Triodos Renewables Europe Fund A sub-fund of Triodos SICAV II

Transcription

1 Triodos Renewables Europe Fund A sub-fund of Triodos SICAV II Semi-annual report June 2017 TLIM

2 Energy and Climate For a transition from a carbon-based economy to a sustainable economy, it is essential to reduce energy demand, to use energy as efficiently as possible and to invest massively in renewable energy systems, while switching to low carbon fuels.

3 Triodos SICAV II - Triodos Renewables Europe Fund Semi-annual report June 2017 Triodos Renewables Europe Fund is a sub-fund of Triodos SICAV II (Société d Investissement à Capital Variable), which is established in the Grand Duchy of Luxembourg. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF). Triodos Investment Management BV is the external alternative investment fund manager of Triodos SICAV II - Triodos Renewables Europe Fund. Triodos Investment Management BV is incorporated under the laws of the Netherlands and is wholly-owned subsidiary of Triodos Bank NV. Triodos Investment Management BV is supervised by the Dutch regulator, Autoriteit Financiële Markten. The value of investments may fluctuate. Past performance is no guarantee of future results. No subscription can be accepted on the basis of financial reports. Subscriptions are only valid if they are made on the basis of the latest published prospectus accompanied by the latest annual report and the most recent semi-annual report, if published thereafter. The prospectus is available free of charge at the registered office of Triodos SICAV II in Luxembourg and from Triodos Bank:

4 Key figures (amounts in EUR) 1st half st half Net assets (end of reporting period) 74,291,520 69,024,181 72,890,787 64,094,871 61,972,666 Income 1,165, ,414 3,140,864 2,464,630 3,160,185 Expenses 946, ,689 1,791,092 1,690,343 1,526,991 Net operating income 218,527 59,725 1,349, ,287 1,633,194 Realised and unrealised results on investments (1,698,121) (1,914,608) (293,815) 1,996, ,534 Net result (1,479,594) (1,854,883) 1,055,957 2,770,851 2,200,728 Ongoing charges per share class* R-cap (EUR) 2.95% 2.97% 2.97% 3.07% 2.85% I-cap (EUR) 2.39% 2.44% 2.42% 2.45% 2.49% Z-cap (EUR) 2.44% 2.50% 2.45% 2.53% 2.48% Net asset value (NAV) per share June 29, 2017 June 30, 2016 Dec. 29, 2016 Dec. 31, 2015 Dec. 29, 2014 R-cap (EUR) I-cap (EUR) Z-cap (EUR) Return based on NAV per share** 6-month return 1-year return 3-year return p.a. 5-year return p.a. Return p.a. since inception R-cap (EUR) -2.2% 1.7% 1.1% -1.1% 2.1% I-cap (EUR) -2.0% 2.3% 1.7% -0.5% 2.7% Z-cap (EUR) -1.9% 2.2% 1.7% -0.7% *** 2.3% *** * The ongoing charges reflect the total normalised expenses charged to the result, divided by the average net asset value. For the calculation of the average net asset value, each computation and publication of the net asset value is taken into account. The ongoing charges are calculated over the twelve-month period ending at the end of the reporting period. ** NAV per share is based on share prices per June 29, 2017, i.e. the last price at which shares were traded in the reporting period. *** The Z-share class has a limited history. Returns prior to the launch date of the Z-share class are based on the returns of the comparable R-share class. 4

5 General information Legal structure Triodos Renewables Europe Fund (the fund) was launched in June 2006 as a sub-fund of Triodos SICAV II. The fund has a semi open-end fund structure and is not quoted on any stock market. Triodos Renewables Europe Fund has euro-denominated share classes for retail and institutional investors. Triodos SICAV II was incorporated under the laws of the Grand Duchy of Luxembourg as a société d investissement à capital variable (SICAV) in the form of a société anonyme on April 10, 2006, for an unlimited period. Triodos SICAV II is governed by Part II of the Luxembourg Law of December 17, 2010, as amended. Triodos SICAV II is an alternative investment fund (AIF) subject to the requirements of Directive 2011/61/EU of June 8, 2011 on Alternative Investment Fund Managers (AIFMD), as implemented in Luxembourg through the law of July 12, 2013 on alternative investment fund managers. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF). The registered office of Triodos SICAV II is established at 11-13, Boulevard de la Foire, L-1528 Luxembourg. Investment policy Triodos Renewables Europe Fund invests primarily in renewable energy producing project companies. These project companies produce energy from natural resources such as wind, sun, biomass and hydro. The fund does not invest in renewable energy technology or technology providers. The main focus of the fund is on investments in wind farms, solar photovoltaic and solar thermal installations, clean biomass installations and small hydro projects. Typically, these installations are privately owned and/or operated by a special purpose company. Triodos Renewables Europe Fund invests in equity and/or quasi-equity, such as shareholder loans and preferred capital, and in subordinated debt in qualifying investments. The fund primarily invests in project companies that operate existing renewable energy power plants or newly developed plants/ installations at financial close that constitute well-developed projects. Investment criteria include the use of proven technologies, solid project contracts, adequate insurance coverage, qualified management of the project, availability of the required irrevocable permits and licenses, Power Purchase Agreements, grid connection, solid cash flow projections and project financing in place. Alternative Investment Fund Manager The Board of Directors of Triodos SICAV II has appointed Triodos Investment Management BV (Triodos Investment Management) as the Alternative Investment Fund Manager (AIFM) of Triodos SICAV II. Triodos Investment Management is incorporated under the laws of the Netherlands and is a wholly-owned subsidiary of Triodos Bank NV. Triodos Investment Management is supervised by the Dutch regulator, Autoriteit Financiële Markten (AFM). The Management Board of Triodos Investment Management consists of: Marilou van Golstein Brouwers (Chair) Jacco Minnaar (as of June 1, 2017) Dick van Ommeren Laura Pool Depositary and Paying Agent, Domiciliary, Corporate and Administrative Agent, Registrar and Transfer Agent RBC Investor Services Bank SA (RBC Investor Services Bank) has been appointed as depositary for Triodos SICAV II. Furthermore, RBC Investor Services Bank acts as Paying Agent, Domiciliary, Corporate and Administrative Agent, and Registrar and Transfer Agent for Triodos SICAV II. 5

