SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc
## SDCL Energy Efﬁciency
## Income Trust plc
## Shaping the future of energy efﬁciency
### Annual Report and Audited Financial Statements
### for the year ended 31 March 2024
### SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc 1
## Contents About and Purpose
### Introduction Governance
About and Purpose 1 Investment Policy and Approach 70
## Supporting the

| Highlights of the year to 31 March 2023 3 |  | Board of Directors 71 |
| --- | --- | --- |
| Why Invest? | 4 | Corporate Governance Statement 72 |
| (Investment Proposition) |  | Nomination Committee Report 81 |

## energy transition

| Overview 4 |  | Audit and Risk Committee Report 83 |  |  |
| --- | --- | --- | --- | --- |
| Energy Efﬁciency 5 |  | Directors’ Remuneration Report 87 |  |  |
| Attractive Investment Returns Strategy | 6 | Report of the Directors 92 |  |  |
|  |  |  | SDCL Energy Efﬁciency Income Trustplc | Energy efﬁciency delivers 40% of the greenhouse |
| Network Access and Expertise 7 |  | Statement of Directors’ Responsibilities 96 |  |  |

gas emission reductions needed by 2040 in the
SEEIT is the only FTSE 250 investment company
Chair’s Statement 8 International Energy Agency’s (“IEA”) Sustainable
that has the speciﬁc sustainable investment
Development Scenario (“SDS”). All net zero
### Financial Statements objective of mitigating climate change by investing
pathways involve energy efﬁciency improvement
in energy efﬁciency projects.
### Strategic Report: The Independent Auditor’s Report 98
as global decarbonisation targets simply cannot
### Company and Portfolio Review The Company has grown its portfolio from £100
Statement of Comprehensive Income 104 be achieved without it.
million in the UK at IPO in 2018, to a total enterprise
Statement of Financial Position 105 Meanwhile, despite the welcome and rapid
### Strategy value of £1.5 billion across ten countries in Europe,
growth rates of the renewable energy sector,

|  | Statement of Changes | 106 | North America and Asia. It has developed and |  |
| --- | --- | --- | --- | --- |
| Introduction to SDCL 12 |  |  |  | the global energy system still remains 80% fossil |
|  | inShareholders’Equity |  | invested in projects involving over 50,000 buildings, |  |

2
fuelled . This is because renewables are taking
The Team 12 industrial facilities and transport assets.
Statement of Cash Flows 107
an increasing share of the energy market, but
Investment Manager: Markets 13
Notes to the Financial Statements 108 at a rate of only around 0.4% per annum. At the
### Why is this so important?
andOutlook
same time, the overall volume of energy supply,
Energy efﬁciency is one of the largest, fastest,
Business Model 15 whether higher or lower carbon, continues to rise,
### Additional Information cheapest and cleanest sources of greenhouse
as do the associated emissions.
gas emission reductions, energy productivity and

| Performance | Investment Policy 121 |  |  |
| --- | --- | --- | --- |
|  |  | sustainable growth. | Reducing wastage in both the demand |
|  | Company Information 123 |  | and supply for energy is therefore a crucial |

Company Key Performance Indicators 16
Energy is the largest source of greenhouse gas
opportunity.
Key Company Data 123

| Portfolio: Key Updates 17 |  |  | emissions. Buildings, industry and transport |  |
| --- | --- | --- | --- | --- |
|  |  |  | represent most of the demand for energy. | Energy efﬁciency involves doing more with less, |
|  | Sustainable Finance Disclosure | 124 |  |  |

Additional Portfolio Project Updates 34
Andyetmost primary energy is lost. delivering the same or more economic output
Regulation (“SFDR”)
Financial Review and Valuation Update 35 using less energy. It is crucial for the climate, for
Glossary 131 In the United States, around 67% of energy
cost and for energy security.

| Environmental, Social and Governance | 45 |  |  |  | 1 |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | is lost | , mostly as waste heat, through the |  |
|  |  | Glossary of Financial Alternative | 133 |  |  |  |
| (“ESG”) Update |  |  |  |  |  | SEEIT’s investments are focused on projects that |

extraction, conversion, generation, transmission,
Performance Measures (“APMs”)
SEEIT Climate Change Report 54 distribution and usage process. At the point of provide more efﬁcient supply of energy as well as
use, it is estimated that around 35% of the energy reducing the demand for, or waste of, it.
TCFD Disclosures 61
consumed in commercial buildings is wasted
Risk Management Framework 62 because of inefﬁciencies in cooling, space heating,
Viability Statement 65 air conditioning, lighting and appliances.
Stakeholders and Section 172 66
1. Energy loss refers to the “rejected energy” referenced in the Lawrence Liverpool National Laboratory Sankey energy
ﬂow diagrams, the most recent of which was published on 2022 energy data. These energy ﬂow diagrams represent
the ﬂow of primary energy to use in residential, commercial, industrial and transportation sectors, demonstrating how
### Find out more: energy is “rejected” during different parts of the energy generation, transmission and use process.
### www.seeitplc.com 2. Figures based on IEA World Energy Balance report of 2019 energy usage.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 2
## About and Purpose:
## Supporting the Energy Transition continued
### Company Structure It should be noted that when referring to
“investments” made by the Company, the
SDCL Energy Efﬁciency Income Trust plc (the
Company makes its investments via its sole direct
“Company” or “SEEIT”) is the largest FTSE
## subsidiary and main investment vehicle, SEEIT SEEIT Board
250 company focused exclusively on energy
Holdco Limited (“SEEIT Holdco” or “Holdco”), and
efﬁciency.
the investment portfolio is held at Holdco level.
The Company is a closed-ended investment
The Company holds no other investments.
company incorporated in England and Wales that
References to “portfolio basis” includes the
was admitted to the Ofﬁcial List and to trading Investment Manager Fund administrator
impact if SEEIT Holdco were to be consolidated.
on the London Stock Exchange’s Main Market on
The revolving credit facility (“RCF”) referred to
11 December 2018, with the objective to generate
in this document is held at Holdco level and the
an attractive total return for investors, comprising
Company itself does not hold any external debt.
stable dividend income and capital preservation,
with the opportunity for capital growth. SEEIT The Investment Manager controls the actions
is an Article 9 Fund under the EU’s Sustainable of Holdco and its direct and indirect subsidiaries
Finance Disclosure Regulation (“SFDR”), with manage the existing investments that Holdco has
the sustainable investment objective of climate directly or indirectly invested in. Holdco typically
change mitigation through investments in energy invests in project companies, which provide
efﬁciency projects. energy efﬁciency solutions to counterparties
through long-term contracts with a ﬁxed lifespan.
The Company has been established to provide
A project company, and by implication the
shareholders with access to investment into
## portfolio of investments as a whole, may have SEEIT Holdco
energy efﬁciency infrastructure investments and
a limited lifetime over which it provides target
has a current portfolio comprising investments in
returns to Holdco and ultimately the Company.
projects across the United States, Europe, the UK
These project companies are structured so that
and Asia. Project Project Project Project Corporate
they can be sold in an active secondary market
companies companies companies companies investments
The Company has an independent Board of
for energy efﬁciency assets although each of
Directors and has appointed SDCL as Investment (includes senior
the investments will also have been assessed
debt investments)
Manager to manage the portfolio of investments
individually to ensure appropriate alternative exit
on its behalf.
strategies are in place.
### Investment timeline
### 2018 2019 2020 2021 2022 2023 2024
(disposal)(IPO)
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

3

# Highlights

of the year to 31 March 2024

# Investing in energy efficiency

90.5p

Net asset value ("NAV") per share

the decrease in the year includes a reduction of 11 pence attributed to an adverse 90 bps increase in weighted average unlevered discount rate in the year (100 bps in the six months to Sept 2023)

31 March 2023: 101.5 pence;
30 September 2023: 90.6 pence

£92m

Investment cash inflow from the portfolio

up 8% on a portfolio basis

31 March 2023: £85m

6.24p

Aggregate dividends

per share declared, in line with target, fully cash covered 1.1x for the year ended 31 March 2024

31 March 2023: 6.0p

6.32p

Target dividend¹ guidance

per share for the year ending 31 March 2025

31 March 2024: 6.24p

£56m loss

Loss before tax

includes unrealised loss of £118 million from discount rate increases in the year

31 March 2023: £19m loss, including £81 million unrealised loss

£1,117m

Portfolio Valuation

£1,066 million at 30 September 2023

31 March 2023: £1,100m

Alternative Performance Measure
See Glossary of Financial Alternative
Performance Measures for further details
on APMs used throughout this report.

1. The target dividend stated above by the Company is based on a projection by the Investment Manager and should not be treated as a profit forecast for the Company.
2. Previously reported as carbon savings.

c. £161m

Investment

mainly into existing investments during the year; a further c.£23 million invested since the year end

31 March 2023: c.£240m

971,828 tCO₂e

Scope 4 emissions²

from the Company's portfolio

31 March 2023: 1.2m tCO₂e

Post Year-End

Following 31 March, the Company completed the sale of its entire investment in UU Solar for approximately £90 million and at a premium to the 30 September 2023 valuation, using the proceeds to reduce short-term gearing.²⁴ᵇ
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial statements Additional informationGovernanceStrategic reportIntroduction 4
## Why Invest?
### Overview
## Enhancing value
## for the long term...
FES lighting
## energy attractive network access
## efﬁciency investment returns and expertise
## strategy
Onyx
### Supporting the energy transition Distinct from traditional An experienced Investment
### through reducing energy loss. ﬁxed income products with Manager working alongside
### shareholder returns from both portfolio company management
### dividends and capital growth. teams and counterparties, helps
### to deliver value to shareholders.
Read more on page 5 Read more on page 6 Read more on page 7
ON Energy
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 5
## Why Invest? continued
## Invest in...
## energy efﬁciency
### By investing in energy efﬁcient generators, SEEIT’s portfolio of energy efﬁciency projects can
### Energy efﬁciency means using
the Company’s energy efﬁciency projects can
### less energy to achieve the same be broadly split into two categories:
alleviate strain on centralised energy systems,
### outcome; it saves money and
enhancing their resilience and reducing emissions
### reduces carbon. associated with the transmission and distribution
of energy. Further, on-site energy generation
SEEIT is the ﬁrst and only FTSE 250 listed
through technologies such as combined heat
company focused exclusively on energy
and power (“CHP”) plants minimises energy loss
efﬁciency.
during conversion by harnessing waste heat, thus
Energy efﬁciency is a key element of the energy
maximising the utilisation of fuel resources.
transition. By reducing energy loss and emissions,
The deployment of energy-saving technologies,
it is possible to decrease energy demand from
such as LED lighting, represents a cost-effective
a centralised grid. Energy efﬁciency technology
and easily implementable solution to
is readily available, affordable and vital to
curtail energy demand at the point of use.
decreasing energy demand despite a growing
Byreducing consumption without compromising
global population. When combined with rapid
performance, these advancements not only
deployment of solar and wind energy, energy
### lower operational costs, but reduce energy Energy generators Energy savers
efﬁciency is capable of delivering half the
demand, therefore alleviating pressure on the
emission abatement needed by 2030 according
central energy grid.
to the IEA’s Net Zero by 2050 scenario. 4,979,953 MWh energy generated in the year 379,589 MWh energy saved in the year ending
This is particularly vital in the context of the ending 31 March 2024 31March 2024
SEEIT focuses on Efﬁcient and Decentralised
energy transition, as the integration of more
Generation of Energy (“EDGE”) projects. This Problem: Problem:
renewable energy sources necessitates a robust
focus is a source of competitive strength, which Energy is lost during generation, transmission Energy is lost during use due to inefﬁcient
and ﬂexible grid capable of accommodating
remains unique among UK investment trusts and distribution to the point of use equipment
variable inputs.
and even across other major listed equity
Solution: Solution:
capital markets. The Company’s EDGE projects Together, energy generators and energy
More efﬁcient energy generators, bringing energy Replace equipment with more efﬁcient solutions
reduce energy lost in the supply, demand and savers deliver critical emissions reductions
generation closer to or at the point of use that use less energy to do the same job
distribution of energy, hence reducing carbon and improvements in energy system resilience,
and costs while improving energy resilience and Example within portfolio: Example within portfolio:
thereby supporting the energy transition to
security of supply. Onyx (on-site solar and storage), Oliva FES (LED lighting), Spark US Energy Efﬁciency
netzero.
(on-site cogeneration), Primary Energy (energy systems as a service)
(on-site cogeneration)
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 6
## Why Invest? continued
## Invest in...
## attractive investment
## returns strategy
The portfolio is diversiﬁed and Underpinned by long-term SEEIT seeks to invest in projects with potential to exceed target
1
### mostly operational (86% ) with cash ﬂows that cover a total returns
### creditworthy counterparties growing dividend
### See Portfolio Summary See Financial Review Illustrative project NAV over time
### formore detail formoredetail
Underwriting Case: NAV plus distributions Opportunity for accretive upside
See pages 17 to 34 See pages 35 to 44
1 2 3
Acquisition
Year 0 Year 1 Year 2 Year 3 Year 4 Year 10 Year 15

| 1 |  Cost reductions | 2 |  Investment in | 3 |  Unlocking |
| --- | --- | --- | --- | --- | --- |
|  | and efﬁciency |  | higher-return projects |  | platformvalue |
|  | improvements |  | or new revenue |  |  |

streams
e.g. in-house gas e.g. new cogen plant e.g. restructure
procurement at Oliva atRED-Rochester atVärtanGas
See pages 28 to 30 See pages 19 to 21 See pages 31 to 33
Oliva RED-Rochester
1. Of portfolio value.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 7
## Why Invest? continued
## Invest in...
## network access and expertise
## SEEIT is the ﬁrst SDCL (The Investment Manager)
## UK-listed company
## of its kind to invest
### Global ofﬁces: Active funds: AUM:
## exclusively in the energy
## efﬁciency sector.
## 6 4 $2.5bn
### Employees: Recent industry awards:
Business Green Awards 2024: ESG investor of the year
## 50+ Environmental Finance, Sustainable Investment Awards 2021:
Boutique investment manager of the year
2
Shortlisted for a further 4 awards
## SEEIT Portfolio
### Revenue counterparties: Subcontractors: Employees at portfolio level:
## 1
## 45 >30 >300
1. Groups of counterparties.
2. Over the previous 5 years.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 8
## Chair’s Statement

| I would like to thank shareholders for their | At the same time, areas of the capital markets, |
| --- | --- |
| support over what is now the second consecutive | particularly in the UK investment trust market, |
| ﬁnancial year characterised by turbulent global | have been under pressure. March 2024 |
| market conditions. I am pleased that in this | represented the 34th straight month of net |
| context SEEIT’s performance has been resilient | redemptions from multi-asset funds that are |
| relative to the wider market. | traditional long-term shareholders, creating |

a background of net selling and overhang in
During the year, SEEIT’s portfolio has delivered
APM the investment trust sector as a whole, and in
an aggregated EBITDA in line with budget
the alternative income markets in which SEEIT
and a fully cash-covered dividend. We have
operates.
seen positive results from the steps taken by the
Investment Manager to improve asset values This has contributed to a signiﬁcant reduction
and to progress selective disposals, proving in SEEIT’s share price during the year. However,
previous asset values and strengthening SEEIT’s the value that this represents has also been
balance sheet. Further details can be found in the identiﬁed by institutional investors and analysts,
Investment Manager’s Report on pages 12 to 14. and as a result, SEEIT has welcomed several new
shareholders to its register and looks forward to
SEEIT’s focus on energy efﬁciency is
continuing to deliver value and ensure that the
differentiated from the other alternative income
best shareholder outcomes can be achieved.
investment trusts focused on infrastructure
or clean energy and, in this respect, it is the
### Governance and Engagement with
only large-scale investment trust or FTSE 250
## “ On behalf of the Board, I am company of its kind beneﬁting from a diversiﬁed Shareholders
portfolio of investments. We thank shareholders for a strong vote in favour
## pleased to present the Annual
of SEEIT’s continuation in the vote at the 2023
### Capital Markets AGM, when all resolutions were passed. Our 2024
## Report and ﬁnancial statements

|  | The last year has been characterised by | AGM will be held on 4 September and the notice |
| --- | --- | --- |
| (the “Annual Report”) for SDCL | continued relatively high inﬂation and interest | will be published in July. Emma Grifﬁn has notiﬁed |
|  | rates. This has put downward pressure on | the Board of her intention to stand down at |
| Energy Efﬁciency Income Trust |  | this AGM and so will not be seeking re-election. |

valuations of income streams and asset values
inthe infrastructure sector. Iwish to take this opportunity to thank Emma
## plc (“SEEIT” or the “Company”) for
for her valuable contribution and insight, and we
Signs of lowering inﬂation and hopes for one or
will seek to recruit a replacement as part of our
## the year ended 31 March2024.” more interest rate cuts by central banks during
succession planning.
2024 collided with stubborn inﬂation numbers
in the last quarter of the Company’s ﬁnancial The Board and the Investment Manager have
year, limiting the opportunity to reduce discount engaged with shareholders throughout the year
### Tony Roper|Chair rates in the short term. Market uncertainty was and listened to feedback. This has resulted,
accompanied by geopolitical instability as the amongst other things, in an increase in the level
wider ramiﬁcations of the Israel-Hamas and the of disclosure that the Company provides in its
Russia-Ukraine conﬂicts continued to impact annual and semi-annual reporting, providing
supply chains and global capital markets. investors with more information related to the
performance of individual investments as well
asthe wider portfolio.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 9
## Chair’s Statement continued

| Governance and Engagement with | – applying its Capital Allocations Policy to focus | Portfolio and Financial Performance |  |  | Under the agreed Capital Allocation Policy, |
| --- | --- | --- | --- | --- | --- |
|  | on those organic investments that exceed the |  |  |  | new investments during the period were limited |
| Shareholders continued |  | The portfolio generated earnings in line with |  |  |  |
|  | minimum return hurdles, being mainly further |  |  |  | almost entirely to “organic investments” to |
| Also during the year, the Investment Manager has |  | expectations and cash ﬂows that were more |  |  |  |
|  | investment into RED-Rochester, Onyx and |  |  |  | support existing portfolios and platforms and |
| been engaging with new prospective shareholders |  | than sufﬁcient to cover the Company’s target |  |  |  |
|  | EVN; and |  |  |  | where returns exceeded minimum hurdles. |
| to support the liquidity and marketability of |  | dividends. |  |  |  |
|  | – planning actions based on feedback from |  |  |  | Only one new investment was added to the |
| the Company’s shares. Thishas resulted in new |  |  | APM |  |  |
|  |  | SEEIT’s NAV |  | per share at 31 March 2024 was |  |
|  | investors, leading to regular meetings with |  |  |  | Company’s portfolio of corporate investments, |
| investments made by some predominantly |  | 90.5 pence (101.5 pence at 31 March 2023), a |  |  |  |
|  | analysts and major shareholders. |  |  |  | which is limited to up to 3% of its portfolio in |
| US-based institutional investors and a change in |  | decrease of 11% in the year. The NAV is in line with |  |  |  |

aggregate. This was £2.4 million invested in
composition of our shareholder register. We are also considering further steps we could APM
the 30 September 2023 NAV of 90.6pence
Rondo, a thermal storage business in the United
take to narrow the discount, including: when the Company reported a reduction of
States. The Company invested alongside a
APM
### Addressing the Share Price Discount NAV , driven largely by an increase in discount
– additional disclosures to improve investor number of large corporate strategic investors,
### to Net Asset Value APM rates reﬂecting a “higher for longer” inﬂation and
conﬁdence in investments and their support including Microsoft, Saudi Aramco and Rio
interest rate environment.

| During the year the Company bought back £20 | for the cash cover of the Company’s dividend; |  | Tinto, in a technology solution aiming to help |
| --- | --- | --- | --- |
| million worth of its own shares. The Board and | – managing borrowing levels overall, and in | The second half of the Company’s ﬁnancial | decarbonise industrial heat, one of the highest |
| Investment Manager will continue to assess | particular the level of short-term borrowings | year saw improvements in performance and | value and hardest to abate sectors. |
| further buybacks if deemed in the best interests | through the Company’s RCF; | projections from signiﬁcant investments such |  |

While current market conditions and a prudent
of shareholders. as Primary Energy and Onyx, which have faced
– marketing of the Company’s shares to wider approach to gearing create limitations in
audience of potential investors, for example delays and provisions in prior periods, as well
In our Interim Results, we set out a plan to help SEEIT’s appetite to fund attractive development
in the United States, as well as the traditional as from Oliva and Värtan that had been the
to reduce the discount to net asset value at and construction opportunities, it is seeking
market for UK investment trusts; and subject of regulatory uncertainty. The Investment
which the Company’s shares have been trading. co-investment from third-party investors on
Manager’s Report on pages 12 to 14 expands
This plan included a series of measures that the – subject to an improvement in share price, certain assets. This is key to SEEIT’s ability to
further on these matters.
Company is well advanced on implementing, acquisition of other smaller investment trusts deliver ongoing value and growth.
including: to improve scale and diversiﬁcation.
### Balance Sheet
– continuing to add value to the portfolio Despite some improvements in the last quarter
APM
As at 31 March total gearing was £485 million.
through active asset management; of the ﬁnancial year, we remain strongly of the
Since the year end, the Company has sold an
– achieving selective disposals to help to view that the Company’s share price does not
investment, enabling it to reduce its short-term
APM reﬂect the value of its investments, nor the
reduce short-term gearing , to prove net APM APM
portfolio gearing . Total gearing has since
APM cashﬂows derived from them that allow the
asset value and to recycle proceeds into
been reduced by 11% to approximately £430
opportunities for increased total return. Company to pay the current level of dividends
million as at 31 May 2024.
Following the year end, thesale in May 2024 of with progressive growth.
APM
UU Solar (“UU”) to UK Power Network services This reduction in gearing was achieved
This represents a signiﬁcant challenge, as well as
is an example (see Portfolio Summary on through a repayment of the revolving credit
a substantial opportunity for new shareholders,
page 18 for further details); facility (“RCF”) in May 2024, which was funded
who are able to acquire SEEIT’s shares in the
APM through the c. £90 million proceeds of the sale
– increasing marketability and liquidity of market well below net asset value and with
of the Company’s investment in UU Solar after
the Company’s shares by attracting new anattractive dividend yield.
1
the year end. The drawn RCF is £98 million ,
institutional investors to the shareholder
substantially lower than the £155 million drawn
register, as well as improving the proﬁle
at 31 March 2024 after also accounting for new
of the Company;
investments in Onyx since 31 March 2024. Further
details can be found in the Finance and Valuation
Update on pages 35 to 44.
1. As at 31 May 2024.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 10
## Chair’s Statement continued
### Dividends Outlook In addition to SEEIT’s cash ﬂows generated from The target is to keep the RCF at moderate levels.
its operational assets, the Company’s portfolio Overall, gearing is well inside the total gearing
In line with previous guidance, in June 2024 the The Board and the Investment Manager are
offers the opportunity for capital growth, for limit of 65% of NAV, with a current headroom of

| Company announced its fourth interim dividend | committed to delivering value to, and positive |  |  |
| --- | --- | --- | --- |
|  |  | example through its exposure to assets at the | approximately £200m. |
| for the year ended 31 March 2024 of 1.56 pence | outcomes for, shareholders. |  |  |

development and construction phase. The
per share. This provided an aggregate dividend In the year ahead, our focus will be on supporting
SEEIT is a unique investment company, fully
Investment Manager and management teams
of 6.24 pence per share declared for the year our existing portfolio with selective capital for
focusing on energy efﬁciency. It is investing in
of portfolio companies beneﬁt from deep
ended 31 March 2024, which was fully covered organic investment, and on working actively with
solutions to an increasingly carbon-constrained
experience and leadership. As such, the Company
1.1times by cash ﬂow from the portfolio. our portfolio companies, as well as strategic and
world, with an investment approach that is
is well positioned to achieve attractive levels of
selective capital partners, to support growth and
Based on our assessment of current cash ﬂow consistently cash generative.
total return for shareholders, underpinned by
to achieve strong returns.
projections, the Company is announcing new
The majority of SEEIT’s investment cash income.
dividend guidance of 6.32 pence per share for As the world seeks to address the practical
ﬂows are contracted with high-quality client
The Board remains cognisant of shareholder
the year to 31 March 2025, an increase of c.1%, challenges of the energy transition and efforts
counterparties, to which SEEIT is providing
feedback regarding capital efﬁciency,
and as before is targeting progressive dividend to decarbonise, energy markets and their supply
essential energy services. This tends to make
recognising that capital is currently scarce.
growth thereafter. The dividend guidance chains face scarcities and price volatility. In
SEEIT as important to its clients as they are to it.
Thismeans the Investment Manager is being
balances growing the dividend with the ability to this context, investing in more efﬁcient supply,
SEEIT’s clients are typically essential providers
selective over new investment, focusing on
generate higher levels of surplus cash available demand and distribution of energy, which is
of products and services to their economies,
organic opportunities from the existing portfolio
for repayment of debt and reinvestment in SEEIT’s focus, becomes increasingly important
including, for example, steel manufacturers,
and passing on a number of opportunities over
investment opportunities. and valuable. We believe that SEEIT remains well
hospitals, universities, agricultural facilities,
the last year.
positioned to beneﬁt from this opportunity.
utilities, hospitals and data centres. The average
The Investment Manager estimates the scale of
remaining life of its contracts with clients is over
organic investments in the ﬁnancial year ending
14 years.
31 March 2025 to be between £75-125m, which
### will be funded by a combination of utilisations Tony Roper
from the Company’s RCF (if appropriate), debt Chair
utilisation at investment level and from selective
disposals.
EVN ON Energy
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 11
## Strategic
## Report
## What’s in this section

|  | Strategy |  |  | Performance |
| --- | --- | --- | --- | --- |
| Introduction to SDCL 12 |  |  | Company Key Performance Indicators 16 |  |
| The Team 12 |  |  | Portfolio: Key Updates 17 |  |
| Investment Manager: Markets |  | 13 | Additional Portfolio Project Updates 34 |  |

andOutlook
Financial Review and Valuation Update 35
Business Model 15
Environmental, Social and Governance 45
(“ESG”) Update
SEEIT Climate Change Report 54
TCFD Disclosures 61
Risk Management Framework 62
Viability Statement 65
Stakeholders and Section 172 66
Capshare
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 12
## Strategy | The Team
## Meet the Investment TeamSustainable
## Development
## Capital LLP
Sustainable Development Capital LLP
(“SDCL” or the “Investment Manager”) is an
independent investment ﬁrm with a proven
track record of investment in energy efﬁciency
and decentralised energy generation projects
in the UK, Europe, North America and Asia.
SDCL was established in 2007 and has a team
of over 50 professionals across ofﬁces in
London, Dublin, New York, Connecticut, Hong
### Kong and Singapore. Jonathan Maxwell Purvi Sapre Eugene Kinghorn Ben Grifﬁths
SDCL CEO & Founder SEEIT Fund Manager SDCL Group CFO SEEIT Fund Management
With over 15 years of sector experience

| in energy efﬁciency, SDCL has specialist |  | Purvi is the Fund Manager for SEEIT |  |  |
| --- | --- | --- | --- | --- |
|  | Jonathan is Founder and CEO of SDCL. |  | Eugene is the Group CFO of the SDCL | Ben is Managing Director of SEEIT Fund |
| origination, project development, execution, | He has over 25 years’ experience in | and has overall responsibility for Fund | Group and has overall responsibility | Management and is responsible for |
| ESG, asset management and portfolio | international ﬁnance, infrastructure | activities and is a member of the | for the ﬁnance function covering its | the technical, ﬁnancial and operational |
| management teams with support from | and private equity and has overall | Investment Committee for SEEIT. Purvi | corporate activity and its funds, including | performance of its investments. |
|  | responsibility for SDCL’s investment | has over 15 years’ experience in Europe, | SEEIT. He is a member of the Investment |  |
| ﬁnance, compliance and risk. Since 2012, |  |  |  | Ben joined SDCL in September 2021 |
|  | activities. He is Chair of the Investment | North America and emerging markets | Committee for SEEIT. Eugene has over |  |
| SDCL has raised over £2 billion in capital |  |  |  | with twelve years’ experience in the |
|  | Committee for SEEIT. Since establishing | investing on behalf of debt, equity | 15 years of experience in ﬁnancial and |  |
| commitments, including seven funds, all |  |  |  | investment and renewable energy |
|  | SDCL in London in 2007, the Group now | and impact investment funds. Purvi | portfolio management, with particular |  |
| exclusively focused on energy efﬁciency. |  |  |  | industries. |
|  | operates across the UK, Europe, North | has transacted and managed assets | focus on private equity and listed |  |
|  | America and Asia and has launched | across a number of renewable energy | infrastructure investment management. | Prior to SDCL, Ben led the portfolio |
|  | energy efﬁciency project investment | technologies including solar, wind, energy | He is responsible for portfolio and | management of a c.£300m separately |
|  | funds in the UK, Ireland, Singapore and | efﬁciency and waste to energy. Purvi | investment management of SEEIT. | managed account, managing a range of |
|  | New York. He has advised and invested | holds a Master’s in Chemical Engineering | Eugene joined SDCL in early 2019 – prior | technologies and sitting on the boards of |
|  | on behalf of a number of national | with Environmental Technology and has | to joining SDCL, Eugene spent eleven | a range of investment companies. |
|  | governments as well as a wide range of | CIMA and IMC qualiﬁcations. | years with InfraRed Capital Partners |  |

He started his career at an engineering
institutional investors. Since 2012, SDCL performing a variety of ﬁnancial and
consultancy working on a range of
has launched a number of innovative portfolio management roles.
renewable power projects, before
investment vehicles including the
managing various energy from waste
London Stock Exchange listed SDCL
and recycling construction and
Energy Efﬁciency Income Trust plc. Prior
operational projects at a UK waste
to establishing SDCL, Jonathan was
management ﬁrm.
at HSBC Infrastructure and managed
the IPO of the HSBC Infrastructure Ben is a Chartered Engineer, with a
Company, the ﬁrst Main Market, London Master’s in Mechanical Engineering and
Stock Exchange listed infrastructure an MBA degree.
fund, which now has an enterprise value
of over £3 billion. Jonathanhas a degree
in Modern History from Oxford University.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 13
## Strategy | Investment Manager: Markets and Outlook
Macroeconomic Context and Assuch, the majority of SEEIT’s projects deliver Higher energy prices increase the advantage However, higher-than-expected inﬂation
energy services that are cheaper, cleaner and and relative value of SEEIT’s energy services to numbers in the ﬁrst months of the calendar year
### Outlookfor SEEIT
more reliable than the grid. This is what makes its clients and can help to extend project lives. curbed expectations and reversed much of the
Energy efﬁciency in the supply of and demand
SEEIT’s decentralised energy generation projects Extensions of major contracts within Primary reduction in longer-term yields. For instance,
for energy is fundamentally about reducing cost
efﬁcient and provides them with an enduring Energy and Oliva during the ﬁnancial year are the yield on ten-year US Treasuries reduced
and improving energy productivity. By reducing
competitive advantage and value even beyond good examples. Higher energy prices also tend to from around 5% in October 2023 to around
losses traditionally associated with the supply of
their initial contractedlives. support the business case for development and 3.8% in January2024, only to increase again to
and demand for energy, it is also a major source
construction of new energy efﬁciency projects around 4.3% by the end of March 2024. Inﬂation
of greenhouse gas emission reductions, energy SEEIT also invests in projects that help to reduce
and, together with a pass-through of higher costs proved stubborn, underpinned by energy prices,
security and resilience. the amount of energy needed by end users to
of capital in a higher interest rate environment, production, and shipping costs and growing
produce the same level of work or economic
It is important to understand that SEEIT is not can improve returns on investment. Higher levels of government debt, while the ramiﬁcations
output. Most energy losses happen in the supply
a merchant energy investor. Instead, it seeks to rates of inﬂation can also help to increase those of the conﬂicts in Ukraine and the Middle East
of energy, mainly as heat losses at the point of
invest in primarily long-term contracted income contracted revenues in SEEIT’s portfolio that are continued to impact supply chains and global
centralised generation, for example in gas-ﬁred
streams with high-quality credit counterparties. indexed to inﬂation. capital markets.
power plants designed to create electricity for
As such, it has limited exposure to energy prices
the grid. However, large amounts of energy is Higher energy prices also feed into the price of These macroeconomic challenges tend to
in its revenue streams and, wherever it does,
lost at the point of use, for example because almost all goods and services in the economy, increase costs, making energy efﬁciency projects
it seeks to mitigate these with contracted
of sub-optimal mechanical and electrical thereby driving inﬂation and, ultimately, interest that reduce costs more attractive, urgent and
arrangements for fuel supply or offtake contracts
infrastructure such as lighting, heating, air rates. Energy prices have remained relatively valuable. However, the ﬁnancial implications
for energy services. It is also not a highly
conditioning and controls. As such, SEEIT’s high and volatile, even after falling from recent on SEEIT during the year translated into
leveraged investment company with short-term
projects seek to invest in the replacement or peaks in the aftermath of Russia’s invasion of higher discount rates applied to the cash ﬂows
reﬁnancing challenges. As such, it has limited
upgrading of this infrastructure to reduce energy Ukraine. Tensions and conﬂict in the Middle East associated with SEEIT’s investments, which
exposure to short-term interest rate movements
demand and cut costs. Associated with demand have added to supply and price uncertainty. have affected valuations. As such, we have been
and availability of project ﬁnance. It is also
reduction, more efﬁcient distribution of energy Increasing supplies and exports of oil and gas focusing on what actions can be taken to improve
not a grid-connected, utility scale renewable
APM
services, such as district energy and electric from the United States, which on their own would net asset value for shareholders irrespective
energy project investor. While it seeks to deploy
vehicle charging infrastructure, also creates have reduced energy prices, have been offset of broader macroeconomic conditions and what
renewable energy technologies, it is not subject
competitive advantages. by the production cuts made by other major steps can be taken to reduce the discount at
to the same competitive dynamics or regulatory
energy producers and exporters, thus inﬂating which the Company, like its peer group in the UK
uncertainties. The combination of Efﬁcient and Decentralised
overall energy prices. Energy prices in turn affect investment trust market, is trading.
Generation of Energy helps to deﬁne SEEIT’s
What SEEIT does do is concentrate on the prices of most goods and services, including
approach to energy investing and its competitive
investing in efﬁcient energy services, generated food (from fertilisers to production and shipping),
advantage. We summarise this strategy and
or applied close to or at the point of use. manufacturing and transport. Increasing energy
approach with the acronym “EDGE”.
SEEIT’s investments in decentralised energy prices is therefore inﬂationary. Central banks
generation, as opposed to centralised or The macroeconomic context for energy efﬁciency tend to raise interest rates to combat inﬂation.
grid-focused energy generation, are designed is important, both because of the contribution
As the Chair notes in his statement, because
to meet the needs of large end users of energy, that it can make to addressing systemic
interest rates and inﬂation fell from their peaks in
predominantly in the commercial, industrial, energy-related challenges, and because of the
2022 and 2023, there were hopes in the market
public sector and transport markets. Its projects impact that the wider market conditions have on
of further falls during the ﬁrst quarter of 2024.
seek to deliver energy services in the form of the performance and value of SEEIT’s investment
The United States Federal Reserve indicated
power, heating and cooling where they are portfolio.
the potential for three interest rate cuts in 2024,
needed at the highest practicable levels of
which helped to set positive market expectations.
combined electrical and thermal efﬁciency.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 14
## Strategy | Investment Manager: Markets and Outlook continued
Adapting to Market Conditions Third, we have agreed a Capital Allocations Fifth, we have sought to position the Company’s In the short term, we are also seeking to
Policy with the Board in 2023 that is aimed at portfolio for growth. Examples include: differentiate the Company by:
Under prevailing market conditions, our
ensuring that returns on any new investment
approach to investment, portfolio construction – Onyx, where the rate of new contract signings – promoting its shares, which trade at a
compare favourably with any alternative
and management of the balance sheet has has tripled to over 75 megawatts (MW) discount, to UK and international investors;
opportunity; for example, to buy back shares in
changed. This reﬂects an environment in which perannum;
APM – increasing the Company’s proﬁle in the
the market at a discount to net asset value ,
the Company has not issued new equity since
– EVN, where, for example, the largest fast media;and
or to reduce short-term borrowing facilities. The
September 2022 and is unlikely to do so for
charging hub in the UK was opened by the – distinguishing the Company from renewable
Company beneﬁts from a pipeline of projects
sometime.
Chancellor during the year and where rates of energy investment companies, which have
arising from its existing portfolio. During the year,
As a result, working closely with the Board as deployment have grown several times; and other market and trading characteristics.
we have supported investments that exceed
Investment Manager, we have taken several – RED-Rochester, where a substantial growth
return thresholds, for example at RED-Rochester, We are also exploring other potential actions,
actions. in capacity is under construction to serve over
Onyx and EVN that supports the Company’s including progressing on additional selective
115 existing customers, as well as new ones.
First, we are progressing selective disposals attractive investment return strategy over the investment disposals or equity joint ventures to

|  | medium and long term. |  | 2 |  |
| --- | --- | --- | --- | --- |
| of assets, which can be sold to create cash for |  | Overall, some 14% | of SEEIT’s portfolio is | create liquidity, strengthen the balance sheet, |
| reinvestment at more attractive rates of return |  | invested in projects at the development or |  | improve the opportunity for total returns, reduce |

Fourth, we have sought to increase the positive
APM
or to repay short-term borrowings. Disposals construction phase of their project investment gearing and to provide the opportunity to
correlation between the revenues from SEEIT’s
can also help to prove valuations in support of lifecycle, which provides opportunity for capital return capital to shareholders, for example via
portfolio of investments and inﬂation. Examples
APM
the Company’s net asset value . A notable growth in addition to the income generated by share buybacks or tender offers.
include the addition of inﬂation indexation, and

| disposal was the sale of UU Solar, completed |  | operational assets. Within its 10% allocation to |  |
| --- | --- | --- | --- |
|  | reduction of exposure to labour costs, at the |  | We expect that our investment activity |
| shortly after the end of the ﬁnancial year, which |  | development-stage assets, SEEIT has private |  |
|  | same time Primary Energy extended its major |  | in the near and medium term will remain |
| was achieved at a premium to the last reported |  | equity investments in growth companies, which |  |
|  | contract with Cleveland-Cliffs in its Cokenergy |  | somewhat limited and focused on the identiﬁed |
| valuation. |  | offer the potential to generate gains as well as |  |
|  | project for a further twelve years. An outcome |  | opportunities within the existing portfolio. For |

proprietary pipeline.

| Second, the Company’s short-term borrowing |  | of SEEIT’s disposal of UU Solar has also been an |  | some of these opportunities we expect to utilise |
| --- | --- | --- | --- | --- |
| facilities have been reduced from £155 million, |  | increase in the overall correlation of its portfolio | Sixth, we have been engaging with new | the RCF, but at the same time remain cognisant |
|  | 1 | to inﬂation. |  |  |
| since 31 March 2024, to £98 million | using cash |  | prospective shareholders to support the | of the agreed Capital Allocations Policy and the |
| proceeds from the disposal of UU Solar and |  |  | liquidity and marketability of the Company’s | necessity to ensure that investments remain |
| accounting for further investment into Onyx. |  |  | shares. This has resulted in signiﬁcant new | accretive to the Company’s objective. Through |
| Further repayments of shorter-term borrowing |  |  | investments made by a number of predominantly | capital recycling we are aiming to substantially |
| facilities are planned. |  |  | US-based institutional investors and a change in | repay the current RCF balance over the medium |
|  |  |  | composition of our shareholder register. | term, notwithstanding the possibility that in the |

near term the balance may increase.
1. As at 31 May 2024.
2. Of value.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 15
## Strategy | Business Model
## What We Do How We Do It Outcome

| SEEIT’s investment objective is |  | Identify/Secure |  | Develop/Construct/ |  |
| --- | --- | --- | --- | --- | --- |
| to generate an attractive total | 1 |  | 2 |  |  |
|  |  | Investment |  | Operate | Growing |

### return for investors comprising
SEEIT assesses investment opportunities based – Heat, power and other energy delivery
### stable dividend income and capital
## on deﬁned characteristics: services dividend
### preservation, with the opportunity for
– Active asset management
1. Fit the deﬁnition of energy efﬁciency
### capital growth.
investments – Cost reductions and efﬁciency See Financial Review on pages
SEEIT achieves this through investing principally improvements 35 to 44for further details
2. Have a contractual structure with suitable
in a diversiﬁed portfolio of energy efﬁciency – 14% of the portfolio is in construction
counterparties
projects with high-quality counterparties. anddevelopment phase
3. Potential to generate accretive returns
The contracts governing these energy

| efﬁciency projects entitle SEEIT to receive |  |  | 1 |
| --- | --- | --- | --- |
| long-term cash ﬂows once the energy efﬁciency | C.£38 million |  |  |
| projects are operational. |  | APM |  |

### value increase recognised in NAV
## 4 Hold/Exit 3 Improve
See Portfolio Summary on
– Crystallise value through selective disposals – Investment in higher-return projects page 18 for further details
– Create and enhance revenue streams
– Reduce costs
## Selective
## asset
## disposals
### to create liquidity, strengthen the
APM
### balance sheet and reduce gearing
See Portfolio Summary
on page 18 for further details
Onyx
1. In the year to 31 March 2024.
### Underpinned By: SEEIT’s strong ESG credentials Responsible risk management Robust corporate governance
Read more in the Environmental, Social and Governance section Read more about our risks and mitigation in the Risk Management Read more in the Governance Report onpages 72 to 80.
onpages 45 to 61. Framework section onpages 62 to 64.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 16
## Performance | Company Key Performance Indicators
In the section below, the Company sets out its ﬁnancial and operational key performance indicators (“KPIs”) used to track the performance of the Company over time against its objectives.
The Board believes that the KPIs detailed below provide shareholders with sufﬁcient information to assess how effectively the Company is meeting its objectives.
### Financial KPIs
Deﬁnition 31 March 2024 31 March 2023 Commentary Deﬁnition 31 March 2024 31 March 2023 Commentary
APM

| Net asset value (”NAV”) per share |  |  |  | (pence) |  |  |  | Ongoing charges ratio (%) |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | APM |  |  |  |  | APM |  |  |  |  |  |  |
| NAV |  | divided by number |  |  | NAV |  | has decreased compared with | Annualised ongoing charges |  |  |  | Remained consistent year on year. See |
|  |  |  | 90.5p 101.5p |  |  |  |  |  |  | 1.02% | 1.02% |  |
| of shares outstanding as at |  |  |  |  | the prior year due to global increases in |  |  | (i.e. excluding investment |  |  |  | Financial Review and ValuationUpdate. |
| 31 March |  |  |  |  | risk-free rates pushing discount rates up |  |  | costs and other irregular |  |  |  |  |
|  |  |  |  |  | materially from March 2023 – see Financial |  |  | costs) divided by the average |  |  |  |  |
|  |  |  |  |  | Review and Valuation Update. |  |  |  | APM |  |  |  |

published undiluted NAV
in the period, calculated
in accordance with AIC
### Share price (pence)
guidelines
### Closing share price as at The share price has decreased Operational KPIs
## 59.1p 84.0p
31March predominantly due to market volatility
and the thematic adverse impact on Deﬁnition 31 March 2024 31 March 2023 Commentary
alternative investments focused UK
investment trusts.
### Weighted average contracted investment life (years)
### Dividends per share (pence)
Weighted average number of Increase was in line with expectations
## 16.4 15.9
years of contracted revenue and mainly due to one material contract
Aggregate dividends The dividend increased year on year remaining in investment successfully renewed during the year.
## 6.24p 6.0p
declared per share in respect due to predictability of near-term contracts (excludes all
of the ﬁnancial year cash generation from portfolio, plus recontracting assumptions)
new investments made previously. The
Company met its stated dividend targets
for the years ended 31March 2023 and 31 APM
### Largest ﬁve investments as a % of gross asset value (“GAV ”) (%)
March 2024.
Total value of ﬁve largest Target is to maintain good portfolio
## 52% 54%
individual investments divided diversiﬁcation, achieved in both
### Dividend cash cover (x)
by the sum of all investments ﬁnancialyears.
held in the portfolio plus cash,
Operational cash ﬂow The target was for net operational cash calculated at year end
## 1.1x 1.2x
divided by dividends paid to inﬂow to fully cover dividends paid. The
shareholders during the year Company met its target for the years
ended 31 March 2023 and 31 March 2024.
APM

| Total return on NAV basis |  | in the year (%) |  |  |  |
| --- | --- | --- | --- | --- | --- |
| NAV growth and dividends |  |  | The payment of interim dividends |  |  |
|  | (4.7)% (0.9)% |  |  | APM |  |
| paid per share in the year |  |  | contributed to NAV |  | return in the year, |

although offset by signiﬁcantly higher
discount rates, resulting in a material
decrease in return in both years.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 17
## Performance | Portfolio: Key Updates
### The information presented below summarises the portfolio of the Company across different metrics, using Overview
APM
the Company’s Gross Asset Value as at 31 March 2024 (and using 31 March 2023 for comparison).
SEEIT has several larger investments, which form a foundation for overall portfolio cash ﬂows as well
as providing established platforms to generate growth opportunities.
### Portfolio by Geography Portfolio by Project
The summaries in this section describes the ﬁve largest groups of investments that are diversiﬁed
as at March 2024 | 2023 as at March 2024 | 2023
across the UK, North America and Europe, consisting of 23 individual investments making up c.71%
of SEEIT’s total portfolio by value. A detailed summary of these investments and their performance
during the year is outlined below.
This section sees the continuation of additional disclosures in relation to SEEIT’s larger portfolio
investments, including the provision of speciﬁc project-level KPIs, which has been kept consistent
with the previous year’s report. These KPIs are reported at calendar year-end (31 December 2023).
The Board and the Investment Manager continue to engage with the Company’s shareholders to
ensure that these disclosures are relevant, informative and beneﬁcial.
For a more comprehensive understanding of these investments, Financial Review and Valuation
Movements, the principal risks, Risk Management Framework and Note 3 in the ﬁnancial statements
provide further details.

|  UK 16% \| 17% |  Asia Paciﬁc 1% \| <1% |  RED-Rochester 17% \| 22% |  Zood - Operational |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 3% \| 0% | The revenues referred to in this section describe the revenues that are assumed in the March 2024 |  |  |
|  Europe 22% \| 20% | Cash 2% \| 3% |  Onyx – Obsidian I 12% \| 8% |  |  |  |  |
|  |  |  |  Primary – Portside |  | APM |  |
| US 62% \| 59% |  |  Primary – Cokenergy |  | Portfolio Valuation |  | and therefore include both contracted and uncontracted revenues. This is |
|  |  | 9% \| 9% | 3% \| 2% |  |  |  |

explained further in Financial Review and Valuation Update.

| UU Solar 8% \| 9% |  Zood – Construction |
| --- | --- |
| Värtan Gas 6% \| 6% | 2% \| 2% |
|   Primary – North Lake |  Oliva – Cepuente |

### Investment Activity

| 4% \| 4% | 2% \| 2% |  |
| --- | --- | --- |
| Capshare 3% \| 3% |  Remainder | The March 2023 Annual Report identiﬁed the following areas of strategic investment focus: |
|  Onyx – Development | of portfolio 27% \| 27% |  |
| Platform 3% \| 2% | Cash 2% \| 3% | – efﬁciency improvement projects at RED-Rochester, which contribute directly to increasing the |

project company’s proﬁt margin;
– further scaling of EVN as it continues to establish itself as one of the UK’s largest EV charging
developers; and
### Portfolio by Technology Portfolio by Investment Stage
– continued rollout of solar and storage projects through the Onyx platform.
as at March 2024 | 2023 as at March 2024 | 2023
During the year, out of total investments of c.£161 million, (as detailed in Note 11), c.£143 million has
been invested into four existing portfolio companies: Onyx (£61m), RED-Rochester (£36m), FES
(£37m) and EVN (£10m), capitalising on the opportunity for organic growth that they offer. A further
c.£15m was invested in existing portfolio companies (Spark Energy Efﬁciency and Turntide) earlier in
the year prior to the Investment Manager deciding to stop pursuing these investments in line with the
Capital Allocations Policy. The remaining investments of c.£4m were made into two new investments
(CPP and Rondo) early in the ﬁnancial year as disclosed previously and were the only investments
made in the year not into existing portfolio companies. Theinvestment at RED-Rochester has been
to fund the construction capital for various projects, which are forecast to generate strong returns.
The investments into Onyx, EVN and FES are funding the installation or construction of the converted
pipeline of the respective businesses, helping deliver the intended growth of those businesses.
As part of the incremental investment in FES, a portfolio of loan facilities was acquired, secured

|  Solar & Storage 26% \| 23% |  Lighting 4% \| 2% |  Operating 86% \| 74% |  | Development 5% \| 6% |  |
| --- | --- | --- | --- | --- | --- |
|  District Energy 18% \| 22% |  Industrial process |  Construction | 1 9% \| 17% |  Cash 2% \| 3% | against an operational portfolio of LED lighting projects in the USA, offering double-digit returns |
|  CHP (Waste gases | efﬁciency solutions |  |  |  | and attractive cash yields that also brought potential to realise further upside from operating and |
| /other) 13% \| 13% | 4%\|4% |  |  |  |  |

ﬁnancial efﬁciencies.

|  CHP (Natural Gas) 12% \| 9% |  Bundled Energy Efﬁciency |  |
| --- | --- | --- |
|  Gas Distribution | 3% \| 3% | 1. Construction stage represent investments where |
| Networks 6% \| 6% |  Other technologies |  |

construction work has commenced or high degree of
 EV charging 5% | 4% 4% | 5%
conﬁdence in it commencing.
Biomass 5% | 6% Cash 2% | 3%
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 18
## Performance | Portfolio: Key Updates continued
### Investment Upside Focus
Further upside opportunities have also been
identiﬁed, a number of which would require
further upfront investment. These are being
developed by the Investment Manager across
the larger investments but are not included in
APM
the March 2024 Portfolio Valuation . These
opportunities alone could potentially add over 5
APM1
£145 million to the NAV over the next two to
ﬁve years, although there can be no guarantee
that this will be realised. As reported in the
following sections, throughout the year there 3 1
2 4
has been positive progress with many of these
opportunities across the portfolio, with some
already delivering an uplift of c.£38 million to
APM1
the March2024 Portfolio Valuation , while
others are well advanced with good prospects
of adding further valuation uplift. We continue
to focus and prioritise the workstreams
associated with these opportunities and expect
them to continue to develop over thenext
fewyears.
Data shown below in the Portfolio Summary is
as at 31 March 2024 unless otherwisestated.

| 1. RED-Rochester | 2. Onyx Renewable Partners | 3. Primary Energy |
| --- | --- | --- |
| Rochester, NY | Over 14 states in the US | Indiana, US |
| No. of projects: 1 | No. of projects: 6 | No. of projects: 5 |


| 4. Oliva Spanish Cogeneration | 5. Vartan Gas |
| --- | --- |
| Spain | Stockholm, Sweden |
| No. of projects: 9 | No. of projects: 1 |

