Integrated Annual Report 2022
1
Content
Atlantica in Two Minutes ................................................3
Other Information ....................................................... 253
Our Purpose and Values .................................................5
Asset Portfolio ......................................................... 253
About This Report .............................................................6
Strategic Report .............................................................. 12
Our Sustainable Business Model and Strategy
.......................................................................................... 12
Events During the Period ....................................... 21
Key Performance Indicators .................................. 32
A Fair Review of the Business ............................... 36
Definitions ................................................................. 256
Reconciliations ........................................................ 262
Global Reporting Initiative (GRI) Content Index
....................................................................................... 264
Sustainability Accounting Standards Board
(SASB) Index ............................................................. 274
Environmental, Social and Other Key
Performance Indicators ........................................ 277
Financial Review ......................................................... 41
Independent Auditor’s Report .......................... 289
Principal Risks and Uncertainties ........................ 62
Consolidated Financial Statements ................. 303
ESG Materiality Analysis ......................................... 90
Company Financial Statements ........................ 392
Environmental Sustainability ................................ 96
Social Sustainability ................................................131
Asset Management.................................................167
Innovation Management ......................................171
Cybersecurity and Data Privacy .........................172
Tax Management.....................................................175
Section 172 Statement ..........................................178
Going Concern Basis ..............................................184
Governance .....................................................................186
Business Ethics ..........................................................186
Sustainability Governance ...................................191
Directors’ Report .....................................................196
Audit Committee Report ......................................217
Directors’ Remuneration Report .......................224
Directors’ Responsibilities Statement..............249
Shareholder Engagement ....................................251
2
Atlantica in Two Minutes
Our Business
2,121MW
Of renewable
generation
(~73% solar)
1,229 miles
41
Stable 100%
contracted or
regulated assets2
75% Renewable1
25% Other sustainable
infrastructure assets
including storage, natural
gas, transmission lines and
water assets
17.5 Mft
3
/day
of water capacity
11 Countries
North America, South
America and certain
EMEA regions
398MW
of Efficient Natural
Gas & Heat
14 years
Weighted average
contracted life
remaining3
2022 Selected Financial and Operational Metrics
Revenue
$1,102 Million
▲ 2.9% vs 20214
Operating Profit
$278 Million
- 21% vs 2021
Renewable
Energy6
5,319 GWh Produced
▲ 14% vs 2021
Adjusted EBITDA5
$797 Million
▲ 1.5% vs 20214
CAFD5
$238 Million
▲ 5% vs 2021
Net Cash provided by
Operating activities
$586 Million
▲ 16% vs 2021
CAFD per share
$2.07
▲ 2% vs 2021
Other Sustainable
Assets7
100% availability
Dividends Paid
per Share8
$1.77
▲ 3% vs 2021
1 Based on Revenue for the twelve month period ended December 31, 2022.
2 Regulated revenues in Spain, Chile TL3 and Italy and non-contracted nor regulated in the case of Chile PV 1.
3 Calculated as weighted average years remaining as of December 31, 2022 based on CAFD estimates for the 2023-2026
period, including assets that have reached COD before March 1, 2023.
4 Compared to the year 2021, on a constant currency basis and adjusted for the consolidation of a non-recurrent Rioglass
solar project in the year 2021.
5 We refer to “Other Information- Reconciliation of non-GAAP measures” section.
6 Includes curtailment in wind assets for which we receive compensation.
7 Availability refers to the time during which the asset was available to our client totally or partially divided by contracted
or budgeted availability, as applicable.
8 Sum of the dividends per share paid to shareholders in 2022.
3
Integrity, Compliance and Safety
Our Values
Value Creation
Sustainability
Excellence and Efficiency
Collaborative Environment
Enabling the Energy Transition
Science Based Targets initiative (SBTi) approved target:
Reduce Scope 1 and 2 GHG emissions per kWh of energy generated by 70%
by 2035 from a 2020 base year
NEW
Targets
✓ Reduce Scope 3 GHG emissions per kWh of energy generated
by 70% by 2035 from a 2020 base year
✓ Achieve Net Zero GHG emissions by 2040
✓ Reduce non-GHG emissions per kWh of energy generated by
50% by 2035 from a 2020
✓ Reduce our water consumption per kWh of energy generated
by 50% by 2035 from a 2020 base year
Key
KPIS
GHG Emissions
Avoided
GHG Emissions
Offset
6.9 million tons of
CO2e
▲ 17% vs 2021
320 thousand tons of
CO2e
▲ 23% vs 2021
Scope 1&2 emission rate
per unit of energy
generated
168 tons of gCO2/kWh
Improved 9% vs 2021
2022 Selected Social Metrics
Employees
978 people
▲75% vs 2021
80% Men
20% Women
▲37% women vs 2021
% Women at
Management
23% in 2022 and 2021
Gender-Pay Gap
13% reduction vs 2021
Local Communities
$1.5 million invested
▲15% vs 2021
Health and Safety: LTFI9 and TRFI10 below
sector average
Human Right
Incidents
0 in 2022 and 2021
9 Lost Time Frequency Index (LTFI) represents the total number of lost-time accidents recorded in the last 12 months per
million hours worked.
10 Total Recordable Frequency Index (TRFI) represents the total number of recordable accidents with and without lost-
time recorded in the last 12 months per million hours worked.
4
Our Purpose and Values
Our Purpose
Our Purpose
Our purpose is to support the transition towards a more sustainable world by investing in and
managing sustainable infrastructure assets, while creating long-term value for our
stakeholders.
Our Values
Our values define who we are and how we behave both as individuals and as a Company.
These values, described below in order of importance, serve as a compass for our day-to-day
decisions and guide our relationships with stakeholders.
Integrity, Compliance and Safety. We will always do what is
right. We are strongly committed to complying with all rules and
regulations.
Value creation. We pursue a proactive approach to creating
long-term value for our shareholders. Our core corporate policies
are supported by a solid commitment to risk management that
guides all our decisions.
Sustainability. We invest in assets that are environmentally
sustainable and we manage them in a sustainable manner. We
follow policies that analyse, evaluate, and propose measures
aimed at minimising the environmental impacts of our business
activity.
Excellence and Efficiency. We believe in outstanding and
disciplined asset management of our operations to be the best-
in-class operator, while seeking excellence on a cost-efficient
basis.
Collaborative Environment. Respect and Teamwork are key to
achieving our goals. We treat others as we would like to be
treated ourselves and we put the team ahead of personal success.
To build strong teams, we recruit, train, and promote the best
people.
5
About This Report
Atlantica Sustainable Infrastructure plc and its subsidiaries (“Atlantica” or “the
Company”), as part of its commitment to transparency and reporting best practices, has
published an Integrated Annual Report, which integrates our financial and non-financial
information, including environment, social and governance (ESG) disclosures.
Integrated Annual Report Information
Atlantica’s Integrated Annual Report has been prepared in accordance with the relevant
U.K. requirements for the year ended December 31, 2022.
The Consolidated Financial Statements contained in this Report have been prepared in
accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (“IASB”) and UK adopted International
Accounting Standards (collectively as “IFRS”), on a basis consistent with the prior year.
The Parent Company Financial Statements have been prepared in conformity with
Financial Reporting Standard 101 “Reduced Disclosure Framework (“FRS 101”)”. We refer
to Note 2 to the Consolidated Financial Statements, and Note 1 to the Parent Company
Financial Statements for accounting policies detailed information.
In addition, this report has been prepared by Management in accordance with the Global
Reporting Initiative (GRI) Standards. We report GRI in line with the matters that are
important and / or material to our business.
This report has also been prepared by Management in accordance with the SASB Electric
Utilities & Power Generators sustainability accounting standard and its reporting
requirements. In addition, we have followed SASB Solar Technology & Project Developers
sustainability accounting standards and its reporting requirements for aspects which are
material to our business.
Data in this report for the year ended and as of December 31, 2022, except where
otherwise noted. Comparative data for the years ended December 31, 2021, and 2020 is
also provided. Our 2021, 2020 and 2019 U.K. Annual Reports and ESG Reports are
available for download from our website.
ESG data reported corresponds to all consolidated subsidiaries, regardless of Atlantica’s
percentage of ownership in each of the subsidiaries.
A multi-disciplinary team participated in the preparation of this report.
Currency amounts are expressed in U.S. Dollars unless otherwise noted.
6
Non-GAAP Financial Measures:
This report contains non-GAAP financial measures including Adjusted EBITDA, CAFD and
CAFD per share.
Non-GAAP financial measures are not measurements of our performance or liquidity
under IFRS and should not be considered alternatives to operating profit or profit for the
period or any other performance measures derived in accordance with IFRS or any other
generally accepted accounting principles or as alternatives to cash flow from operating,
investing or financing activities. Please refer to the section “Other Information-
Reconciliation of non-GAAP measures” of this report for a reconciliation of the non-GAAP
financial measures included in this Report to the most directly comparable financial
measures prepared in accordance with IFRS. Also, please refer to the following
paragraphs in this section for an explanation of the reasons why management believes
the use of non-GAAP financial measures (including CAFD, CAFD per share and Adjusted
EBITDA) in this Report provides useful information to investors.
We present non-GAAP financial measures because we believe that they and other similar
measures are widely used by certain investors, securities analysts and other interested
parties as supplemental measures of performance and liquidity. The non-GAAP financial
measures may not be comparable to other similarly titled measures of other companies
and have limitations as analytical tools and should not be considered in isolation or as a
substitute for analysis of our operating results as reported under IFRS. Non-GAAP
financial measures and ratios are not measurements of our performance or liquidity
under IFRS and should not be considered as alternatives to operating profit or profit for
the year or any other performance measures derived in accordance with IFRS or any other
generally accepted accounting principles or as alternatives to cash flow from operating,
investing or financing activities.
Some of the limitations of these non-GAAP measures are:
• they do not reflect our cash expenditures, future requirements for capital expenditures
or contractual commitments;
• they do not reflect changes in, or cash requirements for, our working capital needs;
• they may not reflect the significant interest expense, or the cash requirements
necessary, to service interest or principal payments, on our debts;
• although depreciation and amortisation are non-cash charges, the assets being
depreciated and amortised will often need to be replaced in the future and Adjusted
EBITDA, CAFD and CAFD per share do not reflect any cash requirements that would
be required for such replacements; and
• the fact that other companies in our industry may calculate Adjusted EBITDA, CAFD
and CAFD per share differently than we do, which limits their usefulness as
comparative measures.
Adjusted EBITDA is calculated as profit/(loss) for the year attributable to the parent
company, after adding back loss/(profit) attributable to non-controlling interest, income
tax expense, financial expense (net), depreciation, amortisation and impairment charges
of entities included in the Annual Consolidated Financial Statements and depreciation
and amortisation, financial expense and income tax expense of unconsolidated affiliates
(pro rata of our equity ownership). Until September 30, 2021, Adjusted EBITDA excluded
equity of profit/(loss) of entities carried under the equity method and did not include
7
income tax expense of
depreciation and amortisation, financial expense and
unconsolidated affiliates (pro rata of our equity ownership). Periods prior to December
2021, have been presented accordingly. CAFD is calculated as cash distributions received
by the Company from its subsidiaries minus cash expenses of the Company, including
debt service and general and administrative expenses. CAFD per share is calculated as
CAFD divided by the weighted average number of outstanding ordinary shares of the
Company during the period.
Our management believes Adjusted EBITDA, CAFD and CAFD per share are useful to
investors and other users of our financial statements in evaluating our operating
performance because they provide them with an additional tool to compare business
performance across companies and across periods. Adjusted EBITDA is widely used by
investors to measure a company’s operating performance without regard to items such
as interest expense, taxes, depreciation and amortisation, which can vary substantially
from company to company depending upon accounting methods and book value of
assets, capital structure and the method by which assets were acquired. Our management
believes CAFD and CAFD per share are relevant supplemental measurements of the
Company’s ability to earn and distribute cash returns to investors and are useful to
investors in evaluating our operating performance because securities analysts and other
interested parties use such calculations as a measure of our ability to make quarterly
distributions. In addition, CAFD and CAFD per share are used by our management team
for determining future acquisitions and managing our growth. Adjusted EBITDA, CAFD
and CAFD per share are widely used by other companies in the same industry.
Our management uses Adjusted EBITDA, CAFD and CAFD per share as measures of
operating performance to assist in comparing performance from period to period on a
consistent basis moving forward. They also readily view operating trends as a measure
for planning and forecasting overall expectations, for evaluating actual results against
such expectations, and for communicating with our Board of Directors, shareholders,
creditors, analysts and investors concerning our financial performance.
Information presented as the pro rata share of our unconsolidated affiliates reflects our
proportionate ownership of each asset in our portfolio that we do not consolidate and
has been calculated by multiplying our unconsolidated affiliates’ financial statement line
items by the Company’s percentage ownership thereto. Note 7 to the Annual
Consolidated Financial Statements includes a description of our unconsolidated affiliates
and our pro rata share thereof. We do not control the unconsolidated affiliates.
Multiplying our unconsolidated affiliates’ financial statement line items by the Company’s
percentage ownership may not accurately represent the legal and economic implications
of holding a non-controlling interest in an unconsolidated affiliate. We include
depreciation and amortisation, financial expense and
income tax expense of
unconsolidated affiliates (pro rata of our equity ownership) because we believe it assists
investors in estimating the effect of such items in the profit/(loss) of entities carried under
the equity method (which is included in the calculation of our Adjusted EBITDA) based
on our economic interest in such unconsolidated affiliates. Each unconsolidated affiliate
may report a specific line item in its financial statements in a different manner. In addition,
other companies in our industry may calculate their proportionate interest in
unconsolidated affiliates differently than we do, limiting the usefulness of such
8
information as a comparative measure. Because of these limitations, the information
presented as the pro rata share of our unconsolidated affiliates should not be considered
in isolation or as a substitute for our or such unconsolidated affiliates’ financial
statements as reported under applicable accounting principles. Please refer to “Other
Information” section for additional information regarding reconciliations from non-GAAP
measures.
9
Renewable Energy – Solar
1,540 MW In Operation
19 Assets
64% of our 2022 Revenue
10
Strategic Report
11
Strategic Report
This Strategic Report has been prepared to provide shareholders with information that
will aid them in assessing Atlantica’s strategies and the potential of such strategies to
succeed.
The Strategic Report contains certain forward-looking statements that are made by the
directors in good faith and based on the information available to them up to the time of
their approval of this report. These statements should be treated with caution due to the
uncertainties, including both economic and business risk factors, inherent in such
forward-looking information.
The directors have prepared this Strategic Report in compliance with Section 414C of the
Companies Act 2006.
The Strategic Report discusses the following areas:
Events during the period.
- Our sustainable business model and strategy.
-
- United Nations Global Compact (UNGC).
- Key performance indicators.
- A fair review of the business.
- Principal risks and uncertainties.
Environment sustainability.
-
- Social sustainability.
- Asset management
- Cybersecurity and data privacy.
-
- Tax management.
- Section 172 statement.
- Going concern basis.
Innovation management.
Our Sustainable Business Model and Strategy
Our Business
Atlantica Sustainable Infrastructure plc’s purpose is to support the transition towards a
more sustainable world by investing in and managing sustainable infrastructure assets,
while creating long-term value for our stakeholders. We are a sustainable infrastructure
company with a majority of our business in renewable energy assets. In 2022, our
renewable sector represented approximately 75% of our revenue with solar energy
representing approximately 64%. We complement our renewable assets portfolio with
storage, efficient natural gas, and transmission infrastructure assets, as enablers of the
transition towards a clean energy mix. We also hold water assets, a relevant sector for
sustainable development.
As of December 31, 2022, we own or have an interest in a portfolio of assets and new
projects under development diversified in terms of business sector and geographic
footprint. Our portfolio consists of 41 assets with 2,121 MW of aggregate renewable
12
energy installed generation capacity, (of which approximately 73% is solar), 343 MW of
efficient natural gas-fired power generation capacity, 55 MWt of district heating capacity,
1,229 miles of electric transmission lines and 17.5 M ft3 per day of water desalination.
We currently own and manage operating facilities and projects under development in
North America (United States, Canada, and Mexico), South America (Peru, Chile,
Colombia, and Uruguay) and EMEA (Spain, Italy, Algeria, and South Africa). Our assets
generally have contracted or regulated revenue. As of December 31, 2022, our assets had
a weighted average remaining contract life of approximately 14 years11.
Our plan for executing this strategy includes the following key components:
Focus on stable assets in the power and water sectors, including renewable energy,
storage, efficient natural gas and heat, transmission assets, as well as water assets,
generally contracted or regulated.
We intend to focus on owning and operating stable, sustainable infrastructure assets,
with long useful lives, generally contracted, for which we believe we have extensive
experience and proven systems and management processes, as well as the critical mass
to benefit from operating efficiencies and scale. We intend to maintain a diversified
portfolio with a large majority of our Adjusted EBITDA generated from low-carbon
footprint assets, as we believe these sectors will see significant growth in our targeted
geographies.
Maintain diversification across our business sectors and geographies.
Our focus on three core geographies, North America, Europe and South America, helps
to ensure exposure to markets in which we believe renewable energy, storage and
transmission will continue to grow significantly. We believe that our diversification by
business sector and geography provides us with access to different sources of growth.
Grow our business through the optimisation of the existing portfolio and through
investments in the expansion of our current assets.
We intend to grow our business through organic growth that we expect to deliver
through the optimisation of the existing portfolio, price escalation factors in many of our
assets, as well as through investments in the expansion and repowering of our current
assets and hybridisation of existing assets with other complementary technologies
including storage, particularly in our renewable energy assets and transmission lines.
Grow our business by developing new projects and investing in new assets in the
business sectors where we are present
We will seek to grow our business by investing in new assets, generally totally or partially
contracted or regulated. We intend to develop new assets and in some cases to invest in
assets under development or construction either directly or with partners. We currently
own a pipeline of assets under development and construction in North America, Europe
and South America with approximately 2.0 GW of renewable energy projects and
11 Calculated as weighted average years remaining as of December 31, 2022 based on CAFD estimates for the 2023-2026
period, including assets that have reached COD before March 1, 2023.
13
approximately 5.6 GWh of storage projects under development12. We also expect to
acquire assets from third parties leveraging the local presence and network we have in
the geographies and sectors in which we operate. We believe that our know-how and
operating expertise in our key markets together with a critical mass of assets in several
geographic areas as well as our access to capital provided by being a listed company will
assist us in achieving our growth plans.
Foster a low-risk approach
We intend to maintain a portfolio of sustainable infrastructure assets, generally totally or
partially contracted, with a low-risk profile for a significant part of our revenue. A large
majority of our revenue is contracted or regulated. We generally seek to invest in assets
with proven technologies in which we generally have significant experience, located in
countries where we believe conditions to be stable and safe. We may complement our
portfolio with investments or co-investments in assets with shorter contracts or with
partially contracted or merchant revenue or in assets with revenue in currencies other
than the U.S. dollar or euro.
Additionally, our policies and management systems include thorough risk analysis and
risk management processes applied on an ongoing basis. Our policy is to insure all of
our assets whenever economically feasible, retaining in some cases part of the risk in
house.
Maintain a prudent financial policy and financial flexibility
Non-recourse project debt is an important principle for us. We intend to continue
financing our assets with project debt progressively amortised using the cash flows from
each asset and where lenders do not have recourse to the holding company assets. The
majority of our consolidated debt is project debt.
In addition, we hedge a significant portion of our interest rate risk exposure. We estimate
that as of December 31, 2022, approximately 93% of our total interest risk exposure was
fixed or hedged, generally for the long-term. We also limit our foreign exchange
exposure. We intend to ensure that at least 80% of our cash available for distribution is
always in U.S. dollars and euros. Furthermore, we hedge net distributions in euros for the
upcoming 24 months on a rolling basis.
We also intend to maintain a solid financial position through a combination of cash on
hand and undrawn credit facilities. In order to maintain financial flexibility, we use
diversified sources of financing in our project and corporate debt including banks, capital
markets and private investor financing. In recent years we have been active in green
financing initiatives, improving our access to new debt investors.
12 Only includes projects estimated to be ready to build before or in 2030 of approximately 3.2 GW, 1.9 GW of renewable
energy and 1.3 GW of storage (equivalent to 5.7 GWh). Capacity measured by multiplying the size of each project by
Atlantica’s ownership. Potential expansions of transmission lines not included.
14
Atlantica: a Sustainable
Infrastructure Platform
GROWTH PIPELINE
• 2.0GW + 5.6GWh storage
• Expansion/repowering
opportunities
• Greenfield development
portfolio
• M&A
CONTRACTED PORTFOLIO
Critical mass (>$9 billion in total assets)
•
• >70% renewable energy
• Diversified by geography and technology
ESG
OPERATIONAL EXCELLENCE
PRUDENT FINANCING
•CDP A list
•Sustainalytics industry top rated
•S&P CSA 2022 Global
Sustainability Yearbook
•Global 100 Corporate Knights
•#1 globally GRESB disclosure
• In-house operation and
maintenance in ~60% of
business
• BB+ S&P, Fitch
• Mostly non-recourse
debt
• Technical expertise across
• Refinancing
technologies
opportunities
15
Our Competitive Strengths
We believe that we are well-positioned to execute our business strategies thanks to the
following competitive strengths:
Stable and predictable long-term cash flows
We believe that our portfolio of sustainable infrastructure has a stable cash flow profile.
We estimate that the off-take agreements or regulation in place at our assets have a
weighted average remaining term of approximately 1413 years as of December 31, 2022,
providing long-term cash flow visibility. In 2022, approximately 51% of our revenue was
non-dependent on natural resource, not subject to the volatility that natural resource
may have, especially solar and wind resources. This includes our transmission lines, our
efficient natural gas plant, our water assets and approximately 76% of the revenue
received from our solar assets in Spain with most of their revenues based on capacity in
accordance with the regulation in place. In these assets, our revenue is not subject to (or
has low dependence on) solar, wind or geothermal resources, which translates into more
stable cash-flow generation. Going forward, our new investments will probably be
dependent on the natural resource. Additionally, our facilities have minimal or no fuel
risk.
Our diversification by geography and business sector also strengthens the stability of our
cash flow generation. We expect our well-diversified asset portfolio, in terms of business
sector and geography to maintain cash flow stability.
Furthermore, due to the fact that we are a U.K. registered company, we should benefit
from a more favourable treatment than if we were a corporation based in the U.S. when
receiving dividends from our subsidiaries that hold our international assets because they
should generally be exempt from U.K. taxation due to the U.K.’s distribution exemption.
Based on our current portfolio of assets, which includes renewable assets that benefit
from an accelerated tax depreciation schedule, and tax regulations benefits permitted in
the jurisdictions in which we operate, under current regulations we do not expect to pay
significant income tax in the upcoming years in most of our geographies due to existing
net operating losses, or NOLs. Furthermore, based on our existing portfolio of assets, we
believe that there is limited repatriation risk in the jurisdictions in which we operate.
Positioned in business sectors with high growth prospects
The renewable energy industry has grown significantly in recent years and it is expected
to continue to grow in the coming decades. According to Bloomberg New Energy
Finance 2022, renewable energy is expected to account for the majority of new
investments in the power sector in most markets. In Bloomberg’s economic transition
scenario, 22.9 TW of new capacity additions are expected by 2050. Solar PV, wind and
battery storage see the largest deployment with 19.5 TW, collectively capturing 85% of
this new power capacity. Total required investment in energy infrastructure over the next
three decades tops $119 trillion. To achieve this, annual investment will need to more
than double from around $2.0 trillion, to $4.1 trillion.
13 Calculated as weighted average years remaining as of December 31, 2022 based on CAFD estimates for the 2023-
2026 period, including assets that have reached COD before March 1, 2023.
16
The significant increase expected in the renewable energy space over the coming
decades also requires significant new investments in electric transmission and
distribution lines for power supply, as well as storage and natural gas generation for
dispatchability, with each becoming key elements to support additional wind and solar
energy generation. We believe that we are well positioned in sectors with solid growth
expectations.
We also believe that our diversified exposure to international markets will allow us to
pursue improved growth opportunities and achieve higher returns than we would have
if we had a narrower geographic or technological focus. If certain geographies and
business sectors become more competitive for investments in the future, we believe we
can continue to execute on our growth strategy by having the flexibility to invest in other
regions or in other business sectors.
Well positioned to capture growth opportunities
Our current portfolio of assets offers growth opportunities through the expansion and
repowering of existing assets and through hybridization of existing assets with other
complementary technologies. We can also grow by adding storage to our existing
renewable assets or by developing standalone storage close to our existing assets. In
addition, we have in-house development capabilities and partnerships with third parties
to co-develop new projects.
Well positioned in ESG
In 2022, 74% of our Adjusted EBITDA was derived from renewable energy and 62% of
our Adjusted EBITDA corresponded to solar energy production. Adjusted EBITDA from
low carbon footprint assets represented 89.4%, including renewable energy, transmission
infrastructure, as well as water assets.
Among others, we have targeted:
-
-
-
-
-
to maintain over 80% of our Adjusted EBITDA generated from low-carbon footprint
assets;
to reduce Scope 1 and 2 GHG emissions per KWh of energy generated by 70% by
2035 from a 2020 base year. This is a GHG reduction objective approved by the
Science Based Target initiative;
to reduce Scope 3 GHG emission per KWh of energy generated by 70% by 2035 from
a 2020 base year;
to achieve Net Zero GHG emission by 2040;
to reduce our non-GHG emissions per KWh of energy generated by 50% by 2035
from a 2020 base year.
We refer to the sections United Nations Global Compact and Environmental
Sustainability for more details.
17
Growth Visibility
As of December 31, 2022 we had 41 assets in operation. In addition, we currently have
the following assets under construction or ready to start construction in the short-term:
Expected
Investment
($ million)
40-50
303
11
11
11
3
12
Off-taker
N.A.
Regulated
Enel
Colombia
Enel
Colombia
Enel
Colombia
Solana
Conelsur5
Asset
Type
Location
Capacity
(Gross)
Expected
COD
Coso Batteries 1
Chile PMGD2
Battery Storage
Solar PV
California, US
Chile
100 MWh
80 MW
Honda 14
Honda 24
Apulo 14
Solar PV
Colombia
10 MW
Solar PV
Colombia
10 MW
2023
Solar PV
Colombia
10 MW
2023
2024
2023 -
2024
2023
Solana C&I PV
Raurapata
Solar PV (behind
the metre)
Transmission Line
Arizona, US
2.5 MW
2023
Peru
3.9KM
220Kv
2024
Notes-
(1) Includes nominal capacity on a 100% basis, not considering Atlantica’s ownership.
(2) Atlantica owns 49% of the shares, with joint control, in Chile PMGD.
(3) Corresponds to the expected investment by Atlantica.
(4) Atlantica owns 50% of the shares in Honda 1, Honda 2 and Apulo 1.
(5) The contract is in the process of being transferred to Conelsur.
Development Pipeline
We have been developing new projects in most of our core geographies. In some cases,
we do this with our local in-house teams and in other cases we have been working with
local partners with whom we jointly invest in developing projects or with whom we have
agreements based on milestones.
By focusing our development activities on locations where we already have assets in
operation and by working in many cases with partners, we have been able to maintain
our development cost at what we believe are low levels.
We currently have a pipeline of assets under development of approximately 2.0 GW of
renewable energy and 5.6 GWh of storage. Approximately 40% of the projects are in PV,
40% in storage and 19% in wind, while 18% of the projects are expected to reach ready
to build (“Rtb”) in 2023 or 2024, 17% are in an advanced development stage and 65% are
in early stage.
Pipeline of Assets Under Development14
North America
Europe
South America
Total
Renewable Energy (GW)
1.0
Storage (GWh)
4.1
0.4
0.6
2.0
1.3
0.2
5.6
14 Only includes projects estimated to be ready to build before or in 2030 of approximately 3.3 GW, 2.0 GW of renewable
energy and 1.3 GW of storage (equivalent to 5.6 GWh). Capacity measured by multiplying the size of each project by
Atlantica’s ownership. Potential expansions of transmission lines not included.
18
By Project Type (GW)
By Project Stage (GW)
By Source (GW)13
1%
40%
40%
19%
PV
Wind
Storage
Others
18%
Rtb 23-24
17%
Advanced
65%
Early Stage
74%
26%
Repowering,
expansion of
existing
assets
Greenfield
development
s
19
Renewable Energy – Wind
442 MW In Operation
7 Assets
20
Events During the Period
Investments
• In January 2022, we closed the acquisition of Chile TL4, a 63-mile transmission line
and 2 substations in Chile for a total equity investment of $38.4 million. We expect to
expand the transmission line in 2023-2024, which would represent an additional
investment of approximately $8 million. The asset has fully contracted revenues in U.S.
dollars, with annual inflation adjustments and a 50-year remaining contract life. The
off-takers are several mini hydro plants that receive contracted or regulated payments.
• In April 2022, we closed the acquisition of Italy PV 4, a 3.6 MW solar portfolio in Italy
for a total equity investment of $3.7 million. The asset has regulated revenues under
a feed-in tariff until 2031.
•
In May 2022, together with our partner, we closed a 7.5-year PPA extension for
Monterrey with our current off-takers. The extension will involve an investment that is
expected to be financed with cash available at the asset level. The main objective of
the investment is to achieve improvements in the asset to provide, among other
things, additional battery capacity and additional redundancy of electric power supply.
The PPA, which is denominated in U.S. dollars, now ends in 2046.
• In July 2022 we closed a 12-year transmission service agreement denominated in U.S.
dollars that will allow us to build a substation and a 2.4-mile transmission line
connected to our ATN transmission line serving a new mine in Peru. The substation is
expected to enter in operation in 2024 and the investment is expected to be
approximately $12 million.
•
In September 2022, we closed the acquisition of Chile PV 3, a 73 MW solar PV plant
through our renewable energy platform in Chile. The equity investment corresponding
to our 35% equity interest was $8 million, and we expect to install batteries with a
capacity of approximately 100 MWh in 2023-2024. Total investment including
batteries is expected to be in the range of $15 million to $25 million depending on
the capital structure. Part of the asset’s revenue is currently based on capacity
payments. Adding storage would increase the portion of capacity payments.
• In September 2022, we agreed our first investment in a standalone battery storage
project of 100 MWh (4 hours) capacity located inside Coso, our geothermal asset in
California. Our investment is expected to be in the range of $40 million to $50 million.
This project is at an advanced stage of development and we are preparing to start
construction, with COD expected in 2024.
• In November 2022, we closed the acquisition of a 49% interest, with joint control, in
an 80 MW portfolio of solar PV projects in Chile which is currently starting construction
(Chile PMGD). Our economic rights are expected to be approximately 70%. Total
investment in equity and preferred equity is expected to be $30 million and COD is
expected to be progressive in 2023 and 2024. Revenue for these assets is regulated
under the Small Distributed Generation Means Regulation Regime (“PMGD”) for
projects with a capacity equal or lower than 9 MW which allows to sell electricity
through a stabilised price.
21
• In addition, we have finished construction of the three assets that we had under
construction and have reached or are about to reach COD:
- Albisu, the 10 MW PV asset wholly owned by us reached COD in January 2023.
Albisu is located in Uruguay and has a 15-year PPA with Montevideo Refrescos,
S.R.L, a subsidiary of Coca-Cola Femsa., S.A.B. de C.V. The PPA is denominated in
local currency with a maximum and minimum price in U.S. dollars and is adjusted
monthly based on a formula referring to the U.S. Producer Price Index (PPI),
Uruguay’s Consumer Price Index (CPI) and the applicable UYU/U.S. dollar exchange
rate.
- La Tolua and Tierra Linda are two solar PV assets in Colombia with a combined
capacity of 30 MW. Each plant has a 10-year PPA (commencing on COD) in local
currency with Coenersa, the largest independent electricity wholesaler in Colombia.
Corporate Financing Activities during the year
On February 28, 2022, we established an “at-the-market programme” and entered into a
Distribution Agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and RBC
Capital Markets LLC, as our sales agents, under which we may offer and sell from time to
time up to $150 million of our ordinary shares, including in “at-the-market” offerings
under our shelf registration statement on Form F-3 filed with the SEC on August 3, 2021,
and a prospectus supplement that we filed on February 28, 2022. For the year ended
December 31, 2022, we issued and sold 3,423,593 ordinary shares under this programme
at an average market price of $33.57 per share pursuant to our Distribution Agreement,
representing gross proceeds of $114.9 million and net proceeds of $113.8 million. This
programme replaced our previous “at-the market programme” with J.P. Morgan
Securities, LLC.
Project Financing Activities during the year
In October 2022, we refinanced the project debt of Solacor 1 & 2 and in December 2022,
we refinanced the project debt of Solnova 1, 3 & 4. We refer to section “Liquidity” under
“Financial Review” for more information.
Inflation Reduction Act
On August 16, 2022, the U.S. Inflation Reduction Act (“IRA”) was signed into law. The
provisions of the IRA are intended to, among other things, incentivise clean energy
investments. The IRA includes, among other incentives, a 30% solar Investment Tax Credit
(“ITC”) for solar projects to be built by 2032, that can be increased for projects that meet
certain criteria, a Production Tax Credit (“PTC”) for wind projects to be built by 2032, a
30% ITC for standalone storage projects to be built by 2032 and a new tax credit that will
award up to $3/kg for low carbon hydrogen. The IRA also includes transferability options
for the ITCs and PTCs, which should allow an easier and faster monetisation of these tax
credits.
22
Regulation in Spain
As expected, in 2022 the Administration in Spain approved measures to adjust the
regulated revenue component for renewable energy plants, following the increase since
mid-2021 in the billings of these plants for the sale of electricity in the market. On March
30, 2022, Royal Decree Law 6/2022 was published, adopting urgent measures in response
to the economic and social consequences of the war in Ukraine. This Royal Decree Law
contains a bundle of measures in diverse fields, including those targeted at containing
the sharp rise in gas and electricity prices. It includes temporary changes to the detailed
regulated components of revenue received by our solar assets in Spain, which are
applicable from January 1, 2022. Specifically, prior to the entry into force of these new
regulation, the level of remuneration under that specific remuneration system depended
on the market price estimates used to calculate it, which are revised in each regulatory
semi-period. Now, under Article 5 of Royal Decree Law 6/2022, an extraordinary measure
has been taken to subdivide the current regulatory semi-period, so as to create a new
semi-period between January 1, 2022 and December 31, 2022 and the remuneration will
be reviewed also taking into account future OMIP prices. Further on May 14, 2022, the
Royal Decree Law 10/2022 was published, including the so-called “Iberian mechanism”,
which is the temporary production cost adjustment mechanism for reducing the price of
electricity in the wholesale market. The proposed remuneration parameters for the year
2022 were published on May 12, 2022 in draft form and became final on December 14,
2022. The main changes to the detailed regulated revenue components received by the
solar assets of the Company in Spain are as follows:
− The statutory half-period of three years from 2020 to 2022 has been split into two
statutory half-periods (1) from January 1, 2020 until December 31 2021 and (2)
calendar year 2022. As a result, the fixed monthly payment based on installed capacity
(Remuneration on Investment or Rinv) for calendar year 2022 was revised in the new
Order TED/1232/2022. The proposed Rinv is detailed in the table below.
− The electricity market price assumed by the regulation for calendar year 2022 was
changed from €48.82 per MWh to an expected price of €121.9 per MWh, i.e., the
remuneration parameters of 2022 have been updated with real prices of 2020 (33.94
€/MWh) and 2021 (111.90 €/MWh) and the future prices of OMIP for 2022 (value of
second semester 2021: 121.9 €/MWh). As a result, the variable payment based on net
electricity produced (Remuneration on Operation or Ro), was also adjusted. The
proposed Ro for the year 2022 is zero €/MWh for most of our assets reflecting the
fact that market prices for the power sold in the market are significantly higher.
Since our assets in Spain are regulated and are entitled to receive a “reasonable rate of
return”, we do not expect any significant impact in the long-term in the value of our
assets.
23
Remuneration
on Investment
2022 (euros/MW)
Remuneration on
Operation
2022 (euros/GWh)
Maximum
Hours
Minimum
Hours
Operating
Threshold
Useful
Life
Solaben 2
25 years
390,453
Solaben 3
25 years
390,453
Solacor 1
25 years
Solacor 2
25 years
390,453
390,453
PS 10
PS 20
25 years
543,185
25 years
401,296
Helioenergy 1 25 years
385,014
Helioenergy 2 25 years
385,014
Helios 1
25 years
398,498
Helios 2
25 years
398,498
Solnova 1
25 years
404,292
Solnova 3
25 years
Solnova 4
25 years
404,292
404,292
Solaben 1
25 years
395,304
Solaben 6
25 years
395,304
Seville PV
30 years
696,418
0
0
0
0
7,580
1,777
0
0
0
0
0
0
0
0
0
0
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
1,840
1,104
1,840
1,104
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,008
1,205
2,041
1,225
703
703
703
703
644
644
703
703
703
703
703
703
703
703
703
714
For the three-year half period starting on January 1, 2023 and ending on December 31,
2025, the adjustment for electricity price deviations in the preceding statutory half period
will be progressively modified to take into account a mix of actual market prices and
future market prices.
In addition, on December 28, 2022 the proposed parameters for 2023 were published in
draft form. They are subject to final publication.
Main ESG Actions during the year
Investing in sustainable infrastructure is only one part of our strategy. Managing those
assets in a sustainable way is key to creating long-term value. We have launched several
initiatives to ensure that we efficiently and sustainably manage key areas of our
Company:
1. Zero-accident culture. Health and Safety is our number one priority, and we want
our employees, partners, and contractors to apply the highest standards to ensure
safe and sustainable operations. In 2022, our key health and safety indicators met
annual targets and remained below the sector average in all our geographies. Refer
to the occupational health and safety section for further details on our safety culture.
2.
Improved our Ethics and Corporate Governance culture. The Board updated the
Compliance documents, including the Supplier Code of Conduct and the Anti-
Corruption Policy.
24
3. Green Financing
We have developed a Green Finance Framework to issue green finance instruments
to finance or refinance renewable energy infrastructure, as well as transmission lines
dedicated to supplying renewable energy to the grid. The Framework is aligned with
our strategy and the use of proceeds will contribute to the advancement of the United
Nations Sustainable Development Goals (SDGs) of Affordable and Clean Energy. The
framework has a Second Party Opinion (SPO) delivered by Sustainalytics.
In April 2022, we updated our Green Finance Report on our website with a list of the
green projects to which the green financing proceeds have been allocated.
In October 2022, we refinanced the project debt of Solacor 1 & 2, two 50MW installed
capacity solar assets. The new financing is a green euro-denominated loan with a
syndicate of banks for a total amount of €205.0 million. The maturity has been
extended until 2037. The green non-recourse financing was issued in compliance with
the Green Loan Principles.
In December 2022, we refinanced the project debt of Solnova 1, 3 & 4, three 50 MW
installed capacity solar assets. The new financing agreement is a green euro-
denominated loan with a syndicate of banks for a total amount of €338.5 million. The
new project debt has replaced the previous three project loans. The maturity has been
extended until 2035. The green non-recourse financing was issued in compliance with
the Green Loan Principles.
4. Improved our environment and social awareness
In 2022, we actively posted ESG content on social media to increase ESG awareness
among our stakeholders.
Source: In-house
5. Offset our GHG emissions
Global warming is a challenge that requires the active participation of public and
private organisations. In 2022, as part of our commitment to sustainability, we
25
continued mitigating our GHG emissions. We encourage you to read our GHG
emissions section for detailed information on our mechanism to offset GHG
emissions.
Recent Development
On February 21, 2023, Atlantica’s Board of Directors commenced a process to explore
and evaluate potential strategic alternatives that may be available to Atlantica to
maximize shareholder value. The Company believes it has attractive growth and other
opportunities in front of it and is committed to ensuring that its diversified portfolio
of assets and growth platform is best positioned to take advantage of those
opportunities. The decision of Atlantica’s Board of Directors to explore strategic
alternatives has the support of the Company’s largest shareholder, Algonquin.
Atlantica expects to continue executing on its existing plans while the review of
strategic alternatives is ongoing, including its current growth plan and its focus on
continuing to invest in accretive growth opportunities. There is no assurance that any
specific transaction will be consummated, or other strategic change will be
implemented as a result of this strategic review.
26
Very Good Progress on our ESG
Credentials
Included for the 2nd consecutive year in CDP’s Climate Change
“A List”
Included for the 2nd consecutive year in the S&P Global
Sustainability Yearbook
Utility Industry Top Rated ESG Risk Rating by Sustainalytics
Ranked 1st on GRESB's Infrastructure Public Disclosure rating.
Best Performer
Recognised for the 3rd consecutive year as one of the World’s
100 Most Sustainable Corporations
Included for the 3rd consecutive year in the Bloomberg
Gender-Equality Index (GEI)
B score (“Management” band) in CDP’s Water Security
disclosure
Science Based Targets initiative (SBTi) approved target to
reduce Scope 1 and 2 GHG emissions per kWh of electricity
produced by 70% by 2035 from a 2020 base year
Selected among the recipients of the Terra Carta Seal
27
United Nations Global Compact (UNGC)
Atlantica is a signatory to the UNGC, the world’s largest corporate sustainability initiative
with more than 20,000 signatories in over 160 countries. The UNGC is an initiative that
encourages companies and organisations worldwide to adopt sustainable and socially
responsible policies. Participation in the UNGC is voluntary and those entities that sign it
pledge to uphold and promote the principles and report on their progress once they
apply them in their management.
Atlantica formally adopted the ten fundamental UNGC principles in the fields of human
rights, labour, environment, and anti-corruption and made the UNGC and its principles
an integral part of our strategy, culture, and day-to-day operations.
Atlantica is committed to aligning its actions to 7 of the 17 Sustainable Development
Goals (SDG): climate action; affordable and clean energy; clean water and sanitation;
decent work and economic growth; gender equality; life on land; and industry,
innovation, and infrastructure.
We are committed to using water efficiently in our power
generation and water desalination activities.
We have set a new plan to reduce our water consumption
at our generating assets that use cycled water in the turbine
circuit and in refrigeration processes.
- We have set a target to reduce our water consumption
per unit of energy generated (KWh) by 50% by 2035,
from a 2020 base year which was approved by the Board
of Directors.
local communities and
We invest in three water desalination plants that generate
drinking water for
industries
through the desalination of sea water. In 2022, these assets
generated purified seawater to meet the water needs of
approximately 3 million people in regions with limited
access to fresh water.
The three water desalination assets celebrated the World
Water Day to raise awareness among local communities
on the importance of sustainable water management.
We encourage you to read our water management section
for more detailed information.
The renewable energy industry has grown significantly in
recent years and it is expected to continue to grow in the
coming decades. This requires significant new investments
in, among others, storage for dispatchability to support
additional wind and solar energy generation.
In 2022, our renewable sector accounted for 75% of our
revenue, with solar energy representing 64%. We intend to
continue to invest in additional clean energy assets to help
increase the share of renewable energy in the global energy
mix.
Our main renewable energy and storage investments during
2022 include:
- A 3.6 MW solar PV portfolio in Italy.
- A 73 MW solar PV asset in Chile through a renewable
energy platform where we own approximately a 35% stake
and have a strategic investor role. We expect to add a
battery system of approximately 100 MWh in 2023-2024.
- A 100 MWh (4 hours) capacity battery storage in
California. Commercial Operations Date (COD) is expected
in 2024.
- A 49% interest in an 80 MW solar PV portfolio in Chile
currently starting construction. COD is expected to be
progressive in 2023 and 2024.
- 30 MW solar PV projects under construction in Colombia.
COD is expected in 2023.
- Lastly, our 3 solar PV assets under-construction in
Uruguay and Colombia finished construction and reached
or are about to reach COD, increasing our renewable
energy capacity by 40 MW.
28
Our activity has a positive impact on mitigating climate
change. We are committed to the reduction of greenhouse
gas emissions (GHG) by investing in renewable energy
assets.
We have a GHG reduction objective approved by the
Science Based Targets initiative (SBTi). Atlantica targets to
reduce Scope 1 and 2 GHG emissions per kWh of energy
generated by 70% by 2035 from a 2020 base year15.
In addition, we have a goal to maintain over 80% of our
adjusted EBITDA generated from low carbon footprint
assets including renewable energy, storage, transmission
infrastructure and water assets.
Following our long-term commitment to sustainability, we
have set a new ambitious plan to reduce:
1. Our GHG emissions. We target to:
(i) reduce Scope 3 GHG emissions per kWh of energy
generated by 70% by 2035 from a 2020 base year, and
(ii) achieving Net Zero GHG emissions by 2040.
2. Our non-GHG emissions. We target to reduce our non-
GHG emissions per kWh of energy generated by 50% by
2035 from a 2020 base year.
In 2022, we helped avoid up to 6.9 million tonnes of
equivalent CO2 compared to a 100% fossil fuel-based
generation plant (vs. 5.9 million tonnes of equivalent CO2 in
2021).
Please read our Environmental Sustainability section for
further details on our climate change related activities.
We protect labour rights and are committed to promoting
safe and secure working environments for all workers. We
are committed to providing decent work for all women and
men, young people and persons with disabilities and equal
pay for work of equal value.
We have always prioritised the health and safety of all our
employees, contractors and partners working at our
premises. Our key health and safety indicators met 2022
targets and remained below the sector average in all our
geographies.
We have internal policies and procedures to support and
ensure human rights, including the Human Rights Policy,
the Code of Conduct and the Supplier Code of Conduct
(available on our website). Our internal compliance team
annually: (i) monitors human rights are internally respected,
(ii) provides human rights related training to our
employees, and (iii) assesses the supply chain across the
jurisdictions in which we operate to identify any potential
breach regarding human rights.
In May 2022, the Board amended and approved our “U.K.
Anti-Modern Slavery and Human Trafficking Statements”
under the Modern Slavery Act, 2015 (available on our
website).
No human rights incidents were reported or identified
during 2022.
We are committed to supporting long-term development
of the communities where we operate as part of our culture
at Atlantica. It is key for us to be a proactive and valued
member of our communities and to foster communities’
economic prosperity.
local
economic growth by choosing to buy from local businesses.
In 2022, more than 90% of our total purchases in the
geographies where we have assets were made to local
suppliers.
In addition, we support
As of December 31, 2022, Atlantica offered over 150
different training programmes to its employees. In 2022,
employees completed an average of 29 hours of training.
We encourage you to read our Social and Governance
sections for details on occupational health and safety,
human rights, supply chain management and training-
related activities.
15 The target boundary includes steam generation.
29
Atlantica also supports other SDGs, as outlined below:
We work to protect flora and
fauna in and around our assets
and have a “no net loss”
commitment on biodiversity
the areas
in
conservation
where we operate.
the
impact
In 2022, we continued to: (i)
of
monitor
local
spinning blades on
species of birds at our wind
in Uruguay, and (ii)
farms
collaborate
local
with
administrations and other key
stakeholders
protect
species settled close to our
assets in the U.S. and Spain.
to
in 2022 we
In addition,
continued to deliver on our
reforestation programme
in
Spain, where we planted
approximately 14,000 trees.
We encourage you to read the
Environmental Sustainability
section for further details on
our biodiversity initiatives.
promote
equal
We
opportunities
our
employees and stakeholders.
for
Atlantica stands for greater
equality for women. We work
to ensure that men and
women are treated equally
and have the same work
opportunities.
We analyse gender pay gap,
for the year ended December
31, 2022 the total overall pay
gap was 13%.
Women represent 22% of
Atlantica’s
of
Directors.
Board
part
As
of Atlantica's
continuing commitment to
gender equality, in January
2023 we were included for
the 3rd consecutive year in
the
Bloomberg Gender-
Equality (GEI) Index. We are
companies
one of 485
committed to nurturing an
equal and inclusive culture in
the workplace.
We encourage you to read
the Social and Governance
sections for further details on
gender equality.
Infrastructure is a key driver of economic
growth and social value creation. At
Atlantica, we produce and
transport
electricity and we provide drinking water to
local communities. Our water assets provide
drinking water to approximately 3 million
people living in high or extremely high-water
stress areas. Our solar asset in South Africa
contributes to providing clean electricity in a
country that requires additional power
capacity. In South America, our transmission
lines help transport electricity to remote
areas. In addition, we foster communities’
local
economic
purchasing and by hiring local employees.
prosperity
through
In 2022, we invested in sustainable energy
infrastructure in the U.S., Mexico, Peru, Chile,
Colombia and Italy.
sector,
the energy
Within
innovation
contributes to the fight against climate
change
enhanced
technologies that enable more sustainable,
reliable and efficient solutions, including
storage and green hydrogen solutions.
through
new
or
To ensure reliability of our assets we: (1) own
31 patents and technology licences, as well
as 6 patents currently in approval process,
related to key components of our assets, to
processes and to solutions to monitor,
in a
operate and maintain our assets
sustainable and cost effective manner, (2)
have an operations department to identify
potential measures
improve asset
performance, reducing operating costs and
developing tools to manage our assets more
efficiently, and
(3) have an advanced
analytics team to improve the performance
of our technologies through data analytics
and machine learning technologies.
to
We encourage you to read the Asset
Management and Innovation sections for
further details on our industry, innovation
and infrastructure initiatives.
Communication on Progress (COP):
This Integrated Annual Report constitutes Atlantica’s “Communication on Progress”
under the UNGC.
30
Transmission Lines
1,229 Miles
7 Assets
Key in Transition Towards Green Generation
31
Key Performance Indicators
Financial KPIs
$ in millions
Revenue
Operating Profit
Net cash provided by operating activities
Adjusted EBITDA
Cash Available for Distribution (CAFD)
Cash Available for Distribution (CAFD) per share (in USD)
Total dividends paid
2022
1,102
278
586
797
238
2.07
203
2021
1,212
354
506
824
226
2.03
190
2020
1,013
373
438
796
201
1.97
169
Annual Dividend Paid per Share
1.77
1.72
1.66
2020
2021
2022
D
S
U
n
I
1.80
1.75
1.70
1.65
1.60
1.55
1.50
32
Renewable energy
MW in operation16
GWh produced17
Efficient natural gas
MW in operation18
GWh produced19
Electric Availability (%)
Electric transmission lines
Miles in operation
Availability (%)
Water
Mft3 in operation16
Availability (%)
Operational KPIs
2022
2,121
5,319
398
2,501
98.9%
1,229
100%
17.5
102.3%
2021
2,044
4,655
398
2,292
100.6%
1,166
100.0%
17.5
97.9%
2020
1,551
3,244
343
2,574
102.1%
1,166
100.0%
17.5
100.1%
We closely monitor the following key drivers of our business sectors’ performance to
plan for our needs, and to adjust our expectations, financial budgets, and forecasts
appropriately.
• MW in operation in the case of Renewable energy and Efficient natural gas and heat
assets, miles in operation in the case of Transmission lines and Mft3 per day in
operation in the case of Water assets, are indicators which provide information about
the installed capacity or size of our portfolio of assets.
• Production measured in GWh in our Renewable energy and Efficient natural gas and
heat assets provides information about the performance of these assets.
• Availability in the case of our Efficient natural gas and heat assets, Transmission lines
and Water assets also provides information on the performance of the assets. In these
business segments revenues are based on availability, which is the time during which
the asset was available to our client totally or partially divided by contracted
availability or budgeted availability, as applicable.
Renewable Energy Production (GWh)
4,655
5,319
3,244
h
W
G
6,000
5,000
4,000
3,000
2,000
1,000
0
2020
2021
2022
16 Represents total installed capacity in assets owned or consolidated at the end of the year, regardless of our percentage
of ownership in each of the assets except for Vento II for which we have included our 49% interest.
17 Includes 49% of Vento II wind portfolio production since its acquisition. Includes curtailment in wind assets for which
we receive compensation.
18 Includes 43 MW corresponding to our 30% share in Monterrey and 55 MWt corresponding to Calgary District Heating.
19 GWh produced includes 30% of the production from Monterrey.
33
Energy Storage and Efficient Natural
Gas
✓ Dispatchable Solutions
✓ Key in Transition
Towards Green
Generation
34
Selected Environmental Metrics
Maintain over 80% of adjusted
EBITDA from low carbon footprint
assets
%
GHG Emissions
Breakdown
Including
Offset GHG
Emissions
Offset GHG
Emissions
Scope 1
Scope 2
Scope 3
Total
Scope 1
GHG Emissions
Breakdown
(without
Offsets)
Scopes 1 and 2 GHG Emission Rate
per Unit of Energy Generated20
Scope 1
Scope 2
Scope 3
Total
GHG Emissions Avoided21
Water
Management in
Power
Generation
Waste
Management
Withdrawal
Discharges
Hazardous waste
Non-hazardous
waste
thousand
tonnes of
CO2e
thousand
tonnes of
CO2e
thousand
tonnes of
CO2e
gCO2/kWh
million
tonnes of
CO2e
m3 per
MWh
tonnes of
waste
2022
89%
1,524
249
814
2,587
320
1,844
249
814
2,907
168
6.9
1.42
0.17
1,908
23,142
2021
88%
1,535
237
798
2,570
260
1,795
237
798
2,830
185
5.9
1.58
0.21
2,664
22,238
20209hh1
87%
1,537
199
821
2,557
200
1,737
199
821
2,757
188
5.4
1.56
0.21
2,679
20,532
20 Our target is to reduce our Scope 1 and Scope 2 GHG emissions per unit of energy generated by 70% by 2035, with
2020 as the base year (57gCO2/KWh by 2035).
21 Calculated considering GHG emissions Scope 1 and 2 and energy generation of our power generation assets, both
electric and thermal energy. The GHG Equivalences Calculator uses the Avoided Emissions and Generation Tool (AVERT)
U.S. national weighted average CO2 marginal emissions rate to convert reductions of Kilowatt-hours into avoided units of
carbon dioxide emissions.
35
Selected Social Metrics
Health and Safety
Employees
Percentage of
Women
Gender Pay Gap3
Total Recordable Frequency Index22
Lost Time Frequency Index23
Total Recordable Deviation Index
Voluntary Turnover by year-end
Total turnover by year-end
Average Annual Training per
employee (in hours)
At Management Level
Over Total Number of Employees
Total overall pay gap
Community Investment and Development
2022
5.0
2.9
1,198
12.8%
22.2%
29
23%
20%
13%
2021
6.0
2.3
1,540
11.0%
16.9%
3725
23%
25%
26%
Investments focused
on improving
infrastructure and
supporting education
2020
5.0
1.4
1,20024
7.5%
10.1%
33
21%
27%
30%
Investments focused on
mitigating COVID-19
pandemic effects and
improving communities’
infrastructure
Note 1: Turnover rates calculated based on the average number of employees in each year.
Note 2: Health and safety industry benchmarks provided in the Health and Safety section.
Note 3: Data includes fixed salary, short-term bonus and long-term incentive plans without adjusting for factors such as
job function, level, education, performance, location, or exchange rate differences. Overtime has not been included. The
CEO has been excluded from the analysis as we believe that including his compensation would distort the results.
A Fair Review of the Business
Factors that Affect Comparability of our Results of Operations
▪ Acquisitions and Non-Recurrent Projects
The results of operations of Coso, Calgary District Heating, Italy PV 1, Italy PV 2, La
Sierpe, Italy PV 3, Chile TL4, Italy PV 4 and Chile PV 3 have been fully consolidated
since April 2021, May 2021, August 2021 for Italy PV 1 and Italy PV 2, November 2021,
December 2021, January 2022, April 2022 and September 2022, respectively. Vento II
has been recorded under the equity method since June 2021. These investments and
acquisitions represent additional revenue for $30.4 million and additional Adjusted
EBITDA of $26.2 million for the year ended December 31, 2022, when compared to
the year ended December 31, 2021.
In addition, the results of operations of Rioglass have been fully consolidated since
January 2021. Rioglass is a supplier of spare parts and services in the solar industry.
For the year ended December 31, 2021, most of Rioglass operating results relate to
a specific solar project which ended in October 2021, and which represented $85.3
million in revenue and $1.0 million in Adjusted EBITDA, included in our EMEA and
Renewable energy segments for the year ended December 31, 2021, and which are
non-recurrent.
22 Total Recordable Frequency Index (TRFI) represents the total number of recordable accidents with and without leave
(lost time injury) recorded in the last twelve months per one million worked hours.
23 Lost Time Frequency Index (LTFI) represents the total number of recordable accidents with leave (lost time injury)
recorded in the last twelve months per one million worked hours.
24 We have revised 2020 figures to account for the final number of near-misses and unsafe acts and conditions.
25 2021 data was revised following the updated 2022 classification
36
▪
Impairment
Considering the delays in the repairs and replacements that we are carrying out in
the storage system at Solana and their impact on production in 2022, as well as an
increase in the discount rate, we identified an impairment triggering event in
accordance with IAS 36 (Impairment of Assets). As a result, an impairment test has
been performed which resulted in the recording of an impairment loss of $41.2
million in 2022 in the line “Depreciation, amortisation, and impairment charges”. In
2021, we recorded an impairment loss of $43.1 million at Solana.
In addition, in 2022, considering that expected electricity prices in Chile over the
remaining useful life of Chile PV1 and Chile PV2 have decreased and are currently
lower than the prices assumed at the time of the acquisition, we have identified an
impairment triggering event, in accordance with IAS 36 (Impairment of Assets). As a
result, an impairment test has been performed and resulted in an impairment loss of
$20.4 million in 2022 in the line “Depreciation, amortisation, and impairment
charges”.
Furthermore, IFRS 9 requires impairment provisions to be based on expected credit
losses on financial assets rather than on actual credit losses. For the year ended
December 31, 2022 we recorded an expected credit loss impairment provision of $4.0
million which is reflected in the line item “Depreciation, amortisation, and impairment
charges”. In 2021, we recorded a reversal of the expected credit loss impairment
provision at ACT for $24.9 million following an improvement of its client’s credit risk
metrics.
▪ Electricity market prices
In addition to regulated revenue, our solar assets in Spain receive revenue from the
sale of electricity at market prices. Electricity prices increased significantly since mid-
2021 and revenue from the sale of electricity at current market prices represented
$142.9 million for the year ended December 31, 2022, compared to $129.1 million for
the year ended December 31, 2021, resulting in higher short-term cash collections.
Regulated revenues are revised periodically to reflect, among other things, the
difference between expected and actual market prices if the difference is higher than
a pre-defined threshold. Current higher market prices in Spain will therefore cause
lower regulated revenue to be received progressively over the remaining regulatory
life of our solar assets. As a result, we increased our provision by $25.3 million for the
year ended December 31, 2022, with no cash impact on the current period, compared
to an increase of provision of $77.1 million for the year ended December 31, 2021.
On May 12, 2022 remuneration parameters in Spain for the year 2022 were published
in draft form and became final on December 14, 2022. Revenue from the sale of
electricity at market prices plus Ro (Remuneration on Operation) less incremental
market price provision was $117.6 million for the year ended December 31, 2022,
compared to $107.7 million for the year ended December 31, 2021. In 2022 we
collected revenue from our assets in line with the parameters corresponding to the
regulation in place at the beginning of the year 2022, as the new parameters became
final on December 14, 2022, while revenue for the year ended December 31, 2022,
37
was recorded in accordance with the new parameters. Collections have started to be
regularised in 2023.
Factors Affecting Results of Operations
▪ Exchange rates
Our presentation currency and the functional currency of most of our subsidiaries is
the U.S. dollar, as most of their revenue and expenses are denominated or linked to
the U.S. dollar. All our companies located in North America, with the exception of
Calgary, with revenue in Canadian dollars, and most of our companies in South
America have their revenue and financing contracts signed in or indexed totally or
partially to U.S. dollars. Our solar power plants in Europe have their revenue and
expenses denominated in euros; Kaxu, our solar plant in South Africa, has its revenue
and expenses denominated in South African rand, La Sierpe, La Tolua and Tierra
Linda, our solar plants in Colombia, have their revenue and expenses denominated
in Colombian pesos and Albisu, our solar plant in Uruguay, has their revenue
denominated in Uruguayan pesos, with a maximum and a minimum price in US
dollars.
Project financing is typically denominated in the same currency as that of the
contracted revenue agreement, which limits our exposure to foreign exchange risk.
In addition, we maintain part of our corporate general and administrative expenses
and part of our corporate debt in euros which creates a natural hedge for the
distributions we receive from our assets in Europe. To further mitigate this exposure,
our strategy is to hedge cash distributions from our assets in Europe. We hedge the
exchange rate for the net distributions in euros (after deducting interest payments
and general and administrative expenses in euros). Through currency options, we
have hedged 100% of our euro-denominated net exposure for the next 12 months
and 75% of our euro-denominated net exposure for the following 12 months. We
expect to continue with this hedging strategy on a rolling basis.
Although we hedge cash-flows in euros, fluctuations in the value of the euro in
relation to the U.S. dollar may affect our operating results. For example, revenue in
euro-denominated companies could decrease when translated to U.S. dollars at the
average foreign exchange rate solely due to a decrease in the average foreign
exchange rate, in spite of revenue in the original currency being stable. Fluctuations
in the value of the South African rand and Colombian peso with respect to the U.S.
dollar may also affect our operating results.
In our discussion of operating results, we have included foreign exchange impacts
in our revenue by providing constant currency revenue growth. The constant
currency presentation is not a measure recognised under IFRS and excludes the
impact of fluctuations in foreign currency exchange rates. We believe providing
information
constant currency
regarding our results of operations. We calculate constant currency amounts by
converting our current period local currency revenue using the prior period foreign
currency average exchange rates and comparing these adjusted amounts to our
prior period reported results. This calculation may differ from similarly titled
measures used by others and, accordingly, the constant currency presentation is not
information provides valuable supplemental
38
meant to substitute recorded amounts presented in conformity with IFRS, nor should
such amounts be considered in isolation.
▪
Interest rates
We incur significant indebtedness at the corporate and asset level. The interest rate
risk arises mainly from indebtedness at variable interest rates. To mitigate interest
rate risk, we primarily use long-term interest rate swaps and interest rate options
which, in exchange for a fee, offer protection against a rise in interest rates. As of
December 31, 2022, approximately 92% of our project debt and close to 96% of our
corporate debt either has fixed interest rates or has been hedged with swaps or caps.
Nevertheless, our results of operations can be affected by changes in interest rates
with respect to the unhedged portion of our indebtedness that bears interest at
floating rates, which typically bear a spread over EURIBOR, LIBOR, SOFR or over the
alternative rates replacing these.
▪ Electricity market prices
As previously discussed, our solar assets in Spain receive revenue from the sale of
electricity at market prices in addition to regulated revenue. Regulated revenues are
revised periodically to reflect the difference between expected and actual market
prices if the difference is higher than a pre-defined threshold. Given that since mid-
2021 electricity prices in Spain have been, and may continue to be, significantly
higher than expected, it will cause lower regulated revenue over the remaining
regulatory life of our solar assets. On December 28, 2022, the parameters applicable
for the year 2023 were published in draft form and are subject to final publication.
Additionally, our assets in Italy have contracted revenues through a regulated feed
in premium in addition to merchant revenues for the energy sold to the wholesale
market.
Furthermore, we currently have three assets with merchant revenues (Chile PV 1 and
Chile PV 3, where we have a 35% ownership, and Lone Star II, where we have a 49%
ownership) and one asset with partially contracted revenues (Chile PV 2, where we
have a 35% ownership). Our exposure to merchant electricity prices represents less
than 2% of our portfolio in terms of Adjusted EBITDA. In Lone Star II we are analysing,
together with our partner, the option to repower the asset in the context of the IRA,
at a point in time to be determined.
39
Health and Safety:
Our Number 1 Priority
U.S.
Mexico
Peru
2022 Safety Day at our
premises
Uruguay
Colombia
Spain
Maintained Health and Safety KPIs
Below Sector Average
40
Financial Review
Renewable energy
MW in operation26
GWh produced27
Efficient natural gas
MW in operation28
GWh produced29
Electric Availability (%)
Electric transmission lines
Miles in operation
Availability (%)
Water
Mft3 in operation
Availability (%)
2022
2021
2020
2,121
5,319
398
2,501
98.9%
1,229
100%
17.5
102.3%
2,044
4,655
398
2,292
100.6%
1,166
100.0%
17.5
97.9%
1,551
3,244
343
2,574
102.1%
1,166
100.0%
17.5
100.1%
Production in the renewable business sector increased by 14.3% in 2022, compared to
2021. The increase was largely due to the contribution from the recently acquired
renewable assets Coso, Vento II, Italy PV 1, Italy PV 2, Italy PV 3, Italy PV 4, Chile PV 3 and
La Sierpe bringing approximately 812 GWh of incremental electricity generation.
In our solar assets in the U.S., solar radiation was higher in 2022 than in 2021, and
production increased by 0.7% compared to the same period in the previous year. In our
wind assets in the U.S., wind resource was mostly in line with expectations in the year
ended December 31, 2022.
In Chile, production at our PV assets in 2022 was in line with the previous year, with an
increase in Chile PV 1 mainly caused by better solar radiation largely offset by a decrease
in Chile PV 2 resulting from larger curtailments. In our wind assets in Uruguay, production
decreased by 3.8% mainly due to lower wind resource in the second and third quarters
of 2022 compared to the same periods of the previous year.
In Spain, production decreased by 13.1% in 2022, partly due to lower solar radiation
compared to 2021. In addition, some of our assets experienced significant technical
curtailments by the grid operator during the second quarter and the beginning of the
third quarter of 2022. At Kaxu, production increased in spite of lower solar radiation
during the year mainly due to the scheduled maintenance stop performed in the third
quarter of 2021.
Efficient natural gas and heat availability and production levels during 2022 were higher
than in the same period of the previous year due to the scheduled maintenance stops
performed in the first quarter of 2021 and to higher demand from our off-taker in 2022
compared to 2021.
26 Represents total installed capacity in assets owned or consolidated at the end of the year, regardless of our percentage
of ownership in each of the assets except for Vento II for which we have included our 49% interest.
27 Includes 49% of Vento II wind portfolio production since its acquisition. Includes curtailment in wind assets for which
we receive compensation.
28 Includes 43 MW corresponding to our 30% share in Monterrey and 55 MWt corresponding to Calgary District Heating.
29 GWh produced includes 30% of the production from Monterrey.
41
In Water, availability in 2022 was higher than in 2021, with very good performance in all
the assets. Our transmission lines, where revenue is also based on availability, continue
to achieve high availability levels.
Results of Operations
The table below details our results of operations for the years ended December 31, 2022,
and 2021.
Year ended December 31,
Year ended December 31,
2022
2021
$ in millions
Revenue
Other operating income
Employee benefit expenses
Depreciation, amortisation, and impairment charges
Other operating expenses
Operating profit
Financial income
Financial expense
Net exchange differences
Other financial income/(expense), net
Financial expense, net
Share of profit/(loss) of entities carried under the equity
method
Profit/(loss) before income tax
Income tax
Profit/(loss) for the year
Profit attributable to non-controlling interests
Profit/(loss) for the year attributable to the parent
company
Revenue
1,102.0
80.8
(80.2)
(473.6)
(351.3)
277.7
5.6
(333.3)
10.3
6.5
(310.9)
21.4
(11.8)
9.7
(2.1)
(3.3)
(5.4)
1,211.7
74.6
(78.7)
(439.4)
(414.3)
353.9
2.7
(361.2)
1.9
15.7
(340.9)
12.3
25.3
(36.2)
(10.9)
(19.2)
(30.1)
Revenue decreased to $1,102.0 million for the year 2022, which represents a decrease of
9.1% compared to $1,211.7 million for the year 2021. On a constant currency basis,
revenue in 2022, was $1,159.2 million, which represents a decrease of 4.3% compared to
2021. Additionally, on a constant currency basis and excluding the Rioglass non-recurrent
solar project accounted for in 2021, revenue increased by 2.9% in 2022.
This increase (on a constant currency basis and excluding the Rioglass non-recurrent
solar project) was mainly due to the contribution of the recently acquired and
consolidated assets which represent a total of $30.4 million of additional revenue in 2022
compared to 2021. Revenue increased in the U.S. and at Kaxu due to higher production
during 2022 compared to 2021, as previously explained. In addition, revenue remained
stable at our solar assets in Spain (0.4% increase on a constant currency basis and
excluding the non-recurrent solar project), in spite of lower production during the year
primarily due to higher electricity prices net of its corresponding accounting provision
(see “—Factors Affecting our Results of Operations—Electricity market prices” above). In
our wind assets in Uruguay, revenue increased in spite of lower production as a result of
the inflation adjustment. These effects were partially offset by a decrease in revenue at
42
ACT in 2022 compared to the previous year (due to the factors described under “—
Revenue and Adjusted EBITDA by business sector — Efficient natural gas & heat” below).
We refer to “Our Segment Reporting” section below for further details.
Other Operating Income
The following table details our other operating income for the years ended December
31, 2022, and 2021:
$ in millions
Other operating income
Grants
Insurance proceeds and other
Total
Year ended December 31,
Year ended December 31,
2022
2021
59.1
21.7
80.8
60.7
13.9
74.6
Other operating income increased by 8.3% to $80.8 million for the year ended December
31, 2022, compared to $74.6 million for the year ended December 31, 2021.
“Grants” represent the financial support provided by the U.S. Department of the Treasury
to Solana and Mojave and consist of an ITC Cash Grant and an implicit grant related to
the below market interest rates of the project loans with the Federal Financing Bank.
Grants were stable for the year 2022 compared to the previous year.
“Insurance proceeds and other” for the year ended December 31, 2022 included an
insurance income of $9.5 million corresponding to an event from previous years: in
December 2022, a Spanish court dictated in favour of our solar assets in a legal
proceeding against our former insurance company.
Employee Benefit Expenses
Employee benefit expenses increased by 1.9% to $80.2 million for the year ended
December 31, 2022, compared to $78.7 million for the year ended December 31, 2021.
The increase was mainly due to the consolidation of Coso and the internalisation of the
operation and maintenance services at Kaxu and at part of our solar assets in Spain.
During 2022, we transferred the employees performing the operation and maintenance
services at Kaxu and at part of our solar assets in Spain from an Abengoa subsidiary to
an Atlantica subsidiary. As a result, the O&M cost is now recorded under “Employee
Benefit Expenses” from the dates of such transfer. The increase was partially offset by a
decrease in the number of employees who were working for the Rioglass non-recurrent
solar project previously mentioned once it was completed.
Depreciation, Amortisation, and Impairment Charges
Depreciation, amortisation and impairment charges increased by 7.8% to $473.6 million
for the year ended December 31, 2022, compared to $439.4 million for the year ended
December 31, 2022. The increase was mainly due to the expected credit loss impairment
provision recorded at ACT. IFRS 9 requires impairment provisions to be based on the
expected credit loss of the financial assets in addition to actual credit losses. ACT
recorded an expected credit loss impairment provision of $4.0 million in 2022, while in
2021, there was a reversal of the expected credit loss provision of $24.9 million. In
addition, in 2022, we recorded an impairment loss of $41.2 million at Solana, as
previously described, compared to a $43.1 million impairment in 2021. In 2022 we also
43
recorded an impairment of $20.4 million at Chile PV 1 and Chile PV 2. Depreciation,
amortisation and impairment charges also increased due to the consolidation of recent
acquisitions. On the other hand, depreciation, amortisation and impairment charges
decreased in our solar assets in Spain mainly due to the depreciation of the euro against
the U.S. dollar.
Other Operating Expenses
The following table details our other operating expenses for the years ended December
31, 2022, and 2021:
Other operating expenses
Raw materials
Leases and fees
Operation and maintenance
Independent professional
Supplies
services
Insurance
Levies and duties
Other expenses
Total
Year ended December 31,
2022
2021
$ in millions
19.7
11.5
140.4
38.9
59.3
45.8
19.8
16.0
351.3
% of revenue $ in millions
70.7
9.3
154.0
39.2
40.8
45.4
29.9
25.0
414.3
1.8%
1.0%
12.7%
3.6%
5.4%
4.2%
1.8%
1.3%
31.8%
% of revenue
5.8%
0.8%
12.7%
3.2%
3.4%
3.8%
2.5%
2.1%
34.2%
Other operating expenses decreased by 15.2% to $351.3 million for the year ended
December 31, 2022, compared to $414.3 million for the year ended December 31, 2021.
Additionally, on a constant currency basis and excluding the Rioglass non-recurrent solar
project accounted for in the year ended December 31, 2021, other operating expenses
in 2022 increased by 8.4%. The increase was mainly due to higher cost of supplies
primarily in Spain, due to the increase of the electricity market prices since mid-2021.
This increase was partially offset by a decrease of levies and duties since the Spanish
government granted an exemption from the 7% electricity sales tax in our Spanish assets.
On the other hand, our operation and maintenance costs decreased mainly due the
internalisation of operation and maintenance at Kaxu and at part of our solar assets in
Spain. These services are now provided by a subsidiary of Atlantica, with the cost
classified in “Employee benefit expenses”.
Operating Profit
As a result of the above-mentioned factors, operating profit decreased by 21.5% to
$277.7 million for the year ended December 31, 2022, compared with $353.9 million for
the year ended December 31, 2021.
44
Financial Income and Financial Expense
Year ended December 31,
2021
2022
$ in millions
Financial income and financial expense
Financial income
Financial expense
Net exchange differences
Other financial income, net
Financial expense, net
5.6
(333.3)
10.3
6.5
(310.9)
2.7
(361.2)
1.9
15.7
(340.9)
Financial Expense
The following table details our financial expense for the years ended December 31, 2022,
and 2021:
$ in millions
Financial expense
Year ended December 31,
2022
2021
Interest on loans and notes
Interest rates losses derivatives: cash flow hedges
Total
(292.1)
(41.2)
(333.3)
(302.6)
(58.7)
(361.3)
6)
Financial expense decreased by 7.7% to $333.3 million for the year ended December 31,
2022, compared to $361.3 million for the year ended December 31, 2021.
“Interest on loans and notes” expense decreased primarily due to the repayment of
project and corporate debt in accordance with the financing arrangements and to the
depreciation of the euro against the U.S. dollar.
Under “Interest rate losses on derivatives designated as cash flow hedges” we record
transfers from equity to financial expense when the hedged item impacts profit and loss
for hedging instruments classified as cash-flow hedges from an accounting perspective.
The decrease was mainly due to lower losses in swaps hedging loans indexed to
EURIBOR, SOFR and LIBOR primarily resulting from the increase in the reference rates in
2022, compared to 2021, and to lower notional amounts, as we progressively repay our
project debt.
Net Exchange Differences
Net exchange differences increased to $10.3 million in 2022 compared to $1.9 million
income in 2021. The increase mainly due to the impact of foreign exchange caps hedging
our net cash flows in Euros, resulting from the appreciation of the U.S. dollar against the
Euro.
Other Financial Income/(Expense), Net
$ in millions
Other financial income/(expenses)
Other financial income
Other financial losses
Total
Year ended December 31,
2022
2021
27.9
(21.4)
6.5
32.3
(16.6)
15.7
45
Other financial income/(expense), net decreased to a net income of $6.5 million for the
year ended December 31, 2022 compared to a net income of $15.7 million for the year
ended December 31, 2021.
Other financial income in 2022 include $6.2 million income corresponding to the change
in fair value of interest rate derivatives at Kaxu, for which hedge accounting is not applied,
and $12.0 million income corresponding to the mark-to-market of the derivative liability
embedded in the Green Exchangeable Notes. Residual items primarily relate to interest
on deposits and loans, including non-monetary changes to the amortised cost of such
loans. The decrease of other financial income for the year ended December 31, 2022, was
mainly due to a one-time non-cash income of $10.4 million recorded in 2021 and
corresponding to the reversal of a potential earn-out which was finally not payable.
Other financial expense includes expenses for guarantees and letters of credit, wire
transfers, other bank fees and other minor financial expenses and the non-monetary
financial component of the long-term provision related to electricity market prices in
Spain and other long-term liabilities. The increase is mainly due to the financial impact
related to the electricity market prices provision recorded at our solar assets in Spain.
This is a long-term provision recorded at present value in accordance with the effective
interest method, which progressively accrues a financial expense.
Share of Profit of Entities Carried Under the Equity Method
Share of profit of entities carried under the equity method increased to $21.4 million in
the year ended December 31, 2022, compared to $12.3 million in the year ended
December 31, 2021 primarily due to the contribution of Vento II.
Profit/(loss) Before Income Tax
As a result of the previously mentioned factors, we reported a loss before income tax of
$11.8 million for the year ended December 31, 2022, compared to a profit before income
tax of $25.3 million for the year ended December 31, 2021.
Income Tax
The reconciliation between the theoretical income tax resulting from applying an average
statutory tax rate to profit before income tax and the actual income tax expense
recognised in the consolidated income statements for the years ended December 31,
2022 and 2021, is as follows:
46
Profit before tax
Average statutory tax rate1
Corporate income tax at average statutory tax rate
Income tax of associates, net
Differences in statutory tax rates
Unrecognised NOLS and deferred tax assets
Other Permanent differences
Other non-taxable income/(expense)
Corporate Income Tax
Year ended December 31,
2022
2021
$ in millions
(11.8)
25%
2.9
5.4
(4.3)
(10.9)
4.0
12.7
9.7
25.3
25%
(6.3)
3.1
(3.4)
(11.2)
(4.1)
(14.3)
(36.2)
Note:
(1) The average statutory tax rate was calculated as an average of the statutory tax rates applicable to each of our
subsidiaries weighted by the Income Before Tax.
For the year ended December 31, 2022, the overall effective tax rate was different than
the statutory rate of 25% primarily due to unrecognised tax losses carryforwards, mainly
in the Chilean entities.
For the year ended December 31, 2021, the overall effective tax rate was different than
the statutory rate of 25% primarily due to unrecognised tax losses carryforwards, mainly
in UK entities and to provisions recorded for potential tax contingencies in some
jurisdictions.
Profit Attributable to Non-Controlling Interests
Profit attributable to non-controlling interests was $3.4 million for the year ended
December 31, 2022 compared to $19.2 million for the year ended December 31, 2021.
Profit attributable to non-controlling interests corresponds to the portion attributable to
our partners in the assets that we consolidate (Kaxu, Skikda, Solaben 2 & 3, Solacor 1 &
2, Seville PV, Chile PV 1, Chile PV 2, Chile PV 3 and Tenes). The decrease is due to the
losses in our PV assets in Chile which were primarily caused by the impairment previously
discussed.
Profit / (Loss) Attributable to the Parent Company
As a result of the previously mentioned factors, the loss attributable to the parent
company was $5.4 million for the year ended December 31, 2022, compared to a loss of
$30.1 million for the year ended December 31, 2021.
Comparison of the Years Ended December 31, 2021 and 2020
The significant variances or variances of the significant components of the results of
operations between the years ended December 31, 2021 and December 31, 2020, are
discussed in the 2021 Consolidated Annual Report and Financial Statements.
Our Segment Reporting
We organise our business into the following three geographies where the contracted
assets and concessions are located: North America, South America and EMEA. In addition,
we have identified four business sectors based on the type of activity: Renewable energy,
47
Efficient natural gas and heat, Transmission lines and Water. We report our results in
accordance with both criteria.
Revenue by geography
North America
South America
EMEA
Total revenue
Adjusted EBITDA by
geography
North America
South America
EMEA
Adjusted EBITDA(1)
Year ended December 31,
2022
$ in millions % of revenue
405.1
166.4
530.5
1,102.0
36.8%
15.1%
48.1%
100.0%
2021
$ in millions % of revenue
32.7%
12.9%
54.5%
100.0%
395.8
155.0
660.9
1,211.7
Year ended December 31,
2022
2021
$ in millions
% of Adjusted
EBITDA
$ in millions
% of Adjusted
EBITDA
310.0
126.5
360.6
797.1
38.9%
15.9%
45.2%
100%
311.8
119.6
393.0
824.4
37.8%
14.5%
47.7%
100%
Note: We refer to section “Non-GAAP Financial Measures”, for a definition of our Adjusted EBITDA and to
section “Other Information” for a detailed reconciliation.
Volume/ availability by
geography
North America (GWh)(1)
North America availability
South America (GWh)(2)
South America availability
EMEA (GWh)
EMEA availability
Volume produced/availability
Year ended December 31,
2022
2021
5,743
98.9%
799
99.9%
1,278
102.3%
4,818
100.6%
722
100.0%
1,407
97.9%
Note:
(1) GWh produced includes 30% of the production from Monterrey and our 49% of Vento II wind portfolio
production since its acquisition
Includes curtailment production in wind assets for which we receive compensation
(2)
North America
Revenue increased by 2.3% to $405.1 million for the year ended December 31, 2022,
compared to $395.8 million for the year ended December 31, 2021, while Adjusted
EBITDA remained stable, with a 0.6% decrease for the year ended December 31, 2022,
compared to 2021. The increase in Revenue was mainly due to the contribution from the
recently acquired assets, Coso and Calgary. Revenue also increased at our solar assets in
North America due to higher production. The increase was partially offset by lower
revenue at ACT where revenue is recorded under IFRIC 12 - financial asset model (see
“—Revenue and Adjusted EBITDA by business sector—Efficient natural gas & heat”
below). Adjusted EBITDA decreased mainly due to lower Adjusted EBITDA at ACT,
resulting mostly from lower Revenue, higher operating and maintenance expenses at our
solar assets in North America mostly due to higher costs related to the scheduled major
maintenance at Solana and higher supply costs, mainly driven by higher electricity prices.
This decrease was partially offset by the contribution from the recently acquired assets
Coso, Calgary and Vento II.
48
South America
Revenue increased by 7.4% to $166.4 million for the year ended December 31, 2022,
compared to $155.0 million for the year ended December 31, 2021. The increase was
mainly due to the contribution from the recently acquired assets, La Sierpe, Chile TL4 and
Chile PV 3. Revenue at our wind assets in Uruguay also increased slightly in spite of lower
wind resource as a result of the inflation adjustment to revenue. Adjusted EBITDA
increased by 5.8% to $126.5 million for the year ended December 31, 2022, compared to
$119.6 million for the year ended December 31, 2021, mostly due to the same reasons.
EMEA
Revenue decreased to $530.5 million for the year ended December 31, 2022, which
represents a decrease of 19.7% compared to $660.9 million for the year ended December
31, 2021. On a constant currency basis, revenue for the year ended December 31, 2022,
was $587.4 million, which represents a decrease of 11.1% compared to the year ended
December 31, 2021. Additionally, on a constant currency basis and excluding the non-
recurrent solar project accounted for in the year ended December 31, 2021, revenue in
2022 increased by 2.0%.
The increase was mainly due to higher revenue at Kaxu caused by higher production
during the year ended December 31, 2022, compared to the same period of previous
year and to the indexation of our PPA to local inflation. The increase was also due to the
contribution of the recently acquired assets in Italy. Revenue remained stable at our solar
assets in Spain (0.4% increase on a constant currency basis and excluding the non-
recurrent solar project), since the negative impact of lower production was offset by
higher electricity prices net of its corresponding accounting provision.
Adjusted EBITDA decreased to $360.6 million for the year ended December 31, 2022,
which represents a decrease of 8.2% compared to $393.0 million for the year ended
December 31, 2021. On a constant currency basis, Adjusted EBITDA in 2022, was $399.1
million, which represents an increase of 1.5% compared to 2021. Additionally, on a
constant currency basis and excluding the non-recurrent solar project accounted for in
the year ended December 31, 2021, Adjusted EBITDA in 2022 increased by 1.8%. This
increase was mainly due to higher EBITDA at Kaxu and to the contribution of the recently
acquired assets in Italy as previously explained. In our solar assets in Spain, Adjusted
EBITDA decreased mainly due to higher costs of supplies largely caused by higher
electricity prices.
49
Year ended December 31,
2022
2021
Revenue by business sector
Renewable
Efficient natural gas & heat
Transmission lines
Water
Total revenue
$ in
millions
821.4
113.6
113.2
53.8
1,102.0
% of revenue
74.5%
10.3%
10.3%
4.9%
100.0%
$ in
millions
928.5
123.7
105.6
53.9
1,211.7
% of revenue
76.6%
10.2%
8.7%
4.5%
100.0%
Year ended December 31,
2022
2021
Adjusted EBITDA by business
sector
$ in millions
% of
Adjusted
EBITDA
$ in
millions
% of
Adjusted
EBITDA
Renewable energy
Efficient natural gas & heat
Transmission lines
Water
Adjusted EBITDA(1)
588.0
84.6
88.0
36.5
797.1
73.8%
10.6%
11.0%
4.6%
100.0%
602.6
100.0
83.6
38.2
824.4
73.1%
12.1%
10.2%
4.6%
100.0%
Note: We refer to the section “Non-GAAP Financial Measures”, for a definition of our Adjusted EBITDA and
to the section “Other Information” for a detailed reconciliation
Volume by business sector
Renewable energy (GWh)(1)
Efficient natural gas & Heat (GWh) (2)
Efficient natural gas & Heat availability
Transmission lines availability
Water availability
Volume produced/availability
Year ended December 31,
2022
2021
5,319
2,501
98.9%
100.0%
102.3%
4,655
2,292
100.6%
100.0%
97.9%
Note:
(1)
Includes curtailment production in wind assets for which we receive compensation. Includes our 49%
of Vento II wind portfolio production since its acquisition.
(2) GWh produced includes 30% of the production from Monterrey.
Renewable Energy
Revenue decreased to $821.4 million for the year ended December 31, 2022, which
represents a decrease of 11.5% compared to $928.5 million for the year ended December
31, 2021. On a constant currency basis, revenue in 2022 was $878.5 million, which
represents a decrease of 5.4% compared to 2021. Additionally, on a constant currency
basis and excluding the non-recurrent solar project accounted for in 2021, revenue in
2022 increased by 4.2%. The increase in revenue was primarily due to the contribution
from the recently acquired assets Coso, La Sierpe, our PV assets in Italy and Chile PV 3.
Revenue also increased at Kaxu, as well as at our solar assets in North America. Revenue
also increased at our wind assets in Uruguay in spite of lower wind resources as
previously described.
Adjusted EBITDA decreased to $588.0 million for the year ended December 31, 2022,
which represents a decrease of 2.4% compared to $602.6 million for the year ended
December 31, 2021. On a constant currency basis, Adjusted EBITDA in 2022 was $626.7
million which represents an increase of 4.0% compared to 2021. Additionally, on a
50
constant currency basis and excluding the non-recurrent solar project accounted for in
2021, Adjusted EBITDA increased by 4.2%. Adjusted EBITDA increased mainly due to the
increase in Revenue and the contribution of Vento II. This increase was partially offset by
lower Adjusted EBITDA at our solar assets in North America and Spain, as previously
discussed.
Efficient Natural Gas and Heat
Revenue decreased by 8.2% to $113.6 million for the year ended December 31, 2022,
compared to $123.7 million for the year ended December 31, 2021, while Adjusted
EBITDA decreased by 15.4% to $84.6 million for the year ended December 31, 2022,
compared to $100.0 million for the year ended December 31, 2021. Revenue at ACT is
recorded under IFRIC 12 - financial asset model. Although billings to clients increased in
2022 compared to 2021 as a result of inflation indexation, accounting revenue decreases
progressively over time. Revenue at ACT also decreased due to lower operation and
maintenance costs, since there is a portion of revenue related to operation and
maintenance services plus a margin. Operation and maintenance costs were higher in
2021 as it happens in the quarters preceding any major maintenance works. Adjusted
EBITDA decreased largely for the same reasons.
Transmission Lines
Revenue increased by 7.2% to $113.2 million for the year ended December 31, 2022,
compared to $105.6 million for the year ended December 31, 2021, while Adjusted
EBITDA increased by 5.2% to $88.0 million for the year ended December 31, 2022
compared to $83.6 million for the year ended December 31, 2021. The increase in
revenue and Adjusted EBITDA was mainly due to the contribution of the recently acquired
asset Chile TL 4 and to lower operation and maintenance costs at some of our
transmission lines in 2022 after a renegotiation with the supplier of these services.
Water
Revenue remained stable at $53.8 million for the year ended December 31, 2022,
compared to $53.9 million for the year ended December 31, 2021. Adjusted EBITDA
decreased by 4.5% to $36.5 million for the year ended December 31, 2022, compared to
$38.2 million for the year ended December 31, 2021. Operating expenses were higher in
2022 mostly due to higher availability in Tenes, which caused the decrease in Adjusted
EBITDA. Revenue follows the IFRIC 12- financial model and did not increase accordingly.
Comparison of the Years Ended December 31, 2021 and 2020
The significant variances in revenue and volume, by geographic region and business
sector, between the years ended December 31, 2021 and December 31, 2020, are
discussed in 2021 Consolidated Annual Report and Financial Statements.
51
Liquidity and Capital Resources
Our principal liquidity and capital requirements consist of the following:
• debt service requirements on our existing and future debt;
• cash dividends to investors; and
• investments in new assets and companies and operations.
As part of our business, depending on market conditions, we will from time to time
consider opportunities to repay, redeem, repurchase or refinance our indebtedness.
Changes in our operating plans, lower than anticipated sales, increased expenses,
acquisitions or other events may cause us to seek additional debt or equity financing in
future periods. There can be no guarantee that financing will be available on acceptable
terms or at all. Debt financing, if available, could impose additional cash payment
obligations and additional covenants and operating restrictions. In addition, any of the
items discussed in detail under “Principal Risk and Uncertainties” and other factors may
also significantly impact our liquidity.
Liquidity Position
Corporate liquidity
Cash and cash equivalents at Atlantica
Sustainable Infrastructure, plc, excluding
subsidiaries
Revolving credit facility availability
Total Corporate liquidity(1)
Liquidity at project companies
Restricted cash
Non-restricted cash
Total cash at project companies
Note:
Year ended December 31,
2021
2022
($ in millions)
60.8
385.1
445.9
207.6
332.6
540.2
88.3
440.0
528.3
254.3
280.1
534.4
(1) Corporate liquidity means cash and cash equivalents held at Atlantica Sustainable Infrastructure plc as of December
31, 2022, and available revolver capacity as of December 31, 2022.
Cash at the project level includes $207.6 million and $254.3 million restricted cash
balances as of December 31, 2022 and 2021, respectively. Restricted cash consists
primarily of funds required to meet the requirements of certain project debt
arrangements. In the case of Solana, part of the restricted cash is being used and is
expected to be used for equipment replacement. As of December 31, 2021, restricted
cash also included Kaxu’s cash balance, given that the project financing of this asset was
under a theoretical event of default which was resolved as of March 31, 2022.
Non-restricted cash at project companies includes among others, the cash that is
required for day-to-day management of the companies, as well as amounts that are
earmarked to be used for debt service and distributions in the future.
As of December 31, 2022, $34.9 million of letters of credit were outstanding under the
Revolving Credit Facility and we had $30 million of borrowings. As a result, as of
December 31, 2022 $385.1 million was available under the Revolving Credit Facility. As
of December 31, 2021, we had $10.0 million of letters of credits outstanding, and we had
52
no borrowing. As a result, $440.0 million was available under our Revolving Credit Facility
as of December 31, 2021.
Management believes that the Company's liquidity position, cash flows from operations
and availability under its Revolving Credit Facility will be adequate to meet the
Company's working capital requirements, financial commitments and debt obligations;
growth, operating and maintenance capital expenditures; and dividend distributions to
shareholders. Management continues to regularly monitor the Company's ability to
finance the needs of its operating, financing and investing activities within the guidelines
of prudent balance sheet management.
Credit Ratings
Credit rating agencies rate us and part of our debt securities. These ratings are used by
the debt markets to evaluate our credit risk. Ratings influence the price paid to issue new
debt securities as they indicate to the market our ability to pay principal, interest and
dividends.
The following table summarises our credit ratings as of December 31, 2022. The ratings
outlook is stable for S&P and Fitch.
Atlantica Sustainable Infrastructure corporate rating
Senior secured debt
Senior unsecured debt
Sources of Liquidity
S&P
BB+
BBB-
BB
Fitch
BB+
BBB-
BB+
We expect our ongoing sources of liquidity to include cash on hand, cash generated from
our operations, project debt arrangements, corporate debt and the issuance of additional
equity securities, as appropriate, and given market conditions. Our financing agreements
consist mainly of the project-level financing for our various assets and our corporate debt
financings, including our Green Exchangeable Notes, the Note Issuance Facility 2020, the
2020 Green Private Placement, the Green Senior Notes, the Revolving Credit Facility, the
"at-the-market programme”, other credit lines and our commercial paper programme.
Maturity
2022
2021
Revolving Credit Facility
Other Facilities(1)
Green Exchangeable Notes
2020 Green Private Placement
Note Issuance Facility 2020
Green Senior Notes
Total Corporate Debt
Total Project Debt
2024
2023-2026
2025
2026
2027
2028
$ in millions
29.4
30.1
107.1
308.4
147.2
395.1
1,017.2
4,553.1
-
41.7
104.3
327.1
155.8
394.2
1,023.1
5,036.2
Note:
(1) Other facilities include the commercial paper programme issued in October 2020, accrued interest payable and other debts.
A) Corporate Debt Agreements
▪ Green Senior Notes
On May 18, 2021, we issued the Green Senior Notes with an aggregate principal
amount of $400 million due in 2028. The Green Senior Notes bear interest at a rate
53
of 4.125% per year, payable on June 15 and December 15 of each year, commencing
December 15, 2021, and will mature on June 15, 2028.
The Green Senior Notes were issued pursuant to an Indenture, dated May 18, 2021,
by and among Atlantica as issuer, Atlantica Peru S.A., ACT Holding, S.A. de C.V.,
Atlantica Infraestructura Sostenible, S.L.U., Atlantica Investments Limited, Atlantica
Newco Limited, Atlantica North America LLC, as guarantors, BNY Mellon Corporate
Trustee Services Limited, as trustee, The Bank of New York Mellon, London Branch,
as paying agent, and The Bank of New York Mellon SA/NV, Dublin Branch, as
registrar and transfer agent.
Our obligations under the Green Senior Notes rank equal in right of payment with
our outstanding obligations under the Revolving Credit Facility, the 2020 Green
Private Placement, the Note Issuance Facility 2020 and the Green Exchangeable
Notes.
▪ Green Exchangeable Notes
On July 17, 2020, we issued 4.00% Green Exchangeable Notes amounting to an
aggregate principal amount of $100 million due in 2025. On July 29, 2020, we issued
an additional $15 million aggregate principal amount in Green Exchangeable Notes.
The Green Exchangeable Notes are the senior unsecured obligations of Atlantica
Jersey, a wholly owned subsidiary of Atlantica, and fully and unconditionally
guaranteed by Atlantica on a senior, unsecured basis. The Green Exchangeable
Notes mature on July 15, 2025, unless they are repurchased or redeemed earlier by
Atlantica or exchanged, and bear interest at a rate of 4.00% per annum.
Noteholders may exchange all or any portion of their notes at their option at any
time prior to the close of business on the scheduled trading day immediately
preceding April 15, 2025, only during certain periods and upon satisfaction of certain
conditions. Noteholders may exchange all or any portion of their notes during any
calendar quarter if the last reported sale price of Atlantica’s ordinary shares for at
least 20 trading days during a period of 30 consecutive trading days, ending on the
last trading day of the immediately preceding calendar quarter is greater than 120%
of the exchange price on each applicable trading day. On or after April 15, 2025, until
the close of business on the second scheduled trading day immediately preceding
the maturity date thereof, noteholders may exchange any of their notes at any time,
at the option of the noteholder. Upon exchange, the notes may be settled, at our
election, into Atlantica ordinary shares, cash or a combination of both. The initial
exchange rate of the notes is 29.1070 ordinary shares per $1,000 of the principal
amount of notes (which is equivalent to an initial exchange price of $34.36 per
ordinary share). The exchange rate is subject to adjustment upon the occurrence of
certain events.
Our obligations under the Green Exchangeable Notes rank equal in right of payment
with our outstanding obligations under the Revolving Credit Facility, the 2020 Green
Private Placement, the Note Issuance Facility 2020 and the Green Senior Notes.
▪ Note Issuance Facility 2020
On July 8, 2020, we entered into the Note Issuance Facility 2020, a senior unsecured
euro-denominated financing with a group of funds managed by Westbourne Capital
54
as purchasers of the notes issued thereunder for a total amount of €140 million ($150
million). The notes under the Note Issuance Facility 2020 were issued on August 12,
2020 and are due on August 12, 2027. Interest accrues at a rate per annum equal to
the sum of the 3-month EURIBOR plus a margin of 5.25% with a floor of 0% for the
EURIBOR. We have entered into a cap at 0% for the EURIBOR with 3.5 years maturity
(from now) to hedge the variable interest rate risk.
Our obligations under the Note Issuance Facility 2020 rank equal in right of payment
with our outstanding obligations under the Revolving Credit Facility, the 2020 Green
Private Placement, the Green Exchangeable Notes and the Green Senior Notes. The
notes issued under the Note Issuance Facility 2020 are guaranteed on a senior
unsecured basis by our subsidiaries Atlantica Infraestructura Sostenible, S.L.U.,
Atlantica Peru, S.A., ACT Holding, S.A. de C.V., Atlantica Investments Limited,
Atlantica Newco Limited and Atlantica North America LLC.