6 Fund Report The fund s net assets increased from EUR 72.9 million as per December 31, 2016 to EUR 74.3 million as per June 30, 2017, of which 75.1% was invested (December 31, 2016: 78.2%). The portfolio currently comprises 21 projects. In the first half of 2017 these projects generated renewable energy equivalent to the energy consumption of 119,622 European households and avoided the emission of 116,678 tonnes of CO 2. Total power generation in the first half of 2017 amounted to 201 GWh. The fund s portfolio valuation in the first half of the year was marked by the downward adjustment of the electricity price outlook as a result of a downward revision of gas and carbon price projections. 119,622 Market developments European households provided with renewable energy in the first half of 2017 The European electricity market is evolving from a fixed-tariff structure towards auction-based subsidy schemes, as the European Commission aims to build a system with market-based support for renewable energy. Recently, Germany adopted this system. The country s first offshore wind auction saw a sharp drop in required government support, due to rapid cost declines in the past eighteen months together with attractive financing conditions. In other words, renewable energy sectors such as solar and wind show that the European Union's market-based system works and that dependence on government support has diminished significantly over the last few years. The Brexit negotiations are creating a great deal of uncertainty about the outlook for both the energy market in the United Kingdom (UK) and the value of the British pound against the euro. The pound weakened against the euro in the first half of 2017 and inflation is expected to rise in the short term. In France, according to Bloomberg New Energy Finance (BNEF), the new government is considering investing EUR billion in renewables between 2017 and Macron s government is also planning to launch renewable energy tenders for up to 26 gigawatts in capacity by The country aims to double its solar and wind power capacities, which last year stood at 6.8 gigawatts and 11.7 gigawatts respectively, partly by simplifying authorisation processes. In the Netherlands, there was considerable interest in the SDE+ subsidy programme, aimed at encouraging sustainable energy production. Between 7 and 30 March 2017, companies and (non-profit) organisations could apply for a grant. This funding round was 1.3 times oversubscribed. Over 3,700 applications were honoured for a total amount of EUR 4.7 billion. Nearly half of this amount went to wind projects. The approved projects will help the Netherlands reach its 2020 target of 14% renewable energy, coming from 8% in On a global scale, the leaders of the G20 economies, with the exception of the US, reaffirmed their commitment to fostering clean energy development and implementing the Paris Climate Agreement. The countries where the fund has investments (see table on page 7) have credit ratings varying from BBB- to AAA. With the exception of Spain and Italy, all countries have a minimum rating of AA according to S&P ratings. The UK has an AA rating with a negative outlook, due to uncertainty about the outcome of the Brexit negotiations. 6

7 Investments As of June 30, 2017, the net assets of Triodos Renewables Europe Fund totalled EUR 74.3 million, of which 75.1% was invested. The fund has investments in 21 projects throughout Europe. The portfolio consists of solar PV and onshore wind assets. In the first half of 2017, Triodos Renewables Europe Fund continued to build a pipeline of investment opportunities that are in line with the fund s strategy, including wind and solar projects in the UK and solar projects in the Netherlands, Spain and Italy. Additionally, the fund made a start with investigating repowering possibilities for the existing portfolio. During the first six months of 2017, the average power production of the fund s portfolio was lower than expected. This was mainly caused by lower-thanprojected wind supply, resulting in lower electricity production by the wind farms. The production of the solar assets was marginally above target. Most projects are technically performing in line with expectations and above the guaranteed availability. The fund s weighted average portfolio discount rate remained unchanged compared to December 31, 2016, at 8.0% as per June 30, As per June 30, 2017, the fund s investment portfolio consisted of 55.8% solar projects and 44.2% wind projects. On an annual basis, solar assets provide more stable cash flows than wind assets. The cash flows from wind energy projects are slightly less predictable because of greater fluctuations in the frequency and strength of wind per year. Fund data, June 30, 2017 Net assets EUR 74,291,520 Portfolio value EUR 55,816,323 Number of equity investments* 35 Number of subordinated loans* 5 Number of projects 21 Number of countries 7 Asset allocation (% of fund s net assets), June 30, 2017 Equity 43.6% Quasi equity 7.7% Subordinated debt 23.8% Other assets and liabilities 24.9% Country allocation (% of fund s net assets), June 30, 2017 The Netherlands 28.1% Belgium 22.7% Spain 7.1% Germany 6.4% Italy* 5.1% United Kingdom 3.3% France 2.4% Other assets and liabilities 24.9% *The investment in Italy was made through a Dutch parent company. Sector allocation (% of fund s net assets), June 30, 2017 Solar 41.9% Wind 33.2% Other assets and liabilities 24.9% * Shareholder loans are classified as equity investments. A project can contain multiple equity investments and/or subordinated loans. 7

