TRIG has completed the acquisition of a c.36% equity interest in Merkur, the 396MW operational offshore wind farm in the German North Sea ("the Project"). This follows the exchange of contracts to acquire the Project announced in December 2019, and receipt of German foreign investment approvals and EU merger clearances.

As announced in December, TRIG intends to sell down a share of its investment to minority co-investors managed by InfraRed, leaving TRIG with an approximate 25% equity interest in the Project. This is expected to complete in July 2020 and once completed, the investment is expected to represent approximately 8% of TRIG's portfolio value. TRIG has also partnered with the Dutch pension investor, APG, who acquired the remaining c.64% in the Project. This is consistent with TRIG's strategy of partnering with aligned co-investors on larger transactions.

Commercial operations commenced in June 2019 and the Project benefits from an attractive Feed-in-Tariff for the next 13 years (until June 2033), followed by a floor price for a further six years. The existing debt financing in the Project is fixed rate and fully amortising within the initial subsidy period.

Exit from Ersträsk onshore wind farm in Sweden

As noted in TRIG's Report & Accounts for the year ended 31 December 2019, the construction of Phase 2 of the Ersträsk wind farm by its developer, Enercon, has been delayed. Ersträsk is an onshore wind farm in Sweden being developed in two phases. TRIG invested in 75% of the equity in Phase 1 (46 MW net) upon it becoming operational in Q1 2019 and had intended to invest in 75% of Phase 2 (126 MW net) upon it becoming operational. The delays in the construction of Phase 2 will result in the project missing key milestones and, given the near-term prospects for its progression, the Company has chosen not to proceed with the investment in Phase 2. TRIG will not suffer any financial loss. Under the terms of the sale and purchase agreement for Ersträsk, the Company is protected: payment is only due provided the turbines become operational by the key milestones and the Company took no construction or delay risks. Phase 2 would have represented c.6% of the Company's portfolio value as at 31 December 2019.

Under the terms of the acquisition agreement for Ersträsk, TRIG has an option to sell Phase 1 back to Enercon in the event that Phase 2 does not complete. TRIG intends to exercise this option given Phase 1 was only intended to be part of the larger project. The investment represents c.2% of the Company's portfolio value as at 31 December 2019. The contractual terms provide for the Company to recover its investment together with its expected return over the period of its investment. The sale back to Enercon is expected to complete in Q3 2020.

Incremental investment in the Fujin wind portfolio

TRIG has made an additional investment into Fujin SAS ("Fujin"), a holding company that owns a portfolio of five operational windfarms in France with a gross generation capacity of 87.8MW. TRIG made an initial investment in Fujin in June 2019, and this additional investment takes TRIG's holding in Fujin from 35% to 42%. Fujin benefits from inflation-linked Feed-in-Tariffs with French utility company EDF with, on average, over five years remaining.

Fujin now comprises approximately 2% of TRIG's portfolio value. Fujin is owned alongside Akuo Energy, a leading French developer, who remains the majority shareholder and will continue to operate the windfarms.

Investment Commitments

The Company began the year with approximately £100m of surplus cash. Following the completed investments in Merkur and Fujin, as detailed above, as well as in Blary Hill, the Scottish onshore wind farm, and the planned sell down of Merkur and sale of Ersträsk Phase 1 during Q3 2020, TRIG expects to be c.£50m drawn on its Revolving Credit Facility ("RCF"), with outstanding commitments of c.£35m, relating to payments for the construction at the Blary Hill and Solwaybank wind farms due over 2020 and 2021. TRIG's committed RCF capacity is £340m.

InfraRed, the Company's Investment Manager, continues to evaluate an attractive pipeline of suitable investment opportunities for the Company.

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