▪ 2020 Green Private Placement
On March 20, 2020, we entered into a senior secured note purchase agreement with
a group of institutional investors as purchasers providing for the 2020 Green Private
Placement. The transaction closed on April 1, 2020, and we issued notes for a total
principal amount of €290 million ($310 million), maturing on June 20, 2026. Interest
accrues at a rate per annum equal to 1.96%. If at any time the rating of these senior
secured notes is below investment grade, the interest rate thereon would increase
by 100 basis points until such notes are again rated investment grade.
Our obligations under the 2020 Green Private Placement rank equal in right of
payment with our outstanding obligations under the Revolving Credit Facility, the
Note Issuance Facility 2020 and the Green Senior Notes. Our payment obligations
under the 2020 Green Private Placement are guaranteed on a senior secured basis
by our subsidiaries Atlantica Infraestructura Sostenible, S.L.U., Atlantica Peru, S.A.,
ACT Holding, S.A. de C.V., Atlantica Investments Limited, Atlantica Newco Limited
and Atlantica North America LLC. The 2020 Green Private Placement is also secured
with a pledge over the shares of the subsidiary guarantors, the collateral of which is
shared with the lenders under the Revolving Credit Facility.
▪ Revolving Credit Facility
On May 10, 2018, we entered into a $215 million Revolving Credit Facility with a
syndicate of banks. The Revolving Credit Facility was increased by $85 million to
$300 million on January 25, 2019, and was further increased by $125 million (to a
total limit of $425 million) on August 2, 2019. On March 1, 2021, this facility was
further increased by $25 million (to a total limit of $450 million). On May 5, 2022, the
maturity of the Revolving Credit Facility was extended to December 31, 2024. Under
the Revolving Credit Facility, we are also able to request the issuance of letters of
credit, which are subject to a sublimit of $100 million that are included in the
aggregate commitments available under the Revolving Credit Facility.
Loans under the Revolving Credit Facility accrue interest at a rate per annum equal
to: (A) for euro dollar rate loans, Term SOFR, plus a Term SOFR Adjustment equal to
0.10% per annum, plus a percentage determined by reference to our leverage ratio,
ranging between 1.60% and 2.25% and (B) for base rate loans, the highest of (i) the
55
rate per annum equal to the weighted average of the rates on overnight U.S. Federal
funds transactions with members of the U.S. Federal Reserve System arranged by
U.S. federal funds brokers on such day plus ½ of 1.00%, (ii) the prime rate of the
administrative agent under the Revolving Credit Facility and (iii) Term SOFR plus
1.00%, in any case, plus a percentage determined by reference to our leverage ratio,
ranging between 0.60% and 1.00%.
Our obligations under the Revolving Credit Facility rank equal in right of payment
with our outstanding obligations under the 2020 Green Private Placement, the Note
Issuance Facility 2020, the Green Exchangeable Notes and the Green Senior Notes.
Our payment obligations under the Revolving Credit Facility are guaranteed on a
senior secured basis by Atlantica Infraestructura Sostenible, S.L.U., Atlantica Peru,
S.A., ACT Holding, S.A. de C.V., Atlantica Investments Limited, Atlantica Newco
Limited and Atlantica North America LLC. The Revolving Credit Facility is also secured
with a pledge over the shares of the subsidiary guarantors, the collateral of which is
shared with the holders of the notes issued under the 2020 Green Private Placement.
▪ Other Credit Lines
In July 2017, we signed a line of credit with a bank for up to €10.0 million ($10.7
million) which was available in euros or U.S. dollars. Amounts drawn accrue interest
at a rate per annum equal to the sum of the 3-month EURIBOR or LIBOR, plus a
margin of 2%, with a floor of 0% for the EURIBOR or LIBOR. On July 1, 2022, the
maturity was extended to July 1, 2024. As of December 31, 2022, we had $6.4 million
drawn under this line of credit.
In December 2020 and January 2022, we also entered into two different loans with
banks for €5 million ($5.4 million) each. The maturity dates are December 4, 2025
and January 31, 2026, respectively, and such loans accrue interest at a rate per
annum equal to 2.50% and 1.90%, respectively.
▪ Commercial Paper Programme
On October 8, 2019, we filed a euro commercial paper programme with the
Alternative Fixed Income Market (MARF) in Spain. The programme had an original
maturity of twelve months and has been extended twice, for annual periods. The
programme allows Atlantica to issue short term notes for up to €50 million, with
such notes having a tenor of up to two years. As of December 31, 2022, we had €9.3
million ($10.0 million) issued and outstanding under the Commercial Paper
Programme at an average cost of 2.21% maturing on or before March 7, 2023.
▪ Covenants, restrictions, and events of default
The Note Issuance Facility 2020, the 2020 Green Private Placement, the Green Senior
Notes and the Revolving Credit Facility contain covenants that limit certain of our
and the guarantors’ activities. The Note Issuance Facility 2020, the 2020 Green
Private Placement and the Green Exchangeable Notes also contain customary events
of default, including a cross-default with respect to our indebtedness, indebtedness
of the guarantors thereunder and indebtedness of our material non-recourse
subsidiaries (project-subsidiaries) representing more than 25% of our cash available
56
for distribution distributed in the previous four fiscal quarters, which in excess of
certain thresholds could trigger a default. Additionally, under the 2020 Green Private
Placement, the Revolving Credit Facility and the Note Issuance Facility 2020 we are
required to comply with a leverage ratio of our corporate indebtedness excluding
non-recourse project debt to our cash available for distribution of 5.00:1.00 (which
may be increased under certain conditions to 5.50:1.00 for a limited period in the
event we consummate certain acquisitions).
Furthermore, our corporate debt agreements contain customary change of control
provisions (as such term is defined in each of those agreements) or similar
provisions. Under the Revolving Credit Facility, a change of control without required
lenders’ consent would trigger an event of default. In the other corporate debt
agreements or securities, a change of control or similar provision without the
consent of the relevant required holders would trigger the obligation to make an
offer to purchase the respective notes at (i) 100% of the principal amount in the case
of the 2020 Green Private Placement and Green Exchangeable Notes and at (ii) 101%
of the principal amount in the case of the Note Issuance Facility 2020 and the Green
Senior Notes. In the case of the Green Senior Notes, such prepayment obligation
would be triggered only if there is a credit rating downgrade by any of the agencies.
B) At-The-Market Programme
On February 28, 2022, we established an “at-the-market programme” and entered into
the Distribution Agreement with BofA Securities, Inc., MUFG Securities Americas Inc. and
RBC Capital Markets LLC, as our sales agents, under which we may offer and sell from
time to time up to $150 million of our ordinary shares, including in “at-the-market”
offerings under our shelf registration statement on Form F-3 filed with the SEC on August
3, 2021, and a prospectus supplement that we filed on February 28, 2022. For the year
ended December 31, 2022, we issued and sold 3,423,593 ordinary shares under such
programme at an average market price of $33.57 per share pursuant to our Distribution
Agreement, representing gross proceeds of $114.9 million and net proceeds of $113.8
million.
C) Project debt refinancing
Solacor 1 & 2
In October 2022, we refinanced the project debt of Solacor 1 & 2. The new financing is a
green euro-denominated loan with a syndicate of banks for a total amount of €205.0
million. The maturity has been extended until 2037. Interest accrues at a rate per annum
equal to the sum of 6-month EURIBOR plus a margin of 1.50% between 2022-2027, 1.60%
between 2027-2032 and 1.70% between 2032-2037. We have hedged our EURIBOR
exposure:
- 71% through a swap set at 2.36% for the life of the financing
- 19% by maintaining the existing 1% strike caps with maturity in 2025.
This financing arrangement permits cash distribution to shareholders twice per year if
the debt service coverage ratio is at least 1.15x.
57
Solnova 1, 3 & 4
In December 2022, we refinanced the project debt of Solnova 1, 3 & 4. The new financing
agreement is a green euro-denominated loan with a syndicate of banks for a total
amount of €338.5 million. The new project debt replaced the previous three project loans
and maturity was extended from 2029 and 2030 to June 2035. Interest accrues at a rate
per annum equal to the sum of 6-month EURIBOR plus a margin of 1.50% between 2023-
2027, 1.65% between 2028-2032 and 1.80% between 2033 onwards. The principal is 90%
hedged for the life of the loan through a combination of the following instruments:
- a swap with a 3.23% strike with initial notional of €170.3 million starting in December
2022 and decreasing over time until maturity.
- a cap with a 1.0% strike with initial notional of €134.2 million starting in December
2022 and decreasing over time until December 2025.
- a cap with a 2.0% strike with initial notional of €64.9 million starting June 2026 and
decreasing over time until December 2030.
This financing arrangement permits cash distribution to shareholders twice per year if
the debt service coverage ratio is at least 1.10x from 2023 to 2032 and 1.15x from 2032
onwards.
Both refinancing agreements also include a mechanism under which, in the case that
electricity market prices are above certain levels defined in the contract, a reserve account
should be established and funded on a six-month rolling basis for the additional revenue
arising from the difference between actual prices and prices defined in the agreement.
Under certain conditions, such amounts, if any, should be used for early prepayments
upon regulatory parameters changes.
Use of Liquidity and Capital Requirements
A) Debt service
Principal payments on debt as of December 31, 2022, are due in the following periods
according to their contracted maturities:
$ in millions
Project Debt
Corporate Debt
Total Debt
2023
2024
2025
2026
2027
Subsequent
Years
Total
328.6
16.7
345.3
323.7
38.9
362.6
442.91
110.2
553.1
358.5
309.1
667.6
505.0
147.3
652.3
2,596.4
395.0
2,989.4
4,553.1
1,017.2
5,570.3
Note:
(1)
Includes the outstanding amount of the Green Project Finance from the sub-holding company of Solaben 1 & 6 and
Solaben 2 & 3. This facility is 25% progressively amortised over its 5-year term and the remaining 75% is expected
to be refinanced before maturity.
The project debt maturities will be repaid with cash flows generated from the projects
in respect of which that financing was incurred.
B) Contractual obligations
In addition to the principal repayment debt obligations detailed above, we have other
contractual obligations to make future payments. The material obligations consist of
interest related to our project debt and corporate debt and agreements in which we enter
in the normal course of business.
58
Total
Up to one
year
823.9
96.8
Between
one and
three years
$ in millions
154.3
Between
three and
five years
Subsequent
years
107.9
464.8
1,821.9
264.6
477.9
383.3
696.0
Purchase commitments
Accrued interest estimate during
the useful life of loans
Purchase obligations include agreements for the purchase of goods or services that are
enforceable and legally binding and that specify all significant terms. In 2022, we reached
an agreement to internalise some of our long-term operation and maintenance contracts
at Kaxu and at part of our solar assets in Spain and to reduce the duration of other
contracts. As a result, Purchase commitments have decreased with respect to December
31, 2022.
Accrued interest estimate during the useful life of loans represents the estimation for the
total amount of interest to be paid or accumulated over the useful life of the loans, notes
and bonds, taking into consideration the hedging contracts.
C) Cash dividends to investors
We intend to distribute a significant portion of our cash available for distribution to
shareholders on an annual basis less reserves for the prudent conduct of our business.
We intend to distribute a quarterly dividend to investors. The determination of the
amount of the cash dividends to be paid to shareholders will be made by our Board of
directors and will depend upon our financial condition, results of operations, cash flow,
long-term prospects and any other matters that our Board of Directors deem relevant.
Our cash available for distribution is likely to fluctuate from quarter to quarter and, in
some cases, significantly as a result of the seasonality of our assets, the terms of our
financing arrangements, maintenance and outage schedules, among other factors.
Accordingly, during quarters in which our projects generate cash available for distribution
in excess of the amount necessary for us to pay our stated quarterly dividend, we may
reserve a portion of the excess to fund cash distributions in future quarters. During
quarters in which we do not generate sufficient cash available for distribution to fund our
stated quarterly cash dividend, if our Board of Directors so determines, we may use
retained cash flow from other quarters, and other sources of cash to pay to our
shareholders.
The table below included our historical quarterly dividends since the beginning of 2022:
Declared
February 25, 2022
May 5, 2022
August 2, 2022
November 8, 2022
February 28, 2023
Record
March 14, 2022
May 31, 2022
August 31, 2022
November 30, 2022
March 14, 2023
Paid
US$ per share
March 25, 2022
June 15, 2022
September 15, 2022
December 15, 2022
March 25, 2023
0.44
0.44
0.445
0.445
0.445
59
D) Investments and Acquisitions
The investments detailed in “Significant events in 2022” have been part of the use of our
liquidity in 2022. We expect to continue making investments in assets in operation, or
under construction or development to grow our portfolio.
E) Capital Expenditures
In 2022, we invested $39.1 million in maintenance capital expenditures in our assets.
From this amount, $20.5 million corresponded to investments in the storage system at
Solana. In 2021, we invested $19.2 million in maintenance capital expenditures in our
assets, mainly corresponding to capital expenditures and equipment replacements at
Solana. In some cases, maintenance capex is included in the operation and maintenance
agreement, therefore it is included in operating expenses within our income statement.
60
Wildlife and Vegetation Protection
61
Principal Risks and Uncertainties
Effective risk management is an essential part of our culture and strategy. Our corporate
policies are supported by a solid commitment to risk management that guides all our
decisions.
Our Approach to Risk
• We recognise that risks are inherent to our business. Only through adequate risk
management we can reduce uncertainty to make the right strategic decisions and to
implement our growth plan and investment strategy.
• Exposure to risks must be consistent with our risk appetite. The Board regularly
reviews the acceptable level of exposure to principal and emerging risks.
• Risks are aligned with our risk appetite, taking into consideration the balance between
threats and opportunities.
• We recognise the importance of a strong culture, which refers to our shared attitudes,
values and standards that shape behaviours related to risk awareness, risk taking and
risk management.
• All our people are responsible for risk management, with the ultimate accountability
residing with the Board. Each business geography carries out risk evaluations to
ensure the sound identification, management, monitoring and reporting of risks that
could impact the achievement of our goals.
• Risk is analysed using a consistent framework. Our risk management methodology is
applied to all our operating companies, projects, development activities and support
areas so that we have a comprehensive view of the uncertainties that could affect us
in achieving our strategic goals.
• We are committed to continuous improvement. Lessons learned and best practices
are incorporated into our procedures to protect and unlock sustainable value.
Our Risk Appetite
We define risk appetite as the nature and extent of risk Atlantica is willing to accept in
relation to the pursuit of its objectives. A scale is used to help determine the risk appetite
threshold for each risk, keeping in consideration that risk appetite may change over time.
The risk management approach is based on the assessment of risk appetite performed
by management and shared with the Board of Directors.
The following principles guide Atlantica´s overarching appetite for risk and determine
how our businesses and risks are managed.
Operating model and business practice
• We are committed to prioritising and actively promoting health and safety as a tool
to protect the integrity and health of our employees, subcontractors and partners
involved in our business activity.
• We seek to generate returns in line with a conservative risk appetite and strong risk
management capability.
• We aim to deliver sustainable and consistent returns for shareholders.
62
• We are strongly committed to complying with all rules and regulations. We
continuously strive for the highest standards of business conduct, safety and
professionalism.
• We are committed to managing the climate risks that have an impact on our business and
delivering on our emissions reduction targets.
Maintain a contracted portfolio with a low risk profile
• We intend to maintain a portfolio with a majority of assets contracted or regulated
with long useful life and a stable and predictable long-term cash flow profile.
• We seek to invest generally in assets with proven technologies in which we normally
have significant experience, located in countries where we believe conditions to be
stable.
• We may complement our portfolio with investments or co-investments in assets with
shorter contracts or with partially contracted or merchant revenue or in assets with
revenue in currencies other than U.S. dollar or euro.
• In terms of operational efficiency, we focus on ensuring long-term availability,
reliability and asset integrity with maintenance and monitoring.
Maintain a prudent financial policy and financial flexibility
• Non-recourse project debt is an important principle for us. We intend to continue
financing our assets with project debt progressively amortised using the cash flows
from each asset and where lenders do not have recourse to the holding company
assets.
• We hedge a significant portion of our interest rate risk exposure for the long-term.
• We limit our foreign exchange exposure. We intend to ensure that at least 80% of our
cash available for distribution is always in U.S. dollars and euros. Furthermore, we
hedge net distributions in euros for the upcoming 24 months on a rolling basis.
• We intend to maintain a solid liquidity position through a combination of cash on
hand and undrawn credit facilities.
• In order to maintain financial flexibility, we use diversified sources of financing in our
project and corporate debt including banks, capital markets and private investor
financing.
Additionally, our policies and management systems include thorough risk analysis and
risk management processes applied on an ongoing basis from the date of asset
acquisition or the beginning of construction.
We seek to build our business for the long term by balancing social, environmental and
economic considerations in the decisions we make. Our strategic priorities are
underpinned by our endeavour to operate in a sustainable way. This helps us to manage
the risk profile of the business.
63
Our Risk Management Framework
Risk Governance
The Board, with the support of management, has overall responsibility for risk
management and determines the nature and extent of the principal and emerging risks
that we will accept in order to achieve our strategic objectives. The Board receives
detailed analysis of key matters in advance of Board meetings. This includes reports on
our operating performance including safety and health, financial, environmental, legal
and social matters, and key progresses in our business development activities, as well as
information on talent management and analysis of financial investments. The provision
of this information allows the early identification of potential issues and the assessment
of any necessary preventive and mitigating actions.
The Audit Committee assists the Board by reviewing the effectiveness of the risk
management process and monitoring principal and emerging risks, preventive and
mitigation procedures and action plans. The Chair of the Audit Committee reports to the
Board when required and, if necessary, the Board discusses the matters raised in greater
detail.
The Risk Management Department is responsible for risk management systems across
the Company. It implements the Company’s risk management policy, vision and purpose
to ensure a strong risk management culture at all levels of the organisation. The
Department supports business areas in analysing their risks, identifying existing
preventive and mitigating controls and defining further action plans. It maintains and
regularly updates the Company’s risk map matrix.
The Business Committee, which is comprised of our Geographic VPs and top
management assesses the Company’s principal risks and their potential impact on the
achievement of our strategic goals. The Committee promotes our risk management
culture in each of the business areas.
Atlantica has developed a risk analysis methodology based on ISO 31000 standard and
on common market practices. The risk analysis comprises the following steps:
- Risk Identification (ex-ante): identify causes that may turn into a risk situation,
classifying those potential causes as natural, human, intentioned, accidental, and
technological.
- Risk Assessment: evaluate the risk considering its likelihood and potential impact.
- Risk Management Plan: focused on mitigating risk effects. To prevent unexpected
events, Atlantica’s Risk Management corporate team in collaboration with Geographic
VPs, analyse unexpected risks in each of our geographies and define a Prevention and
Mitigation Plan for each risk.
The Head of Risk Management coordinates the risk identification, assessment,
monitoring and mitigation effort primarily with the Geographic VPs. The resulting Risk
Heat Map is periodically reviewed and approved by the senior management team
64
including Atlantica’s VPs, the Chief Financial Officer, and the Chief Executive Officer and
reported to the Board quarterly.
Atlantica’s risk management process follows a multidisciplinary approach to identifying
risks in different areas, assigning probability distributions, and estimating potential
economic impacts in order to develop action plans to mitigate the main risks facing the
Company. The process includes completing a questionnaire regarding risk indicators and
economic impact. An output of the process includes reporting on each major risk
including the risk assessment, mitigation strategies, deadlines, and responsible parties.
Risks are re-assessed on a quarterly basis.
The Finance Committee monitors market risks such as interest rate risk, foreign exchange
risk and credit risk and is also responsible for monitoring and managing liquidity risks.
In addition, the Operations Department and the Operations Committee are responsible
for monitoring and preventing health and safety, operational and environmental risks.
65
Risk management Structure
Board of Directors
Audit Committee
Business Committee
Third Line of Defence
Second Line of Defence
First Line of Defence
Board of Directors
• Overall responsibility for risk management and its alignment with the strategy
• Defines risk appetite and sets the “tone from the top”
• Reviews, challenges and monitors principal risks
Audit Committee
• Makes recommendations to the Board on the risk management system
• Reviews the effectiveness and implementation of the risk management system
Business Committee
• Assesses risks and their potential impact on the achievement of our strategic goals
• Promotes our risk management culture in each of the business areas
• Is the owner of principal risks
• Approves the Risk Management Policies
Third Line of Defence
• The Internal Audit Department provides assurance on the risk management process,
including the effectiveness of the performance of the first and second lines of
defence.
Second Line of Defence
• The Risk Management Department is accountable for monitoring our overall risk
profile and risk management performance, registering risks and issuing alerts if any
deviation is detected.
• Make recommendations on the risk management system.
First Line of Defence
• Each person is responsible for identifying, preventing and mitigating risks in their
business area and escalating concerns to the appropriate level if required.
66
Principal risks
The Company and its underlying assets are subject to a number of risks including
operational, regulatory, financial, and other. The processes and systems implemented
have been designed to mitigate those risks to the extent possible.
Brexit and COVID-19 were identified as principal risks in 2021 but are no longer
considered significant. However, we remain vigilant in our health and safety measures.
On the other hand, we have included the potential impacts of dependence on certain key
personnel because employee turnover has increased in 2022.
We include the following table as a summary of some of those risks and action plans
carried out to mitigate them:
Risk / Impact
Safety and health incidents
could result in harm to our
employees, contractors and
local communities and
expose us to significant
financial losses, as well as
civil and criminal liabilities.
in
The ownership, construction
and operation of our assets
often put our employees and
others, including those of our
subcontractors,
close
proximity with large pieces of
equipment,
mechanised
vehicles,
moving
industrial
manufacturing or
processes,
electrical
equipment, batteries, heat or
liquids stored under pressure
or at high temperatures and
highly regulated materials. On
most projects and at most
facilities, we, in some cases
together with the operation
and maintenance supplier or
the EPC contractor supplier, are
safety.
responsible
Accordingly,
must
implement safe practices and
safety procedures, which are
also applicable
to on-site
subcontractors.
for
we
If we or the operation and
maintenance supplier or the
EPC contractor fail to design
and implement such practices
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Low
construction
As our
activity
increases, our
exposure to accidents
has also increased, since
accident performance
indicators are typically
higher in construction
activities compared to
operation
and
maintenance.
In 2022 all our key
health
safety
and
indicators met annual
targets and remained
below sector average.
2022 GFI was 5.2 and
FWLI was 3, compared
to 6.0 and 2.3 in 2021
(see
“Occupational
Health and Safety”).
Although our
ratios
remain low, the FWLI
increased with respect
to the previous year,
which is mostly due to
the
in our
increase
construction activity.
We continue to closely
monitor all accidents
and incidents. As the
construction activity of
new projects increases
in 2023 and 2024, the
exposure to this risk is
expected to increase.
67
- Safety
is our
top
priority and one of our
core values.
- Atlantica
has
implemented a Health
and
Safety
programme, which is
key to mitigating this
risk and has been in
place since 2017. We
regularly audit our
assets and implement
new best practices
lessons
based on
other
in
learned
assets, as well as from
peers, contractors and
suppliers.
- We have defined a
plan to reinforce our
health
safety
and
procedures during the
phase
construction
and to involve the EPC
contractors.
- To integrate recently
acquired assets we
have
performed
specific external and
internal audits, issued
new safety campaigns
bulletins,
and
performed
safety
inspections,
and
procedures
training,
and
extended health and
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Risk / Impact
if
and procedures or
the
practices and procedures are
ineffective or if our operation
and maintenance
service
providers or the contractors in
charge of the construction of
our assets or other suppliers do
not follow them, our employees
and others may become
injured. This could result in civil
and criminal liabilities against
the Company.
subject
dealing
to
We are also
with
regulations
occupational health and safety
and
work
environmental
procedures
throughout our
organisation. The failure to
comply with such regulations
could
to
reputational damage and/or
liability.
subject
us
Mediu
m/
Low
Counterparty credit risk
Not being able to collect our
revenues.
A significant portion of the
electric power we generate, the
transmission capacity we have,
and our desalination capacity
are sold under long-term off-
take agreements with public
or
utilities,
commercial
or
governmental entities, with a
weighted average remaining
duration of approximately 14
years as of December 31, 2022.
end-users
industrial
The credit
rating of
Eskom has been stable
during 2022 and we
have never experienced
delays in collections.
In the case of Pemex,
there was a downgrade
of its credit rating by
Moody’s in 2022. We
experienced
have
the past.
delays
However,
of
December 31, 2022 the
shorter
delays were
previous
than
quarters.
as
in
in
fulfil
If any of our clients are unable
or unwilling
their
to
contractual obligations or if
they delay payments, our
business, financial condition,
results of operations and cash
flow may
be materially
adversely affected.
Eskom is the off-taker of our
Kaxu solar plant, a state-
owned,
liability
limited
company, wholly owned by the
68
Mitigation of Risk
safety bonuses
to
certain employees to
improve supervision.
- The
short-term
variable
compensation of our
CEO, Geographic VPs,
Head of Operations
and other members of
management
our
includes Health and
Safety targets.
- See
section
“Occupational Health
and Safety”
for a
comprehensive
description of our
initiatives.
In the case of Kaxu,
payment
Eskom’s
guarantees
to our
Kaxu solar plant are
underwritten by the
African
South
of
Department
the
Energy, under
terms
an
implementation
The
agreement.
credit ratings of the
Republic of South
Africa as of the date
of this report are BB-
/Ba2/BB- by S&P,
Moody’s and Fitch,
respectively.
of
In the case of Pemex,
during 2022 we have
maintained a pro-
approach
active
including
fluid
dialogue with our
client.
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Risk / Impact
Republic of South Africa. The
credit rating of Eskom has
weakened in the last few years
and is currently CCC+ from
S&P Global Rating (“S&P”),
Caa1 from Moody’s Investor
Service Inc. (“Moody’s”) and
BB- from Fitch Ratings Inc.
(“Fitch”).
In addition, Pemex’s credit
rating is currently BBB, B1 and
BB- from S&P, Moody’s and
Fitch, respectively. We have
experienced
in
collections from Pemex in the
past, especially
the
second half of 2019, which
have been significant in certain
quarters.
delays
since
Low
Poor performance of assets
If our assets perform worse
than
can
expected, we
experience loss of revenues
and cash flows at the project
level, which
subsequently
impacts cash returns to the
Company.
The ability of certain assets in
our portfolio to meet our
performance expectations
is
subject to the risks inherent to
the operation of such facilities,
including, but not limited to,
degradation of equipment in
excess of our expectations,
system failures and outages
and more operational costs or
capital
maintenance
initially
expenditures
expected.
than
and
In addition, Atlantica relies on
third parties for the supply of
equipment,
services
technologically
including
complex
and
software, and operation and
maintenance
to
operate our assets.
equipment
services
in
- During 2022, our assets
generally
have
performed fairly in line
with
expectations.
However, at Solana,
the
availability
system was
storage
lower
than expected
due to the repairs and
replacements that we
are carrying out after
leaks were identified in
the first quarter of 2020.
have
These works
impacted production in
2021 and 2022 and may
in
impact production
have
2023.
experienced delays
in
2021 and 2022 in the
repairs
and
replacements we are
These
carrying out.
works have
impacted
production in 2021 and
2022, together with a
field
solar
lower
performance, and may
impact production
in
2023.
We
- Dedicated supervisory
management
and
teams in place at our
assets.
- Reporting
and
monitoring systems in
place.
- Asset managers are
for
responsible
completing checklists
designed to identify
operational,
and
maintenance
risks,
engineering,
improve
efficiency
and reduce costs at
asset level.
- Our
corporate
team
regular
operations
performs
operational,
maintenance
and
engineering audits to
risks,
identify
and
implement
follow-up
on
mitigation plans and
best practices and
share insights gained
from other assets.
- Risk-related training
courses are regularly
69
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Equipment may not last as long
as expected and we may need
to
than
planned.
it earlier
replace
in
respect
policies
Damages to our equipment
may not be covered by
insurance
place. Our
property damage and business
interruption
have
significant deductibles and
exclusions with
to
some key equipment which, if
in
could
damaged,
financial losses and business
interruption. In some cases, the
replacement
damaged
equipment can take a long
period of time, which can cause
our plants to curtail or cease
operations during that time.
result
of
on
key
Dependence
personnel and risk of work
stoppages
for
In some of our geographies,
competition
qualified
personnel is high. Some of our
assets are in remote locations,
and it may be difficult for us to
retain employees or to cover
certain positions. We may
experience difficulty in hiring
and retaining employees with
appropriate qualifications. We
turnover,
may
face high
to
our
provided
and
employees
subcontractors
to
improve their skills,
identify
risk
management
practices and report
them to management.
new
- Operation
and
maintenance can be
either carried out in-
house or contracted
with specialists. We
have
internalised
and
operation
maintenance services
in some of our assets.
We have also tracked
alternative
down
operation
and
maintenance
opportunities in the
market.
- On-going analysis of
insurance alternatives
in the market and on-
going dialogue with
insurance companies
present
our
programme as well as
alternative insurers.
in
- The local teams, the
Operations
Department and the
Insurance Department
take ownership of
managing this risk.
- Remuneration
packages attractive to
employee, taking into
account the specific
geography.
- Identification
of
employees with high
potential and who are
to
more
replace.
difficult
Low
-
In 2022, our turnover
has
in
increased,
particular in the United
States. This is a trend
that we are observing in
other companies in the
sector as well.
- The local teams and
the
and
People
Culture Department
take ownership of
managing this risk.
70
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Risk / Impact
requiring us to dedicate time
and resources to find and train
new
The
employees.
challenging markets in which
we compete for talent may also
require us to invest significant
amounts of cash and equity to
attract and retain employees. If
we fail to attract new personnel
or fail to retain and motivate
this
our current personnel,
could adversely
impact the
performance of our assets, our
business and future growth
prospects and our ability to
compete.
result
could
In addition, the operation and
maintenance of most of our
assets is labour intensive and in
many cases our employees and
our operators’ employees are
by
covered
collective
bargaining
agreements. A
dispute with a union or
employees represented by a
union
in
production
interruptions
caused by work stoppages. If
our
our
operators’ employees were to
initiate a work stoppage, we
may not be able to reach an
in a
agreement with them
timely fashion. If a strike or
work stoppage or disruption
were to occur, our business,
financial conditions, results of
operations and cash flows may
be
adversely
affected.
employees
materially
or
Climate change
No significant change
Risks Related to Our Business
and Our Assets:
Low
Climate change
Climate change is causing an
increasing number of severe,
chronic and extreme weather
events, which are a risk to our
facilities and may impact them.
71
Acute physical:
Our geographic VPs
and our corporate
team
operations
weather
monitor
conditions
in-real
time at each of the
assets to adopt the
required protection
For
measures.
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
example, if winds are
forecasted, our solar
fields are placed in a
In
defence mode.
addition, we
also
have:
Risk / Impact
transition
existing
In addition, climate change
risks,
may cause
related
and
to
emerging regulation related to
climate change. These risks
include:
- Acute physical. Severe and
extreme weather
events
include severe winds and
hurricanes,
rains,
cyclones, droughts, as well as
the risk of fire and flooding.
In particular:
hail,
• Severe floods could damage
our solar generation assets
or our water facilities. Floods
landslides
can also cause
which may
our
transmission lines.
affect
• If our transmission assets
caused a fire, we could be
found
fire
the
liable
damaged third parties.
if
to wind
• Severe winter weather, like
the storm in February 2021 in
Texas, could cause supply
from wind farms to decline
due
turbine
freezing. Also,
equipment
natural gas assets could trip
offline due to operational
issues caused by freezing
conditions.
• Rising
have
could
temperatures and
droughts
cause
wildfires like the ones that
have
affected California
starting in 2017. In California
been
wildfires
catastrophic,
especially
causing human fatalities and
losses.
significant material
Although our assets
in
California are located in areas
without trees and vegetation,
wildfires affected PG&E, one
of our clients in the recent
“Downstream”
(see
past
described below).
• Severe winds could cause
72
(ii)
- Insurance
policies
covering: (i) physical
damage and
l
business interruption.
- A crisis management
procedure
defining
specific action plans
for all our assets.
- An automatic alert
system
using
information from U.S.
Agencies
National
local
and
weather
forecast
agencies.
from
- A specific procedure
for extreme weather.
- Furthermore,
Atlantica does not
have
hedge
any
contract in place with
an
to
obligation
deliver electricity with
the potential risk of
having to purchase it
at market price.
Chronic physical:
- Our
corporate
operations
closely
department
monitors
the
performance of each
of our assets
to
identify measures that
improve efficiency.
- In addition, Atlantica
has historically only
withdrawn
approximately 50% of
the total regulatory
limit
water
of
permitted at our solar
assets. Even
if the
water limits were to
Risk / Impact
damage the solar fields at
our solar assets.
Furthermore, components of
our equipment and systems,
such as structures, mirrors,
absorber tubes, blades, PV
panels or
transformers are
susceptible to being damaged
by severe weather, including
for example by hail or
lightning.
- Chronic physical. An increase
in temperatures can reduce
efficiency
increase
and
operating costs at our plants.
The main impacts of rising
temperatures include:
- Lower turbine efficiency in
our efficient natural gas
asset.
- Reduced efficiency at our
photovoltaic
solar
generation assets.
- Lower air density at our wind
facilities.
chemicals
Higher consumption
-
for
of
operational purposes at our
water treatment plants.
used
Furthermore, a reduction of
mean precipitation may result
in a reduction of availability of
water from aquifers and could
also modify the main water
properties at our generation
facilities
- Current Regulation. Atlantica
affected by
is directly
environmental regulation at
all our assets. This includes
climate-related risks driven
by laws, regulation, taxation,
disclosure of emissions and
other practices
- Emerging
regulation.
Changes in regulation could
have a negative impact on
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
to
reduced,
we
be
have
believe
margin to withdraw
enough water to keep
our plants working
local
properly. Our
asset management
teams systematically
track and monitor
water availability as a
key asset KPI.
Regulation:
- Current
regulation:
Asset managers are
for
responsible
monitoring
asset
activities in line with
local regulation and
contractual
requirements
(environmental,
servitudes,
permits,
etc.).
Local
compliance managers
are
for
responsible
managing and solving
compliance issues in
geographies
their
under
their
responsibility,
including
supervision
compliance
current regulation.
- Emerging regulation:
internal
Various
working groups and
management
regularly review risks
new
arising
regulatory
developments
potential impacts.
the
of
with
from
and
Reputation:
- We
to
refer
the
Environment, Social
Governance
and
section in this Report.
- General:
73
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Risk / Impact
Atlantica's growth or cause
an increase in cost.
to
- Reputation. If our reputation
worsened, our cost of capital
increase and our
could
capital may
access
become more difficult.
In
addition,
some potential
employees, clients, and /or
could perceive
suppliers
Atlantica as a less appealing
a
company
due
our
deterioration
reputation.
to
in
risks,
and
- Downstream. Some of our
clients are large utilities or
corporations.
industrial
These are also exposed to
significant climate change
including
related
emerging
current
regulation, acute and chronic
physical risks. If our clients
are affected by climate
this could
related
impact their credit quality
and affect their ability to
comply with
the existing
contract.
risks,
Related
Risks
to Our
Relationship with Algonquin
Algonquin
shareholder
substantial influence over us.
is our
and
largest
exercises
Algonquin
Currently,
beneficially owns 42.2% of our
ordinary shares and is entitled
to vote on approximately
41.5% of our ordinary shares.
As a result of this ownership,
Algonquin
substantial
has
influence over our affairs and
their ownership interest and
voting power constitute a
significant percentage of the
shares eligible to vote on any
matter requiring the approval
of our shareholders.
Not
Relevan
t
74
January
is possible
In
2023
Algonquin announced
a number of actions,
including a plan to
divest
approximately
$1 billion in assets. As
one of the assets in
Algonquin’s portfolio,
it
that
Algonquin may have a
potential
in
selling part or all of its
equity
in
Atlantica. Uncertainty
about
Algonquin’s
plans or strategy with
respect to the holding
or disposition of all or
its
any portion of
in
interest
equity
interest
interest
- Atlantica
a
has
risk
developed
analysis methodology
ISO
based on
on
31000
market
common
practices.
and
the
- We
use
a
multidisciplinary
approach to identify
risks in different areas
and
develop
appropriate
mitigation plans.
- Management,
and
local
teams
the
corporate operations
take
department
ownership
of
managing this risk.
- Any
us
GES
transaction
between
and
or
Liberty
Algonquin (including
the acquisition of any
ROFO assets or any
co-investment with
or
Liberty
GES
any
Algonquin or
an
investment
in
is
Algonquin asset)
subject to our related
party
transactions
policy, which requires
prior approval of such
the
transactions by
Related
Party
Transactions
Committee, which is
composed
of
independent
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
including
Liberty GES and Algonquin are
related parties and may have
interests that differ from our
interests,
with
respect to growth appetite, the
types of investments made, the
timing and amount of the
dividends paid by us, the
reinvestment
returns
generated by our operations,
the use of
leverage when
making investments and the
appointment
outside
advisors and service providers.
of
of
to
related
In addition, our reputation is
closely
that of
Algonquin. Any damage to the
public image or reputation of
Algonquin
a
material adverse effect on our
business, financial condition,
results of operations and cash
flows.
could have
Furthermore, dispositions of
substantial amounts of the
shares, or the anticipation or
perception by the market that
such dispositions could occur,
affect
adversely
could
prevailing trading prices of the
shares and could impair our
ability to raise capital through
future offerings of equity or
equity-related securities
from
if any
Additionally,
investor
acquires over 50.0% of our
shares or if our ordinary shares
cease to be listed, we may be
required to refinance all or part
of our corporate debt or obtain
the
waivers
related
noteholders or
lenders, as
applicable, due to the fact that
all of our corporate financing
agreements contain customary
change of control provisions
and delisting restrictions. If we
fail to obtain such waivers and
the
related noteholders or
lenders, as applicable, elect to
and
such
Atlantica
may
uncertainty
negatively affect the
market price for our
shares and our ability
raise capital by
to
offering
or
equity
equity-related
securities.
Mitigation of Risk
directors.
to
our
Parties
- Algonquin has
comply with
Related
Transaction
Committee and Terms
of Reference
- Algonquin has
the
appoint
to
right
directors
proportionally to their
ownership but in any
event no more than (i)
of
such
directors
as
corresponds to 41.5%
of
voting
securities; and (ii) 50%
of our Board less one.
number
our
and
- Furthermore,
Algonquin’s
voting
rights are limited to
41.5%
the
additional shares (the
between
difference
shares
the
beneficially owned by
Algonquin and shares
representing 41.5% of
voting rights) votes
replicating
non-
Algonquin’s
shareholders vote.
actual
- The Board of Directors
takes ownership of
managing this risk.
75
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
accelerate
relevant
the
corporate debt, we may not be
able to repay or refinance such
debt, which may have a
material adverse effect on our
financial condition
business,
results of operations and cash
flows. Additionally, in the event
of a change of control we could
see an increase in the yearly
state property tax payment in
Mojave, which would be
reassessed by the tax authority
at the time the change of
control potentially occurred.
There could also be other tax
impacts and other impacts that
we have not yet identified.
Furthermore, a change of
control
an
ownership
under
Section 382 of the IRC (see risks
related to Taxation below).
change
trigger
could
Related
Risks
Relationship with Abengoa
to Our
Abengoa is the O&M supplier
at part of our assets and was
our largest shareholder years
ago.
Low
Abengoa’s financial condition
including the insolvency filing
by Abengoa S.A. (which is the
holding company) could affect
its
its
to
obligations with us under the
operation and maintenance
agreements and may affect our
reputation.
satisfy
ability
In addition, although Abengoa
has not been our shareholder
since the end of 2018, in some
geographies our
reputation
continues to be related to that
of Abengoa. Any damage to
the public image or reputation
of Abengoa could have a
negative impact on us.
Many of our senior executives
have previously worked for
During the year 2022,
has
exposure
our
decreased substantially
that we have
given
O&M
internalised
services at part of our
2021,
plants.
In
performed
Abengoa
and
operation
maintenance
(O&M)
services for assets that
represented
approximately 47% of
our
consolidated
revenue for that year.
the
Following
the
internalisation of
O&M services a Kaxu
and at part of our assets
Abengoa
in
Spain,
for
provided services
assets
representing
around 20% of our 2022
consolidated
revenue.
We are currently in the
process of transitioning
and
operation
the
have
We
replaced
as O&M
Abengoa
supplier in part of the
assets.
We have reached an
agreement to introduce
a clause to be able to
terminate their services
at the rest of our assets
and we are currently
considering options to
replace them.
We have identified third
party suppliers who can
perform the operation
maintenance
and
services.
We are currently in the
process of transitioning
and
operation
the
maintenance services in
Spain from an Abengoa
subsidiary
a
the
subsidiary
Company.
to
of
Senior management
76
Mitigation of Risk
and local teams take
ownership of managing
this risk.
to
of
Assessment of Change
in Risk
Year-on-Year
maintenance services in
Spain from an Abengoa
a
subsidiary
the
subsidiary
Company. once
this
is completed,
transfer
we expect Abengoa to
provide O&M services
for assets representing
approximately 4% of
our
consolidated
revenue.
Risk / Impact
Risk
Appeti
te
Risk
Trend
of
prior
Abengoa. Abengoa’s current
restructuring
and
processes, and the events and
circumstances that led to them,
are currently the subject of
various legal proceedings and
may in the future become the
subject
additional
proceedings. To the extent that
allegations are made in any
such proceedings that involve
us, our assets, our dealings
with
our
employees, such proceedings
may have a material adverse
effect on our business, financial
condition, results of operations
and cash flows, as well as on
our reputation and employees.
Abengoa
or
All these situations may have
an adverse effect on our
business, financial condition,
results of operations and cash
flows.
The financing agreements of
our project subsidiaries
interest
These
loan
are primarily
agreements which provide that
the repayment of the loans
(and
is
secured solely by the shares,
physical assets, contracts and
the cash flow of that project
company.
thereon)
project
finance
Our
agreements include covenants
and restrictions which may
limit our ability to distribute
cash from project companies to
the holding company level.
In addition, if we fail to satisfy
any of our debt
service
obligations or breach any
related financial or operating
covenants,
applicable
the
lender could declare the full
amount of the relevant project
debt to be immediately due
could
and
payable
and
No significant change
- Reporting
monitoring
covenants
contract.
and
of
in each
Low
- Forecasts by
local
teams, reviewed by
corporate
our
to
departments
the main
monitor
covenants
and
identify any potential
future restriction to
take measures
in
advance.
and
- Management
specialised
compliance and legal
teams
constantly
tracking any change.
- The local teams take
of
ownership
managing this risk.
- A quarterly report is
provided to the Audit
Committee
from
Internal Audit on
77
Risk / Impact
foreclose on
any
pledged as collateral.
assets
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Low
Liquidity Risk and Access to
capital
Our liquidity at the corporate
level depends on distribution
from the project level entities,
most of which have project
debt in place. Distributions are
generally
the
subject
compliance with covenants and
other conditions under our
project finance agreements
to
Liquidity risk involves:
- Not being able to meet our
payment obligations as they
fall due.
- Not being able to meet our
covenants and obligations
under
corporate
our
financing arrangements.
financing
for
- Failing to meet the required
for
or desired
acquisitions and
the
successfully refinancing of
and
Company’s
corporate indebtedness.
project
The global capital and credit
markets have experienced in
the past and may continue to
experience, periods of extreme
volatility and disruption. At
times, our access to financing
was
curtailed by market
conditions and other factors.
Continued
disruptions,
uncertainty or volatility in the
global
credit
markets may limit our access to
additional capital required to
on
our
refinance
satisfactory terms or at all, may
limit our ability to replace, in a
capital
debt
and
in
and
over
Capital markets have
been experiencing high
volatility during 2022
the United
both
Europe.
States
the
Concerns
lingering effect of the
pandemic,
COVID-19
high global
inflation,
interest rate increases,
war in Ukraine, energy
crisis in Europe, volatile
high
gas
prices,
prices
electricity
particularly in Europe,
tensions between the
U.S., Russia and China,
the availability and cost
of credit, the instability
of the euro, and the
economic
conditions
and concerns of a global
have
recession
and
exacerbated
to
contributed
increased volatility
in
capital markets and
worsened expectations
In
for the economy.
addition, our high pay-
out ratio may hamper
our ability to manage
in moments
liquidity
when accessing capital
markets becomes more
challenging.
78
Mitigation of Risk
covenant compliance.
- Local teams and the
corporate controlling
department
(under
the CFO supervision)
take ownership of this
risk.
- The objective of our
financing and liquidity
policy is to ensure that
we maintain sufficient
funds to meet our
financial obligations
as they fall due.
- Project
finance
borrowing permits
finance
to
us
projects
through
project debt and
thereby insulate the
rest of our assets
credit
such
from
exposure. We incur
project finance debt
on a project-by-
project basis or by
groups of projects.
repayment
The
each
profile
of
is
project
established
based
on
the projected
cash flow generation
of the business. This
that
ensures
sufficient
financing
is available to meet
and
deadlines
which
maturities,
the
mitigates
In
liquidity
we
addition,
maintain a periodic
communication with
our
and
lenders
regular monitoring
of debt covenants
and minimum ratios.
cash
management
to
ensure appropriate
levels of cash: as of
December 31, 2022,
risk.
- Appropriate
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Risk / Impact
timely manner, maturing
liabilities, and may limit our
access to new debt and equity
capital
further
to make
acquisitions. Volatility in debt
markets may also limit our
ability to fund or refinance
many of our projects and
corporate level debt, even in
cases where such capital has
already been committed.
Mitigation of Risk
had
$445.9
we
liquidity at
million
the corporate level,
comprised of $60.8
million of cash on
hand
the
at
corporate level and
$385.1
million
available under our
Revolving
Credit
Facility.
debt
- Managing
and
maturities
our
refinancing
debt
corporate
when the markets
are favourable.
- Management
to
continues
regularly monitor
the
Company’s
ability to finance the
its
needs
operating, financing
and
investing
activities within the
of
guidelines
prudent
balance
sheet management.
of
- A portion of cash
flows generated and
distributed by our
project companies to
the holding company
are retained at the
holding
company
level.
- Regular discussions
with rating agencies.
- Our
of
Board
Directors may change
our dividend policy at
any point in time if
required, or modify
for
the
dividend
quarters
specific
into
taking
consideration
the
prevailing conditions.
- The
Finance
Committee and the
Board of Directors
take ownership of
79
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Low
Interest rate risk
indebtedness
Some of our
(including
project-level
indebtedness) bears interest at
variable rates, generally linked
to market benchmarks such as
EURIBOR, SOFR and U.S. LIBOR.
rates
Increases
would
finance
raise our
expenses at project companies
or corporate level.
interest
in
in
in
During 2022, the U.S.
Federal
Reserve
increased the reference
the
rates
interest
United
from
States
0.125% to a targeted
range between 4.25%
and
4.50%
and
announced additional
increases
2023.
Similarly, in 2022 the
European Central Bank
increased the reference
interest rates in the Euro
zone
from negative
levels up to 2% and also
expects
additional
increases. Any increase
in interest rates would
finance
increase our
expenses relating to our
un-hedged variable rate
indebtedness
and
increase the costs of
refinancing our existing
indebtedness
and
issuing new debt.
Mitigation of Risk
managing this risk.
As of December 31,
2022,
approximately
92% of our project debt
and approximately 96%
of our corporate debt
either has fixed interest
rates or has been
hedged with swaps or
caps.
To mitigate
interest rate risk, we
primarily use long-term
interest rate swaps and
interest
rate options
which, in exchange for a
fee, offer protection
against a rise in interest
rates.
The Finance Committee
and local management
teams take ownership of
managing this risk.
Low
During the year 2022,
the euro and the South
African
rand
depreciated against the
U.S. dollar
Foreign currency exchange
rate
pesos
Revenue and expenses of our
solar assets in Europe, South
Africa, Colombia and Uruguay
in euros,
are denominated
Rands,
African
South
and
Colombian
Uruguayan pesos
(with a
maximum and minimum price
in U.S. dollars in the case of
pesos),
Uruguayan
respectively. Depreciation
in
the value of these currencies
against the U.S. dollar may
have a negative impact on our
operating results and our cash
available for distribution.
80
financing
The main cash flows in
our
subsidiaries are
cash collections arising
long-term
from
contracts with clients
and debt payments
from project
arising
repayment.
finance
Project
is
typically denominated
in the same currency as
that of the contracted
agreement,
revenue
our
which
foreign
exposure
exchange
In
addition, we maintain
part of our corporate
and
general
administrative
expenses and part of
limits
to
risk.
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
our corporate debt in
euros which creates a
natural hedge for the
distributions we receive
from our assets
in
Europe.
we
hedge
To further mitigate this
exposure, our strategy is
cash
to
distributions from our
Europe.
assets
in
Through
currency
have
options,
hedged 100% of our net
euro-denominated net
exposure for the next 12
months and 75% of our
euro-denominated net
exposure
the
following 12 months.
We expect to continue
with
hedging
strategy on a rolling
basis.
this
for
Medium
Risks Related to Our Growth
Strategy
We may not be successful in
finding
investment
opportunities or we may
invest in projects and assets
with a higher risk profile.
Our growth strategy depends
on our ability to successfully
evaluate
and
identify
investment
opportunities,
develop and build new assets
and consummate acquisitions
terms. The
on
number
investment
opportunities may be limited.
We are competing with other
international
local
developers
the
for
development and construction
favourable
of
and
The Finance Committee
and local management
teams take ownership of
managing this risk.
We have a proven track
closing
record
of
and
acquisitions
in
investments
development
and
construction, and we
have diversified sources
of growth:
We believe we can
achieve organic growth
the
through
the
optimisation of
portfolio,
existing
factors at
escalation
many of our assets, as
well as the repowering
and hybridisation with
other technologies at
some of the renewable
energy facilities and the
of
In 2022, following the
trend of recent years,
competition to develop
and acquire renewable
increased.
assets has
Some
our
for
competitors
investments pay more
for
investments and
acquisitions and may be
identify and
to
able
purchase
greater
a
number of assets than
our resources permit.
In addition, in 2022 we
increased our
have
investments
in assets
under development and
construction, in assets
revenue
with
81
Assessment of Change
in Risk
Year-on-Year
in
denominated
local
currency and assets with
exposure to electricity
prices.
Mitigation of Risk
expansion
existing
lines.
of
our
transmission
We are investing more
in the development and
construction of new
assets, which we expect
will provide us with a
more secure source of
growth. We
have
entered into and intend
into
to
enter
or
agreements
partnerships
with
developers.
Additionally, we expect
to acquire assets from
third parties leveraging
the local presence and
in
network we have
geographies
and
sectors
in which we
operate.
where
We intend to maintain a
portfolio
a
majority of the assets
and
stable
have
predictable cash flows.
Every time we make an
investment decision, we
the
always
consider
impact
the potential
investment will have on
the overall portfolio, in
order to preserve its low
risk profile.
Investment
The
the
and
Committee
Board of Directors take
ownership of managing
this risk.
Risk / Impact
Risk
Appeti
te
Risk
Trend
from
local and
for
of new assets, which may
hamper our ability to grow. Our
ability to develop and build
new assets depends, among
other things, on our ability to
transmission
secure
interconnection
or
access
agreements, to secure
land
rights to secure PPAs or similar
schemes and to obtain licences
and permits and we cannot
guarantee that we will be
successful obtaining
them.
Similarly, we are competing
international
with
acquisition
companies
opportunities
third
parties, which may increase our
cost of making investments or
cause us to refrain from making
acquisitions from third parties.
Our ability to consummate
future
and
investments
acquisitions may also depend
on our ability to obtain any
required
or
regulatory approvals. If we are
unable
and
complete future investments
and acquisitions, it will impede
our ability to execute our
growth strategy and limit our
ability to increase the amount
of dividends paid
to our
shareholders.
government
identify
to
intend to
In addition, in order to grow
our business, we may develop
and build or acquire assets and
businesses which may have a
higher risk profile than certain
of the assets we currently own.
We
increase our
investments in assets which are
not currently in operation, and
which
to
development and construction
In addition, we may
risk.
in
investing more
consider
assets which are not contracted
or not fully contracted, for
subject
are
82
Risk / Impact
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
which revenues will depend on
the price of the electricity. We
may also consider investing in
businesses which are regulated
or which are contracted with
“as contracted” agreements or
hedge agreements where we
need to deliver the contracted
power even if the facility is not
in operation or which are
subject to demand risk. We
have recently invested and may
consider investing in business
sectors where we do not have
previous experience and may
not be able to achieve the
expected returns. We may also
in new
investing
consider
technologies where we do not
have for the moment a long
historical
record as
proven as our current assets,
such
storage, district
heating, geothermal, offshore
wind, distributed generation or
hydrogen. Furthermore, we
may consider
in
assets with
revenues not
denominated in U.S. dollars or
euros, which would increase
our exposure to local currency,
and which could generate
higher volatility in the cash
flows we generate. In all these
types of assets and businesses,
the risk of not meeting the
expected cash flow generation
and expected returns is higher
than in contracted assets.
investing
track
as
Low
investments may not
Our
perform as expected and
development
and
construction activities are
subject to specific risks
Our investments are subject to
including
risks,
substantial
unknown
contingent
or
liabilities, the failure to identify
material problems during due
diligence, the risk of over-
In 2022 we increased
in
our
investments
and
development
construction
with
partners or on our own.
We had three assets
construction
under
year.
during
the
these
Although
still
investments
small
represent
a
- We
take
multidisciplinary
approach
identifying
different areas.
risks
a
to
in
- We have sufficient
internal expertise in
development
and
construction activities
and we generally
invest with partners.
83
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
portion of our portfolio,
we expect this source of
growth to increase over
time.
Mitigation of Risk
- Detailed
due
for
diligences both
acquisitions
and
project development,
carried out either in-
house or contracted
with specialists.
- Senior management,
including Geographic
VPs, and local teams
take ownership of
managing this risk.
Risk / Impact
paying for assets and the ability
to retain customers.
In addition, we have increased
our activities of development
and construction and we are
increasing our investments in
these projects, in some cases
with partners and
in some
cases on our own.
secure
Development and construction
activities are subject to failure
rate and different types of risks.
Our ability to develop new
assets is dependent on our
ability to secure or renew our
rights to an attractive site on
reasonable terms; accurately
measuring resource availability;
the ability to secure new or
renewed approvals,
licences
and permits; the acceptance of
local communities; the ability
transmission
to
or
access
interconnection
agreements;
to
the ability
acquire
labour,
suitable
equipment and construction
services on acceptable terms;
the ability to attract project
financing; and the ability to
secure PPAs or other sales
contracts on reasonable terms.
Failure to achieve any one of
these elements may prevent
the
and
development
construction of a project. If any
of the foregoing were to occur,
lose all of our
we may
investment
in development
expenditures and may be
required to write-off project
development assets.
is
subject
In addition, the construction
and development of new
projects
to
environmental,
engineering
and construction risks that
could result in cost-overruns,
reduced
and
delays
84
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
Risk / Impact
performance. A delay in the
projected completion of a
project can result in a material
total project
increase
in
through
costs
construction
interest
capitalised
higher
charges, additional labour and
other expenses, and a delay in
the commencement of cash
flow.
International
including
markets.
in
operations
emerging
Medium
of
investing
We operate our activities in a
range
international
including North
locations,
America (Canada, the United
States and Mexico), South
America (Peru, Chile, Uruguay
and Colombia), and EMEA
(Spain, Italy, Algeria and South
Africa), and we may expand our
operations
to certain core
countries within these regions.
Accordingly, we face several
risks associated with operating
and
in different
countries that may have a
material adverse effect on our
business, financial condition,
results of operations and cash
flows. These risks include, but
are not limited to, adapting to
the regulatory requirements of
such countries, compliance
laws and
with changes
to
regulations
foreign
the
uncertainty
judicial
processes, and the absence,
loss
of
favourable treaties, or similar
local
agreements,
authorities, or political, social
and economic instability, all of
which
place
can
disproportionate demands on
our management, as well as
significant demands on our
applicable
corporations,
of
non-renewal
with
or
in
No significant change.
In Peru, after an attempt
by the former President
to dissolve congress
and replace it with an
“exceptional emergency
government”,
the
President was replaced.
uncertainty
Political
the
may persist
upcoming months.
in
that
We intend to grow our
portfolio mainly
in
we
countries
consider stable in North
America, South America
and Europe. We expect
in
investments
that
countries with a higher
risk profile such as
Algeria and South Africa
always represent a small
portion of our portfolio.
South
We have a political risk
insurance agreement in
place
the
with
Multinational
Investment Guarantee
Agency for Kaxu. The
insurance
provides
protection for breach of
contract up to $58.0
million in the event that
the
African
Department of Energy
does not comply with its
as
obligations
guarantor. We have also
a political risk insurance
for two of our assets in
to $37.2
Algeria up
2
million,
years
dividend
coverage. This insurance
policy does not cover
credit risk.
including
Our local presence in
each region provides us
with good knowledge
and expertise to operate
85
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Risk / Impact
and
operational
financial
personnel. As a result, we can
provide no assurance that our
future international operations
and investments will remain
profitable.
Mitigation of Risk
in these regions.
The geographic VPs
together with the local
teams and support from
the
compliance
take
department
ownership of managing
this risk.
Risks Related to Regulation:
legal, environmental and
general compliance of each
asset
Low
laws
Such
require
We are subject to extensive
regulation of our business in
in which we
the countries
and
operate.
regulations
licences,
permits and other approvals to
be obtained in connection with
the operations of our activities.
This
framework
imposes significant actual, day-
to-day compliance burdens,
In
costs and risks on us.
addition, we need to adapt to
the regulatory requirements of
the different countries where
we operate.
regulatory
Uncertainty or changes to any
such regulation in any of the
countries where we operate
could adversely affect
the
return of our current plants and
our results of operations and
cash flows.
subject
to
We are also
significant
environmental
regulation, which, among other
things, requires us to obtain
and maintain
regulatory
licences, permits and other
approvals and comply with the
requirements of such licences,
permits and other approvals
and perform environmental
impact studies on changes to
projects. In addition, our assets
need to comply with strict
environmental regulation on
assets
in
the
During 2022, electricity
have
market prices
Spain,
increased
following
trend
initiated in the second
half of 2021. This
is
resulting in higher cash
collections. Since our
renewable
in
Spain have the right to
receive a “reasonable
rate of return”, higher
electricity prices have
caused a reduction of
the
regulated
remuneration
component in 2022 and
further
will cause a
the
reduction
component
regulated
starting from 2023 (we
refer to “Regulation in
Spain” under “Events
period”
the
during
section).
of
Volatility
in electricity
market prices can cause
volatility in our results of
operations.
86
in
to-day
individual
- An
responsible
local
for
compliance has been
appointed
each
geography where we
are present to solve
issues.
day
These
employees
report to the General
Counsel. We have local
in each
legal teams
that are
geography
assisted by
usually
local external lawyers.
Our local internal and
external lawyers are in
close contact with the
and
regulation
regulation
potential
each
changes
in
geography.
These,
together with the asset
managers, proactively
track and monitor any
potential
regulatory
change.
- We have a Quality,
and
Environmental,
Health
Safety
and
Management System
in-place certified under
ISO 9001, 14001 and
45001 standards, which
are audited annually by
an external third party.
- The
corporate
operations department
annual
performs
internal audits on our
ensure
assets
to
compliance
with
regulation and our best
and
practices
to
continuous
promote
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Risk / Impact
air emissions, water usage and
contaminating spills, among
others. As a company with a
focus on ESG and most of the
business in renewable energy,
incidents can
environmental
also significantly harm our
reputation.
In
In addition, in several of the
in which we
jurisdictions
operate including Spain and
Chile, we are exposed
to
remuneration schemes which
contain
regulated
both
incentives and market price
such
components.
regulated
jurisdictions,
incentive or the contracted
component
not
compensate for fluctuations in
the market price component,
and,
total
consequently,
remuneration may be volatile.
Our assets in Spain receive a
remuneration based on a
“reasonable rate of return”.
may
the
Low
Risks Related to Taxation:
changes to tax regulations
could adversely affect the
return of our current assets.
We are subject to changes in
tax regulation in all the
jurisdictions where we have
assets. Our future tax
liability may be greater than
expected if we do not use
sufficient NOLs to offset our
taxable income.
We have NOLs that we can use
to offset future taxable income.
Based on our current portfolio
of assets, which
includes
renewable assets that benefit
from
tax
depreciation
schedule, and
subject to potential tax audits,
which may result in income,
sales, use or other
tax
obligations, we do not expect
accelerated
an
in
in
Changes
tax
regulations have been
announced
some
countries where we
operate. We do not
any material
expect
impact
these
from
changes.
Solution”,
agreed
the
In November 2021, 137
to
countries
“Two
implement
an
Pillars
Inclusive
OECD/ G20
initiative,
Framework
which aims to reform
the
international
taxation policies and
ensure
that
multinational
companies pay
taxes
wherever they operate
and generate profits.
this
“Pillar Two” of
initiative
generally
provides for an effective
87
Mitigation of Risk
improvement.
Geographic VPS and
local
take
teams
ownership of managing
the
this
risk, with
the
support
Compliance
Management
Committee.
of
- Management
and
specialised teams with
experience
broad
monitor
these
developments.
- Engagement
with
local authorities on
tax matters.
- Support of reputable
tax
with
in
external
consultants
proven expertise
each jurisdiction.
- The Corporate Tax
Department
(under
the CFO supervision)
and local teams take
ownership
of
managing this risk.
Risk / Impact
to pay significant taxes in the
upcoming years in most of our
assets.
Although we expect
these
NOLs will be available as a
future benefit, in the event that
they are not generated as
expected, or are successfully
challenged by the local tax
authorities, or are subject to
future limitations, our ability to
realise these benefits may be
limited.
could
to
Some countries where we
implement
operate
changes
regulations
regarding tax loss, the content
of which are largely uncertain
at this time.
Risk
Appeti
te
Risk
Trend
Assessment of Change
in Risk
Year-on-Year
Mitigation of Risk
on
from
of
global
minimum
corporate tax rate of
profits
15%
on
generated
by
multinational
companies
with
revenues
consolidated
of at least €750 million,
calculated on a country-
by country basis. This
minimum tax would be
applied on profits in any
jurisdiction
wherever
the effective tax rate,
a
determined
is
jurisdictional basis,
Any
below
15%.
liability
additional tax
the
resulting
application
this
minimum tax will be
payable by the parent
the
entity
multinational group to
the tax authority in such
parent’s
of
residence. The OECD
and its members are still
working
the
coordinated
implementation of the
is
minimum
expected to be in force
in the UK and the EU for
fiscal years commencing
on January 1, 2024. The
global minimum
tax
may have a negative
impact on our financial
results of
condition,
operations and cash
flows.
country
tax,
on
of
it
In addition, our NOL
and
carryforwards
certain recognised built-
in losses may be limited
by Section 382 of the
IRC if we experience an
“ownership change.” In
general, an “ownership
change” occurs if 5%
shareholders of our
stock
their
increase
collective ownership of
88
Risk / Impact
Risk
Appeti
te
Risk
Trend
Mitigation of Risk
the
the
382.
than
Assessment of Change
in Risk
Year-on-Year
the aggregate amount
outstanding
of
shares of our company
50
by more
percentage
points,
generally over a three-
year testing period. In
2019,
Internal
Revenue Service issued
proposed
regulations
the
concerning
calculation of built-in
gains and losses under
After
Section
public
receiving
comments, in May of
2022 the IRS announced
that they will issue new
regulations
proposed
on calculating built in
gains
losses
and
following an ownership
change. If the proposed
regulations are enacted
and depending on its
final outcome, they may
limit our
significantly
annual use of pre-
ownership change U.S.
NOLs in the event a new
ownership
change
occurs after the new rule
is in place
The government of
South Africa approved
new limitations for tax
years ending on or after
March 31, 2023. The net
interest
expense
deductibility will be
limited to 30% of the
EBITDA and the NOLs
carried
forward may
only be applied against
80% of taxable income
of the corporate income
tax. These new limitation
may have a negative
impact in our cash flows.
The number of cyber-
attacks to companies
has been increasing in
the last few years. Many
89
- We
have
implemented
prevention,
monitoring
threat-detection
and
Cybersecurity risk
We are dependent upon
information
technology
systems to run our operations.
Low
Assessment of Change
in Risk
Year-on-Year
of these attacks have
critical
on
focused
infrastructure.
in
There
been
have
cyberattacks within the
industry on
energy
electricity infrastructure
such as substations and
related assets
in the
past and there may be
such attacks
the
future. Our generation
transmission
assets,
storage
facilities,
facilities,
information
technology systems and
infrastructure
other
facilities and systems
could be direct targets
of, or otherwise be
adversely
materially
affected
such
activities.
by
Risk / Impact
Risk
Appeti
te
Risk
Trend
are
subject
information
technology
Our
to
systems
disruption, damage or failure
from a variety of sources,
limitation,
including, without
security
viruses,
computer
breaches,
cyber-attacks,
ransomware attacks, malicious
or destructive code, phishing
disasters,
natural
attacks,
design
denial-of-
defects,
service attacks or information
or
fraud or other security
breaches.
in
Given the unpredictability of
the timing, nature and scope of
technology
information
disruptions, we
could be
subject to production stops,
unavailability
our
transmission lines, operational
delays, the compromising of
otherwise
confidential
or
protected
information,
destruction or corruption of
data, security breaches, other
manipulation or improper use
of our systems and networks or
financial losses from remedial
actions, any of which could
have a material adverse effect
on our
financial condition,
results of operations or cash
flows.
Mitigation of Risk
measures
international
standards
ISO 27000.
following
including
- Internal and external
audits to ensure that
our
cybersecurity
controls are effective,
simulated
including
targeted
and
cyberattacks to our
servers
and
employees accounts.
- Employees training to
detect, monitor and
prevent threats.
- Our
information
systems that support
business
processes
are certified under the
ISO 27001 standard
audited
and
annually
an
external third party.
are
by
- The Corporate IT team
(under
the CFO’s
supervision) and local
teams take ownership
of managing this risk.
Financial Risk Management
We refer to Note 3 to the Consolidated Financial Statements for more detail on Financial
Risk Management.
ESG Materiality Analysis
Stakeholder Inclusiveness
Our stakeholders have a broad range of interests and viewpoints. We believe that
collaboration with them is key to our success. As such, we listen and do our best to gain
stakeholders’ trust, thus leading to a more stable and long-term relationships. Across the
Company, we engage with our stakeholders to obtain input that can be helpful as we
execute on our strategy.
90
We believe that systematic stakeholder engagement, executed properly, is likely to result
in ongoing learning within the Company, as well as increased accountability to a wide
range of stakeholders.
Atlantica has a Stakeholder Policy in-place to emphasise the importance of collaboration
with our shareholders, employees, suppliers, customers, business partners, local
communities, and debt investors to generate a stable and predictable business
environment.
We have made a two-way engagement channel available for our stakeholders to build
trusting long-term relationships:
Shareholders Employees Suppliers Customers
Business
Partners
Local
Communities
Debt
Investors
Key Stakeholders
Face-to-face
meetings, video, or
phone calls1
Annual Reports2
Social Media1
Materiality
Assessment Survey2
Press Releases1
Website Content1
Whistleblower
Channel3
Annual General
Meeting (AGM)2
Earnings
Presentations4
Roadshows4
Intranet1
Employee Climate
Survey5
Training1
(1) Regular or on an as-needed basis; (2) On an annual basis; (3) Always available; (4) On a quarterly basis; (5) At least every three years.
ESG Materiality Assessment
We consider a topic to be material from an ESG perspective if it represents one of the
Company’s most significant impacts on (i) the economy, environment, and people,
including impacts on human rights, and (ii) our business. Our materiality assessment is
based on international sustainability standards GRI and SASB, and ESG rating entity
assessments.
We have performed a double materiality assessment. We have identified the most
important impacts on society (i.e., impacts on the economy, the environment and people)
and the most important impacts on the Company. This analysis is one of the most
important tools Atlantica uses to set its priorities. It enables us to identify potential risks
and opportunities, focus on key ESG priorities that may materially impact our
stakeholders and our businesses, on how we can best mitigate these impacts, and to
respond adequately in a dynamic and rapidly changing sustainability landscape.
In 2021, we gained input from 50 internal and external stakeholders. In 2022, we internally
updated our materiality analysis to better take into account our impacts on (i) the
91
economy, the environment and the people and (ii) our businesses. To do so, we used the
information received from our stakeholders in 2021 as well as insights obtained during
2022 through the two-way engagement channel previously mentioned. Considering that
our strategy and business model have not changed since 2021 and that we engage with
our stakeholders on a continuous basis, we believe to have an up-to-date understanding
of themes material to our stakeholders. In addition, to assess impact on our business, we
have considered the reputational, operational, regulatory and financial risks and
opportunities that a topic could pose.
The materiality process was divided into five main steps, as shown in the table below:
Step 1.
Map material topics
Step 2.
Prioritise topics based on their
impact on our society
Step 3.
Prioritise topics based on their
impact on our business
Update the list of material topics
Identify material impacts on our society (i.e., economic, environment and people)
Identify material impacts on our business
Step 4.
Set a response and an
implementation plan
Agree priorities with senior management, anchor the prioritised topics in our
internal governance structure and implement ESG programmes and initiatives into
our day-to-day business activities
Step 5.
Disclose ESG-related information
Publish annual ESG key performance indicators. Disclosure should serve towards the
continued dialogue on ESG material topics
As part of our 2022 materiality assessment, we have identified four key topics. These are:
Climate Change
Occupational
Health and Safety
Human Rights, Ethics
and Integrity
Environmental
Impacts
Impact on
Society
Potential negative
impact: Incidents
could harm (i) our
employees, (ii) those
of our contractors
working at our
assets and (iii)
close-by local
communities.
Positive impact: 75% of
our 2022 revenues are
from renewable energy
production. With our
renewable energy
production, in 2022 we
avoided the emission of
6.9 million tonnes of
CO2e, helping to
mitigate climate change.
Negative impact:
However, we also
generate GHG emissions
in our business, mostly
at ACT, our efficient
natural gas plant in
Mexico.
Our business impacts
the lives of people
across our own
operations, our supply
chains, and
communities.
Positive impact: We
foster communities’
economic prosperity
through local
purchasing, the hiring of
local employees, etc.
Potential negative
impact: However, we
need to make sure that
we always respect
human rights in
everything we do and
that no one is adversely
impacted, specifically in
regions or industries
where regulations are
weaker.
Impact on
Business
- Positive and negative
impacts: Our assets and
Potential negative
impacts: Health and
Potential negative
impact: If we do not
92
Our assets occupy
large areas of land,
generate hazardous
and non-hazardous
waste, and some of
our power generation
assets use water in
power generation
processes.
Potential negative
impact: If we do not
properly manage our
waste, it could
damage the
environment and
biodiversity in or
close to our assets.
Hazardous waste
could also harm our
employees and those
of our contractors
working at our assets.
Positive impact: we
have reforestation
programmes and
targeted biodiversity
programmes.
Potential negative
impacts: Incidents or
operations are exposed
to climate-related risks
and opportunities,
including physical and
transition risks, as well
as opportunities
(detailed information
provided in the TCFD
section).
safety incidents at
our premises could
generate potential
financial losses, civil
and criminal
liabilities, damaging
our reputation.
ensure that human
rights are respected
across our operations,
supply chains, and
communities, we risk
severe regulatory and
reputational damage to
our business.
accidents causing
spills, an
inappropriate use of
water or non-
compliance with
environmental
regulation, including
water management,
could generate
potential financial
losses, civil and
criminal liabilities,
damaging our
reputation.
✓ Environment and
biodiversity policy,
processes and
procedures
✓ ISO 14001
compliant
✓ Regular monitoring
of environmental
KPIs
✓ Human rights policies,
processes and
procedures
✓ Human rights matters
reviewed as part of
the internal
compliance annual
due diligence
activities
✓ Compliance with
✓ Analysis of
initiatives to reduce
leaks and water
consumption
✓ Regular internal and
external audits
✓ New internal target
to reduce water
consumption at our
power generation
assets
FCPA and UK Bribery
Act
✓ Internal and external
verification on our
policies with local
rules and regulations
✓ Internal and external
due diligence
processes for new
suppliers
✓ Communication
channels in-place to
report any
misconduct or
instances of non-
compliance
Strategic Report:
- Human Rights
- Section 172
Governance Section:
- Business ethics
- Sustainability
Governance
Strategic Report:
- Environmental
Sustainability
- Asset Management
Governance Section
- Sustainability
Governance
Our Response
Reference
✓ We intend to continue
investing in renewable
energy assets
✓ Approved SBTi
intensity target to
reduce Scopes 1 and
2 per unit of energy
generated
✓ New internal targets
to:
(i) reduce Scope 3
emissions and
(ii) achieve Net Zero
GHG emissions
✓ Process to offset GHG
emissions
✓ Monitor weather
conditions in-real
time
✓ Insurance policy
✓ Transition and
physical risks
evaluated through
scenario analysis
Strategic Report:
- Our Sustainable
Business Model and
Strategy
- TCFD (Environmental
Sustainability)
Governance Section:
- Sustainability
Governance
UNGC
✓ Health and safety
policy, processes
and procedures
✓ ISO 45001
compliant
✓ Comprehensive
safety
programmes
✓ Regular internal
and external
audits
✓ Reinforced safety
procedures
during the
construction
phase
✓ Provided safety
training to our
employees and
those of our
contractors
✓ Short term
variable
compensation of
CEO and
Geographic VPs
include safety
targets
Strategic Report:
- Occupational
Health and Safety
- Asset
Management
Governance Section:
- Sustainability
Governance
93
We have identified 10 material topics based on the impact on our society and our
business:
Note: Atlantica’s Management considers all topics disclosed in the Materiality Matrix when planning and executing
business activities, independently to their impact as shown in the Matrix.
Material Topics
Reference
Occupational Health and
Safety
- Occupational Health and Safety (Strategic Report; Social Sustainability)
- Key Performance Indicators (Strategic Report)
- Section 172 Statement (Strategic Report)
- Our Sustainable Business Model and Strategy; Key Performance
Climate Change
Indicators;
Environmental Sustainability and TCFD (Strategic Report)
Human Rights, Ethics and
Integrity
Environmental Impact (waste,
water and biodiversity)
Asset Management
Data Security
Human Capital
Diversity and Equal
Opportunities
Supply Chain Management
Community Development
- Human Rights and Anti-Slavery and Human Trafficking Statement
(Strategic Report; Social Sustainability)
- Business Ethics (Governance Section)
- Section 172 Statement (Strategic Report)
- Environmental Sustainability (waste, water and biodiversity sections);
Key Performance Indicators (Strategic Report); Section 172 Statement
(Strategic Report)
- Asset Management (Strategic Report)
- Cybersecurity and Data Privacy; Section 172 Statement (Strategic
Report)
- People and Culture (Strategic Report; Social Sustainability)
- Section 172 Statement (Strategic Report)
- People and Culture (Strategic Report; Social Sustainability)
- Key Performance Indicators (Strategic Report)
- Business Ethics (Governance Section)
- Supply Chain Management (Strategic Report; Social Sustainability)
- Section 172 Statement (Strategic Report)
- Local Communities (Strategic Report; Social Sustainability)
- Key Performance Indicators (Strategic Report)
- Section 172 Statement (Strategic Report)
Note 1: Corporate Governance and ESG-related documents and policies are available on our website.
Note 2: Material topics are addressed in the Global Reporting Initiative (GRI) Content index and Sustainability
Accounting Standards Board (SASB) Index (“Other Information” Section).
Atlantica’s management determined while reviewing 2022’s materiality assessment
process, and after analysing international best practices, ESG rating assessments, and
peer frameworks, that in addition to these topics, it was important to address the
Company’s approach to innovation and tax management.
94
Next year, we will look into how we can further strengthen our double materiality
assessment.
ESG Data Review
Atlantica’s management is responsible for the completeness, accuracy and validity of the
information contained in this report. The data presented is based on the input received
from internal data collection, management systems and external stakeholders. Certain
parts of this report have been subject to external and/or internal assurance. We conduct
regular internal audits to review our management system, including the procedures to
collect information from our assets and the main data reported.
In 2022, independent third parties have been engaged to verify our reported Scope 1, 2
and 3 GHG emissions under a reasonable level of assurance;
- In Mexico, our Scope 1 and 2 greenhouse emissions were reviewed by ANCE, a leading
certification association across industries in Mexico and our Scope 3 emissions were
reviewed by DNV, an independent expert in assurance and risk management.
- In Spain, our Scope 1 stationary greenhouse emissions were reviewed by AENOR, a
not-for-profit entity that fosters standardisation and certification across industrial and
service sectors.
- Our Scope 3 emissions and Scope 1 and 2 emissions for the rest of the assets were
reviewed by DNV.
In 2022, DNV has been engaged to verify Atlantica’s air quality (i.e., non-GHG emissions),
waste, water and health and safety indicators and their compliance with GRI Reporting
under a limited level of assurance.
In addition, in 2022 Atlantica’s Internal Audit team reviewed the completeness and
accuracy of certain environmental, social and governance performance indicators,
including GHG emissions, water and waste management, health and safety, energy
consumption, supply chain, people and culture and investment in local communities.
Furthermore, Atlantica’s Accounting and Disclosure Committee reviewed this Integrated
Annual Report prior to its publication.
Atlantica’s Board of Directors approved this report prior to its publication.
95
Environmental Sustainability
At Atlantica, our strategy focuses on climate change solutions in the power and water
sectors. We intend to be part of the solution to climate change. Our long-term strategy
reflects this. We are committed to investing mostly in renewable energy assets as
enablers of the energy transition.
We have a greenhouse gas emissions (GHG) reduction objective approved by the Science
Based Targets initiative (SBTi). Atlantica targets to reduce Scope 1 and 2 GHG emissions
per kWh of energy produced by 70% by 2035 from a 2020 base year30. This objective is
particularly ambitious for a company like Atlantica, where approximately 75% of our 2022
revenues consists of renewable energy production, an activity which already has a very
low rate of emissions per unit of energy produced.
In addition, we have a goal to maintain over 80% of our adjusted EBITDA generated from
low carbon footprint assets including renewable energy, storage, transmission
infrastructure and water assets.
Following our long-term commitment to sustainability, we have set new targets to reduce
our:
⚫ GHG emissions. We target to:
(i) reduce our Scope 3 GHG emissions per kWh of energy generated by 70% by 2035
from a 2020 base year, and
(ii) achieve Net Zero GHG emissions by 2040.
⚫ Non-GHG emissions. We target to reduce our non-GHG emissions31 per kWh of
energy generated by 50% by 2035 from a 2020 base year.
⚫ Water consumption. We target to reduce our water consumption per kWh of energy
generated by 50% by 2035 from a 2020 base year.
Our Environmental Policy was approved by the Board of Directors in May 2020 and was
last amended in December 2021. The policy is available at www.atlantica.com.
Task Force on Climate-Related Financial Disclosures
(TCFD)
We have voluntarily reported climate-related financial disclosures largely consistent with
the recommendations of TCFD Guidance 2021 on climate-related financial disclosures.
We will continue working towards improving these disclosures acknowledging this is an
evolving area.
This section is structured using the four TCFD pillars: Governance, Strategy, Risk
Management, and Metrics and Targets.
The analysis has been prepared based on the TCFD guidance, advice of expert third-party
consultants, and internal expertise.
30 The target boundary includes steam generation. Targets are considered ‘science-based’ if they are in line with the levels
recommended by climate science to meet the goals set out in the Paris Agreement to limit global warming to “well-below
2ºC”. The SBTi target was approved in 2021. We expect to reduce Scopes 1 and 2 per unit of energy generated mainly by
(i) investing in renewable energy assets and (ii) implementing measures to reduce emissions over time. We refer to
Atlantica’s 2022 CDP’s Climate Change questionnaire (section C3) for additional details on our climate-related strategy.
31 Non-GHG emissions including nitrogen oxide (NOx), sulphur dioxide (SO2) and carbon monoxide (CO).
96
TCFD
Elements
Recommended Disclosure
Cross Reference
Current Status
Future Priorities
1) Governance a) Describe the Board’s
oversight of climate related
risks and opportunities
2) Strategy
3) Risk
Management
4) Metrics and
Targets
b) Describe management’s role
in assessing and managing
climate related risks and
opportunities
a) Describe the climate related
risks and opportunities the
organisation has identified over
the short, medium and long
term
b) Describe the impact of
climate related risks and
opportunities on the
organisation’s businesses,
strategy and financial planning
c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate related scenarios,
including a 2C or lower
scenario
a) Describe the organisation’s
processes for identifying and
assessing climate related risks
b) Describe the organisation’s
processes for managing
climate related risks
c) Describe how processes for
identifying, assessing and
managing climate related risks
are integrated into the
organisation’s overall risk
management
a) Disclose the metrics used by
the organisation to assess
climate related risks and
opportunities in line with its
strategy and risk management
process
b) Disclose Scope 1, Scope 2
and if appropriate Scope 3
greenhouse gas (GHG)
emissions, and the related risks
c) Describe the targets used by
the organisation to manage
climate related risks and
opportunities and performance
against these targets
Sustainability
Governance
(Business ethics
section) and
section 1 below
Sustainability
Governance
(Business ethics
section) and
section 1 below
Section 2 below
Section 2 below
Section 2 below
- Board and Management
- At Board level:
Committees review risks and
opportunities as part of their
areas of responsibility
- Climate related risks and
opportunities are integrated
into our strategy and
business model
- Climate change and
environmental sustainability is a
major consideration of our
business at all levels
continue supervising
ESG and climate-
related matters,
initiatives, risks and
opportunities
- At Management level:
maintain different
committees to
efficiently address ESG
and climate-related
matters
- Climate change and ESG-
- Increased linkages
related training provided to
employees (including
management)
- Screened for potential climate-
related risks and opportunities
and conducted climate-related
scenario analysis to determine
and assess Atlantica’s 2030 and
2050 key risk and opportunity
impacts
- ESG and climate change
integrated into financial
planning
between sustainability
performance and
remuneration
- Continue screening
and analysing
potential climate-
related risks and
opportunities
- Continue investing in
assets that are
environmentally
sustainable and
managing them
sustainably
- Continue developing
our risk assessment
processes to better
identify emerging
climate-related risks
and to manage
climate-related risks
effectively
- Continue analysing
and implementing
climate-related
reporting best
practices
- Measure progress to
reach targets
Principal Risks and
Uncertainties
section and
section 3 below
Principal Risks and
Uncertainties
section and
section 3 below
Principal Risks and
Uncertainties
section and
section 3 below
- ISO 31000 aligned risk
management framework
incorporating climate-
related risks
- Climate change is considered a
strategic risk, hence is
continually reviewed across
at business and corporate level
- Transition and physical risks
evaluated through scenario
analysis
- Climate-related risks included
in our Risk Map
Environmental
Sustainability and
section 4 below
Environmental
Sustainability and
section 4 below
Environmental
Sustainability and
section 4 below
- Scopes 1 and 2 reported since
2015 and Scope 3 since 2019
- Externally reviewed 100% of
Scopes 1, 2 and 3 since 2020
- Approved SBTi intensity target
to reduce Scopes 1 and 2 per
unit of energy generated
- New internal targets to: (1)
reduce Scope 3 emissions and
achieve Net Zero GHG
emissions, (2) reduce non-GHG
emissions and (3) reduce water
consumption at generating
assets
- Internal carbon price of $20-
$35 per ton of CO2 to evaluate
investment opportunities32
- Process to offset GHG
emissions
97
1. Governance
We refer to the subsections Business Ethics and Sustainability Governance within the
Governance section for a description of the role of the Board of Directors and
Management in terms of climate-change.
We refer to the Directors’ Report for details on the Board of Directors’ profiles.
2. Strategy
In 2022 we screened for potential climate-related risks and opportunities and conducted
a climate-related scenario analysis to analyse Atlantica’s 2030 and 2050 key risk and
opportunity impacts.
The risks were identified following a two-step process. In the first place, an initial
screening was carried out to determine which physical and transition risks are most likely
to affect all our businesses and geographies. Once the initial screening was completed,
company-specific data (e.g., historical records of past events, input from internal
stakeholders) was taken into account to determine the key risks most likely to affect
Atlantica as well as their potential impact on our activities.
We refer to the ESG Materiality Analysis for details on our materiality assessment.
Physical Risks: Methodology and Key Findings
The physical risk analysis covered fourteen regions and eight different climate hazards.
The selection took into consideration Atlantica’s key technologies, countries and assets,
past events that affected Atlantica’s or other peers’ operations, and climate scenarios that
project how the intensity or frequency of certain climate hazards might change as a result
of global warming.
Summary of Potential Impacts of Physical Climate Risks33
Risk
Technology
Changing
wind patterns
Wind power
Increase in mean
temperatures
Solar, wind
power
Droughts/water
scarcity
Solar, geothermal
energy
Potential Impacts
The wind power plants are designed for the prevalent wind
direction to work as efficiently as possible. A change in the
wind direction and /or wind speeds may impact the power
production efficiency.
Increasing temperatures reduce the efficiency of solar power
production.
Increasing mean air temperature lowers air density which
causes less efficient wind power production.
Solar PV panels exposed to high temperatures age more
quickly.
Water is needed for steam turbines, cooling condensers etc.
If there is less water available, water costs may increase. Water
restrictions may occur affecting the cooling capacity of the
plants.
32 We apply a carbon price when we evaluate investments in natural gas assets with long-term useful life. The economic
impact is evaluated as an additional cost. In 2022, we did not evaluate investments in natural gas assets. In 2021, when
the carbon pricing cost was factored in the investment opportunity model of a gas plant in North America, the Investment
Committee decided that the potential investment was not reaching the minimum returns required for the specific sector
and geography and rejected any potential investment.
33 From a climate-related perspective, potential physical climate risks include short-term (1-2 years), medium-term (3 to
10 years) and long-term (over 11 years) horizons. We have updated this climate-related classification based on our long-
term decarbonisation strategy and SBTIs updated guidance.
98
Increasing mean
water temperatures
Water
desalination
Landslides caused
by heavy
precipitation
Solar,
transmission
infrastructure
Severe winds/ wind
gusts
Solar
Wildfires
Transmission
infrastructure
Severe winter
weather and hail
Wind power,
natural gas, solar
Warmer sea water may contribute to the growth of algae that
negatively affect the membranes inside the desalination
plant. In addition, higher water temperatures reduce the feed
pressure and the membranes performance.
Heavy rains can cause flooding close to transmission lines,
which can result in landslide which can damage towers. This
can lead to business interruption and require repair work.
Flooding of solar PV fields may prevent access to the site or
destroy components.
Severe winds can damage solar
components, requiring repair work.
If the transmission lines cause a wildfire, it could result in
damage, including damage to third parties and subsequent
liabilities.
Severe winter weather, like the storm in February 2021 in
Texas, could cause supply from wind farms to decline due to
wind turbine equipment freezing. In addition, natural gas
assets could trip offline due to operational issues caused by
freezing conditions. Furthermore, hail can damage solar fields
and destroy components, requiring repair work.
fields and destroy
Assessment of the current and short-term exposure to potential impacts of physical
climate risks:
Risk
Type of Risk
Changing wind
patterns
Chronic Physical
Increase in mean
temperatures
Droughts/water
scarcity
Increasing mean
water temperatures
Acute Physical
Landslides caused by
heavy precipitation
Evaluation
The design of our plants is appropriate considering the
current prevailing wind direction.
Our solar and wind plants have been in operation for
approximately 10 years. Since our plants started
operations, we have not observed a decrease in efficiency
that might be attributable to an increase in temperatures,
even in those years with higher temperatures.
To avoid health and safety issues, we undertake operation
and maintenance activities in those timeframes with less
heat intensity.
Atlantica has historically only withdrawn approximately
50% of the total regulatory water limits permitted at our
solar assets. Even if the water limits were reduced, we
believe we have sufficient margin to withdraw enough
water to keep our plants working properly. Our local asset
management teams systematically track and monitor
water availability as a key KPI of the asset.
Water temperature in the region where our desalination
plants are located typically ranges from 15ºC in winter to
26ºC in summer (monthly averages). For the moment, we
have not experienced a proliferation of algae which may
result in a loss of efficiency in the desalination process.
In our transmission lines, heavy precipitation may cause
landslides which can damage the towers
in our
transmission lines. In the case that we faced an event such
as this, it would typically affect one or two towers,
especially taking into consideration the distance between
towers. An event like this is covered by our insurance
policy, thus the remaining risk is currently not considered
material.
99
Severe winds/wind
gusts
Wildfires
Severe winter weather
and hail
Our geographic VPs and our operations team monitor
weather conditions in real-time at each of the assets to
adopt the required protection measures. An event like this
is covered by our insurance policy, so the remaining risk
is currently not considered material.
Our largest transmission lines ATS and ATN are located in
arid regions, with little or no vegetation. Most of our
transmission lines in Chile are also located in areas with
low risk of wildfires.
After the acquisition of Chile TL4, we have dedicated
significant efforts to manage the vegetation in proximity
to the line.
In addition, in 2019 one of our off-takers, PG&E, a large
for bankruptcy
utility company
protection under Chapter 11 due to liabilities related to
its potential involvement in wildfires in California in 2017
and 2018. PG&E emerged from Chapter 11 in 2020.
During this process, a Wildfire Fund was created to pay
eligible claims for liabilities arising from wildfires.
New regulation further mitigates this risk.
Hail impacting our solar panels is covered by our
insurance policy, so the remaining risk is currently not
considered material. In addition, we do not have hedge
agreements where we need to deliver the contracted
power even if the facility is not in operation.
in California,
filed
We believe that physical climate risks are adequately managed based on our policies,
procedures, processes and systems in-place.
Assessment of the medium and long-term exposure to potential impacts of
physical climate risks through scenario analysis
We evaluated the potential changes in the selected risks as projected by the
Representative Concentration Pathway (RCP) 8.5, a business-as-usual scenario. This
scenario assumes that GHG emissions will continue rising at today’s rate until the end of
the century, with little mitigation efforts. By the end of the century, the RCP 8.5 scenario
projects a rise of approximately 4ºC in global mean temperature by 2100, compared to
pre-industrial levels.
Under the RCP 8.5 scenario, chronic and acute physical risks become greater and more
frequent as a result of the increase in the average global temperature.
The analysis carried out focused on the Company’s specific locations. Furthermore,
scientific literature such as the (i) NASA Centre for Climate Simulations (NCCS), and (ii)
Aqueduct Floods Hazard Maps and Aqueduct Global Maps 3.0 from the World Resources
Institute (WRI) that included projections from different climate models were consulted to
further analyse future climate conditions in the medium (2030) and long term (2050).
A qualitative rating was assigned, ranging from low to high, which reflects the future
changes in the frequency and/or severity of the hazard from baseline conditions under a
RCP 8.5 scenario.
100
Potential Changes in Frequency and Severity of the Hazard from Baseline
Conditions under RCP 8.5
We have completed a detailed analysis of four physical risks which have been selected
based on (i) potential change in 2030 and 2050 with respect to baseline conditions, (ii)
risk exposure at asset level, and (iii) Atlantica’s management assessment. The identified
physical climate risks impacts were:
Risk
Changing wind
patterns in wind
assets
Increase in mean
temperatures in solar
and wind assets
Droughts/water
scarcity in solar assets
Landslides caused by
heavy precipitation in
transmission
infrastructure
Potential Physical Climate Risks Impacts
Results
We do not expect a change in the wind direction and/or wind speeds may
significantly impact the power production efficiency in the mid-term.
We estimate that (i) a reduction of the efficiency of solar power production, and
(ii) lower air density which causes less efficient wind power production, could
have, if no additional mitigation measures were implemented, a maximum
annual revenue loss of approximately $1 million in 2030.
If there is less water available, water costs may increase. Water restrictions may
affect the cooling capacity of the plants. For example, we estimate that droughts
and water scarcity in Spain could have, if no additional mitigation measures were
implemented, an annual revenue loss between approximately $75 thousand and
$1.1 million in 2030.
Flooding close to transmission lines can damage towers. This can lead to
business interruption and require repair work. We estimate that landslides could
have, if no additional mitigation measures were implemented, an annual
damage between approximately $30 thousand and $3.0 million in 2030.
Note 1: Different hypothesis and approaches have been used to calculate these physical climate risks impacts,
including the advice of expert third-party consultants and internal expertise (including the Chief Executive
Officer and other senior managers). Additional disclosure on physical climate risks impacts calculations is
provided in Atlantica’s 2022 CDP’s Climate Change questionnaire (section C2 Risks and Opportunities)
available on our website.
Note 2: By 2050, some of the physical climate-related risks analysed may not impact us since we could replace
some of the existing technologies with others with for example, lower water consumption. By 2050, we expect
physical climate risks impacts to be immaterial.
Based on the work completed (i.e., including historical records of past events, input from
different stakeholders and RCP 8.5 scenario analysis where chronic and acute physical
risks become greater and more frequent as a result of the increase in the average global
temperature), the potential impact of physical climate-related risks on our short, medium
101
and long-term assets’ financial performance (i.e., revenues, costs) and financial position
(i.e., asset, liabilities) is expected to be immaterial34. From a physical risk perspective, the
results of the work completed indicate that Atlantica’s short, medium and long-term
strategy and asset portfolio would be resilient to physical climate-related changes.
Transition Risks and Opportunities: Methodology and Key Findings
Transition Climate Risks Description and Mitigation
Risk
Current
Regulation
(policy and
legal)
Emerging
regulation
(policy and
legal)
Reputation
Risk Description
Atlantica is directly affected by climate-
related risks driven by laws, regulations,
taxation, disclosure of emissions and other
practices. For example, we are subject to the
requirements of the U.K. Climate Change Act
2008 on GHG emissions
In
addition, our U.S. solar plants are for example,
subject to permits under the Clean Air Act.
reporting.
Changes in regulation could have a negative
impact on Atlantica’s future growth or
profitability.
If our reputation suffered, our cost of capital
could increase, and it could be more difficult
for us to access capital. In addition, some
potential employees,
/or
suppliers could perceive Atlantica as a less
appealing company as a
result of a
deterioration in our reputation.
clients, and
Downstream Some of our clients are large utilities or
industrial corporations. They are also exposed
to significant climate change-related risks,
including current and emerging regulation,
acute and chronic physical risks. A negative
climate-related risk impact on our clients,
including their credit quality could lead to
their inability to comply with their obligations
under our existing contracts.
Risk Mitigation
- Asset managers are responsible for
monitoring asset activities in line with
regulations and contractual
local
requirements (environmental, permits,
etc.). Local compliance managers are
and
responsible
resolving compliance
in the
geographies under their responsibility,
including ensuring compliance with
current regulations.
for managing
issues
- Various internal working groups and
management regularly review risks that
regulatory
arise
from
developments
potential
impacts.
new
and
its
- GHG reduction objective on Scope 1
and 2 emissions approved by the
Science Based Targets initiative (SBTi).
- We target to maintaining over 80% of
our adjusted EBITDA generated from
low carbon footprint assets.
- We have set new internal targets to
reduce: (1) Scope 3, (2) non-GHG
emissions and (3) water consumption
- We have also set a new internal target
to achieve Net Zero GHG emissions.
- Large
and
utilities
industrial
corporations strive to comply with the
highest ESG and climate change
standards and to maintain their credit
ratings.
Note: all these transition-related risks and their mitigation plans apply to the Company in the short, medium
and long-term. We refer to Atlantica’s 2022 CDP’s Climate Change questionnaire (section C2) for additional
details on transition-related risks.
The transition risks prioritised for this analysis relate to policy, technology and market
developments. The analysis considered two of the scenarios provided in the World
Energy Outlooks (WEO) 2021 report prepared by the International Energy Agency (IEA).
34 We categorize risks depending on their potential impact on (1) CAFD pre-corporate debt service and asset value (equity
value) of the company and (2) health and safety and environment. Additional disclosure on risk impacts is provided in
Atlantica’s 2022 CDP’s Climate Change questionnaire (section C2 Risks and Opportunities) available on our website.
102
IEA Sustainable
Development Scenario
(SDS)
- Assumes strong policy support and international cooperation in meeting the
United Nations Sustainable Development Goals (SDGs) along with a major
transformation of the global energy system
- Full alignment with the Paris Agreement
- Global average temperature increase is limited to below 2°C by the end of the
century
IEA Stated Policies
Scenario (STEPS)
- Assumes current and announced policies, plans, and trajectories and their
implications for energy demand, emissions, carbon markets, and energy
security
- Global average temperature increases of approximately 3°C by the end of the
century.
As global decarbonisation ambitions increase, the physical impacts of climate change
decrease, but transition risk increases as more aggressive and disruptive policies are
required to achieve the necessary global warming temperature goal.
Based on the work completed (i.e., including historical records, input from different
stakeholders and existing risk mitigation plans), the potential impact of transition-related
risks on our short, medium and long-term assets’ financial performance (i.e., revenues,
costs) and financial position (i.e., asset, liabilities) is expected to be immaterial, hence we
have not analysed transition-related risks under SDS and STEPS scenarios.