RED-Rochester
1. Incremental to the associated capital, where
applicable.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 19
## Performance | Portfolio: Key Updates continued
## RED-Rochester
### One of the largest commercial district energy systems in North America

|  |  |  | 1 |  | Investment Overview | RED-Rochester Revenues |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| EBITDA ($’000) |  | MMBtus | delivered to customers |  |  |  |  |
|  | 1 |  |  |  | RED-Rochester is the exclusive provider of | andCostModel |  |
| Y/E December 2023 |  | Y/E December 2023 |  |  |  |  |  |
|  |  |  |  |  | a number of utility services to customers | The project is underpinned by predominantly |  |
|  |  |  |  |  | within the Eastman Business Park (“EBP”) in | long-term contracted cash ﬂows with positive |  |
| 15,903 |  | 6,494,000 |  |  |  |  |  |
|  |  |  |  |  | Rochester, New York in the US, for which it has | inﬂation correlation. RED-Rochester has |  |
|  |  |  |  |  | regulated utility-status franchise rights. | contracts with over 115 commercial and |  |
|  | 1 |  |  | 1 |  |  |  |
| Y/E December 2022 | : 14,628 | Y/E December 2022 |  | : 7,005,222 |  |  |  |
|  |  |  |  |  | The project provides 16 on-site utility services | industrial customers on ﬁxed terms under an |  |
|  |  |  |  |  | to EBP landowners and tenants under | approved tariff structure as follows: |  |
| Investment Highlights |  |  |  |  | long-term service contract agreements. | – customers typically sign a 20-year contract |  |
|  |  |  |  |  | These services are delivered efﬁciently |  | with no break clauses. Contract extensions |

Investment type Direct equity (100%)

|  | without long-distance distribution losses and | are assumed in the March 2024 Portfolio |  |  |
| --- | --- | --- | --- | --- |
| Acquisition date May 2021 | are competitively priced, generally at a cost |  | APM |  |
|  |  | Valuation |  | ; |
| Asset location Rochester, NY USA | lower than that available from the local utility |  |  |  |

– revenues are split:
No. of projects 1 company outside EBP or third-party service
– ﬁxed charge: c.30% of revenues are
providers. The services include electricity,

| Project equity value |  | c.$252 million (c.£200 million) (c.17%) |  |  |
| --- | --- | --- | --- | --- |
|  | APM |  |  | generated from ﬁxed fees paid, unrelated |
| and as a percentage of SEEIT’s GAV |  |  | steam, chilled water, low-temperature brine, |  |

to demand or services procured;
industrial wastewater treatment, compressed
Project-level debt c.$75 million
air, nitrogen, industrial water, high-purity water – capacity-based charge: c.62% of
Capacity 117MW
and industrial wastewater treatment. revenues are from a pre-determined
Technology 16 on-site services, primarily process/heating steam,
tariff, based on the cost of delivery of
electricity and process/space-conditioning cooling RED-Rochester provides SEEIT with a platform
each service used and the customer’s
to grow the delivery of on-site, energy efﬁcient
Forecast project life remaining c.40 years
associated demand; and
services to the local region, including the
Lifecycle stage Operational
– overheads: c.8% of revenues are from a
expansion of operations beyond the EBP
Counterparties/offtakers Over 115, including Eastman Kodak, Ortho, Li-Cycle and Amazon ﬁxed mark-up for each customer on the
to greater Rochester and the north-east of
O&M RED-Rochester staff total utility bill.
theUSA.
Fuel supply Natural gas and purchased electricity supplied from
Future cash ﬂows are also assumed from
Rochester Gas and Energy Corporation
growth opportunities, including accretive capital
enhancements such as the CHP plant described
on the next page that is expected to increase
future revenues.
RED-Rochester
1. Unaudited ﬁgures.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 20
## Performance | Portfolio: Key Updates continued
### RED-Rochester
### Value Accretion Potential
### Investment Risks and Mitigants Improving efﬁciency
RED-Rochester has pursued value accretion in
Risk type and description Mitigation – CHP construction project
the last year based on two priorities:
Operational: Historically, demand from customers at RED-Rochester is
CHP construction has continued on schedule
Demand risk resulting in relatively stable, as diversiﬁcation across 115 customers mitigates – increasing ﬁxed revenues: RED-Rochester
and on budget, with completion expected
lower-than-expected variable against individual customer demand volatility. However, lower has provided proactive support to EBP
duringQ22025.
revenues. weather-related demand at EBP businesses has been observed in landowners to pursue the lease or sale of
the last year. Expected demand from Li-Cycle, a material customer existing buildings and development of open

|  |  | 2023 reported |  | £10-15 million |
| --- | --- | --- | --- | --- |
| at EBP, has been adjusted downwards signiﬁcantly as described on |  |  | 1 |  |
|  | land. Even with positive progress in these | expectations |  | over 2-3 years |

the next page. The Investment Manager and RED-Rochester are
efforts in the period, RED-Rochester’s utilities
advancing options to renegotiate the tariff structure to mitigate APM
Updated £8 million in March 2024 NAV ,
infrastructure remains underutilised overall

| thisrisk and are also improving the marketing of available sites in |  |  | 2 |  |
| --- | --- | --- | --- | --- |
|  |  | expectations |  | c.£2-7 million untaken, expected |
| order to bring more customers into the park. | and has capacity to service more customers. |  |  |  |

over 1-2 years
As new tenants join EBP, RED-Rochester
Development: Where appropriate, project contracts include liquidated damages
beneﬁts from increased proﬁts from the
Construction delays of accretive for contractor delays should they cause overruns in the construction
additional ﬁxed and demand fees that each
capital projects, including the schedule. The schedules also assume a buffer for delays. Each project is Improving efﬁciency – other projects
new customer will pay; and
CHPplant. probability weighted based on the development stage, with some very
early development projects not yet included for tracking purposes. – improving efﬁciency: The existing variable A number of projects have progressed as
tariff charge is based on a baseline efﬁciency expected, with some being approved for
Development: RED-Rochester management has been working closely with Eastman commencement and some ﬁnishing installation.
of the cost of delivering services from
Challenges in attracting new Kodak and other EBP property owners to make land and buildings Additional accretive projects have been identiﬁed
2011. When RED-Rochester improves the
businesses to locate within the EBP. more attractive to potential tenants. This includes making unoccupied and are under development to maintain a pipeline
operational efﬁciency of any of its utility
lots “shovel ready”, reducing development time and costs. Eastman of site efﬁciency improvements that accrue directly
Kodak and RED-Rochester are now working with a commercial real services and reduces the unit delivery cost,
to the business.
estate brokerage to improve marketing of availablesites. the business captures the full ﬁnancial beneﬁt
of this efﬁciency improvement. 2023 reported £5-10 million
Some potential tenants chose other locations or failed to progress,
1
expectations over 1-3 years
resulting in taking a provision for these lost opportunities. All new Several upside opportunities are being pursued
tenant prospects are now probability weighted based on progress
at RED-Rochester that have not been reﬂected APM
Updated £1 million in March 2024 NAV ,
toagree to come to EBP.

|  |  | in full in its valuation (unless otherwise stated), |  | 2 |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | expectations |  | c.£4 million untaken, expected |  |
| Credit: | By providing services to over 115 customers across the EBP, | but could provide additional value over the short |  |  |  | over 1-2 years |
| Default of counterparties. | the credit risk is diversiﬁed. The Investment Manager works with | to medium term, including the following: |  |  |  |  |

other stakeholders, such as landowners, seeking to ensure the
creditworthiness of new customers does not degrade the overall Cost recovery of overheads
### Existing Initiatives:
credit proﬁle. In addition, the ﬁxed charge component of the tariff is
through tariff amendments
joint and several between customers, thus limiting the impact of any
Increasing ﬁxed revenues by
potential default.
RED-Rochester has developed amendments
bringing new customers to EBP
to the tariff to address the ability to recover
Regulatory: Rulemaking is in progress by State regulators, with implementation
capitaland overhead costs. Theseamendments
New York State is developing the expected in late 2024. RED-Rochester and Eastman Kodak are Good progress with EBP property owners,
aredue to be presented to andnegotiated with
NewYork Carbon Cap and Investment collaborating to lobby State regulators and legislators to ensure agreeingto improve the attractiveness of
EBP customers in mid-2024.

| programme (“NYCI”) to reduce | a favourable business classiﬁcation to minimise or eliminate | vacant properties to potential tenants. Work |  |  |
| --- | --- | --- | --- | --- |
| greenhouse gas emissions in the | the businesses’ requirements to purchase emissions credits. | ongoing with a commercial real estate broker, |  |  |
|  |  |  | 2023 reported | £5-10 million |
| industrial, commercial building and | RED-Rochester is also proposing tariff amendments to customers to | toimprove the marketing of the sites. |  |  |

1

|  |  |  |  | expectations | over 3-5 years |
| --- | --- | --- | --- | --- | --- |
| transportation business sectors. | accommodate potential incoming legislation. |  |  |  |  |
| Subject to the ﬁnal details of the |  | 2023 reported | £10-20 million |  |  |

APM
1 Updated £8 million in March 2024 NAV ,
programme, this could introduce expectations over 2-4 years
2
expectations £10+million untaken, expected
signiﬁcant costs to RED-Rochester.
over 2-5 years
Updated £10-20 million
2
expectations over 1-3 years
APM
1. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame as
reported in the 2023 Annual Report.
APM
2. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
correct as at the reporting date.
SEKIT Annual Report 2024 | SOG | Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

21

## Performance | Portfolio: Key Updates continued
RED-Rochester

### Investment Updates for the Year

Several growth initiatives have progressed that will support the operational and financial performance at RED-Rochester. RED-Rochester's dedicated on-site management team has made significant progress to implement operational management processes, refine the management and execution of accretive projects, improve recruitment and retention of key technical and administrative talent, and identify opportunities to grow the business development pipeline collaboratively with EBP landowners.

Projects approved in 2022 were well progressed in the last year, including:

- completion in early 2024 of construction of the 7.5.7 million new chiller installation, with site-wide chilled water system improvements expected to be complete in Q2 2024; and construction of the 7.5.7 million C-IP plant (regeneration turbine generator and heat recovery steam generator) commenced in 2023 and remains on schedule and on budget, with expected start of commercial operation in Q2 2025.

As previously reported, an existing EBP facility, Li-Cycle, has been significantly expanding its EBP facilities with the construction of a new hub processing centre. To support Li-Cycle's schedule and targeted mid-2024 commercial operations data, RED-Rochester executed an interconnection agreement with Li-Cycle and commenced construction to connect Li-Cycle's new facilities in Q2 2023. However, Li-Cycle suspended EBP project construction activities in Q4 2023, with construction at an advanced stage, citing significant cost overruns and related construction issues, none of which were associated with any RED-Rochester interconnection work. Li-Cycle announced in Q1 2024 additional budget funding that would support budgeting construction, which is now expected to occur before the end of calendar year 2024.

We have provisioned for projected revenues, being delayed from H2 2024 into 2025 and of a materially lower level than previous projections, fundamentally assuming that the Li-Cycle facilities will come into operation.

Meanwhile, we have focused on adjusting and communicating the value of site properties owned by Eastman Kodak, the largest EBP landowner. Eastman Kodak has appointed a real estate broker, with which RED-Rochester is working to improve the marketing of available sites. RED-Rochester is also engaging directly with potential benefits to communicate and demonstrate the advantages of EBP sites in their development plans, which has been positively received.

With this also progressed to identify also commence development work for additional accretive projects now included in the pipeline, increasing the number of opportunities to increase energy efficiency and revenue generation.

In line with our projections in our Interim Results during the year, EBITDA was c.21% below budget for the calendar year 2023, driven by several factors, including:

- (a) lower-than-budgeted demand from a few large customers, arising from unexpected decreased market demand for their products, lower electricity demand from Li-Cycle construction activities, as well as slower arrival of fleet electric vehicles on Amazon, lowering their planned energy demand; Overall, MMBUs delivered were c.10% under budget as a result; and
- (b) mild weather in the first half of 2023, which resulted in lower demand for space conditioning utility services, including steam and chilled water.

We are therefore now developing amendments to the current tariff structure to mitigate the risk of recurrence. These amendments will be presented to the EBP customers in mid-2024 for consideration, negotiation and approval.

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 22
## Performance | Portfolio: Key Updates continued
Onyx
## Onyx Renewable Partners (“Onyx”)
### Commercial and industrial solar and storage platform in the USA

|  |  |  |  | Investment Overview | Power Purchase Agreements (“PPAs”): c.93% |
| --- | --- | --- | --- | --- | --- |
| EBITDA ($’000) |  | New projects at COD (MW) |  |  |  |
|  | 1 |  | 1 |  | of asset revenues are generated from delivery |
| Y/E December 2023 |  | Y/E December 2023 |  | Onyx Renewable Partners is one of the largest |  |

of electric power to contracted end users. PPAs
and most established commercial and industrial
## 2 have ﬁxed indexation and are typically 20 years
(“C&I”) on-site solar and storage platforms in
## 13,621 22 in length (the Onyx portfolio PPA duration has a
the United States, which owns and operates
weighted average of c.18 years).
over 225 operational C&I projects across 14 US

|  | 1 |  | 1 |  |  |
| --- | --- | --- | --- | --- | --- |
| Y/E December 2022 | : 6,823 | Y/E December 2022 | : 14 |  |  |
|  |  |  |  | states. | Solar Renewable Energy Credits (“SRECs”): |

c.7% of asset revenues are generated from
SEEIT’s investment consists of:
3 3 SRECs that are awarded within state-speciﬁc
### MWh produced Performance ratio (a) 100% ownership of portfolios of projects that
regulatory structures that provide marketable
1 1
Y/E December 2023 Y/E December 2023 are operational (94MW) or in construction/
credits for each MWh of renewable energy
late-stage development (118MW); and
generated.
(b) 100% in the development platform.

| 107,908 |  | 95% |  |  | The valuation assumes that the current |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  | SEEIT acquired the remaining 50% stake in | construction and development-stage projects |
|  | 1 |  | 1 |  |  |
| Y/E December 2022 | : 62,007 | Y/E December 2022 | : 95% |  |  |
|  |  |  |  | the development platform from Blackstone in | within this portfolio will become operational |
|  |  |  |  | June2023. | within a deﬁned time frame. |

Onyx provides SEEIT with a well-established
### Investment Highlights
### platform to expand its C&I solar power Onyx Developer Revenues
Investment type Direct equity (100% of operational assets; 100% development platform) generation and battery storage portfolio in and Cost Model
Acquisition date February 2021 original; June 2023 purchase of remaining 50% JV interest North America. The investments have strong
The Onyx development platform makes up
in development platform energy efﬁciency characteristics, increasing the
c.16% of the total Onyx value and has the
Asset location Currently operational in over 14 states in the USA supply of on-site renewable energy, and help
following revenue structure:
No. of projects 7 customers by reducing their greenhouse gas
– asset management fees: c.52%, generated

| Project equity value |  |  | c.$255 million (c.£201 million) | emissions related to the supply, distribution |  |
| --- | --- | --- | --- | --- | --- |
|  | APM |  |  |  | from asset management fees charged by |
| and as a percentage of SEEIT’s GAV |  |  |  | and consumption of energy. Onyx has |  |
|  |  | SEEIT – SM III, Janus II, CTAZ, and Obsidian I, |  |  | Onyx for managing operational portfolios; |

also diversiﬁed its pipeline of investment
operational portfolios (c.5%)
opportunities to include community solar. – EPC development margin: c.33%, achieved
Onyx – Obsidian II, GAF and Nova construction/late-stage on commercial operation date for delivery of
development portfolios (c.9%)
certain assets; and
### Onyx Portfolio Revenues
Onyx – Development platform (c.3%) – asset sales: c.15%, based on the net
### and CostModel
Project-level debt c.$102 million proceeds from the future sale of assets
The portfolio of projects consists of operational,
Capacity 94MW operational developed in the pipeline. Following the
construction and development projects and
Technology Solar and battery storage June 2023 acquisition of the Blackstone
makes up c.84% of the investment’s value. The
Forecast project life remaining c.34 years development platform interests, SEEIT will
portfolio of projects has the following revenue
Lifecycle stage Development, construction, operational retain all beneﬁts of future asset sales.
structure once they are operational:
Counterparties/offtakers Over 100 across operational and construction sites
O&M Various
Fuel supply N/A
1. Unaudited ﬁgures. 2. Reported EBITDA is that generated by the operational portfolios in Onyx. 3. Operational projects only.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 23
## Performance | Portfolio: Key Updates continued
### Onyx Renewable Partners (“Onyx”)
### Value Accretion Existing Initiatives
### Investment Risks and Mitigants
Onyx is focused on value accretion, targeting two
Risk type and description Mitigation Operational cash ﬂows – 10% increase in
main activities to raise the overall worth of the
Operational: The Investment Manager and Onyx have focused expected MW deployment in the near term
development platform:

| Near-term delays in development pipeline | on accelerating the conversion of the development |  |  |
| --- | --- | --- | --- |
| to achieve expected commercial operations | pipeline. KeyOnyx leadership positions are now ﬁlled | – increasing the number of prospective projects | Management is on track to build 75MW |
| dates (“COD”) reduces revenue and cash | with individuals who are streamlining and accelerating |  | in2024, in line with targets. In addition, |

in the solar and battery storage pipeline
ﬂow; as valuation assumes quicker transition development activities. These include strategic marketing managementhas begun to develop a large
adds to Onyx’s value. Valuation of the Onyx
of pipeline projects from development to and communications plans, expanded origination and lead pipelineof community solar projects, partially
development platform assumes a forecast
operational status. generation processes, improved project management, reﬂected in the valuation.
level of MW under management over a period,
derisked supply chain requirements and incorporation
with value created through revenues from 2023 reported £5-10 million
ofquality management principles.
1
Onyx’s asset management and operations expectations over 3 years
The development pipeline is more robust, with more initial
(engineering, procurement and construction)
customer leads resulting in exclusivity, customer contract Updated £5-10 million
teams, recognising the intrinsic value derived

| execution and construction commencement. The larger |  |  | 2 |  |
| --- | --- | --- | --- | --- |
|  |  | expectations |  | over 3 years |
| pipeline helps to mitigate the risk of execution delays. | from the potential sale of any portfolio |  |  |  |

project. Increasing the number of projects and
Development platform
Operational: Onyx has implemented a company-wide quality programme total MW in the pipeline increases the value of
– increase in MW deployment
Underperformance of operational projects. to reduce operational underperformance. This includes
the development platform; and
quality controls and inspections during project construction,
– improving the economics and margins 2023 reported £5-10 million
installing tier 1 equipment with market-based warranties
1

|  |  |  | expectations |  | over 3+ years |
| --- | --- | --- | --- | --- | --- |
|  | and using OEM repair parts, best-in-class procedures and | achieved on new individual solar and battery |  |  |  |
|  | preferred contractors to perform O&M at projectsites. | storage projects can create value for SEEIT |  |  |  |
|  |  |  | Updated |  | £5-10 million |
|  |  | given that it has an option to contract and |  | 2 |  |
|  |  |  | expectations |  | over 3+ years |
| Operational: | During project development, PPA pricing includes |  |  |  |  |

acquire projects at pre-agreed rates of return.
Supply chain, interconnection issues and cost construction and operational costs with appropriate
increases. contingencies based on Onyx’s experience and project Several upside opportunities exist for Onyx that
requirements identiﬁed at the time of signing. As part of the have not been reﬂected in its valuation (unless Improved economics resulting
focus on quality, Onyx is selecting standard components from the Inﬂation Reduction Act
otherwise stated), which could provide additional
across multiple projects to buy in bulk wherever possible
value over the short to medium term:
to minimise costs as well as streamlining maintenance and The IRA continues to beneﬁt Onyx primarily
spares requirements during operations. throughthe long-term stability in investment
tax credits, improving underlying project
Following approval of the US Inﬂation Reduction Act (“IRA”),
economicsand providing headroom in PPA pricing.
Onyx is proactively managing the interconnection and
Indirectly, the wider economic stimulus provided by
permitting approval process, with long queues slowing
the IRA and other recent policy efforts to promote
progress. High demand for electrical components globally,
the energy transition in the US have beneﬁted Onyx
especially equipment such as switchgear and transformers,
through increasing customer approaches and a
is being mitigated by Onyx using standard components
consequently expanding pipeline.
across projects and ordering in bulk in advance of expected
requirements, pushing design decisions earlier to get ahead
2023 reported £2-5 million
of these delays.
1
expectations over 3-5 years
Updated £2-5 million
2
expectations over 2-4 years
APM
1. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
as reported in the 2023 Annual Report.
APM
2. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
correct as at the reporting date.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 24
## Performance | Portfolio: Key Updates continued
### Onyx Renewable Partners (“Onyx”)
### Investment Updates for the Year As a result of positive changes in the
development business, Onyx management
The Investment Manager has worked closely with
improved pipeline development in 2023,
the Onyx team to ensure that the investment has
executing a company record 75MW of project
the right leadership and support to develop and
PPAs in the calendar year, with 40MW of projects
convert its project opportunity pipeline. Speciﬁc
achieving “notice to proceed with construction”
actions included:
(“NTP”).
– continuing collaboration with Onyx’s
Annual delivery of projects to COD increased
management to drive growth and optimise
c.70% year-on-year to December 2023. However,
operations, asset management and business
this was under budget due in part to delays in
development;
supply chain logistics in obtaining critical project
– the expansion of the Onyx management
components as well as interconnection delays,
team to enhance governance and increase
both exacerbated by signiﬁcant market demand
capacity, through the hiring of a Chief Legal
resulting from the passage of the US IRA. While
Ofﬁcer, Chief Administrative Ofﬁcer and a
improved, permitting and interconnection delays
Finance Senior Vice President;
remain challenging for projects to reach COD.
– accelerating pipeline development and
This remains a timing issue, which is factored into
execution through improved planning,
forecasts, rather than resulting in lost projects.
procurement, project management and
operational procedures; and Legacy delays in supply chain repair parts
availability, component failures, insurance claims
– implementation of quality programmes
and customer co-ordination issues to resolve
focusing on improved project procurement
third-party damages resulted in c.5% lower
and construction, best-in-class customer
production and performance than budgeted
service, and effective execution of operations
for the period. Onyx’s asset management team
and maintenance practices.
successfully resolved a number of these issues in
the last year, with the expectation that improved
maintenance practices and root cause analyses
will result in improved performance going
forward.
Onyx
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 25
## Performance | Portfolio: Key Updates continued
Primary Energy
## Primary Energy
Portfolio of on-site energy recycling, cogeneration and process efﬁciency projects, servicing the largest steel blast furnace in theUSA

| EBITDA ($’000) |  | Average net production (MW) |  | Investment Overview | Primary Energy Revenues |
| --- | --- | --- | --- | --- | --- |
|  | 1 |  | 1 | Primary Energy is a 298MW portfolio | and Cost Model |
| Y/E December 2023 |  | Y/E December 2023 |  |  |  |

2

|  |  |  |  | comprising of three energy recycling projects | , | Approximately 73% of Primary Energy’s |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | one natural gas-ﬁred CHP project and a 50% |  | revenues are derived from energy services to |
| 36,763 |  | 182 |  |  |  |  |
|  |  |  |  | interest in an industrial process efﬁciency |  | CC’s Blast Furnace (“BF”) #7 at Indiana Harbor |
|  |  |  |  | project. These projects are fully integrated into |  | Works (“IH”), the largest and most economically |
|  | 1 |  | 1 |  |  |  |
| Y/E December 2022 | : 36,450 | Y/E December 2022 | : 163 |  |  |  |
|  |  |  |  | the operations of two steel mills in the USA, one |  | competitive furnace facility of its kind in North |
|  |  |  |  | owned by Cleveland-Cliffs (“CC”) and the other |  | America. Remaining revenues are derived from |
|  |  |  |  | by United States Steel Corporation (“USS”). |  | the Portside Project, which services USS BF |

### Investment Highlights
The projects provide services critical to steel #14. Primary Energy’s revenues are split in the
Investment type Direct equity (100% in four projects; 50% in PCI Associates) mill operations, including fuel handling and following way between the ﬁve different projects:
emissions control equipment. Primary Energy
Acquisition date December 2019 (50%), December 2020 (15%), September 2021 (35%)
– Cokenergy (c.54% of revenues): the project
has overall responsibility for the projects’ O&M
Asset location Indiana, USA receives waste gas and converts it to power
but uses line staff for site operations seconded
No. of projects 5 and steam to sell to CC’s BF #7 through
from CC and USS under contracts.
Project equity value c.$240 million (c.£190 million) a long-term PPA that is index linked. The
APM Primary Energy’s Cokenergy, North Lake and revenues are protected from demand
and as a percentage of SEEIT’s GAV
Consisting of:
Ironside facilities generate electricity used in ﬂuctuations through a true-up mechanism;
Primary – Cokenergy (c.9%)
blast furnaces at the steel mills through the
Primary – North Lake (c.4%) – North Lake (c.19% of revenues): the project
recycling of waste gases, playing a crucial role

|  |  | Primary – Portside (c.3%) |  |  |  | receives waste gas and converts it into |
| --- | --- | --- | --- | --- | --- | --- |
|  | Primary – PCI Associates (c.1%) |  | in reducing harmful emissions such as CO |  |  |  |
|  |  |  |  |  | 2 | power and steam and sells it back to BF |
|  |  | Primary – Ironside (<1%) | and SO | and, in certain cases, serving as the |  |  |
|  |  |  |  | 2 |  | #7 through a long-term PPA, which is index |
| Project-level debt c.$159 million |  |  | sole source for blast furnace emissions control |  |  |  |

linked. The revenues are protected from
equipment and fuel handling. Primary Energy
Capacity 298MW demand ﬂuctuations through a true-up
also improves energy efﬁciency by bringing
Technology On-site cogeneration, waste heat recovery process efﬁciency mechanism;
energy generation closer to the point of use
Forecast project life remaining c.31 years – PCI (c.7% of revenues): the project is
and reducing heat wasted in the steel-making
50% owned with CC; the asset pulverises
Lifecycle stage Operational process that would otherwise be vented
metallurgical coal injected into IH BF
Counterparties/offtakers CC, USS through stacks.
#7 for steel production. Revenues are
O&M Primary Energy, CC, USS
The projects qualify for Renewable Energy demand-based;
Fuel supply Waste gases from CC; natural gas supplied via CC and USS Certiﬁcates (“RECs”) that are equivalent to
– Portside (c.18% of revenues): the project’s

| those generated by approximately 536MW of | revenues generated through the sale of |
| --- | --- |
| solar or 374MW of wind projects, due to their | heat, power and softened water through |
| efﬁciency and environmental impact. | a long-term PPA with USS. Revenues are |

capacity-based; and
– RECs (c.2% of revenues): the RECs are
generated by Cokenergy and North Lake
and are sold in the open market.
1. Unaudited ﬁgures. 2. As a result of the idling of IH BF #4, Ironside is currently operating as a CHP project.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 26
## Performance | Portfolio: Key Updates continued
### Primary Energy
### Value Accretion Potential
### Investment Risks and Mitigants BF #4 restarted by Cleveland-Cliffs
Examples of upside opportunities at Primary
Risk type and description Mitigation

|  |  | Energy that have not been reﬂected in its | CC has made no commitment regarding IH |
| --- | --- | --- | --- |
| Operational: | Primary Energy assets play a critical role in the operations |  |  |
|  |  | valuation (unless otherwise stated), but could | BF #4 – hence the impact and time frames |
| Recontracting of existing PPAs is assumed in | of two of the most proﬁtable and critical blast furnaces |  |  |
|  |  | provide additional value over the short to | remainuncertain. |
| the forecasts and risk of recontracting terms | in North America, providing signiﬁcant cost savings and |  |  |

medium term, include:

| being below forecasts. | emissions reductions. Given our incumbent occupancy at |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 2023 reported |  |  | £20-40 million |
|  | the sites, alternative energy sources would not be able to |  |  | 1 |  |  |
|  |  |  | expectations |  | over an uncertain time period |  |
|  | compete on the same terms and associated beneﬁts. | Existing Initiatives: |  |  |  |  |
|  | The successful renegotiation of the Cokenergy contract |  | Updated |  |  | £20-40 million |
|  |  | Additional revenues |  | 2 |  |  |
|  | during 2023 provides a reference point for the assumption |  | expectations |  | over an uncertain time period |  |
|  | in the valuation that Portside will be successfully renewed in | and contracts from existing assets |  |  |  |  |

the future at a higher level than the current contract.
Primary Energy continued discussions with
### Investment Updates in the Year
Credit: Primary Energy counterparties CC and USS are CC to develop requirements to allow Primary
Primary Energy remains focused on maximising
Offtaker is currently sub-investment grade. sub-investment grade. The CC blast furnaces associated Energy to pursue participation in the
with the Primary Energy assets are some of the largest in MidcontinentIndependent System Operator operational performance at their ﬁve operating
the USA and are highly proﬁtable. Given their importance (“MISO”) capacity market. This is a prerequisite facilities.
to the North American steel market, the likelihood of not to pursuing the increasing of electric generation
This was underscored by the successful major
ﬁnding a buyer, in the event of a credit default by CC, is capacity at Primary Energy facilities.
overhaul of the Portside combustion engine
consideredlow.

|  |  | 2023 reported |  | £5-10 million | completed in April 2023, which included |
| --- | --- | --- | --- | --- | --- |
| Climate: | The Investment Manager and Primary Energy are in |  | 1 |  |  |
|  |  | expectations |  | over 2-5 years | replacement of the rotor to extend engine |
| Development of new technologies to lower | discussions with CC and USS to assess options for |  |  |  |  |

operating life, improve reliability and reduce
carbon emissions may displace or make employing best available technologies across the ﬁve Updated £5-10 million
required major maintenance for the life of this
obsolete existing pulverised coal injection projects and will deploy, and/or replace, them into existing 2
expectations over 1-4 years
component. This major overhaul was completed
(“PCI”) technology, leading to reduction in assets if necessary.
revenues. on budget and on programme.
Operational energy efﬁciency projects The Investment Manager supported Primary
Energy leadership in their development of the
Installation of one project (bag ﬁlters) interim operating agreement proposal, signed in
started in early 2023 and will be completed in
Q1 2023, for the continuation of select operations
phases between 2024 and2026. A further two
at Ironside. This was following the idling of CC’s IH
projects were approved, with one due to become
BF #4 in 2022 and provided incremental revenues
operational in late 2024 (boiler feedwater heating)

| and one due to become operational mid-2026 |  | to run Primary Energy’s more efﬁcient boilers |
| --- | --- | --- |
| (variable frequency drives). |  | using natural gas purchased by CC. |
| 2023 reported | £2-5 million |  |

1
expectations over 2-3 years
APM
Updated £3 million in March 2024 NAV ,
2
expectations c.£4million untaken, expected
over 1-2 years
APM
1. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
as reported in the 2023 Annual Report.
APM
2. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
correct as at the reporting date.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 27
## Performance | Portfolio: Key Updates continued
### Primary Energy

| The Investment Manager worked closely with | EBITDA for 2023 was slightly up, due to high |
| --- | --- |
| Primary Energy during 2023 in renewing the | levels of operating availability and capacity from |
| Cokenergy contract, signed in January 2024. | CC’s IH BF #7, resulting in strong performance |
| Under this new twelve-year agreement, a | and availability at the Cokenergy, North Lake |
| single-tier pricing structure for energy was | and PCI facilities. Despite CC’s continued idling of |
| agreed that will improve revenues by c.13% and | IH BF #4, Ironside demonstrated above-budget |
| enhance Primary Energy’s ability to execute | EBITDA and net production as CC used both |
| accretive projects with favourable returns. | boiler and steam turbine generator capacity |
| Signiﬁcant cost risk was removed with CC’s | that was not originally anticipated. The Portside |
| agreement to assume all costs for O&M labour, | facility EBITDA was down due to below-budgeted |
| previously a Primary Energy responsibility. A | natural gas prices that depressed revenues |
| fee was also incorporated for CC to reimburse | related to contracted cost savings mechanisms |
| Primary Energy for certain emissions programme | as well as lower demand from the USS site due to |
| services. The majority of the beneﬁt of the revised | their market conditions. |

contract terms had already been included in the
Operations and maintenance costs across the
previous valuation.
Primary Energy facilities were c.7% below budget
The Investment Manager and Primary Energy despite two unplanned outages caused by faults
continue to pursue discussions with CC regarding within CC systems, for which the investment has
PCI, which provides pulverised metallurgical neither control nor responsibility, that affected
coal that is essential for steelmaking in IHBF#7. Cokenergy operations during the year.
TheInvestment Manager is preparing for
negotiations for the renewal of the partnership
agreement with CC in September 2025. It will
engage with them to discuss options to extend
the asset life as well as consider technology
alternatives that align to SEEIT and CC objectives
for lower carbon emissions.
Primary Energy
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 28
## Performance | Portfolio: Key Updates continued
## Oliva Spanish Cogeneration (“Oliva”)
Portfolio of on-site waste recycling, on-site generation and process efﬁciency projects supporting the olive oil industry in Spain

|  |  |  | 1 | Investment Overview | Oliva Revenues and Cost Model |
| --- | --- | --- | --- | --- | --- |
| EBITDA (€’000) |  | MWh produced |  |  |  |
|  | 1 |  | 1 | Oliva Spanish Cogeneration, located in | Oliva’s revenues are split in the following way: |
| Y/E December 2023 |  | Y/E December 2023 |  |  |  |

Southern Spain, comprises nine on-site
RoRi: c.49% of revenues on average. The RoRi
operating projects, of which ﬁve are efﬁcient,
is a regulatory payment from the government
## 68,827 1,129,183
natural gas cogeneration CHP plants with a
paid to CHP and biomass assets and adjusted
combined capacity of 100MW, two are olive
1 1 to account for changes in revenues received
Y/E December 2022 : (8,010) Y/E December 2022 : 827,966
waste biomass plants with a combined capacity
by the assets, namely sale of electricity, and
of 25MW and two are olive pomace processing
operating costs, namely natural gas and
plants.
### Investment Highlights EU Allowance emission certiﬁcates for the
The investment has a good cash yield and cogeneration. This results in stabilised cash
Investment type Direct equity (100% owned, apart from Celvi which is 90% owned with 10%
inﬂation correlation, as well as robust energy ﬂows and EBITDA over the long term. The
owned by the offtaker)

|  | efﬁciency credentials providing process | assets receive the RoRi for the remainder of |
| --- | --- | --- |
| Acquisition date November 2019 | efﬁciencies compared with alternative heat | their asset life. |
| Asset location Andalucía, Spain | sources. In addition, the assets process waste |  |

Electricity sales: on average c.35% of revenue
No. of projects 9 pomace to produce Orujo oil and electricity,
comes from electricity sales produced
Project equity value c.€151 million (c.£129 million) an efﬁcient energy solution that reduces
by the biomass and CHP plants, which is
and as a percentage of greenhouse gas emissions.
Consisting of: predominantly sold to the grid, as the heat
APM

| SEEIT’sGAV |  |  | APM |  |  |
| --- | --- | --- | --- | --- | --- |
|  | Oliva – Celinares (c.3% of GAV |  |  | ) | is used on site. While the revenues are linked |
|  |  | Oliva – Colinares (c.1%) |  |  | to market pricing, this is effectively hedged |

Oliva – Cepuente (c.2%)
through the RoRi and the management team’s
Oliva – Cepalo (c.1%)
hedging policy.
Oliva – Sedebisa (c.1%)
Oliva – Bipuge (c.1%) Oil sales: c.12% of revenues on average come
Oliva – La Roda (c.1%) from the product of the pomace processing,
Oliva – Celvi (c.1%)
namely the production of Orujo oil, which
Oliva – Biolinares (c.<1%)
Oliva sells through short-term contracts in
Project-level debt £nil
the market. The price of the oil is linked to the
Capacity 125MW cost of the biomass, providing a partial hedge
Technology On-site cogeneration, biomass, oil extraction against this fuel supply cost.
Forecast project life remaining Various, up to c.17 years
Lifecycle stage Operational
Counterparties/offtakers Olive oil co-operatives, San Miguel Arcángel, Acesur, Spanish Government
O&M Sacyr
Fuel supply Natural gas, biomass, waste olive cake
Oliva
1. Unaudited ﬁgures.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 29
## Performance | Portfolio: Key Updates continued
### Oliva Spanish Cogeneration (“Oliva”)
### Value Accretion Potential Investment Updates in the Year
### Investment Risks and Mitigants
The Investment Manager has been investigating Following a challenging 2022, Oliva has
Risk type and description Mitigation
several upside opportunities at Oliva that have responded strongly through 2023. As a result of
Regulatory: The cost of EU ETS certiﬁcates has seen relative volatility over recent
not been reﬂected in its current valuation (unless diligent cash management through 2022, Oliva
Increase of EU Emissions Trading years, albeit during 2023 there was a steady decline in the certiﬁcate
otherwise stated), but could provide additional was well positioned at the start of 2023. When
System (“ETS”) costs. price. The costs of the EU ETS are reimbursed over the medium term
value over the short, medium and long term, the global energy markets began to moderate at
through the RoRi mechanism, which has seen positive structural
updates during the reporting period. Control of the EU ETS costs is including: the start of 2023, this was critical in allowing the
also subject to Oliva’s management team’s hedging policy, which is assets to swiftly return to operations in line with
### constructed to reduce the impact of the market volatility. Existing Initiatives: expectations.
Regulatory: Signiﬁcant updates were received during the reporting period that The level of support through the RoRi scheme
Use of owned land for
Update of RoRi mechanism: previous have seen an improvement to the structure of the RoRi. This should provided a strong tailwind for performance,
additional revenues (e.g. solar)
timing delays by the Spanish result in more frequent updates that should allow for an improvement somewhat mirroring the headwinds experienced
Government have improved, but in consistency with energy market pricing.
during 2022. Towards the end of 2023 the
Three projects (solar, olive oil extraction and
still exist, creating short-term cash
The Investment Manager remains cautious about the timely biogas generation) have been progressed Spanish Government published long-expected
impacts on the business as well as
administration of the scheme by the Spanish Government, and throughearly development, as expected. improvements to the RoRi scheme that are
general uncertainty in the market.
therefore has continued lobbying efforts, through trade bodies, to try Projectswill be progressed through detailed expected to improve the administration of the
to ensure timely decision making. development and necessary commercial
scheme and ensure a more suitable alignment of
negotiations in order to complete a full appraisal
the scheme with the global energy markets.
Regulatory: Management is collaborating with industry associations and other
prior to an investment decision.
Potential new regulations on producers to inform the regulations about what an appropriate
While the tailwind from the RoRi scheme
speciﬁcation of olive oil – potentially speciﬁcation would include. 2023 reported £1-3 million
was a signiﬁcant contributor to the positive
impacting the processing 1
Management is also investigating means to deliver the draft expectations over 3-4 years
performance, a proﬁt of c.€15 million was also
requirements and/or impacting the
speciﬁcation as well as looking at alternative uses and markets for generated from the activities of the Oliva
demand for olive oil. Updated £1-3 million
the olive oil.
2 in-house procurement team. This was the result
expectations over 2-3 years
of successfully delivering Oliva’s clean spark
Climate: The Investment Manager has brought olive feedstock procurement
Extreme weather conditions expertise into the Oliva management team in order to more closely spread hedging policy.
(particularly drought) continue to manage the activity and to strengthen relationships with the
Extension of an existing contract Technical availability at the project sites has
impact the olive harvest in Andalucía. local supply chain. This is allowing Oliva to maximise procurement
largely been high, but there was a period of
This would not only impact the opportunities and hence minimise the impact in the short term.
Offtake contract at the Celvi contract
biomass assets within Oliva, but also signiﬁcant downtime at the Cepuente site
Capital projects are also being explored, which would increase successfully negotiated and executed,
the operations of the offtakers. that resulted from the landlord unintentionally
feedstock stockpiling capacity, further mitigating the risk in the foranadditional ten years.
damaging the export cable during routine
medium to long term. There are also capital projects in early
2023 reported £5-10 million sitework.
development looking to reduce the process water consumption of
1
the operations and hence mitigate the risk of water restriction during expectations over 1 year
Operations were restored as a priority and
periods of drought.

|  |  | Updated |  |  | £7.3 million in |  | Oliva’s management team continue to work |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 2 |  |  | APM | with the landlord and insurers to recover the |
| Health and safety: | The Investment Manager, along with the Oliva management team, | expectations |  | March 2024 NAV |  |  |  |
| Health and safety management | has increased the level of monitoring, reviews and auditing of the |  |  |  |  |  | lost revenues and repair costs, which amount to |
| resulting in poor practices and | O&M contractor to ensure contractual and regulatory compliance |  |  |  |  |  | c.€7million; this is not included in the ﬁnancial |
| increased risk of health and safety | and best practice is delivered across the operations. |  |  |  |  |  | results for the year. |

incidents.
APM
1. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
as reported in the 2023 Annual Report.
APM
2. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
correct as at the reporting date.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 30
## Performance | Portfolio: Key Updates continued
### Oliva Spanish Cogeneration (“Oliva”)
There have been two successful pieces of legal In October 2023, a worker of a subcontractor
and commercial work in the period. Firstly, the to Oliva’s O&M contractor sadly died at one
heat offtake contract at Celvi has successfully of the Oliva sites. The circumstances that led
been extended for a further ten years, to this incident are still subject to statutory
coterminous with the project’s RoRi support, investigations, which are yet to be concluded.
under improved terms. Secondly, an arbitration This is expected during 2024. While Oliva is
process with a previous gas supplier has reached co-operating fully with these investigations, the
settlement in Oliva’s favour, seeing the return of Investment Manager and Oliva’s management
c.€3 million of pre-payments that the supplier team have also taken timely and proactive steps
was unlawfully retaining. to conduct their own independent investigation,
which has concluded that there is no expectation
of any fault or liability being found against Oliva
or its management. The Investment Manager
and Oliva’s management team continue to work
closely with the O&M contractor to ensure that
health and safety best practices are maintained
at the sites.
Oliva
Oliva
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 31
## Performance | Portfolio: Key Updates continued
## Värtan Gas
### Green gas distribution and supply for the city of Stockholm

| EBITDA (SEK million) |  | % of green gas |  | Investment Overview | Värtan Gas Revenues and Cost |
| --- | --- | --- | --- | --- | --- |
|  | 1 |  | 1 | Värtan Gas owns and operates the regulated | Model |
| Y/E December 2023 |  | Y/E December 2023 |  |  |  |
|  |  |  |  | gas grid in Stockholm, Sweden. Over 80% of | The investment’s revenues consist of: |

the gas is renewable biogas, with a signiﬁcant
## 58.9 91% – ﬁxed tariff (c.39% of revenues): annual ﬁxed
proportion sourced from the city’s wastewater
fee to the regulated grid from end users,
facilities. Theinvestment was fully operational
1 1
Y/E December 2022 : 40.2 Y/E December 2022 : 78% which is not related to consumption and is
from the point of acquisition, with strong
generally reviewed annually; and
long-term yield metrics and inﬂation correlation.
– variable fee (c.61% of revenues): fees paid
### Investment Highlights Värtan Gas provides essential energy
for the supply of gas which are related to
infrastructure services, reducing pollution
consumption. Tariffs and prices are generally
Investment type Direct equity
and greenhouse gas emissions at the point
reviewed annually, or more frequently if
Acquisition date October 2020 of use, through the displacement of natural
required, and are predominantly based on
Asset location Stockholm, Sweden gas in buildings and diesel in transport. These
gas costs and a margin.
No. of projects 1 characteristics are aligned to Swedish national
and EU regional strategies to attain carbon
Project equity value and as a c.SEK 940 million (c.£70 million) (c.6%)
APM neutrality by 2040.
percentage of SEEIT’s GAV
Project-level debt c.SEK 682 million This investment has a substantial customer
Capacity Distributing approximately 225GWh/year of gas base and opportunity to unlock further growth
potential – including through transport and
Technology Green gas distribution
restaurant segments, as well as the opportunity
Forecast project life remaining c.21 years and terminal value
to diversify to supply Energy-as-a-Service
Lifecycle stage Operational
(“EaaS”) offerings to the customer base.
Counterparties/offtakers Various, including c.50,000 residential customers and c.800 commercial and
industrial customers
O&M Värtan Gas
Fuel supply Biokraft, Gasum, Others
Vartan Gas
1. Unaudited ﬁgures.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 32
## Performance | Portfolio: Key Updates continued
### Värtan Gas
### Value Accretion Potential
### Investment Risks and Mitigants Appeal of regulatory decisions
There are several examples of upside
Risk type and description Mitigation
opportunities at Värtan Gas that have not been Appeal was successfully won, resulting in a
Operational: A new customer retention strategy has been implemented by
reﬂected in its current valuation (unless otherwise favourable revision in regulatory decision,
Churn rate (reduction) of customers Värtan Gas management to improve the customer experience.
stated), but could provide additional value over increasing revenue potential and regulated
higher than expected, resulting in Churn has reduced during the reporting period, but remains a risk
the short to medium term, including: assetbase (“RAB”).
fewer customers and lower revenues. to the business. New strategies are being developed to diversify
the customer base and offerings of Värtan Gas to mitigate both the

|  |  |  | 2023 reported |  |  | £5-10 million |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | cause and effect of churn. | Existing Initiatives: |  | 1 |  |  |  |
|  |  |  | expectations |  |  | over 1-2 years |  |
| Operational: | Electriﬁcation of Stockholm buses continues and therefore the |  |  |  |  |  |  |
|  |  | Improved customer retention | Updated |  |  | £14 million in |  |
| Transport and restaurant revenues | Värtan Gas management team is focusing on expanding into new |  |  | 2 |  |  | APM |
|  |  |  | expectations |  | March 2024 NAV |  |  |
| lower than targeted, resulting in lower | transport segments such as ferries/marine transport. New offerings |  |  |  |  |  |  |

New retention initiatives implemented,
revenues. and sales resources have also been implemented to increase sales
and some positive results achieved in the short
opportunities to restaurants.
term.However, the Investment Manager is
### New Initiative
mindedto take a more conservative view on
Regulatory: This presents a cyclical risk that the business mitigates by active
thevalue potential in this area.
Periodic regulatory updates causing engagement with the regulator and lobbying directly with other Liquefaction connection project

| revenues to be less than expected. | transmission system operators (“TSOs”). The most recent risk was |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | 2023 reported |  |  | £3-5 million |  |
|  | mitigated through the successful appeal of the regulators’ previous |  | 1 |  |  | Project development completed and |
|  |  | expectations |  | over 2-3 years |  |  |
|  | decision. |  |  |  |  | customer contracts signed. Construction |

duetostart mid-2024.
Updated £3-5 million
Commodity: Implementation of Värtan Gas’s hedging strategy continues to derisk
2

|  |  | expectations | over 3-5 years |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
| Volatility in biogas costs, resulting in | the volatility of the energy markets, hence enabling Värtan Gas to |  |  | 2023 reported |  | N/A |
| higher gas procurement costs. | effectively pass on these costs to the customers. |  |  |  | 1 |  |

expectations

| Biogas tax ruling: | The Swedish Tax Authority is reapplying for the tax exemption, | New offerings and new business lines |  |  |  |  | APM |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Updated |  | £3.9 million in March 2024 NAV |  |  | , |
| Challenges to the application of tax | which is expected to be obtained during 2024. This does not impact |  |  | 2 |  |  |  |  |
|  |  |  | expectations |  |  | £1.7million untaken, expected |  |  |
| exemption to biogas, increasing the | residential customers due to separate tax rules, but does impact | New EaaS customer offerings have been |  |  |  |  |  |  |

over 1-2 years
cost of biogas. business customers in the short term. The impact on business developed through the period, with ﬁrst
customers is limited by careful review of the prices set by Värtan Gas contractsbeing signed with customers. Solar
and through engagement with them surrounding the tax exemption. products are a strategic focus for development and
deployment over the coming period; initial progress
is in line with expectations.
2023 reported £10-15 million
1
expectations over 3-5 years
Updated £10-15 million
2
expectations over 2-4 years
APM
1. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
as reported in the 2023 Annual Report.
APM
2. Estimated potential value uplift (expressed as the NAV incremental to the associated capital) and time frame,
correct as at the reporting date.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 33
## Performance | Portfolio: Key Updates continued
### Värtan Gas
### Investment Updates in the Year Since joining in January 2023, Värtan Gas’s new
CEO has been focused on driving excellence
Performance during the year has been positive
through the new consolidated organisational
with an overall increase of Värtan Gas’s key
structure, at the same time as devising a new
performance indicators.
business strategy for delivering growth. During
Some business-to-business (“B2B”) customer
2023, a new business line has been set up, named
segments, such as transport and restaurants,
Driva – the Swedish for drive, power, operate. The
have seen reductions in volumes. In transport,
Driva strategy is to develop new EaaS offerings,
the bus sector is undergoing electriﬁcation of
predominantly for B2B customers. To date, the
many of the bus ﬂeets. Värtan Gas is looking
Värtan Gas management team has developed
to replace these volumes by increasing supply
new EaaS offerings, completed market research
to the Stockholm marine industry, which has
and testing, whilst developing the offerings on
an increasing pressure to decarbonise due
a commercial and contractual basis. This has
to incoming regulations. This transition in the
resulted in the ﬁrst EaaS contracts being signed
transport sector is expected to occur over the
for heating and electric vehicle (“EV”) charging
coming few years. In the restaurant sector,
products. Solar-as-a-Service is of particular
businesses appear to be operating with a close
strategic importance and hence focus for the
eye on their cost base; hence the restaurant
Driva brand.
volume consumption has seen a small decrease.
As well as the growth areas, stability and
Värtan Gas has increased its sales team to
sustainability of supply for biogas remains
increase the restaurant customer base and has
strategically important for the Investment
also rolled out a Heater-as-a-Service product
Manager and the Värtan Gas management team.
to increase the gas sales to restaurants. Despite
Along with continued focus on increasing the
these customer headwinds, Värtan Gas has
biogas content of the grid, which has been further
delivered the expected EBITDA performance,
increased during the period, and successful
which is largely a result of improved margin on
implementation of the hedging policy, the
the gas sales cost; another positive outcome
Värtan Gas management team is also exploring
from Värtan Gas’s gas hedging policy.
opportunities to vertically integrate the biogas
A positive outcome was reached in relation
supply chain, with a strategy to be devised
to the appeal of the Swedish regulator’s (the
during2024.
Energy Markets Inspectorates (“Ei”)) previous
decision relating to reductions in the RAB, hence
the revenue cap for the period 2023-2026. In
September 2023, following the appeal of the
TSOs (including Värtan Gas), the Ei conﬁrmed
it would retract their initial decision. Following
this, in December 2023 and January 2024,
it republished their decisions in relation to
the calculation of the RAB and the assumed
weighted average cost of capital (“WACC”),
respectively. Both these updates were in the
favour of the TSOs and have had a positive
impact on the revenue potential and terminal
value, and hence valuation, of Värtan Gas.
Vartan Gas
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

34

## Performance | Additional Portfolio Project Updates

The following section provides an update on matters occurring during the year, in relation to other select investments from around the portfolio. The investment updates covered are based on materiality of the investment and/or the matter being reported.

