THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT MAY CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE UK'S MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, SUCH INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

LEI: 254900VC23329JCBR9G82

6 June 2023

ThomasLloyd Energy Impact Trust plc (the "Company")

Notice of Annual General Meeting and Dividend Declaration

On 24 April 2023, the Company announced that, in the process of preparing its annual report and accounts for the year ended 31 December 2022 (the "2022 Annual Report and Accounts"), the Company had been made aware of material uncertainty regarding the fair value of certain of its assets and liabilities. This uncertainty relates, in particular, to the 200 MW construction-ready asset in Rewa Ultra Mega Solar Park (the "RUMS Project") held by a wholly-owned special purpose subsidiary, Talettutayi Solar Projects Nine Private Limited (the "SPV"), of the Indian renewable energy platform that the Company has invested in ("SolarArise"). The RUMS Project is the sole sustainable energy infrastructure asset of the SPV and the sole construction asset in the Company's portfolio. Accordingly, the Company announced that further work was required involving the Company's auditors and other professional advisers to clarify the Company's financial position and that, pending the completion of that work, the Company was not in a position to publish the 2022 Annual Report and Accounts within the deadline prescribed by the Disclosure Guidance and Transparency Rules. Consequently, the Company sought an immediate suspension of listing and trading which became effective at 7.30 a.m. on 25 April 2023 (the "Suspension").

As explained in more detail below, the Company is not yet in a position to finalise its 2022 Annual Report and Accounts. Notwithstanding this, under the UK Companies Act 2006 (the "Companies Act"), the Company is obliged to hold an annual general meeting on or before 30 June 2023. The Company will therefore hold its 2023 annual general meeting (the "Annual General Meeting" or "AGM") at the offices of JTC (UK) Limited, The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF at 10.00 a.m. on Friday, 30 June 2023. The notice of the Annual General Meeting (the "Notice of AGM") will be posted to shareholders today, and copies will shortly be available for inspection on the Company's website, www.tlenergyimpact.com, and at the National Storage Mechanism, which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

For the reasons set out in detail below, the Board of Directors of the Company (the "Board") is recommending that shareholders vote in favour of Resolutions 1 to 4 to be proposed at the AGM and that shareholders abstain from voting on Resolutions 5 to 7 as the Chair will seek an adjournment of the AGM prior to putting those resolutions to the meeting.

RUMS PROJECT

The SPV successfully bid for the RUMS Project in a reverse auction conducted on 19 July 2021 and received the letter of award on 1 September 2021. Power purchase agreements ("PPAs") were signed on 25 November 2021 with Rewa Ultra Mega Solar Limited ("RUMSL"), the operator of the solar park of which the RUMS Project forms part, and M.P. Power Management Company Limited and Indian Railways, with a fixed rate tariff of INR 2.339 per kWh for 25 years. The original deadline for the scheduled commercial operating date ("SCOD") was 25 June 2023, but in September 2022 this was extended to 8 September 2023 due to a delay by RUMSL in getting the initial tariff and other related approvals from the state regulatory agencies. The original bid projections were for an overall project cash cost of INR 5,880 million (US$78.4 million) funded by debt of INR 4,700 million (US$62.7 million) and equity of INR 1,180 million (US$15.7 million) with an INR IRR of 13.5 per cent. It was expected that the equity financing required for the construction of the RUMS Project would be funded entirely from existing cash resources within SolarArise and ongoing operating cash flow from its operational solar portfolio.

During Board meetings held in the week of 17 April 2023, the Company's investment manager, ThomasLloyd Global Asset Management (Americas) LLC (the "Investment Manager"), advised the Board that the SPV's contract with the engineering, procurement and construction ("EPC") contractor would need to be signed imminently. During those meetings it became apparent that the cost of the RUMS Project and the attendant equity funding requirement had gone up significantly thereby calling into question its economic viability. These cost increases had arisen principally due to increases in module costs, the cost of the EPC contract, goods and services tax and adverse movements in exchange rates in comparison to the costs in the original bid assumptions. For example, the RUMS Project was originally bid with a module cost of US$24.2 cents per watt peak ("c/Wp") but prices rose significantly during 2022, in particular due to supply chain issues in the market and following the implementation of basic customs duty of 40 per cent. on imported solar modules and 25 per cent. on imported solar cells from 1 April 2022 when prices rose to a peak of approximately US$40 c/Wp, but have since fallen to approximately US$29 c/Wp.