Opportunities
We have focused on two opportunities for our medium and long-term scenario analysis:
Opportunity
Scenario Geography
STEPS
1.Changes in
Demand for Low-
Carbon Products
and Services may
lead to increased
demand for products
and services due to
rising adoption of
renewables.
SDS
US
EU
US
EU
Potential Changes in 2030 and 2050
This scenario assumes an extension of renewable tax
credits for solar, and onshore and offshore wind, as
well as 100% carbon-free electricity by 2050 in 20
states. In addition, this scenario assumes that a target
of 30 GW offshore wind capacity by 2030 will be
achieved.
This scenario projects that there will be an increase in
demand for renewable energy, which will be more
prominent between 2030-2050 compared to 2020-
2030.
This scenario assumes that the renewable energy
market in the EU will continue to grow, as country
members move rapidly toward decarbonisation. This
includes a successful completion of the already
announced coal phase-out plans considered in 16
including Spain. This scenario
member states,
assumes a strengthening of national energy
transition plans with a particular focus on offshore
wind targets and increased electrification of the
These
economy,
developments could
renewable
energy investments which could in turn, facilitate the
penetration of renewables in the power generation
mix.
Demand for renewable energy is projected to grow
rapidly, accelerating during the period 2020-2030
compared to 2030-2050.
Demand for renewable energy is projected to grow
rapidly, accelerating during the period 2020-2030
compared to 2030-2050.
further de-risk
particularly
transport.
in
103
Opportunity
Scenario Geography
2.Changes in
Government
Supporting Schemes
may lead to increased
competitiveness and to
a lower risk when
investing in renewable
energy.
STEPS
US
UK
US
SDS
EU
UK
Potential Changes in 2030 and 2050
✓ The US has achieved notable reductions in CO2
emissions over the past decade, led by the
transformation of
the power sector. Policy
dynamics are expected to be supportive for the
development of the renewable energy market. The
opportunity is assessed to be higher in the long run,
as more stringent policies are expected to be
implemented in the US to further reduce its GHG
emissions footprint.
✓ The UK has set ambitious goals to reach its carbon
neutrality goal by 2050, with the electricity sector
shifting due to investment in offshore wind and
solar PV. The government’s support for the
development of renewable energy in order to meet
its climate commitments is expected to intensify
during 2030-2050.
✓ The ambitious 2021 U.S. Long-Term Strategy
“Pathways to Net-Zero Greenhouse Gas Emissions
by 2050” is consistent with limiting global warming
to 1.5°C. The policies that would need to be
implemented by the U.S. to reach this goal
represent an opportunity for Atlantica, with more
initiatives to be expected during the period 2030-
2050.
✓ The EU’s track record
in decarbonising the
electricity system
renewable energy
through
technologies, notably offshore wind, but also solar
photovoltaic, suggests that the EU is on track to
reach its climate targets. This opportunity has a
higher consideration in the long-term than in the
mid-term, taking
into consideration that the
policies aiming to deliver the EU’s Green Deal will
intensify during that period.
✓ This scenario assumes that the U.K. administration
will implement all policies required to reduce
emissions down to a level consistent with the Paris
in the government
Agreement. The changes
supporting schemes in the long-term is expected to
favour the renewable energy market more than in
the mid-term.
Note: We refer to “Our Sustainable Business Model and Strategy” for additional disclosures on our: (i) short-
term opportunities (“growth visibility” section), (ii) growth pipeline of assets under development pipeline and
(iii) competitive strengths to execute our business strategies.
A qualitative rating was assigned, ranging from low to high, which reflects the potential
future changes in (i) demand for low-carbon products, and (ii) government supporting
schemes under STEPS and SDS scenarios.
104
Potential Opportunities by Geography under STEPS and SDS Scenarios in the
Medium (2030) and Long-Term (2050)
From a transition perspective, the combination of market trends, including the growing
demand for clean energy supported by expanding GHG reduction targets, and the
increasingly favourable economics of clean energy, creates many opportunities for our
business.
According to Bloomberg New Energy Finance 2022, renewable energy is expected to
account for the majority of new investments in the power sector in most markets. In
Bloomberg’s economic transition scenario, 22.9 TW of new capacity additions are
expected by 2050. Solar PV, wind and battery storage see the largest deployment with
19.5 TW, collectively capturing 85% of this new power capacity. Total required investment
in energy infrastructure over the next three decades tops $119 trillion. To achieve this,
annual investment will need to more than double from around $2.0 trillion, to $4.1 trillion
In addition, in the U.S. the Inflation Reduction Act was signed into law in 2022 and
includes a bundle of measures to incentivise clean energy investment and storage.
Considering that we are a sustainable infrastructure company with a majority of our
business in renewable energy assets and that we (i) complement our renewable assets
portfolio with storage, efficient natural gas, and transmission infrastructure assets, as
enablers of the transition towards a clean energy mix and (ii) hold water infrastructure
assets, a sector at the core of sustainable development, we believe that our diversification
by business sector and geography (including the U.S. and the European Union), our
know-how and operating expertise in our key markets together with a critical mass of
assets in several geographic areas, as well as our access to capital provided by being a
listed company will assist us in benefiting from the expected transition towards a more
sustainable power generation mix in our markets.
Based on the work completed (i.e., including historical investments, our competitive
strengths, identified growth opportunities and SDS and STEPS scenario analysis),
Atlantica’s short, medium and long-term strategy would be resilient and would be well
positioned to take advantage of transition-related opportunities.
We refer to “Our Sustainable Business Model and Strategy“ section for further details on
our growth plans.
We refer to Atlantica’s 2022 CDP’s Climate Change questionnaire (section C2) for
additional details on transition climate-related opportunities.
105
We refer to the “Reporting under the European Union Taxonomy” section for further
details on clean revenues, Adjusted EBITDA, and capital allocation and capital
expenditures (investments and maintenance capex).
3. Risk Management
Atlantica’s Board of Directors is responsible for supervising climate change risk analysis.
Day-to-day risk management activities are led by the Head of Risk Management35.
Climate change risks and opportunities are also discussed, whenever considered, in the
ESG Committee and in the Geographic Committees. In addition, when we evaluate
potential investments, the Investment Committee evaluates all potential risks related to
the potential investment, including ESG and climate-related risks. Atlantica has
developed a risk analysis methodology based on ISO 31000 and on standard market
practices.
We refer to the “Principal Risks and Uncertainties” section for a detailed description of
our risks, including how our risks are assessed and prioritised (i.e., based on their
likelihood and magnitude of the impact).
We refer to the “Sustainability Governance” section for further details on processes and
committees for identifying, assessing and managing ESG and climate-related risks.
4. Metrics and Targets
This Integrated Annual Report discloses our annual performance across many climate-
change related areas. This information is disclosed in the Environmental Sustainability
section. We refer to sections “Greenhouse Gas Emissions” and “Water Management”.
We refer to Atlantica’s 2022 CDP’s Climate Change questionnaire, sections C2 and C3, for
additional metrics on climate-related risks and opportunities, and on our climate
strategy, respectively.
35 The Head of Risk Management participated in the screening for potential climate-related risks and
opportunities and in the climate-related scenario analysis to analyse Atlantica’s 2030 and 2050 key risk and
opportunity impacts.
106
Greenhouse Gas Emissions
Key facts:
✓ GHG emissions reduction objective approved by SBTi: reduce Scope 1 and 2
GHG emissions per kWh of energy produced by 70% by 2035 from a 2020
base year
✓ New GHG emissions reduction target: reduce Scope 3 GHG emissions per
kWh of energy produced by 70% by 2035 from a 2020 year base
✓ New GHG emissions reduction target: achieve net zero GHG emissions by
2040
✓ Increased CO2e emissions avoided vs. 2021 ▲ 17%
✓ GHG emission rate per unit of energy generated decreased to 168 gCO2e/kWh
(vs. 185 gCO2e/KWh in 2021)
✓ Offset 320 thousand tonnes of Scope 1 GHG emissions (▲ 23% vs. 2021)
Atlantica complies with the (i) 2008 U.K. Climate Change Act on GHG reporting, (ii)
Commission Regulation (EU) No 601/2012, (iii) ISO 14064-1:2018 Greenhouse gases, Part
1, on quantification and reporting of GHG emissions and removals, and (iv) GHG Protocol
on GHG quantification.
We have followed the operational control approach to calculate our 2022, 2021 and 2020
GHG emissions data. Under the operational control approach, a company accounts for
100% of the GHG emissions from operations over which it has control.
As of December 31, 2022 and 2021, approximately 84% of our installed power generation
capacity relates to renewable energy assets and 16% refers to ACT and Monterrey, two
efficient natural gas-fired power generation assets in Mexico, and one district heating
plant in Canada.
Installed Capacity in Generation Assets, MW
2022
2021
2020
Efficient Natural
Gas and Heat
16%
Efficient Natural
Gas and Heat
16%
Efficient
Natural Gas
18%
Renewable
Energy
84%
Renewable
Energy
84%
Renewable
Energy
82%
Note: We have revised 2021 figures to account for our 55 MWt district heating installed capacity plant.
ACT is located in a gas complex belonging to our client. Our plant does not purchase or
pay for the natural gas, it is just one more step in our client’s production process (i.e.,
ACT receives natural gas and water from its client and in exchange provides electricity
and steam). The client bears the cost and also all the responsibility for environmental
obligations. Nevertheless, following reporting best practices we are consolidating all
107
ACT’s environmental indicators, including GHG emissions, water and waste.
ACT has an “efficient cogeneration facility” status granted by the Mexican energy
regulator that is renewed each year. The Mexican regulator categorises facilities that
deliver energy above a defined efficiency threshold as “efficient plants”. This status allows
ACT to benefit from certain favourable conditions regarding interconnection and
transmission.
In 2022 independent third parties have been engaged to verify our reported Scope 1, 2
and 3 GHG emissions under a reasonable level of assurance. In Mexico, our Scope 1 and
2 greenhouse emissions were reviewed by ANCE and our Scope 3 emissions were
reviewed by DNV. In Spain, our Scope 1 stationary greenhouse emissions were reviewed
by AENOR. Our Scope 3 emissions and Scope 1 and 2 emissions for the rest of the assets
were reviewed by DNV. We refer to the ESG Data Review section for additional
information on the third-party entities.
% of Reviewed GHG Emissions in 2022, 2021 and 2020
Scopes 1, 2 and 3 Reviewed Emissions
2022
100%
2021
100%
2020
100%
In 2022 we avoided emissions of approximately 6.9 million tonnes of equivalent CO2,
compared with a 100% fossil fuel-based generation plant, versus approximately 5.9
million tonnes of equivalent CO2 in 2021.
GHG Emissions Avoided by Generating Technologies
In millions tonnes
Scopes 1, 2 and 3 GHG Emissions
Avoided
2022
6.9
2021
5.9
2020
5.4
We base our avoided emissions calculations on the “Greenhouse Gas Equivalencies
Calculator” and the Avoided Emissions and Generation Tool (AVERT) U.S. national
weighted average CO2 marginal emission rate, to convert reductions of kilowatt-hours
into avoided units of CO2 emissions. We consider electric and steam generation in the
calculation.
In 2022, the GHG emissions avoided increased compared to 2021 largely due to the
contribution from the recently acquired renewable assets Coso, Vento II, Italy PV 1, Italy
PV 2, Italy PV 3, Italy PV 4, Chile PV 3 and La Sierpe bringing approximately 812 GWh of
incremental electricity generation.
In 2022 and 2021 Atlantica’s Scopes 1 and 2 GHG emission rate per unit of energy
generated was well-below those of fossil fuel-based generation.
108
2022
2021
2020
1,000
h
W
k
e
2
O
C
g
750
500
250
0
709
168
1,000
h
W
k
e
2
O
C
g
750
500
250
0
709
185
1,000
h
W
k
e
2
O
C
g
750
500
250
0
709
188
Atlantica GHG
Emissions Ratio
Electricity-Related
Emissions Factor
(AVERT)
Atlantica GHG
Emissions Ratio
Electricity-Related
Emissions Factor
(AVERT)
Atlantica GHG
Emissions Ratio
Electricity-Related
Emissions Factor
(AVERT)
We quantified and reported on the GHG emissions figures following the GHG Protocol:
- Scope 1: Direct emissions of GHG from sources that are owned or controlled by the
Company.
- Scope 2: Indirect emissions of GHG from consumption of purchased electricity, heat or
steam.
- Scope 3: Indirect emissions of GHG not included in Scope 2 that occur in the Company’s
value chain, including both upstream and downstream emissions, and the investments in
joint ventures where partners have control.
Our reported emissions include emissions of carbon dioxide (CO2), methane (CH4), and
nitrous oxide (N2O) as CO2 equivalents36.
We calculated Scopes 1 and 2 emissions using the GHG inventories conversion factors
indicated by the organisations listed below:
-
Intergovernmental Panel on Climate Change (“IPCC”).
- United States Environmental Protection Agency (“EPA”).
- 2022 GHG National Inventory from the Ministry of Ecological Transition in Spain.
We calculated Scope 3 emissions using an economic input-output analysis and key
emission factors from CEDA’s 5.037 database. We also used the fuel consumption activity
data and emission factors disclosed at WTT DEFRA 202238 to calculate Scope 3 emissions.
In 2022, approximately 71% of the Scopes 1 2 and 3 GHG emissions generated came
from our efficient natural gas plants in Mexico.
36 Some of our transmission lines use sulfur hexafluoride (SF6). We analysed this KPI following our internal process and
procedures and concluded that the SF6-related GHG emissions are not significant.
37 CEDA stands for “Comprehensive Environmental Data Archive”, a set of databases designed to assist on environmental
system analysis throughout the supply chain.
38 WTT DEFRA 2022 stands for “Department of Environment Food and Rural Affairs”, GHG conversion factors from resource
extraction, production and delivery.
109
GHG Emissions by Technology
2022
2021
2020
29%
Others
71% Efficient
Natural Gas
25%
Others
75% Efficient
Natural Gas
14%
Others
86% Efficient
Natural Gas
Others: Renewable energy, water
desalination assets, and transmission
lines.
Others: Renewable energy, water
desalination assets, and transmission
lines.
Others: Renewable energy, water
desalination assets, and transmission
lines.
Note: 2022 was the first full year we consolidated COSO, our geothermal asset in the U.S.
Following U.K. GHG regulation disclosure, GHG emissions generated in the U.K. were less
than 0.001% in both 2022 and 2021.
In 2022, as part of our commitment to sustainability, we offset 320 thousand tonnes of
Scope 1 CO2 emissions through Certified Emissions Reduction (CERs) credits, compared
to 260 thousand tonnes of Scope 1 CO2 offset emissions in 2021.
GHG Emissions Breakdown by Scope Including Offset GHG Emissions
e
2
O
C
f
o
s
e
n
n
o
t
s
'
0
0
0
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,557
2,570
2,587
2020
2021
2022
1,537
1,535
1,524
821
798
814
199
237
249
Scope 1
Scope 2
Scope 3
Total
Note: Scope 2 market-based figure
The GHG emissions offsetting mechanism reduced our total Scopes 1, 2 and 3 GHG
emissions by 11% and our Scope 1 GHG emissions by 17%, compared to 10% and 17%
respectively, in 2021. We believe this initiative proves our sustainability focus and further
demonstrates Atlantica’s commitment to fighting climate change.
The graph below shows our GHG emissions in 2020, 2021 and 2022 (without offsets):
110
GHG Emissions Breakdown by Scope
2,757
2,830
2,907
2020
2021
2022
1,795
1,844
1,737
821
798
814
199
237
249
e
2
O
C
f
o
s
e
n
n
o
t
s
'
0
0
0
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Scope 1
Scope 2
Scope 3
Total
Note: Scope 2 market-based figure
Scope 1 emissions include CO2 emissions from Coso, our geothermal asset in California,
since we acquired the asset in April 2021. The area where our asset is located releases
GHG emissions to the atmosphere, mostly in the form of CO2 that already exists and is
released progressively in a natural process. With our activity, while we produce electricity,
we are accelerating this process of release of already existing CO2. Following the GHG
protocol, we record these emissions as part of our Scope 1 emissions even though these
emissions were not created by Atlantica.
In 2022, our Scope 1 emissions increased mainly due to Coso, as this asset was fully
consolidated for the entire year 2022 while only for 8 months in 2021 (i.e., we closed the
acquisition of Coso in April 2021). In 2022, production increased at ACT, however
emissions generated by this asset decreased in accordance with the Scope 1 updated
conversion factors in Mexico for these type of plants. In 2021, ACT’s offtaker requested
less electricity and steam, hence decreased natural gas consumption and emissions. A
tolling agreement exists for this asset, according to which we receive water and natural
gas from the client and in return we provide electricity and steam.
In addition, our Scopes 2 and 3 emissions increased slightly due to the increased water
production at our water desalination assets. In 2022 our desalination plants achieved
high levels of availability.
111
Scopes 1 and 2 GHG Emissions Rate per Unit of Energy Generated39
h
W
k
/
e
2
O
C
g
400
350
300
250
200
150
100
50
0
188
185
168
2020
2021
2022
Our Scopes 1 and 2 GHG emissions rate per unit of energy generated decreased from
185 gCO2e/kWh in 2021 to 168 gCO2e/kWh in 2022. This decrease was largely due to
additional production from recently acquired renewable energy assets, partially offset by
higher Scope 1 emissions from Coso, as previously discussed.
Non-Greenhouse Gas Emissions
Atlantica generates (i) nitrogen oxide (NOx), excluding nitrous oxide (N2O) which is
computed within the GHG emission calculation, (ii) sulphur dioxide (SO2), and (iii) carbon
monoxide (CO). Our efficient natural gas plants in Mexico generate most of these
emissions.
NOx, SO2 and CO Emissions as of December 31, 2022, 2021 and 2020
2022
2021
2020
Tonnes
NOx
SO2
CO
NOx
SO2
CO
NOx
SO2
CO
Mexico
546.7
Spain
Algeria
Canada
15.1
6.5
1.6
-
0.6
0.3
-
333.2
493.8
5.9
2.5
9.5
15.4
8.4
1.2
-
0.6
0.4
-
328.1
534.8
6.0
3.3
7.3
15.2
-
-
-
0.6
-
-
385.1
4.6
-
-
Total
569.9
0.9
351.2
518.9
1.0
344.7
550.0
0.6
389.7
Note: We have revised 2021 figures to account for our controlling water desalination asset investments that produce non-
GHG emissions.
NOx and CO emissions increased mainly due to higher production at ACT, which resulted
in higher emissions.
Our assets do not generate any lead (Pb) or mercury (Hg), and limited amounts of
particulate matter (PM), volatile organic compounds (VOC) and hazardous air pollutants
(HAP).
39 Scopes 1 and 2 GHG emissions rate per unit of energy is an accepted SBTi ratio for the utility sector, hence we believe
it is a generally accepted industry-specific GHG efficiency ratio.
112
Following our long-term commitment to sustainability, we have implemented a new non-
GHG emissions reduction target. We target to reduce our non-GHG emissions40 per kWh
of energy generated by 50% by 2035 from a 2020-year base.
Energy Management
Our renewable energy, efficient natural gas and water assets consume energy from
different sources, including purchased fuel and electricity and, self-generated energy. In
2022, Atlantica consumed 8,371 GWh of energy compared to 8,376 GWh of energy in
2021.
In 2022 and 2021 approximately 99% of fuel consumption came from ACT, our efficient
natural gas asset. In 2022, ACT had higher production, resulting in higher fuel
consumption. This is the main reason for the increase in Atlantica’s energy consumption
in 2022 compared to 2021.
Energy Consumption and Generation in 2022, 2021 and 2020
In GWh
2022
2021
2020
Consumption of fuel
Consumption of Purchased Electricity for own use
Consumption of Self-Generated Renewable Energy
Total Energy Consumption
Electricity generation
Thermal energy generated
Total Net Energy Generated1
Total net energy consumption within the organisation2
1 Includes 49% of Vento II wind portfolio production since its acquisition. Does not include curtailment in
8,545
448
294
9,287
5,815
4,463
10,278
(991)
7,328
569
474
8,371
7,818
4,616
12,434
(4,063)
7,543
537
296
8,376
6,889
4,092
10,981
(2,605)
wind assets for which we receive compensation.
2 If negative, energy generation is higher than energy consumption.
Following U.K. energy consumption regulation disclosure, energy consumption in the
U.K. was less than 0.001% in both 2022 and 2021.
Reporting our activities under the European Union
Taxonomy
The European Union (EU) Taxonomy defines economic activities that can be considered
environmentally sustainable. It is aimed at investors, companies, and financial
institutions, covers a wide range of industries and is intended to protect against
greenwashing, help companies plan the transition to a decarbonised economic model,
and help shift investments where they are most needed. Reporting is not mandatory for
Atlantica, but we have decided to voluntary provide revenue, Adjusted EBITDA and capex
information from our business activities.
The table below summarises the percentage of our activities that are considered Eligible
and Aligned to the European Union Taxonomy:
40 Non-GHG emissions including nitrogen oxide (NOx), sulfur dioxide (SO2) and carbon monoxide (CO).
113
Eligible Activities1
Aligned Activities1
Revenue
2022
Adjusted EBITDA
Capex
Revenue
20213
Adjusted EBITDA
Capex
Revenue
2020
Adjusted EBITDA
Capex
83%
85%
98%
85%
85%
60%4
89%
87%
97%5
78%
81%
97%
81%
80%
60%
85%
83%
97%
Note: On January 1, 2023, the “Taxonomy Complementary Climate Delegated Act” entered into force to include among
others, certain gas power activities as part of the EU’s transition towards climate neutrality. The table above does not
consider our efficient natural gas assets as taxonomy eligible nor aligned as we are currently analysing their compliance
with the previously mentioned “Taxonomy Complementary Climate Delegated Act.”
1 We have determined that (i) our solar and wind renewable energy plants, transmission infrastructure and water assets
are taxonomy eligible activities, and (ii) wind and solar renewable energy plants, and transmission infrastructure are
taxonomy aligned activities. We are currently analysing if our (iii) geothermal asset is a taxonomy eligible and aligned
activity, and if (iv) water assets are taxonomy aligned.
2 Includes 2022 third-party investments, as well as other capex investments in the existing portfolio.
3 We have revised 2021 figures following the updated 2022 classification.
4 2021 includes investments in Coso, Vento II, Chile PV2, La Sierpe, Italy PV 1, 2 and 3, Rioglass, and other capex
investments in existing portfolio.
5 Includes 2020 investments at Solana and Chile PV1, and other capex investments in existing portfolio.
Water Management
Key facts:
✓ 4th consecutive year withdrawing less than 60% of water available under
existing permits
✓ New water consumption target: reduce our water consumption per kWh of
energy generated by 50% by 2035 from a 2020 base year
Atlantica is committed to using water efficiently in its operations. This covers two main
types of water use:
1. Power generation in the assets that use cycled water in the turbine circuit and in
refrigeration processes.
2. Generation of drinking water for local communities and industries through the
desalination of sea water.
We are also committed to: (i) calculating and monitoring our water usage and promoting
rational and sustainable use of water in compliance with our Environmental Policy, (ii)
limiting water consumption as much as possible and operating our assets using an
amount of water well below legal limits, and (iii) continuing to improve our water
management beyond compliance. We aim to reduce the water consumption of our plants
over time.
114
We generally have water permits at our assets that limit total water withdrawals. We
operate our assets well below these limits.
Risk Assessment
Atlantica’s risk assessment includes management of water risks. These water-associated
risks could be potentially material to many of our generation and water desalination
assets. We refer to the TCFD section for additional details on water-related risks.
Our local asset management teams systematically track and monitor water availability as
a key KPI. Our internal operations team performs annual audits of our assets aimed at
reviewing compliance with our best practices, identifying and mitigating risks, and
promoting constant improvement. These audits cover a broad range of areas, including
water management.
Regarding regulatory changes, we have local legal teams in each geography who work
generally with the support of local external lawyers. Our local internal and external
lawyers are in close contact with the regulation and potential regulation changes in each
geography. These, together with the asset managers, monitor any potential regulatory
change.
We participate in integrated watershed management initiatives in certain key asset
locations. For example, in Spain, we (i) participate in the Drainage Commission meetings
and in the Watershed Governing Board, (ii) have regular or as-needed meetings with the
Hydrographic Confederations to address specific water matters. In addition, we test water
samples at reservoirs to verify the quality of the water discharged and comply with total
water withdrawal requirements permitted under the existing regulatory limits.
Water Used for / in Power Generation
Renewable Energy Assets
Some of our renewable assets use water in their power generation process. These plants
use water for cooling condensers during power generation. We withdraw fresh water
primarily from rivers and aquifers. The Company holds permits to withdraw water from
these sources and adheres to regulations on water quality. The difference between water
withdrawn from and returned to its source is our water consumption which occurs
because of evaporation.
We measure the water we withdraw and return using the installed water metres on the
plants’ pumping equipment. The reported volumes represent the total readings
measured by the water metres at all our assets without adjusting for our interest in the
assets.
The water metres are sealed and are normally subject to audit by the inspector
representing the local water authorities. We comply with the requirements and
regulations of the applicable local regulatory authorities in the areas in which we operate.
We regularly report the results of our water statistics to the local water agencies.
We have implemented initiatives to reduce our water consumption. For example, we have
installed an air-dry cooling system, instead of cooling towers, to refrigerate the
condensers at one of our plants.
115
Efficient Natural Gas Plant
The ACT plant is an efficient natural gas cogeneration facility with a rated capacity of
approximately 300 MW and between 550 and 800 metric tonnes per hour of steam. ACT
produces electricity and steam.
The water necessary to operate the plant is withdrawn and supplied by our client. The
water received is transformed to high pressure steam through heat recovery steam
generators and delivered back to the client.
The following charts set out water management KPIs for power generation assets for
2020, 2021 and 2022:
Water Withdrawal Breakdown by Sources of
Water
Water Discharges
11.8
11.9
10.5
5.5
5.5
5.8
14
12
10
8
6
4
2
0
l
a
w
a
r
d
h
t
i
w
r
e
t
a
w
3
m
f
o
s
n
o
i
l
l
i
m
4
3
2
1
0
s
e
g
r
a
h
c
s
i
d
r
e
t
a
w
3
m
f
o
s
n
o
i
l
l
i
m
2.3
2.2
2.1
2020
2021
2022
Ground Water
Surface Water
2020
2021
2022
Water Withdrawal and Discharges per MWh
Water Withdrawal vs. % of Water Available
Under Water Permits
1.58
1.56
1.42
h
W
M
r
e
p
3
m
2
2
1
1
0
0.21
0.21
0.17
l
a
w
a
r
d
h
t
i
w
r
e
t
a
w
3
m
f
o
s
n
o
i
l
l
i
m
20
16
12
8
4
0
51%
43%
44%
60%
50%
40%
16.0
17.3
17.7
30%
20%
10%
Withdrawals
Discharges
2020
2021
2022
2020
2021
2022
Percentage of available water not used
Source: In-house. We have revised 2021 water withdrawal breakdown by sources of water following the
116
updated 2022 classification (i.e., we have reclassified 0.1 million of m3 water withdrawal to ground water).
Water Withdrawal and Discharges in millions of m3
Withdrawal
2022
2021
2020
Discharges
Renewabl
e Energy
Assets
2.1
2.3
2.2
12.1
12.4
10.7
0
2
4
8
6
millions of m3
10
12
14
In 2022, water withdrawal decreased mainly due to the lower production at our solar
assets in Spain.
Efficient
Natural
Gas Plant
(ACT)
Withdrawal
2022
2021
2020
Discharges
0.0
0.0
0.0
0
5.6
4.9
5.3
2
4
millions of m3
6
At ACT, water received is transformed to high pressure steam through heat recovery
steam generators and delivered back to our client. In 2022, water withdrawn was 0.7
million cubic metres higher because of higher production per the client request, which
resulted in higher water withdrawal.
In 2022 and 2021, we had nine power generation assets located in extremely high or high
baseline water stress areas as classified by the World Resources Institute’s (WRI)
Aqueduct Water Risk Atlas Tool.
117
Extremely High or High Baseline Water Stress Areas of our Generating Assets
Generating Asset
Technology
Geography
Helioenergy
Helios
PS
Solacor
Solnova
Solaben
Mojave
Solana
Coso
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Geothermal
EMEA
EMEA
EMEA
EMEA
EMEA
EMEA
North America
North America
North America
Baseline Water Stress
Areas
Extremely High
Extremely High
Extremely High
Extremely High
Extremely High
High
High
High
High
Note: we have excluded solar PV assets as these consume minimum amounts of water.
The following table breaks down total water withdrawal by source and water stress areas
for our power generation assets.
Withdrawal by Water Source in 2022, 2021 and 2020
2022
2021
2020
In millions of m3
All areas
Surface water
Fresh water
Other water
Groundwater
Fresh water
Other water
Third-party water2
Fresh water
Other water
Produced Water
Fresh water
Other water
Total power
generation
6.3
5.1
1.2
5.8
0.2
5.6
5.6
5.6
-
-
-
-
Water
stress
areas1
6.2
5.0
1.2
5.8
0.2
5.6
-
-
-
-
-
-
All areas
6.9
5.7
1.2
5.5
-
5.5
4.9
4.9
-
-
-
-
Water
stress
areas
6.8
5.6
1.2
5.5
-
5.5
-
-
-
-
-
-
All areas
5.1
4.0
1.1
5.6
-
5.6
5.3
5.3
-
-
-
-
Water
stress
areas
5.0
3.9
1.1
5.6
-
5.6
-
-
-
-
-
-
17.7
12.0
17.3
12.3
16.0
10.6
1 Water stress areas classification according to 2022 Aqueduct Water Risk Atlas.
2 Third-party water corresponds to surface water withdrawn and supplied by our client.
All water withdrawals intended for use in power generation are generally strictly
regulated by government authorities, which issue the permits and determine the
maximum permitted withdrawal volumes, to ensure that no significant negative effects
occur.
After use in cooling and other auxiliary processes, approximately 19% of the water
withdrawn at solar facilities is returned to the environment. At ACT, the water we receive
from our offtaker is transformed into high pressure steam through heat recovery steam
generators and delivered back to the client.
The following table breaks down total water discharge by source and water stress areas
for our power generation assets.
118
Discharge by Water Source in 2022, 2021 and 2020
2022
2021
2020
In millions of m3
All areas
Water
stress
areas1
1.8
1.4
0.4
0.2
-
0.2
-
-
-
-
-
-
All areas
2.2
1.7
0.5
0.2
-
0.2
-
-
-
-
-
-
Water
stress
areas
2.1
1.6
0.5
0.2
-
0.2
-
-
-
-
-
-
All areas
2.0
1.6
0.4
0.2
-
0.2
-
-
-
-
-
-
Water
stress
areas
1.9
1.5
0.4
0.2
-
0.2
-
-
-
-
-
-
2.1
2.0
2.3
2.3
2.2
2.1
1 Water stress areas classification according to 2022 Aqueduct Water Risk Atlas.
The water discharged to the environment is reused, without affecting the natural
environment.
The following table details total water consumption at generating assets, considered as
the difference between total water withdrawal and water discharged.
Consumption by Water Source in 2022, 2021 and 2020
2022
2021
2020
In millions of m3
All areas
Surface water
Fresh water
Other water
Groundwater
Fresh water
Other water
Third-party water
Fresh water
Other water
Produced Water
Fresh water
Other water
Total power
generation
Surface water
Fresh water
Other water
Groundwater
Fresh water
Other water
Third-party water
Fresh water
Other water
Produced water
Fresh water
Other water
Total power
generation
1.9
1.5
0.4
0.2
-
0.2
-
-
-
-
-
-
4.4
3.6
0.8
5.6
0.2
5.4
5.6
5.5
-
-
-
-
Water
stress
areas1
4.4
3.6
0.8
5.6
0.2
5.4
-
-
-
-
-
-
All areas
4.7
4.1
0.7
5.4
0.1
5.3
4.9
-
-
-
-
-
Water
stress
areas
4.7
4.0
0.7
5.4
0.1
5.3
-
-
-
-
-
-
All areas
3.1
2.4
0.7
5.4
-
5.4
5.3
5.3
-
-
-
-
Water
stress
areas
3.1
2.4
0.7
5.4
-
5.4
-
-
-
-
-
-
15.6
10.0
15.0
10.1
13.8
8.5
1 Water stress areas classification according to 2022 Aqueduct Water Risk Atlas.
Water used in Water Desalination
Some parts of the world are suffering from ongoing drought which, combined with a
water supply that is unfit for human consumption, can foster disease and death. Water
scarcity also affects food production. The desalination of sea water provides a climate-
119
independent source of drinking water.
We withdraw sea water for desalination as specified in the agreements for our
investments in three desalination plants.
In 2022, we withdrew 280.1 million cubic metres of sea water, from which we removed
salt and minerals during the desalination process at our water treatment facilities to
prepare it for human consumption. The difference between water withdrawn from and
returned to the sea is the desalinated potable water delivered to the water utility, as
specified by our take-or-pay agreements for the consumption needs of approximately 3
million people. In 2022, we produced 123.3 million cubic metres of desalinated water and
returned 156.8 million cubic metres (56%) back to the sea.
We invest in three water assets that are located in extremely high or high baseline water
stress areas as classified by the WRI Aqueduct Water Risk Atlas Tool.
Extremely High or High Baseline Water Stress Areas of our Water Desalination
Assets
Water Desalination
Asset
Honaine
Tenes
Skikda
Technology
Geography
Water desalination
Water desalination
Water desalination
EMEA
EMEA
EMEA
Baseline Water Stress
Areas
Extremely High
Extremely high
Medium-High
Water Withdrawal, Desalinated Potable Water Production and Discharges in 2022,
2021 and 2020
In millions of cubic metres
Water (seawater) withdrawal
Desalinated potable water production
Water discharges (returned to the sea)
2022
280.1
123.3
156.8
2021
284.7
115.7
169.0
2020
211.0
92.3
118.7
Note: We have revised 2020 and 2021 figures following the updated 2022 classification (i.e., account for
water at Honaine, a non-controlling investment, based on our percentage of economic interest in the
project).
100% of water withdrawn in 2022, 2021 and 2020 is seawater that does not affect water
stress areas.
120
Waste Management
The Company’s assets produce two main types of waste, hazardous and non-hazardous.
Our processes generate hazardous waste through the use of chemical products. Waste
that does not contain substances that are potentially harmful to human health or the
environment is defined as non-hazardous waste.
Atlantica is committed to reducing waste and has a comprehensive waste management
system with controls in place. In 2022 we continued to implement new initiatives that
improved our leak prevention capabilities. We also provided enhanced employee waste-
related training, updated our leaks procedure with best practices and insights gained,
and identified new recycling and reuse initiatives.
In the U.S., where some of our largest solar assets are located, we have an environmental
management plan to minimise our waste impact based on these four principles: (1)
Reduce, (2) Reuse, (3) Recycle, and (4) Replace. For example, at Mojave, one of our solar
U.S. assets, the company provided re-usable utensils to the employees to encourage
them to use fewer plastic utensils during 2022. In 2021, the company had previously
improved the water treatment plant process and its recycling programme (sorting metals
between steel and stainless steel).
Tonnes of Hazardous and Non-Hazardous Waste in 2020, 2021 and 2022
25,000
20,000
15,000
10,000
5,000
0
e
t
s
a
W
f
o
s
e
n
n
o
T
23,142
22,238
20,532
2,679
2,664
1,908
Non-hazardous
Hazardous
2020
2021
2022
121
Non-Hazardous Waste
Non-hazardous waste corresponds mainly to the wastewater41 from treatment plants
and the reuse of wastewater before discharge. The increase in non-hazardous waste in
2022 is mainly driven by the inclusion of Rioglass in our waste indicators. Rioglass is a
supplier of spare parts and services to the solar industry that we acquired in 2021.
Hazardous Waste
Hazardous waste is reused, recycled or disposed.
Hazardous Waste Reused, Recycled or Disposed in 2022, 2021 and 2020
100%
80%
60%
40%
20%
0%
49%
51%
2020
Hazardous Waste
70%
30%
2021
39%
61%
2022
Diverted from Disposal
Directed to Disposal
Note: Diverted from disposal refers to reused or recycled waste, and directed to disposal refers to waste
disposed.
Non-Hazardous Waste
100%
80%
60%
40%
20%
0%
39%
61%
2020
28%
72%
2021
36%
64%
2022
Diverted from Disposal
Directed to Disposal
Environmental Compliance
We promote the highest environmental standards and a culture of continuous
improvement to minimise our environmental risks. Among others, we: (i) have certified
our environmental management system (EMS) under ISO 14001, (ii) regularly monitor
environmental KPIs, (iii) perform annual environmental audits on our assets to ensure
compliance with our best practices, identifying and mitigating risks, and sharing lessons
41 Wastewater treatment is the process of improving the quality of wastewater and converting it into an effluent that can
be either returned to the nature or incorporated to the water cycle with minimum environmental issues or that can be
reused.
122
learnt to promote continuous improvement, (iv) have an ERP-software that enables us to
have strict control over our assets, (v) have in-house legal and compliance teams
supervising compliance with contractual and existing and/or new regulation
requirements, and (vi) provide regular environmental training to our employees and
contractors working at our plants.
In 2022, we had one instance of non-compliance that was resolved with an immaterial
sanction ($0.8 thousand).
In 2021, we had one instance of non-compliance that was resolved without sanction, two
that were resolved with an immaterial sanction ($7 thousand). In 2020, we received an
approximately $64 thousand sanction related to an environmental accident that occurred
in 2019 at one of our assets in Spain, and an approximately $800 sanction related to a
missing semi-annual report in North America. We undertook all necessary measures to
minimise their impact, informed public authorities, performed a root-cause analysis,
implemented corrective actions to remediate contaminated soils, thus reducing the
impact and, internally shared the insights gained.
Number of Accidents by
Category
Volume of Spills
Fines and Penalties
Severity
Moderate
High
2022
2021
2020
Litres
2022
2021
2020
USD ‘000s
2022
2021
2020
8
0
9
11
7
2
Amount
of spills
4,146
2,829
31,559
Fines and
penalties2
1
7
65
1 In 2021, the high severity accident corresponds to Monterrey, an associate where we do not have control.
2 The fines and penalties paid vary from year-to-year depending on the nature of the violation and the timing of its
resolution.
The volume of spills increased in 2022 compared to 2021 mainly due to one heat transfer
fluid spill and one chemical spill of approximately 1,000 litres each at two solar plants in
Spain. These spills are included in waste indicators in the year when the fluid is removed.
We consider all environmental fines and penalties over the period 2020-2022 to be non-
material.
123
Biodiversity
Key facts:
✓ Proactive approach to protect flora and fauna close to our assets
The protection of the ecosystem is a critical issue for global sustainability; we intend to
promote its conservation as an essential means for environmental, economic and social
progress.
We are aware that our assets can cause interactions with various ecosystems, landscapes
and species. The Company therefore commits to promoting biodiversity, allowing balan-
ced co-existence, and conserving, protecting and promoting the natural ecosystem.
Our commitment includes having “no net loss” or impacts on biodiversity conservation
in the areas where we operate, minimizing deforestation in all our operational activities
and selecting suppliers taking into consideration the biodiversity impact of their products
or services. We seek to avoid operational activities in close proximity to World Heritage
areas and IUCN Category I-IV protected areas.
We also have various tools to help manage our biodiversity matters:
- Strict control of GHG and non-GHG emissions, water, and hazardous and non-
hazardous waste. We expect our measures to reduce emissions, water consumption
and waste, to minimise biodiversity impacts.
- Quality and environmental management systems certified under ISO 9001 and 14001,
respectively.
- Existing consultation guidelines with local communities that enable us to identify and
manage local stakeholders and communities of interest, including potential
biodiversity matters.
- Asset managers and the compliance, internal audit and legal corporate teams who
regularly supervise asset contractual obligations, including biodiversity covenants.
- Geographic Committees are held once a month between Geographic VPs and heads
of several corporate functions to update and discuss key asset matters.
Some of our solar plants are close to protected areas, while two of our transmission lines
cross some areas that are also considered protected.
124
Asset
Location
Technology
Size
Helios 1 & 2
Solnovas 1 &
3 & 4 and
Solaben 2 &
3, 1 & 6
ATN
Palmucho
Near a protected area:
“Tablas de Daimiel”
Solar
Generation
Near zones of special
protection for birds
Solar
Generation
2x50M
W
3x50M
W
4x50M
W
Type of
Biodiversity
Listing of
Protecting status
Wetland National Park
Birds
Zones of Special
Protection of birds
as per Spanish
Government
Our transmission lines
cross three zones:
(1) National Reserve
Junin,
(2) National Park
Huascaran,
(3) Hunt reserve
Sunchubamba
Our transmission line
crosses the National
Reserve Altos de
Pemehue
Transmission
Line
379
miles in
total
Terrestrial
(1) National Reserve
(2) National Park
(3) Hunt reserve
Transmission
Line
2 miles Terrestrial National Reserve
We apply the mitigation hierarchy42 in our environmental impact assessments to achieve
biodiversity “no net loss”. In our sector, environmental impact assessments are typically
prepared in the design and construction stages, where opportunities for impact
avoidance are far greater as siting and design may be influenced. During 2022 most of
our assets were in operation and we had three solar projects under construction. In these
projects, for example, alternatives were analysed to avoid placing new infrastructure in
protected areas or areas with a high biodiversity value. During the construction process,
we comply with permitting, law and regulation in-place, and seek to minimise the
environmental impacts to be as low as possible, as well as restoring affected areas.
In addition, typical potential biodiversity impacts caused by solar assets under
development or construction include (i) habitat loss through clearance or displacement,
(ii) barrier effects, (iii) pollution, (iv) habitat degradation, and (v) introduction of invasive
alien species.
Typical potential biodiversity impacts caused by operational renewable energy assets
include: (1) solar assets (i) barrier effects (assets occupying large landscapes and/or
fences acting as a barrier), (ii) pollution (dust, light, noise and vibration, solid/liquid
waste), (iii) habitat degradation due to changes in hydrology and water availability and
quality, (iv) wildlife mortality due to attraction to evaporation ponds, (v) bird collisions
(with solar panels), and bird mortality, (2) wind assets (i) barrier effects (assets occupying
42 The mitigation hierarchy is comprised of a sequence of four steps: (a) Avoidance, (b) Minimisation, (c) Restoration, and
(d) Offsets.
a) Avoidance: Measures taken to anticipate and prevent the creation of impacts. For avoidance to be effective,
biodiversity risks need to be identified early in the project planning stages. It is the most important step of the
mitigation hierarchy.
b) Minimisation: Measures taken to reduce the duration, intensity and/or extent of impacts that cannot be completely
avoided, as far as is practically feasible. Typically undertaken either in the construction or operational stages.
c) Restoration: Measures aimed at repairing specific biodiversity features or ecosystem services damaged by project
impacts that could not be completely avoided or minimised. Typically undertaken during construction or
decommissioning.
d) Offset: Measures taken to compensate for significant adverse residual impacts.
125
large landscapes and/or fences acting as a barrier), (ii) pollution (dust, light, noise and
vibration, solid/liquid waste), and (iii) bird and bat collisions with turbine blades, (3)
geothermal assets (i) noise and sight pollution, (ii) gas emissions.
We have implemented controls aligned with the mitigation hierarchy approach to
minimise our potential biodiversity impacts.
Project
Phase
Mitigation
Hierarchy
Construction
and
operational
phase
Minimisation
Controls
- Abatement controls: steps taken to reduce levels of pollutants (e.g. light,
noise, gases or liquids) that could have negative biodiversity impacts.
- Operational controls: measures taken to manage and regulate the actions
of people, including project employees and contractors.
- Physical controls: adapting the physical design of project infrastructure
to reduce potential impacts.
Some specific examples during the operational phase include:
Technology
Control
Measure
Receptor
Description
Solar
Physical
Modify security
fencing to
minimise barrier
effects
Small- and
medium-
sized
animals
Solar
Abatement
Reduce water
use
General
Modifications to fencing to facilitate
animal movement
Employ dry instead of wet cooling and
cleaning technologies at some solar
assets, such as air cooling (dry cooling
and cleaning)
Solar
Physical
Wind
Physical
Prevent
drowning or
poisoning of
wildlife
Reduce collision
risk
All wildlife
Fencing to keep wildlife away from
ponds
Birds
Shutdown wind turbines on demand
At Atlantica, we also consider reforestation as a measure to improve flora and fauna in
those geographies where we operate.
Our summarised biodiversity strategy by geography is:
Protection of Fauna
-
Strategic Areas
Protection and
Management of
Vegetation
-
Protection of Impacts
to Water
-
-
-
-
U.S.
Colombia
Uruguay
Spain
Italy
Argelia
2022 key biodiversity initiatives by technology and geography were:
126
Solar Assets
United States
At Mojave, we continue to monitor and survey the protected Mojave desert tortoise,
gopherus agassizii, golden eagle, burrowing owl, american badger, desert fox and
Mojave ground squirrel. For example, the plant has a desert tortoise exclusion fence
clearance survey and translocation plan. These conditions were established by the
California Energy Commission (CEC) for the approval of the Mojave solar plant. In 2022,
we invested $34 thousand to repair one of the tortoise guards on Harper Lake Road to
assure safety of the tortoises.
We have also set up measures to protect birds and animals from potential damage
caused by our evaporation ponds, if they drank evaporated pond water, which is high in
salt minerals. We hired third party biologists and environmental specialists to
continuously study the behaviour of local and migrating birds and animals to protect
them by actively deterring them from the evaporation ponds. We use various avian
deterrents approved by the CEC. Among these deterrents are the emissions of noises
resembling their predators, water spraying, and “eagle eyes”. We also installed two nets
at the cooling tower at our facility in Mojave. These nets follow recommendations of and
have been approved by the California Energy Commission (CEC) and are part of our
commitment to avoid bird fatalities at the plant. Our specialists continue to identify ways
to protect birds and animals, and always do so in coordination with the CEC. According
to our approved Bird Monitoring Study that complies with condition BIO-17, we
continuously monitor bird life at and around the Mojave project, survey collected dead
birds and transfer bird carcasses found to local authorities within the surrounding area
of the plant for further autopsies to determine cause of death. We have not had any
violations or non-compliance in this respect in the past three years.
Currently one evaporation pond is netted and the three remaining ponds are scheduled
to be completed in 2023. In addition, we continue to support the “Wetland and Wildlife
Care Centre” programme, a non-profit organisation that takes care of the rehabilitation
and release of native wildlife. We consider this sponsorship very important as they treat
any injured wildlife we might bring to them, which in some cases are species considered
to be endangered.
At our Solana plant in Arizona, we continue to control the flora and fauna of the natural
wash area located north of our solar plant. We annually send approximately 477-acre
feet of water to the Bull Durham Wash as a minimisation action after the nearby farmland
changed to industrial use. By doing so, many birds are now stopping in this wash as
opposed to our evaporation ponds while minimizing the impact of industrial farmland
located close-by.
Bull Durham Wash
Evaporation pond net
Tortoise guard on Harper Lake Road
127
At our Coso geothermal facility, we perform quadrennial studies on the endangered
Mojave Ground Squirrel. This includes trapping and tagging the local population for
monitoring purposes, and production of reports to document findings. Also, although
the Coso area has not been designated as a desert tortoise habitat, all personnel are
trained to address tortoise encounters in the unlikely event they occur. Additionally,
studies are performed to monitor any potential impact due to the cooling tower drift on
the vegetation or wildlife near the facility.
Colombia
In 2022, prior to the start of the construction of La Tolua and Tierra Linda solar PV
projects, a fauna and flora relocation programme was carried out following all legal
requirements. The programme aimed to relocate the animals and plants to areas with
conditions identical to those found in their natural habitats.
Spain
In 2022, we continued to deliver on our reforestation programme in Spain. The main
initiatives include:
- We planted 460 holm oaks close to one of our solar plants amounting to an
investment of $40 thousand.
- Reforestation of approximately 45 hectares with 8,800 holm oaks, 4,500 quercus
coccifera and small plants. Total investment amounted to $110 thousand.
New reforestation area
Planting of holm oaks
In addition, we continued to carry out maintenance actions on the more than 220
hectares (540 acres) already planted.
Furthermore, we continued to collaborate with local administrations in Spain to protect
species, including vultures (aegypius monachus), eagles (aquila adalberti) and other
steppe birds settled close to our plants. We donated approximately $80 thousand to
provide food and participated in the census and monitoring of these birds aimed at
locating the birds’ nesting areas on private agricultural land.
128
Monitoring of bird populations
Vultures feeding area
Planting of oleaginous plants
Eagle’s nest
Italy
None of our solar PV assets in Italy are close to protected areas. We have put voluntary
biodiversity initiatives in-place including: (i) vegetation control activities without using
pesticides, and (ii) security fences that facilitate animal movement, thus minimizing
barrier effects.
Vegetation close to our assets under control
Wind Assets
Uruguay
We constantly monitor and report on the impact of spinning blades on local species of
birds at our three wind farms in Uruguay. The scientific monitoring studies are performed
by independent biodiversity consultants contracted by our projects. Studies cover a
census of birds to analyse bird mortality and monitor the protected birds, including the
black-chested buzzard-eagle (Geranoaetus melanoleucus), the loica pampeana, the
black-and-white monjita (xolmis dominicanus), and the straight-billed reedhaunter
(limnoctites rectirostris).
At Cadonal and Palmatir, we have implemented an enhanced monitoring system to
manage and mitigate the mortality of endangered species. In particular, we have an alarm
129
protocol to shutdown selective turbines on demand to minimise the black-chested
buzzard-eagle’s risk of collision with spinning blades.
Summarised Protocol
Alarm level
Black-chested buzzard-eagle at risk
Procedure
Red
Orange
Yellow
Green
flying <300
Black-chested buzzard-eagle
metres away from wind turbines.
Black-chested buzzard-eagle flying between
300 and 500 metres away from wind turbines.
Black-chested buzzard-eagle
flying >500
metres away from wind turbines and within
the wind farm perimeter.
Black-chested buzzard-eagle is no longer at
risk. It is >500 metres away from wind turbines
and outside the wind farm perimeter.
Immediate turbine(s) shutdown.
Prepare turbine(s) shutdown.
On-hold.
No further action required.
Note 1: Different alarm levels can be triggered consecutively.
Note 2: Employees receive specific training to correctly identify black-chested buzzard-eagle vs. other similar
birds.
In 2022, 2021 and 2020, we did not record any black-chested buzzard-eagle mortal event
caused by collisions with wind turbines.
On a yearly basis, Atlantica develops its biodiversity plan in accordance with the
Environmental Operation Management Plan (PGAO). The plan is approved by the
National Environmental Governmental Agency (DINAMA).
Moorish Eagle
Moorish Eagle and Pampas Loica
Water Desalination Assets
In May 2022, along with local associations and authorities, we organised the clean-up of
two beaches close to our desalination plants. Many volunteers participated in the
initiative, including families with children of different ages, and we took advantage of the
event to raise awareness about the importance of clean coasts for the conservation of
marine species.
Beach clean-up
130
Social Sustainability
Human Rights
We are committed to conducting our business in a manner that respects the rights and
dignity of our employees and those linked to our activities, including our supply chain.
We respect internationally recognised human rights, as set out in the International Bill of
Human Rights, the
International Labour Organisation´s (ILO) Declaration Core
Conventions and the OECD Due Diligence Guidance for Multinational Enterprises.
Labour practices at Atlantica, including our employees and directors, are governed by
our Human Rights Policy. This Policy aims to ensure respect for human rights in all our
day-to-day activities – regardless of local practices -, implementing the commitments
defined by our policies and international reference standards, directives and conventions,
and establishing the procedures to ensure compliance with them.
We also have a Code of Conduct, Supplier Code of Conduct, Corporate Governance
Guidelines and an Anti-Bribery and Anti-Corruption Policy to identify and mitigate any
type of violations of human rights that are linked to our operations, products or services
and by our business relationships. These documents include specific sections on integrity,
dignity, health and safety and labour practices (including those of our suppliers), equal
opportunities, non-discrimination, environmental protection (including environmental
accidents that could affect our employees or subcontractors’ employees and/or local
communities), cybersecurity and data protection.
In addition, we have a Diversity and Inclusion Policy to formalise our zero tolerance to
discrimination against anyone based on any personal characteristic, such as ethnic
background, culture, religion, age, disability, gender, marital status, sexual orientation,
union membership, political affiliation, health, disability, pregnancy, or any other
characteristic protected by law. We provide equal opportunities to all employees,
including supportive and understanding workplace environments where employees feel
welcomed, respected and listened to, and where they can realise their full potential
regardless of their race, colour, sex, age, religion, ethnicity, nationality, or disability. We
seek to provide a climate of confidence where employees can raise issues. Any behaviour
which is not acceptable must be reported through the Ethical Mailbox that Atlantica has
established to report any kind of abuse.
Furthermore, we acknowledge the rights of workers to collectively bargain the terms and
conditions of work as defined by international reference standards, directives and
conventions. Collective bargaining refers to all negotiations which take place between
the employer on the one hand, and one or more workers’ organisations (trade unions),
on the other, for determining working conditions and terms of employment or for
regulating relations between employers and workers. Additional information on
collective bargaining is disclosed in the People and Culture section.
Atlantica’s management has implemented different measures to identify, assess and
mitigate potential human rights-related risks. These include:
131
- An Internal Compliance team that reviews human rights-related matters as part of
their annual due diligence activities. The compliance team is responsible for
monitoring that human rights are internally respected, providing human rights related
training to our employees, and assessing the supply chain across the jurisdictions in
which we operate to identify any potential breach. Additional information on
compliance training is disclosed in the Business Ethics section. Information on our
supply chain is disclosed in the Anti Modern Slavery & Human Trafficking Statement
and in the Supply Chain Management Section, both part of the Strategic Report.
- A Code of Conduct that sets forth on working with third parties who operate under
principles that are similar to those set out in the Code of Conduct. Additional
information on our Code of Conduct is disclosed in the Business Ethics section.
- A Supplier Code of Conduct to which our suppliers must adhere to and which includes
human rights and labour standard principles. Additional information on our Supplier
Code of Conduct is disclosed in the Supply Chain Management section.
Internal and external due diligence processes for new suppliers. Additional
information is disclosed in the Supply Chain Management section.
-
- Regular internal and external audits to review compliance with data protection rules
and regulations. Additional information is disclosed in the Cybersecurity and Data
Privacy section.
- A Corporate Operations team that audits health and safety procedures at the asset
level, as well as operational and environmental performance to implement insights
gained and best practices. Additional information is provided on the Health and Safety
Asset Management sections.
- An Investment Committee that reviews, as part of its due diligence when acquiring
new assets, that the asset and/or the potential investment partner have not had any
human rights incidents or sanctions.
- A Head of Risk Management who reviews risk management processes, procedures
and tools implemented by the Company, including human rights-related risks
affecting our operating portfolio as well as assets under development or under
construction. Atlantica’s Risk Map is reviewed by the Risk Management Committee
and presented to the Board on a quarterly basis. Additional information on our risk
management function is disclosed in the Sustainability Governance section.
- Rights of local communities. Our Geographic VPs and local asset managers lead
community
their
development. Additional information on local communities is disclosed in the Local
Communities section.
including monitoring community matters and
relations,
- Tolerating no salary discrimination for any reason, including gender. Different
employees, including men and women in a similar position, can have different salaries
based on the results of their performance evaluations. Additional information on
gender equality is disclosed in the People and Culture section.
- Reporting our “Communication-On-Progress” on our commitment to the Sustainable
Development Goal (SDG) Nº8 (Decent Work and Economic Progress) through this
Integrated Annual Report and directly through the United Nations webpage.
Additional information on our commitment to SDGs is disclosed in the United Nations
Global Compact (UNGC) section.
- Proposing changes to the Compliance and ESG-related policies to the Board, as well
as maintaining our internal processes and procedures aligned with best practices.
132
- Providing communication channels to report any misconduct or instances of non-
compliance with human rights. These include the whistleblower channel and the
compliance channel. We have implemented several initiatives to encourage their use.
Additional information on our communication channels is disclosed in the Business
Ethics section.
In addition, we have partners at some of our assets. In some cases, such as at Solacor 1
& 2, Solaben 2 & 3, Seville PV, Kaxu, Skikda, Tenes and Chile PV 1, 2 and 3, we have
control over the asset. In other cases, such as Honaine, Monterrey or Vento II, we do not
manage the projects’ day-to-day operations. As an example, our partner at Vento II is
EDP Renewables (EDPR), a company with ethical standards similar to those set out in our
Code of Conduct. In any case, our Geographic VPs maintain regular engagement and
dialogue with our partners. To the extent possible, considering Atlantica’s ownership
interest, we try to introduce our business ethics practices, including our human rights-
related practices, in affiliates where we do not have control.
We confirm that no human rights incidents were reported or identified during 2022, 2021
or 2020.
We plan to continue analysing, implementing and reporting initiatives to improve our
human rights procedures going forward.
Anti-Slavery and Human Trafficking Statement
In May 2022 our Board of Directors amended and approved our “U.K. Anti-Modern
Slavery and Human Trafficking Statement” under the Modern Slavery Act, 2015. The
statement, available on www.atlantica.com, outlines the steps taken by the Company to
address the risk of slavery and human trafficking occurring within our operations and
supply chains.
At Atlantica, we respect internationally recognised human rights, as set out in the
International Bill of Human Rights, the International Labour Organisation´s (ILO)
Declaration on Fundamental Principles and Rights at Work, and the OECD Due Diligence
Guidance for Multinational Enterprises.
We seek to identify or mitigate any type of violations of human rights that are directly or
indirectly linked to our operations, products or services. We have a Human Rights Policy
in-place aimed at safeguarding respect for human rights in all our day-to-day activities,
implementing the commitments defined by our policies and international reference
standards, directives and conventions, and establishing the procedures to ensure
compliance with them.
We have analysed our supply chains across the jurisdictions in which we operate and
most of our suppliers are suppliers of equipment and services for our assets, as well as
financial and professional services organisations, including banks, legal advisors,
accountants, consultants and insurers. We believe we have a robust due diligence system
in place for the management of human rights issues.
Measures to identify, assess and mitigate potential risks relating to respecting human
rights include that our new suppliers are subject to internal due diligence and, when
applicable, required to confirm that their organisation will comply with our corporate
policies and our Supplier Code of Conduct (available at www.atlantica.com), which
133
integrity and ethical standards, human rights and
includes expectations with regards to sustainable development in the following areas:
business
labour standards,
environmental sustainability, and reporting concerns and compliance monitoring.
Through our Supplier Code of Conduct, we encourage our suppliers to conduct their
operations respectfully with fundamental human rights, as affirmed by the Universal
Declaration of Human Rights. In this regard, Atlantica joined the United Nations Global
Compact (the “UNGC”) initiative in January 2018 and formally adopted the UN Global
Compact Ten Principles in the fields of human rights, labour, environment and
anticorruption. We are determined to make the UNGC and its principles an integral part
of the strategy, culture and day-to-day operations of Atlantica and its suppliers.
In addition, we provide our employees, shareholders and other stakeholders with the
whistleblower channel (available at www.atlantica.com), a specific communication
channel with management and the governing bodies that serves as an instrument to
report any misconduct, instances of non-compliance with our compliance policy
framework, as well as unethical or unlawful behaviour, including any suspected or actual
form of modern slavery taking place within the business or supply chain.
Atlantica has zero tolerance for modern slavery, and we confirm that no incidents of
modern slavery were reported or identified during 2022, 2021 or 2020.
Training was provided in 2022, 2021 and 2020 to our employees about our Code of
Conduct and corporate policies through our online training platform, in-person training,
and/or real-time video conferencing. The training includes specific content related to
human and labour rights, in order to promote the Human Rights Policy throughout our
organisation.
All our employees must annually read, understand, and commit to following our
corporate governance policies.
Supply Chain Management
Description of the Supply Chain
In 2022 we engaged with approximately 2,860 suppliers across all the regions we operate
in, compared to 2,57043 in 2021 and 1,200 in 2020. The increase in the number of
suppliers in 2022 compared to 2021 was mainly due to the: (i) internalisation of the
operation and maintenance services at part of our solar assets in Spain and at Kaxu, (ii)
recently acquired assets in Italy, and (iii) construction activity.
During 2022 we had forty-one assets in operation and three solar projects under
construction. As we continue to increase our development and construction activities, we
have updated our purchasing policies, processes and procedures, and hired additional
purchasing personnel to manage a higher number of suppliers in different geographies.
Our purchasing team is also preparing a pool of prequalified construction subcontractors
in different geographies based on, among others, their experience, costs and health and
safety records.
43 We have revised the total number of suppliers in 2021 to account for those of COSO, our 135 MW installed capacity
geothermal plant in the U.S., and Chile PV 1 and PV 2, two solar PV assets under our renewable energy platform with 95
MW aggregated installed capacity, which were acquired in 2021.
134
We expect our suppliers to adhere to our Supplier Code of Conduct. We include our
requirements in our contractual arrangements with suppliers. Understanding that some
suppliers may face challenges in adhering to every aspect of the Code, from the onset of
our business relationship, we pledge to work with those suppliers to help them comply.
Our Supply Chain Strategy
In 2022 and 2021 ~100% of our suppliers adhered to our Supplier Code of Conduct. We
have a supply chain management strategy comprised of five priorities:
(1) Maintaining a resilient and agile supply chain that complies with all rules and regulations,
including best practices set out in our Supplier Code of Conduct.
(2) Ensuring that the purchase of all goods, supplies, external professional services and works
required to perform our day-to-day activities are performed in a timely, efficient and
effective manner. As such, our internal general purchasing policy and standardised
procedures are maintained and regularly updated in all our geographies.
(3) Maintaining a comprehensive risk management approach. We seek to reduce purchasing
costs over time through new or existing suppliers, while minimizing the potential supply
chain risks on our businesses and maintaining ESG standards. As such, vendors are
evaluated (internally and/or externally) before being hired and are regularly reviewed
thereafter.
(4) Maintaining a robust information system that enables the Purchasing Department to
identify business needs, in advance, while being supported by a comprehensive vendor
database that includes a multiple-level approval system.
Identifying and implementing international purchasing best practices.
(5)
Considering that “Integrity, Compliance and Safety” is our first value and prevails over
the rest, in 2022 we provided compliance-training to all employees who are involved in
purchasing, including anti-corruption and anti-bribery practices. We refer to the Business
Ethics sections for further details on compliance-related training.
Our Suppliers
Our Tier 1 suppliers are those who directly supply goods, materials or services to the
Company. Within Tier 1 suppliers, we consider critical Tier 1 suppliers those with a total
annual expense equal to or higher than $250 thousand.
Our Tier 2 suppliers are those who supply goods, materials or services to our suppliers at
the next level up in our supply chain.
In 2022, we had 2,860 suppliers, out of which 120 were considered Critical Tier 1 suppliers.
These represent approximately 4% of the total number of suppliers and approximately
70% of our total purchase expense. In 2021, we had 2,570 suppliers, out of which 117
were considered Critical Tier 1 suppliers. These represented approximately 5% of the total
number of suppliers and approximately 60% of our total purchase expense in 2021.
Comprehensive Risk Management Approach
The Purchase, Compliance and Risk Management teams play a key role in establishing
mechanisms to avoid negative impacts from our suppliers: avoid conflicts of interest,
bribery and corruption, comply with human rights and labour standards, comply with our
occupational health and safety targets and work with environmentally sustainable
suppliers.
135
Atlantica uses SAP, an ERP system, to track suppliers general information, purchase
orders and payments. As of December 31, 2022, SAP is used at all our assets, with the
exception of our recent investments in Colombia, Chile and Italy, and at our water assets.
In 2022 and 2021, companies without SAP represented less than 7% and 6%, respectively,
of our total revenue. We plan to implement SAP at recent investments during 2023. We
believe having one single database of suppliers and one process for the entire
organisation helps to prevent supply chain risks.
We have several lines of defence to mitigate supply chain risks:
Line of
Defence
1st line
2nd line
3rd line
Measure
Periodicity
Responsible
Internal pre-screening evaluation of new
suppliers
Manage and supervise suppliers as per
contracts
Identify, monitor, mitigate and report
Company risks, including potential supply
chain-related risks
Always
Always
Compliance, Quality, Risk
Management, Purchasing
Asset Managers, Corporate
Departments, Legal
Quarterly
Risk Management
4th line
External supplier evaluation
Annually
Third-party vendor
5th line
Test that supply chain activities follow our
internal processes and procedures
Annually
Internal Audit
6th line
Supplier evaluation every three years
Every 3 years
Compliance, Purchasing,
Risk Management
1st line of defence: Atlantica’s internal pre-screening evaluation of all new suppliers
follows a 4-step process:
- Step 1: Initial supplier evaluation to verify among others, the suppliers’ general
information, bank account certificates and taxpayer identification number.
- Step 2: Verify the suppliers’ technical qualification including their experience,
capabilities, management systems in-place (e.g., ISO 9001, 14001), as well as other
specific technical requirements.
- Step 3: Compliance due diligence assessment based on our internal policies, processes
and procedures, including among others, checking the supplier adherence to our
Supplier Code of Conduct44 and verifying that the supplier has no conflicts of interest
nor corruption or bribery accusations.
- Step 4: Financial solvency check – reviewed for services or products above $50
thousand – undertaken by the Risk Management Department.
1st Line of Defence in 2022, 2021 and 2020
Internal pre-screening evaluation of new suppliers
2022
100%
2021
100%
2020
100%
We identified seven potential new suppliers that were disqualified (vs. two in 2021)
during the pre-screening internal approval process.
2nd line of defence: asset managers at the operational level and the head of each
Corporate Department manage their supplier activities as per the contracts. The Internal
44 We understand that some our suppliers may face challenges in adhering to every aspect of the Code. Thus,
we have set up minimum Supplier Code of Conduct requirements that are reviewed by the Compliance
Department on a case-by-case basis.
136
Legal Department, as well as external legal counsels when needed, provide support (e.g.,
drafting and revising contracts, disputes, etc.) to prevent material adverse impacts,
including environmental and social impacts. In case of failure or violations of Atlantica’s
commitments which have significant impact on, for example, environment, human or
labour rights, Atlantica may terminate, suspend or revoke the contract.
To strengthen our second line of defence, align Atlantica’s safety standards to those
activities of our subcontractors working at our premises and prevent material adverse
social impacts, we also have: (1) local teams, including asset managers, ensuring our
procedures are being followed by all subcontractors working at our plants, (2) a central
operations team performing regular health and safety audits of subcontractors
employees to monitor compliance with legal regulations, safety guidelines included in
contractual agreements, and our safety best practices, (3) health and safety written
procedures, including emergency response plans and a safety app to be followed by
subcontractors employees, and (4) training safety awareness including subcontractor
employees. We refer to the Health and Safety section for additional information on health
and safety.
3rd line of defence: our corporate Risk Management Department carries out quarterly
reviews of all Company risks, including those related to our supply chain. We refer to the
Risk and Uncertainties and the Sustainability Governance sections for additional
disclosure on risk management.
4th line of defence: following a thorough analysis, in 2022 we changed our external
evaluation provider to Achilles, an independent, international well-known company that
evaluates suppliers based on:
-
Environment, including GHG emissions, water and waste management, energy
consumption, biodiversity and environmental management systems.
- Social, including health and safety, child labour, discrimination and harassment,
diversity, training and investments in local communities.
- Governance, including corporate social responsibility, human rights, adherence to the
United Nations Sustainable Development Goals, and management of the vendor’s
supply chain (i.e., sub-supplier environmental and social practices).
Achilles methodology is built on international standards including ISO 26000, the United
Nations Global Compact and the Global Reporting Initiative reporting requirements.
Achilles annual evaluation process includes:
- A scorecard per supplier with a zero to one hundred (0 – 100) score, and medals
(silver, gold and platinum) when applicable. The scorecards also provide guidance on
strengths and improvement areas for each supplier.
Engagement with suppliers to determine appropriate actions on improvement areas
(if necessary).
-
4th Line of Defence in 2022, 2021 and 2020
External supplier evaluation as a percentage of
total annual operating expenses
2022
~45%
2021
>51%
2020
>51%
We externally pre-screened suppliers representing ~45% of the Company‘s annual
operating expenses.
137
5th line of defence: our Internal Audit Department annually tests that our supply chain
activities follow internal policies, procedures and processes. We refer to the Sustainability
Governance section and the Audit Committee Report for additional disclosure on the
internal audit activities.
6th line of defence: in 2022, we implemented a new supplier evaluation process to assess
all suppliers every three years. The Compliance team monitors suppliers’ activities to
verify that they continue to operate under the principles set out in our Supplier Code of
Conduct. An objective and systematic analysis is performed to analyse the continuation
of the contractual relationship. Non-compliance may result in terminating, suspending,
or revoking the contract.
Supply Chain Targets
Following our commitment to supply chain management we have updated our targets:
Target
Internal pre-screening evaluation of new suppliers (i.e., Tier 1 suppliers)
External supplier evaluation: review 70% of total annual operating expenses
(i.e., Tier 1 suppliers) by 2024 year-end1
Supplier evaluation every three years: internally review 100% of all suppliers
every three years (first full year applying this process was in 2023)
(1) Following third party evaluation changes in 2022 we have updated the target.
Status
On-track
-
Spending on Local Suppliers
We acknowledge that our day-to-day activities have impacts on local communities. We
foster communities’ economic prosperity through local purchasing and hiring of local
employees. We have stakeholder and community development and involvement policies
in-place to generate a stable and predictable business environment that enables us to
promote local communities environmental, economic and social progress, reduce risks
and identify opportunities. The policies are available on our website.
We buy local whenever purchases are made to suppliers from the same country where
the service or the material is used. In 2022 and 2021, more than 90% of our total
purchases in the geographies where we have assets were made from local suppliers.
Customer Management
We derive our revenue from selling electricity, electric transmission capacity, water
desalination capacity and heat. Our customers are mainly comprised of electric utilities
and corporations, with which we typically have entered into PPAs with. We also have
electric systems and government owned electricity and transmission companies as
customers. We do not have individuals or retail clients as customers in any of our assets.
Our Geographic VPs and local managers are responsible for managing customers
relations. Considering that most of our clients are large electric utilities and corporations
in different countries, each geography has implemented its own procedures and
consultation guidelines to communicate with customers to manage their needs
efficiently and effectively. This usually involves physical meetings or phone calls between
our local employees and customers. We have learnt from our "boots-on-the-ground"
approach that, in addition to complying with contract obligations, we need to adapt to
the local culture.
138
We have an in-house system that enables us to measure the success of our customer
relations. We generally have a very fluid and good rapport with all our clients. We do not
have a direct relationship with state-owned electric systems (for example, solar assets in
Europe and wind assets in South America). Considering the limited number of offtakers
within our portfolio, we do not have a formal customer survey in place as some integrated
electric utilities may have.
We also perform annual reviews with some of our clients to check that we comply with
certain key areas. In addition, we have communication channels to report any
misconduct, irregularities or instances of non-compliance, including a whistleblower and
a compliance channel, as detailed in the Business Ethics section. Furthermore, we
leverage on this Integrated Annual Report, social media, press releases and website
content to provide additional information to our customers.
Customer-related topics are discussed, on an as-needed basis, in the Business and
Geographic Committees, allowing senior corporate management to better assess
customer-related matters.
People and Culture
We believe that by providing a healthy working environment for our employees, and by
enhancing social and professional development, we will attract and retain valuable
employees. Employees are a core component of our present and future success.
Our values and Code of Conduct set out what we expect of all our people. The honesty,
integrity and sound judgement of our employees and directors is essential to Atlantica's
reputation and success. We seek employees who have the right skills and who
understand and embody the values and expected behaviours that guide our business
activity.
We perform an employee climate survey at least every three years to assess employees’
satisfaction. The goal is to receive feedback, as well as engage with our employees. The
survey is confidential, managed by a third party, and results are aggregated, shared and
discussed with supervisors. In October 2022 we carried out an employee climate survey.
Approximately 78% of employees took part and the general engagement with the
Company was 68%, compared to 77% in October 2020. This decrease was largely driven
by the integration processes from recently acquired assets. In 2022, Atlantica scored
highly in several areas, including employees’ satisfaction with their immediate
manager/supervisor. This survey also helped us to identify certain areas for improvement.
Management prepared action plans for those areas. The Board receives reports on the
survey results together with action plans that management intends to take moving
forward.
We use a platform, called Meta4 as our global system for human resources management.
Meta4 is accessible to all Atlantica employees. It is an interactive tool that allows
employees to access and manage their development, performance reviews, benefits,
compensation, work-time planning, etc.
To improve communication with our people we have implemented several measures:
- Our CEO updates Atlantica’s employees on key priorities in open sessions with Q&A
at least twice a year.
139
-
In 2022, we held two Strategic Sessions in the U.S. and Spain. Most of Atlantica’s
office employees attended. Our CEO, CFO and other key senior management
presented Atlantica’s recent milestones at the corporate and geographic level, key
priorities going forward, and highlighted the importance of our values, compliance,
risk and purchasing process and procedures.
- Also in 2022, some Country Managers held specific sessions with local employees to
address key priorities in the geography under their responsibility.
- Our senior management takes part in our “Atlantica’s Management Model” training
to discuss with our employees, excluding those performing operation and
maintenance activities, the Company’s long-term strategy and business model,
recent milestones, growth strategy, as well as values, policies and procedures. We
promote an informal and open environment to foster discussions with employees in
groups of less than 20 people. Employees can express their ideas and concerns
without evaluation or retaliation. The feedback is analysed and shared with Atlantica’s
management in monthly management meetings. Where appropriate, we devise
action plans and assign one or several managers responsibility for their
implementation.
- We periodically publish Atlantica-related news via our internal intranet and LinkedIn.
Atlantica has implemented a “Work-life balance management policy” to achieve an
effective balance between work and life outside the workplace. Atlantica’s management
believes that employees are most productive when they have a certain flexibility to fulfil
their professional and personal responsibilities. Under this policy Atlantica’s employees
have the opportunity to request remote work for one business day per week under
certain terms and conditions.
As of December 31, 2022, our workforce increased to 978 from 558 as of December 31,
2021. The increase was mostly due to:
• The internalisation of the operation and maintenance services at Kaxu in February
2022, bringing 70 employees, and at part of our solar assets in Spain in June 2022,
bringing 205 employees; and
• The integration of Rioglass, a supplier of spare parts and services in the solar industry.
Key performance indicators for Rioglass have been included from January 1, 2022
and Rioglass employees were 130 as of that date. Atlantica has control of Rioglass
since January 1, 2021; however this subsidiary was in a restructuring process during
2021 and we did not have reliable and comparable information for the year 2021.
Our 2021 people and culture key performance indicators did not include data from
this subsidiary.
140
Number of Employees per Geography as of December 31, 2020, 2021 and 2022
s
e
e
y
o
p
m
E
l
f
o
r
e
b
m
u
N
1,200
1,000
800
600
400
200
0
978
558
456
308
312
243
443
51
68
93
55
67
115
130
107
North America
South America
EMEA
Corporate
Total
2020
2021
2022
Our corporate employees support our assets in roles including Operations, Health and
Safety, Environment and other certain corporate areas including Corporate Development,
Finance, Consolidation, Administration, Tax, Internal Audit, Human Resources, Insurance
and Legal.
Number of Employees by Category as of December 31, 2020, 2021 and 2022
s
e
e
y
o
p
m
E
l
f
o
r
e
b
m
u
N
1,000
800
600
400
200
0
519
245
196
264
178
150
23
34
49
133
73
88
14
13
13
978
558
456
Asset Operation
Employees
Assistants and
Professionals
Engineers and
Graduates
2020
2021
Middle
Management
2022
Management
Total
The percentage of women at the Board of Directors, management level (without
including middle management level and without including directors) and over total
number of employees as of December 31, 2022, 2021 and 2020 was:
Women on the Board of Directors
Women at Management Level
Women at Atlantica
2022
22%
23%
20%
2021
25%
23%
25%
2020
25%
21%
27%
As of December 31, 2022, 193 out of 978 employees were women, representing 20% of
the Company’s personnel. In 2021, 141 out of 558 employees were women, or 25% of
the total headcount. The decrease of women at Atlantica during 2022 as a percentage of
141
total employees was mostly due to the (i) internalisation of the operation and
maintenance services at Kaxu and at part of our solar assets in Spain. These activities
added 275 new employees to our workforce in EMEA, of which approximately 90% were
men, and (ii) integration of Rioglass employees, adding 130 new employees to our
workforce in EMEA, out of which approximately 85% were men. Without considering
Asset Operation Employees 160 out of 459 employees were women, representing 35%
of the Company’s personnel.
Employees at 2022, 2021 and 2020 year-end by employment type and by contract type
were:
2022
2021
2020
Male
Female
Total Male
Female
Total Male
Female
Total
By
employment
type
By type of
contract
Full-time1
785
193
978
417
141
558
333
123
456
Part-time
Total
Indefinite
-
785
743
Temporary
42
-
193
182
11
-
-
978
417
925
399
53
18
-
141
132
9
-
-
558
333
531
329
27
4
-
123
114
9
-
456
443
13
Total
785
193
978
417
141
558
333
123
456
1 Voluntary working time reductions have been included under full-time employment contracts.
Employees at 2022, 2021 and 2020 year-end by contract type and by geography were:
2022
2021
2020
North
America
311
South
America
60
1
312
33
93
Indefinite
Temporar
y
Total
EMEA Corporate Total
EMEA Corporate Total
EMEA* Total
429
125
925
109
531
14
5
53
-
443
130
978
308
17
68
6
27
-
115
558 243
10
51
159 443
3
13
162 456
North
America
308
South
America
51
63
4
67
North
America
243
South
America
41
(*) Corporate employees included in EMEA in 2020.
Employees at 2022, 2021 and 2020 year-end by age group were:
Age
< 30
31-40
41-50
>51
Total Employees
2022
Female
Male
Total Male
117
321
217
130
785
35
82
60
16
193
152
403
277
146
978
64
158
111
84
417
2021
2020
Female Total Male Female Total
74
50
26
24
90
59
43
13
141
217
154
97
558
126
90
67
48
41
10
174
131
77
333
123
456
The average age of our workforce in 2022, 2021 and 2020 was 40 years old.
Average Number of Employees
The table below shows the average number of employees for the years 2022, 2021 and
2020 on a consolidated basis:
142
Average Number of Employees by Geography
North America
South America
EMEA
Corporate
Total
Average Number of Employees by Category
Management
Middle Management1
Engineers and Graduates
Assistants and Professionals
Asset Operations Employees
Total
Average Number of Employees by Gender
Male
Female
Total
2022
306
87
360
121
874
2022
13
132
234
46
449
874
2022
696
178
874
2021
296
61
61
109
527
2021
13
85
162
27
240
527
2021
396
131
527
2020
237
46
54
104
441
2020
14
73
142
21
191
441
2020
325
116
441
1 Middle Management mainly consists of employees who: (i) manage a specific area, (ii) supervise a group of employees,
or (iii) are considered key personnel within the organisation.
Collective Bargaining Agreements
The percentage of employees that are covered by company specific collective bargaining
agreements was 11% in 2022, 8% in 2021 and 14% in 2020. The 2022 increase versus
2021 was mostly due to the internalisation of the operation and maintenance services at
Kaxu and at part of our solar assets in Spain. Part of these operation and maintenance
employees are trade union members.
If we include sector collective bargaining agreements, the percentage of employees that
are covered by collective bargaining agreements is 60% in 2022, 40% in 2021, and 50%
in 2020.
Diversity and Inclusion Policy and Opportunities
We believe that the diversity of our workforce is an asset that enriches the Company with
fresh ideas, perspectives and experiences. We acknowledge the contribution of people
of different genders, nationalities, cultures, races, professional backgrounds, abilities,
socio-economic backgrounds and age. Our belief is that employees with diverse skills
represent an important resource identifying innovative solutions and improving our
business performance, which ultimately benefits all our stakeholders.
We provide a work environment free of discrimination, intimidation and sexual and non-
sexual harassment, where everyone can participate in the success of the business and
where all employees are valued for the distinctive skills and experiences they bring to the
Company.
Initiatives and Recognitions
• In January 2023, Atlantica was included for the 3rd consecutive year in the Bloomberg
Gender-Equality Index (GEI).
• During 2022, 2021 and 2020 more than 80% of the employees hired by the Kaxu
operation and maintenance supplier were black citizens, exceeding the minimal
143
requirements defined by the project. Furthermore, almost 50% of employees working
at the plant in 2022, 2021 and 2020, came from local communities, also exceeding the
minimal requirements defined by the project. Due to its remote location and technical
skill requirements, the Kaxu plant provides job opportunities to citizens from different
regions in South Africa. As of December 31, 2022, 2021 and 2020, approximately 95%
of the employees were South African citizens, while the remaining 5% are support staff
from different countries.
• In 2022, the Company performed a human capital analysis at certain locations aimed
at guaranteeing equal opportunities to our employees and to promoting a culture of
diversity and inclusion. The main objectives of this analysis were:
- Preventing any kind of gender discrimination, either direct or indirect.
- Reinforcing Atlantica’s commitment to
its employees to ensure equal
opportunities and to eradicate any potential conduct that may discriminate any
employee due to their gender or family situation.
- Promoting effective equality measures among men and women and
guaranteeing the same opportunities to hiring candidates, internal professional
development and working conditions for all employees.
- Promoting work-life conciliation and ensuring that such balanced work-life
conciliation does not negatively impact employees.
• Atlantica is a signatory to the Women’s Empowerment Principles since 2020, a set of
good business practices that promote equality between men and women across all
areas of the organisation.
In 2022, 2021 and 2020, we were not notified of any incidents relating to potential
situations of discrimination.
Gender-Related Information
Employees by Gender as of December 31, 2022, 2021 and 2020
20%
25%
27%
2022
80%
Men
Women
2021
75%
Men
Women
2020
73%
Men
Women
We operate in a sector that has historically employed a majority of men, especially in
operation and maintenance activities. We seek to remove any barriers we might have
including unconscious bias and to empower women and ensure that they progress with
the same opportunities as men. During 2022, we promoted a total of 34 employees, 27
men and 7 women, compared to 50 employees in 2021, out of which 44 were men and
6 were women.
144
Promoted Employees by Gender in 2022, 2021 and 2020
2022
2021
2020
Male
Female
Total Male
Female
Total Male
Female
Total
27
7
34
44
6
50
15
8
23
Number of
promotions
All employees returned to work in 2022, 2021 and 2020 after parental leave. 89% of
employees were still employed 12 months after returning to work in 2022. The
outstanding 11% voluntarily left the Company due to personal reasons. In 2021, all
employees were still employed 12 months after returning to work. In addition to rules
and regulations, management encourages employees to take parental leave.
Parental Leave in 2022, 2021 and 2020
2022
2021
2020
Male
Female
Total Male
Female
Total Male
Female
Total
28
8
36
11
19
30
14
7
21
Parental
leave
Women by Geography and by Category as of December 31, 2020, 2021 and 2022
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
42%
40%
44%
42%
41%
33%
31%
26%
16%
14%
13%
17%
91%
76%
71%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
8%
6%
5%
43%
43%
37%
27%
26%
18%
23%
23%
21%
North America
South America
EMEA
Corporate
Asset
Operation
Employees
Assistants
and
Professionals
Engineers and
Graduates
Middle
Management
Management
2020
2021
2022
2020
2021
2022
The decrease of women in the EMEA region during 2022 was mostly due to the
internalisation of the operation and maintenance services at Kaxu and at part of our solar
assets in Spain, as well as the integration of the Rioglass employees. These activities
added 405 new employees to our workforce in EMEA, of which approximately 90% were
men, and most were asset operation employees, but also engineers and graduates and
middle managers.
In addition, during 2022 we hired additional personnel in Colombia and Peru, of which
approximately 65% and 75% respectively, were men.
145
Gender Pay Gap Analysis
Atlantica guarantees respect for salary equality rights. Monitoring pay equality is one of
the key factors to ensuring the creation of an inclusive and respectful culture without
differentiation based on gender, age, race or any other personal factor.
The Company is determined to ensure that there is no gender-based inequality in its
activities by offering equal pay for equal work in all the businesses and countries where
it does business.
We believe it is important to understand the difference between the concepts of salary
gap and salary equality:
- The pay gap shows the difference between the average salary received by men and
women.
- Pay equality is the right of men and women to receive the same salary for the same
work.
At Atlantica, there is no salary discrimination for any reason, including gender. Different
employees, including men and women in a similar position, can have different salaries
based on the results of their performance evaluations.
The Pay Gap is measured subtracting the average female compensation from the average
male compensation and dividing the result by the average of the higher earning gender
(male or female) compensation.
2022, 2021 and 2020 Pay Gap by Category
Management
Middle management
Senior engineers and graduates
Engineers and graduates
Assistants and professionals
Asset operation employees
Average Salary by Gender
2022
18%
16%
7%
10%
(14%)
29%
13%
2021
18%
29%
15%
8%
(8%)
10%
26%
2020
23%
29%
14%
6%
(33%)
6%
30%
Note 1: Data includes fixed salary, short-term bonus and long-term incentive plans without adjusting for factors such as
job function, level, education, performance, location, or exchange rate differences. Overtime has not been included.
Note 2: The CEO has been excluded from the analysis as we believe that including his compensation would distort the
results.
Note 3: Management consists of the members of the Management Committee.
Note 4: Middle management consists of certain employees who manage a specific area, supervise a group of employees,
or are considered key personnel within the organisation.
The overall pay gap decreased in 2022 compared to 2021 mainly due to the
internalisation of the operation and maintenance services at Kaxu and at part of our solar
assets in Spain, as well as the integration of Rioglass. Most of these new employees are
asset operation employees, who are approximately 90% men and, on average, have lower
remuneration than Atlantica’s average salary.
The integration of these activities also added middle managers and senior engineers and
graduates based in Spain and South Africa, who have lower remuneration than the
average mostly due to the countries where they are based.
In the category “Asset operation employees”, the pay gap has increased to 29% from
10% in 2021, but the increase is due to the fact that we are adding information from
different countries where average salaries are very different. On a country-by-country
146
basis, the pay gap difference for this category in the U.S. was 6%, in Spain 11% and 0%
in South Africa. Approximately 93% of all asset operation employees are based in these
3 countries.
In addition, the gender pay gap information is also affected by the lower presence of
females in management and engineering positions, which is common in the energy
sector. In addition, female representation is significantly lower in age groups above 40,
where salaries are usually higher.
To mitigate this situation and accelerate the progressive reduction of gender pay-gap,
Atlantica continues to analyse several initiatives:
- Ensuring that we progressively build a pool of females to undertake management
positions.
- Promoting STEM careers among female students.
- Always considering female candidates when hiring new employees.
Recruitment and Retention
Our career development programme, performance assessment and skill training
programmes are aimed at talent retention and development.
In 2022, we hired 204 employees. The “under 30” and “31-40” age categories (37% and
38%, respectively) led our hiring’s by age, while North America (35%) led by geography.
Employees Hired in 2022, 2021 and 2020 by Age and Gender
2022
2021
2020
Male
Female
Total Male
Female
Total Male
Female
Total
< 30
31-40
41-50
>51
57
63
34
12
Total Employees
166
19
14
5
0
38
76
77
39
12
204
21
36
14
7
78
9
12
6
1
30
48
20
8
28
106
18
20
12
8
58
11
5
3
1
20
29
25
15
9
78
Employees Hired in 2022, 2021 and 2020 by Geography and Gender
2022
2021
2020
Male
Female
Total Male
Female
Total Male
Female
Total
North America
South America
EMEA
Corporate
64
33
52
17
Total Employees
166
8
11
11
8
38
72
44
63
25
204
44
15
10
9
78
9
4
4
11
28
53
19
14
20
37
3
9
9
8
5
-
7
106
58
20
45
8
9
16
78
147
Average Employee Turnover Rate in 2022, 2021 and 2020
Employee voluntary turnover rate
Employee voluntary turnover rate
without U.S. activities
Employee involuntary turnover rate
Employee total turnover rate
2022
12.8%
9.7%
9.4%
22.2%
2021
11.0%
5.9%
5.9%
16.9%
2020
7.5%
2.7%
2.9%
10.1%
Note 1: Turnover rates calculated based on the average number of employees during the year.
Note 2: Employee turnover rate includes dismissals, finalisation of temporary contracts, retirement and others.
Note 3: 2021 data was revised following the updated 2022 classification.
In 2022, the employee voluntary turnover increased to 12.8%, from 11.0% in 2021. This
was mainly due to the low unemployment and high rotation in the U.S.. If we exclude our
employees in the U.S., our employee voluntary turnover would have remained at 9.7% in
2022 and 5.9% in 2021.
In addition, the employee involuntary turnover increased to 9.4%, from 5.9% in 2021.
63% of non-voluntary turnover corresponded to the restructuring process at Rioglass,
which started in 2021 and was finalised in 2022.
Employee Turnover in 2022, 2021 and 2020 by Age and Gender
2022
Female
Male
Total
Male
2021
Female
Total
Male
2020
Female
Total
< 30
31-40
41-50
>51
38
58
44
25
Total Employees
165
10
14
3
2
29
48
72
47
27
194
13
25
13
18
69
2
7
6
5
20
15
32
19
23
89
11
10
7
9
37
3
2
4
-
9
14
12
11
9
46
Employee Turnover in 2022, 2021 and 2020 by Geography and Gender
Male
2022
Female
Total
Male
2021
Female
Total
Male
2020
Female
North America
South America
EMEA
Corporate
62
11
86
6
8
8
7
6
70
19
93
12
54
13
6
2
7
2
-
5
Total Employees
165
29
194
69
20
67
8
2
12
89
31
-
2
4
37
3
-
1
5
9
Total
34
-
3
9
46
We perform exit surveys with all our employees who voluntarily decide to resign. Our aim
is to identify weaknesses and improvement opportunities that can help reduce voluntary
turnover.
We offer a remuneration package that includes monetary and non-monetary
compensation. In 2022, 2021 and 2020 we based our compensation policy on these four
pillars:
- Pre-defined remuneration bands based on market surveys provided by several
external consultants for certain positions.
- Annual performance appraisal for 100% of our employees.
- Variable compensation based on Company targets, department and individual
targets.
148
-
Long-term incentive plan for certain employees.
Our People and Culture Department receives remuneration data from two separate
external consultants for certain positions based on position and location.
In 2022, approximately 59% of our employees with variable remuneration had targets
linked to ESG performance, compared to 58% in 2021 and 57% in 2020.
The package offered by Atlantica includes monetary compensation and remuneration in-
kind, depending on the employee’s position, and on local practices in the countries where
we operate. In addition, we offer flexible compensation in certain locations, which
sometimes presents tax advantages for employees. Under current local regulations, we
offer 401(k) retirement plans in the U.S. We also finance a high percentage of our
employees’ health insurance costs and their immediate family in most of the countries
where we are based.
Development and Training
Part of our supervisor’s mission is to collaborate with each of his or her team members
to evaluate performance through the Annual Performance Appraisal (APA), a talent and
development management module of Meta4. As part of the individual appraisal process,
the supervisor evaluates the performance during the period in nine standardised areas.
The manager also identifies individual targets for the coming period and sets training
actions in the Annual Training Plan (ATP). Supervisors set individual meetings with their
teams once the assessment is completed to share results and explain the action plan
defined in depth. Employees can provide feedback about their own performance,
improvement opportunities, etc. It is an ongoing process, normally spread over a year to
ensure its effectiveness.
Once the APA is completed by supervisors, we conduct a calibration process to ensure
that evaluations are consistent and as fair as possible across the entire organisation.
In addition, we plan to perform a 360º feedback process for certain management profiles,
including senior and middle management, where managers receive feedback from their
supervisor, peers and direct reports. Full confidentiality is guaranteed as the data is
processed and summarised by external consultants.
Considering that we are a flat and lean organisation, it can be challenging for us to
provide development opportunities to talented employees. We have a programme in-
place to identify key members of our workforce. The goal is to consider employees’ for
internal transfers to other positions, functions or geographies. In 2022, we continued to
strengthen our organisational structure. We bolstered our asset management capabilities
by designating new country managers and other key asset management positions in
some of our geographies. Most of these positions were filled with internal promotions.
We also have an internal job site on our intranet where we inform employees of job
vacancies in order to promote internal mobility between different departments.
Regarding our training programme, we identify training categories to improve distinct
sets of skills, integrate them into Atlantica’s team and culture, and as a measure to retain
talented employees:
149
-
Introduction to Atlantica. All new employees must attend our “Introduction to
Atlantica” course during their induction period. In addition, all employees receive
training on our compliance and management policies.
- Management skills. We offer soft management-skills courses to
improve
leadership and
negotiation,
communication, among other skills.
team-working,
team-building, decision-making,
- Technical knowledge courses. Our training plans also include technical knowledge
courses specific to different technical fields.
- Languages. We offer several language courses to our employees to allow them to
operate effectively in an international setting.
- Health and Safety. This is part of our core values. We offer several training courses
to both our employees and operation and maintenance personnel to reinforce it. We
refer to the “Occupation Health and Safety” section detailed below.
As of December 31, 2022 and 2021, Atlantica offered over 150 different training
programmes to its employees. Each employee agrees on the definitive training
programme with his or her manager and, the People and Culture Department.
Training Hours in 2022, 2021 and 2020
Total Hours of Training
2022
321
3,724
2021
170
2,689
2020
558
2,636
10,740
9,281
3,740
1,189
413
321
11,548
6,846
7,202
27,521
19,399
14,457
Management
Middle Management
Engineers and
Graduates
Assistants and
Professionals
Asset Operations
Employees
Total Average
Total Average Hours of
Training per Employee
2022
2021
2020
27
31
40
26
23
29
13
32
57
15
29
37
40
36
26
13
38
33
Management
Middle Management
Engineers and
Graduates
Assistants and
Professionals
Asset Operations
Employees
Total
(*) 2021 data was revised following the updated 2022 classification.
In 2022, the employees completed 29 hours of training on average compared to 37 in
2021. The decrease is due to the internalisation of the operation and maintenance
services at part of our solar assets in Spain and at Kaxu. These services brought mostly
asset operation employees and engineers and graduates who received training during
part of 2022 (i.e., since their incorporation date).
Key Management for 2022
We have a key management team with extensive experience in developing, financing,
managing and operating contracted sustainable
infrastructure assets. Our key
management in 2022, 2021 and 2020 includes:
150
Name
David Esteban
Emiliano Garcia
Position
VP EMEA
VP North America
Irene M. Hernandez
General Counsel and Chief of Compliance
Francisco Martinez-Davis
Chief Financial Officer
Antonio Merino
VP South America
Stevens C. Moore
VP Corporate Development
Santiago Seage
Chief Executive Officer and Director
Year of Birth
1979
1968
1980
1963
1967
1973
1969
There are no potential conflicts of interest between the private interests or other duties
of the key management members listed above and their duties to Atlantica. There are no
family ties among any of our senior management and Board of Directors.
As of December 31, 2022, the average age of our key management team was 51 years
old.
The biographies of the key management team are:
David Esteban,
Vice President EMEA
Mr. Esteban has served as Vice President of our operations in EMEA since July 2014. He
had previously served in Abengoa’s Corporate Concession department for two years.
Before joining Abengoa, Mr. Esteban worked for the management consulting firm Arthur
D. Little for seven years in the industries of Telecoms & Energy and then moved to a
private equity firm specialised in renewable energy investments in Europe for three years.
Emiliano Garcia,
Vice President North America
Mr. Garcia serves as Vice President of our North American business. Mr. Garcia was
previously the General Manager of Abengoa Solar in the United States and of the Solana
Power Plant. Before that, he held a number of managerial positions in various Abengoa
companies over two decades. Mr. Garcia holds a Bachelor’s degree in Engineering from
Madrid Technical University.
Irene M. Hernandez,
General Counsel and Chief Compliance Officer
Ms. Hernandez has served as our General Counsel since June 2014 and also serves as
Chief Compliance Officer and Head of People and Culture. Prior to that, she served as
head of our legal department since the date of our formation. Before joining Abengoa,
she worked for several law firms. Ms. Hernandez holds a law degree from Complutense
Madrid University and a Master’s degree in law from the Madrid Bar Association (Colegio
de Abogados de Madrid (ICAM)).
151
Francisco Martinez-Davis,
Chief Financial Officer
Mr. Martinez-Davis was appointed as our Chief Financial Officer on January 11, 2016. Mr.
Martinez-Davis has more than 30 years of experience in senior finance positions both in
the United States and Spain. He has served as Chief Financial Officer of several large
industrial companies. Most recently, he was Chief Financial Officer for the company
responsible for the management and operation of metropolitan rail service of the city of
Madrid where he was also member of the Executive Committee. He has also worked as
CFO for a retailer and as Deputy General Manager in Finance and Treasury for Telefonica
Moviles. Prior to that, he worked for different investment banks in New York City and
London for more than 10 years, including J.P. Morgan Chase & Co. and BNP Paribas. Mr.
