Atlantica Sustainable Infrastructure Annual Report 2023

← All annual reports

FY2023 Annual Report · Atlantica Sustainable Infrastructure

Loading PDF…

I N T E G R A T E D

A N N U A L

R E P O R T

Content

Atlantica in Two Minutes……….…………3

Business Ethics…………………………….167

Our Purpose and Values……………..…….5

About This Report…………………..………...6

Sustainability Governance……………174

Directors’ Report………………………….178

Audit Committee Report……………..198

Strategic Report…………………..………..…11

Directors’ Remuneration Report….204

Our Sustainable Business Model and
Strategy…………………………………………12

Events During the Period……………….20

Key Performance Indicators………….30

Directors’ Responsibilities
Statement…………………………………….230

Shareholder Engagement…………….232

Other Information……………………………233

A Fair Review of the Business……….33

Asset Portfolio……………………………….234

Financial Review……………………..…….38

Definitions…………………………………….236

Principal Risks and Uncertainties….56

Reconciliations……………….……………..242

ESG Materiality Analysis……………….74

Environmental Sustainability………..80

Social Sustainability…………………….117

Asset Management……………………..150

Innovation Management…………….154

Cybersecurity and Data Privacy…..155

Tax Management……………………….158

Section 172 Statement……………….160

Going Concern Basis………………….165

Governance…………………………………..167

Global Reporting Initiative (GRI)
Content Index…………………….………….244

Sustainability Accounting Standards
Board (SASB) Index………………….……253

Environmental, Social and Other Key
Performance Indicators…………..……257

Independent Auditor’s Report……..270

Consolidated Financial
Statements…………………………………..280

Company Financial Statements…...367

Atlantica in Two Minutes123

Our Business

2023 Selected Financial and Operational Metrics

Revenue
$1,100 Million

Adjusted EBITDA

$795 Million

Cash available for
Distribution
$236 Million

Operating Profit
$342 Million

Dividends Paid per
Share
$1.78

Renewable Energy
5,458 GWh Produced

Total Assets as of
December 31, 2023
$8.7 bn

Renewable Generation Pipeline Growth
▲12% vs. 2022

1 100% Contracted or regulated. Regulated revenues in Spain, Chile TL 3 and Italy and non-contracted nor regulated in the
case of Chile PV 1 and Chile PV 3.
2 Based on CAFD estimates for the 2024-2027 period as of March 1, 2024, for the assets as of December 31, 2023, including
assets that have reached COD before March 1, 2023.
3 We refer to section “Strategic Report” for further detail regarding the pipeline description.

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

Other 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

✓ Reduce our hazardous and non-hazardous waste4 per unit of energy generated by

30% and 40%, respectively, by 2035 from a 2023 base year.

EU Taxonomy
assessment: 97%
of CapEx invested
in sustainable
activities according
to EU Taxonomy.

Employees
1,366 people
▲40% vs 2022

Key KPIS

GHG Emissions
Avoided

GHG Emissions
Offset

7.0 million tons of
CO2e

380 thousand tons of
CO2e
▲ 23% vs 2021

Scope 1&2 emission
rate per unit of
energy generated

162 tons of gCO2/kWh
Improved 9% vs 2021

2023 Selected Social Metrics

83% Men

17% Women

▲22% women vs 2022

Health and Safety: LTFI5
and TRFI4 below sector
average

✓ LTFI and TRFI Decreased vs. 2022

Training hours
per employee

33 as of Dec. 2023

Local Communities

$1.5 million invested

4 The target does not include the waste generated during end-of-life decommissioning of the assets.
5 We refer to section “Occupational Health and Safety” for further detail.

Our Purpose and Values

Our Purpose

Our purpose is to support the transition towards a more sustainable world by developing, building,
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.

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, 2023.

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, 2023, except where otherwise noted.
Comparative data for the years ended December 31, 2022, and 2021 is also provided. Our 2022,
2021 and 2020 Integrated Annual Report, U.K. Annual Reports and ESG Reports are available for
download from our website.

ESG data reported corresponds to all consolidated subsidiaries. For Companies where Atlantica
has joint financial control, we are consolidating the percentage of equity ownership for each of
the ESG KPIs reported. Green House Gas emissions are accounted for following the financial
control approach from the GHG Protocol. Emissions from joint ventures where partners have joint
financial control are accounted for based on the equity share approach. We are accounting for
proportional scope 1 and scope 2 emissions of equity investments in scope 3, category 15
(Investments).