### EVN

SEEIT's dedicated EV charging infrastructure platform has had another positive year, with its number of operational sites increasing from 6 to 23 (totalling 105 ultra-fast chargers, and another 150 fast chargers). The pipeline of projects continues to grow, with another five sites currently undergoing construction, soon to be handed over to the Charge Point Operator ("CPO"), and many more with agreed leases.

In September 2023, at an event attended by the Chancellor of the Exchequer, EVN unveiled the UK's largest fast charging hub at the NEC in Birmingham, which saw 30 ultra-fast chargers and 150 fast chargers handed over to the CPO.

### FES

The Investment Manager has worked closely with FES management in the last year to assess requirements to restructure the overall operations and development activities to restore profitability and to establish a strategy that provides for long-term growth and sustainability of the FES LED-lighting-as-a-service business. This has involved a streamlining of staffing and operations, as well as some key lines such as a new CFO to strengthen financial controls and reporting. The business development strategy was revised to focus on developing a robust pipeline targeting larger multi-site enterprise business prospects that have longer sales cycles but higher revenue potential. These changes will take some time to take full effect; however, during 2023, FES signed a total of $22 million of new contracts, including $15 million of completed installed contracts.

FES's operational service contracts continue to operate and to deliver stable income. In October 2023, SEEIT acquired a senior ranking debt facility from Deutsche Bank at a heavily discounted price, transferring the value of the related underlying FES service contracts to SEEIT.

### Huntsman Energy Centre

The Huntsman project successfully completed commissioning and testing, achieving the start of the operational phase in June 2023. Since then, the plant has also passed its performance testing and has been delivering energy services to the customer, Huntsman Polyurethanes.

Since the start of operations, there have been reliability issues with the water treatment plant that provides demineralised water to Huntsman. A significant focus of the Investment Manager has been put towards satisfactory rectification of this matter, with an upgrade of the system, at the contractor's cost, expected to be completed in the summer.

### Moy Park Biomass

The performance of the biomass boilers across the portfolio of sites continues to be strong, with output in line with expectations.

As previously reported, the minority shareholder, which is also the feedstock provider, had submitted two claims alleging force majeure ("FM") events and made allegations of loss in relation to their shareholding.

The FM claims were successfully managed by the Investment Manager to ensure continuity of services to the end customer. In relation to the allegations of shareholder loss, the Investment Manager successfully renegotiated the terms of the long-term feedstock agreement, to reflect general changes in market conditions, and removed the minority shareholder to bring these matters to a close.

### GET Solutions

Following on from the previous period, where SEEIT's GET Solutions project was impacted by record high gas costs, in October 2023 the Investment Manager employed a new gas procurement agent to improve visibility of the project's forecast fuel costs and implement a more sophisticated hedging policy. With energy markets still being elevated compared to long-term trends, fuel costs are still above the expectations at the conception of the project; however, the future hedged position of the project is much improved as a result of the change in gas procurement agent.

In addition to this, the Investment Manager has continued efforts to recover the historical high fuel costs from the previous gas procurement agent (as per contractual terms), to improve the financial position of SEEIT's project. Commercial and contractual discussions continue with the previous gas procurement agent to try and bring this matter to a conclusion.

## Portfolio Project Exits

### UU Solar

Following the year end, in May 2024, the Investment Manager successfully sold the investment in UU Solar to UK Power Networks Services Holdings Limited. The agreed price represented a 4.5% premium to the Company's 30 September 2023 valuation.

In the lead-up to the exit, the Investment Manager had progressed a number of workstreams, such as repowering projects and strategic inverter procurement, as well as commencing the installation of a new control (SCADA) system across the portfolio. These workstreams were important in relation to forecasting an improvement in performance of the portfolio, therefore supporting the agreed price at a premium to valuation.

### St Barts Hospital

During August 2023, the contract with St Barts Hospital in London came to a successful conclusion. This saw the project delivering all services to the hospital in line with expectations, and the ownership of the assets transferring to the hospital as intended.

### Santander Lighting

In July 2023, Santander exercised its option to end the contract early as part of a capital expenditure programme across its business. This exercise was successfully completed, with final payment received during Q1 2024.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 35
## Performance | Financial Review and Valuation Update
### Financial Performance Consolidated Gearing Position
APM
The Company’s investment strategy and the Investment Manager’s focus on asset management The structural gearing target is measured across the portfolio, enabling the Company to optimise
has helped manage downside risks and target value-accretive opportunities during the year, for efﬁciency and risk, utilise debt where it can be most efﬁciently sourced and enable a signiﬁcant
notwithstanding market volatility. part of the portfolio (41 out of 54 investments) to operate on an unlevered basis. Alarge portion
APM
of the structural gearing amortises from free cash ﬂow generated by the relevant investment
APM
and although the absolute exposure to portfolio-level gearing in GBP terms has reduced, as a
APM
percentage it has increased due to the reduction in the Company’s NAV .
There is no reﬁnancing requirement at a portfolio level until at least 2025, although the Investment
## £92m £(56)m Manager may look to optimise through opportunistic project-level reﬁnancing. Forexample, the
Cokenergy recontracting substantially improves the ﬁnance capacity and risk from the perspective
of a lender, from which the Investment Manager anticipates improvement of terms in the Primary
2023: £85m 2023: £(19)m Energy ﬁnancing whilst retaining beneﬁt from the long-term interest rate swaps currently in place.
The Company, via Holdco, also has a £180 million RCF in place until June 2026, having recently
### Investment cash inﬂow from the Loss before tax
extended/reﬁnanced the expiry date by twelve months. The Company intends for this to be a
### portfolio reﬂects income of £64 million less the
temporary ﬁnance, repayable through surplus distributions from the portfolio, reﬁnancing proceeds

|  |  | APM |  | unrealised loss of £(118) million from increased |  |
| --- | --- | --- | --- | --- | --- |
| up 8% on a portfolio basis |  |  | , providing 1.1x |  | at investment level and investment disposals which the Investment Manager is currently pursuing. |
|  | APM |  |  | discount rates and speciﬁc valuation |  |

dividend cash cover
As at 31 March 2024, the Holdco RCF had been drawn by £155 million to fund investments.
adjustments.
At31May2024, the drawing had reduced to £98 million after a partial repayment following the
disposal of UU Solar in May 2024. Based on investment outlook, the RCF could be £110-£130 million
drawn at 30 September 2024 (before any proceeds from a disposal or portfolio-level reﬁnancing),
subject to returns from proposed investments meeting the Capital Allocation Policy criteria. The
## (5.2)p
estimated drawings are predominantly based on projected capital requirements for Onyx andEVN.
APM 1 2 APM
% of GAV Debt at 31 Mar 24 Debt as a % of EV Debt as a % of NAV
### 2023: (1.8)p
Primary Energy (USA) 17% £126m 40%
### Loss per share RED-Rochester (USA) 17% £59m 24%
comprising income components of 5.7 pence,
Onyx (USA) 17% £81m 30%
made up from inﬂation increases, FX gain and
N/A
portfolio performance, less capital component of Vartan Gas (Sweden) 6% £51m 46%
10.8 pence, made up of discount rate movements.
Capshare (Portugal) 1% £14m 30%
Citi Riverdale (UK) <1% £1m 34%
### Financing
APM Structural gearing £330m 21% 34%
The Investment Manager seeks to maintain a conservative level of total gearing consistent with
APM
APM (medium-term target =35% NAV ) (32% at March 2023)
the Company’s tolerance for ﬁnancial risk. Total gearing is measured on a look-through basis by
including debt at Company level through to the investment portfolio level. The Company’s investment

|  | APM |  | APM |  | APM |  | Aggregate gearing including RCF |  | £485m 30% 49% |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| policy provides for a target medium-term gearing |  | of 35% of NAV |  | (“structural gearing” |  | ) |  | APM |  |  |
|  |  |  |  |  |  |  | (cap = 65% NAV | ) |  | (32% at March 2023) |

APM
and a consolidated borrowing limit of 65%, which includes the longer-term structural gearing and
acquisition ﬁnancing facilities used to ﬁnance the Company’s investments over a shorter term, both
1. Percentage of investment as a percentage of gross asset value (“GAV”) as at 31 March 2024, consisting of
calculated at the time of borrowing. Portfolio Valuation and other assets.
APM 2. Enterprise value (“EV”) equals the Investment value included in the Portfolio Valuation plus debt at
Reﬁnancing risk at the portfolio level is managed through low gearing , staggered debt tenors and
investmentlevel.
maintaining low absolute levels of reﬁnancing requirements over the medium term.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 36
## Performance | Financial Review and Valuation Update continued
### Gearing summary as at 31 March 2024
### Amortisation of existing debt (GBPk)
### Investments Weighted average Interest rate exposure
80,000
### geared interest rate of of portfolio debt
60,000
### portfoliodebt
40,000
## 1
2
## 12 /54 investments 6.0% 80% is ﬁxed
20,000

| 2023: 14/55 | 2023: 5.8% | 2023: 80% |  | 0 |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |  |
|  |  |  |  |  | 2024 | 2024 | 2024 | 2025 2026 2027 2028 2029 2030 2031 | 2025 | 2025 | 2025 | 2032 2034 2035 20362033 |
| Portfolio-level debt | Weighted average life | Portfolio debt |  |  |  |  |  |  |  |  |  |  |
|  |  |  | 3 | Amortisation of existing debt – From project cash (GBPk) Amortisation of existing debt – From debt drawn (GBPk) |  |  |  |  |  |  |  |  |
| bygeography | remaining on debt | repaidin the year |  |  |  |  |  |  |  |  |  |  |

### USA: 80%
### Inﬂation
### Europe: 19% Inﬂation correlation is derived from a combination of explicit linkage to revenues, through contract
or regulatory mechanisms, and de facto linkage applied on recontracting events or through
## UK: <1% 3.7 years £26m
discretionary annual tariff increases. Inﬂation correlation is a relevant metric when evaluating new
investment opportunities and when recontracting on existing projects within the portfolio. The
### 2023: USA: 79%, 2023: 4.0 years 2023: £18m
Company’s projects are in a number of different geographic regions, which diversiﬁes and mitigates
### Europe: 20%, UK: <1%
the impact of inﬂation volatility for the portfolio.
Positive inﬂation correlation on investment returns has increased since 31 March 2023 as a result of
March 2024 SEEIT Structural Gearing (£’000) increased contractual inﬂation linkage related to new contracts and renewals.
### March 2024 SEEIT sensitivities (pence per share)
450,000
400,000
Discount Rates +/- 50 bps
350,000
300,000
Inﬂation -/+ 100 bps
250,000

| 200,000 | Corporate Tax +/- 500 bps |  |
| --- | --- | --- |
| 150,000 |  | 4 |
|  | FX | +/- 10% |

100,000
Positive change to assumption
50,000
0
Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep Sep
### Contracted Revenue over time
24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45
Reﬁ, Floating Reﬁ, Fixed Existing, Floating Existing, Fixed The Company derives its return on its investments primarily through receipt of contracted cash ﬂows
500,000
through the operational life of the investments in the portfolio. These are often calculated upfront and
can be based on a variety of factors, including, but not limited to: heat and electricity availability, output
of heat and electricity, opportunity for energy savings or other energy-related services. Cash ﬂows
may however be variable or ﬂuctuating for certain investments, if they rely on a host counterparty’s
demand for energy or can be impacted by volatility in the energy market. The valuation of certain
investments also assumes that cash ﬂows will continue beyond the current contractual period.
1. Includes ﬁve projects at Primary Energy and three projects at Onyx.
Once operational, investments provide attractive levels of cash distributions, and are designed to
2. % of total debt that is ﬁxed or has long term interest swaps in place to mitigate interest rate exposure. achieve relatively high, contracted and reasonably predictable cash ﬂows. The quality of these cash
3. Incremental to the associated capital, where applicable. ﬂows is supported through investments with strong delivery partners, where the risks involved in
4. FX is shown after the impact on hedging. implementation, operation and the associated revenues can be identiﬁed and mitigated.
Negative change to assumption (5.0) (4.0) (3.0) (2.0) (1.0) 0.0 1.0 2.0 3.0 4.0 5.0 6.0
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 37
## Performance | Financial Review and Valuation Update continued
Based on the model of projected future cash ﬂows over the next 15 years, the Investment Manager Contracted Uncontracted
believes that the Company will generate sufﬁcient cash to fully cover dividends over the medium to
Existing – Long-term contracts – Ancillary revenues that are considered side
long term, with excess cash ﬂows after dividend payments expected to be reinvested to grow the products of primary revenues in certain
– Rolling annual contracts (e.g. in Vartan

|  | APM |  | 1 |  |  |
| --- | --- | --- | --- | --- | --- |
| Company’s NAV |  | in line with its target returns | . | Gas where majority of customers have | projects (e.g. olive oil sales at Oliva Spanish |
|  |  |  |  | contracts that are rolled over automatically | Cogeneration) |

The visibility of revenues derived from the contracts at the operational phase provides support for
on an annual basis) – Contract life extensions where the customer
an attractive and growing yield to be returned to investors.
– Short-term contracts prior to their expiry can be considered to have a viable alternative
(e.g. spill electricity, RECs, etc.) source of energy at the end of the existing
### Long term cash ﬂow 15 year (£’000)
contract (e.g. Onyx where it is assumed that
120,000 the customer will seek an extension for a few
years instead of decommissioning)

| 100,000 | Growth – Contracts due to be recontracted in the |  | – Growth assumptions based on existing |
| --- | --- | --- | --- |
|  |  | future, where there is a clear history of | contracts (e.g. RED-Rochester where |
| 80,000 |  | recontracting and the customer does not | revenue growth is assumed from successful |
|  |  | have another viable or contractual source of | delivery of value accretive capital expansion |
|  |  | energy (e.g. extension of existing contracts | and addition of new customers) |

60,000
in RED-Rochester and Primary Energy) – Expansion of developer platforms (e.g. future
C&I solar portfolios developed by Onyx)
40,000
Based on the above characteristics, as at 31 March 2024, 75% (March 2023: 79%) of the Portfolio
APM
Valuation by value is considered to be contracted and 25% (March 2023: 21%) is considered to be
20,000
uncontracted.
0
### 2025 2026 2027 2028 2029 2030 2031 2032 2034 2035 2036 2033 2037 2038 2039 2040 Dividends
The Company paid a total of £67 million in dividends to shareholders during the year. This included
Distributable cash ﬂow (LHS) Dividends paid to shareholders (LHS)
the last quarterly interim dividend for the year ended 31 March 2023 and the ﬁrst three quarterly
interim dividends for the year ended 31 March 2024. The Company has declared the fourth quarterly
2 interim dividend for the year ended 31 March 2024. This is payable at the end of June 2024, delivering
### Project Revenues (£m)
the target of a 6.24 pence per share total dividend related to the year ended March 2024.
as at March 2024
Based on the projected investment cash ﬂows from the current portfolio prepared by the Investment
Manager, the Company has announced new dividend guidance of 6.32 pence per share for the year
500 to 31 March 2025 and, as before, will target progressive dividend growth thereafter. The Company has
increased its annual dividend each year since its IPO in 2018. The Company intends to continue to pay
400
interim dividends on a quarterly basis through four broadly equal instalments (in pence pershare).
300
### Data TBC Dividend Growth (pence per share)
200
Future expectations
100
6.32
6.24
600 6.00
0
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 5.62
5.50
Uncontracted Contracted
5.00
1. Note: The chart above is for illustrative purposes only, assuming a 16-year weighted average portfolio term and
does not represent a forecast. There can be no assurance that these cash ﬂows will be met. The hypothetical 2020 2021 2022 2023 2024 20262025
cash ﬂows do not take into account any unforeseen costs, expenses or other factors which may affect the
The Company paid a stub dividend of 1 pence per share for the four-month period between its IPO and
portfolio assets and therefore the impact on the cash ﬂows to the Company. As such, the graph above should
not, in any way, be construed as forecasting the actual cash ﬂows or actual returns from the portfolio. March2019. Thereafter, dividends reﬂect the full-year dividends declared in relation to each ﬁnancial year
toMarch 2024 and targeted thereafter.
2. The chart covers only a 20 year period even though cash ﬂows are projected to continue beyond this period.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 38
## Performance | Financial Review and Valuation Update continued
The Company has a single investment in a directly and wholly owned holding company, SEEIT Holdco.
### Analysis of Movement in NAV APM
It recognises this investment at fair value. To derive the fair value of SEEIT Holdco, the Company
APM
As of 31 March 2024, the NAV per share was 90.5 pence, a decrease of 11.0 pence from 101.5 pence APM
determines the fair value of investments held directly or indirectly by Holdco (the Portfolio Valuation )
at 31 March 2023. After taking into account dividend paid (6.2p), this decrease reﬂects the impact
and adjusted for any other assets and liabilities. The valuation methodology applied by Holdco to
of increased discount rates (negative 10.8 pence per share) offset primarily by an uplift in portfolio
determine the fair value of its investments is materially unchanged from the Company’s IPO and has
performance of 6.1 pence. These are further described below in the Portfolio Valuation section.
been applied consistently in each subsequent valuation. See Note 4 for further details on the valuation
APM APM
Revisions to medium-term inﬂation assumptions had a small negative impact on NAV of 0.3 pence. methodology and approach. A reconciliation between the Portfolio Valuation at31 March 2024 and
The adverse impact of FX movements was limited to 0.1 pence, in line with expectations of using foreign investment at fair value shown in the ﬁnancial statements is given in Note 11.
APM
currency hedging to limit volatility in NAV from ﬂuctuations in the valuations of non-GBP investments. APM
For the Portfolio Valuation at 31 March 2024, the Directors commissioned a report from a third-party
valuation expert to provide their assessment of the appropriate discount rate range for each investment
APM
Movement in NAV in the year (pence per share) (excluding small investments with an aggregate value of less than 2% of the Portfolio Valuation at
31March 2024) in order to benchmark the valuation prepared by the Investment Manager. Thediscount
6.1
rate applied to each investment by the Investment Manager was within the ranges advised by the
third-party valuation expert, (with the exception of a few instances where the Investment Manager
101.5 0.1 101.2
selected higher discount rates to compensate for risk within the underlying cashﬂows).
(0.3) (6.2) 0.1
APM
In addition, for the Portfolio Valuation at 31 March 2024, the Company beneﬁted from full scope
third-party valuation reports on Onyx (comprising its operational, construction and development
90.5
components), EVN’s development component and four corporate investments in the portfolio (Turntide,
(10.8)
Rondo, ON Energy and Iceotope). The Investment Manager used the outputs of these reports as their
APM
basis for the purpose of valuing these investments in the Portfolio Valuation at31March 2024.
### Movements in Portfolio Valuation
APM
The Portfolio Valuation as at 31 March 2024 was £1,117 million, an increase of 2% compared with
£1,100 million as at 31 March 2023.
After allowing for investments made of £161 million and cash receipts from investments of £92million,
APM
the Rebased Portfolio Valuation is £1,169 million. Adjusting for changes in macroeconomic
assumptions, foreign exchange movements (excluding the effect of hedging) and changes in
discount rates, this resulted in a portfolio return of £93 million, equating to an 8.0% return in the
period. The return takes into account a number of project-speciﬁc valuation movements described
under Balance of Portfolio Return below.

| Opening | Change in |  | FX | Portfolio | Dividends | NAV before | Impact | Changes in | Closing |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| NAV | macroeconomic | movements |  | performance | paid | discount rates | of share | discount | NAV | The weighted average remaining life of investments as at 31 March 2024 is 16.4 years |
| (March 2023) | assumptions |  |  |  |  | and buyback | buyback | rates | (March 2024) |  |

(31March2023: 15.9 years), when calculated purely on when current contracts end. When based on
APM
the 31 March 2024 Portfolio Valuation , which includes assumptions for recontracting and contract
life extensions, the weighted average remaining life is 26.4 years (March 2023: 28.0 years).
Portfolio Valuation APM Further information on key investments and potential future valuation movements can be found in
Note 3.
### Approach
The Investment Manager is responsible for carrying out the fair market valuation of SEEIT’s
APM
portfolio of investments (the “Portfolio Valuation” ), which is presented to the Directors for their
APM
consideration and approval. A Portfolio Valuation is carried out on a six-monthly basis, at 31March
APM
and 30Septembereach year. The Portfolio Valuation is the key component in determining the
APM
Company’sNAV .
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 39
## Performance | Financial Review and Valuation Update continued
### Valuation Movements
APM
A breakdown of the movement in the Portfolio Valuation in the year is illustrated in the following chart.
### Valuation bridge - March 2023 to March 2024 (£m)
1,169
(92)
(3)
(24)
1 61
93 1,117
1,100
(118)
Portfolio Valuation New Cash from Rebased Portfolio Changes in Changes in Changes in Balance of Portfolio Valuation APM
– 31 March 2023 investments investments Valuation APM macroeconomic foreign exchange discount rates portfolio return – 31 March 2024
## £(3)m £(24)m £(118)m £93m
### i) Changes in ii) Change in foreign exchange iii) Changes in discount rates iv) Balance of portfolio return
### macroeconomic assumptions
Read more on page 40 Read more on page 40 Read more on pages 40 and 41 Read more on page 41
assumptions
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 40
## Performance | Financial Review and Valuation Update continued
– Of this adverse movement in discount rates, c.£31 million relates to adjustments made to
### Return from the Portfolio of the Rebased Portfolio Valuation APM
asset-speciﬁc risk premiums. This includes:
APM
Each movement between the Rebased Portfolio Valuation of £1,169 million and the 31March2024
valuation of £1,117 million is considered in turn below: – an adjustment of c.£26 million to reﬂect the uncertainty over Li-Cycle’s future energy demand
in light of their construction delays factored into the valuation of RED-Rochester; and
– an adjustment of c.£5 million to reﬂect a risk of the value for which RECs can be sold for in the
### i) Changes in macroeconomic assumptions – impact of £3 million:
USA after 2026.
– Inﬂation assumptions: consistent with March 2023, the approach in all jurisdictions is to apply
a three-year near-term bridge to the relevant long-term inﬂation assumption. Given the – Since March 2023, there has been limited market activity to help set benchmarks for appropriate
persistently high global inﬂation since March 2023, this has resulted in an uplift in the valuation APM
discount rates for the investments in the Portfolio Valuation .
due to higher than previously assumed near-term inﬂation, compared with the assumptions
applied for the March 2023 valuation. The long-term inﬂation assumptions remain the same as Weighted average discount rate at 31 March 2024
applied to the March 2023 valuation.
– Tax rate assumptions: there were no changes to corporation tax rate assumptions during Levered/unlevered UK US Europe/Asia Combined
theyear.
Levered
2024 8.1% 9.6% 9.1% 9.4%
### ii) Changes in foreign exchange rates – impact of £23.5 million (before hedging):
2023 7.1% 8.9% 8.4% 8.5%
– The investment portfolio decreased £23 million during the year from movements in foreign
exchange rates, driven by the movement of GBP against the US dollar, euro, Singapore dollar and Unlevered
Swedish krona since 31 March 2023 or since new investments were made in the year.
2024 8.1% 8.8% 8.2% 8.6%
– However, it is important to note that this only reﬂects the movement in underlying investment
2023 7.1% 7.9% 7.4% 7.7%
values, and it does not take into account the offsetting effect of foreign exchange hedging that
APM
SEEIT Holdco applies outside of the Portfolio Valuation .
Discount rate ranges (unlevered) at 31 March 2024
– SEEIT Holdco experienced an aggregate gain of £24 million due to foreign exchange hedging.
APM
– Therefore, the overall foreign exchange movements did not have a signiﬁcant impact on NAV
UK US Europe/Asia Combined
during the year, resulting in a net gain of less than £1 million from foreign exchange movement.
2024 6.10%-10.30% 7.60%-11.25% 5.15%-11.40% 5.15%-11.40%
iii) Changes in valuation discount rates - impact of £(118) million: 2023 4.75%-8.75% 6.50%-9.00% 4.75%-10.25% 4.75%-10.25%
– The discount rate used for valuing each investment represents an assessment of the rate of
return at which infrastructure investments, with similar cash ﬂow assumptions and risk proﬁles, Breakdown of discount rate (unlevered) at 31 March 2024
would trade on the open market.
– During the year, there were further signiﬁcant increases in interest rates globally, including in key UK US Europe/Asia Combined
geographical areas of SEEIT’s portfolio, thus continuing a trend from the last 18 to 24 months.
Weighted average risk-free rate
This has stemmed from geopolitical uncertainties and a high inﬂationary environment due, in part,
to high energy costs. 2024 4.4% 4.3% 3.0% 4.0%
– The Investment Manager considered it necessary to apply a signiﬁcant increase to discount rates 2023 3.7% 3.7% 3.0% 3.6%
and, having assessed geographical areas as a whole and each project individually, has applied
Risk premium
discount rate increases that increased the weighted average discount rate by approximately 90
2024 4.4% 3.8% 5.2% 4.6%
bps to 8.6% on an unlevered basis (March 2023: 7.7%). On a levered basis, which assumes existing
portfolio-level debt is reﬁnanced at current market rates, incorporating existing interest rate 2023 4.1% 3.5% 4.3% 4.1%
swaps into the interest cost assumption, the weighted average discount rate has increased to
Weighted average discount rate (unlevered)
9.4% (March 2023: 8.5% and September 2023: 9.4%).
2024 8.8% 8.1% 8.2% 8.6%
– This has led to an increase in discount rates across the whole investment portfolio in this period
APM
that in aggregate resulted in a decrease in the Portfolio Valuation of c.£117 million. 2023 7.9% 7.2% 7.3% 7.7%
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

41

## Performance | Financial Review and Valuation Update continued

The Investment Manager reviews movements in discount rates for each individual asset at each valuation date. The key approach to the overall discount rate can be summarised as:

- risk-free rate of each individual asset is assessed against relevant government bonds, taking into account length of cash flows and geography; and
- risk premium taking into account asset-specific premiums, considering inter alia country risk, market risk, construction risk, counterparty risk and credit risk.
- Credit risk is determined by deducting the risk-free rate applied to each asset from the most relevant corporate bond yield curve, accounting for the credit rating and maturity of each asset. Where the counterparty is not rated, it may require some judgement to determine the appropriate credit rating.

### iv) Balance of portfolio return – impact of £93 million:

- This refers to the balance of valuation movements in the period, excluding (i) to (ii) above, which provided an uplift of £93 million. The balance of portfolio return reflects the net present value of the cash flows unwinding over the period at the average prevailing portfolio discount rate, and various additional valuation adjustments described below. The portfolio delivered a return of 8.0% in the year with details on key movements described below.
- The Portfolio Valuation$^{a/b}$ as at 31 March 2024, and by implication the return achieved over the period, includes a number of key estimates and judgements of future cash flows expected from different investments. In addition, specific adjustments to future cash flows were required for events during the period that affected the actual outcome from certain investments.
- The key factors that have had a material impact on the 31 March 2024 Portfolio Valuation$^{a/b}$ listed out below, have had a value impact of 1% or higher on the Company's NAV$^{a/b}$.

#### RED-Rochester

- Prior to preparing the Portfolio Valuation$^{a/b}$ as at 30 September 2023, the Investment Manager and the RED-Rochester management team conducted an additional in-depth review of actual results and how certain long-term assumptions were applied in the project financial model. Several revenue and cost estimates were revised, up and down, with a material net adverse impact on the overall valuation of c.£26 million. No further changes were made to the Portfolio Valuation$^{a/b}$ as at 31 March 2024.
- The Portfolio Valuation$^{a/b}$ as at 30 September 2023 reflected a combination of updates to projected loads, business development assumptions, operating costs, labour costs and timing of new efficiency projects, which caused a reduction in the overall valuation of c.£17 million. Positive movements in the second half of the year in relation to new efficiency projects broadly offset a reduction in value from a downwards revision of expected revenue from Li-Cycle (also referred to in discount rates updates above).
- After adjusting for new investment into RED-Rochester and distributions received during the second half of the financial year, the valuation of RED-Rochester at 31 March 2024 is in line with the valuation at 30 September 2023.

#### Oliva Spanish Cogeneration

- The Spanish Government published regulatory updates in the period to the RARI, an incentive scheme to provide a return on operations and investments, that allows for a substantial reduction in uncertainty and therefore greater ability to plan financial optimisation of the plants in the near to medium term.

The overall positive impact on the valuation of Oliva was c.£30 million, after netting off by a reduction of value from standard updates to commodity pricing that form part of the regulatory updates. The majority of the positive impact was reflected in the September 2023 valuation of Oliva, with the valuation of Oliva at 31 March 2024 in line with the valuation at 30 September 2023.

#### Värtan Gas

- The periodic regulatory update in late 2022 relevant to Värtan Gas changed both the WACC and RAB used in calculating the value of the regulated investment, causing an adverse impact on the 31 March 2023 valuation. Värtan Gas has since successfully appealed against the update, resulting in a c.£14 million positive impact (already reflected in the September 2023 valuation) and thus substantially reversing the adverse impact on the previous valuation.
- Further positive changes to the WACC and RAB added incremental value of c. £10 million in the second half of the financial year.

#### Onyx

- As referred to above, for the valuation of the entire Onyx business at 31 March 2024, an independent valuation expert provided a valuation range from which the Investment Manager derived its valuation. The valuation included for the first time a recognition of a pipeline of future investment opportunities in community solar projects. The valuation applied by the Investment Manager was towards the conservative end of the range provided and after adjusting for new investments and distributions during the year, resulted in a positive impact on the valuation of Onyx of c. £35 million.

Additional information and sensitivities are disclosed in the critical estimates and judgements section of Note 3 on pages 111 and 112.

### Financial Information

As described in detail in Note 2, the Company meets the conditions of being an investment entity in accordance with IFRS 10. This report is prepared on a consistent basis to previous reports whereby the IFRS 10 investment entity exemption is applied to the financial statements.

To provide shareholders with more transparency into the Company's capacity for investment, ability to make distributions, operating costs and gearing$^{a/b}$ levels, results have been reported in the pro forma tables below on a non-statutory 'portfolio basis'$^{a/b}$, as it has been done in previous years, to include the impact if SEEIT Holdco were to be consolidated by the Company on a line-by-line basis.

The Directors consider the non-statutory portfolio basis$^{a/b}$ to be a more helpful basis for users of the accounts to understand the performance and position of the Company. This is because key balances such as cash and debt balances carried in Holdco and all expenses incurred in Holdco, including debt financing costs, are shown in full rather than being netted off.

The impact of including Holdco is shown in the Holdco reallocation column in the income statement and balance sheet, which reconciles back to the statutory financial statements (IFRS) and constitutes a reallocation between line items rather than affecting NAV$^{a/b}$ and earnings. In the cash flow statement, the Holdco reallocation column simply represents the net difference between the portfolio basis$^{a/b}$ and IFRS for movements that may occur only in Holdco or only in the Company.

NAV per share$^{a/b}$ and earnings per share are the same under the portfolio basis$^{a/b}$ and the IFRS basis.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

42

# Performance | Financial Review and Valuation Update continued

# Summary Financial Statements

# Portfolio basis summary income statement

|  £'million | Year to 31 March 2024 |   |   | Year to 31 March 2023  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Portfolio basis | Holdco reallocation | IFRS (Company) | Portfolio basis | Holdco reallocation | IFRS (Company)  |
|  Total (loss) | (33.0) | (11.7) | (44.7) | (1.8) | (4.8) | (6.6)  |
|  Expenses and finance costs | (22.7) | 11.1 | (11.6) | (16.7) | 4.7 | (12.0)  |
|  **(Loss) before tax** | **(55.7)** | **(0.5)** | **(56.3)** | **(18.5)** | **(0.1)** | **(18.6)**  |
|  **Tax** | **(0.5)** | **0.5** | **—** | **(0.1)** | **0.1** | **—**  |
|  **(Loss)/earnings** | **(56.3)** | **—** | **(56.3)** | **(18.6)** | **—** | **(18.6)**  |
|  **(Loss)/earnings per share (pence)** | **(5.2)** | **—** | **(5.2)** | **(1.8)** | **—** | **(1.8)**  |

# Portfolio basis balance sheet

|  £'million | Year to 31 March 2024 |   |   | Year to 31 March 2023  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Portfolio basis | Holdco reallocation | IFRS (Company) | Portfolio basis | Holdco reallocation | IFRS (Company)  |
|  Investments at fair value | 1,117.4 | (133.6) | 983.86 | 1,099.6 | 28.3 | 1,127.8  |
|  Working capital | 15.5 | (17.9) | (2.4) | (39.9) | 37.2 | (2.7)  |
|  Debt | **(155.0)** | **155.0** | **—** | **—** | **—** | **—**  |
|  Net cash | 3.9 | (3.4) | 0.5 | 65.7 | (65.4) | 0.3  |
|  **Net assets attributable to ordinary shares** | **981.9** | **—** | **981.9** | **1,125.4** | **—** | **1,125.4**  |
|  **NAV per share^{2/3} (pence)** | **90.5** | **—** | **90.5** | **101.5** | **—** | **101.5**  |

- Total income: Income at the Company level is the income it receives from Holdco which contrasts to portfolio basis$^{2/3}$ where the income is received from the portfolio assets.
- Expenses and finance costs: Investment transaction costs are incurred at Holdco only and therefore not included in the Company income statement.
- Investment at fair value: Company valuation excludes Holdco's other net assets (see Note 11 for detailed reconciliation).

# Treasury Management

# Cash cover for dividends paid

The financial year saw cash inflow from investments (on a portfolio basis$^{2/3}$) of £92 million, an increase of c.10% from the previous year's £84 million. After allowing for Fund-level costs of £20 million (March 2023: £13.5 million), this enabled the Company to cover its cash dividends of £67 million by 1.1x, maintaining a similar level as the previous year (March 2023: 1.2x).

The main factor affecting the increase in Fund-level costs compared to the previous year is interest payable on drawn amounts on the RCF. In turn, this caused the cash cover to be marginally lower than last year.

Maintaining positive levels of cash cover$^{2/3}$ has resulted in cumulative excess cash cover$^{2/3}$ of c.£34 million since IPO, demonstrating the consistent nature of the income from the underlying assets in the portfolio, as well as the ability of the portfolio to generate excess cash that can be reinvested for on-accretive return.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 43
## Performance | Financial Review and Valuation Update continued
APM
### Hedging Strategy Impact on NAV arising from FX
### FX hedging FX gain on hedging FX loss in portfolio Net impact
The Company’s hedging strategy is executed at the level of SEEIT Holdco, so the Company itself is
only indirectly exposed to foreign exchange movements. The objective of the Company’s hedging
## 24.0 (23.5) 0.5
strategy is to protect the value of both near-term income and capital elements of the portfolio from
APM
a material impact on NAV arising from movements in foreign exchange rates.
### Interest Rate Hedging
This is achieved on an income basis by hedging forecast investment income from non-sterling
investments for up to 24 months through foreign exchange forward sales. On a capital basis, it is During the year the Investment Manager assessed hedging options to mitigate the risk of
achieved by hedging a signiﬁcant portion of the portfolio value through rolling foreign exchange unfavourable interest rate movements associated with the RCF ﬂoating rate. This resulted in the
forward sales. The Investment Manager also seeks to utilise corporate debt facilities in the local Company, via Holdco, successfully executing an interest rate cap (“IR cap”) against RCF drawdowns,
currency to reduce foreign exchange exposure. limiting the total interest rate exposure to c.7.0%. The IR cap remains in place at the time of this
report, adjusted for RCF movements since 31 March 2024, and continues to protect against adverse
As part of the Company’s hedging strategy, the Investment Manager regularly reviews the
interest rate movements.
non-sterling exposure in the portfolio and adjusts the hedging levels accordingly while considering
the cost beneﬁt of the hedging activity. The hedging strategy also involves ensuring regular
### Revolving Credit Facility
calculation of sufﬁcient cash headroom, so as to meet potential liquidity requirements imposed by
The Investment Manager periodically considers reﬁnancing options aligned to the pipeline of new
hedging counterparties during periods of volatility that may adversely affect the Company.
and existing investments. At 31 March 2024, the RCF was drawn at £155 million. Following the year
As demonstrated below, the portfolio has a substantial exposure to non-GBP assets. In the 1
end, the drawn amount has reduced to £98 million , the net decrease coming from applying disposal
execution of hedging strategy, the Investment Manager has chosen to retain high levels of
proceeds from UU Solar to the RCF balance.
hedging during the year, typically ranging between 75-90% of the value of the underlying non-GBP
investments.
### Ongoing Charges
APM
The portfolio’s ongoing charges ratio remained in line with previous years at 1.02% (March2023:
### Current FX hedging levels
1.02%). Ongoing charges, in accordance with AIC guidance, are deﬁned as annualised ongoing
Total hedging Total non-GBP assets Hedging level charges (i.e. excluding acquisition costs and other non-recurring items) divided by the average
APM
published undiluted net asset value in the year). Ongoing charges percentage has been calculated
APM
on the portfolio basis to take into consideration the expenses of the Company andHoldco.
## £739m £934m 79%

| USD: £544 | USD: £687 |
| --- | --- |
| EUR: £138 | EUR: £170 |
| SEK: £57 | SEK: £77 |

The hedging strategy effectively mitigated the decrease in portfolio value attributed to foreign
exchange of £23.5 million, resulting in a marginal foreign exchange loss after taking into account
APM
hedging gains of £24 million. Consequently, the impact on the NAV due to currency movements
APM
inthe year was limited to 0.1 pence per share loss, which equates to less than 1% of NAV .
1. At 31 May 2024.
SEBIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

44

## Performance | Financial Review and Valuation Update continued

### Portfolio Basis Cash Flow Statement

|  £'million | 31 March 2024 |   |   | 31 March 2023  |   |   |
| --- | --- | --- | --- | --- | --- | --- |
|   |  Portfolio basis | Haldco reallocation | IFRS (Company) | Portfolio basis | Haldco reallocation | IFRS (Company)  |
|  Cash from investments | 92.5 | 44.9 | 137.4 | 85.1 | (0.3) | 84.8  |
|  Operating and finance costs outflow | (20.0) | (2.8) | (17.2) | (13.1) | 3.1 | 10.0  |
|  **Net cash inflow before capital movements** | **72.5** | **47.7** | **120.2** | **72.0** | **2.8** | **74.8**  |
|  Cost of new investments including acquisition costs | (163.7) | 131.0 | (32.7) | (240.2) | (52.2) | (292.4)  |
|  Share capital raised/(share buybacks) net of costs | (20.1) | — | (20.1) | 132.6 | — | 132.6  |
|  Movement in borrowings | 120.8 | (120.8) | — | 29.6 | (29.6) | —  |
|  Movement in capitalised debt costs and FX hedging | (4.1) | 4.1 | — | (37.3) | 38.5 | 1.2  |
|  Dividends paid | (67.2) | — | (67.2) | (62.0) | — | (62.0)  |
|  Movement in the period | (61.8) | 62.0 | 0.2 | (105.3) | (40.5) | 145.8  |
|  Net cash at start of the period | 65.6 | (65.3) | 0.3 | 170.9 | (24.9) | 146.1  |
|  **Net cash at end of the period** | **3.9** | **(3.3)** | **0.5** | **65.6** | **(65.3)** | **0.3**  |

### Going Concern

The Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements. Further details of the processes carried out by the Company in determining that the going concern basis continues to be appropriate can be found in the Report of the Directors and Note 2 on pages 94 and 95, and 109 respectively.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Strategic Report Financial Statements Additional InformationGovernanceIntroduction 45
## Performance
1 3
### Scope 4 emissions Energy saved
## Environmental,
## 972,201 tCO e 379,589 MWh
## 

| avoiding the equivalent amount of carbon |  | reducing the equivalent amount of average |  |
| --- | --- | --- | --- |
|  | 2 |  | 4 |
| generated by 872,712 average cars annually |  | energy demanded by 26,732 houses annually |  |

## Social and
## Governance
## (“ESG”) Update
### What’s in this section
ESG Committee Chair’s Introduction 46

| SEEIT Sustainability Framework | 47 |
| --- | --- |
| – Principle 1: Champion Energy Efﬁciency | 48 |
| – Principle 2: Deliver Net Zero Energy | 50 |
| – Principle 3: Promote Sustainable SupplyChains | 50 |
| – Principle 4: Support Our Communities | 51 |
| – Principle 5: Match Best Practice | 52 |

SEEIT’s ESG Management Process 53
SEEIT Climate Change Report 54
TCFD Disclosures 61
1. For the year ending 31 March 2024 and based on an analysis of the portfolio. Scope 4 emissions refer to the
previously reported on “carbon savings” KPI.
2. Based on the Statistica average CO emissions from new cars in the United Kingdom from 2004-2023.
3. For the year ending 31 March 2024 and based on an analysis of the portfolio.
Onyx
4. Based on the Ofgem 2023 average annual energy usage of houses in the UK.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Strategic Report Financial Statements Additional InformationGovernanceIntroduction 46
## Performance | Environmental, Social and Governance (“ESG”) Update continued
## ESG Committee
## Chair’sIntroduction
On behalf of the SEEIT Board and the Company’s ESG Committee, I am pleased to introduce the 2024
ESG Update for the ﬁnancial year ended 31 March 2024. In this section, we will share the progress
SEEIT has made towards fulﬁlling its sustainability commitments during the year.
As the ﬁrst London-listed fund to invest exclusively in energy efﬁciency projects, SEEIT has a history
of being deﬁned by its sustainability-related focus. The Company has followed this philosophy in its
sustainability principles, where a growing body of ESG regulations and standards could have made it easy
to let the marketplace deﬁne a ﬁrm’s ESG priorities. Instead, the Investment Manager worked with the
Board to develop the SEEIT Sustainability Framework (the “Framework”), which reﬂects the Company’s
ESG priorities. We are pleased to use the 2024 ESG Update to introduce the Framework.
Due to the development of the Framework, along with the evolution of sustainability standards in the
wider market, the Investment Manager has revised its ESG Management Process and ESG-related
governance to better align with internal and external standards.
## “ Reﬂecting on the year, the
As its Chair, I am delighted to highlight that a key part of this work included creating a dedicated ESG
Committee at the SEEIT Board to oversee the implementation of the Framework and the subsequent
## Investment Manager has
revisions of the Company’s ESG processes, policies and standards.
## made signiﬁcant progress
Another major focus for the year was on the governance, identiﬁcation and management of climate
change risks. The focus on climate change risk has led to the drafting of SEEIT’s ﬁrst “Climate Change
## by redeﬁningthe Company’s
Report”, which forms a major part of the 2024 ESG Update.
sustainability priorities through Finally, we were very pleased that the Company won the Association of Investment Companies (“AIC”)
2023 Best ESG Communication Award and the Investment Manager won ESG Investor of the Year at
## the Framework and building
the 2024 Business Green awards. Both achievements demonstrate the Investment Manager’s and
Company’s leadership in sustainability.
## up its ESG governance and
Reﬂecting on the year, the Investment Manager has made signiﬁcant progress by redeﬁning the
## management process to
Company’s sustainability priorities through the Framework and building up its ESG governance and
management process to align with new standards. The Company is well positioned to progress its
## alignwith new standards.”
sustainability practices and further implement the Framework through continued engagement with
portfolio companies.
### Helen Clarkson OBE Key initiatives
Achievements during the year Goals for next year
### |Chair of ESG Committee

| Over the year, the Company delivered on the |  | The Company plans the following key initiatives |  |
| --- | --- | --- | --- |
| following key initiatives: |  | nextyear: |  |
| 1. Finalised the SEEIT Sustainability Framework |  | 1. Continue the implementation of the Sustainability |  |
| 2. Updated the ESG Management Process |  |  | Framework at portfolio companies |
| 3. Progressed climate change risk identiﬁcation and |  | 2. Further enhance climate change risk work, with a |  |
|  | mitigation analysis |  | focus on mitigation and adaptation |

SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 47
## Performance | Environmental, Social and Governance (“ESG”) Update continued
## SEEIT Sustainability Framework
During the year, the Investment Manager
collaborated closely with the SEEIT Board and
speciﬁcally the newly formed ESG Committee
to identify SEEIT’s top ESG priorities based on
the UN Sustainable Development Goals (“UN
SDGs”). The Investment Manager used those
### Principle 1 Principle 2 Principle 3 Principle 4
ESG priorities to establish the ﬁve principles of
the SEEIT Sustainability Framework (the “ESG
## Champion Deliver net Promote Support our
Principles”).
## energy zeroenergy sustainable communities
The ESG Principles will be used during the due
## diligence process to assess new investments, efﬁciency supply chains
and then as a framework for engaging
with management teams and third parties Links to UN SDGs Links to UN SDGs Links to UN SDGs Links to UN SDGs
responsible for the day-to-day operations
within each business.
The Framework’s ESG Principles have
not only inﬂuenced the revision of the
1
Company’s Responsible Investment Policy
but also prompted engagement with Read more on page 48 Read more on page 50 Read more on page 50 Read more on page 51
portfolio companies and driven updates
to the Investment Manager’s overall ESG
Management Process for SEEIT.
Importantly, the Framework marks a transition
### from monitoring ESG performance at portfolio Investment strategy ESG management
companies to actively managing outcomes.
Invest in energy efﬁciency solutions that reduce emissions, reduce Managing general ESG factors that impact the Company’s portfolio
The Framework is intended to provide portfolio
waste, and improve reliability. companies and their operations
companies with clear guidance on the ESG
priorities of the Company and set KPIs and
minimum standard policies to measure ESG
performance.
### Principle 5
## Match best practice Read more on page 52
1. The SEEIT Responsible Investment Policy can be found on SEEIT’s website. The Responsible Investment Policy was approved and published after the period ended 31 March 2024.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 48
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Sustainability Framework
## Principle 1: Champion Energy Efﬁciency
“Champion Energy Efﬁciency” is Principle 1 of the Framework, reﬂecting the Company’s focus on energy
efﬁciency. Principle 1 highlights the energy impact of the Company’s portfolio companies and commits to
advocating for the role of energy efﬁciency in the energy transition.
At present, the Company uses three KPIs across its portfolio to demonstrate the energy impact of portfolio
companies and to measure their success: energy savings, energy generation and Scope 4 emissions, also
referred to as carbon savings.
In addition to these KPIs, a few of SEEIT’s energy generating investments have the potential to do so more
efﬁciently. The Investment Manager reviews these investments to identify further energy efﬁciencies and
prioritises asset improvements that can deliver this. As part of the implementation of this Principle, the
Investment Manager will continue this engagement and unlock further efﬁciencies at relevant investments.
Generation Transmission & distribution Point of use
Finally, the Investment Manager continues to champion energy efﬁciency and its role in the energy
transition. The Investment Manager’s CEO, Jonathan Maxwell, published a book called “The Edge: How
Competition for Resources is Pushing the World, and Its Climate, to the Brink – and what We Can Do Energy Generators Energy Savers
about It,” and has appeared in numerous media engagements throughout the year advocating for energy

| efﬁciency. |  |  | 4,979,953 MWh 379,589MWh |  |
| --- | --- | --- | --- | --- |
| KPI Deﬁnition Energy efﬁciency impact |  |  | energy generated energy saved |  |
| Energy | Energy savings refers to the estimated | Reduced energy waste at the point of use. |  |  |
| savings | reduction in customer energy demand due to a | These investments decrease the energy |  |  |
|  | SEEIT investment. These savings are normally | customers need, without changing their | Scope 4 Emissions |  |
|  | achieved through investments in appliances, | operations, which in turn lowers energy |  |  |
|  | such as LED lighting or HVAC systems, which | consumption and carbon emissions. |  |  |
|  | require less energy to achieve the same result. |  | 972,201 tCO | e |

2
Energy Energy generation refers to the amount of Reduced waste associated with centralised carbon saved
generation decentralised energy produced by an energy energy generation, such as transmission and
efﬁcient investment. Progress towards this KPI distribution losses. These investments also shift
is achieved through investments that generate the customer’s demand from the electrical
energy behind-the-meter. grid to on-site energy generation, therefore
decreasing pressure on the centralised system
and promoting energy system resiliency.

| Scope 4 | Scope 4 emissions refer to the avoidance of | Scope 4 emissions quantify the beneﬁt arising |
| --- | --- | --- |
| emissions | in GHG emissions achieved by a particular | from energy saving and energy generating |
| (carbon | project when compared to a relevant | investments. |
| savings) | counterfactual. |  |

Capshare
1. Based on an analysis of the portfolio.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 49
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Sustainability Framework
## Principle 1: Champion Energy Efﬁciency continued
### Investment Spotlight:
## Championing
## energyefﬁciency
## atRED-Rochester

| In 2021, the Company acquired one of the | Additionally, the cogen plant has been |
| --- | --- |
| United States’ largest district energy systems, | refurbished from existing equipment, thus |
| RED-Rochester, from Ironclad Energy Partners | saving carbon emissions that would have |
| LLC. RED-Rochester exclusively provides utility | resulted from constructing a new unit. |

services to over 100 commercial and industrial
In addition to the cogen investment, since
customers within the 1,200-acre Eastman
2017, RED-Rochester has been awarded $17.5
Business Park in Rochester, New York.
million in funding towards energy efﬁciency
The Investment Manager and RED-Rochester projects from New York State Energy Research
are both committed to improving the efﬁciency and Development Authority (“NYSERDA”)
of the district energy generation system across multiple programmes.
to provide customers with resilient and
Most recently, RED-Rochester was awarded
low-carbon utility services.
a $5 million grant from NYSERDA’s “C&I

| As such, the Investment Manager invested | Carbon Challenge”. The grant will go towards |
| --- | --- |
| into the construction of a 38MW cogeneration | other carbon-reduction projects, including |
| (“cogen”) plant that will serve new customer | electriﬁcation of steam chillers and waste |
| electricity loads and improve the overall park | heat recovery for compressed air generation. |
| thermal efﬁciency by c.12%. The cogen plant | Further, in 2022, RED-Rochester successfully |
| will be using natural gas once operational and | completed its obligations to NYSERDA for the |
| is increasing capacity at RED-Rochester, so | 2019 Carbon Challengeaward. |

while it is increasing energy efﬁciency it will also
RED-Rochester’s efforts to enhance the
be improving its emissions in the ﬁrst instance.
energy efﬁciency of its activities shows
The plant can however use 100% hydrogen fuel
alignment to the Company’s energy efﬁciency
and will transition to low-carbon fuel once that
principle.
is commercially and economically available.
RED-Rochester
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 50
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Sustainability Framework
## Principle 2: Deliver Net Zero Energy Principle 3: Promote Sustainable Supply Chains
## 3

| 608,024 |  | 725,976 |  |  | 82% |
| --- | --- | --- | --- | --- | --- |
|  | 1 |  |  | 2 |  |
| MWh renewable energy generated |  | tCO | e emissions (S1 + S2) |  | of the portfolio by value covered by a supplier code of conduct against unsafe working conditions, |

