff to implement the Company’s
strategy and investment policy,
to deliver its objectives and to
maintain sufcient day-to-day
oversight of investments. Should
any key personnel leave the
employment of the Investment
Adviser and it is unable to recruit
other individuals of similar
experience and credibility, this
may have a negative impact on
the performance of both the
Investment Adviser and the
Company.
The Company is also reliant on the
effectiveness of the Investment
Adviser’s control environment.
Link to strategy:
1
3
Failure by the Investment
Adviser to carry out its
obligations in accordance with
the terms of its appointment,
or to exercise due skill and
care, could have a material
effect on the Company’s
performance. Any poor
performance, misconduct
or misrepresentation by
the Investment Adviser
may manifest itself in direct
nancial losses or result in
damage to the Company’s
reputation, having longer-term
nancial consequences on the
Company’s performance.
The performance of the
Investment Adviser is monitored
closely by the Board. In addition,
the Management Engagement
committee performs a formal
review process at least once
a year, which considers the
ongoing performance of
the Investment Adviser. The
Audit and Risk committee also
conducts anannual control
review.
The Investment Adviser has
industry and asset knowledge
of specic use and importance
to the Company. The Company
has entered into a contractual
agreement with the Investment
Adviser on terms that it
considers to be mutually fair
and reasonable. The Investment
Adviser monitors its key
personnel to ensure that their
experience ts the role and
proper training is provided
for continued professional
development.
The Investment Adviser obtains
assurance of its controls
processes annually through
the completion of an ISAE3402
audit by external auditor,
Deloitte LLP.
Stable
The Investment Adviser continues
to provide adequate resources
and act with due skill, care and
diligence in its responsibilities as
Investment Adviser and AIFM to
the Company.
The Company’s shares continue
to trade at a signicant discount
to NAV, in line with the wider
market, which means that new
investment deals are not being
prioritised. The Investment
Adviser is following the Board’s
capital allocation policy before
considering new investments.
The relationship between the
Investment Adviser and the
Board remains strong, open and
collaborative and the Directors
gain additional comfort from
the fact that the Investment
Adviser is part of the wider ORIX
Corporation group, a global
nancial services company.
Risk management continued
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
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Annual report and nancial statements 2024
Category 2: Portfolio risk
Risk Impact How the risk is managed
Change in residual
riskover the year
4
Changes in laws, regulations
and/or UK Government policy
impacting investments
Changes in laws, regulations and/or
UK Government policy, in particular
those relating to the PPP/PFI and
renewable energy markets, may
have an adverse effect on the
Company.
Link to strategy:
1
2
3
Potential adverse effect on the
performance of the Company’s
investment portfolio and
the returns achieved by the
Company.
Price capping or other
intervention in the energy
market may impact returns.
Reduced support for
private sector nance of
infrastructure and/or a material
change in the approach to
infrastructure delivery (such
as nationalisation) represent
risks to the Company’s ability to
reinvest capital.
Any changes in laws, regulations
and/or policy, or the application
thereof, are monitored by the
Board on an ongoing basis.
The Investment Adviser
engages with industry bodies
to understand and inuence
Government policy options.
Given the UK Government’s
reliance on private capital
for, inter alia, the funding
of new social and economic
infrastructure and renewable
energy projects, it is the view of
the Investment Adviser and the
Board that, despite potential
short-term intervention in the
energy market, the risk of any
future signicant changes in
policy is low and is more likely
to have a prospective impact
rather than a retrospective
effect.
Stable
The implementation of the
Electricity Generator Levy in
January 2023 has impacted
the short-term protability of
certain assets in the portfolio.
The levy will be in place until
31March2028.
The new Government is expected
to increase action around
climate policy as it prioritises
decarbonisation and the
transition to net zero.
5
Performance of, and
relianceon, subcontractors
The performance of the
Company’s investments is typically
dependent on the performance
of subcontractors, most notably
facilities managers and operations
and maintenance subcontractors.
The Company is heavily reliant on
subcontractors to carry out their
obligations in accordance with the
terms of their appointment and to
exercise due skill and care.
Link to strategy:
1
2
If a key subcontractor was to be
replaced due to the insolvency
of that subcontractor or for any
other reason, the replacement
subcontractor may charge a
higher price for the relevant
services than previously paid.
The resulting increase in costs
may result in the Company
receiving lower interest
and principal payments than
envisaged.
The competence and nancial
strength of subcontractors, as
well as the terms and feasibility
of their engagement, are a
key focus of investment due
diligence. The Board and the
Investment Adviser monitor
the Company’s exposure
to any given subcontractor
and ensure that the risk of
underperformance is mitigated
through diversication.
Stable
The concentration of credit risk
to any individual project did not
exceed 10% of the Company’s
portfolio at the year end, which is
the maximum amount permissible
per the Company’s investment
policy. Notwithstanding these
issues, there has been no
evidence of insolvency indicators
in the subcontractor group.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
Strategic report
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Category 2: Portfolio risk continued
Risk Impact How the risk is managed
Change in residual
riskover the year
6
Technological, operational
orconstruction issues
The Company’s investments are
exposed to construction and/or
operational risks or utilise relatively
new or developing technologies
and may not perform as expected.
Over the life of a project,
components of a project may need
to be replaced or undergo a major
refurbishment; these costs may be
higher than projected. Operational
risks also include cyber risks.
In addition, climate change, in
the form of changes to weather
patterns, can also have an impact
on assets in relation to their
operation and/or construction,
especially in relation to wind and
solar assets.
Link to strategy:
1
3
In the event of material
operational or construction
issues, the interest and principal
payments received by the
Company may be lower than
expected or forecast and/
or additional costs may be
incurred.
The Investment Adviser
undertakes extensive due
diligence on all projects
regarding expected
performance. A full package of
insurance and manufacturer
guarantees is put in place to
protect the Company from
unforeseen events. The Board
ensures that the Company
has security over the assets
against which it is lending, so
in the instance of a borrower
default it can enforce security
over the assets and implement
performance improvement plans.
The Investment Adviser’s
dedicated portfolio
management team monitors the
performance of investments on
an ongoing basis. Monitoring
takes the form of regular
interaction with borrowers,
including periodic site visits
to the underlying assets. The
Investment Adviser reports to
the Board on asset performance
on a quarterly basis.
Increased
The Company continues to face
challenges in its gas-to-grid
anaerobic digestion projects in
Scotland, representing 4.4% of
the portfolio. Signicant progress
has been made, completing
grid upgrade works to provide
a more reliable method of
injecting biogas into the gas grid
and reducing the likelihood of
curtailment.
Construction exposure was
1% at 30 September 2024
(30September 2023: 1%).
Risk management continued
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
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Category 3: Financial risk
Risk Impact How the risk is managed
Change in residual
riskover the year
7
Valuation
The value of the investments
made by the Company will change
from time to time according to a
variety of factors, including actual
and anticipated movements in
energy prices, interest rates,
ination and/or discount rates and
general market pricing of similar
investments.
The Company makes investments
which rely on detailed nancial
models based on certain
assumptions, estimates and
projections of each investment’s
future cash ow. Such assumptions
include, inter alia, ination, power
prices, interest rates, feedstock
costs, asset productivity, taxation,
lifecycle and insurance costs.
There is a risk these assumptions
may be incorrect.
Link to strategy:
3
Such changes to valuations
may negatively impact the value
of the Company’s investment
portfolio.
There can be no assurance that
assumptions will turn out to be
accurate, and actual data could
have an adverse impact on the
performance of the Company’s
investments.
Errors may occur in the
calculation of an investment
valuation with a potential
corresponding impact upon the
Company’s published nancial
statements.
The Company’s infrastructure
investments are generally
low volatility investments
with stable, pre-determined,
long-term, public sector backed
revenues. Nearly half of the
Company’s investment portfolio
is exposed to some form of
ination protection mechanism.
The Company’s investments
are valued by an independent
Valuation Agent with reference
to duration-matched interest
rates, typically between 15 and
25 year rates. The discount
rates currently used to value the
Company’s investments include
a premium to the risk-free rate
that offers protection in the
event of raterises.
When modelling future cash
ows and structuring debt
proles, the Investment Adviser
uses assumptions considered to
be conservative by third party
experts. The Investment Adviser
constantly monitors the actual
performance of projects and
takes action where appropriate.
Stable
The Company is exposed to a
number of shareholder interests,
6% of the portfolio by value (a
reduction of 3% compared to the
prior year) either as a result of
the specic targeting of these
positions or through enforcing
its security as a result of the
occurrence of defaults. Such
exposures are more sensitive
to changes in market factors,
such as electricity prices, and
the operational performance of
projects, and are therefore likely
to result in increased volatility in
the valuation of the portfolio.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
Strategic report
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Risk management continued
Category 3: Financial risk continued
Risk Impact How the risk is managed
Change in residual
riskover the year
8
Company liquidity and
balancesheet risk
The Company requires cash ows
from investment income and loan
repayments to fund its investment
activities.
The Company utilises borrowing
facilities to nance and/or
part-nance further acquisitions
in accordance with the Company’s
investment policy. However, there
can be no guarantee that any
such facility will be available to
the Company on commercially
acceptable terms or at all.
Link to strategy:
1
If the Company is unable to
secure borrowing facilities
this may adversely affect the
Company’s investment returns
and may have a material adverse
effect on the Company’s
nancial position and its
operating results.
The RCF has historically been
in place to fund potential
investments in the near term
and to avoid holding material
amounts of uninvested
cash awaiting investment.
Consideration may also be given
to other forms of credit as part
of the Company’s future funding
strategy. Through the use of
forecasting and modelling
techniques, the Investment
Adviser has the capability to
plan in advance the sale of
assets if required for liquidity
purposes.
Decreased
The Board and the Investment
Adviser continue to pay close
attention to cash ow modelling
and cash cover to nance
acquisitions and to pay dividends.
During the year, the Company
disposed of its interest in loan
notes secured against Blackcraig
Wind Farm. The disposal
occurred at a 6.4% premium to
the valuation of the project at
31 March 2024. The Investment
Adviser, on behalf of the
Company, continues to progress
a number of additional disposal
opportunities.
The Company reduced its RCF
from £190 million to £150million
and has repaid amounts of
£47million in line with the Board’s
stated intention to reduce
leverage by the end of2024.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
94
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Category 4: Other risks
Risk Impact How the risk is managed
Change in residual
riskover the year
9
Litigation or legal risk
Litigation or legal action either by
the Company or against it or its
assets, which involve legal costs,
management time and resources
with potential asset impairment
consequences, notwithstanding
possible mitigation through
insurance schemes.
The Company is required to
disclose material litigation
to shareholders and/or the
Company’s regulators.
Link to strategy:
1
3
Any material legal claims or
regulatory action against the
Company or its underlying
assets may adversely damage
the Company’s reputation and
affect the Company’s ability
to successfully pursue its
investment policy, meet its
investment objective and/or
provide favourable returns to
shareholders.
The Board is kept informed
by the Investment Adviser
regarding any litigation or
regulatory action relating to
the portfolio. If necessary, a
sub-committee of the Board
is constituted to oversee a
specic matter.
Insurance regarding
representations and warranties
is considered on its merits by
the Investment Adviser for each
transaction.
Stable
Previously disclosed litigation and
regulatory proceedings regarding
a number of solar assets have
continued to progress during the
year. Further details are set out in
the Investment Adviser’s report
on page 44.
10
Geopolitical
Risk of a sustained shift in the
geopolitical environment. For
instance, international conict,
a winding back of globalisation,
trade wars and the desire to be
more self-sufcient in energy, and
increased migrant ows.
Link to strategy:
1
2
3
Impacts on supply chains,
ination, interest rates,
and adverse exchange rate
movements. Potential volatility
on long-term power prices
affecting the Company’s
exposure to shareholder
interests. Increase in the
volume of capital owing into
infrastructure and renewable
projects creating downward
pressure on yields and difculty
in sourcing investments
within the required risk return
parameters of the Company’s
investment strategy. Potential
for increased uncertainty
around investment valuations if
Government subsidy or support
is unpredictable.
Regular engagement with
the public sector through
the Investment Adviser. The
Investment Adviser conducts
quarterly reviews on important
and/or emerging topics for
the Board’s consideration.
Monitoring of key emerging
issues is undertaken by the
Directors on an ongoing basis.
Stable
The world remains turbulent, with
the ongoing war in Ukraine and
unrest in the Middle East. This is
balanced by a new Government
in the UK who are committed to
making the UK a clean energy
superpower as set out in their
Autumn Budget. This is set to
increase energy security in the
UK and promote investment in the
renewable energy sector.
The Board does not consider that
this risk needs to be increased
from its existing heightened
level. The Board, along with the
Investment Adviser, continues
to closely monitor the impact of
these issues on the portfolio.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
Strategic report
95
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Category 4: Other risks continued
Risk Impact How the risk is managed
Change in residual
riskover the year
11
Share price discount
1
or
premium
1
to NAV
The Company’s share price
discount to NAV will persist and
widen to a signicant level, or will
remain at an insufciently large or
consistent premium
1
.
Link to strategy:
1
2
3
A signicant discount
1
may
prevent the Company raising
more capital. If the Company
is unable to secure further
capital for investment, this may
adversely affect the Company’s
ability to achieve its investment
policy and strategy and/or
maintain a diversied portfolio
of investments.
The level of discount that the
Company’s shares are trading at
has meant that buybacks have
become an attractive option
from an investment point of view
relative to other opportunities.
Consequently, during the year,
the Company has continued its
share buyback programme. The
decision to buy back shares is
subject to ongoing evaluation
by the Board of the Company’s
share price, the investment
pipeline and the available cash
resources of the Company.
The level of discount relative
to the NAV per share is closely
monitored by the Board.
Stable
The Company’s shares have
traded at an average discount
1
of 32.4% during the year and an
average premium of 3.8% since
IPO. The level of share price
discount
1
is closely monitored by
the Board.
The Company is executing on
its capital allocation policy with
progress made to date, which is
expected to enhance earnings
per share and dividend cover
going forward.
12
Strategic positioning
The Company’s shares are trading
at a persistent discount
1
to NAV.
In this environment there is a
strong argument to prioritise de-
levering and buying back shares
over making any new investments.
The Board has to determine the
right balance and set the strategy
accordingly. Shareholders may
disagree with the strategy, or it
may not work as intended.
Link to strategy:
1
2
3
Implementation of the wrong
strategy or poor execution of
it will damage sentiment in the
Company, exacerbating the
discount
1
.
The Board is prioritising the
allocation of capital to pay
down the balance drawn under
its RCF alongside the buyback
of shares. Select sales of
portfolio assets are also under
consideration. At the same
time, the Investment Adviser
continues to develop a pipeline
of new investment opportunities
and is considering the renance
of existing positions to improve
returns and/or reduce risk,
whilst acknowledging the
current high hurdle for new
investment.
Stable
The Board and the Investment
Adviser are working closely to
address the discount at which
the shares trade through the
execution of the capital allocation
policy.
Risk management continued
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
96
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Annual report and nancial statements 2024
Emerging risks
Emerging risks need to be managed differently than ‘business as usual’ risks. Emerging risks are, by their nature, more challenging to identify, assess and
manage. There is a lack of data to assess and to base the risk response on. The relevant emerging risks for the Company are described below. Emerging
risks is an area the Board will continue to consider.
Emerging risks
Risk Impact How the risk is managed
Change in residual
riskover the year
1
Climate change
a) Physical
Higher frequency and severity of
extreme weather conditions, for
example intense heat waves, storm
surges and higher water levels on
coasts.
If renewable assets are
damaged by extreme weather
events, with the subsequent
inability to connect to the grid,
or suffer reduced availability,
this would impact revenue.
The portfolio is diversied
across a number of asset
classes and physical locations
and ESG processes are
embedded in investment
decision making. The Investment
Adviser has a Responsible
Investment policy and a
Responsible Investment
committee to monitor and
implement ESG initiatives.
Environmental impact
assessments are carried out
as part of the due diligence
process. The Investment
Adviser also carries out ongoing
performance monitoring,
including site visits by
experienced personnel. Regular
fortnightly updates, ad hoc and
quarterly detailed reports on
asset performance are provided
to the Board.
Stable
The Board considers this a
long-term issue; the impact of
climate change on the Company’s
portfolio will continue to be
closely monitored by the Board,
the ESG committee and the
Investment Adviser.
During the year, the Investment
Adviser carried out a climate
risk assessment for each
underlying portfolio asset as
part of its TCFD disclosures to
assess the actual and potential
impacts of climate-related risks
and opportunities across the
portfolio. The analysis considered
both physical and transition
risks for each asset. Further
information is given on page 73.
2
Climate change
b) Transition
Risks associated with the
long-term trends arising from
climate change and the energy
transition it requires. This includes
increasing regulation, insurance
availability and price, government
inertia or over-reaction,
failure of business models, and
changing consumer and business
preferences.
Increased focus on sustainability
and ESG factors amongst
governments, regulators,
shareholders and the wider
community. Any associated
consequences arising from this
risk, such as regulatory or legal
sanctions including nancial
and reputational damage.
Governmental availability,
sufciency and consistency of
support mechanisms to enable
the transition to a low carbon
economy. Potential increase in
costs to the Company.
The Board is focused on this
area. Compliance with both
new and existing reporting
requirements and best practice
is managed by the Investment
Adviser and monitored by the
Audit and Risk committee and
the Sustainability committee.
Stable
The new Government is expected
to increase action around
climate policy as it prioritises
decarbonisation and the
transition to net zero.
However, Government climate
policy, transition planning
frameworks, and standards of
best practice are all nascent and
will continue to evolve for some
time.
The Sustainability committee
and the Investment Adviser will
continue to monitor and assess
the impact of these policies on
the investment portfolio and the
Company as a whole.
Key to strategy references
1
Dividend income
2
Diversication
3
Capital preservation
Strategic report
97
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Risk management continued
Going concern assessment and viability statement
Going concern
The Directors have considered the nancial
prospects of the Company for the next
twelve months and made an assessment of
the Company’s ability to continue as a going
concern. The Directors’ assessment included
consideration of the availability of the Company’s
RCF, hedging arrangements, cash ow forecasts
and stress scenarios.
The Directors are satised that the Company
has the resources to continue in business for
the foreseeable future and are not aware of any
material uncertainties that may cast signicant
doubt upon the Company’s ability to continue as
a going concern.
Viability statement
At least twice a year, the Board carries out a
robust assessment of the principal and emerging
risks facing the Company, including those
that may threaten its business model, future
performance, solvency and liquidity.
The Directors have considered each of the
Company’s principal risks, detailed on pages
89 to 96, that could materially affect the cash
ows of the underlying projects that support the
Company’s investments.
The potential impact of a further increase in
power prices and, in particular, the consequent
cash requirements of the Company’s hedging
programme, have been considered in the context
of each project in the portfolio.
The Directors also considered the Company’s
policy for monitoring, managing and mitigating its
exposure to these risks.
The Directors have assessed the prospects
of the Company over a longer period than the
twelve months from the date of signing the
report required by the going concern provision.
The Board has conducted this review for a period
covering the next ve years as, over this period,
it believes the risk of changes in UK Government
policy that would result in retrospective
adjustments to public sector backed cash ows
is low.
This assessment involved an evaluation of the
potential impact on the Company of these risks
occurring. Where appropriate, the Company’s
nancial model was subject to a sensitivity
analysis involving exing a number of key
assumptions in the underlying nancial forecasts
in order to analyse the effect on the Company’s
net cash ows and other key nancial ratios.
The assumptions used to model these scenarios
included:
— an increase in the cost of debt by 3% over the
all-in margin or operating expenses of 50%;
— the impact of a signicant proportion of the
portfolio, 50%, not yielding, which is a worst
case scenario and would require a number of
the principal risks materialising in parallel; and
— the potential impact of a short-term increase
in electricity prices over the period to
maturity of the nancial derivatives by a
99% worst case scenario and, in particular,
the consequent cash requirements of the
Company’s hedging programme.
98
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Alongside this analysis, reverse stress testing
was carried out in order to further assess the
Company’s viability.
The sensitivity analysis was based on a number of
assumptions, including that the Company’s RCF
is renanced in advance of the date of expiry
if required, and it remains in place to provide
short-term nance.
Given the projects that the Company’s
investments are secured against are all
UK infrastructure projects that generate
long-dated, public sector backed cash ows,
the Board considers the revenue of the
Company over that period to be dependable.
This is supported by a diversied portfolio
of investments, reducing exposure to risks
affecting a single sector.
Additionally, the Company primarily invests in
long-dated UK infrastructure debt that earns
a xed rate of interest and is repaid over time
according to a pre-determined amortisation
schedule. As such, assuming that the underlying
projects perform as expected, the Company’s
cash inows are predictable.
Based on this assessment of the principal
risks facing the Company, stress testing and
reverse stress testing undertaken to assess
the Company’s prospects, the Directors have a
reasonable expectation that the Company will
be able to continue in operation and meet its
liabilities as they fall due over the ve year period
of assessment.
Approval
The strategic report has been approved by the
Board and signed on its behalf by:
Andrew Didham
Chairman
11 December 2024
Strategic report
99
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Governance at a glance
Pages 102 and 103
Board of Directors
Pages 104 and 105
The Investment Adviser
Pages 106 to 109
Board leadership and purpose
Pages 110 to 115
Division of responsibilities
Pages 116 to 118
Composition, succession
andperformancereview
Pages 119 to 121
Audit, risk and internal control
See the Audit and Risk committee report on pages 122 to 125,
risk management disclosures on pages 88 to 97 and the
nancial statements on pages 134 to 169
Remuneration
See the Directors’ remuneration report on pages 126 to 130
Directors’ report
Pages 131 to 133
Governance
What’s in
the section
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
100
Each year the Board holds an annual strategy day
to look back over the previous twelve months
and compare it with the agreed strategy, and
to consider the strategic proposal for portfolio
management activities over the next twelve
months, with a keen focus on the resolution of
issues.
Holding the annual strategy day is benecial
for the Company, as it fosters a unied vision,
facilitates in-depth strategic planning and
enhances Board member engagement. It allows
for focused discussions on both short-term
and long-term goals, investment/divestment
opportunities and enablers for growth, ensuring
alignment among Board members and the
Investment Adviser.
This year the meeting was held in November2024,
key topics discussed included a review of the
current strategic plan, analysis of sales strategy
and investor engagement, portfolio enhancements
and optimisation, new sectors, and innovation
and growth opportunities. This concentrated
effort helps sharpen the strategic focus of the
Company and drive its organisational success.
Details of the activities undertaken by the Board
in relation to its stakeholders can be found in the
stakeholders section on pages 82 to 87.
Annual strategy day
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
101
1. Senior positions including Chairman and Senior Independent Director.
2. Refer to page 120 for further information.
Governance at a glance
The Company’s governance framework promotes transparency, accountability and
responsible decision-making, ensuring long-term value creation for shareholders.
Board gender diversity
Female 33%
Male 67%
Gender diversity in senior positions
Female 50%
Male 50%
100%
Percentage of Board
independence
Read more on page 120
Read more on page 120
Read more on page 120
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
102
Board roles
Senior
Independent
Director
1
Chair 1
NED
4
17%
Board members from
minority ethnicbackground
Board age diversity
61-70 1
51-60 5
40-50 0
Read more on page 120
Non-executive Director tenure
Director 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years
Andrew Didham
Julia Chapman
Michael Gray
Steven Wilderspin
Dawn Crichard
Alex Yew
Number of meetings held during the year
Meeting No. of meetings
Quarterly Board 4
Ad hoc Board 5
Investment committee 7
Audit and Risk committee 4
Sustainability committee 1
Nomination committee 2
Management and Engagement committee 1
Total number of meetings held in the year 24
100%
Directors’ attendance
atmeetings
Read more on page 118
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
103
Board of Directors
Andrew Didham
FCA
Chairman and Chair of the Nomination
committee
Andrew Didham, a UK resident, is a Fellow of the
Institute of Chartered Accountants in England and
Wales. A senior executive director with extensive board
level experience in the Rothschild Banking group, Mr
Didham was group nance director for 16 years and a
member of the group management of the worldwide
Rothschild business, comprising investment banking,
wealth management, asset management and merchant
banking activities. He serves on the boards of IG
Group Holdings plc and Shawbrook Group plc as a
non-executive director and audit committee chairman.
Within Rothschild, he remains an executive vice
chairman, presently on a part-time basis. Formerly, he
served as a non-executive director of Charles Stanley
plc and Jardine Lloyd Thompson Group plc and, prior
to joining Rothschild & Co, was a partner in the London
ofce of KPMG with responsibility for the audit of a
number of global nancial institutions and assignments
for various government and regulatory authorities.
Skills and experience:
Banker and Chartered Accountant with extensive
boardexperience, strong leadership skills and a
wealthof nancial knowledge, particularly in relation
todebt nancing.
Date of appointment:
17 December 2021
Julia Chapman
Senior Independent Director
Julia Chapman, a Jersey resident, is a qualied solicitor
in England, Wales and Jersey with over 30years’
experience in the investment fund and capital markets
sectors. Having trained with Simmons & Simmons in
London, Ms Chapman moved to Jersey to work for
Mourant duFeu & Jeune (now known as Mourant) and
became a partner in 1999. Following the acquisition of
Mourant’s fund administration business by State Street
in April2010, Ms Chapman was appointed senior counsel
at State Street, heading up a team supporting State
Street’s European alternative investment services
division. In July 2012, Ms Chapman left State Street to
focus on the independent provision of directorship and
governance services to a small number of alternative
investment fund vehicles. Ms Chapman serves on the
boards of two other Main Market listed companies,
Henderson Far East Income Limited and BH Macro
Limited, and The International Stock Exchange (the
shares of which arelisted on its own exchange).
