Company Announcements

16 August 2022

SDCL Energy Efficiency Income Trust plc
("SEEIT" or the "Company")

Company Update

SDCL Energy Efficiency Income Trust plc, the first London Stock Exchange listed investment company of its kind to invest exclusively in the energy efficiency sector, is pleased to provide an update on recent investment and portfolio activity.

Investment in US Battery Energy Storage System Provider

SEEIT has signed an agreement to provide a convertible loan of up to US$10 million, including an initial US$5 million drawdown, in ON Energy Storage LLC ("On.Energy"), a Battery Energy Storage System ("BESS") and microgrids solutions provider, headquartered in the US. SEEIT has also provided a conditional commitment to fund up to US$100 million in qualifying commercial & industrial ("C&I") Energy Storage as a Service ("ESaaS") projects to be developed and operated by On.Energy across North America.

On.Energy provides its proprietary end-to-end BESS solution, integrating software and artificial intelligence to develop and manage battery equipment on-site for Commercial & Industrial ("C&I") counterparties. On.Energy focuses on delivering long-term ESaaS projects to customers seeking sustainable power whilst reducing energy costs. Operation and maintenance is managed by On.Energy, with equipment undergoing remote 24/7 monitoring.

The use of batteries allows energy to be stored for when it is needed, overcoming the intermittent production obstacles of certain types of renewable energy and increasing resiliency while reducing reliance on the grid. A typical 1 MW / 2 MWh system deployed by On.Energy reduces an average of 12,850 kg of CO2eq per year from the atmosphere.

The convertible loan investment aligns with SEEIT's Investment Policy, within its allocation of 3% of gross asset value to developers, managers or operators of energy efficiency projects. The investment commitment of up to $100 million is potentially funding qualifying behind-the-meter, long-term energy efficient contracts with C&I counterparties. Overall, the investment supports SEEIT's total returns target as well as its progressive dividend policy and adds further technological diversification to the portfolio.

Commenting on the investment, Purvi Sapre, Fund Manager of SEEIT, said: "On.Energy represents SEEIT's first investment into a focused Battery Energy Storage System provider, further diversifying SEEIT's portfolio while also providing opportunities for synergies across its existing portfolio companies. We are delighted to be partnering with a company committed to the development and commercialisation of technologies that push forward global efforts to achieve net zero, by providing affordable and sustainable energy through safe and efficient infrastructure."

Early Repayment of Bio Town Loan

SEEIT has received early repayment of the total outstanding portion of its $31 million investment into the large-scale green gas-to-grid project operated by Bio Town Biogas. SEEIT has now substantially exited this investment.

The investment involved the acquisition of an operating renewable power facility in Reynolds, US, and further investment in the expansion of the facility to enable the project to produce green gas.

The counterparty has elected to pay down SEEIT's senior and subordinated debt early following unanticipated profits generated from project hedging arrangements. The early repayment includes customary repayment penalties and outstanding interest and will have a positive effect on SEEIT's expected total returns from this project for the period of investment.

For Further Information

About SEEIT

SDCL Energy Efficiency Income Trust plc is a constituent of the FTSE 250 index. It was the first UK listed company of its kind to invest exclusively in the energy efficiency sector. Its projects are primarily located in the UK, Europe and North America and include, inter alia, a portfolio of cogeneration assets in Spain, a portfolio of commercial and industrial solar and storage projects in the United States, a regulated gas distribution network in Sweden and a district energy system providing essential and efficient utility services on one of the largest business parks in the United States.

The Company aims to deliver shareholders value through its investment in a diversified portfolio of energy efficiency projects which are driven by the opportunity to deliver lower cost, cleaner and more reliable energy solutions to end users of energy.

The Company is targeting an attractive total return for shareholders of 7-8 per cent. per annum (net of fees and expenses and by reference to the initial issue price of £1.00 per Ordinary Share), with a stable dividend income, capital preservation and the opportunity for capital growth. The Company is targeting an aggregate dividend of 6.00p per share in respect of the financial year to 31 March 2023. SEEIT's last published NAV was 108.4p per share as at 31 March 2022.

Past performance cannot be relied on as a guide to future performance.

Further information can be found on the Company's website at www.seeitplc.com.

Investment Manager

SEEIT's investment manager is Sustainable Development Capital LLP, an investment firm established in 2007, with a proven track record of investment in energy efficiency and decentralised generation projects in the UK, Continental Europe, North America and Asia.

SDCL is headquartered in London and also operates worldwide from offices in New York, Dublin, Madrid, Hong Kong and Singapore. SDCL is authorised and regulated in the UK by the Financial Conduct Authority.

Further information can be found on at www.sdclgroup.com.