2
in the year to 31 March 2024 in the year to 31 March 2024 precarious work, child labour and forced labour in the year to 31 March 2024
Principle 2 of the SEEIT Sustainability Framework underpins the Company’s commitment to providing “Promote Sustainable Supply Chains” has been chosen as Principle 3 of the Framework, reﬂecting the
customers with low-carbon energy by choosing investments that are aligned to net zero and engaging Company’s goal to provide customers with sustainable energy services from both an environmental
with current investments on their net zero trajectory. It recognises that energy efﬁciency solutions and social perspective. The ﬁrst phase of implementing this principle is setting the Company’s supply
must be paired with low-carbon, renewable energy generation in order to reach net zero emissions in chain standards and engaging with portfolio companies to understand existing processes, policies and
line with the Paris Climate Agreement. suppliers.
4
During the year, the Investment Manager reviewed the Company’s emissions and selected some of the The Investment Manager has developed a Human Rights Policy setting out key supply chain
highest-emitting companies to engage with on net zero goals and strategy. The Investment Manager standards as they relate to human rights and modern slavery. The supply chain standards inform a
has also integrated questions around net zero into its due diligence process and will require that questionnaire that the Investment Manager uses when conducting due diligence on key third parties
potential investments with material emissions can demonstrate alignment with the its net zero goals. involved in a potential transaction. The Investment Manager intends to engage with the Company’s
portfolio companies to develop similar policies and processes to review the standard alignment of
As part of the Investment Manager’s Glasgow Financial Alliance for Net Zero (“GFANZ”) target, which
third-party suppliers.
is set out in more detail in the Climate Report section of the 2024 ESG Update on pages 54 to 60, the
Company will begin reporting on the net zero target coverage of SEEIT’s portfolio. The Investment Finally, as part of the ESG asset management process, the Investment Manager has begun
Manager will also track KPIs such as greenhouse gas emissions and the amount of renewable energy incorporating an asset management third-party questionnaire, separate from the normal annual
generated to monitor the implementation of this principle across the Company’s portfolio. ESG questionnaire, to monitor the policies of third parties in charge of the day-to-day operations of
a project. Over the next year, the Investment Manager intends to work with portfolio companies to
Energy efﬁciency has been the focus of the Company, but Principle 2 highlights that reaching net
review their key third parties and will promote engaging with those third parties on their alignment with
zero is also a priority. Further work is necessary to reach net zero, but the Investment Manager is
the human rights standards.
committed to achieving this important objective.
Onyx Baseload
1. Based on an analysis of the portfolio.
2. Based on an analysis of the portfolio. The Company’s GHG emissions predominately represent emissions associated with generating energy.
3. Based on an analysis of 95% of the portfolio by value in scope of the analysis.
4. The Investment Manager’s Human Rights Policy can be found on SDCL’s website.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 51
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Sustainability Framework
## Principle 4: Support Our Communities

|  |  | 1 | Investment Spotlight: |
| --- | --- | --- | --- |
| 92% | 1 incident |  |  |
| of portfolio by value covered by Diversity | of discrimination reported at a portfolio |  |  |
| and Inclusion (“D&I”) policies in the year to | company during the year 31 March 2024 |  | Improving employee |

31March 2024
## Principle 4 of the Framework concerns the role the Company has within its communities. In addition to wellbeing at Onyx
providing customers with sustainable services, the Investment Manager is focused on ensuring that its
community, namely the employees at SEEIT’s portfolio companies, work in well-managed, supportive
and ﬂourishing workplaces. Therefore, the Investment Manager is promoting policies and initiatives in RenewablePartners
each of these workplaces aligned to the following four pillars:

|  |  |  | In 2020, SEEIT acquired Onyx Renewable | In addition, Onyx’s internship programme |
| --- | --- | --- | --- | --- |
| 1 | Diversity and inclusion Training and development | 2 |  |  |
|  |  |  | Partners, one of the largest and most | aims to offer valuable working experience |
|  |  |  | established commercial and industrial (“C&I”) | to college students, further contributing to |
|  |  |  | on-site solar and storage platforms in the | community support and talent development. |

United States. Onyx owns and operates
### 3 Mental and physical health Local charitable activities 4 Onyx also demonstrates its commitment
over225 operational C&I projects across
to diversity and inclusion through robust
14US states.
The Investment Manager has begun engaging with portfolio companies around the four pillars recruitment efforts and support for
to determine whether they have policies and initiatives in place with respect to each. In time, the Over the past few years, Onyx has employees to engage in afﬁliate groups
four pillars of employee experiences will be used to monitor portfolio company compliance with consistently prioritised enhancing employee such as Women of Renewable Industries
thisprinciple. experiences aligned with the “Support Our andSustainable Energy (“WRISE”).
Communities” principle in the Framework.
Finally, Onyx underpins its efforts to support
Onyx does this through its dedication to its employees through an annual employee
training members of the community through engagementsurvey.
its participation in initiatives such as the
“Hiring Our Heroes Programme” and creation
of an internship programme. The Hiring Our
Heroes Programme facilitates connections
between US military veterans and private
sector companies for fellowship opportunities.
Onyx
1. The incident was raised and settled using an external agency. The incident occurred at a portfolio company
that SEEIT holds a minority investment in. The Investment Manager investigated the incident and found that
appropriate remediation efforts occurred following the incident.
As part of the review of the third parties engaged with SEEIT’s portfolio companies, one incidence of
Onyx
discrimination was reported by a third party that manages a SEEIT investment. The incident was not at a SEEIT
portfolio company. The Investment Manager reviewed the incident and conﬁrmed that the incident was resolved
and that appropriate mitigation actions are in place.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 52
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Sustainability Framework
## Principle 5: Match Best Practice
The ﬁrst four Principles of the Framework focus on the Company’s particular ESG-related goals. 1
### ESG Asset Management KPI 2024 Score Card
Theﬁfth Principle acknowledges that there are many frameworks and standards in the ESG ﬁeld
Sustainability Framework Indicator KPI
that the Company aims to comply with. In particular, following best practice for the Company means
fulﬁlling its legal and voluntary obligations, including the following: Principle 1 – Energy savings 379,589 MWh
Champion Energy
Total energy generated 4,979,953 MWh
### Commitment Efﬁciency
Scope 4 emissions/carbon savings 972,201 tCO e
2

|  | EU Sustainable Finance |  | Task Force on Climate-related |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
| 1 |  | 2 |  |  |  |  |
|  | Disclosures Regulation (“SFDR”) |  | Financial Disclosures (“TCFD”) | Principle 2 – Deliver | Scope 1 and 2 emissions 725,976 tCO | e |

2
Net Zero Energy
Renewable energy generated 608,024 MWh

|  | Streamlined Energy |  | Glasgow Financial Alliance for |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
| 3 |  | 4 |  | Principle | % portfolio by value covered by a supplier | 81% |
|  | and Carbon Reporting |  | Net Zero (“GFANZ”) – SDCL |  | code of conduct against unsafe working |  |

3 - Promote
### (“SECR”) Commitment conditions, precarious work, child labour and
Sustainable Supply
forced labour
Chains
### United Nations’ Principles for Principle 4 - Support % portfolio by value covered by diversity and 92%
### 5 inclusion policies
Our Communities
### Responsible Investment (“UN
### PRI”) – SDCL Commitment Number of incidents of discrimination 1 incident
reported in investee companies
The standards included in Principle 5 have commitments that span from minimum standard policies
Principle 5 - Match % of portfolio by value covered by health and 100%
to disclosure requirements to monitoring of speciﬁc KPIs. Principle 5 ensures that meeting those
Best Practice safety policies
commitments is a key sustainability priority for the Company and forms a major part of the Investment
Manager’s ESG Management Process for the Company. % of portfolio by value with violations of UN 0%
Global Compact principles and Organization
for Economic Cooperation and Development
(OECD) guidelines for Multinational
enterprises
% of the portfolio by value covered by codes 92%
of conduct relating to anti-bribery and
corruption
% of portfolio by value covered by a grievance/ 89%
complaints handling mechanism/process
% of portfolio by value covered by a policy to 92%
protect whistleblowers
1. KPIs for Principle 1 and 2 are based on an analysis of the portfolio for the year to 31 March 2024. KPIs for
Principles 3, 4 and 5 are based on an analysis of c.95% of the portfolio by value in scope of that analysis, also
forthe year to 31 March 2024.
Baseload
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 53
## Performance | Environmental, Social and Governance (“ESG”) Update continued
## SEEIT’s ESG Management Process
The Investment Manager’s ESG Management Investment due diligence Asset management Reporting
Process for the Company refers to the
integration of sustainability considerations
Go/No Go Initial due Detailed due Environmental Annual ESG Ongoing Results reporting
into due diligence, asset management and review diligence diligence performance survey engagement
reporting. survey
Disclosures
The Investment Manager is responsible for
the day-to-day activities relating to the ESG
Marketing & investor materials
Management Process. SEEIT’s ESG Committee
oversees the overall effectiveness of and
material outcomes or ﬁndings relating to the ESG ﬁndings incorporated into IC papers Investor DDQs
process.
During the year, the Investment Manager
revised the ESG Management Process to align
SEEIT Sustainability Framework
with the Framework and SFDR requirements.
Speciﬁcally, the Investment Manager created

|  | Principle 1: |  | Principle 3: | Principle 4: |
| --- | --- | --- | --- | --- |
| a risk rating for each indicator in the due |  | Principle 2: |  |  |
|  | Champion Energy |  | Promote sustainable | Support Our |
| diligence questionnaire to assess alignment |  | Deliver net zeroenergy |  |  |
|  | Efﬁciency |  | supply chains | Communities |

with the Framework and conﬁrm an investment
aligns with the SFDR’s “do no signiﬁcant harm”
requirement. Principle 5: Match Best Practice
The ESG investment due diligence process
entails initial identiﬁcation of ESG red
ﬂags, followed by preliminary and detailed
assessments for alignment with the
Framework. Post-investment, the Investment
Manager interacts with investments through
regular meetings, bi-annual environmental
performance reporting and annual ESG
questionnaires, enabling ongoing monitoring
and management as necessary. Key
performance indicators reﬂecting portfolio
companies’ ESG performance are reported
in the annual SEEIT ESG Update, as shown
in theSustainability Framework section on
pages47 to 52.
EVN
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 54
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### Year ended 31 March 2024
## SEEIT Climate Change Report
The SEEIT Climate Change Report (“Climate Nevertheless, the Investment Manager ﬁnds that
Report”) is designed to provide shareholders, the TCFD’s recommendations on governance,
clients and wider stakeholders with insights strategy, risk management and metrics provide
into the Company’s approach to identifying a useful framework for monitoring, managing and
and managing climate-related risks and increasing transparency around climate-related
opportunities. risks and opportunities. The TCFD’s eleven
recommended disclosures are outlined in the
The Investment Manager and the Company
Appendix of this report, with corresponding
are both supporters of the TCFD, recognising
page numbers referencing where the information
that climate change presents signiﬁcant risks
can be found. Climate change risk is integrated
and opportunities for the Company in the short,
into the Company’s overall risk framework,
medium and long term. While the UK’s Financial
more information of which is within the Risk
Conduct Authority (“FCA”) made publishing a
Management Framework section, starting on
TCFD report mandatory for many companies in
page 62.
the UK in January 2023, the Company is not in
scope of this requirement.
## “ Though we have published
## climate risk sections in the past,
## this ﬁrst SEEIT ClimateReport
## represents the progress
## theInvestment Manager
## has made in identifying and
## monitoring the Company’s
## climate change risks and
## opportunities.”
### Anjali Berdia|SDCL Sustainability Manager
Baseload
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 55
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
## Governance Strategy
### Governance framework Climate-related opportunities
Oversight and management of climate-related issues are incorporated into the Company’s existing The assessment of climate-related opportunities is fundamental to the Company’s investment
governance structure and Risk Management Framework. Following consultation with the Investment strategy, as the Company supports the global transition to a low-carbon future through energy
Manager, the Board approves the Company’s investment policy, long-term objectives and efﬁciency investments. The opportunities for the Company to invest in energy efﬁciency projects that
commercial strategy, as stated in the Introduction and Strategic Report. Reports of the proceedings support the energy transition increases in scenarios with stronger government policies and public
and decisions of the Audit and Risk Committee and ESG Committee, alongside others, are received support for those investments. The Investment Manager monitors the emergence of government
by the Board quarterly. policies that impact the success of the Company to assess climate-related opportunities, as set out
in Investment Manager: Markets and Outlook on pages 13 and 14.
Under the direction of the Board and its respective Committees, the Investment Manager is
responsible for the day-to-day management of climate-related risks and opportunities impacting the
### Climate-related risks
Company. The Investment Manager integrates the identiﬁcation and monitoring of climate-related
risks and opportunities into the ESG Management Process outlined in the ESG Update. The assessment of both physical and transition climate-related risks is carried out by the Investment
Manager once per material investment and then reviewed on an annual basis for changes occurring
The Investment Manager does this in the ﬁrst instance through due diligence questionnaires and
during the year.
checklists, including the ESG questionnaire with climate-related questions speciﬁc to physical
and transition risks. Post-investment, the Investment Manager monitors and manages material
### Physical climate risks
climate-related risks through regular discussions with investments and the ESG asset management
questionnaire. Physical climate risks assessed fall into two categories:
Climate reporting is integrated into the Audit and Risk Committee discussions, with the Investment
### Acute1
Manager notifying the Board of urgent matters arising outside of the regular reporting cycle.
In addition to engagement with portfolio companies and the Board to manage climate change risk,
the Investment Manager has made efforts to educate its employees about climate change risks and
### opportunities. Over the year, the Investment Manager received ESG-related training on the mandatory 2 Chronic
and voluntary obligations of the Company, including the TCFD Framework.
Acute physical risks are event-driven, e.g. rainfall ﬂooding and typhoons, whereas chronic physical
The Board, Audit and Risk Committee, ESG Committee and the SDCL Investment Committee all
risks are caused by longer-term shifts in climate patterns, e.g. extreme heat and drought.
have delegated responsibilities relating to climate issues. The SDCL ESG team identiﬁes and raises
climate-related risks to the SDCL Investment Committee and reports them to the Audit and Risk To assess physical climate risks, the Investment Manager conducts scenario analysis through a
Committee through the risk framework. The ESG Committee is involved in climate change risks and specialist third-party provider, analysing the impact under Representative Concentration Pathways
opportunities from a strategic perspective through its oversight of the Framework and the ESG (“RCP”) two scenarios (RCP 8.5 and RCP 2.6) over two forward-looking time periods (2021-40 and
Management Process. Both the ESG Committee and Audit and Risk Committee report to the Board. 2041-60). Both time periods are compared to a baseline period (2006 or 2014-2020). Further details
are provided below.
RCP Range of global mean temperature increase by 2100 (from pre-industrial baseline) (Celsius)
## SEEIT Board
8.5 3.2-5.4 degrees (Business-as-usual scenario without additional efforts to constrain
emissions, resulting in warming of more than 4 degrees)
2.6 0.9-2.3 degrees (Net zero pathway that aims to keep warming below 2 degrees)
### SEEIT ESG Committee SEEIT Audit and Risk Committee
Time horizon Period covered
2020 Historical data (2006 or 2014-2020), baseline period
SDCL Investment Committee
2030 2021-2030
2050 2031-2050
SDCL ESG Team
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 56
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
### Transition-physical risk: company overview
## Strategy continued
The tables below provide both a high-level summary and granular breakdown of the top physical
### Climate-related risks continued
and transition risks impacting the Company. Mitigation actions, both current and proposed, have
### Transition climate risks also been outlined below.
Transition climate risks assessed can be split into four categories:
Summary of portfolio-level climate change risks
### 1 Policy and legal risk Technological risk 2 Risk description Comment
Physical risks The physical risks associated with the SEEIT portfolio primarily fall into three categories:
relating to climate
1. reduced feedstock availability;
### 3 Market risk Reputational risk 4 change
2. lower demand for products due to milder weather; and
3. operational delays due to extreme weather events and asset damage.
To assess transition risks, the Investment Manager regularly engages with portfolio companies, These risks have been identiﬁed predominantly using specialist third-party climate
remaining up to date with policy changes, new technologies, market movements and changing 1
modelling software. Select risks have been identiﬁed because the portfolio company
customer demands in the relevant region. The Investment Manager also engages with a third-party has begun to see them materialise.
provider to assess its carbon ﬁnancial risk exposure due to the EU-ETS within EU markets on a
Transitional risks Transition risks within the SEEIT portfolio primarily stem from two main sources:
quarterly basis.
relating to climate
1. policy and legal changes related to decarbonisation may result in higher
change operational costs for assets with material emissions; and
Transition-physical risk: conceptual overview
2. customer demand for the energy products generated by portfolio companies
Typically, at RCP 8.5, a “Business-as-usual” scenario, the Company would face higher threat from
reduces due to shifting consumer preferences for lower-carbon products.
physical risks, as emissions are expected to continue rising at current rates, increasing global
These risks have been identiﬁed using the TCFD’s transition risk framework and
temperatures to >4 degrees Celsius. However, at RCP 2.6, an “Aggressive” mitigation scenario, the
through engagement with the asset management team and portfolio companies.
Company would face higher threat from transition risks, as emissions are expected to halve by 2050,
limiting temperature increases to below 2 degrees Celsius. This is outlined in the diagram below.
Physical climate-related risks
Risk and category Impact Mitigation Actions
RCP 8.5
Extreme heat Reduced olive yields, limiting biomass Source biomass feedstock from
Physical – chronic feedstock availability. fartheraway.
Diminished customer demand for heat, Acquire a different site with greater
resulting in reduced revenuestreams. biomass storage capacity.
Monitor customer demand and consider
amending tariffs.
Physical Risk

|  | Drought | Limited water availability for processes | Seek alternative water sources. |
| --- | --- | --- | --- |
|  | Physical – chronic | at sites. |  |
| RCP 2.6 |  |  | Invest in new drought-resistant |

technologies.
Transitional Risk
Rainfall ﬂood Asset damage and/or operational Source biomass feedstock from areas
Physical – acute delays. less exposed to ﬂooding.
Impact on harvest yields due to Acquire a different site less exposed
adverse effects on soil saturation, toﬂooding.
erosion and fruit quality.
Acquire appropriate natural catastrophe
insurance.
1. These select risks that have materialised, speciﬁcally reduced biomass feedstock at Oliva and milder weather at RED, are considered in the Portfolio Valuation. Other risks are hypothetical and have been identiﬁed under multiple
climate scenarios and timelines. The Audit and Risk Committee review both materialised and hypothetical climate related risks as part of the risk framework.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 57
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
## Strategy continued Climate Change Risk Management
Climate-related risks continued Climate-related risks and opportunities are integrated across all components of the Company’s Risk
Management Framework and thus follow the same monitoring, managing and governance structure
### Transition climate risks continued
as other types of risk. The Company’s broader Risk Management Framework is detailed in the Risk
Transition climate-related risks
Management section on pages 62 to 64; however, a summary of how the risk framework pertains to
Risk and category Impact Mitigation Actions
Climate Change risk isoutlined below:
Higher operating Reduced ﬁnancial support from Monitor emerging policies.
### costs due to new governments, e.g. Spanish Regulatory Risk strategy
Engage with lobbyists, industry
Regime.
carbon policies association members and others The climate change risk strategy of the Company is set by the Board, with input from the Investment
Transition – policy Introduction of New York Climate involved in policymaking. Manager. Further details on how climate-related risks and opportunities are integrated into the
and legal Leadership and Community Protection Company’s strategy are set out in the Strategy section of this report on pages 55 to 57.
Determine how to align trajectories to
Act capping GHG emissions.
be future-proofed for emission-related
### Speciﬁc ﬁnes and penalties associated regulations. Risk appetite
with methane leakage would require
Within climate change risk, the Company has a low appetite for physical risks and a medium
pipe relining.
appetite for transition risk, as the Company is looking to beneﬁt from the transition to a low-carbon
Decreased Higher decarbonisation pressures from Build out a decarbonisation plan with economy and take advantage of new technologies and policies to enhance investment returns.
demand for customers and governments seeking portfolio companies.
low-carbon/renewable energy sources.
### products Demonstrate a commitment to Risk management policies
Transition – market sustainability or adapt to evolving The Company documents its procedures relating to climate issues in its Responsible Investment
environmental regulations and consumer
Policy and will include speciﬁc reference in its Risk Management Policy over the following year.
preferences.
### Risk governance
### Physical risk climate modelling approach
Governance of climate change risk is set out in the Governance framework on page 55 of this report.
The Company conducts its analysis on the impacts from chronic and acute physical risks through
a third-party provider and uses its climate hazard score to assess potential physical risk facing
theasset.
### Climate hazard score:
The climate hazard score rates the severity of various climate hazards on a scale of 0-100 based on
the geographical location of the assets. The score is not weighted based on the size and valuation of
assets.
Using the climate hazard score, as well as real-time information of the climate impacts on an
investment, the Investment Manager assigns a risk rating to each climate risk. The risk rating mirrors
the risk rating system used for all other portfolio risks.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 58
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
## Metrics and Targets
### Climate-related environmental performance data
The Company reports on a variety of metrics related to carbon and energy savings, energy generation and GHG emissions (Scopes 1, 2 and 3), which are calculated by monitoring environmental performance
data of all investments quarterly. The climate-related metrics are calculated using guidance from the Greenhouse Gas Protocol and the UK SECR legislation. The data is collected individually from the portfolio
companies and collated by an external consultant based on actual energy usage and generation. The data is then reviewed by the external consultant and the Investment Manager. The energy performance
data disclosed for the year ending 31 March2024 covers the majority of the projects in SEEIT’s portfolio for the period, making up c.99% of the portfolio by value in scope of the analysis.
The Company monitors its energy performance data to track progress against its sustainability indicators, namely Scope 4 emissions (carbon savings) and energy savings. Furthermore, the Company tracks
the relevant GHG emissions of assets to monitor its environmental impact and will inform the degree of risk associated with an accelerated net zero transition on a project-by-project basis.
The calculation approach in each case follows several key principles to maintain a consistent approach. The principles are:
– where possible, to capture fundamental data regarding project performance. Examples of this data include energy generated (kWh) and fuel consumed (kWh);
– use publicly available emissions factors from government sources speciﬁc to the project location;
– where a project was commissioned or purchased by the Company midway through the reporting period, only the portion of the period after commissioning or purchase date should be recognised; and
– where the Company owns less than 100% of a project, the total project savings should be reduced pro-rata with the ownership percentage.
The data-gathering process is predominantly manual and therefore dependent on accurate reporting from the management teams and other sources at the asset level. Market practice and processes keep
improving and the Investment Manager is actively engaged in seeking the most up-to-date and accurate data for each of the investments.
Principal environmental performance data of the Company’s portfolio is set out in the tables below.
Data Deviations Compared to Last Year:
During this period, the Manager found that two portfolio companies were reporting on energy savings and Scope 4 emissions with calculation methodologies that were inconsistent with those used for the rest
of the portfolio. Additionally, the carbon intensities of the local electrical grid in most of the jurisdictions SEEIT invests in decreased, therefore reducing the benchmark used to calculate the carbon avoided
from the Company’s investments. The combination of decreasing carbon intensities of local electrical grids and these two calculation inconsistences have offset the increase in Scope 4 emissions from some
portfolio companies, leading to a net decrease when compared to last period. The Company’s Scope 4 emissions may ﬂuctuate from period to period given it is calculated is based on relevant counterfactual
scenarios, such as the carbon intensities of local electrical grids, and those calculation methodologies are consistently being reviewed and improved.
Further, Scope 1 emissions have increased compared to last year because one of the portfolio companies returned to full operation. In pursuance of the Investment Manager’s net zero target, it is the intention
for the Company’s overall GHG emissions to decrease overtime, but changes in investment operations or the portfolio’s composition may lead to data ﬂuctuations.

|  | 1 | 2 |  |  |
| --- | --- | --- | --- | --- |
| Portfolio Scope 4 emissions | and energy | savings |  |  |
|  |  |  | Scope 4 emissions/carbon savings tCO | e Energy savings MWh |

2
2023/24 2022/23 2023/24 2022/23
APAC 7,447 8,136 10,048 10,613
EU 144,504 153,474 4,464 1,518
UK 30,620 18,980 23,521 37,849
US 789,630 1,021,939 341,556 337,889
Total portfolio 972,201 1,202,528 379,589 387,868
1. Scope 4 emissions, previously referred to as “carbon savings” in SEEIT’s Annual Reports, refer to the reduction in GHG emissions achieved by a project compared to a relevant counterfactual, i.e. how the customer would receive the
energy services in the absence of said project.
2. Energy Savings refer to the electrical and thermal energy not consumed at the point of use due to a SEEIT investment.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 59
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
## Metrics and Targets continued
### Climate-related environmental performance data continued
### Portfolio energy generation

| 4,979,953 MWh |  |  |  |  | 4,373,103 MWh |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Total Energy Generated as at 31 March 2024 |  |  |  |  | Total Energy Generated as at 31 March 2023 |  |  |  |  |
|  | Renewable electricity generated |  | Renewable heat generated |  |  | Non-renewable electricity generated |  | Non-renewable heat generated |  |
|  |  | MWh |  | MWh |  |  | MWh |  | MWh |

2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23
APAC 5,715 5,772 — — — – – –
EU 196,365 227,449 204,914 214,394 634,302 353,882 316,112 239,165
UK 51,161 34,069 36,523 34,838 27,262 42,002 100,641 48,728
US 113,347 89,301 — — 1,878,686 1,701,990 1,414,925 1,381,514
Total portfolio 366,587 356,591 241,437 249,232 2,540,250 2,097,873 1,831,679 1,669,406
1
### Portfolio GHG emissions

| 726,898 tCO | e | 558,821 tCO |  | e |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| Scope 1 and 2 emissions as at 31 March 2024 |  | Scope 1 and 2 emissions as at 31 March 2023 |  |  |

Scope 1 Scope 2 Scope 3
2
tCO e MWh tCO e MWh tCO e
2 2 2
2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23
APAC — — – — — — — — — —
EU 336,701 180,776 2,844,317 2,148,396 2,719 2,479 12,865 14,578 4,734 2,482
UK 6,018 6,645 74,696 74,876 0.1 — 5,665 — 26,169 16,829
US 375,213 361,550 2,049,597 1,973,844 6,246 7,372 58,749 68,228 92,360 255,283
Total portfolio 717,933 548,971 4,968,610 4,197,116 8,965 9,851 77,280 82,806 123,263 274,594
1. The Company’s Scope 1, 2 and 3 emissions predominately represent fuel used to generate energy in SEEIT’s energy generating assets. The Company does receive emission data from portfolio companies on factors such as business
travel, ofﬁce energy use, etc., but not all portfolio companies currently report to that level of granularity.
2. MWh in the emissions table refers to the energy consumed associated with the disclosed emissions.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 60
## Performance | Environmental, Social and Governance (“ESG”) Update continued
### SEEIT Climate Change Report Year ended 31 March 2024
## Metrics and Targets continued
### Climate-related environmental performance data continued
1
### Carbon intensity indicators

| Weighted average carbon intensity |  |  | Carbon footprint |  | Carbon intensity |  | Exposure to carbon-related assets |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | tCO | e/£m value | tCO | e/£m value | tCO | e/£m value |  | % |
|  |  | 2 |  | 2 |  | 2 |  |  |

2023/24 2022/23 2023/24 2022/23 2023/24 2022/23 2023/24 2022/23
APAC — — — — — — —% —%
EU 3,220 1,680 304 173 1.552 1,516 6.2% 6.1%
UK 1,041 1,519 5 6 301 472 —% —%
US 1,912 1,459 341 349 2,998 2,721 —% —%
Total portfolio 6,174 4,658 651 529 1,980 2,060 6.2% 6.1%
1. Deﬁnitions of the carbon intensity factors are as follows:
– Weighted Average Carbon Intensity: The portfolio’s exposure to carbon-intensive companies, expressed in tCO2e/£m value. The KPI compares an investment’s Scope 1 and 2 emissions, normalised by ownership, with its portfolio
value.
– Carbon Footprint by value: Total carbon emissions for the portfolio normalised by the ownership of the asset, expressed in tCO2e/£m value. The KPI compares the investment’s Scope 1 and 2 emissions, normalised by ownership,
with the entire portfolio value.
– Carbon Intensity by Revenue: The volume of carbon emissions per million dollars of revenue, expressed in tCO2e/£m revenue. The KPI compares the investment’s Scope 1 and 2 emissions with its revenue, both normalised by
ownership. The KPI is recalculated at the regional and total portfolio level based on overall Scope 1 and 2 emissions and revenue of the majority of the portfolio.
– Exposure to Assets Active in the Fossil Fuel Sector: The percentage of assets active in the fossil fuel sector in the portfolio, expressed as a percentage of the current portfolio value. Active in the fossil fuel sector is deﬁned as
“companies that derive any revenues from exploration, mining, extraction, production, processing, storage, reﬁning or distribution, including transportation, storage and trade, of fossil fuels. The 6.2% represents one asset,
VartanGas, which has limited exposure to fossil fuels as most of the fuel it distributes is biogas (c.91% in the year ended 31 March 2024).
### Climate targets
### Glasgow Financial Alliance for Net Zero (“GFANZ”)
Through the Net Zero Asset Managers initiative (“NZAM”), the Investment Manager is committed to supporting the goal of reaching net zero by 2050 or sooner (in line with 1.5 degrees) and investing in
alignment with that target. Speciﬁcally, the Investment Manager is committed to the following targets as set by the Net Zero Investment Framework (“NZIF”):
### 1 2Portfolio Coverage Target Engagement Threshold

| Aims for 100% of the Company’s ﬁnanced | Aims for 100% of the Company’s ﬁnanced | Aims for 100% of the Company’s ﬁnanced emissions in material sectors to be subject to direct |
| --- | --- | --- |
| emissions in material sectors to be | emissions in material sectors to be | or collective engagement and stewardship actions by 2030. |
| considered net zero, aligned to net zero, | considered net zero or aligned to net |  |
| oraligning to net zero by 2030. | zeroby2040. |  |

Progress against the above targets will be disclosed in the subsequent Climate Change Report, following the development and formalisation of the Company’s Transition Plan.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 61
## Performance | Environmental, Social and Governance (“ESG”) Update continued
## TCFD Disclosures
Page reference in
Recommendation Climate Change Report
### Governance
Describe the Board’s oversight of climate-related risks and opportunities. 55
Describe management’s role in assessing and managing climate-related risks and opportunities. 55
### Strategy
Describe the climate-related risks and opportunities the organisation has identiﬁed over the short, medium and long term. 55 - 57
Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and ﬁnancial planning. 55 - 57
Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lowerscenario. 55 - 57
### Risk Management
Describe the organisation’s processes for identifying and assessing climate-relatedrisks. 57
Describe the organisation’s processes for managing climate-related risks. 57
Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management. 57
### Metrics and Targets
Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. 58 - 60
Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and the relatedrisks. 58 - 60
Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. 58 - 60
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 62
## Performance | Risk Management Framework
### Risk Management Framework Risk strategy
The Company maintains a comprehensive Risk Management Framework that encompasses all facets The risk strategy of the Company is set by the Board, with the input from the Investment Manager.
of its operations. This framework includes systems and protocols to identify, monitor and mitigate In determining the identity of the risks to the Company, how these risks should be managed,
relevant risks associated with the Company’s operations, its investment portfolio and/or stakeholders. implementing appropriate controls and setting appropriate risk appetites, the Company
demonstrates how the principal risks to the business have been mitigated.
The Investment Manager plays a crucial role as a service provider to the Company and is responsible
for maintaining the Risk Management Framework. The Board sets the Company’s risk appetite,
### Risk appetite
aiming for a balance of risk mitigation and generating return to shareholders. Oversight of the Risk
Management Framework and risk tolerances is entrusted to the Company’s Audit and Risk Committee, Each risk within the Company’s Risk Management Framework is set a risk appetite, the level of risk
convening at least quarterly. The Committee’s responsibilities include monitoring risks against that the Company is willing and able to tolerate. These risks are managed against predetermined
predetermined risk tolerance levels and assessing the adequacy and efﬁcacy of the Company’s thresholds in order to ensure the appropriate level of risks is maintained throughout the ﬁrm and
internal ﬁnancial controls, internal controls and risk management systems. aligns to the ﬁrm’s strategy.
Regular risk management reports from the Investment Manager are provided to the Audit and
### Risk management policies
Risk Committee to maintain oversight of the Company’s risk proﬁle, alongside updates to the risk
register, which entails rating each risk, detailing mitigating factors and highlighting relevant controls. Risk management policies within the Company outline the procedures which ensure all applicable
The Committee, together with the Investment Manager, engages in ongoing discussions regarding risks pertaining to the Company are effectively identiﬁed, monitored and managed.
emerging risks and potential mitigation strategies. External advisers are consulted by the Company
### asneeded. Risk governance
The Company’s risk management strategy permeates through the Company and effective
Within the broader Risk Management Framework, the activities of key service providers, including the
corporate governance structure. The Audit and Risk Committee is accountable for the oversight
Investment Manager, are also captured. The Investment Manager maintains its own Risk Management
of the Company’s risk proﬁle and receives quarterly reports pertaining to the top risks, associated
function with appropriate systems and controls, upon which the Company relies.
controls and agreed risk appetites.
### Risk management process
The Company’s risk management process is perpetual and at the heart of the Company’s Risk
Management Framework, it involves:
Risk appetite
1) Risk identiﬁcation;
2) Risk analysis and assessment;
Risk management policies
3) Risk treatment; and
4) Risk monitoring and reporting.
Risk governance
### Principal Risks
Risk management process The primary risks facing the Company and its investment portfolio have been outlined in the table
provided below. These risks are monitored on an ongoing basis by the Investment Manager and are
Report and monitor Identify regularly reviewed by both the Board and the Audit and Risk Committee.
The principal risks encountered by the Company and its investment portfolio largely remain
consistent with those of the previous year, although there may have been shifts in the likelihood of
Treat Analyse and assess
certain risks materialising over time.
These principal risks either directly impact the Company or indirectly impact the Company via the
investment portfolio. It is anticipated that the identity of these risks will remain constant throughout
the year. Emerging risks are continually assessed and considered by the Investment Manager and
Audit and Risk Committee.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 63
## Performance | Risk Management Framework continued
Outlined below are the Company’s principal risks and their associated mitigating controls.
Risk change Risk change
Risk (toprevious Risk Risk (toprevious Risk
type year) description Mitigation type year) description Mitigation
Operational Same The risk that operational control – The Board has ongoing oversight
Liquidity risk Same The risk that the Company cannot – The Investment Manager maintains
risk failures may disrupt operations of of the performance of SDCL and
meet its ﬁnancial obligations as they a Treasury Policy for the Company,
the Company and impact ﬁnancial focuses upon SDCL’s resources.
fall due. compliance of which is reported to
performance and investor returns. – The Investment Manager has
the Board quarterly.
long-term incentive plans in Potential impact:
Potential impact:
– The Investment Manager provides
place to retain key staff and
– Inability to make dividend regular cash ﬂow forecasts and
– Loss of key personnel impacts large enough investment teams
payments. stress testing analysis for the Board
investment decision making. for succession plans to be
– Inability to fund operating to review.
– Cyber incident at the Investment implemented.
expenses or portfolio – The RCF provides additional liquidity
Manager impacts operations. – Business continuity planning at the
commitments. as required.
Investment Manager is tested at
least annually to minimise the risk – The Investment Manager considers
of operational disruption. strategic disposals when it can
maximise value for shareholders and
Market Increase Risk of the share price continuing – The Board regularly reviews the raise funds for future investment.
sentiment and to trade at a discount to NAV share price discount and can
APM Macroeconomic Increase Interest rate risk: – The Investment Manager uses
share price pershare and market sentiment implement a share buyback
discount risk for listed infrastructure investment programme. risks predominantly ﬁxed rate hedging
– The risk of changes in Portfolio
trusts remaining unfavourable. APM to manage the portfolio’s debt
– The Investment Manager has Valuation due to higher
interest rate exposure and
a stepped plan targeted at interestrates.
Potential impact:
minimise the impact of rising
eliminating the discount.
– Poor shareholder returns. Potential impact: interest rates on the cost of debt.
– Inability to raise new equity – The Investment Manager performs
– Higher interest rates increase
capital. stress testing to assess the impact
discount rate and decrease the
of future interest rate increases.
value of assets.
Financial risk Same The risk of being unable to manage – The Company maintains a
– Greater cost of borrowing.
portfolio debt, debt at SEEIT Holdco maximum level of leverage which is
and/or fulﬁl the Company’s ﬁnancial continuously monitored.
Same Inﬂation risk: – The Investment Manager monitors
obligations. – The Investment Manager regularly
portfolio correlation with inﬂation,
– The risk of changes in
provides ﬁnancial forecasts and including via stress testing, and
Potential impact:
market valuations, fund
management accounts to ensure assesses expected correlation
– Excessive cost of debt underperformance and/or
the Company meets its ﬁnancial in respect of new prospective
hinders the ability to meet the incurred losses due to higher
obligations. investments.
Company’s target returns. inﬂation.
– The Company will use proceeds – The Investment Manager builds
– Inability to renew the from selective disposals to pay Potential impact:
the portfolio to minimise the risk
Company’sRCF. down debt as required.
of inﬂation mismatch and seeks
– Increased costs of asset
to ensure the Company’s portfolio
operations.
FX risk Same The risk of exchange rate – The Company enters into FX
has a positive correlation to
ﬂuctuations impacting the value hedging arrangements to protect – Reduced demand as prices rise.
inﬂation.
APM APM
ofNAV . the Company’s NAV from
material adverse exchange rate Same Energy and gas price risk: The Investment Manager reduces the
Potential impact:
movements. risks by:
– The risk of changes in Portfolio
– Reduction in the value of – The Investment Manager
Valuation APM
, due to changes in – hedging exposure to gas and
non-GBP assets and their maintains a target level of
energy and gas prices. energy prices in the short term;
revenue. unhedged non-GBP exposure at
and
– Volatile FX rates increase the Company level. Potential impact:
– making arrangements to pass
cost of FX hedging.
– Reduced proﬁtability of assets. on material price risk to the
– Increased competition for counterparty in the longer term.
consumers.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 64
## Performance | Risk Management Framework continued
Risk change Risk change
Risk (toprevious Risk Risk (toprevious Risk
type year) description Mitigation type year) description Mitigation
Reputational, Same – The risk that SEEIT does not – The Investment Manager Performance Same – The risk that SEEIT fails to – The Company has appointed
regulatory and comply with its regulatory undertakes regular horizon risk meet ﬁnancial objectives and an Investment Manager who is
governance risk requirements, investment scanning for upcoming changes to investment returns. an experienced specialist in the
mandates and governance regulation. industry with a strong track record.
Potential impact:
requirements. – The Investment Manager – There is Investment Committee
has an independent second – Company fails to deliver on scrutiny, due diligence processes
Potential impact:
line compliance team that is target returns and dividends. and risk management disciplines,
– Loss of investor conﬁdence. responsible for ensuring alignment – Diminishing investor sentiment. including counterparty credit
– Increased cost of operations. to regulation, alongside the assessments.
Company Secretary. – The Investment Manager aims to
– As required, third-party advisers construct a diversiﬁed portfolio
are engaged to support regulatory and monitors concentration limits
implementation and provide on the maximum asset size.
assurance.
Market Same The risk that the Company – The Investment Manager
Climate risk Increase – The risk that climate change – The Investment Manager conducts regulatory risk underperforms due to regulatory continuously assesses the impact
will have a negative impact climate change analysis as part changes that impact the asset that future regulation will have on
on the underlying portfolio of its existing Risk Management valuation and viability of their the assets.
and therefore the Company’s Framework and reports regularly investments. – There is proactive engagement
ﬁnancial performance and to the ARC. with stakeholders at the asset
APM Potential impact:
NAV . – Further details can be found in the level to align to regulatory
Climate Change Report on pages – Increased regulation increases requirements in the most efﬁcient
Potential impact:
54 to 60. operational cost of assets. manner possible.
– Physicl risk – dmge to – Regulation drives away demand.
ssets, disruption of supply
chains, lower demand for heat Counterparty Same Offtaker credit risk: The Investment Manager minimises
or cooling, and interruption to risk credit risk via:
– The risk that an offtaker to a
business operations.
transaction at an asset level will – qualitative and quantitative due
– Transitional risk – impacts of
not pay their dues, resulting in diligence on the creditworthiness
policy change, technology
the Company suffering a loss. of counterparties;
changes and consumer demand
– credit ratings of counterparties
changes. Potential impact:
being continuously monitored;
– Loss of asset revenue.
Investment risk Same – Poor investment performance – The Investment Manager – controls added into the
– Poor contract renewal terms contracting arrangements;
at an asset level impacting the undertakes a comprehensive
leading to reduction in revenue.
valuation of the portfolio. due diligence process before – counterparties being essential
investment is made. services; and
Potential impact:
– The Investment Manager – diversiﬁcation of counterparties.
– Material issue at an asset proactively engages with portfolio
impacting operations. assets to address issues and Same Contractor risk (O&M providers): – The Investment Manager performs
– Miscalculation of an optimise performance. due diligence on the contractors
– The risk that an operating
investment’s risk/return proﬁle. to minimise the risk of operational/
– The management teams of counterparty for an asset will fail
construction delays.
portfolio assets are incentivised to todischarge its obligations.
optimise operational performance. – Contract rights between
Potential impact: counterparties are substitutable.
– Delays in development/
construction before revenue
generation.
– Increased cost in getting assets
operational.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 65
## Performance | Viability Statement
### Viability Assessment Period Scenarios reviewed and their impact
The Directors have assessed the prospects of the Company over a ﬁve-year period to The Investment Manager selected these scenarios on the basis that each could reasonably be
31March2029. Consistent with prior years, the Directors have determined that ﬁve years is an assumed, before mitigants, to have a plausible but severe impact affecting the Company directly
appropriate period over which to provide this viability statement, as this period accords with the or indirectly, caused by market factors such as a high interest and high inﬂation environment and
Company’s business planning exercises and is appropriate for the investments owned by the a global recession, or investment-speciﬁc factors that are unique to an individual or group of
Company and the nature of the Company. investments in the SEEIT portfolio:
– signiﬁcant delay and cost increases associated with the construction of a cogeneration facility
### Assessment process
at RED-Rochester, resulting in additional debt costs. This potentially causes covenant breaches
In making this statement, the Directors have considered the resilience of the Company, taking APM
in debt facilities which in turn places the Company’s ability to cash cover its dividends under
account of its current position, the principal risks facing the business in severe but plausible downside pressure in speciﬁcally identiﬁed future years; and
scenarios and the effectiveness of any mitigating actions.
– a permanent cancellation of construction by a key customer (Li-Cycle) at RED-Rochester that
APM
The Company beneﬁts from a diversiﬁed portfolio of investments, of which the majority have a high materially reduces revenues generated at the investment. Overall cash cover is under pressure
degree of contracted long-term cash ﬂows and a set of risks that can be identiﬁed and assessed in speciﬁcally identiﬁed future years due to potential covenant breaches, in turn potentially
and would not be expected to change materially from one period to the next. affecting the Company’s ability to pay distributions to shareholders.
The individual investments are each supported by detailed ﬁnancial models, and those investments The Audit and Risk Committee reviewed and challenged the Investment Manager on each of the
that have ﬁnancing in place have done so on a non-recourse basis to the Company. The Directors scenarios presented. This included reviewing the likelihood of the risks of the scenarios materialising
believe that the diversiﬁcation within the portfolio, of predominantly operational investments, helps and considering the potential mitigants that the Investment Manager could apply to reduce any
to withstand and mitigate the identiﬁed risks the Company may face. potential downside risk. The Audit and Risk Committee concluded that the scenarios, each prepared
individually, demonstrated good resilience of the Company against adverse factors impacting its
The Investment Manager prepared, and the Directors reviewed, ﬁve-year cash ﬂow projections
portfolio.
as part of business planning – including as part of the approval process of the Company’s budget
and business plan, and undertook to approve dividends on a quarterly basis after reviewing The Investment Manager also provided the Audit and Risk Committee with a severe scenario
medium-term cash ﬂow projections. The projections consider cash ﬂows, dividend cover, investment (i.e.no revenues received) that calculated the extent of the loss in revenue required to threaten
policy compliance and other key ﬁnancial indicators over the period. These projections are based the Company’s solvency. The outcome of this scenario provided comfort that the Company should
on the Investment Manager’s expectations of future asset performance, income and costs, and are remain viable over the period assessed.
consistent with the methodology applied to provide the valuation of the investments during the year.
### Conﬁrmation of viability
The Investment Manager provided analysis on these projections at various points through the year,
Based on the reviews conducted throughout the year, the Directors conﬁrm that they have a
considering the potential impact of the Company’s principal risks actually occurring in severe but
reasonable expectation that the Company will be able to continue in operation and meet its liabilities
plausible downside scenarios.
as they fall due over the period to 31 March 2029.
The Audit and Risk Committee had the opportunity to review and challenge the scenario analysis,
On behalf of the Board
which included the potential adverse impact of the scenarios detailed below on the Company’s
projected near-term, medium and long-term cash ﬂows, and the associated effect on the ability to
APM
pay dividends, ability to settle ordinary liabilities and on earnings and the NAV .
### Tony Roper,
Chair
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

66

# Performance | Stakeholders and Section 172

# Section 172: Promoting the Success of the Company

The Directors consider, both individually and together, that they have fulfilled their duties under Section 172 of the Companies Act 2006 to act in good faith and to promote the success of the Company for the benefit of shareholders and stakeholders as a whole, having regard to the stakeholders and matters set out in Section 172 of the UK Companies Act 2006 ("Companies Act") in the decisions taken during the year, as set out below:

|  Section 172(1) | Description  |
| --- | --- |
|  **(a) the likely consequences of any decision in the long term** | During the year under review, the Board believes it acted in good faith, with a view to promoting the Company's long-term sustainable success and to achieving its wider objectives for the benefit of its shareholders as a whole, having had regard to wider stakeholders and the other matters set out in Section 172 of the Companies Act. See the rest of this section for the Board's decisions on approving dividends, implementing a share buyback programme, agreeing a Capital Allocations Policy with the Investment Manager and the oversight and monitoring of the Investment Manager's activities in relation to risk and portfolio management for the Company.  |
|  **(b) the interests of the Company's employees** | As a closed-ended investment company, the Company does not have any direct employees. During the year, the interests of employees in project companies in the portfolio were considered when making decisions for the Company's benefit, such as promoting positive health and safety cultures and other ESG initiatives (further details can be found in the ESG Update on pages 45 to 53).  |
|  **(c) the need to foster the Company's business relationships with suppliers, customers and others** | The Company's approach is described under "Stakeholders" below.  |
|  **(d) the impact of the Company's operations on the community and the environment** | The Board places a high value on the monitoring of ESG issues and sets the overall strategy for ESG matters related to the Company. The Board provides oversight for the managing of climate-related risks for the portfolio by the Investment Manager, including transparent disclosure of these risks, and reviews mitigating actions taken by the Investment Manager to reduce or eliminate them where possible. A description of the Company's Responsible Investment Policy is available on the Company's website and further detail on climate-related risks is set out in the ESG Update on pages 45 to 53 and the Risk Management Framework on pages 62 to 64. Further details of matters discussed and agreed by Directors during the year are described in the ESG Update on pages 45 to 53.  |
|  **(e) the desirability of the Company maintaining a reputation for high standards of business conduct** | The Board's approach is described under "Culture and Values" below. For further information please also see the ESG Update on pages 45 to 53.  |
|  **(f) the need to act fairly between members of the Company** | The Board's approach is described under "Stakeholders" below. For further information please also see the Corporate Governance Statement on pages 72 to 80.  |

The issues, factors and stakeholders the Directors consider relevant in complying with Section 172(1) (a) to (f) are described in detail below. The Investment Manager provides updates to the Board at quarterly meetings on the above items, including the rationale behind investment decisions, its relationships with the Company's shareholders and key stakeholders and the Company's reputation in the broader market. This is further supported by reports from several advisers such as the Company's broker and financial PR consultant.

Further, the Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of "members as a whole". The Board's approach is described under "Stakeholders" below.

# Stakeholders

The Board challenges the Investment Manager to balance the interests and concerns of all stakeholders effectively to ensure continuing positive stakeholder engagement. The Company is committed to maintaining good communications and building positive relationships with all stakeholders. To achieve this, the Company, either directly or via the Investment Manager, interacts with a variety of stakeholders relevant to its success. The Company seeks to achieve the correct balance between engagement and communication, whilst working within the limitations of what can be disclosed to the various stakeholders, maintaining confidentiality of market and/or commercially sensitive information.

