128 thousand households

provided with
clean energy

The fund made two new investments in 2015. The first investment was in rooftop solar with SolarAccess, the same developer with whom it invested in Silvius Sun in 2014. This investment was made in the third quarter of 2015. The project consists of eight roof mounted solar plants for brewer Heineken in the Netherlands. A total of more than 12,000 solar panels have been installed on distribution centres in various locations in the Netherlands. The solar panels have a total generating capacity of 3.0 MWp, which compares to the energy consumption of 800 households. The electricity is primarily used by the host companies on whose roofs the panels are installed. In addition, in Amsterdam and Rotterdam electric vehicles distributing Heineken products will be powered by the solar installations. Construction of all projects was completed in 2015. Triodos Renewables Europe Fund and SolarAccess own the majority of the shares, while the fund also provided a mezzanine loan.

The second investment was in Windpark Willem-Annapolder, in which the fund increased its stake. This wind farm is located in the province of Zeeland in the Netherlands and has been in the portfolio since March 2007. The farm became operational in 2003 and consists of 10 smaller wind turbines. The acquisition fits the fund’s strategy to increase its interest in well-performing assets and thereby strengthen an existing partnership. Willem-Annapolder produces roughly 17 GWh per annum, which equals the energy demand of approximately 5,000 households.

Country allocation (% of fund’s total assets), December 31, 2015

Country allocation (% of value of investments), December 31, 2014 (pie chart)

Source: Triodos Investment Management B.V.

Sector allocation (% of fund’s total assets), December 31, 2015

Source: Triodos Investment Management B.V.

The fund’s portfolio of renewable energy assets is geographically diversified across six European countries, spreading the fund’s exposure to regulatory risks. A substantial part of the fund’s revenues is derived from regulatory support, the rest from electricity sales. Whilst EU policies support the proliferation of renewable energy and the use of regulations to achieve this, at a national level support is delivered via a variety of mechanisms. Maintaining exposure to a range of countries mitigates the risk of the fund’s performance being materially impacted by changes in national support mechanisms.

In all countries where the fund is invested, with the historic exception of Spain, the regulatory regimes have been stable.

Solar PV projects, both ground-mounted as well as solar roof systems, accounted for 55.8%, and onshore wind 44.2% of the portfolio value. The solar PV projects performed on average above expectations in 2015, mainly due to higher-than-forecasted irradiation. In 2015, wind supply was on portfolio value-weighted average also just above expectations. The fund continues to review opportunities to invest in small- to medium-scale hydro power projects, in addition to wind and solar PV. All in all, the fund’s weighted average portfolio discount rate decreased slightly from 8.9% at the end of 2014 to 8.6% at the end of 2015. The reduction in this rate is due to a change in portfolio composition following the new investments in 2015. The discount rate of individual assets remained unchanged. The rate is consistent with the fund’s valuation methodology, which considers the maturity and operational stability of projects, the country risk premium and risk-free rates, and the value of comparable assets in the market.

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