Martinez-Davis holds a Bachelor of Science, cum laude, in Business Administration from
Villanova University in Philadelphia and an MBA from The Wharton School at the
University of Pennsylvania.
Antonio Merino,
Vice President South America
Mr. Merino serves as Vice President of our South American business. Previously, he was
the Vice President of Abengoa’s Brazilian business, as well as the head of Abengoa’s
commercial activities and partnerships in South America. Mr. Merino holds an MBA from
San Telmo International Institute.
Stevens C. Moore,
Vice President Corporate Development
Mr. Moore has more than 25 years of experience in finance positions in Spain, the United
Kingdom and the United States. He has worked in various positions in structured and
leveraged finance at Citibank and Banco Santander, and vice president of M&A at GBS
Finanzas. Most recently, he was Director of Corporate Development and Investor
Relations at Codere, the Madrid stock exchange listed international gaming company.
He holds a B.A. degree in history from Tulane University of New Orleans, Louisiana.
Key management compensation, excluding the Chief Executive Officer, in 2022, 2021 and
2020:
152
In USD thousands
2022
2021
2020
Short-Term Employee Benefits
-
Fixed and variable remuneration
LTIP Awards
- Options vested under LTIP
- Restricted Stock Units vested under the
LTIP
One-offs
- One-off plans
Post-employment benefits
Other long-term benefits
Termination benefits
Total
2,294
2,294
2,176
733
1,443
684
684
-
-
-
5,154
2,365
2,365
839
839
653
653
-
-
-
3,857
2,144
2,144
156
156
423
423
-
-
-
2,723
Note: The table includes compensation for 6 key executives, excluding the Chief Executive Officer. Detailed
information on the Board of Directors remuneration, including the Chief Executive Officer’s remuneration, is
disclosed in the Directors’ Remuneration Report.
Short-term employee benefits to management are paid in Euros and have been
converted to US$ using the average foreign exchange rate for each period.
“LTIP Awards” include share options and share units vested in 2022. In addition, “One-off
Awards” include share units vested in 2022. The vested options and share units have been
included in the remuneration table above valued using the share price at the vesting
date. Under the LTIP and one-off plans, the 6 key executives, excluding the CEO, hold as
of December 31, 2022 83,855 restricted share units, convertible into shares in the future,
and 22,061 unexercised vested share options 72,612 unvested share options which were
underwater at 2022 year-end. In 2021, the 6 key executives, excluding the CEO, held
103,559 share units, convertible into shares in the future and 154,282 share options.
Risks Linked with Human Capital
General key risks associated with human capital include attracting and retaining qualified
personnel as well as maintaining a diversified workforce to enrich the Company with fresh
ideas, perspectives and experiences. In addition, digital transformation requires cultural
and organisational changes and continuous training to avoid overall company human
capital risks.
As detailed in different sections of this Integrated Annual Report, Atlantica has put
different measures in place to mitigate human capital risks, including: (i) providing equal
opportunities to all employees, (ii) implementing an effective diversity and inclusion
policy throughout the Company, (iii) promoting in-house professional opportunities,
providing training programmes to improve skills and technical knowledge, establishing
fixed and variable remuneration considering data from external consultants (for key
personnel), financing a high percentage of health insurance costs, and subsidizing fitness
as measures to attract and retain employees; and (iv) auditing processes to ensure
compliance with all human capital legal requirements, process and procedures.
153
Occupational Health and Safety
Key facts:
✓ Maintained health and safety KPIs below sector average
✓ Improved health and safety reporting based on international best practices
Atlantica, its Board and its management are committed to prioritising and actively
promoting health and safety as a tool to protect the integrity and health of our
employees and those of our subcontractors at our assets or work centres. We promote
a safe operating culture across Atlantica and encourage our subcontractors to adopt a
preventive culture in the operation and maintenance activities as reflected in our
corporate health and safety policy available on our website.
Health and Safety Management System
Our Health and Safety Management System is ISO 45001 compliant. An external third
party (DNV) audits our management system annually. Our ISO 45001 certification is valid
until 2024.
In addition, we perform periodic health and safety audits of our operation and
maintenance suppliers to monitor compliance with legal regulations, contractual
requirements, and our safety best practices.
Health and Safety Best Practices
Our health and safety performance indicators include both our employees´ and
subcontractors’ data.
The Company’s health and safety best practices programme is a key management tool.
It has been in place since 2017 and we regularly update it to include insights gained from
our peers, contractors and suppliers. During 2022, we continued implementing new best
practices as well as incorporating our best practices to newly acquired assets, including:
- Safety awards. We provide (i) quarterly awards to our employees and subcontractors
for the best safety observation reported, and (ii) annual award to the best
improvement opportunities.
- Safety Day. In 2022 we held our Safety Day online and physically at some of our assets
depending on COVID-19 pandemic restrictions. Over 750 Atlantica’s employees and
subcontractors’ employees took part. We honoured 30 Atlantica and subcontractors’
employees with awards for their commitment to safety.
154
Behaviour Based Safety Programme
2022 Safety Day Pictures
In 2022 we started the implementation of the new programme “SafeStart”, aimed at
improving employees and subcontractors’ employees behaviour regarding safety and at
reducing the number of accidents caused by human errors over time.
SafeStart is an add-on to our existing health and safety policy, process and procedures.
We plan to continue its implementation during 2023 and 2024.
Safety App
We have a mobile safety app for our employees and those of our subcontractors to raise
safety awareness at all our assets. The app provides valuable information on safety rules,
information on the use of personal protective equipment (“PPE”) during hazardous
activities, emergency instructions and first aid procedures. It also serves as an important
communication channel with internal and external employees working at our assets to
improve safety through lessons learned.
In 2022, we improved the “Walk and Talk” module to easily and efficiently report unsafe
acts and conditions and prevent accidents.
The app also serves as a tool to promote risk awareness and improve safety knowledge.
On a monthly basis, we launch questions related to “how much do you know about
safety?” through the quiz module. Atlantica provides monthly awards to quiz winners.
COVID-19 Pandemic
In 2022, our COVID-19 Committee, which included the Chief Executive Officer, the
Geographic VPs, the Health and Safety Manager and other members of Atlantica’s
management team, continued adapting measures based on new information released
on COVID-19 in each specific location where our assets and offices are located and took
all necessary actions to manage the risks affecting our employees, operations and
stakeholders.
As COVID-19 became endemic and restrictions eased in most of the geographies where
we operate, we decided to finalise the COVID-19 Committees in July 2022. Since then,
COVID-19 KPIs continue to be discussed at monthly Health and Safety Committees. From
January to July 2022, the COVID-19 Committee held 28 meetings.
155
In 2022 and 2021 we operated our assets and provided a reliable service to all our clients,
with no disruptions to availability or production because of COVID-19.
Health and Safety Performance Indicators
During 2022 we had forty-one assets in operation and three solar projects under
construction. We intend to increase our construction activities in the upcoming years.
Accordingly, and following international best practices, we have improved our reporting
and disclosed our Lost Time Frequency Index (LTFI) and Total Recordable Frequency
Index (TRFI) for both assets in operation and assets under-construction.
LTFI represents the total number of lost-time accidents recorded, including major injuries
(defined as death or serious accidents45), in the last 12 months per million hours worked.
Our LTFI ended 2022 at 2.9, compared to 2.3 in 2021. The increase was mainly due to the
number of accidents with lost-time at our assets under construction, which was partially
offset by the LTFI improvement at our assets in operation.
Lost Time Frequency Index (LTFI) in 2020, 2021 and 2022
Employees
1.9
1.0
0.0
2020
2021
2022
Employees
1.9
0.0
0.5
Total
Subcontractors
4.2
2.0
2.4
2020
2021
2022
Assets in Operation
Subcontractors
2.4
2.1
2.0
5
4
3
2
1
0
3
2
1
Total
2.9
2.3
1.4
2020
2021
2022
Total
2.3
1.4
1.4
5
4
3
2
1
0
3
2
1
0
2020
2021
2022
2020
2021
2022
2020
2021
2022
Employees
Assets under Construction
Subcontractors
8.0
0.0
0.0
15
10
5
0
0.0
0.0
14.5
15
10
5
0
Total
13.1
0.0
0.0
2020
2021
2022
2020
2021
2022
2020
2021
2022
5
4
3
2
1
0
3
2
1
0
15
10
5
0
In 2023, we seek to improve our LTFI performance by implementing new construction
policies, processes, procedures and best practices, and performing internal audits to
ensure compliance with our existing best practices, promote continuous improvement
45 Serious accidents include severe burns, amputation, paraplegia, tetraplegia, major surgery and state of
coma.
156
and share lessons learnt between assets. In addition, we are preparing a pool of
prequalified construction subcontractors based on, among others, their health and safety
performance indicators.
Atlantica’s LTFI is below the sector average.
LTFI Below Sector Average in 2020, 2021 and 2022
5.5
1.4
6
5
4
3
2
1
0
3.3
2.3
4.3
2.9
2020
2021
2022
Atlantica
Sector Average
Note: The Sector Average is calculated based on the Public National Indices weighted by Atlantica’s actual working hours in
each geography. Sources: U.S. and Canada: Bureau of Labour Statistics (2021) and Canada Government (2019); Mexico:
Secretaria del Trabajo y Prevision Social (2021); Spain, South Africa and Algeria: Instituto Nacional de Estadisticas (2021); Italy:
Istituto Nazionale per l'Assicurazione Contro gli Infortuni sul Lavoro (2021); Peru, Chile and Colombia: Superintendencia
Seguridad Social Chile (2021), Oficina General de Estadística y Tecnologías de la Información y Comunicaciones (2021) and
Ministerio de Salud y Protección Social (2022); Uruguay: Banco del Seguros del Estado (2020). For each year, we are considering
the most recent available public information.
In addition, TRFI represents the total number of recordable accidents with and without
lost-time recorded in the last 12 months per million hours worked.
Our TRFI ended 2022 at 5.0, compared to 6.0 in 2021. In 2022, at our assets in operation,
we decreased both the number of accidents without lost-time and the number of
accidents with lost-time while increasing the number of employees in our workforce. As
of December 31, 2022, our workforce increased to 978 from 558 as of December 31, 2021.
This increase was mostly due to: (i) the internalisation of the operation and maintenance
services at Kaxu and at part of our solar assets in Spain, bringing approximately 275
employees and moving safety KPIs from our subcontractors to our employees category,
(ii) the integration of Rioglass, bringing approximately 130 new employees as of January
1, 2022 (additional information is disclosed in the People and Culture section), and (iii)
new asset operations employees in different geographies.
157
Total Recordable Frequency Index (TRFI) in 2020, 2021 and 2022
Employees
5.6
3.0
0.9
2020
2021
2022
Employees
5.6
2.7
0.9
Total
Subcontractors
6.8
6.2
6.3
2020
2021
2022
Assets in Operation
Subcontractors
6.8
6.2
4.7
8
6
4
2
0
8
6
4
2
0
Total
6.0
5.0
5.0
2020
2021
2022
Total
6.0
5.0
3.8
8
6
4
2
0
8
6
4
2
0
2020
2021
2022
2020
2021
2022
2020
2021
2022
Employees
8.0
0.0
0.0
Assets under Construction
Subcontractors
14.5
0.0
0.0
15
10
5
0
15
10
5
0
Total
13.1
0.0
0.0
2020
2021
2022
2020
2021
2022
2020
2021
2022
8
6
4
2
0
8
6
4
2
0
15
10
5
0
Atlantica’s TRFI is below the sector average.
TRFI Below Sector Average in 2020, 2021 and 2022
15
10
5
0
13
10.7
5.0
5.0
7.5
6.0
2020
2021
2022
Atlantica
Sector Average
Note: The Sector Average is calculated based on the Public National Indices weighted by Atlantica’s actual working hours
in each geography. Sources: U.S. and Canada: Bureau of Labour Statistics (2021) and Canada Government (2019); Mexico:
Secretaria del Trabajo y Prevision Social (2021); Spain, South Africa and Algeria: Instituto Nacional de Estadisticas (2021);
Italy: Istituto Nazionale per l'assicurazione contro gli infortuni sul lavoro (2021); Peru, Chile and Colombia:
Superintendencia Seguridad Social Chile (2021), Oficina General de Estadística y Tecnologías de la Información y
Comunicaciones (2021) and Ministerio de Salud y Protección Social (2022); Uruguay: Banco del Seguros del Estado (2020).
For each year, we are considering the most recent available public information.
158
In 2022 we continued to work on the integration of recently acquired assets in order to
implement our safety culture in all regions. We undertook all necessary measures to
minimise potential safety impacts, performed specific external and internal audits, issued
new safety campaigns and bulletins, improved safety inspections, procedures and
training, and extended health and safety bonuses to certain employees to improve
supervision.
The fatality performance indicator at our sites or facilities (including our employees,
subcontractors and other third-party employees at our plants) has been zero, and we
have recorded no major injuries since our incorporation.
We also monitor near-misses and unsafe acts and conditions through our Total
Recordable Deviation Index (TRDI). This index represents the number of near-misses and
unsafe acts and conditions recorded in the last 12 months per million hours worked. The
goal of this Key Performance Indicator (KPI) is to encourage the identification and
communication of near misses and unsafe acts and conditions by our employees and our
contractors’ employees. Given the fact that this helps identify risks and implement
adequate preventive measures, the higher the performance indicator is, the better.
In 2022 our TRDI decreased compared to the previous year. Even though we have
enhanced risk identification processes and communication initiatives at our assets,
identifying near misses and unsafe acts and conditions becomes more difficult year-over-
year. Our preventive reporting programme, mainly through Walk and Talk, has
progressed alongside our measures to managing and mitigating risks. We believe in the
health and safety processes and procedures we have in place, hence we expect the Total
Recordable Deviations to remain relatively stable in the future.
Total Recordable Deviations Index
1,540
1,200
1,198
2,000
1,500
1,000
500
0
2020
2021
2022
Note: We have revised 2020 figures to account for the final number of near-misses and unsafe acts and conditions
We also have a Health and Safety Committee with asset employee representatives at
those assets where we operate and maintain our assets directly. In the rest of our assets,
our operation and maintenance subcontractors have a Health and Safety Committee with
their employees’ representatives. As asset owners, we are regularly informed on the
results of these committees.
Following GRI requirements, the Occupational Disease performance indicator, caused by
occupational activities which have a high incidence or high risk of specific diseases, is
zero both for our employees and for our subcontractors’ employees’. We do not consider
COVID-19 an occupational disease.
159
By 2022 year-end, approximately 60% of our assets had achieved more than 1,000 days
without lost time accidents and approximately 70% over 500 days without lost-time
accidents.
Local Communities
Key facts:
✓ Community investments focused on improving infrastructure and supporting
education
We acknowledge that our day-to-day activities have impacts on nearby communities. We
recognise that the communities where we operate are where some of our employees and
other stakeholders live and raise their families, and where part of our future workforce is
educated and trained. We foster communities’ economic prosperity through local
purchases and by hiring local employees. As such, it is key for us to be both proactive
and a valued member of our communities.
We have a Stakeholder Policy and a Local Community Investment and Development
Policy in place that set the basis to support local communities, collaborate with them and
promote their environmental, economic and social progress. Both policies are available
on our website.
Our Geographic VPs and local managers are responsible for community relations and
monitoring community development programmes. Monitoring KPIs include quantitative,
qualitative, remote and physical analysis.
Each geography has its own procedures and consultation guidelines in place to speak
with community leaders and identify local needs. This usually involves physical meetings
or phone calls between our local employees and local communities. We have learnt from
our "boots-on-the-ground" approach that we need to adapt to local requirements and
that communities located close-by may have very different needs, which evolve over
time. A proactive approach and scheduled activities undertaken by our local employees
to efficiently identify and manage local stakeholders and communities of interest is key
to the success of our relationship with local communities.
We engage and work collaboratively with local communities from the development
phase. We also comply with permitting, local law and regulation in-place, and have
purchased locally where possible and hired local employees during the construction
phase. During 2022 we had forty-one assets in operation and three solar projects under
construction. We intend to increase our development and construction activities in the
upcoming years.
In addition, ex-post controls are usually performed. Once an investment is completed,
Atlantica’s employees visit the site to review the investment’s outcome and speak with
local stakeholders. The agreement reached with the community along with the local
stakeholders’ feedback, provides sufficient information to conclude on our investment
positively or negatively. Lessons learnt are then internally shared within Atlantica if
deemed appropriate.
160
We have a grievance mechanism for local stakeholders to directly contact our local
managers. We also have corporate communication channels to report any misconduct,
irregularities or instances of non-compliance, as detailed in the Business Ethics section.
We also take a proactive approach to preventing, detecting and acting on local
community conflict risks concerning water resources. Any potential risk or grievances
concerning water resources would be addressed and followed-up in our regular
communications with them. In 2022, 2021, and 2020 we did not receive any negative
feedback from local communities regarding our management of water resources,
including at those assets located on water-stressed areas, nor have we been subject to
water-related incidents with substantial impact on cost or revenues.
To emphasise the importance of local community engagement, some local managers
have to achieve certain social objectives as part of their variable remuneration.
Considering that Atlantica is present in different geographies, our local communities long
and short-term strategy varies depending on the communities needs:
Medium / Long-Term
Infrastructure1
-
-
-
Education / Skill
Development
-
-
U.S.
Peru
Chile
Colombia
Spain
South Africa
Algeria
Short-Term2
Basic Needs3
-
-
-
1 Infrastructure usually involves building, maintaining or upgrading roads, cleaning irrigation canals, etc.
2 One-year period.
3 Basic needs includes food and clothes donations.
In 2022, we invested $1.5 million in local communities, compared to $1.3 million and $1.2
million in 2021 and 2020, respectively.
In Peru and Chile, we have several employees who visit the areas where we own and
manage our transmission lines. Among others, they review that: (i) we comply with all
our obligations including Health and Safety, environmental conditions, permits, etc., (ii)
we listen to the communities’ needs and, (iii) we jointly agree to develop, execute and
monitor development programmes with those communities. These employees report to
the Country Manager. Local needs are discussed in the Geographic Committee if deemed
necessary.
Peru
Local communities near our assets in Peru generally require road maintenance support.
We have an annual plan in place to execute road maintenance.
In 2022, we invested approximately $294 thousand in different initiatives that benefited
local communities located near our transmission lines and our mini-hydroelectric power
plant. In 2021 and 2020 we invested approximately $289 thousand and $115 thousand,
respectively.
2022 investments mainly relate to:
161
✓ Improving infrastructures (i.e., road construction and maintenance, cleaning irrigation
canals, providing irrigation maintenance supplies, etc.)
✓ Supporting indigenous people through agriculture and livestock development
projects.
Construction and maintenance of roads
Chile
In 2022, we invested approximately $85 thousand in initiatives that benefited (i) 18
indigenous communities representing more than 1,000 people of different ethnicities.
The funds were invested in house improvements, small businesses, cultural activities and
sustainable agriculture initiatives, and (ii) 40 students who received support to pay
education tuition fees and purchase school supplies.
Colombia
In 2022, we invested approximately $74 thousand in initiatives that benefited local
communities, mostly indigenous people, close to our PV plants, including among others,
Christmas presents to children and the construction of a nursery to preserve local plant
species.
Algeria
During 2022, we donated approximately $30 thousand to the local communities near the
water desalination plants. We also donated approximately $30 thousand in 2021 and
2020.
Skikda
Donations benefited needy families in the Skikda commune. These included school
supplies kits and bags for 188 schoolchildren and food baskets.
162
Donation of school supplies
Donation of food
Honaine
Donations benefited needy families in the Honaine commune. These included school
supplies kits and bags for 200 schoolchildren and food baskets.
Donation of school supplies
Donation of food
In March 2022, the three water desalination assets celebrated the World Water Day. Both
local and regional authorities attended the events, which included a presentation and a
tour of the assets.
South Africa
World Water Day Event
We participate in substantial social and economic development activities in South Africa
as part of a collaborative effort with the Department of Energy of South Africa. Kaxu is
located in the Khai Ma Local Municipality of Northern Cape Province. Kaxu’s social and
economic development activities are governed by an Implementation Agreement with
the South African Department of Energy. This agreement sets out key economic
development obligations to positively benefit local communities. Kaxu contributes 1.1%
163
of its yearly collections to be reinvested in the local communities that lie within an
approximately 50km (31 miles) radius of the site, as well as a very remote community
beyond this distance.
In 2022, Kaxu invested approximately $916 thousand in community activities, including:
• We continued supporting two of our flagship programmes, Kindergarten and Soup
Kitchens project, which give meals to children and people in need from communities
near our facilities. Investment: $96 thousand.
• Education and skills development is one of the key elements to promote economic
community development. Kaxu addresses this need by means of an internship and
bursary programme The bursary programme grants the youth within nearby local
communities the opportunity to study at any tertiary institution of their choice in the
country. The programme includes tuition fees, accommodation and a monthly
allowance to help with the living expenses of each student. Our Internship
programme allows young individuals to gain valuable experience to prepare them for
the South African Labour market. Investment: $149 thousand
• We distributed school clothing at primary schools (Back2School Programme).
Investment: $51 thousand.
• We provided local schools with additional teachers to assist with overcrowded
classrooms. Investment: $66 thousand.
• We upgraded basic needs infrastructure comprising of water supply and purification
plants, as well as equipment upgrades to a local hospital. Investment: $55 thousand.
• We supported three regional community-based agricultural programmes through
equipment, infrastructure and materials. We plan to continue supporting them until
they become self-sustainable. Investment: $167 thousand.
As part of our obligations, we also help create jobs to empower black citizens from local
communities. During 2022 and 2021, 79% and 81%, respectively, of the employees hired
by the Kaxu operation and maintenance supplier were black citizens, exceeding the
requirements defined by the project. Furthermore, approximately 30% of employees
working at the plant in 2022 and 2021, came from local communities, also exceeding the
requirements defined by the project. Due to its remote location and technical skill
requirements, the Kaxu plant provides job opportunities to citizens from various different
areas in South Africa. As of December 31, 2022 approximately 95% of the employees
were South African citizens, and the remaining 5% are support staff from different
countries.
164
Agriculture
Social Welfare
Support
Infrastructure
and
Equipment
Upgrades
Spain
Agricultural support in Onseepkans
Melon harvest delivered to market
Kindergarten feeding scheme programme
Back2School Programme – New uniforms
Hot water and air-conditioning provided to a local hospital
In 2022, we donated $2.5 thousand to the Congregation of Little Sisters of the Poors, an
organisation that helps elderly people in need in different countries.
165
Donation to the Congregation of Little Sisters of the Poor
In Spain, we also promoted the benefits of clean energies among local communities. We
invited university students and organised a birdwatching trip with two ornithologists for
40 schoolchildren to one of our solar plants.
United States
Solana
In 2022, Solana donated backpacks and supplies to the Gila Bend School valued at $5
thousand, an automated external defibrillator (AED) to the Gila Bend Fire Department
valued at $1.6 thousand, and $1 thousand to the Paloma School for a Family Fun Night.
AED donation to the Gila Bend Fire Department
Mojave
In 2022, Mojave donated $5 thousand to the Mojave Environmental Education
Consortium (MEEC) to provide training and resources to local students in projects such
as energy, air quality, water quality and sustainability, as well as enrolment in a field trip
programme. In addition, we also donated a business copier machine to a local school to
support the educators.
166
Coso
In 2022, we provided cash donations of $108 thousand to support college scholarships,
local youth sports, schools, and various local organisations and charities. We also
provided support for the building of a new pavilion at one of the local parks. In addition,
we sponsored fishing derbies, concerts, fairs, parades and other events that generated
revenues for the local communities.
Support to the Eastern Sierra Foundation
Donations to the Bishop Sunrise Rotary
Asset Management
Asset management refers to the systematic process of developing, operating,
maintaining and improving the assets in the most cost-effective manner, while
considering costs, risks, opportunities and performance factors. Asset management also
involves health and safety, environmental matters, compliance, financial, economic and
other practices applied to the assets.
Excellence and efficiency are part of our core values. We believe in the outstanding and
disciplined operation of our assets, while seeking operational excellence in a cost-
efficient manner. Atlantica’ asset management policy is publicly available on our website.
Asset managers supervise day-to-day activities of each of our assets and report to three
Geographic VPs, who have full responsibility and accountability for the assets they
manage. In addition, the corporate operations team supports asset managers by auditing
the assets’ health and safety, operational and environmental performance by
implementing best practices and improvements, and by developing asset management
tools, while the internal audit team audits asset records, processes and procedures.
167
Summarised Asset Management and Corporate Department Functions
and
best
practices
Asset Management Functions
Manage operation and maintenance activities.
Implement
audit
recommendations, and share lessons learned
ESG management2, including implementing a
zero-accident culture, minimizing environmental
impacts, and overall asset risk identification and
mitigation
Cash management, budget-tracking, preparing
financials
Manage relationships with all asset stakeholders
Measure, monitor and report asset KPIs
Corporate Department1 Supporting Functions
Operations, health and safety, environment and
quality
Accounting,
financing,
control,
administration, tax, insurance and information
technology3
budget
Internal audit and risks management
Legal, compliance, and people and culture
Purchasing
1 Corporate departments focused on supporting and controlling geographies.
2 We encourage you to read section Sustainability Governance for further details on ESG-related functions.
3 We encourage you to read section Innovation Management for further details on enhanced machine learning
capabilities aimed at improving asset performance.
Asset Management Approach
Atlantica’s asset management objectives and targets are set on an annual basis. These
are discussed and agreed at the Health and Safety, ESG and Operations Committee. The
Board of Directors approves consolidated key performance indicators.
We believe in a disciplined and efficient asset management approach. To achieve this,
we monitor the performance of our assets in real time. We identify deviations, analyse
them, learn from potential errors and apply corrective actions whenever needed.
We believe that by investing in our monitoring and predictive capabilities, we will
improve our asset performance over time. We refer to the Innovation Management
section for detailed information on our data analytics and machine learning initiatives.
We have monthly KPIs on health and safety, operation and maintenance, environmental
metrics, equipment availability and overall plant performance. We also have an ERP-
software that enables us to have strict control over our inventory, spare parts, work
orders, work permits, accounting, and maintenance records among other thigs.
Atlantica’s Health and Safety, Environmental and Quality Management System are ISO
45001, 14001, and 9001 compliant, respectively, for the activities of acquisition and
management of contracted assets. An external third party (DNV) audits our Health and
Safety, Environmental and Quality Management System annually. Our certifications,
obtained for the first time in 2015, were renewed in May 2021 and are valid until May
2024. In addition, our Information Security Management System (ISMS) is ISO 27001
compliant. This certification was obtained in September 2022 and is valid until September
2025.
The Company’s management system gives us a high degree of confidence that we
comply with our own policies and with the regulations in force in each of the countries
we operate in. In particular, we measure and monitor the environmental impact of our
activities (including among others how these impact our local communities close to our
assets as well as other stakeholders), and we analyse initiatives to reduce our GHG and
non-GHG emissions, water consumption, and hazardous and non-hazardous waste.
168
We perform annual internal audits on our assets to ensure compliance with our best
practices and to promote continuous improvement. The Operations Department audits
all our assets at least every two years. The purpose of these audits is to perform an in-
depth operational, maintenance, engineering, health and safety and environmental
indicators assessment, as well as to assess compliance with internal corporate reporting
requirements. The internal audit team reviews the internal controls and financial
information of all our assets on an annual basis. Specific internal audits may be carried
out on certain assets on an as-needed basis.
Audit findings are discussed between the Geographic VPs, Asset Managers and the
Operations Director or the Head of Internal Audit. Key audit findings are discussed in the
Geographic Committees, allowing senior corporate management to better assess our
business activities, identify improvement areas and implement corrective action plans
when necessary. In 2022, we had 13 of our assets audited by the Operations team, which
resulted in recommendations for 273 improvement actions (vs. 91 in 2021). A high
percentage of these improvement actions relate to non-material findings corresponding
to operation and maintenance, health and safety, and environmental internal standards.
In 2022, we identified 182 additional improvement actions compared to 2021. This was
mainly due to the increased number of assets audited (including recently acquired assets
where we have performed audits following Atlantica’s asset management standards,
process and procedures), and the increased scope of our audits. In 2021, due to COVID-
19 restrictions, some audits were performed remotely and some others were performed
partially, resulting in a lower number of identified improvement actions.
Number of Assets Audited and Improvement Actions in 2022, 2021 and 2020
Number of assets audited
Number of identified
improvement actions
2022
13
273
2021
7
91
2020
12
173
Note 1: We have revised 2021 and 2020 figures following the updated 2022 classification (e.g., account for Solacor 1&2
as one asset (vs. two assets)).
Note 2: Approximately 20% of the identified improvement actions in 2022 have been implemented. The rest (improvement
actions mainly identified in Q3 and Q4 2022 audits) are expected to be implemented during 2023.
Note 3: All improvement actions identified in 2021 were implemented during 2021 and 2022.
Geographic VPs, Asset Managers and the Corporate Operations team dedicate time and
effort to implement improvement actions. The progress on implemented improvement
actions are reviewed at different management committees.
To meet Atlantica’s asset management objectives, the Company provides specific
training to its employees. In 2022, training received by our asset employees included
health and safety, enhanced technical skills on electric systems, heat exchangers, and
hydraulic pumps among others, and compliance-related programmes. Atlantica’s senior
management is convinced that well-trained employees will foster continuous day-to-day
improvement, hence improving asset performance.
Our asset management functions include ESG factors. On the environmental side, asset
managers are generally requested to share lessons learnt, implement best practices,
measure, monitor and report KPIs, and implement internal audit recommendations and
actions to reduce our environmental footprint. Regarding the social dimension, asset
managers are requested to implement measures to promote and maintain a zero-
169
accident culture. On the governance dimension, asset managers are requested to
proactively manage asset risks and ensure asset compliance with internal and external
rules and regulations.
Summarised Key Asset Management ESG-Related Responsibilities
Environment
- Identify environmental risks,
Social
- Implement a zero-accident
Compliance
- Compliance with all
improve efficiency and
reduce overall costs.
culture at all assets.
- Identify health and safety
- Implement environmental
risks, perform walk & talks.
audit findings
recommendations.
- Share lessons-learnt and
implement operational,
environmental, and quality
best practices.
- Maintain environmental and
quality management system
certifications.
- Implement health and
safety audit findings
recommendations.
- Share lessons-learnt and
implement health and
safety best practices.
- Maintain health and safety
management system
certifications.
- Measure, monitor, and
- Measure, monitor, and
internal and external rules,
regulations, processes, and
procedures.
- Proactively manage and
report asset risks.
- Promote reporting of any
complaints and concerns,
as well as any breaches of
the Code of Conduct or
any conduct contrary to
ethics, law, or the
company’s standards.
report key GHG and non-
GHG emissions, waste and
water indicators. Implement
actions to reduce their
impact.
- Implement biodiversity
initiatives.
report key social indicators,
including health and safety,
and people and culture key
metrics.
- Propose suppliers
considering the
environmental and
biodiversity impacts of their
product/service.
- Support long-term
development of local
communities close to our
assets.
Asset Closure
We are committed to rehabilitating land to its “before-use” state, minimizing negative
impacts. As of December 31, 2022, our assets had a weighted average remaining contract
life of approximately 14 years46. Our first Power Purchase Agreements (PPA) or regulated
contract where we have operational control ends in 2031 and in many cases the useful
life of the asset goes beyond the duration of the PPA. For example, the PPA of Lone Star
II, one of the assets in our Vento II portfolio where we own a 49% stake, ended in January
2023 and the asset continues operating, selling electricity at electricity market prices. No
asset has been dismantled since our incorporation. We believe that we can continue
operating some of our assets beyond their contract or regulatory life. ATN and ATS
transmission lines property will be transferred to the government at the end of the
concession period. For the rest of the assets, if or when we decide to stop operations
after the contracted period, we are committed to dismantling the asset and returning the
46 Calculated as weighted average years remaining as of December 31, 2022 based on CAFD estimates for
the 2023-2027 period, including assets that have reached COD before March 1, 2023.
170
land to its original state. In most of the assets, the process would consist of taking
equipment apart. We do not expect any environmental or landscape impact after
dismantling.
On a yearly basis, we update our dismantling provision. The estimated total amount of
dismantling costs include health and safety and environmental measures to avoid
significant environmental or landscape impacts. We plan to involve local communities in
the dismantling activities. Our Chief Executive Officer and Geographic VPs hold
responsibility and accountability for future land closure and rehabilitation. For more
information on dismantling provisions, please read our 2022 financial statements
available in this report.
In USD million
Dismantling provision
2022
141
2021
125
2020
88
The dismantling provision increase from $125 million in 2021 to $141 million in 2022 was
mainly due to dismantling obligations from recently acquired assets. The increase from
$88 million in 2020 to $125 million in 2021 was mainly due to the reduction of the useful
life of our solar plants in Spain from 35 years to 25 years after COD following the Energy
and Climate Policy Framework adopted by Spain in 2020. The useful life reduction
increased the dismantling provision as the dismantling of the plants is expected to occur
earlier.
Innovation Management
Within the energy sector, innovation contributes to the fight against climate change
through new or enhanced technologies that enable more sustainable, reliable and
efficient solutions, including storage and green hydrogen solutions. Innovation is also
key in the development of new tools and systems to more efficiently operate and manage
sustainable infrastructure assets. Artificial intelligence in general, and particularly data
analytics and machine learning, provide new solutions to predictive analysis for the
maintenance and operation of generating assets in a sustainable and cost-effective
manner.
We own a total of 31 patents and technology licences, as well as 6 patents currently in
approval process, related to key components of our assets. We have an Operations
Department that dedicates time and effort to identifying potential measures to improve
asset performance, reduce operating costs and develop tools to manage our assets more
efficiently. We also have joint-collaboration agreements in place with universities and
innovation institutions as well as with certain suppliers and service providers across the
regions where we operate to develop intelligent solutions to improve asset performance.
In addition, we have an in-house advanced analytics team to improve the performance
of our existing technologies. The advanced analytics team focuses on data analytics and
machine learning technologies to provide accurate energy production forecasts, predict
equipment breakdowns or malfunctions, and reduce the risk of major outages as well as
health and safety and environmental risks, among others.
In 2022, we continued (1) strengthening our modelling, data analytics and artificial
intelligence capabilities, and (2) moving forward on our digitalisation roadmap to cover
171
a broader scope of key components and the range of failure mechanisms. In particular,
we have: (i) expanded our portfolio of machine learning models, physical models and
diagnosis capabilities, and (ii) signed new and increased scope of existing collaboration
agreements with equipment manufacturers. We have also continued to deploy sensors
and tools on key equipment at our assets in order to collect asset information and
develop data-driven models to:
- Detect anomalies and operational deviations of key equipment,
- Diagnose faults or failure and assessing their root causes,
- Predict expected fault progression, and
- Recommend the most suitable maintenance actions, among other actions.
Furthermore, we have improved our remote monitoring capabilities of our assets from
our centralised monitoring centre, including the development and automatisation of
operational reports. We have also hired additional specialised personnel.
We have already benefited from our innovation initiatives. For example, thanks to
deployed sensors on key equipment and our data analytics capabilities, we have been
able to prevent failures in: (1) wind turbines, (2) electric transformers in solar and wind
assets, and (3) water feed pumps in solar assets. We expect that our efforts in operational
innovation will continue, over time, to reduce costs, to improve asset performance,
maximizing energy production, minimizing risks and to extending the useful life of our
assets.
Cybersecurity and Data Privacy
Our information security policies, procedures and processes apply to all our activities in
all the geographies where we operate.
Cybersecurity
Atlantica has a digitalised, cloud-based collaborative work environment in-place that
promotes a strong cybersecurity culture.
Atlantica relies on both a physical and a digital technological infrastructure to support its
processes and operations. These systems are subject to disruption, damage or failure
from a variety of sources, including, without limitation, computer viruses, security
breaches, cyber-attacks, ransomware attacks, malicious or destructive code and phishing
attacks. Cybersecurity incidents, in particular, are constantly evolving and include
malicious software, attempts to gain unauthorised access to data and other electronic
security breaches that could lead to disruptions in systems, unauthorised release of
confidential or otherwise protected information and to the corruption of data. We have
preventive, detective and reactive controls in-place to avoid and/or mitigate damage or
failure to our plants that could lead to business disruption (i.e., being unable to operate
our plants or to access our Enterprise Resource Planning (ERP) systems). These controls
are based on international standards, frameworks, best practices, internal and external
audit recommendations, and insights gained from other companies.
Details on our cybersecurity risks are addressed in the Principal Risks and Uncertainties
section of the Strategic Report.
172
To prevent cybersecurity risks, we regularly review our capabilities, reassess our IT policy,
incident response procedure and, cybersecurity practices, as well as review our
communication and cybersecurity related training across the Company to support
resilience across our ecosystems. In 2022, we continued investing time and effort in
strengthening prevention, monitoring and threat-detection measures in line with
international standards. For example, our Information Security Management System
(ISMS) is ISO 27001 compliant. Our certification was obtained in September 2022 and is
valid until September 2025. We also increased our on-site and cybersecurity measures to
ensure that our systems remain functional to serve the operational needs of our blended
on-site and remote workforce, keeping them in operation to ensure uninterrupted
service to our customers. These measures ranged from software improvement, tailored
communications to raising security awareness among our workforce, and implementing
mandatory IT security training aimed at detecting, monitoring and preventing threats.
For example, our employees received training on identifying phishing in its different
forms (e.g., email, phone calls, SMS, etc.) its potential consequences (e.g., data breaches,
plant operation disruption, economic loss, reputational damage, etc.) and implementing
sophisticated corporate and personal password maintenance.
We also regularly conduct internal and external audits to ensure that our cybersecurity
controls are updated and effective, including simulated and targeted cyberattacks to our
servers and employees’ accounts. The results of this ethical hacking exercise are
published quarterly in a “Wall of shame” that is accessible to every employee in the IT
Security Hub. We regularly update our risk map on identifying, evaluating and mitigating
information security risks. High-level areas of focus are IT policies, human resources
security, access control, physical security, operational and communication security,
cryptography, incident management, supplier relationships, business continuity and
compliance.
Cybersecurity-Related Incidents in 2022, 2021 and 2020
Number of cybersecurity incidents
Cybersecurity governance
2022
0
2021
0
2020
0
The Board is responsible for the effective oversight of the Company’s strategy and
performance, financial reporting, corporate governance process, and internal control and
risk management framework, including cybersecurity risks. The Board of Directors is
informed at least twice a year on the cybersecurity strategy, measures and systems to
securely protect and safeguard Atlantica's information.
At the management level, our Head of IT, with approximately 25 years of experience in
information security, is responsible for implementing Atlantica's cybersecurity strategy.
The Head of IT reports to the Chief Financial Officer (CFO) and is a member of both the
Management Committee and the Compliance Management Committee. The Chief
Executive Officer, the CFO and the Head of IT review Atlantica's information security at
least on a monthly basis.
173
Data Privacy
All Atlantica’s activities, including those of our directors and employees, as well as
everyone we have a relationship with, are required to comply with our Compliance Policy
on privacy and personal data protection. This policy is based on the European General
Data Protection Regulation (GDPR), the U.K. Data Protection Act (DPA) and applies to all
Atlantica companies. In particular, the Policy sets a framework that enables compliance
with local data protection and privacy laws, and defines a baseline for those countries
where there are no equivalent legal requirements.
We have several mechanisms in-place to ensure effective implementation of our Privacy
Policy:
• Our Code of Conduct addresses privacy and personal data protection. All employees
receive annual training on our code. The code is approved annually by Atlantica
employees.
• Clear and direct data protection and privacy responsibilities.
- The Compliance Management Committee is responsible for coordinating and
managing personal data protection activities. It is also responsible for reassessing,
on an annual or as-needed basis, the compliance and efficacy of our data
protection and privacy policies. To do so, regular internal and biannual external
audits are conducted to identify and mitigate potential privacy and personal data
risks and their compliance with rules and regulations. For example, as part of
these audits, we review that all our activities comply with data protection and
privacy regulations, including the GDPR requirements. We are committed to
protecting all stakeholder information, including that of employees, suppliers
(including subcontractors working at our assets), investors and other stakeholders
confidential data. In particular:
- The Head of IT and Administration leads day-to-day data protection activities
and is responsible for implementing the control measures and developments
needed to ensure compliance with rules and regulations on data protection in
Atlantica’s information security management systems.
- The Head of Risk Management oversees risk management processes,
procedures and tools implemented by the Company, including the risk map.
Data protection and privacy is included in the risk map. The Board of Directors
monitors risks on a quarterly basis as part of the Company’s risk management
assessment.
- Personal data and privacy issues can be escalated to the Compliance
Management Committee through face-to-face meetings, video or phone calls, or
via email (dataprotection@atlantica.com, or compliance@atlantica.com).
• We provide data protection training to acquaint employees on the rights of
individuals to control their personal information and data confidentiality, integrity
and availability.
• Data protection documentation is available to all Atlantica employees on the
Company’s intranet. In addition, we publicly inform stakeholders about our privacy
data measures on our website
(https://www.atlantica.com/web/en/privacy-
policy/index.html) providing details on:
174
the nature of the information captured,
(i)
(ii) the use of the collected information,
(iii) the possibility for stakeholders to decide how private data is collected, used,
retained and processed,
(iv) how long the information is kept on corporate files, and
(v) how the information is protected.
We do not use stakeholder’s data collection outside of the primary purpose for which
the data was collected, including, but not limited to, selling targeted ads or
transferring data or information to a third-party through either sale, rental, or sharing.
We have a zero-tolerance approach to privacy and data breaches. In 2022, 2021 and 2020
we did not identify any substantiated complaints regarding leaks, thefts, or losses of
stakeholder data.
Incidents Relating to Data Protection and Privacy in 2022, 2021 and 2020
Number of substantiated complaints
- From regulatory entities
- From other sources
Total substantiated complaints
Tax Management
Tax Strategy
2022
0
0
0
2021
0
0
0
2020
0
0
0
Atlantica has a tax strategy in place that serves as a set of principles and guidelines for
all our geographies. This strategy is based on values of integrity, compliance, and
excellence, complies with Schedule 19 of the U.K. Finance Act 2016, and is publicly
available on our website.
Our tax policy, procedures and processes apply to our tax operations, reporting and
compliance of Atlantica and its subsidiaries.
The Tax Strategy applies to directors, officers, finance and administration personnel, tax
professionals employed by Atlantica, as well as other stakeholders, including tax advisors
and service providers.
General Principles
Atlantica is committed to complying with all tax obligations and providing disclosure to
tax authorities. Compliance for Atlantica means paying the right amount of tax in the
right place at the right time.
We are also committed to applying the Organisation for Economic Co-operation and
Development (OECD) tax guidelines for multinational companies - including the
adoption of the arm’s length principle in intra-group related party transactions following
OECD guidelines - and complying with the tax legislation in force in those countries
where we operate.
Atlantica’s Tax Strategy is governed by the following tax practices:
- Legality. Attitude towards tax planning
175
Our business activities are conducted in compliance with tax obligations in the
countries where we are present. We do not engage in aggressive tax planning and do
not participate in artificial tax avoidance schemes to reduce our tax liability. Our tax
planning is supported by economic arguments. In addition, we engage with external
tax advisors where there is need for tax guidance and support.
- Tax risk management and tax governance
We have implemented risk management tools to identify, monitor and mitigate any
potential tax risk.
The management and control of tax risk begins with the identification and
classification of the risks to which we are subject. We regularly assess our tax risks and
uncertainties. The effectiveness of our tax procedures is ensured through different
workflows of approval, periodic monitoring of tax affairs with corporate departments
and local employees, external advisory, and periodic internal and external audits.
Atlantica’s Corporate Tax Department trains, educates and supports corporate and
local departments that manage or process tax data.
- Appropriate relationship with tax authorities
We seek to have a relationship with tax authorities based on integrity, transparency
and good faith, aiming to resolve any potential dispute in a timely manner by working
collaboratively with them.
We engage with tax advisors where a particular tax law or regulation is unclear or
subject to interpretation to be fully compliant or to help the administration team in
those geographies where we do not have a local tax team.
Tax governance bodies and organisation
Atlantica has integrated the Tax Strategy into its businesses. The tax strategy is applied
through different governance bodies at Board and management level.
Board of Directors
- Responsible for the effective oversight of among others, Atlantica’s tax affairs.
-
The Board reviews potential tax risks when evaluating investments and
receives tax updates on an as-needed basis.
Audit Committee
(at Board level)
-
The Audit Committee assists the Board in fulfilling its oversight responsibilities
concerning the risks, including the tax function.
Business
Committee
Investment
Committee
Accounting and
Disclosure
Committee
The Audit Committee receives tax updates on an as-needed basis.
-
- Analyse short and medium-term key decisions and define appropriate action
plans to implement these decisions, including tax affairs.
- Analyse potential growth opportunities considering tax affairs.
- Responsible for analysing and implementing the Company’s most significant
accounting policies, including those related to tax accounting affairs and
decide on the appropriate disclosure of tax matters.
Key tax-related departments and responsibilities include:
Corporate tax
Department
- Under the CFO´s supervision, is responsible for the design, development,
implementation and coordination of the tax function following our Tax
Strategy.
176
Local tax and
administration
departments
Geographic VPs
and country
managers
Consolidation
Department
Internal audit
Department
- Meets with Geographic VPs, country managers and tax advisors among others,
are held to control tax risks.
- Responsible for the execution of the tax functions. They are responsible for the
tax compliance functions in the countries under their responsibility in
coordination with the Corporate Tax Department.
- Overall responsible for the assets they manage, including tax affairs in the
countries under their responsibility.
- Responsible for the accounting policies, including the tax accounting matters
and deferred taxes.
- Oversee
internal controls, evaluate policies, procedures and
tools
implemented by the Company, including those related to the tax function.
Tax stakeholder engagement, management of stakeholder concerns, and
mechanisms for reporting unethical or unlawful tax behaviour
We have different communication channels in place to report any misconduct or
instances of non-compliance with our compliance policy framework, including tax
irregularities, or unethical or unlawful tax behaviour. These are the whistleblower and the
compliance channels. Additional information is provided in the Ethics section of this
Strategic Report.
177
Section 172 Statement
The Board is ultimately responsible for the long-term success of the Company. Our
Directors are aware of their responsibility to promote the success of the Company in
accordance with Section 172 of the Companies Act 2006 and have acted in accordance
with these responsibilities during the year.
The Board’s Approach to Section 172 and Decision-Making
The Board acknowledges that Atlantica’s purpose is to support the transition towards a
more sustainable world by investing in and managing sustainable infrastructure assets,
while creating long-term value for its shareholders, employees, suppliers, customers,
business partners, local communities and debt investors. As such, the Board has
considered their interests and the impact of its decisions on these stakeholders as part
of its decision-making process. When making such decisions, each Director has acted in
the way they consider, in good faith, would most likely promote the success of the
Company for the benefit of its stakeholders.
The Board believes governance of the Company is best achieved by delegation of its
authority for the executive management to the Chief Executive Officer, subject to a set
of defined limits and monitoring by the Board. The Board routinely monitors the
delegation of authority, ensuring that it is regularly updated, while retaining ultimate
responsibility.
Stakeholder Identification and Engagement
At Atlantica, we acknowledge that our stakeholders have a broad range of interests and
viewpoints. We believe that collaboration with them is key to our success. As such, we
listen and do our best to gain stakeholders’ trust, thus leading to a more stable and long-
term relationship. Across the Company, we engage with our stakeholders to obtain input
that can be helpful as we execute on our strategy.
We believe that systematic stakeholder engagement, executed properly, is likely to result
in ongoing learning within the Company, as well as increased accountability to a range
of stakeholders.
We have made a two-way engagement channel available for our stakeholders to build
trusting long-term relationships. We refer to the ESG materiality analysis for further
information on stakeholder inclusiveness.
The Board ensures that stakeholder considerations are considered in strategic decision-
making by requiring that strategic proposals include an analysis of key stakeholder
impacts, which form part of the decision-making process.
Our Employees
Our people are fundamental for the long-term success of the Company. Atlantica, its
Board and its management are committed to prioritising and actively promoting health
and safety. In addition, we provide a work environment free of discrimination,
178
intimidation and sexual and non-sexual harassment where everyone can participate in
the success of the business. We refer to sections Health and Safety, Business Ethics,
Human Rights, and People Management.
We perform an employee climate survey at least every three years to assess employees’
satisfaction. The goal is to receive feedback, as well as to engage with our employees.
The survey is confidential, managed by a third-party, and results are aggregated, shared
and discussed with supervisors. In October 2022 we carried out an employee climate
survey. Approximately 78% of employees took part and the general engagement with
the Company was 68%. Atlantica scored highly in several areas, including employees’
satisfaction with their immediate manager/supervisor. This survey helped us to identify
certain areas for improvement. Management prepared action plans for those areas. The
Board receives reports on the survey results together with action plans that management
intends to take moving forward.
We refer to the Employees, Diversity and Inclusion, Business Ethics, Our People and
Culture, Health and Safety and Data Privacy sections for further employee-related details
and initiatives.
Key employee-related metrics followed by the Board include:
Health and Safety
Human Rights
Employee
Percentage of Women
Data Protection and
Privacy
Total Recordable Frequency Index (TRFI)47
Lost Time Frequency Index (LTFI)48
Near Misses Unsafe Acts and Unsafe
Conditions Frequency Performance Indicator
Number of human rights incidents
Voluntary Turnover by year-end
Total turnover by year-end
Average Annual Training per employee
(in hours)
At Management Level
Over Total Number of Employees
Number of data protection and privacy
incidents
2022
5.0
2.9
1,198
0
12.8%
22.2%
29
23%
20%
0
2021
6.0
2.3
1,540
0
11.0%
16.9%
37
23%
25%
0
Note 1: Turnover rates calculated based on the average number of employees in each year.
Note 2: Health and safety industry benchmarks provided in the Health and Safety section.
Our Shareholders and Debt Investors
The support and engagement of our shareholders, potential shareholders, debt investors
and capital markets is key for the future success of our business. Continued access to
capital is of vital importance to the long-term success of our business, especially
considering that our strategy includes distributing a high portion of the cash we generate
as dividend and growing that dividend through acquisitions and investments.
We strive to effectively communicate our strategic objectives and operating and financial
performance through our engagement activities, including:
1 Total Recordable Frequency Index (TRFI) represents the total number of recordable accidents with and without lost-time recorded in the
last 12 months per million hours worked.
2 Lost Time Frequency Index (LTFI) represents the total number of lost-time accidents recorded in the last 12 months per million hours
worked.
179
- Dialogue with shareholders, prospective shareholders and analysts, led by the Chief
Executive Officer, Chief Financial Officer and Head of Investor Relations. Our Chair of
the Board and Independent Directors are also available to meet institutional
shareholders.
- Quarterly earnings presentations with Q&A.
Major investor relations engagement activities carried out in 2022 include:
- 132 meetings with existing and potential investors.
- Attendance at 21 investor conferences and roadshows.
Investors can contact our Head of Investor Relations or access all public information on
our website (www.atlantica.com).
The Board periodically receives feedback on the views of our shareholders, including their
main issues and concerns. The Board also reviews reports from sector analysts on the
Company.
The Annual General Meeting is also an important part of effective engagement and
communication with shareholders. All shareholders have the opportunity to ask
questions at our AGM meetings. The Chair of the Board and the Chairs of all the
Committees at Board level are available to answer questions at that meeting.
We also maintain a dialogue with the two proxy advisory agencies covering Atlantica to
explain the main resolutions included in the notice to our AGM and answer any questions
they may have.
The Environment and Local Communities
Our Board of Directors believes climate change can lead to significant risks and
opportunities for the Company and its stakeholders. Our strategy is focused on climate
change solutions in the power and water sectors and we therefore see sustainability and
climate change as a growth opportunity for us.
We have a GHG reduction objective approved by the Science Based Targets initiative
(SBTi). Atlantica targets to reduce Scope 1 and 2 GHG emissions per kWh of energy
generated by 70% by 2035 from a 2020 base year49.
In addition, we have a goal to maintain over 80% of our adjusted EBITDA generated from
low carbon footprint assets including renewable energy, storage, transmission
infrastructure and water assets.
Following our long-term commitment to sustainability, we have set new targets to reduce
our:
1. GHG emissions. We target to:
(i) reduce our Scope 3 GHG emissions per kWh of energy generated by 70% by 2035
from a 2020 base year, and
(ii) achieve Net Zero GHG emissions by 2040.
49 The target boundary includes steam generation.
180
2. Non-GHG emissions. We target to reduce our non-GHG emissions50 per kWh of
energy generated by 50% by 2035 from a 2020 base year.
3. Water consumption. We target to reduce our water consumption per kWh of energy
generated by 50% by 2035 from a 2020 base year.
Our Board takes sustainability targets into consideration while making decisions,
including capital allocation. Our Board also monitors the main impacts that our assets
may have on the environment through waste.
Furthermore, we acknowledge that our day-to-day activities have impacts on nearby
communities.
The key metrics followed by the Board are:
At least 80% of adjusted EBITDA coming from
low carbon footprint assets
Scope 1
Scope 2
Scope 3
Total
thousand tonnes of
CO2
thousand tonnes of
CO2
thousand tonnes of
CO2
thousand tonnes of
CO2
GHG Emissions
2022
89%
2021
88%
1,844
1,795
249
814
237
798
2,907
2,830
Scopes 1 and 2 GHG
Emission Rate per Unit of
Energy Generated
tonnes of gCO2/kWh
168
185
Water
Management in
Power Generation
Offsets
thousand tonnes of
CO2
Withdrawal
m3 per MWh
Discharges
m3 per MWh
320
1.42
0.17
260
1.58
0.21
Waste
Management
Hazardous waste
Non-hazardous waste
tonnes of waste
tonnes of waste
1,908
23,142
2,664
22,238
Community Investment and Development
Investments focused on
improving infrastructure and
supporting education
We refer to the Key Performance Indicators, Environmental Sustainability and Local
Communities sections for further environment and local communities-related details and
initiatives.
Our Suppliers and Business Partners
We have a Supplier Code of Conduct and expect our suppliers to adhere to it. We include
our requirements in our contractual arrangements with suppliers. The Board reviews our
Code of Conduct and Supplier Code of Conduct on an ongoing basis, at least once per
year. In addition, we have a Modern Slavery and Human Trafficking Statement which sets
out the steps taken to prevent modern slavery in our business and supply chains.
50 Non-GHG emissions including nitrogen oxide (NOx), sulfur dioxide (SO2) and carbon monoxide (CO).
181
In 2022 we continued the environmental certification of our suppliers described in the
Supply Chain Management section.
In addition, we have partners in some of our assets. In some cases, such as at Solacor 1
& 2, Solaben 2 & 3, Seville PV, Kaxu, Skikda, Tenes and Chile PV 1, 2 and 3, we have
control over the asset. In other cases, such as Honaine, Monterrey or Vento II, we do not
manage the projects’ day-to-day operations. As an example, our partner in Vento II is
EDP Renewables (EDPR), a company with ethical standards similar to those set out in our
Code. In any case, our Geographic VPs maintain regular engagement and dialogue with
our partners. To the extent possible, considering Atlantica’s ownership interest, we try to
apply our Code of Conduct and business ethics practices in affiliates where we do not
have control.
Among others, the key metrics followed by the Board are:
Adherence of new suppliers to Atlantica’s Supplier Code of Conduct
Internal pre-screen evaluation of new suppliers
External supplier evaluation1
1 Percentage of total annual operating expenses
2022
~100%
100%
~45%
2021
~100%
100%
>51%
We refer to the Supply Chain Management section for further supply chain-related
details.
Our Customers
Our customers are mainly comprised of electric utilities and corporations. We also have
electric systems and government owned electricity and transmission companies as
customers.
Engagement with clients is achieved through dialogue led by Geographic VPs, country
managers and/or asset managers. This generally enables us to identify and react in
advance to our customers’ needs. We listen and do our best to gain our customers’ trust,
thus leading to a more stable and long-term relationship.
We refer to the Customer Management section for further customer-related details.
Strategic Decisions
In 2022, the main decisions relate to our strategy going forward and the investment in
new assets.
Investments
Our Board analyses and approves, if deemed appropriate, investment and acquisition
opportunities proposed by our Investment Committee. We refer to section “Events
during the Period” under the “Strategic Report” section for more information.
When approving these investments, the Board continued to promote the transition
towards a low-carbon energy industry and a business model based on sustainable
development. The Board considered our long-term growth plan, expected returns for
each investment, impact on GHG emissions and environmental targets, synergies with
182
existing assets, risks involved in each asset investment (operational, country and off-taker
credit risk, etc.), and potential impacts to communities and the environment. The Board
also considered resources available to finance these investment in the context of our
broader growth plan. While deciding investments, the Board took into consideration the
interest of all our stakeholders.
We refer to the Events During the Period section (Strategic Report) for further details on
our 2022 investments approved by the Board.
Corporate Financing
In February 2022 we established an “at-the-market programme” (ATM) under which we
may offer and sell from time to time up to $150 million of our ordinary shares. During
2022 we issued and sold 3.4 million shares, representing gross proceeds of $114.9 million.
When approving this financing, the Board took into consideration our strategic growth
plan, the Company’s corporate leverage and how the financing decisions affect all our
stakeholders. The Board also considered the impact of their decisions on shareholders
and debt investors and concluded that the financing transactions would promote the
long-term success of the Company.
We refer to the Events During the Period and Financial Review sections for further details
on our financing activities during 2022.
Dividends
In 2022, the Board decided to pay total dividends of $1.77 per share to our shareholders
in quarterly dividends, a 3.2% increase with respect to the previous year. Details of the
dividend policy are included in Directors’ Report, where we explain our long-term
approach to dividends. The Board decides the dividend on a quarterly basis. The Directors
considered the performance of our assets, cash available for distribution generated in
the period, available liquidity under our financing arrangements and investment plans of
the Company. The Directors also considered the net corporate debt position of the
Company.
The Board deliberated on and concluded that the level of dividends approved would
promote the long-term success of the Company.
We refer to the Events During the Period and Financial Review sections for further details
on our 2022 dividends.
183
Going Concern Basis
The Group has prepared the consolidated financial statements on a going concern basis.
The Directors have considered a number of factors in concluding in their going concern
assessment covering the period to March 31, 2024. The Directors have a reasonable
expectation that the Group and Company will meet its commitments as they fall due over
the going concern period. Accordingly, the Directors continue to adopt the going
concern basis in preparing the Group’s consolidated financial statements and Company’s
standalone financial statements. For further information, please refer to Note 2.1 of the
consolidated financial statements for the going concern basis.
Approval
This Strategic Report was approved by the Board of Directors on February 28, 2023 and
signed on its behalf by Santiago Seage, Director and Chief Executive Officer.
Director and Chief Executive Officer
Santiago Seage
February 28, 2023
184
Governance
185
Governance
Business Ethics
“Integrity, Compliance and Safety” is our first value and prevails over the rest. We are
committed to promoting ethical business practices and complying with all relevant laws
and regulations. Atlantica has a Code of Conduct to ensure consistent and effective
commitment to Integrity and Compliance.
The Company also has policies, processes, and procedures in-place to prevent, avoid and
mitigate actions improper or contrary to law and to ensure ethical principles are applied
in all our activities. We have measures in place to prevent and combat corruption
effectively and efficiently. Our Anti-Bribery and Anti-Corruption Policy applies to all
Atlantica businesses.
Atlantica business activities are governed by laws that prohibit bribery supporting global
efforts to fight corruption. Specifically, the U.S. Foreign Corrupt Practices Act (FCPA) and
the U.K. Bribery Act 2010 make it a criminal offense for companies, as well as their officers,
directors, employees, and agents, (or any other person) to give, request, promise, offer
or authorise the payment of anything of value (such as money, any advantage, benefits
in kind, or other benefits) to a foreign official, foreign political party, officials of foreign
political parties, candidates for foreign political office or officials of public international
organisations to obtain or retain business. Similar laws have been or are being adopted
by other countries. Private bribery is also illegal under U.S. laws, the U.K. Bribery Act, and
the laws of other jurisdictions in which Atlantica operates.
Atlantica is a member of the United Nations Global Compact (UNGC) initiative. The UNGC
and its principles are an integral part of Atlantica’s strategy and our objective is to also
make it part of our suppliers’ strategy. Please read further details in the UNGC section of
this Integrated Annual Report.
We have zero tolerance for modern slavery and we confirm that no incidents of modern
slavery were reported or identified during 2022, 2021 and 2020. Please see additional
details on modern slavery in the Anti-Slavery and Human Trafficking Statement of this
Report and Accounts.
All our employees must annually read, understand, and commit to following our
corporate governance policies. In addition, all our officers and employees working with
confidential information sign a formal commitment annually acknowledging our insider
trading policy.
We regularly provide training to all our employees on our corporate policies to promote
our compliance culture and to ensure that all our employees understand and apply all
our compliance policies.
We encourage our employees and other stakeholders to address any questions or
comments they may have to our compliance team. We have different communication
channels available to report any misconduct or instances of non-compliance with our
compliance policy framework. These are:
- Whistleblower channel: Either through our website or via email. Additional
information is provided in the Whistleblower section.
186
- Compliance channel: Email to (i) communicate any potential irregularities or (ii)
request advice. Additional information is provided in the Compliance Management
Committee section.
Code of Conduct
Atlantica has implemented a Code of Conduct to ensure commitment to Integrity and
Compliance. The Code applies to all directors, officers, and employees of Atlantica
Sustainable Infrastructure plc and each of its subsidiaries, including controlled and
associated non-controlled companies. We make every effort to apply this Code at
associated non-controlled companies given Atlantica ´s level of participation. We also
seek to work or partner with third parties that adhere to principles that are similar to
those set out in this Code. As an example, when we evaluate potential co-investments
with business partners, the Investment Committee and more specifically, the Head of Risk
Management, reviews the business partner’s code of conduct as part of the due diligence
process.
In 2022, two Code of Conduct incidents were identified and investigated following our
internal process and procedures. As a result, among other actions, the employment of
those employees involved was terminated, and comprehensive anti-bribery and anti-
corruption training was provided to local employees. In 2021 and 2020 we did not
identify, nor did we receive, any notification of non-compliances or breaches in relation
to the Code of Conduct.
Atlantica’s Code of Conduct prohibits political involvement of any kind on the Company’s
behalf. Neither the Company, nor its directors, employees, or representatives on its
behalf, can make political contributions (donations to politicians, political parties, or
political organisations) or sponsor events whose exclusive purpose is political
propaganda. In 2022, 2021 and 2020 neither Atlantica, nor any of its subsidiaries made
any financial or in-kind political contributions to political campaigns, ballots measures,
referendums, political organisations,
lobbying organisations, trade
associations with political impact nor other tax-exempt groups, whether directly or
indirectly.
lobbyists or
All Atlantica employees must annually read, understand, and commit to following our
Code of Conduct.
Compliance Management Committee
Atlantica’s Compliance Management Committee is comprised of the General Counsel,
the Head of Risk Management, and the Head of IT and Administration. The Committee
is supervised by the General Counsel - who is also the Compliance Officer, the Secretary
of the Board of Directors and the Head of People and Culture - and reports its activities
to the Business Committee (at Management level), the Nominating and Corporate
Governance Committee (at Board level) and the Board, as applicable. The Compliance
Management Committee’s main objective is to support the Compliance Officer and assist
all our employees and the Board in implementing the compliance programmes, policies
and procedures required by laws and regulations, as well as by best corporate practices.
The Compliance Management Committee receives regular reports from local managers
in each of our geographies where we are present on compliance-related matters.
187
We have a compliance mailbox (compliance@atlantica.com) where our employees and
other stakeholders can send any questions and/or comments they may have. We
encourage our stakeholders to report any irregular behaviour through any of the
available communication channels in place. We have incorporated the communication
channels in many public documents as well as in internal training to encourage its use.
Anti-Bribery and Anti-Corruption Policy
We have an anti-bribery and anti-corruption safeguard and reporting policy and
procedures to forestall and prevent operations related to corruption, bribery, and fraud.
The Policy establishes that:
- Any type of bribery is prohibited.
- Political Contributions are forbidden. Charitable donations and Sponsorships are
subject to internal review and approval.
- Travel, entertainment, and gifts may never be accepted for the purpose of improperly
obtaining, retaining business, or securing any improper advantage from public
officials or private persons.
- Using an independent contractor, agent, consultant, intermediary, reseller, distributor
or any other third party to pay or give a bribe is strictly prohibited.
Additionally, accounting procedures and internal control over financial reporting prohibit
cash payments other than well documented petty cash disbursements which have to
follow very strict procedures.
A summarised version of our Anti-Bribery and Anti-Corruption Policy is available on our
website.
Operations Assessed for Risks Related to Corruption
Atlantica has a Criminal Risk Prevention Programme to mitigate the risk of engaging in
activities that would violate laws in countries where such violations could result in
criminal liability. The criminal risk map for each geography describes the types of offences
that may raise criminal liability for legal entities. Offences vary across jurisdiction and
includes financial offences, money laundering, corruption, bribery, and illicit trade crimes.
In 2022, local external lawyers reviewed our criminal risk map contained all key corruption
crimes in each geography where we are present.
Whistleblowing Channel
The Whistleblowing Channel is an essential part of Atlantica’s commitment to preventing
fraud, irregularities, and corruption. It is available on our website to all employees and
stakeholders in two languages. It is managed by the Audit Committee and serves as a
tool to report any complaints and concerns about management, as well as any breaches
of the Code of Conduct or any conduct contrary to ethics, law, or Company standards.
Confidentiality and no retaliation are the essential operating principles of the channel.
We may suspend these principles only where the claimant did not act in good faith.
In 2022, we received one communication through the Whistleblower Channel. The matter
was analysed following our internal process and procedures. We concluded that the
188
communication was unrelated to Atlantica Sustainable Infrastructures plc, its affiliates
and its businesses. In 2021 and 2020 no communications were received through the
Whistleblower Channel in relation to any irregularities. We have implemented initiatives
to encourage its use, including descriptive and user-friendly disclosure on how to use it,
providing two languages to report misconducts, directly through our internal online and
in-person compliance training, and disclosing our ethics mailboxes in many of our
publicly available reporting.
Training and Communication about anti-corruption policies and procedures
Atlantica has a training programme on the Code of Conduct and related-policies. This
includes the Anti-Corruption Policy, FCPA training and the Criminal Risk Prevention
Programme. Training is provided to all employees on an annual basis. In addition,
Directors generally receive training addressing topics such as Sarbanes-Oxley regulation,
directors’ duties and governance requirements under the Nasdaq rules, the U.S.
Securities and Exchange Commission and the U.K. Companies Act 2006.
In 2022, 2021 and 2020, we provided training to our employees on our corporate policies
to promote our compliance culture and to ensure that all our employees understand and
apply all our compliance policies. We believe the training helps employees to: (i) identify
“red flags” corruption warning signs, (ii) mitigate corruption risks, (iii) report a breach and
understand the steps the Company takes to address whistleblower complaints, including
protection from retaliation, and (iv) understand potential sanctions driven by compliance
breaches.
In 2022, compliance-related training was provided to employees through our online
training platform, in-person training, and real-time video conferencing.
189
Summarised Compliance Training
Training
Goals
Code of Conduct
awareness
Anti-Corruption
Anti-Money
Laundering
Data Protection
Environment,
Social and
Governance (ESG),
Human Rights,
Unconscious Bias,
Gender Equality
and Sexual
Harassment
Sexual Harassment
and Discrimination
Anti-Bribery &
Anti-Corruption
Atlantica
Management
Model
that
could
employees with
employees with
employees with
Acquaint
the
importance of the Code of Conduct
through real-life cases.
Acquaint
the
importance of identifying and avoiding
situations
involve
corruption or conflicts of
interest
through real-life cases.
the
Acquaint
mechanisms or procedures aimed at
giving the appearance of legitimacy or
legality to goods or assets of criminal
origin.
Acquaint employees with the rights of
individuals to control their personal
information and data confidentiality,
integrity and availability.
Acquaint employees with key ESG,
rights unconscious bias,
human
diversity and
inclusion principles,
gender equality and sexual harassment
measures, regulations and policies.
and
sexual
discrimination
Acquaint employees with
harassment
prevention.
Acquaint employees with corruption in
the private and public
sectors,
international
regulation, corruption
risk mitigation, sanctions driven by
compliance breaches and Atlantica’s
anti-corruption policy.
on
employees
Acquaint
Atlantica’s
long-term strategy,
business model, recent milestones,
(2)
and growth
Compliance. Average training time: 3.5
hours (50% on Compliance matters).
office
(1)
strategy,
and
Minutes
per
Employee
8
8
8
8
8
78
60
Participants
551
551
551
551
574
74
55
105
300
Type
Online
platform
Online
platform
Online
platform
Online
platform
Online
platform
Online
platform
In-person
and real-
time video
conferencing
In-person
and real-
time video
conferencing
Note: All Atlantica employees receive compliance training. The difference between our total workforce as of
December 31, 2022, and the Participants to the compliance-related training (except specific local sessions
such as the sexual harassment and discrimination, anti-bribery & anti-corruption and the Atlantica
Management Model trainings) is mainly due to: (i) new hirings and (ii) recently closed acquisitions (i.e., we
are in the process of fully integrating certain subsidiaries to our policies, processes and procedures). The
employees that were not members of our workforce at the time of the training will receive compliance-
related training in the sessions scheduled for 2023.
In 2022, Atlantica employees received a total of ~1,025 hours of compliance-related
training, compared to ~200 hours in 2021. On average, each Atlantica employee received
~1.15 hours (~70 minutes) compliance training in 2022, compared to 0.38 hours (~23
minutes) in 2021.
190
Trade Associations
In 2022, Atlantica contributed $192.5 thousand to associations or organisations related
to power generation, clean energy, and sustainability.
Trade Associations Costs in 2022, 2021 and 2020
In thousands of U.S. dollars
Trade associations contributions1
2022
192.5
2021
121.32
2020
66.5
1 None of these contributions relate to trade associations with political impact (i.e., political campaigns,
ballots measures, referendums, political organisations, lobbyists or lobbying organisations, nor other tax-
exempt groups).
2 We have revised 2021 figures to account for the final cost of each trade association.
Trade Associations
Geothermal Resource Council
Bishop Chamber of Commerce
Lone Pine Chamber of Commerce
Ridgecrest Chamber of Commerce
Indian Wells Valley Economic Development Corporation
American Council on Renewable Energy
Independent Energy Producers Association
Mexican Energy Association (AME)
Association for Cogeneration (COGENERA)
Spanish Chamber of Commerce
National Chamber of Electric Manufacturers (CANAME)
Association for Transmission Lines (ATX)
Association for Renewable Energy (ACERA)
Association for Renewable Energy (SPR)
Energy Association (SNMPE)
Association for Electric Energy Generation (AUGPEE)
Spanish Association of Energy Storage (ASEALEN)
Association for the CSP sector (Protermosolar)
Spanish Confederation of Business Organisations (CEOE)
Country
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
U.S.
Mexico
Mexico
Mexico
Mexico
Chile
Chile
Peru
Peru
Uruguay
Spain
Spain
Spain
Total
Sustainability Governance
In thousands of USD
2021
3.3
2.5
2.5
1.8
5.0
12.5
-
17.3
2.0
1.0
-
-
2.2
7.7
17.7
2.9
5.3
25.7
11.9
121.3
2022
3.3
2.5
2.5
1.8
5.0
12.5
30.0
17.4
2.5
-
-
44.5
1.7
7.9
16.3
3.4
3.7
24.9
12.6
192.5
2020
-
-
-
-
-
-
-
8.0
1.9
-
7.6
-
1.4
2.7
16.6
2.6
-
23.3
2.4
66.5
Given that it is the ultimate decision-making body, the Board of Directors is the highest
level of responsibility for ESG and climate change-related matters. The CEO, in his
executive role and as Director of the Board, holds the leading position and responsibility
in relation to ESG and climate change-related matters.
ESG and climate change encompass many of Atlantica’s key daily and long-term
activities. It is a cross-functional activity that involves Geographic VPs, country and asset
managers, as well as multiple corporate departments, including among others, the
Operations, Health and Safety, Environment, Compliance, People and Culture, and
Corporate Development Departments.
191
Sustainability Governance Structure
Board of Directors
Nominating and Corporate Governance
Committee
Audit Committee
Compensation Committee
Related Party Transactions
Management
Business Committee
Management Committee
Geographic Committee
Compliance Management
Committee
Risk Management Committee
Health and Safety, ESG and
Operations Committee
Accounting and Disclosure
Committee
Internal Audit Committee
Investment Committee
Corporate and Business Areas
Board of Directors: ESG and Climate Change Related Responsibilities and Functions
✓ The Board is responsible for the effective oversight of the Company’s strategy and
performance, financial reporting, corporate governance process, and internal control
and risk management framework, including ESG and climate-related risks and
opportunities. It is also ultimately accountable to shareholders for the long-term
performance of the Company and value creation for shareholders and other
stakeholders in a sustainable manner.
✓ The Board oversees the implementation of ESG and climate change initiatives and
prioritises internal resources committed to the advancement of objectives. The CEO,
in his executive role and as Director of the Board, manages, supervises and has a
leading position and responsibility over ESG and climate change-related matters,
including informing on and/or submitting the following actions for Board approval:
192
Topic
Frequency
Potential ESG and climate-related risks and
mitigation plans
Quarterly or on an as-needed basis.
For example, in 2022 the Board was informed
(i) twice on the climate-related scenario
analysis on Atlantica’s 2030 and 2050 key
potential risk and opportunity impacts, and
(ii) quarterly on our risk map (including
climate-related risks)
New and/or updated ESG and climate change
policies and targets
Annual
Environment, climate change and social key
performance indicators and their status against
established objectives (if applicable)
Health and safety: always
Other social KPIs: annual
Environment and climate change KPIs (GHG
emissions, water, and waste): semi-annual
Best practices to improve ESG and climate change
performance over time
Annual or an as-needed basis
Process to offset Atlantica’s GHG emissions
Integrated Annual Report with comprehensive ESG
disclosures
Annual
Annual
Results of ESG-related rating evaluation
assessments
Annual and on as-needed basis
Investment proposals in non-renewable generating
assets consider Atlantica’s long-term ESG and
climate change targets
Always
✓ The Audit Committee assists the Board in fulfilling its oversight responsibilities
concerning the management of risks, controls and processes, including potential ESG
factors that could be risk drivers, as well as compliance with ESG and climate-change
reporting requirements.
✓ The Nominating and Corporate Governance Committee assists the Board in fulfilling
its oversight responsibilities concerning compliance topics, including ESG-related
policy approvals.
At Atlantica, we believe that our comprehensive approach to ESG, as well as the level of
engagement on ESG-related topics at the Board and Management level, enables us to
deliver on heightened ESG demands from our stakeholders.
Management: ESG and Climate Change Related Responsibilities and Functions
Atlantica has integrated ESG and climate change into its businesses via policy making,
ESG planning, risk management, and KPI setting and tracking. At the management level,
we have assembled committees with different responsibilities based on Atlantica’s
priorities. These committees are led by senior management members with diverse
perspectives and experiences to efficiently and effectively address ESG related matters,
risks and opportunities.
193
Frequency
Weekly
Business Committee
Key ESG-
related
functions
Key
committee
member*
responsibilities
- Implement short and medium-term key strategic decisions (based on the business
strategy approved by the Board), including, but not limited to, health and safety,
environment, people and culture, compliance, and risk matters.
- Analyse and implement ESG-related best practices.
- Approve (at Management level) climate change-related targets.
CEO
CFO
Geographic
VPs
Leads Business Committee.
Responsible for among others, ESG and IT matters across our businesses.
Responsible for the assets they manage, including ESG and climate
change-related matters.
The General Counsel - who is also the Compliance Officer, the Secretary
of the Board of Directors and the Head of People and Culture - is
responsible among others, for Atlantica’s legal, people and culture and
compliance activities and reports to the Nominating and Corporate
Governance Committee (at Board level) and the Board, as applicable.
Responsible for all health and safety, operations, environmental and
quality aspects across all assets.
General
Counsel
Head of
Operations
(*) Other employees attend meetings by invitation.
Frequency
Monthly
Health and Safety, ESG and Operations Committee
Key functions
Key
committee
member
responsibilities
- Set health and safety targets.
- Set environmental protection measures.
- Review key health and safety and environmental KPIs as well as best practices, lessons
learned and implementation progress in relation to audit recommendations.
CEO
Geographic
VPs*
Head of
Operations
Head of
ESG
Leads Health and Safety, ESG and Operations Committees.
Responsible for the assets they manage, including ESG and climate
change-related matters.
Responsible for all health and safety, environmental and operations
aspects across all assets, including improving asset performance, KPI
monitoring, regular environmental and operational audits, analysing
measures to reduce health and safety and environmental impacts, and
implementing best practices.
Identifies sustainability best practices, proposes actions to the CEO and
Geographic VPs and monitors the
implementation of approved
proposals.
(*) Certain country managers attend by invitation of Geographic VPs.
Compliance Management Committee
Frequency
Key ESG-
related
functions
Quarterly, and on an as-needed basis
- Support the Compliance Officer and assist all our employees and the Board in
implementing the compliance programmes, policies and procedures required by laws
and regulations, as well as by best corporate practices.
Committee
member
responsibilities
The General Counsel - who is also the Compliance Officer, the
Secretary of the Board of Directors and the Head of People and
Culture - is responsible among others, for Atlantica’s legal, people and
culture and compliance activities and reports to the Business
Committee (at Management level), the Nominating and Corporate
Governance Committee (at Board level) and the Board, as applicable.
tools
Oversees
implemented by the Company, including the risk map.
Oversees IT (including cybersecurity matters), and personal data
protection processes and procedures.
risk management processes, procedures and
General
Counsel
Head of Risk
Management
Head of IT and
Administration
194
Investment Committee
Frequency
Key ESG-
related
functions
Generally once a week and on an as-needed basis
Analyse potential growth opportunities considering: (1) impacts on Atlantica's climate
change-related commitments and targets, (2) ESG and climate change risks in due
diligence analysis, and (3) carbon pricing to evaluate investment opportunities.
Key
committee
member*
responsibilities
VP Corporate
Development
Head of Risk
Management
Responsible for identifying, analysing, and presenting potential
growth opportunities to the Investment Committee. Oversees all due
diligence processes.
Responsible for
investments, including ESG and climate change risks.
identifying and evaluating risks for potential
(*) The Head of Operations and the Head of Finance co-lead the Investment Committee. The CEO, the CFO
and the General Counsel are also permanent committee members. Other employees attend meetings by
invitation.
Other ESG-related committees include:
- Risk Management Committee: Held once a month between the CEO, the CFO and
the Head of Risk Management. This committee addresses all Company risks,
including those related to our operating portfolio as well as assets under
development or under construction. Atlantica’s risk map is reviewed and presented
to the Board on a quarterly basis. ESG and climate change risks are always considered
in the risk analysis process.
-
Internal Audit Committee: Held once a month between the CEO, CFO and Head of
Internal Audit. This committee addresses corporate and business impacts driven by
internal audit day-to-day activities, including, but not limited to, effectiveness of
internal controls, anti-fraud procedures, policy evaluation, implementation progress
of audit recommendations, and external auditor reviews on Atlantica and its affiliates.
The Head of Internal Audit reports to the Audit Committee (at Board level).
- Accounting and Disclosure Committee: Reviews the Form 20-F, the Integrated Annual
Report and quarterly reports including quarterly financial statements prior to their
publication. The Accounting and Disclosure Committee is comprised by the Chief
Financial Officer, the Head of Investor Relations and Reporting and the Head of
Accounting and Consolidation. The Head of Internal Audit attends meetings by
invitation. The Accounting and Disclosure Committee approves the accounting
criteria to be applied by the Company, discusses new reporting requirements and
approves quarterly financial statements and disclosure.
195
Directors’ Report
The directors are pleased to present their Integrated Annual Report on the affairs of the
Company and its subsidiaries, together with the Consolidated Financial Statements and
Auditor’s Report, for the year ending December 31, 2022.
Strategic Report
The Strategic Report was prepared in accordance with the Companies Act 2006 which
requires the Company to set out a fair review of our business during the financial year,
including a financial analysis at year-end and the trends and factors likely to affect the
future development, performance and position of the business.
Review of Business and Future Developments
The Strategic Report includes an indication of likely future developments in our business.
Dividends
We intend to distribute a significant portion of our cash available for distribution as
dividends, after considering the cash available for distribution that we expect our assets
will be able to generate, less reserves for the prudent conduct of our business, on an
annual basis. We intend to distribute a quarterly dividend to shareholders. We intend to
grow our business via organic growth through the optimisation of the existing portfolio
and through investments, development and construction of new assets and acquisitions.
We believe this will facilitate the growth of our cash available for distribution and enable
us to increase our dividend per share over time. However, the determination of the
amount of cash dividends to be paid to holders of our shares will be made by our Board
of Directors and will depend upon our financial condition, results of operations, cash
flow, long-term prospects and any other matters that our Board of Directors deem
relevant. Our Board of Directors may, by resolution, amend the cash dividend policy at
any time.
Our cash available for distribution is likely to fluctuate from quarter to quarter, in some
cases significantly, as a result of the seasonality of our assets, the terms of our financing
arrangements and maintenance and outage schedules, among other
factors.
Accordingly, during quarters in which our assets generate cash available for distribution
in excess of the amount necessary for us to pay our stated quarterly dividend, we may
reserve a portion of the excess to fund cash distributions in future quarters. During
quarters in which we do not generate sufficient cash available for distribution to fund our
stated quarterly cash dividend, if our Board of Directors so determines, we may use
retained cash flow from other quarters, and other sources of cash, to pay dividends to
our shareholders.
We refer to section “Financial Review - Use of Liquidity and Capital Requirements – C.
Cash dividends to investors.”
196
Risks Regarding Our Cash Dividend Policy
There is no guarantee that we will pay quarterly cash dividends to our shareholders. We
do not have a legal obligation to pay any dividend. While we currently intend to grow
our business and increase our dividend per share over time, our cash dividend policy is
subject to all the risks inherent in our business and may be changed at any time as a
result of certain restrictions and uncertainties, including the following:
in our project-level
- The amount of our quarterly cash available for distribution could be impacted by
restrictions on cash distributions contained
financing
arrangements, which require that our project-level subsidiaries comply with certain
financial tests and covenants in order to make such cash distributions. Generally,
these restrictions limit the frequency of permitted cash distributions to semi-annual
or annual payments, and prohibit distributions unless specified debt service coverage
ratios, historical and/or projected, are met. When forecasting cash available for
distribution and dividend payments we have aimed to take these restrictions into
consideration, but we cannot guarantee future dividends. In addition, restrictions or
delays on cash distributions could also happen if our project finance arrangements
are under an event of default.
- Additionally, indebtedness we have incurred under the Green Senior Notes, the Note
Issuance Facility 2020, the 2020 Green Private Placement and the Revolving Credit
Facility contain, among other covenants, certain
incurrence and
maintenance covenants, as applicable.
financial
- We and our Board of Directors have the authority to establish cash reserves for the
prudent conduct of our business and for future cash dividends to our shareholders,
and the establishment of or increase in those reserves could result in a reduction in
cash dividends from levels we currently anticipate pursuant to our stated cash
dividend policy. These reserves may account for the fact that our project-level cash
flows may vary from year to year based on, among other things, changes in the
operating performance of our assets, operational costs, capital expenditures required
in the assets, collections from our off-takers, electricity market prices, compliance
with the terms of project debt including debt repayment schedules and cash reserve
accounts requirements, compliance with the terms of corporate debt, compliance
with all the applicable laws and regulations and working capital requirements. Our
Board of Directors may increase the reserves to account for the seasonality that has
historically existed in our assets’ cash flows and the variances in the pattern and
frequency of distributions to us from our assets during the year.
- We may lack sufficient cash to pay dividends to our shareholders due to cash flow
shortfalls attributable to a number of operational, commercial or other factors,
including low availability, low production, low electricity prices in our assets with
exposure to merchant revenues, unexpected operating interruptions, legal liabilities,
costs associated with governmental regulation, changes in governmental subsidies,
delays in collections from our off-takers, changes in regulation, as well as increases
in our operating and/or general and administrative expenses, maintenance capital
expenditures, principal and interest payments on our and our subsidiaries’
outstanding debt, income tax expenses, inability to upstream cash from our
197
subsidiaries or to do it in an efficient manner, working capital requirements or
anticipated cash needs at our project-level subsidiaries.
- We may pay cash to our shareholders via capital reduction in lieu of dividends in
some years.
- Our project companies’ cash distributions to us (in the form of dividends or other
forms of cash distributions such as shareholder loan repayments) and, as a result, our
ability to pay or grow our dividends, are dependent upon the performance of our
subsidiaries and their ability to distribute cash to us. The ability of our project-level
subsidiaries to make cash distributions to us may be restricted by, among other
things, the provisions of existing and future indebtedness, applicable corporation
laws and other laws and regulations.
- Our Board of Directors may, by resolution, amend the cash dividend policy at any
time. Our Board of Directors may elect to change the amount of dividends, suspend
any dividend or decide to pay no dividends even if there is ample cash available for
distribution.
Our Ability to Grow our Business and Dividend
We intend to grow our business via organic growth through the optimisation of the
existing portfolio, repowering, hybridisation with other technologies, expansion of our
current assets and through investments in development and construction of new assets,
as well as acquisitions of new assets. We believe this will facilitate the growth of our cash
available for distribution and enable us to increase our dividend per share over time.
Our policy is to distribute a significant portion of our cash available for distribution as a
dividend. We expect we will rely primarily upon external financing sources, including
commercial bank borrowings and issuances of debt and equity securities in capital
markets, to fund any future growth capital expenditures. To the extent we are unable to
finance growth externally, our cash dividend policy could significantly impair our ability
to grow because we do not currently intend to reserve a substantial amount of cash
generated from operations to fund growth opportunities. If external financing is not
available to us on acceptable terms, our Board of Directors may decide to finance
investments with cash from operations, which would reduce or impair our ability to pay
dividends to our shareholders. Our Board of Directors may also decide to finance our
investments with cash generated from operations to increase the capital dedicated to
finance development, construction and acquisition of new assets and foster our growth.
To the extent we issue additional shares to fund our business, our growth or for any other
reason, the payment of dividends on those additional shares may increase the risk that
we will be unable to maintain or increase our per share dividend level. Additionally, the
incurrence of additional commercial bank borrowings or other debt to finance our
growth would result in increased interest expense, which in turn may impact our cash
available for distribution and, in turn, our ability to pay dividends to our shareholders.
198
Capital Structure
Details of the share capital, together with details of the movements in the Company's
issued share capital during the year are shown in note 13 to the Consolidated Financial
Statements. The Company has one class of ordinary shares which are listed on the
NASDAQ Global Select Market under the symbol “AY.” Our shares carry no right to fixed
income and each share provides the owner the right to one vote at General Meetings of
the Company.
When Algonquin acquired a 25% stake in our equity, Atlantica signed a Shareholders
Agreement with Algonquin, which set forth that, if and to the extent provided in our
articles of association, Algonquin had the right to appoint to our Board the maximum
number of directors that corresponds to Algonquin’s holding of voting rights as per
articles of association but in no event more than (i) such number of directors as
corresponds to 41.5% of our voting securities; and (ii) 50% of our Board less one, and if
the resulting number is not a whole number, it shall be rounded up to the next whole
number. In 2019, Algonquin completed the purchase of 3,384,402 ordinary shares and
increased its equity interest in Atlantica to 44.2%.
On December 11, 2020 Atlantica closed an underwritten public offering of 5,069,200
ordinary shares (including those sold pursuant to the underwriters’ over-allotment
option) at a price of $33 per new share. Algonquin purchased 4,020,860 ordinary shares
of the Company in a private placement, which closed on January 7, 2021, which
represents the pro rata number of shares required to maintain their previous equity
ownership in the Company. As a result, as of January 7, 2021 Algonquin was the beneficial
owner of 48,962,925 ordinary shares, representing 44.2% of the issued and outstanding
ordinary shares.
On August 3, 2021, we established an “at-the-market programme” and entered into the
Distribution Agreement with J.P. Morgan Securities LLC, as sales agent, under which we
may offer and sell from time to time up to $150 million of our ordinary shares, including
in “at-the-market” offerings under our universal shelf registration statement on Form F-
3 and a prospectus supplement that we filed on August 3, 2021. On the same date we
entered into the ATM Plan Letter Agreement with Algonquin, pursuant to which we will
offer Algonquin the right but not the obligation, on a quarterly basis, to purchase a
number of ordinary shares to maintain its percentage interest in Atlantica. For the year
ended December 31, 2022, we issued and sold 3,423,593 ordinary shares under such
programme at an average market price of $33.57 per share pursuant to our Distribution
Agreement, representing gross proceeds of $114.9 million and net proceeds of $113.8
million. Pursuant to the ATM Plan Letter Agreement, we delivered a notice to Algonquin
quarterly in order for them to exercise their rights thereunder.
As of December 31, 2022, Algonquin owned 48,962,925 ordinary shares, representing a
42.2% of the issued and outstanding ordinary shares.
In addition, as of December 31, 2022, there was no treasury stock and there have been
no transactions with treasury stock during the period then ended.
199
With regard to the appointment and replacement of directors, the Company is governed
by its Articles of Association, the SEC listing rules, the U.K. Companies Act 2006 and
related legislation. The Articles of Association may be amended by special resolution of
the shareholders.
Substantial Shareholdings
Name
5% Beneficial Owners
Algonquin (AY Holdco) B.V.” (1)
Ordinary Shares
Beneficially Owned
Percentage
48,962,925
42.2%
Notes:
(1) This information is based solely on the Schedule 13D filed on May 10, 2022 by Algonquin Power & Utilities
Corp., a corporation incorporated under the laws of Canada. The direct beneficial owner of the
shares is Algonquin (AY Holdco) B.V.
To the best of our knowledge and based on public information, the majority of other
shareholders are mainly United States-based institutional investors.
Change of Control
If any investor acquires over 50.0% of our shares or if our ordinary shares cease to be
listed on the NASDAQ or a similar stock exchange, we may be required to refinance all
or part of our corporate debt or obtain waivers from the related noteholders or lenders,
as applicable, due to the fact that all of our corporate financing agreements contain
customary change of control provisions and delisting restrictions. If we fail to obtain such
waivers and the related noteholders or lenders, as applicable, elect to accelerate the
relevant corporate debt, we may not be able to repay or refinance such debt (on
favourable terms or at all), which may have a material adverse effect on our business,
financial condition results of operations and cash flows. Additionally, in the event of a
change of control we could see an increase in the yearly state property tax payment in
Mojave, which would be reassessed by the tax authority at the time the change of control
potentially occurred. Our best estimate with current information available and subject to
further analysis is that we could have an incremental annual payment of property tax of
approximately $10 million to $12 million, which could potentially decrease progressively
over time as the asset depreciates. There could also be other tax impacts and other
impacts that we have not yet identified. Furthermore, a change of control could trigger
an ownership change under Section 382 of the IRC.
Furthermore, in order to protect the Company's know-how and to ensure continuity in
terms of attainment of business objectives, the policy approved by our shareholders at
the 2017 Annual General Meeting, introduced certain termination payments to key
executives, including the Chief Executive Officer in the case of a change of control. This
is addressed in the Policy on Payments for Loss of Office section of this report. In addition,
if there is a change in control, all awards under long-term incentives shall vest in full on
the date of the change in control.
A change of control means that a third party or coordinated parties: (i) acquire directly
or indirectly by any means a number of shares in the Company which (together with the
200
shares that such party may already hold in the Company) amount to more than 50% of
the share capital of the Company or, (ii) appoint or have the right to appoint at least half
of the members of the Board of Directors of the Company.
Directors
Our Board is comprised of nine directors.
All the directors meet the U.S. securities or NASDAQ’s qualifications from independence
except our CEO. Atlantica's Board has determined that Mr. Banskota and Mr. Trisic are
not independent based on their relationship with Algonquin, which is currently Atlantica’s
largest shareholder with a 42.2% ownership. Mr. Banskota is the current Chief Executive
Officer of Algonquin, while Mr. Trisic held a senior executive role at Algonquin until April
2022. The Board has also determined that the rest of the non-executive directors, Mr.
Aziz, Ms. Del Favero, Ms. Eprile, Mr. Forsayeth, Mr. Hall and Mr. Woollcombe are
independent. Mr. Edward C. Hall has been an independent director since he was
appointed on August 2, 2022.
201
Committee
Memberships(*)
A N&CG C RPT
✓
★ ✓
★
✓
★
✓
✓
✓
★
Name, Primary Occupation
Independent
Other Public
Company
Boards
William Aziz
President and Chief Executive Officer of
BlueTree Advisors Inc.
Arun Banskota
President and Chief Executive Officer of
Algonquin
Debora Del Favero
Co-Founder of CMC Capital Limited
Brenda Eprile
Director and Chair of the Audit Committee
of Westport Fuel Systems Inc.
Michael Forsayeth
Former Chief Executive Officer and Director
of Granite Real Estate Investment Trust
Edward C. Hall1
Chairman of Cypress Creek Renewables,
and Vice Chairman of Japan Wind
Development
Santiago Seage
Chief Executive Officer of the Company
George Trisic
Former Chief Governance Officer and
Corporate Secretary of Algonquin
Michael Woollcombe
Partner of Voorheis & Co. LLP and
Executive Vice-President of VC & Co. Inc.
Yes
No
Yes
Yes
Yes
Yes
No
No
Yes
1
1
-
1
-
-
-
-
-
(*) A = Audit Committee; N&CG = Nominating and Corporate Governance Committee C = Compensation
Committee;
RPT = Related Parties Transactions Committee
(1) Edward C. Hall was appointed in 2022
★ Chair ✓ Member
The Board is committed to promoting the success of the Company. The Board is
responsible to shareholders for its performance and for the strategy and management
of the Company, its values, its governance and its business.
Directors are obliged, among other duties, to act in the way they consider, in good faith,
would be most likely to promote the success of the Company for the benefit of its
members as a whole. All directors are expected to spend the time and effort necessary
to properly discharge their responsibilities.
The main objectives of the Board may be summarised as follows:
- Providing entrepreneurial leadership;
- Setting strategy;
- Ensuring the human and financial resources are available to achieve objectives;
202
- Reviewing management performance;
- Setting the Company’s values and standards; and
- Ensuring that obligations to shareholders and other stakeholders are understood and
met.
Under English law, the Board of Directors is responsible for management, administration
and representation of all matters concerning the relevant business, subject to the
provisions of relevant constitutional documents, applicable laws and regulations, and
resolutions duly adopted at annual general meetings.
In addition, the Board of Directors is entitled to delegate its powers to an executive
committee or other delegated committee or to one or more persons, unless the
shareholders, through a meeting, have specifically delegated certain powers to the Board
and have not approved the Board of Director’s delegation to others.
The Board has established four Board Committees. Membership, roles, duties and
authority of these committees are described in their Terms of Reference, available in
Atlantica’s website (www.atlantica.com). These Terms of Reference are reviewed and
updated by the Board on a yearly basis. The Board Committees are:
- Audit Committee. Responsible for monitoring the effectiveness of Atlantica’s
financial reporting, internal control and risk management systems, as well as the
integrity of the Company’s external and internal audit processes. We refer to the
Audit Committee Report for additional information on its responsibilities and
activities, membership, attendance, external audit assessments, internal audit plan,
and whistleblower management.
-
Compensation Committee. Responsible for setting the remuneration for directors
and recommending and monitoring remuneration for senior management. We refer
to the Directors’ Remuneration Report for additional information on its role,
membership, attendance and activities.
- Nominating and Corporate Governance Committee. Responsible for reviewing
the structure, size and composition of the Board as well as updating and/or issuing
rules,
following
governance-related documents
developments and best practices.
corporate governance
- Related Parties Transactions Committee. Responsible for overseeing the
implementation of a system for identifying, monitoring and reporting related-parties
transactions.
The directors who served throughout 2022 and to the date of this report were as follows:
203
Name
Role
Term
William Aziz
Director, Independent
Appointed on May 5, 2020.
Arun Banskota
Director
Appointed on April 28, 2020.
Debora Del Favero
Director, Independent
Appointed on May 5, 2020.
Brenda Eprile
Director, Independent
Appointed on May 5, 2020.
Michael Forsayeth
Director, Independent
Appointed on May 5, 2020.
Edward C. Hall
Director, Independent
Appointed on August 2, 2022.
Santiago Seage
Director and Chief
Executive Officer
Appointed on December 17, 2013, resigned March
9, 2018, re-appointed on December 19, 2018 and
elected on June 20, 2019.
George Trisic
Director
Appointed on October 9, 2020.
Michael Woollcombe
Director, Independent
and Chair of the Board
Appointed on May 5, 2020.
There are no family relationships among any of our executive officers or directors. There
are no potential conflicts of interest between the private interests or other duties of the
members of the Board of Directors listed above and their duties to Atlantica, except in
the case of Mr. Banskota, who serves as President and Chief Executive Officer at
Algonquin, and Mr. Trisic, who retired from a senior executive role at Algonquin Power
Utilities Corp in April 2022.