The Company has identified the following key stakeholders:

- shareholders;
- the Investment Manager;
- the Company's key service providers;
- the Company's investment business partners (including host counterparties); and
- lenders at project level and corporate level.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 67
## Performance | Stakeholders and Section 172 continued

| Stakeholders Why they are important Engagement |  |  | Stakeholders Why they are important Engagement |  |  |
| --- | --- | --- | --- | --- | --- |
| Shareholders As the Company is |  | The Company currently has over 350 shareholders. | Key service | The Company has a | During the year, the Company conducted a review of the terms |
|  | an investment trust |  | providers | number of other key | of all key service provider engagements along with their fee |

Through the Company’s engagement activities, it strives to
listed on the London service providers, each levels to ensure an appropriate level of support was being
obtain investor endorsement for the Company’s strategic
Stock Exchange and a of which provides a provided to the Company.
objectives and how they are executed.
constituent of the FTSE vital service to the
The Directors provided speciﬁc feedback to key service
250 index, its shareholders In light of the persistent share price discount to NAV per share, Company and ultimately
providers with the aim of ensuring the Company receives an
are also its main the Board and the Investment Manager agreed to a Capital to its shareholders.
appropriate service.
stakeholders. Continued Allocations Policy, asdescribed elsewhere in the Annual Report, The Company’s key
shareholder support and taking into account shareholder feedback on how capital should service providers are The Company seeks to ensure a two-way engagement between
engagement are critical be used. the Administrator and the Board and key service providers on service delivery
to the existence of the Company Secretary, expectations and feedback on important issues experienced by
The Company also engaged, directly or via the Investment
Company and to the Auditor, Corporate Broker, service providers.
Manager, with shareholders in the year through meetings,
delivery of the long-term Depositary and Registrar.
market announcements and various written materials, available The annual review in 2023 of key service providers instigated a
strategy.
on the Company’s website. change in Company Secretary and Administrator. Supported
by the Investment Manager, a successful transition to JTC was
In April 2023, and after a period of the Company’s shares
APM achieved during 2023.
trading at a discount to NAV , the Board authorised a share
buyback programme as part of the Company’s discount control
Investment The Company has As the Company acquires new portfolio investments, the
strategy in order to increase liquidity in the Company’s shares.
business various business partners Investment Manager undertakes a review of the contracting
At every Board meeting, the Directors received updates on partners including, crucially, the terms of all counterparties to ensure they are fair and
share trading activity, share price performance, shareholder (including host counterparty hosts to appropriate.
feedback and any mention of the Company in the press. counterparties) whom the Company’s
The Directors received an update on actions during the year
investments are providing
Through a combination of the above engagement activities, for the Investment Manager to seek to maintain long-term
critical energy services,
clear reporting and shareholder support, the Board has been collaborative partnerships with these counterparties to ensure
as well as subcontractors
able to ensure the Investment Manager’s investment aligned relationship stability and that the Company’s investment return
who provide key
with the investment strategy appropriate for the tougher targets are achieved.
services to individual
market conditions compared to previous years. The Company
or groups of portfolio
will continue to engage actively with shareholders.
companies. Such services
include operations and
The Investment The Investment Manager’s Constructive and ongoing engagement with the Investment
maintenance, technical
Manager performance is critical for Manager is important to ensure that the expectations of
asset management and
the Company to deliver its shareholders are being met and that the Board is aware of any
EPC construction that are
investment strategy and challenges to the investment strategy or management of the
considered vital to the
meet its objectives. Company’s portfolio of investments.
success of the investments.
The Board conducts both an ongoing and an annual review
of the Investment Manager’s performance and terms of
Lenders at The availability of funding Considering how important the availability of funding is, the
engagement, and provides feedback after such reviews. The
project level and liquidity are crucial Company aims to demonstrate to its lenders, through regular
most recent annual review took place in March 2024 and written
and corporate elements in ensuring reporting and dialogue, that it is a well-managed business
feedback was given to the Investment Manager.
level the Company’s ability to and, in particular, that the Investment Manager is focused on
The Board and the Investment Manager maintain an open and execute against attractive providing regular and careful management of risk within the
ongoing dialogue on key issues facing the Company with a view investment opportunities investment portfolio and the Company as a whole.
to ensuring that key decisions relating to, inter alia, potential as they arise.
During the year, the Directors received and reviewed the
investments, portfolio performance and the Company’s
Investment Manager’s recommendation for exercising a
investment strategy are aligned with achieving long-term value
one-year extension of the RCF held by the Company’s single
for shareholders. This open dialogue takes the form of at least
subsidiary, SEEIT Holdco, thereby ensuring that the Company
quarterly scheduled Board meetings and frequent informal
had access to liquidity to make further investments.
contact, as appropriate to the subject matter.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 68
## Performance | Stakeholders and Section 172 continued
### The Board of Directors at Oliva
The Directors’ overarching duty is to promote the success of the Company for the beneﬁt of
shareholders, with due consideration of other stakeholders’ interests. The Company seeks to
maintain high standards of business conduct and corporate governance, and to ensure via the
Investment Manager that appropriate oversight, control and suitable policies are in place to
guarantee stakeholders are treated fairly.
The Board seeks to ensure the alignment of its purpose, values and strategy with this culture
of openness, debate and integrity through ongoing dialogue and engagement with its key
stakeholders. The Board, made up of 40% male and 60% female members, aims to achieve a
supportive business culture combined with constructive challenge, and to provide a regular ﬂow of
information to shareholders and relevant information as required to other key stakeholders. Both the
Board and the Investment Manager support equal opportunities for recruitment and when managing
existing employees – regardless of age, race, gender, or personal beliefs and preferences.
Although the Company has no employees, it is committed to respecting human rights in its broader
relationships. The Company does not tolerate corruption, fraud, bribes or human rights breaches.
TheCompany aims to maintain standards of business integrity, a commitment to truth and fair
dealing, and a commitment to complying with all applicable laws and regulations.
The Company has several policies and procedures in place to assist with maintaining a culture of
good governance, including those relating to diversity, anti-bribery – including the acceptance of
gifts and hospitality – tax evasion, conﬂicts of interest, whistleblowing and Directors’ dealings in
the Company’s shares. The Board assesses and monitors compliance with these policies regularly
through Board meetings and the annual evaluation process.
The Board seeks to appoint the most appropriate service providers for the Company’s needs
and evaluates their services on a regular basis. The Board considers the culture of the Investment
Manager and other service providers through regular reporting and by receiving regular The Board and Manager at Oliva
presentations, as well as through ad hoc interactions.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 69
## Governance
## What’s in this section
Investment Policy and Approach 70
Board of Directors 71
Corporate Governance Statement 72
Nomination Committee Report 81
Audit and Risk Committee Report 83
Directors’ Remuneration Report 87
Report of the Directors 92
Statement of Directors’ Responsibilities 96
RED-Rochester
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 70
## Investment Policy and Approach
Investment Objective – Investments may be acquired individually or The Company intends to repay any acquisition Cash Management
as a portfolio. The Company may also invest ﬁnance with the proceeds from capital
The Company’s investment objective is to Whilst it is the intention of the Company to be
jointly with a co-investor. The Company raisings and/or capital recycling in the short to
generate an attractive total return for investors fully or near fully invested in normal market
aims to achieve diversiﬁcation by investing mediumterm.
comprising stable dividend income and capital conditions, the Company may hold cash
in a range of different energy efﬁciency APM
preservation, with the opportunity for capital Structural gearing and acquisition ﬁnance are on deposit and invest in cash-equivalent
technologies and contracting with a wide
growth. employed either at the level of the Company, investments, which could include short-term
range of counterparties.
at the level of the relevant investment or at the investments in money market type funds and
– Though the Company initially focused its tradeable debt securities. For further details
### Summary of the Investment Policy level of any intermediate wholly owned subsidiary
attention on investing in the UK, over time the APM please see the Company website:
– The Company seeks to achieve its of the Company. Structural gearing and
Company has expanded to invest in projects https://www.seeitplc.com/.
investment objective by investing principally acquisition ﬁnance primarily comprise bank
in Europe, North America and the Asia-Paciﬁc
in a diversiﬁed portfolio of investments borrowings, though small overdraft facilities may
region.
with high-quality, private and public sector be used for ﬂexibility in corporate transactions.
– In pursuing its investment policy, the Company
counterparties. The contracts governing these
will seek to target sustainable investments,
### investments typically entitle the Company, on Use of Derivatives
for example by making investments that
the whole, to receive stable and predictable The Company may use derivatives for efﬁcient
contribute to GHG emission reductions.
cash ﬂows. The Company’s returns are derived portfolio management but not for investment
from contractual payments by counterparties purposes. In particular, the Company may
### Gearing APM
in respect of each relevant investment. engage in full or partial interest rate hedging or
– Whilst the Company invests predominantly in The Company maintains a conservative level otherwise seek to mitigate the risk of interest
APM

| operational investments, the Company may, | of aggregate gearing | in the interests of |  |  |  | rate increases and full or partial foreign exchange |
| --- | --- | --- | --- | --- | --- | --- |
| under certain circumstances, invest while | capital efﬁciency, to enhance income returns, |  |  |  |  | hedging to mitigate the risk of currency inﬂation. |
| such investments are in a construction or | long-term capital growth and capital ﬂexibility. |  |  |  |  |  |
|  |  |  |  |  | APM | The Company does not typically enter into |
| development phase. In addition, the Company | The Company’s target medium-term gearing |  |  |  |  |  |
|  |  |  | APM |  |  | hedging contracts and other derivative contracts |
| may, to a limited extent, invest in developers, | is 35% of net asset value (“NAV”) |  |  | , calculated |  |  |

directly but may do so via its subsidiaries when
operators or managers of energy efﬁciency at the time of borrowing (“structural gearing”).
they are available in a timely manner and on
infrastructure investments.
The Company may also enter borrowing facilities terms acceptable to it. The Company reserves
– In respect of the investment portfolio, the on a short-term basis to ﬁnance acquisitions
the right to terminate any hedging arrangement
Company seeks to diversify its subcontracting (“acquisition ﬁnance”), provided that the
in its absolute discretion.

| exposure by contracting, where commercially | aggregate consolidated borrowing of the |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| practicable, with a range of different | Company and the investment portfolio, including |  |  |  |  |
| engineers, manufacturers or other service |  |  |  | APM |  |
|  | any structural gearing |  |  |  | , shall not exceed 65% |
| providers. |  | APM |  |  |  |
|  | of NAV |  | , calculated at the time of borrowing. |  |  |

SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 71
## Board of Directors
As at the date of this Annual Report, the Board consists of ﬁve Directors who have complementary and relevant skills and backgrounds.
The Directors are of the opinion that the Board as a whole has an appropriate balance of skills, experience and diversity.
### Anthony (Tony) Roper N ME Helen Clarkson OBE Emma Grifﬁn R A Christopher (Chris) Knowles Sarika Patel
Independent Non-Executive Chair Independent Non-Executive Director Independent Non-Executive Director Senior Independent Non-Executive Director Independent Non-Executive Director
Appointed: 12 October 2018 Appointed: 12 October 2018 Appointed: 21 October 2020 Appointed: 12 October 2018 Appointed: 1 January 2022

| Tony started his career as a structural | Helen joined Climate Group in March 2017 | Emma is an experienced director, | Chris has over 40 years’ experience in | Sarika is an experienced business leader |
| --- | --- | --- | --- | --- |
| engineer with Ove Arup and Partners in | as Chief Executive Ofﬁcer. Climate Group | having worked in both the UK and North | projects, infrastructure and environmental | across public and private organisations |
| 1983. In 1994 he joined John Laing plc | is an international non-proﬁt organisation | America. She has broad capital markets | ﬁnance and economics, much of it at the | and has worked as a senior corporate |
| to review and make equity investments | with a mission to drive climate action, fast. | and signiﬁcant international investment | European Investment Bank (“EIB”), heading | ﬁnance professional within technology and |
| in infrastructure projects both in the UK | Climate Group builds networks of leading | expertise, gained as both an executive | its infrastructure and environmental | infrastructure sectors at Grant Thornton |
| and abroad and then in 2006 he joined | governments and businesses working on | and non-executive director. From 2002 | investment funds business from 2005 to | and Zeus Caps. She was the Director of |
| HSBC Specialist Investments to be the | issues such as renewable electricity and zero | to 2013 Emma was a founding partner | 2017 (clean energy, energy efﬁciency, carbon | Innovation and all business sectors at the |
| fund manager for HSBC Infrastructure | carbon steel, to shape markets and policy. | of Oriel Securities, which was sold to | ﬁnance and natural capital). | London Development Agency attracting |
| Company Limited (now HICL Infrastructure | Helen also sits on the board of the We Mean | Stifel Corporation, and in her early career |  | and supporting businesses in London. |

From 2000 to 2005 he led EIB’s ﬁnancing

| plc). In 2011, Tony was part of the senior | Business Coalition. | she worked for HSBC James Capel and |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | in the transport and infrastructure sectors | Sarika chairs abrdn Equity Investment Trust |
| management team that bought HSBC |  | Schroders. |  |  |
|  | Prior to joining the Climate Group, Helen |  | in Spain, then Europe’s largest national | plc and is a non-executive director and |

Specialist Investments from HSBC, renaming
worked at Forum for the Future where Emma currently serves as a non-executive infrastructure programme, much of it in public- chair of the audit committee at, Foresight
it InfraRed Capital Partners.

|  | she founded the organisation’s US ofﬁce. | director of St James’s Place plc and of | private partnership form. He spent the 1980- | Forestry Fund plc . Sarika is the Chair of |
| --- | --- | --- | --- | --- |
| Tony was a managing partner and a senior | At Forum, Helen led work with large US | IA Financial Group (listed on the TSX in | 90s in similar jobs elsewhere in Europe and in | Action for Children and is a board member |
| member of the infrastructure management | corporations such as Target, Walmart, Nike, | Canada). She is also a director of privately | Africa. Prior to EIB he worked for the Lesotho | and chair of the audit, risk and assurance |
| team at InfraRed Capital Partners until | Gap and Levi Strauss & Co. to solve complex | owned ED&F Man Holdings and serves | National Development Corporation, the | committee of the Ofﬁce for Nuclear |
| June 2018, during which time he oversaw | sustainability challenges. Helen joined Forum | on the board of Claridge Inc., a private | European Commission and Lazard Brothers. | Regulation,. |
| the successful launch of The Renewables | from Médecins Sans Frontières where she | investment ﬁrm, and on the board of one |  |  |
|  |  |  | Chris also serves as a NED on a number | She has held various Board positions at |
| Infrastructure Group on the London Stock | worked on humanitarian missions across a | of its largest individual investments. Emma |  |  |
|  |  |  | of private equity and debt funds pursuing | Sequoia Economic Infrastructure Fund, The |
| Exchange. | number of conﬂict zones. | is also a director of N.M. Rothschild & Sons |  |  |
|  |  |  | ESG and impact strategies globally. He is | Gambling Commission, Imperial Healthcare |

Limited.
Tony is the chair of abrdn European Helen qualiﬁed as a Chartered Accountant a member of various advisory committees, NHS Trust, University of Greenwich etc
Logistics Income plc. with Deloitte and has an undergraduate Emma has a master’s degree in Latin and including that for the Climate Bond Initiative
Sarika is a Chartered Accountant and

|  | degree from the University of Cambridge, | Greek from the University of Oxford. | and the Organisation for Economic |  |
| --- | --- | --- | --- | --- |
| Tony has a master’s degree in Engineering |  |  |  | a Chartered Marketer and is a double |
|  | and a master’s degree from the University of |  | Co-operation and Development (“OECD”) |  |
| from the University of Cambridge and is |  |  |  | graduate in Law and Commerce. |
|  | London. In 2022 Helen was awarded an OBE |  | Centre for Green Finance & Investment. |  |

an Associate Chartered Management
for services to the climate.
Accountant (“ACMA”). Chris holds degrees in Economics and
Management from the University of Durham.
Audit and Risk Management Engagement Nomination Remuneration ESG
Key: A M N R E
Committee Chair Committee Chair Committee Chair Committee Chair Committee Chair
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

72

# Corporate Governance Statement

## This Corporate Governance Statement forms part of the Directors' Report

The Board of Directors has considered the Principles and Provisions of the Association of Investment Companies ("AIC Code") published in February 2019. The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code 2018 (the "UK Code") published in July 2018, as well as setting out additional Provisions on issues that are of specific relevance to the Company.

### Statement of Compliance with the AIC Code

The Board recognises the importance of a sound corporate governance culture that meets the requirements of the UK Listing Authority and the AIC Code.

As an AIC member, the Company has considered the Principles and Provisions of the AIC Code, which addresses the Principles and Provisions set out in the UK Code. The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to shareholders. The AIC code can be found at www.theaic.co.uk and the UK Code can be found at www.frc.org.uk.

The Company has complied with the Principles and Provisions of the AIC Code. In respect of the UK Code, the following items which are not considered to be relevant (and so are not reported on further) due to the Company being an externally managed investment company with no Executive Directors or employees:

- the role of the Chief Executive.

The AIC Code 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.

Set out below are the full details of how the Company has applied the Principles of the AIC Code:

AIC

|  Code | Principle | Compliance statement  |
| --- | --- | --- |
|  A | A successful company is led by an effective board, whose role is to promote the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society. | In managing the Company, the aim of the Board and of the Investment Manager is always to ensure the long-term sustainable success of the Company and, therefore, the likely long-term consequences of any decision are a key consideration. The Board is subject to an annual evaluation, the results of which indicate that the Board performs effectively as a whole. As part of the evaluation process, the Board identifies areas in which they could further improve, and performance in these areas is monitored throughout the year and at the point of the next annual evaluation. Further information on the Board evaluation process can be found in the Nomination Committee Report on pages 81 and 82.  |

AIC

|  Code | Principle | Compliance statement  |
| --- | --- | --- |
|  B | The Board should establish the Company's purpose, values and strategy, and satisfy itself that these and its culture are aligned. All Directors must act with integrity, lead by example and promote the desired culture. | The Company's investment objective is to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth. The Board seeks to ensure the alignment of its purpose, values and strategy with a culture of openness, debate and integrity through ongoing dialogue and engagement with its stakeholders. The Directors aim to achieve a supportive business culture combined with constructive challenge and to provide a regular flow of information to shareholders and other stakeholders.  |
|  C | The Board should ensure that the necessary resources are in place for the Company to meet its objectives and measure performance against them. The Board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed. | The Directors regularly consider the Company's financial position in the context of its business model, the balance sheet, cash flow projections, availability of funding and the Company's contractual commitments. The Company is subject to various risks in pursuing its objectives and, in order to effectively assess and manage risk, appropriate controls and policies are in place, which are regularly reviewed and assessed by the Audit and Risk Committee. These are detailed in the Risk Management Framework on pages 62 to 64, in the Audit and Risk Committee Report on pages 83 to 86 and in Note 13 to the financial statements on pages 118 to 120. The Directors confirm 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. See the Risk Management Framework on pages 62 to 64, for further details. The Directors have assessed the prospects of the Company over a five-year period to 31 March 2029. The Directors have determined that a viability statement for a five-year period is appropriate as this period accords with the Company's business planning exercises and is appropriate for the investments owned by the Company and the nature of the Company. See page 65 for further details on the Viability Statement.  |
|  D | In order for the Company to meet its responsibilities to shareholders and stakeholders, the Board should ensure effective engagement with, and encourage participation from, these parties. | The Company describes its key stakeholders, the reason they are important, how it seeks to gain an understanding of their interests and how the Board engages with them, whether directly or via the Investment Manager, on pages 66 to 68, Stakeholders and Section 172.  |
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 73
## Corporate Governance Statement continued

| AIC |  |  | AIC |  |  |
| --- | --- | --- | --- | --- | --- |
| Code Principle Compliance statement |  |  | Code Principle Compliance statement |  |  |
| F The Chair leads the Board and |  | The role and responsibilities of the Chair are described in the | J Appointments to the Board |  | The Company is committed to ensuring that any vacancies arising |
|  | is responsible for its overall | Corporate Governance Statement on pages 72 to 80. The |  | should be subject to a formal, | are ﬁlled by suitably qualiﬁed candidates. |
|  | effectiveness in directing | Company recognises that the Chair leads the Board and is |  | rigorous and transparent |  |

The Board has adopted a Diversity Policy, which acknowledges the
the Company. They should responsible for its overall effectiveness in directing the affairs of the procedure, and an effective
beneﬁts of greater diversity, and remains committed to ensuring
demonstrate objective Company. succession plan should be
that the Company’s Directors bring a wide range of skills, knowledge,
judgement throughout their maintained. Both appointments
The annual evaluation of the Board’s effectiveness always experience, backgrounds and perspectives to the Board.
tenure and promote a culture of and succession plans should be
considers the performance of the Chair, and whether they have
openness and debate. In addition, based on merit and objective Appointments of new Directors to the Board follow a structured
performed their role effectively. The Directors have concluded
the Chair facilitates constructive criteria and, within this context, and transparent process as described further below. The
that the Chair has fulﬁlled his role and performed well to support
board relations and the effective should promote diversity of Company’s policy on the tenure of Directors also helps guide
effective functioning of the Board as evidenced in the internal
contribution of all Non-Executive gender, social and ethnic long-term succession plans and recognises the need and value of
Board evaluation that took place during the latter part of the
Directors, and ensures that backgrounds, cognitive and progressive refreshing of the Board. Both policies are described in
ﬁnancial year.
Directors receive accurate, timely personal strengths. more detail below.
and clear information.
K The Board and its Committees The Nomination Committee, which comprises the whole Board, is
G The Board should consist of During the year under review, the Board consisted only of Non- should have a combination of responsible for identifying and recommending to the Board the
an appropriate combination Executive Directors and all of the Directors are deemed to be skills, experience and knowledge. appointment of new Directors.
of Directors (and, in particular, independent of the Investment Manager. In the Board’s opinion, Consideration should be given to
The Nomination Committee reviews, at least annually, the key skills
independent Non-Executive each Director continues to provide constructive challenge and the length of service of the Board
and experience of each Director and the skills matrix is reviewed at
Directors) such that no one robust scrutiny of matters that come before the Board. as a whole and membership
least once per year to ensure that the Board has an appropriate
individual or small group of regularly refreshed.
The Board also considers the composition of the Board as well as mix of skills and experience, particularly when considering
individuals dominates the Board’s
longer-term succession plans. The Board is satisﬁed that the Board’s longer-term succession plans.
decision making.
current composition is adequate to appropriately discharge its
duties and currently has no intentions to alter its composition. L Annual evaluation of the Board The Directors are aware that they need to monitor and improve
should consider its composition, Board performance continuously and recognise that this can
H Non-Executive Directors should The Board considers the required time commitment annually diversity and how effectively be achieved through regular Board evaluation, which provides a
have sufﬁcient time to meet and, during the year under review, the Board concluded that all members work together to valuable feedback mechanism for improving Board effectiveness.
their Board responsibilities. They Directors continued to devote sufﬁcient time to the business of achieve objectives. Individual
In line with the AIC Code, the Board has agreed that an external
should provide constructive the Company. Through their contributions in meetings, as well evaluation should demonstrate
Board evaluation will be carried out every three years and, in the
challenge, strategic guidance, as outside of the usual meeting cycle, the Directors share their whether each Director continues
intervening years, evaluations will be carried out by means of
offer specialist advice and hold experience and guidance with, as well as constructively challenge, to contribute effectively.
questionnaires and interviews.
third-party service providers to the Investment Manager.
account. An internal evaluation of the performance of the Board, its
The Management Engagement Committee annually assesses the
Committees and individual Directors took place during the
performance of all material third-party service providers.
year, and was led by the Chair with the support of the Senior
Independent Director and the Company Secretary. The next
I The Board, supported by the The Board’s responsibilities are set out in the Schedule of Matters
external evaluation is due to take place in 2025.
Company Secretary, should Reserved for the Board and certain responsibilities are delegated
ensure that it has the policies, to its Committees, so that it can operate effectively and efﬁciently. Further details of the results of the Board evaluation process can
processes, information, time and be found in the Nomination Committee Report on pages 81 and 82..
All Board policies were reviewed and, where appropriate, updated
resources it needs in order to
during the year. They continue to be reviewed on a regular basis.
function effectively and efﬁciently. M The Board should establish The Audit and Risk Committee supports the Board in fulﬁlling its
Directors are also provided with any relevant information and have
formal and transparent policies oversight responsibilities by reviewing the performance of the
access to the Company Secretary and independent advisers, if
and procedures to ensure the independent auditor, audit quality and the auditor’s objectivity
required.
independence and effectiveness and independence. The Audit and Risk Committee also reviews
of external audit functions and the integrity and content of the ﬁnancial statements, including the
satisfy itself on the integrity ongoing viability of the Company.
of ﬁnancial and narrative
More details can be found in the Audit and Risk Committee Report
statements.
on pages 83 to 86.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 74
## Corporate Governance Statement continued
### AIC The Board of Directors
Code Principle Compliance statement
The Directors of the Company who were in ofﬁce during the year and up to the date of signing the
N The Board should present a fair, The Audit and Risk Committee supports the Board in assessing ﬁnancial statements are listed in the Board of Directors on page 71.
balanced and understandable that the Company’s Annual Report presents a fair, balanced
assessment of the Company’s and understandable assessment of the Company’s position and
### Board Independence
position and prospects. prospects.
The Board consists of ﬁve independent Non-Executive Directors, who were considered independent
Please refer to the Audit and Risk Committee Report on pages 83
of the Investment Manager at the time of their appointment. The independence of the Directors is
to 86, forfurther information.
reviewed as part of the annual evaluation process and, in line with the guidelines of the AIC Code,
O The Board should establish The work of the Audit and Risk Committee supports the Board continue to be considered independent in character and judgement and entirely independent from
procedures to manage risk, through its independent oversight of the ﬁnancial reporting process the Investment Manager.
oversee the internal control – including the ﬁnancial statements, the system of internal control
framework, and determine the and management of risk, the appointment and ongoing review
nature and extent of the principal of the quality of the work and independence of the Company’s Appointment of New Directors
risks the Company is willing external auditor – is described in the Audit and Risk Committee Any appointments to the Board are subject to a formal, rigorous and transparent process.
to take in order to achieve its Report on pages 83 to 86. Responsibilities of the Nomination Committee include satisfying itself that there is succession
long-term strategic objectives.
planning in place for Directors to ensure continued refreshment of the Board and its Committees;
determining membership of the Board’s Committees in conjunction with the respective Committee
P Remuneration policies and The Directors are all non-executive and independent of the
practices should be designed to Investment Manager. They receive fees and no component of Chairs for approval by the Board; and identifying and nominating for the approval of the Board,
support strategy and promote any Director’s remuneration is subject to performance factors. candidates to ﬁll Board vacancies, as and when they arise.
long-term sustainable success. Whilst there is no requirement under the Company’s Articles of
As part of the appointment process, the Nomination Committee:
Association or letters of appointment for Directors to hold shares
in the Company, all Directors do hold shares in the Company and – evaluates the balance of skills, knowledge and experience on the Board;
the details of their shareholdings are set out in the Directors’
– will draw up a description of the role, including the capabilities required, and use an external
Remuneration Report on pages 87 to 91.
search consultancy, if considered necessary and appropriate, in the search for candidates;
Q A formal and transparent The Board has established a separate Remuneration Committee, – will ensure that appointments are made based on merit and after assessing candidates by
procedure for developing a which, as the Company has no employees and the Board is
means of objective criteria, including, but not limited to, the Board’s Diversity Policy; and
policy for remuneration should be comprised wholly of Non-Executive Directors, is comprised of
– will ensure that appointees have enough time available to devote to their position, and also
established. No Director should all the Directors. Directors’ remuneration is determined by the
determine the terms and conditions of the appointment of Non-Executive Directors, setting
be involved in deciding their own Committee, at its discretion within an aggregate ceiling as set out
remuneration outcome. in the Company’s Articles of Association. Each Director abstains out clearly what is expected of them in terms of time, commitment, committee service and
from voting on their own individual remuneration. The details of involvement outside of Board meetings.
the Remuneration Policy and Directors’ fees can be found in the
Directors’ Remuneration Report on pages 87 to 91. The terms and
### Induction Process
conditions of the Directors’ appointments are set out in their letters
of appointment, which are available for inspection on request at New appointees to the Board are provided with a full induction programme.
the registered ofﬁce of the Company.
The programme is based on the Corporate Governance Institute UK & Ireland’s “Induction of
R Directors should exercise The process of reviewing the Directors’ fees is described in the directors” guidance note, adapted to the requirements of the Company, and is designed to:
independent judgement and Directors’ Remuneration Report on pages 87 to 91, although
(i) build an understanding of the nature of the Company, its business and its markets;
discretion when authorising because there are no performance-related elements of the
(ii) build a link with the Board; and
remuneration outcomes, taking remuneration, there is very little scope for the exercise of discretion
account of Company and or judgement. (iii) build an understanding of the Company’s main relationships.
individual performance, and wider
During the year, the Remuneration Committee engaged Trust The programme covers the Company’s investment strategy, policies and practices. The Directors
circumstances.
Associates LLP to carry out a remuneration review of the Board.
are also given key information on the Company’s regulatory and statutory requirements as they
This was led by the Remuneration Committee Chair with the
arise, information on the role of the Board including matters reserved for its decision and the terms
support of the Senior Independent Director.
of reference for the Board Committees; the Company’s corporate governance practices; and
procedures and the latest ﬁnancial information.
Principle E of the UK Code relates to the treatment of employees and so is generally not applicable
to companies under the AIC Code if, as in the case of the Company, there are no employees.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 75
## Corporate Governance Statement continued
Incoming Directors are also afforded the opportunity to meet early on with the current Role and Responsibilities of the Senior Independent Director
Non-Executive Directors, key personnel from the Investment Manager and other key service
The key elements of the Senior Independent Director’s role are to:
providers, including the independent auditor, the Company Secretary and Administrator, and
– act as a sounding board for the Chair;
theCorporate Broker.
– lead the annual evaluation of the Chair as part of the annual evaluation process;
### Terms of Appointment – in the event of any major difference of opinion on the direction of the Company, act as an
intermediary between the Chair, other Directors and the Investment Manager; and
The terms of appointment of the Directors are formalised in letters of appointment, copies of
which are available for inspection at the Company’s registered ofﬁce. None of the Directors have – provide a conduit for views of shareholders in the event that the usual channels are not available
a contract of service with the Company nor has there been any other contract or arrangement or not suitable in the circumstances.
between the Company and any Director at any time during the year. Chris Knowles was appointed as Senior Independent Director at IPO.
The responsibilities of the Chair and Senior Independent Director are available on the Company’s
### Re-Election
website.
The Articles of Association provide that each of the Directors shall retire at each AGM. All Directors
intend to retire at the forthcoming AGM. Emma Grifﬁn will not be standing for re-election and
### Delegation of Responsibilities
the remaining Directors will offer themselves for re-election. Chris Knowles will replace Emma as
The Board has delegated the following areas of responsibility to a number of service providers,
Remuneration Committee Chair.
eachengaged under separate contracts:
As set out further below, the Board carries out an annual review of each Director and the Board
as a whole. The Board believes that the balance of skills, gender, experience and knowledge of the
### Company Secretary and Administrator
current Board provides for a sound base from which the interests of investors will be served to a
During the year, on 1 October 2023, the Company appointed JTC (UK) Limited as Company
highstandard.
Secretary and Administrator in place of Apex Group Secretaries (UK) Limited as Company Secretary
The Board recommends the re-election of those Directors standing at the forthcoming AGM. and Apex Group Fiduciary Services (UK) Limited as Administrator. Day-to-day administration has
been delegated to the Company Secretary and Administrator.
### Board Responsibilities
The Board has access to the Company Secretary to advise on all governance and day-to-day
Under the leadership of the Chair, the Board is responsible for the effective stewardship of the administrative matters. The Company Secretary is also responsible to the Board for ensuring that
Company’s affairs, including strategy, corporate governance, risk assessment and overall investment allthe Company’s continued statutory obligations are met.
policy.
### Investment Manager
### Role and Responsibilities of the Chair
The management of the Company’s portfolio is delegated to the Investment Manager, Sustainable
The Chair leads the Board and is responsible for its overall effectiveness in directing the affairs of the Development Capital LLP.
Company. Key aspects of the Chair’s role and responsibilities are to:
The Investment Manager has full discretion, within agreed parameters, to make investments in
– act with objective judgement; accordance with the Company’s investment policy and has responsibility for ﬁnancial administration
– promote a culture of openness and debate; and investor relations, in addition to advising the Board in relation to further capital raisings and the
– facilitate constructive Board relations and the effective contribution of all Directors; payment of dividends amongst other matters, subject to the overall supervision and oversight of the
– work with the Company Secretary to ensure that all Directors receive accurate and timely Board.
information so that they can discharge their duties; Among the speciﬁc tasks of the Investment Manager are the overall ﬁnancial management of the
– seek regular engagement with the Company’s shareholders; and Company and existing portfolio as a whole, including the deployment of capital, management of the
– take any necessary actions following the results of the annual evaluation of the performance of SEEIT Group’s debt facilities, hedging arrangements, the sourcing of new investments, operating
the Board, its Committees andindividual Directors. the Risk Management Framework, preparing the semi-annual valuations, the statutory accounts,
the management accounts, business plans, presenting results and information to shareholders,
The Chair, Tony Roper, met the independence criteria upon appointment and has continued to meet
co-ordinating all corporate service providers to the Company and giving the Board general advice.
this condition throughout his term of service.
SEBIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

76

## Corporate Governance Statement continued

Members of the Investment Manager are also appointed as Directors of the SEBIT Group's project companies and/or intermediate holding companies. As part of their role in managing the portfolio, those Directors attend board meetings of these companies and make appropriate decisions. Material decisions are referred back to the Investment Manager's Investment Committee for consideration. The Company's Board is consulted on key matters relevant to the Company's strategy, policies or overall performance, both on an ad hoc basis, where required, and during formal reporting sessions, including all matters outside of the Investment Manager's delegated authority.

### Share Premium Account

At the Company's 2023 AGM, shareholders voted in favour of the special resolution authorising the Company to cancel £300 million of the amounts standing to the credit of its share premium account. On 21 November 2023, following approval by the Court, the Company cancelled £300 million of its share premium account, creating distributable reserves which may be used by the Board to deliver returns to shareholders in the future, should they consider it appropriate to do so.

### Board Tenure Policy

The Board's policy regarding tenure of service of the Directors, including its Chair, is that any decisions regarding tenure should balance the benefits of continuity and knowledge and the orderly transition of responsibilities through succession plans for the retirement and appointment of Directors against the need to periodically refresh the Board's composition to maintain an appropriate mix of the required skills, experience, diversity and length of service. The Board considers each of the Directors' independence carefully on an annual basis as part of the Board's self-evaluation and succession planning process.

It is not envisaged that any Board members will continue on the Board past nine years, except where required by Company circumstances at that time – and then only for a limited period, to be agreed by the Board as a whole, taking into account their independence and the need to balance this against the benefits of maintaining continuity, knowledge and experience.

### Culture

The culture of the Board is considered as part of the annual performance evaluation process that is undertaken by each Director. The culture of the Company's service providers, including their policies, practices and behaviour, is considered by the Board as a whole during the annual review of the performance and continuing appointment of all service providers. Further information on the Company's culture and values and engagement with its service providers and other stakeholders is set out in Stakeholders and Section 172 on pages 66 to 68.

### Diversity

Diversity, including, but not limited to, gender, ethnicity, professional and industry-specific knowledge is an important consideration in ensuring that 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.

The Board has adopted a Diversity Policy and considers that its composition, with respect to the balance of skills, ethnicity and cultural diversity, gender, experience and knowledge, coupled with a mixed length of service, provides for a sound base from which the interests of shareholders will be served to a high standard.

The Board of Directors comprised five independent Non-Executive Directors, two male and three female (being 60% female representation), as at 31 March 2024.

The Company supports the recommendations of the FTSE Women Leaders Review published in February 2022, which builds on the work of the Hampton-Alexander Review and has increased the voluntary target for FTSE 350 boards to be represented by a minimum of 40% of women. The Company also supports the Parker Review's recommendations to increase ethnic and cultural diversity on boards, including its target for FTSE 250 boards to have at least one director from an ethnic minority background by 2024, develop a pipeline of candidates planning for succession through mentoring and sponsoring, and enhancing transparency and disclosure to record and track progress against the objectives. The Company meets the recommendations and targets of these three reviews as at 31 March 2024.

In accordance with the Listing Rules, the Company is required to include a statement in the annual financial report setting out whether it has met the following targets on Board diversity as at 31 March 2024:

- (a) at least 40% of individuals on the Board are women;
- (b) at least one of the senior Board positions (defined by the FCA as either the Chair, SID, CED or CFO) is held by a woman; and
- (c) at least one individual on the Board is from a minority ethnic background.

The following tables set out the prescribed format for information in accordance with the requirements of Listing Rule 9 Annex 2

### Table for reporting on gender identity or sex

|   | Number of Board members | Percentage of the Board | Number of senior positions on the Board (SID and Chair)  |
| --- | --- | --- | --- |
|  Men | 2 | 40% | 2  |
|  Women | 3 | 60% | —  |
|  Not specified | — | — | —  |

### Table for reporting on ethnic background

|   | Number of Board members | Percentage of the Board | Number of senior positions on the Board (SID and Chair)  |
| --- | --- | --- | --- |
|  White British or other White (including minority-white groups) | 4 | 80% | 2  |
|  Mixed/Multiple ethnic groups | — | — | —  |
|  Asian/Asian British | 1 | 20% | —  |
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 77
## Corporate Governance Statement continued
As at 31 March 2024, the Board meets the criteria of target a) as 60% of the Board are women, andtarget c) as one Board member is from a minority ethnic background.
With regard to target b) the Company does not have Executive Directors and therefore does not have a CEO or CFO, and therefore none of the senior Board positions, as deﬁned by the FCA, are held by a
woman. However, the Board considers the role of the Audit and Risk Committee Chair to be a senior Board position given the nature of the Company as an investment trust. That role is the second highest
remunerated position on the Board, reﬂecting the importance of the position and the time commitments it commands and is held by a woman. Therefore, under this interpretation, the Board considers that at
least one of the senior Board positions is held by a woman.
### Matters Reserved for the Board
The Directors have adopted a formal schedule of matters speciﬁcally reserved for their approval. The Directors have overall responsibility for the Company’s business activities in accordance with the
Company’s Articles of Association and investment policy. The Board has delegated certain functions as described further below and retains the right to vary the delegation from time to time.
Reserved matters for the Board’s approval include:
– capital raising activities;
– declaring dividends;
– reviewing the performance and appointments of key service providers;
– setting terms of reference for the Board and relevant Board Committees; and
– monitoring the constitution and efﬁciency of the Board and its Committees and key governance aspects such as general meetings and shareholder circulars.
### Committees of the Board
The Board has ﬁve Committees to assist with its operations: the Audit and Risk Committee, the Remuneration Committee, the Nomination Committee, the Management Engagement Committee and the ESG
Committee. The delegated responsibilities of each Board Committee are clearly deﬁned in formal terms of reference, which are available on the Company’s website.
The Company Secretary acts as secretary to each Committee. No persons other than the Committee members are entitled to attend Committee meetings unless formally invited by the respective Committee.
Memberships of the Board Committees as at 31 March 2024 are as follows:
Management
Audit and Risk Remuneration Nomination Engagement
Committee Committee Committee Committee ESG Committee
Chair Sarika Patel Emma Grifﬁn Tony Roper Helen Clarkson Helen Clarkson
Members Helen Clarkson Helen Clarkson Helen Clarkson Emma Grifﬁn Chris Knowles
Emma Grifﬁn Chris Knowles Emma Grifﬁn Chris Knowles
Chris Knowles Sarika Patel Chris Knowles Sarika Patel
Tony Roper Tony Roper Sarika Patel Tony Roper
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 78
## Corporate Governance Statement continued
### Audit and Risk Committee ESG Committee
The Board considers that the members of the Audit and Risk Committee have the requisite skills and In keeping with its commitment to ESG matters, in November 2023, the Company formally
experience to fulﬁl the responsibilities of the Committee. The Chair of the Audit and Risk Committee established an ESG Committee. The ESG Committee comprises of two Directors and is scheduled
has signiﬁcant recent and relevant ﬁnancial experience. The Audit and Risk Committee has direct to meet at least twice a year. However, given its set-up date, the Committee held one inaugural
access to the Company’s independent auditor and provides a forum through which the independent meeting during the year. Matters discussed included an update on the implementation of the
auditor reports to the Board. Representatives of the independent auditor attend meetings of the Company’s Sustainability Framework and the UK’s Sustainable Disclosure Requirements. Further
Audit and Risk Committee at least twice per year. details on the Company’s approach to ESG can be found in the ESG Update on pages 45 to 53.
Further details about the Audit and Risk Committee and its activities during the year under review
### Meetings
are set out in the Audit and Risk Committee Report on pages 83 to 86.
The Board is scheduled to meet at least four times per year and between these formal meetings
### Remuneration Committee
there is regular contact with the Investment Manager, the Administrator, the Company Secretary
The Remuneration Committee meets at least once per year and deals with matters of Directors’ and the Corporate Broker. The Directors are kept fully informed of investment and ﬁnancial controls,
remuneration. In particular, the Remuneration Committee reviews and makes recommendations and other matters that are relevant to the business of the Company that should be brought to the
to the Board regarding the ongoing appropriateness and relevance of the Remuneration Policy, attention of the Directors.
Directors’ annual fee levels and also considers the need to appoint independent professional
The agenda for all Board meetings are circulated to the Board in advance of the meeting as part
external remuneration consultants.
of the Board papers. The directors consider agenda items and may request any agenda items to
Further details about the Remuneration Committee and remuneration matters are set out in the be added that they consider appropriate for Board discussion. Each Director is required to inform
Directors’ Remuneration Report on pages 87 to 91. the Board of any potential or actual conﬂicts of interest prior to Board discussions. Board meetings
include a review of investment performance and associated matters such as health and safety,
APM
### Nomination Committee marketing, investor relations, risk management, gearing , general administration and compliance,
The Nomination Committee meets at least once per year to consider Board succession planning and peer group information and industry issues.
recruitment and to conduct the annual Board evaluation exercise.
Further details about the Nomination Committee and its activities during the year under review are
set out in the Nomination Committee Report on pages 81 and 82.
### Management Engagement Committee
The Management Engagement Committee meets at least once per year to assess the performance
of the Investment Manager and the Company’s other key third-party service providers. This
annual review process includes two-way feedback, which provides the Board with an opportunity
to understand the views, experiences and any issues encountered by service providers during the
year. In addition, the Management Engagement Committee is actively involved in reviewing the
contractual relationships of the Investment Manager and the Company’s other key third-party
service providers and ensuring the contractual terms remain aligned with the objectives of the
Company and the interests of shareholders.
Following the Committee’s assessment of the Investment Manager, and based on its performance,
the continued appointment of the Investment Manager is considered to be in the interests of
shareholders as a whole, and it was recommended that SDCL continue as Investment Manager.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 79
## Corporate Governance Statement continued
The number of scheduled Board and Board Committee meetings held during the year and the attendance of the individual Directors is shown below:
Management
Scheduled Audit and Risk Remuneration Nomination Engagement
Board meetings Committee Committee Committee Committee ESG Committee
No. of meetings held 4 4 1 1 1 1
Tony Roper 4 4 1 1 1 N/A
Helen Clarkson 4 4 1 1 1 1
Chris Knowles 4 4 1 1 1 1
Emma Grifﬁn 4 4 1 1 1 N/A
Sarika Patel 4 4 1 1 1 N/A
During the year ended 31 March 2024, there were 14 additional ad hoc Board meetings, one ad hoc Audit and Risk Committee and one ad hoc Nomination Committee meeting held to deal with administrative
matters. These were attended by those Directors available and/or delegated by the Board to one or more members to action.
### Insurance and Indemnity Provisions
Directors’ and Ofﬁcers’ liability insurance cover is in place in respect of the Directors. The Company’s Articles of Association provide, subject to the provisions of UK legislation, an indemnity for Directors in
respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted, or judgement is given in their favour
by the Court.
Except for such indemnity provisions in the Company’s Articles of Association and in the Directors’ letters of appointment, there are no qualifying third-party indemnity provisions in force.
The Board has agreed arrangements whereby Directors may take independent professional advice in the furtherance of their duties.
### Conﬂicts of Interests
It is the responsibility of each individual Director to avoid an unauthorised conﬂict of interest situation arising. All Directors must inform the Board as soon as they become aware of the possibility of an interest
that conﬂicts, or might possibly conﬂict, with the interests of the Company.
A register of conﬂicts is maintained by the Company Secretary and regularly reviewed by the Board to ensure that any authorised conﬂicts remain appropriate. The Directors are required to conﬁrm at Board
meetings whether there has been any change to their position.
The Board has adopted a policy that records all gifts and hospitality in excess of £50 accepted by the Directors from the Company’s service providers and other relevant third parties.
### Reporting on Stakeholder Engagement
The Company sets out how it interacts and engages with its stakeholders on pages 66 to 68, Stakeholders and Section 172. The stakeholder relationships identiﬁed provide the foundation for the Company’s
sustainability, which in return provides beneﬁts to all parties. Both the Board and the Investment Manager value the importance of maintaining a high standard of business conduct and stakeholder
engagement in order to ensure a positive impact on the environment in which the Company operates.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 80
## Corporate Governance Statement continued
### Relations with Shareholders 2023 AGM
The Company welcomes the views of its shareholders, placing great importance on communication The 2023 AGM of the Company was held on 11 September 2023. Resolutions 1 to 12 were proposed
with them. Senior members of the Investment Manager make themselves available, as practicable, as ordinary resolutions. In accordance with the Articles, this included a vote to approve the
to meet with shareholders and key sector analysts, and feedback from these meetings is provided continuation of the Company as a closed-ended investment trust until the conclusion of the AGM, to
to the Board. The Directors also make themselves available to engage with shareholders and offer be held in 2026. Resolutions 13 to 16 were proposed as special resolutions as follows:
meetings annually as part of good governance to those shareholders who wish to meet them.
– to approve the purchase of the Company’s own shares;
The Board is kept fully informed of all relevant market commentary on the Company by the – to authorise the disapplication of statutory pre-emption rights;
Company’s Financial PR consultant, as well as receiving relevant updates from the Investment
– to approve that a general meeting may be convened on not less than 14 clear days’ notice; and
Manager and the Corporate Broker.
– to approve the reduction of the share premium account of the Company.
The Company reports formally to shareholders twice per year through its interim and annual ﬁnancial
Each of the resolutions proposed at the AGM were passed.
statements. Further details on shareholder engagement are included in the S172 Statement on page
66.
### 2024 AGM
The results of the AGM are announced by the Company promptly after the relevant meeting and are
The next AGM of the Company is currently scheduled to be held on 4 September 2024.
also published on the Company’s website. Additionally, other notices and information are provided
A separate notice convening the AGM will be sent to shareholders and expected to be published on
to shareholders on an ongoing basis through the Company’s website in order to assist in keeping
the Company’s website in July 2024 and will include an explanation of the items of business to be
shareholders informed.
considered at the meeting.
The Company Secretary and Registrar monitor the voting of the shareholders and proxy voting is
taken into consideration when votes are cast at the AGM.
The Company is committed to ongoing shareholder dialogue and takes an active interest in voting
outcomes. Where there are substantial votes against any resolution at an AGM, the Company will
consider what, if any, actions it intends to take going forward.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 81
## Nomination Committee Report
### Nomination Committee Matters Reviewed in the Year
### The Nomination Committee is chaired by Tony Succession planning
Roper and the membership of the Committee
The Committee annually reviews its effectiveness,
comprises all Directors of the Company, given
composition and long-term succession planning.
that they are all independent and non-executive.
This process takes into consideration the balance
During the year, the Nomination Committee of skills, knowledge, experience, independence
held two meetings. The Nomination Committee and diversity of the Board, to ensure any new
operates within clearly deﬁned terms of appointments complement or address any gaps
reference, which are available on the Company’s in these areas.
website.
The Committee has reviewed the composition
of the Board and is satisﬁed that the Board’s
### Function of the Nomination current composition is appropriate to adequately
### Committee discharge its duties. The Committee has no
The principal duties of the Nomination immediate concerns regarding the independence
Committee are to: or tenure of the Board as the longest-serving
Directors have been in ofﬁce for less than six
– regularly review the structure, size and
years, having been appointed in October 2018,
composition required of the Board and make
which is less than the nine years that could, as
recommendations to the Board with regard to
noted in the AIC Code, impair a non-executive
any changes (including skills, knowledge and
director’s independence. Notwithstanding this,
### Tony Roper
experience in accordance with Principle K of
the Committee has implemented an emergency
### |Chair of the Nomination Committee the AIC Code);
succession plan which is reviewed annually and
– give full consideration to succession
continues to monitor succession.
planning for Directors, taking into account
the challenges and opportunities facing the
Company, and to oversee the development of
a diverse pipeline for succession;
– be responsible for identifying and nominating,
for the approval of the Board, candidates to
ﬁll Board vacancies as and when they arise;
and
– oversee a formal and rigorous annual
evaluation of the performance of the Board,
its Committees, the Chair and individual
Directors.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 82
## Nomination Committee Report continued
### Board performance evaluation The evaluation addressed all areas relating The evaluation also highlighted a number
to the Board, its Committees, the Chair, the of opportunities for improvement, including:
The Board recognises the importance of the
individual Directors and their performance. The identifying further training and development
AICCode’s recommendation in respect of
scope of the evaluation was in line with other opportunities to assist the Board and each
evaluating the performance of the Board as
internal evaluations conducted in previous individual Director to continue their professional
a whole, the Committees of the Board and
years to track progress in each assessed area, development, and continuing to improve the
individual Directors. The Chair, with the assistance
which included, but was not limited to: Board presentation and challenge of risk management
of the Senior Independent Director and the
and Committee relationships, composition, key performance indicators.
Company Secretary, oversaw an internal Board
effectiveness, leadership, roles, activities,
evaluation process with respect to the year
### development and engagement with and impact Terms of reference
ended 31March2024.
on various stakeholder groups. The evaluation
The Committee reviewed its terms of reference
The evaluation followed a number of stages as
also explored other items including culture and
in March 2024 to ensure that it was still operating
outlined below:
the Board processes for developing strategy,
effectively and in line with its delegated duties
– an update was given against the performance dealing with investments and managing risk.
and responsibilities.
of the recommendations and actions from the
Overall, the evaluation was positive and
prior year;
indicated a high level of satisfaction with the
– all Directors responded to questionnaires operation of the Board. It also demonstrated
### about the Chair, the Board and its that the Board and Investment Manager were Tony Roper
Committees; operating effectively and showed the necessary Chair of the Nomination Committee
– the Chair held individual meetings with each commitment to the effective fulﬁlment of their
Director to understand their views on the duties. A number of areas were highlighted as
performance of the Board; strengths, including:
– the Senior Independent Director collated
– calibre of depth and experience;
feedback from the Non-Executive Directors,
– leadership of the Board and of each
excluding the Chair, on the performance of the
Committee;
Chair;
– Board dynamics and communication;
– a summary of results, together with
– sufﬁcient opportunity to challenge and
anonymised comments, was collated into a
support the Investment Manager;
comprehensive report and presented to the
– clear consensus around strategy; and
Nomination Committee; and
– good oversight of the Company’s
– an action plan for the Board and its
performance.
Committees with recommendations of areas
to improve was prepared and approved by
the Committee.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 83
## Audit and Risk Committee Report
The Audit and Risk Committee is chaired – making recommendations to the Board, for
by Sarika Patel and the membership of the approval at the Company’s Annual General
Committee comprises all Directors of the Meeting, relating to the appointment,
Company, all of whom are independent and reappointment and removal of the Company’s
non-executive. independent auditor;
– agreeing with the independent auditor the
The Board is satisﬁed that the Committee is
external audit plan, including discussing with
properly constituted. Tony Roper is a member of
the independent auditor the key risk areas
the Audit and Risk Committee, notwithstanding
within the ﬁnancial statements;
his appointment as Chair of the Board, given his
independence at the time of his appointment – reviewing and recommending to the Board,
and throughout his service. The Board believes for approval, the audit, audit-related and
that his extensive experience in dealing with non-audit fees payable to the independent
matters such as valuation and risk management auditor or their afﬁliated ﬁrms overseas and
is relevant to the Committee. the terms of their engagement;
– reviewing the scope, results,
The Audit and Risk Committee operates within
cost-effectiveness, independence and
clearly deﬁned terms of reference, which are
objectivity of the independent auditor,
available on the Company’s website. It is also
as well as reviewing the effectiveness of
the formal forum through which the independent
the external audit process and making
auditor reports to the Board of Directors and

|  |  | 1 | any recommendations to the Board for |
| --- | --- | --- | --- |
|  | met ﬁve | times during the year. |  |
| Sarika Patel |  |  | improvement of the audit process; |