Skills and experience:
Qualied solicitor with extensive legal, governance
andregulatory risk expertise in the funds and capital
market sectors.
Date of appointment:
1 October 2015
Michael Gray
FCBI, AMCT, DIP IoD
Chair of the Investment committee
Michael Gray, a Jersey resident, is a qualied
corporatebanker and corporate treasurer. Mr Gray
was most recently the regional managing director
of corporate banking for RBS International, based
in Jersey, with responsibility for the Royal Bank of
Scotland’s corporate banking business in the Crown
Dependencies and British Overseas Territories. In a
career spanning 31 years with the Royal Bank of Scotland
Group plc, Mr Gray has undertaken a variety of roles,
including that of an auditor, and has extensive general
management and lending experience across a number
of industries. He is also a non-executive director of LSE
listed companies JTC plc, EPE Special Opportunities
Limited, Foresight Enterprise VCT plc and TEAM plc.
Skills and experience:
Qualied corporate banker and corporate treasurer,
with signicant experience in banking, nance
and corporate governance in both the private and
publicsectors.
Date of appointment:
1 October 2015
The Board of Directors is responsible for the effective leadership of the
Company’s activities in order to ensure its long-term success is in the
interest of stakeholders.
104
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Steven Wilderspin
FCA, IMC
Chair of the Audit and Risk committee
Steven Wilderspin, a Jersey resident, is a Fellow of
theInstitute of Chartered Accountants of England
and Wales. He has acted as an independent director
of a number of public and private investment funds
and commercial companies since 2007. Mr Wilderspin
serves on theboards of three other Main Market listed
companies: he is a non-executive director and chair of
Blackstone Loan Financing Limited, a non-executive
director and chair of the audit and risk committee
of HarbourVest Global Private Equity Limited, and a
non-executive director of Phoenix Spree Deutschland
Limited. Prior to 2007, he was a director of Maples
Group in Jersey, with responsibility for their fund
administration and duciary businesses. Mr Wilderspin
began his career at PwC inLondonin1990.
Skills and experience:
Chartered Accountant with extensive audit and
accounting experience with a deep knowledge of
nancial matters within the nancial services sector.
Date of appointment:
10 February 2021
Dawn Crichard
FCA
Chair of the Management Engagement committee
and Chair of the Sustainability committee
Dawn Crichard, a Jersey resident, is a Fellow of the
Institute of Chartered Accountants of England and
Wales with over 25 years’ experience in senior chief
nancial ofcer and nancial director positions. Having
qualied with Deloitte, Ms Crichard moved into the
commercial sector and was chief nancial ofcer of a
large private construction group for twelve years. Ms
Crichard worked with both private and listed clients
in the hedge fund division of State Street. Following
this, she was appointed as chief nancial ofcer for
Bathroom Brands plc. Ms Crichard also held the senior
nancial position for a substantial multinational family
ofce business, including establishing and overseeing
high value private expert funds. She is currently a non-
executive director and chair of the audit committee
for funds of a Northern European private equity rm.
Her broad accounting and commercial experience
includes establishing new group head ofces, mergers,
acquisitions, renancing and restructuring.
Skills and experience:
Chartered Accountant with extensive experience,
bothoperational and nancial, within the commercial
and funds sectors.
Date of appointment:
16 September 2019
Alex Yew
Non-executive Director
Alex Yew, a UK resident, has more than 25 years of
experience as a lawyer, banker and investor. He is a
qualied solicitor in Singapore, England and Wales. Mr
Yewcurrently holds a number of non-executive roles
ininfrastructure, energy and energy transition.
Prior to this, Mr Yew was a senior adviser and a senior
managing director at John Laing, an international
investor in infrastructure and energy assets. Mr Yew
worked at John Laing for more than 14 years, during
which time he held leadership positions in project
nance, new markets, strategy, partnerships, and was
regional head of the European and Latin American
businesses. He was also a member of the senior
leadership team and the investment committee.
PriortoJohn Laing, Mr Yew was a director in the
infrastructure advisory team at CIBC World Markets in
London. He was also a banker and lawyer in Southeast
Asia before he moved to the UK.
Skills and experience:
Qualied solicitor with extensive international
experience in nance law, banking and investing.
Specialises in infrastructure, PPPs, renewable energy
and energy transition.
Date of appointment:
1 November 2022
Governance
105
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The Investment Adviser
At Gravis we don’t believe in a
short-termapproach to investment.
We are Gravis. We invent and manage funds that
aim to give investors radically steady returns.
We involve ourselves in long-term projects that
offer a human dimension, investing in assets that
will be needed for many years to come, such as
renewable energy generation and social and
economic infrastructure. Our investments are
generally underpinned by dependable cash ows
and generate long-term predictable income.
Our long-term approach enables us to engage
with our stakeholders on matters relating to
the Principles for Responsible Investment.
Werecognise that applying the principles better
aligns investment activities with the broader
interests of society, and have committed to their
adoption and implementation. This gives us the
opportunity to drive positive change.
As a team, we have worked together over many
years to build both our investment philosophy
and a practical track record of performance.
Wehave created funds that make infrastructure,
real estate and asset backed investments
accessible to a wide range of investors.
We are a multi-disciplined investment team with
all the capabilities to critically evaluate and
execute investment opportunities. Individually,
we invest in the funds we believe in and have built
as a team.
Gravis is the Investment Adviser to the Company,
Investment Manager of GCP Asset Backed and
advises Gravis Clean Energy Income, Gravis
UK Listed Property, Gravis UK Infra, Gravis
DigitalInfra and Robeco Gravis Digital Infra.
Managing
assets of c.£2.5bn
1
Across a diverse range of sectors and structures.
This includes our open-ended funds which are
managed by Valu-Trac and advised by Gravis.
Built to weather
market cycles
Many of our investments are backed by
central and local UK Government or long-term
contracted cash ows.
Experts in long term
We believe that investing with a focus on a positive
long-term impact for people and the planet
translates to steady returns.
Formed in 2008
At a time when institutions weren’t able to offer
investors interest or security, we found a way to
combine stability with returns. It’s shaped our
approach ever since.
1. Data at 31 March 2024.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
106
Investment Adviser
Gravis is the appointed Investment Adviser and
AIFM to the Company. The Investment Adviser
was appointed upon the Company’s launch in
2010 (at which time the Investment Advisory
Agreement was held with GRVS Capital Partners
LLP (formerly Gravis Capital Partners LLP), a
partnership under largely the same ownership).
The Investment Adviser was incorporated
in England and Wales on 9November 2016
(registered number 10471852) and is authorised
and regulated by the UK FCA (registration
number 770680).
The directors and employees of the Investment
Adviser have a long track record of working
within the UK infrastructure market, particularly
with regard to debt advisory work, and have
established close relationships with many of the
key participants in the UK infrastructure market,
including equity investors and lenders.
Gravis is an independently managed business
with ORIX Corporation as majority shareholder.
ORIX are a global nancial services company
based in Japan. Their partnership has helped
Gravis expand into new markets, focus on returns
for investors and ensure responsible investment
is a key focus.
Investment Advisory Agreement
The Company is party to an Investment Advisory
Agreement dated 28 June 2010, as amended
and restated most recently on 26 January 2023,
under which the Investment Adviser provides
advisory services relating to the Company’s
assets on a day-to-day basis in accordance with
the investment objectives and policies agreed by
the Company and under the overall supervision
and direction of the Board of Directors.
Under the terms of the Investment Advisory
Agreement, the Investment Adviser receives an
investment advisory fee from the Company equal
to 0.9% per annum of the NAV of the Company
(net of cash holdings).
This fee is calculated and payable quarterly in
arrears. The Investment Adviser is also entitled to
an arrangement fee of up to 1% (at the discretion
of the Investment Adviser) of the initial cost of
each asset acquired by the Company.
The Investment Adviser will generally seek to
charge the arrangement fee to borrowers rather
than the Company where possible but, in any
event, any such fee payable to the Investment
Adviser will not exceed 1%. To the extent any
arrangement fee negotiated by the Investment
Adviser with a borrower exceeds this percentage,
the benet of any such excess shall be paid to the
Company. No performance fee is charged.
During the year, the Investment Adviser
received a fee of £89,000 in relation to its role
as theCompany’s AIFM. The fee is based on an
annual fee of £70,000 which has been increased
annually atthe rate of RPI.
The Investment Advisory Agreement may be
terminated by the Company or the Investment
Adviser by giving 24 months’ written notice.
Provision of advice
The Investment Adviser provides advice which
enables the Directors of the Company to
identify potential investments, monitor the
performance of existing assets and the nancial
and infrastructure markets generally. The scope
of services provided by the Investment Adviser
includes, inter alia:
— making investment/divestment
recommendations to the Investment
committee of the Board in line with the
Company’s investment policy and strategy;
— identifying potential investments and making
recommendations to the Company in respect
of the acquisition, sourcing of nancing, asset
management and disposal of assets;
— performing due diligence, including, but
not limited to, legal, nancial, technical and
market projections;
— monitoring and reporting to the Board the
performance of the Company’s investments;
— regularly reviewing the Company’s
investment policy and strategy and providing
recommendations to the Board;
— overseeing and arranging borrowings for
the Company within such limits set out in the
prospectus;
— advising the Company in relation to dividends
to shareholders; and
— co-operating and co-ordinating with
third party service providers such as
administrators, valuers, tax/legal advisers etc.
and statutory auditor.
The approval of asset origination and investment
decisions are made by the Investment committee
based on the Company’s investment policy, the
overall investment parameters set by the Board
and the advice of the Investment Adviser.
The Board of Directors has appointed Gravis to provide day-to-day
investment advisory services to the Company.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
107
The Investment Adviser continued
Philip Kent
Chief Executive Ofcer
Philip Kent is the CEO of the Investment Adviser
and acts as lead fund adviser to the Company.
Background:
Mr Kent joined Gravis from Foresight Group,
where he was responsible for investments in
the waste and renewable sectors, including
large waste wood combustion projects and a
pipeline of anaerobic digestion projects across
the UK. MrKent has been involved in the energy
sector for over ten years, working initially as
a consultant within PA Consulting’s energy
practice, focusing on energy markets and
energy asset valuations. In 2008, he moved to
Gazprom Marketing and Trading, working in risk
management across a number of commodities
before moving into the clean energy team.
Skills and experience:
Extensive experience in the infrastructure
sector, including energy markets, asset
valuations and renewables transactions.
Anthony Curl
Chief Investment Ofcer
Anthony Curl is Chief Investment Ofcer at the
Investment Adviser.
Background:
Mr Curl joined Gravis from Alpha Real Capital,
where he was an investment committee member
and managed several investment teams in his role
as co-head of Long Income. Having started his
career in banking, Mr Curl has worked at asset
managers such at BlackRock. He has also worked
in the insurance sector, for example as portfolio
manager of Friends Life’s annuities book.
Skills and experience:
Signicant experience across a range of public
and private asset classes, including real estate
and credit.
Ed Simpson
Head of Energy and Infrastructure
Ed Simpson is Head of Energy and Infrastructure,
overseeing all direct infrastructure and
renewables investment activity.
Background:
Mr Simpson joined Gravis from Gresham House,
where he was the co-manager of its sustainable
infrastructure fund. He started his career
in sustainable investment at Bridges Fund
Management in 2008 and has also worked at the
Carbon Trust and Downing. He has led investments
in several key sustainable themes: decarbonisation
(battery energy storage, peaking power plants,
renewable energy generation, anaerobic digestion,
hydro, solar and wind), digital infrastructure,
modern methods of construction for housing,
regeneration (biodiversity net gain habitat banks),
vertical farming, waste and recycling solutions.
Skills and experience:
Qualied Chartered Accountant with extensive
experience in the sustainable infrastructure
sector, including renewable and asset backed
transactions.
Our senior management team have extensive specialist expertise and a demonstrable track record of originating, structuring and managing
infrastructuredebt investments.
Investment team
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
108
Albane Poulin
Head of Private Credit
Albane Poulin is Head of Private Credit at the
Investment Adviser.
Background:
Ms Poulin joined Gravis from abrdn, where she
was head of European private placements,
responsible for the origination and underwriting
of new transactions, as well as monitoring
existing private placement investments. She
was also the lead fund manager on a number
of multi-sector private credit funds investing
in a range of private credit asset classes,
including private placement, infrastructure
loans and commercial real estate debt. She
has also worked as a credit analyst at Insight
Asset Management covering utilities and
transportation.
Skills and experience:
Substantial experience in credit markets,
witha focus on private credit and asset
backedsecurities.
Max Gilbert
Investment Director
Max Gilbert is an Investment Director at the
Investment Adviser and acts as an adviser to the
Company.
Background:
Mr Gilbert joined Gravis in 2018 having worked
at Cambridge Associates, a global investment
consultancy, advising US and European pension
funds on their private investments. He was
responsible for consulting on potential new
investments and detailed private fund due
diligence, as well as ongoing investment
monitoring.
Skills and experience:
Mechanical engineer by training with signicant
experience in the infrastructure sector, including
infrastructure debt and renewables transactions.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
109
Introduction from the Chairman
I am pleased to introduce the Company’s
corporate governance statement. In this
statement the Company reports on its
compliance with the AIC Code, sets out how the
Board and its committees have operated over the
past year and describes how the Board exercises
effective stewardship over the Company’s
activities in the interests of stakeholders.
The Board encourages a culture of robust
governance, and the Company reviews its
standards of governance against the principles
and provisions of the AIC Code. The AIC Code
addresses the principles and provisions set out
in the UK Code, as well as setting out additional
provisions that are of specic relevance to
investment companies such as the Company.
The Board considers that reporting against
the principles and provisions of the AIC Code,
which is endorsed by the FRC and supported
by the JFSC, provides better and more relevant
information for shareholders.
A copy of the AIC Code can be found on the
AIC website (www.theaic.co.uk). It includes an
explanation of how the AIC Code adapts the
principles and provisions set out in the UK Code
to make them relevant for investment companies.
A copy of the UK Code can be obtained from the
FRC website (www.frc.org.uk).
Statement of compliance with the AIC Code
During the year the Company complied with
the principles and provisions of the AIC Code,
except for the establishment of a Remuneration
committee (provision 9.2). The Board fulls the
role of the Remuneration committee as it was
agreed that the size and entirely non-executive
nature of the Board does not warrant the
establishment of a separate committee.
TheDirectors’ remuneration consists of an
annual fee and has no element of performance
or equity-based compensation. The Directors’
remuneration report is included on pages 126
to130.
The Board and its purpose
The Board consists of six Directors, all of
whom are non-executive and are considered
independent. Biographical details of the
Directors are shown on pages 104 to 105.
The Board is responsible for the long-term
success and sustainability of the Company,
as well as the effective stewardship of its
affairs, including corporate strategy, corporate
governance, risk assessment and overall policies.
The Board provides overall leadership, sets the
strategic aims of the Company and ensures
that the necessary resources are in place for
the Company to meet its objectives and full its
obligations to shareholders within a framework
of high standards of corporate governance and
effectiveinternal controls.
It is the Board’s policy that Directors do not
have service contracts. Each of the Directors
have signed a letter which sets out the terms
and conditions of their appointment, copies of
which are available at the registered ofce of
the Company. Further details as to the terms of
appointment of the Directors are set out in the
Directors’ remuneration report on pages 126
to130.
Appointments to the Board continue to be based
on merit, regardless of gender, ethnic group
or social background. The Board comprises
four male Directors and two female Directors.
TheCompany has no employees. The Company’s
policy on diversity is set out on page 120.
This corporate governance statement forms part
oftheDirectors’ report.
Board leadership and purpose
Andrew Didham
Chairman
110
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Matters reserved for the Board
The Board has approved a formal schedule of
matters reserved for the Board. The schedule
is available on the Company’s website and upon
request from the Company Secretary.
The principal matters considered by the Board
during the year included:
— Board succession planning;
— cash management;
— declaration of dividends and dividend
strategy;
— electricity price strategy and associated
hedging;
— ESG matters;
— RCF matters;
— share buybacks;
— strategic initiatives; and
— capital allocation policy.
Board values and culture
Under the leadership of the Chairman, the
Board operates with the core values of integrity
and impartiality with the aim of maintaining a
reputation for high standards in all areas of the
business it conducts. The Board recognises
the value and importance of ESG to the
Company’s shareholders and indeed all of the
Company’s stakeholders. Refer to pages 58
to81 for additional information on Company’s
ESGinitiatives.
In aligning its values with operations, the Board
aims to create a culture of open dialogue,
collaboration and exchange of views as
evidenced by the high-quality debate and the
contributions made by all Directors during Board
meetings and as endorsed by the feedback
received from the Board’s annual performance
evaluation process. In addition, the Board
encourages a culture of robust governance
and also seeks to ensure the alignment of its
purpose, values and strategy with this culture
ofopenness, debate and integrity through
ongoing discourse and engagement with its
service providers.
The culture of the Company’s service providers,
including their policies, practices and behaviour,
is considered by the Management Engagement
committee during the annual review of the
performance and continuing appointment of
allservice providers.
Governance
111
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Events during the year
Board leadership and purpose continued
8th – Publication of investor report
to31March 2024
25th – Quarterly Board meeting
9th – Dividend payment date
25th – 2024/25 LBCM winter swap agreement.
Read more on page 115
8th – Dividend payment date
28th – 2024 Axpo summer swap agreement.
Read more on page 115
23rd – Quarterly Board meeting
4th – Dividend payment date
20th – Announcement of
half-yearly nancial report
2024
8th – Publication of investor
report to 30 June 2024
2nd – Publication of investor report
to 31 December 2023
14th – Annual General Meeting
15th – RCF renewal. Read more on page 115
20232024
1st – 2023/24 Axpo winter swap agreement.
Readmore on page 115
10th – Appointment of RBC Capital Markets. Read more
on page 114
5th – Dividend payment date
12th – Adoption of capital allocation policy. Read more
on pages 14 and 15
13th – Announcement of annual report and nancial
statements 2023
1st – Quarterly Board meeting
15th – Publication of investor report
to30September 2023
16th – Capital Markets Day
26th – Quarterly Board meeting
Jan
Mar
May
Jul
Sep
Nov
Feb
Oct
Dec
Apr
Jun
Aug
112
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The event attracted 65 external attendees,
consisting of a mixture of existing and prospective
shareholders, as well as a broker research analyst.
This event provided shareholders and stakeholders
with a transparent overview of the Company’s
performance, strategic direction and commitment
to sustainability and highlighted the Company’s
continued role in driving infrastructure
development in the UK while delivering attractive,
long-term returns.
The Chairman welcomed attendees and
commenced the event with an update on the
Company’s resilient nancial performance,
emphasising how the Company’s portfolio has
continued to generate stable returns despite
broader market volatility.
Phillip Kent and Ed Simpson, representatives of the
Investment Adviser, provided a detailed investment
update focusing on the capital allocation
strategy, which aimed to release £150 million to
shareholders, reduce leverage and rebalance
the portfolio away from equity-like exposure.
Mr Kent emphasised the attractive investment
opportunities that the Company presents and
explained the role of the RCF in maintaining the
Company’s exibility.
Mr Simpson gave a comprehensive overview of the
Company’s portfolio exposure, offering insight into
two specic assets: the UBB Waste project and the
SolarCatcher asset. These were further illustrated
through videos showcasing a construction
time-lapse of UBB Waste and the unique features
of the SolarCatcher asset.
Matteo Quatraro, head of portfolio at Gravis,
presented a detailed ESG case study on Blackcraig
Wind Farm, which highlighted the outstanding
GRESB results achieved by the asset and
demonstrated the Company’s focus on ensuring its
infrastructure investments are not only nancially
viable but also aligned with sustainability targets.
Blackcraig Wind Farm was subsequently sold in April
2024, generating net cash proceeds of £31.4million.
Read more on page 25.
A representative from Titchberry Limited, one
of the Company’s borrowers, provided insights
into the running of anaerobic digestion projects,
discussing the operational aspect of these
projects, their contribution to renewable energy
generation, and the crucial role the Company
plays in their success. The presentation offered
a tangible example of how the Company’s
investments in green technologies are creating
real-world environmental benets.
Lloyds discussed the role of the RCF in the
Company’s nancial strategy and emphasised
its structure and exibility. Lloyds’ presentation
provided valuable insight into the Company’s ability
to maintain nancial resilience through strong
partnerships with leading nancial institutions such
as Lloyds.
The capital allocation strategy presented by
MrKent provided reassurance to both existing
andprospective investors.
The event concluded with a brief summary and
an open Q&A session, giving attendees the
opportunity to engage directly with the Company’s
leadership and the Investment Adviser.
The 2024 Capital Markets Day successfully
delivered key updates on the Company’s
performance and strategy, and reinforced the
Company’s commitment to sustainable and
long-term value creation. The focus on capital
allocation and ESG integration highlighted the
Company’s position as a fund that is well prepared
to navigate the challenges of today’s investment
landscape while continuing to deliver robust
returns for its shareholders.
In January 2024, the Company hosted its Capital Markets Day in London.
Capital Markets Day 2024
Governance
113
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Key for stakeholder groups most impacted
LendersShareholders Suppliers
Appointment
of joint
broker
The Board agreed in 2023 that additional support was needed to help support the delivery of the Company’s strategy.
Process:
A process had been run since early 2023 to identify and
appoint a party.
Outcomes:
On 10 October 2023, the Company announced the
appointment of RBC Capital Markets as the Company’s
joint corporate broker, to work alongside Stifel Nicolaus
EuropeLimited.
Capital
allocation
policy
On 12 December 2023, the Company adopted a capital allocation policy which was announced as part of its 2023 annual
report and accounts, conrming its intention to prioritise a material reduction in leverage, reducing equity-like exposures
and exposures in certain sectors, and facilitating the return of capital to shareholders. The Board set a conditional target of
releasing £150 million (c.15% of the portfolio) from disposals or renancings to materially reduce leverage and return at least
£50 million to shareholders before the end of the calendar year 2024.
Process:
Board meetings were held in November 2023, January
2024 and April 2024, and during these meetings the Board,
working closely with the Investment Adviser, focused on
proactively seeking to manage the portfolio and return
cash, taking into consideration the Company’s available
cash resources, repaying the RCF, repurchasing shares
via its buyback programme and accelerating its capital
allocation strategy.
Outcomes:
In April 2024, the Company disposed of its interest in loan
notes securedagainst Blackcraig Wind Farm. The disposal
occurred at a 6.4% premium to the valuation at 31 March
2024 and generated net cash proceeds of £31.4 million.
Thenet cash proceeds were used to prepay drawings
underthe Company’s RCF.
This disposal represented a positive rst step in facilitating
the Company’s execution on its capital allocation policy.
The Board and the Investment Adviser continue to focus on
additional opportunities for renancings or disposals within
the portfolio, in order to achieve the targets set out in the
capital allocation policy.
Borrowers
Board leadership and purpose continued
Key Board decisions
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
114
Electricity
price
hedging
Further to the Company’s hedging policy, which was adopted in April 2023, the Investment Adviser was granted authority by
the Board to enter into rolling seasonal commodity swap agreements to mitigate volatility in valuations caused by movements
in electricity prices.
Process:
In recent years, the Company has increased its exposure to
investments where the value of such investments was linked
to merchant electricity prices, with valuations changing on
a quarterly basis as power price forecasts were refreshed.
Whilst changes to forecasts have benetted the Company,
the volatility of such prices remains a risk to the Company.
The Company entered into the below electricity price
commodity swap agreements with Axpo, providing hedging
during the year to 30 September 2024:
— 28 September 2023, a winter seasonal contract was
entered into which expired on 31 March 2024; and
— 27 March 2024, a summer seasonal contract was
entered into which expired on 30 September 2024.
The commodity swap agreement is a derivative nancial
instrument utilised for the purpose of hedging market price
volatility.
At a Board meeting in July 2024, the Company reviewed its
cash ow forecasts and the Investment Adviser presented
an alternative route to improving the pricing offered to the
Company, and to mitigate any credit risks, by recommending
the entry into a commodity swap agreement with a new
counterparty.
Outcomes:
The Board concluded that the proposed alternative hedging
arrangement was in the interest of shareholders as it
would help reduce volatility in the valuation of investments
impacted by electricity price uctuations. This would in turn
help support the share price and total returns for investors
going forward.
The Board therefore approved entering into the commodity
swap agreements with LBCM, granting the Investment
Adviser the authority to continue to manage the hedge
price and volume of the day-to-day rolling of swap
contracts.
The Company subsequently entered into a winter seasonal
contract with LBCM on 27 September 2024 for the period to
31 March 2025.
Further information on the commodity swap can be found in
note 18 to the nancial statements.
Renewal
ofRCF
The Company successfully entered into a new RCF during the year, reducing the total RCF commitments to £150 million
from£190 million.
Process:
At Board meetings held in January and February 2024, the
Investment Adviser submitted a proposal to the Board to
enter into a new RCF of £150 million. The previous facility
of £190 million was with RBSI, Lloyds, AIB, Mizuho and
Clydesdale and expired in March 2024.