Detailed biographical information on Atlantica’s Board of Directors is available on our
website. The Company’s Board of Directors represents a balanced structure in terms of
diverse professional and industry backgrounds (i.e., financial, legal and regulatory,
governance, diversity and social responsibility, energy sector, etc.), gender and
geographical experience (i.e., experience in international business environments),
enabling making good use of complementary views, insights and opinions to assess
problems from a broader point of view, and making it more likely that the Board will take
into account the best interests of all stakeholders. In August 2022, the Nominating and
Corporate Governance Committee proposed to the Board of Directors, and the Board
approved, the appointment of Mr. Hall as an independent non-executive director. Mr.
Hall brings a deep understanding of electricity markets worldwide, power generation
technologies and utility operations.
As of December 31, 2022, the Board of Directors’ average tenure is less than 3 years and
the Board members average age is 61 years old.
Board member profiles:
204
205
206
207
208
209
z
i
z
A
m
a
i
l
l
i
W
n
u
r
A
a
t
o
k
s
n
a
B
l
e
D
a
r
o
b
e
D
o
r
e
v
a
F
a
d
n
e
r
B
e
l
i
r
p
E
l
e
a
h
c
i
M
h
t
e
y
a
s
r
o
F
d
r
a
w
d
E
l
l
a
H
o
g
a
i
t
n
a
S
e
g
a
e
S
c
i
s
i
r
T
e
g
r
o
e
G
l
e
a
h
c
i
M
e
b
m
o
c
l
l
o
o
W
✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓
l
a
t
o
T
6
5
8
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
8
5
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓
8
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
9
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
9
9
9
9
5
7
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓
Independent (in accordance
with the Board of Directors’
determination51)
CEO/Senior Executive:
CEO or senior executive
experience with a large publicly
traded organisation
Governance/ Other
Directorships:
Director of public company
and/or significant governance
role
Stakeholder:
Experience in managing
stakeholders or represents
stakeholder group
Energy Sector:
Senior executive experience in
the energy sector
Mergers & Acquisitions
/Growth Strategy:
Senior executive experience
with mergers, acquisitions
and/or business growth
strategy
Compensation and Human
Resources:
Understanding and experience
with human resources issues
and compensation policies
Financial:
Senior financial executive
experience / Corporate or
project finance/ Capital
allocation
Legal and Regulatory:
Legal and regulatory experience
International:
Experience in international
business environments
Enterprise Risk Management
Health and Safety, Climate
Change, Environment
Governance, Diversity and
Social Responsibility
51 Atlantica's Board has determined that Mr. Banskota and Mr. Trisic are not independent based on their relationship with Algonquin,
which is currently Atlantica’s largest shareholder with a 42.2% ownership. The Board has also determined that the rest of the non-
executive directors, Mr. Aziz, Ms. Del Favero, Ms. Eprile, Mr. Forsayeth, Mr. Hall and Mr. Woollcombe are independent.
210
Board Diversity Matrix as of December 31, 2022 and 2021
Total Number of Directors
2022
9
2021
8
Female
Male
Non-Binary
Did Not Disclose
Gender
2022
2021
2022
2021
2022
2021
2022
2021
Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian1
Hispanic or Latinx2
Native Hawaiian or Pacific Islander
White3
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Background
2
-
-
-
-
-
2
-
-
-
2
-
-
-
-
-
2
-
-
-
7
-
-
1
1
-
5
-
-
-
6
-
-
1
1
-
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The information provided above is based on the voluntary self-identification of each member of the Company’s Board
of Directors.
Note: demographic background definitions include:
(1) Asian – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian
subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands,
Thailand, and Vietnam.
(2) Hispanic or Latinx – A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture
or origin, regardless of race. The term Latinx applies broadly to all gendered and gender-neutral forms that may be used
by individuals of Latin American heritage, including individuals who self-identify as Latino/a/e.
(3) White (not of Hispanic or Latinx origin) – A person having origins in any of the original peoples of Europe, the Middle
East, or North Africa.
Membership and Attendance
A total of 10 Board of Directors meetings were convened in 2022 with an attendance of 100%.
211
Director
Membership
From
William Aziz
May 2020
Arun Banskota
April 2020
Debora Del Favero
May 2020
Brenda Eprile
May 2020
Michael Forsayeth
May 2020
Edward C. Hall
Aug’ 2022
Santiago Seage
Dec' 2018
George Trisic
Oct’ 2020
Michael Woollcombe
May 2020
To
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Role
Attendance /
Eligible to attend
Director, Independent
Director
Director, Independent
Director, Independent
Director, Independent
Director, Independent
Director and Chief
Executive Officer
Director
Director, Independent
and Chair of the Board
10/10
10/10
10/10
10/10
10/10
4/4
10/10
10/10
10/10
Senior management attend meetings by invitation of the Board.
2022 Key Activities
Major areas of focus of the Board during 2022 have been as follows:
- Review of health and safety issues;
- Review environmental, social and governance (ESG) matters;
- Review and approval of the strategy of the Company: growth plan, key priorities and risks;
- Review of assets’ performance and main technical issues;
- Approval and review of the budget of the Company;
- Review and approval of quarterly and annual accounts;
- Approval of significant transactions (acquisitions, partnerships, etc.);
- Review of capital markets updates; and
- Approval of dividends.
Prior to the meetings, the Secretary of the Board of Directors sent the agenda and provided
sufficient notes and time for review.
Nominating and Corporate Governance Committee
Membership and Attendance
A total of three Nominating and Corporate Governance Committee meetings were convened in
2022, with an average of 100%.
212
Director
Membership
From
To
Role
Attendance / Eligible
to Attend
Debora Del Favero
May 2020
n/a
Director, Independent and Chair of
the Nominating and Corporate
Governance Committee
Michael Forsayeth
May 2020
n/a
Director, Independent
3/3
3/3
2022 Key Activities
Major areas of focus of the Nominating and Corporate Governance Committee during 2022 have
been as follows:
- The Nominating and Corporate Governance Committee proposed to the Board of Directors, and
the Board approved, the appointment of a new independent non-executive director.
- Updated key corporate governance documents including amongst others, the Code of Conduct,
the Supplier Code of Conduct, and the Insider Trading Policy.
Related Parties Transactions Committee
The Related Parties Transaction Committee is responsible for overseeing the implementation of a
system for identifying, monitoring and reporting related-parties transactions.
As part of its duties and responsibilities, the Related Parties Transaction Committee evaluates all
related parties transactions to ensure that: (1) these are not undertaken on more favourable
economic terms (e.g., price, commissions, interest rates, fees, tenor, collateral requirement) to such
related parties than similar transactions with non-related parties under similar circumstances, (2)
no corporate or business resources of the Company are misappropriated or misapplied, and (3)
any potential reputational risk issues arises as a result of or in connection with the transactions.
The Related Parties Transactions Committee shall meet as many times as required. Prior to entering
into a Related Parties Transaction, the transaction shall be either approved or rejected by the non-
conflicted Directors at a Board of Director’s meeting upon recommendation of the Related Parties
Transactions Committee.
Membership and Attendance
In 2022, the Related Parties Transactions Committee held one meeting with an attendance of 100%.
Director
Michael
Forsayeth
Membership
From
May 2020
To
n/a
Director, Independent and Chair
of the Related Parties
Transactions Committee
Role
Attendance / Eligible to
attend
William Aziz
May 2020
n/a
Director, Independent
Brenda Eprile
May 2020
n/a
Director, Independent
1/1
1/1
1/1
Under the principles of good corporate governance, the Code of Conduct and applicable law, any
director or executive officer of Atlantica has a duty to declare any actual or potential conflict of
213
interest in any proposed or existing transaction or arrangement. In accordance with our Policy, all
transactions with related parties over US$50,000 are subject to approval or ratification by the Board.
Directors’ Indemnities
The Company has made qualifying third-party indemnity provisions for the benefit of its directors
which were made during the year and are in force at the date of this report.
Financial Instruments
Information about the use of financial instruments by the Company is given in note 8 to the
Consolidated Financial Statements. In addition, a detailed analysis of risk, including liquidity,
interest rate, foreign exchange and credit risks is provided in sections “Principal risks and
uncertainties” of our Strategic report.
Environmental Reporting
Environmental information such as our (i) GHG emissions and, (ii) quantity of energy consumed
from activities for which the Company is responsible for and from the purchase of electricity, heat,
steam or cooling by the Company for its own use is disclosed in the Strategic Report.
Employees
As part of our commitment to diversity and inclusion, we tolerate no discrimination in employment,
including discrimination based on nationality, ethnicity, religion, caste, age, disability, gender,
marital status, sexual orientation, union membership, political affiliation, health, disability,
pregnancy, smoking habits, or any other characteristic protected by law. In particular, we are
committed to create a supportive and understanding workplace environment in which all
employees feel welcome, respected and listened to, and where they can realise their full potential
regardless of their race, colour, sex, age, religion, ethnicity, nationality, or disability.
Atlantica’s Diversity and Inclusion Policy was approved by the Board of Directors in May 2020 and
was last amended in December 2021.
Additional information on Atlantica’s employees and its policies can be found in the Strategic
Report.
Stakeholders
Details on the methods the Board has used to engage and build strong business relationships with
our suppliers, customers and other key stakeholders are given on the Strategic Report (Supply
Chain Management, Customer Management and Data Privacy). Further information on how the
Board considered stakeholders in its decision making can be found in the Governance Section
(Business Ethics and Sustainability Governance). The section 172 statement is available in the
Strategic Report.
Anti-Slavery and Human Trafficking Statement
Atlantica has published its anti-slavery and human trafficking statement in accordance with the
Modern Slavery Act, 2015, which can be found on www.atlantica.com. Additional information is
provided in the Strategic Report.
214
Political Contributions
It is the Company’s policy that neither the Company nor any of its subsidiaries may, under any
circumstances, make donations or contributions to political organisations, political campaigns,
ballots measures, referendums, lobbyists or lobbying organisations nor other tax-exempt groups.
Thus, no political donations or contributions were made during 2022, 2021 nor 2020.
Research and Development
As of December 31, 2022, we own 31 patents and technology licences related to key components
of our assets, to processes and to solutions to monitor, operate and maintain our assets in a
sustainable and cost-effective manner, as well as 6 patents currently in process. We also have an
Operations Department that dedicates time and effort to identifying potential measures to improve
asset performance, reducing operating costs and developing tools to manage our assets more
efficiently. In addition, we have an in-house advanced analytics team to improve the performance
of our existing technologies. Additional information on our patents and our operations and in-
house advanced analytics teams is disclosed in the Strategic Report.
Corporate Governance Statement
Atlantica, as a non-premium listed company, is not required to implement the provisions of the UK
Corporate Governance Code (the “Code”) and has chosen to follow the requirements of the
NASDAQ Listing Rules in terms of corporate governance.
Our Board is responsible collectively for providing leadership within a framework of appropriate
and effective controls that enable us to assess the risk and then manage it promoting the success
of the Company. The Board is also responsible for the effective oversight of the Company’s strategy
and performance, financial reporting, internal control and risk management framework, and
corporate governance processes. It is also ultimately accountable to shareholders for the long-term
performance of the Company and the delivery of sustainable shareholder and stakeholder value.
The Board has put in place a clear and robust corporate governance framework in order to facilitate
the oversight role that it provides in these areas. This includes a schedule of matters reserved for
the approval of the Board, such as the approval of acquisitions, the Company strategy and budgets,
major capital expenditure, the Company’s financial statements and its dividend policy. With the aim
of allowing the Board appropriate time to focus on these key matters within the constraints of its
annual programme, a number of its other responsibilities have been delegated to four principal
committees. Such responsibilities are set out within the Terms of Reference for each Committee,
which can be found on our website at www.atlantica.com.
Auditors
Each person who is a director at the date of approval of this Consolidated Annual Report confirms
that:
- So far as the director is aware, there is no relevant audit information of which the Company's
auditor is unaware; and
- The director has taken all the steps that he/she ought to have taken as a director in order to
make himself/herself aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
215
This confirmation is given and should be interpreted in accordance with the provisions of Section
418 of the U.K. Companies Act 2006.
Ernst & Young S.L. and Ernst & Young LLP are our auditors providing the audit services to the
Company during 2021. Ernst & Young S.L. and other member firms of EY were appointed as external
auditor of the Group in February 2019 for the period 2019 – 2022.
The Company requested at the Annual General Meeting held in May 2022 to approve the re-
appointment of Ernst & Young LLP and Ernst & Young S.L. as the Company’s auditors until
December 31, 2023.
Events After the Balance Sheet Date
Details of significant events since the balance sheet date are contained in note 25 to the
Consolidated Financial Statements.
On February 21, 2023, Atlantica’s Board of Directors commenced a process to explore and evaluate
potential strategic alternatives that may be available to Atlantica to maximize shareholder value.
The Company believes it has attractive growth and other opportunities in front of it and is
committed to ensuring that its diversified portfolio of assets and growth platform is best positioned
to take advantage of those opportunities. The decision of Atlantica’s Board of Directors to explore
strategic alternatives has the support of the Company’s largest shareholder, Algonquin. Atlantica
expects to continue executing on its existing plans while the review of strategic alternatives is
ongoing, including its current growth plan and its focus on continuing to invest in accretive growth
opportunities. There is no assurance that any specific transaction will be consummated, or other
strategic change will be implemented as a result of this strategic review.
On February 28, 2023, our Board of Directors approved a dividend of $0.445 per share which is
expected to be paid on March 25, 2023 to shareholders of record on March 14, 2023.
This report was approved by the Board of Directors on February 28, 2023 and signed on its behalf
by Santiago Seage, Director and Chief Executive Officer.
Director and Chief Executive Officer
Santiago Seage
February 28, 2023
216
Audit Committee Report
Chair’s Introduction
I am pleased to introduce this report on the Audit Committee’s activities during the year. The
committee has continued to assist the Board in fulfilling its oversight responsibilities by monitoring
the integrity of the company’s financial reporting and risk management systems and challenging
management and the external auditors on key issues including accounting judgements and control
issues.
Brenda Eprile
Committee Chair
Committee Overview
Role of the Committee
The committee monitors the effectiveness of Atlantica’s financial reporting, systems of internal
control and risk management, as well as the integrity of the Company’s external and internal audit
processes.
Key Responsibilities during 2022
- Monitoring and obtaining assurance that the processes to identify, manage, and mitigate
significant and emerging financial risks are appropriately addressed by senior management and
that the system of internal control is designed and implemented effectively in accordance with
Board authorised limits.
- Overseeing the appointment, remuneration, independence and performance of the external
auditor and the integrity of the audit process overall, including the engagement of the external
auditor to provide non-audit services to Atlantica.
- Reviewing the effectiveness of the internal audit function, Atlantica’s internal financial controls
and systems of internal control and risk management.
- Reviewing financial statements and other financial disclosures along with ESG indicators for
clarity and monitoring compliance with relevant legal and listing requirements, and applicable
financial reporting standards.
- Reviewing the systems in place to enable those who work for Atlantica to raise concerns about
possible improprieties in financial reporting or other issues and for those matters to be
investigated.
Meetings and attendance
There were 4 committee meetings in 2022. All members attended each meeting. Regular attendees
at the meetings from management include the Chief Financial Officer, Head of Accounting and
Consolidation Department, Head of Investor Relations, Head of Internal Audit, Corporate Secretary,
and the external auditor.
217
Director
Brenda Eprile
William Aziz
Michael Forsayeth
Membership
From
May 2020
May 2020
May 2020
To
n/a
n/a
n/a
Role
Attendance /
Eligible to
Attend
Director, Independent and Chair of the Audit
Committee. Financial Expert
Director, Independent. Financial Expert
Director, Independent. Financial Expert
4/4
4/4
4/4
The Directors who serve on the committee have the necessary qualifications and bring a wide range
and depth of financial experience across various industries. The Board is satisfied that all three
members meet the requirements to qualify as “audit committee financial experts” under applicable
SEC rules. The collective knowledge, skills, experience and objectivity of the committee members
enables the committee to work effectively and to have robust discussions with management on
significant issues.
2022 Key Activities
Reviewing Financial Disclosure
During the year, the committee reviewed the quarterly and annual financial statements with
management, focusing on the:
• Integrity of the Company’s financial reporting process.
• Clarity of the disclosures.
• Compliance with relevant legal and listing requirements, and applicable financial reporting
standards.
• Application of accounting policies and judgements.
In its review of financial reporting, the committee received regular updates from management and
the external auditor in relation to accounting judgements and estimates, including those related to
asset impairment and recoverability.
In considering Atlantica’s 2022 Integrated Annual Report and Form 20-F, the committee assessed
whether the reports were fair, balanced and understandable and whether they provided
shareholders with the information necessary to assess Atlantica’s position and performance. In
making this assessment, the committee examined disclosures during the year, discussed the
requirements with senior management, confirmed that representations to the external auditors had
been evidenced and reviewed reports relating to internal control over financial reporting. The
committee made a recommendation to the Board, who in turn reviewed these reports, confirmed
the assessment and approved the reports’ publication and filing.
Accounting Judgements and Estimates
The committee was briefed on a quarterly basis on the company’s key accounting judgements and
estimates. The primary areas of judgement and estimation considered by the committee are laid
out below. These areas were discussed with management and the external auditor throughout the
year and during the review of the financial statements. The committee is satisfied that the financial
statements appropriately address the key accounting judgements and estimates in the reported
amounts and related disclosures.
218
Particular attention was paid to the following significant judgements and estimates in the 2022
financial reporting.
1. Recoverability of contracted concessional assets.
2. Credit risk assessment of certain off takers / customers and potential expected losses on
receivables.
3. Significant one-off transactions, including acquisitions, partnerships and other significant
agreements.
4. Recoverability of tax assets.
5. Operation and maintenance risk in specific geographies.
6. Controls for identifying and evaluating potential impairment indicators or triggering events.
7. Impact of regulatory developments in particular jurisdictions.
Non-Financial Reporting
The principal risks allocated to the Audit Committee for monitoring in 2022 included those
associated with:
• Counterparty risk.
• Compliance with policies and regulation.
• Financial liquidity.
• Tax risk.
• ESG indicators.
We discussed management’s ongoing approach to these risk areas during our quarterly committee
meetings.
In addition, during the year, the committee reviewed the Supplement on ESG to the 2021 U.K.
Annual Report, focusing on the clarity and consistency of the disclosure, prior to Board approval.
219
Committee's Time and Responsabilities
Internal Audit,
Internal Control and
Risk Management
35%
Financial
Reporting
30%
15%
20%
Non-financial
Reporting
External Audit
The committee performed an annual self-assessment in 2022. We discussed the findings and areas
for improvement. Climate risk was an area identified as increasing in importance.
External Audit
➢ Assessing Audit Risk
The external auditor prepared an audit plan for 2022 which identified key audit risks to be
addressed during the audit including:
Improper revenue recognition.
- Management override of controls related to relevant management estimates.
-
- Credit risk of certain significant power off-takers or customers.
- Recoverability assessment of contractual concessional assets.
- Risks related to material acquisitions or transactions.
- Significant unusual transactions.
- Financial covenants in relation to the risk of incorrect classification of current assets and
liabilities.
The committee received updates during the year on the audit process, including how the external
auditor challenged management’s assumptions on key issues.
➢ Assessing Audit Fees
The Audit Committee reviews the fee structure, resourcing and terms of engagement for the
external auditor annually. In addition, we review the non-audit services that the auditor provides
on a quarterly basis.
Fees paid to the auditor for the year were $2.6 million (2021 $2.9 million). Non-audit fees were $0.5
million (2021 $0.6 million), which was 24% of the audit and audit-related fees (see financial
statements – Note 23). Non-audit or non-audit related services consisted of tax compliance in US
subsidiaries and transfer pricing services. The Audit Committee is satisfied that this level of fee is
appropriate in respect of the audit services provided and that an effective audit can be conducted
for this fee.
220
➢ Assessing Audit Effectiveness
Management undertook a survey which compromised questions in the following areas:
- Communication and availability.
- Technical knowledge.
- Quality of the service.
- Deadline achievements.
- Added value.
- Objectivity.
The results of the survey indicated that most geographic regions were satisfied with the
performance of the external auditors. There were some areas for improvement, however none of
them impacted the effectiveness of the audit. The results of the survey were discussed with EY for
consideration in their 2022 audit approach. EY’s proposed action plan to address these areas for
improvement was reviewed with the committee. Progress on addressing these matters was
discussed with management at the quarterly audit committee meetings.
The committee also held in camera meetings with the external auditors during the year and the
committee chair met separately with the external auditor and Head of Internal Audit at least
quarterly.
The effectiveness of the external auditor is evaluated by the committee. In this regard, the
committee along with management and the external auditors, responded to a survey in relation to
the following areas:
- Auditor independence, objectivity, and professional scepticism.
- Quality of the engagement team.
- Communication and interaction.
- Quality of service.
The committee assessed the auditor’s approach to providing audit services and concluded that the
audit team was providing the appropriate quality in relation to the services provided. The audit
team has the requisite expertise, depth of knowledge, appreciation of complex issues, dedication,
as well as the independence and objectivity necessary to fulfil their responsibilities to shareholders.
They are able and willing to appropriately challenge management.
➢ Assessing Auditor Reappointment and Independence
The committee considers the reappointment of the external auditor each year before making a
recommendation to the Board. The committee assesses the independence of the external auditor
on an ongoing basis. The external auditor is required to rotate the lead audit partner every five
years and we have discussed and agreed succession plans with EY during the year.
➢ Oversight of Non-Audit Services
The Audit Committee is responsible for Atlantica’s policy on non-audit services and the approval
of non-audit services. Audit objectivity and independence is safeguarded through the prohibition
of certain non-audit services and audit-related services which fall within certain defined categories.
Atlantica’s policy on non-audit services states that the auditor may not perform non-audit services
that are prohibited by the SEC and the Public Company Accounting Oversight Board (PCAOB).
221
The Audit Committee approves the terms of all audit services as well as permitted audit-related
and non-audit related services.
Approvals for individual engagements of pre-approved permitted services below certain thresholds
are delegated to the Head of Internal Audit. Any proposed service not included in the permitted
services categories must be approved in advance either by the Audit Committee Chair or the Audit
Committee before the engagement commences. The Audit Committee, Chief Financial Officer and
Head of Internal Audit monitor overall compliance with Atlantica’s policy on audit-related and non-
audit services, including whether the necessary pre-approvals have been obtained. The categories
of permitted and pre-approved services are outlined in Note 23 of the Consolidated Financial
Statements included in this Annual Report. The external auditor is considered for permitted non-
audit services only when its expertise and experience with Atlantica is important.
For non-audit services, the accumulated annual fees threshold is 50% of the annual audit services
fees as stated in the policy.
All services performed by EY have been approved by the committee. All fees received by EY in 2022
have been approved by the committee.
EY
Other Auditors
Total
In thousand USD
Audit Fees
Audit-Related Fees
Tax Fees
Total
1,643
422
502
2,567
295
-
-
295
1,938
422
502
2,862
“Audit Fees” are the aggregate fees billed for professional services in connection with the audit of our Annual
Consolidated Financial Statements, quarterly reviews of our interim financial statements and statutory audits of our
subsidiaries’ financial statements under the rules of England and Wales and the countries in which our subsidiaries are
organised. The increase in audit fees is mainly due to inflation increase partially counterbalanced by exchange rates
variations.
“Audit-Related Fees” include fees charged for services that can only be provided by our auditor, such as consents and
comfort letters of non-recurring transactions, assurance and related services that are reasonably related to the
performance of the audit or review of our financial statements. Fees paid during 2022 and 2021 related to comfort letters
and consents required for capital market transactions of our major shareholder are also included in this category ($204
thousand and $272 thousand in 2022 and 2021 respectively). These fees were re-invoiced and paid by our major
shareholder.
“Tax Fees” include mainly fees charged for transfer pricing services and tax compliance services in our US subsidiaries.
Internal Audit
The committee reviewed and approved the 2022 Internal Audit Plan. Throughout the year the
committee received quarterly reports on the findings of internal audit and actions taken to address
those findings, as well as their reviews of cash distributions from its operating entities and the
Group’s various financial covenants. The committee also received a report from internal audit on
their annual review of the system of internal control. The committee met privately with the Head
of Internal Audit each quarter. The committee continued to monitor and review the effectiveness
of internal audit during the year.
222
Whistleblowing
The committee is responsible for monitoring the management of the Whistleblower Channel.
According to the Code of Conduct, any allegation received through the Whistleblower Channel will
be sent to the Chair of the Audit Committee, the General Counsel and the Head of Internal Audit.
All main procedures performed, conclusions and proposed corrective measures are communicated
to the committee.
The Company’s whistle-blower policy encourages employees of the Company, its subsidiaries and
all external stakeholders to raise concerns about suspected wrongdoing within the Group in
complete confidence.
Atlantica’s Whistleblower Channel is available at the Company’s website www.atlantica.com.
223
Directors’ Remuneration Report
Introduction
This report (the “Directors' Remuneration Report”) relates to the remuneration of the directors of
Atlantica for the year ending December 31, 2022. It sets out the remuneration policy and
remuneration details for the executive and non-executive directors of the Company. It has been
prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended.
The report is split into three main areas:
- The statement by the Chair of the Compensation Committee;
- The annual report on remuneration; and
- The remuneration policy.
The Directors’ Remuneration Report and the Remuneration Policy will be submitted to a vote by
shareholders at the Annual General Meeting in April 2023. The Remuneration Policy was last
approved by shareholders at the Annual General Meeting in 2021. Shareholders will be asked to
approve amendments to the remuneration policy at our 2023 Annual General Meeting to be held
in April 2023.
The changes to the policy consist of (1) extending to executive directors the vesting conditions of
the LTIP currently applicable to the rest of executives, so that 33% of the award is subject to
continuing employment and 67% of the award is subject to continuing employment and
achievement of a minimum 5% average annual TSR, (2) amending the performance measures
applicable to the annual bonus, (3) approving a strategic review bonus and (4) updates to the
change of control and delisting events in the LTIP to reflect the assessment of performance
conditions under such events, and are set out in more detail below.
The Companies Act 2006 requires the auditors to report to the shareholders on certain parts of the
Directors’ Remuneration Report and to state whether, in their opinion, those parts of the report
have been properly prepared in accordance with the Regulations. The statement by the Chair of
the Compensation Committee and the remuneration policy are not subject to audit.
Statement by the Chair of the Compensation Committee
I am pleased to present the Directors’ Remuneration Report for 2022. The regular and transparent
dialogue with shareholders, investors and other stakeholders is a vital element in our way of
operating and, through this remuneration report, we aim to increase the awareness of our
shareholders of the principles of our remuneration policy.
The Company´s remuneration policy is set in accordance with applicable law, with the aim of
attracting and retaining highly skilled professional and managerial resources and aligning the
interests of management with the primary objective of value creation for shareholders, for the
Company, its stakeholders and the members of the Company as a whole, in the medium to long
term.
A total of three Compensation Committee meetings were convened in 2022. All Committee
members attended each meeting that they were eligible to attend. On February 3, 2023, the Board
224
of Directors elected Mr. Hall independent, non-executive director, as a new member of the
Compensation Committee.
The Compensation Committee focused its activities on the following objectives:
✓ Periodically reviewing the Chief Executive Officer’s annual compensation package and
performance objectives;
✓ Periodically reviewing the remuneration policy and overall levels of remuneration for the Chief
Executive Officer and senior management team, including the long-term incentive plans, in
accordance with the following criteria:
- Seeking an alignment between incentives, business performance and creation of value for
shareholders, and
- Retention in the medium to long term of high-quality personnel who can achieve ambitious
targets and face the challenges that the Company will have to face in the current and future
market context.
✓ Periodically reviewing the remuneration levels of non-executive directors; and
✓ Reviewing the Company’s compensation for directors, the CEO and management in
comparison with its direct peers and best practices.
In 2022, most of the objectives defined for the Chief Executive Officer's variable bonus were met
or exceeded and the Compensation Committee decided to approve a bonus corresponding to
102.35%% of the target variable compensation, which will be payable in 2023. In 2021, most of the
objectives defined for the Chief Executive Officer's variable bonus were met or exceeded and a
bonus corresponding to 105.0% of the target variable compensation was paid in 2022.
To finalise, I would like to thank our shareholders for their strong vote in favour of approving the
directors’ remuneration report last year, demonstrating their support of Atlantica’s remuneration
arrangements.
I look forward to welcoming you and receiving your support again at the Annual General Meeting
this year.
Annual Report on Remuneration
1. Single Total Figure of Remuneration for Each Director (Audited)
Each independent non-executive director is entitled to receive annual compensation of $150.0
thousand. The Chair of the Board and Chairs of the committees of the Board are entitled to receive
additional compensation as detailed in the table below.
Non-independent non-executive directors are entitled to be compensated on the same terms as
independent non-executive directors. In 2021, non-independent non-executive directors declined
compensation. In 2022, Mr. Banskota also declined compensation. Since April 2022, Mr. Trisic has
received compensation after retiring from a senior executive role at Algonquin Power Utilities Corp.
The following table sets out the fee schedule for 2022 and 2021:
225
In thousands of U.S. Dollars
2022
2021
Annual Director Retainer
Non-Executive Director
Annual Committee Chair Retainer
Chair of the Board
Chair of the Audit Committee
Chair of the Nominating and Corporate Governance Committee
Chair of the Compensation Committee
150.0
75.0
15.0
10.0
10.0
150.0
75.0
15.0
10.0
10.0
The table below summarises the total annual compensation of the executive and non-executive
directors who received remuneration during 2022 and 2021.
In thousands of U.S.
Salary and Fees
Salary and Fees in
Dollars
in Cash
DRSUs2
Deferred
Long-Term
Restricted
Annual Bonuses
Incentive
Share Units
Awards3 (Vested)
Dividend
Equivalents4
Total Fixed
Total Variable
Remuneration
Remuneration
Total
Name1
2022
2021
2022
2021
2022
2021
2022
2021
2022 2021
2022
2021
2022
2021
2022
2021
William Aziz
Debora Del Favero
Brenda Eprile
Michael Forsayeth
Edward C Hall5
160.0
112.0
165.0
75.0
62.5
160.0
128.5
165.0
100.8
-
Santiago Seage6
727.2
816.6
George Trisic7
Michael Woollcombe
-
-
-
77.5
-
48.0
-
75.0
-
-
110.0
225.0
-
31.5
-
49.2
-
-
-
147.5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
931.3 1,056.3
2,992.4
1,879.8
-
-
160.0
160.0
2.5
0.3
162.5
160.3
-
-
165.0
165.0
4.0
0.5
154.0
150.5
62.5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.6
11.9
111.6
-
1.5
236.9
226.5
-
-
-
-
111.6
236.9
-
226.5
727.2
816.6
3,923.7
2,936.1
4,651.0
3,752.7
-
-
-
-
-
-
-
-
-
-
160.0
162.5
165.0
154.0
62.5
160.0
160.3
165.0
150.5
-
Total
1,301.7 1,448.5
458.0
228.1 931.3 1,056.3 2,992.4 1,879.8
20.0
2.3 1,779.7 1,679.0 3,923.7 2,936.1 5,703.5 4,615.1
1 None of the Directors received any pension entitlement and/or taxable benefits in 2022 or 2021.
2 Non-executive directors receive salary and fees via a mix of cash and Deferred Restricted Share Units (DRSUs). Following the Annual
General Meeting held in May 2021, the Company determined, and Ms. Del Favero, Mr. Forsayeth, and Mr. Woollcombe agreed that
30%, 50% and 100% respectively of the annual fee payable to the director by the Company from May 31, 2021 shall be irrevocably
substituted for the grant of DRSUs.
3 Long-term Incentive Awards includes awards under both the Long-term Incentive Plan (LTIP) and the One-Off Plan which vested in
the year, calculating amounts using the share price at vesting date. In 2022, from the $2,992.4 thousand vested, $1,490.1 corresponded
to share appreciation. In 2021, from the $1,879.8 thousand vested, $1,549.1 corresponded to share appreciation.
4 Dividend equivalent rights accumulated on the DRSU corresponding to the amount of dividends paid for one share in the period
between the DRSU effective date and December 31, 2022 and 2021, respectively, multiplied by the number of DRSUs held on that
date. Such rights are only payable on vesting of the DRSUs.
5 Mr. Hall was appointed to the Board on August 2, 2022 as an independent non-executive Director. Mr. Hall’s 2022 fee was prorated
for the year based on the annual directors’ retainer.
6 The CEO’s compensation is approved in Euros. It has been converted to U.S. dollars for reporting purposes, at the average exchange
rate of each year, which is 1.05 $/€ in 2022 and 1.18 $/€ in 2021.
- In 2022, the CEO’s total pay amounted to €4,401.7 thousand ($4,651.0 thousand). Fixed salary amounted to €690.0 thousand
($727.2 thousand), annual bonus to €870.0 thousand ($931.3 thousand) and long-term incentive awards to €2,841.7 thousand
($2,992.4 thousand).
- In 2021, the CEO’s total pay amounted to €3,148.6 thousand ($3,752.7 thousand). Fixed salary amounted to €690.0 thousand
($816.6 thousand), annual bonus to €892.5 thousand ($1,056.3 thousand) and long-term incentive awards to €1,566.1 thousand
($1,879.8 thousand).
7 Mr. Trisic, non-independent non-executive director, has received compensation since April 6, 2022. Mr. Trisic’s 2022 fee was prorated
for the year based on the annual directors’ retainer. The Company determined and Mr. Trisic agreed that 100% of his fee shall be
irrevocably substituted for the grant of DRSUs.
226
The Remuneration Report is presented in U.S. dollars since remuneration of all directors except the
CEO is defined in U.S. dollars and the functional currency of the Company is also the U.S. dollar.
None of the directors received any pension entitlement and/or taxable benefits in 2022 or 2021.
Each member of our Board of Directors will be indemnified for his or her actions associated with
being a director to the extent permitted by law.
The increase in the remuneration of the CEO in 2022 corresponds mainly to the vesting of restricted
share units granted under the LTIP in 2019, as we explain below.
Chief Executive Officer Long Term Incentives awards vested
1) One-off plan
An award in the form of restricted stock units (RSUs) was granted under a One-off plan to the CEO
in 2019. In June 2022 and 2021, the second and third tranches vested, and shares were transferred
to the CEO in accordance with the terms of the plan. The One-off plan RSUs are now fully vested.
The value of the shares transferred have been included in the Single Total Figure of Remuneration
table above in their vesting period.
One-Off Plan1
One-Off Plan
Vesting
Share Price on
Vesting Date
(USD)
31.30
36.50
1 Additional information on the One-off plan is disclosed in the Remuneration Policy section.
2 On each vesting date, one third of the RSUs vest (14,535 RSUs) plus dividend equivalent rights corresponding to the amount of
dividends paid on one share in the period between the One-off plan effective date and the date on which the RSU vests ($5.07 per
RSU for 2022 and $3.32 per RSU for 2021), multiplied by the number of RSUs vesting on that date.
Number of
Restricted Stock
Units (#)
14,535
14,535
RSUs Value at
Vesting Date
(000’s USD)2
528.6
578.8
June 20223
June 2021
2019
3 In June 2022, the final tranche of RSUs vested. As a result, there are no other awards outstanding under this plan.
2) Options vested under the LTIP
One-third of each of the CEO’s share options awarded in 2019, 2020 and 2021 under the LTIP
vested during 2022. The 2019 and 2020 share options were exercised, and shares were transferred
to the CEO in accordance with the terms of the plan. The 2021 share options vested, but they were
not exercised. The 2021 share options were underwater on the vesting date.
The share options value have been included in the Single Total Figure of Remuneration table above
in their vesting period.
LTIP Share
Option Grant
Date1
2021
2020
2019
Share
Option Vesting
Date
2022
2022
2021
2022
2021
Number of Share
Options Vesting
(#)
Share Price on
Vesting Date
(USD)
Exercise Price
per Share
Option (USD)
24,948
34,494
34,494
40,693
40,693
32.53
34.48
44.17
31.30
36.50
37.98
26.39
26.39
19.60
19.60
Share Options
Value at Vesting
Date (000’s USD)2
-
279.1
613.3
476.1
687.7
1 Additional information on the LTIP is disclosed in the Remuneration Policy section.
2 The value of the share options on the vesting date is calculated using the number of share options multiplied by (the share price on
the vesting date minus the exercise price per share option).
227
3) Restricted Stock Units vested under the LTIP
In June 2022 restricted stock units (RSUs) awarded in 2019 under the LTIP vested and shares were
transferred to the CEO in accordance with the terms of the plan. In 2021 no units vested under the
LTIP. The value of the vested RSUs have been included in the Single Total Figure of Remuneration
table above in their vesting period.
RSU Grant Date
Number of
Restricted Stock
Units Vesting (#)
46,987
1 RSU vesting under the LTIP in 2019 includes RSUs (46,987 RSUs) plus dividend equivalent rights corresponding to the amount of
Share Price on
Vesting Date
(USD)
31.10
RSUs Value at
Vesting Date
(000’s USD)1
1,708.7
RSU
Vesting Date
2022
2019
dividends paid on one share RSU between the LTIP 2019 effective date and the date on which the RSU vests ($5.07 per RSU).
In 2022, most of the objectives defined for the Chief Executive Officer's variable bonus were met
or exceeded and the Compensation Committee decided to approve a bonus corresponding to
102.35% of the target variable compensation, which will be payable in 2023.
CAFD1 – Equal or higher than the CAFD budgeted in the 2022 budget
Adjusted EBITDA – Equal or higher than the Adjusted EBITDA budgeted in the
2022 budget
Close sustainable value accretive investments
Achieve health and safety targets – (Frequency with Leave / Lost Time Index
below 3.9 and General Frequency Index below 10.1) based on reliable targets
and consistent measure metrics
Management of relationships with key shareholders and partners
Continued executive talent development
Disclosure best standards
Percentage
Weight
35%
15%
15%
10%
10%
10%
5%
Achievement
99%
98%
85%
120%
120%
120%
85%
1 Cash Available for Distribution (CAFD) refers to the cash distributions received by the Company from its subsidiaries, minus cash
expenses of the Company, including debt service and general and administrative expenses.
In 2021, most of the objectives defined for the Chief Executive Officer's variable bonus were met
or exceeded and the Compensation Committee decided to approve a bonus corresponding to
105.0% of the target variable compensation, which was paid in 2022.
The Chief Executive Officer’s maximum potential bonus is 120% of such bonus, which is
approximately $1,092 thousand (approximately €1,020 thousand).
No element of the Chief Executive Officer’s annual bonus is deferred.
Deferred Restricted Shares Units (DRSU) Plan
The following table sets out the total compensation received by non-executive directors via a mix
of cash and DRSUs in 2022:
228
Name
Total Remuneration
Total Remuneration in Cash and/or
Deferred Restricted Stock Units (DRSU)
(000’s USD)
Remuneration in Cash
Remuneration in DRSUs
(000’s USD)
DRSUs (000’s USD)
Number of DRSUs (#)4
2022
2021
2022
2021
2022
2021
2022
2021
William Aziz
Debora Del Favero1
Brenda Eprile
Michael Forsayeth1
Edward C. Hall2
George Trisic3
Michael Woollcombe1
160.0
160.0
165.0
150.0
62.5
110.0
225.0
160.0
160.0
165.0
150.0
-
-
225.0
160.0
112.0
165.0
75.0
62.5
-
-
160.0
128.5
165.0
100.8
-
-
77.5
-
48.0
-
75.0
-
110.0
225.0
-
31.5
-
49.2
-
-
147.5
-
1,619
-
2,530
-
3,901
7,589
-
878
-
1,372
-
-
4,117
Total
1 Following the Annual General Meeting held in May 2021, the Company determined, and Ms. Del Favero, Mr. Forsayeth, and Mr.
Woollcombe agreed that 30%, 50% and 100% respectively of the annual fee payable to the director by the Company from May 31,
2021 shall be irrevocably substituted for the grant of DRSUs.
1,032.5
15,638
631.9
574.5
860.0
228.1
458.0
6,367
2 Mr. Hall was appointed to the Board on August 2, 2022 as an independent non-executive Director. Mr. Hall’s 2022 fee was prorated
based on the annual director’s retainer.
3 Mr. Trisic, non-independent non-executive director, has received compensation since April 6, 2022. Mr. Trisic’s 2022 fee was prorated
based on the annual directors’ retainer. The Company determined and Mr. Trisic agreed that 100% of his fee shall be irrevocably
substituted for the grant of DRSUs.
4 The number of DRSUs granted is determined by dividing the amount of the annual compensation to be substituted for DRSUs by the
market value of an ordinary share at the time of grant.
2. Remuneration of the Chief Executive Officer
The information provided in this part of the report is subject to audit.
Details for Mr. Seage, who serves in the role of the Chief Executive Officer, are set out in the “Single
Total Figure of Remuneration for Each Director” section above.
In 2022, Mr. Seage was awarded $931.3 thousand as a bonus payment in accordance with his
service agreement, payable in 2023. In 2021, Mr. Seage was awarded $1,056.3 thousand in
accordance with his service agreement, which was paid in 2022. The CEO’s bonus is approved in
Euros and converted to U.S. dollars for reporting purposes at the average exchange rate of each
year. The decrease in amount is due in part to the fluctuation of the Euro-Dollar exchange rate.
Scheme Interests Awarded During 2022
LTIP
Number of
Restricted
Stock Units
Restricted Stock
Units Face Value1
(000’s USD)
2022
35,2022
1,197.2
Performance Criteria
RSU: 5% minimum Total Shareholder Return
performance stock unit over a three-year period
1 Face Value means the maximum number of shares that would vest if performance measures are met using the share price at the grant
date. The face value for the restricted stock units (RSUs) is calculated using the share price at the grant date.
2 RSUs will vest on the third anniversary of the grant date, subject to the satisfaction of the performance criteria.
If the total shareholder return (“TSR”) performance condition has not been met during the vesting
period, the participant's Restricted Stock Units will lapse in full on the vesting date.
The value of the RSUs granted to the CEO is equal to 70% of the previous year total annual
compensation (fixed + target annual bonus) at the grant date. Further information including a
description of each type of interest awarded and the basis on which the award is made is provided
in the Remuneration Policy section below.
229
The following information provided in this part of the report is not subject to audit (unless
otherwise indicated).
Total Shareholder Return and Chief Executive Officer Pay
The chart below shows the Company’s total shareholder return since June 2014, the date of our
Initial Public Offering (“IPO”), until the end of 2022 compared with the TSR of the companies in the
Russell 2000 Index. The chart represents the progression of the return, including investment,
starting from the time of the IPO at a 100%-point. In addition, dividends are assumed to have been
re-invested at the closing price of each dividend payment date.
We believe the Russell 2000 Index is an adequate benchmark as it represents a broad range of
companies of similar size.
TSR is calculated in U.S. dollars.
100%
100%
96%
74%
116%
76%
149%
121%
133%
119%
87%
85%
204%
183%
178%
178%
162%
134%
250%
225%
200%
175%
150%
125%
100%
75%
50%
25%
0%
2014
2015
2016
2017
2018
2019
2020
2021
2022
Atlantica
Russell
The table below shows the total remuneration of the Chief Executive Officer, his bonus and his
long-term incentive awards expressed as a percentage of the maximum he is likely to be awarded.
Bonus
Long-Term Incentive Awards3
Total Pay1
(000’s USD)
Percentage of Target
4,651.0
3,752.7
2,524.1
1,685.4
2,511.1
1,602.0
1,499.4
1,597.64
174.1
102.4%
105.0%
102.7%
100.7%
101.8%
96.3%
100.0%
-
-
Amount of
Bonus2
(000’s USD)
931.3
1,056.3
996.4
957.7
992.2
924.2
940.5
-
-
Percentage of
Value
Maximum
(000’s USD)
100.0%
100.0%
100.0%
-
22.0%
-
-
-
-
2,992.4
1,879.8
770.9
-
751.1
-
-
-
-
Year
2022
2021
2020
2019
2018
2017
2016
2015
2014
1 The CEO’s compensation is approved in Euros. It has been converted to U.S. dollars for reporting purposes at the average exchange
rate each year. The total pay received by the CEO in thousands of Euros was €4,401.7 in 2022, €3,148.6 in 2021, €2,222.2 in 2020,
€1,505.5 in 2019, €2,170.3 in 2018, €1,418.1 in 2017, €1,329.1 in 2016, €1,440.9 in 2015, and €130.9 in 2014.
230
2 Amount of bonus earned by the CEO at year-end and paid the next year. For example: In 2021, the CEO earned a bonus of $1,056.3
thousand, which was paid to the Chief Executive Officer in 2022.
3 Long-Term Incentive Awards includes awards granted under both the LTIP and One-Off Plan which vested in the year.
4 Includes a €1,189.5 thousand (approximately $1,319.6 thousand) termination payment received by Mr. Garoz after his leaving the
Company on November 25, 2015.
The Chief Executive Officer did not receive any variable remuneration for services provided to the
Company for the years ended December 31, 2015 and 2014. Mr. Seage occupied that office
between January and May 2015, and again from late November 2015. Mr. Garoz held that position
between May and November 2015, when Santiago Seage left the Company.
Directors’, Chief Executive Officer’s and Employee’s Pay
The table below sets out the percentage change between 2021 and 2022 in salary and, bonus for
executive and non-executive directors who received remuneration and the average per capita
change for employees of the Company’s group as a whole, excluding the Chief Executive Officer.
2022 (% Change from 2021
2021 (% Change from 2020
2020 (% Change from 2019
to 2022)
to 2021)
to 2020)
Name
Salary and
Fees (Cash
Bonus
and DRSU)
Salary and
Fees (Cash
and DRSU)1
Bonus
Salary
Bonus
Non-executive directors
William Aziz2
Debora Del Favero2
Brenda Eprile2
Michael Forsayeth2
Edward C. Hall3
George Trisic4
Michael Woollcombe2
Andrea Brentan5
Robert Dove5
Francisco J. Martinez5
Jackson Robinson5
Daniel Villalba5
Executive director
Santiago Seage (CEO)
Employees (excluding CEO)6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%7
4%
-3%7
9%
4%7
4%
2%7
8%
-
-
-
-
-
-
-
3%
3%
3%
3%
3%
2%
5%
-
-
-
-
-
-
-
-
-
-
-
-
2%
8%
Notes:
None of the non-executive directors received any bonus, and/or taxable benefits in 2022, 2021 or 2020.
1 Following the Annual General Meeting held in May 2021, the Company determined, and Ms. Del Favero, Mr. Forsayeth, and Mr.
Woollcombe agreed that 30%, 50% and 100% respectively of the annual fee payable to the director by the Company from May 31,
2021 shall be irrevocably substituted for the grant of DRSUs.
2 Mr. Aziz, Mrs. Del Favero, Mrs. Eprile, Mr. Forsayeth and Mr. Woollcombe joined the Board of Directors on May 5, 2020 as independent
non-executive Directors.
3 Mr. Hall was appointed to the Board on August 2, 2022 as an independent non-executive Director.
4 Mr. Trisic, non-independent non-executive director, has received compensation since April 6, 2022. The Company determined and
Mr. Trisic agreed that 100% of his fee shall be irrevocably substituted for the grant of DRSUs.
5 Mr. Villalba, Mr. Dove, Mr. Martinez and Mr. Robinson were directors until May 5, 2020, and were Chair of the Board of Directors,
Chair of the Nominating and Corporate Governance Committee, Chair of the Audit Committee, and Chair of the Compensation
231
Committee, respectively, until such date. Their percentage of salary change was calculated on a full-time equivalent basis for 2020,
hence based on their total remuneration received in 2019 compared to their 2020 entitled compensation. Mr. Brentan was a director
until May 5, 2020.
6 The salary and bonus percentage change for employees (excluding the CEO) has been calculated considering the same average
number of employees and the same average exchange rate in both 2022 and 2021. This is the most appropriate methodology to
reflect how much the salary and potential bonus changed on a year-to-year basis as it excludes the effect of employee hires and
turnover.
7 The Compensation Committee approved (i) fixed remuneration of €690 thousand ($727 thousand converted to U.S. dollars at the
December 31, 2022 average exchange rate, which is 1.05 $/€) for the Chief Executive Officer for 2022 (in 2021, the CEO’s fixed
remuneration was also €690 thousand), and (ii) variable remuneration of €870.0 thousand ($931.3 thousand) for 2022 compared to
€893 thousand ($1,056 thousand) for 2021, representing a 3% decrease in Euros on a year-to-year basis.
The Compensation Committee approved (i) fixed remuneration of €690 thousand ($817 thousand) for the Chief Executive Officer for
2021 compared to €663 thousand ($757 thousand) for 2020, representing a 4% increase in Euros on a year-to-year basis, and (ii)
variable remuneration of €893 thousand ($1,056 thousand) for 2021 compared to €873 thousand ($996 thousand) for 2020,
representing a 2% increase in Euros on a year-to-year basis.
Pay Ratio Information
The average number of employees in the U.K. is below 250 employees. Following the U.K. pay ratio
disclosure requirements, Atlantica is exempt from disclosing U.K. pay ratio-related information.
Relative Importance of Spend on Pay
The following table sets out the change in overall employee costs, directors’ compensation and
dividends.
$ in Millions
Spend on Pay for All Employees
Total Remuneration of Directors
Total Remuneration of employees and
directors
Dividends Paid
2022
2021
Difference
80.2
5.6
85.9
203.1
78.8
4.6
83.4
190.4
1.4
1.0
2.5
12.7
The Company has not made any share repurchases during 2022 or 2021.
The average number of employees in 2022 in Atlantica was 874 employees, compared to 655
employees in 2021. The $1.4 million increase in spend on pay and the increase in the average
number of employees is mostly due to the internalisation of the operation and maintenance
activities at Kaxu and at part of our solar assets in Spain. We refer to section “People and Culture”
under “Social Sustainability.”
The increase in total remuneration of directors is mainly due to the vesting of the CEO’s stock units
awarded under the LTIP 2019, the appointment of Mr. Hall to the Board in August 2022 and the
fee received by Mr. Trisic since April 2022.
3. Directors’ Shareholdings (Audited)
The following table includes information with respect to beneficial ownership of our ordinary shares
as of December 31, 2022 by each of our current directors and executive officers, as well as their
connected persons, in relation to any compensation paid and/or benefits granted by the Company.
Directors who do not receive remuneration from the Company are not required to comply with
minimum share ownership requirements.
232
Name1
Number
of Shares
Number of
Deferred
Number of
Share Units3
Restricted
subject to
Share
Units2
performance
measures
Investment
Value
($000’s)4
William Aziz
2,500
-
Debora Del
Favero
-
2,608
Brenda Eprile
13,000
-
Michael
Forsayeth
2,500
4,075
Edward Hall
1,500
Santiago
Seage
77,000
-
-
George Trisic
1,000
3,962
Michael
Woollcombe
5,000
12,225
-
-
-
-
-
65
68
337
170
39
94,559
4,443
-
-
129
446
Minimum
Share
Ownership
Requirement
3 times annual
compensation
3 times annual
compensation
3 times annual
compensation
3 times annual
compensation
3 times annual
compensation
6 times fixed
compensation
3 times annual
compensation
3 times annual
compensation
Compliance
With Policy5
Number of
Share Options
Vested
Unexercised6
Number
of Share
Options
Not
Vested7
On track
On track
On track
On track
On track
-
-
-
-
-
-
-
-
-
-
24,948
84,389
On track
On track
-
-
-
-
1 Mr. Banskota, non-independent, non-executive director, does not receive remuneration from the Company. Thus, he is not required
to comply with minimum share ownership requirements.
2 The number of DRSUs includes accumulated cash dividend equivalent rights, corresponding to the amount of dividends paid for one
share in the period between the DRSU effective date and December 31, 2022 and 2021, respectively, multiplied by the number of DRSU
on that date and divided by the share price of $25.90 as of December 31, 2022. The director shall not have any rights of a shareholder
unless and until the DRSUs vest and are settled by the issuance of shares and dividend equivalent rights will not be payable until the
DRSUs vest.
3 Non-vested Share Units as of December 31, 2022. LTIP share units subject to 5% minimum Total Shareholder Return.
4 Assuming a share price of $25.90 as of December 31, 2022.
5 Mr. Aziz, Ms. Del Favero, Ms. Eprile, Mr. Forsayeth, Mr. Seage and Mr. Woollcombe have a 5-year window starting in May 2021 to
comply with this policy. Mr. Hall and Mr. Trisic have a 5-year window starting in August and April 2022, respectively.
6 2021 share options (24,948) were underwater as of December 31, 2022.
7 Share options awarded in 2020 and 2021 under the LTIP (84,389). These share options have not vested as of December 31, 2022.
Between the year end and the date of issuance of this report there have been no changes to
directors’ share ownership except in the case of the CEO, due to the vesting of the 2020 awards
and grant of 2023 awards under the LTIP.
Under the LTIP and one-off plans, the CEO holds as of December 31, 2022, 94,559 restricted share
units, convertible into shares in the future, and 24,948 unexercised vested share options and 84,389
unvested share options which were underwater at 2022 year-end. As of December 31, 2021, the
CEO held 120,880 restricted share units, convertible into shares in the future and 184,524 unvested
share options.
Minimum Share Ownership Requirements
The Board of Directors has minimum share ownership guidelines for directors receiving
remuneration from the Company and for the executives participating in the LTIP to further align
executive and shareholder interests. Directors and executives subject to these guidelines shall
achieve, within a period of five years, a minimum share ownership in the Company. The value of
shares owned includes shares that are issuable pursuant to the LTIP and the DRSU Plans (both
vested and non-vested). Directors receiving remuneration and executives participating in the LTIP
shall achieve a minimum share ownership in the Company equal in value to:
233
- Non-executive directors receiving remuneration from the Company: 3 times their annual
compensation,
- CEO: 6 times his fixed compensation,
- CFO: 3 times his fixed compensation,
- Other executives: 2 times their fixed compensation.
The directors receiving remuneration from the Company and executives have a 2-year window to
amend non-compliances with minimum share ownership requirements derived from a stock price
decrease.
The directors not receiving remuneration from the Company are not required to comply with
minimum share ownership requirements.
Termination Payments (Audited)
No termination payments were made to the Chief Executive Officer or any other director in 2022
nor 2021. The policy for termination payments is detailed under the section “Policy on payments
for loss of office” of this report.
4. Statement of Implementation of Policy in 2022
The targets for bonuses are detailed under the section “Remuneration Policy” of this Directors’
Remuneration Report. The current policy was approved at our 2021 Annual General Meeting, held
in May 2021.
For 2023, the bonus measures for the remuneration of the Chief Executive Officer, will focus on five
areas: financial targets, capital allocation, ESG including health and safety, management of
relationships with key shareholders and partners and continued executive talent development.
This approach is intended to provide a balanced assessment on how the business has performed
over the course of the year against stated objectives. Targets are aligned with the annual plan and
strategic and operational priorities for the year.
For 2023 the bonus objectives are:
CAFD – Equal or higher than the CAFD budgeted in the 2023 budget
Adjusted EBITDA – Equal or higher than the Adjusted EBITDA budgeted in the 2023 budget
Capital allocation management on a value accretive basis
Achievement of ESG metrics including health and safety targets – (Frequency with Leave / Lost
Time Index below 3.7 and General Frequency Index below 9.5)
Management of relationships with key shareholders and partners
Continued executive talent development
Percentage
Weight
35%
15%
20%
10%
10%
10%
5. Compensation Committee
The Compensation Committee is responsible for determining the remuneration policies of directors
and the remuneration of the Chief Executive Officer and other senior members of management.
In 2022, the Compensation Committee focused its activities on the following key remuneration
topics:
234
- Reviewing the Chief Executive Officer’s annual compensation package and performance
objectives,
- Reviewing Long Term Incentive Plans,
- Reviewing non-executive director’s remuneration, and
- Analysing peers and comparable remuneration structures.
Membership and Attendance
As of December 31, 2022, all members of the Compensation Committee are independent, non-
executive directors.
A total of three Compensation Committee meetings were convened in 2022, with an average
attendance of 100%.
Membership
Director
From
William Aziz
May 2020
Debora Del Favero
May 2020
To
n/a
n/a
Role
Attendance /
Eligible to Attend
Director, Independent and Chair of
the Compensation Committee
Director, Independent
3/3
3/3
No director or senior manager shall be involved in any decision as to their own remuneration. The
Chief Executive Officer and members of senior management, such as the Head of People and
Culture, may attend the meetings by invitation.
The Chair of the Compensation Committee provides regular updates to the Board of Directors on
the key issues discussed at the Compensation Committee’s meetings.
2022 Key Activities
In 2022, the Compensation Committee proposed to the Board of Directors, and the Board
approved, the Chief Executive Officer’s 2021 bonus achievement and his 2022 target variable
compensation. In addition, the Compensation Committee continued its work on reviewing our
remuneration structure to ensure that the Company has in place an effective remuneration policy
which:
- Allows the Company to attract and retain top quality talent; and
- Rewards and compensates sustainable performance to the benefit of shareholders and other
stakeholders.
Remuneration Analysis
The Compensation Committee keeps the remuneration policy implemented by the Board of
Directors and approved in the 2021 Annual General Meeting under review. At least once a year, the
Compensation Committee reviews compensation practices for non-executive directors in similar
companies.
The Compensation Committee has been particularly focused on reviewing remuneration for
directors and the Chief Executive Officer, based on the information collected from external
consultants that provided independent advice on remuneration best practices and market practice
on directors´ minimum ownership requirements.
235
The Compensation Committee is responsible for proposing the remuneration of the Chief Executive
Officer and the overall remuneration of the senior management to the Board of Directors, including
any kind of compensation.
The Compensation Committee has the following duties regarding performance-related bonuses or
variable remuneration:
- Definition of specific targets for the Chief Executive Officer and overall structure for senior
management.
- Evaluation of the accomplishment of those objectives in the case of the Chief Executive Officer.
Long-Term Incentive Awards
In April 2018, the Board of Directors approved the implementation of a remuneration policy
including LTIP awards. Since May 2021, LTIP awards have been granted as Restricted Stock Units
only. Approximately 13 executives and the Chief Executive Officer are eligible to participate in the
LTIP.
For awards granted until the end of 2021, 100% of the award was subject to (1) continuing
employment (or other service relationship) and to (2) the achievement of a minimum 5% average
annual TSR over a three-year period. In 2022, for executives who are not directors only, 67% of the
awards was subject to the satisfaction of these two conditions and 33% of the award was subject
to continuing employment only. In order to align the 2020 and 2021 award conditions to the
current policy, the Board of Directors decided to offer executives who are not directors the
possibility of amending the 2020 and 2021 plans so that 33% of the award is not subject to the
minimum 5% average annual TSR condition, and is subject to continuing employment only, and
delay the vesting period by approximately six months.
In addition, the Company is changing its remuneration policy to extend to executive directors the
vesting conditions of the LTIP currently applicable to the rest of executives, so that 33% of future
awards will be granted subject to continuing employment and 67% of future awards will be granted
subject to continuing employment and achievement of a minimum 5% average annual TSR.
Shareholders will be asked to approve amendments to the remuneration policy at our 2023 Annual
General Meeting to be held in April 2023.
Voting at the 2022 Annual General Meeting
The Company takes an active interest in voting outcomes. In the event of a substantial vote against
a resolution in relation to director´s remuneration, the Company would seek to understand the
reasons for any such vote and would set out in the following Annual Report any actions in response
to it.
At the 2022 Annual General Meeting, the Directors’ Remuneration Report votes were as follows:
For
Against
Withheld*
Number of votes
84,496,041
1,035,384
106,601
%
98.8%
1.2%
-
* A vote “withheld” is not a vote in law and is not counted in the calculation of the proportion of votes for and against the resolution
236
Please refer to the Shareholder Engagement section for additional resolutions voted at the Annual
General Meeting.
Remuneration Policy
The current policy was approved at our 2021 Annual General Meeting. Shareholders will be asked
to approve amendments to the remuneration policy at our 2023 Annual General Meeting to be
held in April 2023.
The changes to the policy consist of (1) extending to executive directors the vesting conditions of
the LTIP currently applicable to the rest of executives, so that 33% of future awards granted under
the LTIP will be subject to continuing employment and 67% of the award will be subject to
continuing employment and achievement of a minimum 5% average annual TSR, (2) amending the
performance measures applicable to the annual bonus, (3) approving a strategic review bonus and
(4) updates to the change of control and delisting events for future awards granted under the LTIP
and all past awards granted under the LTIP to executives participating in the strategic review bonus,
to reflect the assessment of performance conditions under such events.
Non-Executive Directors:
The Company’s policy is to compensate non-executive directors via cash or Deferred Restricted
Share Units (“DRSUs”) for the time dedicated to promoting greater alignment of interests between
directors and shareholders subject to a maximum total annual compensation for non-executive
directors in aggregate of two million dollars. Once a year, the Compensation Committee reviews
compensation practices for non-executive directors in similar companies and the skills and
experience required and may propose an adjustment in the current compensation.
The DRSU plan provides a means for directors to accumulate a financial interest in the Company
and to enhance Atlantica’s ability to attract and retain qualified individuals with the experience and
ability to serve as directors. Pursuant to the DRSU Plan, the Company shall determine, and the
directors shall agree, the percentage of their fees, starting on May 31, 2021, that shall be irrevocably
substituted for the grant of Deferred Restricted Stock Units.
The number of DRSUs credited to a participant’s account is determined by dividing the amount of
the annual compensation to be received in DRSUs by the market value of an ordinary share at the
time of the grant. Upon a participant ceasing to be a member of the Board, for any reason whether
voluntary or involuntary, the DRSUs will vest. The Company shall transfer to the director a number
of shares equal to the number of vested DRSUs and a number of shares equal in value to any
dividends which would have been paid or payable, on such number of ordinary shares equal to the
vested DRSUs, from the grant date until the vesting date. The director shall not have any
shareholders’ rights other than the dividend equivalent rights until the DRSUs vest and are settled
by the issuance of shares.
None of the non-executive directors receive bonuses, long-term incentive awards, pension or other
benefits in respect of their services to the Company.
237
Executive Directors:
The policy for executive directors, only applicable to the Chief Executive Officer as the only
executive director, is as follows:
Name of
component
Description of
component
How does this
component support the
company’s (or Group’s)
short and long-term
objectives?
What is the
maximum that
may be paid in
respect of the
component?
Maximum amount
€800 thousand
(approximately $850
thousand), may be
increased by 5% per
year.
Salary levels for peers
are considered.
Helps to recruit and retain
executive directors and forms
the basis of a competitive
remuneration package.
Helps to offer a competitive
remuneration package and
align it with the Company’s
objectives.
200% of base salary.
25%-50% of CAFD.
Framework used to
assess performance
Not applicable.
No retention or clawback.
10-15% of Adjusted EBITDA.
40%-50% of other
operational or qualitative
objectives.
No retention.
Clawback policy.
Closing of a strategic
transaction as such term is
defined by the Board of
Directors.
Salary/fees
Benefits
Annual Bonus
Strategic
Review Bonus
Fixed remuneration
payable monthly.
Opportunity to join
existing plans for
employees but
without any increase
in remuneration.
Annual bonus is
paid following the
end of the financial
year for
performance over
the year. There are
no retention or
forfeiture provisions.
One-time bonus
related to the
strategic review
process and payable
upon closing of a
potential strategic
transaction.
Helps retain executive
directors who are relevant for
the success of the strategic
review process.
110% of 2023 target
annual remuneration
(including fixed salary
+ target annual
bonus).
238
Name of
component
Description of
component
Long Term
Incentive
Awards
Restricted Stock
Units subject to
certain vesting
periods and in part
to minimum TSR.
How does this
component support the
company’s (or Group’s)
short and long-term
objectives?
Align executive directors and
shareholders interests.
What is the
maximum that
may be paid in
respect of the
component?
Framework used to
assess performance
70% of target annual
remuneration
(including fixed salary
+ target annual
bonus.
Restricted Stock Units
granted after the approval
of the proposed
amendments to the Policy in
2023 subject to
- Continuing employment for
33% of the award and
- Continuing
If
the
employment
and achievement of a
minimum
average
5%
annual TSR for 67% of the
award.
TSR
performance condition has
not been met during the
vesting
the
Restricted
participant's
to
Stock Units
minimum
TSR
condition will lapse on the
vesting date.
subject
period,
annual
Restricted Stock Units
granted prior to the
approval of the proposed
amendments to the Policy in
2023 subject to
- Continuing
If
the
employment
and achievement of a
minimum
average
5%
annual TSR for 100% of the
award.
TSR
performance condition has
not been met during the
vesting
the
participant's
Restricted
Stock Units will lapse in full
on the vesting date.
period,
CAFD, Adjusted EBITDA and TSR have been selected as key parameters to measure the Company’s
performance due to their importance for our shareholders. These measures are considered
standard indicators of financial performance in our sector.
Share units.
Clawback policy.
239
Clawback Policy
The Company has an incentive compensation recoupment, or clawback policy since 2021. The
policy is aimed at allowing the Company to recover performance-based compensation for three
years after short-term variable compensation and/or long-term compensation awards are granted.
The clawback policy is applicable to all executives who participate in long term incentive
arrangements.
The clawback policy is applicable in the event of the occurrence of either of the following triggering
events: material financial restatement, including a restatement resulting from employee
misconduct, or in the case of fraud, embezzlement or other serious misconduct that is materially
detrimental to the Company. The Compensation Committee shall retain discretion regarding
application of the policy. The policy is incremental to other remedies that are available to the
Company.
If a triggering event occurs, unless otherwise determined by the Compensation Committee and/or
if the Company is required to prepare a material restatement of its financial statements as a result
of misconduct, and the Compensation Committee determines that the executive knowingly
engaged in the misconduct or acted knowingly or with gross negligence in failing to prevent the
misconduct, or the Compensation Committee concludes that the participant engaged in fraud,
embezzlement or other similar activity (including acts of omission) that the Compensation
Committee concludes was materially detrimental to the Company, the Company may require the
participant (or the participant’s beneficiary) to reimburse the Company for, or forfeit, all or any
portion of any short or long term variable compensation awards.
Compensation Committee Discretions
The Compensation Committee has discretion, consistent with market practice, in respect of, but
not limited to, participants, timing of payments, size of the award subject to policy, performance
measures and when dealing with special situations, such as change of control or restructuring.
The annual bonus is a variable cash bonus, based on the objectives described above. Those
objectives include Cash Available for Distribution (CAFD) and Adjusted EBITDA, as these are key
financial metrics for our industry sector. Additionally, the annual bonus includes 3-4 objectives that
reflect some of the key projects, initiatives or key objectives.
Annual bonus performance targets include annual CAFD and Adjusted EBITDA performance
thresholds for payment and also thresholds for the operational/qualitative targets defined by the
Compensation Committee. These could vary on a year-to-year basis, hence assessment
performance thresholds are analysed and updated by the Compensation Committee on an annual
basis.
For the management team and key personnel, our policy is to use two external consultants to
estimate market conditions for similar positions in terms of fixed and variable remuneration and,
based on a performance appraisal, set a target remuneration, as a general rule, within that market
practice. Variable payments are based on a number of specific measurable targets in relation to the
measures described herein, which are defined by the Compensation Committee at the beginning
of the year. For the rest of its employees, the Company establishes predefined remuneration ranges
for different positions and reviews each individual remuneration depending on performance
appraisal and within two ranges without employee consultation.
240
In addition, the Compensation Committee shall retain discretion regarding application of the
clawback policy described in the remuneration policy section.
Long-Term Incentive Awards
The purpose of the LTIP is to attract and retain the best talent for positions of substantial
responsibility in the Company, to encourage ownership in the Company by the executive team
whose long-term service the Company considers essential to its continued progress and, thereby,
encourage recipients to act in the shareholders’ interest and to promote the success of the
Company.
The long-term incentive plan permits the granting of Restricted Stock Units (“Awards”) to the
executive team of the Company (the “Executives”). The LTIP applies to approximately 13 Executives
and the Chief Executive Officer.
In addition, the management has discretion to grant additional LTIPs to a certain group of
employees and decide the value up to the 50% of the participant´s total annual compensation for
the year closed before the date upon which an Award is granted.
The aggregate number of shares which may be reserved for issuance under the LTIP must not
exceed 2% of the number of the shares outstanding at the time of the Awards are granted but is
expected to be significantly less. In addition, total equity-based awards will be limited to 10% of
the Company's issued share capital over a 10-year rolling period, in order to assure shareholders
that dilution will remain within a reasonable range. In any case, the Compensation Committee may
decide that, instead of issuing or transferring shares, the Executives may be paid in cash.
The value of the Awards will be defined as 50% of the Executives’ total annual compensation for
the year closed before the date upon which an Award is granted and, in the case of the Chief
Executive Officer, would be 70% of the same previous year total annual compensation at the grant
date. The award will be granted in Restricted Stock Units.
Main terms of the LTIP after the approval of the proposed amendments to the Policy in 2023:
Nature
Exercisability and Vesting
Period
Ownership and Dividends
Main terms of the LTIP for awards granted to all Executives
after the approval of the proposed amendments to the Policy in
2023 – Restricted Stock Units
Conditions shall be based on:
- Continuing employment (or other service relationship) for 33% of
the award and
- Continuing employment and achievement of a minimum 5%
average annual TSR for 67% of the award.
33% of the shares will vest on the third anniversary of the grant date
and 67% of the shares will vest on the third anniversary of the grant
date but only if the annual TSR has been at least a 5% yearly average
over such 3-year period. If the TSR has not met such threshold during
the period, the participant's relevant Restricted Stock Units for the
67% portion will lapse on the vesting date.
The Company will decide at vesting if cash or shares are given as
payment.
The participant will be entitled to receive, for each Restricted Stock
Unit held, a payment equivalent to the amount of any dividend or
distribution paid on one share between the grant date and the date
on which the Restricted Stock Unit vests.
241
Main Terms of the LTIP before the approval of the proposed amendments to the policy in 2023:
Nature
Exercisability
and Vesting
Period
Ownership and
Dividends
Main Terms of the LTIP before the approval of the proposed amendments to the policy in
2023 – Restricted Stock Units
Executives who are not Directors
Executives who are Directors
Conditions shall be based on:
- Continuing employment (or other service
relationship) for 33% of the award and
- Continuing employment and achievement of
a minimum 5% average annual TSR for 67%
of the award.
33% of the shares will vest on the third
anniversary of the grant date and 67% of the
shares will vest on the third anniversary of the
grant date but only if the annual TSR has been at
least a 5% yearly average over such 3-year
period. If the TSR has not met such threshold
during the period, the participant's relevant
Restricted Stock Units for the 67% portion will
lapse on the vesting date.
The Company will decide at vesting if cash or
shares are given as payment.
The participant will be entitled to receive, for
each Restricted Stock Unit held, a payment
equivalent to the amount of any dividend or
distribution paid on one share between the grant
date and the date on which the Restricted Stock
Unit vests.
Conditions shall be based on continuing
employment (or other service relationship)
and achievement of a minimum 5% average
annual TSR.
The shares will vest on the third anniversary
of the grant date but only if the annual TSR
has been at least a 5% yearly average over
such 3-year period. If the TSR has not met
such threshold during the period, the
participant's relevant Restricted Stock Units
will lapse on the vesting date.
The Company will decide at vesting if cash or
shares are given as payment.
The participant will be entitled to receive, for
each Restricted Stock Unit held, a payment
equivalent to the amount of any dividend or
distribution paid on one share between the
grant date and the date on which the
Restricted Stock Unit vests.
Effect on Termination of Employment
If a participant’s employment terminates by reason of involuntary termination (death, disability,
redundancy, constructive dismissal or retirement dismissal rendered unfair), any portion of his/her
Award shall thereafter continue to vest and become exercisable according to the terms of the LTIP
but such participant shall no longer be entitled to be granted Awards under the LTIP.
If a participant incurs a termination of employment for cause or voluntary resignation or
withdrawal, share options that have vested at the termination date will be exercisable within the
period of 30 days from such termination date (after which they will lapse) but any unvested Awards
(options or Restricted Stock Units) shall lapse.
Change of Control
If there is a change of control, all Awards granted under the LTIP after the approval of the
amendments to the Policy in 2023 and all past awards granted under the LTIP to executives
participating in the strategic review bonus shall vest based on the satisfaction of performance
conditions as at the time of the change in control. All Awards granted to other employees prior to
this shall vest in full on the date of the change in control. The participants must exercise their share
options within a period of 30 days following receipt of a change of control notice from the
Company without which, the options will lapse.
242
Delisting
If the Company is delisted, all outstanding Awards granted under the LTIP after the approval of the
amendments to the Policy in 2023 and all past awards granted under the LTIP to executives
participating in the strategic review bonus shall vest based on the satisfaction of performance
conditions as at the time of delisting and will be settled in cash. All Awards granted to other
employees prior to this shall vest in full on the date of delisting and will be settled in cash. The cash
payment for Restricted Stock Units will be the last quoted share price of the Company and the cash
payment for any outstanding share options will be the difference between the last quoted share
price and the exercise price for the applicable option. Such cash payments will be made after
applicable tax deductions within 30 days of the delisting.
One-Off Plan
The one-off plan grants Restricted Stock Units to certain members of the management and certain
members of middle management52, consisting of approximately 25 managers including the Chief
Executive Officer. The value of the award was defined as 50% of 2019 target remuneration
(including salary and variable bonus). The share units vested over 3 years, one third each year
starting in 2020, provided that the manager is still an employee of the Company. This was approved
by shareholders at the 2019 Annual General Meeting. In 2022, the last third of stock units vested
and the one-off plan ended.
Strategic Review Bonus
On February 21, 2023, Atlantica announced the initiation of a process to explore and evaluate
potential strategic alternatives that may be available to Atlantica to maximize shareholder value. In
connection with this process, the purpose of the strategic review bonus is to retain talent for certain
positions in the organization which are relevant for the success of this process. The strategic review
bonus applies to ten executives and the CEO. The value of the bonus is defined as 75% of the target
annual remuneration for 2023 (including fixed salary + target annual bonus for 2023) (110% in the
case of the CEO) and will become payable upon closing of a potential strategic transaction, as such
term is defined by the Board of Directors. In the case of the CEO, the strategic review bonus is
subject to the approval of Shareholders at the Annual General Meeting to be held in April 2023.
Pension
The executive director does not receive any pension contributions.
None of the non-executive directors receive bonuses, long-term incentive awards, pension or other
benefits in respect of their services to the Company.
There are no provisions for the recovery of sums paid or the withholding of any sum, except for
those potentially derived from the application of the clawback provision.
52 Middle Management consists of employees who: (i) manage a specific area, (ii) supervise a group of employees, or (iii) are considered
key personnel within the organization.
243
Chief Executive Officer Remuneration Policy
The Compensation Committee approved a fixed remuneration of €738 thousand ($790 thousand
converted to U.S. dollars at the December 31, 2022 exchange rate, which is 1.07 $/€) for the Chief
Executive Officer for 2023, a 7% increase versus 2022.
Total remuneration of the only executive director for a minimum, target and maximum
performance in 2023 is presented in the chart below.
In thousands of USD
$790
$790
$2,337
$1,092
$455
$790
$2,974
$1,092
$1,092
$790
Minimum
Target
Maximum
Salary and Benefits
Annual Bonus
LTIP Awards
Assumptions made for each scenario are as follows:
Minimum:
Target:
Maximum:
Fixed remuneration only, assuming performance targets are not met for the annual
bonus nor for the RSU and assuming no value for the options vesting in the year.
Fixed remuneration, plus half of target annual bonus and the LTIP vesting in 2023
at face value, using share price at grant date for units and option value at grant
date for options, not including dividends, and assuming that the minimum annual
TSR of at least a 5% yearly average over the 3-year period is met for the units.
Fixed remuneration, plus maximum annual bonus and LTIP vesting in 2023 at face
value, using share price at grant date for units and option value at grant date for
options not including dividends, and assuming that the minimum annual TSR of at
least a 5% yearly average over the 3-year period is met for the units.
In addition, if we assume a 50% appreciation of the share price with respect to the grant date,
maximum remuneration for 2023 including vesting long-term awards would be approximately
$4,138 thousand. If we assume a 50% appreciation of the share price with respect to the December
31, 2022 share price, maximum remuneration for 2023 including vesting long-term awards would
be approximately $3,959 thousand.
For 2023, the bonus measures for the remuneration of the Chief Executive Officer, will focus on five
areas: financial targets, capital allocation, ESG including health and safety, management of
relationships with key shareholders and partners and continued executive talent development.
244
This approach is intended to provide a balanced assessment of how the business has performed
over the course of the year against stated objectives. Targets are aligned with the annual plan and
strategic and operational priorities for the year.
The CEO’s 2023 bonus objectives are disclosed under the section Annual Report on Remuneration.
Approach to Recruitment
The remuneration policy reflects the composition of the remuneration package for the
appointment of new executive and non-executive directors. We expect to offer a competitive fixed
remuneration, an annual bonus (for executive directors) not exceeding 200% of the fixed
remuneration and participation in the LTIP. Whenever needed, the Company can contract an
external advisor to hire key personnel.
Policy on Payments for Loss of Office
The Company has an agreement in-place with certain executives with strategic and key
responsibilities in the Company (“Key Managers”), including the Chief Executive Officer, to protect
the Company's know-how and to ensure continuity in terms of attainment of business objectives,
the policy approved by our shareholders at the 2019 Annual General Meeting, introduced certain
termination payments to key executives, including the Chief Executive Officer.
No payments would be made to Key Managers for dismissal for breach of contract, breach of
fiduciary duties or gross misconduct, determined (in the event of a dispute) by a court of competent
jurisdiction to reach a final determination.
The Company agreed with Key Managers, including the CEO, the Company would make payments
for loss of office or employment in addition to the severance payment under the prevailing labour
and legal conditions in their contracts or countries where they are employed if they should leave
(by loss of office or employment) the Company within 2 years of a change in control. The payment
would represent six months of remuneration and will be adjusted to ensure that total payment
including severance payment required under prevailing laws represent at least 12 months of
remuneration (including salary, benefits, long term incentive plans and variable pay), but never
more than 24 months of remuneration, unless required by local law.
A change of control means that a third party or coordinated parties (i) acquire directly or indirectly
by any means a number of shares in the Company which (together with the shares that such party
may already hold in the Company) amount to more than 50% of the share capital of the Company;
or (ii) appoint or have the right to appoint at least half of the members of the Board of Directors
of the Company.
Consideration of Employee Conditions Elsewhere
Our policy is to use external consultants to estimate market conditions for specific roles of a similar
level in terms of fixed and variable remuneration and, as a general rule, based on a performance
appraisal, set target remuneration within that market practice.
The annual variable remuneration payment is calculated with reference to the achievement of a
number of specific measurable targets defined in the previous year. Each specific target is measured
on a performance scale of 0%-120%.
245
For the rest of its employees, the Company establishes predefined remuneration ranges for
different positions and reviews each individual remuneration depending on performance appraisal
within two ranges without employee consultation.
The remuneration of all employees, including the members of the management team, may be
adjusted periodically in the framework of the annual salary review process which is carried out for
all employees.
Overall, we expect that, following the implementation of our policies, remunerations of the
Company’s employees will increase in line with the market with the exception of individuals that
have recently been promoted or whose remuneration is above market conditions.
Statement of Consideration of Shareholder Views
There are no comments in respect of directors’ remuneration expressed to the Company by
shareholders. The last Annual General Meeting was held in May 2022.
246
Summary of Policy for Non-Executive Directors
Name of
component
How does the
component support the
company’s objective?
Operation
Maximum
Fees and/or
Deferred
Restricted
Share Units
(DRSU)
Attract and retain high-
performing non-executive
directors.
Align interests of non-
executive directors with
interests of shareholders.
Reviewed annually by the
Compensation Committee and Board.
The chair of the Board and the chair
of each committee (except the
Related Parties Committee) receive
additional fees.
Annual total compensation for
non-executive directors, in any
case, the fees or DRSUs will
not exceed two million dollars.
DRSUs: the Company and the
Directors shall agree the percentage
of their fees that shall be paid in
DRSUs. The number of DRSUs
credited is determined using the
market value of an ordinary share at
the time of the grant. Upon a
participant ceasing to be a member of
the Board the DRSUs will vest. The
Company shall transfer to the director
a number of shares equal to the
number of vested DRSUs and a
number of shares equal in value to
any dividends which would have been
paid or payable, or such number of
ordinary shares equal to the vested
DRSUs, from the grant date until the
vesting date.
Minimum share ownership: within a
period of five years, directors
receiving remuneration from the
Company should have a minimum
share ownership in the Company of 3
times their annual compensation.
Customary control procedures.
Real costs of travel with a
maximum of one million
dollars for all directors.
Benefits
Reasonable travel
expenses to the
Company’s registered
office or venues for
meetings.
Non-independent, non-executive directors are entitled to the same compensation as independent
non-executive directors.
In 2021, the Board of Directors adopted minimum share ownership guidelines for directors
receiving remuneration from the Company (see the Directors’ Shareholdings section). Within a
period of five years, non-executive directors receiving remuneration from the Company should
have a minimum share ownership in the Company of 3 times their annual compensation.
In addition, the directors may elect to receive compensation via a mix of cash and DRSUs. The
DRSUs shall vest upon the date on which the director ceases to be a member of the Board due to
a voluntary or involuntary separation from service. The director shall not have any rights of a
247
shareholder unless and until the DRSUs vest and are settled by the issuance of shares (see further
detail in the Current remuneration policy section above).
Service Contracts
Mr. Seage has a service contract with Atlantica that includes a 6-month notice period.
Non-executive directors do not have a service contract. All directors will be submitted for re-
election by shareholders annually at the Annual General Meeting.
Employee Benefit Trusts
The Company has not established employee trusts for share plans.
Statement of Voting at General Meetings
The remuneration report will be submitted to a vote of shareholders at the Annual General Meeting
in April 2023.
Approval
This report was approved by the Board of Directors on February 28, 2023 and signed on its behalf
by William Aziz, Director and Chair of the Compensation Committee.
Director and Chair of the Compensation Committee
William Aziz
February 28, 2023
248
Directors’ Responsibilities Statement
The directors are responsible for preparing the Integrated Annual Report and the Consolidated
Financial Statements in accordance with applicable U.K. law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under
that law the directors are required to prepare the group financial statements in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards
Board (“IASB”) and UK adopted International Accounting Standards (collectively as “IFRS”). The
parent Company financial statements have been prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (FRS 101). Under Company law the directors must
not approve the accounts unless they are satisfied that they give a true and fair view of the state
of affairs of the Company and the Group and of the profit or loss of the Company and the Group
for that period.
In preparing these financial statements the directors are required to:
- Select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors and then apply them consistently;
- Make judgements and accounting estimates that are reasonable and prudent;
- Present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
-
- Provide additional disclosures when compliance with the specific requirements in IFRSs and in
respect of the parent Company financial statements, FRS 101 is insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the Group and
Company financial position and financial performance;
In respect of the Group financial statements, state whether International Accounting Standards
in conformity with the requirements of the Companies Act 2006 have been followed, subject to
any material departures disclosed and explained in the financial statements;
In respect of the parent company financial statements, state whether the applicable FRS 101
have been followed, subject to any material departures disclosed and explained in the financial
statements; and
-
- Prepare the financial statements on the going concern basis unless it is appropriate to presume
that the Company and the Group will not continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Company’s and the Group’s transactions and disclose with reasonable accuracy at
any time the financial position of the Company and the Group and enable them to ensure that the
financial statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
249
Responsibility Statement
Under applicable law and regulations, the directors are also responsible for preparing a strategic
report, directors’ report and directors’ remuneration report that comply with that law and those
regulations. The directors are responsible for the maintenance and integrity of the corporate and
financial information included on the Company’s website.
We confirm that to the best of our knowledge:
The Consolidated Financial Statements, prepared in accordance with the International Accounting
Standards in conformity with the requirements of the Companies Act 2006, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the company and the undertakings
included in the consolidation taken as a whole,
The Strategic Report includes a fair review of the development and performance of the business
and the position of the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face, and
The Integrated Annual Report and Financial Statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Company’s
performance, business model and strategy.
This responsibility statement was approved by the Board of Directors on February 28, 2023 and is
signed on its behalf by:
By order of the Board
Director and Chief Executive Officer
Chief Financial Officer
Santiago Seage
February 28, 2023
Francisco Martinez-Davis
February 28, 2023
250
Shareholder Engagement
Atlantica’s Board is accountable to its shareholders. Each year, at the Annual General Meeting,
shareholders have the opportunity to elect each member of our Board of Directors and to vote on
the Directors’ remuneration report and policy.
The proposals are published in our Annual Proxy Statement and voted on by shareholders in
conjunction with the Annual General Meeting.
Proxy Item
% shares present
2022
75.1%
2021
74.6%
2020
72.7%
Proxy Item
-
Integrated Annual Report
- Directors’ remuneration report
- Directors’ remuneration policy
- Election of non-executive directors (average)
- Re-election of Santiago Seage as director
- Appointment of independent auditor
- Redemption of share premium account
- Authorise the Company to purchase its own shares
- Audit committee to determine auditors’ remuneration
- Change the Company name
- Appropriation of Distributable Profits and Deeds of Release
- Authorise the Board of Directors to issue shares
- Disapplication of pre-emption rights
- Disapplication of pre-emptive rights up to an additional
amount of approximately a 10% of the aggregate nominal
value of the issued share capital of the Company
- Authorise the Board of Directors to issue equity securities
without pre-emptive rights up to approximately a 10% of the
aggregate nominal value of the issued share capital of the
Company
Percentage Vote “For”53
2021
100.0%
96.7%
96.6%
99.8%
99.6%
99.9%
99.8%
-
99.9%
-
-
98.1%
-
2022
100.0%
98.8%
-
99.2%
99.6%
99.9%
-
-
99.8%
-
-
98.8%
-
2020
99.9%
95.6%
88.3%
37.0%
-
-
-
-
-
99.9%
99.5%
99.9%
74.6%
78.7%
80.1%
97.4%
99.8%
-
-
53 Defined as For/(For+Against), expressed as a percentage. Non-voters are not included in the calculation
251
Other Information
252
Other Information
Asset Portfolio
The following table provides an overview of our current assets as of December 31, 2022:
Assets
Type
Ownership
Location
Currency
(9)
Capacity
(Gross)
Counterparty
Credit Ratings(10)
COD*
Contract
Years
Remaining(17)
Solana
Renewable (Solar)
100% Arizona (USA) USD 280 MW BBB+/A3/ BBB+ 2013
Mojave
Renewable (Solar)
100%
Coso
Renewable
(Geothermal)
100%
California
(USA)
California
(USA)
USD 280 MW
BB-/--/BB
2014
USD 135 MW
Investment grade
(11)
1987/
1989
Elkhorn Valley(16) Renewable (Wind)
49% Oregon (USA) USD 101 MW
BBB/Baa1/--
2007
Prairie Star(16)
Renewable (Wind)
49%
Minnesota
(USA)
USD 101 MW
--/A3/A-
2007
Twin Groves II(16) Renewable (Wind)
49%
Illinois (USA) USD 198 MW BBB-/Baa2/--
2008
21
17
16
5
5
3
Lone Star II(16)
Renewable (Wind)
49%
Texas (USA) USD 196 MW
Chile PV 1
Renewable (Solar)
35%(1)
Chile
USD
55 MW
N/A
N/A
2008
N/A
2016
N/A
Chile PV 2
Renewable (Solar)
35%(1)
Chile
USD
40 MW
Not rated
2017
8
Chile PV 3
Renewable (Solar)
35%(1)
Chile
USD
73 MW
N/A
2014
N/A
La Sierpe
Renewable (Solar)
100%
Colombia
COP
20 MW
Not rated
2021
Palmatir
Cadonal
Renewable (Wind)
100%
Uruguay
USD
50 MW BBB/Baa2/BBB-(12) 2014
Renewable (Wind)
100%
Uruguay
USD
50 MW BBB/Baa2/BBB-(12) 2014
Melowind
Renewable (Wind)
100%
Uruguay
USD
50 MW BBB/Baa2/BBB- 2015
Mini-Hydro
Renewable
(Hydraulic)
100%
Peru
USD
4 MW
BBB/ Baa1/BBB 2012
13
11
12
13
10
Solaben 2 & 3
Renewable (Solar)
70%(2)
Spain
Euro 2x50 MW
A/Baa1/A-
2012
15/15
Solacor 1 & 2
Renewable (Solar)
87%(3)
Spain
Euro 2x50 MW
A/Baa1/A-
2012
14/14
PS10/PS20
Renewable (Solar)
100%
Spain
Euro
31 MW
A/Baa1/A-
2007&
2009
Helioenergy 1 & 2 Renewable (Solar)
100%
Spain
Euro 2x50 MW
A/Baa1/A-
2011
Helios 1 & 2
Renewable (Solar)
100%
Spain
Euro 2x50 MW
A/Baa1/A-
2012
9/11
14/14
14/15
Solnova 1, 3 & 4 Renewable (Solar)
100%
Spain
Euro 3x50 MW
A/Baa1/A-
2010
12/12/13
Solaben 1 & 6
Renewable (Solar)
100%
Spain
Euro 2x50 MW
A/Baa1/A-
2013
16/16
Seville PV
Renewable (Solar)
80%(4)
Spain
Euro
1 MW
A/Baa1/A-
2006
13
Italy PV 1
Renewable (Solar)
100%
Italy PV 2
Renewable (Solar)
100%
Italy PV 3
Renewable (Solar)
100%
Italy PV 4
Renewable (Solar)
100%
Italy
Italy
Italy
Italy
Euro
1.6 MW BBB/Baa3/BBB 2010
Euro
2.1 MW BBB/Baa3/BBB 2011
Euro
2.5 MW BBB/Baa3/BBB 2012
Euro
3.6 MW
BBB/Baa3/BBB
2011
8
8
9
9
Kaxu
Renewable (Solar)
51%(5)
South
Rand 100 MW
BB-/Ba2/
2015
12
253
10
23
18
21
10
49
11
15
17
Assets
Type
Ownership
Location
Currency
(9)
Capacity
(Gross)
Counterparty
Credit Ratings(10)
COD*
Contract
Years
Remaining(17)
Calgary
ACT
Monterrey
ATN (13)
ATS
ATN 2
Efficient natural
gas
Efficient natural
gas
Efficient natural
gas
Africa
100%
Canada
CAD 55 MWt
100%
Mexico
USD 300 MW
BB-(13)
~41% A+ or
higher(14)
BBB/ B1/
BB-
2010
18
2013
30%
Mexico
USD 142 MW
Not rated
2018
Transmission line
100%
Transmission line
100%
Transmission line
100%
Peru
Peru
Peru
USD 379 miles BBB/ Baa1/BBB 2011
USD 569 miles BBB/ Baa1/BBB 2014
USD 81 miles
Not rated
2015
Quadra 1 & 2
Transmission line
100%
Chile
USD
49 miles/
32 miles
100%
Chile
USD
6 miles
Not rated
2014
12/12
BBB/-/
BBB+
2007
15
100%
Chile
USD 50 miles
A/A2/A-
1993
N/A
100%
Chile
USD
63 miles
Not rated
2016
Palmucho
Chile TL3
Chile TL4
Transmission
line
Transmission
line
Transmission
line
Skikda
Water
34.2%(5)
Algeria
USD
Honaine
Water
25.5%(6)
Algeria
USD
Tenes
Water
51%(8)
Algeria
USD
3.5 M
ft3/day
7 M ft3/
day
7 M ft3/
day
Not rated
2009
Not rated
2012
Not rated
2015
254
Notes:
(1) 65% of the shares in Chile PV 1, Chile PV 2 and Chile PV 3 are indirectly held by financial partners through the
renewable energy platform of the Company in Chile. Atlantica has control over these entities under IFRS 10,
Consolidated Financial Statements.
Itochu Corporation holds 30% of the shares in each of Solaben 2 and Solaben 3.
JGC holds 13% of the shares in each of Solacor 1 and Solacor 2.
Instituto para la Diversificación y Ahorro de la Energía (“Idae”) holds 20% of the shares in Seville PV.
(2)
(3)
(4)
(5) Kaxu is owned by the Company (51%), Industrial Development Corporation of South Africa (“IDC”, 29%) and Kaxu
Community Trust (20%).
(6) Algerian Energy Company, SPA owns 49% of Skikda and Sacyr Agua, S.L. owns the remaining 16.8%. Atlantica has
control over it under IFRS 10, Consolidated Financial Statements.
(7) Algerian Energy Company, SPA owns 49% of Honaine and Sacyr Agua, S.L. owns the remaining 25.5%.
(8) Algerian Energy Company, SPA owns 49% of Tenes. The Company has an investment in Tenes through a secured
loan to Befesa Agua Tenes (the holding company of Tenes) and the right to appoint a majority at the board of
directors of the project company. Therefore, the Company controls Tenes since May 31, 2020, and fully consolidates
the asset from that date.
(9) Certain contracts denominated in U.S. dollars are payable in local currency.
(10) Reflects the counterparty’s credit ratings issued by Standard & Poor’s Ratings Services, or S&P, Moody’s Investors
Service Inc., or Moody’s, and Fitch Ratings Ltd, or Fitch. Not applicable (“N/A”) when the asset has no PPA.
(11) Refers to the credit rating of two Community Choice Aggregators: Silicon Valley Clean Energy and Monterrey Bar
Community Power, both with A Rating from S&P and Southern California Public Power Authority. The third off-
taker is not rated.
(12) Refers to the credit rating of Uruguay, as UTE (Administración Nacional de Usinas y Transmisoras Eléctricas) is
unrated.
(13) Refers to the credit rating of the Republic of South Africa. The off-taker is Eskom, which is a state-owned utility
company in South Africa.
(14) Refers to the credit rating of a diversified mix of 22 high credit quality clients (~41% A+ rating or higher, the rest is
unrated).
(15) Including ATN Expansion 1 & 2.
(16) Part of Vento II Portfolio.
(17) As of December 31, 2022.
(*) Commercial Operation Date.
255
Definitions
Unless otherwise specified or the context requires otherwise in this annual report:
- references to “2020 Green Private Placement” refer to the €290 million (approximately $310
million) senior secured notes maturing on June 20, 2026 which were issued under a senior
secured note purchase agreement entered with a group of institutional investors as purchasers
of the notes issued thereunder;
- references to “Abengoa” refer to Abengoa, S.A., together with its subsidiaries, unless the context
otherwise requires;
- references to “ACT” refer to the gas-fired cogeneration facility located inside the Nuevo Pemex
Gas Processing Facility near the city of Villahermosa in the State of Tabasco, Mexico;
- references to “ADEQ” refer to Arizona’s Departments of Environmental Quality;
- references to “Adjusted EBITDA” have the meaning set forth in the Section entitled “Non-GAAP
Financial Measures” in the section “Financial review.”
- References to “Albisu” refer to the 10 MW solar PV plant located in Uruguay;
- references to “Algonquin” refer to, as the context requires, either Algonquin Power & Utilities
Corp., a North American diversified generation, transmission and distribution utility, or
Algonquin Power & Utilities Corp. together with its subsidiaries;
- references to “Algonquin ROFO Agreement and Liberty GES ROFO Agreement” refer to the
agreements we entered into with Algonquin and with Liberty GES, respectively, on March 5,
2018, under which Algonquin and Liberty GES granted us a right of first offer to purchase any
of the assets offered for sale located outside of the United States or Canada as amended from
time to time.
