Alerion Clean Power S p A : Financial Statements as of 31/12/2023

2023

ANNUAL REPORT

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TABLE OF CONTENTS

Corporate Bodies	3
Group's structure	4
Directors' Report	5
Location of operational facilities	6
Foreword	7
Significant events during the financial year	7
Alternative performance indicators	8
Alerion Clean Power on the Stock Exchange	10
Summary of results	11
Basis of preparation of the reclassified		11
consolidated financial statements
12
The Group's performance
The Parent's performance	23
Legislative framework		25
Main risks and uncertainties		27
Corporate events	32
Related party and intra-group transactions	32
Significant events occurring after the end of the		33
financial year and outlook for the year
33
Other information
Proposed allocation of the profit for the year	37

Consolidated financial		38
statements
39
Consolidated financial statements
Basis of preparation and notes	46
Certification of Consolidated Financial		145
Statements
Independent auditor's report on the consolidated		146
financial statements
Separate financial
statements of Alerion Clean		151
Power S.p.A.	152
Separate financial statements
Basis of preparation and notes	158
Certification of the Parent Company's financial		224
statements
Report of the Board of Statutory Auditors to the		225
Shareholders' Meeting
Independent auditor's report on the financial		242
statements
247
Annex "A" - List of equity investments

Explanation Added for Translation

These financial statements are a free translation of the financial statements originally issued in Italian in accordance with International Financial Reporting Standards as adopted by the European Union. In the event of discrepancies, the Italian language version prevails.

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CORPORATE BODIES

Corporate Bodies

Board of directors*

Josef Gostner	Chairman and chief executive officer 1
Stefano Francavilla	Deputy chairman and chief executive	as of 22 April 2022
	officer 1

Patrick Pircher	Director and chief executive officer 1	as of 22 April 2022
Germana Cassar	Director 3	as of 27 April 2020
Antonia Coppola	Director 2 4	as of 22 April 2022
Stefano D'Apolito	Director		as of 27 April 2020
Nadia Dapoz	Director2	3 4	as of 27 April 2020
Carlo Delladio	Director2	3 4	as of 22 April 2022
Elisabetta Salvani	Director2		as of 22 April 2022
Pietro Mauriello	Director		as of 22 April 2022

1. Directors with operating powers
2. Members of the control, risks and sustainability commitee
3. Members of remuneration and appointments committe
4. Members of the committe for related party transactions

Board of statutory auditors

Francesco Schiavone Panni Chairman

Loredana Conidi Standing statutory auditor

Alessandro Cafarelli Standing statutory auditor

Alice Lubrano Alternate statutory auditor

Roger Demoro Alternate statutory auditor

Manager in charge of financial reporting (Law no. 262/05)

Stefano Francavilla

Independent auditors

KPMG S.p.A.

Via Vittor Pisani 25

20124 Milan

*In office since 22 April 2022

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ALERION GROUP STRUCTURE

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DIRECTORS' REPORT

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LOCATION OF OPERATIONAL FACILITIES

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FOREWORD

The parent company Alerion Clean Power S.p.A. (hereinafter "Parent" or "Alerion" or "Issuer") is a legal entity organised under the laws of the Italian Republic. The ordinary shares of Alerion are listed on the electronic circuit of the Milan Stock Exchange - EURONEXT MILAN. The registered office of the Alerion Group (hereinafter referred to as "Group" or "Alerion Group") is in Milan, at Via Renato Fucini 4.

This Annual Financial Report for the year ended 31 December 2023 has been prepared in accordance with International Financial Reporting Standards (hereinafter referred to as "IFRS" or "International Financial Reporting Standards") endorsed by the European Commission, in force as of 31 December 2023.

This Annual Financial Report as at 31 December 2023 was approved by resolution of the Board of Directors on 12 March 2024.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

The main events that took place during the year 2023 are described below:

On 21 April 2023, Alerion Clean Power S.p.A. ("Alerion") entered into an agreement with RWE Renewables Italia S.r.l. ("RWE") for the acquisition of 51% of the share capital of Fri-El Anzi S.r.l. and Fri-El Guardionara S.r.l., of which Alerion already held the other 49% of the share capital.

Fri-el Anzi and Fri-el Guardionara own two wind farms, located respectively in the municipality of Anzi (Potenza Province), with an installed capacity of 16 MW, and in the municipality of San Basilio (Cagliari Province), with an installed capacity of 24.7 MW. The agreement also provided for the sale by Alerion of a 49% minority stake in the share capital of the company Andromeda Wind S.r.l. (in which RWE already holds the remaining 51% of the share capital), owner of a wind farm located in the municipality of Ururi (Campobasso Province), with an installed capacity of 26 MW.

