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

11 October 2023

ThomasLloyd Energy Impact Trust plc

(the "Company")

Decision to proceed with the construction of the RUMS Project and recommended proposals to amend the Company's investment policy

DECISION TO PROCEED WITH THE CONSTRUCTION OF THE RUMS PROJECT

On 6 June 2023, the Company announced that its current investment manager, ThomasLloyd Global Asset Management (Americas) LLC (the "Investment Manager"), had indicated that, on the basis of the significant reduction in equity returns and the increased risk profile and having regard to the potential non-completion liabilities and penalties of up to US$33.5 million (the "Abandonment Penalties"), it would be inappropriate to proceed to construct the 200 MW DC solar PV project in Rewa Ultra Mega Solar Park (the "RUMS Project"), owned via the Company's wholly-owned Indian subsidiary, SolarArise India Projects Private Limited ("SolarArise"). That announcement also confirmed that, based on then available information, the Board had 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.

Following the announcement on 6 June 2023, the Investment Manager continued to evaluate the economic options for the future of the RUMS Project. In light of a further fall in the prices of solar modules, being the major cost component in constructing a solar PV project, and having regard to the Investment Manager's revised recommendation to proceed with the RUMS Project and independent advice received by the Board based on the information available at that time, the Board approved, on 7 August 2023, the funding of pre-construction preparatory work for the RUMS Project which was required in order to preserve the RUMS Project timeline outlined by the Investment Manager.

In September 2023, the Investment Manager advised the Board that, in order for the RUMS Project to be sufficiently constructed and commissioned by the expected scheduled commercial operation date of 5 February 2024 ("SCOD") to meet the minimum 125 MW requirement under the power purchase agreements, and fully constructed by 31 March 2024, a final decision on whether to proceed with the RUMS Project was required by 10 October 2023. On 10 October 2023, the Investment Manager advised that proceeding with the construction of the RUMS Project at an estimated total cost of approximately US$84 million was estimated, in the base case scenario, to result in a negative net present value ("NPV") of approximately US$13 million for the RUMS Project assuming that construction proceeded to plan, before the benefit of a refinancing once the RUMS Project is operational which could improve the NPV by approximately US$1 million. Under other scenarios, especially if (i) construction is not completed by 31 March 2024 (currently the last legal date for commissioning Chinese-manufactured solar modules within India) and/or (ii) the yield once the RUMS Project is operational falls materially below expectations, the negative NPV resulting from constructing the RUMS Project could be materially higher than estimated in the base case scenario. Due to the extremely tight timeline for completing the RUMS Project on time, the Board believes that there is a reasonable likelihood of construction not being fully completed on time. It should also be noted that the RUMS Project finance is subject to a guarantee from SolarArise.

In conjunction with considering the direct financial impact of proceeding to construct the RUMS Project and the associated risks, including the likelihood that the resulting negative NPV could be materially higher than estimated in the base case scenario, the Board has also taken into account the economic loss and other consequences that would be triggered by failing to construct the RUMS Project as well as the potential benefits of proceeding with construction. Based on advice received from the Investment Manager:

· aborting the RUMS Project would: (i) crystallise an immediate write off of US$8.9 million of costs incurred in respect of the project as at 30 September 2023; (ii) result in the encashment of US$1.2 million of performance bank guarantees; (iii) potentially indirectly expose SolarArise to Abandonment Penalties (net of the performance bank guarantees) of up to US$32.3 million and likely protracted associated litigation; and (iv) lead to reputational damage that could adversely impact the value of the SolarArise platform; and

· whilst the RUMS Project is clearly not value accretive, proceeding to construct it would: (i) allow SolarArise to better manage its liabilities in respect of the RUMS Project, providing greater certainty compared to a very uncertain process of aborting it, both in terms of the value of any potential Abandonment Penalties and the expected timeline for settlement; and (ii) add a further 200 MW of capacity to the SolarArise platform and, once operational as part of a wider portfolio, may facilitate a more attractive exit of SolarArise in any future liquidity event.

Based on the advice received from the Investment Manager and the Company's other appointed advisers (not including Octopus Energy Generation, which, as previously announced, the Company is proposing to appoint as its transitional investment manager), the Board has concluded that proceeding with the construction of the RUMS Project may now be the less value destructive option for shareholders. Accordingly, the Board has agreed to provide funding of up to US$20 million by way of an INR denominated external commercial borrowings loan from the Company to SolarArise to enable construction of the RUMS Project to proceed.

Recommended proposals to amend the Company's investment policy

The Company's only development project (the "TT8 Project") is a 150 MW DC solar PV project, held by a special purpose vehicle of SolarArise. The Board was advised by the Investment Manager in August 2023 to proceed with development of the project and sign the power purchase agreement with Maharashtra State Electricity Distribution Company Limited.

The provision of funding for the construction of the RUMS Project, at the same time as continuing with the TT8 Project, may result in the fair value of the Company's Indian portfolio exceeding 50 per cent. of its gross asset value, which is the single country limit in the Company's investment policy. Accordingly, to ensure that there is no breach of the Company's investment policy, a material change to the policy is required. The proposed changes to the investment policy will permit the Company to exclude the amount of any funds invested in the RUMS Project up to completion of commissioning from the assessment of the single country limit. The revised investment policy will also contain a commitment that no further sustainable energy infrastructure assets shall be acquired, or projects committed to, with exposure to India until the Company is in compliance with the single county limit. The Company is also proposing clarificatory changes to its gearing policy.

A circular detailing the proposed changes to the Company's investment policy, and convening a general meeting at which a resolution to approve the changes will be proposed (the "Resolution"), is today being posted to shareholders; 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.

SHAREHOLDER SUPPORT FOR THE proposed changes to the investment policy

The Company has received signed agreements from shareholders representing approximately 69 per cent. of the voting rights of the Company indicating their support for the proposed changes to the investment policy and confirming their intention to vote in favour of the Resolution.

The person responsible for arranging the release of this announcement on behalf of the Company is Rachel Orebote of JTC (UK) Limited, the Company Secretary.

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