A multi-disciplinary team participated in the preparation of this report.

Currency amounts are expressed in U.S. Dollars unless otherwise noted.

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 2023, independent third parties have been engaged to verify our reported Scope 1, 2 and 3
GHG emissions under a reasonable level of assurance.

DNV, an independent expert in assurance and risk management, verifies all our reported Scope 1,
2 and 3 GHG emissions in all the geographies where we are present. In addition, we also hired:

- ANCE, a leading certification association across industries in Mexico, to verify Scope 1 and 2

greenhouse emissions in that geography,

- AENOR, a not-for-profit entity that fosters standardisation and certification across industrial
and service sectors in Spain, to review our Scope 1 stationary GHG emissions in that geography.

In addition, DNV has also been engaged to verify Atlantica’s air quality (i.e., non-GHG emissions),
waste and water indicators and their compliance with GRI Reporting under a limited level of
assurance.

In addition, in 2023 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.

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 employed by other companies and they may
have limitations as analytical tools. These measures may not be fit for isolated consideration or as
a substitute for analysis of our operating results as reported under IFRS as issued by the IASB.
Non-GAAP financial measures and ratios are not measurements of our performance or liquidity
under IFRS as issued by the IASB. Thus, they should not be considered as alternatives to operating
profit, profit for the period, any other performance measures derived in accordance with IFRS as
issued by the IASB, 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:

Some of the limitations of these non-GAAP measures are:

• they do not reflect our cash expenditures or 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.

We define Adjusted EBITDA as profit/(loss) for the period attributable to the parent company,
after adding back loss/(profit) attributable to noncontrolling interest, income tax expense,
financial expense (net), depreciation, amortisation and impairment charges of entities included in
our Annual Consolidated Financial Statements and depreciation and amortisation, financial
expense and income tax expense of unconsolidated affiliates (pro-rata of our equity ownership).
CAFD is calculated as 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 and including proceeds from the sale of assets. 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 such
measures provide investors with additional tools 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 measure of the Company’s ability to earn and distribute cash returns to investors
and is 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. Our management uses Adjusted
EBITDA, CAFD and CAFD per share as measures of operating performance to assist in comparing
performance from period to period and aims to use them 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. Adjusted EBITDA, CAFD and CAFD per share are widely used by other companies in
the same industry.

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 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.

R E N E W A B L E E N E R G Y - S O L A R

1,590 MW IN OPERATION

23 ASSETS

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.
Innovation management.
-
Tax management.
-
Section 172 statement.
-
- Non-Financial and Sustainability Information Statement.
- Going concern basis.

Our Sustainable Business Model and Strategy

Our Business

We are a sustainable infrastructure company with a majority of our business in renewable energy
assets. Our purpose is to support the transition towards a more sustainable world by developing,
building, investing and managing sustainable infrastructure assets, while creating long-term value
for our investors and the rest of our stakeholders. In 2023, renewables represented 73% of our
revenue, with solar energy representing 63%. 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 the date of this annual report, 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 45 assets with 2,171 MW of aggregate renewable 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, 2023, our assets had a weighted average remaining
contract life of approximately 13 years6.

We intend to grow our business through the development and construction of projects including
expansion and repowering opportunities, as well as greenfield developments, third-party
acquisitions, and the optimisation of our existing portfolio. We currently have a pipeline of assets
under development of approximately 2.2 GW of renewable energy and 6.0 GWh of storage.
Approximately 47% of the projects are PV, 41% storage, 11% wind and 1% other projects, while
22% are expected to reach ready-to-build (“RTB”) in 2024-2025, 28% are in an advanced
development stage and 50% are in early stage. Also, 20% are expansion or repowering
opportunities of existing assets and 80% greenfield developments.

Our objective is to pay a consistent and growing cash dividend to shareholders that is sustainable
on a long-term basis. We expect to distribute a significant percentage of our cash available for
distribution as cash dividends and we will seek to increase such cash dividends over time through
organic growth, investments in new assets and acquisitions.

Our plan for executing this strategy includes the following key components:

Grow our business by developing new projects and investing in new assets with a focus on
renewable energy and storage.

We intend to develop new assets and, in some cases, to invest in assets under development or
construction. 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 will assist
us in achieving our growth plans.