The Board considered the proposal, including:
— cash ow forecasts;
— the Company’s leverage position; and
— any restrictions stipulated by the Company’s
investment and treasury policies or current RCF.
After due consideration, the new facility was approved.
Outcomes:
In February 2024, the Company entered into a new RCF of
£150 million with a lending group comprising Lloyds, AIB,
Mizuho and Clydesdale, on terms similar to the previous RCF.
The RCF is repayable in February 2027.
Further information on the RCF can be found in note 15 to
the nancial statements.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
115
Division of responsibilities
Purpose:
Responsible for the long-term success
and sustainability of the Company.
The Board provides overall leadership, sets the strategic
aimsof the Company and ensures that the necessary
resourcesare in place for the Company to meet its objectives
and full its obligations to shareholders and other stakeholders
within a framework of high standards of corporate governance
and effective internal controls.
The Board
The Board is responsible for the effective stewardship of the
Company’s affairs, including corporate strategy, corporate
governance, risk assessment and overall policies.
Board committees
Audit and Risk
committee
Investment
committee
Management Engagement
committee
Nomination
committee
Sustainability
committee (formerly
theESGcommittee)
Purpose:
Ensures that the Company’s
nancial performance
is properly monitored,
controlled and reported,
including engagement with
the Company’s external
Auditor, and reviews and
monitors the Company’s
risks and internal controls.
Purpose:
Considering new investment
proposals received from the
Investment Adviser based on
the Company’s investment
policy and the overall
investment parameters,
and disposals as part of the
capital allocation policy.
Purpose:
Reviews the performance
and continuing appointments
of the Investment Adviser
and other service providers.
Purpose:
Considers appointments to
the Board and its individual
committees and makes
recommendations in regard
to changes to maintain a
balanced and effective
Board.
Purpose:
Developing the Company’s
ESG strategy and policy and
ensuring it is integrated in
the Company’s policies and
procedures.
Composition
Chair: Steven Wilderspin
Julia Chapman
Dawn Crichard
Chair: Michael Gray
Andrew Didham
Alex Yew
Chair: Dawn Crichard
Andrew Didham
Julia Chapman
Michael Gray
Steven Wilderspin
Alex Yew
Chair: Andrew Didham
Julia Chapman
Michael Gray
Chair: Dawn Crichard
Andrew Didham
Julia Chapman
Michael Gray
Steven Wilderspin
Alex Yew
See Audit and Risk
committee report on
pages122 to 125.
See Nomination committee
report on pages 119 to 121.
See Sustainability section
onpages 58 to 81.
Chairman:
Andrew Didham
Julia Chapman Michael Gray Steven Wilderspin Dawn Crichard Alex Yew
Composition
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
116
Committees
The structure includes an Audit and Risk
committee, an Investment committee,
aManagement Engagement committee,
aNomination committee and a Sustainability
committee. The terms of reference for each of
the committees are available on the Company’s
website or upon request from the Company
Secretary.
Audit and Risk committee
The membership and activities of the Audit and
Risk committee are described in its report on
pages 122 to 125.
Investment committee
The Investment committee comprises Michael
Gray (Chair), Andrew Didham and Alex Yew.
The Board has agreed terms of reference for the
Investment committee which include meeting
to consider new investment proposals received
from the Investment Adviser based on the
Company’s investment policy and the overall
investment parameters set by the Board, and to
further consider disposals in line with the capital
allocation policy. The committee met seven times
during the year.
The committee reports upon request and
otherwise on a quarterly basis to the Board,
such that the Board can adequately monitor
theimplementation of the Company’s investment
policy. Opportunities that the committee believes
could be benecial to the Company butare
outside the investment policy are referred to
theBoard.
The committee is also responsible for ensuring
that investment proposals from the Investment
Adviser have been properly prepared and
comply with the Company’s investment
policy and strategy, include stakeholder and
ESG considerations and that key conditions
precedent are complied with for each
transaction. The committee also approves the
release of capital advances.
Nomination committee
The membership and activities of the Nomination
committee are described in its report on pages
119 to 121.
Management Engagement committee
The Management Engagement committee
comprises all the Directors of the Company in
view of the wide remit of the committee and is
chaired by Dawn Crichard.
The Board has agreed terms of reference for
thecommittee, which meets at least once a year,
and the Chair reports to the Board quarterly to
consider the performance of the Investment
Adviser and other third party service providers,
the terms of their engagement, remuneration
and their continued appointment.
Following the committee’s assessment of
the Investment Adviser, and based on its
performance, the continued appointment of
the Investment Adviser is considered to be in
the interests of shareholders as a whole, and it
was recommended that Gravis be retained as
Investment Adviser. In addition, the committee
maintains a watching brief over all third
party service providers whom the committee
independently evaluates.
Sustainability committee
The Sustainability committee (formerly known
as the ESG committee until 25 July 2024),
comprises all the Directors and its purpose is
to dene the Company’s ESG strategy, oversee
the implementation and effectiveness of such
a strategy and ensure it is integrated into
the Company’s policies and procedures. The
committee meets at least once a year and the
Chair reports to the Board quarterly to consider
its activities.
Further details on the Company’s sustainability
activities are described in the sustainability
section on pages 58 to 81.
Committee membership changes during the
year and post year end
There were no changes to the committee
memberships during the year.
The Chairman of the Board
The Chairman, Andrew Didham, who is considered
independent by the Board, is responsible for the
leadership of the Board, including organising
the Board’s business and setting its agenda.
He has no signicant commitments other than
those disclosed in his biography on page 104
and considers himself to have sufcient time to
spend on the affairs of the Company.
Mr Didham is an executive vice chairman at
Rothschild & Co, presently on a part-time basis.
Rothschild & Co is engaged by the Company
to provide ongoing investor relations support.
The Company and Rothschild & Co maintain
procedures to ensure that Mr Didham has no
involvement in either the decisions concerning the
engagement of Rothschild & Co or the provision of
investor relations services to the Company.
The relationship between the Company and
Rothschild & Co is not material in nature
and is not considered to impair Mr Didham’s
independence. The fees paid to Rothschild & Co
in the nancial year ended 30 September2024
represented 0.5% of the total expenses of
theCompany.
Senior Independent Director
Julia Chapman is the Senior Independent
Director, who works closely with the Chairman,
acting as a sounding board when necessary.
Ms Chapman also meets with the other Board
members annually to assess the Chairman’s
performance.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
117
Division of responsibilities continued
A total of ve additional Board meetings were
held during the year. These meetings were in
respect of the approval of the half-yearly and
annual nancial statements, the RCF and the
capital allocation policy.
The Investment Adviser, the Company Secretary
and the Administrator regularly provide the
Board with nancial information, including an
annual expense budget, together with brieng
notes and papers in relation to changes in the
Company’s economic environment, statutory and
regulatory changes and corporate governance
best practice. A description of the Company’s
risk management and internal control systems is
set out in the risk management section on pages
88 to 97, and the Audit and Risk committee report
on pages 122 to 125.
At each quarterly meeting of the Board, the
Directors follow a formal agenda which includes
a review of the Company’s investments and
associated matters such as gearing, asset
allocation, principal risks, marketing and investor
relations, and economic and industrial issues.
The Board is also active in ensuring any
regulatory developments which may affect the
operations of the Company are considered.
The Board regularly considers the Company’s
investment objectives and strategy, with
discussions focused on general market
conditions and future investment/disposal
opportunities for the Company, with a focus
on protecting and enhancing the value of the
current portfolio.
In order to enable the Directors to discharge
their responsibilities effectively, they have full
and timely access to all relevant information.
The Company Secretary
The Board has access to the Company Secretary
to advise on corporate governance and
day-to-day administrative matters.
The Company Secretary is also responsible
for ensuring the timely delivery of reports and
information required by the Directors and for
ensuring that all statutory obligations of the
Company are met.
Market Abuse Regulation
Following the implementation of MAR on
3July2016, which was further enshrined into UK
law on 31 December 2020 by the European Union
(Withdrawal) Act 2018 (UK MAR), the Board is
responsible for taking all proper steps to meet
itsobligations under the UK MAR and the UKFCA
Listing Rules and Disclosure Guidance and
Transparency Rules.
UK AIFM Regime
The Company is classed as an externally
managed AIF under the UK AIFM Regime.
TheBoard appointed the Investment Adviser as
the authorised AIFM to the Company and Apex
Financial Services (Corporate) Limited as the
Company’s Depositary on 22 July 2014 under
theUK AIFM Regime.
AIFM remuneration
The Investment Adviser is authorised as an AIFM
by the UK FCA under the UK AIFM Regime.
TheCompany has provided disclosures on its
website, incorporating the requirements of the
UK AIFM Regime.
The total annual remuneration paid to the
Investment Adviser by the Company is disclosed
in note 13 to the nancial statements and further
detail is provided on page 168.
Markets in Financial Instruments Directive
(“MiFID”)
The ordinary shares of the Company are
considered as ‘non-complex’ in accordance
withMiFID II.
Non-mainstream pooled investments
The Board notes the rules of the UK FCA on
the promotion of non-mainstream pooled
investments.
The Board conrms that it conducts the
Company’s affairs, and intends to continue
todo so, in order for the Company’s shares
to be ‘excluded securities’ under the UK FCA’s
rules. This is on the basis that the Company,
which is resident outside the EEA, would qualify
for approval as an investment trust by the
Commissioners for HM Revenue and Customs
under Sections 1158 and 1159 of the Corporation
Tax Act 2010 if resident and listed in the
UnitedKingdom.
Therefore, the Company’s shares do not
amount to non-mainstream pooled investments.
Accordingly, promotion of the Company’s shares
will not be subject to the UK FCA’s restriction
on the promotion of non-mainstream pooled
investments.
Meetings
The Board meets at least four times a year, and in addition, regular contact is kept between the Board, the Investment Adviser, the Administrator and
theCompany Secretary. The number of scheduled meetings of the Board and committees held during the year and the attendance of individual Directors
are shown below.
Quarterly Board
meetings
Audit and Risk
committee
Investment
committee
Nomination
committee
Management
Engagement
committee
Sustainability
committee
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Number
entitled to
attend
Number
attended
Andrew Didham 4 4 — — 7 7 2 2 1 1 1 1
Julia Chapman 4 4 4 4 — — 2 2 1 1 1 1
Michael Gray 4 4 — — 7 7 2 2 1 1 1 1
Steven Wilderspin 4 4 4 4 — — — — 1 1 1 1
Dawn Crichard 4 4 4 4 — — — — 1 1 1 1
Alex Yew 4 4 — — 7 7 — — 1 1 1 1
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
118
Composition, succession and performance review
Nomination committee report
Andrew Didham
Chair of the Nomination committee
I am pleased to present the Nomination committee report
for the year ended 30 September 2024.
The Nomination committee comprises Andrew
Didham, Julia Chapman and Michael Gray.
Function of the Nomination committee
The Nomination committee is formally charged
bythe Board to regularly review the structure,
size, performance, composition and remuneration
of the Boardand make recommendations
regarding any changes to the Board, its individual
committees and remuneration. It operates
within clearly dened terms of reference which
are available on the Company’s website or from
the Company Secretary upon request. The
Nomination committee is further charged by the
Board to give full consideration to succession
planning for Directors, based on merit and
objective criteria (which includes knowledge,
experience, skills, and promoting diversity of
gender, social and ethnic backgrounds). During
the year, the Nomination committee held two
meetings. Attendance of members at those
meetings is shown in the table on page 118.
Theother Directors and relevant third parties
may be invited by the Nomination committee to
attend meetings as and when appropriate.
Board composition
The Board consists of six non-executive
Directors. The Board believes the Directors
provide, individually and collectively, the breadth
of skills and experience required to manage the
Company. Biographical details of the Directors
are shown on pages 104 to 105.
The Board, via its Nomination committee,
regularly reviews the Board’s composition and
effectiveness with the objective of ensuring
that it has an appropriate balance of skills
and experience required to meet the future
opportunities and challenges facing the
Company. As part of this review, it considers
diversity of the Board, including, but not limited
to, gender, social background and ethnicity
alongside intellectual and personal capabilities.
Board appointments are made based on merit and
calibre, with the most appropriate candidate,who
is the best t for the Company, appointed.
Induction of new Directors
The Company has an established process
in place for the induction of new Directors.
Aninduction pack is provided to new Directors
by the Company Secretary, containing relevant
information about the Company, its constitutional
documents and its processes and procedures.
New Directors meet with relevant persons at
the Investment Adviser and service providers.
Aprogramme of induction training is agreed with
each new Director.
Director training
The Board undertakes regular anti-money
laundering training and the required hours
of continuing professional development in
accordance with their profession and with Jersey
regulations, including training on areas relating
to the Company’s activities, such as the specialist
renewable energy sectors.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
119
Composition, succession and performance review continued
Nomination committee report continued
Diversity
Diversity, including, but not limited to, gender,
social background, ethnicity, age, sexual
orientation, disability and professional and
industry-specic knowledge, is an important
consideration to ensure the Board and its
committees have the right balance of skills,
experience, independence and knowledge
necessary to discharge their responsibilities. The
right blend of perspectives is critical to ensuring
an effective Board and a successful Company.
In accordance with Listing Rule 6.6.6R (9), the
committee is supportive of the recommendations
of the FTSE Women Leaders Review and the
Parker Review on gender and diversity, as well
as the UK FCA rules on diversity and inclusion
oncompany boards:
a) at least 40% of individuals on the Board to be
women;
b) at least one senior Board position to be held
by a woman; and
c) at least one individual on the Board to be from
a minority ethnic background.
At 30 September 2024, both (b) and (c) are
satised through Julia Chapman’s role as Senior
Independent Director and Alex Yew, who is from
an Asian ethnic background. For item (a), the
Company falls short of the target at only 33%,
however the Company continues to progress
its succession plan to replace Mr Gray and Ms
Chapman, as detailed further under ‘Board
tenure and succession planning ’ on page 121.
In accordance with Listing Rule 6.6.6R (9) Annex
1 R, the tables below, in the prescribed format,
show the gender and ethnic background of the
Directors at the year end.
Gender identity or sex
Number of
Board members
Percentage
on the Board
Number of
senior positions
on the Board
Men 4 67% 1
Women 2 33% 1
Not specied/prefer not to say — — —
Ethnic background
Number of
Board members
Percentage
on the Board
Number of
senior positions
on the Board
White British or other White (including minority white groups) 5 83% 2
Mixed/multiple ethnic groups — — —
Asian/Asian British 1 17% —
Black/African/Caribbean/Black British — — —
Other ethnic group — — —
Not specied/prefer not to say — — —
In accordance with Listing Rule 6.6.6R (11) the data in the above tables was collected through self-reporting by the Directors.
Board independence
The Board is mindful of the principles set out in the AIC Code regarding the independence of non-executive Directors. The Board regularly reviews the
independence of its members and considers whether there are any relationships or circumstances that are likely to affect a Director’s independence.
TheBoard considers all of the Company’s Directors to be independent.
Overboarding
The Directors consider that as an investment company, the Company demands less time commitment than what would be required of an executive of an
operating company. The Directors also believe that a formulaic approach to assessing whether a Director is able to effectively discharge their duties is
notappropriate given the nature of the Company anddirectorships.
Prior to accepting the appointment as a Director of the Company, each Director must disclose existing signicant commitments and conrm that they
are able to allocate sufcient time to the business of the Company. In addition, the Company has an external directorship appointment policy whereby a
Director must consult with, and seek prior approval from, the Chairman or the Senior Independent Director before committing to any new listed, conicted,
time consuming or otherwise material board appointments. The Director should promptly notify the Company Secretary of any new board appointments
which they take on so that the appropriate records can be updated and any announcements per the Listing Rules can be made if required.
Prior to their recommendation for re-election to the Board, each Director’s continuing ability to meet the time requirements of the role is assessed by
considering, amongst other things, their attendance at Board, committee and other ad hoc meetings and events of the Company that may be held during
the year as well as the nature and complexity of other, both public and private, roles held.
120
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
As detailed above, the Board has processes in
place to mitigate instances of overboarding, such
as the pre-approval of external directorships,
and reviews of each Director’s continuing ability
to meet the time requirements of the role.
Board tenure and succession planning
The Board’s policy regarding tenure of service
is that any decisions regarding tenure should
balance the benets of continuity, against
the need to periodically refresh the Board
composition. The Board is also of the view that
length of service does not automatically impair a
director’s ability to act independently.
Therefore, if a Director has served more
than nine years, the Board will consider their
independence carefully on an annual basis as
part of the Board self-performance review and
succession planning process and balance this
against the benets of maintaining continuity,
knowledge andexperience.
Michael Gray and Julia Chapman have served on
the Board for over nine years from the date of
their appointment on 1 October 2015.
In July 2024, the Board engaged Nurole Limited
(‘Nurole’), an independent and reputable
external consultant based in the UK, with no
connection to the Company or its Directors,
to undertake a search process to identify a
potential non-executive Director candidate
with deep credit experience to replace Michael
Gray and to support the Company’s Investment
committee. The Directors considered the desired
background, personal attributes and expertise of
the candidates in order to complement the skills
already on the Board.
The process involved Nurole presenting a long
list of diverse potential candidates. This was
then short-listed by the Nomination committee
to ve and included a mixture of female, male
and ethnically diverse candidates. Those ve
candidates were interviewed in person by the
Nomination committee and, following these
interviews, a candidate was recommended
to, and subsequently approved by, the Board.
Ian Brown, currently the Head of Banking and
Investments at the UK’s National Wealth Fund,
will be appointed as a non-executive Director of
the Company and a member of the Investment
committee at the forthcoming AGM subject to
regulatory approval.
Further information on Mr Brown, including his
biography, will be included in the 2025 AGM
circular and announced upon his appointment.
There are no details requiring disclosure in
respect of this appointment under paragraph
6.4.8 of the UK Listing Rules of the FCA.
Whilst the Company is aware of the Listing
Rule diversity target that at least 40% of the
Company’s Directors should be female, the Board
also had to balance the challenges in nding the
right person to ll the key skills gap created by
Mr Gray’s retirement. At the date of this report,
the Company has two female Directors on the
Board, one of which holds a senior position.
The independence of the Directors is determined
with reference to the AIC Code and is reviewed
by the Nomination committee at least annually.
The Nomination committee considers each
Director’s other appointments and commitments,
as well as their tenure and any connections they
may have with the Investment Adviser or other
key service providers. Following completion of
the evaluation, the Nomination committee has
concluded that all Directors continued to show
independence of judgement.
Performance review
In accordance with the AIC Code, the Company
undertakes an annual performance review of
its Board, its committees, the Chairman and its
Directors. An external review is undertaken every
three years, with the next due in 2026, and in the
intervening years, the Board conducts an internal
performance review by means of a questionnaire.
During the year, the Board undertook an internal
performance review, which was led by the
Nomination committee and designed to assess
the strengths and independence of the Board
and the performance of its committees, the
Chairman and individual Directors.
The performance review of the Chairman
was carried out by the other Directors of the
Company and led by the Senior Independent
Director. The results of the 2024 Board
performance review process were considered
and discussed by the Nomination committee and
subsequently by the Board. Based on the results
and the recommendations of the Nomination
committee, the following areas will be of focus in
the forthcoming nancial year:
— continue to focus on short-term succession
planning by engaging a recruitment rm to
assist and advise on the appointment of
a non-executive Director to replace Julia
Chapman during 2025, with the relevant
expertise to align with the Company’s
strategic direction;
— develop the longer-term succession plan for
the Board by keeping under review all matters
raised by the performance reviews detailed
above; and
— increased shareholder engagement through
targeted communications and an enhanced
Capital Markets Day experience to build
transparency and trust.
Appointment and re-election of Directors
Under the provisions of the Company’s Articles,
the Directors retire by rotation, with one-third
of the Directors submitting themselves for
re-election at each AGM. However, the Board
recognises that, as a FTSE 250 company, and
in accordance with corporate governance
best practice as set out in the AIC Code, all
Directors should put themselves forward for
re-election every year. As such, each Director
issubject toannual re-election by shareholders
at theAGM.
All of the Directors except Michael Gray (as
detailed within Board tenure and succession
planning) will be offering themselves for
re-election at the forthcoming AGM to be
heldinFebruary 2025.
Having considered the Directors’ performance
within the Board performance review process,
the Board believes that it continues to be
effective and the Directors bring extensive
knowledge and commercial experience
together by demonstrating a range of business,
nancial and asset management skills. The
Board therefore believes that it would be in the
Company’s best interests for the Directors to be
proposed for re-election at the AGM given their
material level of contribution and commitment
to the role and, hence, recommends that
shareholders vote in favour of each Director’s
proposed re-election.
Terms of reference and policies
The committee reviews its policies and terms
of reference at least annually and at such other
times as required to ensure that it continues to
operate effectively. All recommended updates
were approved by the Board.
On behalf of the Board
Andrew Didham
Chair of the Nomination committee
11 December 2024
Governance
121
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Steven Wilderspin FCA
Chair of the Audit and Risk committee
I am pleased to present the Company’s Audit and Risk
committee report for the year ended 30 September 2024.
Audit, risk and internal control
Audit and Risk committee report
Summary
The committee operates within clearly dened
terms of reference, a copy of which is available
from the Company’s website or on request from
the Company Secretary. The terms of reference
require the committee to monitor the Company’s
nancial reporting, internal controls, risk
management and external audit process.
The committee is responsible for making
recommendations to the Board in respect of the
appointment, re-appointment and remuneration
of the Auditor and the Auditor’s plan for the year.
Composition
At 30 September 2024, the committee comprised
three Directors: Steven Wilderspin (Chair), who is
a Chartered Accountant, Dawn Crichard, who is
also a Chartered Accountant, and Julia Chapman,
who is a qualied solicitor.
The Board considers that the independence,
experience and knowledge of each of
the committee members is sufcient for
discharging its responsibilities. The committee
formally met four times during the year ended
30September2024. Attendance of members at
these meetings is shown in the table on page 118.
Financial reporting
The committee considered the requirements
ofthe UK Companies Act 2006 (Strategic
Reportand Directors’ Report) Regulations 2013,
with which it is complying voluntarily, in line
with best practice reporting. The committee
specically reviewed the annual report and
nancial statements to conclude whether
it is, when taken as a whole, fair, balanced,
understandable, comprehensive and consistent
with prior years’ reporting and how the Board
assesses the performance of the Company’s
business during the nancial year, as required
under the AIC Code.
As part of this review, the committee
considered if the annual report and nancial
statements provided the information necessary
to shareholders to assess the Company’s
performance, strategy and business model and
reviewed the description of the Company’s key
performance indicators as well as updating the
governance section of the annual report.
The committee presented its recommendations
to the Board and the Board concluded that
it considered the annual report and nancial
statements, taken as a whole, to be fair,
balanced and understandable and to provide the
information necessary for the shareholders to
assess the Company’s performance, business
model and strategy.
122
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
In addition to the above matters, the committee’s
work was focused on the following areas:
— reviewing the effectiveness of the internal
control environment of the Company;
— reviewing and recommending to the
Board signicant accounting matters and
accounting disclosures in the half-yearly
and annual nancial statements of the
Company including matters of judgement
in relation to the valuation of nancial
assets at fair value through prot or loss.
Thecommittee discussed these matters
with the independent Valuation Agent, the
Investment Adviser and the Auditor, including
the Auditor’s valuation specialist;
— overseeing relations with the Auditor,
including assessing the conduct and
effectiveness of the audit process and the
Auditor’s independence and objectivity,
recommending the Auditor’s re-appointment
and approving the Auditor’s fees;
— reviewing the Company’s compliance with its
regulatory obligations in Jersey and listing
requirements;
— developing the Company’s risk management
framework;
— reviewing the committee’s own terms of
reference; and
— reviewing the Company’s cash management
and treasury policy.
The Auditor is invited to attend the committee
meetings where the audit plan, annual report
and half-yearly reports are considered and has
the opportunity to meet with the committee
without representatives of the Investment
Adviser being present. The committee has direct
access to the Auditor and to the key senior
staff of the Investment Adviser and reports its
ndings and recommendations to the Board,
which retains the ultimate responsibility for
the nancial statements of the Company. All
recommendations were accepted by the Board.
External audit
The committee met with the Auditor in June 2024
to review, challenge and agree their audit plan for
the audit of the nancial statements, in particular
their approach to the valuation of investments.
The committee also met with the Auditor in
December 2024 to discuss their report, following
the conclusion of the audit.
The Auditor explained the results of the audit
and conrmed that based on their audit work,
there were no adjustments proposed that
were material in the context of the nancial
statements as a whole.
Audit fees for the year amounted to £182,000
(30 September 2023: £169,000). Non-audit fees
amounted to £50,000 (30 September 2023:
£47,000) and were incurred solely in relation to
the Auditor’s review of the Company’s half-yearly
report.
KPMG has been the Auditor of the Company since
their appointment at the AGM in February2016,
following an external audit tender process in
October 2015. Andrew Quinn is the current
audit partner for the nancial year ended
30September 2024. Following completion of
the 30 September 2025 nancial statements
audit, KPMG will have been the Company’s
Auditor for ten years and Mr Quinn the audit
partner for ve years. There are no contractual
obligations restricting the choice of Auditor and
the Company will put the audit services contract,
with respect to the audit of the Company’s
nancial statements for the year ending
30September 2026, out to tender in 2025. The
Company is obligated to conduct a formal audit
tender process at least every ten years which it
will commence ahead of the 30 September 2026
annual accounts. KPMG could be re-appointed
considering that they have not served as Auditor
for 20 years. However, their tender would be with
a new audit partner.