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9 WIND FARM RANSONMOOR, UNITED KINGDOM In 2013 Triodos Renewables Europe Fund diversified its geographical spread by make an investment in the United Kingdom. Ransonmoor is operational since 2007 and has three Gamesa G80 wind turbines and two Repower MM80 wind turbines. 9

10 Results Financial results Triodos Renewables Europe Fund closed the first half of 2017 with a net operating gain of EUR 0.2 million (first half of 2016: EUR 0.1 million). Dividends and interest generated EUR 1.2 million in realised income in the first half of 2017 (first half of 2016: EUR 0.9 million). Return The return over the first six months of 2017 was -2.0% for the I-share class. The lower return over the first half of the year was mainly due to the impact of lower electricity price forecasts on the share price. The second quarterly update of the power price scenario in 2017 had a negative impact of 1.5% on the share price, which was incorporated in the NAV on June 30, The adjusted forecast is mainly a result of a drop in gas prices. Gas-fired plants often set the price of electricity as most expensive supplier to meet total demand. Other factors influencing performance were lower-than-expected production in the Netherlands and Germany and the weaker British pound. The operational performance of the portfolio companies during the first half of 2017 was in line with expectations. Liquidity The fund s liquidity ratio (cash and cash equivalents) changed from 22.7% of the fund s net assets (per December 31, 2016) to 25.7% as per June 30, The fund strives to maintain a minimum liquidity level of around 10% to facilitate the liquidity requirements in case of redeeming investors. Costs The largest item in the cost structure of Triodos Renewables Europe Fund is the management fee paid to the AIFM, Triodos Investment Management. The AIFM uses this fee primarily to cover staffrelated costs and travel expenses incurred in connection with investments. The investment process is labour intensive. Other costs include the fees paid to RBC Investor Services Bank for their depositary and administrative services. Triodos Renewables Europe Fund s ongoing charges, including the management fee, amounted to 2.95% for the R-share class, 2.44% for the Z-share class and 2.39% for I-share class as per June 30, 2017 (June 30, 2016: 2.97%, 2.50% and 2.44%, respectively). More detailed information about management fees and ongoing charges can be found on pages 21 and 23. Return based on NAV per share* 6-month return 1-year return 3-year return p.a. 5-year return p.a. Return p.a. since inception R-cap (EUR) -2.2% 1.7% 1.1% -1.1% 2.1% I-cap (EUR) -2.0% 2.3% 1.7% -0.5% 2.7% Z-cap (EUR) -1.9% 2.2% 1.7% -0.7% ** 2.3% ** * NAV per share is based on share prices as per June 29, 2017, i.e. the last price at which shares were traded in the reporting period. ** The Z-share class has a limited history. Returns prior to the launch date of the Z-share class are based on the returns of the comparable R-share class. 10

11 Outlook BNEF estimates that global power demand will grow by 58% between now and 2040, constituting an annual growth rate of 2%. Furthermore, the agency expects USD 10.2 trillion to be invested in new power generation capacity worldwide until Of this estimated amount, 72%, or USD 7.4 trillion, is expected to go to renewables. European investment in renewables is estimated to grow by 2.6% per year on average until 2040, averaging USD 40 billion per year. Total investment in renewables across Europe is expected to reach almost one trillion US dollar by Based on this general outlook, Triodos Renewables Europe Fund expects to expand its portfolio further. The fund is currently working on several development opportunities and assessing the business case for repowering of existing projects. The focus will remain on solar and onshore wind projects in the current portfolio countries. In addition, the team is investigating investment opportunities in other technologies, such as hydro energy and electricity storage. Luxembourg, August 31, 2017 The Board of Directors of Triodos SICAV II Garry Pieters (Chair) Monique Bachner Marilou van Golstein Brouwers Patrick Goodman Jeroen Smakman 11

12 Statement of net assets as per June 30, 2017 (amounts in EUR) Notes June 30, 2017 December 31, 2016 June 30, 2016 Assets Fixed assets Investment in financial assets 2 55,816,323 57,026,310 55,596,073 (Historic cost: EUR 53,550,092 as at June 30, 2017; EUR 52,754,851 as at December 31, 2016; EUR 53,489,648 as at June 30, 2016) Current assets Cash and cash equivalents 19,072,558 16,549,120 13,890,537 Subscriptions receivable 88, ,054 - Other receivable 13,501 13,501 13,501 Other current assets 5,917 5,556 5,146 Total assets 74,997,229 73,892,541 69,505,257 Liabilities Liabilities due within one year Investment management, distribution and service fees payable 5 383, , ,737 Redemptions payable 176, ,061 - Accounts payable and accrued expenses 8 145, , ,339 Total liabilities 705,709 1,001, ,076 Net assets 74,291,520 72,890,787 69,024,181 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 12