Focus on stable assets in renewable energy, storage and transmission, 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 limits
risks, reinforces stability and provides us with better growth opportunities.

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.

6 Calculated as weighted average years remaining as of December 31, 2023 based on CAFD estimates for the 2024-2027
period, including assets that have reached COD before March 1, 2024.

Maintain 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. 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. We
have a set of policies and a risk management system in place which define thorough risk
management processes.

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, 2023, 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.

A T L A N T I C A A S U S T A I N A B L E

I N F R A S T R U C T U R E P L A T F O R M

GROWTH PIPELINE

• 2.2GW + 6.0GWh storage
• Expansion/repowering

opportunities

• Greenfield development portfolio
• M&A

CONTRACTED PORTFOLIO

• Critical mass (>$8 billion in total assets)
• >70% renewable energy
• Diversified by geography and technology

ESG

OPERATIONAL EXCELLENCE

PRUDENT FINANCING

• CDP A list on climate change and
water security
• Sustainalytics industry top rated
• S&P CSA 2023 Global Sustainability
Yearbook
• #1 globally GRESB disclosure

• In-house operation and

maintenance

• Technical expertise across

technologies

• BB+ S&P, Fitch
• Mostly non-recourse debt
• Refinancing opportunities

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 137 years as of December 31, 2023, providing long-term cash
flow visibility. In 2023, approximately 54% 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 a more stable cash-flow generation. Going forward, our new investments will probably be
more 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.

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 (BNEF),
the next three decades will require between $46 trillion and $131 trillion of investment which
translates into an annual range of $1.5-$4.4 trillion. BNEF projects an annual investment of $1.2-
$3.9 trillion in low-carbon energy sources, including renewables, surpassing the $1 trillion invested
in 20228. Furthermore, clean energy is on track to set new records. Global installation of wind,
solar and storage is expected to exceed 680 GW in 2024, up 22% from 2023. Solar is anticipated
to lead the way in 2024 with over 500 GW expected to be installed; which will likely make it the
largest source of new capacity and new generation worldwide. Onshore wind follows as the
second-highest, with close to 100 GW projected to be installed in 2024, followed by storage
capacity, of which around 50 GW is expected to be installed9.

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.

7 Calculated as weighted average years remaining as of December 31, 2023 based on CAFD estimates for the 2024-2027
period, including assets that have reached COD before March 1, 2024.
8 BNEF Theme: Energy Investment and Climate Scenarios.
9 Where Energy Markets and Climate Policy Are Headed in 2024: BNEF.

We have in-house development capabilities and partnerships with third parties to co-develop new
projects. Our development asset identification is supported by rigorous analysis and deeply
rooted industry knowledge and experience. In addition, we follow a disciplined approach to make
capital allocation decisions and we have strict minimum required returns for development projects
and acquisitions that we update frequently. In addition, our current portfolio of assets offers
growth opportunities through the expansion and repowering of existing assets and through
hybridisation 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.

Proven capabilities in operation and maintenance.

We perform operation and maintenance in-house in a majority of our assets. We believe this
approach allows us to have full control of our assets and to optimise their performance. We can
benefit from synergies in shared resources and centralised purchasing management, among other
advantages. Our corporate operations departments have a plan to periodically review all our
assets in detail to identify best practices and improvement actions which are then implemented
across the portfolio.

Solid financing expertise.

Our Finance team has extensive experience in project financing and project refinancing in our
different geographies. In our corporate financing, we have access to different pools of capital. We
have issued bonds in the public markets, including convertibles, private placements with different
types of investors, bank financing and commercial paper. Since a portion of the assets have
revenues denominated in euros, we can issue corporate financings in euros, to take advantage of
lower costs.

Lean corporate structure focused on value added activities.

We operate a lean and efficient organisation where corporate functions support each operating
asset. Our core corporate policies are supported by a solid commitment to risk management that
guides all our decisions. We believe that our internal management system ensures a nimble
decision-making process while ensuring compliance with our policies and risk management
system.

Well positioned in ESG.

In 2023, 72% 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%, including renewable energy, transmission infrastructure, as well as water
assets. We have set a target to maintain over 85% of our Adjusted EBITDA generated from low-
carbon footprint assets.