The committee reviewed the quality and
effectiveness of the audit process during the
year, considering the performance, objectivity,
independence and relevant experience of the
Auditor. Following this review, the committee
concluded the audit was effective and of
good quality and has recommended the
re-appointment of KPMG as the Company’s
Auditor at the 2025 AGM.
As with previous years, it has been decided
that the Auditor would review the Company’s
half-yearly report and nancial statements, but
the Auditor would not be requested to perform
any other non-audit services.
The Audit and Risk committee considers KPMG
to be independent to the Company and the
provision of such non-audit services is not a
threat to the objectivity and independence of
the conduct of the audit. KPMG conrmed their
compliance with their standard independence
and objectivity procedures to the Audit and Risk
committee.
Governance
123
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Audit, risk and internal control continued
Audit and Risk committee report continued
Signicant issues considered
The signicant issues relating to the nancial statements, and how these issues were addressed, are noted below. After discussions with both the
Investment Adviser and the Auditor, the committee determined that the key risks of material misstatement of the Company’s nancial statements
relatedto the valuation of the investments.
Valuation of investments
As outlined in notes 11 and 19 to the nancial statements, the total carrying value of nancial assets at fair value
at 30 September 2024 was £0.96 billion (30 September 2023: £1.0 billion). Market quotations are not available for
these nancial assets, instead their valuation is undertaken using a discounted cash ow methodology where
applicable. This requires a series of material judgements to be made, as further explained innote 19.3 to the
nancial statements.
The committee discussed the valuation process and methodology with the Investment Adviser as part of the
quarterly Board meeting cycle and during the review of the half-yearly and annual reports. The independent
Valuation Agent provides a detailed valuation report to the Company quarterly. The committee, together with
therest of the Board, discuss their views of the market with the independent Valuation Agent and Investment
Adviser and the relevant discount rates of individual investments within the portfolio as part of the quarterly
valuation process.
The discount rates adopted to determine the valuation are selected and recommended by the independent
Valuation Agent. The discount rates applied to the expected future cash ows for each investment’s nancial
forecasts are derived by adopting the assumptions explained in note 19.3 to the nancial statements.
Theresulting valuation is sensitive to the discount rate selected, in addition to other key assumptions which
affect forecast future cash ows, such as future ination rates and forecast electricity prices. The independent
Valuation Agent is experienced and active in the area of valuing these investments and adopts discount rates it
believes are appropriate using its extensive experience.
In particular, the committee considered the effect of electricity prices on the valuation of investments.
Additionaldisclosures in relation to the impact can be seen in the Investment portfolio section on pages 52 and
53. The committee reviewed in detail the electricity price sensitivity analysis prepared by the Investment Adviser
and its potential impact on the NAV of the Company.
The committee discussed the Company’s material estimates and judgements with the Investment Adviser; this
included discussions regarding the valuation of the shareholder interest exposure of the investments within the
portfolio, which is c.6% of the portfolio by value. The committee was satised that the range of discount rates
was appropriate for the valuation carried out by the independent Valuation Agent.
As detailed in the investment portfolio section on page 44, there have been certain investments subject to
upward and downward revaluations equivalent to 0.59 and 5.47 pence per share respectively during the year.
These revaluations were discussed and agreed with the independent Valuation Agent and the Investment Adviser.
The upward revaluations predominantly comprise revisions to ination forecasts and principal indexation applied
to the valuation of the portfolio and the impact of the latest tax computations. The majority of the downward
revaluation is a direct result of discount rate changes, lower electricity prices and power generation, and other
inationary and portfolio revaluations. Further information on valuation movements is given on page 50.
The committee, along with the Investment Adviser, continues to monitor the impact of changes to electricity price
forecasts on the valuation of investments closely. Given ongoing tensions in the Middle East and the conict in
Ukraine, there remains a risk of volatility in electricity prices, which the Investment Adviser continues to partially
mitigate with the hedging programme.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
124
Other matters considered
Other matters reviewed by the committee during
the year are noted below.
Risk management
During the year, the committee continued
developing and reviewing its risk management
framework and procedures. A full business risk
assessment was conducted by the committee
and considered by the Board in October 2024.
The committee also considered the presentation
of risk-related matters in the annual report and
nancial statements, asdisclosed on pages 88
to 97.
Going concern and viability statement
The nancial statements have been prepared on
a going concern basis, with the viability period of
ve years unchanged in the viability statement;
see pages 98 and 99 for further information.
Thecommittee reviewed the Company’s viability
statement and accompanying commentary,
as well as projections, stress testing and
sensitivities, including the risks associated
with volatile electricity prices, prepared by
theInvestment Adviser.
The committee considered the viability
statement prepared by the Investment Adviser,
which included consideration of the availability
of the Company’s credit facilities, hedging
arrangements, cash ow forecasts and stress
scenarios. The Auditor was provided with the
assessments and relevant supporting papers
as part of their audit of the annual report.
The committee concluded that the going
concern basis of preparation for the annual
nancial statements and the Company’s viability
statement was appropriate.
Internal controls
The committee monitored and reviewed the
internal controls of the Company, which included:
— review of reports on the control systems
and their operation within the Investment
Adviser and the Administrator to determine
the effectiveness of their internal controls
respectively; and
— conducting an onsite visit of the Administrator
in October 2024 to discuss their control
systems and their operations, including a
review of relevant policies and procedures.
The committee concluded that the Company’s
internal controls remain adequate and effective.
Details of the Company’s internal control review
and risk management process are outlined on
page 88.
Regulatory
The committee considered reports from
the Company’s Compliance Ofcer, Money
Laundering Compliance Ofcer and Money
Laundering Reporting Ofcer, and considered
the Company’s compliance with its regulatory
requirements and obligations.
Steven Wilderspin FCA
Chair of the Audit and Risk committee
11 December 2024
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
125
Remuneration
Directors’ remuneration report
The report is made up of two sections: the annual report on remuneration and the Directors’ remuneration policy.
The annual report on remuneration provides details on remuneration in the year. Although it is not a requirement under Jersey Company Law to have the
Directors’ remuneration report or the Directors’ remuneration policy approved by shareholders, the Board believes that as a company whose shares are
traded on the LSE, it is good practice for the Company to do so.
The Directors’ remuneration report will be put to a shareholder vote every year. Accordingly, an ordinary resolution will be put to shareholders at the 2025
AGM to receive and approve the Directors’ remuneration report.
The Directors’ remuneration policy is put to a shareholder vote at least every three years and in any year if there is to be a change in the Directors’
remuneration policy. The remuneration policy was approved by shareholders in 2022, and although there will be no change in the way in which the policy will
be implemented during the course of the next nancial year, given the three year period, the policy will be put to shareholders at the AGM in February 2025.
This report is not subject to audit.
Voting at Annual General Meeting
The Directors’ remuneration report for the year ended 30 September 2023 was approved by shareholders at the 2024 AGM and the votes cast by proxy
were as follows:
Directors’ remuneration report
Number of
votes cast
% of
votes cast
For 431,186,770 99.88
Against 512,038 0.12
Total votes cast 431,698,808 100.00
Number of votes withheld 423,808 —
Directors’ remuneration
The remuneration paid to the Directors during the year ended 30 September 2024 (and prior year) is set out in the table below and on page 127:
30 September 2024
Directors’
fees
(base fee)
£’000
Chairman/
Senior
Independent
Director fee
£’000
Management
Engagement
committee
Chair fee
£’000
Sustainability
committee
(formerly ESG
committee)
Chair fee
£’000
Audit and Risk
committee fees
£’000
Investment
committee fees
£’000
Total
£’000
Andrew Didham 50 33 — — — 13 96
Julia Chapman 50 3 — — 8 — 61
Michael Gray 50 — — — — 26 76
Steven Wilderspin 50 — — — 24 — 74
Dawn Crichard 50 — 3 12 8 — 73
Alex Yew 50 — — — — 13 63
Total 300 36 3 12 40 52 443
The Directors are pleased to present their report on
remuneration for the year ended 30 September 2024.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
126
30 September 2023
Directors’
fees
(base fee)
£’000
Chairman/
Senior
Independent
Director fee
£’000
Management
Engagement
committee
Chair fee
£’000
Sustainability
committee
(formerly ESG
committee)
Chair fee
£’000
Audit and Risk
committee fees
£’000
Investment
committee fees
£’000
Total
£’000
Andrew Didham 47 32 — — — 13 92
Ian Reeves CBE
1
4 — — — — 1 5
Julia Chapman 47 3 — — 8 — 58
Michael Gray 47 — — — — 25 72
Steven Wilderspin 47 — — — 23 — 70
Dawn Crichard 47 — 3 12 8 — 70
Alex Yew
2
43 — — — — 12 55
Total 282 35 3 12 39 51 422
1. Ian Reeves CBE retired from the Board on 31 October 2022. Prior to this, he was a member of the Investment committee, Management Engagement committee, the
Sustainability committee and Nomination committee.
2. Alex Yew joined as a non-executive Director and became a member of the Investment committee, the Management Engagement committee and the Sustainability committee
on 1 November 2022.
Directors’ expenses for the year totalled £8,000 (30 September 2023: £10,000). No other remuneration or compensation was paid or payable by the
Company during the year to any of the Directors. There are no long-term incentive schemes provided by the Company and no performance fees or bonuses
paid to Directors. Any changes to Directors’ aggregate remuneration are considered at the AGM of the Company.
During the year, the Board approved an increase of 5% with effect from 1 October 2023 to Directors’ remuneration against a twelve month CPI in
October2023 of 4.6%.
Post year end, on 23 October 2024, the Board approved a further increase to Directors’ remuneration of 3% against twelve month CPI in September 2024.
The increased remuneration amounts are effective from 1 October 2024 and are shown on page 130.
The cumulative cap on Directors’ fees of £500,000 as approved at the 2018 AGM, remains unchanged.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
127
Remuneration continued
Directors’ remuneration report continued
Company performance
In setting the Directors’ remuneration, consideration is given to the size and long-term performance of the Company. The tables below set out total
shareholder return and NAV total return to ordinary shareholders since the Company’s launch compared with the Sterling Corporate Bond Index over the
same period. The Sterling Corporate Bond Index is used as a benchmark as the constituents are comparable in asset type with the Company’s investment
portfolio (being a portfolio of debt instruments). For the year ended 30 September 2024, total shareholder return
1
was 28.4%, compared with the Sterling
Corporate Bond Index which was 10.7%.
Cumulative performance to 30 September 2024
Period Three months One year Three years Five years Since launch
GCP Infra (share price) 0.6% 28.4% (0.3%) (9.9%) 101.8%
GCP Infra (net asset value) (0.6%) 2.2% 22.3% 30.8% 176.6%
Sterling Corporate Bond Index 2.4% 10.7% (9.0)% (4.8)% 76.5%
Annual performance to 30 September 2024
Period
Year ended
30 September
2024
Year ended
30 September
2023
Year ended
30 September
2022
Year ended
30 September
2021
Year ended
30 September
2020
GCP Infra (share price) 28.4% (25.2%) 3.8% (7.9%) (2.0%)
GCP Infra (net asset value) 2.2% 3.7% 15.8% 7.2% (0.1%)
Sterling Corporate Bond Index 10.7% 8.1% (24.0%) 0.1% 4.6%
Basis: percentage growth, total return with dividends reinvested. Past performance is not a guide to future performance.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
128
Relative importance of the spend on pay
The table below sets out, in respect of the nancial years ended 30 September 2024 and 30 September 2023:
a) total income;
b) the remuneration paid to the Directors;
c) the distributions made to shareholders by way of a dividend; and
d) share repurchases.
30 September
2024
£’000
30 September
2023
£’000
Change
%
Total income 38,329 51,705 (25.9%)
Directors’ remuneration
1
443 422 5%
Dividends paid to shareholders 60,750 61,785 (1.7%)
Share repurchases 2,183 10,603 (79.4%)
1. Excluding Directors’ expenses.
Directors’ interests
Directors, together with their family members, had the following interests in the shares of the Company:
30 September
2024
Number of
Shares held
30 September
2023
Number of
Shares held
Andrew Didham 146,345 93,024
Julia Chapman 60,446 60,446
Steven Wilderspin 15,000 15,000
Dawn Crichard 80,463 75,261
Alex Yew 75,000 20,000
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
129
Remuneration continued
Directors’ remuneration policy
The Company follows the recommendation of the AIC Code that non-executive Directors’ remuneration should reect the time commitment and
responsibilities of the role. The Board’s policy is that the remuneration of non-executive Directors should reect the experience of the Board as a whole
and be determined with reference to comparable organisations and appointments.
The fees of the non-executive Directors are determined within the limits set out in the Company’s Articles of Association, and the Directors are not eligible
for bonuses, pension benets, share options, long-term incentive schemes or other benets.
There are no performance conditions attached to the remuneration of the Directors as the Board does not consider such arrangements or benets
necessary or appropriate for non-executive Directors.
It is the Board’s policy that Directors do not have service contracts but are provided with a letter of appointment as a non-executive Director. Under the
Directors’ letters of appointment, there is no notice period and no compensation is payable to a Director on leaving ofce.
The Company is committed to ongoing shareholder dialogue and any views expressed by shareholders on Directors’ fees are taken into consideration
bythe Board when reviewing the Directors’ remuneration policy and associated Directors’ fees.
Directors’ fee levels
The Board has set different fee levels to reect the workload, responsibilities and time commitment of the various roles held by Board members.
Thecurrent cumulative cap on Directors’ fees is £500,000. The fee levels in respect of the year ended 30 September 2024 and the expected fee levels
inrespect of the year ending 30 September 2025 are as follows:
Fee level
30 September
2024
30 September
2025
Base fee 49,660 51,150
Chairman’s fee 33,000 34,000
Senior Independent Director’s fee 3,400 3,520
Chair of the Audit and Risk committee 24,000 24,720
Chair of the Investment committee 26,400 27,200
Chair of the Management Engagement committee 3,400 3,520
Chair of the Sustainability committee (previously the ESG independent Director representative fee) 12,600 12,980
Member of the Audit and Risk committee 8,000 8,240
Member of the Investment committee 13,200 13,600
Approval
The Directors’ remuneration report was approved by the Board and signed on its behalf by:
Andrew Didham
Chairman
11 December 2024
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
130
Directors’ report
Principal activity and business review
The strategic report on pages 20 to 99 has been
prepared by the Directors and should be read in
conjunction with the Chairman’s statement and
forms part of the annual report to shareholders.
Corporate governance
The corporate governance statement on pages
110 to 130 forms part of this Directors’ report.
Directors
The Directors in ofce during the year and at the
date of this report and their biographical details
are shown on pages 104 to 105.
Details of the changes in Directors can be found
under Board tenure and succession planning on
page 121.
Details of the Directors’ terms of appointment
can be found in the corporate governance
statement on pages 110 to 130.
The Company has Directors’ and Ofcers’ liability
insurance, professional indemnity insurance,
and crime and property loss cover for nancial
institutions to cover legal defence costs. Under
the Company’s Articles of Association, the
Directors are provided, subject to the provisions
of Jersey legislation, with an indemnity in respect
of liabilities which they may sustain or incur in
connection with their appointment.
Director conicts of interest
It is the responsibility of each individual Director
to avoid an unauthorised conict of interest
situation arising. The Director must inform the
Board as soon as he or she becomes aware of
an interest that might conict with the interests
of the Company. The Company’s Articles of
Association authorise the Board to approve such
situations, where deemed appropriate.
A register of conicts is maintained by the
Company Secretary and is reviewed at Board
meetings, to ensure that any authorised conicts
remain appropriate. The Directors are required
to conrm at these meetings whether there has
been any change to their position.
The Directors must also comply with the
statutory rules requiring company directors to
declare any interest in an actual or proposed
transaction or arrangement with the Company.
Share capital
At the AGM held on 14 February 2024, the
Company was granted the authority to allot
ordinary shares up to 10% of its total issued
share capital at that date on a non-pre-emptive
basis, amounting to 88,479,766 ordinary shares.
No ordinary shares have been allotted under this
authority during the year. The Company will be
seeking shareholder approval at the Company’s
AGM, scheduled to be held in February2025,
to renew this authority. This will provide the
Company with the ability to take advantage
of investment opportunities as they arise and
further broaden its investor base over time.
Details of the movements in share capital during
the year are set out in the statement of changes
in equity on page 144 and in note 16 to the
nancial statements.
Furthermore, at the 2024 AGM, the Company
was granted the authority to purchase up to
14.99% of the Company’s ordinary share capital
in issue at the date on which the notice of the
AGM was published, 17 January 2024, amounting
to 132,631,170 ordinary shares. This authority will
expire at the conclusion of, and renewal will be
sought at, the AGM to be held in February 2025.
During the year, the Company repurchased
3,420,000 shares under this authority
(30September2023: 13,565,019), an aggregate
total of 16,985,019 shares since the buyback
programme commenced in March2023, at a
weighted average price of 63.83 pence per share,
a discount to the prevailing NAV. The Company
may hold any ordinary shares that it purchases
in treasury or cancel them, in accordance with
the Articles and Companies Law. The Directors
believe that it is desirable for the Company to
have this choice. Holding the shares purchased in
treasury gives the Company the ability to re-sell
or transfer them quickly and cost effectively and
provides the Company with additional exibility in
the management of its capital base.
The decision to cancel any shares purchased by
the Company or hold such shares in treasury will
be made by the Directors at the time of purchase,
on the basis of the Company’s and shareholders’
best interests.
At 30 September 2024, the Company’s issued
share capital comprised 884,797,669 ordinary
shares of no par value (30 September 2023:
884,797,669), 16,985,019 of which are held in
treasury. The total voting rights of the Company
at 30 September 2024 were 867,812,650
(30September 2023: 871,232,650), being
the issued share capital minus shares held in
treasury.
At general meetings of the Company, every
ordinary shareholder shall have one vote in
respect of every ordinary share.
The Directors are pleased to present their report
for the year ended 30 September 2024.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
131
Directors’ report continued
Dividends
Details of dividends paid and declared during the
year are set out in note 9.
The Company offers a scrip dividend alternative
under which shareholders elect to receive new
ordinary shares in lieu of the cash dividend.
The price of a new ordinary share to be issued
under the scrip dividend alternative is calculated
by taking the average of the Company’s closing
middle market quotations of an ordinary share
for the ex-dividend date and the four subsequent
dealing days.
As a result of the Company’s ordinary shares
trading at a discount to the prevailing NAV, the
Board has exercised its discretion to suspend the
scrip dividend alternative since 1 July 2022.
The Board will keep under consideration the offer
of a scrip dividend alternative in respect of future
quarterly dividends if the Company’s ordinary
shares trade at a premium to the prevailing
published NAV at the relevant time.
Greenhouse gas emissions reporting
Refer to the sustainability report on pages
80 to 81 for information on the Company’s
climate-related emissions.
Signicant voting rights
At 30 September 2024, the Company had been informed of the following holdings representing more than 3% of the voting rights of the Company:
Name Shares held
% of total
voting rights
Rathbones Investment Management 68,445,728 7.89
Gravis Capital Management 41,007,604 4.73
West Yorkshire Pension Fund 38,344,860 4.42
Asset Value Investors 38,000,000 4.38
Close Brothers Asset Management 37,813,024 4.36
Hargreaves Lansdown Stockbrokers (EO) 34,988,150 4.03
Investec Wealth & Investment 30,452,660 3.51
The following changes have been notied to the Company between 30 September 2024 and the date of this report:
Name Shares held
% of total
voting rights
Rathbones Investment Management 92,272,983 10.63
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
132
Political donations
The Company made no donations to political
parties or organisations during the year and no
political expenditure was incurred.
Auditor
The Directors holding ofce at the date of this
annual report conrm that, so far as they are
each aware, there is no relevant audit information
of which the Company’s Auditor is unaware.
Each Director has taken all the steps necessary
as a Director to make themselves aware of
any relevant audit information and to establish
that the Company’s Auditor is aware of that
information.
KPMG has expressed its willingness to continue in
ofce as Auditor of the Company and resolutions
for its re-appointment and to authorise the
Board to determine its remuneration will be
proposed at the forthcoming 2025 AGM.
Financial risk management
Information about the Company’s nancial risk
management objectives and policies is set out in
note 19 to the nancial statements.
Requirements of the Listing Rules
Listing Rule 6.6.4 requires the Company to
include specied information in a single
identiable section of the annual report or a
cross reference table indicating where the
information is set out. Interest income capitalised
is disclosed as loan interest capitalised in note3
to the nancial statements. The Directors
conrm that there are no other disclosures
required in relation to Listing Rule 6.6.4.
Approved by the Board
This Directors’ report was approved by the Board
and signed on its behalf by:
Andrew Didham
Chairman
11 December 2024
Governance
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
133
Statement of Directors’ responsibilities
Page 136
Independent Auditor’s report
Pages 137 to 141
Statement of comprehensive income
Page 142
Statement of nancial position
Page 143
Statement of changes in equity
Page 144
Statement of cash ows
Page 145
Notes to the nancial statements
Pages 146 to 169
Financial statements
What’s in
the section
134
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
The Autumn Budget was eagerly anticipated.
While taxes and NHS funding grabbed the
initial headlines (including £1.5 billion for new
hospital beds and diagnostic centres), the new
Government’s commitment to making the UK a
clean energy superpower is increasingly positive.
The Board believes this presents a material
opportunity for investment and growth in the UK
and is vital for achieving the UK’s decarbonisation
commitments.
Commitments to hire 300 more planners
and work with the National Energy System
Operator (“NESO”) and Ofgem to accelerate
grid connections are welcome to unlocking
development. A commitment to reform relevant
National Policy Statements within twelve months
also recognises the need for planning reform.
Other infrastructure and clean energy pledges
included £8 billion for carbon capture, usage and
storage infrastructure and include eleven green
hydrogen projects.
There was also support for four new electrolytic
hydrogen projects across Scotland and Wales,
£200 million for electric vehicle charging
infrastructure, support for port infrastructure
to facilitate oating offshore wind (£134 million),
the rollout of broadband through Project Gigabit
and shared rural networks (£500 million) and
£125million for Great British Energy in 2025/26
(£100 million of capital and £25 million of
establishment costs).
In relation to core infrastructure, the Chancellor
built on the new Government’s manifesto
commitments and announced £5 billion to
meet their commitment of delivering 1.5 million
new homes, £1.4 billion to rebuild schools, and
£1.2billion to deliver extra prison services.
The Board is looking forward to the
announcement of the ten year infrastructure
strategy which will be published in the spring of
2025 and a ‘Clean Power 2030 Action Plan’ which
the new Government have also committed to.
Both are expected to contain more detail than
was provided in the Autumn Budget on the new
Government’s commitment to decarbonise the
electricity grid by 2030, and how it will support
wider infrastructure deployment.
Autumn Budget 2024
Financial statements
135
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Statement of Directors’ responsibilities
In respect of the annual report and nancial statements
The Directors are responsible for preparing
the nancial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
nancial statements for each nancial year.
Under Jersey Company Law they have elected to
prepare the nancial statements in accordance
with International Financial Reporting Standards
(“IFRS”) as adopted by the EU and applicable law.
Under Jersey Company Law, the Directors must
not approve the nancial statements unless they
are satised that they give a true and fair view
of the state of affairs of the Company and of the
prot or loss of the Company for that period.
In preparing these nancial statements, the
Directors are required to:
— select suitable accounting policies and apply
them consistently;
— make judgements and estimates that are
reasonable and prudent;
— state whether applicable accounting
standards have been followed, subject
to anymaterial departures disclosed and
explained in the nancial statements;
— assess the Company’s ability to continue as
a going concern, disclosing, as applicable,
matters related to going concern; and
— use the going concern basis of accounting
unless they either intend to liquidate the
Company or to cease operations, or have
norealistic alternative but to do so.
The Directors are responsible for keeping
adequate accounting records that are sufcient
to show and explain the Company’s transactions
and disclose with reasonable accuracy at any
time the nancial position of the Company
and enable them to ensure that the nancial
statements comply with Jersey Company Law.
They are responsible for such internal control
as they determine is necessary to enable the
preparation of nancial statements that are free
from misstatement, whether due to fraud or
error, and have general responsibility for taking
such steps as are reasonably open to them to
safeguard the assets of the Company and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the
maintenance and integrity of the corporate and
nancial information included on the Company’s
website. Legislation in Jersey governing the
preparation and dissemination of nancial
statements may differ from legislation in other
jurisdictions where the nancial statements are
published on the internet.
Directors’ responsibility statement
In accordance with the UK FCA’s Disclosure
Guidance and Transparency Rules, each of the
Directors on the Board at the date of this report,
whose names are set out on page 116, conrms
that to the best of his or her knowledge:
— the nancial statements have been prepared
in accordance with IFRS as adopted by the
EU, give a true and fair view of the assets,
liabilities, nancial position and prot or loss
of the Company; and
— the strategic report, including the Directors’
report, includes a fair, balanced review of
the development and performance of the
business and the position of the Company,
together with a description of the principal
risks and uncertainties that the Company
faces.
The annual report and nancial statements, taken
as a whole, are considered by the Board to be
fair, balanced and understandable and provide
the information necessary for shareholders to
assess the Company’s position and performance,
business model and strategy.