13 Statement of operations for the period ended June 30, 2017 (amounts in EUR) Notes 1st half year, st half year, 2016 Income Dividend income 2 37,740 1,138,754 Interest on loans 2 1,094,492 1,897, ,758 Other income 6 33, ,371 10,656 Total income 1,165,399 3,140, ,414 Expenses Investment management, distribution and service fees 5 761,927 1,409, ,863 Administrative and depositary fees 4 71, ,914 68,527 Audit and reporting expenses 15,353 39,592 18,723 Subscription tax 3 13,656 27,702 14,673 Other tax 3,813 10,089 7,240 Other expenses 7 80, ,529 54,663 Total expenses 946,872 1,791, ,689 Net operating income 218,527 1,349,772 59,725 Realised loss on investments (544,265) Realised gain on foreign exchange 1 1 Realised loss on foreign exchange (6) (6) Change in net unrealised appreciation on investments 307, ,455 Change in net unrealised depreciation on investments (2,005,251) (1,914,603) Net increase/(decrease) in net assets resulting from operations (1,479,594) 1,055,957 (1,854,883) The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 13

14 Statement of changes in net assets for the period ended June 30, 2017 (amounts in EUR) 1st half year, st half year, 2016 Operations Net operating income 218,527 1,349,772 59,725 Realised loss on investments - (544,265) Realised gain on foreign exchange Realised loss on foreign exchange - (6) (6) Change in net unrealised appreciation on investments 307, ,455 Change in net unrealised depreciation on investments (2,005,251) (1,914,603) Net increase/(decrease) in net assets resulting from operations (1,479,594) 1,055,957 (1,854,883) Capital transactions Capital subscriptions R Share Class 536,818 2,952,222 1,919,612 I Share Class 692,950 12,417,200 3,031,888 Z Share Class 4,817,397 5,763,336 3,821,860 Total subscriptions 6,047,165 21,132,758 8,773,360 Capital redemptions R Share Class (495,773) (202,795) (114,328) I Share Class (144,709) (30,672) (30,672) Z Share Class (2,526,356) (13,159,332) (1,844,167) Total redemptions (3,166,838) (13,392,799) (1,989,167) Net increase in net assets resulting from capital transactions 2,880,327 7,739,959 6,784,193 Net assets Net assets at the beginning of the year 72,890,787 64,094,871 64,094,871 Total increase in net assets 1,400,733 8,795,916 4,929,310 Net assets at the end of the period/year 74,291,520 72,890,787 69,024,181 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 14

15 Cash flow statement for the period ended June 30, 2017 (amounts in EUR) Cash provided by operating activities 1st half year, st half year, 2016 Profit/(loss) after taxation (1,479,594) 1,055,957 (1,854,883) (-) increase/(+) decrease in unrealised gains and losses on investments and forward foreign exchange contracts 1,698,121 (250,455) 1,914,603 (+) increase/(-) decrease in receivables and other assets (361) (1,010) (600) (+) increase/(-) decrease in payables (364,676) 415,514 2,897 Net cash provided by operating activities (146,510) 1,220,006 62,017 Cash provided by financing activities (+) proceeds from shares issued 6,256,289 20,834,704 8,773,360 (-) decrease from shares redeemed (3,098,207) (13,284,738) (1,989,167) Net cash provided by financing activities 3,158,082 7,549,966 6,784,193 Cash provided from investing activities (-) acquisitions of financial assets (488,134) (1,250,553) (1,985,374) Net cash used by investing activities (488,134) (1,250,553) (1,985,374) Cash Net increase in cash and cash equivalents 2,523,438 7,519,419 4,860,836 Cash at the beginning of the year 16,549,120 9,029,701 9,029,701 Cash at the end of the period/year 19,072,558 16,549,120 13,890,537 The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 15

16 Statement of changes in the number of shares outstanding for the period ended June 30, st half year, st half year, 2016 Number of Shares outstanding at the beginning of the period/year Share Class R 398, , , Share Class I 570, , , Share Class P Share Class Z 1,458, ,732, ,732, Subscriptions over the period/year Share Class R 16, , , Share Class I 20, , , Share Class P Share Class Z 173, , , Redemptions over the period/year Share Class R 15, , , Share Class I 4, Share Class P Share Class Z 91, , , Number of Shares outstanding at the end of the period/year Share Class R 399, , , Share Class I 586, , , Share Class P Share Class Z 1,540, ,458, ,805, The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 16

17 Statistics (amounts in EUR) June 30, 2017 December 31, 2016 June 30, 2016 Total net asset value at the end of the period/year Share Class R 12, ,814,951 11,400,217 Share Class I 19,643,596 19,474,827 9,401,272 Share Class P Share Class Z 42,073,751 40,600,973 48,222,658 74,291,520 72,890,787 69,024,181 Net asset value per share at the end of the period/year Share Class R Share Class I Share Class P Share Class Z The accompanying notes form an integral part of these financial statements. The figures shown in these financial statements have not been subjected to an external audit. 17