We have set a target to reduce our scope 1 and scope 2 GHG emissions per unit of energy
generated10 by 70% by 2035, with 2020 as base year. This target was validated in 2021 by the
Science Based Targets initiative. We have also set a target to reduce our scope 3 emissions per
unit of energy generated by 70% by 2035 from a 2020 base year. With this, we target to achieve
net zero GHG emissions by 2040. Additionally, we have also set targets to reduce non-GHG
emissions per unit of energy generated and to reduce our water consumption per unit of energy
generated.

In 2023, our key health and safety indicators met annual targets and remained below the sector
average in all our geographies. Health and Safety is our number one priority, and we want our

10 Including thermal generation.

employees, partners, and contractors to apply the highest standards to ensure safe and
sustainable operations.

Regarding our local communities, 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. In 2023 we invested $1.5 million. Atlantica’s investments in local
communities are focused on improving infrastructure and supporting education.

In terms of governance, we maintain a simple structure with one class of shares. The majority of
our Directors are independent, and all the board committees are formed exclusively by
independent directors. 22% of our directors are women. We believe that we have a solid
compliance framework with a set of policies approved and reviewed annually by the Board of
Directors, a Code of Conduct which is acknowledged by all employees annually and internal
procedures aimed at ensuring that all geographies comply with our policies.

We have been rated by various ESG rating agencies, which we believe can provide relevant
information for investors.

Growth Visibility

Development Pipeline

We are 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 2.2 GW of renewable
energy and 6.0 GWh of storage. Approximately 47% of the projects are in PV, 41% in storage and
11% in wind, while 22% of the projects are expected to reach ready to build (“Rtb”) in 2023 or
2024, 28% are in an advanced development stage and 50% are in early stage.

Pipeline of Assets Under Development11

North America
Europe
South America
Total

Renewable Energy (GW)
1.2
0.4
0.6
2.2

Storage (GWh)

4.3
1.6
0.1
6.0

11 Only includes projects estimated to be ready to build before or in 2030 of approximately 3.7 GW, 2.2 GW of renewable
energy and 1.5 GW of storage (equivalent to 6.0 GWh). Capacity measured by multiplying the size of each project by
Atlantica’s ownership. Potential expansions of transmission lines not included.

R E N E W A B L E E N E R G Y - W I N D

442 MW IN OPERATION

7 ASSETS

Events During the Period

Assets that entered into operation

During 2023, four assets that were under construction entered into operation:

• 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 wholly owned solar PV assets in Colombia with a combined
capacity of 30 MW both of which reached COD in the first quarter of 2023. Each plant has a
10-year PPA in local currency with Coenersa, the largest independent electricity wholesaler
in Colombia. Each PPA provides for the sale of electricity at fixed base price indexed to local
CPI.

• Honda 1, a 10 MW PV asset in Colombia reached COD in December 2023. Honda 1 is a 10
MW plant where we have a 50% ownership. The asset has a 7-year PPA with Enel Colombia,
a major electricity company in the country. The PPA is denominated in local currency, with
fixed base price, indexed to the local CPI.

Assets under construction

As of December 31, 2023 we had the following assets under construction or ready to start
construction in the short-term:

Asset

Type

Location

Capacity
(Gross)

Expected
COD

Expected
Investment
($ million)

Coso Batteries 1

Battery Storage

California, US

100 MWh

2025

40-50

Coso Batteries 2

Battery Storage

California, US

80 MWh

2025

35-45

Chile PMGD2

Solar PV

Chile

80 MW

ATN Expansion 3

Transmission Line

Peru

ATS Expansion 1

Transmission Line

Peru

2.4 miles
220kV
n.a.
(substation)

2024 -
2025

2024

2025

Honda 24

Solar PV

Colombia

10 MW

2024

Solar PV

Apulo 14
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.

Colombia

10 MW

2024

303

5.5

15.5

Off-taker

Investment
grade utility
Investment
grade utility

Regulated

Conelsur

Republic of
Peru
Enel
Colombia
-

•

In October 2023, we entered into two 15-year tolling agreements (PPAs) with an investment
grade utility for Coso Batteries 1 and Coso Batteries 2. Under each of the tolling agreements,
Coso Batteries 1 and 2 will receive fixed monthly payments adjusted by the financial settlement
of CAISO’s Day-Ahead market. In addition, we expect to obtain revenue from ancillary services
in each of the asset.