On behalf of the Board
Andrew Didham
Chairman
11 December 2024
136
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Independent Auditor’s report
To the members of GCP Infrastructure Investments Limited
Our opinion is unmodied
We have audited the nancial statements of
GCP Infrastructure Investments Limited (the
“Company”), which comprise the statement of
nancial position as at 30 September 2024, the
statements of comprehensive income, changes
in equity and cash ows for the year then ended,
and notes, comprising material accounting
policies and other explanatory information.
In our opinion, the accompanying nancial
statements:
— give a true and fair view of the nancial
position of the Company as at 30 September
2024, and of the Company’s nancial
performance and cash ows for the year then
ended;
— are prepared in accordance with International
Financial Reporting Standards as adopted by
the EU; and
— have been properly prepared in accordance
with the Companies (Jersey) Law, 1991.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities
are described below. We have fullled our ethical
responsibilities under, and are independent of
the Company in accordance with, UK ethical
requirements including the FRC Ethical Standard
as applied to listed entities. We believe that the
audit evidence we have obtained is a sufcient
and appropriate basis for our opinion.
Key audit matters: our assessment of the risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most signicance in the audit of the nancial statements and include the
most signicant assessed risks of material misstatement (whether or not due to fraud) identied by us, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matter was as follows (unchanged from 2023):
Key audit matters The risk Our response
Valuation of nancial assets at
fair value through prot or loss
£960,023,000 or 98.8% of total
assets; (2023: £1,046,568,000 or
98.3% of total assets)
Refer to the Audit and Risk
Committee Report (pages 122
to 125), note 2.2 - signicant
accounting judgements and
estimates, and note 11 - nancial
assets at fair value through prot
or loss, and note 19 - nancial
instruments
Basis:
98.8% of the Company’s total assets is
represented by the fair value of a portfolio of
unquoted infrastructure investments domiciled
in the United Kingdom (the ‘Investments’).
The Company’s estimation of the fair value
of the Investments primarily involves using a
discounted cash ow methodology, where the
inputs and assumptions, such as the amounts
and timings of cash ows, the use of appropriate
discount rates and the selection of appropriate
assumptions surrounding uncertain future
events are subjective.
Our audit procedures included:
Internal Controls:
We tested the design and implementation of the controls
adopted by the Company over the valuation of the
Investments.
Evaluating experts engaged by management:
We performed enquiries of the Investment Adviser
and Valuation Agent to update our knowledge of the
valuation process and methodology and reassessed its
appropriateness against industry practice and IFRS.
We evaluated the competency of the Company’s third party
Valuation Agent in the context of their ability to appropriately
challenge and review the fair value of the Investments
prepared by the Company, by assessing their professional
qualications, experience and independence from the
Company.
Use of KPMG Specialists:
We challenged, with the support of our KPMG valuation
specialist, the reasonableness of discount rates applied in
the valuation by comparing these to independent market
data including discount rates used by peers, recent market
transactions and our KPMG valuation specialist’s experience
in valuing similar investments.
Financial statements
137
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Key audit matters The risk Our response
Risk:
There is a risk of error associated with:
— estimating the timing and amounts of long-
term forecasted cash ows; and
— the selection and application of appropriate
assumptions, such as discount rates and
other inputs.
Changes to long-term forecasted cash ows
and/or the selection and application of different
assumptions and inputs may result in a materially
different fair value being attributed to the
Investments
Our audit procedures included continued:
Challenging managements’ assumptions and inputs:
We performed substantive procedures in relation to the
Company’s determination of fair value on a risk based
selection of Investments, which included:
— for new Investments during the year, compared the
long-term forecasted cash ows included in the
discounted cash ow model to the terms of the loan
agreements, such as the repayment prole, prepayment
premium, loan term and the coupon;
— assessed the recoverability of outstanding cash ows by
considering nancial performance of underlying assets,
the general economic environment and reviewing the
repayment history;
— assessed the reasonableness of key general and
project-specic inputs and assumptions into the
cash ow projections for equity linked loan notes, to
corroborate key revenues and costs with reference to
relevant market data, underlying contracts, agreements
and management information; and
— assessed the reliability of the Company’s cash ow
forecasts included in the valuation models by appraising
the completeness and accuracy of the retrospective
review analysis performed by the Investment Adviser.
Assessing disclosures:
We considered the adequacy of the Company’s disclosures
in note 19.3 in respect of the fair value of Investments
for compliance with IFRS, specically the estimates and
judgements made by the Company in arriving at that fair value
and the disclosure of the degree of sensitivity of the fair
value to a reasonably possible change in the discount rate.
Our application of materiality and an overview of the scope of our audit
Materiality for the nancial statements as a whole was set at £10,000,000, determined with reference to a benchmark of total assets of £971,915,000, of
which it represents approximately 1.0% (2023: 1.0%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material
amount across the nancial statements as a whole. Performance materiality for the Company was set at 75% (2023: 75%) of materiality for the nancial
statements as a whole, which equates to £7,500,000. We applied this percentage in our determination of performance materiality because we did not
identify any factors indicating an elevated level of risk.
We reported to the Audit and Risk Committee any corrected or uncorrected identied misstatements exceeding £500,000, in addition to other identied
misstatements that warranted reporting on qualitative grounds.
Our audit of the Company was undertaken to the materiality level specied above, which has informed our identication of signicant risks of material
misstatement and the associated audit procedures performed in those areas as detailed above.
Independent Auditor’s report continued
To the members of GCP Infrastructure Investments Limited
Key audit matters: our assessment of the risks of material misstatement continued
138
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Going concern
The directors have prepared the nancial
statements on the going concern basis as they
do not intend to liquidate the Company or to
cease its operations, and as they have concluded
that the Company's nancial position means
that this is realistic. They have also concluded
that there are no material uncertainties that
could have cast signicant doubt over its ability
to continue as a going concern for at least a
year from the date of approval of the nancial
statements (the “going concern period").
In our evaluation of the directors' conclusions,
we considered the inherent risks to the
Company's business model and analysed how
those risks might affect the Company's nancial
resources or ability to continue operations over
the going concern period. The risks that we
considered most likely to affect the Company's
nancial resources or ability to continue
operations over this period were:
— availability of capital to meet operating costs
and other nancial commitments;
— availability of credit facilities and the ability of
the Company to comply with debt covenants;
and
— the recoverability of nancial assets subject
to credit risk.
We considered whether these risks could
plausibly affect the liquidity in the going concern
period by comparing severe, but plausible
downside scenarios that could arise from these
risks individually and collectively against the level
of available nancial resources indicated by the
Company’s nancial forecasts.
We considered whether the going concern
disclosure in note 2.1 to the nancial statements
gives a full and accurate description of the
directors' assessment of going concern.
Our conclusions based on this work:
— we consider that the directors' use of the
going concern basis of accounting in the
preparation of the nancial statements is
appropriate;
— we have not identied, and concur with the
directors' assessment that there is not, a
material uncertainty related to events or
conditions that, individually or collectively,
may cast signicant doubt on the Company's
ability to continue as a going concern for the
going concern period; and
— we have nothing material to add or draw
attention to in relation to the directors'
statement in the notes to the nancial
statements on the use of the going concern
basis of accounting with no material
uncertainties that may cast signicant doubt
over the Company's use of that basis for the
going concern period, and that statement
is materially consistent with the nancial
statements and our audit knowledge.
However, as we cannot predict all future events
or conditions and as subsequent events may
result in outcomes that are inconsistent with
judgements that were reasonable at the time
they were made, the above conclusions are not
a guarantee that the Company will continue in
operation.
Fraud and breaches of laws and regulations
– ability to detect
Identifying and responding to risks of
material misstatement due to fraud
To identify risks of material misstatement due
to fraud (“fraud risks”) we assessed events
or conditions that could indicate an incentive
or pressure to commit fraud or provide
an opportunity to commit fraud. Our risk
assessment procedures included:
— enquiring of management as to the Company’s
policies and procedures to prevent and
detect fraud as well as enquiring whether
management have knowledge of any actual,
suspected or alleged fraud;
— reading minutes of meetings of those charged
with governance; and
— using analytical procedures to identify any
unusual or unexpected relationships.
As required by auditing standards, we perform
procedures to address the risk of management
override of controls, in particular the risk that
management may be in a position to make
inappropriate accounting entries. On this audit
we do not believe there is a fraud risk related
to revenue recognition because the Company’s
revenue streams are simple in nature with
respect to accounting policy choice, and are
easily veriable to external data sources or
agreements with little or no requirement for
estimation from management. We did not identify
any additional fraud risks.
We performed procedures including
— Identifying journal entries and other
adjustments to test based on risk criteria and
comparing any identied entries to supporting
documentation; and
— incorporating an element of unpredictability in
our audit procedures.
Financial statements
139
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Fraud and breaches of laws and regulations
– ability to detect continued
Identifying and responding to risks
of material misstatement due to
non-compliance with laws and regulations
We identied areas of laws and regulations that
could reasonably be expected to have a material
effect on the nancial statements from our
sector experience and through discussion with
management (as required by auditing standards),
and from inspection of the Company’s regulatory
and legal correspondence, if any, and discussed
with management the policies and procedures
regarding compliance with laws and regulations.
As the Company is regulated, our assessment
of risks involved gaining an understanding of
the control environment including the entity’s
procedures for complying with regulatory
requirements.
The Company is subject to laws and regulations
that directly affect the nancial statements
including nancial reporting legislation and
taxation legislation and we assessed the extent
of compliance with these laws and regulations as
part of our procedures on the related nancial
statement items.
The Company is subject to other laws and
regulations where the consequences of
non-compliance could have a material effect
on amounts or disclosures in the nancial
statements, for instance through the imposition
of nes or litigation or impacts on the Company’s
ability to operate. We identied nancial services
regulation as being the area most likely to
have such an effect, recognising the regulated
nature of the Company’s activities and its legal
form. Auditing standards limit the required
audit procedures to identify non-compliance
with these laws and regulations to enquiry of
management and inspection of regulatory and
legal correspondence, if any. Therefore if a
breach of operational regulations is not disclosed
to us or evident from relevant correspondence,
an audit will not detect that breach.
Context of the ability of the audit to detect
fraud or breaches of law or regulation
Owing to the inherent limitations of an audit,
there is an unavoidable risk that we may not
have detected some material misstatements
in the nancial statements, even though we
have properly planned and performed our audit
in accordance with auditing standards. For
example, the further removed non-compliance
with laws and regulations is from the events
and transactions reected in the nancial
statements, the less likely the inherently limited
procedures required by auditing standards would
identify it.
In addition, as with any audit, there remains a
higher risk of non-detection of fraud, as this may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
controls. Our audit procedures are designed
to detect material misstatement. We are not
responsible for preventing non-compliance or
fraud and cannot be expected to detect non-
compliance with all laws and regulations.
Other information
The directors are responsible for the other
information. The other information comprises
the information included in the annual report
but does not include the nancial statements
and our auditor's report thereon. Our opinion
on the nancial statements does not cover the
other information and we do not express an audit
opinion or any form of assurance conclusion
thereon.
In connection with our audit of the nancial
statements, our responsibility is to read the
other information and, in doing so, consider
whether the other information is materially
inconsistent with the nancial statements or our
knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on
the work we have performed, we conclude that
there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Disclosures of emerging and principal risks
and longer term viability
We are required to perform procedures to
identify whether there is a material inconsistency
between the directors’ disclosures in respect
of emerging and principal risks and the viability
statement, and the nancial statements and our
audit knowledge. we have nothing material to add
or draw attention to in relation to:
— the directors’ conrmation within the Going
Concern Assessment and Viability Statement
(page 98) that they have carried out a robust
assessment of the emerging and principal
risks facing the Company, including those that
would threaten its business model, future
performance, solvency or liquidity;
— the emerging and principal risks disclosures
describing these risks and explaining how they
are being managed or mitigated;
— the directors’ explanation in the Going
Concern Assessment and Viability Statement
(page 98) as to how they have assessed
the prospects of the Company, over what
period they have done so and why they
consider that period to be appropriate, and
their statement as to whether they have a
reasonable expectation that the Company
will be able to continue in operation and
meet its liabilities as they fall due over the
period of their assessment, including any
related disclosures drawing attention to any
necessary qualications or assumptions.
We are also required to review the Going
Concern Assessment and Viability Statement, set
out on page 98 under the Listing Rules. Based on
the above procedures, we have concluded that
the above disclosures are materially consistent
with the nancial statements and our audit
knowledge.
Independent Auditor’s report continued
To the members of GCP Infrastructure Investments Limited
140
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Corporate governance disclosures
We are required to perform procedures to
identify whether there is a material inconsistency
between the directors’ corporate governance
disclosures and the nancial statements and our
audit knowledge.
Based on those procedures, we have concluded
that each of the following is materially consistent
with the nancial statements and our audit
knowledge:
— the directors’ statement that they consider
that the annual report and nancial
statements taken as a whole is fair, balanced
and understandable, and provides the
information necessary for shareholders
to assess the Company’s position and
performance, business model and strategy;
— the section of the annual report describing
the work of the Audit and Risk Committee,
including the signicant issues that the audit
and risk committee considered in relation
to the nancial statements, and how these
issues were addressed; and
— the section of the annual report that
describes the review of the effectiveness of
the Company’s risk management and internal
control systems.
We are required to review the part of Corporate
Governance Statement relating to the
Company’s compliance with the provisions of the
UK Corporate Governance Code specied by the
Listing Rules for our review. We have nothing to
report in this respect.
We have nothing to report on other matters on
which we are required to report by exception
We have nothing to report in respect of the
following matters where the Companies (Jersey)
Law 1991 requires us to report to you if, in our
opinion:
— adequate accounting records have not been
kept by the Company; or
— the Company's nancial statements are not in
agreement with the accounting records; or
— we have not received all the information and
explanations we require for our audit.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set
out on page 136, the directors are responsible
for: the preparation of the nancial statements
including being satised that they give a true and
fair view; such internal control as they determine
is necessary to enable the preparation of
nancial statements that are free from material
misstatement, whether due to fraud or error;
assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters
related to going concern; and using the going
concern basis of accounting unless they either
intend to liquidate the Company or to cease
operations, or have no realistic alternative but to
do so.
Auditor's responsibilities
Our objectives are to obtain reasonable
assurance about whether the nancial
statements as a whole are free from material
misstatement, whether due to fraud or
error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of
assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will
always detect a material misstatement when it
exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in aggregate, they could reasonably be
expected to inuence the economic decisions
of users taken on the basis of the nancial
statements.
A fuller description of our responsibilities is
provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The purpose of this report and restrictions
on its use by persons other than the
Company's members as a body
This report is made solely to the Company’s
members, as a body, in accordance with Article
113A of the Companies (Jersey) Law 1991 and,
in respect of any further matters on which
we have agreed to report, on terms we have
agreed with the Company. Our audit work has
been undertaken so that we might state to
the Company’s members those matters we are
required to state to them in an auditor’s report
and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the Company
and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we
have formed.
Andrew Quinn
For and on behalf of KPMG Channel Islands Limited
Chartered Accountants and Recognized Auditors
Jersey
11 December 2024
Financial statements
141
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Statement of comprehensive income
For the year ended 30 September 2024
Notes
Year ended
30 September
2024
£’000
Year ended
30 September
2023
£’000
Income
Net income/gains on nancial assets at fair value through prot or loss 3 37,340 29,301
Net gains on derivative nancial instruments at fair value through prot or loss 3 496 12,860
Other income 3 493 9,544
Total income 38,329 51,705
Expenses
Investment advisory fees 20 (8,300) (8,670)
Operating expenses 5 (3,038) (2,752)
Total expenses (11,338) (11,422)
Total operating prot before nance costs 26,991 40,283
Finance costs 6 (7,477) (9,378)
Total prot and comprehensive income for the year 19,514 30,905
Basic and diluted earnings per share (pence) 10 2.25 3.50
All of the Company’s results are derived from continuing operations.
The accompanying notes on pages 146 to 169 form an integral part of these nancial statements.
142
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Statement of nancial position
As at 30 September 2024
Notes
As at
30 September
2024
£’000
As at
30 September
2023
£’000
Assets
Cash and cash equivalents 14 11,755 16,867
Other receivables and prepayments 12 137 575
Derivative nancial instruments at fair value through prot or loss 18 — 265
Financial assets at fair value through prot or loss 11, 19 960,023 1,046,568
Total assets 971,915 1,064,275
Liabilities
Other payables and accrued expenses 13 (2,885) (4,048)
Derivative nancial instruments at fair value through prot or loss 18 (110) —
Interest bearing loans and borrowings 15 (55,790) (103,674)
Total liabilities (58,785) (107,722)
Net assets 913,130 956,553
Equity
Share capital 16 8,678 8,712
Share premium 16 858,965 861,118
Capital redemption reserve 17 101 101
Retained earnings 45,386 86,622
Total equity 913,130 956,553
Ordinary shares in issue (excluding treasury shares) 16 867,812,650 871,232,650
NAV per ordinary share (pence per share) 105.22 109.79
The nancial statements were approved and authorised for issue by the Board of Directors on 11 December 2024 and signed on its behalf by:
Andrew Didham Steven Wilderspin FCA
Chairman Director
The accompanying notes on pages 146 to 169 form an integral part of these nancial statements.
Financial statements
143
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Statement of changes in equity
For the year ended 30 September 2024
Notes
Share
capital
£’000
Share
premium
1
£’000
Capital
redemption
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
At 1 October 2022 8,848 871,606 101 117,502 998,057
Total prot and comprehensive income
fortheyear — — — 30,905 30,905
Share repurchases 16 (136) (10,467) — — (10,603)
Shares repurchase costs 16 — (21) — — (21)
Dividends 9 — — — (61,785) (61,785)
At 30 September 2023 8,712 861,118 101 86,622 956,553
Total prot and comprehensive income
fortheyear — — — 19,514 19,514
Share repurchases 16 (34) (2,149) — — (2,183)
Shares repurchase costs 16 — (4) — — (4)
Dividends 9 — — — (60,750) (60,750)
At 30 September 2024 8,678 858,965 101 45,386 913,130
1. The share premium reserve is a distributable reserve in accordance with Jersey Company Law. Refer to note 9 for further information.
The accompanying notes on pages 146 to 169 form an integral part of these nancial statements.
144
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Statement of cash ows
For the year ended 30 September 2024
Notes
Year ended
30 September
2024
£’000
Year ended
30 September
2023
£’000
Cash ows from operating activities
Total operating prot before nance costs 26,991 40,283
Adjustments for:
Loan interest income 3 (87,297) (80,750)
Net losses on nancial assets at fair value through prot or loss 3 49,957 51,449
Net gains on derivative nancial instruments at fair value through prot or loss 3 (496) (12,860)
Decrease in other payables and accrued expenses (1,097) (33)
Decrease/(increase) in other receivables and prepayments 436 (390)
Total (11,506) (2,301)
Loan interest received 3 65,129 58,791
Purchase of nancial assets at fair value through prot or loss 11 (5,133) (66,739)
Repayment of nancial assets at fair value through prot or loss 11 63,889 78,012
Proceeds on derivative nancial instruments at fair value through prot or loss 3 871 8,734
Net cash ows generated from operating activities 113,250 76,497
Cash ows from nancing activities
Proceeds from revolving credit facility 15 18,147 55,000
Repayment of revolving credit facility 15 (67,022) (50,000)
Share repurchases 16 (2,183) (10,090)
Share repurchase costs 16 (4) (20)
Dividends paid 9 (60,750) (61,785)
Finance costs paid (6,550) (8,716)
Net cash ows used in nancing activities (118,362) (75,611)
Net (decrease)/increase in cash and cash equivalents (5,112) 886
Cash and cash equivalents at beginning of the year 16,867 15,981
Cash and cash equivalents at end of the year 14 11,755 16,867
Net cash ows generated by operating activities includes:
Loan fee income 3 61 9,143
Deposit interest received 3 432 401
The accompanying notes on pages 146 to 169 form an integral part of these nancial statements.
Financial statements
145
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements
For the year ended 30 September 2024
1. General information
GCP Infrastructure Investments Limited is a public
company incorporated and domiciled in Jersey on
21 May 2010 with registration number 105775. The
Company is governed by theprovisions of Jersey
Company Law and the CIF Law.
The Company is a closed-ended investment
company and its ordinary shares are traded on
the Main Market of the LSE.
The Company makes infrastructure investments,
typically by acquiring interests in debt
instruments issued by infrastructure Project
Companies, their owners or their lenders and
related and/or similar assets which provide
regular and predictable long-term cash ows.
2. Material accounting policy information
The principal accounting policies applied in the
preparation of these nancial statements are set
out below. These policies, except for the changes
discussed in this note, have been consistently
applied throughout the years presented.
2.1 Basis of preparation
These nancial statements are prepared in
accordance with IFRS as adopted by the EU. The
nancial statements have been prepared under
the historical cost convention, as modied by the
revaluation of nancial assets and liabilities held
at fair value through prot or loss.
New standards, amendments and interpretations
adopted in the year
In the current year the Company has applied
amendments to IFRS issued by the IASB.
These include annual improvements to IFRS,
changes in standards, legislative and regulatory
amendments, changes in disclosure and
presentation requirements.
The new IFRS that will apply for reporting periods
beginning 1 January 2027 is as follows:
— presentation and disclosure in nancial
statements (introduction of IFRS 18).
Under current IFRS accounting standards,
companies use different formats to present
their results, making it difcult for investors
to compare nancial performance across
companies.
IFRS 18 promotes a more structured income
statement. In particular, it introduces a newly
dened ‘operating prot’ subtotal and a
requirement for all income and expenses to be
allocated between three new distinct categories
based on a company’s main business activities.
The Directors are still assessing the impact
of IFRS 18, but at present do not anticipate
it to have a material impact on the nancial
statements. Other than those detailed above,
there are no new IFRS or IFRIC interpretations
that are issued but not effective that are
expected to have a material impact on the
Company’s nancial statements.
Classication and measurement of nancial
instruments
Amendments to IFRS 7 and 9 effective on or
before 1 January 2026, over the following 12
months an assessment will be conducted on the
impact of IFRS 7 and 9 which relate to settlement
of liabilities through electronic payment systems
and the classication of nancial assets with
ESGand similar features. The Company has
elected not to early adopt the amendments to
IFRS 7 and 9.
Functional and presentation currency
Items included in the nancial statements of
the Company are measured in the currency of
the primary economic environment in which the
Company operates. The nancial statements are
presented in Pound Sterling and all values have
been rounded to the nearest thousand pounds
(£’000) except where otherwise indicated.
Going concern
The Directors have made an assessment of
the Company’s ability to continue as a going
concern and are satised that the Company has
the resources to continue in business for the
foreseeable future and for a period of at least
twelve months from the date of the authorisation
of these annual nancial statements.
The Investment Adviser has prepared cash ow
forecasts which were challenged and approved
by the Directors and included consideration of
the availability of the Company’s RCF, hedging
arrangements, cash ow forecasts and stress
scenarios.
The Directors are not aware of any material
uncertainties that cast doubt upon the
Company’s ability to continue as a going concern.
Therefore, the nancial statements have been
prepared on a going concern basis.
2.2 Signicant accounting judgements
andestimates
The preparation of nancial statements in
accordance with IFRS requires the Directors of
the Company to make judgements, estimates
and assumptions that affect the application of
accounting policies and the reported amounts
recognised in the nancial statements.
However, uncertainty about these assumptions
and estimates could result in outcomes that
require a material adjustment to the carrying
amount of the asset or liability in the future.
(a) Critical accounting estimates and
assumptions
Fair value of instruments not quoted in an
activemarket
The valuation process is dependent on
assumptions and estimates which are signicant
to the reported amounts recognised in the
nancial statements taking into account the
structure of the Company and the extent of its
investment activities (refer to note 19 for further
information).
146
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
(b) Critical judgements
Assessment of non-current assets held for sale
The Directors have determined that at the date of the report, none of the Company's assets full the classication criteria prescribed by IFRS 5.
Thisdetermination has been made with consideration to the Company's capital allocation policy and the relative progress of various sales processes.
This process requires judgement in assessing a complex range of commercial factors in the context of the purpose, objectives and operational norms of
the Company and its sector, and the application of the objective and scope of the standard. Factors considered include: the probability of completing a
sale within a specied timeframe, the status of commercial negotiations and related agreements, the relative strength of obligations or disincentives for
non-performance, and the possibility of impediments to completion or a change in terms.
Assessment as an investment entity
The Directors have determined that the SPVs through which the Company invests fall under the control of the Company in accordance with the control
criteria prescribed by IFRS 10 and therefore meet the denition of subsidiaries. In addition, the Directors continue to hold the view that the Company
meets the denition of an investment entity and therefore can measure and present the SPVs at fair value through prot or loss. This process requires
a signicant degree of judgement taking into account the complexity of the structure of the Company and the extent of investment activities (refer to
note11 for further information).
Segmental information
For management purposes, the Company is organised into one main operating segment. All of the Company’s activities are interrelated and each activity is
dependent on the others. Accordingly, all signicant operating decisions by the Board (as the chief operating decision maker) are based upon analysis of
the Company as one segment. The nancial results from this segment are equivalent to the nancial statements of the Company as a whole. The following
table analyses the Company’s underlying operating income per geographical location. The basis for attributing the operating income is the place of
incorporation of the underlying counterparty.