The price paid for the purchase of Fri-el Anzi's and Fri-el Guardionara's shares was EUR 18.8 million and EUR 25.5 million, respectively, while the price received for the sale of the shareholding in Andromeda Wind was EUR 26.5 million.

Acquisition of two authorised wind power projects with a total capacity of approximately 60 MW On 20 October 2023, Alerion Clean Power S.p.A. ("Alerion") resolved to enter into two preliminary agreements for the purchase from Fri-elS.p.A., a wholly-ownedsubsidiary of Fri-elGreen Power S.p.A., of 100% of the share capital of two companies owning two authorised wind power projects, located in the municipalities of Arlena di Castro and Castelfranco in Miscano, respectively, each with a capacity of 29.4 MW.

The planned investment for the construction of the wind power plants will amount to approximately EUR 100 million and the commissioning for both plants is expected for the first half of 2025.

Modification approved of framework agreement with Fri-el S.p.A. for the development of photovoltaic projects

On 23 October, the company resolved to acquire 100% of the share capital of Fri-el Solar S.r.l., a wholly- owned subsidiary of Fri-el S.p.A., which holds a portfolio of photovoltaic development projects in Italy. In particular, Fri-el Solar owns, through wholly-owned subsidiaries, two authorised photovoltaic projects in the municipalities of Licodia Eubea and Grottole, with a capacity of 11.3 MW and 16.4 MW respectively.

Underwriting of long-term PPA

On 23 October 2023, Alerion Clean Power S.p.A. resolved to underwrite two long-term,fixed-price purchase power agreements ("PPAs") between Enermac S.r.l. and Naonis Wind S.r.l., wholly-owned subsidiaries and owners of the Orta Nova and Cerignola wind farms with a total installed capacity of approximately 62 MW, and Fri-El Trading S.r.l., a wholly-owned subsidiary of Fri-El Green Power S.p.A.

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The PPAs relate to the sale of the power produced by the plants owned by Enermac and Naonis to Fri-El Trading for the period after 31 December 2023, and in particular from 1 January 2024 until 31 December 2035.

Issue of a senior, non-convertible bond (Green Bond) approved

On 3 November 2023, Alerion commenced the preparatory activities for the issuance of a senior unsecured, non-convertible and non-subordinated bond issue for a counter-value of up to EUR 170 million, with a fixed duration of 6 years, to be qualified as a Green Bond, addressed both to the general public in Italy and to qualified investors in Italy and institutional investors abroad (the "Bond Issue" and the "Bonds"). The financial resources from the bond issue will be used, inter alia, to finance the Group's new projects in the wind and photovoltaic sector, in Italy and abroad, as well as to refinance existing projects in the wind and photovoltaic sector.

On 17 November 2023, the Central Bank of Ireland approved the prospectus (the "Prospectus") relating to the public offering for subscription of the bonds called "Alerion Clean Power S.p.A. Senior Unsecured Fixed Rate Notes due 2029" (the "2023 Bond") (the "Bonds").

In addition, Borsa Italiana S.p.A. ("Borsa Italiana [Italian stock exchange]"), by order dated 14 November 2023, admitted the Bonds to listing on the electronic bond market of Borsa Italiana (the "MOT").

On 1 December 2023, Alerion Clean Power S.p.A., with reference to the public offer for the subscription of the green bonds called "Alerion Clean Power S.p.A. Senior Unsecured Fixed Rate Notes due 2029" (the "Bonds"), announced the results of the Offer, which closed early - in the morning of 30 November 2023.

The total nominal value of the transaction amounts to Euro 170,000,000, at an issue price equal to 100% of the par value, corresponding to 170,000 Bonds, each having a minimum denomination of Euro 1,000. As announced on 29 November 2023, the annual interest rate of the Bonds is 6.75% gross per annum.

The acquisition of a 35 MW licensed wind power project in Wales

On 23 November 2023, Alerion, through its subsidiary Alerion UK Ltd, signed an agreement with a group of companies specialising in the development of plants from renewable sources in Great Britain - including Penant Walters (Holdings) Limited - for the acquisition of 100% of the company Wind Farm Penant Walters (Foelt) Limited, owner of an authorised project for the construction of a wind farm located in Neath Port Talbot, in Wales, with an installed capacity of 35 MW and an estimated annual production at full capacity of approximately 100 GWh.

The value of the investment, including the purchase cost of the authorised project, is estimated at approximately EUR 55 million. The closing of the transaction for the purchase of the company owning the project is expected for the first half of 2024.