- references to “Amherst Island Partnership” or “AIP” refer to the holding company of
Windlectric Inc;
- references to “Annual Consolidated Financial Statements” refer to the audited annual
consolidated financial statements as of December 31, 2022 and 2021, including the related notes
thereto, prepared in accordance with IFRS as issued by the IASB (as such terms are defined
herein), included in this annual report;
- references to “ASI Operations” refer to ASI Operations LLC;
- references to “Atlantica” refer to Atlantica Sustainable Infrastructure plc and, where the context
requires, Atlantica Sustainable Infrastructure plc together with its consolidated subsidiaries;
-
-
references to “Atlantica Jersey” refer to Atlantica Sustainable Infrastructure Jersey Limited, a
wholly-owned subsidiary of Atlantica;
references to “ATM Plan Letter Agreement” refer to the agreement by and among the Company
and Algonquin dated August 3, 2021, pursuant to which the Company offers Algonquin the right
but not the obligation, on a quarterly basis, to purchase a number of ordinary shares to maintain
its percentage interest in Atlantica at the average price of the shares sold under the Distribution
Agreement in the previous quarter, as adjusted;
- references to “ATN” refer to ATN S.A., the operational electric transmission asset in Peru, which
is part of the Guaranteed Transmission System;
256
- references to “ATS” refer to Atlantica Transmision Sur S.A.;
- references to “AVERT” refer to Avoided Emissions and Generation Tool a U.S. national weighted
average CO2 marginal emission rate, to convert reductions of kilowatt-hours into avoided units
of CO2 emissions;
- references to “Befesa Agua Tenes” refer to Befesa Agua Tenes, S.L.U;
- references to “cash available for distribution” or CAFD refer to the cash distributions received by
the Company from its subsidiaries minus cash expenses of the Company, including third party
debt service and general and administrative expenses;
- references to “CAISO” refer to the California Independent System Operator;
- references to “Calgary District Heating” or “Calgary” refer to the 55 MWt thermal capacity district
heating asset in the city of Calgary which we acquired in May 2021;
- references to “CDP” refer to Carbon Disclosure Project a leading provider of environmental
management and transparency and rates more than 9,600 companies with assets of US$106
trillion and representing over 50% of global market capitalisation;
- references to “CEDA” refer to Comprehensive Environmental Data Archive that hosts over 13
Petabytes of atmospheric and earth observation data;
- references to “Chile PV 1” refer to the solar PV plant of 55 MW located in Chile;
- references to “Chile PV 2” refer to the solar PV plant of 40 MW located in Chile;
- references to “Chile PV 3” refer to the solar PV plant of 73 MW located in Chile;
-
-
-
references to “Chile TL 3” refer to the 50-mile transmission line located in Chile;
references to “Chile TL 4” refer to the 63-mile transmission line located in Chile;
references to “CNMC” refer to Comision Nacional de los Mercados y de la Competencia, the
Spanish state-owned regulator;
- references to “Corruption” consists of the abuse of power with the goal of private gain and can
be initiated by individuals in the public or private sector. Corrupt practices include, but are not
limited to, bribes, extortion, collusion, conflicts of interest and money laundering;
- references to “COD” refer to the commercial operation date of the applicable facility;
- references to “Coso” refer to the 135 MW geothermal plant located in California;
- references to the “Distribution Agreement” refer to the agreement entered into with BofA
Securities, Inc., MUFG Securities Americas Inc. and RBC Capital Markets LLC, as sales agents,
dated February 28, 2022 as amended on May 9, 2022, under which we may offer and sell from
time to time up to $150 million of our ordinary shares and pursuant to which such sales agents
may sell our ordinary shares by any method permitted by law deemed to be an “at the market
offering” as defined by Rule 415(a)(4) promulgated under the U.S. Securities Act of 1933, as
amended;
- references to “DOE” refer to the U.S. Department of Energy;
- references to “DOE” refer to the U.S. Department of Energy;
- references to “DTC” refer to The Depository Trust Company;
257
- references to “EMEA” refer to Europe, Middle East and Africa;
- references to “EPC” refer to engineering, procurement and construction;
- references to “EPA” refer to United States Environmental Protection Agency;
- references to “Eskom” refer to Eskom Holdings SOC Limited, together with its subsidiaries,
unless the context otherwise requires;
- references to “ETF” refer to passively managed funds;
- references to “EURIBOR” refer to Euro Interbank Offered Rate, a daily reference rate published
by the European Money Markets Institute, based on the average interest rates at which Eurozone
banks offer to lend unsecured funds to other banks in the euro wholesale money market;
- references to “EU” refer to the European Union;
- references to “Federal Financing Bank” refer to a U.S. government corporation by that name;
- references to “Fitch” refer to Fitch Ratings Inc.;
- references to “FCPA” refer to U.S. Foreign Corrupt Practices Act;
- references to “GEI” refer to Gender-Equality Index, an index that includes 380 companies across
11 sectors and 44 countries and regions. It measures disclosure and gender equality using
indicators across five areas: female leadership and talent pipeline, equal pay and gender pay
parity, inclusive culture, sexual harassment policies, and pro-women brand;
- references to “Green Exchangeable Notes” refer to the $115 million green exchangeable senior
notes due in 2025 issued by Atlantica Jersey on July 17, 2020, and fully and unconditionally
guaranteed on a senior, unsecured basis, by Atlantica;
- references to “Green Project Finance” refer to the green project financing agreement entered
into between Logrosan, the sub-holding company of Solaben 1 & 6 and Solaben 2 & 3, as
borrower, and ING Bank, B.V. and Banco Santander S.A., as lenders;
- references to “Green Senior Notes” refer to the $400 million green senior notes due in 2028;
- references to “GRI” refers to Global Reporting Initiative standards, an internationally recognised
standardised framework for disclosing economic, environmental and social performance;
- references to “GBP” refers to “Green Bond Principles”, a voluntary process guideline that seek to
support issuers in financing environmentally sound and sustainable projects that foster a net-
zero emissions economy and protect the environment. GBP-aligned issuance should provide
transparent green credentials alongside an investment opportunity;
- references to “Gross capacity” refers to the maximum, or rated, power generation capacity, in
MW, of a facility or group of facilities, without adjusting for the facility’s power parasitic
consumption, or by our percentage of ownership interest in such facility as of the date of this
annual report;
- references to “GWh” refer to gigawatt hour;
- references to “IAS” refer to International Accounting Standards issued by the IASB;
- references to “IASB” refer to the International Accounting Standards Board;
- references to “IFRIC 12” refer to International Financial Reporting Interpretations Committee’s
Interpretation 12—Service Concessions Arrangements;
258
- references to “IFRS as issued by the IASB” refer to International Financial Reporting Standards
as issued by the International Accounting Standards Board;
- references to “ILO” refer to International Labour Rights;
- references to “Independent Director” refers to, following Nasdaq rules, a person other than an
officer or employee of a company or its subsidiaries or a person who, in the opinion of the board
of directors, has a relationship that would interfere with the exercise of independent judgment
in carrying out the responsibilities of a director. Atlantica has chosen to follow the requirements
of the NASDAQ Listing Rules in terms of corporate governance. As of December 31, 2022,
Atlantica has determined that the non-executive directors Mr. Aziz, Ms. Del Favero, Ms. Eprile,
Mr. Hall, Mr. Forsayeth and Mr. Woollcombe are independent directors as they do not have a
relationship that would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. Mr. Banskota and Mr. Trisic were considered non-independent
based on their relationship with Algonquin, which is currently Atlantica’s largest shareholder.
Mr. Banskota is the current Chief Executive Officer of Algonquin, while Mr. Trisic held a senior
executive role at Algonquin until April 2022.
- references to “IPO” refer to our initial public offering of ordinary shares in June 2014;
- references to “IRA” refer to the U.S. Inflation Reduction Act;
- references to “Italy PV” refer to the six solar PV plants located in Italy with combined capacity of
9.8 MW;
- references to “IPCC” refer to the Intergovernmental Panel on Climate Change;
- references to “ITC” refer to investment tax credits;
- references to “Kaxu” refer to the 100 MW solar plant located in South Africa;
- references to “La Sierpe” refer to the 20MW solar asset in Colombia;
- references to “La Tolua” refer to the 20 MW solar PV plant located in Colombia;
- references to “LDR” refer to Lost Day Rate calculated as “(Lost Days in a Year / Total Worked-
Hours) * 200,000 worked-hours;
- references to “Liberty GES” refer to Liberty Global Energy Solutions B.V., a subsidiary of
Algonquin formerly known as Abengoa- Algonquin Global Energy Solutions B.V. (AAGES) which
invests in the development and construction of contracted clean energy and water infrastructure
contracted assets;
- references to “LIBOR” refer to London Interbank Offered Rate;
- references to “Logrosan” refer to Logrosan Solar Inversiones, S.A.;
- references to “Lost Time Frequency Index” (LTFI) refer to the total number of recordable
accidents with leave (lost time injury) recorded in the last 12 months per million of worked
hours;
- references to “LTIP” refer to the long-term incentive plans approved by the Board of Directors;
- references to “Mft3M ft3” refer to million standard cubic feet;
- references to “Monterrey” refer to the 142 MW gas-fired engine facility including 130 MW
installed capacity and 12 MW battery capacity, located in, Monterrey, Mexico;
259
- references to “NMFR” refer to Near Miss Frequency Rate described by Sustainable Accounting
Standards as near misses, unsafe acts and unsafe conditions frequency rate;
- references to “Multinational Investment Guarantee Agency” refer to Multinational Investment
Guarantee Agency, a financial institution member of the World Bank Group which offers political
insurance and credit enhancement guarantees;
- references to “MW” refer to megawatts;
- references to “MWh” refer to megawatt hour;
- references to “Moody’s” refer to Moody’s Investor Service Inc.; - references to “NOL” refer to net
operating loss;
- references to “NEPA” refer to the National Environment Policy Act;
- references to “NOL” refer to net operating loss;
- references to “Note Issuance Facility 2019” refer to the senior unsecured note facility dated April
30, 2019, as amended on May 14, 2019, October 23, 2020 and March 30, 2021 for a total amount
of €268 million, (approximately $287 million), with Lucid Agency Services Limited, as facility
agent and a group of funds managed by Westbourne Capital as purchasers of the notes issued
thereunder which was fully repaid on June 4, 2021;
- references to “Note Issuance Facility 2020” refer to the senior unsecured note facility dated July
8, 2020, as amended on March 30, 2021 of €140 million (approximately $150 million), with Lucid
Agency Services Limited, as facility agent and a group of funds managed by Westbourne Capital
as purchasers of the notes issued thereunder;
- references to “O&M” refer to operation and maintenance services provided at our various
facilities;
- references to “operation” refer to the status of projects that have reached COD (as defined
above);
- references to “Pemex” refer to Petroleos Mexicanos;
- references to “PG&E” refer to PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company collectively;
- references to “PPE” refer to personal protective equipment.
- references to “PPA” refer to the power purchase agreements through which our power
generating assets have contracted to sell energy to various off-takers;
- references to “PTS” refer to Pemex Transportation System;
- references to “Revolving Credit Facility” refers to the credit and guaranty agreement with a
syndicate of banks entered into on May 10, 2018 as amended on January 24, 2019, August 2,
2019, December 17, 2019 and August 28, 2020, March 1, 2021 and May 5, 2022 providing for a
senior secured revolving credit facility in an aggregate principal amount of $450 million;
- references to “Rioglass” refer to Rioglass Solar Holding, S.A.;
- references to “ROFO” refer to a right of first offer;
- references to “ROFO agreements” refer to the AAGES ROFO Agreement and Algonquin ROFO
Agreement;
260
- references to “SASB” refer to Sustainability Accounting Standards Board a guidance intended
for use in communications to investors regarding sustainability issues that are likely to impact
corporate ability to create value over the long term;
- references to the “Shareholders’ Agreement” refer to the agreement by and among Algonquin
Power & Utilities Corp., Abengoa-Algonquin Global Energy Solutions and Atlantica Sustainable
Infrastructure plc, dated March 5, 2018, as amended;
- references to “Skikda” refer to the seawater desalination plant in Algeria, which is 34% owned
by Atlantica;
- references to “SOFR” refer to Secured Overnight Financing Rate.
- references to “Solaben Luxembourg” refer to Solaben Luxembourg S.A;
- references to “Solnova 1, 3 & 4” refer to three solar plants with capacity of 50 MW wholly owned
by Atlantica, located in the municipality of Sanlucar la Mayor, Spain;
- references to “S&P” refer to S&P Global Rating;
- references to “SDG” refer to Sustainable Development Goals a total of 17 goals defined by the
UNG;
- references to “Tenes” refer to the water desalination plant in Algeria, which is 51% owned by
Befesa Agua Tenes;
- references to “Tierra Linda” refer to the 10 MW solar PV plant located in Colombia;
- references to “Total-Record Incident” refer to the total number of recordable accidents with and
without leave (lost time injury) recorded in the last 12 months per two hundred thousand worked
hours;
- references to “Total Recordable Incident Rate” (TRIR) refer to the total number of recordable
accidents with leave (lost time injury) recorded in the last twelve months per million of worked
hours;
- references to “TFCD” refer to Task Force on Climate related Financial Disclosures, a set of
recommendations focused on four thematic areas that represent core operational elements,
including: Governance, Strategy, Risk Management and Metrics and Targets;
- references to “U.K.” refer to the United Kingdom;
- references to “UNGC” refer to United Nations Global Compact, world’s largest corporate
sustainability initiative;
- reference to “U.S.” or “United States” refer to the United States of America;
- references to “WRI” refer to World Resources Institute;
- references to “WTT DEFRA” refer to Well to Tank from the Department for Environment, Food
and Rural Affairs;
references to “we,” “us,” “our,” “Atlantica” and the “Company” refer to Atlantica Sustainable
Infrastructure plc and its subsidiaries, unless the context otherwise requires.
261
Reconciliations
- Reconciliation of Adjusted EBITDA and Cash Available For Distribution to Profit for the period
attributable to the Company
(in thousands of U.S. dollars)
Profit/(loss) for the period attributable to the Company
Profit/(loss) attributable to non-controlling interest
Income tax
Depreciation and amortisation, financial expense and
income tax expense of unconsolidated affiliates (pro rata of
our equity ownership)
Financial expense, net
Depreciation, amortisation, and impairment charges
Adjusted EBITDA
Atlantica’s pro-rata share of EBITDA from unconsolidated
affiliates
Non-monetary Items
Accounting provision for electricity market prices in
Spain
Difference between billings and revenue in assets
accounted for as concessional financial assets
Income from cash grants in the US
Other non-monetary items
Maintenance Capex
Dividends from equity method investments
Net interest and income tax paid
Changes in other assets and liabilities
Deposits into/ withdrawals from restricted accounts
54
Change in non-restricted cash at project level
54
Dividends paid to non-controlling interests
Debt principal repayment
Cash Available For Distribution
For the year ended
December 31,
2022
2021
$ (5,443)
3,356
(9,689)
$ (30,080)
19,162
36,220
24,304
18,753
310,934
473,638
$ 797,100
340,892
439,441
$ 824,388
(45,769)
(31,057)
27,996
25,253
61,631
(58,888)
-
(18,588)
67,695
(277,284)
102,896
33,018
(61,672)
(39,209)
(348,311)
$ 237,872
55,809
77,055
38,890
(58,711)
(1,424)
(17,722)
34,883
(342,263)
43,696
2,729
2,209
(28,134)
(318,991)
$ 225,547
54 “Deposits into/ withdrawals from restricted accounts” and “Change in non-restricted cash at project level” are calculated on a constant currency basis to
reflect actual cash movements isolated from the impact of variations generated by foreign exchange changes during the period.
262
- Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
(in thousands of U.S. dollars)
For the year ended December 31
Net cash provided by operating activities
Net interest and income tax paid
Changes in working capital
Other non-monetary items and other
Atlantica’s pro-rata share of EBITDA from
unconsolidated affiliates
Adjusted EBITDA
- Reconciliation of CAFD to CAFD per share
CAFD (in thousands of U.S. dollars)
Weighted Number of Shares (basic) for the period
(in thousands)
CAFD per share (in U.S. dollars)
2022
2021
$ 586,322
277,284
(78,805)
(33,470)
45,769
$ 505,623
342,263
3,127
(57,682)
31,057
$ 797,100
$ 824,388
For the year ended December 31
2022
2021
$ 237,872
$ 225,547
114,695
111,008
$ 2.0740
$ 2.0318
263
Global Reporting Initiative (GRI) Content Index
Atlantica Sustainable Infrastructure Plc has reported in accordance with the GRI Standards for the
period January 1, 2022 and December 31, 2022.
GRI Standard
Description, section(s) and/or URL(s)
GRI 1: Foundation 2021
Reporting principles
This report adheres to the following principles:
• Stakeholder inclusiveness
• Sustainability context
• Materiality
• Completeness
• Accuracy
• Balance
• Clarity
• Comparability
• Reliability
• Timeliness
GRI 2: General Disclosures 2021
1. The organisation and its reporting practices
2-1 Organisational details
2-2 Entities included in the
organisation’s sustainability
reporting
2-3 Reporting period,
frequency and contact
point
2-4 Restatements of
information
2-5 External assurance
Atlantica Sustainable Infrastructure Plc
Great West Road, Brentford TW8 9DF, Greater London (United Kingdom)
Atlantica Sustainable Infrastructure plc common shares trade on the Nasdaq Stock
Exchange under the symbol “AY”
Our sustainable business model and strategy (Strategic Report)
Detailed asset portfolio: Asset Portfolio (Other Information)
Entities included in the consolidated financial statements are entities in which Atlantica
has control and its associates.
Report Information (About this report)
Detailed asset portfolio: Asset Portfolio (Other Information)
Reporting period: January 1, 2022 to December 31, 2022.
Frequency of reporting: Annual
Contact points: Leire Perez; Gabriel Deniz
Email addresses: sustainability@atlantica.com, or ir@atlantica.com
Integrated Annual Report Information (About this report)
2021 non-material ESG-related disclosure restatements have been performed to ensure
consistency and enable comparability of information between reporting periods.
Reasons for restatements of 2021 relate to changes in measurement methodologies.
Certain KPIs modified in sections:
- GHG emissions, non-GHG emissions, water management, reporting our activities
(Strategic Report; Environmental
the European Union Taxonomy
under
Sustainability)
- Training hours (Strategic Report; Social Sustainability; People and culture)
- Supply chain management (Strategic Report; Social Sustainability)
- Number of assets internally audited and improvement actions (Strategic Report;
Asset Management)
- Trade associations (Business ethics)
Effect of the ESG-related data restatement are non-material
Data Review (About this report)
- GHG emissions Scope 1, 2 and 3: 100% externally reviewed
- Non-GHG emissions, water and waste KPIs 100% externally reviewed
Asset management (Strategic Report; Social Sustainability): ISO 9001, 14001 and
45,001 compliant, environmental and quality management system reviewed by DNV.
Data security (Strategic Report) ISO 27001 compliant
264
2. Activities and workers
2-6 Activities, value chain
and other business
relationships
2-7 Employees
2-8 Workers who are not
employees
3. Governance
2-9 Governance structure
and composition
2-10 Nomination and
selection of the highest
governance body
2-11 Chair of the highest
governance body
2-12 Role of the highest
governance body in
overseeing the
management of impacts
2-13 Delegation of
responsibility for managing
impacts
2-14 Role of the highest
governance body in
sustainability reporting
2-15 Conflicts of interest
2-16 Communication of
critical concerns
All reviews were performed by independent third parties.
Atlantica in Two Minutes
Our sustainable business model and strategy; Key performance indicators; A fair
review of the business; and ESG materiality analysis (Strategic Report)
Supply chain management and customer management (Strategic Report; Social
Sustainability)
Detailed asset portfolio (Other information)
Key Performance Indicators (Strategic Report)
People and Culture; Section 172 Statement (Strategic Report; Social Sustainability)
Atlantica does not have non-guaranteed hours employees.
People and Culture (Strategic Report; Social Sustainability)
Atlantica does not have workers who are not employees.
Sustainability governance and Directors’ Report (Governance Section)
Key Management (Strategic Report; Social Sustainability; People and Culture)
Sustainability Governance (Governance Section)
Directors’ Report (Governance Section)
Committee Charters (at Board level) https://www.atlantica.com/web/en/company-
overview/corporate-governance/corporate-governance-documents/
Corporate Governance Guidelines (https://www.atlantica.com/wp-
content/uploads/documents/Corporate-Governance-Guidelines_2021.pdf)
Sustainability Governance and Directors’ Report (Governance Section)
Sustainability governance and directors’ report (Governance Section)
Stakeholder engagement (About this report; ESG Materiality assessment)
Stakeholder policy (https://www.atlantica.com/web/en/sustainability/stakeholder-
policy/)
Environmental compliance, principal risks and uncertainties and section 172
statement (Strategic Report)
Human rights (Strategic Report; Social Sustainability)
Sustainability governance and directors’ report (Governance Section)
Principal risks and uncertainties (Strategic Report)
Data review (About this report)
Atlantica’s Board of Directors approved this Integrated Annual Report prior to its
publication
Directors’ responsibilities statement (Strategic Report)
Sustainability governance (Governance Section)
Business ethics and directors’ report (Governance Section)
Business ethics, sustainability governance, directors’ report and audit committee report
(Governance Section)
Human rights (Strategic Report; Social Sustainability)
Cybersecurity and data Privacy (Strategic Report)
Sustainability governance and directors’ report (Governance Section)
2-17 Collective knowledge
of the highest governance
body
2-18 Evaluation of the
performance of the highest
governance body
2-19 Remuneration policies Directors’ remuneration report (Governance Section)
Sustainability governance and directors’ report (Governance Section)
2-20 Process to determine
remuneration
Key management (Strategic Report; Social Sustainability; People and Culture)
Directors’ report and directors’ remuneration report (Governance Section)
People and Culture (Strategic Report; Social Sustainability)
265
2-21 Annual total
compensation ratio
Directors’ remuneration report (Governance Section)
4. Strategy, policies and practices
2-22 Statement on
sustainable development
strategy
2-23 Policy commitments
Our sustainable business model and strategy (Strategic Report)
Sustainability governance (Governance Section)
Our Purpose and Values
Business ethics (Governance Section)
Our Sustainable Business Model and Strategy (Strategic Report)
Human rights (Strategic Report; Social Sustainability)
Corporate governance policies and documents available at:
https://www.atlantica.com/web/en/company-overview/corporate-
governance/corporate-governance-documents/
ESG-related policies available at: https://www.atlantica.com/web/en/policies/
We apply the Precautionary Principle consistently when we assess risks related to the
Environment in all our activities.
Sustainability governance and directors’ report (Governance Section)
Corporate Governance policies and documents available on our website
ESG-related policies available on our website
Business ethics and directors’ report (Governance Section)
Human rights (Strategic Report; Social Sustainability)
Principal risks and uncertainties and environmental sustainability (Strategic Report)
Business ethics and directors’ report (Governance Section)
People and Culture and human rights (Social Sustainability)
Business ethics and directors’ report (Governance Section)
Environmental compliance and cybersecurity and Data Privacy (Strategic Report)
Human rights (Strategic Report; Social Sustainability)
No significant fines or non-monetary sanctions for non-compliance with laws and/or
regulations in the environmental, social and economic areas were received in 2022,
2021 and 2020.
Business ethics (Governance Section)
ESG materiality assessment (Strategic Report)
Stakeholder engagement policy and other Compliance and ESG-related policies
available on our website
People and Culture, supply chain management, customer management and local
communities (Strategic Report; Social Sustainability)
Collective bargaining agreements (Strategic Report; Social Sustainability; People and
Culture)
Atlantica’s remuneration package includes monetary compensation and remuneration
in-kind, depending on the employee’s position, and on local practices in the countries
where we operate. In all cases, Atlantica’s remuneration package complies with all local
rules and regulations.
ESG materiality analysis (Strategic Report)
ESG materiality analysis (Strategic Report)
In 2022, no significant changes were made to the list of material topics compared to
the previous reporting period.
266
2-24 Embedding policy
commitments
2-25 Processes to
remediate negative impacts
2-26 Mechanisms for
seeking advice and raising
concerns
2-27 Compliance with laws
and regulations
2-28 Membership
associations
5. Stakeholder Engagement
2-29 Approach to
stakeholder engagement
2-30 Collective bargaining
agreements
Material Topics
GRI 3: Material Topics 2021
3-1 Process to determine
material topics
3-2 List of material topics
3-3 Management of
material topics
ESG materiality analysis (Strategic Report)
Sustainability governance and directors’ directors (Governance Section)
Principal risks and uncertainties and section 172 statement (Strategic Report)
TCFD reporting, GHG emissions, water and waste management, and biodiversity
(Strategic Report; Environmental Sustainability)
Human rights, health and safety, People and Culture, supply chain management and
local communities (Strategic Report; Environmental Sustainability)
Asset management (Strategic Report)
Independent Auditor’s Report (Other information)
Atlantica periodically performs internal analysis comparing current practices with
benchmarks in different areas. In addition, the Compliance Management Committee
periodically analyses best practices and benchmarks to improve our compliance
practices over time. The Board of Directors reviews annually Atlantica’s board practices
and compares them to best practices following recommendations from the U.K.
Institute of Directors and the main proxy advisors incorporating recommendations
whenever possible.
CDP (Climate Change and Water questionnaires), S&P CSA and Sustainalytics ESG
assessments provide valuable information and have been used internally to improve
certain areas following best practices. Asset management functions are a core part of
our business and are also periodically evaluated against best practices.
Economic performance
GRI 201: Economic Performance 2016
3-3 Management of
material topics
Key Performance Indicators, A Fair Review of the Business, and ESG Materiality Analysis
(Strategic Report)
201-1 Direct economic
value generated and
distributed
Direct economic value generated, distributed and retained for the year ended
December 31, 2021, 2020 and 2019:
$ in Millions
2022
2021
2020
Economic Value Generated
Revenue
Other Operating Income
Financial Income
Economic Value Distributed
Operating costs, including wages and benefits
Payments to providers of capital1
Payments to Government2
Community Investments3
Economic Value Retained
1,188
1,102
81
6
1,290
1,212
75
3
(925) (1,030)
(493)
(433)
(484)
(475)
(52)
(15)
(1)
(2)
260
264
1,120
1,013
100
7
(793)
(331)
(445)
(16)
(1)
327
Note: Figures were determined according to GRI 201 guidelines
1 Interest paid and Dividends paid to Company’s shareholders
2 Income tax paid
3 Community investments in the U.S., Chile, Colombia, Peru, South Africa and Algeria
Key Performance Indicators and A Fair Review of the Business (Strategic Report)
Local Communities (Strategic Report; Social Sustainability)
Detailed financial information provided in our 2022 annual report: U.S. Securities
Exchange Commission Form 20-F available on our website
201-2 Financial implications
and other risks and
opportunities due to
climate change
Task Force on Climate-Related Financial Disclosures (Strategic Report; Environmental
Sustainability)
Principal risks and uncertainties (Strategic Report)
2022 CDP’s Climate Change questionnaire at www.atlantica.com
Sustainability governance (Governance section)
267
201-3 Defined benefit plan
obligations and other
retirement plans
201-4 Financial assistance
received from government
The Company does not have any defined benefit compensation plans. The only
retirement obligations are related to 401(k) plans in the U.S. in accordance with the
regulation in place and in the U.K. also in accordance with the regulation in place.
2022 Consolidated Financial Statements (Other Information)
GRI 204: Procurement Practices
3-3 Management of
material topics
204-1
of
spending on local suppliers
Proportion
GRI 205: Anti-Corruption 2016
3-3 Management of
material topics
205-1 Operations assessed
for risks related to
corruption
205-2 Communication and
training about anti-
corruption policies
and procedures
205-3 Confirmed incidents
of corruption and actions
taken
ESG materiality analysis (Strategic Report)
Supply chain management (Strategic Report; Social Sustainability)
Local supplier is an organisation or person that provides a product or service in the
country where we perform our business activities.
ESG Materiality Analysis (Strategic Report)
Atlantica’s webpage corporate Governance Section
Business ethics (Governance Section)
United Nations Global Compact, Principal Risks and Uncertainties, Supply Chain
Management, Cybersecurity and Data Privacy, (Strategic Report; Social Sustainability)
Business ethics (Governance Section)
People and Culture (Strategic Report; Social Sustainability)
Business ethics (Governance Section)
In 2022, two Code of Conduct incidents were identified and investigated following our
internal process and procedures. As a result, among other actions, the employment of
those employees involved was terminated, and comprehensive anti-bribery and anti-
corruption training was provided to local employees.
GRI 206: Anti-Competitive Behaviour 2016
3-3 Management of
material topics
ESG materiality analysis (Strategic Report)
Atlantica’s Webpage: Corporate Governance Section
206-1 Legal actions for
anti-competitive behaviour,
anti-trust,
and monopoly practices
GRI 207: Tax 2019
3-3 Management of
material topics
207-1 Approach to tax
207-2 Tax governance,
control, and risk
management
207-3 Stakeholder
engagement and
management of concerns
related to tax
207-4 Country-by-country
reporting
Category: Environmental
No legal actions or anti-competitive behaviour, anti-trust,
or monopoly practices have been taken in 2022, 2021 and 2020
Business ethics (Governance Section)
ESG Materiality Analysis (Strategic Report)
Atlantica’s Webpage: Corporate Governance Section
We have decided to voluntarily apply GRI 207 requirements
Tax Strategy: Tax Management
Atlantica’s tax strategy is available on our website (Corporate Governance section)
Tax Management (Strategic Report)
Tax Management (Strategic Report)
Confidentiality constraints
268
GRI 302: Energy 2016
3-3 Management of
material topics
302-1 Energy consumption
within the organisation
302-2 Energy consumption
outside of the organisation
302-3 Energy Intensity
302-4 Reduction of energy
consumption
302-5 Reductions in energy
requirements of products
and services
ESG Materiality Analysis (Strategic Report)
Environmental Sustainability (Strategic Report)
We have decided to voluntarily apply GRI 302 requirements
Energy Management (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Partially disclosed. Energy consumption outside of the organisation is included in our
scope 3 GHG emissions.
Energy Management Strategic Report; Environmental Sustainability.
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
Our Operations Department dedicates time and efforts to identify potential measures
to improve efficiency at our assets. This could result in reduction of energy
consumption over time.
Asset Management (Strategic Report)
GRI 303: Water and Effluents 2018
3-3 Management of
material topics
303 -1 Interactions with
water as a shared resource
303-2 Management of
water discharge-related
impacts
303-3 Water withdrawal
303-4 Water discharge
ESG Materiality Analysis (Strategic Report)
Key Performance Indicators (Strategic Report)
Task Force on Climate-Related Financial Disclosures (Strategic Report; Environmental
Sustainability)
Water Management (Strategic Report; Environmental Sustainability)
Environmental Policy available on our website
Water Management (Strategic Report; Environmental Sustainability)
Water Management (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Water Management (Strategic Report; Environmental Sustainability)
We have reported the data in million cubic metres
Our Municipality Water withdrawals are immaterial
Water Management (Strategic Report; Environmental Sustainability)
We have reported the data in million cubic metres
Our Municipality Water discharges are immaterial
303-5 Water consumption Water Management (Strategic Report; Environmental Sustainability)
We have reported the data in million cubic metres
Our Municipality Water consumption is immaterial
GRI 304: Biodiversity 2016
103-1 Explanation of the
material topic and its
Boundary
304-1: Operational sites
owned, leased, managed in,
or adjacent to, protected
areas and areas of high
biodiversity value outside
protected areas
304-2 Significant impacts of
activities, products, and
services on biodiversity
304-3 Habitats protected or
restored
ESG Materiality Analysis (Strategic Report)
Biodiversity (Strategic Report; Environmental Sustainability)
Biodiversity Policy available on our website
Biodiversity (Strategic Report; Environmental Sustainability)
Partially disclosed: Information unavailable
Biodiversity (Strategic Report; Environmental Sustainability)
Biodiversity (Strategic Report; Environmental Sustainability)
269
304-4 IUCN Red List species
and national conservation
list
species with habitats in
areas affected by
operations
GRI 305: Emissions 2016
3-3 Management of
material topics
305-1 Direct (Scope 1) GHG
emissions
305-2 Energy indirect
(Scope 2) GHG emissions
305-3 Other indirect (Scope
3) GHG emissions
305-4 GHG emissions
intensity
305-5 Reduction of GHG
emissions
305-6 Emissions of ozone-
depleting substances (ODS)
305-7 Nitrogen oxides
(NOX), sulphur oxides (SOX),
and other significant air
emissions
GRI 306: Waste 2020
306-1 Waste generation
and significant waste-
related impacts
306-2 Management of
significant waste-related
impacts
306-3 Waste generated
306-4 Waste diverted from
disposal
Category: Social
GRI 401: Employment 2016
3-3 Management of
material topics
401-1 New employee hires
and employee turnover
401-2 Benefits provided to
full-time employees that
are not provided
to temporary or part-time
employees
401-3 Parental leave
Omission: Information incomplete
ESG Materiality Analysis (Strategic Report)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
Environmental Policy available on our website
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability): GHG
Emission Rate per Unit of Energy Generated
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2022 CDP Climate Change questionnaire (available at www.atlantica.com)
Omission: Information unavailable
Non-GHG emissions (Strategic Report; Environmental Sustainability)
Waste management (Strategic Report; Environmental Sustainability)
Environmental Policy available on our website
Waste management (Strategic Report; Environmental Sustainability)
Waste management (Strategic Report; Environmental Sustainability)
All the waste is managed off-site
Waste management (Strategic Report; Environmental Sustainability)
ESG materiality analysis (Strategic Report)
People and Culture (Strategic Report; Social Sustainability)
People and Culture (Strategic Report; Social Sustainability)
All benefits provided to full-time employees are the same to those provided to
temporary or part-time employees.
People and Culture (Strategic Report; Social Sustainability)
GRI 402: Labour/Management Relationship 2016
270
3-3 Management of
material topics
402-1 Minimum notice
periods regarding
operational changes
ESG Materiality Analysis (Strategic Report)
People and Culture (Strategic Report; Social Sustainability)
At Atlantica we generally provide a minimum of a two week notice prior to the
implementation of significant operational changes that could substantially affect our
employees. Where applicable, minimum number of weeks’ notice is specified in the
collective bargaining agreements. Unexpected events may require different notice
periods.
Occupational Health and Safety (Strategic Report; Social Sustainability): Health and
safety committees held with asset employee representatives cover all the necessary
topics to promote a positive health and safety culture in our assets.
GRI 403: Occupational Health and Safety 2018
3-3 Management of
material topics
ESG Materiality Analysis (Strategic Report)
Occupational Health and Safety (Strategic Report; Social Sustainability)
Health and Safety Policy available on our website
Occupational Health and Safety (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
403-1 Occupational health
and safety management
system
403-2 Hazard identification,
risk assessment, and
incident
investigation
403-3 Occupational health
services
403-4 Worker participation,
consultation, and
communication on
occupational health and
safety
403-5 Worker training on
occupational health and
safety
403-6 Promotion of worker
health
403-7 Prevention and
mitigation of occupational
health and safety
impacts directly linked by
business relationships
403-8 Workers covered by
an occupational health and
safety management system
403-9 Work-related injuries Occupational Health and Safety (Strategic Report; Social Sustainability)
403-10 Work-related ill
health
Occupational Health and Safety (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
Atlantica does not have any work-places with high-risk incidence of diseases
GRI 404: Training and Education 2016
3-3 Management of
material topics
ESG Materiality Analysis (Strategic Report)
People and Culture (Strategic Report; Social Sustainability)
Occupational Health and Safety (Strategic Report; Social Sustainability)
People and Culture (Strategic Report; Social Sustainability)
404-1 Average hours of
training per year per
employee
404-2 Programmes for
upgrading employee skills
and transition
assistance programmes
People and Culture and Occupational health and safety (Strategic Report; Social
Sustainability)
Asset Management (Strategic Report)
Atlantica has upgrading skills training programmes for its employees. We do not have
transition assistance programmes resulting from retirement or termination of
employment
271
404-3 Percentage of
employees receiving
regular performance
and career development
reviews
People and Culture (Strategic Report; Social Sustainability)
Annual performance appraisal for 100% of our employees.
GRI 405: Diversity and Equal Opportunity 2016
3-3 Management of
material topics
ESG Materiality Analysis (Strategic Report)
People and Culture (Strategic Report; Social Sustainability)
Diversity and Inclusion Policy available on our website
People and Culture (Strategic Report; Social Sustainability)
People and Culture (Strategic Report; Social Sustainability)
405-1 Diversity of
governance bodies and
employees
405-2 Ratio of basic salary
and remuneration of
women to men
407-1 Operations and
suppliers in which the right
to freedom of association
and collective bargaining
may be at risk
GRI 408: Child Labour 2016
3-3 Management of
material topics
408-1 Operations and
suppliers at significant risk
for incidents of child labour
GRI 406: Non-discrimination 2016
3-3 Management of
material topics
406-1 Incidents of
discrimination and
corrective actions taken
ESG Materiality Analysis (Strategic Report)
People and Culture (Strategic Report; Social Sustainability)
Business ethics (Governance Section)
Code of Conduct available on our website
People and Culture (Strategic Report; Social Sustainability)
In 2022 we did not receive any communication with respect to incidents relating to
potential situations of discrimination
GRI 407: Freedom of Association and Collective Bargaining 2016
3-3 Management of
material topics
ESG Materiality Analysis (Strategic Report)
Human Rights and People and Culture (Strategic Report; Social Sustainability)
Business ethics (Governance Section)
Code of conduct and supplier code of conduct available on our website
Human Rights and Anti-Slavery and Human Trafficking Statement (Strategic Report;
Social Sustainability)
Section 172 Statement (Strategic Report)
Business ethics (Governance Section)
ESG Materiality Analysis (Strategic Report)
Business ethics (Governance Section)
Code of Conduct and Supplier Code of Conduct available on our website
Human Rights and Anti-Slavery and Human Trafficking Statement (Strategic Report;
Social Sustainability)
Section 172 Statement (Strategic Report)
Business ethics (Governance Section)
GRI 409: Forced or Compulsory Labour 2016
3-3 Management of
material topics
409-1 Operations and
suppliers at significant risk
for incidents of forced
or compulsory labour
ESG Materiality Analysis (Strategic Report)
Business ethics (Governance Section),
Code of Conduct and Supplier Code of Conduct available on our website.
Human Rights and Anti-Slavery and Human Trafficking Statement (Strategic Report;
Social Sustainability)
Section 172 Statement (Strategic Report)
Business ethics (Governance Section)
GRI 411 Rights Of Indigenous People 2016
272
3-3 Management of
material topics
411- 1 Incidents of
violations involving rights
of Indigenous peoples
ESG Materiality Analysis (Strategic Report)
Local Communities (Strategic Report; Social Sustainability)
No substantial incidents of violations involving the rights of Indigenous people have
been registered in 2022, 2021 and 2020
GRI 413: Local Communities 2016
3-3 Management of
material topics
413-1 Operations with local
community engagement,
impact assessments,
and development
programmes
413-2 Operations with
significant actual and
potential negative impacts
on local communities
ESG Materiality Analysis (Strategic Report)
Local Communities (Strategic Report; Social Sustainability)
Local Communities (Strategic Report; Social Sustainability)
Partially disclosed: Information unavailable
Given the nature of our business, we do not believe that our operations trigger
significant damage to local communities.
GRI 415: Public Policy 2016
3-3 Management of
material topics
415-1 Political
contributions
ESG Materiality Analysis (Strategic Report)
Business ethics (Governance Section)
In 2022, 2021 and 2020 Atlantica nor any of its subsidiaries made any financial or in-
kind political contributions to political campaigns, political organisations, lobbyists or
lobbying organisations, trade associations with political impact nor other tax-exempt
groups, whether directly or indirectly.
GRI 416: Customer Health and Safety 2016
3-3 Management of
material topics
416-1 Assessment of the
health and safety impacts
of product and service
categories
416-2 Incidents of non-
compliance concerning the
health and safety impacts
of products and services
ESG Materiality Analysis (Strategic Report)
Occupational health and safety (Strategic Report; Social Sustainability)
Occupational health and safety (Strategic Report; Social Sustainability)
We have not identified any non-compliance with regulations and/or voluntary codes
concerning the health and safety impacts of products and services in 2022, 2021 nor
2020.
GRI 418 Customer Privacy 2016
3-3 Management of
material topics
418-1 Substantiated
complaints concerning
breaches of customer
privacy and losses of
customer data
ESG Materiality Analysis (Strategic Report)
Business ethics (Governance Section)
Cybersecurity and Data Privacy (Strategic Report)
273
Sustainability Accounting Standards Board (SASB) Index
We are a sustainable infrastructure company with a majority of our business in renewable energy
assets. We complement our portfolio of renewable assets with storage, efficient natural gas and
transmission infrastructure assets, as enablers of the transition towards a clean energy mix. We are
also present in water infrastructure assets, a sector at the core of sustainable development.
We provide the Electric Utilities and Power Generation SASB. In addition, given that Atlantica’s
activity does not correspond exactly to the activity of an electric utility, we have included certain
references to the Solar Technology Developers SASB, which are applicable to Atlantica.
Sustainability Disclosure Topics and Accounting Metrics Electric Utilities and Power
1)
Generation (Version 2018 – 10)
Topic
SASB code
Accounting metric
Section
Greenhouse
emissions and
energy resource
planning
IF-EU-110a.1
IF-EU-110a.2
IF-EU-110a.3
IF-EU-110a.4
Air quality
IF-EU-120a.1
IF-EU-140a.1
Water
management
IF-EU-140a.2
IF-EU-140a.3
IF-EU-150a.1
IF-EU-150a.2
Coal ash
management
Energy
affordability
IF-EU-240a.1
(1) Gross global Scope 1 emissions,
percentage covered under (2) emissions-
limiting regulations, and (3) emissions-
reporting regulations
Greenhouse gas (GHG) emissions
associated with power deliveries
Discussion of long-term and short-term
strategy or plan to manage Scope 1
emissions, emissions reduction targets,
and an analysis of performance against
those targets
(1) Number of customers served in
markets subject to renewable portfolio
standards (RPS) and (2) percentage
fulfilment of RPS target by market
Air emissions of the following pollutants:
(1) NOx (excluding N2O), (2) SOx, (3)
particulate matter (PM10), (4) lead (Pb),
and (5) mercury (Hg); percentage of each
in or near areas of dense population
(1) Total water withdrawn, (2) total water
consumed, percentage of each in regions
with High or Extremely High Baseline
Water Stress
Number of incidents of non-compliance
associated with water quantity and/or
quality permits, standards, and
regulations
Description of water management risks
and discussion of strategies and practices
to mitigate those risks
Amount of coal combustion residuals
(CCR) generated, percentage recycled
Total number of coal combustion residual
(CCR) impoundments, broken down by
hazard potential classification and
structural integrity assessment
Average retail electric rate for (1)
residential, (2) commercial, and (3)
industrial customers
274
Greenhouse Gas Emissions
(Strategic Report; Environmental
Sustainability)
Not applicable. Atlantica does not
deliver power to retail customers
Greenhouse Gas Emissions
(Strategic Report; Environmental
Sustainability)
Not applicable. Atlantica is not a
utility company, and our
customers are not subject to
renewable portfolio standards.
Greenhouse Gas Emissions
(Strategic Report; Environmental
Sustainability): Non-GHG
emissions
Water Management (Strategic
Report; Environmental
Sustainability)
No significant incidents or non-
compliances were registered
during the reporting period
Water Management (Strategic
Report; Environmental
Sustainability): Risk assessment
Not applicable. Atlantica does not
use coal in its operations
Not applicable. Atlantica does not
use coal in its operations
Not applicable. Atlantica does not
sell energy to retail customers
Topic
SASB code
IF-EU-240a.2
IF-EU-240a.3
IF-EU-240a.4
Workforce health
and safety
IF-EU-320a.1
Accounting metric
Typical monthly electric bill for residential
customers for (1) 500 kWh and (2) 1,000
kWh of electricity delivered per month
Number of residential customer electric
disconnections for non-payment,
percentage reconnected within 30 days
Discussion of impact of external factors
on customer affordability of electricity,
including the economic conditions of the
service territory
(1) Total recordable injury rate (TRIR), (2)
fatality rate, and (3) Near Misses, Unsafe
Acts and Unsafe Conditions Frequency
Rate (NMFR)
IF-EU-420a.1
Percentage of electric utility revenue from
rate structures that (1) are decoupled and
(2) contain a lost revenue adjustment
mechanism (LRAM)
End-use efficiency
and demand
IF-EU-420a.2
Percentage of electric load served by
smart grid technology
Nuclear safety
and emergency
management
Grid Resiliency
IF-EU-420a.3
Customer electricity savings from
efficiency measures, by market
IF-EU-540a.1
IF-EU-520a.2
IF-EU-550a.1
IF-EU-550a.2
Total number of nuclear power units,
broken down by U.S. Nuclear Regulatory
Commission (NRC) Action Matrix Column
Description of efforts to manage nuclear
safety and emergency preparedness
Number of incidents of non-compliance
with physical and/or cybersecurity
standards or regulations
(1) System Average Interruption Duration
Index (SAIDI), (2) System Average
Interruption Frequency Index (SAIFI), and
(3) Customer Average Interruption
Duration Index (CAIDI), inclusive of major
event days
Section
Not applicable. Atlantica does not
sell energy to retail customers
Not applicable. Atlantica does not
sell energy to retail customers
Not applicable. Atlantica does not
sell energy to retail customers
Occupational health and safety
(Strategic Report; Social
Sustainability)
Not Applicable. Atlantica does not
sell electricity to retail customers.
Atlantica does not sell electricity
under rate base note. Atlantica
does not do distribution, it does
not use smart grid technology
Not Applicable. Atlantica does not
sell electricity to retail customers.
Atlantica does not sell electricity
under rate base note. Atlantica
does not do distribution, it does
not use smart grid technology
Not Applicable. Atlantica does not
sell electricity to retail customers.
Atlantica does not sell electricity
under rate base note. Atlantica
does not do distribution, it does
not use smart grid technology
Not applicable. Atlantica does not
have any nuclear asset
Not applicable. Atlantica does not
have any nuclear asset
Not applicable
Not applicable
2)
Activity Metrics of the Electric Utilities and Power Generation.
Activity metric
Number of: (1) residential, (2)
commercial, and (3) industrial
customers served
SASB code
Section
IF-EU-000.A
We have a total of 47 offtakers
275
Activity metric
SASB code
Section
Total electricity delivered to: (1)
residential, (2) commercial, (3)
industrial, (4) all other retail customers,
and (5) wholesale customers
The electricity we produce is not delivered to
final customers. We deliver electricity to utilities
(for example APS and PG&E) and to the grid in
Spain, where payments are regulated. For
additional information we refer to:
IF-EU-000.B
Our Sustainable Business Model and Strategy
(Strategic Report)
A Fair Review of the Business (Strategic Report)
Greenhouse Gas Emissions (Strategic Report;
Environmental Sustainability): Energy
management
Length of transmission and distribution
lines
IF-EU-000.C
Atlantica in Two Minutes (Strategic Report)
A Fair Review of the Business (Strategic Report)
Total electricity generated, percentage
by major energy source, percentage in
regulated markets
IF-EU-000.D
A Fair Review of the Business (Strategic Report)
Greenhouse Gas Emissions (Strategic Report;
Environmental Sustainability): Energy
Management
Form 20-F submitted to the U.S. Securities
Exchange Commission
Total wholesale electricity purchased
IF-EU-000.E
Not Applicable
Applicable Sustainability Disclosure Topics and Accounting Metrics from Solar
3)
Technology Developers (Version 2018-10).
Topic
SASB code
Accounting metric
Water
Management in
Manufacturing
Hazardous Waste
Management
RR-ST-140a.1
(1) Total water withdrawn, (2) total water
consumed, percentage of each in regions with
High or Extremely High Baseline Water Stress
RR-ST-140a.2
Description of water management risks and
discussion of strategies and practices to
mitigate those risks
RR-ST-150a.1
Amount of hazardous waste generated
percentage recycled
RR-ST-150a.2
Number and aggregate quantity of reportable
spills, quantity recovered
Section
Water Management
(Strategic Report;
Environmental
Sustainability)
Water Management
(Strategic Report;
Environmental
Sustainability)
Waste Management
(Strategic Report;
Environmental
Sustainability)
Waste Management
(Strategic Report;
Environmental
Sustainability)
276
Environmental, Social and Other Key Performance Indicators
Atlantica’s GHG emission rate per
unit of energy generated vs. Fossil
Fuel-Based Generation GHG
emission rate per unit of energy
generated Ratio
Scopes 1 and 2 GHG Emissions Rate
per Unit of Energy Generated
gCO2/kWh
168
185
188
Electricity-related emissions factor
(AVERT)
gCO2/kWh
709
Portfolio
Targets
Key Performance Indicators
Renewable Energy
Efficient natural gas
District heating
Transmission lines
Water desalination
Units
MW
MW
MWt
miles
M ft3
Number of assets
GHG reduction objective approved by the Science
Based Target (SBTi)(1)
Maintain over 80% of Adjusted EBITDA generated
from low-carbon footprint assets
#
Revenue
Adjusted EBITDA
Cash Available for Distribution
(CAFD)
Dividends per share paid
Environmental Dimension
Installed Capacity in Generation
Assets, MW
Renewable Energy
Efficient Natural Gas and Heat
GHG Emissions Avoided
Total Atlantica
$ in
millions
$ in
millions
$ in
millions
amount in
dollars
MW
MW
Million
Tonnes of
CO2
GHG Emissions Generated by Source
Efficient natural gas
GHG Emissions by Scope Including
Offset GHG emissions
GHG Emissions Breakdown by Scope
Others
Scope 1
Scope 2
Scope 3
Total
Scope 1
Scope 2
Scope 3
Total
ISO 14064-1 Category 3
GHG Protocol Category 3, 4, 6 and 7
ISO 14064-1 Category 4
GHG Protocol Category 1, 2, 5 and 8
ISO 14064-1 Category 5
GHG Protocol Category 15
GHG Scope 1 Emissions by Gas:
Indirect GHG Emissions from
transportation
Indirect GHG Emissions from
products used by the organisation
Indirect GHG Emissions associated
with the use of products from the
organisation
Total
277
%
%
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
000´s
tonnes of
CO2e
2022
2,161
343
55
1,229
17.5
41
2021
2,044
343
55
1,166
17.5
38
2020
1,551
343
-
1,166
17.5
27
-
1,102
1,212
1,013
797
238
1.77
84%
16%
6.9
824
226
796
201
1.72
1.66
84%
16%
5.9
82%
18%
5.4
709
75%
25%
709
86%
14%
1,535
1,537
237
798
199
821
71%
29%
1,524
249
814
2,587
2,570
2,557
1,844
1,795
1,737
249
814
237
798
199
821
2,907
2,830
2,757
636
636
79
99
69
93
814
798
-
-
-
-
Fuel Consumption (Stationary)
Fuel Consumption (Mobile)
Fugitive Emissions
Geothermal Steam
GHG Emissions Scope 1 (Tonnes)
CO2e)
GHG Scope 2 Emissions by Gas
Electricity Consumption
Volatile Organic Compounds (COV),
Hazardous Air Pollutants (HAP),
Particulate Matter (PM)
NOx, SO2 and CO Emissions
Energy Consumption and
Generation
Units
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
GWh
GWh
GWh
GWh
GWh
GWh
GWh
GWh
GJ
GJ
GJ
GJ
GJ
GJ
GJ
2022
1,500,873
2021
1,532,246
2020
1,725,666
27
3
27
3
31
3
1,502,347
1,533,739
1,727,345
2,351
0.1
0.2
2,407
-
308
-
8,637
330,779
-
-
1,692
0.1
0.1
1,725
-
312
-
8,742
250,530
-
-
330,779
250,530
699
1
-
763
-
313
-
8,758
-
-
-
-
1,834,003
1,784,467
1,726,365
335
3
9,512
758
9,641
859
1,844,170
249,228
1,794,737
236,711
1,736,866
199,127
-
-
-
-
-
-
249,228
236,711
199,127
192.0
50.3
4.1
546.7
15.1
6.5
1.6
569.9
-
0.6
0.3
-
0.9
192.0
50.4
3.4
493.8
15.4
8.4
1.2
518.9
-
0.6
0.4
-
1.0
333.2
328.1
5.9
2.5
9.5
351.2
7,328
569
474
8,371
7,818
4,616
6.0
3.3
7.3
344.7
7,543
537
296
8,376
6,889
4,092
192.0
56.6
0.8
534.8
15.2
-
-
550.0
-
0.6
-
-
0.6
385.1
4.6
-
-
389.7
8,545
448
294
9,287
5,815
4,463
12,434
10,981
10,278
(4,063)
(2,605)
(991)
26,382,560
27,154,122
30,762,477
2,047,646
1,934,588
1,613,834
1,706,458
1,065,636
1,056,989
30,136,664
30,154,346
33,433,299
28,143,208
24,802,161
20,944,589
16,617,490
14,732,304
16,068,100
44,760,698
39,534,464
37,012,689
CO2
CH4
N2O
CO2e
CO2
CH4
N2O
CO2e
CO2
CH4
N2O
CO2e
CO2
CH4
N2O
CO2e
CO2
CH4
N2O
CO2e
CO2
CH4
N2O
CO2e
COV
HAP
PM
Mexico NOx
Spain NOx
Algeria
Canada NOx
Total NOx
Mexico SO2
Spain SO2
Algeria
Canada SO2
Total SO2
Mexico CO
Spain CO
Algeria
Canada CO
Total CO
Consumption of fuel
Consumption of purchased
electricity for own use
Consumption of self-generated
renewable energy
Total Energy Consumption
Electricity generation
Thermal energy generated
Total Energy Generated
Total energy consumption within
the organisation
Consumption of fuel
Consumption of purchased
electricity for own use
Consumption of self-generated
renewable energy
Total Energy Consumption
Electricity generation
Thermal energy generated
Total Net Energy Generated
278
Energy Intensity Ratio
Total energy consumption within
the organisation
Energy Intensity Ratio from non-
renewable assets
Water Withdrawal
m3 water withdrawal
Available Water Not Used
Water Withdrawal by Sources of
Water
Ground Water m3 water withdrawal
million m3
Surface Water m3 water withdrawal
Million m3
11.9
Public Network m3 water withdrawal Million m3
Units
2022
2021
2020
GJ
(14,624,033)
(9,380,119)
(3,579,390)
m3
%
million m3
m3 / MWh
m3 / MWh
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
million m3
0.33
17.7
44%
5.8
-
2.2
1.42
0.17
6.3
5.8
5.6
-
17.7
1.9
0.2
-
-
2.1
4.4
5.6
5.6
-
15.6
280.1
123.3
0.24
17.3
43%
5.5
11.8
-
2.3
1.58
0.21
6.9
5.5
4.9
-
17.3
2.2
0.2
-
-
2.3
4.7
5.4
4.9
-
15.0
284.7
115.7
0.09
16.0
51%
5.6
10.4
-
2.1
1.56
0.21
5.1
5.6
5.3
-
16.0
2
0.2
-
-
2.2
3.1
5.4
5.3
-
13.8
211.0
92.3
million m3
156.8
169.0
118.7
Tonnes
Tonnes
%
%
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
%
%
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
Tonnes
23,142
1,908
61%
39%
101
131
935
1,167
11
251
479
741
1,647
261
1,908
64%
36%
2,678
1,475
10,721
14,874
-
7,837
431
8,268
22,306
836
23,142
22,238
2,664
30%
70%
47
36
718
800
1
349
1,515
1,864
2,156
508
2,664
72%
28%
2,769
2,266
11,005
16,039
-
6,124
74
6,198
20,469
1,768
22,237
20,532
2,679
51%
49%
69
2
1,408
1,478
-
461
739
1,201
-
-
-
61%
39%
1,997
3,886
6,679
12,562
-
7,971
-
7,971
-
-
-
Water Discharges
Water discharges
Water Withdrawal and Discharges
per MWh
Withdrawal by Water Source
Discharge by Water Source
Consumption by Water Source (All
Areas)
Water Withdrawal, Desalinated
Potable Water
Production and Discharges
Tonnes of Hazardous and Non-
Hazardous Waste
Hazardous Waste
Hazardous Waste Diverted from
Disposal
Hazardous Waste Directed to
Disposal
Breakdown of Hazardous Waste by
Composition
Non-Hazardous Waste
Non-hazardous Waste Diverted
from Disposal
Non-hazardous Waste Directed to
Disposal
Breakdown of Non-hazardous
Waste by Composition
Withdrawal
Discharges
Surface water
Groundwater
Third-party water
Produced water
Total power generation
Surface water
Groundwater
Third-party water
Produced water
Total power generation
Surface water
Groundwater
Third-party water
Produced water
Total power generation
Water (seawater) withdrawal
Desalinated potable water
production
Water discharges (returned to the
sea)
Non-Hazardous Waste
Hazardous Waste
Reused or recycled
Disposed of in Landfills
Preparation for reuse
Recycling
Other Recovery Operations
Total
Incineration
Landfill
Other Disposal Operations
Total
Waste linked to solar assets
Other waste
Total
Reused or recycled
Disposed of in Landfills
Preparation for reuse
Recycling
Other Recovery Operations
Total
Incineration
Landfill
Other Disposal Operations
Total
Waste linked to solar assets
Other waste
Total
279
Number of accidents by category,
severity
Moderate
High
Number of Spills
Fines and Penalties
Units
#
#
Litres
USD ‘000S
2022
8
0
4,146
1
2021
9
1
2,829
7
2020
7
2
31,559
65
Supply Chain Management
Suppliers Assessments
Internal pre-screening evaluation of
new suppliers
External supplier evaluation as a
percentage of total annual
operating expenses
People And Culture
Number of Employees per
Geography
Employees by Employment Type
and by Contract Type55
North America
South America
EMEA
Corporate
Total
Full-Time
Part-time
Indefinite
Temporary
Indefinite
Temporary
Number of Employees by Level
Management
Number of Employees by Age
Middle Management
Engineers and Graduates
Assistants and professionals
Asset Operations Employees
Total
Less than 30
31-40
41-50
Over 51
55 Corporate employees included in EMEA in 2020.
280
%
%
#
#
#
#
#
Male
Female
Total
Male
Female
Total
Male
Female
Total
Male
Female
Total
North
America
South
America
EMEA
Corporate
Total
North
America
South
America
EMEA
Corporate
Total
#
#
#
#
#
#
Male
Female
Male
Female
Male
Female
Male
Female
100
100
100
~45
>51
>51
312
93
443
130
978
785
193
978
-
-
-
743
182
925
42
11
53
311
60
429
125
925
1
33
14
5
53
13
133
264
49
519
978
117
35
321
82
217
60
130
16
308
68
67
115
558
417
141
558
-
-
-
399
132
531
18
9
27
308
51
63
109
531
-
17
4
6
27
13
88
178
34
245
558
64
26
158
59
111
43
84
13
243
51
55
107
456
333
123
456
-
-
-
329
114
443
4
9
13
243
41
159
-
443
-
10
3
-
13
14
73
150
23
196
456
50
24
126
48
90
41
67
10
Units
#
2022
978
2021
558
2020
456
Average number of employees by
geography
Average number of employees by
category
Total
North America
South America
EMEA
Corporate
Total
Management
Middle Management
Engineers and Graduates
Assistants and professionals
Asset Operations Employees
Total
Average Number of employees by
gender
Average number of employees by
gender
Promoted employees by gender
Parental leave
Share of women by geography
Share of women by level
Share of women in all
management positions,
including junior, middle and
top management
Total
Women at Atlantica
Total
Total
North America
South America
EMEA
Corporate
Asset operation employees
Assistants and professionals
Engineers and graduates
Middle management
Management
As % of total management
positions
Share of women in junior
and middle management positions
As % of total junior and middle
management positions
Share of women in management
positions in revenue-generating
functions
Share of women in STEM-related
positions
Share of entry level positions held
by women
Share of information technology
workforce held by women
Share of engineering workforce
held by women
Estimated people with disability
considering available information
Employee Turnover Rate
Employee voluntary turnover rate
Employee turnover rate without U.S.
Employee involuntary turnover rate
Employee total turnover rate
#
#
#
#
#
#
#
#
#
#
#
Male
Female
#
%
Male
Female
#
Male
Female
#
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
Employee Turnover
<30
31-40
41-50
Male
Female
Male
Female
Male
281
306
87
360
121
874
13
132
234
46
449
874
696
178
874
20%
27
7
34
28
8
36
13%
26%
17%
41%
6%
71%
37%
18%
23%
18%
296
61
61
109
527
13
85
162
27
240
527
396
131
527
237
46
54
104
441
14
73
142
21
191
441
325
116
441
25%
27%
44
6
50
19
11
30
14%
31%
40%
44%
5%
76%
43%
26%
23%
15
8
23
14
7
21
16%
33%
42%
42%
8%
91%
43%
27%
21%
26%
26%
18%
26%
29%
17%
29%
23%
8%
44%
7%
8%
24%
58%
8%
26%
23%
58%
11%
27%
0.3%
0.4%
0.4%
12.8%
11.0%
7.5%
9.7%
5.9%
2.7%
9.4%
22.2%
38
10
58
14
44
5.9%
2.9%
16.9%
10.1%
13
2
25
7
13
11
3
10
2
7
Employees hired
>51
Total
North America
South America
EMEA
Corporate
Total
<30
31-40
41-50
>51
Total
North America
South America
EMEA
Corporate
Total
Percentage of open positions filled by internal candidates
Total Training hours
Management
Total Average Hours of Training per
Employee
Middle Management
Engineers and Graduates
Assistants and Professionals
Asset Operations Employees
Total
Management
Middle Management
Engineers and Graduates
Assistants and Professionals
Asset Operations Employees
Total
Average amount spent per employee on training and development
Gender Pay Gap
Management
Middle Management
Senior Engineers and Graduates
Engineers and Graduates
Assistants and Professionals
Asset Operation Employees
282
Units
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
%
Hours
Hours
Hours
Hours
Hours
Hours
Hours
Hours
Hours
Hours
Hours
Hours
In
thousands
of USD
%
%
%
%
%
%
2022
3
25
2
165
29
62
8
11
8
86
7
6
6
165
29
57
19
63
14
34
5
12
-
166
38
64
8
33
11
52
11
17
8
166
38
28%
321
3,724
10,740
1,189
11,548
27,521
27
31
40
26
23
29
0.4
18%
16%
7%
10%
(14%)
29%
2021
6
2020
4
18
5
69
20
54
13
6
2
2
-
7
5
69
20
21
9
36
12
14
6
7
1
78
28
44
9
15
4
10
4
9
11
78
28
25%
170
2,689
9,281
413
6,846
9
-
37
9
31
3
-
-
2
1
4
5
37
9
18
11
20
5
12
3
8
1
58
20
37
8
3
5
9
-
9
7
58
20
24%
558
2,636
3,740
321
7,202
19,399
14,457
13
32
57
15
29
37
0.9
18%
29%
15%
8%
(8%)
10%
40
36
26
13
38
33
0.8
23%
29%
14%
6%
(33%)
6%
Type of Philanthropic Activities
Philanthropic Contributions
Total
Charitable donations
Community Investments
Commercial Initiatives
Total
Cash contributions
Time: employee volunteering
during paid working hours
In-kind giving: product or services
donations, projects/partnerships or
similar
Total
Health and Safety
Total Lost Time Frequency Index
(LTFI)
Employees
Subcontractors
Total
Lost Time Frequency Index (LTFI)
from our Assets in Operation
Employees
Subcontractors
Total
Lost Time Frequency Index (LTFI)
from our Assets under Construction
Employees
Total Lost Time Injury Rate (LTIR)
Subcontractors
Total
Employees
Subcontractors
Total
Lost Time Injury Rate (LTIR) from
our Assets in Operation
Employees
Lost Time Injury Rate (LTIR) from
our Assets under Construction
Subcontractors
Total
Employees
283
Units
%
% of total
cost
% of total
cost
% of total
cost
%
In millions
of USD
In millions
of USD
In millions
of USD
In millions
of USD
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
2022
13%
3%
97%
-
2021
26%
2%
98%
-
2020
30%
16%
84%
-
100%
100%
100%
1.1
-
0.4
1.5
1.0
4.2
1.0
-
0.3
1.3
1.9
2.4
1.0
-
0.2
1.2
0.0
2.0
2.9
2.3
1.4
0.5
2.1
1.9
2.4
0.0
2.0
1.4
2.3
1.4
8.0
14.5
0.0
0.0
0.0
0.0
13.1
0.0
0.0
0.2
0.8
0.6
0.1
0.4
0.3
1.6
0.4
0.5
0.5
0.4
0.5
0.5
0.0
0.0
0.4
0.3
0.0
0.4
0.3
0.0
Subcontractors
Total
Lost Time Frequency Index (LTIR)
sector average vs. Atlantica
Sector Average
Atlantica
Total Recordable Frequency Index
(TRFI)
Employees
Subcontractors
Total
Total Recordable Frequency Index
(TRFI) from our assets in operation
Employees
Total Recordable Frequency Index
(TRFI) from our assets under
construction
Subcontractors
Total
Employees
Subcontractors
Total
Total Recordable Incident Rate
(TRIR)
Employees
Subcontractors
Total
Total Recordable Incident Rate
(TRIR) from our assets in operation
Employees
Total Recordable Incident Rate
(TRIR) from our assets under
construction
Subcontractors
Total
Employees
Subcontractors
Total
Total Recordable Frequency Index
(TRFI) sector average vs. Atlantica
Sector Average
284
Units
per 200k
hours
worked
per 200k
hours
worked
per million
of hours
worked
per million
of hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per million
of hours
worked
2022
2021
2020
2.9
2.6
4.3
2.9
3.0
6.3
0.0
0.0
3.3
2.3
5.6
6.2
0.0
0.0
5.5
1.4
0.9
6.8
5.0
6.0
5.0
2.7
4.7
5.6
6.2
0.9
6.8
3.8
6.0
5.0
8.0
14.5
0.0
0.0
0.0
0.0
13.1
0.0
0.0
0.6
1.3
1.1
1.2
0.2
1.4
1.0
1.2
1.0
0.5
0.9
1.1
1.2
0.2
1.4
1.0
1.2
1.0
1.6
2.9
0.0
0.0
0.0
0.0
2.6
0.0
0.0
10.7
7.5
13
Units
per million
of hours
worked
per million
of hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
#
#
#
#
#
#
%
%
%
%
2022
2021
2020
5.0
6
5.0
1,198
1,540
1,200
14.1
4.1
0
23.3
19.2
34.1
19.5
15.2
23.9
14.6
4.1
0.0
21.0
19.2
34.1
18.2
15.2
23.9
8.0
34.3
0.0
0.0
0.0
0.0
28.9
0.0
0.0
0
0
0
0
0
0
66
22
22
50
0
0
0
0
0
0
63
25
25
50
0
0
0
0
0
0
63
25
25
50
Total Recordable Deviations Index
(TRDI)
Lost-day rate (LDR)
Atlantica
Employees
Subcontractors
Total
Lost-day rate (LDR)
From our assets in operations
Employees
Subcontractors
Total
Lost-day rate (LDR)
From our assets under construction
Employees
Fatality Rate
Serious Accidents
Governance
ESG Reporting
Subcontractors
Total
Employees
Subcontractors
Total
Employees
Subcontractors
Total
Only one class of shares. No Special
rights
% of independent directors
Board committees only comprised
of independent members
Ethnic minorities at Board level
Women at Board level
Board committees chaired by
women
Global Reporting Initiative (GRI)
Sustainability Accounting Standards
Board (SASB) (utilities + solar)
Task Force on Climate Change
Financial Disclosure (TCFD)
285
Forward-Looking Statements
This annual report includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions, strategies, future events or performance
(often, but not always, through the use of words or phrases such as may result, are expected to,
will continue, is anticipated, likely to, believe, will, could, should, would, estimated, may, plan,
potential, future, projection, goals, target, outlook, predict, aim and intend or words of similar
meaning) are not statements of historical facts and may be forward looking. Such statements occur
throughout this annual report and include statements with respect to our expected trends and
outlook, potential market and currency fluctuations, occurrence and effects of certain trigger and
conversion events, our capital requirements, changes in market price of our shares, future
regulatory requirements, the ability to identify and/or make future investments and acquisitions on
favourable terms, ability to capture growth opportunities, reputational risks, divergence of interests
between our company and that of our largest shareholder, tax and insurance implications, and
more. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly,
any such statements are qualified in their entirety by reference to, and are accompanied by,
important factors included in Part I, of Item 3.D. Risk Factors in our Annual Report on form 20-F
filed with the SEC on March 1, 2023 (in addition to any assumptions and other factors referred to
specifically in connection with such forward-looking statements) that could have a significant
impact on our operations and financial results, and could cause our actual results, performance or
achievements, to differ materially from the future results, performance or achievements expressed
or implied in forward-looking statements made by us or on our behalf in this annual report, in
presentations, on our website, in response to questions or otherwise. These forward-looking
statements include, but are not limited to, statements relating to:
• The condition of, and changes in, the debt and equity capital markets and other traditional
liquidity sources and our ability to borrow additional funds, refinance existing debt and access
capital markets, as well as our substantial indebtedness and the possibility that we may incur
additional indebtedness going forward;
• the ability of our counterparties, including Pemex, to satisfy their financial commitments or
business obligations and our ability to seek new counterparties in a competitive market;
• government regulation, including compliance with regulatory and permit requirements and
changes in market rules, rates, tariffs, environmental laws and policies affecting renewable
energy, including the IRA and recent changes in regulation defining the remuneration of our
solar assets in Spain;
• potential regulatory changes in Spain in relation to the proposed remuneration parameters for
the year 2023 to be applicable to our solar assets in Spain published on December 28, 2022 in
draft form and which are subject to final publication;
• changes in tax laws and regulations, including new taxes recently announced in Italy, Spain and
the U.K.;
• risks relating to our activities in areas subject to economic, social and political uncertainties;
286
• global recession risks, volatility in the financial markets, a persistent inflationary environment,
increases in interest rates and supply chain issues, and the related increases in prices of
materials, labour, services and other costs and expenses required to operate our business;
• risks related to our ability to capture growth opportunities, develop, build and complete projects
in time and within budget, including construction risks and risks associated with the
arrangements with our joint venture partners;
• our ability to grow organically and inorganically, which depends on our ability to identify
finance such
attractive development opportunities, attractive potential acquisitions,
opportunities and make new investments and acquisitions on favourable terms;
• risks relating to new assets and businesses which have a higher risk profile and our ability to
transition these successfully;
• potential environmental liabilities and the cost and conditions of compliance with applicable
environmental laws and regulations;
• risks related to our reliance on third-party contractors or suppliers, including issues with our
O&M suppliers and their employees, among others, resulting from disagreements with
subcontractors;
• risks related to disagreements and disputes with our employees, a union and employees
represented by a union;
• risks related to our ability to maintain appropriate insurance over our assets;
• risks related to our facilities not performing as expected, unplanned outages, higher than
expected operating costs and/ or capital expenditures, including as a result of interruptions or
disruptions caused by supply chain issues and trade restrictions;
• risks related to our exposure in the labour market;
• risks related to extreme and chronic weather events related to climate change could damage
our assets or result in significant liabilities and cause an increase in our operation and
maintenance costs;
• the effects of litigation and other legal proceedings (including bankruptcy) against us our
subsidiaries, our assets and our employees;
• price fluctuations, revocation and termination provisions in our off-take agreements and PPAs;
• risks related to information technology systems and cyber-attacks could significantly impact our
operations and business;
• our electricity generation, our projections thereof and factors affecting production;
• risks related to our current or previous relationship with Abengoa, our former largest
shareholder and currently one of our O&M suppliers, including bankruptcy and reputational risk
and particularly the potential impact of Abengoa’s insolvency filing and liquidation process, as
well as litigation risk;
• the termination of certain O&M agreements with Abengoa and performing the O&M services
directly and the successful integration of the O&M employees where the services thereunder
have been recently replaced and internalised;
• our guidance targets or expectations with respect to Adjusted EBITDA derived from low-carbon
footprint assets;
• risks related to our relationship with our shareholders, including Algonquin, our major
shareholder;
287
• the process to explore and evaluate potential strategic alternatives, including the risk that this
process may not lead to the approval or completion of any transaction or other strategic change;
• potential impact of the continuance of the COVID-19 pandemic on our business and our off-
takers’, financial condition, results of operations and cash flows;
• reputational and financial damage caused by our off-takers PG&E, Pemex and Eskom;
• our plans relating to our financings, including refinancing plans;
• risks related to Russian military actions in Ukraine and across global geopolitical tensions; and
• other factors discussed under “Risk Factors”.
Any forward-looking statement speaks only as of the date on which such statement is made, and
we undertake no obligation to update any forward-looking statement to reflect events or
circumstances, including, but not limited to, unanticipated events, after the date on which such
statement is made, unless otherwise required by law. New factors emerge from time to time and it
is not possible for management to predict all of these factors, nor can it assess the impact of each
of these factors on the business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained or implied in any forward-looking
statement.
288
Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ATLANTICA SUSTAINABLE
INFRASTRUCTURE PLC
Opinion
In our opinion:
• Atlantica Sustainable Infrastructure plc’s Group financial statements and parent company
financial statements (the “financial statements”) give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 31 December 2022 and of the Group’s loss
for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards;
• the parent company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Atlantica Sustainable Infrastructure plc (the ‘parent
company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2022 which
comprise:
Group
Parent company
Consolidated balance sheet as at 31 December
2022
Balance sheet as at 31 December
2022
Consolidated income statement for the year then
ended
Statement of changes in equity for
the year then ended
Consolidated statement of comprehensive income
for the year then ended
Related notes 1 to 10 to the financial
statements including a summary of
significant accounting policies
Consolidated statement of changes in equity for
the year then ended
Consolidated statement of cash flows for the year
then ended
Related notes 1 to 27 to the financial statements,
including a summary of significant accounting
policies
289
Consolidated Financial Statements
Consolidated Income Statement
Amounts in thousands of U.S. dollars
Note (1)
For the year ended December 31,
Revenue
Other operating income
Employee benefit expenses
Depreciation, amortization, and impairment charges
Other operating expenses
Operating profit
Financial income
Financial expense
Net exchange differences
Other financial income, net
Financial expense, net
4
20
24
6
20
21
21
21
21
2022
1,102,029
80,782
(80,232)
(473,638)
(351,248)
2021
1,211,749
74,670
(78,758)
(439,441)
(414,330)
277,693
353,890
5,569
(333,263)
10,257
6,503
2,755
(361,270)
1,873
15,750
(310,934)
(340,892)
Share of profit of entities carried under the equity method
7
21,465
12,304
Profit/(loss) before income tax
(11,776)
25,302
Income tax (expense)/income
18
9,689
(36,220)
Profit/(loss) for the year
(2,087)
(10,918)
Profit attributable to non-controlling interests
(3,356)
(19,162)
Profit/(loss) for the year attributable to owners of the
Company
Weighted average number of ordinary shares outstanding
(thousands) – basic
Weighted average number of ordinary shares outstanding
(thousands) – diluted
Basic earnings per share (U.S. dollar per share)
Diluted earnings per share (U.S. dollar per share) (*)
22
22
22
22
(5,443)
(30,080)
114,695
111,008
118,501
114,523
(0.05)
(0.05)
(0.27)
(0.27)
(*) The potential ordinary shares related to the Green Exchangeable Notes and the ATM program have not been
considered in the calculation of diluted earnings per share for the years 2022 and 2021 as they have an antidilutive effect
(Note 22).
(1) Notes 1 to 27 are an integral part of the consolidated financial statements
303
Consolidated Statement of Other Comprehensive Income
Amounts in thousands of U.S. dollars
Note (1)
Year
Ended
December
31, 2022
Year
Ended
December
31, 2021
Loss for the year
(2,087)
(10,918)
Items that may be reclassified subsequently to
profit or loss:
Change in fair value of cash flow hedges
Less: reclassification adjustments for gains transferred
to profit or loss
218,737
9
38,187
33,846
58,292
Exchange differences on translation of foreign
operations
(33,704)
(41,956)
Income tax relating to items that may be reclassified
subsequently to profit or loss
(63,952)
(23,712)
Other comprehensive income for the year net of
tax
159,268
26,470
Total comprehensive income for the year
157,181
15,552
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
142,568
14,613
966
14,586
(1)
Notes 1 to 27 are an integral part of the consolidated financial statements
304
Consolidated Balance Sheet
Amounts in thousands of U.S. dollars
Assets
Non-current assets
Contracted concessional, PP&E and other intangible assets
Investments carried under the equity method
Other accounts receivable
Derivative assets
Other financial assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Other financial assets
Cash and cash equivalents
Total current assets
Total assets
Equity
Share capital
Share premium
Capital reserves
Other reserves
Accumulated currency translation reserve
Accumulated deficit
Equity attributable to the Company
Non-controlling interests
Total equity
Non-current liabilities
Long-term corporate debt
Long-term project debt
Grants and other liabilities
Derivative liabilities
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Short-term corporate debt
Short-term project debt
Trade payables and other current liabilities
Income and other tax payables
Total current liabilities
Total equity and liabilities
Note
(1)
As of
December
31, 2022
As of
December
31, 2021
6
7
8
9
8
18
11
8
12
13
13
13
9
13
13
13
13
14
15
16
9
18
14
15
17
7,483,259
260,031
86,431
89,806
176,237
149,656
8,021,568
294,581
85,801
10,807
96,608
172,268
8,069,183
8,585,025
34,511
200,334
195,893
600,990
29,694
307,143
207,379
622,689
1,031,728
1,166,905
9,100,911
9,751,930
11,606
986,594
814,951
345,567
(161,307)
(397,540)
1,599,871
189,176
1,789,047
1,000,503
4,226,518
1,252,513
16,847
296,481
6,792,862
16,697
326,534
140,230
35,541
519,002
11,240
872,011
1,020,027
171,272
(133,450)
(398,701)
1,542,399
206,206
1,748,605
995,190
4,387,674
1,263,744
223,453
308,859
7,178,920
27,881
648,519
113,907
34,098
824,405
9,100,911
9,751,930
1)
Notes 1 to 27 are an integral part of the Consolidated Financial Statements
305
The consolidated financial statements of Atlantica Sustainable Infrastructure plc, company
registration no. 08818211, were approved by the board of directors and authorised for issue on 28
February 2023.
They were signed on its behalf by:
Director and Chief Executive Officer
Chief Financial Officer
Santiago Seage
February 28, 2023
Francisco Martinez-Davis
February 28, 2023
306
Balance as of
January 1, 2022
Profit/(Loss) for
the year after taxes
Change in fair
value of cash flow
hedges net of
transfer to income
statement
Currency
translation
differences
Tax effect
Other
comprehensive
income
Total
comprehensive
income
Capital increase
(Note 13)
Business
Combinations
(Note 5)
Share-based
compensation
(Note 13)
Distributions (Note
13)
Balance as of
December 31,
2022
Consolidated Statement of Changes in Equity
Amounts in
thousands of U.S.
dollars
Share
Capital
Share
Premium
Capital
Reserves
Other
reserves
Accumulate
d deficit
Accumulated
currency
translation
differences
Total equity
attributable
to the
Company
Non-
controlling
interest
Total
equity
11,240
872,011
1,020,027
171,272
(133,450)
(398,701)
1,542,399
206,206 1,748,605
-
235,732
-
-
(5,443)
(5,443)
3,356
(2,087)
1,573
237,305
19,619
256,924
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(27,857)
-
(61,437)
-
-
-
(27,857)
(5,847)
(33,704)
(61,437)
(2,515)
(63,952)
174,295
(27,857)
1,573
148,011
11,257
159,268
-
174,295
(27,857)
(3,870)
142,568
14,613
157,181
366
114,583
(1,970)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
112,979
112,979
-
14,300
14,300
5,031
5,031
-
5,031
(203,106)
(203,106)
(45,943)
(249,049)
11,606
986,594
814,951
345,567
(161,307)
(397,540)
1,599,871
189,176 1,789,047
307
Consolidated Statement of Changes in Equity
Amounts in
thousands of U.S.
dollars
Share
Capital
Share
Premium
Capital
Reserves
Other
reserves
Accumulate
d deficit
Accumulated
currency
translation
differences
Total
equity
attributable
to the
Company
Non-
controlling
interest
Total
equity
Balance as of
January 1, 2021
Profit/(Loss) for the
year after taxes
Change in fair value
of cash flow hedges
net of transfer to
income statement
Currency translation
differences
Tax effect
Other
comprehensive
income
Total comprehensive
income
Capital increase (Note
13)
Reduction of Share
Premium (Note 13)
Business
Combinations (Note
5)
Share-based
compensation (Note
13)
Distributions (Note
13)
Balance as of
December 31, 2021
10,667
1,011,743
881,745
96,641
(99,925)
(373,489)
1,527,382
213,499 1,740,881
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
97,421
-
-
(30,080)
(30,080)
19,162
(10,918)
(10,060)
87,361
4,777
92,138
-
(33,525)
(22,790)
-
-
-
(33,525)
(8,431)
(41,956)
(22,790)
(922)
(23,712)
74,631
(33,525)
(10,060)
31,046
(4,576)
26,470
-
74,631
(33,525)
(40,140)
966
14,586
15,552
573
60,268
128,920
-
-
-
-
(200,000)
200,000
-
-
-
-
-
(190,638)
-
-
-
-
-
-
-
-
-
-
-
-
-
189,761
-
-
-
-
189,761
-
8,287
8,287
14,928
14,928
-
14,928
-
(190,638)
(30,166)
(220,804)
11,240
872,011
1,020,027
171,272
(133,450)
(398,701)
1,542,399
206,206 1,748,605
(1) Notes 1 to 27 are an integral part of the Consolidated Financial Statements
308
Consolidated Cash Flow Statement
For the year ended
Amounts in thousands of U.S. dollars
Profit/(loss) for the year
Note (1)
2022
2021
(2,087)
(10,918)
Non-monetary adjustments
Depreciation, amortization and impairment charges
Financial expense
Fair value (gains)/losses on derivative financial instruments
Shares of (profits)/losses from entities carried under the equity
method
Income tax
Other non-monetary items
6
21
21
7
18
473,638
335,546
(19,138)
(21,465)
(9,689)
27,996
439,441
359,550
(16,785)
(12,304)
36,220
55,809
Profit/(loss) for the year adjusted by non-monetary items
784,801
851,013
Changes in working capital
Inventories
Trade and other receivables
Trade payables and other current liabilities
Other current assets/liabilities
11
17
Changes in working capital
Income tax paid
Interest received
Interest paid
(6,955)
99,249
(6,158)
(7,331)
5,215
48,521
(25,782)
(31,081)
78,805
(3,127)
(14,730)
9,178
(271,732)
(51,684)
2,519
(293,098)
Net cash provided by operating activities
586,322
505,623
Acquisitions of subsidiaries and entities under the equity method
Investments in operating concessional assets
Investments in assets under development or construction
Distribution from entities under the equity method
Other non-current assets
5&7
6
6
(50,507)
(39,107)
(36,784)
67,695
1,265
(362,449)
(19,216)
(7,028)
34,883
2,655
Net cash used in investing activities
(57,438)
(351,155)
Proceeds from project debt
Proceeds from corporate debt
Repayment of project debt
Repayment of corporate debt
Dividends paid to Company´s shareholders
Dividends paid to non-controlling interest
Capital increase
15
14
15
14
13
13
13
-
101,140
(426,396)
(80,519)
(203,106)
(39,209)
113,072
14,560
429,014
(418,265)
(376,154)
(190,638)
(28,134)
189,454
Net cash used in financing activities
(535,018)
(380,163)
Net increase / (decrease) in cash and cash equivalents
(6,134)
(225,695)
Cash and cash equivalents at beginning of the year
12
Translation differences cash and cash equivalents
622,689
(15,565)
868,501
(20,117)
309
Cash and cash equivalents at the end of the year
12
600,990
622,689
Notes 1 to 27 are an integral part of the consolidated financial statements. Reference to such notes is indicated
(1)
here to provide with additional information on the nature of some of the lines of the Consolidated cash flow statement.
310
Notes to the Consolidated Financial Statements
1. General information
Atlantica Sustainable Infrastructure plc (“Atlantica” or the “Company”), a Company registered in
England and Wales and incorporated in the United Kingdom (Company registration no. 08818211),
is a sustainable infrastructure company with a majority of its business in renewable energy assets.
Atlantica currently owns, manages and invests in renewable energy, storage, efficient natural gas
and heat, electric transmission lines and water assets focused on North America (the United States,
Canada and Mexico), South America (Peru, Chile, Colombia and Uruguay) and EMEA (Spain, Italy,
Algeria and South Africa).
Atlantica’s shares trade on the NASDAQ Global Select Market under the symbol “AY”.
On January 17, 2022, the Company closed the acquisition of Chile TL4, a 63-mile transmission line
and 2 substations in Chile for a total equity investment of $38.4 million (Note 5). The Company
expects to expand the transmission line in 2023-2024, which would represent an additional
investment of approximately $8 million. The asset has fully contracted revenues in US dollars, with
annual inflation adjustments and a 50-year remaining contract life. The off-takers are several mini-
hydro plants that receive contracted or regulated payments.
On April 4, 2022, the Company closed the acquisition of Italy PV 4, a 3.6 MW solar portfolio in Italy
for a total equity investment of $3.7 million (Note 5). The asset has regulated revenues under a
feed in tariff until 2031.
On September 2, 2022, the Company completed its third investment through its Chilean renewable
energy platform in a 73 MW solar PV plant, Chile PV 3, located in Chile, for $7.7 million
corresponding to a 35% of equity interest (Note 5). The Company expects to install batteries with
a capacity of approximately 100 MWh in 2023-2024. Total investment including batteries is
expected to be in the range of $15 million to $25 million depending on the capital structure. Part
of the asset´s revenue is currently based on capacity payments. Adding storage would increase the
portion of capacity payments.
On November 16, 2022, the Company closed the acquisition of a 49% interest, with joint control,
in an 80 MW portfolio of solar PV projects in Chile, Chile PMGD, which is currently starting
construction. Atlantica´s economic rights are expected to be approximately 70%. Total investment
in equity and preferred equity is expected to be approximately $30 million and Commercial
Operation Date (“COD”) is expected to be progressive in 2023 and 2024. Revenue for these assets
is regulated under the Small Distributed Generation Means Regulation Regime (“PMGD”) for
projects with a capacity equal or lower than 9MW, which allows to sell electricity through a
stabilized price.
During the year 2021, the Company completed the following investments:
-
In 2021, the Company closed the acquisition in two stages of the 85% equity interest in Rioglass
Solar Holding S.A. (“Rioglass”) that it did not previously own for a total investment of $17.1
million, resulting in a 100% ownership (Note 5). Rioglass is a supplier of spare parts and services
311
in the solar industry and the Company gained control over the asset in January 2021.
- On January 6, 2021, the Company closed its second investment through its Chilean renewable
energy platform in a 40 MW solar PV plant, Chile PV 2, located in Chile, for $5.0 million
corresponding to a 35% of equity interest.
- On April 7, 2021, the Company closed the acquisition of Coso, a 135 MW geothermal plant in
the United States with 18-year average contract life PPAs in place. The total equity investment
was $130 million (Note 5). In addition, on July 15, 2021, the Company repaid $40 million to
reduce project debt.
- On May 14, 2021, the Company closed the acquisition of Calgary District Heating, a district
heating asset in Canada for a total equity investment of $22.9 million (Note 5). The asset has
availability-based revenue with inflation indexation and 20 years of weighted average contract
life at the time of the acquisition.
- On June 16, 2021, the Company acquired a 49% interest in Vento II, a 596 MW wind portfolio
in the United States, for a total equity investment net of cash consolidated at the transaction
date of approximately $180.7 million (Note 7). EDP Renewables owns the remaining 51%. The
assets have PPAs with investment grade off-takers with a five-year average remaining contract
life at the time of the investment.
- On August 6, 2021, the Company closed the acquisition of Italy PV 1 and Italy PV 2, two solar
PV plants in Italy with a combined capacity of 3.7 MW for a total equity investment of $9 million
(Note 5). On December 14, 2021, the Company closed the acquisition of Italy PV 3, a 2.5 MW
solar PV portfolio in Italy for a total equity investment of $4 million (Note 5). These assets have
regulated revenues under a feed in tariff until 2030, 2031 and 2032, respectively.
- On November 25, 2021, the Company closed the acquisition of La Sierpe, a 20 MW solar PV
plant in Colombia for a total equity investment of $23.5 million (Note 5). The asset was acquired
under a Right of First Offer (“ROFO”) agreement with Liberty GES.
In addition, the following three assets that the Company had under construction during 2022,
finished construction and reached or are about to reach COD:
- Albisu, a 10 MW PV asset wholly owned by the Company reached COD in January 2023. Albisu
is located in the city of Salto (Uruguay). The asset has a 15-year PPA with Montevideo Refrescos,
S.R.L, a subsidiary of Coca-Cola Femsa., S.A.B. de C.V. The PPA is denominated in local currency
with a maximum and minimum price in U.S. dollars and is adjusted monthly based on a formula
referring to U.S. Producer Price Index (PPI), Uruguay’s Consumer Price Index (CPI) and the
applicable UYU/U.S. dollar exchange rate.
-
La Tolua and Tierra Linda, two solar PV assets in Colombia with a combined capacity of 30 MW.
Each plant has a 10-year PPA in local currency indexed to local inflation with Coenersa, the
largest independent electricity wholesaler in Colombia. Additionally, the Company has recently
started the construction of three additional PV plants with a total capacity of 30 MW.
312
The following table provides an overview of the main operating assets the Company owned or
had an interest in as of December 31, 2022:
Assets
Type
Ownership Location Currency(9)
Capacity
(Gross)
Counterparty
Credit Ratings(10)
COD*
Contract
Years
Remaining(17)
Solana
Mojave
Coso
Elkhorn
Valley(16)
Prairie Star(16)
Twin Groves
II(16)
Lone Star II(16)
Chile PV 1
Chile PV 2
Chile PV 3
La Sierpe
Palmatir
Cadonal
Melowind
Mini-Hydro
Solaben 2 &
3
Solacor 1 & 2
PS10 & PS20
Helioenergy
1 & 2
Helios 1 & 2
Solnova 1, 3
& 4
Solaben 1 &
6
Seville PV
Italy PV 1
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Geothermal)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Hydraulic)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
100%
100%
100%
49%
49%
49%
Arizona
(USA)
California
(USA)
California
(USA)
Oregon
(USA)
Minnesota
(USA)
Illinois
(USA)
USD
280 MW BBB+/A3/BBB+
2013
USD
280 MW
USD
135 MW
BB-/ -- /BB
Investment
Grade(11)
2014
1987-1989
USD
101 MW
BBB/Baa1/--
2007
USD
101 MW
--/A3/A-
2007
USD
198 MW
BBB/Baa2/--
2008
49%
Texas (USA)
USD
196 MW
N/A
35%(1)
Chile
USD
55 MW
N/A
2008
2016
21
17
16
5
5
3
N/A
N/A
35%(1)
Chile
USD
40 MW
Not rated
2017
8
35%(1)
Chile
USD
73 MW
N/A
2014
N/A
100%
Colombia
COP
20 MW
100%
Uruguay
USD
50 MW
100%
Uruguay
USD
50 MW
Not rated
BBB/Baa2/BBB-
(12)
BBB/Baa2/BBB-
(12)
2021
2014
2014
100%
Uruguay
USD
50 MW BBB/Baa2/BBB-
2015
100%
Peru
USD
4 MW
BBB/Baa1/BBB
2012
13
11
12
13
10
70%(2)
Spain
Euro
2x50 MW
A/Baa1/A-
2012
15/15
87%(3)
Spain
Euro
2x50 MW
A/Baa1/A-
2012
14/14
100%
Spain
Euro
31 MW
A/Baa1/A-
2007&2009
9/11
100%
Spain
Euro
2x50 MW
A/Baa1/A-
2011
14/14
100%
Spain
Euro
2x50 MW
A/Baa1/A-
2012
14/15
100%
Spain
Euro
3x50 MW
A/Baa1/A-
2010
12/12/13
100%
Spain
Euro
2x50 MW
A/Baa1/A-
2013
16/16
80%(4)
100%
Spain
Italy
Euro
Euro
1 MW
1.6 MW BBB/Baa3/BBB
A/Baa1/A-
2006
2010
13
8
313
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Efficient
natural gas
&heat
Efficient
natural gas &
heat
Efficient
natural gas
&heat
Transmission
line
Transmission
line
Transmission
line
Italy PV 2
Italy PV 3
Italy PV 4
Kaxu
Calgary
ACT
Monterrey
ATN (15)
ATS
ATN 2
Quadra 1 & 2
Palmucho
Chile TL3
Chile TL4
Transmission
line
Transmission
line
Transmission
line
Transmission
line
100%
Italy
Euro
2.1 MW BBB/Baa3/BBB
2011
100%
Italy
Euro
2.5 MW BBB/Baa3/BBB
2012
100%
51%(5)
Italy
South
Africa
Euro
3.6 MW BBB/Baa3/BBB
2011
Rand
100 MW BB-/Ba2/BB-(13)
2015
12
100%
Canada
CAD
55 MWt
~41% A+ or
higher(14)
2010
18
100%
Mexico
USD
300 MW
BBB/B1/BB-
2013
10
30%
Mexico
USD
142 MW
Not rated
2018
100%
Peru
USD
379 miles BBB/Baa1/BBB
2011
100%
Peru
USD
569 miles BBB/Baa1/BBB
2014
100%
Peru
USD
100%
Chile
USD
81 miles
49
miles/32
miles
Not rated
2015
Not rated
2014
12/12
100%
Chile
USD
6 miles
BBB/ -- /BBB+
2007
15
100%
Chile
USD
50 miles
A/A2/A-
1993
N/A
8
9
9
23
18
21
10
100%
Chile
USD
Skikda
Water
34.20%(6)
Algeria
USD
Honaine
Water
25.50%(7)
Algeria
USD
63 miles
3.5 M
ft3/day
7 M
ft3/day
7 M
ft3/day
Not rated
2016
Not rated
2009
Not rated
2012
Not rated
2015
49
11
15
17
Tenes
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Water
51%(8)
Algeria
USD
65% of the shares in Chile PV 1, Chile PV 2 and Chile PV 3 are indirectly held by financial partners through the renewable energy
platform of the Company in Chile. Atlantica has control over these entities under IFRS 10, Consolidated Financial Statements.
Itochu Corporation holds 30% of the shares in each of Solaben 2 and Solaben 3.
JGC holds 13% of the shares in each of Solacor 1 and Solacor 2.
Instituto para la Diversificación y Ahorro de la Energía (“Idae”) holds 20% of the shares in Seville PV.
Kaxu is owned by the Company (51%), Industrial Development Corporation of South Africa (“IDC”, 29%) and Kaxu Community
Trust (20%).
Algerian Energy Company, SPA owns 49% of Skikda and Sacyr Agua, S.L. owns the remaining 16.8%. Atlantica has control over
over Skikda under IFRS 10, Consolidated Financial Statements.
Algerian Energy Company, SPA owns 49% of Honaine and Sacyr Agua, S.L. owns the remaining 25.5%.
Algerian Energy Company, SPA owns 49% of Tenes. The Company has an investment in Tenes through a secured loan to Befesa
Agua Tenes (the holding company of Tenes) and the right to appoint a majority at the board of directors of the project company.
Therefore, the Company controls Tenes since May 31, 2020, and fully consolidates the asset from that date.
314
(9) Certain contracts denominated in U.S. dollars are payable in local currency.
(10)
(11)
Reflects the counterparty’s credit ratings issued by Standard & Poor’s Ratings Services, or S&P, Moody’s Investors Service Inc.,
or Moody’s, and Fitch Ratings Ltd, or Fitch. Not applicable (“N/A”) when the asset has no PPA.
Refers to the credit rating of two Community Choice Aggregators: Silicon Valley Clean Energy and Monterrey Bar Community
Power, both with A Rating from S&P and Southern California Public Power Authority. The third off-taker is not rated.
(12)
Refers to the credit rating of Uruguay, as UTE (Administración Nacional de Usinas y Transmisoras Eléctricas) is unrated.
(13)
Refers to the credit rating of the Republic of South Africa. The off-taker is Eskom, which is a state-owned utility company in
South Africa.
(14)
Refers to the credit rating of a diversified mix of 22 high credit quality clients (~41% A+ rating or higher, the rest is unrated).
(15)
Including ATN Expansion 1 & 2.
(16)
Part of Vento II Portfolio.
(17)
As of December 31, 2022.
(*)
Commercial Operation Date.
The project financing arrangement for Kaxu contained a cross-default provision related to Abengoa
S.A.’s insolvency filing. In September 2021, the Company obtained a waiver for such cross-default
which became effective on March 31, 2022, following the transfer of the employees performing the
O&M in Kaxu from an Abengoa subsidiary to an Atlantica subsidiary and other conditions. As a
result, as of March 31, 2022, the Company had again an unconditional right to defer the settlement
of the debt for at least twelve months, and therefore the debt previously presented as current (as
of December 31, 2021) had been reclassified as non-current at that date in accordance with the
financing agreements in these Consolidated Financial Statements (Note 15).
As expected, in 2022 the Administration in Spain approved, measures to adjust the regulated
revenue component for renewable energy plants, following the increase since mid-2021 in the
billings of these plants for the sale of electricity in the market. On March 30, 2022, Royal Decree
Law 6/2022 was published, adopting urgent measures in response to the economic and social
consequences of the war in Ukraine. This Royal Decree Law contains a bundle of measures in
diverse fields, including those targeted at containing the sharp rise in gas and electricity prices. It
includes temporary changes to the detailed regulated components of revenue received by the solar
assets of the Company in Spain, which are applicable from January 1, 2022. Specifically, prior to the
entry into force of this new regulation, the level of remuneration under that specific remuneration
system depended on the market price estimates used to calculate it, which are revised in each
regulatory semi-period. Now, under article 5 of Royal Decree Law 6/2022, an extraordinary measure
has been taken to subdivide the current regulatory semi-period, so as to create a new semi-period
between January 1, 2022 and December 31, 2022 and the remuneration will be reviewed taking
into account the future prices of OMIP (Regulated market operator in Spain), too. On May 14, 2022,
the Royal Decree Law 10/2022 was published, including the so-called “Iberian mechanism”, which
is the temporary production cost adjustment mechanism for reducing the price of electricity in the
wholesale market. The main changes included by these regulations are:
- The statutory half-period of three years from 2020 to 2022 has been split into two statutory
half-periods (1) from January 1, 2020 until December 31 2021 and (2) calendar year 2022.
