14 March 2023

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

Company Update

Ahead of today's Capital Markets Day, the Company is pleased to provide an update on activity since 30 September 2022.

Portfolio Update

·    The Company is well positioned to deliver a long-term total return meeting or exceeding its stated target, notwithstanding recent short-term macroeconomic headwinds with respect to rising risk free rates. SEEIT's diversified portfolio comprises investments that provide opportunity for outperformance over the medium to long-term. This can be achieved through active asset management, operational initiatives and incremental accretive investments, as well as managing the challenges an operational portfolio company may face from time to time.

·     Specific activities and opportunities will be discussed in detail at the Company's Capital Markets Day at the London Stock Exchange later today, which will also include the presentation of a recent interview between Jonathan Maxwell and Executive Director of the International Energy Agency, Fatih Birol. The Capital Markets Day will also give investors and analysts further insight into key drivers and operations of some of the Company's larger investments. No trading or financial information will be disclosed during the event and a recording will be made available to view on the Company's website thereafter.

·   The Spanish government has revised its Regulated Energy Regime, which is designed to support cogeneration projects in Spain for fluctuations in market pricing. As noted in the Interim Report, SEEIT Oliva elected to idle certain operations pending government policy clarity, which had impacted profitability for the project in the short-term. The revisions are expected to benefit SEEIT Olivia by compensating its projects for higher gas costs it has been incurring and allowing it to re-instate full day to day operations ahead of expectations.

·   Also highlighted in the Company's Interim Report, Primary Energy management has been working with Cleveland-Cliffs to provide options that will allow for operations to continue at the Ironside project to offset some of the losses associated with the recent idling of Blast Furnace #4. Primary Energy has now signed an interim agreement with Cleveland-Cliffs in respect of the Ironside project and revenue generation has commenced. The interim agreement will serve to re-start operations at the project and support continued performance of the project.

·    RED, the Company's district energy project servicing one of the largest business parks in the US, has been awarded the maximum $5 million in funding through the latest New York State Energy Research and Development Authority ("NYSERDA") Carbon Challenge grant. The grant will help RED install a new ultra-efficient electric chiller as well as develop additional waste steam recovery technology to power a new air compressor, both of which will improve margins for the project.

·     SEEIT's dedicated Electric Vehicle ("EV") charging infrastructure development company, EVN, has started construction at the NEC Group Campus in the West Midlands. EVN has agreed a 30-year exclusive contract with the NEC group to develop and build the charging infrastructure at the NEC campus. Once completed, this project will transform the NEC Group site into a first-of-its-kind charging hub for electric vehicles at this scale, with over 180 charging points amounting to one of the largest charging stations in Europe.

·    Two of SEEIT's projects under construction have now reached their operational phases, ahead or in line with expectations. Construction of the energy efficient chiller system at Lycra's Singapore facility was completed one month ahead of contracted schedule and on budget, with full operation commencing 1 February 2023. In addition, construction of the energy efficiency retrofit at Tallaght Hospital in Ireland was completed on budget and on schedule, with operational handover achieved in early January 2023.

·   The Investment Manager is currently working closely with some of the Company's smaller investments, including GET Solutions and Future Energy Solutions with a view to improving operational performance and new business development. While these investments in aggregate represent less than 3% of SEEIT's portfolio, these activities require significant hands-on management to address short-term challenges and to unlock project pipelines associated with these platforms.

·      Newly appointed CEOs have joined two of SEEIT's largest portfolio project companies, both of which have commenced their positions in January 2023:

o  Dan Kelly has been appointed CEO of RED, overseeing operations at the Eastman Business Park in Rochester, NY. Dan has a 30 year track record in the energy and engineering sectors, most recently as a Senior Vice President at CenTrio Energy

o  Jesper Karpsen has been appointed as CEO for Värtan Gas, the Company's gas distribution network project in Stockholm, Sweden. Jesper joins from Vattenfall where he was most recently Chairman of Elanläggningar AB.

Investment Activity

As announced on 23 November 2022, SEEIT has signed an agreement to finance the design, acquisition and installation of energy efficiency solutions across various buildings in the US for a wholly owned subsidiary of leading energy efficiency developer BlocPower LLC, through a 10% participation in a US$80 million loan facility.