The terms of reference are reviewed annually.
### |Chair of the Audit and Risk Committee – reviewing and recommending for approval
The Committee last reviewed its terms of
the Viability and Going Concern Statements
reference in March 2024 and is satisﬁed that it is
and reviewing the work prepared by the
still operating effectively.
Investment Manager in support of these
The main functions of the Audit and Risk statements;
Committee are: – monitoring the current and emerging risk
exposures on behalf of the Board and
– considering and understanding the key risks
challenging the actions taken to mitigate
of misstatement of the ﬁnancial statements
against such risks, taking into account
and formulating an appropriate plan to review
scenario analysis;
and address these and agreeing with the
– ensuring the adequacy and effectiveness of
Investment Manager its processes to manage
the internal control and risk management
these risk areas;
systems;
– reviewing the appropriateness of the
– assessing, and recommending to the Board
Company’s accounting policies;
for approval, the contents of the half-year and
– reviewing the valuation of the Company’s
annual ﬁnancial statements and reviewing
investment portfolio prepared by the
the independent auditor’s report on these,
Investment Manager and making a
including consideration as to whether the
recommendation to the Board on the
ﬁnancial statements are overall fair, balanced
valuation;
and understandable;
– reviewing the appropriateness of the
Company’s accounting policies;
1. The Audit and Risk Committee had four scheduled meetings during the reporting period and received one
valuation update from the Investment Manager.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 84
## Audit and Risk Committee Report continued
– ensuring the adequacy and effectiveness of Signiﬁcant Activities in the Year – reviewing climate change risks and discussing Market quotations are not available for these
the internal control and risk management with the Investment Manager their current ﬁnancial assets, and therefore their valuation is
During the year, the Audit and Risk Committee’s
systems; actions outlined to mitigate future climate undertaken using predominantly a discounted
discussions have been broad, ranging and
– reviewing the effectiveness of controls of change risk impact; cash ﬂow methodology, or a similar method
focused on, but not limited to:
subcontractors and suppliers; – conducting a review of the risk management to determine the fair value of an investment.
– agreeing the audit plan and fees with the
systems of the Company and its third-party This requires a number of material estimates to
– considering, and recommending to the Board
independent auditor in respect of the review
service providers, and introducing further be made, as further explained in Note 3 to the
for approval, the Investment Manager’s
of the half-yearly report for the six months
enhancement to the system; ﬁnancial statements.
recommendations to changes in the
ended 30 September 2023 and the statutory
Company’s Risk Management Policy and – reviewing the Investment Manager’s ongoing The valuation process and methodology was
audit of the Annual Report for the year ended
Treasury Policy; programme of stress scenarios aimed at discussed by the Audit and Risk Committee
31 March 2024, including the principal areas
– reviewing the Company’s risk appetite and understanding the impact on the Company with the Investment Manager at the time of
of focus;
overall risk management approach; ofplausible downside scenarios; the interim review, in March 2024, prior to the
– receiving and discussing with the independent
– considering any report or information – reviewing the Company’s Risk Management year-end valuation process, and again post
auditor their report on the results of the
received in respect of whistleblowing; Policy and Treasury Policy; and year end in May 2024 and June 2024 as part of
review of the half-yearly ﬁnancial statements
– reviewing reports of internal controls of key the year-end sign-off process. The Investment
– reviewing the adequacy of arrangements for and the year-end audit;
advisers and gaining assurance from the Manager carries out a valuation semi-annually
its contractors and external third parties to
– meeting independently with the external
Investment Manager and Administrator on and provides a detailed valuation report to the
raise concerns about possible wrongdoing;
auditor, including the new audit partner
these. Company.
– reviewing the Company’s procedures for following the mandatory rotation of the
detecting fraud and the systems and controls previous audit partner in accordance with In addition to formal Audit and Risk Committee The Audit and Risk Committee reported to the
for the prevention of bribery; and theFRC’s Ethical Standard for Auditors; meetings during the year, the Committee has Board on the challenges it made to the valuation
– reporting to the Board on how it has had regular contact and meetings with the and the outcome of discussions with the
– reviewing and challenging information
discharged its duties. Investment Manager, the Administrator and the Investment Manager and independent auditor
received from the Investment Manager
independent auditor. on the valuation, particularly in relation to key
recommending the rationale for preparing
None of the members of the Audit and Risk
judgements. The Audit and Risk Committee met
the ﬁnancial statements on a going concern
Committee have any involvement in the
with the independent auditor when it reviewed
### basis, including a viability statement. This Key Issues Considered for
preparation of the ﬁnancial statements of
and agreed the independent auditor’s Group
was discussed with the independent auditor
### the Company, as this has been contracted to FinancialStatements
audit plan, and also at the conclusion of the audit
prior to concluding that the recommendation
the Investment Manager and the Company’s After discussion with the Investment Manager
of the ﬁnancial statements, focusing much of
be made by the Committee that the Board
Administrator. and the independent auditor, the Audit and
its discussion on the valuation process and the
approve the adoption of the ﬁnancial
Risk Committee determined that the key risks
The Audit and Risk Committee meets the outcome of the audit of the valuation.
statements on a going concern basis and
of misstatement of the Company’s ﬁnancial
independent auditor regularly and as required.
theirapproval of the viability statement; The Company engaged independent valuation
statements related to the valuation of the
It discusses the scope of annual audit work and
– reviewing and challenging the valuation experts to provide a report on a fair and
Company’s investment in SEEIT Holdco and in
audit ﬁndings with the independent auditor.
prepared by the Investment Manager and reasonable range of discount rates for the
turn the valuation of the underlying investments
The independent auditor attends the Audit
its valuation process, together with the investments in the portfolio as at 31 March2024.
held via SEEIT Holdco.
and Risk Committee meetings at which the
independent auditor; The Audit and Risk Committee received a
annual and interim ﬁnancial statements are

|  | – reviewing and recommending to the |  | presentation from the independent valuation |
| --- | --- | --- | --- |
| considered. The Committee also meets with the |  | Valuation of Investments |  |
|  | Board the continued application of IFRS 10 |  | expert and challenged the assumptions and |
| independent auditor without representatives |  | As outlined in Note 11 to the ﬁnancial statements, |  |
|  | investment entity, which is considered a key |  | conclusions as needed. The Audit and Risk |
| of the Investment Manager and Administrator |  | the total carrying value of the investment |  |
|  | judgement for the Company’s accounting |  | Committee was satisﬁed that this report |
| being present. The Committee has direct access |  | portfolio at fair value at 31 March 2024 was |  |
|  | policies; |  | conﬁrmed the reasonableness of the discount |
| to the independent auditor and to key senior |  | £1,117.4million (31 March 2023: £1,099.6 million). |  |

rates applied by the Investment Manager in its
– reviewing the Company’s annual and
staff of the Investment Manager. It reports its
valuation of the portfolio as at 31 March 2024.
half-yearly ﬁnancial statements and
ﬁndings and recommendations to the Board,
recommending these to the Board for
which retains the ultimate responsibility for the
approval;
ﬁnancialstatements of the Company.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 85
## Audit and Risk Committee Report continued
Valuation of investments – The Audit and Risk Committee discussed with Key Risks Considered Macroeconomic and market risk
the Investment Manager the process adopted
### keyforecast assumptions The Company’s key risks are set out in more – reviewing the impact of global volatility
to arrive at the selected valuation discount
The Audit and Risk Committee considered in detail in the Risk Management Framework on in inﬂation, including the sensitivity of the
rates, which includes comparison with other
detail those assumptions that are subject to pages 62 to 64. valuations of the Company’s underlying
market transactions. These discount rates were
judgement and may have a material impact on investments to changes in inﬂation in the near,
The Audit and Risk Committee actively provides
cross checked against an independent review
the valuation. The key assumptions are: medium and long term;
risk management oversight, and reviews and
of valuation discount rates by the independent
– reviewing the impact of the Ukraine and
challenges on a regular basis the risk updates
valuation expert and the Audit and Risk
Valuation discount rates Middle East conﬂicts and the emerging risk
provided by the Investment Manager.
Committee satisﬁed itself that the rates applied
of larger-scale conﬂict as well as seeking
The vast majority of the underlying investments
were appropriate. The independent auditor These risks and reviews included:
assurance on compliance with sanctions;
are valued using a discounted cash ﬂow
explained to the Audit and Risk Committee the
valuation. A small selection of investments – reviewing the impact of potential global rises
results of its review and audit of the valuation,
### Counterparty and credit risk
were valued using other forms of fair value in corporation taxes, including the sensitivity
including its consideration of the Company’s
calculations, such as earnings multiples, and – reviewing the dynamic levels of risk of the valuations of the Company’s underlying
underlying cash ﬂow projections, the economic
certain investments were held at cost as the associated with the counterparties investments to potential changes not yet
assumptions and discount rates.

| most accurate reﬂection of their fair value. |  | associated with the Company’s investments; | enacted, discussing potential mitigants |
| --- | --- | --- | --- |
|  |  | – reviewing stress tests assessing the impact of | available to the Company and agreeing |
| The discount rates adopted to determine | Macroeconomic assumptions |  |  |
|  |  | material counterparty defaults; | reviews to be undertaken by the Investment |
| the valuation are selected by the Investment | Macroeconomic assumptions include inﬂation, |  |  |
|  |  | – assessing the Investment Manager’s | Manager; and |
| Manager and recommended to the Audit and | foreign exchange and tax rate assumptions. |  |  |
|  |  | feedback on mitigants available to the | – reviewing the impact on the portfolio of a |
| Risk Committee. These discount rates are | The Investment Manager’s assumptions in this |  |  |
|  |  | Company; and | period of recessionary environment in the key |
| applied to the expected future cash ﬂows for | area are set out and explained in the Financial |  |  |
|  |  | – monitoring compliance with the Company’s | jurisdictions in which the Company operates. |
| each investment’s ﬁnancial forecasts to arrive | Review and Valuation Update on pages 35 to |  |  |
| at a discounted cash ﬂow valuation which is, in |  | Treasury Policy in relation to exposures to |  |

44. The Audit and Risk Committee reviewed
### turn, sensitive to the discount rate selected. The deposit takers. Internal Controls and
and discussed the methodology by which the
### Investment Manager is experienced and active RiskManagement
Investment Manager derived the assumptions
in the valuation of these investments and adopts Operations and business The Audit and Risk Committee is responsible for
and agreed its appropriateness.
### discount rates which reﬂect their understanding interruptionrisk reviewing and monitoring the effectiveness of
of the current market. It is noted, however, that the Company’s internal control systems and risk
### Other key assumptions – receiving updates from the Investment
the judgement required is subjective and there management systems on which it is reliant.
Manager on the risks speciﬁc to each asset
The Investment Manager has discussed and
are a range of discount rates which could be
and the potential impact of these risks on
agreed the key valuation assumptions with the The Board has considered the need for an
applied. The discount rate assumptions and the
the valuation of the Company’s portfolio as
Audit and Risk Committee. These included critical internal audit function, and it has decided that
sensitivity of the valuation of the investments
awhole; and
estimates and judgements regarding future cash the systems and procedures employed by the
to this discount rate are set out in the Financial
ﬂow assumptions, predominantly for investments – receiving and challenging regular formal and Investment Manager and the Administrator,
Review and Valuation Update on pages 35 to 44
in Primary Energy, Onyx, RED-Rochester, Oliva informal updates from the Investment Manager including their own internal review processes and
and Note 4 on pages 113 and 114.

| Spanish Cogeneration and Värtan Gas. In relation | on the level of business interruption or potential | processes in place in relation to the Company, |
| --- | --- | --- |
| to certain key judgements underpinning the | for business interruption at the operational | provide sufﬁcient assurance that a sound |
| valuation, the Investment Manager has provided | level of the investments, particularly focusing | system of internal control, which safeguards the |
| sensitivities showing the impact of changing | on identiﬁable event risks. | Company’s assets, is maintained. An internal |
| economic assumptions, further described in |  | audit function speciﬁc to the Company is |
| Note 3 on pages 111 and 112. These have been |  | therefore considered unnecessary at this time; |
| reviewed by the Investment Manager and the |  | however, the Board is keeping this under regular |
| Audit and Risk Committee to assist in forming an |  | review and focuses on identifying any areas |
| opinion on the fairness and balance of the Annual |  | where internal control improvements can be |
| Report, together with their conclusion on the |  | made. |

overall valuation.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 86
## Audit and Risk Committee Report continued

| The Audit and Risk Committee recognises that | Non-audit services generally only cover reviews | The Audit and Risk Committee is satisﬁed |
| --- | --- | --- |
| these control systems can only be designed to | of interim ﬁnancial statements and capital | with PwC’s effectiveness and independence |
| manage rather than eliminate the risk of failure | raising work. The independent auditor may not | as auditor, having considered the degree |
| to achieve business objectives. It is understood | undertake any work for the Company in respect | of diligence and professional scepticism |
| that they provide reasonable, but not absolute, | of the preparation of the ﬁnancial statements, | demonstrated by the ﬁrm. As such, the |
| assurance against material misstatement or loss, | preparation of valuations used in ﬁnancial | Committee has not considered it necessary |
| and rely on the operating controls established by | statements, provision of investment advice, | during this period to conduct a tender process |
| the Company’s Administrator and the Investment | taking management decisions or advocacy work | for the appointment of its independent auditor |
| Manager. | in adversarial situations. | for the year ending 31March 2025. Resolutions |

to reappoint PwC and authorise the Board
The Audit and Risk Committee assesses the The total proposed fees for audit services
to determine the Auditor’s remuneration
effectiveness of the internal controls, internal amounted to £0.7 million for the year ended
will be proposed at the forthcoming Annual
ﬁnancial controls and risk management systems 31March 2024, and £0.2 million related to the
GeneralMeeting.
on a continuing basis and receives regular audit of its direct subsidiary, SEEIT Holdco, and
reports on these systems. The Committee some of the SEEIT Group’s intermediate and In accordance with the FRC’s guidance, the audit
believes that the Company’s internal controls and project subsidiaries. Non-audit fees amounted will be tendered within ten years of the initial
processes are satisfactory, and that appropriate to £80k for the year ended 31 March 2024 due to appointment. As this is the sixth audit conducted
systems are in place. the interim review of the Company’s half-yearly by PwC and the ﬁfth full year of operation of the
ﬁnancial statements. Company, it is not expected that the Company
### Appointment of the will tender the external audit in the near future.
Notwithstanding such non-audit services, the
Following the rotation of the previous audit
### IndependentAuditor Audit and Risk Committee considers PwC to
partner at the end of the 2023 full-year audit, this
PricewaterhouseCoopers LLP (“PwC”) was be independent of the Company and that the
is the Company’s ﬁrst audit with the new audit
appointed as independent auditor for the provision of such non-audit services is not a
partner, MilesSaunders.
SEEIT Group at the IPO of the Company in threat to the objectivity and independence of
December2018. theconduct of the audit. The Audit and Risk Committee will conduct a
formal review of PwC following the issue of these
The objectivity of the independent auditor is To fulﬁl its responsibility regarding the
ﬁnancial statements to ensure that the Audit
reviewed by the Audit and Risk Committee, independence of the independent auditor, the
and Risk Committee considers all aspects of the
which also reviews the terms under which Audit and Risk Committee considered:
independent auditor’s service and performance.
the independent auditor may be appointed
– a report from the independent auditor
to perform non-audit services. The Audit
describing their arrangements to identify,
### Whistleblowing
and Risk Committee reviews the scope and
report and manage any potential
results of the audit, its cost-effectiveness The Board has a Whistleblowing Policy which
independence threats; and
and the independence and objectivity of the details how the Board, staff of the Company’s
– the extent of non-audit services provided by
independent auditor, with particular regard to key advisers and project companies may, in
the independent auditor.
any non-audit work that the independent auditor conﬁdence, raise any concerns. The policy is
may undertake and the level of non-audit fees. To assess the effectiveness of the external audit reviewed annually.
In order to safeguard auditor independence process, the Audit and Risk Committee reviewed:
and objectivity, the Audit and Risk Committee
– the independent auditor’s fulﬁlment of the
ensures that any other advisory and/or
agreed audit plan and variations from it;
### consulting services provided by the independent Sarika Patel
– the evaluations from the Investment Manager
auditor do not conﬂict with its statutory audit Chair of the Audit and Risk Committee
and Administrator on the performance of the
responsibilities.
independent auditor’s team; and
– all reports highlighting any signiﬁcant issues
that arose during the course of the audit.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 87
## Directors’ Remuneration Report
The Remuneration Committee is chaired by The key activities during the year included:
Emma Grifﬁn and the membership of the
– selecting a suitably qualiﬁed independent
Committee comprises all Directors of the
professional external remuneration consultant
Company, all of whom are independent and
to undertake a review of the Directors’ annual
non-executive.
remuneration;

| The Board is satisﬁed that the Committee is | – reviewing advice received in early 2024 |
| --- | --- |
| properly constituted. Tony Roper, the Company’s | from an independent professional external |
| Chair, is a member of the Remuneration | remuneration consultant; and |

Committee given his independence at the time of
– discussing and agreeing the level of Directors’
his appointment and throughout his service.
annual remuneration to be recommended to
The Board presents the Directors’ Remuneration the Board for the next ﬁnancial year.
Report for the year ended 31 March 2024, which
These activities are described further below.
is made up of two sections: the Annual Report on
Regulation requires the Company’s independent
Remuneration and the Directors’ Remuneration
auditor to audit certain disclosures provided.
Policy report.
Where disclosures have been audited, they
are indicated as such. The auditor’s opinion is
### Annual Report on Remuneration
included in their report on pages 99 to 103.
The Remuneration Committee’s main functions
include:
### Statement of the Chair of the
### Emma Grifﬁn
– agreeing the policy for the remuneration of
### Remuneration Committee
### |Chair of the Remuneration Committee the Directors and reviewing and proposing
The Committee assists the Board in developing
changes to the Company’s Remuneration
a fair and transparent framework for setting the
Policy;
levels of Directors’ remuneration while having
– reviewing and considering ad hoc fees to the
regard to the Company’s ﬁnancial position and
Directors in relation to duties undertaken over
performance, remuneration in other companies
and above routine business; and
of comparable scale and complexity and market
– appointing independent professional external statistics generally. It also reviews the ongoing

|  | remuneration consultants, as may be required |  | appropriateness and relevance of the Directors’ |
| --- | --- | --- | --- |
|  | from time to time. |  | Remuneration Policy. No Director is involved in |
|  |  | 1 | determining their own remuneration. |
| The Remuneration Committee met three |  | times |  |
| during the year and operates within clearly |  |  | The Board may determine that additional |
| deﬁned terms of reference, which are available |  |  | remuneration may be paid, from time to time, |
| on the Company’s website. The Committee |  |  | to any one or more Directors in the event such |
| reviewed its terms of reference in March 2024 to |  |  | Director or Directors are requested by the Board |
| ensure that it continues to operate effectively. |  |  | to perform extra or special services on behalf of |

the Company. Where the Company requires the
Directors to work on speciﬁc corporate actions,
such as the raising of further equity, an additional
fee will be determined, on each occasion, by the
Committee and recommended to the Board.
1. The Remuneration Committee had one scheduled meeting during the reporting period and met on two further
occasions on an ad hoc basis to discuss remuneration matters.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 88
## Directors’ Remuneration Report continued
Directors’ Remuneration Review and Review of Directors’ Fees for the Year Directors’ Remuneration for the Year Ended 31 March 2024 (audited)
### to31 March 2025 The table below sets out the Directors’ remuneration for the year ended 31 March 2024:
During the year, the Committee engaged an independent external remuneration consultant, Trust
Fees for the Fees for the
Associates 2022 LLP (“Trust Associates”), who have particular expertise in the investment company
year ended year ended
sector, to carry out a review of the remuneration paid to the Company’s Directors. Trust Associates
31 March 2024 31 March 2023
had also undertaken a review of the Directors’ remuneration in 2021.
Total Total
£’000 £’000
The methodology employed by Trust Associates included comparing the remuneration of the
Directors to that of c.305 companies in the investment company sector generally, as well as peer 3
Tony Roper Chair 69.5 69.5
group companies and the infrastructure sector. Trust Associates spoke individually to each Director,
Helen Clarkson Management Engagement Committee
who also provided written detail on estimated time spent on the business of the Company and
1 3
Chair 51.5 49.5
other factors that they believed should be considered when setting fee levels. Trust Associates also

|  |  | 1 |  | 3 |
| --- | --- | --- | --- | --- |
| spoke to senior members of the Investment Manager to understand their perspective of the Board’s | Emma Grifﬁn Remuneration Committee Chair 51.5 |  | 51.5 |  |
| work and time commitment. As part of their review, Trust Associates also considered the impact |  | 1 |  | 3 |
|  | Chris Knowles Senior Independent Director 51.5 |  | 51.5 |  |

of inﬂation, given that CPI had increased 19% between April 2021 and January 2024, the market

|  |  |  |  | 2 |  | 3 |
| --- | --- | --- | --- | --- | --- | --- |
|  | APM |  | Sarika Patel Audit and Risk Committee Chair 54.5 |  | 54.5 |  |
| capitalisation and the discount to NAV |  | . |  |  |  |  |

Total 278.5 276.5
Following their review, Trust Associates provided a report to the Remuneration Committee with their
recommendations which were accepted by the Remuneration Committee. The recommendations of 1. These ﬁgures include an annual supplement of £2,000 paid to each of Helen Clarkson, Emma Grifﬁn and
the Remuneration Committee, in relation to the fees of the Directors for the year to 31 March 2025, Chris Knowles for their respective roles as Chair of the Management Engagement Committee, Chair of the
Remuneration Committee and Senior Independent Director.
which were considered carefully, are set out below. Increases will be implemented in two phases,
subject to approval by shareholders of the advisory vote on the Remuneration Policy at the Annual 2. This ﬁgure includes an annual supplement of £5,000 paid to Sarika Patel for her role as Chair of the Audit and
General Meeting in September 2024. The initial increase would then be backdated to 1 April 2024 as Risk Committee.
follows: 3. This ﬁgure includes the sum of £2,500 that was agreed to be paid to each Director on top of their base fee
inrespect of work undertaken in relation to the capital raising in September 2022.
– the base annual Directors’ fee be increased to £55,000 (2024: £49,500);
– the annual fee paid to the Company’s Chair be increased in two stages to £76,000 in the ﬁnancial The Directors’ remuneration for the year ended 31 March 2024, detailed in the table above, is
year ending 31 March 2025 and then to £82,500 in the ﬁnancial year ending 31 March 2026 (2024: inclusive of the increases in the Directors’ fees noted in the Directors’ Remuneration Report
£69,500); approved by the shareholders at the AGM held on 11 September 2023.
– the annual fee paid to the Company’s Audit and Risk Committee Chair be increased in two stages The Directors are also entitled to be paid all reasonable expenses properly incurred by them in
to £61,000 in the ﬁnancial year ending 31 March 2025 and then to £66,000 in the ﬁnancial year connection with the performance of their duties. These expenses include those associated with
ending 31 March 2026 (2024: £54,000); AGMs, Board or Committee meetings and legal fees. During the year, such expenses were de minimis
– the annual supplement paid to the Audit and Risk Committee Chair was removed (2024: £5,000); and were in line with the Directors’ Expenses Policy.
– the annual supplement for the roles of the Senior Independent Director, the Remuneration
There are no other taxable beneﬁts payable by the Company other than certain expenses which may
Committee Chair and the Management Engagement Committee Chair to be removed
be deemed to be taxable. None of the above fees were paid to third parties.
(2024:£2,000);
– additional fees, up to a limit of £10,000 per Director, can be paid for speciﬁc corporate work that
may be undertaken during the year. There were no additional fees recommended for the year
ended 31 March 2024 (2024: £10,000); and
– the cap on the aggregate annual Directors’ base remuneration remains at £400,000
(2024:£400,000).
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 89
## Directors’ Remuneration Report continued
### Annual Percentage Change in the Directors’ Remuneration
The annual percentage change in remuneration in respect of the ﬁnancial years prior to the current year in respect of each Director’s role is detailed in the table below. The annual percentage change is
calculated based on the aggregate annual base Directors’ remuneration plus any additional fees, where applicable, for additional corporate work or acting in the role as either Chair of the Company, Senior
Independent Director or as the Chair of a Board Committee.
Director Role Date appointed 2020-2021 2021-2022 2022-2023 2023-2024
Tony Roper Chair 12 October 2018 11.1% 30.0% 3.1% —
1
Helen Clarkson Management Engagement Committee Chair 12 October 2018 14.2% 25.0% (6.0)% 4.0%
Emma Grifﬁn Remuneration Committee Chair 21 October 2020 — 17.5% 4.3% —
Chris Knowles Senior Independent Director 12 October 2018 14.2% 17.5% 4.3% —
2
Sarika Patel Audit and Risk Committee Chair 1 January 2022 N/A N/A — —
1. Helen Clarkson was the Audit and Risk Committee Chair for the period from 1 April 2021 to 1 January 2022, although received fees consistent with remuneration of the Audit and Risk Committee Chair up to 31 March 2022 to ensure an
orderly handover to Sarika Patel.
2. Sarika Patel was appointed as a Non-Executive Director and Audit and Risk Committee Chair on 1 January 2022, and fees were paid pro-rata for the year ended 31 March 2022 accordingly. If Sarika had been a Non-Executive Director
and the Audit and Risk Committee Chair for the full year to 31 March 2022, the annual percentage change in her remuneration for the year to 31 March 2023 would be 4.0%.
### Relative Importance of Spend on Pay
The table below sets out the total remuneration paid to the Directors in comparison to total aggregate amount of dividends paid to the Company’s shareholders for the year ended 31 March 2024:

|  | Year to |  | Year to |
| --- | --- | --- | --- |
| 31 March 2024 |  | 31 March 2023 |  |
|  | £’000 |  | £’000 % change |

Directors’ remuneration 278.5 276.5 0.72
Dividends paid to shareholders 67,199 62,029 8.33
### Company Performance
### Shareholder return since IPO
40.0%
30.0%
20.0%
10.0%
0.0%
(10.0%)
(20.0%)
(30.0%)
(40.0%)

|  | Dec | May | Oct | Mar | Aug |  | Jan |  | Jun |  | Nov | Apr | Sep | Feb | Jul | Dec | May |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 18 | 19 | 19 | 20 | 20 |  | 21 |  | 21 |  | 21 | 22 | 22 | 23 | 23 | 23 | 24 |
| 50.0% |  |  |  |  |  | SEEIT: (21.1%) |  | FTSE 100: +18.3% |  | FTSE 250: +13.7% |  |  |  |  |  |  |  |

The graph above highlights the comparative total shareholder return (“TSR”) for an investment in the Company from inception to 31 March 2024 compared with an investment in the FTSE 250 index over the
same period. The Company is a member of the FTSE 250 and All-Share Index, hence they have been selected for this graph.
The Board is responsible for the Company’s investment strategy and performance, although day-to-day management of the Company’s affairs, including the management of the Company’s portfolio, has
been delegated to the Investment Manager. An explanation of the performance of the Company is given in the Financial Review and Valuation Update on pages 35 to 44.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 90
## Directors’ Remuneration Report continued
### Directors’ Interests in the Company (audited) Statement of Voting at AGM on the Annual Report
As at 31 March 2024, the interests of the Directors and any Persons Closely Associated (“PCAs”), as A binding ordinary resolution approving the Remuneration Policy was approved by shareholders at
deﬁned in Article 3(1)(26) of the UK Market Abuse Regulation (“MAR”), in the ordinary shares of the the AGM held on 12 September 2022 and an advisory vote adopting the Directors’ Remuneration
Company are set out in the table below: Report for the year ended 31 March 2023 was approved by shareholders at the AGM held on
11September 2023.
Ordinary shares Ordinary shares
The votes cast were as follows:
of £0.01 each held of £0.01 each held
at 31 March 2024 at 31 March 2023
Directors’

| Tony Roper 198,500 148,500 |  | Remuneration |  |  | Remuneration |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Report |  | Policy |
| Helen Clarkson 20,000 20,000 |  |  | (AGM 2023) |  | (AGM 2022) |  |
| Emma Grifﬁn 20,509 20,509 | Votes for 832,588,649 838,755,779 |  |  |  |  |  |

1

| Chris Knowles | 126,000 94,000 | % 94.22 99.68 |
| --- | --- | --- |
| Sarika Patel 30,000 25,000 |  | Votes against 51,039,516 2,723,252 |
| Total 395,009 308,009 |  | % 5.78 0.32 |
| 1. Chris Knowles’ spouse, whom under MAR is his PCA, holds 49,000 ordinary shares in the Company and these are |  | Total votes cast 883,628,165 841,479,031 |

included in the ﬁgure shown in the above table.
Votes withheld 45,696 29,735
There have been no changes to any of the above holdings between 31 March 2024 and the date of
this report. A resolution to approve this Directors’ Remuneration Report in respect of the year ended
31March2024 will be proposed at the forthcoming AGM. The Directors’ Remuneration Policy is
None of the Directors or any of their PCAs had a material interest in the Company’s transactions,
required to be presented to shareholders for approval every three years and is due to be next
arrangements or agreements during the year.
presented at the AGM to be held in 2025.
As at the date of this report, Jonathan Maxwell, CEO and Founder of the Investment Manager, holds
240,000 ordinary shares. Jonathan Maxwell is considered to be a Person Discharging Managerial
### Remuneration Policy
Responsibilities (“PDMR”) by both the Board of Directors and Investment Manager.
This Remuneration Policy provides details of the Remuneration Policy for the Directors of the
There have been no changes in the year in respect of each of the Directors as notiﬁable to the Company. All Directors are independent and non-executive, appointed under the terms of letters of
Company in accordance with DTR 3.1.2. appointment, and none of the Directors has a service contract. The Company has no employees.
This Remuneration Policy was approved by shareholders at the AGM of the Company held on
12September 2022 and is also available on request at the Company’s registered ofﬁce.
The Company follows the recommendation of the AIC Code that Non-Executive Directors’
remuneration should reﬂect the time commitment and responsibilities of the role.
The Board’s policy is that the remuneration of Non-Executive Directors should reﬂect 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 Directors’ remuneration is determined by the Remuneration Committee,
at its discretion within the current aggregate limit of £400,000, as set out in the Company’s Articles
of Association.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 91
## Directors’ Remuneration Report continued
There are no performance conditions attached to the remuneration of the Directors as the Board Proposed Base Directors’ Fees to be Paid for the Year Ending 31 March 2025:
does not consider such arrangements or beneﬁts necessary or appropriate for Non-Executive
Proposed base
Directors. fees to be paid for Base fees paid
the year ending for the year ended
The Company is committed to ongoing shareholder dialogue and any views expressed by
31 March 2025 31 March 2024
shareholders on the fees being paid to Directors would be taken into consideration by the Board
Total Total
when reviewing the Directors’ Remuneration Policy and in the annual review of Directors’ fees.

|  |  | £’000 |  | £’000 |
| --- | --- | --- | --- | --- |
| Under the Directors’ letters of appointment, there is no notice period. All Directors of the Company |  |  | 1 |  |
|  | Tony Roper Chair 76.0 |  |  | 69.5 |

receive an annual fee appropriate for their responsibilities and time commitment but no other
Helen Clarkson Management Engagement Committee
incentive programme or performance-related emoluments. As such, there are:
Chair 55.0 51.5
– no service contracts with the Company;
Emma Grifﬁn Remuneration Committee Chair 55.0 51.5
– no long-term incentive schemes;
Chris Knowles Senior Independent Director 55.0 51.5
– no options or similar performance incentives; and
2
– no payments for loss of ofﬁce unless approved by shareholder resolution. Sarika Patel Audit and Risk Committee Chair 61.0 54.5
The Directors’ remuneration shall: Total 302.0 278.5
1. Chair’s increase to be in two stages: £76,000 and £82,500, respectively.
– reﬂect the responsibility, experience, time commitment and position of each Director on the
Board; 2. Audit and Risk Committee Chair’s increase to be in two stages: £61,000 and £66,000, respectively.
– allow the Chair and the Audit and Risk Committee Chair to be remunerated in excess of any
The Board also considered the availability of each Director, taking into account their other
potential remaining Board members to reﬂect their increased roles of responsibility and
commitments, and concluded that each Director made adequate time available for the appropriate
accountability;
discharge of the Company’s affairs. Each Director abstains from voting on their own individual
– be paid quarterly in arrears; remuneration.
– include remuneration for additional, speciﬁc corporate work, which shall be carefully considered
The Directors’ Remuneration Report was approved by the Board on 26 June 2024 and signed on
and only become due and payable on completion of that work; and
its behalf by:
– be reviewed annually and, at least every three years, by an independent professional external
remuneration consultant with experience of investment companies and their fee structures.
Following the report of Trust Associates, who had been engaged to carry out a remuneration view
### of the Directors, the Remuneration Committee met in March 2024 to consider the current levels of Emma Grifﬁn
Directors’ remuneration and the proposed level of base Directors’ remuneration for the year ending Chair of the Remuneration Committee
31 March 2025. The proposed remuneration recommendations for the year ending 31 March 2025
would result in an increase in the aggregate Directors’ annual base remuneration to £313,500 in
the coming year. This included removing the premium for certain Committee Chairs and the Senior
Independent Director and staggering the increase of the Board Chair and Audit and Risk Committee
Chair over two stages. The Board accepted the Committee’s recommendation for the base level of
the Directors’ remuneration for the year ending 31 March 2025, per the table below.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

92

## Report of the Directors

The Directors are pleased to present the Annual Report for the year ended 31 March 2024. In accordance with the Companies Act 2006 (as amended), the Listing Rules and the Disclosure Guidance and Transparency Rules, the Corporate Governance Statement, the Directors' Remuneration Report, the Audit and Risk Committee Report, the Nomination Committee Report and the Statement of Directors' Responsibilities should be read in conjunction with one another and the Strategic Report. As permitted by legislation, some of the matters normally included in the Directors' Report have instead been included in the Strategic Report, as the Board considers them to be of strategic importance. Therefore, a review of the business of the Company, recent events and outlook can be found in the Strategic Report. The Company and Portfolio Review on pages 11 to 68. Information regarding Environmental, Social and Governance matters can be found Strategic Report: ESG and Risk on pages 45 to 64.

### Corporate Governance

The Company's Corporate Governance Statement is set out in the Corporate Governance Statement on pages 72 to 80 and forms part of this report.

Details regarding independent professional advice and insurance are set out in the Corporate Governance Statement on pages 72 to 80.

### Principal Activity

The Company is a closed-ended UK investment trust that invests in energy efficiency infrastructure projects. Further details can be found in the Strategic Report on pages 11 to 68. The Directors do not anticipate any change in the principal activity of the Company in the foreseeable future.

### Investment Trust Company Status

The Company has been approved as an investment trust under Sections 1158/1159 of the Corporation Tax Act 2010. The Company has continued to meet relevant eligibility conditions and ongoing requirements as an investment trust, in particular that the Company must not retain more than 15% of its eligible investment income. The Directors are of the opinion that the Company continues to conduct its affairs as an Approved Investment Trust under the Investment Trust (Approved Company) (Tax) Regulations 2011.

### Non-Mainstream Pooled Investments

As a UK investment trust, the Company's shares are excluded from the restrictions in the FCA Rules on the marketing of non-mainstream pooled investments ("NMPs") to "ordinary retail clients" and the Company is accordingly not considered to be a NMP. The Company currently conducts its affairs and intends to continue to do so for the foreseeable future, in order that its shares can be recommended by a financial adviser to ordinary retail investors in accordance with the FCA Rules on NMPs. As an equity security admitted to listing on the premium listing segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange, the ordinary shares of the Company are expected to qualify as a readily realisable security. Accordingly, it will not be either a (i) speculative liquid security; (ii) a non-mass market investment; or (iii) a restricted mass market investment.

### Directors

The Directors in office at the date of this report and their biographical details are shown in the Board of Directors on page 71.

Details of the Directors' terms of appointment can be found in the Corporate Governance Statement on pages 72 to 80. The beneficial interest of the Directors and their connected persons in the ordinary shares of the Company are set out in the Directors' Remuneration Report on pages 87 to 91.

### The Investment Manager

The Company and the Investment Manager entered into the Investment Management Agreement pursuant to which the Investment Manager has been given responsibility, subject to the overall supervision of the Board, for active discretionary investment management of the portfolio in accordance with the Company's investment objective and policy.

The Investment Manager is authorised and regulated as an alternative investment fund manager ("AIFM") by the FCA and, as such, is subject to the FCA rules in the conduct of its investment business.

As the entity appointed and responsible for risk management and portfolio management, the Investment Manager is the Company's AIFM. The Investment Manager has full discretion under the Investment Management Agreement to make investments in accordance with the Company's investment policy. This discretion is, however, subject to:

(i) the Board's ability to give instructions to the Investment Manager from time to time; and
(ii) the requirement of the Board to approve certain investments where the Investment Manager has a conflict of interest in accordance with the terms of the Investment Management Agreement.

The Investment Manager also has responsibility for financial administration and investor relations, advising the Company and its Group in relation to the strategic management of the portfolio, advising the Company in relation to any significant investments and monitoring the Company's funding requirements.

The Board keeps the performance of the Investment Manager under continual review. The Directors believe that the continuing appointment of the Investment Manager, on the agreed terms, is in the best interest of the Company and its shareholders as a whole.

Further information on the SDCL Group can be found on the website: https://www.sdcigroup.com/.

### Articles of Association

The Company's Articles of Association set out its internal regulations and cover the rights of the shareholders, the appointment of Directors and the conduct of the Board and general meetings.

The Articles of Association may be amended by the shareholders of the Company by special resolution (requiring a majority of at least 75% of the persons voting on the relevant resolution).
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

93

## Report of the Directors continued

### AIFM Requirements

AIFM Directive ("AIFMD") requirements have continued to apply since 1 January 2021, through existing transposed rules replicating EU AIFM Directive (2011/61/EU), within the rules of the UK's FCA. AIFMD requirements impose detailed and prescriptive obligations on fund managers, including prescriptive rules on measuring and capping leverage, the treatment of investors, liquidity management, the use of depositories and cover for professional liability risks. The AIFMD requirements further impose conditions on the marketing of entities such as the Company to investors in the UK.

### Independent Auditor and Disclosure of Information

PricewaterhouseCoopers LLP has expressed its willingness to continue in office as independent auditor of the Company, and resolutions for its reappointment and to authorise the Audit and Risk Committee to determine its remuneration will be proposed at the forthcoming AGM.

Further information about the Company's independent auditor, including tenure, can be found in the Audit and Risk Committee Report on page 83 to 86.

### Financial Risk Management

The principal risks and uncertainties facing the Company are set out in Risk Management Framework. Information about the Company's financial risks and policies for managing these risks are set out in Note 13 to the financial statements.

### Foreign Account Tax Compliance Act ("FATCA") and the OECD Common Reporting Standards ("CRS")

The Board, in conjunction with the Company's service providers and advisers, will ensure the Company's compliance with FATCA and CRS requirements are to the extent relevant to the Company.

### Share Capital

As at 31 March 2024 and 26 June 2024, being the last practicable date prior to the publication of this Annual Report, the issued share capital of the Company was 1,108,709,053 ordinary shares, with 23,289,495 shares held in treasury, thereby leaving a total voting rights figure of 1,085,419,558.

Details of movements in share capital during the year are shown in Note 12 to the financial statements.

The Company has one class of ordinary shares which carry no rights to fixed income and have no restrictions attached to them. Shareholders are entitled to all dividends paid by the Company and, on a winding up, provided the Company has satisfied all of its liabilities, the shareholders are entitled to all of the surplus assets of the Company.

Shareholders are entitled to attend and vote at all general meetings of the Company and, on a poll, to one vote for each ordinary share held.

### Treasury Shares

The Companies Act allows companies to hold shares acquired by way of market purchase as treasury shares, rather than having to cancel them. This gives the Company the ability to re-issue ordinary shares quickly and cost effectively, thereby improving liquidity and providing the Company with additional flexibility in the management of its capital base. Ordinary shares will not be sold from treasury at a price less than the (cum income) NAV$^{1,2,3}$ per existing ordinary share at the time of their sale. As at 31 March 2024, the Company held 23,289,495 ordinary shares in treasury which is unchanged as at the date of this Annual Report.

### Share Repurchases and Discount Management

The Company may seek to address any significant discount to NAV$^{4,5,6}$ at which its ordinary shares may be trading by purchasing its own ordinary shares in the market on an ad hoc basis. As outlined above, 23,289,495 ordinary shares were bought back by the Company during the year to 31 March 2024.

At the AGM held on 11 September 2023, the Company was granted the authority to purchase up to 14.99% of the Company's ordinary share capital in issue at the date that the AGM notice was published, amounting to 163,871,572 ordinary shares.

The maximum price (exclusive of expenses) which may be paid for an ordinary share must not be more than the higher of:

- (i) 5% above the average of the mid-market values of the ordinary shares for the five business days before the purchase is made; or
- (ii) the higher of the price of the last independent trade and the highest current independent bid for the ordinary shares.

Ordinary shares will be repurchased only at prices below the prevailing NAV$^{4,5,6}$ per ordinary share, which should have the effect of increasing the NAV$^{4,5,6}$ per ordinary share for remaining shareholders.

It is intended that a renewal of the authority to make market purchases will be sought from shareholders at each AGM of the Company and authority for the Company to purchase up to 166,195,487 ordinary shares (subject to a maximum of 14.99% of the ordinary shares in issue, excluding those shares held in treasury, at the date of the AGM) will be sought at the forthcoming AGM. Purchases of ordinary shares will be made within guidelines established from time to time by the Board. Any purchase of ordinary shares would be made only out of the available cash resources of the Company. Ordinary shares purchased by the Company may be held in treasury or cancelled.

Purchases of ordinary shares may be made only in accordance with the Companies Act, the Listing Rules and the Disclosure Guidance and Transparency Rules.

Investors should note that the repurchase of ordinary shares is entirely at the discretion of the Board and no expectation or reliance should be placed on such discretion being exercised on any one or more occasions or as to the proportion of ordinary shares that may be repurchased.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 94
## Report of the Directors continued
### Share Premium Account Dividends to Shareholders
At the Company’s 2023 AGM, shareholders voted in favour of the special resolution authorising the The Company’s policy is to pay interim dividends on a quarterly basis, so typically there is no ﬁnal
Company to cancel £300 million of the amounts standing to the credit of its share premium account. dividend payable.
On 21 November 2023, following approval by the Court, the Company cancelled £300 million of its
The total aggregate interim dividends attributable to shareholders for the year amounted to
share premium account, creating distributable reserves which may be used by the Board to deliver
£67.2million (2023: £62.0 million).
returns to shareholders in the future, should they consider it appropriate to do so.
Details of the interim dividends paid during the year under review are noted in the table below:

| Signiﬁcant Voting Rights |  | Aggregate |  |
| --- | --- | --- | --- |
| As at 31 March 2024, the Company is aware or had been informed of the following notiﬁable |  | dividend paid |  |
|  | Dividend Year ended Dividend per share |  | £m |

interestsin the voting rights of the Company, in accordance with Disclosure Guidance and
Transparency Rule 5.1.2: Fourth interim dividend 31 March 2022 1.405p 16.4
Number of ordinary First interim dividend 31 March 2023 1.5p 16.9
shares held % of voting rights
Second interim dividend 31 March 2023 1.5p 16.9
Investec Wealth & Investment Limited 141,200,533 14.01
Third interim dividend 31 March 2023 1.5p 16.9
M&G plc 134,282,702 12.37
On 5 June 2024, the Board declared a fourth interim dividend of 1.56p per share with respect to the
GASC MGP, LLC 132,616,055 12.22
year ended 31 March 2024, payable on 28 June 2024.
BlackRock, Inc. 109,063,316 10.05
### Evelyn Partners 55,982,058 5.16 Going Concern
CCLA Investment Management 47,891,684 4.41 The Board and the Investment Manager have performed an assessment of the current exposure
to the conﬂicts in Ukraine, Russia and the Middle East and the potential impact to the Company’s
The Company has been informed of the following changes to notiﬁable interests between
and the portfolio companies’ operations. The Company is a UK registered public company. Currently
31March2024 and 26 June 2024, being the last practicable date prior to the publication of this
neither the Company, the Investment Manager nor the Company’s investments conducts business
Annual Report:
and operations in the regions; therefore the Company is not subject to any direct impact by this
Number of ordinary event. The Investment Manager duly considered any restriction imposed by relevant sanctions, and
shares held % of voting rights its impact on the portfolio companies and have concluded there are no direct material implications.
M&G plc 130,979,478 12.07 The Company has carried out an assessment of the impact of the global rise in inﬂation on its
portfolio and has concluded that overall there is a positive correlation to inﬂation and there is no
GASC MGP, LLC 147,066,055 13.55
adverse impact.
In assessing whether the Company is a going concern for a period of at least twelve months from the
approval of the Annual Report, the Directors have reviewed a cash ﬂow forecast to December 2025,
taking into consideration potential changes in investment and trading performance and applying a
10% reduction in income to test the resilience of cash ﬂows in the near term. The forecast results in
positive cash ﬂows for the foreseeable future that meets the liabilities as they fall due.
They also reviewed a severe downside scenario where the Company receives no income from its
investment for the next twelve months but continues with existing committed payments for running
the Company. Even under this stress scenario, the Company would have sufﬁcient cash reserves
to continue as a going concern. As at 31 March 2024, the Company’s net assets were £981.9 million
(March 2023: £1,125.4 million), including cash balances of £0.5 million (March 2023: £0.3 million).
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

95

## Report of the Directors continued

### Going Concern continued

Further amounts of cash are held by the Company's direct and indirect subsidiaries (including Holdco which has c.£3.4 million (March 2023: c.£65.4 million) at the year-end), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the payment of dividends and payments relating to the investment in new assets, both of which are discretionary.

The Company's single subsidiary, SEEIT Holdco, has £180m Revolving Credit Facility ("RCF") that has adequate headroom in its covenants that have been tested for historic and forward interest cover and loan to value limits. As at 31 March 2024, £155 million (March 2023: £nil) of the RCF was drawn down. The Company is a guarantor to the RCF but has no other guarantees or commitments.

The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than twelve months from the date of approval of the interim financial statements, and that it is appropriate to prepare the financial statements on a going concern basis.

### Directors' Responsibilities Pursuant to Section 172 of the Companies Act 2006

The Directors fulfilled their duties under Section 172 of the Companies Act 2006 to act in good faith and to promote the success of the Company for the benefit of shareholders as a whole. See pages 66 to 68 Stakeholders and Section 172 for further details.

### Employees and Officers of the Company

The Company does not have any employees and therefore employee policies are not required. The Directors of the Company who were in office during the year and up to the date of signing the financial statements are listed in the Board of Directors on page 71.

### Greenhouse Gas Emissions

Information about the Company's greenhouse gas emissions are set out in the SEEIT Climate Change Report on pages 54 to 60.

### Political Donations

The Company made no political donations during the year or the preceding year.

### Anti-Bribery and Tax Evasion

The Company is committed to ensuring that the Company, its subsidiaries, partners, agents and anyone contracted to it, including the Company's Investment Manager and key service providers, complies with the requirements of the UK Bribery Act 2010 or equivalent legislation in other jurisdictions.

The Company does not tolerate tax evasion in any of its forms in its Group or the project companies in which it invests. The Company complies with the relevant UK law and regulation in relation to the prevention of facilitation of tax evasion and supports efforts to eliminate the facilitation of tax evasion worldwide. It also works to make sure its business partners share this commitment.

The Company's Anti-Bribery and Criminal Finances Policy is published on the Company's website. These statements are reviewed annually by the Board.

### Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include certain information in a single identifiable section of the Annual Report or a cross-reference table indicating where the information is set out. The Directors confirm that there are no matters requiring disclosure in relation to Listing Rule 9.8.4.