30 September
2024
£’000
30 September
2023
£’000
Channel Islands 432 401
United Kingdom 37,897 51,304
Total 38,329 51,705
3. Operating income
The table below analyses the Company’s operating income for the year by investment type:
30 September
2024
£’000
30 September
2023
£’000
Interest received on cash and cash equivalents 432 401
Loan fee income
1
61 9,143
Other income 493 9,544
Net changes in fair value of nancial instruments at fair value through prot or loss 37,836 42,161
Total 38,329 51,705
1. Includes prepayment fee of £61,000 (30 September 2023: prepayment fees of £8,715,000 and restructuring fee income of £375,000).
Financial statements
147
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
3. Operating income continued
The table below analyses the Company’s net changes in fair value of nancial assets and nancial liabilities at fair value through prot or loss:
30 September
2024
£’000
30 September
2024
£’000
30 September
2023
£’000
30 September
2023
£’000
Loan interest received 65,129 58,791
Loan interest capitalised 22,168 21,959
Total loan interest income 87,297 80,750
Unrealised gains on nancial assets at fair value through prot or loss 13,549 15,017
Unrealised losses on nancial assets at fair value through prot or loss (65,394) (66,603)
Total net unrealised losses on nancial assets at fair value through prot or loss (51,845) (51,586)
Net realised gains on disposal of nancial assets at fair value through prot or loss 1,888 137
Total net losses on nancial assets at fair value through prot or loss (49,957) (51,449)
Total net income/gains on nancial assets at fair value through prot or loss 37,340 29,301
Unrealised (losses)/gains on derivative nancial instruments at fair value through
prot or loss (375) 4,126
Realised gains on settlement of derivative nancial instruments at fair value
through prot or loss 871 8,734
Total net gains on derivative nancial instruments at fair value through prot
orloss 496 12,860
Net changes in fair value of nancial instruments at fair value through prot
orloss 37,836 42,161
Accounting policy
Interest income and interest expense, other than interest income received on nancial assets at fair value through prot or loss, are recognised on an
accrual basis in the statement of comprehensive income. Interest income on nancial assets is included in net income/gains on nancial assets at fair
value through prot or loss in the statement of comprehensive income.
Gains or losses on disposals of nancial assets at fair value through prot or loss represent the difference between the proceeds received on
the repayment of loan notes and the carrying value of loan notes at the time of sale or disposal. Net gains or losses on disposal of nancial assets
at fairvalue through prot or loss are included in net income/gains on nancial assets at fair value through prot or loss in the statement of
comprehensive income.
Other operating income includes unscheduled (early) prepayment fees which are recognised in the nancial statements when the contractual
provisions are met and the amounts become due.
The Company holds derivative nancial instruments comprising a commodity swap to hedge its exposure to the volatility of the electricity prices in
the market. It is not the Company’s policy to trade in derivative nancial instruments. Commodity swaps are held at fair value through prot or loss,
being the difference between the xed legs with a xed price and oating legs that are indexed. The Company does not apply hedge accounting and
consequently all gains or losses in the fair value of the derivative nancial instruments are recognised in the statement of comprehensive income,
referto note 18.
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Annual report and nancial statements 2024
4. Auditor’s remuneration
30 September
2024
£’000
30 September
2023
£’000
Audit fees 182 169
Non-audit fees – review of half-yearly report and nancial statements 50 47
Total 232 216
5. Operating expenses
30 September
2024
£’000
30 September
2023
£’000
Corporate administration and Depositary fees 1,008 1,034
Legal and professional fees 49 18
Independent Valuation Agent fees 260 260
Directors’ remuneration and expenses
1
451 432
Advisory fees 229 114
Registrar fees 67 74
Other expenses 974 820
Total 3,038 2,752
1. Refer to note 7 for further information.
Key service providers other than the Investment Adviser (refer to note 20 for disclosures in respect of the Investment Adviser)
Administrator and Company Secretary
The Company has appointed Apex Financial Services (Alternative Funds) Limited as Administrator and Company Secretary. Fund accounting, administration
services and company secretarial services are provided to the Company pursuant to an agreement dated 31 January 2014 and amended and restated
on 20 November 2023. All Directors have access to the advice and services of the Company Secretary, who provides guidance to the Board, through
the Chairman, on governance matters. The fee for the provision of administration and company secretarial services during the year was £724,000
(30September 2023: £735,000), of which £172,000 remains payable at year end (30 September 2023: £182,000).
Depositary
Depositary services are provided to the Company by Apex Financial Services (Corporate) Limited pursuant to an agreement dated 21 July 2014.
Thefeeforthe provision of these services during the year was £284,000 (30 September 2023: £299,000) of which £70,000 remains payable at year end
(30September 2023: £74,000).
Accounting policy
All operating expenses are charged to the statement of comprehensive income and are accounted for on an accrual basis.
6. Finance costs
30 September
2024
£’000
30 September
2023
£’000
Finance costs 7,477 9,378
Accounting policy
Finance expenses in the statement of comprehensive income comprise loan arrangement fees, loan commitment fees, loan interest expense and
agency fees which are accounted for on an accruals basis along with interest accrued on the facility incurred in connection with the borrowing of funds.
Arrangement fees are amortised over the life of the facility.
Financial statements
149
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
7. Directors’ remuneration
The Directors of the Company are remunerated on the following basis:
30 September
2024
£’000
30 September
2023
£’000
Andrew Didham 96 92
Ian Reeves CBE
1
— 5
Julia Chapman 61 58
Michael Gray 76 72
Steven Wilderspin 74 70
Dawn Crichard 73 70
Alex Yew 63 55
443 422
Directors’ expenses 8 10
Total 451 432
1. Ian Reeves CBE stepped down as Chairman of the Company effective from 20 June 2022 and retired from the Board on 31 October 2022.
Full details of the Directors’ remuneration policy can be found on page 130.
8. Taxation
Prots arising in the Company for the year ended 30 September 2024 are subject to tax at the standard rate of 0% (30 September 2023: 0%)
inaccordance with the Income Tax (Jersey) Law 1961, as amended.
150
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Annual report and nancial statements 2024
9. Dividends
Dividends for the year ended 30 September 2024 were 7.0 pence per share (30 September 2023: 7.0 pence per share) as follows:
Quarter ended Dividend Pence
30 September
2024
£’000
30 September
2023
£’000
Current year dividends
30 September 2024
1
2024 fourth interim dividend 1.75 — —
30 June 2024 2024 third interim dividend 1.75 15,186 —
31 March 2024 2024 second interim dividend 1.75 15,187 —
31 December 2023 2024 rst interim dividend 1.75 15,187 —
Total 7.0 45,560 —
Prior year dividends
30 September 2023 2023 fourth interim dividend 1.75 15,190 —
30 June 2023 2023 third interim dividend 1.75 — 15,365
31 March 2023 2023 second interim dividend 1.75 — 15,452
31 December 2022 2023 rst interim dividend 1.75 — 15,484
Total 7.0 15,190 46,301
30 September 2022 2022 fourth interim dividend 1.75 — 15,484
Dividends in statement of changes in equity 60,750 61,785
Dividends settled in shares — —
Dividends in cash ow statement 60,750 61,785
For the forthcoming nancial year, the Directors have concluded the Company will target
2
a dividend of 7.0 pence per share.
The Board, at its discretion, has suspended the scrip dividend alternative as a result of the likely discount between any scrip dividend reference price of
the shares and the NAV per share of the Company. The Board intends to keep the offer of future scrip dividends under review.
Accounting policy
In accordance with the Company’s constitution, in respect of the ordinary shares, the Company will distribute the income it receives to the fullest
extent that is deemed appropriate by the Directors.
In declaring a dividend, the Directors consider the payment based on a number of factors, including accounting prot, fair value treatment of
investments held, future investments, buybacks, reserves, cash balances and liquidity. The payment of a dividend is considered by the Board and is
declared on a quarterly basis. Dividends are a form of distribution and, under Jersey Company Law, a distribution may be paid out of capital. Therefore,
the Directors consider the share premium reserve to be a distributable reserve. Dividends due to the Company’s shareholders are recognised when
they become payable.
1. On 24 October 2024, the Company declared a fourth interim dividend of 1.75 pence per share amounting to £15.2 million, which was paid on 29 November 2024 to ordinary
shareholders on the register at 1 November 2024.
2. The dividend target set out above is a target only and not a prot forecast or estimate and there can be no assurance that it will be met.
3. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
Financial statements
151
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
10. Earnings per share
Basic and diluted earnings per share are calculated by dividing total prot and comprehensive income for the year attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares in issue during the year.
Total prot
£’000
Weighted
average
number of
ordinary shares
Pence per
share
Year ended 30 September 2024
Basic and diluted earnings per ordinary share 19,514 867,940,448 2.25
Year ended 30 September 2023
Basic and diluted earnings per ordinary share 30,905 881,850,353 3.50
11. Financial assets at fair value through prot or loss
The table below analyses the movements in nancial assets at fair value through prot or loss during the year by the type of movement:
30 September
2024
£’000
30 September
2023
£’000
Opening balance 1,046,568 1,087,331
Purchases of nancial assets at fair value through prot of loss 27,301 138,698
Repayments of nancial assets at fair value through prot of loss (63,889) (128,012)
Net realised gains on disposal of nancial assets at fair value through prot or loss
1
1,888 137
Unrealised gains on nancial assets at fair value through prot or loss
2
13,549 15,017
Unrealised losses on nancial assets at fair value through prot or loss (65,394) (66,603)
Closing balance 960,023 1,046,568
1. Gains in the current year relate to the sale of Blackcraig wind farm, gains in the prior year relate to principal indexation on realised assets.
2. Includes principal indexation of £0.8 million (30 September 2023: £4.0 million) applied to certain loans.
All portfolio assets are held as security against the RCF (refer to note 15).
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Annual report and nancial statements 2024
The tables below show the reconciliation of purchases and repayments of nancial assets at fair value through prot or loss to the statement of
cashows:
Purchases
30 September
2024
£’000
30 September
2023
£’000
Purchases of nancial assets at fair value through prot or loss (27,301) (138,698)
Loan interest capitalised 22,168 21,959
Non-cash internal transfers — 50,000
Purchases of nancial assets at fair value through prot or loss in statement of cash ows (5,133) (66,739)
Repayments
30 September
2024
£’000
30 September
2023
£’000
Repayments of nancial assets at fair value through prot or loss 63,889 128,012
Non-cash internal transfers — (50,000)
Repayments of nancial assets at fair value through prot or loss in statement of cash ows 63,889 78,012
Accounting for subsidiaries
The Company’s investments are made through a number of SPVs (refer to note 23) which are domiciled in the UK. The Company owns 100% of the loan
notes issued by the SPVs with the exception of GCP Rooftop Solar 6 plc (37.1%), GCP Rooftop Solar Finance plc (31.1%) and FHW Dalmore (Salford Pendleton
Housing) plc (13.8%).
The Directors have made an assessment in regard to whether the Company, as an investor, controls or has signicant inuence in the SPVs under the
criteria within IFRS 10 and IAS 28, and whether the SPVs meet the denition of subsidiary or associate companies in accordance with IFRS 10 and IAS 28.
The Directors are of the opinion that the Company demonstrates all three of the criteria for all SPVs to be considered subsidiary companies within
the denition of control in IFRS 10, with the exception of GCP Rooftop Solar 6 plc, GCP Rooftop Solar Finance plc and FHW Dalmore (Salford Pendleton
Housing) plc, which are considered to be associates within the denition of IAS 28, as the Company has signicant inuence over the relevant activities
ofthe SPVs through similar arrangements. Associates are measured at fair value through prot or loss, as permitted by IAS 28.
Assessment as an investment entity
Entities that meet the denition of an investment entity within IFRS 10 are required to measure their investments in subsidiaries at fair value through
protor loss rather than consolidate the subsidiary companies. The criteria which dene an investment entity are as follows:
— an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;
— an entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income
orboth; and
— an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Directors have concluded that the Company continues to meet the characteristics of an investment entity, in that it has more than one investor
and its investors are not related parties; it holds a portfolio of investments, predominantly in the form of loan securities which generate returns through
interest income and capital appreciation; and the Company reports to its investors via quarterly investor information and to its management, via internal
management reports, on a fair value basis.
Financial statements
153
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
11. Financial assets at fair value through prot or loss continued
Accounting policy
The loan notes held by the Company are shown as nancial assets at fair value through prot or loss in the statement of nancial position, which in the
opinion of the Directors represents the fair value of the SPVs, as any other net assets held in the SPVs at year end are immaterial.
Principal indexation is applied to certain loan notes where applicable. The indexation is a contractually allowable inationary adjustment to loan principal
calculated where permitted by a predened mechanism in a loan agreement. The effect of the adjustment is to increase or decrease the fair value of certain
loan notes in line with the indexation factor which takes account of the rate of ination against a stipulated ination threshold of each relevant loan.
The Company recognises a nancial asset or a nancial liability when, and only when, it becomes a party to the contractual provisions of the instrument.
Purchases or sales of nancial assets that require delivery of assets within the time frame generally established by regulation or convention in the
marketplace are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset. A nancial asset (or, where
applicable, a part of a nancial asset or part of a group of similar nancial assets) is derecognised where:
— the rights to receive cash ows from the asset have expired;
— the Company has transferred its rights to receive cash ows from the asset or has assumed an obligation to pay the received cash ows in full
without material delay to a third party under a pass-through arrangement; and
— either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset but has transferred control of the asset.
When the Company transfers a portion of its rights to receive cash ows from an asset or has entered into a pass-through arrangement and has
neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the
extent of the Company’s continuing involvement in the asset. The Company derecognises a nancial liability when the obligation under the liability is
discharged, cancelled or expired.
Financial assets and nancial liabilities at fair value through prot or loss are recorded in the statement of nancial position at fair value. All transaction
costs for such instruments are recognised directly in the statement of comprehensive income.
After initial measurement, the Company measures nancial instruments which are classied as fair value through prot or loss at fair value. Subsequent
changes in the fair value of those nancial instruments are recorded in prot or loss in the statement of comprehensive income.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. For all other nancial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques.
Valuation techniques used by the independent Valuation Agent include using recent arm’s length market transactions, referenced to appropriate
current market data, and discounted cash ow analysis, at all times making as much use of available and supportable market data as possible.
An analysis of fair values of nancial instruments and further details as to how they are measured are provided in note 19.
12. Other receivables and prepayments
30 September
2024
£’000
30 September
2023
£’000
Other receivables and prepayments 137 575
Accounting policy
Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provision
for impairment. The Company recognises a loss allowance for expected credit losses on other receivables where necessary.
13. Other payables and accrued expenses
30 September
2024
£’000
30 September
2023
£’000
Investment advisory fees 2,062 2,132
Other payables and accrued expenses 823 1,916
Total 2,885 4,048
Accounting policy
Payables are recognised initially at fair value including transaction costs and subsequently measured at amortised cost using the effective interest method.
154
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Annual report and nancial statements 2024
14. Cash and cash equivalents
Cash held by nancial institutions at the year end is shown in the table below:
30 September
2024
£’000
30 September
2023
£’000
Barclays account 2,436 8,482
BONY account 527 —
Lloyds Money Market Call account — —
RBSI Capital and Interest account
1
6,700 4,435
RBSI Cash Management account 2,092 3,950
Total 11,755 16,867
1. For the year ended 30 September 2024, capital and interest received on 30 September 2024 was transferred to the Barclays account on 1 October 2024. In the prior year,
thesame occurred on 29 September 2023 and 2 October 2023, respectively.
Cash is held at a number of nancial institutions in order to spread credit risk. Cash awaiting investment is held on behalf of the Company at banks carrying
a minimum rating of A-1, P-1 or F1 from Standard & Poor’s, Moody’s or Fitch respectively, or in one or more similarly rated money market or short-dated
gilt funds. Cash is generally held on a short-term basis, pending subsequent investment. The amount of working capital that may be held at RBSI is limited
to the higher of £4 million or one quarter of the Company’s running costs. Any excess uninvested/surplus cash is held at other nancial institutions with
minimum credit ratings described above. The maximum amount to be held at any one of these other nancial institutions is £25 million or 25% of total cash
balances, whichever is the larger. It is also recognised that with the advent of the ring-fenced bank concept, it has become more difcult to interact with
sufciently well-rated counterparty banks.
Accounting policy
Cash and cash equivalents in the statement of nancial position and statement of cash ows comprise cash on hand, demand deposits, short-term
deposits in nancial institutions with original maturities of three months or less and short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignicant risk of changes in value.
15. Interest bearing loans and borrowings
30 September
2024
£’000
30 September
2023
£’000
Revolving credit facility 57,000 104,000
Unamortised arrangement fees (1,210) (326)
Total 55,790 103,674
The table below analyses the movement for the year:
30 September
2024
£’000
30 September
2023
£’000
Balance at the start of the year 103,674 98,009
Changes from cash ows
Proceeds from revolving credit facility 18,147 55,000
Repayment of revolving credit facility (67,022) (50,000)
Drawdown for RCF renancing fees 1,875 —
Non-cash changes
Amortisation of loan arrangement fees 644 665
Commitment and other capitalised fees (1,528) —
Balance at the end of the year 55,790 103,674
Financial statements
155
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
15. Interest bearing loans and borrowings continued
Revolving credit facility
Expired facility
Previously, the Company had secured an RCF of £190 million with Royal Bank of Scotland International, AIB (UK) plc, Lloyds Bank plc, Clydesdale Bank plc
(trading as Virgin Money) and Mizuho Bank Limited. The RCF was secured against underlying assets held by the Company. Interest on amounts drawn under
the facility were charged at SONIA plus 2.0% per annum. A commitment fee was payable on undrawn amounts of 0.7%.
At the beginning of the year, £104 million was drawn. On 16 February 2024, the facility was repaid as part of renancing and entering into a new RCF.
New facility
On 16 February 2024, the Company entered into a new secured RCF of £150 million with AIB (UK) plc, Lloyds Bank plc, Clydesdale Bank plc (trading as Virgin
Money) and Mizuho Bank Limited. The RCF is secured against the portfolio of underlying assets held by the Company. The facility is repayable in March
2027. Interest on amounts drawn under the facility is charged at SONIA plus 2.0% per annum. A commitment fee of 0.7% per annum is payable on undrawn
amounts. At 30 September 2024, the total amount drawn on the RCF was £57 million.
All amounts drawn under the RCF may be used in or towards the making of investments in accordance with the Company’s investment policy, with
additional exibility to allow the Company to enhance its working capital management. The facility provides the Company with continued access to exible
debt nance, allowing it to take advantage of investment opportunities as they arise, and may also be used to manage the Company’s working capital
requirements from time to time.
The RCF includes loan to value
1
and interest cover
1
covenants that are measured at the Company level. The Company has maintained sufcient headroom
against all measures throughout the nancial period and is in full compliance with all loan covenants at 30 September 2024.
Leverage
For the purposes of the UK AIFM Regime, leverage is any method which increases the Company’s exposure, including the borrowing of cash and the use
of derivatives. It is expressed as a ratio between the Company’s exposure and its NAV and is calculated under the gross and commitment methods, in
accordance with the UK AIFM Regime.
The Company is required to state its maximum and actual leverage levels, calculated as prescribed by the UK AIFM Regime, at 30 September 2024.
Thegures are as follows:
Leverage exposure
Maximum
limit
30 September
2024
Actual
exposure
30 September
2023
Actual
exposure
Gross method 1.20 1.05 1.10
Commitment method 1.20 1.07 1.11
The leverage gures disclosed above represent leverage calculated under the UK AIFM Regime methodology as follows:
30 September
2024
Gross
£’000
30 September
2024
Commitment
£’000
30 September
2023
Gross
£’000
30 September
2023
Commitment
£’000
Financial assets at fair value through prot or loss 960,023 960,023 1,046,568 1,046,568
Cash and cash equivalents — 11,755 — 16,867
Derivative nancial instruments at fair value through prot or loss
2
1,099 1,099 2,324 2,324
Total exposure under the UK AIFM Regime 961,122 972,877 1,048,892 1,065,759
Total shareholders’ funds (net assets) 913,130 913,130 956,553 956,553
Leverage (ratio) 1.05 1.07 1.10 1.11
The Company’s leverage limit under the UK AIFM Regime is 1.20, which equates to a gearing limit of 20%. The Company has maintained sufcient headroom
against the limit throughout the year.
1. AAPM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
2. Refer to note 18 for further information on derivative nancial instruments at fair value through prot or loss.
156
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Accounting policy
Borrowings are recognised initially at fair value, less attributable costs. Borrowings are subsequently stated at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the
borrowings using the effective interest method. Transaction costs are spread over the term of the RCF.
16. Authorised and issued share capital
30 September 2024 30 September 2023
Share capital
Number
of shares £’000
Number
of shares £’000
Ordinary shares issued and fully paid
Opening balance 884,797,669 8,848 884,797,669 8,848
Total shares in issue 884,797,669 8,848 884,797,669 8,848
Treasury shares
Opening balance (13,565,019) (136) — —
Shares repurchased (3,420,000) (34) (13,565,019) (136)
Total shares repurchased and held in treasury (16,985,019) (170) (13,565,019) (136)
Total ordinary share capital excluding treasury shares 867,812,650 8,678 871,232,650 8,712
Share capital represents the nominal amount of the Company’s ordinary shares in issue.
The Company is authorised in accordance with its Memorandum of Association to issue 1.5 billion ordinary shares, 300 million C shares and 300 million
deferred shares, each having a par value of one pence per share.
Share premium
30 September
2024
£’000
30 September
2023
£’000
Premium on ordinary shares issued and fully paid
Opening balance 861,118 871,606
Premium on equity shares issued through:
Share repurchases (2,149) (10,467)
Share repurchase costs (4) (21)
Total 858,965 861,118
Financial statements
157
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
16. Authorised and issued share capital continued
Share premium represents amounts subscribed for share capital in excess of the nominal value less associated costs of the issue, less dividend payments
charged to premium as and when appropriate. Share premium is a distributable reserve in accordance with Jersey Company Law.
The Company’s share capital is represented by one class of ordinary shares. Quantitative information about the Company’s share capital is provided in the
statement of changes in equity.
At 30 September 2024, the Company’s issued share capital comprised 884,797,669 ordinary shares (30 September 2023: 884,797,669), of which 16,985,019
(30 September 2023: 13,565,019) were held in treasury, and there were no C shares or deferred shares in issue.
The ordinary shares carry the right to dividends out of the prots available for distribution attributable to each share class, if any, as determined by the
Directors. Each holder of an ordinary share is entitled to attend meetings of shareholders and, on a poll, to one vote for each share held.
Accounting policy
The Directors of the Company continually assess the classication of the ordinary shares. If the ordinary shares cease to have all the features or
meet all the conditions set out to be classied as equity, they will be reclassied as nancial liabilities and measured at fair value at the date of
reclassication, with any differences from the previous carrying amount recognised in equity. Transaction costs incurred by the Company in issuing,
acquiring or reselling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly
attributable to the equity transaction that otherwise would have been avoided. No gain or loss is recognised in the statement of comprehensive income
on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.
17. Capital redemption reserve
30 September
2024
£’000
30 September
2023
£’000
Capital redemption reserve 101 101
The Company is required by Jersey Company Law to establish and maintain this reserve on the redemption of its own shares.
18. Derivative nancial instruments at fair value through prot or loss
On 27 March 2024, the Company entered into a commodity swap agreement with Axpo under the ISDA Master Agreement for risk management purposes,
which includes full right of set off. The derivative nancial instrument comprises a commodity swap on electricity/baseload for the purpose of hedging
electricity price market movements, in cases where the Company has stepped into projects and/or has direct exposure through its investment structure.
The commodity swap agreement expired on 30 September 2024 and was settled in October 2024 in line with the contractual terms.
On 27 September 2024, the Company entered into a new commodity swap agreement with LBCM under the ISDA Master Agreement framework for risk
management purposes, which includes full right of set off. The derivative nancial instrument comprises a commodity swap on baseload electricity for the
purpose of hedging market movements in electricity prices, in cases where the Company has stepped into projects and/or has direct exposure through its
investment structure. The commodity swap agreement is due to expire on 31 March 2025.
The table below sets out the valuation of the swap held by the Company at year end provided by Axpo and LBCM:
Derivative Maturity
Total
notional
quantity
Notional
quantity
per hour
Commodity swap – electricity/baseload ‘summer 2023’ 30 September 2023 26,352 MWh 6 MW
Commodity swap – electricity/baseload ‘winter 2023/24’ 31 March 2024 21,960 MWh 5 MW
Commodity swap – electricity/baseload ‘summer 2024’ 30 September 2024 35,136 MWh 8 MW
Commodity swap – electricity/baseload ‘winter 2024/25’ 31 March 2025 13,104 MWh 3 MW
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Annual report and nancial statements 2024
30 September
2024
£’000
30 September
2023
£’000
Fixed
Fixed price:
Summer 2023 (maturity 30 September 2023) £140.5/MWh — 607
Winter 2023/24 (maturity 31 March 2024) £106.5/MWh — 2,339
Summer 2024 (maturity 30 September 2024) £62.0/MWh 357 —
Winter 2024/25 (maturity 31 March 2025) £82.2/MWh 1,077 —
Floating
Commodity Reference Price Index: summer 2023 Electricity N2EX UK Power Index Day Ahead — (357)
Commodity Reference Price Index: winter 2023/24 Electricity N2EX UK Power Index Day Ahead — (2,324)
Commodity Reference Price Index: summer 2024 Electricity N2EX UK Power Index Day Ahead (445) —
Commodity Reference Price Index: winter 2024/25 Electricity N2EX UK Power Index Day Ahead (1,099) —
Fair value (110) 265
Accounting policy
Recognition of derivative nancial assets and liabilities takes place when the derivative contracts are entered into. They are initially recognised and
subsequently measured at fair value; transactions costs, where applicable, are included directly in nance costs. The Company does not apply hedge
accounting and consequently all gains or losses are recognised in the statement of comprehensive income in net gains/(losses) on derivative nancial
instruments at fair value through prot or loss.