In addition, the Company has deployed c.£61 million since 30 September 2022 into follow-on investments in its existing portfolio projects, including:

§ Onyx: c.£30 million into new behind the meter solar and storage projects across the US.

§ EVN: c.£13 million into rolling out EV charging stations in the UK.

§ FES Lighting: c.£3 million into follow-on lighting projects across the US.

§ Baseload: c.£1 million into a geothermal project in the US.

§ Sparkfund: c.£4 million into loans for energy efficiency investments across the US.

§ RED: c.£6m as part of follow-on capex into the district energy system in Rochester, US.

§ Tallaght: c.£2m in scheduled construction payments for the energy efficiency hospital retrofit in Ireland.

§ Lycra: c.£3m in scheduled construction payments for an energy efficient chiller system in Singapore.

Balance Sheet and Dividends

At 28 February 2023, the Group had a cash balance of c.£57 million (30 September 2022: £53 million) and total borrowings of c.£372 million (30 September 2022: £405 million), all of which are at the project level. Borrowings are equivalent to 32% of the 30 September 2022 NAV, broadly in line with SEEIT's medium-term target.

The Board has not considered share buybacks to be in the best interests of the Company's shareholders to date, however it continues to evaluate all relevant factors and would enact the discount control mechanism if and when it was deemed appropriate.

The Company completed a £35 million accordion increase of its RCF in February, expanding the facility to £180 million, from £145 million. The RCF, which is undrawn as at the date of this update, provides the Company with substantial capacity to:

§ manage its hedging strategy effectively;

§ deploy into organic investments arising from the existing portfolio; and

§ provide flexibility for new identified pipeline projects.

Although SEEIT has a medium-term leverage target of 35% of NAV, the Company is able to borrow up to 65% of its NAV on a short-term basis to finance acquisitions ("Acquisition Finance") under its investment policy. This Acquisition Finance flexibility remains fully available, in addition to existing cash reserves and free cash flow above target dividends. The Company is therefore well positioned to be able to fund its commitments as well as consider new opportunities.

Following declaration of its third quarterly interim dividend for the year, the Company remains on track to deliver its FY23 dividend target of 6.00 pence per share, fully covered by net operational cash inflows and up 7% from the year ended 31 March 2022.

Market Outlook and Pipeline

In an environment characterised by high energy prices, energy security concerns and increasingly challenging decarbonisation targets, energy efficiency, which reduces carbon emissions and energy costs, has never been more important.

The Company has an attractive and diverse pipeline, generated from organic and inorganic opportunities for further accretive investment. The organic pipeline includes several investment opportunities within the existing portfolio which are expected to contribute positively to portfolio project valuations, such as:

-     Efficiency improvement projects at RED which contribute directly to increasing the project company's profit margin;

-     Further scaling of EVN as it continues to establish itself as one of the UK's most recognised EV charging developers; and

-     Continued rollout of solar and storage projects through Onyx, which benefits from the substantial policy tailwinds associated with the Inflation Reduction Act of 2022.

The Company is also evaluating two efficient heat project opportunities in Europe, utilising biogas technology.

A strong liquidity position provides SEEIT with the ability to capitalise on attractive investment opportunities in a market undergoing valuation uncertainty, where prudent deployment of capital can unlock substantial investment upside. Furthermore, the Company expects to continue to benefit from strong policy tailwinds encouraging energy efficiency investment throughout the markets in which it operates.

SEEIT remains focused on delivering a strong total return to its investors, underpinned by long-term contracted cashflows in its diversified portfolio of projects, with opportunity for outperformance through accretive investment. It is able to generate a stable dividend income for investors, while providing the opportunity for capital growth through a number of asset management initiatives and a focused investment strategy.

Jonathan Maxwell, CEO of Sustainable Development Capital LLP, said: "Energy efficiency is key to reducing the impact of the current energy and cost of living crises, and given policymakers across all our major markets are now acknowledging this in their decision making, the opportunities for energy efficiency investment are set to multiply. With the portfolio performing well and the management team actively seeking additional value from our assets, we feel we are in a strong position to continue delivering returns for our investors."

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.

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, 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.