NextEnergy Solar Fund : NESF – Annex V Periodic Disclosure For Article 9 | FY2022/2023

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Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not

ANNEX V

Periodic disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852

Product name: NESF ("NextEnergy Solar Fund" or "the Fund")

Legal entity identifier: 213800ZPHCBDDSQH5447

Sustainable investment objective

Does this financial product have a sustainable investment objective?

significantly harm any environmental or social objective and that the investee companies follow good governance practices.

The EU Taxonomy is

a classification

system laid down in

Regulation (EU)

2020/852

establishing a list of

environmentally

sustainable

economic activities.

That Regulation

does not include a

list of socially

sustainable

economic activities.

Sustainable

investments with an

environmental

Yes

It will make a minimum of

sustainable investments1 with an

environmental objective: 95%

in economic activities that

qualify as environmentally sustainable under the EU

Taxonomy2

in economic activities that do not qualify as environmentallysustainable under the EU Taxonomy

It will make a minimum of

sustainable investments with a

social objective: __0_%

No

It promotes Environmental/Social (E/S)

characteristics and while it does not have asits objective a sustainable investment, it will have a minimum proportion of

sustainable investments

with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy

with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy

with a social objective

It promotes E/S characteristics, but will not

make any sustainable investments

objective might be

aligned with the

Taxonomy or not.

1. Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economic, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.
2. The EU Taxonomy is a classification system laid down in Regulation (EU) 2020/852, establishing a list of environmentally sustainable economic activities. That Regulation does not include a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not.

1

Sustainability indicators measure how the sustainable objectives of this financial product are attained.

To what extent was the sustainable investment objective of this financial product met?

Sustainable investment objective pursued by the NESF

NESF is a listed solar investment fund, which is currently active both in the acquisition of solar PV assets on the secondary market, as well as investing in solar PV assets that are under development (e.g., at the stage of origination, project planning or construction) when acquired.

The NESF fund sustainable investment objectives are:

• Committing to support UK governmental ambitions of bringing greenhouse gas emissions to net zero by 2050; and
• To substantially contribute to the environmental objective of climate change mitigation within the meaning of the EU Taxonomy regulation.

Together, these fund objectives contribute to the Article 9 qualification, under "economic activities that qualify as environmentally sustainable under the EU Taxonomy3" and more specifically, qualifies as contributing substantially to climate change mitigation.

NESF's integration of ESG factors, including its development activities, is driven by a consistent internal due diligence process ensuring ESG factors are fully integrated into investment decision-making. The due diligence's objective is to identify any potential ESG risks and put forward adequate mitigation to achieve compliance with national legislation and planning permission, as well as align to NextEnergy Capital's Sustainable Investment Policy and solar industry best practices. The due diligence covers various environmental, social and governance factors, including climate change, biodiversity, supply chain, circular economy, health&safety, labor conditions and stakeholder engagement amongst others. These factors are consistent with the principles of "do not do significant harm" and minimum safeguard of the EU Taxonomy for Solar PV activities.

Monitoring of progress against the sustainable investment objectives is primarily based on the calculation of GHG emissions and fossil fuel volume avoided by utilization of the solar assets and their output in MW. Data can be used to create forecasts or can be based on actual historic power output data to provide GHG emission and fossil fuel avoided figures.

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The positive impacts of the NESF biodiversity commitments are also being monitored to understand if they can be quantified and include the contribution toward climate change mitigation within future NESF reports.

How did the sustainability indicators3 perform?

The table below provides historical performance indicators (GHG emission avoided) up to the current reporting year.

Metric	Units	FY 2022	FY 2023
GHG Avoided	ktCO2e	328.7	363.0
NOx Avoided	tonnes	269.3	331.1
SOx Avoided	tonnes	549.7	612.4
PM2.5	tonnes	25.2	28.3
PM10	tonnes	6.2	6.9
Fossil Fuels avoided	kilotonnes oil equivalent	142.8	160.3
	(ktoe)
	Millions of barrels	1.0	1.2

The latest numbers are based on the renewable electricity generation (GWh) related to 2023 tax year (i.e. 1st April 2022 to 31st March 2023)4.

As indicated in the table, up to 363.0 ktCO2e of emissions and up to 160.3 kt of oil equivalent has been avoided.

…and compared to previous periods?

The historical data has been calculated in 2023 which includes data from the

2014 financial year onwards. This can be seen in the graph below:

1. Sustainability indicators measure how the sustainable objectives of this financial product are attained.
2. *The 363,000 tCO2e avoided figure provided within this report and the Annual Report for the year ended 31 March 2023 is calculated based on a total generation of 869.96 GWh for the year ended 31 March 2023, which includes all assets that have reached connection date (COD) at 31st March 2023.

3

As dsemonstrated in the graph, annual emissions avoided and fossil fuel use avoided increases in line with the growth of AuM by NESF and summarizes the contribution of the NESF assets toward climate change mitigation.

How did the sustainable investments not cause significant harm to any sustainable investment objective?

NESF's investment decision-making process ensures that investments do not only contribute to climate objectives, but also cause no significant harm to other environmental objectives as defined by the EU taxonomy and are conducted in accordance with minimum safeguards on matters such as social responsibility, human rights and labour conventions. A robust due-diligence process captures all the relevant key risks associated with the Solar PV industry. The risks are aligned with the Do No Significant Harm (DNSH) approach of the Taxonomy (with extension beyond) and include:

• Climate change;
• Circular economy;
• Biodiversity and ecosystems.

In the event that any risks were identified, these were captured/recorded and either mitigated against or the transactions were halted and not progressed.

From a climate change mitigation perspective, NESF substantially contributes to the objective by avoiding CO2e emissions to atmosphere and fossil fuel use. NESF reports the amount of CO2e avoided consistently year on year.

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For more information on the NEC/NESF due-diligence process, please refer to the ESG Disclosure document on the NESFand NEC websites.

How were the indicators for adverse impacts5 on sustainability factors taken into account?

Principal Adverse Impacts (PAI) are considered throughout all stages of the investment process.

NESF predominantly invests in utility-scale solar PV assets and complementary technologies, such as energy storage assets, and the investment decision is based on the outcome of due diligence which includes ESG adverse impacts as explained above. The due diligence process, as detailed in the Sustainable Investment Policy and NESF ESG Disclosure document, reviews all aspects of the asset(s) and counterparties (seller, contractors, and suppliers) and the associated adverse impacts (including environmental, social and employee, human rights, anti-corruption etc.) during the pre-investment stage. When gaps are identified, mitigation measures are proposed, and action plans are agreed during the approval process. Cost for implementation of ESG actions are also allocated into the financial model, to ensure capital can be deployed for these activities during the lifetime of the asset.

Post-acquisition of the assets, all relevant contractors who construct or operate the asset are requested to provide their ESG Key Performance Indicators (KPI). These include resource consumption, GHG scope 1, 2, and 3 emissions, Health&Safety, biodiversity, diversity, and other relevant ESG indicators at the asset level. A full set of KPI related to PAI has been developed consistently with the requirements of Table 1, Annex 1 of the Commission Delegated Regulation 2022/1288.

Further details on the reporting and KPI approach can be found in the NESF ESG Disclosure document on the NESFand NEC websites.

5 Principal adverse impacts are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption, and anti-bribery matters.

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