18 Notes to the financial statements 1. General Triodos SICAV II (the SICAV ) has been incorporated under the laws of the Grand Duchy of Luxembourg as a société d investissement à capital variable (SICAV) under the form of a société anonyme on April 10, 2006, for an unlimited period. Triodos SICAV II is governed by Part II of the Luxembourg Law of December 17, The SICAV is an alternative investment fund ( AIF ) subject to the requirements of the Directive 2011/61/EU of June 8, 2011, on Alternative Investment Fund Managers Directive ( AIFMD ) as implemented in Luxembourg through the law of July 12, 2013, on alternative investment fund managers (the Law of 2013 ). The Registered Office of the SICAV is established at 11/13, Boulevard de la Foire, L-1528 Luxembourg. The Articles have been deposited with the Chancery of the District Court of Luxembourg on April 27, 2006, and published in the Mémorial C, Recueil des Sociétés et Associations (the Mémorial ). The SICAV has been registered with the Companies Register of the District Court of Luxembourg under number B The Articles were last amended at the extraordinary general meeting of shareholders held on October 16, 2014, and published in the Mémorial. The SICAV is structured as an umbrella fund, which provides both institutional and retail investors with a variety of sub-funds, each of which relates to a separate portfolio of assets permitted by law and managed within specific investment objectives. As at June 30, 2017, the SICAV has three sub-funds: Triodos Renewables Europe Fund, Triodos Microfinance Fund and Triodos Organic Growth Fund. The overall objective of Triodos Renewables Europe Fund is to offer investors an environmentally sound investment in renewable energy projects with the prospect of an attractive financial return combined with the opportunity for the investors to make a pro-active, measurable and lasting contribution to the development of sustainable energy sources. The first net asset value was calculated on July 27, Shares in the sub-fund may be subscribed once a week, on the business bay preceding the valuation date. The sub-fund is semi open-ended, i.e. shares may be redeemed in principle once a week on the business day preceding the valuation date. However, the SICAV is entitled to (temporarily) stop trading and thus the execution of the redemption applications received, if trading is not possible, in accordance with the stipulations of the prospectus. The shares are divided into Shares of Classes R, Z, I, P. Class R Shares and Class Z Shares are open to any investor. Class I Shares is restricted to Institutional Investors. Class P Shares is open to entities of Triodos Group. Class P gives the right, in accordance with the Articles, to propose to the general meeting of shareholders a list containing the names of candidates for the position of director of the SICAV from which a majority of the directors of the SICAV must be appointed. Currently, all shares issued are of the capitalisation type. Therefore, the sub-fund does not pay dividends to its shareholders as realised profits are reinvested by the sub-fund. The sub-fund Triodos Renewables Europe Fund incorporated Triodos S II LuxCo S.à r.l. ( the holding company ) in February As a wholly-owned subsidiary of the sub-fund, all assets and liabilities, income and expenses of the holding company are consolidated in the statement of net assets, the statement of operations and the statement of changes in net assets of the sub-fund. All investments held by the holding company are disclosed in the financial statements of the sub-fund. 18

19 The financial year end of the SICAV is end of December each year. Triodos SICAV II, including its sub-funds, is supervised by the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (CSSF). Triodos SICAV II, including its sub-funds, is also registered with the Dutch Supervisory authorities, the Autoriteit Financiële Markten (AFM). 2. Summary of significant accounting principles Investments are valued at their fair value. The fair value is determined as follows: (a) The valuation of private equity investments (such as equity, subordinated debt and other types of mezzanine finance) are based on the International Private Equity and Venture Capital Valuation Guidelines, as published from time to time by the European Venture Capital Association (EVCA), and is conducted with prudence and in good faith. The private equity and subordinated debt investments are valued on the basis of discounted cash flows. Other assets are valued according to the following rules: (b) Senior debt instruments, invested in/granted to companies not listed or dealt in on any stock exchange or any other Regulated Market, are valued at fair market value, deemed to be the nominal value, increased by any interest accrued thereon; such value is adjusted, if appropriate, to reflect the appraisal of the Advisor of the relevant sub-fund on the creditworthiness of the relevant debtor. The Board of Directors uses its best endeavors to continually assess this method of valuation and recommend changes, where necessary, to ensure that debt instruments are valued at their fair value as determined in good faith by the Board of Directors. (c) The value of money market instruments not listed on any stock exchange or dealt in on any other Regulated Market and with a remaining maturity of less than 12 months is deemed to be the nominal value thereof, increased by any interest accrued thereon. (d) The value of securities which are admitted to official listing on any stock exchange is based on the latest available price or, if appropriate, on the average price on the stock exchange which is normally the principal market of such securities, and each security dealt on any other Regulated Market is based on the last available price. In the event that this price is, in the opinion of the Board of Directors, not representative of the fair market value of such securities, for example in the case of illiquid securities and/or stale prices, the directors value the securities at fair market value according to their best judgment and information available to them at that time. (e) Units or shares of open-end UCIs are valued at their last official net asset values, as reported or provided by such UCI or their agents, or at their last unofficial net asset values (i.e. estimates of net asset values) if more recent than their last official net asset values, provided that due diligence has been carried out by the relevant Advisor, in accordance with instructions and under the overall control and responsibility of the Board of Directors, as to the reliability of such unofficial net asset values. (f) The liquidating value of futures, forward or options contracts not admitted to official listing on any stock exchange or dealt on any other Regulated Market means their net liquidating value determined, pursuant to the policies established prudently and in good faith by the Board of Directors, on a basis consistently applied for each different variety of contracts. 19