ALTERNATIVE PERFORMANCE INDICATORS

The Group uses a number of Alternative Performance Indicators to (i) monitor the Group's economic and financial performance, (ii) anticipate any business trends in order to take promptly any corrective action, and (iii) define investment and management strategies and the most effective allocation of resources. The Alternative Performance Indicators are considered to be another important parameter for assessing the Group's performance, as they allow for a more analytical monitoring of the Group's economic and financial performance. For the purpose of a correct reading of the Alternative Performance Indicators presented in this Annual Financial Report, please note that:

• the determination of the Alternative Performance Indicators used by the Issuer is not governed by IFRS, and these indicators should not be considered as alternative measures to those provided by the Group's financial statements for the assessment of the Group's economic performance and financial position;
• the Alternative Performance Indicators must be read in conjunction with the Group's financial statements;
• the Alternative Performance Indicators are determined (or derived) based on the Group's historical data, resulting from the Financial Statements, general and management accounting, and elaborations carried out by management, in accordance with the recommendations contained in the document prepared by ESMA, No. 1415 of 2015, as implemented by CONSOB Communication No. 0092543 of 3 December 2015.
• the Alternative Performance Indicators have not been subject to any audit and should not be interpreted as an indicator of the Group's future performance;

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• the method for determining the Alternative Performance Indicators, as indicated above, is not regulated by the accounting principles for the preparation of the financial statements, and therefore the criteria applied by the Group for their determination may not be homogeneous with those adopted by other groups; therefore, the Alternative Performance Indicators presented by the Issuer may not be comparable with those that may be presented by other groups.

Below are the Alternative Performance Indicators contained in this annual financial report

The Gross operating profit (EBITDA) is the operating profit before amortisation, depreciation and impairment losses. EBITDA thus defined represents a measure used by management to monitor and evaluate its operational performance.

Financial indebtedness is determined in accordance with ESMA's guidance in paragraph 175 of the "Guidance on Disclosure Requirements under the Prospectus Regulation" (04/03/2021 | ESMA32-382-1138). Financial indebtedness is not identified as an accounting measure under IFRS.

Financial indebtedness (net of derivatives) is calculated as financial indebtedness, excluding the fair value of current and non-current hedging financial instruments.

Accounting financial indebtedness is calculated as the sum of cash and cash equivalents, current and non-current financial assets, financial receivables and other non-current financial assets, current and non-current financial liabilities, the fair value of hedging financial instruments and other non-current financial assets, net of financial indebtedness resulting from assets held for sale. Accounting financial indebtedness is not identified as an accounting measure under IFRS. The calculation criteria applied by Alerion may not be the same as that used by other groups, and therefore the balance obtained by Alerion may not be comparable to that calculated by them.

Accounting financial indebtedness (net of derivatives) is calculated as accounting financial indebtedness, excluding the fair value of current and non-current hedging financial instruments. Furthermore, it should be noted that financial indebtedness (excluding derivatives) is also reported as relevant to the determination of the financial covenants as provided for in the regulation of the four bonds issued by the Group on 19 December 2019, 3 November 2021, 17 May 2022 and 12 December 2023, respectively, in line with the criteria set forth in the "Green-Bond Framework" adopted by the Company.

Gross financial indebtedness is calculated as the sum of current and non-current financial liabilities and the fair value of financial instruments. Accounting financial indebtedness is not identified as an accounting measure under IFRS. The calculation criteria applied by Alerion may not be the same as that used by other groups, and therefore the balance obtained by Alerion may not be comparable to that calculated by them.

Net invested capital is calculated as the algebraic sum of non-current assets and non-financial assets and liabilities.

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ALERION CLEAN POWER ON THE STOCK EXCHANGE

As of 31 December 2023, the reference price of ALERION shares was EUR 26.60, a decrease (-17%) compared to 31 December 2022, when it was EUR 32.20, after having distributed a dividend of EUR 0.65 per share on 10 May 2023.

During the period under examination, the entire 2023 financial year, Alerion's share price fluctuated between a low of EUR 21.75 on 14 November 2023 and a high of EUR 34.05 on 03 January 2023, as shown in the chart below regarding the average monthly data recorded by the share during the year under examination:

Below are some price and volume figures for the ALERION share for the financial year 2023.

Share price	€
Price at 31 December 2023	26.60
Maximun price (03/01/2023)	34.05
Minimum price (14/11/2023)	21.75
Average price	28.27
Volumes traded	Shares (no.)
Maximum volume (14/12/2023)	74,863
Minimun volume (03/11/2023)	1,807
Average volume	10,283

Market capitalisation as at 31 December 2023 amounted to approximately EUR 1,443 million (EUR 1,746 million at the end of 2022). The average number of shares outstanding during the period was 53,839,778.

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