The board of Asian Energy Impact (AEIT ) has published its delayed 2022 annual report and 2023 interims leading it one step closer to reinstating its shares, which have been suspended for 9 months. 

The £70m emerging markets renewable fund formerly known as ThomasLloyd Energy Impact must now upload the results to the National Storage Mechanism before applying to the FCA for a restoration of the listing.

Writing in the audited annual results, which covered the period from launch in November 2021 to December 2022, transition manager Octopus Energy Generation said progress had been made on the construction of the Rewa Ultra Mega Solar Park (RUMS) project in India, with three of the five shipments of solar panels on site.

AEIT has appointed Fichtner as the owner’s technical advisor to the project, providing boots on the ground to oversee the construction of the asset on a day-to-day basis.

An official extension has been granted to the deadline and while risks remain on timing and the overall cost owing to the size and tight timelines of the project, it is currently expected to be commissioned before 31 March, the results said.

The documents also showed the cash balance at the end of 2023 was $41.4m (£32.5m), while its wholly owned UK subsidiary, AEIT Holdings Limited held $1.7m in reserves.

Peel Hunt analyst Markuz Jaffe said this cash holding should ‘provide comfort around a floor to the value of the shares’ adding if outcome of the ongoing strategic review is a managed winddown this cash would be given to shareholders. 

The strategic review, which is determing the future of the fund and if it can be relaunched, is due to finish at the end of the current quarter. 

Chair Sue Inglis (pictured) said the board would review the annualised ongoing charges ratio of 2.5% for the period to the end of 2022, given the fund’s reduced size, to see where cost saving could be made.

She thanked shareholders, the largest of which is the UK Foreign Office, for their patience since the board suspended the shares last April, noting it would be ‘disingenuous’ to say the period since launch was not without disappointment and challenges.

‘However, the board is encouraged by AEIT’s progress following Octopus Energy Generation’s appointment last November and we firmly believe in the investment opportunity to deliver an impact-led renewable investment strategy in Asia.’

2022 annual results              

Much of the information contained in the results around the net asset value had been disclosed last year, however, they do provide a detailed timeline and summary of key events that led to the breakdown of the relationship between the board and the manager. 

At the end of its first full year in operation, net asset value per share had dropped 50% from 98 cents to 49.3 cents, according to the results. While foreign exchange movements and downward pressure on wholesale electricity spot market pricing played a part, Inglis took aim at former manager ThomasLloyd’s actions.

‘Significant deficiencies in how assets have been valued historically alongside overly aggressive assumption sets have materialised through the preparation of the 31 December 2022 portfolio valuation. The asset valuations now presented as at 31 December 2022 are based on what could and should have been known at that time.’

The fund made a loss for the period of $88.8m. This was driven by a drop in valuations and a $38.5m contract provision with respect to the 57% SolarArise acquisition. No investment income was received during the period. 

The board paid $4m worth of dividends during the year, which was covered by pre-tax profits of $4.9m, excluding costs within the SolarArise Indian investment platform holding company. 

Inglis highlighted that getting cash back to the UK from the underlying assets is problematic under the current structures, noting a key priority for 2024 will be to undertake capital restructurings.

Interim results 2023

The unaudited results showed a 3.7% increase in NAV to 51.1 cents per shares over the six months to July, with $99.9m, or 55% of capital raised at launch, invested.

This was driven by investment into the Vietnamese assets and an increased valuation of the RUMS project, which had been written down to zero the preivous December.