**The Report was approved by the Board on 26 June 2024 and signed on its behalf by:**

Tony Roper **Chair**
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 96
## Statement of Directors’ Responsibilities
### Statement of Directors’ Responsibilities in Respect of theFinancial Directors’ Conﬁrmations
### Statements The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and
The Directors are responsible for preparing the Annual Report and the ﬁnancial statements in understandable and provides the information necessary for shareholders to assess the Company’s
accordance with applicable law and regulation. position and performance, business model and strategy.
Company law requires the Directors to prepare ﬁnancial statements for each ﬁnancial year. Under Each of the Directors, whose names and functions are listed in the Board of Directors on page 71,
that law, the Directors have prepared the ﬁnancial statements in accordance with UK-adopted conﬁrm that, to the best of their knowledge:
International Accounting Standards. – the Company ﬁnancial statements, which have been prepared in accordance with UK-adopted
Under company law, Directors must not approve the ﬁnancial statements unless they are satisﬁed International Accounting Standards, give a true and fair view of the assets, liabilities, ﬁnancial
that they give a true and fair view of the state of affairs of the Company and of the loss of the position and result of the Company; and
Company for that period. In preparing the ﬁnancial statements, the Directors are requiredto: – the Strategic Report: Portfolio Review includes a fair review of the development and performance
of the business and the position of the Company, together with a description of the principal risks
– select suitable accounting policies and then apply them consistently;
and uncertainties that itfaces.
– state whether applicable UK-adopted International Accounting Standards have been followed,
subject to any material departures disclosed and explained in the ﬁnancial statements accounts; In the case of each Director in ofﬁce at the date the Directors’ Report is approved:
– make judgements and accounting estimates that are reasonable and prudent; and – so far as the Director is aware, there is no relevant audit information of which the Company’s
– prepare the ﬁnancial statements on the going concern basis unless it is inappropriate to presume auditor is unaware; and
that the Company will continue in business. – they have taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Company’s auditor
The Directors are responsible for safeguarding the assets of the Company and hence for taking
is aware of that information.
reasonable steps for the prevention and detection of fraud and other irregularities.
The Annual Report and ﬁnancial statements were approved by the Board on 26 June 2024 and
The Directors are also responsible for keeping adequate accounting records that are sufﬁcient to
the above responsibility statement was signed on its behalf by:
show and explain the Company’s transactions and disclose with reasonable accuracy at any time the
ﬁnancial position of the Company and enable them to ensure that the ﬁnancial statements and the
Directors’ Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website.
### Tony Roper
Legislation in the United Kingdom governing the preparation and dissemination ofﬁnancial
Chair
statements may differ from legislation in other jurisdictions.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

07

# Financial Statements

## What's in this section

|  Independent Auditor's Report | 98  |
| --- | --- |
|  Statement of Comprehensive Income | 104  |
|  Statement of Financial Position | 105  |
|  Statement of Changes in Shareholders' Equity | 106  |
|  Statement of Cash Flows | 107  |
|  Notes to the Financial Statements | 108  |
|  Investment Policy | 121  |
|  Company Information | 123  |
|  Key Company Data | 125  |
|  Sustainable Finance Disclosure Regulation ('SFDR') | 124  |
|  Glossary | 131  |
|  Glossary of Financial Alternative Performance Measures ('APMs') | 133  |

![img-2.jpeg](img-2.jpeg)
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 98
## Independent Auditor’s Report
### to the members of SDCL Energy Efﬁciency Income Trust plc
### Report on the audit of the ﬁnancial statements Our audit approach
### Opinion Overview
In our opinion, SDCL Energy Efﬁciency Income Trust plc’s ﬁnancial statements: Audit scope
– The company invests in a diversiﬁed portfolio of energy efﬁciency projects through an
– give a true and fair view of the state of the company’s affairs as at 31 March 2024 and of its loss
intermediate holding company named SEEIT Holdco Limited. We performed an audit of the
and cash ﬂows for the year then ended;
company including its investment in SEEIT Holdco Limited.
– have been properly prepared in accordance with UK-adopted international accounting
– All of our audit work was conducted in the UK by the company audit team.
standards; and
– have been prepared in accordance with the requirements of the Companies Act 2006.
Key audit matters
We have audited the ﬁnancial statements, included within the Annual Report and Audited Financial
– Valuation of Investment at fair value through proﬁt or loss
Statements (the “Annual Report”), which comprise: the statement of ﬁnancial position as at
31March2024; the statement of comprehensive income, the statement of changes in shareholders’
Materiality
equity and the statement of cash ﬂows for the year then ended; and the notes to the ﬁnancial
– Overall materiality: £9.8m (2023: £11.3m) based on 1% of total assets.
statements, comprising material accounting policy information and other explanatory information.
– Performance materiality: £7.4m (2023: £8.5m).
Our opinion is consistent with our reporting to the Audit and Risk Committee.
### The scope of our audit
### Basis for opinion
As part of designing our audit, we determined materiality and assessed the risks of material
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) misstatement in the ﬁnancial statements.
and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’
responsibilities for the audit of the ﬁnancial statements section of our report. We believe that the
### Key audit matters
audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in the auditors’ professional judgement, were of most
signiﬁcance in the audit of the ﬁnancial statements of the current period and include the most
### Independence
signiﬁcant assessed risks of material misstatement (whether or not due to fraud) identiﬁed by the
We remained independent of the company in accordance with the ethical requirements that are auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
relevant to our audit of the ﬁnancial statements in the UK, which includes the FRC’s Ethical Standard, of resources in the audit; and directing the efforts of the engagement team. These matters, and
as applicable to listed public interest entities, and we have fulﬁlled our other ethical responsibilities in any comments we make on the results of our procedures thereon, were addressed in the context of
accordance with these requirements. our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s
Ethical Standard were not provided. This is not a complete list of all risks identiﬁed by our audit.
Other than those disclosed in the notes to the ﬁnancial statements, we have provided no non-audit
services to the company or its controlled undertakings in the period under audit.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 99
## Independent Auditor’s Report continued
### to the members of SDCL Energy Efﬁciency Income Trust plc
### Our audit approach continued Key audit matter How our audit addressed the key audit matter
### Key audit matters continued Determining the valuation We speciﬁcally considered management’s assessment of the
methodology and the inputs and impact of climate change on the fair valuation of investments
Ability to continue as a going concern (Continuation vote), which was a key audit matter last year, is
assumptions within the valuation is and tailored our audit approach to respond to the audit risks
no longer included because a continuation vote is only required once every three years. Otherwise,
subjective and complex particularly identiﬁed. In particular, we:
the key audit matter below is consistent with last year.
given the current macroeconomic
Key audit matter How our audit addressed the key audit matter – challenged management on how the impact of climate
conditions. There is also growing
commitments made by the company would impact the
Valuation of Investment at fair We planned our audit to critically assess management’s scrutiny on the valuation of
assumptions within the discounted cash ﬂows prepared by
value through proﬁt or loss assumptions and the investment valuation model in which investments given the potential
management that are used in the valuation of investment

|  | they are applied; | impacts of climate change. This, |  |
| --- | --- | --- | --- |
| The company has £983.8 million |  |  | at fair value through proﬁt or loss; |
| of investments recorded at fair |  | combined with the signiﬁcance of |  |

– evaluated whether the impact of both physical and
value and these are signiﬁcant in the unlisted investments balance in
transition risks arising due to climate risk had been
the context of the overall balance the statement of ﬁnancial position,
appropriately considered and included in the valuation; and
sheet of the company. See note 11 meant that this was a key audit
– with assistance from our valuation experts for certain assets,
for details. matter for our current yearaudit.
evaluated the appropriateness of the key assumptions
The company invests through a We have evaluated the design and implementation of used by management to model the impact of climate risk,
holding company which in turn relevant controls over the preparation of the portfolio including the reasonableness of adjustments to the future
holds debt and equity interests in valuation. However, we have not relied on controls as cash ﬂows and the discount rates where applicable.
project companies (the “underlying substantive procedures are determined to be more effective
We used our internal valuation specialists in the United
investment portfolio”) which are not for this audit;
Kingdom, Sweden and Spain to provide audit support in
listed and therefore are not actively
reviewing and concluding on the fair valuation of certain
traded.
investments in the underlying investment portfolio. They (a)
The fair value of the underlying We assessed the reasonableness of key assumptions made assessed the appropriateness of the valuation methodology
investment portfolio has principally by management in the applicable valuation models; and approach and (b) assessed the appropriateness of the
been valued on a discounted cash discounted cash ﬂow valuation models, including comparing
We tested the mathematical accuracy of a sample of the
ﬂow basis, which necessitates the discount rate and certain other key assumptions against
valuation models;
signiﬁcant estimates in respect those used by comparable market participants, where
of the forecasted cash ﬂows appropriate and/or other macroeconomic data and (c)
and discount rates applied. The concluded that the overall valuation is reasonable;
directors also engaged external
In addition, we have assessed the competence and
valuations experts to support them
objectivity of management’s experts and engaged with our
with determining the fair value of
valuation specialists to read the independent third-party
some investments.
reports that management have obtained to support the
The directors’ assessment of those We performed detailed testing over the signiﬁcant inputs valuation of certain assets within the portfolio. We conﬁrmed
fair values involves estimates in a sample of investment valuation models. The testing that they have been prepared using an appropriate
about the future results of the entailed obtaining appropriate supporting documentation methodology, conﬁrmed the source for the data inputs to
underlying businesses, in particular and audit evidence over the signiﬁcant inputs and challenging management’s models, and challenged key estimates; and
around future revenues and management to justify the estimates made;
As a result of our testing, we have obtained sufﬁcient audit
discount rates applied to future
evidence to conclude that the overall valuation of the
cash ﬂow forecasts. Based on
portfolio as a whole is materially reasonable.
the historical performance of
investments and best estimates of
future assumptions, the directors
believe that these fair values are
reasonable.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

100

## Independent Auditor's Report continued to the members of SDCL Energy Efficiency Income Trust plc

### Our audit approach continued

#### How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates.

As part of designing our audit approach, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.

#### The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the financial statements and the fair valuation of investments in particular. In addition to enquiries with management, we also understood the governance processes in place by the company to assess climate risk and read the additional reporting made by the entity within its Annual Report on climate, particularly focusing on the section where the company sets out its climate related risks.

We challenged the completeness of management's climate risk assessment by reading external reporting made by management. We challenged the consistency of management's assessment with internal climate plans and board minutes and considered the information published by the management on the entity's website and communications for details of climate related impacts.

Management have made a commitment to the Glasgow Financial Alliance for Net Zero (GFANZ) which aligns them to accelerate the transition to a net zero economy. As part of its commitment to GFANZ, and specifically the Net Zero Asset Managers Initiative, management is developing a net zero strategy for the company. This commitment does not directly impact financial reporting, as management has not yet developed a pathway to deliver this commitment and will only be able to model the impact once the pathway is developed.

Using our knowledge of the business and with assistance from our internal valuation experts we evaluated management's risk assessment and adjustments to the financial statements and resulting disclosures, where significant. We considered the Valuation of Investment at fair value through profit or loss to potentially be materially impacted by climate risk and consequently we focused our audit work in these areas.

Where climate risk relates to a key audit matter our audit response is given in the key audit matters section of our audit report. We also considered the consistency of the disclosures in relation to climate change within the Annual Report with the financial statements and our knowledge obtained from our audit.

Our procedures did not identify any further material impact in the context of our audit of the financial statements as a whole, or our key audit matters for the year ended 31 March 2024.

### Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

|  Overall company materiality | £9.8m (2023: £11.5m)  |
| --- | --- |
|  How we determined it | Based on 1% of total assets  |
|  Rationale for benchmark applied | We believe that total assets is the most appropriate benchmark because this is the key metric of interest to investors and is a generally accepted measure used for companies in this industry.  |

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £7.4m (2023: £8.5m) for the company financial statements.

In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £0.5m (2023: £0.56m) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 101
## Independent Auditor’s Report continued
### to the members of SDCL Energy Efﬁciency Income Trust plc
### Conclusions relating to going concern Reporting on other information
Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going The other information comprises all of the information in the Annual Report other than the ﬁnancial
concern basis of accounting included: statements and our auditors’ report thereon. The directors are responsible for the other information.
Our opinion on the ﬁnancial statements does not cover the other information and, accordingly, we
– Testing the mathematical integrity of the cash ﬂow forecasts and the models and reconciled
do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any
these to Board approved budgets;
form of assurance thereon.
– Challenging management on the appropriateness of key assumptions in particular whether
all capital commitments to the investment companies had been appropriately reﬂected in In connection with our audit of the ﬁnancial statements, our responsibility is to read the other
management’s models and considering their reasonableness in the context of other supporting information and, in doing so, consider whether the other information is materially inconsistent
evidence gained from our audit work; with the ﬁnancial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If we identify an apparent material inconsistency or material misstatement,
– Reading the debt agreements to conﬁrm the terms and conditions, including covenants.
we are required to perform procedures to conclude whether there is a material misstatement of the
Thecovenants were consistent with those used in management’s going concern assessment;
ﬁnancial statements or a material misstatement of the other information. If, based on the work we
– Agreeing all cash balances as at 31 March 2024 to third-party evidence and considering the
have performed, we conclude that there is a material misstatement of this other information, we are
available ﬁnancing. This supported the directors’ conclusion that sufﬁcient liquidity headroom
required to report that fact. We have nothing to report based on these responsibilities.
remained throughout the assessment period;
– Testing the mathematical accuracy of the covenant calculations, and conﬁrming based on With respect to the Strategic report and Report of the Directors, we also considered whether the
management’s calculations that covenant compliance remained throughout the assessment disclosures required by the UK Companies Act 2006 have been included.
period; and
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to
– Considering the severe downside scenario to assess the viability of the company in such report certain opinions and matters as described below.
circumstances. This included an assessment of the company’s ability to meet its debt covenants
and ability to repay its liabilities as they fall due.
### Strategic report and Report of the Directors
Based on the work we have performed, we have not identiﬁed any material uncertainties relating to In our opinion, based on the work undertaken in the course of the audit, the information given in the
events or conditions that, individually or collectively, may cast signiﬁcant doubt on the company’s Strategic report and Report of the Directors for the year ended 31 March 2024 is consistent with the
ability to continue as a going concern for a period of at least twelve months from when the ﬁnancial ﬁnancial statements and has been prepared in accordance with applicable legal requirements.
statements are authorised for issue.
In light of the knowledge and understanding of the company and its environment obtained in the
In auditing the ﬁnancial statements, we have concluded that the directors’ use of the going concern course of the audit, we did not identify any material misstatements in the Strategic report and
basis of accounting in the preparation of the ﬁnancial statements is appropriate. Report of the Directors.
However, because not all future events or conditions can be predicted, this conclusion is not a
### guarantee as to the company’s ability to continue as a going concern. Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
In relation to the directors’ reporting on how they have applied the AIC Corporate Governance
prepared in accordance with the Companies Act 2006.
Code, we have nothing material to add or draw attention to in relation to the directors’ statement in
the ﬁnancial statements about whether the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 102
## Independent Auditor’s Report continued
### to the members of SDCL Energy Efﬁciency Income Trust plc
### Corporate governance statement Responsibilities for the ﬁnancial statements and the audit
The Listing Rules require us to review the directors’ statements in relation to going concern, Responsibilities of the directors for the ﬁnancial statements
longer-term viability and that part of the corporate governance statement relating to the
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible
company’s compliance with the provisions of the AIC Corporate Governance Code speciﬁed for our
for the preparation of the ﬁnancial statements in accordance with the applicable framework and for
review. Ouradditional responsibilities with respect to the corporate governance statement as other
being satisﬁed that they give a true and fair view. The directors are also responsible for such internal
information are described in the Reporting on other information section of this report.
control as they determine is necessary to enable the preparation of ﬁnancial statements that are
Based on the work undertaken as part of our audit, we have concluded that each of the following free from material misstatement, whether due to fraud or error.
elements of the corporate governance statement is materially consistent with the ﬁnancial
In preparing the ﬁnancial statements, the directors are responsible for assessing the company’s
statements and our knowledge obtained during the audit, and we have nothing material to add or
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
draw attention to in relation to:
and using the going concern basis of accounting unless the directors either intend to liquidate the
– The directors’ conﬁrmation that they have carried out a robust assessment of the emerging and company or to cease operations, or have no realistic alternative but to do so.
principal risks;
– The disclosures in the Annual Report that describe those principal risks, what procedures are Auditors’ responsibilities for the audit of the ﬁnancial statements
in place to identify emerging risks and an explanation of how these are being managed or Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a
mitigated; whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’
– The directors’ statement in the ﬁnancial statements about whether they considered it report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
appropriate to adopt the going concern basis of accounting in preparing them, and their guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
identiﬁcation of any material uncertainties to the company’s ability to continue to do so over a misstatement when it exists. Misstatements can arise from fraud or error and are considered
period of at least twelve months from the date of approval of the ﬁnancial statements; material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the
– The directors’ explanation as to their assessment of the company’s prospects, the period this economic decisions of users taken on the basis of these ﬁnancial statements.
assessment covers and why the period is appropriate; and
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
– The directors’ statement as to whether they have a reasonable expectation that the company procedures in line with our responsibilities, outlined above, to detect material misstatements in
will be able to continue in operation and meet its liabilities as they fall due over the period of its respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
assessment, including any related disclosures drawing attention to any necessary qualiﬁcations irregularities, including fraud, is detailed below.
or assumptions.
Based on our understanding of the company and industry, we identiﬁed that the principal risks of
Our review of the directors’ statement regarding the longer-term viability of the company was non-compliance with laws and regulations related to environmental regulations, and we considered
substantially less in scope than an audit and only consisted of making inquiries and considering the the extent to which non-compliance might have a material effect on the ﬁnancial statements. We
directors’ process supporting their statement; checking that the statement is in alignment with the also considered those laws and regulations that have a direct impact on the ﬁnancial statements
relevant provisions of the AIC Corporate Governance Code; and considering whether the statement such as the Companies Act 2006 and UK Tax legislation, including section 1158 of the Corporation
is consistent with the ﬁnancial statements and our knowledge and understanding of the company Tax Act 2010 and the regulations made thereunder. We evaluated management’s incentives and
and its environment obtained in the course of the audit. opportunities for fraudulent manipulation of the ﬁnancial statements (including the risk of override
of controls), and determined that the principal risks were related to the valuation of investment
In addition, based on the work undertaken as part of our audit, we have concluded that each of the
and posting inappropriate journal entries to achieve desired ﬁnancial results. Audit procedures
following elements of the corporate governance statement is materially consistent with the ﬁnancial
performed by the engagement team included:
statements and our knowledge obtained during the audit:
– Discussions with management, including consideration of known or suspected instances of non-
– The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced
compliance with laws and regulations and fraud;
and understandable, and provides the information necessary for the members to assess the
company’s position, performance, business model and strategy; – Evaluation of design and implementation of management’s controls designed to prevent and
detect irregularities. However, we have not relied on controls as substantive procedures are
– The section of the Annual Report that describes the review of effectiveness of risk management
determined to be more effective for this audit;
and internal control systems; and
– Reviewing the minutes of meetings of the Board and its committees;
– The section of the Annual Report describing the work of the Audit and Risk Committee.
– Challenging the assumptions and judgments made by management in their signiﬁcant accounting
We have nothing to report in respect of our responsibility to report when the directors’ statement
estimates relating to the valuation of investments; and
relating to the company’s compliance with the Code does not properly disclose a departure from
– Identifying and testing journal entries, in particular certain journal entries posted with unusual
arelevant provision of the Code speciﬁed under the Listing Rules for review by the auditors.
account combinations.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

103

## Independent Auditor's Report continued
to the members of SDCL Energy Efficiency Income Trust plc

### Responsibilities for the financial statements and the audit continued

#### Auditors' responsibilities for the audit of the financial statements continued

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRIC's website at: www.fric.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.

#### Use of this report

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

#### Other required reporting

##### Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

- we have not obtained all the information and explanations we require for our audit; or
- adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
- certain disclosures of directors' remuneration specified by law are not made; or
- the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

#### Appointment

Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 10 December 2018 to audit the financial statements for the year ended 31 March 2019 and subsequent financial periods. The period of total uninterrupted engagement is six years, covering the years ended 31 March 2019 to 31 March 2024.

#### Other matter

The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these financial statements in an annual financial report prepared under the structured digital format required by OITR 4.1.15B - 4.1.18B and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditors' report provides no assurance over whether the structured digital format annual financial report has been prepared in accordance with those requirements.

#### Miles Saunders

##### (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors

Watford

26 June 2024
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 104
## Statement of Comprehensive Income
### For the year ended 31 March 2024

|  |  |  | For the |  |  | For the |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | year ended |  |  | year ended |  |
|  | 31 March 2024 |  |  | 31 March 2023 |  |  |
| Note |  | £’millions |  |  |  | £’millions |

Investment loss 5 (44.7) (7.8)
Total operating loss (44.7) (7.8)
Finance income 0.2 1.2
Fund expenses 6 (11.8) (12.0)
Loss for the year before tax (56.3) (18.6)
Tax on loss on ordinary activities 7 — —
Loss for the year (56.3) (18.6)
Total comprehensive loss for the year (56.3) (18.6)
Attributable to:
Equity holders of the Company (56.3) (18.6)
Loss per ordinary share (pence) 8 (5.2) (1.8)
The accompanying Notes are an integral part of these ﬁnancial statements.
All items in the above Statement derive from continuing operations.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

105

# Statement of Financial Position

As at 31 March 2024

|   | Note | 31 March 2024 £ millions | 31 March 2023 £ millions  |
| --- | --- | --- | --- |
|  **Non-current assets** |  |  |   |
|  Investment at fair value through profit or loss | 11 | 983.8 | 1,127.8  |
|   |  | 983.8 | 1,127.8  |
|  **Current assets** |  |  |   |
|  Trade and other receivables |  | 0.2 | 0.6  |
|  Cash and cash equivalents |  | 0.5 | 0.3  |
|   |  | 0.7 | 0.9  |
|  **Current liabilities** |  |  |   |
|  Trade and other payables |  | (2.6) | (3.3)  |
|  **Net current liabilities** |  | (1.9) | (2.4)  |
|  **Net assets** |  | 981.9 | 1,125.4  |
|  **Capital and reserves** |  |  |   |
|  Share capital | 12 | 11.1 | 11.1  |
|  Share premium | 12 | 756.8 | 1,056.8  |
|  Other distributable reserves | 12 | 339.3 | 39.3  |
|  (Accumulated losses)/retained earnings |  | (125.3) | 18.2  |
|  **Total equity** |  | 981.9 | 1,125.4  |
|  **Net assets per share^{1,2,3} (pence)** | 10 | 90.5 | 101.5  |

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

The financial statements on pages 104 to 107 were approved by the Board of Directors on 26 June 2024 and signed on its behalf by:

Sarika Patel

Director

Tony Roper

Director

Company number: 11620959
SEBIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

106

## Statement of Changes in Shareholders' Equity

For the year ended 31 March 2024

|   | Note | Share capital £'millions | Share premium £'millions | Other distributable reserves £'millions | Retained earnings (accumulated losses) £'millions | Total equity £'millions  |
| --- | --- | --- | --- | --- | --- | --- |
|  **Balance at 1 April 2023** |  | 11.1 | 1,056.8 | 39.3 | 18.2 | 1,125.4  |
|  Share buyback | 12 | — | — | — | (20.0) | (20.0)  |
|  Share transaction costs | 12 | — | — | — | (0.1) | (0.1)  |
|  Cancellation of share premium account |  |  | (300.0) | 300.0 | — | —  |
|  Dividends paid | 9 | — | — | — | (67.1) | (67.1)  |
|  Total comprehensive loss for the year |  | — | — | — | (56.3) | (56.3)  |
|  **Balance at 31 March 2024** |  | **11.1** | **756.8** | **339.3** | **(125.3)** | **981.9**  |

|   | Note | Share capital £'millions | Share premium £'millions | Other distributable reserves £'millions | Retained earnings (accumulated losses) £'millions | Total equity £'millions  |
| --- | --- | --- | --- | --- | --- | --- |
|  **Balance at 1 April 2022** |  | 9.9 | 925.1 | 39.3 | 98.8 | 1,073.1  |
|  Shares issued |  | 1.2 | 133.8 | — | — | 135.0  |
|  Share issue costs |  | — | (2.1) | — | — | (2.1)  |
|  Dividends paid | 9 | — | — | — | (62.0) | (62.0)  |
|  Total comprehensive income for the year |  | — | — | — | (18.6) | (18.6)  |
|  **Balance at 31 March 2023** |  | **11.1** | **1,056.8** | **39.3** | **18.2** | **1,125.4**  |

The accompanying Notes are an integral part of these financial statements.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 107
## Statement of Cash Flows
### For the year ended 31 March 2024

|  |  |  | For the |  |  | For the |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | year ended |  |  | year ended |  |
|  | 31 March 2024 |  |  | 31 March 2023 |  |  |
| Note |  | £’millions |  |  |  | £’millions |

Cash ﬂows from operating activities
Total comprehensive loss for the year before tax (56.3) (18.6)
Adjustments for:
Loss on investment at fair value through proﬁt or loss 5 116.2 74.3
Loan interest income 5 (6.5) (9.0)
Operating cash ﬂows before movements in working capital 53.4 46.7
Changes in working capital
Decrease/(increase) in trade and other receivables 0.4 (0.3)
(Decrease)/increase in trade and other payables (0.7) 1.8
Net cash generated from operating activities 53.1 48.2
Cash ﬂows from investing activities
Additional investment in Holdco 11 (38.4) (292.4)
Loan principal repayment received 11 66.2 18.5
Loan interest income received 6.5 9.0
Net cash generated from/(used in) investing activities 34.3 (264.9)
Cash ﬂows from ﬁnancing activities
Proceeds from the issue of shares 12 — 135.0
Share buyback payments 12 (20.0) —
Payment of shares issue/buyback costs (0.1) (2.1)
Dividends paid 9 (67.1) (62.0)
Net cash (used in)/generated from ﬁnancing activities (87.2) 70.9
Net movement during the year 0.2 (145.8)
Cash and cash equivalents at the beginning of the year 2 0.3 146.1
Cash and cash equivalents at the end of the year 2 0.5 0.3
The accompanying Notes are an integral part of these ﬁnancial statements.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

108

# Notes to the Financial Statements

For the year ended 31 March 2024

## 1. General Information

SDCL Energy Efficiency Income Trust plc (the "Company") is a Public Company limited by shares, incorporated on 12 October 2018 and registered and domiciled in England, United Kingdom, under number 11620959 pursuant to the Companies Act 2006. The Company's registered office and principal place of business is The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF.

The Company's ordinary shares were first admitted to the premium segment of the UK Listing Authority's Official List and to trading on the Main Market of the London Stock Exchange under the ticker SEIT on 11 December 2018.

The Company's objective is to generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth through the acquiring and realising of a diverse portfolio of energy efficiency infrastructure projects.

The Company currently makes its investments through its principal holding company and single subsidiary, SEEIT Holdco Limited ("Holdco"), and intermediate holding companies (together referred to as the "Group"), which are directly owned by the Holdco. The Company controls the investment policy of each of the Holdco and its intermediate holding companies in order to ensure that each will act in a manner consistent with the investment policy of the Company.

The Company has appointed Sustainable Development Capital LLP as its Investment Manager (the "Investment Manager") pursuant to the Investment Management Agreement dated 22 November 2018. The Investment Manager is registered in England and Wales under number OC330266 pursuant to the Companies Act 2006. The Investment Manager is regulated by the FCA, number 471124.

The financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates. All values are rounded to the nearest million (£ million), except otherwise indicated.

## 2. Significant Accounting Policies

### a) Basis of accounting

The financial statements of the Company have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006, as applicable to companies reporting under those standards. The financial statements are prepared under the historical cost convention, except for certain investments and financial instruments measured at fair value through profit or loss.

Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis.

The principal accounting policies adopted are set out below and consistently applied, subject to changes in accordance with any amendments in IFRS.

### (1) New standards and amendments to existing standards effective 1 April 2023

The following standard has been issued and are effective for annual periods beginning 1 April 2023:

- IAS 8 (amended) – Amendments regarding the definition of accounting estimate – effective from 1 January 2023.

Adoption of the above did not have a material effect on the financial statements of the Company.

### (2) New standards, amendments and interpretations effective after 1 April 2023 and have not been early adopted

The following standards have been issued but are effective for annual periods beginning after 1 April 2023 and have not been adopted early:

- IFRS 7 (amended) – Amendments regarding supplier finance arrangements – effective from 1 January 2024;
- IFRS 18 – Presentation and Disclosures in Financial Statements – effective from 1 January 2027. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but it might change what an entity reports as its operating profit or loss;
- IAS 1 (amended) – Amendments regarding the classification of debt with covenants – effective from 1 January 2024; and
- IAS 7 (amended) – Amendments regarding supplier finance arrangements – effective from 1 January 2024.

Except as stated above, none of these are expected to have a material effect on the financial statements of the Company.

### b) IFRS 10 – basis of consolidation and investment entities exemption

The Company applies IFRS 10 Consolidated Financial Statements. As in the previous year, the Directors have concluded that in accordance with IFRS 10, the Company continues to meet the definition of an investment entity having re-evaluated the criteria (see below) that needs to be met. The financial statements therefore comprise the results of the Company only and no subsidiaries are consolidated on a line-by-line basis.

The Company invests its investable cash into SEEIT Holdco when a targeted investment has been approved by the Investment Manager's Investment Committee. The sole objective of the Holdco is to enter into several energy efficiency projects, via individual corporate entities. The Holdco issues equity and loans to finance the projects. Holdco also incurs overheads and borrowings on behalf of the Group. As a result, the Directors have provided an alternative presentation of the Company's results in the Strategic Report, which includes a consolidation of Holdco.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

109

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 2. Significant Accounting Policies continued

Under IFRS 10, investment entities are required to hold subsidiaries at fair value through profit or loss rather than consolidate them. There are three key conditions to be met by the Company for it to meet the definition of an investment entity. For each reporting period, the Directors assess whether the Company continues to meet these conditions:

- (i) the Company has obtained funds for the purpose of providing investors with investment management services;
- (ii) the business purpose of the Company, which was communicated directly to investors, is investing solely for risk-adjusted returns (including having an exit strategy for investments); and
- (iii) the performance of substantially all investments is measured and evaluated on a fair value basis.

The Company is an investment company, providing investors exposure to a diversified portfolio of energy efficiency infrastructure projects that are managed for investment purposes.

During the year ended 31 March 2024, the Company, via Holdco, made additional investments but primarily into existing investments. The Directors assessed that there was no fundamental change to the Company and its portfolio of investment that would cause the Company not to satisfy the conditions of an investment entity under IFRS 10. As a result, the Company continues to apply the investment entity conditions under IFRS 10 to its financial statements.

#### c) Going concern

The Directors have considered the following current matters alongside the regular cash flow and business activities in assessing that it is appropriate to prepare the financial statements on a going concern basis:

##### Ukraine and Middle East conflicts

The Board and the Investment Manager have performed an assessment of the current exposure to the conflicts in Ukraine, Russia and the Middle East and the potential impact to the Company's and the portfolio companies' operations. The Company is a UK registered public company. Currently neither the Company, the Investment Manager nor the Company's investments conducts business and operations in the regions; therefore the Company is not subject to any direct impact by this event.

Manager duly considered any restriction imposed by relevant sanctions, and its impact on the portfolio companies and have concluded there are no direct material implications.

##### Inflation and cost of energy crisis

The Company has carried out an assessment of the impact of the global rise in inflation on its portfolio and have concluded that overall there is a positive correlation to inflation and there is no adverse impact.

The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than twelve months from the date of approval of the financial statements. The Directors have reviewed the Company's financial projections and cash flow forecasts, including the potential impact from this and believe, based upon those projections and forecasts and various risk mitigation measures in place, that it is appropriate to prepare the financial statements on a going concern basis.

##### Regular cash flow and business activity

In assessing whether the Company is a going concern for a period of at least twelve months from the approval of the Annual Report, the Directors have reviewed a cash flow forecast to December 2025, taking into consideration potential changes in investment and trading performance and applying a 10% reduction in income to test the resilience of cash flows in the near term. The forecast results in positive cash flows for the foreseeable future that meets the liabilities as they fall due.

They also reviewed a severe downside scenario where the Company receives no income from its investment for the next twelve months but continues with existing committed payments for running the Company. Even under this stress scenario, the Company would have sufficient cash reserves to continue as a going concern. As at 31 March 2024, the Company's net assets were £981.9 million (31 March 2023: £942.8 million), including cash balances of £0.5 million (31 March 2023: £0.5 million).

Further amounts of cash are held by the Company's direct and indirect subsidiaries (including Holdco which has c.£3.3 million (31 March 2023: c.£62 million) at the year end), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the payment of dividends and payments relating to the investment in new assets, both of which are discretionary.

The Company's single subsidiary, Holdco, has £180m RCF that has adequate headroom in its covenants that have been tested for historic and forward interest cover and loan to value limits. As at 31 March 2024, £155 million (31 March 2023: £ml) of the RCF was drawn down. The Company is a guarantor to the RCF but has no other guarantees or commitments.

##### Closing summary

The Directors are satisfied that the Company has sufficient resources to continue in operation for the foreseeable future, a period of not less than twelve months from the date of approval of the interim financial statements, and that it is appropriate to prepare the financial statements on a going concern basis.

#### d) Segmental reporting

The Chief Operating Decision Maker ("CODM"), being the Board of Directors, is of the opinion that the Company is engaged in a single segment of business, being investment in energy efficiency projects to generate investment returns whilst preserving capital. The financial information used by the CODM to manage the Company presents the business as a single segment.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

110

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 2. Significant Accounting Policies continued

#### e) Foreign currency translation

##### Foreign currency and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates, the Company's functional currency. The financial statements are presented in pounds sterling which is the Company's functional and presentation currency.

##### Transactions and balances

Foreign currency transactions are translated into pounds sterling using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

#### f) Income

Dividend income and investment income (including loan interest income) from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income within investment income when the Company's right to receive payments is established.

Fair value gains on financial assets at fair value through profit or loss are recognised in the Statement of Comprehensive Income at each valuation point.

Finance income comprises interest earned on cash held on deposit. Finance income is recognised on an accruals basis. Loan interest income is accounted for on an accruals basis using the effective interest method.

#### g) Dividends payable

Dividends to the Company's shareholders are recognised when they become legally payable. In the case of interim dividends, this is when they are paid. In the case of final dividends, this is when they are approved by the shareholders at the AGM.

#### h) Fund expenses

All expenses including investment management fees, transaction costs and Non-Executive Directors' fees are accounted for on an accruals basis. Share issue expenses of the Company directly attributable to the issue and listing of shares are charged to the share premium account.

#### i) Acquisition costs

Acquisition costs are expensed to the Statement of Comprehensive Income as they are incurred.

#### j) Taxation

The Company is approved as an Investment Trust Company (ITC) under sections 1158 and 1159 of the Corporation Taxes Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/2999 for accounting periods commencing on or after 25 May 2018. The approval is subject to the Company continuing to meet the eligibility conditions of the Corporations Tax Act 2010 and the Statutory Instrument 2011/2999. The Company intends to ensure that it complies with the ITC regulations on an ongoing basis and regularly monitors the conditions required to maintain ITC status.

From 1 April 2015, there was a single corporation tax on its income rate of 19%. This rate has increased to 25% since 1 April 2023. Current tax is the expected tax payable on any taxable income for the period, using tax rates that have been enacted or substantively enacted at the date of the Statement of Financial Position and end of the relevant period. The Company may use taxable losses from within the Group to relieve taxable profits in the Company and also income streams part of the dividends paid into interest payments to achieve tax efficiency for the Company. The increase in the headline rate of corporation tax does impact on the valuation of the Company's investments.

#### k) Cash and cash equivalents

Cash and cash equivalents include deposits held at call with banks and other short-term deposits with original maturities of three months or less. Cash is spread across three banks including at the Money market fund managed by JP Morgan. It is a highly liquid investment and readily convertible to a known amount of cash. There is no expected credit loss as the bank institutions have credit ratings of at least BBB+ and all cash is held at call from the banks.

#### l) Financial instruments

Financial assets and financial liabilities are recognised in the Company's Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred and the transfer qualifies for derecognition in accordance with IFRS 9 Financial Instruments.

Investments are recognised when the Company has control of the asset. Control is assessed considering the purpose and design of the investments including any options to acquire the investments where these options are substantive. The options are assessed for factors including the exercise price and the incentives for exercise.

The Company classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value through profit or loss; and

At initial recognition, the Company measures all investments at its transaction price net of transaction costs that are directly attributable to the acquisition of the financial asset. The Company subsequently measures all investments at fair value and changes in the fair value are recognised as gains/(losses) on investments at fair value through profit or loss within investment income.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expired.

#### m) Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Those include VAT receivable and other receivables which are intercompany balances due from subsidiaries. Receivables are initially recognised at fair value. They are subsequently measured at amortised cost, less any expected credit loss.

The Company has assessed IFRS 9's expected credit loss model and does not consider that there is a material impact on these financial statements.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

111

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 2. Significant Accounting Policies continued

#### n) Trade and other payables

Trade and other payables include accruals and other payables and initially are recognised at fair value, and subsequently measured at amortised cost using the effective interest method.

#### o) Share capital and share premium

The Company's ordinary shares are not redeemable and are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction in equity and are charged from the share premium account. The costs incurred in relation to the IPO and subsequent fundraisings of the Company were charged from the share premium account.

#### p) Treasury shares

The Company recognises the purchase of its own equity instruments in treasury shares, which are deducted from retained earnings. No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issue or cancellation of the Company's own equity instruments.

### 3. Critical Accounting Estimates and Judgements

The preparation of financial statements in accordance with IFRS requires the Directors to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period or in the period and future periods if the revision affects both current and future periods.

#### Judgements

##### Investment entity

As disclosed in Note 2, the Directors have concluded that the Company continues to meet the definition of an investment entity as defined in IFRS 10. This conclusion involved a degree of judgement and assessment as to whether the Company met the criteria outlined in the accounting standards.

#### Estimates

##### Investment valuations

The key area where estimates may be significant to the financial statements is the valuation of the Company's single subsidiary, SEEIT Holdco, which in turns holds investments in a portfolio that are held at fair value (the 'Portfolio Valuation' $^{2011}$). See Note 11 for calculation.

IFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. Fair value is defined as 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.

The Board of Directors has appointed the Investment Manager to produce the Portfolio Valuation$^{2011}$ at 31 March 2024, which includes estimates of future cash flows that have the potential to have a material effect on the measurement of fair value.

The key estimates made include:

##### Discount rate

The weighted average unlevered discount rate (post tax) applied in the 31 March 2024 valuation was 8.6% (31 March 2023: 7.7%) and 9.4% on a levered basis (31 March 2023: 8.5%). The discount rate is considered one of the most unobservable inputs through which an increase or decrease would have a material impact on the fair value of investment at fair value through profit or loss. An appropriate discount rate is applied to each underlying asset. The range of discount rates applied and its sensitivity to movements in discount rates is shown in Note 4.

##### Macroeconomic assumptions

Further estimates have been made on the key macroeconomic assumptions that are likely to have a material effect on the measurement of fair value being inflation, corporation tax and foreign exchange, which are further described in Note 4.

##### Investment-specific cash flow assumptions and sensitivities

The below highlights several key investment-specific estimates made for the Portfolio Valuation$^{2011}$ at 31 March 2024:

**Primary Energy** – An estimate has been made to determine the future demand for generation by the off-take in the PCI asset. If the demand assumed is 25% less than estimated, the investment at fair value through profit or loss at 31 March 2024 could be reduced by between an estimated £5 million and £15 million, assuming no other mitigants are available.

**Onyx** – The process of converting development assets into construction and then operational stages has been adversely affected by delays in the financial year, however an estimate has been made for the amount of megawatts that is expected to be become mechanically complete and earn revenues in 2025 and 2026. If only 75% of the megawatts are achieved in each of 2025 and 2026, the investment at fair value through profit or loss at 31 March 2024 could be reduced by between an estimated £5 million and £10 million, assuming no other mitigants are available.

An estimate has been made for the amount of megawatts that is expected to be deployed from the development pipeline in 2026 to 2030. This estimate and methodology has not changed since March 2023, however if only 50% of the development pipeline is achieved, including community solar projects, the investment at fair value through profit or loss at 31 March 2024 would be reduced by between an estimated £25 million and £35 million, assuming no other mitigants are available.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 112
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
3. Critical Accounting Estimates and Judgements continued The valuation methodology applied by Holdco to determine the fair value of its investments is
described below and is consistent with the methodology described in the March 2023 Annual Report.
Oliva Spanish Cogeneration - There are updates under the regulatory regime governing the
nine investments that have currently been published in draft form and awaiting ﬁnalisation. Key The Directors have satisﬁed themselves as to the methodology used and the discount rates and
estimates are made in applying the draft legislation, speciﬁcally regarding the compensation for gas keyassumptions applied in producing the valuations. All investments are at fair value through proﬁt
distribution and grid costs that is forecast. If this compensation is excluded from the ﬁnal legislation or loss.
and no other changes are introduced, then the Investment at fair value through proﬁt or loss at
For non-market traded investments (being all the investments in the current portfolio), the valuation
31March 2024 could be reduced by between an estimated £15 million and £25 million.
is based on a discounted cash ﬂow methodology and adjusted in accordance with the IPEV
RED-Rochester - Estimates have been made regarding future capital expenditure projects at the (International Private Equity and Venture Capital) valuation guidelines where appropriate to comply
site and the expected increase to overall revenues, the most material being the construction of with IFRS 13 and IFRS 9, given the special nature of infrastructure investments. Where an investment
a cogeneration plant expected to complete in 2025. If the cogeneration plant delivers only 75% is traded in an open market, a market quote is used. Certain investments may be held at cost if in
of the energy savings currently assumed, the Investment at fair value through proﬁt or loss at the early part of a construction phase, however this will still be supported by a discounted cash ﬂow
31March2024 would be reduced by between an estimated £10 million and £20 million. analysis or similar method to determine fair value. For certain investments, fair value is determined
through assuming a price that can be achieved per MW.
Estimates have been included for revenues related to providing electricity to customers based on
projected demands and an assumed power price charged to customers. If market power pricing is The Investment Manager exercises its judgement in assessing the expected future cash ﬂows from each
25% lower than assumed, the Investment at fair value through proﬁt or loss at 31 March 2024 would investment based on the project’s expected life and the ﬁnancial models produced for each project
be reduced by between £5 million and £10 million. company and adjusts the cash ﬂows where necessary to take into account key external macroeconomic
assumptions and speciﬁc operating assumptions. Assumptions for future cash ﬂows may include
In addition, estimates have been included, based on projected growth of earnings in the
successful recontracting and project life extensions, as well as cash ﬂow linked to assumptions made on
RED-Rochester business, that a gain share pay-out will be made to the external asset management
growth rates and further business development opportunities within existingprojects.
team tasked with delivering the growth within the next seven years, linked to the investment
increasing its proﬁtability. Furthermore, the projected growth is assumed to deliver a business The fair value for each investment is then derived from the application of an appropriate market
capable of continuing to serve customers at the Eastman Business Park for a further 20 years discount rate (on an unlevered basis) to reﬂect the perceived risk to the investment’s future cash
beyond the c. 20 years lifetime assumed at the time of the original investment. Should only 15 years ﬂows and the relevant year-end foreign currency exchange rate to give the present value of those
of the targeted economic life extension occur, the Investment at fair value through proﬁt or loss at 31 cash ﬂows. Where relevant, project-level debt balances are then netted off to arrive at the valuation
March 2024 would be reduced by between £10 million and £20 million, assuming no other mitigants for each investment The discount rate takes into account risks associated with the ﬁnancing of an
are available. investment such as investment risks (e.g. liquidity, currency risks, market appetite), any risks to the
investment’s earnings (e.g. predictability and covenant of the income) and a thorough assessment
Estimates have been included for the timing of completion of construction work undertaken by
ofcounterparty credit risk, all of which may be differentiated by the phase of the investment.
Li-Cycle and the levels of their near to medium term and long term demand for energy services. If
there is a material delay in the construction work and a 50% reduction in future demand for energy Speciﬁc risks related to each asset that can be attributed to climate-related risks are assessed
services, the Investment at fair value through proﬁt or loss at 31 March 2024 would be reduced by and where required, adjustments are made to expected future cash ﬂows or reﬂected in the
between £10 million and £25 million, assuming no other mitigants are available. asset-speciﬁc discount rate that is applied.
Värtan Gas - The future cash ﬂows includes an assumption that the management team will target a The Investment Manager uses its judgement in arriving at the appropriate discount rate. This is
decline in customer numbers at a year-on-year rate that is lower than the historic average decline. based on its knowledge of the market, taking into account intelligence gained from its bidding
There are also a number of accretive expansion opportunities for the Värtan Gas investment in the activities, discussions with ﬁnancial advisers in the appropriate market and publicly available
Stockholm region’s transport sector for which estimates have been made around the future growth information on relevant transactions.
proﬁle in relation to decarbonisation targets and electriﬁcation. If the recent historic average rate
to customers is applied for the next ﬁve years and no growth in revenue from transport is achieved
### Fair value measurement by level
over the next ten years, the Investment at fair value through proﬁt or loss may potentially reduce by
IFRS 13 requires disclosure of fair value measurement by level. Fair value measurements are
between £5 million and £10 million, assuming no other mitigants are available.
categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements
are observable and the signiﬁcance of the inputs to the fair value measurement in its entirety which
### 4. Financial Instruments
are described as follows:
### Valuation methodology
– Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the
The Company has a single investment wholly owned holding company (Holdco). It recognises this
Company can access at the measurement date;
investment at fair value. To derive the fair value of Holdco, the Company determines the fair value of
– Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
investment held directly or indirectly by Holdco and adjusts for any other assets and liabilities. See
the asset or liability, either directly or indirectly; and
Note 11 for a reconciliation of this fair value.
– Level 3 inputs are unobservable inputs for the asset or liability.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

113

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 4. Financial Instruments continued

|  Investment at fair value through profit or loss | Level 1 £'millions | Level 2 £'millions | Level 3 £'millions  |
| --- | --- | --- | --- |
|  31 March 2024 | — | — | 983.8  |
|  31 March 2023 | — | — | 1,127.8  |

The Company's indirect investments have been classified as Level 3 as the investments are not traded and contain unobservable inputs. As the fair value of the Company's equity and loan investments in the Halalco is ultimately determined by the underlying fair values of the SPV investments or debt schedules, the Company's sensitivity analysis of reasonably possible alternative input assumptions is the same across all its investments. The reconciliation of Level 3 fair value is disclosed in Note 11.

#### Valuation assumptions

|   |  | 31 March 2024 | 31 March 2023  |
| --- | --- | --- | --- |
|  Inflation rates | UK (RPI) | 3.3% declining to 2.9% by 2026, 3.0% p.a. long term | 7.8% declining to 3.0% by 2025, 3.0% p.a. long term  |
|   |  UK (CPI) | 2.5% declining to 2.2% by 2026, 2.0% p.a. long term | 6.6% declining to 1.5% by 2025, 2.0% p.a. long term  |
|   |  Spain (CPI) | 2.9% declining to 2.0% by 2026, 2.0% p.a. long term | 4.6% declining to 2.1% by 2025, 2.0% p.a. long term  |
|   |  Sweden (CPI) | 2.9% declining to 2.0% by 2026, 2.0% p.a. long term | 7.0% declining to 2.2% by 2025, 2.0% p.a. long term  |
|   |  Singapore (CPI) | 3.0% declining to 2.0% by 2026, 2.0% p.a. long term | 5.0% declining to 2.0% by 2025, 2.0% p.a. long term  |
|   |  Ireland (CPI) | 2.3% declining to 1.7% by 2026, 2.0% p.a. long term | 5.8% declining to 2.3% by 2025, 2.0% p.a. long term  |
|   |  USA (CPI) | 2.6% declining to 2.2% by 2026, 2.0% p.a. long term | 3.7% declining to 2.1% by 2025, 2.0% p.a. long term  |
|  Tax rates | UK | 25% | 25%  |
|   |  Spain | 25% | 25%  |
|   |  Sweden | 20.6% | 20.6%  |
|   |  Singapore | 17% | 17%  |
|   |  Ireland | 12.5% | 12.5%  |
|   |  USA | 21% Federal & 3% to 9% States rates | 21% Federal & 3-9% State rates  |
|  Foreign exchange rates | EUR/GBP | 0.86 | 0.88  |
|   |  SEK/GBP | 0.07 | 0.08  |
|   |  SOD/GBP | 0.59 | 0.61  |
|   |  USD/GBP | 0.79 | 0.81  |

#### Discount rates

The discount rates used for valuing the investments in the portfolio are as follows:

|   | 31 March 2024 | 31 March 2023  |
| --- | --- | --- |
|  Weighted average discount rate (on unlevered basis) | 8.6% | 7.7%  |
|  Weighted average discount rate (on levered basis) | 9.4% | 8.5%  |
|  Discount rates | 5.15% to 11.40% | 4.75% to 10.25%  |
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 114
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
### 4. Financial Instruments continued
### Sensitivities
APM
The sensitivities below show the effect on net asset value of assuming a different range for each key input assumption, in each case applying a range that is considered to be a reasonable and plausible
outcome for the market in which the Company has invested.
### Discount rates
A change to the weighted average levered discount rate by plus or minus 0.5% has the following effect on the net assets.
APM APM APM
Discount rate NAV/share impact -0.5% change Net asset value +0.5% change NAV/share impact
31 March 2024 5.0p £53.9m £981.9m £(49.6)m (4.6)p
31 March 2023 5.0p £55.1m £1,125.4m £(50.3)m (4.5)p
### Inﬂation rates
APM
The Portfolio Valuation assumes long-term inﬂation as indicated above in the UK, USA, Spain, Singapore, Portugal and Sweden. A change in inﬂation rate by plus or minus 1.0% has the following effect on the
net assets, with all other variables held constant.

|  |  |  | -1% (2023: -0.5%) |  |  | +1% (2023: +0.5%) |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | APM |  |  |  | APM |  |  | APM |  |
| Inﬂation rate NAV/share |  | impact |  | change Net asset value |  |  | change NAV/share |  | impact |

31 March 2024 (4.4)p £(47.7)m £981.9m £57.2m 5.3p
31 March 2023 (1.5)p £(16.4)m £1,125.4m £18.3m 1.7p
### Corporation tax rates
APM

| The Portfolio Valuation | assumes tax rates based on the jurisdiction. A change in the corporate tax rate by plus or minus 5% has the following effect on the net assets, with all other variables held constant. |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | APM |  | APM |  | APM |  |
| Corporation tax rate NAV/share |  |  | impact -5% change Net asset value |  | +5% change NAV/share |  | impact |

31 March 2024 3.4p £36.6m £981.9m £(36.4)m (3.3)p
31 March 2023 2.7p £29.5m £1,125.4m £(29.8)m (2.7)p
### Foreign exchange rates
APM
The Portfolio Valuation assumes foreign exchange rates based on the relevant foreign exchange rates against GBP at the reporting date. A change in the foreign exchange rate by plus or minus 10% (GBP
against euro, Swedish krona, Singapore dollar and US dollar) has the following effect on the NAV, with all other variables held constant. The effect is shown after the effect of current level of hedging which
reduces the impact of foreign exchange movements on the Company’s net assets.
APM APM APM
Foreign exchange rate NAV/share impact -10% change Net asset value +10% change NAV/share impact
31 March 2024 0.9p £93.7m £981.9m £(93.7)m (0.9)p
31 March 2023 0.8p £9.0m £1,125.4m £(9.0)m (0.8)p
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 115
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
### 5. Investment loss 7. Tax
The tax for the year shown in the Statement of Comprehensive Income is as follows.

|  |  | Year ended |  | Year ended |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 31 March 2024 |  | 31 March 2023 |  |  |  |  |  |  |
|  |  |  |  |  |  |  | Year ended |  | Year ended |
|  |  | £’millions |  | £’millions |  |  |  |  |  |
|  |  |  |  |  |  | 31 March 2024 |  | 31 March 2023 |  |
| Dividend income 65.0 57.5 |  |  |  |  |  |  | £’millions |  | £’millions |
| Loss on investment at fair value through proﬁt or loss |  |  |  |  | Loss for the year before taxation (56.3) (18.6) |  |  |  |  |

(Note 11) (116.2) (74.3)
Tax on loss on ordinary activities for the year multiplied
Loan interest income 6.5 9.0 by the standard rate of corporation tax of 25%
Investment loss (44.7) (7.8) (31March2023: 19%) (14.1) (3.5)
Fair value movements (not subject to taxation) 29.0 14.1
Interest income is in respect of coupon bearing loan notes issued to the Company by Holdco
Dividends received (not subject to taxation) (16.3) (10.9)
(Note15). The loan notes accrue interest at 6%, are unsecured and repayable in full on 18 April 2039.
Loan Interest income is recognised in the Statement of Comprehensive Income on an accruals basis. Surrendering of tax losses to unconsolidated subsidiaries 1.4 0.3
The loss/gain on investment is unrealised.
Total tax charge — —
### 6. Fund Expenses The corporation tax rate increased from 19% to 25%, with effect from 1 April 2023. No deferred tax
was recognised in the periods.

|  |  | Year ended |  | Year ended |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 31 March 2024 |  | 31 March 2023 |  |  |  |  |  |  |
|  |  | £’millions |  | £’millions | 8. Proﬁt/(loss) per Ordinary Share |  |  |  |  |
| Investment management fees (Note 15) 9.2 9.6 |  |  |  |  |  |  | Year ended |  | Year ended |
|  |  |  |  |  |  | 31 March 2024 |  | 31 March 2023 |  |

Non-Executive Directors’ fees (Note 16) 0.3 0.3
Proﬁt/(loss) for the year (£’millions) 56.3 (18.6)
Other expenses 1.6 1.3
Weighted average number of ordinary shares (‘000) 1,090,075 1,056,150
Fees to the Company’s independent auditor
Loss per ordinary share (pence) (5.2) (1.8)
- for the audit of the statutory ﬁnancial statements 0.7 0.7
- for audit-related assurance services 0.1 0.1 There is no dilutive element during the current or prior ﬁnancial year, or subsequent to the
ﬁnancialyear.
Fund expenses 11.8 12.0
As at 31 March 2024, the Company had no employees (31 March 2023: nil) apart from Directors in
ofﬁce. The Company conﬁrms that it has no key management personnel, apart from the Directors
disclosed in Directors’ Remuneration Report on pages 87 to 91 of the Annual Report. There is
no other compensation apart from those disclosed. Additional fees relating to the audit of the
Company’s subsidiaries were £0.3m (2023: £0.3m).
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 116
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
### 9. Dividends

|  | Year ended |  | Year ended |
| --- | --- | --- | --- |
| 31 March 2024 |  | 31 March 2023 |  |
|  | £’millions |  | £’millions |

Amounts recognised as distributions to equity holders during the year:
Fourth quarterly interim dividend for the year ended 31 March 2022 of 1.405 pence per share — 13.9
First quarterly interim dividend for the year ended 31 March 2023 of 1.5 pence per share — 14.9
Second quarterly interim dividend for the year ended 31 March 2023 of 1.5 pence per share — 16.6
Third quarterly interim dividend for the year ended 31 March 2023 of 1.5 pence per share — 16.6
Fourth quarterly interim dividend for the year ended 31 March 2023 of 1.5 pence per share 16.4 —
First quarterly interim dividend for the year ended 31 March 2024 of 1.56 pence per share 16.9 —
Second quarterly interim dividend for the year ended 31 March 2024 of 1.56 pence per share 16.9 —
Third quarterly interim dividend for the year ended 31 March 2024 of 1.56 pence per share 16.9 —
Total dividends 67.1 62.0
All dividends have been paid out of distributable reserves. Further information on distributable reserves can be found in Note 12.

| 10. Net Assets per Share | APM |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  | Year ended |  | Year ended |
|  |  | 31 March 2024 |  | 31 March 2023 |  |

Shareholders’ equity (£’millions) 981.9 1,125.4
Number of ordinary shares (‘000) 1,085,420 1,108,709
Net assets per ordinary share (pence) 90.5 101.5
### 11. Investment at Fair Value through Proﬁt or Loss
The Company recognises the investment in Holdco, its single directly owned holding company, at fair value. Holdco’s fair value includes the fair value of each of the individual project companies and holding
companies in which the Holdco holds a direct or an indirect investment, along with the working capital of Holdco.

|  | Year ended |  | Year ended |
| --- | --- | --- | --- |
| 31 March 2024 |  | 31 March 2023 |  |
|  | £’millions |  | £’millions |

Brought forward investment at fair value through proﬁt orloss 1,127.8 928.2
Loan investments in the year — —
Equity investments in the year 38.4 292.4
Loan principal repaid in the year (66.2) (18.5)
Movement in fair value (116.2) (74.3)
Closing investment at fair value through proﬁt or loss 983.8 1,127.8
Movement in fair value is recognised through investment income in the Statement of Comprehensive Income (see Note 5).
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 117
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
Investment/Commitment Investment/
### 11. Investment at Fair Value through Proﬁt or Loss continued Project Date Type Location Commitment Amount
Of the closing investment at fair value through proﬁt and loss balance, £65 million (31 March2023:
FES Various in the period Organic USA c.£36.6m
£131 million) relates to loan investment (also see Note 5) and £916 million (31 March 2023:
CPP 1 June 2023 New UK c.£1.2m
£996million) relates to equity investment.
APM Rondo Energy June 2023 New USA c.£2.4m
A reconciliation between the Portfolio Valuation , being the valuation of the investment portfolio
held by Holdco, and the investment at fair value through proﬁt or loss per the Statement of Financial c£161.1m
Position is provided below. The principal differences are the balances in Holdco for cash and
workingcapital.
### 12. Share Capital and Share Premium

|  | Year ended |  | Year ended |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  | Year ended |  |  | Year ended |  |
| 31 March 2024 |  | 31 March 2023 |  |  |  |  |  |  |  |  |
|  |  |  |  |  | 31 March 2024 |  |  | 31 March 2023 |  |  |
|  | £’millions |  | £’millions |  |  |  |  |  |  |  |
|  |  |  |  | Ordinary shares of £0.01 |  |  | ‘000 |  |  | ‘000 |

Portfolio Valuation (see Financial Review and Valuation
1,117.4 1,099.6 Authorised and issued at the beginning of the year 1,108,709 990,288
Update for details)
Shares issued – during the year — 118,421
Holdco cash 3.4 65.4
1
Share buyback (23,289) —
Holdco intercompany debt 65.2 —
Authorised and issued at the end of year 1,085,420 1,108,709
Holdco RCF (155.0) —
Holdco net working capital (47.2) (37.2) Year ended Year ended
31 March 2024 31 March 2023
Investment at fair value per Statement of
Treasury shares ‘000 ‘000
FinancialPosition 983.8 1,127.8
Balance at the beginning of the year — —
Share buyback during the year 23,289 —
### Investments by the Company
During the year ended 31 March 2024, the Company invested £32.7 million (31 March 2023: Balance at the end of the year 23,289 —
£292.4million) into Holdco for new portfolio investments and to fund acquisition costs. Acquisition

| costs are expensed to the income statement at Holdco as they occur. |  | 31 March 2024 |  | 31 March 2023 |  |
| --- | --- | --- | --- | --- | --- |
|  | Share Capital |  | £’millions |  | £’millions |
| Portfolio investments, via Holdco | Balance at the beginning of the year 11.1 9.9 |  |  |  |  |

During the year ended 31 March 2024, Holdco invested £161 million (31 March 2023: £236 million)
Issue of ordinary shares — 1.2
inportfolio investments.

|  | Investment/Commitment |  | Investment/ | Total as at 31 March 2024 11.1 11.1 |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Project | Date Type Location | Commitment Amount |  |  |  |  |  |  |
| Spark US Energy Efﬁciency 2 Various in the period Organic USA c.£9.0m |  |  |  |  | 31 March 2024 |  | 31 March 2023 |  |
|  |  |  |  | Share premium |  | £’millions |  | £’millions |

RED-Rochester Various in the period Organic USA c.£35.8m
Balance at the beginning of the year 1,056.8 925.1
Onyx – HoldCo Various in the period Organic USA c.£61.1m
Issue of ordinary shares 133.8
Tallaght Hospital July 2023 Organic Ireland c.£1.5m
Costs of issue of ordinary shares — (2.1)
Turntide August 2023 Organic USA c.£3.1m
Transfer to other distributable reserves (300.0) —
Biocpower Various in the period Organic UK c.£0.4m
Total as at 31 March 2024 756.8 1,056.8
EV Networks Various in the period Organic UK c.£10.0m
1. All repurchased shares are held in treasury.
SEIIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

118

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 12. Share Capital and Share Premium continued

In September 2022, the Company issued 118,421,053 new ordinary shares at a price of 1¼ pence per share, raising gross proceeds of £135 million.

