LEI: 254900V23329JCBR9G82

2 November 2022

ThomasLloyd Energy Impact Trust plc

Entry into Vietnam through first solar acquisition and update on deployment of IPO proceeds

ThomasLloyd Energy Impact Trust plc ("TLEI" or the "Company"), the renewable energy investment trust providing direct access to sustainable energy infrastructure in fast-growing and emerging economies in Asia, is pleased to announce its expansion into Vietnam, via a new local partnership with an investment agreement for an initial US$30m with Solar Electric Vietnam ("SEV"). As the first transaction in this new partnership, the Company is also pleased to announce that, subject to normal regulatory and other completion conditions, it has entered into an agreement to acquire Viet Solar System Company Limited ("VSS"), a privately-owned company which holds 6.12 MWp of rooftop solar assets ("RTS").

Of the US$30 million of initial funding for renewable energy assets in Vietnam provided for in the investment agreement with SEV, US$4.6 million will be utilised to acquire VSS.  The remaining US$25.4 million is expected to be deployed on additional opportunities in Vietnam, which have predominantly been identified, and include a portfolio of a 19 MWp of RTS currently under exclusivity to the Company. Based on this investment agreement, TLEI is pleased to announce that, once this initial facility has been fully utilised, more than 86% of net IPO proceeds will have been deployed.  

Renewable energy in Vietnam

The rapid growth and industrialisation experienced in Vietnam in recent years has led to a three-fold increase in the country's electricity consumption, outpacing the growth in electricity output. As of 2021, Vietnam's total installed capacity stood at 70,470 MW. The country's installed capacity is dominated by three generating technologies; coal, hydro (large and small scale) and solar, accounting for 36.2%, 26.5% and 22.1% of total capacity respectively. Vietnam has made significant progress in the deployment of renewable energy. The country's considerable natural endowments mean a substantial transition away from fossil fuel generation is, with the appropriate investment, readily attainable.

Partnership with SEV

TLEI and SEV have signed an investment agreement for initial funding of up to a total of US$30 million to purchase renewable energy assets already owned, controlled or identified by SEV or originated by the investment manager, ThomasLloyd Global Asset Management (Americas) LLC. TLEI also holds a right of first refusal on new construction-ready or operational projects developed or originated by SEV, meeting pre-determined investment criteria.  TLEI will acquire, via its subsidiary ThomasLloyd Energy Impact Holdings Ltd, 99.8% of VSS, creating a renewable energy platform for the Vietnamese market, with technologies including solar, wind and biomass. SEV is a well-established engineering, procurement and construction provider and renewable energy developer and has a track record of developing and constructing more than 80 MWp of solar projects supplying state-owned Electricity Vietnam ("EVN") and foreign-owned corporate and industrial offtakers. This new partnership in Vietnam supplements the existing local partnerships of the Company's investment manager in its other target markets.

VSS portfolio

The portfolio of 6.12 MWp of RTS assets being acquired consists of installations at two sites near Ho Chi Minh City which are named, 'Hoang Thong' and 'Mo Cay', both with 20-year US Dollar-indexed fixed-price PPAs with EVN. Both projects are located on the rooftops of factories, whereby a minority of the electricity generated is sold directly to the factory at a higher price than the EVN rate, with any surplus electricity not consumed by the factory sold to EVN under the PPAs. The impact of these assets is the supply of electricity to 3,589 people and avoidance of 7,324 tonnes of CO₂ p.a.  As part of the acquisition process, VSS will be renamed ThomasLloyd Energy Impact Holdings Vietnam JSC.

Near term pipeline in Vietnam

SEV has also identified additional off-market solar assets with a total capacity of 137 MWp, which includes 11 MWp of assets under negotiation for exclusivity to the Company and in respect of which due diligence is well advanced.

Michael Sieg, Group Chief Executive of the Investment Manager commented:

"Despite challenging market circumstances, we are delighted to have formally entered Vietnam, a market that we have been observing for a number of years, as we continue to execute on our investment strategy. Finding the right local partners and establishing proprietary platforms to develop new primary assets has always been a core principle of our investment philosophy and process and we are delighted to welcome SEV as our on-the-ground partner. This latest investment allows us to deliver our 'Triple Return' of providing attractive investment returns for investors by investing where capital makes a meaningful, measurable and significant impact and tackles climate change at source. We look forward to accelerating our pipeline momentum."

Following the completion of the acquisition of the 57% interest in SolarArise in India, which is expected to occur shortly and following full utilisation of the investment agreement for Vietnam announced today, the Company will have deployed more than 86% of net IPO proceeds. TLEI's portfolio now comprises three solar power projects in the Philippines, seven solar power projects in India (including a 200 MW construction-ready asset) and two solar power projects in Vietnam with a combined capacity of 520 MW. This latest acquisition further enhances TLEI's geographic and currency diversification.

Enquiries:

About ThomasLloyd Energy Impact Trust Plc

ThomasLloyd Energy Impact Trust plc listed on the premium segment of the London Stock Exchange in December 2021 and was awarded the London Stock Exchange's Green Economy Mark upon admission.

In 2021, ThomasLloyd Group participated in the Mobilising Institutional Capital Through Listed Product Structures (MOBILIST) competition, which engaged financial institutions in a search for the best sustainable infrastructure proposals that can list either on the London Stock Exchange or local exchanges. ThomasLloyd Group was the first fund manager to complete this process successfully and received US$32.3 million in investment from the UK government into TLEI.

The Company has a triple return investment objective which consists of:

·      providing Shareholders with attractive dividend growth and prospects for long-term capital appreciation (the financial return);

·      protecting natural resources and the environment (the environmental return); and

·      delivering economic and social progress, helping build resilient communities and supporting purposeful activity (the social return).

The Company seeks to achieve its investment objective by investing directly in a diversified portfolio of sustainable energy infrastructure assets in the fast-growing and emerging economies in Asia. The Company invests in unlisted sustainable energy infrastructure assets in the areas of renewable energy power generation, transmission infrastructure, energy storage and sustainable fuel production, including utilising different technologies to reduce revenue variability.

The Company aims to generate additional value for its investors through focusing its investments on construction-ready or in-construction projects. The Company only invests in such pre-operational assets where: (i) an offtake agreement has been entered into; (ii) the land on which the project is situated is identified or contractually secured where appropriate; and (iii) all relevant permits have been granted. Offtake agreements will typically benefit from long-term fixed-price power purchase agreements, capacity contracts or other similar revenue contracts with creditworthy (primarily investment grade) private and public sector buyers.

As is the case for all ThomasLloyd funds, the Company is expected to qualify as an Article 9 fund under the EU Sustainable Finance Disclosure Regulation (SFDR). Further information on the Company can be found on its website at http://www.tlenergyimpact.com.

About the Investment Manager

The Investment Manager is a wholly-owned subsidiary of ThomasLloyd Group ("ThomasLloyd" or the "Group"). Founded in 2003, the Group is a leading impact investor and provider of climate financing.  ThomasLloyd is a pure play impact investor and aims to apply a robust, socially and environmentally responsible investment approach that is geared towards reducing carbon emissions and improving economic prospects, while reducing investment risk through diversification across countries, sectors and technologies

Over the last decade, ThomasLloyd has deployed over US$1 billion across 16 projects in renewable energy power generation, transmission and sustainable fuel production with a total capacity in excess of 700 MW.

Since 2013, ThomasLloyd has been measuring and reporting on the impact of its investments, creating an empirical database showing the positive impact of their investments in sustainable energy infrastructure in high growth and emerging markets in Asia.