20 (g) The value of any cash at hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends declared and interest accrued, and not yet received are deemed to be the full amount thereof, unless, however, the same is unlikely to be paid or received in full, in which case the value thereof is determined after making such discounts as the Board of Directors may consider appropriate to reflect the true value thereof. (h) Swaps, as far as credit swaps are concerned, are valued at fair market values as determined prudently and in good faith by the Board of Directors. Cross-currency interest rate swaps are valued on the basis of the prices provided by the counterparty. (i) All other securities and assets are valued at fair market value as determined in good faith pursuant to procedures established by the Board of Directors. (j) Placements in foreign currency are quoted in euros with due observance of the currency exchange rates most recently known. (k) Realised and non-realised changes in the value of investments are incorporated in the profit and loss account. (l) The principle for determination of profit is based on the attribution of income and expenses to the relevant period. The income from payments of profit on equity participations is accounted for in the year in which they are made payable. Prepaid costs and costs still to be paid are taken into account in determining the expenses. (m) Other assets and liabilities are recorded at nominal value after deduction of any provision in respect of anticipated non-recovery. (n) The costs of investments expressed in currencies other than EUR are translated into EUR at the exchange rate prevailing at purchase date. (o) Interest income is accrued pursuant to the terms of the underlying investment. Income is recorded net of respective withholding taxes, if any. (p) Gain and losses arising from un-matured forward foreign exchange contracts are determined on the basis of the applicable forward exchange rates at the valuation date and are booked in the profit and loss accounts. (q) Dividend income is recognised on cash basis, net of any withholding taxes. (r) Equity investments of Triodos SICAV II are excluded from consolidation due to exemptions by temporary holding, size and time window. 3. Taxation According to the law in force and current practice, the SICAV is not subject to any Luxembourg tax on income and capital gains nor are dividends paid by the SICAV subject to any Luxembourg withholding tax. However, each of the SICAV s sub-funds is subject to a subscription tax (taxe d abonnement) at an annual rate of 0.05% p.a. Such rate may be decreased to 0.01% p.a. for certain sub-funds or classes of shares which are restricted to Institutional Investors as specified in the relevant sub-fund particulars. This tax is 20

21 calculated and payable quarterly on the basis of the net asset value of each sub-fund at the end of each quarter. This tax is not due on that portion of the SICAV s assets invested in other Luxembourg UCIs. In addition, the issue of Shares in the SICAV is not subject to any registration duties or other taxes in Luxembourg. 4. Administrative and depositary fees The Depositary and Paying Agent, the Administrative Agent, the Domiciliary and Corporate Agent and the Registrar and Transfer Agent are entitled to receive fees in accordance with usual practice in Luxembourg and payable quarterly. The administrative and depositary fees comprise the following: (amounts in EUR) 1st half year, st half year, 2016 Domiciliary agency fee 7,620 15,542 7,771 Administrative fee 27,856 56,722 28,351 Transfer agency fee 16,239 28,983 14,462 Depositary fee 19,747 36,667 17,943 Total 71, ,914 68, Investment management, distribution and service fees For the services it provides, the Alternative Investment Fund Manager is entitled to an annual fee payable quarterly and calculated as described in the relevant sub-fund s particulars. The sub-fund pays for the provision of investment management services and supporting services and the distribution activities an annual fee of 2.50% for Class R Shares, an annual fee of 1.95% for Class Z Shares, Class I Shares and Class P Shares, calculated on the relevant Class net assets, accrued weekly and payable quarterly. The costs for marketing and distribution activities related to retail investors and attributable to Class R Shares, will only be borne by Class R Shares and will be part of the management fee. The costs for marketing activities incurred by the AIFM related to retail investors and attributable to Class Z Shares will only be borne by Class Z Shares and may amount to maximum 0.20% (on an annual basis) of this Share Class net assets. 21

22 6. Other income The other income comprises the following: (amounts in EUR) 1st half year, st half year, 2016 Redemption fees 15,965 24,157 10,173 Administrative fee and other income 17,202 80, Total 33, ,371 10, Other expenses The other expenses comprise the following: (amounts in EUR) 1st half year, st half year, 2016 Supervisory fee (CSSF) 2,000 2,000 2,000 Remuneration of the Board of Directors/Managers* 11,749 23,497 11,749 Legal fees 14,798 38,552 8,252 Consulting fees 6,240 9,825 (1,803) Bank fees 26,998 32,454 11,916 Other expenses 18,876 60,201 22,549 Total 80, ,529 54,663 * Amounts include the remuneration of the Board of Managers of the sub-fund s holding company Triodos SII LuxCo S.à r.l. 8. Accounts payable and accrued expenses As per June 30, 2017, the accounts payable and accrued expenses mainly include the following expenses: administrative fees, audit fees, consulting fees, depositary fees, domiciliary agency fees, legal fees, subscription tax and transfer agency fees. 9. Off-balance sheet commitments The sub-fund has committed itself to investments in certain windfarms for a total of approximately EUR 2.4 million. 22