On 21 April 2023, the Board was further advised by the Investment Manager that potentially significant non-completion liabilities would arise at the SPV level in the event that the SPV did not proceed with the construction of the RUMS Project. Having received information that suggested the RUMS Project may no longer be commercially viable and that there were potentially significant non-completion liabilities, the Company immediately sought the Suspension in order to undertake further work to clarify the position and complete its 2022 Annual Report and Accounts.

Current status

The project debt agreements for an INR 4,560 million facility were signed on 4 November 2022. Pre-construction works for the RUMS Project have been progressing with 246 of the 250 hectares on which the RUMS Project is due to be constructed already transferred to the SPV under a land use agreement, with the remaining four hectares due to be handed over within the next two months. The grid connection infrastructure for the RUMS Project is currently under construction by a subcontractor appointed by RUMSL with an expected completion date in November 2023. The SPV is at an advanced stage in the EPC contract tender process for the solar PV installation.

As a consequence of supply chain disruption in the solar PV sector, the Government of India's Ministry of New & Renewable Energy has decided that its Renewable Energy Implementing Agencies may further extend the SCOD to 31 March 2024 (and commensurately extend other associated intermediate milestones) of solar PV projects where the last date of bid submission was on or after 10 April 2021 (and the SCOD is otherwise due before 31 March 2024), for those that wish to benefit from such time-extension. As the last bid submission date for the RUMS Project was after 10 April 2021, the SPV could seek an extension to its SCOD to 31 March 2024, but any such extension is at the discretion of the relevant Renewable Energy Implementing Agency and, therefore, is not guaranteed.

As at 30 September 2022, based on the 100 per cent. interest in SolarArise now held by the Company, the fair value of the RUMS Project included within the valuation of SolarArise was approximately US$5 million (approximately US$2 million for the 43 per cent. interest owned at that date). This comprised the project cashflows from the SPV valued at approximately US$14 million offset by a reduction in the cash in SolarArise of approximately US$9 million being the present value of the equity still required for the project in the valuation model of approximately US$10 million (approximately US$14 million less approximately US$4 million of costs already incurred). SolarArise has incurred RUMS Project costs to date of approximately US$6 million, which have been funded out of SolarArise's cash resources, of which approximately US$4 million had been incurred up to 30 September 2022.

Commercial evaluation

In the days following the Suspension, the Board and its Investment Manager commenced a number of important workstreams. The Board has taken advice regarding potential liabilities in the event that the RUMS Project is not constructed in accordance with the contractual documentation. The Investment Manager has also continued to evaluate the options for the RUMS Project, including available mitigating actions, to determine the best course of action.

If construction does not proceed, the SPV could be subject to liabilities for non-completion of up to approximately INR 2,750 million (US$33.5 million) but these should be substantially lower after mitigating actions. These liabilities comprise various charges and damages, including delay liquidated damages, generation shortfall liquidated damages, transmission capacity relinquishment charges and solar park charges and penalties. If construction does not proceed, SolarArise has exposure in respect of the SPV of INR 100 million (US$1.2 million) pursuant to performance bank guarantees. The Company has not provided any guarantees in respect of the SPV's liabilities, and the Board has been advised that creditors to the SPV are unlikely to have recourse to any other group company.

If construction were to proceed, financing of the RUMS Project would require material additional equity funding for the SPV. The Investment Manager has revisited the assumptions and timelines in the investment models and, on 31 May 2023, advised the Board that, whilst solar module prices were continuing to fall, should the relevant EPC contracts be entered into now, the SPV would now require equity funding of approximately INR 4,136 million (US$50 million), of which approximately INR 3,640 million (US$44 million) would need to be funded by the Company into SolarArise. This includes approximately INR 442 million (US$5 million) of potential penalties arising as a result of not meeting the 8 September 2023 SCOD, should the extension to the SCOD referred to above not be granted. The RUMS Project is expected to have a significantly negative net present value which, based on current estimates, may be comparable with the maximum potential liabilities of the SPV in the event that construction does not proceed. In addition, the material additional equity funding would result in a majority of the Company's assets being invested in India, requiring a change to the Company's investment policy, including in relation to the limit on exposure to a single country to a maximum of 50 per cent. of gross asset value ("GAV") and potentially in relation to the limit on exposure to a single sustainable energy infrastructure asset of 25 per cent. of GAV.

The Investment Manager has indicated that, on the basis of the significant reduction in equity returns and the increased risk profile, it would be inappropriate for the Company to proceed with the investment in the RUMS Project. Based on currently available information, the Board has therefore concluded that it would not be in the interests of shareholders for the Company to commit to funding SolarArise to enable the construction of the RUMS Project, as currently configured, and that the Investment Manager should continue to evaluate the options for the RUMS Project, including available mitigating actions, to determine the best course of action. The Board has also appointed Ernst & Young LLP in New Delhi to assist it in reviewing options presented by the Investment Manager on the appropriate strategy for the RUMS Project.