As a result, the fixed monthly payment based on installed capacity (Remuneration on
Investment or Rinv) for calendar year 2022 has been revised in the new Order
315
TED/1232/2022.
- The electricity market price assumed by the regulation for calendar year 2022 was changed
from €48.82 per MWh to an expected price of €121.9 per MWh, i.e., the remuneration
parameters of 2022 have been updated with real prices of 2020 (33.94 €/MWh) and 2021
(111.90 €/MWh) and the future prices of OMIP for 2022 (value of second semester 2021:
121.9 €/MWh). As a result, the variable payment based on net electricity produced
(Remuneration on Operation or Ro), is also being adjusted. The proposed Ro for the year
2022 is zero €/MWh reflecting the fact that market prices for the power sold in the market
are significantly higher.
Following the mandate contained in Royal Decree Law 6/2022 and Royal Decree Law 10/2022,
whose main measures have been exposed above, the remuneration parameters have been updated
for the year 2022 by the recent Order TED/1232/2022, of December 2, 2022, that was published in
final form on December 14, 2022.
For the three-year semi period starting on January 1, 2023, and ending on December 31, 2025, the
adjustment for electricity price deviations in the preceding statutory half period will be
progressively modified to take into account a mix of actual market prices and future market prices.
On December 28, 2022, the proposed parameters for the year 2023 were published. They are still
subject to review.
All the adjustments to the regulated revenue of the solar assets of the Company in Spain stated
above do not affect the reasonable return on investment previously set by the Spanish government,
and therefore do not impact the value of these assets in the long term.
2. Significant Accounting Policies
2.1. Basis of Preparation
These Consolidated Financial Statements are presented in accordance with the International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”) and with UK adopted International Accounting Standards, on a basis consistent with the
prior year.
The Consolidated Financial Statements are presented in U.S. dollars, which is the Company’s
functional and presentation currency. Amounts included in these Consolidated Financial
Statements are all expressed in thousands of U.S. dollars, unless otherwise indicated.
The Company presents assets and liabilities in the statement of financial position based on
current/non-current classification. An asset or liability is current when it is expected or due to be
realized within twelve months after the reporting period.
The Company recognises that there may be potential financial implications in the future from
changes in legislation and regulation implemented to address climate change risk. Over time these
changes may have an impact across a number of areas of accounting. However, as at the reporting
sheet date, the Company believes there is no material impact on the balance sheet carrying values
316
of assets or liabilities.
Application of new accounting standards
a) Standards, interpretations and amendments effective from January 1, 2022 under IFRS-IASB,
applied by the Company in the preparation of these Consolidated Financial Statements:
The applications of these amendments have not had any impact on these financial statements.
b) Standards, interpretations and amendments published by the IASB that will be effective for
periods beginning on or after January 1, 2023:
The Company does not anticipate any significant impact on the Consolidated Financial
Statements derived from the application of the new standards and amendments that will be
effective for annual periods beginning on or after January 1, 2023, although it is currently still
in the process of evaluating such application.
The Company has not early adopted any standard, interpretation or amendment that has been
issued but is not yet effective.
Going concern
In assessing going concern for the Group and Company, the Directors have considered the period
up to March 31, 2024. Management’s going concern assessment, including sensitivity analysis and
key assumptions used, was presented to, and discussed with, the Audit Committee.
The Group has a formal process of budgeting, reporting, measuring asset performance, identifying
and mitigating risks. This information is provided to the directors, which is used to ensure the
adequacy of resources available for the Group to meet its business objectives. The Company’s
business activities, together with the factors likely to affect its future development, performance
and position are set out within this report.
During the period, the Group generated $586.3 million of cash from operating activities, used $57.4
million in investing activities and $535.0 million in financing activities. All of these resulted in a $6.1
million net decrease on its cash position by year-end, with a closing cash position of $601.0 million
(Note 12). The Group´s cash includes $540.2 million held at the project level, of which $207.6 million
are held to satisfy the customary requirements of certain non-recourse debt agreements (Note
15). The remaining $60.8 million is held at the corporate level.
As at 31 December 2022 total debt was $5,570.3 million, of which $343.3 million was short-term.
Related facilities are at both the corporate level and project level, with this structure being reflected
in the assessment of going concern below.
At the corporate level, total debt was $1,017.2 million as at 31 December 2022, of which $16.7
million is current (Note 14). In addition, it had $385.1 million undrawn and available under its
revolving credit facility, which, in aggregate with cash of $60.8 million, results in total available
liquidity at this level of $445.9 million. At the corporate level, the principal source of liquidity are
dividends from the Group’s projects. The aggregate level of these distributions is also the principal
metric for the corporate level debt covenants.
317
Aggregate project level debt was $4,553.1 million as at 31 December 2022, of which $326.6 million
is current. These facilities are subject to covenants including debt service coverage ratios at the
respective project level. These facilities are non-recourse to the entities of the Group outside of the
relevant project (Note 15).
In assessing going concern, the Directors have considered the forecast cash flows of the Group’s
projects and the expected level of cash available to distribute from these. Cash available for
distribution is forecast after the servicing of project level debt and the maintenance of restricted
cash required under the facilities. The repayment profile of each project is established based on the
projected cash flow generation of the business. This ensures that sufficient financing is available to
meet deadlines and maturities, which mitigates liquidity risk. Distributions are generally subject to
the compliance with covenants and other conditions under the project finance agreements of the
Company which are regularly monitored, including assessing forecast compliance with project level
debt covenants.
The Directors believe that the off-take agreements or regulation in place at the Company’s portfolio
of projects provide a predictable and stable cash flow generation. The exposure to market electricity
prices represents less than 2% of the Company’s portfolio in terms of Adjusted EBITDA. In addition,
approximately 51% of the Group’s revenue in 2022 is not subject to the volatility that natural
resource may have, especially solar and wind resources. This includes transmission lines, efficient
natural gas plant, water assets and approximately 76% of the revenue received from the solar assets
of the Company in Spain with most of their revenues based on capacity in accordance with the
regulation in place. The diversification by geography and business sector also strengthens the
stability of the cash flow generation of the remaining balance.
For the purposes of the corporate level element of the assessment, the directors have considered
sensitivities on the cash forecast to be received from projects as distributions to enable the
Company to meet its payment’s obligation and its covenants and obligations under its corporate
financing arrangements. In the downside scenario, though considered highly unlikely, in which
management has reduced the aggregate receipts of dividends throughout the going concern
period by 20 percent, the Company would have the level of cash needed to operate the business
and none of the corporate level debt covenants would be breached. The Directors consider that
such a reduction is highly unlikely given the absolute number of the Group’s projects, their
geographical diversity and their cashflow stability.
From a liquidity perspective, the Directors have identified mitigations that are within the Board’s
control including further use of the undrawn element of the corporate facilities and reductions in
discretionary investments.
Following this assessment at both the project and corporate levels the Directors have concluded it
is appropriate to prepare the consolidated financial statements on a going concern basis and have
not identified material uncertainties that may cast significant doubt on the Group and Company’s
ability to continue as a going concern.
2.2. Principles to include and record companies in the consolidated financial
statements
Companies included in these Consolidated Financial Statements are accounted for as subsidiaries
318
as long as Atlantica has control over them and are accounted for as investments under the equity
method as long as Atlantica has significant influence over them, in the periods presented.
a) Controlled entities
Control is achieved when the Company:
• Has power over the investee;
•
Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee when facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
The Company uses the acquisition method to account for business combinations of companies
previously controlled by a third party. According to this method, identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. Any contingent consideration is recognized at fair value at
the acquisition date and subsequent changes in its fair value are recognized in accordance with
IFRS 9 in profit or loss. Acquisition related costs are expensed as incurred. The Company recognizes
any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s
proportionate share of the acquirer’s net assets on an acquisition by acquisition basis.
All assets and liabilities between entities of the Company, equity, income, expenses, and cash flows
relating to transactions between entities of the Company are eliminated in full.
b) Investments accounted for under the equity method
An associate is an entity over which the Company has significant influence. Significant influence is
the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint venture. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require the unanimous consent of the parties sharing control.
The results and assets and liabilities of associates and joint ventures are incorporated in these
financial statements using the equity method of accounting. Under the equity method, an
investment in an associate or joint venture is initially recognized in the statement of financial
position at fair value and adjusted thereafter to recognize changes in Atlantica´s share of net assets
of the associate or joint venture since the acquisition date. Any goodwill relating to the associate
is included in the carrying amount of the investment and is not tested for impairment separately.
319
2.3. Contracted concessional, Property, Plant and Equipment (PP&E) and other
intangible assets
The assets accounted for by the Company as contracted concessional assets under IFRIC 12 (either
intangible model or financial model), as PP&E under IAS 16 or as other intangible assets under IAS
38 or under IFRS 16 (as “Lessee” or “Lessor”), include renewable energy assets, transmission lines,
efficient natural gas assets and water plants.
a)
Contracted concessional assets under IFRIC 12
The infrastructure used in a concession accounted for under IFRIC 12 can be classified as an
intangible asset or a financial asset, depending on the nature of the payment entitlements
established in the agreement. The application of IFRIC 12 requires extensive judgement in relation
to, among other factors, (i) the identification of certain infrastructures and contractual agreements
in the scope of IFRIC 12, (ii) an understanding of the nature of the payments in order to determine
the classification of the infrastructure as a financial asset or as an intangible asset and (iii) the timing
and recognition of revenue from construction and concessionary activity.
Under the terms of contractual arrangements within the scope of this interpretation, the operator
shall recognize and measure revenue in accordance with IFRS 15 for the services it performs.
The useful life of these assets is approximately the same as the length of the concession
arrangement.
Intangible assets
The Company recognizes an intangible asset to the extent that it receives a right to charge final
customers for the use of the infrastructure. This intangible asset is subject to the provisions of IAS
38 and is amortized linearly, taking into account the estimated period of commercial operation of
the infrastructure which coincides with the concession period.
Once the infrastructure is in operation, the treatment of income and expense is as follows:
- Revenues from the updated annual revenue for the contracted concession, as well as
revenues from operations and maintenance services are recognized in each period
according to IFRS 15 “Revenue from contracts with Customers”.
- Operating and maintenance costs and general overheads and administrative costs are
recorded in accordance with the nature of the cost incurred (amount due) in each period.
Financial asset
The Company recognizes a financial asset when demand risk is assumed by the grantor, to the
extent that the concession holder has an unconditional right to receive payments for the asset. This
asset is recognized at the fair value of the construction services provided, considering upgrade
services in accordance with IFRS 15, if any.
The financial asset is subsequently recorded at amortized cost calculated according to the effective
interest method, using a theoretical internal return rate specific to the asset. Revenue from
320
operations and maintenance services is recognized in each period according to IFRS 15 “Revenue
from contracts with Customers”.
Allowance for expected credit losses (financial assets)
According to IFRS 9, Atlantica recognises an allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the difference between
the contractual cash flows due in accordance with the contract and all the cash flows that the
Company expects to receive.
There are two main approaches to applying the ECL model according to IFRS 9: the general
approach which involves a three stage approach, and the simplified approach, which can be applied
to trade receivables, contract assets and lease receivables. Atlantica applies the simplified approach.
Under this approach, there is no need to monitor for significant increases in credit risk and entities
will be required to measure lifetime expected credit losses at the end of each reporting period.
The key elements of the ECL calculations, based on external sources of information, are the
following:
-
-
-
the Probability of Default (“PD”) is an estimate of the likelihood of default over a given time
horizon. Atlantica calculates PD based on Credit Default Swaps spreads (“CDS”);
the Exposure at Default (“EAD”) is an estimate of the exposure at a future default date;
the Loss Given Default (“LGD”) is an estimate of the loss arising in the case where a default
occurs at a given time. It is based on the difference between the contractual cash flows due
and those that the Company would expect to receive. It is expressed as a percentage of the
EAD.
b)
Property, plant and equipment under IAS 16
Property, plant and equipment is measured at historical cost, including all expenses directly
attributable to the acquisition, less depreciation and impairment losses, with the exception of land,
which is presented net of any impairment losses. Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for long-term installation projects if the recognition
criteria are met. Repair and maintenance costs are recognized in profit or loss as incurred.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.
The Company reviews the estimated residual values and expected useful lives of assets at least
annually. In particular, the Company considers the impact of health, safety and environmental
legislation in its assessment of expected useful lives and estimated residual values.
An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit or loss when the asset is derecognized.
321
c)
Rights of use under IFRS 16
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee:
The Company applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. The Company recognizes lease liabilities to make
lease payments and right-of-use assets representing the right to use the underlying assets.
Main right of use agreements correspond to land rights. The Company recognizes right-of-use
assets at the commencement date of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities (Note 2.11). The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets.
d)
Other intangible assets
Other intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization
and accumulated impairment losses. Intangible assets are amortized over the useful economic life
and assessed for impairment whenever there is an indication that the intangible asset may be
impaired.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising
upon derecognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in the statement of profit or loss.
Research and development costs:
Research costs are expensed as incurred. Development expenditures on an individual project are
recognised as an intangible asset when the Company can demonstrate:
-
the technical feasibility of completing the intangible asset so that the asset will be available for
use or sale
its intention to complete and its ability and intention to use or sell the asset
-
- how the asset will generate future economic benefits
the availability of resources to complete the asset
-
the ability to measure reliably the expenditure during development.
-
Following initial recognition of the development expenditure as an asset, the asset is carried at cost
less any accumulated amortization and accumulated impairment losses. Amortization of the asset
322
begins when development is complete, and the asset is available for use. It is amortized over the
period of expected future benefit. During the period of development, the asset is tested for
impairment annually.
e)
Asset impairment
Atlantica reviews its contracted concessional assets to identify any indicators of impairment at least
annually, except for ECL assessment for financial assets which is discussed above. When impairment
indicators exist, the Company calculates the recoverable amount of the asset.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in
use, defined as the present value of the estimated future cash flows to be generated by the asset.
In the event that the asset does not generate cash flows independently of other assets, the Company
calculates the recoverable amount of the Cash Generating Unit (‘CGU’) to which the asset belongs.
When the carrying amount of the CGU to which these assets belong is higher than its recoverable
amount, the assets are impaired.
Assumptions used to calculate value in use include a discount rate and projections considering real
data based in the contracts terms and projected changes in both selling prices and costs. The
discount rate is estimated by Management, to reflect both changes in the value of money over time
and the risks associated with the specific CGU.
For contracted concessional assets, with a defined useful life and with a specific financial structure,
cash flow projections until the end of the project are considered and no relevant terminal value is
assumed.
Contracted concessional assets have a contractual structure that permits the Company to estimate
quite accurately the costs of the project and revenue during the life of the project.
Projections take into account real data based on the contract terms and fundamental assumptions
based on specific reports prepared internally and third-party reports, assumptions on demand and
assumptions on production. Additionally, assumptions on macro-economic conditions are taken
into account, such as inflation rates, future interest rates, etc. and sensitivity analyses are performed
over all major assumptions which can have a significant impact in the value of the asset.
Cash flow projections of CGUs are calculated in the functional currency of those CGUs and are
discounted using rates that take into consideration the risk corresponding to each specific country
and currency.
Taking into account that in most CGUs the specific financial structure is linked to the financial
structure of the projects that are part of those CGUs, the discount rate used to calculate the present
value of cash-flow projections is based on the weighted average cost of capital (WACC) for the type
of asset, adjusted, if necessary, in accordance with the business of the specific activity and with the
risk associated with the country where the project is performed.
In any case, sensitivity analyses are performed, especially in relation to the discount rate used and
fair value changes in the main business variables, in order to ensure that possible changes in the
323
estimates of these items do not impact the recovery of recognized assets.
In the event that the recoverable amount of an asset is lower than its carrying amount, an
impairment charge for the difference would be recorded in the income statement under the item
“Depreciation, amortization and impairment charges”.
An assessment is made at each reporting date to determine whether there is an indication that
previously recognized impairment losses no longer exist or have decreased. If such indication exists,
the Company estimates the CGU’s recoverable amount. A previously recognized impairment loss
is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognized. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been
recognized for the asset in prior years. Such reversal is recognized in the income statement.
2.4. Revenue recognition
According to IFRS 15, Revenue from Contracts with Customers, the Company assesses the goods
and services promised in the contracts with the customers and identifies as a performance
obligation each promise to transfer to the customer a good or service (or a bundle of goods or
services).
In the case of contracts related to intangible or financial assets under IFRIC 12, the performance
obligation of the Company is the operation of the asset. The contracts between the parties set the
price of the service in an orderly transaction and therefore corresponds to the fair value of the
service provided. The services is satisfied over time. The same conclusion applies to concessional
assets that are classified as tangible assets under IAS 16 or leases under IFRS 16. All of the
transaction prices of assets under IFRIC 12 are fixed and included as part of the long-term PPAs of
the Company as disclosed in Note 26.
In the case of financial asset under IFRIC 12, the financial asset accounts for the payments to be
received from the client over the residual life of the contract, discounted at a theoretical internal
rate of return for the project. In each period, the financial asset is reduced by the amounts received
from the client and increased by any capital expenditure that the project may incur and by the
effect of unwinding the discount of the financial asset at the theoretical internal rate of return. The
increase of the financial asset deriving from the unwinding of the discount of the financial asset is
recorded as revenue in each period. Revenue will therefore differ from the actual billings made to
the client in each period.
In the case of Spain, according to Royal Decree 413/2014, solar electricity producers receive: (i) the
market price for the power they produce, (ii) a payment based on the standard investment cost for
each type of plant (without any relation whatsoever to the amount of power they generate) and
(iii) an “operating payment” (in €/MWh produced). The principle driving this economic regime is
that the payments received by a renewable energy producer should be equivalent to the costs that
they are unable to recover on the electricity pool market where they compete with non-renewable
technologies. This economic regime seeks to allow a “well-run and efficient enterprise” to recover
the costs of building and running a plant, plus a reasonable return on investment (project
324
investment rate of return). Some of the Company´s assets in Spain are receiving a remuneration
based on a 7.09% reasonable rate of return until December 31, 2025 while others are receiving a
remuneration based on a 7.398% reasonable rate of return until December 31, 2031.
2.5. Loans and Accounts Receivable
Loans and accounts receivable are non-derivative financial assets with fixed or determinable
payments, not listed on an active market.
In accordance with IFRIC 12, certain assets under concessions qualify as financial assets and are
recorded as is described in Note 2.3.
Pursuant to IFRS 9, an impairment loss is recognized if the carrying amount of these assets exceeds
the present value of future cash flows discounted at the initial effective interest rate.
Loans and accounts receivable are initially recognized at fair value plus transaction costs and are
subsequently measured at amortized cost in accordance with the effective interest rate method.
Interest calculated using the effective interest rate method is recognized under other financial
income within financial income.
2.6. Derivative Financial Instruments and Hedging Activities
Derivatives are recognized at fair value in the statement of financial position. The Company
maintains both derivatives designated as hedging instruments in hedging relationships, and
derivatives to which hedge accounting is not applied.
When hedge accounting is applied, hedging strategy and risk management objectives are
documented at inception, as well as the relationship between hedging instruments and hedged
items. Effectiveness of the hedging relationship needs to be assessed on an ongoing basis.
Effectiveness tests are performed prospectively at inception and at each reporting date. The
Company analyses on each date if all these requirements are met:
-
-
-
there is an economic relationship between the hedged item and the hedging instrument;
the effect of credit risk does not dominate the value changes that result from that economic
relationship; and
the hedge ratio of the hedging relationship is the same as that resulting from the quantity of
the hedged item that the Company actually hedges and the quantity of the hedging instrument
that the Company uses to hedge that quantity of hedged item.
Ineffectiveness is measured following the accumulated dollar offset method.
In all cases, current Company´s hedging relationships are considered cash flow hedges. Under this
model, the effective portion of changes in fair value of derivatives designated as cash flow hedges
are recorded temporarily in equity and are subsequently reclassified from equity to profit or loss in
the same period or periods during which the hedged item affects profit or loss. Any ineffective
portion of the hedged transaction is recorded in the consolidated income statement as it occurs.
When interest rate options are designated as hedging instruments, the time value is excluded from
the hedging instrument as permitted by IFRS 9. Changes in the effective portion of the intrinsic are
325
recorded in equity and subsequently reclassified from equity to profit or loss in the same period
or periods during which the hedged item affects profit or loss. Any ineffectiveness is recorded as
financial income or expense as it occurs. Changes in options time value is recorded as cost of
hedging. More precisely, considering that the hedged items are, in all cases, time period hedged
item, changes in time value is recognized in other comprehensive income to the extent that it
relates to the hedged item. The time value at the date of designation of the option as a hedging
instrument, to the extent that it relates to the hedged item, is amortized on a systematic and
rational basis over the period during which the hedge adjustment for the option’s intrinsic value
could affect profit or loss.
When the hedging instrument matures or is sold, or when it no longer meets the requirements to
apply hedge accounting, accumulated gains and losses recorded in equity remain as such until the
forecast transaction is ultimately recognized in the income statement. However, if it becomes
unlikely that the forecast transaction will actually take place, the accumulated gains and losses in
equity are recognized immediately in the income statement.
Any change in fair value of derivatives instruments to which hedge accounting is not applied is
directly recorded in the income statement.
2.7. Fair Value Estimates
Financial instruments measured at fair value are presented in accordance with the following level
classification based on the nature of the inputs used for the calculation of fair value:
-
-
Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value is measured based on inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
-
Level 3: Fair value is measured based on unobservable inputs for the asset or liability.
In the event that prices cannot be observed, management shall make its best estimate of the price
that the market would otherwise establish based on proprietary internal models which, in the
majority of cases, use data based on observable market parameters as significant inputs (Level 2)
but occasionally use market data that is not observed as significant inputs (Level 3). Different
techniques can be used to make this estimate, including extrapolation of observable market data.
The best indication of the initial fair value of a financial instrument is the price of the transaction,
except when the value of the instrument can be obtained from other transactions carried out in the
market with the same or similar instruments, or valued using a valuation technique in which the
variables used only include observable market data, mainly interest rates. Differences between the
transaction price and the fair value based on valuation techniques that use data that is not observed
in the market, are not initially recognized in the income statement.
Atlantica derivatives correspond primarily to the interest rate swaps designated as cash flow hedges,
which are classified as Level 2.
326
Description of the valuation method
Interest rate swap valuations consist in valuing separately the swap part of the contract and the
credit risk. The methodology used by the market and applied by Atlantica to value interest rate
swaps is to discount the expected future cash flows according to the parameters of the contract.
Variable interest rates, which are needed to estimate future cash flows, are calculated using the
curve for the corresponding currency and extracting the implicit rates for each of the reference dates
in the contract. These estimated flows are discounted with the swap zero curve for the reference
period of the contract.
The effect of the credit risk on the valuation of the interest rate swaps depends on the future
settlement. If the settlement is favorable for the Company, the counterparty credit spread will be
incorporated to quantify the probability of default at maturity. If the expected settlement is negative
for the Company, its own credit risk will be applied to the final settlement.
Classic models for valuing interest rate swaps use deterministic valuation of the future of variable
rates, based on future outlooks. When quantifying credit risk, this model is limited by considering
only the risk for the current paying party, ignoring the fact that the derivative could change sign at
maturity. A payer and receiver swaption model is proposed for these cases. This enables the
associated risk in each swap position to be reflected. Thus, the model shows each agent’s exposure,
on each payment date, as the value of entering into the ‘tail’ of the swap, i.e. the live part of the
swap.
Variables (Inputs)
Interest rate derivative valuation models use the corresponding interest rate curves for the relevant
currency and underlying reference in order to estimate the future cash flows and to discount them.
Market prices for deposits, futures contracts and interest rate swaps are used to construct these
curves. Interest rate options (caps and floors) also use the volatility of the reference interest rate
curve.
To estimate the credit risk of the counterparty, the credit default swap (CDS) spreads curve is
obtained in the market for important individual issuers. For less liquid issuers, the spreads curve is
estimated using comparable CDSs or based on the country curve. To estimate proprietary credit
risk, prices of debt issues in the market and CDSs for the sector and geographic location are used.
The fair value of the financial instruments that results from the aforementioned internal models
takes into account, among other factors, the terms and conditions of the contracts and observable
market data, such as interest rates, credit risk and volatility. The valuation models do not include
significant levels of subjectivity, since these methodologies can be adjusted and calibrated, as
appropriate, using the internal calculation of fair value and subsequently compared to the
corresponding actively traded price. However, valuation adjustments may be necessary when the
listed market prices are not available for comparison purposes.
327
2.8. Trade and Other Receivables
Trade and other receivables are amounts due from customers for sales in the normal course of
business. They are recognized initially at fair value and subsequently measured at amortized cost
using the effective interest rate method, less allowance for doubtful accounts. Trade receivables
due in less than one year are carried at their face value at both initial recognition and subsequent
measurement, provided that the effect of not discounting flows is not significant.
An allowance for doubtful accounts is recorded when there is objective evidence that the Company
will not be able to recover all amounts due as per the original terms of the receivables. The
Company has established a provision matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors specific to the debtors and the economic environment.
2.9. Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, cash in bank and other highly-liquid current
investments with an original maturity of three months or less which are held for the purpose of
meeting short-term cash commitments.
2.10. Grants
Grants are recognized at fair value when it is considered that there is a reasonable assurance that
the grant will be received and that the necessary qualifying conditions, as agreed with the entity
assigning the grant, will be adequately complied with.
Grants are recorded as liabilities in the consolidated statement of financial position and are
recognized in “Other operating income” in the consolidated income statement based on the period
necessary to match them with the costs they intend to compensate.
In addition, as described in Note 2.11 below, grants correspond also to loans with interest rates
below market rates, for the initial difference between the fair value of the loan and the proceeds
received.
2.11. Loans and Borrowings
Loans and borrowings are initially recognized at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortized cost and any difference between the proceeds
initially received (net of transaction costs incurred in obtaining such proceeds) and the repayment
value is recognized in the consolidated income statement over the duration of the borrowing using
the effective interest rate method.
In the case of modification of terms of loans and borrowings, the Company determines whether
the modification constitutes an exchange or an extinguishment of the debt instrument. In
determining whether there is an exchange, the Company evaluates whether the redemption of the
old debt and the issuance of new debt were negotiated in contemplation of one another
(qualitative assessment) and performs the 10 per cent test to determine if the terms of the modified
debt are substantially different (the net present value of the modified cash flows, including any fees
paid net of any fees received, is higher than 10% different from the net present value of the
remaining cash flows of the liability prior to the modification, both discounted at the original
328
effective interest rate). When the terms of the modified liability are substantially different, the
modification is accounted for as an extinguishment of the original liability and recognition of a new
liability.
Loans with interest rates below market rates are initially recognized at fair value in liabilities and
the difference between proceeds received from the loan and its fair value is initially recorded within
“Grants and Other liabilities” in the consolidated statement of financial position, and subsequently
recorded in “Other operating income” in the consolidated income statement when the costs
financed with the loan are expensed.
Lease liabilities are recognized by the Company at the commencement date of the lease at the
present value of lease payments to be made over the lease term. The lease payments include the
exercise price of a purchase option reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the lease term reflects the Company exercising
the option to terminate. In calculating the present value of lease payments, the Company uses its
incremental borrowing rate at the lease commencement date considering that the interest rate
implicit in the lease is not readily determinable.
2.12. Bonds and notes
The Company initially recognizes ordinary notes at fair value, net of issuance costs incurred.
Subsequently, notes are measured at amortized cost until settlement upon maturity. Any other
difference between the proceeds obtained (net of transaction costs) and the redemption value is
recognized in the consolidated income statement over the term of the debt using the effective
interest rate method.
Convertible bonds or notes or debt issued with conversion features must be separated into liability
and equity components if the feature meets the equity classification conditions in IAS 32. The issuer
separates the instrument into its components by determining the fair value of the liability
component and then deducting that amount from the fair value of the instrument as a whole; the
residual amount is allocated to the equity component. If the equity conversion feature does not
satisfy the equity classification conditions in IAS 32, it is bifurcated as an embedded derivative
unless the issuer elects to apply the fair value option to the convertible debt. The embedded
derivative is initially recognized at fair value and classified as derivatives in the statement of
financial position. Changes in the fair value of the embedded derivatives are subsequently
accounted for directly through the income statement. The debt element of the bond or note (the
host contract), will be initially valued as the difference between the consideration received from the
holders for the instrument and the value of the embedded derivative, and thereafter at amortized
cost using the effective interest method.
2.13. Income Taxes
Current income tax expense is calculated on the basis of the tax laws in force as of the date of the
consolidated statement of financial position in the countries in which the subsidiaries and
associates operate and generate taxable income.
Deferred income tax is calculated in accordance with the liability method, based upon the
329
temporary differences arising between the carrying amount of assets and liabilities and their tax
base. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognized to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized.
2.14. Trade Payables and Other Liabilities
Trade payables are obligations arising from purchases of goods and services in the ordinary course
of business and are recognized initially at fair value and are subsequently measured at their
amortized cost using the effective interest method. Other liabilities are obligations not arising in
the normal course of business and which are not treated as financing transactions. Advances
received from customers are recognized as “Trade payables and other current liabilities”.
2.15. Foreign Currency Transactions
The Consolidated Financial Statements are presented in U.S. dollars, which is Atlantica’s functional
and presentation currency. Financial statements of each subsidiary within the Company are
measured in the currency of the principal economic environment in which the subsidiary operates,
which is the subsidiary’s functional currency.
Transactions denominated in a currency different from the entity’s functional currency are
translated into the entity’s functional currency applying the exchange rates in force at the time of
the transactions. Foreign currency gains and losses that result from the settlement of these
transactions and the translation of monetary assets and liabilities denominated in foreign currency
at the year-end rates are recognized in the consolidated income statement, unless they are
deferred in equity, as occurs with cash flow hedges and net investment in foreign operations
hedges.
Assets and liabilities of subsidiaries with a functional currency different from the Company’s
reporting currency are translated to U.S. dollars at the exchange rate in force at the closing date of
the financial statements. Income and expenses are translated into U.S. dollars using the average
annual exchange rate, which does not differ significantly from using the exchange rates of the dates
of each transaction. The difference between equity translated at the historical exchange rate and
the net financial position that results from translating the assets and liabilities at the closing rate is
recorded in equity under the heading “Accumulated currency translation differences”.
Results of companies carried under the equity method are translated at the average annual
exchange rate.
2.16. Equity
The Company has recyclable balances in its equity, corresponding mainly to hedge reserves and
translation differences arising from currency conversion in the preparation of these Consolidated
Financial Statements. These balances have been presented separately in equity.
330
Ordinary shares are classified as equity. Any excess above the par value of shares received upon
issuance of those shares is classified as share premium in accordance with the UK Companies Act
2006.
Capital reserves is mainly the result of reductions of the share premium account which have
increased distributable reserves upon confirmation from the High Court in the UK, pursuant to the
Companies Act.
Non-controlling interest represents interest of other partners in subsidiaries included in these
Consolidated Financial Statements which are not fully owned by Atlantica as of the dates presented.
The costs of issuing equity instruments are accounted for as a deduction from equity.
2.17. Provisions and Contingencies
Provisions are recognized when:
- there is a present obligation, either legal or constructive, as a result of past events;
-
it is more likely than not that there will be a future outflow of resources to settle the
obligation; and the amount has been reliably estimated.
Provisions are measured at the present value of the expected outflows required to settle the
obligation. The discount rate used is a current pre-tax rate that reflects, when appropriate, the risks
specific to the liability. The increase in the provision due to the passage of time is then recognized
as a financial expense. The balance of provisions disclosed in the Notes reflects management’s best
estimate of the potential exposure as of the date of preparation of the Consolidated Financial
Statements.
Contingent liabilities are possible obligations, existing obligations with low probability of a future
outflow of economic resources and existing obligations where the future outflow cannot be reliably
estimated. Contingences are not recognized in the consolidated statements of financial position
unless they have been acquired in a business combination.
Some companies of Atlantica have dismantling provisions, which are intended to cover future
expenditure related to the dismantlement of the plants in situations where it is likely to be settled
with an outflow of resources in the long term (over 5 years).
Such provisions are recognised when the obligation for dismantling, removing and restoring the
site on which the plant is located, is incurred, which is usually during the construction period. The
provision is measured in accordance with IAS 37, “Provisions, Contingent Liabilities and Contingent
Assets” and is recorded as a liability under the heading “Grants and other liabilities” of the Financial
Statements, and the corresponding entry as part of the cost of the plant under the heading
“Contracted concessional assets.” The estimated future costs of dismantling are reviewed annually
if conditions have changed and adjusted appropriately. The impact of changes in the estimate of
future costs or in the timing of when such costs will be incurred, on the dismantling provision, is
recorded against an increase or decrease of the cost of the plant.
2.18. Earnings per share
331
Basic earnings per share is calculated by dividing the profit for the period attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding
during the period.
Diluted earnings per share is calculated by dividing the profit for the period attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding
during the period plus the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into ordinary shares.
2.19. Significant judgements and estimates
Some of the accounting policies applied require the application of significant judgement by
management to select the appropriate assumptions to determine these estimates. These
assumptions and estimates are based on the historical experience, advice from experienced
consultants, forecasts and other circumstances and expectations as of the close of the financial
period. The assessment is considered in relation to the global economic situation of the industries
and regions where the Company operates, taking into account future development of the
businesses of the Company. By their nature, these judgements are subject to an inherent degree
of uncertainty; therefore, actual results could materially differ from the estimates and assumptions
used. In such cases, the carrying values of assets and liabilities are adjusted.
The most critical accounting policies, which reflects significant management estimates and
judgement to determine amounts in these Consolidated Financial Statements, are as follows:
Estimates:
-
Impairment of contracted concessional, PP&E and other intangible assets.
Impairment exists when the carrying value of an asset or cash generating unit exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal and its value in
use. The value in use calculation is based on a discounted cash flow model, which is sensitive
to the discount rate used as well as projected cash-flows (Note 6).
The significant assumptions which required substantial estimates used in management’s
impairment calculation are discount rates and projections considering real data based on
contract terms and projected changes in selling prices, energy generation and costs.
- Recoverability of deferred tax assets.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilised. Significant management
estimates are required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and the level of future taxable profits together with future tax
planning strategies (Note 18).
-
Fair value of derivative financial instruments
332
When the fair values of financial assets and financial liabilities recorded in the statement of
financial position cannot be measured based on quoted prices in active markets, their fair
value is measured using valuation techniques including the discounted cash flow model. The
inputs to these models are taken from observable markets where possible, but where this is
not feasible, a degree of estimate is required in establishing fair values. Estimates include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions
relating to these factors could affect the reported fair value of financial instruments.
-
Fair value of identifiable assets and liabilities arising from a business combination
The assets acquired and liabilities assumed on a business combination are recognised at the
fair values of the underlying items. The estimates that have a significant risk of causing a
material adjustment to the carrying amounts of the assets and liabilities are the ones
considered when performing impairment review of operating assets (see above).
Judgements:
- Assessment of assets agreements.
By evaluating the terms and conditions of each assets agreement, the Company determines
the accounting category to which the asset belongs, e.g. IAS 16, IFRIC 12 or IFRS 16 (Note 2.3.).
- Assessment of control.
Judgement is required in determining the nature of Atlantica´s interest in another entity and
in determining if it has control, joint control or significant influence over it(Note 2.2.).
As of the date of preparation of these Consolidated Financial Statements, no relevant changes in
the estimates made are anticipated and, therefore, no significant changes in the value of the assets
and liabilities recognized at December 31, 2022, are expected.
Although these estimates and assumptions are being made using all available facts and
circumstances, it is possible that future events may require management to amend such estimates
and assumptions in future periods. Changes in accounting estimates are recognized prospectively,
in accordance with IAS 8, in the consolidated income statement of the year in which the change
occurs.
3. Financial Risk Management
Atlantica’s activities are exposed to various financial risks: market risk (including currency risk and
interest rate risk), credit risk and liquidity risk. Risk is managed by the Company’s Risk Management
and Finance Departments, which are responsible for identifying and evaluating financial risks
quantifying them by project, region and company, in accordance with mandatory internal
management rules. The internal management rules provide written policies for the management
of overall risk, as well as for specific areas. The internal management policies of the Company also
define the use of hedging instruments and derivatives and the investment of excess cash.
a) Market risk
The Company is exposed to market risk, such as movement in foreign exchange rates and interest
333
rates. All of these market risks arise in the normal course of business and the Company does not
carry out speculative operations. For the purpose of managing these risks, the Company uses a
series of interest rate swaps and options, and currency options. None of the derivative contracts
signed has an unlimited loss exposure.
-
Interest rate risk
Interest rate risk arises when the Company’s activities are exposed to changes in interest
rates, which arises from financial liabilities at variable interest rates. The main interest rate
exposure for the Company relates to the variable interest rate with reference to the Libor,
Euribor and SOFR. To minimize the interest rate risk, the Company primarily uses interest
rate swaps and interest rate options (caps), which, in exchange for a fee, offer protection
against an increase in interest rates. The Company does not use derivatives for speculative
purposes.
As of December 31, 2022, approximately 92% of the Project debt of the Company and
approximately 96% of the Corporate debt either has fixed interest rates or has been hedged
with swaps or caps. The Revolving Credit Facility of the Company has variable interest rates
and is not hedged (Note 14).
In connection with the interest rate derivative positions of the Company, the most
significant impacts on these Consolidated Financial Statements are derived from the
changes in EURIBOR, SOFR and LIBOR, which represent the reference interest rate for most
of the debt of the Company. In the event that EURIBOR, SOFR and LIBOR had risen by 25
basis points as of December 31, 2022, with the rest of the variables remaining constant, the
effect in the consolidated income statement would have been a loss of $1.3 million (a loss
of $2.5 million in 2021) and a gain in hedging reserves of $18.4 million ($22.4 million in
2021). The gain in hedging reserves would be mainly due to an increase in the fair value of
interest rate swaps designated as hedges.
A breakdown of the interest rates derivatives as of December 31, 2022 and 2021, is provided
in Note 9.
- Currency risk
-
The main cash flows in the entities included in these Consolidated Financial Statements are
cash collections arising from long-term contracts with clients and debt payments arising
from project finance repayment. Given that financing of the projects is typically closed in
the same currency in which the contract with client is signed, a natural hedge exists for the
main operations of the Company.
In addition, to further mitigate this exposure, the Company policy is to contract currency
options with leading financial institutions, which guarantee a minimum Euro-U.S. dollar
exchange rate on the net distributions expected from solar assets in Europe. The net Euro
exposure is 100% hedged for the coming 12 months and 75% for the following 12 months
on a rolling basis.
Although the Company hedges cash-flows in euros, fluctuations in the value of the euro in
334
relation to the U.S. dollar may affect its operating results. For example, revenue in euro-
denominated companies could decrease when translated to U.S. dollars at the average
foreign exchange rate solely due to a decrease in the average foreign exchange rate, in spite
of revenue in the original currency being stable. Fluctuations in the value of the South
African rand, the Colombian peso and the Uruguayan peso with respect to the U.S. dollar
may also affect the operating results of the Company. Apart from the impact of these
translation differences, the exposure of the income statement of the Company to
fluctuations of foreign currencies is limited, as the financing of projects is typically
denominated in the same currency as that of the contracted revenue agreement.
b) Credit risk
The Company considers that it has a limited credit risk with clients as revenues primarily derive
from power purchase agreements with electric utilities and state-owned entities. In addition, the
diversification by geography and business sector helps to diversify credit risk exposure by diluting
the exposure of the Company to a single client.
c) Liquidity risk
Atlantica’s liquidity and financing policy is intended to ensure that the Company maintains
sufficient funds to meet its financial obligations as they fall due.
Project finance borrowing permits the Company to finance the project through project debt and
thereby insulate the rest of its assets from such credit exposure. The Company incurs in project-
finance debt on a project-by-project basis.
The repayment profile of each project is established on the basis of the projected cash flow
generation of the business. This ensures that sufficient financing is available to meet deadlines and
maturities, which mitigates the liquidity risk significantly. In addition, the Company maintains a
periodic communication with its lenders and regular monitoring of debt covenants and minimum
ratios.
Corporate and Project debt repayment schedules are disclosed in Note 14 and 15, respectively.
d) Capital risk management
The Company manages its capital to ensure that entities in the Company will be able to continue as
a going concern while maximising the return to shareholders through the optimisation of the debt
and equity balance. The capital structure of the Company consists of net debt (borrowings disclosed
in Notes 14 and 15 after deducting cash and bank balances disclosed in Note 12) and equity of the
Company (comprising issued capital, reserves and accumulated deficit). The board of directors
review the capital structure on a regular basis. As part of this review, the Company considers the
cost of capital and the risks associated with each class of capital.
e) Gearing ratio
The gearing ratio at the year-end is as follows:
335
Debt
Cash and cash equivalents
Net Debt
Equity
Balance as of
December 31, 2022
$’000
Balance as of
December 31, 2021
$’000
5,570,252
600,990
6,059,264
622,689
4,969,262
5,436,575
1,789,048
1,748,605
Net debt to equity ratio
278%
311%
Corporate and Project debt repayment schedules are disclosed in Note 14 and 15, respectively.
4. Financial information by segment
Atlantica’s segment structure reflects how management currently makes financial decisions and
allocates resources. Its operating and reportable segments are based on the following geographies
where the contracted concessional assets are located: North America, South America and EMEA. In
addition, based on the type of business, as of December 31, 2022, the Company had the following
business sectors: Renewable energy, Efficient natural gas and Heat, Transmission lines and Water.
Atlantica’s Chief Operating Decision Maker (CODM), which is the CEO, assesses the performance
and assignment of resources according to the identified operating segments. The CODM considers
the revenue as a measure of the business activity and the Adjusted EBITDA as a measure of the
performance of each segment. Adjusted EBITDA is calculated as profit/(loss) for the year
attributable to the parent company, after adding back loss/(profit) attributable to non-controlling
interest, income tax expense, financial expense net, depreciation, amortization and impairment
charges of entities included in these Consolidated Financial Statements and depreciation and
amortization, financial expense and income tax of unconsolidated affiliates (pro rata of Atlantica´s
equity ownership).
In order to assess performance of the business, the CODM receives reports of each reportable
segment using revenue and Adjusted EBITDA. Net interest expense evolution is assessed on a
consolidated basis. Financial expense and amortization are not taken into consideration by the
CODM for the allocation of resources.
In the year ended December 31, 2022, Atlantica had three customers with revenues representing
more than 10% of total revenue, two in the renewable energy and one in the efficient natural gas
and heat business sectors. In the year ended December 31, 2021, Atlantica had one customer with
revenues representing more than 10% of the total revenue, in the renewable energy business
sector.
a)
The following tables show Revenues and Adjusted EBITDA by operating segments and
business sectors for the years 2022 and 2021:
336
Revenue
$’000
Adjusted EBITDA
$’000
For the year ended December 31,
For the year ended December 31,
Geography
North America
South America
EMEA
2022
2021
2022
2021
405,047
166,441
530,541
395,775
154,985
660,989
309,988
126,551
360,561
311,803
119,547
393,038
Total
1,102,029
1,211,749
797,100
824,388
Revenue
$’000
For the year ended December 31,
2022
2021
821,377
113,591
113,273
53,788
928,525
123,692
105,680
53,852
Adjusted EBITDA
$’000
For the year ended
December 31,
2022
588,016
84,560
88,010
36,514
2021
602,583
99,935
83,635
38,235
1,102,029
1,211,749
797,100
824,388
Business sector
Renewable energy
Efficient natural gas &
Heat
Transmission lines
Water
Total
The reconciliation of segment Adjusted EBITDA with the loss attributable to the parent company
is as follows:
Profit/(loss) attributable to the Company
Profit attributable to non-controlling interest
Income tax expense, (income)
Financial expense, net
Depreciation, amortization, and impairment charges
Depreciation and amortization, financial expense and
income tax expense of unconsolidated affiliates pro
rata of Atlantica´s equity ownership
For the year ended December 31,
2022
$’000
2021
$’000
(5,443)
3,356
(9,689)
310,934
473,638
24,304
(30,080)
19,162
36,220
340,892
439,441
18,753
Total segment Adjusted EBITDA
797,100
824,388
b)
The assets and liabilities by geography and business sector at the end of 2022 and 2021
are as follows:
Assets and liabilities by geography as of December 31, 2022:
337
Assets allocated
concessional, PP&E and other
Contracted
intangible assets
Investments carried under the equity method
Other current financial assets
Cash and cash equivalents (project companies)
Subtotal allocated
Unallocated assets
Other non-current assets
Other current assets (including cash and cash
equivalents at holding company level)
Subtotal unallocated
Total assets
Liabilities allocated
Long-term and short-term project debt
Grants and other liabilities
Subtotal allocated
Unallocated liabilities
Long-term and short-term corporate debt
Other non-current liabilities
Other current liabilities
Subtotal unallocated
Total liabilities
Equity unallocated
Total liabilities and equity unallocated
Total liabilities and equity
North
America
$’000
South
America
$’000
EMEA
$’000
Balance as of
December 31, 2022
$’000
3,167,490
1,241,879
3,073,889
7,483,259
210,704
118,385
187,568
4,450
31,136
85,697
44,878
46,373
266,557
260,031
195,893
539,822
3,684,147
1,363,162
3,431,697
8,479,005
325,893
296,013
621,906
9,100,911
North
America
$’000
South
America
$’000
EMEA
$’000
Balance as of
December 31, 2022
$’000
1,713,125
994,874
841,906
25,031
1,998,021
232,608
2,707,999
866,937
2,230,629
4,553,052
1,252,513
5,805,565
1,017,200
313,328
175,771
1,506,299
7,311,864
1,789,047
3,295,346
9,100,911
338
Assets and liabilities by geography as of December 31, 2021:
Assets allocated
concessional, PP&E and other
Contracted
intangible assets
Investments carried under the equity method
Other current financial assets
Cash and cash equivalents (project companies)
Subtotal allocated
Unallocated assets
Other non-current assets
Other current assets (including cash and cash
equivalents at holding company level)
Subtotal unallocated
Total assets
Liabilities allocated
Long-term and short-term project debt
Grants and other liabilities
Subtotal allocated
Unallocated liabilities
Long-term and short-term corporate debt
Other non-current liabilities
Other current liabilities
Subtotal unallocated
Total liabilities
Equity unallocated
Total liabilities and equity unallocated
Total liabilities and equity
North
America
$’000
South
America
$’000
EMEA
$’000
Balance as of
December 31, 2021
$’000
3,355,669
1,231,276
3,434,623
8,021,568
253,221
135,224
171,744
-
28,155
74,149
41,360
44,000
287,655
294,581
207,379
533,548
3,915,858
1,333,580
3,807,638
9,057,076
268,876
425,978
694,854
9,751,930
North
America
$’000
South
America
$’000
EMEA
$’000
Balance as of
December 31, 2021
$’000
1,792,739
1,051,679
2,844,418
887,497
14,445
901,942
2,355,957
197,620
2,553,577
5,036,193
1,263,744
6,299,937
1,023,071
532,312
148,005
1,703,388
8,003,325
1,748,605
3,451,993
9,751,930
339
Assets and liabilities by business sectors as of December 31, 2022:
Assets allocated
Contracted concessional, PP&E and
other intangible assets
Investments carried under the equity
method
Other current financial assets
Cash and cash equivalents (project
companies)
Subtotal allocated
Unallocated assets
Other non-current assets
Other current assets (including cash
and cash equivalents at holding
company level)
Subtotal unallocated
Total assets
Liabilities allocated
Long-term and short-term project
debt
Grants and other liabilities
Subtotal allocated
Unallocated liabilities
Long-term and short-term corporate
debt
Other non-current liabilities
Other current liabilities
Subtotal unallocated
Total liabilities
Equity unallocated
liabilities
Total
unallocated
and
equity
Total liabilities and equity
Renewable
energy
Efficient
natural gas
& Heat
$’000
$’000
Transmission
lines
$’000
Water
Balance as of
December 31,
2022
$’000
$’000
6,035,091
485,431
800,067
162,670
7,483,259
203,420
10,034
4,450
42,128
260,031
6,706
392,577
116,366
73,673
30,582
48,073
42,240
25,498
195,893
539,822
6,637,794
685,504
883,172
272,536
8,479,005
325,893
296,013
621,906
9,100,911
Renewable
energy
$’000
Efficient
natural
gas &
Heat
$’000
Transmission
lines
Water
Balance as of
December 31, 2022
$’000
$’000
$’000
3,442,625
440,999
582,689
86,739
4,553,052
1,211,878
4,654,503
32,138
473,137
6,040
588,729
2,457
89,196
1,252,513
5,805,565
1,017,200
313,328
175,771
1,506,299
7,311,864
1,789,047
3,295,346
9,100,911
340
Assets and liabilities by business sectors as of December 31, 2021:
Renewable
energy
$’000
Efficient
natural gas
& Heat
$’000
Transmission
lines
Water
$’000
$’000
Balance as of
December 31,
2021
$’000
6,533,408
517,247
805,987
164,926
8,021,568
240,302
15,358
-
38,921
294,581
10,761
442,213
128,461
25,392
27,813
44,574
40,344
21,369
207,379
533,548
7,226,684
686,458
878,374
265,560
9,057,076
Assets allocated
Contracted concessional, PP&E and other
intangible assets
Investments carried under the equity
method
Other current financial assets
Cash and cash equivalents
companies)
Subtotal allocated
(project
Unallocated assets
Other non-current assets
Other current assets (including cash and
cash equivalents at holding company
level)
Subtotal unallocated
Total assets
Renewable
energy
$’000
3,857,313
1,244,346
5,101,659
Efficient
natural
gas &
Heat
$’000
478,724
11,212
489,936
Liabilities allocated
Long-term and short-term project debt
Grants and other liabilities
Subtotal allocated
Unallocated liabilities
Long-term and short-term corporate
debt
Other non-current liabilities
Other current liabilities
Subtotal unallocated
Total liabilities
Equity unallocated
liabilities
Total
unallocated
and
equity
Total liabilities and equity
341
268,876
425,978
694,854
9,751,930
Transmission
lines
Water
Balance as of
December 31, 2021
$’000
$’000
$’000
602,278
5,795
97,878
2,391
608,073
100,269
5,036,193
1,263,744
6,299,937
1,023,071
532,312
148,005
1,703,388
8,003,325
1,748,605
3,451,993
9,751,930
c)
The amount of depreciation, amortization and impairment charges recognized for the
years ended December 31, 2022 and 2021 are as follows:
Depreciation, amortization and
geography
impairment by
North America
South America
EMEA
Total
Depreciation, amortization and
business sectors
impairment by
Renewable energy
Efficient natural gas & Heat
Transmission lines
Water
Total
5. Business Combinations
For the year ended December 31, 2022
For the year ended December 31,
$’000
2022
2021
(182,159)
(80,039)
(211,440)
(473,638)
(152,946)
(57,214)
(229,281)
(439,441)
For the year ended December 31,
$’000
2022
(434,042)
(5,430)
(32,466)
(1,700)
2021
(432,138)
23,910
(31,286)
73
(473,638)
(439,441)
On January 17, 2022, the Company closed the acquisition of Chile TL4, a 63-mile transmission line
and 2 substations in Chile for a total equity investment of $38.4 million. Atlantica has control over
Chile TL4 under IFRS 10, Consolidated Financial Statements. The acquisition of Chile TL4 has been
accounted for in these Consolidated Financial Statements in accordance with IFRS 3, Business
Combinations. Chile TL4 is included within the Transmission Lines sector and the South America
geography.
On April 4, 2022, the Company closed the acquisition of Italy PV 4, a 3.6 MW solar portfolio in Italy
for a total equity investment of $3.7 million. Atlantica has control over Italy PV 4 under IFRS 10,
Consolidated Financial Statements. The acquisition of Italy PV 4 has been accounted for in these
Consolidated Financial Statements in accordance with IFRS 3, Business Combinations. Italy PV4 is
included within the Renewable energy sector and the EMEA geography.
On September 2, 2022 the Company closed the acquisition of Chile PV 3, a 73 MW solar PV plant
through its renewable energy platform in Chile for a total equity investment of $7.7 million.
Atlantica has control over Chile PV 3 under IFRS 10, Consolidated Financial Statements. The
acquisition of Chile PV 3 has been accounted for in these Consolidated Financial Statements in
accordance with IFRS 3, Business Combinations, showing 65% of non-controlling interests. Chile
PV 3 is included within the Renewable energy sector and the South America geography.
The fair value of assets and liabilities consolidated at the effective acquisition date is shown in
342
aggregate on the basis that they are individually not significant in the following table:
Property, plant and equipment under IAS 16 (Note 6)
Rights of use under IFRS 16 (Lessee) or intangible assets under IAS 38 (Note 6)
Cash & cash equivalents
Other current assets
Non-current Project debt (Note 15)
Current Project debt (Note 15)
Other current and non-current liabilities
Non-controlling interests
Total net assets acquired at fair value
Asset acquisition – purchase price paid
Net result of business combinations
Business
combinations
for the year ended
December 31, 2022
$’000
58,002
16,993
1,057
8,283
(1,301)
(148)
(18,919)
(14,300)
49,667
(49,667)
-
The purchase price equals the fair value of the net assets acquired.
The allocation of the purchase price is provisional as of December 31, 2022 and amounts indicated
above may be adjusted during the measurement period to reflect new information obtained about
facts and circumstances that existed at the acquisition date that, if known, would have affected the
amounts recognized as of December 31, 2022. The measurement period will not exceed one year
from the acquisition dates.
The amount of revenue contributed by the acquisitions performed during 2022 to the Consolidated
Financial Statements of the Company for the year 2022 is $6.2 million, and the amount of profit
after tax is $1.7 million. Had the acquisitions been consolidated from January 1, 2022, the
consolidated statement of comprehensive income would have included additional revenue of $4.8
million and additional profit after tax of $1.7 million.
For the year ended December 31, 2021
On January 6, 2021, the Company completed its second investment through its Chilean renewable
energy platform in a 40 MW solar PV plant, Chile PV 2, located in Chile, for approximately $5 million.
Atlantica has control over Chile PV 2 under IFRS 10, Consolidated Financial Statements. The
acquisition of Chile PV 2 had been accounted for in these Consolidated Financial Statements in
accordance with IFRS 3, Business Combinations, showing 65% of non-controlling interests. Chile
PV 2 is included within the Renewable energy sector and the South America geography.
343
On January 8, 2021, the Company completed the purchase of an additional 42.5% stake in
Rioglass, a supplier of spare parts and services to the solar industry, increasing its stake from 15%
to 57.5% and gaining control over the business under IFRS 10, Consolidated Financial Statements.
The purchase price paid was $8.6 million, and the Company paid an additional $3.7 million
(deductible from the final payment) for an option to acquire the remaining 42.5% under the same
conditions until September 2021. On July 22, 2021, the Company exercised the option paying an
additional $4.8 million, becoming the sole shareholder of the entity. Rioglass is included within the
Renewable energy sector and the EMEA geography. The acquisition of Rioglass had been
accounted for in these Consolidated Financial Statements in accordance with IFRS 3, Business
Combinations.
On April 7, 2021, the Company closed the acquisition of Coso, a 135 MW renewable asset in
California. The purchase price paid was $130 million. Atlantica has control over Coso under IFRS
10, Consolidated Financial Statements and its acquisition had been accounted for in these
Consolidated Financial Statements in accordance with IFRS 3, Business Combinations. Coso is
included within the Renewable energy sector and the North America geography.
On May 14, 2021, the Company closed the acquisition of Calgary District Heating, a district heating
asset of approximately 55 MWt in Canada. The purchase price paid was approximately $22.9 million.
The acquisition had been accounted for in these Consolidated Financial Statements in accordance
with IFRS 3, Business Combinations. Calgary District Heating is included within the Efficient natural
gas and Heat sector and the North America geography.
On August 6, 2021, the Company closed the acquisition of Italy PV 1 and Italy PV 2, two solar PV
plants in Italy with a combined capacity of 3.7 MW for a total equity investment of $9 million. The
acquisition had been accounted for in these Consolidated Financial Statements in accordance with
IFRS 3, Business Combinations. These assets are included within the Renewable energy sector and
the EMEA geography.
On November 25, 2021, the Company closed the acquisition of La Sierpe, a 20 MW solar PV plant
in Colombia for a total equity investment of approximately $23.5 million. The acquisition had been
accounted for in these Consolidated Financial Statements in accordance with IFRS 3, Business
Combinations. La Sierpe is included within the Renewable energy sector and the South America
geography.
On December 14, 2021, the Company closed the acquisition of Italy PV 3, a 2.5 MW solar asset in
Italy for a total equity investment of approximately $4.0 million. The acquisition had been
accounted for in these Consolidated Financial Statements in accordance with IFRS 3, Business
Combinations. Italy PV 3 is included within the Renewable Energy sector and the EMEA geography.
The fair value of assets and liabilities consolidated at the effective acquisition date is shown in
aggregate under Other on the basis that they are individually not significant in the following table:
344
Business combinations
for the year ended December 31, 2021
$’000
Coso
Other
Total
Property, plant and equipment under IAS 16 (Note 6)
383,153
137,426
520,579
Rights of use under IFRS 16 (Lessee) or intangible
assets under IAS 38 (Note 6)
-
22,149
22,149
Deferred tax asset (Note 18)
-
4,410
4,410
Other non-current assets
Cash & cash equivalents
Other current assets
11,024
1,943
12,967
6,363
14,649
21,012
14,378
46,632
61,010
Non-current Project debt (Note 15)
(248,544 )
(39,808 )
(288,352)
Current Project debt (Note 15)
(13,415 )
(25,366 )
(38,781 )
Deferred tax liabilities (Note 18)
-
(4,910 )
(4,910 )
Other current and non-current liabilities
(22,959 )
(64,922 )
(87,881 )
Non-controlling interests
-
(8,287 )
(8,287 )
Total net assets acquired at fair value
130,000
83,916 213,916
Asset acquisition – purchase price paid
(130,000 )
(80,868 )
(210,868)
Fair value of previously held 15% stake in Rioglass
-
(3,048 )
(3,048 )
Net result of business combinations
-
-
-
The purchase price equalled the fair value of the net assets acquired.
The amount of revenue contributed by the acquisitions performed during 2021 to the Consolidated
Financial Statements of the Company for the year 2021 was $163.5 million, and the amount of
profit after tax was $0.8 million. Had the acquisitions been consolidated from January 1, 2021, the
consolidated statement of comprehensive income would have included additional revenue of $17.7
million and additional profit after tax of $3.3 million.
The provisional period for the purchase price allocation of all the businesses acquired in 2021
closed during the year 2022 and did not result in significant adjustments to the initial amounts
recognized.
345
6. Contracted Concessional, PP&E and Other Intangible Assets
The Company has assets recorded as intangible or financial assets in accordance with IFRIC 12,
property plant and equipment in accordance with IAS 16 and right of use assets under IFRS 16 or
intangible assets under IAS 38.
For further details on the application of IFRIC 12 to assets of the Company, see Note 26.
a)
The following table shows the movements of assets included in the heading “Contracted
Concessional, PP&E and other intangible assets” for 2022:
Cost
Financial
assets
under IFRIC
12
Financial
assets
under IFRS
16
(Lessor)
Intangible
assets under
IFRIC 12
Right of use
assets under
IFRS 16
(Lessee) and
intangible
assets under
IAS 38
Property,
plant and
equipment
under IAS 16
Total assets
Total as of January 1,
2022
Additions
Subtractions
Business combinations
(Note 5)
Currency translation
differences
Reclassification and
other movements
Total Cost as of
December 31, 2022
874,525
2,843
9,202,539
100,109
839,119
11,019,135
-
-
-
1,760
(58,115)
-
(57)
32,941
(499)
4,155
(1,350)
80,196
(8,655)
117,292
(10,561)
-
1
-
-
16,993
58,002
74,995
(261,536)
(4,531)
(21,006)
(285,312)
2,798
(6,200)
8,950
(52,567)
818,170
2,787
8,976,243
109,176
956,606
10,862,982
Depreciation,
amortization and
impairment
Financial
assets
under
IFRIC 12
Financial
assets
under
IFRS 16
(Lessor)
Intangible
assets under
IFRIC 12
Right of use
assets
under IFRS
16 (Lessee)
and
intangible
assets
under IAS
38
(21,578)
(6,419)
859
Property,
plant and
equipment
under IAS 16
Total assets
(143,755)
(64,306)
7,643
(2,997,567)
(475,924)
8,502
79,206
822
5,346
85,266
(62,889)
(6,560)
-
(108)
-
-
-
-
(2,769,345)
(398,639)
-
Total as of January 1, 2022
Additions
Subtractions
Currency translation
differences
Total depreciation,
amortization and
impairment as of
December 31, 2022
Total net book value as of
December 31, 2022
(69,557)
-
(3,088,778)
(26,316)
(195,072)
(3,379,723)
748,613
2,787
5,887,465
82,860
761,534
7,483,259
346
The decrease in the contracted concessional assets cost is primarily due to the lower value of the
Euro denominated assets since the exchange rate of the Euro decreased against the U.S. dollar
since December 31, 2021, that more than offsets the increase resulting from business combinations
and the additions for the year that primarily correspond to investments in operating concessional
assets and assets under development or construction. The increase in accumulated depreciation,
amortization and impairment is primarily due to the amortization charge for the year and the
impairment registered in Solana, Chile PV1 and Chile PV2 (see further explanation below).
The decrease included in “Reclassification and other movement” is mainly due to the reclassification
from the long to the short term of the current portion of the contracted concessional financial
assets.
b)
The following table shows the movements of assets included in the heading “Contracted
Concessional, PP&E and other intangible assets” for 2021:
Cost
Financial
assets
under IFRIC
12
Financial
assets
under IFRS
16
(Lessor)
Intangible
assets under
IFRIC 12
Right of use
assets under
IFRS 16
(Lessee) and
intangible
assets under
IAS 38
Property,
plant and
equipment
under IAS 16
Total assets
Total as of January 1,
2021
Additions
Subtractions
Business combinations
(Note 5)
Currency translation
differences
Reclassification and
other movements
Total Cost as of
December 31, 2021
936,837
2,941
9,467,309
80,030
336,920
10,824,037
922
-
-
442
-
-
40,383
(348)
3,639
(16)
13,204
(21,266)
58,410
(21,630)
-
22,149
519,931
542,080
(9,519)
(540)
(334,497)
(5,693)
(20,029)
(370,278)
(53,715)
-
29,692
-
10,539
(13,484)
874,525
2,843
9,202,539
100,109
839,119
11,019,135
347
Total as of January 1, 2021
Additions
Reversal of impairment
Currency translation
differences
Total depreciation,
amortization and
impairment as of
December 31, 2021
Total net book value as of
December 31, 2021
Depreciation,
amortization and
impairment
Financial
assets
under
IFRIC 12
Financial
assets
under
IFRS 16
(Lessor)
Intangible
assets under
IFRIC 12
Right of use
assets
under IFRS
16 (Lessee)
and
intangible
assets
under IAS
38
(16,171)
(6,370)
-
Property,
plant and
equipment
under IAS 16
Total assets
(122,239)
(29,392)
-
(2,668,619)
(460,361)
24,929
97,356
963
7,876
106,484
(87,689)
(418)
24,929
289
-
-
-
-
(2,442,520)
(424,181)
-
(62,889)
-
(2,769,345)
(21,578)
(143,755)
(2,997,567)
811,636
2,843
6,433,194
78,531
695,364
8,021,568
The increase in the contracted concessional assets cost was primarily due to business combinations
for a total amount of $542 million (Note 5), partially offset by the lower value of the Euro
denominated assets since the exchange rate of the Euro decreased against the U.S. dollar since
December 31, 2020.
This increase was mainly offset by the depreciation and amortization charge for the year and the
impairment registered in Solana (see further explanation below).
The decrease included in “Reclassification and other movement” was mainly due to the
reclassification from the long to the short term of the current portion of the contracted
concessional financial assets.
Solana triggering event of impairment
Considering the continued delays in the works and replacements that the Company is carrying out
in the storage system at Solana and their impact on production in 2022, as well as an increase in
the discount rate, the Company identified an impairment triggering event, in accordance with IAS
36, Impairment of assets. As a result, an impairment test has been performed using historical level
of output (generation), which resulted in the recording of an impairment loss of $41 million in 2022
($43 million in 2021).
The impairment has been recorded within the line “Depreciation, amortization and impairment
charges” of the consolidated income statement, decreasing the amount of Intangible assets under
IFRIC 12 pertaining to the Renewable energy sector and the North America geography. The
recoverable amount considered is the value in use and amounts to $881 million for Solana, as of
December 31, 2022 ($943 million as of December 31, 2021). A specific discount rate has been used
in each year considering changes in the debt/equity leverage ratio over the useful life of this
project, resulting in the use of a range of pre-tax discount rates between 5.9% and 6.3% (between
4.9% and 5.9% in 2021).
348
An adverse change in the key assumptions which are individually used for the valuation could
lead to future impairment recognition; specifically, a 5% decrease in generation over the entire
remaining useful life (PPA) of the project would generate an additional impairment of
approximately $59 million. An increase of 50 basis points in the discount rate would lead to an
additional impairment of approximately $33 million.
Chile PV1 and Chile PV2 triggering event of impairment
Considering that expected electricity prices in Chile over the remaining useful life of Chile PV1 and
Chile PV2 have recently decreased and are currently lower than the prices assumed at the time of
the acquisition, the Company identified an impairment triggering event, in accordance with IAS 36,
Impairment of assets. As a result, an impairment test has been performed which resulted in the
recording of an impairment loss of $8 million for Chile PV1 and $12 million for Chile PV2 in 2022.
The impairment has been recorded within the line “Depreciation, amortization and impairment
charges” of the consolidated income statement, decreasing the amount of Property, plant and
equipment under IAS 16 pertaining to the Renewable energy sector and the South America
geography. The recoverable amount considered is the value in use and amounts to $58 million for
Chile PV1 and $22 million for Chile PV2, as of December 31, 2022. A specific discount rate has been
used in each year considering changes in the debt/equity leverage ratio over the useful life of these
projects, resulting in the use of a range of pre-tax discount rates between 7.5% and 8.4% for Chile
PV1 and 7.5% and 8.3% for Chile PV2.
An adverse change in the key assumptions which are individually used for the valuation could lead
to future impairment recognition; specifically, a 5% decrease in electricity prices over the entire
remaining useful life of these projects would generate an additional total impairment of
approximately $5 million. An increase of 50 basis points in the discount rate would lead to an
additional total impairment of approximately $3 million.
The Company did not identify any other triggering event of impairment of its contracted
concessional assets as of December 31, 2022 and 2021.
Expected credit losses
The impairment provision based on the expected credit losses on contracted concessional financial
assets, calculated in accordance with IFRS 9, Financial instruments, increased by $7 million in the
year ended December 31, 2022, (decreased by $25 million in the year ended December 31, 2021,
primarily in ACT, following an improvement of its client´s credit risk metrics), primarily in ACT.
7. Investments Carried Under the Equity Method
The table below shows the breakdown and the movement of the investments held in associates
and joint ventures for 2022 and 2021:
349
Investments in associates and joint ventures
Initial balance
Share of profit
Distributions
Acquisitions
Others (incl. currency translation differences)
Final balance
2022
$‘000
294,581
21,465
(57,537 )
4,901
(3,379)
260,031
2021
$‘000
116,614
12,304
(36,877)
202,345
195
294,581
In November 2022, Atlantica closed the acquisition of a 49% interest, with joint control, in Chile
PMGD, an 80MW portfolio of solar PV assets in Chile, which is currently starting construction (Note
1). Chile PMGD is accounted for in these Consolidated Financial Statements using the equity
method as per IAS28 – Investments in Associates.
The decrease in investments carried under the equity method in 2022, is primarily due to the
distributions received by AYES Canada from Amherst Island Partnership for $20.9 million ($17.7
million in 2021), distributions from Vento II for $32.6 million ($14.8 million in 2021) and from
Honaine for $4.0 million ($4.4 million in 2021), partially offset by the share of profit of associates
for $21.5 million ($12.3 million in 2021) and the investment made in Chile PMGD in November,
2022 for $4.5 million. A significant portion of the distributions received from Amherst Island
Partnership are distributed by the Company to Algonquin Power Co. (Note 13).
The tables below shows a breakdown of stand-alone amounts of assets, revenues and profit and
loss as well as other information of interest for the years 2022 and 2021 for the entities carried
under the equity method:
350
%
Shares
of the Company
Non-
current
assets
Company
2007 Vento II, LLC
Current
assets
Project
debt
Other non-
current
liabilities
Other
current
liabilities Revenue
Operating
profit/
(loss)
Net
profit/
(loss)
Investment
under the
equity
method
(1)
49.00
435,029 14,198
-
57,596
11,515
103,362 42,662
40,992
181,735
Windlectric Inc
(2)
Myah Bahr
Honaine,
S.P.A.(3)
Pemcorp SAPI de
30.00
278,504 3,338
-
167,519
43,227
24,996 10,560
(15)
18,935
25.50
150,623 66,246 43,579 18,902
4,257
55,267 33,374
26,768
42,128
CV (4)
30.00
138,931 112,352 159,382 90,474
4,328
45,625 1,680
(17,747)
10,034
Pectonex, R.F.
Proprietary
Limited
Evacuacion
Valdecaballeros,
S.L.
Evacuacion
Villanueva del
Rey, S.L
Liberty
Infraestructuras
S.L.
Akuo Atlantica
PMGD Holding
S.P.A. (5)
Fontanil Solar,
S.L.U.
Murum Solar,
S.L.U.
As of December 31,
2022
50.00
2,045
-
-
-
1
-
(168 )
(168 )
1,411
57.16
15,551 1,020
-
13,635
232
860
(60
(89 )
858
40.02
2,317
12
-
1,386
111
-
57
-
-
20.00
93
283
-
-
37
-
-
(22 )
29
49.00
14,814 2,828
-
8,755
326
-
-
(348)
4,450
25.00
117
7
-
99
24
-
(1)
(2)
229
25.00
228
8
-
180
59
-
(1)
(5)
222
260,031
351
%
Shares of
the
Company
Non-
current
assets
Current
assets
Project
debt
Company
2007 Vento II, LLC
Other
non-
current
liabilities
Other
current
liabilities Revenue
Operating
profit/
(loss)
Net
profit/
(loss)
Investment
under the
equity
method
(1)
49.00 459,037 13,511
- 62,387 10,259 104,461
34,216
32,806 195,952
Windlectric Inc (2)
30.00 310,751 11,036
- 207,404 38,126 24,008
10,442
152 41,911
Myah Bahr
Honaine,
S.P.A.(3)
Pemcorp SAPI de
25.50 151,830 59,020 51,721 18,142
3,293 53,450
33,935
24,899 38,922
CV (4)
30.00 127,892 117,083 146,931 101,439
2,925 40,166
6,561
(6,522 ) 15,358
Pectonex, R.F.
Proprietary
Limited
Evacuación
Valdecaballeros,
S.L.
Evacuación
Villanueva del
Rey, S.L
Liberty
Infraestructuras
S.L.
As of December
31, 2021
50.00 2,356
-
-
-
1
-
(186 )
(186 )
1,495
57.16 17,185
976
- 15,022
156
938
(63 )
(93 )
923
40.02 2,637
63
-
1,601
172
-
59
-
-
20.00
238
46
-
-
5
-
(54 )
(54 )
21
294,581
The Company has no control over Evacuacion Valdecaballeros, S.L. as all relevant decisions of this
company require the approval of a minimum of shareholders accounting for more than 75% of the
shares.
None of the associated companies referred to above is a listed company.
(1) 2007 Vento II, LLC, is the holding company of a 596 MW portfolio of wind assets in the U.S., 49% owned by Atlantica since June 16,
2021, and accounted for under the equity method in these Consolidated Financial Statements (Note 1). Share of profit of 2007 Vento II,
LLC. included in these Consolidated Financial Statements amounts to $20.1 million in 2022 and $8.4 million in 2021.
(2) Windlectric Inc., the project entity, is 100% owned by Amherst Island Partnership which is accounted for under the equity method
in these Consolidated Financial Statements.
(3) Myah Bahr Honaine, S.P.A., the project entity, is 51% owned by Geida Tlemcen, S.L. which is accounted for using the equity method
in these Consolidated Financial Statements. Geida Tlemcen, S.L. is 50% owned by Atlantica. Share of profit of Myah Bahr Honaine S.P.A.
included in these Consolidated Financial Statements amounts to $6.8 million in 2022 and $6.4 million in 2021.
(4) Pemcorp SAPI de CV, Monterrey´s project entity, is 100% owned by Arroyo Netherlands II B.V. which is accounted for under the
equity method in these Consolidated Financial Statements. Arroyo Netherlands II B.V. is 30% owned by Atlantica. Share of profit of
Pemcorp SAPI de CV included in these Consolidated Financial Statements amounts to a loss of $5.3 million in 2022 and a loss of $2.0
million in 2021.
352
(5) Akuo Atlantica PMGD Holding S.P.A. is the holding company of a 80MW portfolio of solar PV assets in Chile, which is currently
starting construction, 49% owned by Atlantica, with joint control since November 2022 and accounted for under the equity method
in these Consolidated Financial Statements.
8. Financial instruments by Category
Financial instruments, in addition to financial assets included within Contracted concessional, PP&E
and other intangible assets disclosed in Note 6, are primarily deposits, derivatives, trade and other
receivables and loans. Financial instruments by category (current and non-current), reconciled with
the statement of financial position as of December 31, 2022 and 2021 are as follows:
Category
Derivative assets
Investment in Ten West Link
Financial assets under IFRIC 12
(short-term portion) (*)
Trade and other receivables
Cash and other equivalents
Other financial assets
Total financial assets
Corporate debt (**)
Project debt (**)
Trade and other current liabilities
Derivative liabilities
Total financial liabilities
Notes
9
11
12
14
15
17
9
Amortized Cost
$’000
Fair value through
Other Comprehensive
Income
$´000
Fair value
through
profit or loss
$’000
Balance as of
12.31.22
$’000
-
-
186,841
200,334
600,990
71,949
1,060,114
1,017,200
4,553,052
140,230
-
5,710,482
-
15,959
-
-
-
-
15,959
-
-
-
-
-
97,381
-
-
-
-
-
97,381
-
-
-
16,847
16,847
97,381
15,959
186,841
200,334
600,990
71,949
1,173,454
1,017,200
4,553,052
140,230
16,847
5,727,329
Category
Derivative assets
Investment in Ten West Link
Financial assets under IFRIC 12
(short-term portion) (*)
Trade and other receivables
Cash and other equivalents
Other financial assets
Total financial assets
Corporate debt (**)
Project debt (**)
Trade and other current liabilities
Derivative liabilities
Total financial liabilities
Notes
9
11
12
14
15
17
9
Amortized Cost
$’000
Fair value through
Other Comprehensive
Income
$´000
Fair value
through
profit or loss
$’000
Balance as of
12.31.21
$’000
-
14,459
-
-
-
-
14,459
-
-
-
-
-
12,960
-
-
-
-
-
12,960
-
-
-
223,453
12,960
14,459
188,912
307,143
622,689
87,657
1,233,820
1,023,071
5,036,193
113,907
223,453
223,453
6,396,624
-
-
188,912
307,143
622,689
87,657
1,206,401
1,023,071
5,036,193
113,907
-
6,173,171
353
(*) The long-term portion of Financial assets under IFRIC 12 is included within the line Contracted concessional, PP&E and other
intangible assets (Note 6).
(**) The percentage of Corporate and Project debt at fixed interest or hedged is 96% and 92% respectively as of December 31, 2022 (99%
and 92% respectively as of December 31, 2021).
Other financial assets as of December 31, 2022 and as of December 31, 2021 include among others,
a loan to Monterrey (Note 7) and restricted cash for repairs or scheduled major maintenance work.
Investment in Ten West Link is a 12.5% interest in a 114-mile transmission line in the U.S., currently
under construction.
9. Derivative Financial Instruments
The breakdown of the fair value amounts of the derivative financial instruments as of December 31,
2022 and 2021 are as follows:
Interest rate cash flow hedge
Foreign exchange derivatives instruments
Notes conversion option (Note 14)
Total
Balance as of 12.31.22
Balance as of 12.31.21
Assets
$’000
Liabilities
$’000
Assets
$’000
Liabilities
$’000
94,192
3,189
-
97,381
12,159
-
4,688
16,847
9,550
3,410
-
12,960
206,763
-
16,690
223,453
The derivatives are primarily interest rate cash-flow hedges. All are classified as non-current assets
or non-current liabilities, as they hedge long-term financing agreements.
As stated in Note 3 to these consolidated financial statements, the general policy is to hedge
variable interest rates of financing agreements using two types of hedging derivatives:
-
Interest rate swaps under which the Company receives the floating leg and pays the
fixed leg; and
- Purchased call options (cap), in exchange of a premium to fix the maximum interest rate
cost.
The notional amounts hedged, strikes contracted and maturities, depending on the characteristics
of the debt on which the interest rate risk is being hedged, can be diverse. As of December 31, 2022,
approximately 92% of the Project debt and close to 96% of the Corporate debt of the Company
either has fixed interest rates or has been hedged with swaps or caps (92% and 99%, respectively,
as of December 31,2021)
The table below shows a breakdown of the maturities of notional amounts of interest rate cash flow
hedge derivatives designated as cash flow hedges as of December 31, 2022 and 2021.
354
Notionals
Up to 1 year
Between 1 and 2 years
Between 2 and 3 years
Subsequent years
Balance as of 12.31.22
$’000
Balance as of 12.31.21
$’000
Assets
Liabilities
Assets
Liabilities
245,147
310,393
217,498
659,186
47,029
102,476
112,855
280,016
71,386
304,930
262,973
217,989
120,874
249,785
276,111
852,696
Total
1,432,224
542,376
857,278
1,499,466
The table below shows a breakdown of the maturity of the fair values of interest rate cash flow
hedge derivative as of December 31, 2022 and 2021.
Fair value
Up to 1 year
Between 1 and 2 years
Between 2 and 3 years
Subsequent years
Total
Balance as of 12.31.22
$’000
Balance as of 12.31.21
$’000
Assets
Liabilities
Assets
Liabilities
10,868
17,860
12,257
53,208
(991)
(2,189)
(2,851)
(6,128)
678
1,810
2,268
4,794
(15,039)
(33,670)
(39,834)
(118,220)
94,192
(12,159)
9,550
(206,763)
The net amount of the fair value of interest rate derivatives designated as cash flow hedges
transferred to the consolidated income statement in 2022 is a loss of $38,187 thousand (loss of
$58,292 thousand in 2021).
The after-tax result accumulated in equity in connection with derivatives designated as cash flow
hedges at the years ended December 31, 2022 and 2021, amount to a $345,567 thousand gain and
a $171,272 thousand gain respectively.
Additionally, the Company has currency options with leading international financial institutions,
which guarantee minimum Euro-U.S. dollar exchange rates. The strategy of the Company is to
hedge the exchange rate for the net distributions from its European assets after deducting euro-
denominated interest payments and euro-denominated general and administrative expenses.
Through currency options, the strategy of the Company is to hedge 100% of its euro-denominated
net exposure for the next 12 months and 75% of its euro denominated net exposure for the
following 12 months, on a rolling basis. Change in fair value of these foreign exchange derivatives
instruments are directly recorded in the consolidated income statement.
Finally, the conversion option of the Green Exchangeable Notes issued in July 2020 (Note 14) is
recorded as a derivative with a fair value (liability) of $5 million as of December 31, 2022 ($17 million
as of December 31, 2021).
10. Related Party Transactions
The related parties of the Company are primarily Algonquin and its subsidiaries, non-controlling
interests (Note 13), entities accounted for under the equity method (Note 7) as well as the Directors
and the Senior Management of the Company.
355
Details of balances with related parties as of December 31, 2022 and 2021 are as follows:
Investments carried under the
equity method:
Arroyo Netherland II B.V
Amherst Island Partnership
Other
Non controlling interest:
Algonquin
JGC Corporation
Industrial Development
Corporation of South Africa and
Community Trust
Other
Total
As of
December 31,
Receivables
(current)
Receivables
(non-
current)
Payables
(current)
Payables
(non-
current)
$000
1,097
10,000
-
6,279
127
-
-
198
-
2,910
-
-
-
-
$000
17,006
15,768
-
-
-
-
-
-
-
-
-
-
-
-
1,224
19,837
17,006
15,768
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
$000
$000
-
-
-
-
-
-
4,762
6,144
-
-
-
3,309
21
41
4,783
9,494
-
-
-
-
-
-
-
-
6,088
-
-
-
-
5
6,088
5
Receivables with Arroyo Netherland II B.V, the holding company of Pemcorp SAPI de CV,
Monterrey´s project entity (Note 7), correspond to the short and long term portion of the loan that
was granted at acquisition date of the project and accrues an interest of Libor plus 6.31%.
As of December 2021, Current receivable included a dividend to be collected from Amherst Island
Partnership and a credit from Solacor 1 and 2 to JGC Corporation that was cancelled in 2022.
Current payables primarily include the dividend to be paid by AYES Canada to Algonquin. The
Current payable as of December 2021 with Industrial Development Corporation of South Africa and
Community Trust corresponded to the residual amount of the loan granted by the non-controlling
interests to Kaxu during the construction period which has been repaid during 2022.
Non-current payables with JGC Corporation as of December 2022 include a subordinated debt with
Solacor 1 and Solacor 2 that accrues an interest of Euribor plus 2.5% and with maturity date in
2037.
The transactions carried out by entities included in these Consolidated Financial Statements with
356
related parties for the years ended December 31, 2022 and 2021 have been as follows:
Investments carried under the equity method:
Arroyo Netherland II B.V
Non controlling interests:
Other
Total
Financial
income
Financial
expense
$000
$000
2022
2021
2022
2021
2022
2021
1,275
2,061
23
8
1,298
2,069
-
-
(65)
(97)
(65)
(97)
The total amount of the remuneration received by the Board of Directors of the Company, including
the CEO, amounts to $5.7 million in 2022 ($4.6 million in 2021), including $0.9 million of annual
bonus ($1.0 million in 2021) and $3.0 million of long-term award vested in 2022 ($1.9 million in
2021). The increase of the total remuneration in 2022 is mainly due to the increase of the long-term
award, as a result of the vesting in 2022 of a portion of the share options awarded from 2019 to
2022 and the increase of Atlantica’s share price from the date of such awards being granted. None
of the directors received any pension remuneration in 2022 nor 2021.
11. Trade and Other Receivables
Trade and other receivables as of December 31, 2022 and 2021, consist of the following:
Trade receivables
Tax receivables
Prepayments
Other accounts receivable
Total
Balance as of December
31, 2022
$’000
Balance as of December
31, 2021
$’000
125,437
45,680
11,827
17,390
200,334
227,343
59,350
9,342
11,108
307,143
The decrease in trade receivables is primarily due to payments received from the Spanish state-
owned regulator, Comision Nacional de los Mercados y de la Competencia or “CNMC”, in the solar
assets of the Company in Spain and from Pemex in ACT. In Spain, the assets of the Company have
collected revenue in 2022 in line with the parameters corresponding to the regulation in place at
the beginning of the year, as the new parameters became final on December 14, 2022, while revenue
was recorded in accordance with these new parameters (Note 1). The amounts collected “in excess”
in 2022 have started to be regularized in 2023.
357
As of December 31, 2022, and 2021, the fair value of trade and other accounts receivable does not
differ significantly from its carrying value.
Trade receivables in foreign currency as of December 31, 2022 and 2021, are as follows:
Euro
South African Rand
Chilean Peso
Other
Total
Balance as of
December 31, 2022
$’000
Balance as of December
31, 2021
$’000
4,088
23,416
5,037
3,974
36,515
65,854
24,513
3,386
9,944
103,697
The decrease in trade receivables in Euro as of December 31, 2022 is primarily due to the
improvement in the collection of receivables from the CNMC.
12. Cash and Cash Equivalents
The following table shows the detail of Cash and cash equivalents as of December 31, 2022 and
2021:
Cash at bank and on hand - non-restricted
Cash at bank and on hand - restricted
2022
$’000
393,430
207,560
2021
$’000
368,381
254,308
Total
600,990
622,689
Cash includes funds held to satisfy the customary requirements of certain non-recourse debt
agreements within the Company´s projects (Note 15) amounting to $208 million as of December
31, 2022 ($254 million as of December 31, 2021).
The following breakdown shows the main currencies in which cash and cash equivalent balances are
denominated:
358
US Dollar
Euro
South African Rand
Mexican Peso
Algerian Dinar
Others
2022
$’000
2021
$’000
309,756
217,675
36,137
4,010
24,727
8,685
318,071
230,136
38,268
4,926
21,156
10,132
600,990
622,689
13. Equity
As of December 31, 2022, the share capital of the Company amounts to $11,605,513 ($11,240,297
as of December 31, 2021) represented by 116,055,126 ordinary shares (112,402,973 shares as of
December 31, 2021) fully subscribed and disbursed with a nominal value of $0.10 each, all in the
same class and series. Each share grants one voting right.
Algonquin owns 42.2% of the shares of the Company and is its largest shareholder as of December
31, 2022. Algonquin’s voting rights and rights to appoint directors are limited to 41.5% and the
difference between Algonquin´s ownership and 41.5% will vote replicating non-Algonquin’s
shareholders’ vote.
On December 11, 2020, the Company closed an underwritten public offering of 5,069,200 ordinary
shares, including 661,200 ordinary shares sold pursuant to the full exercise of the underwriters’
over-allotment option, at a price of $33 per new share. Gross proceeds were approximately $167
million. Given that the offering was issued through a subsidiary in Jersey, which became wholly
owned by the Company at closing, and subsequently liquidated, the premium on issuance was
credited to a merger reserve account (Capital reserves), net of issuance costs, for $161 million.
Additionally, Algonquin committed to purchase 4,020,860 ordinary shares in a private placement
in order to maintain its previous equity ownership of 44.2% in the Company. The private placement
closed on January 7, 2021. Gross proceeds were approximately $133 million ($131 million net of
issuance costs).
During the first quarter of 2021, the Company changed the accounting treatment applied to its
existing long-term incentive plans granted to employees from cash-settled to equity-settled in
accordance with IFRS 2, Share-based Payment, as a result of incentives being settled in shares. The
liability recognized for the rights vested by the employees under such plans at the date of this
change, was reclassified to equity within the line “Accumulated deficit” for approximately $9 million.
The settlement in shares was approved by the Board of Directors on February 26, 2021, and the
Company issued 141,482 new shares to its employees up to December 31, 2021, to settle a portion
of these plans. During the year 2022, the Company issued 228,560 new shares under such incentive
plans.
359
On August 3, 2021, the Company established an “at-the-market program” and entered into a
distribution agreement with J.P. Morgan Securities LLC, as sales agent, under which the Company
may offer and sell from time to time up to $150 million of its ordinary shares. The Company also
entered into an agreement with Algonquin pursuant to which the Company has offered Algonquin
the right but not the obligation, on a quarterly basis, to purchase a number of ordinary shares to
maintain its percentage interest in Atlantica at the average price of the shares sold under the
distribution agreement in the previous quarter (the “ATM Plan Letter Agreement”). On February 28,
2022, the Company established a new “at-the-market program” and entered into a distribution
agreement with BofA Securities, MUFG and RBC Capital Markets, as its sales agents, under which
the Company may offer and sell from time to time up to $150 million of its ordinary shares. Upon
entry into the distribution agreement, the Company terminated its prior “at-the-market program”
established on August 3, 2021 and the related distribution agreement dated such date, entered
into with J.P. Morgan Securities LLC. During the year 2022, the Company sold 3,423,593 shares
(1,613,079 shares during the year 2021) at an average market price of $33.57 ($38.43 in 2021)
pursuant to its distribution agreement, representing net proceeds of $114 million ($61 million in
2021). Pursuant to the ATM Plan Letter Agreement, the Company delivers a notice to Algonquin
quarterly in order for them to exercise their rights thereunder.
Atlantica´s reserves as of December 31, 2022 are made up of share premium account and capital
reserves. The share premium account reduction by $200 million during the year 2021, increasing
capital reserves by the same amount, was made effective upon the confirmation received from the
High Court in the UK, pursuant to the Companies Act 2006.
Other reserves primarily include the change in fair value of cash flow hedges and its tax effect.
Accumulated currency translation differences primarily include the result of translating the financial
statements of subsidiaries prepared in a foreign currency into the presentation currency of the
Company, the U.S. dollar.
Accumulated deficit primarily includes results attributable to Atlantica.
Non-controlling interests fully relate to interests held by JGC in Solacor 1 and Solacor 2, by Idae in
Seville PV, by Itochu Corporation in Solaben 2 and Solaben 3, by Algerian Energy Company, SPA
and Sacyr Agua S.L. in Skikda, by Algerian Energy Company, SPA in Tenes, by Industrial
Development Corporation of South Africa (IDC) and Kaxu Community Trust in Kaxu, by Algonquin
Power Co. in AYES Canada, and by partners of the Company in the Chilean renewable energy
platform in Chile PV 1, Chile PV 2 and Chile PV 3.
Dividends declared during the year 2022 by the Board of Directors of the Company were as follows:
Declared
Payable
Amount ($) per share
February 28, 2023
November 8, 2022
August 2, 2022
May 5, 2022
February 25, 2022
March 25, 2023
December 15, 2022
September 15, 2022
June 15, 2022
March 25, 2022
0.445
0.445
0.445
0.44
0.44
360
Dividends declared during the year 2021 by the Board of Directors of the Company were as
follows:
Declared
Payable
Amount ($) per share
November 9, 2021
July 30, 2021
May 4, 2021
February 26, 2021
December 15, 2021
September 15, 2021
June 15, 2021
March 22, 2021
0.435
0.43
0.43
0.42
In addition, the Company declared dividends and distributions to non-controlling interests,
primarily to Algonquin (interests in Amherst through AYES Canada, see Note 7) for $20.4 million in
2022 ($17.3 million in 2021), JGC for $10.4 million in 2022 ($0.5 million in 2021), Algerian Energy
Company for $5.4 million in 2022 ($6.6 million in 2021), IDC and Kaxu Community Trust for $5.8
million in 2022 (nill in 2021) and Itochu for $3.5 million in 2022 ($5.7 million in 2021).
As of December 31, 2022 and December 31, 2021, there was no treasury stock and there have been
no transactions with treasury stock during the years then ended.
14. Corporate Debt
The breakdown of the corporate debt as of December 31, 2022 and 2021 is as follows:
Non-current
Current
Total Non-current
Balance as of
December 31, 2022
$’000
Balance as of
December 31, 2021
$’000
1,000,503
16,697
1,017,200
995,190
27,881
1,023,071
On July 20, 2017, the Company signed a credit facility (the “2017 Credit Facility”) for up to €10 million
($10.7 million), which is available in euros or U.S. dollars. Amounts drawn down accrue interest at a
rate per year equal to EURIBOR plus 2% or LIBOR plus 2%, depending on the currency, with a floor
of 0% on the LIBOR and EURIBOR. As of December 31, 2022, $6.4 million has been drawn down
($8.2 million as of December 31, 2021). As of December 31, 2021, the credit facility maturity was July
1, 2023. On July 1, 2022, the maturity has been extended to July 1, 2024.
On May 10, 2018, the Company entered into the Revolving Credit Facility for $215 million with a
syndicate of banks. Amounts drawn down accrue interest at a rate per year equal to (A) for
Eurodollar rate loans, Term SOFR, plus a Term SOFR Adjustment equal to 0.10% per annum, plus a
percentage determined by reference to the leverage ratio of the Company, ranging between 1.60%
and 2.25% and (B) for base rate loans, the highest of (i) the rate per annum equal to the weighted
average of the rates on overnight U.S. Federal funds transactions with members of the U.S. Federal
Reserve System arranged by U.S. Federal funds brokers on such day plus ½ of 1.00%, (ii) the U.S.
prime rate and (iii) Term SOFR plus 1.00%, in any case, plus a percentage determined by reference
to the leverage ratio of the Company, ranging between 0.60% and 1.00%. Letters of credit may be
issued using up to $100 million of the Revolving Credit Facility. During 2019, the amount of the
Revolving Credit Facility increased from $215 million to $425 million. In the first quarter of 2021, the
361
Company increased the amount of the Revolving Credit Facility from $425 million to $450 million.
On May 5, 2022, the maturity was extended to December 31, 2024. On December 31, 2022, $30
million were drawn down (nill as of December 31, 2021). On December 31, 2022, the Company
issued letters of credit for $35 million ($10 million as of December 31, 2021). As of December 31,
2022, therefore, $385 million of the Revolving Credit Facility were available ($440 million as of
December 31, 2021).
On April 30, 2019, the Company entered into the Note Issuance Facility 2019, a senior unsecured
note facility with a group of funds managed by Westbourne Capital as purchasers of the notes
issued thereunder for a total amount of €268 million ($287 million), with maturity date on April 30,
2025. Interest accrued at a rate per annum equaled to the sum of 3-month EURIBOR plus 4.50%.
The interest rate on the Note Issuance Facility 2019 was fully hedged by an interest rate swap
resulting in the Company paying a net fixed interest rate of 4.24%. The Note Issuance Facility 2019
was fully repaid on June 4, 2021, and subsequently delisted from the Official List of The International
Stock Exchange.
On October 8, 2019, the Company filed a euro commercial paper program (the “Commercial Paper”)
with the Alternative Fixed Income Market (MARF) in Spain. The program had an original maturity of
twelve months and has been extended for annual periods until October 2023. The program allows
Atlantica to issue short term notes over the next twelve months for up to €50 million ($54 million),
with such notes having a tenor of up to two years. As of December 31, 2022, the Company had €9.3
million ($9.9 million) issued and outstanding under the program at an average cost of 2.21% (€21.5
million, or $24.4 million, as of December 31, 2021).
On April 1, 2020, the Company closed the secured 2020 Green Private Placement for €290 million
($310 million). The private placement accrues interest at an annual 1.96% interest rate, payable
quarterly and has a June 2026 maturity.
On July 8, 2020, the Company entered into the Note Issuance Facility 2020, a senior unsecured
financing with a group of funds managed by Westbourne Capital as purchasers of the notes issued
thereunder for a total amount of $150 million which is denominated in euros (€140 million). The
Note Issuance Facility 2020 was issued on August 12, 2020, interest accrues at a rate per annum
equal to the sum of the 3-month EURIBOR plus a margin of 5.25% with a floor of 0% for the
EURIBOR, payable quarterly and has a maturity of seven years from the closing date. The Company
have entered into a cap at 0% for the EURIBOR with 3.5 years maturity to hedge the variable interest
rate risk.
On July 17, 2020, ASI Jersey Ltd, a subsidiary of the Company, issued the Green Exchangeable Notes
for $100 million in aggregate principal amount of 4.00% convertible bonds due in 2025. On July 29,
2020, the Company closed an additional $15 million aggregate principal amount of the Green
Exchangeable Notes. The notes mature on July 15, 2025 and bear interest at a rate of 4.00% per
annum. The initial exchange rate of the notes is 29.1070 ordinary shares per $1,000 principal amount
of notes, which is equivalent to an initial exchange price of $34.36 per ordinary share. Noteholders
may exchange their notes at their option at any time prior to the close of business on the scheduled
trading day immediately preceding April 15, 2025, only during certain periods and upon satisfaction
of certain conditions. On or after April 15, 2025, noteholders may exchange their notes at any time.
362
Upon exchange, the notes may be settled, at the election of the Company, into Atlantica ordinary
shares, cash or a combination thereof. The exchange rate is subject to adjustment upon the
occurrence of certain events.
As per IAS 32, “Financial Instruments: Presentation”, the conversion option of the Green
Exchangeable Notes is an embedded derivative classified within the line “Derivative liabilities” of
these Consolidated Financial Statements (Note 9). It was initially valued at the transaction date for
$10 million, and prospective changes to its fair value are accounted for directly through the profit
and loss statement. The principal element of the Green Exchangeable Notes, classified within the
line “Corporate debt” of these Consolidated Financial Statements, is initially valued as the difference
between the consideration received from the holders of the instrument and the value of the
embedded derivative, and thereafter, at amortized cost using the effective interest method as per
IFRS 9, Financial Instruments.
On December 4, 2020, the Company entered into a loan with a bank for €5 million ($5.4 million).
This loan accrues interest at a rate per year equal to 2.50%. The maturity date is December 4, 2025.
On May 18, 2021, the Company issued the Green Senior Notes due in 2028 in an aggregate principal
amount of $400 million. The notes mature on May 15, 2028 and bear interest at a rate of 4.125%
per annum payable on June 15 and December 15 of each year, commencing December 15, 2021.
On January 31, 2022, the Company entered into a loan with a bank for €5 million ($5.4 million). This
loan accrues interest at a rate per year equal to 1.90%. The maturity date is January 31, 2026.