23 10. Ongoing charges cost ratios 12 months ending June 30, months ending December 31, months ending June 30, 2016 Share Class I 2.39% 2.42% 2.44% Share Class P 1.60% 1.58% 1.63% Share Class R 2.95% 2.97% 2.97% Share Class Z 2.44% 2.45% 2.50% The ongoing charges reflect the total normalised expenses charged to the result, divided by the average net asset value. For the calculation of the average net asset value, each computation and publication of the net asset value is taken into account. The ongoing charges are calculated over the twelve-month period ending at the end of the reporting period. 11. Exchange rate The exchange rate used as per June 30, 2017, is: 1 EUR = GBP 12. Other information: Belgian savings tax In scope of Belgian Savings Tax Yes Method used to determine the status Asset testing Result Belgian asset testing 46.97% Period of validity of the status 1 May April

24 Management and administration Registered office 11-13, Boulevard de la Foire L-1528 Luxembourg Grand-Duchy of Luxembourg Board of Directors G.R. Pieters (1958) Chair Independent, Partner of the Directors Office Luxembourg Garry Pieters is an ILA (Institut Luxembourgeois des Administrateurs)-certified director. He is Money Laundering Reporting Officer (MLRO) of Triodos SICAV II and oversees the handling of complaints. Garry Pieters is a Board Member of several other Luxembourg investment entities, including Fundsmith LLP, Astellon Capital Partners LLP and Sustainability Finance Real Economies fund (SFRE, initiated by the Global Alliance for Banking on Values). He is also a Conducting Officer for the Luxembourg entities of Columbia Threadneedle and Nikko Asset Management. He has over 30 years of experience in the field of finance, in particular with ING Group NV. He was fund manager for a number of ING Group s Luxembourg money market and fixed income funds and was Chief Executive Officer of NN Investment Partners Luxembourg SA and of its Singapore joint venture, as well as Executive Vice President of its Korean joint venture. He is also Chair of the Board of Triodos SICAV I. As per June 30, 2017, Garry Pieters did not hold any shares in Triodos Renewables Europe Fund. P.H. Aeby (1956) (until April 26, 2017) Chief Financial Officer and member of the Executive Board of Triodos Bank NV M.D. Bachner (1972) Independent, Founder Bachner Legal Monique Bachner is lawyer and an ILA-certified director. She started her legal career in London, at Freshfields Bruckhaus Deringer, and later moved to Debevoise & Plimpton. She currently has her own law firm, Bachner Legal. Monique Bachner focuses her practice on corporate and funds law, as well as on corporate governance advisory services for Board of Directors. She has served as Member of the Board of several investment funds and charitable institutions and is a Member of both the Board and the Management Committee of ILA (Institut Luxembourgeois des Administrateurs), as well as Chair of ILA s Education Committee and Member of ILA s Investment Funds Committee. Monique Bachner is also a Member of the Board of Triodos SICAV I. As per June 30, 2017, Monique Bachner did not hold any shares in Triodos Renewables Europe Fund. M.H.G.E. van Golstein Brouwers (1958) Chair of the Management Board of Triodos Investment Management Marilou van Golstein Brouwers is Chair of the Management Board of Triodos Investment Management and Triodos Investment Advisory Services BV. In addition, she is a Member of the Board of Stichting Triodos Sustainable Trade Fund and Stichting Triodos Renewable Energy for Development Fund. Furthermore, Marilou van Golstein Brouwers is a Member of the Board of the Global Impact Investing Network (GIIN), Member of the Advisory Committee of the Fund for Rural Prosperity of the MasterCard Foundation, Member of the Advisory Council on International Affairs Committee for Development Cooperation (AIV/COS) and Member of the Supervisory Board of B Corps Europe. She is also a Member of the Board of Triodos SICAV I. As per June 30, 2017, Marilou van Golstein Brouwers held 382 shares in Triodos Renewables Europe Fund. P.M. Goodman (1963) Independent, Partner of Innpact S.à r.l. Patrick Goodman is co-founder of Innpact S.à r.l., which provides expert consulting services for the establishment and management support of impact finance vehicles. He has an in-depth understanding of all operational, financial and legal processes of investment vehicles, backed by almost thirty years experience in the banking and fund industry. Previous employers include JP Morgan in Brussels and Citibank in Belgium and Luxembourg. Since 24