The Board notes that the decision not to proceed with the RUMS Project may have certain commercial implications for SolarArise, including SolarArise not being able to participate in certain Indian government energy procurement tenders for a period of time. However, the Board expects that SolarArise should still be able to acquire operating assets.

AUDIT OF FINANCIAL PERIOD ENDED 31 DECEMBER 2022

The circumstances that gave rise to the Suspension, and the resulting uncertainties, are important factors in the actions which need to be undertaken to finalise the valuation of the Company's portfolio, to progress completion of the 2022 Annual Report and Accounts and for the Company's auditors to complete their audit. In this context, the Board has appointed PricewaterhouseCoopers LLP to assist Adepa Asset Management S.A. (the Company's AIFM) and the Board with the finalisation of the valuation of the Company's investment portfolio as at 31 December 2022 which includes a review of (i) the key assumptions included in the financial models provided by the Investment Manager to the Company's Independent Valuer, Kroll Advisory Ltd ("Kroll") and (ii) the valuation methodology used by Kroll. This work is already underway.

In particular, whilst the Board has been advised that creditors to the SPV are unlikely to have recourse to any other group company in the event of non-completion liabilities arising in respect of the RUMS Project, the valuation of SolarArise will need to reflect the new information made available to the Board and the material uncertainties over the future of the RUMS Project. The historic carrying fair values of the RUMS Project in SolarArise, currently estimated to total approximately US$7 million, will need to be written off and the valuation may need to reflect the exposures in relation to the performance bank guarantees (US$1.2 million) and the fair value of any associated contingent liabilities.

Accordingly, the Board is not currently able to provide a timetable for completion of the audit of the financial period ended 31 December 2022 and the Suspension will remain until such time as the Company publishes its 2022 Annual Report and Accounts. The net asset value of the Company ("NAV") as at 30 June 2023 will be announced as part of the Company's interim results for the period ended 30 June 2023 which, if the Company is in a position to do so, may be published at the same time as the 2022 Annual Report and Accounts, ensuring shareholders have the latest available information on the NAV at the time of the Suspension being lifted. Accordingly, the Board does not intend to publish a NAV of the Company as at 31 March 2023.

ESG AND SUSTAINABILITY REPORTING

In view of the delay in the Company's valuation and financial reporting, the Company is also delaying its reporting on ESG and sustainability, some of the data for which is derived from financial numbers. The Company's ESG and sustainability data, as well as its Principal Adverse Impact (PAI) disclosures will be issued at the same time as the 2022 Annual Report and Accounts.

OPERATING PORTFOLIO UPDATE

At 31 December 2022 and 31 March 2023, the operating portfolio comprised six operating solar assets in India with fixed rate tariff PPAs and a total generating capacity of 234 MWp and three in the Philippines with 100 per cent. wholesale electricity spot market ("WESM") prices and a total capacity of 80 MWp. The operating portfolio produced 272,188 MWh of clean renewable energy during the year ended 31 December 2022 and 102,826 MWh in the quarter ended 31 March 2023.

The Indian assets' generation of clean renewable energy increased by 12 per cent. in the year ended 31 December 2022 in comparison to the prior year, principally due to 2022 being the first full operating year of a 75 MWp plant which became operational in January 2021 only reaching its normal capacity from July 2021. Electricity generated by the Indian assets increased 6 per cent. in Q1 2023 in comparison to Q1 2022.

Electricity generated by the Philippine assets decreased by 7 per cent. in the year ended 31 December 2022 in comparison to the prior year, due principally to the combined impact of a category 5 typhoon at the end of 2021 and resultant grid curtailment due to the temporary unavailability of a subsea cable, but this was more than offset by the strong WESM prices achieved by the assets during the year. Q1 2023 generation increased by 48 per cent. in comparison to Q1 2022. However, Q1 2023 WESM prices achieved decreased by 14 per cent. in comparison to Q1 2022 reflecting the increase in supply.

The operating portfolio avoided 216,476 tonnes of carbon equivalent ("tCO2e") in the year ended 31 December 2022, and 82,503 tCO2e in Q1 2023. It also directly supported 287 jobs at the end of both periods.

Further to its announcement on 2 November 2022, the acquisition of the 99.8 per cent. interest in Viet Solar System Company Limited ("VSS") for US$4.6 million was completed in April 2023 following the satisfaction of standard regulatory and other completion conditions. VSS is a privately owned company with 6.12 MWp of operational rooftop solar assets at two sites near Ho Chi Minh City with 20-year US Dollar-indexed fixed-price government PPAs with Electricity Vietnam.