19. Financial instruments
The table below sets out the classications of the carrying amounts of the Company’s nancial assets and nancial liabilities into categories of nancial
instruments under IFRS 9. The carrying amount of the nancial assets and nancial liabilities at amortised cost approximates their fair value.
Notes
30 September
2024
£’000
30 September
2023
£’000
Financial assets
Cash and cash equivalents 14 11,755 16,867
Other receivables and prepayments 12 137 575
Financial assets at amortised cost 11,892 17,442
Financial assets at fair value through prot or loss 11 960,023 1,046,568
Derivative nancial instruments at fair value through prot or loss 18 — 265
Total 971,915 1,064,275
Financial liabilities
Other payables and accrued expenses 13 (2,885) (4,048)
Interest bearing loans and borrowings 15 (55,790) (103,674)
Financial liabilities measured at amortised cost (58,675) (107,722)
Derivative nancial instruments at fair value through prot or loss 18 (110) —
Total (58,785) (107,722)
Financial statements
159
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
19. Financial instruments continued
19.1 Capital management
The Company is funded from equity balances, comprising issued ordinary share capital as detailed in note 16, and retained earnings, in addition to an RCF,
asdetailed in note 15.
The Company may seek to raise additional capital from time to time to the extent that the Directors and the Investment Adviser believe the Company will
be able to make suitable investments, with consideration also given to the alternatives of share buybacks and a reduction in leverage. The Company may
borrow up to 20% of its NAV at the time any such borrowings are drawn down. At the year end, the Company remains modestly geared with a loan to value
1
of6% (30 September 2023: 11%).
19.2 Financial risk management objectives
The Company has an investment policy and strategy, as summarised above, that sets out its overall investment strategy and its general risk management
philosophy and has established processes to monitor and control these in a timely and accurate manner. These guidelines are the subject of regular
operational reviews undertaken by the Investment Adviser to ensure that the Company’s policies are adhered to as it is the Investment Adviser’s duty to
identify and assist in the control of risk. The Investment Adviser reports regularly to the Directors, who have ultimate responsibility for the overall risk
management approach.
The Investment Adviser and the Directors ensure that all investment activity is performed in accordance with investment guidelines. The Company’s
investment activities expose it to various types of risks that are associated with the nancial instruments and markets in which it invests. Risk is inherent
to the Company’s activities and it is managed through a process of ongoing identication, measurement and monitoring. The nancial risks to which the
Company is exposed include market risk (which includes other price risk) and interest rate risk, credit risk and liquidity risk. Furthermore, the Company
is exposed to a number of shareholder interests, 6% of the portfolio by value, either as a result of the specic targeting of these positions or through
enforcing its security as a result of the occurrence of defaults. Such exposures are more sensitive to changes in market factors, such as electricity prices,
and the operational performance of projects and are therefore likely to result in increased volatility in the valuation of the portfolio.
Geopolitical and market uncertainties
During the year, market conditions have improved for the Company. Falling ination has been met by interest rate cuts, with the Bank of England
announcing a further interest rate cut of 25 basis points in November 2024. However, following the announcement of the new Government’s Budget at the
end of October, there are concerns that ination will creep higher as the new Government growth policy is set to have a knock-on effect on prices.
The war in Ukraine and the Israel-Hamas conict continue to be monitored by the Board and the Investment Adviser; however, both believe the effect on
energy prices and market volatility has subsided. The Israel-Hamas war in the Middle East is of particular concern to the Company, as there is a possibility
for sanctions to be implemented, which could have a knock-on effect on global energy markets. However, the Company’s infrastructure investments are
generally low-volatility investments with stable, pre-determined, long-term, public sector backed revenues.
There is also uncertainty regarding potential future Government intervention in the energy market, which may lead to forecast power prices not being
realisable in reality. The implementation of the Electricity Generator Levy in January 2023 impacted the short-term protability of certain assets in the
portfolio in the 2023 nancial year; however, there has been no impact in the current nancial year. The levy will be in place until 31 March 2028.
Climate risk
For the third consecutive year, the Investment Adviser carried out a climate risk assessment for each underlying portfolio asset to assess the actual and
potential impacts of climate-related risks and opportunities across the portfolio. The analysis considered both physical and transition risks for each asset.
The data collected was based upon IPCC, UK Government and publicly available data, supplemented by data inputs from the Investment Adviser’s portfolio
management team and its investment management team. Further information is given on pages 74 to 79. Based on the climate risk analysis undertaken, the
Investment Adviser does not currently propose to make any material changes to nancial forecasts due to climate risk.
1. APM – for denition and calculation methodology, refer to the APMs section on pages 170 to 172.
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GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
19.3 Market risk
There is a risk that market movements in interest rates, credit markets and observable yields may decrease or increase the fair value of the Company’s
nancial assets without regard to the assets’ underlying performance. The fair value of the Company’s nancial assets is measured and monitored on a
quarterly basis by the Investment Adviser with the assistance of the independent Valuation Agent.
The valuation principles used are based on a discounted cash ow methodology, where applicable. A fair value for each asset acquired by the Company is
calculated by applying a relevant market discount rate to the contractual cash ows expected to arise from each asset. At the year end, all investments
were classied as Level 3; refer to note 19.7 for additional information.
The independent Valuation Agent determines the discount rates that it believes the market would reasonably apply to each investment taking into account,
inter alia, the following signicant inputs:
— Pound Sterling interest rates;
— movements of comparable credit markets; and
— observable yields on other comparable instruments.
In addition, the following are also considered as part of the overall valuation process:
— general infrastructure market activity and investor sentiment; and
— changes to the economic, legal, taxation or regulatory environment.
The independent Valuation Agent exercises its judgement in assessing the expected future cash ows from each investment. Given that the investments
of the Company are generally xed-income debt instruments (in some cases with elements of ination protection) or other investments with a similar
economic effect, the focus of the independent Valuation Agent is on assessing the likelihood of any interruptions to the debt service payments, in light
of the operational performance of the underlying asset as conrmed by the Investment Adviser. Where appropriate, the independent Valuation Agent will
also consider long-term assumptions that have a direct impact on valuation, such as electricity prices, ination and availability. Given uctuating electricity
prices, the Investment Adviser has continued with a hedging programme to reduce volatility in the portfolio. Further information can be found on pages 52
and 53.
The table below shows how changes in discount rates affect the changes in the valuation of nancial assets at fair value through prot or loss. The
range of discount rates used reects the Investment Adviser’s view of a reasonable expectation of valuation movements across the portfolio in a twelve
monthperiod.
30 September 2024
Change in discount rates 0.50% 0.25% 0.0% (0.25%) (0.50%)
Value of nancial assets at fair value (£’000) 931,236 945,386 960,023 975,173 990,866
Change in valuation of nancial assets at fair value through
protor loss (£’000) (28,787) (14,637) — 15,150 30,843
At 30 September 2024, the discount rates used in the valuation of nancial assets ranged from 6.58% to 13.00%, with a rate of 20.00% being applied to one
nancial asset due to changes in the perceived risk associated with one project, representing 0.63% of the portfolio.
30 September 2023
Change in discount rates 0.50% 0.25% 0.0% (0.25%) (0.50%)
Value of nancial assets at fair value (£’000) 1,016,759 1,031,449 1,046,568 1,062,134 1,078,166
Change in valuation of nancial assets at fair value through
protor loss (£’000) (29,809) (15,119) — 15,566 31,598
At 30 September 2023, the discount rates used in the valuation of nancial assets ranged from 6.58% to 13.00%, with a rate of 20.00% being applied to one
nancial asset due to changes in the perceived risk associated with one project, representing 0.58% of the portfolio.
Financial statements
161
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Notes to the nancial statements continued
For the year ended 30 September 2024
19. Financial instruments continued
19.4 Interest rate risk
Interest rate risk has the following effect:
Fair value of nancial assets
Interest rates are one of the factors which the independent Valuation Agent takes into account when valuing nancial assets. Interest rate risk is
incorporated by the independent Valuation Agent into the discount rate applied to the nancial assets at fair value through prot or loss. Discount rate
sensitivity analysis is disclosed in note 19.3.
Future cash ows
The Company primarily invests in senior and subordinated debt instruments of infrastructure Project Companies. The nancial assets have xed interest
rate coupons, albeit with some ination protection and, as such, movements in interest rates will not directly affect the future cash ows payable to
theCompany.
Interest rate hedging may be carried out to seek protection against falling interest rates in relation to assets that do not have a minimum xed rate of
return acceptable to the Company in line with its investment policy and strategy. No interest rate hedging was undertaken at year end.
Where the debt instrument is subordinated, the Company is indirectly exposed to the gearing of the infrastructure Project Companies. The Investment
Adviser ensures as part of its due diligence that the Project Company debt ranking senior to the Company’s investment has been, where appropriate,
hedged against movement in interest rates, through the use of interest rate swaps. At 30 September 2024, the Company had not entered into any interest
rate swap contracts (30 September 2023: none).
Borrowings
Details of the RCF are given in note 15.
The new facility has a three year term and was renanced on similar terms to the previous RCF, with the most notable amendment being the introduction of
additional exibility in utilisations and repayments to allow the Company to enhance its working capital management.
The drawn amount under the RCF at 30 September 2024 was £57 million (30 September 2023: £104 million).
The following tables show an estimate of the sensitivity of the drawn amounts under the RCF to interest rate changes of 100, 200 and 300 basis points in
atwelve month period, with all other variables held constant.
30 September 2024
Change in interest rates 3.0% 2.0% 1.0% 0.0% (1.0%) (2.0%) (3.0%)
Value of interest expense
(£’000) 5,683 5,113 4,543 3,973 3,403 2,833 2,263
Changes in interest expense
(£’000) 1,710 1,140 570 — (570) (1,140) (1,710)
30 September 2023
Change in interest rates 3.0% 2.0% 1.0% 0.0% (1.0%) (2.0%) (3.0%)
Value of interest expense
(£’000) 10,594 9,554 8,514 7,474 6,434 5,394 4,354
Changes in interest expense
(£’000) 3,120 2,080 1,040 — (1,040) (2,080) (3,120)
Other nancial assets and liabilities
Bank deposits are exposed to and affected by uctuations in interest rates. However, the impact of interest rate risk on these assets and liabilities is not
considered material.
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19.5 Credit risk
Credit risk refers to the risk that the counterparty to a nancial instrument will fail to discharge an obligation or commitment that it has entered into with
the Company. The assets classied at fair value through prot or loss do not have a published credit rating; however, the Investment Adviser monitors the
nancial position and performance of the Project Companies on a regular basis to ensure that credit risk is appropriately managed.
The Company is exposed to differing levels of credit risk on all its assets. Per the statement of nancial position, the Company’s total exposure to credit
risk is £972 million (30 September 2023: £1,064 million) being the balance of total assets less prepayments. As a matter of general policy, cash is held at a
number of nancial institutions to spread credit risk, with cash awaiting investment being held on behalf of the Company at banks which carry a minimum
rating of A-1, P-1 or F1 from Standard & Poor’s, Moody’s or Fitch respectively or in one or more similarly rated money market or short-dated gilt funds. Cash
is generally held on a short-term basis, pending subsequent investment. The amount of working capital that may be held at RBSI is limited to the higher of
£4 million or the value of one quarter of the Company’s running costs. Any excess uninvested/surplus cash is held at other nancial institutions with the
minimum credit ratings described above. The maximum amount to be held at any one of these other nancial institutions is £25 million or 25% of total cash
balances, whichever is the larger. It is also recognised by the Board that the arrival of ring-fenced banking has impacted the availability of A-rated banks.
Before an investment decision is made, the Investment Adviser performs extensive due diligence complemented by professional third party advisers,
including technical advisers, nancial and legal advisers, and valuation and insurance experts. After an investment is made, the Investment Adviser
primarily uses detailed cash ow forecasts to assess the continued creditworthiness of Project Companies and their ability to pay all costs as they fall due.
Theforecasts are regularly updated with information provided by the Project Companies in order to monitor ongoing nancial performance.
The Project Companies receive a signicant proportion of revenue from Government departments and public sector or local authority clients.
The Project Companies are reliant on their subcontractors, particularly facilities managers, continuing to perform their service delivery obligations such
that revenues are not disrupted. The credit standing of each signicant subcontractor is monitored by the Investment Adviser on an ongoing basis, and
signicant exposures are reported to the Directors on a quarterly basis.
The concentration of credit risk to any individual project did not exceed 10% of the Company’s portfolio at the year end, which is the maximum amount
permissible per the Company’s investment policy. The Investment Adviser regularly monitors the concentration of risk based upon the nature of each
underlying project to ensure appropriate diversication and risk remains within acceptable parameters.
The concentration of credit risk associated with counterparties is deemed to be low due to asset and sector diversication. The underlying counterparties
are typically public sector entities which pay pre-determined, long-term, public sector backed revenues in the form of subsidy payments for renewables
transactions (i.e. FiT and ROCs payments), unitary charge payments for PFI transactions and lease payments for social housing projects. In the view of the
Investment Adviser and the Board, the public sector generally has both the ability and willingness to support the obligations to these entities.
There continues to be volatility in electricity market prices following the Russian invasion of Ukraine in 2022. These dynamics have resulted in the collapse
of some energy suppliers. The Company has exposure to certain electricity suppliers through offtake arrangements with renewable project borrowers.
Todate, the Company has not been directly impacted by suppliers that have collapsed.
Through its usual systems and processes, the Investment Adviser monitors the credit standing of all customers and suppliers and believes that where
offtakers have supply businesses they remain in a strong position to continue such arrangements. In any case, the Investment Adviser considers the
offtake market for renewable projects to be a liquid and competitive sector, meaning any arrangements that are terminated as part of an offtake collapse
could be easily replaced by a new third party.
Financial statements
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Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
19. Financial instruments continued
19.5 Credit risk continued
The credit risk associated with each Project Company is further mitigated because the cash ows receivable are secured over the assets of the Project
Company, which in turn has security over the assets of the underlying projects. The debt instruments in the portfolio are held by the Company at fair value,
and the credit risk associated with these investments is one of the factors which the independent Valuation Agent takes into account when valuing the
nancial assets.
Changes in credit risk affect the discount rates. The sensitivity of the fair value of the nancial assets at fair value through prot or loss is disclosed in
note 19.3. The Directors have assessed the credit quality of the portfolio at the year end and based on the parameters set out above, are satised that the
credit quality remains within an acceptable range for long-dated debt.
On 27 March 2024, the Company entered into a commodity swap agreement with Axpo under the ISDA Master Agreement for risk management purposes,
which includes full right of set off. The derivative nancial instrument comprises a commodity swap on electricity/baseload for the purpose of hedging
electricity price market movements, in cases where the Company has stepped into projects and/or has direct exposure through its investment structure.
The commodity swap agreement expired on 30 September 2024 and was settled in October 2024 in line with the contractual terms.
On 27 September 2024, the Company entered into a new commodity swap agreement with LBCM under the ISDA Master Agreement framework for risk
management purposes, which includes full right of set off. The derivative nancial instrument comprises a commodity swap on baseload electricity for the
purpose of hedging market movements in electricity prices, in cases where the Company has stepped into projects and/or has direct exposure through its
investment structure. The commodity swap agreement is due to expire on 31 March 2025.
The Company has not been required to post collateral in respect of the commodity swap agreement. There is potential for credit risk in relation to the
arrangement depending on whether the arrangement is an asset or a liability at any point in time. At the date of this report, the Company’s exposure to
credit risk relating to the commodity swap agreement is a £38,000 liability. LBCM is a subsidiary of Lloyds Banking Group plc, and the non-ring-fenced
bank of Lloyds Banking Group plc. LBCM has more than 1,200 employees providing banking, nancing and risk management services to its customers.
TheDirectors are satised that the credit risk associated with this entity as a counterparty is minimal and remains within the Company’s risk appetite.
Further information on derivative nancial instruments is given in note 18.
19.6 Liquidity risk
Liquidity risk is dened as the risk that the Company will encounter difculty in meeting obligations associated with nancial liabilities that are settled by
delivering cash or another nancial asset. Exposure to liquidity risk arises because of the possibility that the Company could be required to pay its liabilities
earlier than expected. The Company’s objective is to maintain a balance between continuity of funding and exibility through the use of bank deposits and
interest-bearing loans and borrowings.
The table on page 165 analyses the Company’s nancial assets and liabilities in relevant maturity groupings based on the remaining period from the period
end to the contractual maturity date. The Directors have elected to present both assets and liabilities in the liquidity disclosure to illustrate the net
liquidity exposure of the Company.
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Annual report and nancial statements 2024
All cash ows in the table below are on an undiscounted basis.
30 September 2024
Less than
one month
£’000
One to
three months
£’000
Three to
twelve months
£’000
Greater than
twelve months
£’000
Total
£’000
Non-derivative nancial assets
Cash and cash equivalents 11,755 — — — 11,755
Other receivables and prepayments — — 137 — 137
Financial assets at fair value through prot or loss 12,594 37,137 95,661 1,945,835 2,091,227
Derivative nancial assets at fair value through prot or loss
Inows 357 545 532 — 1,434
Outows (445) (537) (562) — (1,544)
Total nancial assets 24,261 37,145 95,768 1,945,835 2,103,009
Financial liabilities
Other payables and accrued expenses — (2,885) — — (2,885)
Interest bearing loans and borrowings (393) (733) (3,458) (63,372) (67,956)
Total nancial liabilities (393) (3,618) (3,458) (63,372) (70,841)
Net exposure 23,868 33,527 92,310 1,882,463 2,032,168
30 September 2023
Less than
one month
£’000
One to
three months
£’000
Three to
twelve months
£’000
Greater than
twelve months
£’000
Total
£’000
Non-derivative nancial assets
Cash and cash equivalents 16,867 — — — 16,867
Other receivables and prepayments — — 575 — 575
Financial assets at fair value through prot or loss — 3,498 107,523 1,785,689 1,896,710
Derivative nancial assets at fair value through prot or loss
Inows 607 — 2,339 — 2,946
Outows (357) — (2,324) — (2,681)
Total nancial assets 17,117 3,498 108,113 1,785,689 1,914,417
Financial liabilities
Other payables and accrued expenses — (4,048) — — (4,048)
Interest bearing loans and borrowings — (2,040) (105,951) — (107,991)
Total nancial liabilities — (6,088) (105,951) — (112,039)
Net exposure 17,117 (2,590) 2,162 1,785,689 1,802,378
Financial statements
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Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
19. Financial instruments continued
19.7 Fair values of nancial assets and nancial liabilities
Basis of determining fair value
Loan notes
The independent Valuation Agent carries out quarterly valuations of the nancial assets of the Company. These valuations are reviewed by the Investment
Adviser and the Directors. The subsequent NAV produced is reviewed and approved by the Directors on a quarterly basis.
The basis for the independent Valuation Agent’s valuation is described in note 19.3.
Derivative nancial instruments
The valuation principles used are based on inputs from observable market data, being a commonly quoted electricity price index, which most closely
reects a Level 2 input. The fair value of the derivative nancial instrument is derived from its mark-to-market (“MTM”) valuations provided by Axpo and
LBCM on a quarterly basis. The MTM value is calculated based on the xed leg of the commodity swap offset by the market price of the oating leg which
is indexed to the ‘Electricity N2EX UK Power Index Day Ahead’. The Investment Adviser monitors the exposure internally using its own valuation system.
Further information on derivative nancial instruments is given in note 18.
Fair value measurements
Investments measured and reported at fair value are classied and disclosed in one of the following fair value hierarchy levels depending on whether their
fair value is based on:
— Level 1: quoted prices in active markets for identical assets or liabilities;
— Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derivedfrom prices); and
— Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
An investment is always categorised as Level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for an investment may use a number
of different inputs that fall into different levels of the fair value hierarchy. In such cases, an investment level within the fair value hierarchy is based
on the lowest level of input that is signicant to the fair value measurement. The assessment of the signicance of a particular input to the fair value
measurement requires judgement and is specic to the investment.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting year during which the change has occurred.
The table below analyses all investments held by the level in the fair value hierarchy into which the fair value measurement is categorised:
Fair value
hierarchy
30 September
2024
£’000
30 September
2023
£’000
Financial assets at fair value through prot or loss
Loan notes Level 3 960,023 1,046,568
Derivative nancial instruments at fair value through prot or loss Level 2 — 265
Financial liabilities at fair value through prot or loss
Derivative nancial instruments at fair value through prot or loss Level 2 (110) —
Discount rates between 6.58% and 13.00%, with a rate of 20.00% being applied to one nancial asset due to changes in the perceived risk associated with
one project, representing 0.63% of the portfolio (30 September 2023: 6.58% and 13.00%, with a rate of 20.00% being applied to one nancial asset due to
changes in the perceived risk associated with one project, representing 0.58% of the portfolio) were applied to the investments categorised as Level 3.
The Directors have classied nancial instruments depending on whether or not there is a consistent data set comparable and observable transactions
and discount rates. The Directors have classied all loan notes as Level 3. No transfers were made between levels in the year.
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Annual report and nancial statements 2024
The following table shows a reconciliation of all movements in the fair value of nancial instruments categorised within Level 3 between the beginning and
end of the year:
30 September
2024
£’000
30 September
2023
£’000
Opening balance 1,046,568 1,087,331
Purchases of nancial assets at fair value through prot or loss
1
27,301 138,698
Repayments of nancial assets at fair value through prot or loss
1
(63,889) (128,012)
Net realised gains on disposal of nancial assets at fair value through prot or loss 1,888 137
Unrealised gains on nancial assets at fair value through prot or loss 13,549 15,017
Unrealised losses on nancial assets at fair value through prot or loss (65,394) (66,603)
Closing balance 960,023 1,046,568
1. Refer to note 11 for a reconciliation to the statement of cash ows.
For the Company’s nancial instruments categorised as Level 3, changing the discount rates used to value the underlying instruments alters the fair value.
A change in the discount rate used to value the Level 3 investments would have the effect on the valuation as shown in the table in note 19.3. Refer to note
11 for movements in nancial assets at fair value through prot or loss throughout the year.
In determining the discount rates for calculating the fair value of nancial assets at fair value through prot or loss, movements in Pound Sterling, interest
rates, comparable credit markets and observable yield on comparable instruments could give rise to changes in the discount rate.
The Directors considered the inputs used in the valuation of investments and the appropriateness of their classication in the fair value hierarchy. Should
the valuation approach change, causing an investment to meet the characteristics of a different level of the fair value hierarchy, it will be reclassied
accordingly in the appropriate period.
20. Related party disclosures
As dened by IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or exercise
signicant inuence over the other party in making nancial or operational decisions.
Directors
The non-executive Directors of the Company are considered to be the key management personnel of the Company. Directors’ remuneration including
expenses for the year totalled £451,000 (30 September 2023: £432,000). At 30 September 2024, liabilities in respect of these services amounted to
£111,000 (30 September 2023: £106,000).
At 30 September 2024, the Directors, together with their family members, held the following shares in the Company:
30 September 2024 30 September 2023
Director
Shares
held
% of total
voting rights
Shares
held
% of total
voting rights
Andrew Didham 146,345 0.017 93,024 0.011
Julia Chapman 60,446 0.007 60,446 0.007
Steven Wilderspin 15,000 0.002 15,000 0.002
Dawn Crichard 80,463 0.009 75,261 0.009
Alex Yew 75,000 0.009 20,000 0.002
Andrew Didham is an executive vice chairman at Rothschild & Co, presently on a part-time basis. Rothschild & Co is engaged by the Company to provide
ongoing investor relations support. The Company and Rothschild & Co maintain procedures to ensure that Mr Didham has no involvement in either the
decisions concerning the engagement of Rothschild & Co or the provision of investor relations services to the Company.
Financial statements
167
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Notes to the nancial statements continued
For the year ended 30 September 2024
20. Related party disclosures continued
Investment Adviser
The Company is party to an Investment Advisory Agreement with the Investment Adviser, which was most recently amended and restated on
26January2023, pursuant to which the Company has appointed the Investment Adviser to provide advisory services relating to the management of assets
on a day-to-day basis in accordance with its investment objectives and policies, subject to the overall supervision and direction of the Board of Directors.
As a result of the responsibilities delegated under this agreement, the Company considers it to be a related party by virtue of being ‘key management
personnel’.
Under the terms of the Investment Advisory Agreement, the notice period of the termination of the Investment Adviser by the Company is 24 months.
Theremuneration of the Investment Adviser is set out below.
For its services to the Company, the Investment Adviser receives an annual fee at the rate of 0.9% (or such lesser amount as may be demanded by the
Investment Adviser at its own absolute discretion) multiplied by the sum of:
— the NAV of the Company; less
— the value of the cash holdings of the Company pro rata to the period for which such cash holdings have been held.