The repayment schedule for the Corporate debt at the end of 2022 is as follows:
2023
2024
2025
2026
2027
2017 Credit Facility
Revolving Credit Facility
Commercial paper
2020 Green Private Placement
2020 Note Issuance Facility
Green Exchangeable Notes
Green Senior Note
Other bank loans
Total
8
112
9,937
423
-
2,107
964
3,146
16,697
6,423
29,387
-
-
-
-
-
3,122
38,932
-
-
-
-
-
107,055
-
3,124
110,179
-
-
-
308,389
-
-
-
686
309,075
Subsequent
years
-
-
-
-
-
-
395,060
-
-
-
-
-
147,257
-
-
-
147,257
395,060
The repayment schedule for the Corporate debt at the end of 2021 was as follows:
2022
2023
2024
2025
2026
Subsequent
years
2017 Credit Facility
Commercial paper
2020 Green Private Placement
2020 Note Issuance Facility
Green Exchangeable Notes
Green Senior Note
Other Bank Loans
Total
5
24,422
359
-
2,121
963
11
27,881
8,199
-
-
-
-
-
1,895
10,094
-
-
-
-
-
-
1,895
1,895
-
-
-
-
104,289
-
1,862
106,151
-
-
327,081
-
-
-
-
327,081
-
-
-
155,814
-
394,155
-
549,969
363
Total
6,431
29,499
9,937
308,812
147,257
109,162
396,024
10,078
1,017,200
Total
8,204
24,422
327,440
155,814
106,410
395,118
5,663
1,023,071
The following table details the movement in corporate debt for the years 2022 and 2021, split
between cash and non-cash items:
Corporate Debt
Initial balance
Cash changes
Non-cash changes
Final balance
2022
1,023,071
(17,945)
12,074
1,017,200
2021
993,725
14,754
14,592
1,023,071
The non-cash changes primarily relate to interests accrued and to currency translation differences.
15. Project debt
This note shows the project debt linked to the assets included in Note 6 of these Consolidated
Financial Statements.
Project debt is generally used to finance contracted assets, exclusively using as a guarantee the
assets and cash flows of the company or group of companies carrying out the activities financed. In
most of the cases, the assets and/or contracts are set up as a guarantee to ensure the repayment of
the related financing. In addition, the cash of the Company´s projects includes funds held to satisfy
the customary requirements of certain non-recourse debt agreements and other restricted cash for
an amount of $208 million as of December 31, 2022 ($254 million as of December 31, 2021).
The variations in 2022 of project debt have been the following:
Project debt - long term
$’000
Project debt - short term
$’000
Balance as of December 31, 2021
Increases
Payments
Business Combination (Note 5)
Currency translation differences
Reclassifications
Balance as of December 31, 2022
4,387,674
39,161
(73,478)
1,301
(119,068)
(9,072)
4,226,518
648,519
230,320
(543,484)
148
(18,041)
9,072
326,534
Total
$’000
5,036,193
269,481
(616,962)
1,449
(137,109)
-
4,553,052
The decrease in total project debt as of December 31, 2022 is primarily due to:
-
-
the repayment of project debt for the period in accordance with the financing arrangements;
and
the lower value of debt denominated in Euros given the depreciation of the Euro against the
U.S. dollar since December 31, 2021.
Interest accrued, which are included in Increases, were offset by a similar amount of interest paid
during the year, included in Payments in the table above.
In October 2022, the Company refinanced the project debt of Solacor 1 & 2. The new financing is
a green euro-denominated loan with a syndicate of banks for a total amount of €205.0 million. The
maturity has been extended until 2037.
In December 2022, the Company refinanced the project debt of Solnova 1, 3 & 4. The new financing
agreement is a green euro-denominated loan with a syndicate of banks for a total amount of €338.5
364
million. The new project debt replaced the previous three project loans and maturity was extended
from 2029 and 2030 to June 2035.
As of December 31, 2021, Kaxu total debt was presented as current in the Consolidated Financial
Statements of the Company, for an amount of $314 million, in accordance with International
Accounting Standards 1 (“IAS 1”), “Presentation of Financial Statements”, as a result of the existence
of a theoretical event of default under the Kaxu project finance agreement. Since March 31, 2022,
the Company has again an unconditional right to defer the settlement of the debt for at least more
than twelve months, and therefore the debt previously presented as current in these Consolidated
Financial Statements has been reclassified as non-current in accordance with the financing
agreements (Note 1).
The variations in 2021 of project debt have been the following:
Project debt - long term
$’000
Project debt - short term
$’000
Total
$’000
Balance as of December 31, 2020
Increases
Payments
Business Combination (Note 5)
Currency translation differences
Reclassifications
Balance as of December 31, 2021
4,925,268
54,908
(85,259)
288,352
(140,502)
(655,093)
4,387,674
312,346
256,581
(564,603)
38,781
(49,679)
655,093
648,519
5,237,614
311,489
(649,862)
327,133
(190,181)
-
5,036,193
The decrease in total project debt as of December 31, 2021 were primarily due to:
-
-
the repayment of project debt for the period in accordance with the financing
arrangements; and
the lower value of debt denominated in Euros given the depreciation of the Euro against
the U.S. dollar since December 31, 2020.
The decrease of project debt during the year 2021 was partially offset by the business combinations,
being the acquisitions of Rioglass, Coso, Chile PV 2, Italy PV 1 and Italy PV 3 for a total amount of
$327 million (Note 5).
Interest accrued, which are included in Increases, were offset by a similar amount of interest paid
during the year, included in Payments in the table above.
The Kaxu project financing arrangement contains cross-default provisions related to Abengoa such
that debt defaults by Abengoa, subject to certain threshold amounts and/or a restructuring process,
could trigger a default under the Kaxu project financing arrangement. The insolvency filing by the
individual company Abengoa S.A. in February 2021 represented a theoretical event of default under
the Kaxu project finance agreement. In September 2021, the Company obtained a waiver for such
theoretical event of default and it was extended until April 30, 2022 and was subject to the lenders
receiving certain documentation from the Company. Although the Company did not expect the
acceleration of debt to be declared by the credit entities, as of December 31, 2021 Kaxu did not
have what International Accounting Standards define as an unconditional right to defer the
settlement of the debt for at least twelve months, as the cross-default provisions make that right
conditional. Therefore, Kaxu total debt, previously presented as non-current as of December 31,
365
2020, was presented as current in the Consolidated Financial Statements of the Company as of
December 31, 2021 for an amount of $314 million (Note 1).
The repayment schedule for project debt in accordance with the financing arrangements as of
December 31, 2022, is as follows and is consistent with the projected cash flows of the related
projects:
2023
Interest
Payment
15,053
Nominal
repayment
311,481
2024
2025
2026
2027
Subsequent
years
Total
323,731
442,920
358,444
504,954
2,596,469
4,553,052
The repayment schedule for project debt in accordance with the financing arrangements and
assuming there would be no acceleration at the Kaxu debt as of December 31, 2021, was as follows
and was consistent with the projected cash flows of the related projects:
2022
Interest
Payment
18,017
Nominal
repayment
317,388
2023
2024
2025
2026
Subsequent
years
Total
355,956
369,528
498,712
411,514
3,065,078
5,036,193
The following table details the movement in Project debt for the years 2022 and 2021, split between
cash and non-cash items:
Project Debt
Initial balance
Cash changes
Non-cash changes
Final balance
2022
5,036,193
(636,343)
153,202
4,553,052
2021
5,237,614
(636,831)
435,410
5,036,193
The non-cash changes primarily relate to interest accrued, currency translation differences and the
business combinations for the year.
The equivalent in U.S. dollars of the most significant foreign-currency-denominated project debts
held by the Company is as follows:
Currency
Euro
South African Rand
Algerian Dinar
Total
Balance as of December 31, 2022
$’000
Balance as of December 31, 2021
$’000
1,633,790
277,492
86,739
1,998,021
1,942,903
314,471
97,877
2,355,251
All of the Company’s financing agreements have a carrying amount close to its fair value.
366
16. Grants and Other Liabilities
Balances as of
December 31, 2022
$’000
Balances as of
December 31, 2021
$’000
Grants
Other liabilities and provisions
Dismantling provision
Lease liabilities
Accruals on Spanish market prices
differences
Other
911,593
340,920
140,595
63,076
91,884
45,365
970,557
293,187
124,593
59,219
74,795
34,580
Grant and other non-current liabilities
1,252,513
1,263,744
As of December 31, 2022, the amount recorded in Grants corresponds primarily to the ITC Grant
awarded by the U.S. Department of the Treasury to Solana and Mojave for a total amount of $610
million ($642 million as of December 31, 2021), which was primarily used to fully repay the Solana
and Mojave short-term tranche of the loan with the Federal Financing Bank. The amount recorded
in Grants as a liability is progressively recorded as other income over the useful life of the asset.
The remaining balance of the “Grants” account corresponds to loans with interest rates below
market rates for Solana and Mojave for a total amount of $299 million ($326 million as of December
31, 2021). Loans with the Federal Financing Bank guaranteed by the Department of Energy for these
projects bear interest at a rate below market rates for these types of projects and terms. The
difference between proceeds received from these loans and its fair value, is initially recorded as
“Grants” in the consolidated statement of financial position, and subsequently recorded
progressively in “Other operating income” starting at the entry into operation of the plants.
Total amount of income for these two types of grants for Solana and Mojave is $58.5 million and
$58.7 million for the years ended December 31, 2022 and 2021, respectively (Note 20).
The “Accruals on Spanish market prices differences” corresponds to the payables related to the
current high market prices in Spain at which the solar assets in Spain invoiced electricity up to
December 31, 2022, as a result of a negative adjustment to the regulated revenues for the deviation
from the estimated market prices used by the Administration in Spain, which is expected to be
compensated over the remaining regulatory life of the solar assets of the Company.
The maturity of Other liabilities and provisions as of December 31, 2022 is as follows:
As of December 31, 2022
Total
2023
2024 and 2025 2026 and 2027 Subsequent
Other liabilities and provisions
Total
340,920
340,920
-
-
46,489
46,489
41,428
41,428
years
253,003
253,003
As of December 31, 2021
Total
2022
2023 and
2024
2025 and 2026 Subsequent
years
Other liabilities and provisions
Total
293,187
293,187
-
-
51,490
51,490
33,656
33,656
208,041
208,041
367
17. Trade Payables and Other Current Liabilities
Item
Trade accounts payables
Down payments from clients
Other accounts payables
Total
Balance as of December 31, 2022
$’000
Balance as of December 31, 2021
$’000
84,465
11,169
44,596
140,230
79,052
542
34,313
113,907
Trade accounts payables mainly relate to the operation and maintenance of the plants.
Down payments from clients in 2022 primarily include the collections from the CNMC (Spanish solar
assets), which have been in line with the parameters corresponding to the regulation in place at the
beginning of the year, as the new parameters became final on December 14, 2022, while revenue
was recorded in accordance with the new parameters (Note 1).
Nominal values of Trade payables and other current liabilities are considered to approximately
equal to fair values and the effect of discounting them is not significant.
18. Income Tax
All the companies of Atlantica file income taxes according to the tax regulations in force in each
country on an individual basis or under consolidation tax regulations.
The consolidated income tax has been calculated as an aggregation of income tax expenses/income
of each individual company. In order to calculate the taxable income of the consolidated entities
individually, the accounting result is adjusted for temporary and permanent differences, recording
the corresponding deferred tax assets and liabilities. At each consolidated income statement date,
a current tax asset or liability is recorded, representing income taxes currently refundable or payable.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying
amount of assets and liabilities for financial statement and income tax purposes, as determined
under enacted tax laws and rates.
Income tax payable is the result of applying the applicable tax rate in force to each tax-paying entity,
in accordance with the tax laws in force in the country in which the entity is registered. Additionally,
tax deductions and credits are available to certain entities, primarily relating to inter-company trades
and tax treaties between various countries to prevent double taxation.
The Company offsets deferred tax assets and deferred tax liabilities in each entity where the latter
has a legally enforceable right to set off current tax assets against current tax liabilities, and the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority.
As of December 31, 2022, and 2021, the analysis of deferred tax assets and deferred tax liabilities is
as follows:
368
Deferred tax assets
From
Net operating loss carryforwards (“NOL´s”)
Temporary tax non-deductible expenses
Derivatives financial instruments
Other
Total deferred tax assets
Deferred tax liabilities
From
Accelerated tax amortization
Other difference between tax and book value of assets
Derivatives financial instruments
Other
Balance as of December 31,
$’000
2022
2021
442,415
134,328
3,461
5,895
323,115
128,186
55,217
4,225
586,099
510,743
Balance as of December 31,
$’000
2022
2021
524,363
186,536
19,034
2,991
465,219
180,218
-
1,897
Total deferred tax liabilities
732,924
647,334
After offsetting deferred tax assets and deferred tax liabilities, where applicable, the resulting net
amounts presented on the consolidated balance sheet are as follows:
Consolidated balance sheets
classifications
Deferred tax assets
Deferred tax liabilities
Net deferred tax liabilities
Balance as of December 31,
$’000
2022
2021
149,656
296,481
146,825
172,268
308,859
136,591
Most of the NOL´s recognized as deferred tax assets corresponds to the entities in the U.S., South
Africa, Peru, Chile and Spain as of December 31, 2022 and 2021.
As of December 31, 2022, deferred tax assets for non-deductible expenses are primarily due to the
temporary limitation of financial expenses deductibles for tax purposes in the solar plants in Spain
for $94 million ($97 million as of December 31, 2021).
As of December 31, 2022, deferred tax liabilities for accelerated tax amortization are primarily in
the U.S. assets for $274, the solar plants in Spain for $173 million and Kaxu for $63 million ($184
million, $186 million and $76 million as of December 31, 2021, respectively).
Deferred tax liabilities for other temporary differences between the tax and book value of
contracted concessional assets relate primarily to ACT for $56 million, the U.S. entities for $51
million, the Peruvian entities for $37 million and the Chilean entities for $27 million as of December
31, 2022 ($72 million, $28 million, $34 million and $27 million as of December 31, 2021,
respectively).
In relation to tax losses carryforwards and deductions pending to be used recorded as deferred tax
assets, the entities evaluate their recoverability projecting forecasted taxable result for the
369
upcoming years and taking into account their tax planning strategy. Deferred tax liabilities reversals
are also considered in these projections, as well as any limitation established by tax regulations in
force in each tax jurisdiction. Therefore, the carrying amount of deferred tax assets is reviewed at
each annual closing date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each annual closing date and are recognised
to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered. In assessing the recoverability of deferred tax assets, Atlantica relies on
projections of results over the useful life of the contracted concessional assets.
In addition, the Company has $361 million unrecognized net operating loss carryforwards as of
December 31, 2022 ($346 million as of December 31, 2021), as it considers it is not probable that
future taxable profits will be available against which these unused tax losses can be utilized.
The movements in deferred tax assets and liabilities during the years ended December 31, 2022
and 2021 were as follows:
Deferred tax assets
As of December 31, 2020
Increase/(decrease) through the consolidated income statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Business combinations (Note 5)
Currency translation differences and other
As of December 31, 2021
Increase/(decrease) through the consolidated income statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Currency translation differences and other
As of December 31, 2022
Deferred tax liabilities
As of December 31, 2020
Increase/(decrease) through the consolidated income statement
Business combinations (Note 5)
Currency translation differences and other
As of December 31, 2021
Increase/(decrease) through the consolidated income statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Currency translation differences and other
As of December 31, 2022
Details of income tax for the years ended December 31, 2022 and 2021 are as follows:
Amount
152,290
46,855
(23,712)
4,410
(7,575)
172,268
29,197
(46,344)
(5,465)
149,656
Amount
260,923
32,059
4,910
10,967
308,859
(19,864)
17,608
(10,122)
296,481
370
Current tax
Deferred tax
-
relating to the origination and reversal of temporary
differences
Total income tax (expense)/income
Year ended 2022
$’000
Year ended 2021
$’000
(39,372)
49,061
)
)
(51,016)
14,796
49,061
9,689
14,796
(36,220)
The reconciliations between the theoretical income tax resulting from applying an average statutory
tax rate to profit before income tax and the actual income tax expense recognized in the
consolidated income statements for the years ended December 31, 2022 and 2021, are as follows:
Consolidated profit/(loss) before taxes
Average statutory tax rate
Corporate income tax at average statutory tax rate
Income tax of associates, net
Differences in statutory tax rates
Unrecognized NOLs and deferred tax assets
Other permanent differences
Other non-taxable income/(expense)
Year ended 2022
$’000
Year ended 2021
$’000
(11,776)
25%
2,944
5,366
(4,296)
(10,944)
3,957
12,662
25,302
25%
(6,326)
3,076
(3,359)
(11,232)
(4,052)
(14,327)
Corporate income tax
9,689
(36,220)
For the year ended December 31, 2021, the overall effective tax rate was different than the average
statutory rate of 25% primarily due to unrecognized tax losses carryforwards, mainly in the UK
entities and to provisions recorded for potential tax contingencies in some jurisdictions.
Uncertain tax positions as of December 31, 2022 and 2021 has been analysed by the Company in
accordance with IFRIC 23 (uncertainty over income tax treatments). As a result of this analysis, the
Company concluded that the risk of the uncertainties is remote and accordingly, the expectation is
that these uncertainties would have an insignificant effect on the Consolidated Financial
Statements.
19. Commitments, third-party guarantees, contingent assets and liabilities
Contractual obligations
The following table shows the breakdown of the third-party commitments and contractual
obligations as of December 31, 2022 and 2021:
371
2022
$’000
Total
2023
2024 and
2025
2026 and
2027
Subsequent
Corporate debt (Note 14)
Loans with credit institutions (project
debt) (Note 15)
Notes and bonds (project debt)
(Note 15)
Purchase commitments (*)
Accrued interest estimate during the
useful life of loans
1,017,200 1
16,697
3,595,671 273,556
149,111
666,875
456,332
755,269
395,060
1,899,972
957,381
52,978
99,776
108,129
696,497
823,856
96,847
1,821,915 264,626
154,344
477,936
107,909
383,347
464,755
696,006
2021
$’000
Total
2022
2023 and
2024
2025 and
2026
Subsequent
Corporate debt (Note 14)
Loans with credit institutions (project
debt) (Note 15)
Notes and bonds (project debt)
(Note 15)
Purchase commitments (*)
Accrued interest estimate during the
useful life of loans
1,023,071
27,881
4,010,825 289,755
11,989
624,633
433,232
549,969
801,713 2,294,724
1,025,368
45,650
100,850
108,512
770,355
1,570,831
79,261
2,029,376 267,645
191,171
497,587
159,297 1,141,102
836,985
427,159
* Purchase commitments include lease commitments for lease arrangements accounted for under IFRS 16 for $112.0
million as of December 31, 2022 ($107.6 million as of December 31, 2021), of which $7.9 million is due within one year
and $104.1 million thereafter as of December 31, 2022 ($7.3 million due within one year and $100.3 million thereafter as
of December 31, 2021).
Third-party guarantees
As of December 31, 2022, the sum of bank guarantees and surety bonds deposited by the
subsidiaries of the Company as a guarantee to third parties (clients, financial entities and other
third parties) amounted to $88.0 million ($92.7 million as of December 31, 2021). In addition,
Atlantica Sustainable Infrastructure plc or other holding entities on its behalf, had outstanding
guarantees amounting to $216.9 million as of December 31, 2022 ($174.2 million as of December
31, 2021), which correspond mainly to guarantees provided to off-takers in PPAs, guarantees for
debt service reserve accounts and guarantees for points of access for renewable energy projects.
Corporate debt guarantees
The payment obligations under the Green Senior Notes, the Revolving Credit Facility, the Note
Issuance Facility 2020 and the 2020 Green Private Placement are guaranteed on a senior unsecured
basis by following subsidiaries of the Company: Atlantica Infraestructura Sostenible, S.L.U., Atlantica
Peru, S.A., ACT Holding, S.A. de C.V., Atlantica Investments Limited, Atlantica Newco Limited and
Atlantica North America LLC. The Revolving Credit Facility and the 2020 Green Private Placement
are also secured with a pledge over the shares of the subsidiary guarantors.
372
Legal Proceedings
In 2018, an insurance company covering certain Abengoa obligations in Mexico claimed certain
amounts related to a potential loss. Atlantica reached an agreement under which Atlantica´s
maximum theoretical exposure would in any case be limited to approximately $35 million, including
$2.5 million to be held in an escrow account. In January 2019, the insurance company called on this
$2.5 million from the escrow account and Abengoa reimbursed this amount. The insurance
company could claim additional amounts if they faced new losses after following a process agreed
between the parties and, in any case, Atlantica would only make payments if and when the actual
loss has been confirmed and after arbitration if the Company initiates it. The Company used to
have indemnities from Abengoa for certain potential losses, but such indemnities are no longer
valid following the insolvency filing by Abengoa S.A. in February 2021.
In addition, during 2021 and 2022, several lawsuits were filed related to the February 2021 winter
storm in Texas against among others Electric Reliability Council of Texas (ERCOT), two utilities in
Texas and more than 230 individual power generators, including Post Oak Wind, LLC, the project
company owner of Lone Star I, one of the wind assets in Vento II where the Company currently has
a 49% equity interest. The basis for the lawsuit is that the defendants failed to properly prepare for
cold weather, including failure to implement measures and equipment to protect against cold
weather, and failed to properly conduct their operations before and during the storm.
Atlantica is not a party to any other significant legal proceedings other than legal proceedings
arising in the ordinary course of its business. Atlantica is party to various administrative and
regulatory proceedings that have arisen in the ordinary course of business.
While Atlantica does not expect these proceedings, either individually or in combination, to have a
material adverse effect on its financial position or results of operations, because of the nature of
these proceedings Atlantica is not able to predict their ultimate outcomes, some of which may be
unfavorable to Atlantica.
20. Other Operating Income and Expenses
The table below shows the detail of Other operating income and expenses for the years ended
December 31, 2022, and 2021:
Other Operating income
Grants
Income from various services and insurance proceeds
Total
For the year ended
December 31, 2022
$’000
For the year ended
December 31, 2021
$’000
59,056
21,726
80,782
60,746
13,925
74,670
373
Other Operating Expenses
Raw materials and consumables used
Leases and fees
Operation and maintenance
Independent professional services
Supplies
Insurance
Levies and duties
Other expenses
For the year ended
December 31, 2022
$’000
For the year ended
December 31, 2021
$’000
(19,639)
(11,512)
(140,382)
(38,894)
(59,336)
(45,756)
(19,764)
(15,965)
(70,690)
(9,332)
(154,007)
(39,177)
(40,790)
(45,429)
(29,949)
(24,957)
Total
(351,248)
(414,330)
Grants income mainly relate to ITC cash grants and implicit grants recorded for accounting
purposes in relation to the FFB loans with interest rates below market rates in Solana and Mojave
projects (Note 16).
The decrease in other operating expenses in 2022, and specifically Raw materials and consumables
used, is primarily due to a specific non-recurrent solar project of Rioglass which ended in October
2021.
21. Financial Expense, net
The following table sets forth financial income and expenses for the years ended December 31, 2022
and 2021:
Financial income
Interest income from loans and credits
Interest rates benefits derivatives: cash flow hedges
TOTAL
Financial expenses
Interest on loans and notes
Interest rate losses derivatives: cash flow hedges
TOTAL
For the year ended
December 31, 2022
$’000
For the year ended
December 31, 2021
$’000
1,641
3,928
5,569
2,066
689
2,755
For the year ended
December 31, 2022
$’000
For the year ended
December 31, 2021
$’000
(292,043)
(41,220)
(333,263)
(302,558)
(58,712)
(361,270)
374
Interest on loans and notes primarily include interest on corporate and project debt, which
decrease in 2022 and 2021 compared to the previous year, primarily due to the repayment of project
and corporate debt in accordance with the financing arrangements.
Losses from interest rate derivatives designated as cash flow hedges primarily correspond to
transfers from equity to financial expense when the hedged item impacts the consolidated income
statement. The decrease in 2022 compared to 2021 is due to an increase in the spot interest rates
in 2022 compared to 2021, which implies lower interest payments on the derivatives instruments
contracted.
Net exchange differences
Net exchange differences primarily correspond to realized and unrealized exchange gains and losses
on transactions in foreign currencies as part of the normal course of the business of the Company.
The increase in profit in 2022 is mainly due to the impact of foreign exchange caps instruments
hedging the net cash flows of the Company in Euros, resulting from the appreciation of the U.S.
dollar against the Euro.
Other financial income/(expenses), net
The following table sets out Other financial income/(expenses), net for the years 2022 and 2021:
Other financial income / (expenses), net
Other financial income
Other financial losses
TOTAL
For the year ended
December 31, 2022
$’000
For the year ended
December 31, 2021
$’000
27,938
(21,435)
6,503
32,321
(16,571)
15,750
Other financial income in 2022 include $6.2 million of income for non-monetary change to the fair
value of derivatives of Kaxu for which hedge accounting is not applied, and $12.0 million income
further to the change in the fair value of the conversion option of the Green Exchangeable Notes
since December 2021 (Note 14). Residual items primarily relate to interest on deposits and loans,
including non-monetary changes to the amortized cost of such loans.
Other financial losses primarily include guarantees and letters of credit, other bank fees, non-
monetary changes to the fair value of derivatives which hedge accounting is not applied and of
financial instruments recorded at fair value through profit and loss, and non-monetary changes to
the present value of provision and other long-term liabilities.
22. Earnings Per Share
Basic earnings per share have been calculated by dividing the profit/(loss) attributable to equity
holders of the Company by the average number of outstanding shares.
375
Average number of outstanding diluted shares for the year 2022 has been calculated considering
the potential issuance of 3,347,305 shares (3,347,305 shares as of December 31, 2021) on the
settlement of the Green Exchangeable Notes (Note 14) and the potential issuance of 596,681 shares
(725,041 shares as of December 31, 2021) to Algonquin under the agreement signed on August 3,
2021, according to which Algonquin has the option, on a quarterly basis, to subscribe such number
of shares to maintain its percentage in Atlantica in relation to the use of the ATM program (Note
13).
Item
For the year ended
December 31, 2022
For the year ended
December 31, 2021
Loss from continuing operations attributable to
Atlantica
Average number of ordinary shares outstanding
(thousands) - basic
Average number of ordinary shares outstanding
(thousands) - diluted
Earnings per share for the year (US dollar per
share) - basic
Earnings per share for the year (US dollar per
share) – diluted (*)
(5,443)
114,695
118,501
(0.05)
(0.05)
(30,080)
111,008
114,523
(0.27)
(0.27)
(*) The potential ordinary shares related to the Green Exchangeable Notes and the ATM program have not been
considered in the calculation of diluted earnings per share for the years 2022 and 2021 as they have an antidilutive effect.
23. Auditor’s Remuneration
The analysis of the auditor’s remuneration is as follows:
Fees payable to the Company’s auditor and their associates for the
audit of the company’s annual accounts
Fees payable to the Company’s auditor and their associates for other
services to the Group
–The audit of the Company’s subsidiaries
Total audit fees
- Audit-related services
- Tax services
Total non-audit fees
Year ended
2022
$000
Year ended
2021
$000
611
604
1,032
1,643
422
502
924
2,567
967
1,571
651
633
1,284
2,855
“Audit Fees” are the aggregate fees billed for professional services in connection with the audit of
the Annual Consolidated Financial Statements, quarterly reviews of the Company financial
statements and statutory audits of the subsidiaries’ financial statements under the rules of England
and Wales and the countries in which subsidiaries are organized. The increase in audit fees is mainly
due to inflation increase partially counterbalanced by exchange rates variations.
376
“Audit-Related Services” include fees charged for services that can only be provided by the auditor
of the Company, such as consents and comfort letters of non-recurring transactions, assurance and
related services that are reasonably related to the performance of the audit or review of the
Company financial statements. Fees paid during 2022 and 2021 related to comfort letters and
consents required for capital market transactions of the major shareholder are also included in this
category ($204 thousand and $272 thousand in 2022 and 2021 respectively). These fees were re-
invoiced and paid by this shareholder.
“Tax Services” include mainly fees charged for transfer pricing services and tax compliance services
in the Company US subsidiaries.
The Audit Committee approved all of the services provided by Ernst & Young S.L and by other
member firms of EY.
24. Staff Costs
The average monthly number of employees (including executive directors) was:
Executives
Middle Managers
Engineers and Graduates
Assistants and Professionals
Plant technicians
2022
2021
Number
Number (*)
13
132
234
46
449
874
16
128
177
29
305
655
(*) Average number of employees excluding temporary workers of Rioglass for a specific non-
recurrent solar project, which ended in October 2021.
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Other staff costs
Year ended 2022
$000
Year ended 2021
$000
(67,453)
(7,841)
(4,938)
(67,713)
(7,089)
(3,956)
(80,232)
(78,758)
The increase in employee benefit expenses in 2022 compared to 2021 is primarily due to the
internalization of operation and maintenance services in some of the solar assets of the Company
in Spain since June 2022 and of Kaxu since February 2022.
Total compensation received by the key management of the Company, which includes the CEO,
the CFO and 5 key executives, and by the directors of the board of the Company, amounts to $9.8
million in 2022 ($8.5 million in 2021), including $5.8 million (2021: $3.4 million) of long-term awards
377
received. Furthermore, information about the remuneration of individual directors’ is provided in
the audited part of the Directors' Remuneration Report.
25. Events After the Balance Sheet Date
On February 22, 2023, the Company signed an agreement to terminate the operation and
maintenance services performed by Abengoa to some of its solar assets in Spain. The transfer of
employees from an Abengoa subsidiary to a Company’s subsidiary is expected to be effective on
March 1, 2023.
On February 28, 2022, the Board of Directors of the Company approved a dividend of $0.445 per
share, which is expected to be paid on March 25, 2023.
26. Service Concessional Arrangements
Below is a description of the concessional arrangements of the Company.
Solana
Solana is a 250 MW net (280 MW gross) solar electric generation facility located in Maricopa County,
Arizona, approximately 70 miles southwest of Phoenix. Arizona Solar One LLC, or Arizona Solar,
owns the Solana project. Solana includes a 22-mile 230kV transmission line and a molten salt
thermal energy storage system. Solana reached COD on October 9, 2013.
Solana has a 30-year, PPA with Arizona Public Service, or APS, approved by the Arizona Corporation
Commission (ACC). The PPA provides for the sale of electricity at a fixed price per MWh with annual
increases of 1.84% per year. The PPA includes limitations on the amount and condition of the energy
that is received by APS with minimum and maximum thresholds for delivery capacity that must not
be breached.
Mojave
Mojave is a 250 MW net (280 MW gross) solar electric generation facility located in San Bernardino
County, California, approximately 100 miles northeast of Los Angeles. Mojave reached COD on
December 1, 2014.
Mojave has a 25-year, PPA with Pacific Gas & Electric Company, or PG&E, approved by the California
Public Utilities Commission (CPUC). The PPA provides for the sale of electricity at a fixed base price
per MWh without any indexation mechanism, including limitations on the amount and condition of
the energy that is received by PG&E with minimum and maximum thresholds for delivery capacity
that must not be breached.
Palmatir
Palmatir is an on-shore wind farm facility in Uruguay with nominal installed capacity of 50 MW.
Palmatir has 25 wind turbines and each turbine has a nominal capacity of 2 MW. UTE, Uruguay’s
state-owned electricity company, has agreed to purchase all energy produced by Palmatir pursuant
to a 20-year PPA. UTE will pay a fixed-price tariff per MWh under the PPA, which is denominated in
U.S. dollars and will be partially adjusted in January of each year according to a formula based on
inflation.
378
Palmatir reached COD in May 2014.
Cadonal
Cadonal is an on-shore wind farm facility in Uruguay with nominal installed capacity of 50 MW.
Cadonal has 25 wind turbines and each turbine has a nominal capacity of 2 MW. UTE, Uruguay´s
state-owned electricity company, has agreed to purchase all energy produced by Cadonal pursuant
to a 20-year PPA.
Cadonal reached COD in December 2014.
Melowind
Melowind is an on-shore wind farm facility wholly owned by the Company, located in Uruguay with
a capacity of 50 MW. Melowind has 20 wind turbines of 2.5 MW each. The asset reached COD in
November 2015.
Melowind signed a 20-year PPA with UTE in 2015, for 100% of the electricity produced. UTE pays a
fixed tariff under the PPA, which is denominated in U.S. dollars and is partially adjusted every year
based on a formula referring to U.S. CPI, Uruguay’s CPI and the applicable UYU/U.S. dollar exchange
rate.
Solaben 2 & 3
The Solaben 2 and Solaben 3 are two 50 MW Solar Power facilities. Itochu Corporation holds 30%
of Solaben 2 & Solaben 3.
Renewable energy plants in Spain, like Solaben 2 and Solaben 3, are regulated through a series of
laws and rulings which guarantee the owners of the plants a reasonable return for their investments.
Solaben 2 and Solaben 3 sell the power they produce into the wholesale electricity market, where
supply and demand are matched and the pool price is determined, and also receive additional
payments from the CNMC, the Spanish state-owned regulator.
Solacor 1 & 2
The Solacor 1 and Solacor 2 are two 50 MW Solar Power facilities. JGC Corporation holds 13% of
Solacor 1 & Solacor 2.
Solnova 1, 3&4
The Solnova 1, 3 and 4 solar plants are located in the municipality of Sanlucar la Mayor, Spain. The
plants have 50 MW each and reached COD in 2010.
Helios 1&2
The Helios 1 and 2 solar plants are located in Ciudad Real, Spain. They reached COD in 2012. The
plants have 50 MW each.
Helioenergy 1&2
The Helioenergy 1 and 2 solar plants are located in Ecija, Spain and reached COD in 2011. The plants
have 50 MW each.
379
Solaben 1&6
The Solaben 1&6 are two 50 MW solar plants located in the municipality of Logrosan, Spain. and
reached COD in 2013.
Kaxu
Kaxu Solar One, or Kaxu, is a 100 MW solar project located in Pofadder in the Northern Cape
Province of South Africa. Atlantica., owns 51% of the Kaxu Project while Industrial Development
Corporation of South Africa owns 29% and Kaxu Community Trust 20%.
The project reached COD in February 2015.
Kaxu has a 20-year PPA with Eskom SOC Ltd., or Eskom, under a take or pay contract for the purchase
of electricity up to the contracted capacity from the facility. Eskom purchases all the output of the
Kaxu plant under a fixed price formula in local currency subject to indexation to local inflation. The
PPA expires on February 2035.
ACT
The ACT plant is a gas-fired cogeneration facility with a rated capacity of approximately 300 MW
and between 550 and 800 metric tons per hour of steam. The plant includes a substation and a 115-
kilowatt 52 mile transmission line.
On September 18, 2009, ACT entered into the Pemex Conversion Services Agreement, or the Pemex
CSA, with Pemex. Pemex is a state-owned oil and gas company supervised by the Comision
Reguladora de Energia (CRE), the Mexican state agency that regulates the energy industry. The
Pemex CSA has a term of 20 years from the in-service date and will expire on March 31, 2033.
According to the Pemex CSA, ACT must provide, in exchange for a fixed price with escalation
adjustments, services including the supply and transformation of natural gas and water into thermal
energy and electricity. Part of the electricity is to be supplied directly to a Pemex facility nearby,
allowing the Comision Federal de Electricidad (CFE) to supply less electricity to that facility.
Approximately 90% of the electricity must be injected into the Mexican electricity network to be
used by retail and industrial end customers of CFE in the region. Pemex is then entitled to receive
an equivalent amount of energy in more than 1,000 of their facilities in other parts of the country
from CFE, following an adjustment mechanism under the supervision of CFE.
The Pemex CSA is denominated in U.S. dollars. The price is a fixed tariff and will be adjusted annually,
part of it according to inflation and part according to a mechanism agreed in the contract that, on
average over the life of the contract, reflects expected inflation. The components of the price
structure and yearly adjustment mechanisms were prepared by Pemex and provided to bidders as
part of the request for proposal documents.
ATS
ATS is a 569 miles transmission line located in Peru wholly owned by the Company. ATS is part of
the Guaranteed Transmission System and comprises several sections of transmission lines and
substations. ATS reached COD in 2014.
380
Pursuant to the initial concession agreement, the Ministry of Energy, on behalf of the Peruvian
Government, granted ATS a concession to construct, develop, own, operate and maintain the ATS
Project. The initial concession agreement became effective on July 22, 2010 and will expire 30 years
after COD, which took place in January 2014. ATS is obliged to provide the service of transmission
of electric energy through the operation and maintenance of the electric transmission line,
according to the terms of the contract and the applicable law.
The laws and regulations of Peru establish the key parameters of the concession contract, the price
indexation mechanism, the rights and obligations of the operator and the procedure that have to
be followed in order to fix the applicable tariff, which occurs through a regulated bidding process.
Once the bidding process is complete and the operator is granted the concession, the pricing of the
power transmission service is established in the concession agreement. ATS has a 30-year
concession agreement with fixed-price tariff base denominated in U.S. dollars that is adjusted
annually after COD of each line, in accordance with the U.S. Finished Goods Less Food and Energy
Index published by the U.S. Department of Labor.
ATN
ATN is a 365 miles transmission line located in Peru wholly owned by the Company, which is part of
the Guaranteed Transmission System and comprises several sections of transmission lines and
substations. ATN reached COD in 2011. On December 28, 2018, ATN S.A. completed the acquisition
of a power substation and two small transmission lines to connect its line to the Shahuindo (ATN
expansion 1) mine located nearby. In October 2019, the Company also closed the acquisition of ATN
Expansion 2.
Pursuant to the initial concession agreement, the Ministry of Energy, on behalf of the Peruvian
Government, granted ATN a concession to construct, develop, own, operate and maintain the ATN
Project. The initial concession agreement became effective on May 22, 2008 and will expire 30 years
after COD of the first tranche of the line, which took place in January 2011. ATN is obliged to provide
the service of transmission of electric energy through the operation and maintenance of the electric
transmission line, according to the terms of the contract and the applicable law.
The laws and regulations of Peru establish the key parameters of the concession contract, the price
indexation mechanism, the rights and obligations of the operator and the procedures that have to
be followed in order to fix the applicable tariff, which occurs through a regulated bidding process.
Once the bidding process is complete and the operator is granted the concession, the pricing of the
power transmission service is established in the concession agreement. ATN has a 30-year
concession agreement with a fixed-price tariff base denominated in U.S. dollars that is adjusted
annually after COD of each line, in accordance with the U.S. Finished Goods Less Food and Energy
Index published by the U.S. Department of Labor. In addition, both ATN Expansion 1 and ATN
Expansion 2 have 20-year PPAs denominated in U.S. dollars.
ATN 2
ATN2, is an 81 miles transmission line located in Peru wholly owned by the Company, which is part
of the Complementary Transmission System. ATN2 reached COD in June 2015.
The Client is Las Bambas Mining Company.
381
The ATN2 Project has an 18-year contract period, after that, ATN2 assets will remain as property
of the SPV allowing ATN2 to potentially sign a new contract. The ATN2 Project has a fixed-price
tariff base denominated in U.S. dollars, partially adjusted annually in accordance with the U.S.
Finished Goods Less Food and Energy Index as published by the U.S. Department of Labor. The base
tariff is independent from the effective utilization of the transmission lines and substations related
to the ATN2 Project. The base tariff is intended to provide the ATN2 Project with consistent and
predictable monthly revenues sufficient to cover the ATN2 Project’s operating costs and debt service
and to earn an equity return. Peruvian law requires the existence of a definitive concession
agreement to perform electricity transmission activities where the transmission facilities cross public
land or land owned by third parties. On May 31, 2014, the Ministry of Energy granted the project a
definitive concession agreement to the transmission lines of the ATN2 Project.
Quadra 1 & Quadra 2
Quadra 1 is a 49-miles transmission line project and Quadra 2 is a 32-miles transmission line project,
each connected to the Sierra Gorda substations.
Both projects have concession agreements with Sierra Gorda SCM. The agreements are
denominated in U.S. dollars and are indexed mainly to CPI. The concession agreements each have
a 21-year term that began on COD, which took place in April 2014 and March 2014 for Quadra 1
and Quadra 2, respectively.
Quadra 1 and Quadra 2 belong to the Northern Interconnected System (SING), one of the two
interconnected systems into which the Chilean electricity market is divided and structured for both
technical and regulatory purposes.
in particular:
As part of the SING, Quadra 1 and Quadra 2 and the service they provide are regulated by several
the Superintendent’s office of Electricity and Fuels
regulatory bodies,
(Superintendencia de Electricidad y Combustibles, SEC), the Economic Local Dispatch Center (Centro
de Despacho Economico de Cargas, CDEC), the National Board of Energy (Comision Nacional de
Energia, CNE) and the National Environmental Board (Comision Nacional de Medio Ambiente,
CONAMA) and other environmental regulatory bodies.
In all these concession arrangements, the operator has all the rights necessary to manage, operate
and maintain the assets and the obligation to provide the services defined above, which are clearly
defined in each concession contract and in the applicable regulations in each country.
Skikda
The Skikda project is a water desalination plant located in Skikda, Algeria. AEC owns 49% and Sacyr
Agua S.L. owns indirectly the remaining 16.83% of the Skikda project.
Skikda has a capacity of 3.5 M ft3 per day of desalinated water and is in operation since February
2009. The project serves a population of 0.5 million.
The water purchase agreement is a 25-year take-or-pay contract with Sonatrach / Algerienne des
Eaux (“ ADE”). The tariff structure is based upon plant capacity and water production, covering
variable cost (water cost plus electricity cost). Tariffs are adjusted monthly based on the indexation
382
mechanisms that include local inflation, U.S. inflation and the exchange rate between the U.S. dollar
and local currency.
Honaine
The Honaine project is a water desalination plant located in Taffsout, Algeria. Myah Bahr Honaine
Spa, or MBH, is the vehicle incorporated in Algeria for the purposes of owning the Honaine project.
Algerian Energy Company, SPA, or AEC, owns 49% and Sacyr Agua S.L., a subsidiary of Sacyr, S.A.,
owns indirectly the remaining 25.5% of the Honaine project.
Honaine has a capacity of 7 M ft3 per day of desalinated water and it has been in operation since
July 2012.
The water purchase agreement is a 25-year take-or-pay contract with Sonatrach / Algerienne des
Eaux, or ADE. The tariff structure is based upon plant capacity and water production, covering
variable cost (water cost plus electricity cost). Tariffs are adjusted monthly based on the indexation
mechanisms that include local inflation, U.S. inflation and the exchange rate between the U.S. dollar
and local currency.
Tenes
Tenes is a water desalination plant located in Algeria. Befesa Agua Tenes has a 51.0% stake in Tenes
Lilmiyah SpA. The remaining 49% is owned by AEC.
The water purchase agreement is a 25-year take-or-pay contract with Sonatrach/ADE. The tariff
structure is based upon plant capacity and water production, covering variable cost (water cost
plus electricity cost). Tariffs are adjusted monthly based on the exchange rate between the U.S.
dollar and local currency and yearly based on indexation mechanisms that include local inflation
and U.S. inflation.
383
Assets subject to the application of IFRIC 12 interpretation based on the concession of services
as of December 31, 2022:
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Renewable energy:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
Solana
USA
(O)
100.0
30 Years
APS
(I)
1,887,669
(664,681)
(25,082)
Mojave
USA
(O)
100.0
25 Years
PG&E
(I)
1,573,621
(497,072)
45,193
Palmatir
Uruguay
(O)
100.0
20 Years
Cadonal
Uruguay
(O)
100.0
20 Years
Melowind
Uruguay
(O)
100.0
20 Years
Solaben 2
Spain
(O)
70.0
25 Years
Solaben 3
Spain
(O)
70.0
25 Years
Solacor 1
Spain
(O)
87.0
25 Years
Solacor 2
Spain
(O)
87.0
25 Years
Solnova 1
Spain
(O)
100.0
25 Years
Solnova 3
Spain
(O)
100.0
25 Years
Solnova 4
Spain
(O)
100.0
25 Years
Helios 1
Spain
(O)
100.0
25 Years
Helios 2
Spain
(O)
100.0
25 Years
Helioenergy
1
Helioenergy
2
Spain
(O)
100.0
25 Years
Spain
(O)
100.0
25 Years
Solaben 1
Spain
(O)
100.0
25 Years
Solaben 6
Spain
(O)
100.0
25 Years
UTE,
Uruguay
Administ
ration
UTE,
Uruguay
Administ
ration
UTE,
Uruguay
Administ
ration
Kingdom
of Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
147,937
(63,692)
4,021
122,012
(49,616)
3,680
136,053
(43,988)
3,567
298,791
(97,618)
6,163
297,865
(98,526)
6,319
299,306
(105,031)
5,275
311,671
(108,306)
5,698
301,041
(123,894)
7,509
281,557
112,213
7,027
263,079
(104,282)
7,694
304,015
101,255)
5,201
296,267
(97,167)
4,508
291,454
(101,428)
8,032
292,225
(99,126)
8,149
293,721
87,873)
6,453
290,745
(86,822)
7,110
Fixed price per
MWh with
annual
increases of
1.84% per year
Fixed price per
MWh without
any indexation
mechanism
Fixed price per
MWh in USD
with annual
increases based
on inflation
Fixed price per
MWh in USD
with annual
increases based
on inflation
Fixed price per
MWh in USD
with annual
increases based
on inflation
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
30-year PPA with APS
regulated by ACC
25-year PPA with
PG&E regulated by
CPUC and CAEC
20-year PPA with UTE,
Uruguay state-owned
utility
20-year PPA with UTE,
Uruguay state-owned
utility
20-year PPA with UTE,
Uruguay state-owned
utility
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
384
Kaxu
South
Africa
(O)
51.0
20 Years
Eskom
(I)
455,517
(179,417)
44,487
Take or pay
contract for the
purchase of
electricity up to
the contracted
capacity from
the facility.
20-year PPA with
Eskom SOC Ltd. With a
fixed price formula in
local currency subject
to indexation to local
inflation
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Efficient Natural Gas:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
ACT
Mexico
(O)
100.0
20 Years
Pemex
(F)
512,796
-
80,731
Fixed price to
compensate
both
investment and
O&M costs,
established in
USD and
adjusted
annually
partially
according to
inflation and
partially
according to a
mechanism
agreed in
contract
20-year Services
Agreement with
Pemex, Mexican oil &
gas state-owned
company
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Transmission lines:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
ATS
Peru
(O)
100.0
30 Years
Republic of
Peru
(I)
532,859
(157,573)
31,351
ATN
Peru
(O)
100.0
30 Years
ATN 2
Peru
(O)
100.0
18 Years
Quadra I
Chile
(O)
100.0
21 Years
Quadra II
Chile
(O)
100.0
21 Years
Republic
of Peru
Las
Bambas
Mining
Sierra
Gorda
Sierra
Gorda
(I)
360,412
(130,364)
10,988
(F)
71,966
-
10,673
(F)
37,423
-
5,847
(F)
51,552
-
4,845
Tariff fixed by
contract and
adjusted
annually in
accordance with
the US Finished
Goods Less
Food and
Energy inflation
index
Tariff fixed by
contract and
adjusted
annually in
accordance with
the US Finished
Goods Less
Food and
Energy inflation
index
Fixed-price
tariff base
denominated in
U.S. dollars with
Las Bambas
Fixed price in
USD with
annual
adjustments
indexed mainly
to US CPI
Fixed price in
USD with
annual
adjustments
indexed mainly
to US CPI
30-year Concession
Agreement with the
Peruvian Government
30-year Concession
Agreement with the
Peruvian Government
18 years purchase
agreement
21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superentendencia de
Electricidad, among
others
21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superentendencia de
Electricidad, among
others
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
385
Water:
Skikda
Algeria
(O)
34.2
25 Years
Honaine
Algeria
(O)
25.5
25 Years
Tenes
Algeria
(O)
51.0
25 Years
Sonatrach
& ADE
Sonatrach
& ADE
Sonatrach
& ADE
(F)
71,007
-
13,121
(F)
(F)
N/A(9)
N/A(9)
N/A(9)
98,962
-
14,637
U.S. dollar
indexed take-
or-pay contract
with Sonatrach
/ ADE
U.S. dollar
indexed take- or-
pay contract with
Sonatrach / ADE
U.S. dollar
indexed take- or-
pay contract with
Sonatrach / ADE
25 years purchase
agreement
25 years purchase
agreement
25 years purchase
agreement
(1) In operation (O), Construction (C) as of December 31, 2022.
(2) Itochu Corporation holds 30% of the economic rights to each of Solaben 2 and Solaben 3. JGC Corporation holds 13% of the economic
rights to each Solacor 1 and Solacor 2. Algerian Energy Company, SPA, or AEC, owns 49% and Sacyr Agua, S.L., a subsidiary of Sacyr,
S.A., owns the remaining 25.5% of the Honaine project. AEC owns 49% and Sacyr Agua S.L. owns the remaining 16.83% of the Skikda
project. Industrial Development Corporation of South Africa (29%) & Kaxu Community Trust (20%) for the Kaxu Project. AEC owns 49%
of the Tenes project.
(3) Classified as concessional financial asset (F) or as intangible assets (I).
(4) The infrastructure is used for its entire useful life. There are no obligations to deliver assets at the end of the concession periods, except
for ATN and ATS.
(5) Generally, there are no termination provisions other than customary clauses for situations such as bankruptcy or fraud from the operator,
for example.
(6) Sales to wholesale markets and additional fixed payments established by the Spanish government.
(7) In each case the off-taker is the grantor.
(8) Figures reflect the contribution to the Consolidated Financial Statements of Atlantica Sustainable Infrastructure plc. as of December 31,
2022.
(9) Recorded under the equity method.
386
Assets subject to the application of IFRIC 12 interpretation based on the concession of services as
of December 31, 2021:
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Renewable energy:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
Solana
USA
(O)
100.0
30 Years
APS
(I)
1,865,770
(568,911)
(26,886)
Mojave
USA
(O)
100.0
25 Years
PG&E
(I)
1,578,530
(435,937)
38,239
Palmatir
Uruguay
(O)
100.0
20 Years
Cadonal
Uruguay
(O)
100.0
20 Years
Melowind
Uruguay
(O)
100.0
20 Years
Solaben 2
Spain
(O)
70.0
25 Years
Solaben 3
Spain
(O)
70.0
25 Years
Solacor 1
Spain
(O)
87.0
25 Years
Solacor 2
Spain
(O)
87.0
25 Years
Solnova 1
Spain
(O)
100.0
25 Years
Solnova 3
Spain
(O)
100.0
25 Years
Solnova 4
Spain
(O)
100.0
25 Years
Helios 1
Spain
(O)
100.0
25 Years
Helios 2
Spain
(O)
100.0
25 Years
Helioenergy
1
Helioenergy
2
Spain
(O)
100.0
25 Years
Spain
(O)
100.0
25 Years
Solaben 1
Spain
(O)
100.0
25 Years
UTE,
Uruguay
Administ
ration
UTE,
Uruguay
Administ
ration
UTE,
Uruguay
Administ
ration
Kingdom
of Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
Kingdom of
Spain
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
(I)
387
147,925
(56,267)
4,278
122,002
(43,465)
1,220
135,988
(36,794)
3,476
315,137
(89,176)
7,111
314,084
(90,477)
6,704
318,557
(96,911)
5,593
331,588
(99,801)
4,689
317,624
(116,464)
7,112
297,046
(105,517)
8,749
277,953
(97,828)
8,720
321,479
(92,943)
5,917
313,182
(89,008)
5,930
307,727
(94,563)
8,510
308,472
(91,879)
8,472
310,257
(79,468)
7,342
Fixed price per
MWh with
annual
increases of
1.84% per year
Fixed price per
MWh without
any indexation
mechanism
Fixed price per
MWh in USD
with annual
increases based
on inflation
Fixed price per
MWh in USD
with annual
increases based
on inflation
Fixed price per
MWh in USD
with annual
increases based
on inflation
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue
base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
Regulated
revenue base(6)
30-year PPA with APS
regulated by ACC
25-year PPA with
PG&E regulated by
CPUC and CAEC
20-year PPA with UTE,
Uruguay state-owned
utility
20-year PPA with UTE,
Uruguay state-owned
utility
20-year PPA with UTE,
Uruguay state-owned
utility
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
Solaben 6
Spain
(O)
100.0
25 Years
Kingdom of
Spain
(I)
307,047
(78,529)
6,884
Kaxu
South
Africa
(O)
51.0
20 Years
Eskom
(I)
481,776
(167,171)
45,779
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain
20-year PPA with
Eskom SOC Ltd. With a
fixed price formula in
local currency subject
to indexation to local
inflation
Regulated
revenue base(6)
Take or pay
contract for the
purchase of
electricity up to
the contracted
capacity from
the facility.
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Efficient Natural Gas:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
ACT
Mexico
(O)
100.0
20 Years
Pemex
(F)
537,579
-
124,799
Fixed price to
compensate
both
investment and
O&M costs,
established in
USD and
adjusted
annually
partially
according to
inflation and
partially
according to a
mechanism
agreed in
contract
20-year Services
Agreement with
Pemex, Mexican oil &
gas state-owned
company
Project
name
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Transmission lines:
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
ATS
Peru
(O)
100.0
30 Years
Republic of
Peru
(I)
532,675
(139,789)
28,451
ATN
Peru
(O)
100.0
30 Years
ATN 2
Peru
(O)
100.0
18 Years
Quadra I
Chile
(O)
100.0
21 Years
Quadra II
Chile
(O)
100.0
21 Years
Republic
of Peru
Las
Bambas
Mining
Sierra
Gorda
Sierra
Gorda
(I)
360,271
(118,116)
7,413
(F)
76,210
-
11,428
(F)
38,993
-
5,358
(F)
55,561
-
4,711
388
Tariff fixed by
contract and
adjusted
annually in
accordance with
the US Finished
Goods Less
Food and
Energy inflation
index
Tariff fixed by
contract and
adjusted
annually in
accordance with
the US Finished
Goods Less
Food and
Energy inflation
index
Fixed-price
tariff base
denominated in
U.S. dollars with
Las Bambas
Fixed price in
USD with
annual
adjustments
indexed mainly
to US CPI
Fixed price in
USD with
annual
adjustments
indexed mainly
to US CPI
30-year Concession
Agreement with the
Peruvian Government
30-year Concession
Agreement with the
Peruvian Government
18 years purchase
agreement
21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superentendencia de
Electricidad, among
others
21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superentendencia de
Electricidad, among
others
Project
name
Water:
Country
Status
(1)
% of
nominal
Share(2)
Period of
Concession
(4)(5)
Off-
taker(7)
Financial/
Intangible (3)
Assets/
Investment
Accumulated
Amortization
Operating
Profit/
(Loss)(8)
Arrangement
Terms (price)
Description of the
Arrangement
Skikda
Algeria
(O)
34.2
25 Years
Honaine
Algeria
(O)
25.5
25 Years
Tenes
Algeria
(O)
51.0
25 Years
Sonatrach
& ADE
Sonatrach
& ADE
Sonatrach
& ADE
(F)
70,969
-
14,654
(F)
(F)
N/A(9)
N/A(9)
N/A(9)
99,438
-
16,671
U.S. dollar
indexed take-
or-pay contract
with Sonatrach
/ ADE
U.S. dollar
indexed take- or-
pay contract with
Sonatrach / ADE
U.S. dollar
indexed take- or-
pay contract with
Sonatrach / ADE
25 years purchase
agreement
25 years purchase
agreement
25 years purchase
agreement
(1) In operation (O), Construction (C) as of December 31, 2021.
(2) Itochu Corporation holds 30% of the economic rights to each of Solaben 2 and Solaben 3. JGC Corporation holds 13% of the economic
rights to each Solacor 1 and Solacor 2. Algerian Energy Company, SPA, or AEC, owns 49% and Sacyr Agua, S.L., a subsidiary of Sacyr,
S.A., owns the remaining 25.5% of the Honaine project. AEC owns 49% and Sacyr Agua S.L. owns the remaining 16.83% of the Skikda
project. Industrial Development Corporation of South Africa (29%) & Kaxu Community Trust (20%) for the Kaxu Project. AEC owns 49%
of the Tenes project.
(3) Classified as concessional financial asset (F) or as intangible assets (I).
(4) The infrastructure is used for its entire useful life. There are no obligations to deliver assets at the end of the concession periods, except
for ATN and ATS.
(5) Generally, there are no termination provisions other than customary clauses for situations such as bankruptcy or fraud from the operator,
for example.
(6) Sales to wholesale markets and additional fixed payments established by the Spanish government.
(7) In each case the off-taker is the grantor.
(8) Figures reflect the contribution to the Consolidated Financial Statements of Atlantica Sustainable Infrastructure plc. as of December 31,
2021.
(9) Recorded under the equity method.
389
27. Additional information of subsidiaries including material non-controlling
interest
As of December 31, 2022:
Profit/(Loss)
of non-
controlling
interest
in
Atlantica
consolidated
net result
2022
Non-
controlling
interest
in
Atlantica
consolidated
equity as
of
December 31,
2022
% of
non-
controlling
interest
held
Distributions
paid to
non-
controlling
interest
Non-
current
assets*
Current
Assets*
Non-
current
liabilities*
Current
liabilities*
Net profit/
(loss)*
Total
Comprehensive
income*
49%**
2,849
7,060
47,509
68,655
29,293
12,470
6,788
10,725
-
-
90%
21,333
30%
1,913
(5)
402
15,996
18,657
4,910
-
4,904
(6)
25,271 201,060 12,730 115,109
14,857
1,158
(1,428)
30%
1,397
370
24,522 201,088 13,814 117,948
15,495
1,051
(1,642)
49%
2,260
5,675
25,592 94,989 40,884
72,279
11,365
11,581
-
Subsidiary
name
Aguas de Skikda
S.P.A.
Non-
controlling
interest
name
Algerian
Energy
Company
S.P.A.
Atlantica Yield
Energy
Solutions
Canada Inc.
Algonquin
Power Co.
Solaben
Electricidad
Dos S.A.
Itochu Europe
Plc
Solaben
Electricidad
Tres S.A.
Itochu Europe
Plc
Ténès Lilmiyah
SPA
Algerian
Energy
Company
S.P.A.
* Stand-alone figures as of December 31, 2022.
** Atlantica Sustainable Infrastructure plc. owns 67% of the shares in Geida Skikda, S.L., which in its turn owns 51% of Aguas de Skikda
S.P.A., so that indirectly Atlantica Sustainable Infrastructure plc. owns 34.17% of Aguas de Skikda S.P.A. The table only shows information
related to the non-controlling interest of the SPV, Aguas de Skikda S.P.A.
390
As of December 31, 2021:
Profit/(Loss)
of non-
controlling
interest
in
Atlantica
consolidated
net result
2022
Non-
controlling
interest
in
Atlantica
consolidated
equity as
of
December 31,
2022
% of
non-
controlling
interest
held
Distributions
paid to
non-
controlling
interest
Non-
current
assets*
Current
Assets*
Non-
current
liabilities*
Current
liabilities*
Net profit/
(loss)*
Total
Comprehensive
income*
49%**
3,753
7,166
43,985
69,057
27,863
17,030
6,552
10,886
90%
17,282
(8)
38,200
38,507
6,291
-
6,279
(8)
-
-
30%
2,375
406
25,864
224,412
12,798
138,026
13,910
1,354
(9,726)
30%
2,382
246
24,605
223,976
12,201
141,077
13,825
820
(9,713)
49%
2,813
6,409
21,795
96,444
36,283
79,129
9,120
12,950
-
Subsidiary
name
Aguas de
Skikda
S.P.A.
Non-
controlling
interest
name
Algerian
Energy
Company
S.P.A.
Atlantica Yield
Energy
Solutions
Canada Inc.
Algonquin
Power Co.
Solaben
Electricidad
Dos S.A.
Itochu
Europe Plc
Solaben
Electricidad
Tres S.A.
Itochu
Europe Plc
Ténès Lilmiyah
SPA
Algerian
Energy
Company
S.P.A.
* Stand-alone figures as of December 31, 2021.
** Atlantica Sustainable Infrastructure plc. owns 67% of the shares in Geida Skikda, S.L., which in its turn owns 51% of Aguas de Skikda
S.P.A., so that indirectly Atlantica Sustainable Infrastructure plc. owns 34.17% of Aguas de Skikda S.P.A. The table only shows information
related to the non-controlling interest of the SPV, Aguas de Skikda S.P.A.
391
Company Financial Statements
Company Balance Sheet
Amounts in thousands of U.S. dollars
Non Current assets
Intangible and tangible assets
Investments in subsidiaries
Amounts owed by group undertakings
Financial investments
Derivative assets
Current assets
Trade and other receivables
Amounts owed by group undertakings
Derivative assets
Cash and cash equivalents
Total assets
Creditors: Amounts falling due within one year
Trade and other payables
Amounts owed to group undertakings
Borrowings
Net current assets
Total assets less current liabilities
Creditors: Amounts falling due after more than one year
Borrowings
Amounts owed to group undertakings
Derivative liabilities
Other liabilities
Total liabilities
Net assets
(1) Notes 1 to 10 are an integral part of the financial statements
392
Notes (1)
As of
December 31,
2022
As of
December 31,
2021
3
4
6
4
6
9
7
4
5
5
4
6
114
1,661,909
930,188
-
279
95
1,779,817
885,991
971
1,607
2,592,490
2,668,481
628
34,495
7,558
60,833
510
47,771
2,153
88,294
103,514
138,728
2,696,004
2,807,209
6,377
3,792
11,442
8,777
4,266
25,749
21,611
38,792
81,903
99,936
2,674,393
2,768,417
886,515
379,892
4,688
16,684
885,249
343,498
16,690
12,288
1,287,779
1,257,725
1,309,390
1,296,517
1,386,614
1,510,692
Capital and Reserves
Share capital
Share premium account
Capital reserves
Other reserves
Accumulated deficit
Shareholders’ funds
8
8
8
8
8
11,606
986,594
814,951
4,638
(431,175)
11,240
872,011
1,020,027
224
(392,810)
1,386,614
1,510,692
(1) Notes 1 to 10 are an integral part of the financial statements
The Company has taken the exemption under Companies Act 2006 section 408 not to publish the
parent company profit and loss account. The Company recorded a loss after tax of 43.1 million for
the period ended 31 December 2022 (2021: profit after tax of $54.7 million).
The financial statements of Atlantica Sustainable Infrastructure plc, company registration no.
08818211, were approved by the board of directors and authorised for issue on 28 February 2023.
They were signed on its behalf by:
Director and Chief Executive Officer
Chief Financial Officer
Santiago Seage
February 28, 2023
Francisco Martinez-Davis
February 28, 2023
393
Company Statement of Changes in Equity
Amounts in thousands of U.S. dollars
Share
capital
Share
premium
account
Capital
reserves
Other
reserves
Accumulated
deficit
Total
Shareholder´s
funds
10,667
1,011,743
881,745
(1,481)
(462,420)
1,440,254
573
-
-
60,268
-
-
128,920
-
(190,638)
-
-
-
-
54,682
-
189,761
54,682
(190,638)
-
-
-
-
-
-
-
(200,000)
200,000
1,705
-
1,705
-
-
14,928
14,928
-
-
11,240
872,011
1,020,027
224
(392,810)
1,510,692
366
-
-
114,583
-
-
(1,969)
-
(203,107)
-
-
-
-
(43,092)
-
112,980
(43,092)
(203,107)
-
-
-
-
-
-
4,414
-
4,414
-
4,727
4,727
11,606
986,594
814,951
4,638
(431,175)
1,386,614
Balance at 1
January 2021
Capital increase
Profit for the year
Dividends
Change in fair value
of cash flow hedges
(net of deferred
taxation)
Share-based
compensation
Reduction of Share
Premium
Balance at 31
December 2021
Capital increase
Loss for the year
Dividends
Change in fair value
of cash flow hedges
(net of deferred
taxation)
Share-based
compensation
Balance at 31
December 2022
394
Notes to the Company Financial Statements
1. Significant Accounting Policies
The separate financial statements of the Company are presented as required by the
Companies Act 2006. The Company meets the definition of a qualifying entity under FRS
100 (Financial Reporting Standard 100) issued by the Financial Reporting Council. These
financial statements were prepared in accordance with Financial Reporting Standard 101
“Reduced Disclosure Framework (“FRS 101”)”.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions
available under that standard in relation to share-based payment, financial instruments,
capital management, presentation of comparative information in respect of certain
assets, presentation of a cash-flow statement and certain related party transactions.
Where required, equivalent disclosures are given in the consolidated financial
statements. General information about the Company is disclosed in note 1 of the
consolidated financial statements. Amounts included in these separate financial
statements are all expressed in thousands of U.S. dollars, unless otherwise indicated. The
financial statements have been prepared on the historical cost basis except for the
remeasurement of certain financial instruments to fair value.
The Company has prepared these financial statements on a going concern basis. For
further information, please refer the “going concern basis” in note 2.1 of the consolidated
financial statements.
The principal accounting policies adopted are the same as those set out in note 2 to the
consolidated financial statements except as noted below.
Investments in subsidiaries and impairment
Investments in subsidiaries are stated at cost less, where appropriate, provisions for
impairment.
At each balance sheet date, the Company reviews the carrying amounts of its investments
to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated to determine the extent of the impairment loss.
Recoverable amount is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount,
the carrying amount of the asset is reduced to its recoverable amount. An impairment
loss is recognised immediately in the profit and loss.
395
Where an impairment loss subsequently reverses, the carrying amount of the asset is
increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in prior years. A reversal of an
impairment loss is recognised immediately in the profit and loss.
Receivables arising from interest-free intercompany loans are recognised when the
Company becomes party to the related contracts and are measured initially at the fair
value represented by the present value of future cash flows discounted at market interest
rate. The difference between the fair value and the consideration advanced is recognised
as an increase in the cost of investment in subsidiary.
After initial recognition, interest-free intercompany loans are subsequently measured at
amortised cost using the effective interest method. The finance income is recognised in
the statement of comprehensive income.
Significant judgements and estimates
The most critical accounting policies, which reflect significant management estimates
and judgement to determine amounts in the Company’s financial statements, are as
follows:
Estimates:
o
Impairment of investments (see Note 3)
Impairment exists when the carrying value of an investment exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The
value in use calculation is based on a discounted cash flow model, which is sensitive to
the discount rate used as well as projected cash-flows.
The significant assumptions which required substantial estimates used in management’s
impairment calculation are discount rates and projections considering real data based on
contract terms and projected changes in selling prices, energy generation and costs.
o Fair value of derivative financial instruments (see Note 6)
When the fair values of financial assets and financial liabilities recorded in the statement
of financial position cannot be measured based on quoted prices in active markets, their
fair value is measured using valuation techniques including the discounted cash flow
model. The inputs to these models are taken from observable markets where possible,
but where this is not feasible, a degree of estimate is required in establishing fair values.
Estimates include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions relating to these factors could affect the reported fair value of
financial instruments.
396
2. Profit/(loss) for the year
As permitted by section 408 of the Companies Act 2006, the Company has elected not
to present its own profit and loss account for the year. The Company reported a loss for
the financial year ended 31 December 2022 of $43.1 million (2021: profit of $54.7 million).
The employee cost recorded in the profit and loss account of the Company for the year
2022 amounts to $6.7 million (2021: $7.3 million). The auditor’s remuneration for audit
and other services is disclosed in note 23 to the consolidated financial statements.
397
3. Investments in Subsidiaries
Details of the Company’s subsidiaries at 31 December 2022 are as follows:
Name
Place of
incorporation and
principal place of
business
Proportion
of
ownership
interest
Proportion
of voting
power held
%
%
Registered office
AC Renovables Sol 1 S.A.S. E.S.P.
Colombia
70,00%
70,00%
ACT Energy Mexico, S. de R.L. de C.V.
Mexico
99.99%
99.99%
ACT Holdings, S.A. de C.V.
Mexico
99.99%
99.99%
Agrisun, S.R.L.
Italy
100.00%
100.00%
Aguas de Skikda, S.P.A.
Algeria
51.00%
51.00%
Alcalá Sviluppo Solare S.r.l.
Arizona Solar One, LLC (USA)
ASHUSA Inc
ASI Operations, LLC
ASO Holdings Company, LLC
ASUSHI Inc.
Italy
USA
USA
USA
USA
USA
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Atlantica Chile, S.P.A.
Chile
100.00%
100.00%
Atlantica Colombia S.A.S. E.S.P.
Colombia
100,00%
100,00%
Atlantica Corporate Resources, S.L.
Spain
100.00%
100.00%
Atlantica DCR, LLC.
USA
100.00%
100.00%
Atlantica Energia Sostenible Italia, S.r.l
Italy
100.00%
100.00%
Atlantica Energía Sostenible España S.L. Spain
100.00%
100.00%
Atlantica Hidro Colombia SPA
Colombia
15.00%
68.00%
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Via de la Mercede, 11, 00187, Roma
(Italy)
162 Bois des Cars III
DelyIbrahim — Alger - Algerie
Vicolo del Messaggero 11 – 38068
Rovereto (TN)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes, Santiago
de Chile
Carrera 7, 71 – 21 Torre B, piso
15,Bogota
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Via de la Mercede, 11, 00187, Roma
(Italy)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
398
Name
Place of
incorporation and
principal place of
business
Atlantica Holdings USA, LLC
Atlantica Infraestructura Sostenible,
S.L.U.
Atlantica Investments Ltd
USA
Spain
UK
Proportion
of
ownership
interest
%
Proportion
of voting
power held
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Atlantica Newco, Ltd
UK
100.00%
100.00%
Atlantica North America, LLC.
Atlantica Peru, S.A.
USA
Peru
100.00%
100.00%
100.00%
100.00%
Atlantica Renewable Power Mexico de
R.L. de C.V
Mexico
100.00%
100.00%
Atlantica Solutions LLC
USA
100.00%
100.00%
Atlantica South Africa (Pty) Ltd
South Africa
100.00%
100.00%
Atlantica South Africa Operations
Proprietary Limited Ltd
South Africa
92.00%
92.00%
Atlantica Sustainable Infrastructure
Jersey Ltd.
Atlantica Transmision Sur, S.A.
Jersey
Peru
100.00%
100.00%
100.00%
100.00%
Atlantica Yield Energy Solutions Canada
Inc.
Atlantica y Quartux Almacenamiento de
Energía S.A.P.I. de C.V.
Canada
10.00%
66.66%
Mexico
60.00%
60.00%
ASI Vento LLC
USA
100.00%
100.00%
Registered office
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Great West House, GW1
Great West Road
Brentford TW8 9DF
London, UK
Great West House, GW1
Great West Road
Brentford TW8 9DF
London, UK
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima (Peru).
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Office 103 Ancorley Building;
45 Scott Street
Upington
8801 (South Africa)
Office 103 Ancorley Building;
45 Scott Street
Upington
8801 (South Africa)
47 Esplanade, St Helier,
Jersey JE1 0BD UK
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
354 Davis Road Suite 100
Oakville On L5J 2X1
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
399
Name
Place of
incorporation and
principal place of
business
Proportion
of
ownership
interest
%
Proportion
of voting
power held
%
Registered office
ATN 2, S.A.
Peru
100.00%
100.00%
ATN 4, S.A.
Peru
100.00%
100.00%
ATN, S.A.
Peru
99.99%
99.99%
AY Holding Uruguay S.A.
Uruguay
100.00%
100.00%
AYES International UK Ltd.
UK
100.00%
100.00%
Banitod, S.A.
Uruguay
100.00%
100.00%
Befesa Agua Tenes, S.L.U.
BPC US Wind Corporation
Spain
USA
100.00%
100.00%
100.00%
100.00%
Cadonal, S.A.
Uruguay
100.00%
100.00%
Calgary District Heating Inc.
Canada
100.00%
100.00%
Carpio Solar Inversiones, S.A.
Chile PV I
Spain
Chile
100.00%
100.00%
35.00%
66.66%
Chile PV II
Chile
35.00%
66.66%
Chile PV III
Chile
35.00%
66.66%
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
Great West House, GW1
Great West Road
Brentford TW8 9DF
London, UK
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
Calle Energia Solar, 1
41014 Sevilla
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
Suite 2500 Park Place
666 Burrard Street
Vancouver BC V6C 2X8
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Avenida Los Militares 5885, piso 7,
departamento 701, Las Condes,
Santiago de Chile.
Avenida Los Militares 5885, piso 7,
departamento 701, Las Condes,
Santiago de Chile.
Avenida Los Militares 5885, piso 7,
departamento 701, Las Condes,
Santiago de Chile.
400
Name
Place of
incorporation and
principal place of
business
CGP Holding Finance, LLC
Ecija Solar Inversiones, S.A.
Coropuna Transmisión, S.A
USA
Spain
Peru
Proportion
of
ownership
interest
%
Proportion
of voting
power held
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Day Ahead Solar LLC
USA
100.00%
100.00%
Energía Renovable Dalia 1 SA de CV
Mexico
51.00%
51.00%
Energía Renovable Dalia 2 SA de CV
Mexico
51.00%
51.00%
Energía Renovable Dalia 3 SA de CV
Mexico
51.00%
51.00%
Estrellada S.A.
Uruguay
100.00%
100.00%
Extremadura Equity Investment S.a.r.l.
Luxembourg
100.00%
100.00%
Fotovoltaica Solar Sevilla, S.A.
Geida Skikda, S.L.
Spain
Spain
80.00%
80.00%
67.00%
67.00%
Global Solar Participations Sarl
Luxembourg
100.00%
100.00%
Helioenergy Electricidad Uno, S.A.
Spain
100.00%
100.00%
Helioenergy Electricidad, Dos, S.A.
Spain
100.00%
100.00%
Helios I Hyperion Energy Investments,
S.L.
Helios II Hyperion Energy Investments,
S.L.
Helios 2, S.R.L.
Spain
Spain
Italy
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Registered office
251 Little Falls Drive, Wilmington,
New Castle, Delaware, 19808 (USA)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
6,
Luxembourg
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Paseo de
28046 Madrid (Spain)
6,
Luxembourg
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Melissano (LE) Via Monte Rosa 19
Roma (Italy)
rue Eugène RuppertL-2453
rue Eugène RuppertL-2453
la Castellana 83-85,
Name
Place of
incorporation and
Proportion
of
Proportion
of voting
power held
Registered office
401
principal place of
business
ownership
interest
%
%
Hidrocañete, S.A.
Peru
100.00%
100.00%
Hypesol Energy Holding, S.L.
Spain
100.00%
100.00%
Hypesol Solar Inversiones S.A.U
Spain
100.00%
100.00%
Hunucma Wind Power S.A. de C.V
Mexico
100.00%
100.00%
Kaxu Solar One (Pty) Ltd
South Africa
51.00%
51.00%
Logrosan Equity Investment S.a.r.l.
Luxembourg
100.00%
100.00%
Logrosan Solar Inversiones Dos, S.L.
Spain
100.00%
100.00%
Logrosan Solar Inversiones, S.A.
Spain
100.00%
100.00%
Mojave Solar Holdings, Llc
Mojave Solar, Llc
Montesejo Piano, S.r.l.
Mordor ES1 LLC
Mordor ES2 LLC
USA
USA
Italy
USA
USA
100.00%
100.00%
100.00%
100.00%
100,00%
100,00%
100.00%
100.00%
100.00%
100.00%
Nesyla, S.A.
Uruguay
100.00%
100.00%
Overnight Solar LLC
USA
100.00%
100.00%
PA Renovables Sol 1 S.A.S. E.S.P.
Colombia
70,00%
70,00%
Palmatir, S.A
Uruguay
100.00%
100.00%
Palmucho, S.A. Chile
100.00%
100.00%
rue Eugène RuppertL-2453
Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608.
Santiago de Surco
Lima.
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
Office 103 Ancorley Building;
45 Scott Street
Upington
8801 (South Africa)
6,
Luxembourg
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Via XX Settembre 1 cap 00187,
Roma.
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
Avda. Luis Alberto de Herrera,
1248, World Trade Center, Torre II,
Piso 1. Oficina 1505, Montevideo,
Uruguay.
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes, Santiago
de Chile
Name
Place of
incorporation and
Proportion
of
Proportion
of voting
power held
Registered office
402
principal place of
business
ownership
interest
%
%
Parque Fotovoltaico La Sierpe S.A.S.
Colombia
100.00%
100.00%
Parque Fotovoltaico La Tolua S.A.S
Colombia
100,00%
100,00%
Parque Solar Tierra Linda, S.A.S
Colombia
100,00%
100,00%
Re Sole, S.R.L.
Italy
100.00%
100.00%
Rilados, S.A.
Uruguay
100.00%
100.00%
Rioglass Solar Holding, S.A.
Spain
100.00%
100.00%
RRHH Servicios Corporativos S. de R.L.
de C.V.
Mexico
100.00%
100.00%
Sanlucar Solar, S.A.
Spain
100.00%
100.00%
SJ Renovables Sun 1 S.A.S. E.S.P.
Colombia
70,00%
70,00%
SJ Renovables Wind 1 S.A.S. E.S.P.
Colombia
70,00%
70,00%
Solaben Electricidad Dos, S.A.
Spain
70.00%
70.00%
Solaben Electricidad Seis, S.A.
Spain
100.00%
100.00%
Solaben Electricidad Tres, S.A.
Spain
70.00%
70.00%
Solaben Electricidad Uno, S.A.
Spain
100.00%
100.00%
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
MZ D CA 23 Urb. Bosques de
Varsovia,
Tolima,
Ibague,
Colombia.
CC Arkacentro Mod T OF A 07 Sec.
Tolima,
Arkacentro,
Colombia.
Ibague,
Via de la Mercede, 11, 00187,
Roma (Italy)
Luis Alberto de Herrera 1248, WTC,
Torre 2, Piso 15, Oficina 1505,
Montevideo, Uruguay
Poligono
Industrial de Sevilla,
Santa Cruz de Mieres, Mieres,
Asturias (Spain)
Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina 1001,
Col. Los Morales Polanco, 11510,
Ciudad de Mexico
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
Plataforma Solar Extremadura,
Carretera EX-116 PK 17,560, 10120
Logrosan (Caceres, Spain)
Plataforma Solar Extremadura,
Carretera EX-116 PK 17,560, 10120
Logrosan (Caceres, Spain)
Plataforma Solar Extremadura,
Carretera EX-116 PK 17,560, 10120
Logrosan (Caceres, Spain)
Plataforma Solar Extremadura,
Carretera EX-116 PK 17,560, 10120
Logrosan (Caceres, Spain)
Name
Place of
incorporation and
principal place of
business
Proportion
of
ownership
interest
%
Proportion
of voting
power held
%
Registered office
403
Solaben Luxembourg S.A.
Luxembourg
100.00%
100.00%
Solacor Electricidad Uno, S.A.
Solacor Electricidad Dos, S.A.
Solar Processes, S.A.
Spain
Spain
Spain
87.00%
87.00%
87.00%
87.00%
100.00%
100.00%
Solnova Electricidad Cuatro, S.A.
Spain
100.00%
100.00%
Solnova Electricidad Tres, S.A.
Spain
100.00%
100.00%
Solnova Electricidad Uno, S.A.
Spain
100.00%
100.00%
Solnova Solar Inversiones, S.A.
Spain
100.00%
100.00%
Tenes Lilmiyah SPA
Algeria
51.00%
51.00%
Transmisora Baquedano, S.A.
Chile
100.00%
100.00%
Transmisora Mejillones, S.A.
Chile
100.00%
100.00%
Transmisora Melipeuco, S.A.
Chile
100.00%
100.00%
VO Renovables SOL 1 S.A.S. E.S.P.
Colombia
70,00%
70,00%
White Rock Insurance (Europe) PPC
Limited
Malta
100.00%
100.00%
rue Eugène RuppertL-2453
6,
Luxembourg
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
C/ Albert Einstein, s/n
41092, Sevilla (Spain)
19 Lot Bois des Cars III.
Dely Ibrahim, Alger.
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes, Santiago
de Chile
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes, Santiago
de Chile
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes, Santiago
de Chile
Carrera 7, 71 – 21 Torre B, piso 15,
Bogota
Central Business District. CBD1070,
Birkirkara (Malta)
404
The investments in subsidiaries are all stated at cost. Information on the investments acquired
in the year is disclosed in Note 5 in the consolidated financial statements. As of 31 December
2022 and 2021, the carrying amount of the investments held directly by the Company were as
follows:
77
Palmucho, S.A.
Atlantica Corporate Resources, S.L.
Transmisora Baquedano, S.A.
Transmisora Mejillones, S.A.
ACT Holdings, S.A. de C.V.
Atlantica Peru, S.A.
Atlantica Infraestructura Sostenible, S.L.U.
ATN, S.A. (*)
Atlantica Transmision Sur, S.A. (*)
Atlantica Investments Ltd.
ATN 2, S.A.
Atlantica North America, LLC.
CKA1 Holding S. de R.L. de C.V.
AYES International UK Ltd.
Atlantica Sustainable Infrastructure Jersey Ltd.
Atlantica Newco, Ltd.
Transmisora Melipeuco, S.A.
2022
$’000
2021
$’000
-
8,954
-
-
98,543
261,920
889,236
13,988
11,847
56,998
13,720
301,751
-
4,854
-
-
98
-
8,954
-
-
98,543
261,920
888,823
13,863
11,847
56,998
13,720
420,288
7
4,854
-
-
-
Total investments in subsidiaries
1,661,909 1,779,817
(*) Corresponds to the initial difference between the amortized cost and nominal amount of interest free loans
(classified as amounts owed by group undertakings, see note 4), classified as capital contribution in accordance with
IFRS 9.
405
Movements in the carrying value of investments during the years 2022 and 2021 were as
follows:
As at 1 January 2022
Increase
Impairment
As at 31 December 2022
As at 1 January 2021
Increase
Impairment
As at 31 December 2021
$ ´000
1,779,817
635
(118,543)
1,661,909
$ ´000
1,846,157
4,094
(70,434)
1,779,817
The increase in 2021 mainly related to capital increase in the U.S. entities.
The impairment for $118.5 million in 2022 and for $70.4 million in 2021 corresponds mainly
to the investment held in Atlantica North America LLC, which is the holding company of all
the U.S. entities of Atlantica. The impairment is primarily due to the impairment recorded in
Solana in 2022 and 2021 (see Note 6 of the consolidated financial statements) and to an
increase in the discount rate used to discount future cash flow projections to obtain the
recoverable amount of the investment.
4. Amounts Owed by/to Group Undertakings
7
Non-current receivables from group companies
Current receivables from group undertakings
2022
$’000
930,188
34,495
2021
$’000
885,991
47,771
Total amounts owed by group undertakings
964,683
933,762
Current amounts owed to group undertakings
Non-Current amounts owed to group undertakings
Total amounts owed to group undertakings
3,792
379,892
383,684
4,266
343,498
347,764
406
As of 31 December 2022 and 2021, the details of the non-current amounts owed by group
undertakings were as follows:
7
ATN, S.A.
Carpio Solar Inversiones, S.A.
Atlantica Transmision Sur, S.A.
Atlantica South Africa (Pty), Ltd.
ASUSHI, Inc
Atlantica Investments, Ltd.
Helios I Hyperion Energy Investments, S.A.
Helios II Hyperion Energy Investments, S.A.
Atlantica North America, LLC
Sanlucar Solar, S.A.
Atlantica Newco, Ltd.
ASHUSA, Inc
Solar Process, S.A.
Solnova Electricidad, S.A.
Solnova Electricidad Tres, S.A.
Solnova Electricidad Cuatro, S.A.
Other
2022
$’000
10,548
-
-
1,321
62,847
142,657
4,187
4,443
438,695
14,723
99,248
70,788
31,327
14,714
14,170
12,955
7,565
2021
$’000
22,897
13,163
3,421
7,903
60,320
102,795
6,591
6,679
455,368
17,038
99,217
68,762
-
4,071
4,392
4,321
9,053
Amounts owed by group undertakings
930,188
885,991
The principal features of the most significant loans to subsidiary undertakings are as
follows:
ATN, S.A.
Carpio Solar Inversiones, S.A.
Atlantica Transmision Sur, S.A.
Atlantica South Africa (Pty) Ltd.
ASUSHI, Inc
ASHUSA Inc.
Atlantica Investments Ltd.
Atlantica North America LLC
Atlantica Newco Limited
Sanlucar Solar, S.A.
Solar Process, S.A.
Solnova Electricidad, S.A.
Solnova Electricidad Tres, S.A.
Solnova Electricidad Cuatro, S.A.
Interest Rate
Maturity
0%
Not applicable
2.5% plus Euribor 12 months
31 July 2031
0%
Not applicable
5.9%
4.5%
4.5%
4.5%
4.5%
4.5%
4.5%
2.5% plus Euribor 12 months
2.5% plus Euribor 12 months
2.5% plus Euribor 12 months
Not applicable
Not applicable
31 December 2024
31 December 2030
31 December 2030
31 December 2030
31 December 2030
31 December 2030
31 December 2030
20 July 2035
20 July 2035
20 July 2035
As at 31 December 2022, the amounts owed to group undertakings primarily relate to ACT
Energy Mexico, S.A. de C.V. for $162.8 million ($172.1 million as of 31 December 2021), to
Atlantica Sustainable Infrastructure Jersey Ltd for $107.9 million ($105.3 million as of 31
December 2021) and to Atlantica Infraestructura Sostenible, S.L.U. for $98.9 million ($58.2 as
of 31 December 2021)
407
5. Borrowings
As of 31 December 2022 and 2021, the details of borrowings were as follows:
Secured borrowing at amortised cost
Bonds
Borrowings
Total borrowings
Amount due for settlement within 12
months
Amount due for settlement after 12
months
2022
$’000
2021
$’000
9,937
888,020
24,422
886,576
897,957
910,988
11,442
25,749
886,515
885,249
The main features of the borrowings and bonds are as follows:
On July 20, 2017, the Company signed a credit facility (the “2017 Credit Facility”) for
up to €10 million ($10.7 million), which is available in euros or U.S. dollars. Amounts
drawn down accrue interest at a rate per year equal to EURIBOR plus 2% or LIBOR
plus 2%, depending on the currency, with a floor of 0% on the LIBOR and EURIBOR.
As of December 31, 2022, $6.4 million has been drawn down ($8.2 million as of
December 31, 2021). As of December 31, 2021, the credit facility maturity was July 1,
2023. On July 1, 2022, the maturity has been extended to July 1, 2024.
On May 10, 2018, the Company entered into the Revolving Credit Facility for $215
million with a syndicate of banks. Amounts drawn down accrue interest at a rate per
year equal to (A) for Eurodollar rate loans, Term SOFR, plus a Term SOFR Adjustment
equal to 0.10% per annum, plus a percentage determined by reference to the
leverage ratio of the Company, ranging between 1.60% and 2.25% and (B) for base
rate loans, the highest of (i) the rate per annum equal to the weighted average of the
rates on overnight U.S. Federal funds transactions with members of the U.S. Federal
Reserve System arranged by U.S. Federal funds brokers on such day plus ½ of 1.00%,
(ii) the U.S. prime rate and (iii) Term SOFR plus 1.00%, in any case, plus a percentage
determined by reference to the leverage ratio of the Company, ranging between
0.60% and 1.00%. Letters of credit may be issued using up to $100 million of the
Revolving Credit Facility. During 2019, the amount of the Revolving Credit Facility
increased from $215 million to $425 million. In the first quarter of 2021, the Company
increased the amount of the Revolving Credit Facility from $425 million to $450
million. On May 5, 2022, the maturity was extended to December 31, 2024. On
December 31, 2022, $30 million were drawn down (nill as of December 31, 2021). On
December 31, 2022, the Company issued letters of credit for $35 million ($10 million
408
as of December 31, 2021). As of December 31, 2022, therefore, $385 million of the
Revolving Credit Facility were available ($440 million as of December 31, 2021).
On April 30, 2019, the Company entered into the Note Issuance Facility 2019, a senior
unsecured note facility with a group of funds managed by Westbourne Capital as
purchasers of the notes issued thereunder for a total amount of €268 million ($287
million), with maturity date on April 30, 2025. Interest accrued at a rate per annum
equaled to the sum of 3-month EURIBOR plus 4.50%. The interest rate on the Note
Issuance Facility 2019 was fully hedged by an interest rate swap resulting in the
Company paying a net fixed interest rate of 4.24%. The Note Issuance Facility 2019
was fully repaid on June 4, 2021, and subsequently delisted from the Official List of
The International Stock Exchange.
On October 8, 2019, the Company filed a euro commercial paper program (the
“Commercial Paper”) with the Alternative Fixed Income Market (MARF) in Spain. The
program had an original maturity of twelve months and has been extended for
annual periods until October 2023. The program allows Atlantica to issue short term
notes over the next twelve months for up to €50 million ($54 million), with such notes
having a tenor of up to two years. As of December 31, 2022, the Company had €9.3
million ($9.9 million) issued and outstanding under the program at an average cost
of 2.21% (€21.5 million, or $24.4 million, as of December 31, 2021).
On April 1, 2020, the Company closed the secured 2020 Green Private Placement for
€290 million ($310 million). The private placement accrues interest at an annual
1.96% interest rate, payable quarterly and has a June 2026 maturity.
On July 8, 2020, the Company entered into the Note Issuance Facility 2020, a senior
unsecured financing with a group of funds managed by Westbourne Capital as
purchasers of the notes issued thereunder for a total amount of $150 million which
is denominated in euros (€140 million). The Note Issuance Facility 2020 was issued
on August 12, 2020, interest accrues at a rate per annum equal to the sum of the 3-
month EURIBOR plus a margin of 5.25% with a floor of 0% for the EURIBOR, payable
quarterly and has a maturity of seven years from the closing date. The Company have
entered into a cap at 0% for the EURIBOR with 3.5 years maturity to hedge the
variable interest rate risk.
On May 18, 2021, the Company issued the Green Senior Notes due in 2028 in an
aggregate principal amount of $400 million. The notes mature on May 15, 2028 and
bear interest at a rate of 4.125% per annum payable on June 15 and December 15 of
each year, commencing December 15, 2021.
6. Derivative assets and liabilities
The breakdowns of the fair value amount of the derivative financial instruments as
of December 31, 2022 and 2021 are as follows:
409
Balance as of December 31, 2022 Balance as of December 31, 2021
Assets
Liabilities
Assets
Liabilities
Foreign exchange derivatives
instruments
3,189
-
3,410
-
Notes conversion option
-
4,688
-
16,690
Interest rate cash flow hedge
4,648
-
350
-
Total
7,837
4,688
3,760
16,690
The Company owns the following derivatives instruments:
-
Interest rate cash flow hedge classified as current assets relate to an interest rate cap
hedging the Note Issuance Facility 2020 interest with a strike of 0%.
- Currency options with leading international financial institutions, which guarantee
minimum Euro-U.S. dollar exchange rates. The strategy of the Company is to hedge
the exchange rate for the distributions from its European assets after deducting
interest payments and euro-denominated general and
euro-denominated
administrative expenses. Through currency options, the Company hedges 100% of
its euro-denominated net exposure for the next 12 months and 75% of its euro
denominated net exposure for the following 12 months, on a rolling basis. Hedge
accounting is not applied to these options.
On July 17, 2020, Atlantica Sustainable Infrastructure Jersey Limited, a subsidiary of the
Company issued $100 million aggregate principal amount of 4.00% convertible bonds
(the “Green Exchangeable Notes”) due 2025. On July 29, 2020, Atlantica Sustainable
Infrastructure Jersey Limited closed an additional $15 million aggregate principal amount
of the Green Exchangeable Notes. The notes mature on July 15, 2025 and bear interest
at a rate of 4.00% per annum. The initial exchange rate of the notes is 29.1070 ordinary
shares of the Company per $1,000 principal amount of notes, which is equivalent to an
initial exchange price of $34.36 per ordinary share. Noteholders may exchange their
notes at their option at any time prior to the close of business on the scheduled trading
day immediately preceding April 15, 2025, only during certain periods and upon
satisfaction of certain conditions. On or after April 15, 2025, noteholders may exchange
their notes at any time. Upon exchange, the notes may be settled, at the election of the
Company, into its ordinary shares, cash or a combination thereof. The exchange rate is
subject to adjustment upon the occurrence of certain events.
The conversion option of the Green Exchangeable Notes is an embedded derivative
associated to the option to convert into the Company´s shares, with no obligation for
Atlantica Sustainable Infrastructure Jersey Limited to deliver itself these shares to the
Noteholders. It is therefore classified within the line “Derivative liabilities” of these
financial statements. As of December 31, 2022, the fair value is a liability of $4.7 million
(a liability of $16.7 million as of December 31, 2021). The prospective changes to its fair
410
value are accounted for directly through the income statement.
7. Trade and Other Payables
As of 31 December 2022, and 2021, Trade and other payables primarily relate to
independent professional services.
8. Equity
As of December 31, 2022, the share capital of the Company amounts to $11,605,513
($11,240,297 as of December 31, 2021) represented by 116,055,126 ordinary shares
(112,402,973 shares as of December 31, 2021) fully subscribed and disbursed with a
nominal value of $0.10 each, all in the same class and series. Each share grants one voting
right.
Algonquin owns 42.2% of the shares of the Company and is its largest shareholder as of
December 31, 2022. Algonquin’s voting rights and rights to appoint directors are limited
to 41.5% and the difference between Algonquin´s ownership and 41.5% will vote
replicating non-Algonquin’s shareholders’ vote.
On December 11, 2020, the Company closed an underwritten public offering of 5,069,200
ordinary shares, including 661,200 ordinary shares sold pursuant to the full exercise of
the underwriters’ over-allotment option, at a price of $33 per new share. Gross proceeds
were approximately $167 million. Given that the offering was issued through a subsidiary
in Jersey, which became wholly owned by the Company at closing, and subsequently
liquidated, the premium on issuance was credited to a merger reserve account (Capital
reserves), net of issuance costs, for $161 million. Additionally, Algonquin committed to
purchase 4,020,860 ordinary shares in a private placement in order to maintain its
previous equity ownership of 44.2% in the Company. The private placement closed on
January 7, 2021. Gross proceeds were approximately $133 million ($131 million net of
issuance costs).
During the first quarter of 2021, the Company changed the accounting treatment applied
to its existing long-term incentive plans granted to employees from cash-settled to
equity-settled in accordance with IFRS 2, Share-based Payment, as a result of incentives
being settled in shares. The liability recognized for the rights vested by the employees
under such plans at the date of this change, was reclassified to equity within the line
“Accumulated deficit” for approximately $9 million. The settlement in shares was
approved by the Board of Directors on February 26, 2021, and the Company issued
141,482 new shares to its employees up to December 31, 2021, to settle a portion of
these plans. During the year 2022, the Company issued 228,560 new shares under such
incentive plans.
On August 3, 2021, the Company established an “at-the-market program” and entered
into a distribution agreement with J.P. Morgan Securities LLC, as sales agent, under which
the Company may offer and sell from time to time up to $150 million of its ordinary
411
shares. The Company also entered into an agreement with Algonquin pursuant to which
the Company has offered Algonquin the right but not the obligation, on a quarterly basis,
to purchase a number of ordinary shares to maintain its percentage interest in Atlantica
at the average price of the shares sold under the distribution agreement in the previous
quarter (the “ATM Plan Letter Agreement”). On February 28, 2022, the Company
established a new “at-the-market program” and entered into a distribution agreement
with BofA Securities, MUFG and RBC Capital Markets, as its sales agents, under which the
Company may offer and sell from time to time up to $150 million of its ordinary shares.
Upon entry into the distribution agreement, the Company terminated its prior “at-the-
market program” established on August 3, 2021 and the related distribution agreement
dated such date, entered into with J.P. Morgan Securities LLC. During the year 2022, the
Company sold 3,423,593 shares (1,613,079 shares during the year 2021) at an average
market price of $33.57 ($38.43 in 2021) pursuant to its distribution agreement,
representing net proceeds of $114 million ($61 million in 2021). Pursuant to the ATM
Plan Letter Agreement, the Company delivers a notice to Algonquin quarterly in order
for them to exercise their rights thereunder.
Atlantica´s reserves as of December 31, 2022 are made up of share premium account and
capital reserves. The share premium account reduction by $200 million during the year
2021, increasing capital reserves by the same amount, was made effective upon the
confirmation received from the High Court in the UK, pursuant to the Companies Act
2006.
Other reserves primarily include the change in fair value of interest rate cashflow hedges
instruments, net of tax.
Accumulated deficit primary includes the results of the Company and the impact of
equity-settled incentive plans.
9. Cash and cash equivalents
Cash and cash equivalents as of December 31, 2022, include $60.8 million of cash at bank
and on hand ($88.3 million as of December 31, 2021).
10. Third-party guarantees
The Company, or other holding entities on its behalf, issued guarantees on behalf of
subsidiaries amounting to $216.9 million as of December 31, 2022 ($174.2 million as of
December 31, 2021), which correspond mainly to guarantees provided to off-takers in
PPAs, guarantees for debt service reserve accounts and guarantees for points of access
for renewable energy projects.
412