Pending resolution of the uncertainties regarding the RUMS Project and its impact on NAV, and publication of the 2022 Annual Report and Accounts, the Company will not be making further investments at this time.

INVESTMENT MANAGER UPDATE

The Board has been informed by the Investment Manager that it has made a number of recent senior appointments to its asset management team. These include the appointments of Nadir Maruf as chief investment officer, Duncan Black as head of portfolio & asset management and Ian Ruddock as chief operating officer. Prior to joining the Investment Manager, Mr Maruf was head of private markets at Tesco Pension Investment Limited. He joins the Investment Manager's executive team reporting to the chief executive officer, Michael Sieg. Mr Black was most recently managing director of Asia Infrastructure Advisors and is based in Singapore. Mr Ruddock was a partner of CAMG LLP, and was previously special adviser to the board of John Laing Infrastructure Fund.

INTERIM DIVIDEND FOR THE PERIOD TO 31 MARCH 2023

Pending resolution of the uncertainties regarding the RUMS Project and publication of the 2022 Annual Report and Accounts, the Board has concluded that, at this time, it would not be appropriate to increase the annual dividends in line with its 2023 dividend target set at the time of the IPO. However, having regard to the Company's total cash balances of US$76.4 million at 31 March 2023 and its ability to pay dividends out of capital, the Board has declared a maintained first interim dividend for the quarter ended 31 March 2023 of 0.44 cents per share. The dividend timetable is:

The dividend timetable facilitates a period for shareholders to elect to receive the dividend payment, which is declared in and by default payable in US Dollars, in either sterling or Euro as an alternative. The deadline for receipt of elections for the payment of dividends other than in US Dollars is (5.00 p.m. BST) on 4 July 2023. 

A copy of the dividend currency election form can be downloaded from www.investorcentre.co.uk and the Company's website: tlenergyimpact.com. Completed dividend currency election forms should be sent to the Company's Registrar, Computershare Investor Services PLC, c/o The Pavilions, Bridgewater Road, Bristol, BS99 6ZY. CREST shareholders must elect via CREST.

CONTINUATION RESOLUTION

In its IPO prospectus published on 19 November 2021, the Company stated that, if it had not invested, or committed to invest, at least 75 per cent. of the net initial proceeds raised at IPO within 12 months of admission to listing and trading, the Board would propose an ordinary resolution at the Company's next annual general meeting that the Company should continue in its present form (a "Continuation Resolution"). As that investment condition was not met, a Continuation Resolution will be proposed at the AGM.

The Board believes that it would not be appropriate to ask shareholders to vote on the continuation of the Company until it is in a position to provide a recommendation and shareholders are able to make an informed decision with the benefit of having received the 2022 Annual Report and Accounts. In any event, the Board intends to seek to consult with its shareholders at the appropriate time. Accordingly, as explained below, the Board intends that the AGM to be held on Friday, 30 June 2023 will be adjourned before the Continuation Resolution is put to the vote and that that resolution will be put to shareholders at the adjourned AGM, which is expected to held on the same day as the Accounts Meeting referred to below.

SPLIT AGM AND ACCOUNTS MEETING

As a result of the delay in the publication of the 2022 Annual Report and Accounts, it is not currently possible to propose the standard resolutions at the AGM relating to receiving the audited financial statements and the auditor's and directors' reports, approving the directors' remuneration report and approving the re-appointment and remuneration of the auditor. Those resolutions will be proposed at a separate general meeting of shareholders (the "Accounts Meeting") to be held as soon as possible following the publication of the 2022 Annual Report and Accounts. The 2022 Annual Report and Accounts will be published as soon as possible and notice of the Accounts Meeting will be sent to shareholders shortly thereafter.

The Company's articles of association (the "Articles") require all of the Directors to retire at each annual general meeting of the Company. Therefore, in order to comply with the Articles, resolutions will be proposed at the AGM for the re-election of each of the Directors. In addition, the Notice of AGM includes the Continuation Resolution as well as the standard resolutions to authorise market purchases of own shares and approve the notice period for general meetings.

The Board intends that, while Resolutions 1 to 4 (re-election of Directors) will be put to shareholders at the AGM to be held on Friday, 30 June 2023, the Chair will seek an adjournment of the AGM once those Resolutions have been put to the vote and that the remaining resolutions, being Resolution 5 (Continuation Resolution), Resolution 6 (market purchases of own shares) and Resolution 7 (notice period for general meetings), will be put to shareholders at the adjourned AGM. Notice will be given to shareholders of the date and time of the adjourned AGM together with a new Form of Proxy and the Board's recommendations on Resolutions 5 - 7 at that time.