25 early 2003, Patrick Goodman has dedicated his career to responsible finance and impact finance, providing structuring and management support for MIVs (Microfinance Investment Vehicles) and other impact finance vehicles. He is also a Board Member of a number of other impact finance investment funds. As per June 30, 2017, Patrick Goodman held 1,703 shares in Triodos Renewables Europe Fund. J.C. Smakman (1969) (as of April 26, 2017) Director Retail Banking Triodos Bank NV Jeroen Smakman is director Retail Banking for Triodos Bank NV at its head office, and in that role responsible for the strategy, support and coordination of all retail activities within Triodos Bank and its branches. He has a long-standing experience in the financial sector. Jeroen Smakman previously worked at ING Group NV in product management, marketing and HR. He has held several management positions in the Netherlands, Italy, Canada and the Czech Republic. As per June 30, 2017, Jeroen Smakman did not hold any shares in Triodos Renewables Europe Fund. Alternative Investment Fund Manager Triodos Investment Management BV Registered office: Nieuweroordweg EC Zeist The Netherlands Postal address: P.O. Box AB Zeist The Netherlands Triodos Investment Management is the alternative investment fund manager of Triodos SICAV II. The Management Board of Triodos Investment Management has the following members: M.H.G.E. van Golstein Brouwers (1958) Marilou van Golstein Brouwers is Chair of the Management Board of Triodos Investment Management and Triodos Investment Advisory & Services BV. In addition, she is Member of the Board of Triodos SICAV I, Triodos SICAV II, Stichting Triodos Sustainable Trade Fund and Stichting Triodos Renewable Energy for Development Fund. Marilou van Golstein Brouwers is also Member of the Board of Global Impact Investing Network (GIIN), Member of the Advisory Committee of the Fund for Rural Prosperity launched by the Mastercard Foundation, Member of the Advisory Council on International Affairs Committee for Development Cooperation (AIV/COS) and Member of the Supervisory Board of B Corps Europe. As per June 30, 2017, Marilou van Golstein Brouwers held 382 shares in Triodos Renewables Europe Fund. J.J. Minnaar (1971) (as of June 1, 2017) Jacco Minnaar is Managing Director at Triodos Investment Management and Triodos Investment Advisory & Services BV. As per June 30, 2017, Jacco Minnaar did not hold any shares in Triodos Renewables Europe Fund. D.J. van Ommeren (1967) Dick van Ommeren is Managing Director at Triodos Investment Management and Triodos Investment Advisory & Services B.V. He is a Member of the Board of Triodos SICAV I and a Member of the Board of the Dutch Fund and Asset Management Association (DUFAS). As per June 30, 2017, Dick van Ommeren did not hold any shares in Triodos Renewables Europe Fund. L.L. Pool (1968) Laura Pool is Managing Director Risk and Finance at Triodos Investment Management and Triodos Investment Advisory & Services BV. She is also Member of the Supervisory Board of ECN (Energy Research Centre of the Netherlands) and Member of the Supervisory Board of housing cooperative De Woonplaats. As per June 30, 2017, Laura Pool did not hold any shares in Triodos Renewables Europe Fund. Fund Manager V.R. van Haarlem (1972) Vincent van Haarlem has been fund manager of Triodos Renewables Europe Fund since September 25

26 1, He has an extensive track record in the field of renewable energy financing and has been part of the investment team of Triodos Renewables Europe Fund since Before joining Triodos Investment Management, Vincent van Haarlem worked in the energy sector for over ten years, both in the fields of project finance and private equity. Besides renewable energy, he also has experience in the fields of offshore oil and gas and traditional power plants. He has a wide experience in business development, portfolio management, asset remarketing, project finance and restructuring with respect to the aforementioned asset classes. Vincent van Haarlem holds an MSc in economics (corporate finance) from Erasmus University Rotterdam and an MBA from IE Business School in Madrid. As per June 30, 2017, Vincent van Haarlem did not have any shares in Triodos Renewables Europe Fund. Distributor Triodos Investment Management BV Registered office: Nieuweroordweg EC Zeist The Netherlands Postal address: P.O. Box AB Zeist The Netherlands Legal Advisor in Luxembourg Arendt & Medernach SA 41A, Avenue John F. Kennedy L-2082 Luxembourg Grand Duchy of Luxembourg Rated by: The Luxembourg Fund Labelling Agency (LuxFLAG) is an independent, non-profit association. The Agency, founded in 2006, aims to promote the raising of capital for Responsible Investment sectors by awarding a recognisable label to investment funds. Its objective is to reassure investors that the applicant investment fund invests, directly or indirectly, in the responsible investment sector. The applicant fund may be domiciled in any jurisdiction that is subject to a level of national supervision equivalent to that available in European Union countries. Depositary, Custodian, Paying Agent, Domiciliary, Corporate and Administrative Agent, Registrar and Transfer Agent RBC Investor Services Bank SA 14, Porte de France L-4360 Esch-sur-Alzette Grand Duchy of Luxembourg Independent Auditors PriceWaterhouseCoopers Société Coopérative 2, rue Gerhard Mercator L-2182 Luxembourg Grand Duchy of Luxembourg 26

27 Colophon Triodos SICAV II - Triodos Renewables Europe Fund semi-annual report June 2017 Published August 2017 Text Triodos Investment Management, Zeist, The Netherlands Design Michael Nash Associates, London, United Kingdom Layout Via Bertha, Utrecht, The Netherlands Photography Photos in this semi-annual report haven been provided by companies in which Triodos SICAV II - Triodos Renewables Europe Fund invests. If you have comments or questions about this report, please contact Triodos Bank. This document can be downloaded from: TLIM 27

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