The Investment Adviser is also entitled to claim for expenses arising in relation to the performance of certain duties and, at its discretion, 1% of the value
ofany transactions entered into by the Company (where possible, the Investment Adviser may seek to charge this fee to the borrower).
The Investment Adviser receives a fee of 0.25% of the aggregate gross proceeds from any issue of new shares in consideration for the provision of
marketing and investor introduction services.
The Company’s Investment Adviser is authorised as an AIFM by the UK FCA under the UK AIFM Regime. The Company has provided disclosures on its website
incorporating the requirements of the UK AIFM Regime. The Investment Adviser receives an annual fee of £70,000 in relation to its role as the Company’s
AIFM, increased annually at the rate of the RPI. The fee paid to the Investment Adviser for the year was £89,000 (30 September 2023: £83,000).
During the year, the Company expensed £8,300,000 (30 September 2023: £8,670,000) in respect of investment advisory fees, marketing fees and
transaction management and documentation services, and £53,000 (30 September 2023: £17,000) in respect of expenses. At 30 September 2024,
liabilitiesin respect of these services amounted to £2,062,000 (30 September 2023: £2,132,000).
The directors and employees of the Investment Adviser also sit on the boards of, and control, several SPVs through which the Company invests.
TheCompany has delegated the day-to-day operations of these SPVs to the Investment Adviser through the Investment Advisory Agreement.
While not related parties under IAS 24 Related Party Disclosures, for transparency, the Investment Adviser has disclosed the shareholdings of key
management personnel. At 30 September 2024, the key management personnel of the Investment Adviser, together with their family members, directly
orindirectly held 935,268 ordinary shares in the Company, equivalent to 0.106% of the issued share capital (30 September 2023: 1,017,800 ordinary shares,
0.115% of the issued share capital).
21. Subsequent events after the report date
The Company declared, on 24 October 2024, a fourth interim dividend of 1.75 pence per ordinary share, amounting to £15.2 million, which was paid on
29November 2024 to ordinary shareholders who were recorded on the register at the close of business on 1 November 2024.
Post year end, the Company made two further advances totalling £0.3 million. The Company received repayments totalling £8.9million in respect of eight
investments, including £6.8 million in respect of the disposal of a portfolio of rooftop solar assets installed on domestic properties across the UK.
Post year end, the Company drew down an amount of £8 million and repaid an amount of £4 million on the RCF, resulting in a total drawn amount
of£61million.
22. Ultimate controlling party
It is the view of the Directors that there is no ultimate controlling party.
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Annual report and nancial statements 2024
23. Non-consolidated SPVs
The following SPVs have not been consolidated in these nancial statements due to the Company meeting the criteria of an investment entity and
therefore, applying the exemption to consolidation under IFRS 10, it has measured its nancial interests in these SPVs at fair value through prot or loss.
Refer to note 11 for the details of contractual arrangements between the Company and the SPVs and to the risk disclosures in note 19 for details of events
or conditions that could expose the Company to losses.
During the year and prior year, the Company did not provide nancial support to the unconsolidated SPVs.
All of the below non-consolidated SPVs are incorporated and domiciled in the United Kingdom.
30 September 2024 30 September 2023
SPV company name Ownership interest in loan notes Classication
1
Ownership interest in loan notes Classication
1
GCP Cardale PFI Limited 100% Subsidiary 100% Subsidiary
FHW Dalmore (Salford Pendleton Housing) plc 13.8% Associate 13.6% Associate
GCP Asset Finance 1 Limited 100% Subsidiary 100% Subsidiary
GCP Biomass 1 Limited 100% Subsidiary 100% Subsidiary
GCP Biomass 2 Limited 100% Subsidiary 100% Subsidiary
GCP Biomass 3 Limited 100% Subsidiary 100% Subsidiary
GCP Bridge Holdings Ltd 100% Subsidiary 100% Subsidiary
GCP Education 1 Limited 100% Subsidiary 100% Subsidiary
GCP Green Energy 1 Limited 100% Subsidiary 100% Subsidiary
GCP Healthcare 1 Limited 100% Subsidiary 100% Subsidiary
GCP Onshore Wind 3 Limited 100% Subsidiary 100% Subsidiary
GCP Programme Funding 1 Limited 100% Subsidiary 100% Subsidiary
GCP RHI Boiler 1 Limited 100% Subsidiary 100% Subsidiary
GCP Rooftop Solar 5 Limited 100% Subsidiary 100% Subsidiary
GCP Rooftop Solar 6 plc 37.1% Associate 37.2% Associate
GCP Rooftop Solar Finance plc 31.1% Associate 30.8% Associate
GCP Social Housing 1 Limited 100% Subsidiary 100% Subsidiary
Gravis Asset Holdings Limited 100% Subsidiary 100% Subsidiary
Gravis Solar 1 Limited 100% Subsidiary 100% Subsidiary
Gravis Solar 2 Limited 100% Subsidiary 100% Subsidiary
GCP Geothermal Funding 1 Limited 100% Subsidiary 100% Subsidiary
1. Refer to note 11 for further details.
Financial statements
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Annual report and nancial statements 2024
Alternative performance measures
The Board and the Investment Adviser assess
the Company’s performance using a variety of
measures that are not dened under IFRS and
are therefore classed as alternative performance
measures (“APMs”).
Where possible, reconciliations to IFRS
are presented from the APMs to the most
appropriate measure prepared in accordance
with IFRS. All items listed below are IFRS nancial
statement line items unless otherwise stated.
APMs should be read in conjunction with the
statement of comprehensive income, statement
of nancial position, statement of changes in
equity and statement of cash ows, which are
presented in the nancial statements section
of this report. The APMs may not be directly
comparable with measures used by other
companies.
Adjusted earnings cover
Ratio of the Company’s adjusted net earnings
per share to the dividend per share. This metric
seeks to show the Company’s right to receive
future net cash ows by way of interest income
from the portfolio of investments, by removing:
(i) the effect of pull-to-par and; (ii) any upward
or downward revaluations of investments,
which are functions of accounting for nancial
assets at fair value under IFRS 9, and that do not
contribute to the Company’s ability to generate
cash ows.
30 Sep
2024
Pence
30 Sep
2023
Pence
Adjusted earnings
pershare
1
7.09 8.58
Dividend per share 7.0 7.0
Times covered 1.01 1.23
Adjusted earnings per share
The Company’s adjusted net earnings
1
divided by
the weighted average number of shares.
30 Sep
2024
£’000
30 Sep
2023
£’000
Adjusted net earnings
1
61,486 75,655
Weighted average
number of shares 867,940,448 881,850,353
Adjusted earnings
pershare (pence) 7.09 8.58
Adjusted loan interest capitalised
In respect of a period, a measure of loan interest
capitalised adjusted for amounts subsequently
paid as part of repayments.
30 Sep
2024
£’000
30 Sep
2023
£’000
Capitalised (planned) 14,868 18,253
Capitalised (unscheduled) 7,300 3,706
Loan interest capitalised 22,168 21,959
Capitalised amounts
subsequently settled as
part of repayments (9,297) (10,822)
Adjusted loan interest
capitalised 12,871 11,137
Adjusted loan interest received
In respect of a period, a measure of loan interest
received adjusted for loan interest capitalised
and subsequently paid as part of repayments or
disposal proceeds.
30 Sep
2024
£’000
30 Sep
2023
£’000
Loan interest received 65,129 58,791
Capitalised amounts
subsequently settled
as part of repayments 9,297 10,822
Adjusted loan interest
received 74,426 69,613
Adjusted net earnings
In respect of a period, a measure of loan interest
accrued
2
by the portfolio less total expenses
and nance costs. This metric is used in the
calculation of adjusted earnings cover
1
.
30 Sep
2024
£’000
30 Sep
2023
£’000
Total prot and
comprehensive
income/loss 19,514 30,905
Less: income/gains on
nancial assets at fair
value through prot
or loss (37,340) (29,301)
Less: gains on
derivative nancial
instruments at fair
value through prot
or loss (496) (12,860)
Add: loan interest
accrued
79,808 86,911
Adjusted net earnings 61,486 75,655
Aggregate downward revaluations since
IPO (annualised)
A measure of the Company’s ability to preserve
the capital value of its investments over the
long term. It is calculated as total aggregate
downward revaluations divided by total invested
capital since IPO expressed as a time weighted
annual percentage.
30 Sep
2024
£’000
30 Sep
2023
£’000
Total aggregate
downward
revaluations since IPO (109,492) (88,996)
Total invested capital
since IPO 1,947,454 1,920,237
Percentage
(annualised) (0.41) (0.36)
1. APM – refer to relevant APM on this page for further information.
2. APM – refer to relevant APM on page 171 for further information.
170
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Average NAV
The average of the twelve net asset valuations
calculated monthly over the nancial year.
Cash earnings cover
Ratio of total net cash received per share to the
dividend per share.
30 Sep
2024
Pence
30 Sep
2023
Pence
Total net cash
received per share
1
6.61 5.65
Dividend per share 7.00 7.00
Times covered 0.94 0.81
Discount
The price at which the shares of the Company
trade below the NAV per share.
Dividend yield
A measure of the quantum of dividends paid to
shareholders relative to the market value per
share. It is calculated by dividing the dividend
per share for the year by the share price at the
yearend.
Earnings cover
Ratio of the Company’s earnings per share to the
dividend per share.
30 Sep
2024
Pence
30 Sep
2023
Pence
Earnings per share 2.25 3.50
Dividend per share 7.00 7.00
Times covered 0.32 0.50
Interest cover
The ratio of total loan interest income to nance
costs expressed as a percentage.
Loan interest accrued
The measure of the value of interest accruing on
a loan in respect of a period, calculated based on
the contractual interest rate stated in the loan
documentation.
Loan interest accrued
1
differs from net
income/ gains on nancial assets at fair value
through prot or loss, as recognised under
IFRS9, as loan interest accrued
2
is not impacted
by movements of:
— the impact of realised and unrealised gains
and losses on nancial assets at fair value
through prot or loss;
— the impact of ‘pull-to-par’ in the unwinding of
discount rate adjustments over time (where
the weighted average discount rate used to
value nancial assets differs from the interest
rate stated in the loan documentation);
— the impact of cash ows from loan interest
received;
— the impact of loan interest capitalised; and
— the impact of loan principal indexation applied.
This metric is used in the calculation of adjusted
net earnings
3
.
Loan to value
A measure of the indebtedness of the Company
at the year end, expressed as interest bearing
loans and borrowings as a percentage of net
assets.
NAV total return
A measure showing how the NAV per share has
performed over a period of time, taking into
account both capital returns and dividends paid
to shareholders, expressed as a percentage.
It assumes that dividends paid to shareholders
are reinvested at NAV at the time the shares
are quoted ex-dividend. This is a standard
performance metric across the investment
industry and allows comparability across
thesector.
Source: Investment Adviser
1. APM- refer to relevant APM on page 172 for further information.
2. APM – refer to relevant APM on this page for further information.
3. APM – refer to relevant APM on page 170 for further information.
Additional info
171
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Alternative performance measures continued
Premium
The price at which the shares of the Company
trade above the NAV per share.
Total expenses paid
In respect of the year, the cash outows from
theCompany in order to settle operating costs.
This metric is used in the calculation of total net
cash received.
30 Sep
2024
£’000
30 Sep
2023
£’000
Total expenses
per statement of
comprehensive income 11,338 11,422
Adjustment for expense
accruals (726) (406)
Total expenses paid
10,612 11,016
Total net cash received
In respect of a period, the cash inows from
investments, comprising adjusted loan interest
received
1
less total expenses paid and nance
costs paid. This metric is used in the calculation
of cash earnings cover
2
.
30 Sep
2024
£’000
30 Sep
2023
£’000
Adjusted loan interest
received 74,426 69,613
Total expenses paid
3
(10,612) (11,016)
Finance costs paid
(6,550) (8,716)
Total net cash received
57,264 49,881
Total net cash received per share
The Company’s total net cash received
3
divided
by the weighted average number of shares.
30 Sep
2024
£’000
30 Sep
2023
£’000
Total net cash
received
3
57,264 49,881
Weighted average
number of shares 867,940,448 881,850,353
Total net cash
received per share
(pence) 6.61 5.65
Total shareholder return
A measure of the performance of a Company’s
shares over time. It combines share price
movements and dividends to show the total
return to the shareholder expressed as a
percentage. It assumes that dividends are
reinvested in the shares at the time the shares
are quoted ex-dividend.
This is a standard performance metric across
the investment industry and allows comparability
across the sector.
Source: Bloomberg
Weighted average annualised yield
The weighted average yield on the investment
portfolio calculated based on the yield of each
investment weighted by the principal balance
outstanding on such investment, expressed as a
percentage. It is calculated including borrower
company leverage but before any Company
levelleverage.
The yield forms a component of investment cash
ows used for the valuation of nancial assets at
fair value through prot or loss under IFRS 9.
1. APM – refer to relevant APM on page 170 for further information.
2. APM – refer to relevant APM on page 171 for further information.
3. APM – refer to relevant APM on this page for further information.
172
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Glossary of key terms
Adjusted earnings cover
Refer to APMs section on pages 170 to 172
Adjusted loan interest capitalised
Refer to APMs section on pages 170 to 172
Adjusted loan interest received
Refer to APMs section on pages 170 to 172
Adjusted net earnings
Refer to APMs section on pages 170 to 172
Aggregate downward revaluations since IPO
(annualised)
Refer to APMs section on pages 170 to 172
AGM
The Annual General Meeting of the Company
AIB
AIB Group (UK)
AIC
Association of Investment Companies
AIC Code
AIC Corporate Governance Code
AIF
Alternative Investment Fund
AIFM
Alternative Investment Fund Manager
APMs
Alternative performance measures
Average life
The weighted average term of the loans in the
investment portfolio
Axpo
Axpo Solutions AG
Borrower
Owners of the Project Companies to which the
Company advances loans
Capture price
The actual electricity price achieved by a
generator in the market
Cash earnings cover
Refer to APMs section on pages 170 to 172
CBF
Community Benet Fund
CfD
Contract-for-difference
CIF Law
Collective Investment Funds (Jersey) Law 1988
Clydesdale
Clydesdale Bank plc (trading as Virgin Money)
Company
GCP Infrastructure Investments Limited
C shares
A share class issued by the Company from time
to time. Conversion shares are used to raise new
funds without penalising existing shareholders.
The funds raised are ring-fenced from the rest of
the Company until they are substantially invested
Deferred shares
Redeemable deferred shares of £0.01 each in
the capital of the Company arising from C share
conversion
Discount
Refer to APMs section on pages 170 to 172
Dividend cover
Earnings (under IFRS, adjusted or cash) for the
year compared to the dividend for the year
Dividend yield
Refer to APMs section on pages 170 to 172
Earnings cover
Refer to APMs section on pages 170 to 172
EEA
European Economic Area
EPC
Energy Performance Certicate
ESG
Environmental, social and governance
EU
European Union
FCA
Fellow Chartered Accountant
FiT
Feed-in tariff
FRC
Financial Reporting Council
FTE
Full-time equivalent
GB market
UK electricity market
GCP Asset Backed
GCP Asset Backed Income Fund Limited
GHG Protocol
Greenhouse gas protocol
GRESB
Global Real Estate Sustainability Benchmark
GWh
Gigawatt hours
Additional info
173
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
HMT
His Majesty’s Treasury
IFRS
International Financial Reporting Standards
Interest cover
Refer to APMs section on pages 170 to 172
IPCC
Intergovernmental Panel on Climate Change
IPO
Initial public offering
IRR
Internal rate of return
ISDA
International Swaps and Derivatives Association
ISO
International Organisation for Standardisation
ISSB
International Sustainability Standards
Jersey Company Law
The Companies (Jersey) Law 1991 (as amended)
JFSC
Jersey Financial Services Commission
KPIs
Key performance indicators
KPMG
KPMG Channel Islands Limited
LBCM
Lloyds Bank Corporate Markets plc
Lloyds
Lloyds Group plc
Loan interest accrued
Refer to APMs section on pages 170 to 172
Loan to value
Refer to APMs section on pages 170 to 172
LSE
London Stock Exchange
MEES
Minimum Energy Efciency Standards
Mizuho
Mizuho Bank
MW
Megawatt
NAV
Net asset value
NAV total return
Refer to APMs section on pages 170 to 172
NED
Non-executive Director
OBR
The Ofce for Budget Responsibility
Ofcial List
The Ofcial List of the UK FCA
Ordinary shares
The ordinary share capital of the Company
PFI
Private nance initiative
PPA
Power purchase agreement
PPP
Public-private partnership
PPS
Pence per share
Premium
Refer to APMs section on pages 170 to 172
PRI
Principles for Responsible Investment
Project Company
A special purpose company which owns and
operates an asset
Public sector backed
All revenues arising from UK central Government
or local authorities or from entities themselves
substantially funded by UK central Government
or local authorities, obligations of NHS
Trusts, UK registered social landlords and
universities and revenues arising from other
Government-sponsored or administered
initiatives for encouraging the usage of
renewable or clean energy in the UK
Pull-to-par
The effect on income recognised in future
periods from the application of a new discount
rate to an investment
RBSI
Royal Bank of Scotland International Limited
RCF
Revolving credit facility with AIB (UK) plc, Lloyds
Bank plc, Clydesdale Bank plc (trading as Virgin
Money) and Mizuho Bank Limited (formerly with
RBSI, AIB Group (UK) plc, Lloyds Group plc,
Clydesdale Bank plc and Mizuho Bank)
Glossary of key terms continued
174
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Rental indexation
Annual rent increase by an amount specied
inthe lease
RHI
Renewable heat incentive
RNS
Regulatory News Service
ROCs
Renewable obligation certicates
Rothschild & Co
NM Rothschild and Sons Ltd
RPs
Registered Providers
RSH
Regulator of Social Housing
SBTi
Science Based Targets initiative
Scheme
Proposed combination of the Company with GCP
Asset Backed
SEM
Irish Single Electricity Market
Senior ranking security
Security that gives a loan priority over other
debt owed by the issuer in terms of control
and repayment in the event of default or issuer
bankruptcy
SFDR
The Sustainable Finance Disclosure Regulation
SONIA
Sterling Overnight Interbank Average rate
SPV
Special purpose vehicle through which the
Company invests
Strike price
A pre-agreed electricity price level agreed by a
generator as part of a CfD, reecting the return
needed to make that technology nancially viable
TCFD
Task Force on Climate-related Financial
Disclosures
Total expenses paid
Refer to APMs section on pages 170 to 172
Total net cash received
Refer to APMs section on pages 170 to 172
Total shareholder return
Refer to APMs section on pages 170 to 172
UK AIFM Regime
Together, The Alternative Investment Fund
Managers Regulations 2013 (as amended by
The Alternative Investment Fund Managers
(Amendment etc.) (EU Exit) Regulations 2019)
andthe Investment Funds sourcebook forming
part of the UK FCA Handbook, as amended from
time to time
UK Code
UK Corporate Governance Code
UK ETS
UK Emissions Trading Scheme
UK FCA
Financial Conduct Authority
UN SDGs
United Nations Sustainable Development Goals
Weighted average annualised yield
Refer to APMs section on pages 170 to 172
Weighted average discount rate
A rate of return used in valuation to convert a
series of future anticipated cash ows to present
value under a discounted cash ow approach. It
is calculated with reference to the relative size
of each investment
Additional info
175
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
UN SDGs and targets
SDG 3
Good health and well-being
UN SDG target 3.8
Achieve universal health coverage, including
nancial risk protection, access to quality
essential healthcare services and access to
safe, effective, quality and affordable essential
medicines and vaccines for all.
SDG 4
Quality education
UN SDG target 4.1
By 2030, ensure that all girls and boys complete
free, equitable and quality primary and secondary
education leading to relevant and effective
learning outcomes.
SDG 5
Gender equality
UN SDG target 5.5
Ensure women’s full and effective participation
and equal opportunities for leadership at all
levels of decision-making in political, economic
and public life.
SDG 7
Affordable and clean energy
UN SDG target 7.2
By 2030, increase substantially the share of
renewable energy in the global energy mix.
SDG 8
Decent work and economic growth
UN SDG target 8.3
Promote development-oriented policies that
support productive activities, decent job
creation, entrepreneurship, creativity and
innovation, and encourage the formalisation
and growth of micro, small and medium-sized
enterprises, including through access to
nancialservices.
SDG 9
Industry, innovation and infrastructure
UN SDG target 9.3
Increase the access of small-scale industrial and
other enterprises, in particular in developing
countries, to nancial services, including
affordable credit, and their integration into
valuechains and markets.
UN SDG target 9.4
By 2030, upgrade infrastructure and retrot
industries to make them sustainable, with
increased resource-use efciency and greater
adoption of clean and environmentally sound
technologies and industrial processes, with all
countries taking action in accordance with their
respective capabilities.
SDG 11
Sustainable cities and communities
UN SDG target 11.1
By 2030, ensure access for all to adequate, safe
and affordable housing and basic services and
upgrade slums.
SDG 15
Life on land
UN SDG target 15.5
Take urgent and signicant action to reduce the
degradation of natural habitats, halt the loss of
biodiversity and, by 2020, protect and prevent
the extinction of threatened species.
SDG 17
Partnerships for the goals
UN SDG target 17.17
Encourage and promote effective public,
public-private and civil society partnerships,
building on the experience and resourcing
strategies of partnerships.
176
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Shareholder information
Key dates for 2025
February
Annual General Meeting
March
Company’s half-year end
Payment of rst interim dividend
June
Half-yearly results announced
Payment of second interim dividend
September
Company’s year end
Payment of third interim dividend
December
Payment of fourth interim dividend
December
Annual results announced
Frequency of NAV publication
The Company’s NAV is released to the LSE via
RNS on a quarterly basis and is published on the
Company’s website.
Sources of further information
Copies of the Company’s annual and half-yearly
reports, stock exchange announcements,
investor reports and further information on the
Company can be obtained from the Company’s
website.
Warning to users of this report
This report is intended solely for the information
of the person to whom it is provided by the
Company, the Investment Adviser or the
Administrator. This report is not intended as an
offer or solicitation for the purchase of shares in
the Company and should not be relied on by any
person for the purpose of accounting, legal or
tax advice or for making an investment decision.
The payment of dividends and the repayment of
capital are not guaranteed by the Company. Any
forecast, projection or target is indicative only
and not guaranteed in any way, and any opinions
expressed in this report are not statements of
fact and are subject to change, and neither the
Company nor the Investment Adviser is under
anyobligation to update such opinions.
Past performance is not a reliable indicator
of future performance, and investors may
not get back the original amount invested.
Unless otherwise stated, the sources for all
information contained in this report are the
Investment Adviser and the Administrator.
Information contained in this report is believed
to be accurate at the date of publication, but
neither the Company, the Investment Adviser
nor the Administrator gives any representation
or warranty as to the report’s accuracy or
completeness. This report does not contain
and is not to be taken as containing any
nancial product advice or nancial product
recommendation. Neither the Company, the
Investment Adviser nor the Administrator accept
any liability whatsoever for any loss (whether
direct or indirect) arising from the useof this
report or its contents.
Additional info
177
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
Corporate information
The Company
GCP Infrastructure Investments Limited
IFC 5
St Helier
Jersey JE1 1ST
Contact: jerseyinfracosec@apexgroup.com
Corporate website: www.gcpinfra.co.uk
Directors
Andrew Didham (Chairman)
Julia Chapman (Senior Independent Director)
Michael Gray
Steven Wilderspin
Dawn Crichard
Alex Yew
Administrator, Company Secretary and
Registered Ofce of the Company
Apex Financial Services (Alternative Funds)
Limited
IFC 5
St Helier
Jersey JE1 1ST
Tel: +44 (0)1534 722787
Adviser on English law
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
Adviser on Jersey Company Law
Carey Olsen Jersey LLP
47 Esplanade
St Helier
Jersey JE1 0BD
Depositary
Apex Financial Services (Corporate) Limited
IFC 5
St Helier
Jersey JE1 1ST
Financial adviser and joint brokers
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
Tel: +44 (0)20 7710 7600
RBC Capital Markets
100 Bishopsgate
London EC2N 4AA
Independent Auditor
KPMG Channel Islands Limited
37 Esplanade
St Helier
Jersey JE4 8WQ
Investment Adviser, AIFM and
SecurityTrustee
Gravis Capital Management Limited
24 Savile Row
London W1S 2ES
Tel: +44 (0)20 3405 8500
Operational bankers
Barclays Bank PLC, Jersey Branch
13 Library Place
St Helier
Jersey JE4 8NE
BNY Mellon
1 Piccadilly Gardens
Manchester M1 1RN
Lloyds Bank International Limited
9 Broad Street
St Helier
Jersey JE4 8NG
Royal Bank of Scotland International Limited
71 Bath Street
St Helier
Jersey JE4 8PJ
Public relations
Burson Buchanan Limited
107 Cheapside
London EC2V 6DN
Registrar
Link Market Services (Jersey) Limited
IFC 5
St Helier
Jersey JE1 1ST
Valuation Agent
Forvis Mazars LLP
Tower Bridge House
St Katharine’s Way
London E1W 1DD
178
GCP Infrastructure Investments Limited
Annual report and nancial statements 2024
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GCP Infrastructure Investments LimitedAnnual report and nancial statements 2024
www.gcpinfra.co.uk
GCP Infrastructure Investments Limited
IFC 5
St Helier
Jersey JE1 1ST
Company number: 105775