The Board believes that the proposals for a split AGM and Accounts Meeting set out above allow the Company to comply with its legal obligations in the most efficient, straightforward and transparent way whilst giving shareholders an earlier opportunity to meet with the Board and the Investment Manager and the opportunity to vote on all of the resolutions expected to be proposed at an annual general meeting of the Company at the appropriate time.

RESOLUTIONS

Shareholders' attention is drawn to the resolutions to be proposed at the AGM, and the corresponding notes, set out in the Notice of AGM. Resolutions 1 to 5 will be proposed as ordinary resolutions and Resolutions 6 and 7 will be proposed as special resolutions.

Ordinary Resolutions

Resolutions 1 to 4 - Re-election of Directors

In accordance with the Articles, all Directors are subject to annual re-election and accordingly, Sue Inglis, Clifford Tompsett, Kirstine Damkjaer and Mukesh Rajani will stand for re-election at the AGM.

Resolution 5: Continuation Resolution

As noted above, the Company stated in its IPO prospectus that if it had not invested, or committed to invest, at least 75 per cent. of the net initial proceeds raised at IPO within 12 months of admission to listing and trading, the Board would propose an ordinary resolution at the Company's next annual general meeting that the Company should continue in its present form.

In accordance with the Articles, if the Continuation Resolution is passed, the Company will continue its business as a closed-ended public limited company conducting its affairs as a UK investment trust. If the Continuation Resolution does not pass, the Directors will be required to put forward proposals for the reconstruction, reorganisation or winding up of the Company to shareholders for their approval within four months of the date of the meeting at which the Continuation Resolution was proposed.

Special Resolutions

Resolution 6 - Market purchases of own shares

This resolution seeks authority for the Company to make market purchases of its own ordinary shares and is proposed as a special resolution. If passed, the resolution gives authority for the Company to purchase up to 26,335,137 of its ordinary shares, representing 14.99 per cent. of the Company's issued ordinary share capital as at the date of the Notice of AGM. The Company currently has no treasury shares.

The resolution specifies the minimum and maximum prices which may be paid for any ordinary shares purchased under this authority. The authority will expire at the conclusion of the Company's next annual general meeting.

The Directors believe that, from time to time and subject to market conditions, it will be in shareholders' best interests to buy back the Company's shares. The Company would only buy back shares when they are trading at a discount to net asset value per share.

The Company may either cancel any shares it purchases under this authority or transfer them into treasury (and subsequently sell or transfer them out of treasury or cancel them).

The Company does not have any options or outstanding share warrants.

Resolution 7 - Notice period for general meetings

The Companies Act stipulates that the notice period for general meetings (other than annual general meetings) is 21 days unless shareholders' approval to reduce the notice period has been given. Resolution 7 is to be proposed as a special resolution to allow the Company to hold general meetings (other than annual general meetings) on at least 14 clear days' notice.

If approved, the resolution will be effective until the end of the Company's next annual general meeting. The Board will consider, on a case-by-case basis, whether the use of the flexibility offered by the shorter notice period is merited, taking into account the circumstances, including whether the business of the meeting is time sensitive.

Full details of the resolutions are set out in the Notice of AGM.

RECOMMENDATION

The Directors consider that Resolutions 1 to 4 to be proposed at the Annual General Meeting are in the best interests of the Company and its shareholders as a whole. Accordingly, the Board unanimously recommends that shareholders vote in favour of Resolutions 1 to 4 to be proposed at the Annual General Meeting. The Directors intend to vote in favour of Resolutions 1 to 4 in respect of their holdings of ordinary shares, amounting to 131,000 ordinary shares in aggregate (representing approximately 0.07 per cent. of the issued share capital of the Company as at the date of the Notice of AGM).

As explained above, given the uncertainty regarding the Company's financial position and the Suspension, at the date of this Notice of AGM the Directors unanimously recommend that shareholders should abstain from voting on Resolutions 5, 6 and 7 (by selecting the "vote withheld" option on their Form of Proxy) as the Chair will seek an adjournment of the AGM prior to putting those resolutions to the meeting. At the time of giving notice of the adjourned AGM, together with a new Form of Proxy, the Directors will give a revised voting recommendation to shareholders in respect of those resolutions. Each of the Directors intends to abstain from voting on Resolutions 5, 6 and 7 at this time.

The person responsible for arranging the release of this announcement on behalf of the Company is Ruth Wright of JTC.

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