Update on The Rock & Benfica III

10 December 2021

Aquila European Renewables Income Fund plc

Update on The Rock and Benfica III

                               The Rock: important milestone achieved with all turbines now fully erected

Aquila European Renewables Income Fund plc ("AERIF" or "the Company"), the London-listed investment company advised by Aquila Capital Investmentgesellschaft mbH (the "Investment Adviser") is pleased to announce that all 72 wind turbines at The Rock have now been fully erected, reaching an important milestone for the project.

Construction is now complete and the project is entering a new phase where the turbines are being prepared for electricity production. The majority of the turbines are energised with the remaining wind farm expected to be fully energised by the end of December 2021. Test runs will follow which are subject to site accessibility, depending on the weather.

With the process of commissioning of The Rock underway, the commercial operation date is expected in the first quarter of 2022. The recent delay of commissioning from Q4 2021 was largely driven by stronger than expected wind conditions, slowing down the installation works, as well as various effects from COVID-19 on the construction process.   

AERIF has also recently observed the positive impact of higher-than-expected wind speeds at Tesla, the Company's other wind farm (25.9% interest), operating in Norway. Further details of the Company's Q4 performance will be reported in February 2022.

The EPC agreement includes a mechanism to compensate the project company in the event that the start of commercial operations is delayed. The Investment Adviser does not expect any material adverse impact on the company's financial position or ability to service the Power Purchase Agreement ("PPA") as a result of the revised operation date.

The Rock is expected to be one of the biggest wind farms in Europe with 400 MW capacity. The project is expected to provide 1.3 TWh renewable electricity annually, equivalent to a saving of approximately 412 kt of CO₂ per annum.

Once in operation, the majority of the power from the wind park will go to the nearby Alcoa aluminum plant, a local cornerstone employer, which has signed a 15-year PPA. This guarantees opportunities for growth in the region and contributes to safeguarding hundreds of Norwegian jobs.

Benfica III

AERIF is also pleased to announce that, following favourable pricing dynamics observed in Iberian power markets, the Investment Adviser has negotiated additional PPAs for Benfica III. The new PPAs have a term of three years, with a pay as-produced structure. The additional PPAs increase Benfica III total P50 production coverage from 52% to approximately 85%.

In coordination with the Investment Advisers' Merchant Market Desk, AERIF was able to secure the new PPAs at very attractive prices, with the new PPA price representing an increase of 93% to 122% compared to the existing PPAs in place[1]. Pro-active management of merchant exposure is a key component of AERIF's investment strategy.

AERIF holds a 100% interest in Benfica III, which was acquired in October 2020.

Michael Anderson, Senior Manager at Aquila Capital, the Investment Adviser, comments on the milestones: "We are happy to have secured the additional Power Purchase Agreements at such favourable pricing, which not only reduces merchant risk but is also expected to be accretive to the economic returns for the asset, relative to the base case. The Rock is AERIF's first construction project, so reaching construction completion is an important milestone for the Company. We look forward to working with our construction partners to start commercial operations next quarter."

For further details contact: 

Media contacts: 

Smithfield Consultants 

Ged Brumby | 020 3047 2527 

John Kiely | 020 3047 2538 

Andrew McLagan | 020 3047 2006 

Sponsor, Broker and Placing Agent  

Numis Securities 020 7260 1000 

Tod Davis  

David Benda  

Vicki Paine  

LEI Number: 213800UKH1TZIC9ZRP41

NOTES 

Aquila European Renewables Income Fund plc ("AERIF" or the "Company") is a London-listed renewable energy infrastructure investment company with the aim to provide investors with an attractive long-term, income-based return in EUR through a diversified portfolio of hydropower, onshore wind and solar PV investments across continental Europe and Ireland. Through the diversification of generation technologies, the seasonal production patterns of these asset types complete each other to balance the cash flow, while the geographic diversification serves to reduce exposure to one single energy market. AERIF is targeting 5.0 cents per ordinary share in relation to the financial year ending 31 December 2021, with the aim of increasing this dividend progressively over the medium term. 

Further details can be found on AERIFs website at www.aquila-european-renewables-income-fund.com.