On 3 April 2023, the Company announced the commencement of a Share Buyback Programme. All repurchased shares are held in treasury. £20 million of the Company's available cash reserves was allocated to the Share Buyback Programme and as at 31 March 2024, the full allocation has been utilised.

The Company currently has one class of ordinary share in issue. All the holders of the £0.01 ordinary shares, which total 1,108,70% (31 March 2023: 1,108,70%) and are fully paid (31 March 2023: fully paid), are entitled to receive dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company.

Other distributable reserves were created through the cancellation of the share premium account on 12 March 2019. On 24 November 2023, the Company cancelled a further £300 million of its share premium, creating additional distributable reserves. This amount is capable of being applied in any manner in which the Company's profits available for distribution, as determined in accordance with the Companies Act 2006, are able to be applied.

Other distributable reserves and retained earnings are detailed in the Statement of Changes in Shareholders' Equity.

### 13. Financial Risk Management

#### Financial risk management objectives

The objective of the Company's financial risk is to manage and control risk exposure of the underlying investment portfolio held by Holdco. The Board is responsible for overseeing the management of financial risks; however, the review and management of financial risks is delegated to the Investment Manager. The Investment Manager monitors and manages the financial risks relating to the operations of the Company through internal procedures and policies designed to identify, monitor and manage the financial risks to which the Company is exposed.

These risks include market risk (including price risk, currency risk and interest rate risk), credit risk and liquidity risk.

#### Price risk

The value of the investments directly and indirectly held by the Company is affected by the discount rate applied to the expected future cash flows and as such may vary with movements in interest rates, inflation, power prices, market prices host demand for energy services and competition for these assets.

#### Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company receives loan interest, loan principal and dividends from its single investment, Holdco, in sterling. However, the Company is indirectly exposed to currency risk through its Holdco as its investments include non-sterling investments held in euro, US dollar, Singapore dollar and Swedish krona.

The Company monitors its foreign exchange rate exposures using its near-term and long-term cash flow forecasts. Its policy is to use foreign exchange hedging (via Holdco) to provide protection to the level of sterling distributions that the Company aims to pay over the medium term, where considered appropriate. This may involve the use of forward exchange.

#### Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company, via Holdco, invests indirectly in loans in project companies, usually with fixed interest rate coupons. Where floating rate debt is owned, the primary risk is that the portfolio's cash flow will be subject to variation depending on changes to base interest rates. The portfolio's cash flows are continually monitored and reforecasted to analyse the cash flow returns from investments.

The Company's policy is to ensure that interest rates are sufficiently hedged, when entering into material medium/long-term borrowings, to protect the Company and portfolio companies' net interest margins from significant fluctuations in interest rates. This may include engaging in interest rate swaps or other rate derivative contracts at the subsidiary level under direction of the Company.

The Company's financial assets and financial liabilities are at a pre-determined interest rate, as a result the Company is subject to limited exposure to risk due to fluctuations in the prevailing levels of market interest rates.

#### Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company through a reduction in future expected cash receipts.

The key counterparties are the project companies in which the Company makes indirect investments via Holdco. The projects companies' near-term cash flows forecasts are used to monitor the timing of cash receipts from project counterparties and are reviewed regularly to demonstrate the projects' ability to pay interest and dividends when they fall due.

The Company does not have any significant credit risk exposure to any single counterparty in relation to trade and other receivables. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

As at 31 March 2024, there were no receivables considered impaired (31 March 2023: Exit). At an investment level, the credit risk relating to significant counterparties is reviewed on a regular basis and potential adjustments to the discount rate are considered to recognise changes to these risks where applicable.

The Company maintains its cash and cash equivalents across various banks to diversify credit risk. These are subject to the Company's credit monitoring policies including the monitoring of the credit ratings issued by recognised credit rating agencies. The Company's cash and deposits are held with counterparties that meet strict investment rating criteria per the Company's Treasury Policy.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 119
## Notes to the Financial Statements continued
### For the year ended 31 March 2024
### 13. Financial Risk Management continued
The Company is at risk of credit loss on its loans, receivables, cash and deposits. Underlying investments are held by Holdco at fair value using discounted cash ﬂows. Receivables are primarily intercompany
and taxation. While cash and cash equivalents are subject to the impairment requirements of IFRS 9, there was no identiﬁed credit loss.
The Company’s maximum exposure to credit risk over ﬁnancial assets is the carrying value of those assets in the Statement of Financial Position.
### Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its ﬁnancial obligations as they fall due. The Board of Directors has established an appropriate liquidity Risk Management Framework for the
management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves by monitoring forecast
and actual cash ﬂows and by matching the maturity proﬁles of assets and liabilities.
Risk is spread by holding cash at three separate banking institutions and the Company also ensures that Holdco has sufﬁcient banking facilities by continuously monitoring forecast and actual cash ﬂows and
matching the maturity proﬁles of ﬁnancial assets and liabilities.
Unconsolidated project companies are subject to contractual agreements that may impose temporary restrictions on their ability to distribute cash. Such restrictions are not deemed signiﬁcant in the context
of the overall liquidity.
The table below shows the maturity of the Company’s non-derivative ﬁnancial assets and liabilities. The amounts disclosed are contractual, undiscounted cash ﬂows and may differ from the actual cash ﬂows
received or paid in the future as a result of early repayments. Balances due within twelve months equal their carrying balances as the impact of discounting is not signiﬁcant.

|  |  | Up to | Between 3 and |  | Between 1 and |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 3 months |  |  | 12 months |  | 5 years |  | Total |
| As at 31 March 2024 | £’millions |  |  | £’millions |  | £’millions | £’millions |  |

Assets
Cash and cash equivalents 0.5 — — 0.5
Trade and other receivables 0.1 — — 0.1
Liabilities
Trade and other payables (2.5) — — (2.5)
Total (1.9) — — (1.9)

|  |  | Up to | Between 3 and |  | Between 1 and |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 3 months |  |  | 12 months |  | 5 years |  | Total |
| As at 31 March 2023 | £’millions |  |  | £’millions |  | £’millions | £’millions |  |

Assets
Cash and cash equivalents 0.3 — — 0.3
Trade and other receivables 0.5 — — 0.5
Liabilities
Trade and other payables (3.3) — — (3.3)
Total (2.4) — — (2.4)
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

120

## Notes to the Financial Statements continued

For the year ended 31 March 2024

### 13. Financial Risk Management continued

#### Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders. In accordance with the Company's investment policy, the Company's principal use of cash (including the proceeds of the IPO) has been to fund investments via Holdco as well as ongoing operational expenses.

The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. The capital structure of the Company consists entirely of equity (comprising issued capital, other distributable reserves and retained earnings).

The Company is not subject to any externally imposed capital requirements.

### 14. Related Undertakings

The following table shows the Company's single direct subsidiary (SEEIT Holdco Limited). Appendix A lists the Company's indirect subsidiaries through SEEIT Holdco Limited.

|  Investment | Country of incorporation & place of business | Shareholding at 31 March 2024 | Shareholding at 31 March 2023  |
| --- | --- | --- | --- |
|  SEEIT Holdco Limited | United Kingdom | 100% | 100%  |

### 15. Related Parties

The Company and Sustainable Development Capital LLP (the "Investment Manager") have entered into the Investment Management Agreement pursuant to which the Investment Manager has been given responsibility, subject to the overall supervision of the Board, for active discretionary investment management of the Company's portfolio in accordance with the Company's investment objective and policy.

As the entity appointed to be responsible for risk management and portfolio management, the Investment Manager is the Company's AIFM. The Investment Manager has full discretion under the Investment Management Agreement to make investments in accordance with the Company's investment policy from time to time. This discretion is, however, subject to: (i) the Board's ability to give instructions to the Investment Manager from time to time; and (ii) the requirement of the Board to approve certain investments where the Investment Manager has a conflict of interest in accordance with the terms of the Investment Management Agreement. The Investment Manager also has responsibility for financial administration and investor relations, advising the Company and its Group in relation to the strategic management of the portfolio, advising the Company in relation to any significant acquisitions or investments and monitoring the Company's funding requirements.

Under the terms of the Investment Management Agreement, the Investment Manager will be entitled to a fee calculated at the rate of:

- 0.9%, per annum of the adjusted NAV¹/²ᵇⁱⁿ in respect of the net asset value¹/²ᵇⁱⁿ of up to, and including, £750 million; and
- 0.8%, per annum of the adjusted NAV¹/²ᵇⁱⁿ in respect of the net asset value¹/²ᵇⁱⁿ in excess of £750 million.

The management fee is calculated using an adjusted NAV which is the latest published NAV¹/²ᵇⁱⁿ at the relevant time, less uncommitted cash and adjusted on a daily basis for new acquisitions, new cash committed to investments, disposals and changes in amounts of debt drawn.

The management fee accrues monthly and is invoiced monthly in arrears. During the year ended 31 March 2024, management fees of £9.2 million (31 March 2023: £9.6 million) were incurred of which £1.4 million (31 March 2023: £2.5 million) was payable at the year end.

During the year ended 31 March 2024, £38.4 million (31 March 2023: £292.4 million) of funding was provided by the Company to the Holdco for investment acquisitions and the repayment of the RCF utilised by Holdco.

During the year ended 31 March 2024, coupon bearing loan notes of £nil (31 March 2023: £nil) were issued. During the year ended 31 March 2024, Holdco had repaid coupon bearing loan notes of £66.2 million (31 March 2023: £18.5 million). In the year to 31 March 2024, £6.5 million interest had accrued on the loan notes (31 March 2023: £8.9 million) of which £nil is outstanding at the year end (31 March 2023: £0.2 million).

### 16. Key Management Personnel Transactions

The Directors of the Company, who are considered to be key management, received fees for their services. Their fees were £0.3 million (disclosed as Non-Executive Directors' fees in Note 6) in the year (31 March 2023: £0.3 million), which included £289,000 for Director salaries (31 March 2023: £289,000), £18,000 for national insurance contributions (31 March 2023: £18,000) and £11,000 for the reimbursement of expenses (31 March 2023: £10,000).

### 17. Guarantees and Other Commitments

The Company is the guarantor of the RCF between Holdco and Investec Bank plc.

The Company holds a revolving credit facility ("RCF") that it holds through its wholly owned subsidiary, SEEIT Holdco, amounting to £180 million. The RCF, which is SONIA linked and has a margin of 2.65%, with an initial expiry date of June 2024 with options to extend for a further two years and includes an accordion function for a further £20 million increase on an uncommitted basis. Post year end, the RCF was extended to June 2026.

### 18. Events After the Reporting Period

The Directors have evaluated subsequent events from the date of the financial statements through to the date the financial statements were available to be issued.

Between April and June 2024, the Company made the following investments, via SEEIT Holdco:

- a further investment c.£22.2 million in Onyx; and
- a further investment c.£2.1 million in FES Lighting.

The Company completed the sale of UU Solar for approximately £90 million in May.
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

121

# Investment Policy

## Appendix A – List of SEEIT plc's Indirect Subsidiaries

The following table shows the Company's indirect subsidiaries and related undertakings. As the Company applies IFRS 10 and investment entities (Amendments to IFRS 10) (see Note 2), these entities have not been consolidated in the preparation of these financial statements:

|  Investment | Country of incorporation & place of business | Shareholding at 31 March 2024  |
| --- | --- | --- |
|  EECO Kingscourt Limited | United Kingdom | 100%  |
|  EECO Biomass No. 1 Limited | United Kingdom | 60%  |
|  EECO Data Centres No. 1 Limited | United Kingdom | 100%  |
|  EECO Wilton No. 1 Limited | United Kingdom | 100%  |
|  SmartEnergy Finance Two Limited | United Kingdom | 49%  |
|  SEEIT UK 1 Limited | United Kingdom | 100%  |
|  Combined Heat and Power Investments Limited | United Kingdom | 100%  |
|  Energy Efficient Global UK Project Limited | United Kingdom | 100%  |
|  SEEIT Asia Limited | United Kingdom | 100%  |
|  EECo Smithfield Limited | United Kingdom | 100%  |
|  SEEIT Europe 2 Limited | United Kingdom | 100%  |
|  SDCL Solar Edge Limited | United Kingdom | 100%  |
|  Zood Infrastructure Limited | United Kingdom | 100%  |
|  SEEIT Europe Limited | United Kingdom | 100%  |
|  SEEIT US TWO Limited | United Kingdom | 100%  |
|  SEEIT Magma Limited | United Kingdom | 100%  |
|  SEEIT Bloc Limited | United Kingdom | 100%  |
|  SEEIT CPP Limited | United Kingdom | 100%  |
|  SIAF Energia S.A | United Kingdom | 80%  |
|  Iceotope Technologies Limited | United Kingdom | 100%  |
|  Iceotope Liquid Cooling Limited | United Kingdom | 100%  |
|  KUL Sistem Limited | United Kingdom | 100%  |
|  SEEIT Sol Limited | United Kingdom | 100%  |
|  Greenland Investment Partners Limited | United Kingdom | 100%  |
|  SEEIT US Limited | USA | 100%  |
|  SDCL TG COGEN LLC | USA | 71%  |
|  COGEN ONE LLC | USA | 100%  |

|  Investment | Country of incorporation & place of business | Shareholding at 31 March 2024  |
| --- | --- | --- |
|  COGEN TWO LLC | USA | 100%  |
|  SEEIT CAPITAL LLC | USA | 100%  |
|  SEEIT CAPITAL II LLC | USA | 100%  |
|  SEEIT PE 1 LLC | USA | 100%  |
|  SEEIT PE 2 LLC | USA | 100%  |
|  PERC Midco LLC | USA | 100%  |
|  PERC Holdings 2 LLC | USA | 100%  |
|  Primary Energy Recycling Corporation | USA | 100%  |
|  Primary Energy Recycling Holdings LLC | USA | 100%  |
|  Primary Energy Operations LLC | USA | 100%  |
|  Cokerwrgy LLC | USA | 100%  |
|  North Lake Energy LLC | USA | 100%  |
|  Portside Energy LLC | USA | 100%  |
|  Ironside Energy LLC | USA | 100%  |
|  Harbor Coal LLC | USA | 100%  |
|  PCI Associates | USA | 50%  |
|  SEEIT Red Holdco LLC | USA | 100%  |
|  SEEIT District Energy LLC | USA | 100%  |
|  Recycled Energy Development LLC | USA | 100%  |
|  RED-Rochester LLC | USA | 100%  |
|  SEEIT Hemisphere Holdco LLC | USA | 100%  |
|  SEEIT Hemisphere I LLC | USA | 100%  |
|  SEEIT Hemisphere II LLC | USA | 100%  |
|  SEEIT Hemisphere III LLC | USA | 100%  |
|  Iceotape Technologies US Inc | USA | 100%  |
|  SEEIT US Lighting Holdings LLC | USA | 100%  |
|  SEEIT US Lighting LLC | USA | 100%  |
|  SEEIT TT LLC | USA | 100%  |
|  Turntide Technologies Inc | USA | 100%  |
|  SEEIT ON Holdco LLC | USA | 100%  |
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 122
## Investment Policy continued
Appendix A – List of SEEIT plc’s Indirect Subsidiaries continued All related undertakings that have a place of business in the United Kingdom are registered in the

|  |  | Country of |  | United Kingdom and their principal place of business and registered ofﬁce is The Scalpel, 18th Floor, |
| --- | --- | --- | --- | --- |
|  | incorporation & |  | Shareholding at | 52 Lime Street, London, EC3M 7AF. |
| Investment | place of business |  | 31 March 2024 |  |

All related undertakings that have a place of business in the US are registered in Delaware, US, and
ON Energy Storage LLC USA 100%
their registered ofﬁce is 1209 Orange Street, Wilmington, Delaware, US, with their principal place of
SEEIT BTB LLC USA 100% business in 1120 Avenue of the Americas, New York, New York 10036, US.
SEEIT Net Zero LLC USA 100% All related undertakings that have a place of business in Spain have their principal place of business
and registered ofﬁce in Calle Príncipe de Vergara 112, Planta Cuarta, 28002 Madrid, Spain.
EE CO Ireland Hospitals TUH Limited Ireland 100%
All related undertakings that have a place of business in Ireland have their principal place of business
Iceotope Technologies Limited Ireland 100%
and registered ofﬁce in 55 Merrion Square South, Dublin, DO2 YD65.
SEEIPL 4 Pte Ltd Singapore 100%
All related undertakings that have a place of business in Singapore have their principal place of
SEEIPL 1 Pte Ltd Singapore 100%
business and registered ofﬁce in 6 Eu Tong Sen Street #11-09, The Central, Singapore 059817.
SEEIPL 3 Pte Ltd Singapore 100%
All related undertakings that have a place of business in Sweden have their principal place of
Shire Oak Green Asia Portfolio 2 Pte Ltd Singapore 100% business and registered ofﬁce in RÅSUNDAVÄGEN 12, 16967 Solna, Stockholm County, Sweden.
Walworth Invest S.L. Spain 100%
SEEIT Oliva, S.A. Spain 100%
SEEIT GAS S.L Spain 100%
Compañía Orujera de Linares, S.L Spain 100%
Bioeléctrica de Linares, S.L. Spain 100%
Compañía Energética de Linares S.L. Spain 100%
Compañía Energética Pata de Mulo S.L. Spain 100%
Compañía Energética Puente del Obispo Spain 100%
Compañía Energética de La Roda, S.L. Spain 100%
Biomasas de Puente Genil. S.L. Spain 100%
Secaderos de Biomasa, S.L . Spain 100%
Compañía Energética Las Villas, S.L. Spain 90%
SEEIT EUROPE 2 SWEDEN Holding AB Sweden 100%
Värtan Gas Stockholm AB Sweden 100%
Värtan Gas AB Sweden 100%
Gasnätet Stockholm AB Sweden 100%
Stockholm Gas AB Sweden 100%
Baseload Capital Sweden AB Sweden 100%
SOGA Uranus Company Limited Vietnam 100%
SOGA Mercury Company Limited Vietnam 100%
SOGA Triton Company Limited Vietnam 100%
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 123
## Company Information Key Company Data

| Directors | Investment Manager | Company name SDCL ENERGY EFFICIENCY INCOME TRUST PLC |  |
| --- | --- | --- | --- |
| Tony Roper (Chair) | Sustainable Development Capital | Registered address The Scalpel, 18th Floor |  |
| Helen Clarkson |  |  | 52 Lime Street |

### LLP
Emma Grifﬁn
London
5th Floor
Christopher Knowles
1 Vine Street EC3M 7AF
Sarika Patel
London Listing London Stock Exchange – Premium Listing
W1J 0AH
### Registered Ofﬁce Ticker symbol SEIT
The Scalpel, 18th Floor SEDOL BGHVZM4
### Independent Auditor
52 Lime Street
### PricewaterhouseCoopers LLP Index inclusion FTSE All-Share, FTSE 250
London
EC3M 7AF 40 Clarendon Road Company year end 31 March
Watford
Dividend payments Quarterly
Hertfordshire
### Company Secretary
Investment Manager Sustainable Development Capital LLP
WD17 1JJ
### andAdministrator
Company Secretary & Administrator JTC (UK) Limited
### JTC (UK) Limited
### Public Relations
Shareholders’ funds £1.0 billion as at 31 March 2024 (31 March 2023: £1.1billion)
The Scalpel, 18th Floor
### TB Cardew
52 Lime Street Market capitalisation £0.6 billion as at 31 March 2024 (31 March 2023: £0.9billion)
29 Lincoln’s Inn Fields
London APM
Management fees 0.9% p.a. of NAV (adjusted for uncommitted cash) upto
London
EC3M 7AF
£750 million, 0.8% p.a. thereafter
WC2A 3EG
ISA, PEP and SIPP status The ordinary shares are eligible for inclusion in PEPs and
### Sponsor, Broker and Placing Agent
### Registrar ISAs (subject to applicable subscription limits), provided
### Jefferies International Limited
that they have been acquired by purchase in the market,
### Computershare Investor Services plc
100 Bishopsgate
and they are permissible assets for SIPPs
The Pavilions
London
Bridgwater Road Website www.seeitplc.com
EC2N 4JL
Bristol
BS13 8AE
### Legal Adviser
### Herbert Smith Freehills LLP
### Bankers
Exchange House
### RBS International
Primrose Street
440 Strand
London
London
EC2A 2EG
WC2R 0QS
### Depositary
### Indos Financial
The Scalpel, 18th Floor
52 Lime Street
London
EC3M 7AF
SEEIT Annual Report 2024 | SDCL Energy Efficiency Income Trust plc

Introduction

Strategic Report

Governance

Financial Statements

Additional Information

124

# Sustainable Finance Disclosure Regulation ("SFDR")

Periodic disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852

Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices.

The EU Taxonomy is a classification system laid down in Regulation (EU) 2020/852, establishing a list of environmentally sustainable economic activities. That Regulation does not lay down a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not.

Product name: SDCL Energy Efficiency Income Trust plc

Legal entity identifier: 2138002FSC7XUVD3NL94

## Sustainable investment objective

Did this financial product have a sustainable investment objective?

☐ Yes

It made sustainable investments with an environmental objective: 100%

in economic activities that qualify as environmentally sustainable under the EU Taxonomy

in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy

It made sustainable investments with a social objective: 0 %

☐ No

It promoted Environmental/Social (E/S) characteristics and while it did not have as its objective a sustainable investment, it had a proportion of ___% of sustainable investments

with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy

with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy with a social objective

It promoted E/S characteristics, but did not make any sustainable investments

## To what extent was the sustainable investment objective of this financial product met?

Sustainability indicators measure how the environmental or social characteristics promoted by the financial product are attained.

How did the sustainability indicators perform?

The sustainability indicators used to measure attainment of the sustainable investment objectives are carbon savings, also referred to as Scope 4 emissions in this report, (measured in tCO₂e) and amounts of electrical and thermal energy saved (measured in kWh), as both directly relate to the Company's sustainable objective of climate change mitigation through energy efficiency projects.

972,2011CO₂e saved across the portfolio in year ended 31 March 2024.

379,589 MWh electrical and thermal energy saved in year ended 31 March 2024.

1 100% of the Company's investments fall into its definition of an energy efficiency project, which is critical to the Company's definition of a sustainable investment. Due to its calculation methodology and local electrical grid carbon intensities, the Company holds a few investments that do not currently contribute to the sustainability indicator of carbon savings. The Company still considers these to be energy efficiency projects and the Company has the intention to decarbonise these projects overtime in line with the Investment Manager's overall net zero commitment.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 125
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
…and compared to previous periods?
1,202,528 tCO e saved across the portfolio in the period ending 31 March 2023.
2
387,868 MWh electrical and thermal energy saved in the period ending 31 March 2023.
The sustainability impact indicators reported during the period ending 31 March 2024 are lower than those reported or the previous period for the
followingreasons:
1. The carbon intensity of the electrical grids across the jurisdictions in which SEEIT invests in have decreased. SEEIT uses electrical grid carbon intensity
tobenchmark the carbon saving calculations for its investments, so as that benchmark decreases, so do the carbon savings.
2. The Investment Manager identiﬁed two issues with the way that investments have previously reported their carbon and energy savings. Correcting
these inaccuracies has led to a decrease in the portfolio’s overall carbon savings.
Principal adverse impacts are the most How did the sustainable investments not cause signiﬁcant harm to any sustainable investment objective?
signiﬁcant negative impacts of investment
decisions on sustainability factors relating to
The Company ensures that its sustainable investments do not cause signiﬁcant harm to any sustainable investment objectives through its ESG
environmental, social and employee matters,
Management Process, which incorporates ESG considerations into investment due diligence and asset management. Potential investments are carefully
respect for human rights, anti-corruption and
assessed during due diligence through multiple stages, including a go/no go review, initial due diligence review and detailed due diligence review.
anti-bribery matters.
Allmandatory and additional principle adverse impact indicators (PAI indicators) are assessed as part of the completion of this process. Each PAI indicator
has an associated risk threshold to determine next steps and conﬁrm the investment does no signiﬁcant harm.
Post-investment, SDCL’s asset management and ESG teams monitor the operations, policies and business conduct of an investment through bi-annual
andannual questionnaires to make sure it is not doing signiﬁcant harm and is performing in line with the Company’s ESG minimum standards.
How were the indicators for adverse impacts on sustainability factors taken into account?
The Investment Manager uses the PAI indicators to conﬁrm that the Company’s asset companies do no signiﬁcant harm. When a potential investment
opportunity is assessed, the ESG questionnaire has speciﬁc questions covering mandatory and additional PAI indicators to determine whether the
investment breaches the risk thresholds set for each PAI indicator. The PAI indicators are then monitored annually through an ESG questionnaire, that asks
speciﬁc questions based around said indicators.
Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business
and Human Rights? Details:
The Company avoids investing in projects that are in breach of the ILO standards, UNGPs, UNGC or OECD Guidelines for Multinational Enterprises.
TheInvestment Manager actively considers alignment of potential investments with the OECD Guidelines and UNGPs through the ESG due diligence
process and investment decision and during the asset management phase.
### How did this ﬁnancial product consider principal adverse impacts on sustainability factors?
As disclosed above, the Company takes indicators for principal adverse impacts into account as part of the do no signiﬁcant harm process. However, as the
Company’s AIFM does not consider principal adverse impacts at entity level under Article 4 SFDR, the Company does not consider principal adverse impacts
at product level for the purposes of Article 7 SFDR.
1. Energy savings refers to the electrical and thermal energy not consumed at the point of use by the customer due to a SEEIT investment.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 126
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
### What were the top investments of this ﬁnancial product?
Large investments Sector % assets Country
The list includes the investments constituting
the greatest proportion of investments of the RED-Rochester Energy 18 US
ﬁnancial product during the reference period
Onyx – Obsidian I Energy 12 US
which is:
Primary Energy – Cokenergy Energy 9 US
31 March 2023 – 31 March 2024
UU Solar Energy 8 UK
Värtan Gas Energy 6 Sweden
### What was the proportion of sustainability-related investments?
Asset allocation describes the share of What was the asset allocation?
investments in speciﬁc assets.
100% of the Company’s assets are sustainable with an environmental objective.
#1 Sustainable
covers sustainable investments with environmental or social
Taxonomy-
objectives
aligned
Environmental
100% #2 Not sustainable
includes investments which do not qualify as sustainable
#1 Sustainable
Other
investments.
100%
100%
Investments Social
#2 Not
sustainable
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 127
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
### What was the proportion of sustainability-related investments? continued
In which economic sectors were the investments made?
All of the Company’s investments fall into the “energy” sector.
### To what extent were sustainable investments with an environmental objective aligned with the EU Taxonomy?
Taxonomy-aligned activities are expressed as Currently, 0% of the Company’s assets are EU Taxonomy aligned.
a share of:
– turnover reﬂects the “greenness” of investee
companies today;
– capital expenditure (“CapEx”) shows the
green investments made by investee
companies, relevant for a transition to a
green economy; and
– operational expenditure (“OpEx”) reﬂects
the green operational activities of investee
companies.
To comply with the EU Taxonomy, the criteria for
1
Did the ﬁnancial product invest in fossil gas and/or nuclear energy-related activities that comply with the EU Taxonomy ?
fossil gas include limitations on emissions and
switching to renewable power or low-carbon
fuels by the end of 2035. For nuclear energy,
Yes
the criteria include comprehensive safety and
waste management rules.
in fossil gas in nuclear energy
###  No
1. Fossil gas and/or nuclear-related activities will only comply with the EU Taxonomy where they contribute to limiting climate change (“climate change mitigation”) and do
not signiﬁcantly harm any EU Taxonomy objectives - see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities that
comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 128
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
### To what extent were sustainable investments with an environmental objective aligned with the EU Taxonomy? continued
1
Did the ﬁnancial product invest in fossil gas and/or nuclear energy-related activities that comply with the EU Taxonomy ? continued
The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to
1
determine the Taxonomy - alignment of sovereign bonds , the ﬁrst graph shows the Taxonomy alignment in relation to all the investments of the ﬁnancial
product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the ﬁnancial product other
than sovereign bonds.
1 1
1. Taxonomy-alignment of investments including sovereign bonds 2. Taxonomy-alignment of investments excluding sovereign bonds

| CapEx |  |  |  | CapEx |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| OpEx |  |  |  | OpEx |  |  |  |
|  | 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% |  |  |  | 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% |  |  |
|  |  |  Taxonomy aligned investments 0%  | Other investments 100% |  |  |  Taxonomy aligned investments 0%  | Other investments 100% |

1. For the purpose of these graphs, “sovereign bonds” consist of all sovereign
This graph represents 100% of the portfolio
exposures.
Enabling activities directly enable other
What was the share of investments made in transitional and enabling activities?
activities to make a substantial contribution to
an environmental objective.
0%
Transitional activities are activities for which
low-carbon alternatives are not yet available
and among others have GHG emission levels
How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods?
corresponding to the best performance.
N/A
Turnover Turnover
100% 100%
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 129
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
### What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy?
100% - the sustainable investments made by the Company all have an environmental objective and are 0% Taxonomy - aligned.
These are sustainable investments with an
environmental objective that do not take
into account the criteria for environmentally
### What was the share of socially sustainable investments?
sustainable economic activities under
Regulation (EU) 2020/852.
0% - the Company does not make socially sustainable investments.
###  What investments were included under “#2 Not sustainable”, what was their purpose and were there any
### minimum environmental or social safeguards
N/A – the Company allocated 100% of assets to sustainable investments. Other assets of the Company are limited to cash held on deposit and cash
equivalent investments, which may include short-term investments in money market type funds and tradeable debt securities.
### What actions have been taken to attain the sustainable investment objective during the reference period?
As laid out in its pre-contractual disclosure and pursuant to the Company’s investment policy, save for any investment in cash and cash equivalents,
the Company principally invests in energy efﬁciency projects, the objectives of which are to achieve one or more of the following: a reduction in energy
consumption, a reduction of GHG emissions, or an increase in the supply of renewable energy. The sustainable objective achieved by the Company’s
investments is climate change mitigation, as all the investments must contribute to one or more of the above criteria.
During the period, the Company contributed to its sustainable investment objective of climate change mitigation through continued investment in energy
efﬁciency projects. The Company invested c.£161 million in the year, c. £142 million has been invested into four existing portfolio companies: Onyx (£61m),
RED-Rochester (£36m), FES (£36m) and EVN (£9m). A further c. £15m was invested in existing portfolio companies (Spark Energy Efﬁciency and Turntide)
earlier in the year prior to the Investment Manager deciding to stop pursuing these investments in line with the Capital Allocations Policy. The remaining
investments of c. £4m were made into two new investments (CPP and Rondo) early in the ﬁnancial year as disclosed previously and were the only
investments made in the year not into existing portfolio companies.
More details of these investments and their sustainability characteristics are detailed in the Company’s Annual Report, The Investment Manager’s Report on
pages 12 to 14.
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 130
## Sustainable Finance Disclosure Regulation (“SFDR”) continued
### How did this ﬁnancial product perform compared to the reference benchmark?
The Company does not use a reference benchmark to assess ESG performance.
Reference benchmarks are indexes to measure
whether the ﬁnancial product attains the
environmental or social characteristics that How did the reference benchmark differ from a broad market index?
they promote.
N/A
 How did this ﬁnancial product perform with regard to the sustainability indicators to determine the alignment of the reference benchmark with the
sustainable investment objective?
N/A
 How did this ﬁnancial product perform compared with the reference benchmark?
N/A
 How did this ﬁnancial product perform compared with the broad market index?
N/A
?
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 131
## Glossary
AIC Contractual Payment Energy Efﬁciency Project – otherwise satisfy, in the Investment Manager’s
the Association of Investment Companies the payments by the Counterparty to the a project, the objective of which is to achieve one reasonable opinion, any other criteria
Company or relevant Project SPV under the or more of the following criteria: or measurement of energy efﬁciency in
AIFM
contractual arrangements governing an energy an industry or sector, or by using energy
an alternative investment fund manager, within – reduce energy consumed and/or related
efﬁciency project, whether such payments efﬁciency technologies that are compatible
the meaning of the AIFM Directive GHG emissions arising from the existing and/
take the form of a service charge, a fee, a loan with the Company’s investment objective and
or future supply, transmission, distribution or
AIFM Directive repayment or other forms of payments as may policy
consumption of energy;
2011/61/EU of the European Parliament and be appropriate from time to time
– reduce its Scope 1 GHG emissions (“Direct Energy Efﬁciency Technology
of the Council of 8 June 2011 on Alternative
Counterparty GHG emissions occur from sources that are technologies deployed to achieve an
Investment Fund Managers and amending
the host, beneﬁciary or procurer of the energy owned or controlled by the Company”) and improvement in energy efﬁciency
Directives 2003/41/EC and 2009/65/EC and

|  | efﬁciency project with whom the Company has | Scope 2 GHG emissions (“electricity indirect |  |
| --- | --- | --- | --- |
| Regulations (EC) No. 1060/2009 and (EU) |  |  | EPC |
|  | entered into the energy efﬁciency project, either | GHG emissions from the generation of |  |
| No. 1095/2010; the Commission Delegated |  |  | Engineering, procurement and construction |
|  | directly or indirectly through the use of one or | purchased, or generated on-site, electricity |  |

Regulation (EU) No. 231/2013 of 19 December
more Project SPVs GHG
consumed by the Company”) as deﬁned
2012 supplementing Directive 2011/61/EU of
greenhouse gases
by the GHG Protocol, directly and/or in
the European Parliament and of the Council Decentralised
conjunction with offsets that may be used Holdco
with regard to exemptions, general operating energy that is produced close to where it will be
to deliver additional net emissions reduction is SEEIT Holdco Limited, the Company’s single
conditions, depositaries, leverage, transparency used, rather than at a large, centralised plant
beneﬁts; wholly owned subsidiary
and supervision elsewhere, delivered through a centralised grid
infrastructure – increase the supply of renewable energy
Board HVAC
generated on the premises of a counterparty
the Board of Directors of the Company, who have Energy Efﬁciency heating, ventilation and air conditioning
or generated at a site directly associated with
overall responsibility for the Company using less energy to provide the same level of
the premises of a counterparty; Investment Manager Sustainable Development
energy. Efﬁcient energy use is achieved primarily
CHP Capital LLP
– reduce emissions and energy consumption in
through implementation of a more efﬁcient
combined heating and power a limited liability partnership incorporated in
non-domestic sectors, which include:
technology or process
England and Wales under the Limited Liability

| Company |  | – all forms of energy supply, conversion, |  |
| --- | --- | --- | --- |
|  | Energy Efﬁciency Equipment |  | Partnership Act 2000 with registered number |
| SDCL Energy Efﬁciency Income Trust plc, a |  | distribution or transmission not originating |  |
|  | the equipment that is installed at or near the |  | OC330266 |
| limited liability company incorporated under |  | within a private domestic dwelling, |  |

premises of a counterparty or a site directly
the Act in England and Wales on 12 October Investment Portfolio
including district heating systems and CHP
associated with an energy efﬁciency project,
2018 with registered number 11620959, whose is the portfolio of energy efﬁciency investments
systems;
including, but not limited to, solar, storage,
registered ofﬁce is at 6th Floor, 125 London Wall, held by the Company via its single wholly owned
– demand for energy in non-domestic
CHP units, heat pumps, HVAC units, lighting
London, EC2Y 5AS subsidiary, SEEIT Holdco Limited
buildings including commercially owned
equipment, motors, controls, biomass boilers
Company SPV or used property and public sector owned ISA
and steam raising boilers (including IP steam
a Project SPV owned by the Company or one of buildings; individual savings account
processors) and green fuels for use in the built
its afﬁliates through which investments are made environment or transport produced at or near – demand for energy in industrial and light
kWh
the point of use or via a distribution network manufacturing plant and machinery,
kilowatt-hours used or generated per hour
operations and logistics;
– demand for energy in the transport sector;
and
– through the deployment of energy
efﬁciency measures in public and private
infrastructure, such as in utilities (including
the installation of smart metering
equipment) and street lighting; or
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 132
## Glossary continued
Lighting Equipment RCF
energy efﬁcient lighting used in connection with is the revolving credit facility of SEEIT Holdco
an energy efﬁciency project, including, but not Limited, used by SEEIT for capital efﬁciency in
limited to, LEDs and associated ﬁttings making new investments
MWh RoRi
megawatt hours used or generated per hour the “Return on Operations” incentive payment
and the “Return on Investment” incentive
NAV
payment under Spain’s Royal Decree-Law
net asset value
9/2013 under which qualifying energy generation

| Ordinary Shares | assets are compensated, in the medium to long |
| --- | --- |
| an ordinary share of £0.01 in the capital of the | term, for ﬂuctuations in revenues and costs |
| Company issued and designated as “ordinary | against an established base case |

shares” of such class (denominated in such
SDCL Group
currency) as the Directors may determine in
the Investment Manager and the SDCL Afﬁliates
accordance with the Articles and having such
rights and being subject to such restrictions as SEEIT
are contained in the Articles the Company
O&M Contractors SEEIT Holdco
operations and maintenance contractors, the see Holdco
contractor appointed by the Company or the
SIPP
relevant Project SPV to perform maintenance
self-invested personal pension
obligations in relation to the relevant energy
efﬁciency projects SPVs
special purpose vehicles
PEP
personal equity plan WACC
weighted average cost of capital
Portfolio Valuation
the Investment Manager is responsible for
carrying out the fair market valuation of the
SEEIT Group’s portfolio of investments
RAB
regulated asset base
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 133
## Glossary of Financial Alternative Performance Measures (“APMs”)
The Company uses APMs to provide shareholders and stakeholders with information it deems relevant to understand and assess the Company’s historic performance and its ability to deliver on the stated
investment objective.
31 March 2023

| Measure Calculation Why the Company uses the APM 31 March 2024 |  |  | (comparison) Reconciliation/cross reference |  |
| --- | --- | --- | --- | --- |
| Aggregate | The sum of the dividend declared in | 6.24p per | 6.0p per share Referred to in Highlights of the year to 31March 2024 on |  |
| dividends | theperiod: | share |  | page 3 |

June 2023: 1.56p
September 2023: 1.56p
December 2023: 1.56p
March 2024: 1.56p

| Cash cover Operational cash inﬂow from |  | Provides a metric for the level of cash | 1.1x 1.2x Portfolio basis net cash inﬂow (£72.5m, p.45) divided by |  |
| --- | --- | --- | --- | --- |
|  | investments into Holdco less fund | generated, enabling the Company to |  | dividends paid in the Statement of Changes in Equity |
|  | expenses in the Company and | pay dividends to shareholders |  | (£67.2m) |

Holdco, divided by dividends paid to
shareholders

| Cumulative excess | Excess cash inﬂow from investments net | Provides a metric for the number of | £34.2m £29.2m Referred to in the Financial Review and Valuation Update on |  |
| --- | --- | --- | --- | --- |
| cash cover | of dividends paid to shareholders, on a | times the Company can pay dividends |  | pages 35 to 44 |
|  | cumulative basis since IPO | to shareholders. This is not considered |  |  |

an APM in the current year.
EBITDA Earnings before interest, taxes, £(56.3)m £(18.6)m Referred to in the Chair’s statement on pages 8 to 10
depreciation and amortisation
Gearing Consolidated outstanding debt at To indicate the Company’s direct and 49% 32% Referred to in the Chair’s Statement on pages 8 to 10 and
Holdco and investment level (£485m) indirect exposure to debt obligation the Investment Manager’s Report on pages 12 to 14
divided by NAV at the year end
(£981.9m)
Gross asset value All assets of the Company (non-current It provides a metric that allows for £984.5m £1,128.7m Statement of Financial Position shows non-current assets
(“GAV”) assets and current assets) useful analysis of underlying portfolio and current assets)
exposures

| Investment cash | Cash received from the portfolio | This provides shareholders with a | £92.5m £85.1m Referred to in the Financial Review and Valuation Update on |  |
| --- | --- | --- | --- | --- |
| inﬂow from the | investments at Holdco during the period | metric that allows for tracking the |  | pages 35 to 44 |
| portfolio |  | Company’s performance year-on-year |  |  |
| NAV per share NAV (£981.9m), divided by total shares |  | This provides shareholders with a | 90.5p 101.5p NAV per share shown on the Statement of Financial Position |  |
|  | in issue, 1,085.4m at the balance | metric that allows for tracking the |  | on page 105 |
|  | sheetdate | Company’s performance year-on-year |  |  |
| Net asset value | Net assets attributable to ordinary | It provides a metric that allows | £981.9m £1,125.4m NAV is shown on the Statement of Financial Position on |  |
| (“NAV”) | shares by deducting gross liabilities | for useful comparison to similar |  | page 105 |
|  | (£2.6m) from gross assets (£984.5m) | companies and that allows for useful |  |  |

year-on-year comparisons of the
Company
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc Financial Statements Additional InformationGovernanceStrategic ReportIntroduction 134
## Glossary of Financial Alternative Performance Measures (“APMs”) continued
31 March 2023

| Measure Calculation Why the Company uses the APM 31 March 2024 |  |  |  | (comparison) Reconciliation/cross reference |  |
| --- | --- | --- | --- | --- | --- |
| Ongoing charges | In accordance with AIC guidance, | Used as a metric in the investment | 1.02% 1.02% Discussed in Financial Review and Valuation Update on |  |  |
| ratio | deﬁned as annualised ongoing charges | company industry to compare |  |  | pages 35 to 44 |
|  | on portfolio basis (i.e. excluding | cost-effectiveness |  |  |  |

Reconciliation of expenses used in ongoing charges calculation
investment costs and other non-
£'m
recurring items), £11.2m divided by the
average published undiluted net asset Fund expenses (income statement) 11.6
value in the year of £1,094.7m
Less Company expenses excluded from
(0.6)
deﬁnition of ongoing charges
Add Holdco expenses included in deﬁnition
0.2
of ongoing charges
A Total annualised ongoing expenses 11.2
B Average NAV (includes Sept 22, March 23
1,094.7
and Sept 23)
Ongoing charges (A/B) 1.02%

| Operational | Cash inﬂow from investments net of | Used in dividend cash cover | £72.5 £71.4 Referred to in the Financial Review and Valuation Update on |  |
| --- | --- | --- | --- | --- |
| cashﬂow | operating and ﬁnance costs | calculation |  | pages 35 to 44 |
| Portfolio basis Portfolio basis includes the impact |  | See Financial Review and Valuation for | N/A N/A Reconciliation provided in, the Financial Review and |  |
|  | if Holdco (the Company’s only direct | detailed description |  | Valuation Update on pages 35 to 44 |

subsidiary) were to be consolidated on a
line-by-line basis

| Portfolio Valuation The fair value of all investments in |  | It provides relevant information of the | £1,117m £1,100m Reconciliation provided in the Financial Review and |  |
| --- | --- | --- | --- | --- |
|  | aggregate that are held directly or | value of the underlying investments |  | Valuation Update on pages 35 to 44 |
|  | indirectly by Holdco | held indirectly by the Company from |  |  |

which it is ultimately expected to
derive its future revenues.
Rebased valuation Portfolio Valuation brought forward, plus Used to derive the fair value £1,168.8m £1,068.6m Referred to in the Financial Review and Valuation Update on
(portfolio basis) new investments (including transaction movement of the portfolio. pages 35 to 44
costs) during the period less cash from
investments.

| Total return on | Interim dividends paid and movement | This provides shareholders with a | (4.3%) (0.9%) Referred to in the Highlights section on page 3 and, the |  |
| --- | --- | --- | --- | --- |
| NAVbasis | in NAV per share over the course of the | metric that allows for tracking the |  | Financial Review and Valuation Update on pages 35 to 44 |
|  | relevant period, divided by opening NAV | Company’s performance year-on-year |  |  |

NAV return in the period:
Dividends paid: 6.18p
NAV movement: (11)p
NAV return since IPO:
Dividends paid: 27.8p
NAV movement: (7.5)p
SEEIT Annual Report 2024|SDCL Energy Efﬁciency Income Trust plc
### SDCL Energy Efﬁciency
### Income Trust plc
### The Scalpel, 18th Floor
### 52 Lime Street
### London
### EC3M 7AF
### www.seeitplc.com