Coso Batteries 1 is a standalone battery storage project of 100 MWh (4 hours) capacity located
inside Coso, our geothermal asset in California. Additionally, Coso Batteries 2 is a standalone
battery storage project with 80 MWh (4 hours) capacity also located inside Coso. Our

•

investment is expected to be in the range of $40 million to $50 million for Coso Batteries 1,
and in the range of $35 to $45 million for Coso Batteries 2. Both projects were fully developed
in-house and are now under construction. We have closed a contract with Tesla for the
procurement of the batteries. COD is expected in 2025 for both projects.

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 under construction (Chile PMGD). Our
economic rights are expected to be approximately 70%. Total investment in equity and
preferred equity is expected to be approximately $30 million and COD is expected to be
progressive in 2024 and 2025. 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 at a stabilized price.

In July 2022 we closed a 17-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 (ATN Expansion 3). The substation is expected to
enter in operation in 2024 and the investment is expected to be approximately $12 million.

In July 2023, as part of the New Transmission Plan Update in Peru, the Ministry of Energy and
Mines published the Ministerial Resolution that enables to start construction of our ATS
Expansion 1 project, consisting in the reinforcement of two existing substation with new
equipment. The expansion will be part of our existing concession contract, a 30-year contract
with a fixed-price tariff base denominated in U.S. dollars adjusted annually in accordance with
the U.S. Finished Goods Less Foods and Energy Index as published by the U.S. Department of
Labor. Given that the concession ends in 2044, we will be compensated with a one-time
payment for the remaining 9 years of concession. The expansion is expected to enter in
operation in 2025 and the investment is expected to be approximately $30 million.

•

In May 2022, we agreed to develop and construct Honda 1 and 2, two PV assets in Colombia
with a combined capacity of 20 MW where we have a 50% ownership. Each plant has a 7-year
PPA with Enel Colombia. Our investment is expected to be $5.5 million for each plant. Honda
1 entered in operation in December 2023 and Honda 2 is expected to enter into operation in
the second quarter of 2024.

Advanced Projects

•

In February 2024, we entered into a 15-year busbar PPA with an investment grade utility for
Overnight. Overnight is a 150 MW PV project located in California. Under the PPA, Overnight
is set to receive a fixed price per MWh, with no basis risk. The project is currently in an advanced
development stage. Total investment is anticipated to be within the range of $165 to $185
million. We expect to include storage in a second phase of the project.

In January 2024, we acquired from Liberty GES two PV projects in advanced development stage
in Southern Spain with approximately 90 MW of combined generation capacity. The acquisition
of land and interconnection are secured and the process for permits is well advanced. The
projects were acquired in exchange for assuming the necessary guarantees, at no additional
cost.

Potential Asset Sale

Our partner in Monterrey initiated a process to sell its 70% stake in the asset. Such process is well
advanced and, as part of it, we intend to sell our interest as well under the same terms. The net
proceeds to Atlantica are expected to be in the range of $45 to $52 million, after tax. The closing
of the transaction is subject to certain conditions precedent. We cannot guarantee that the
transaction will finally close.

Project Debt Refinancing

In March 2023, we refinanced the Solaben 2 and Solaben 3 project debt by entering into two
green senior euro-denominated loan agreements for the two assets with a syndicate of banks for
a total amount of €198.0 million. The new project debt replaced the previous project loans for a
similar amount and maturity was extended from December 2030 to June 2037.

In addition, in June 2023 we extended the maturity of the debt for Logrosan Solar Inversiones,
S.A, the subsidiary-holding company of Solaben 2 & 3 and Solaben 1 & 6 from April 2025 to
December 2028. We refer to section “Liquidity” under “Financial Review” for more information.

Operation and Maintenance

In March 2023, we completed the process of transitioning in-house the O&M services for our
assets in Spain through the acquisition of the business of an Abengoa subsidiary which was still
providing those services to some of our assets.

In addition, in July 2023 we internalised the O&M services for ATN, which were previously
performed by Omega Peru. Additionally, the O&M contract for ATS with Omega Peru, which could
be terminated every five years was modified and can now be terminated every three years (or two
years under certain circumstances) and the contract for ATN2, which was a long-term contract
expiring in 2027, was also amended to reflect the same termination provision.

Currently, we perform O&M services with our own personnel for assets representing
approximately 74% of our consolidated revenue for the year ended December 31, 2023.

Regulation in Spain

In June 2023, the final parameters for the year 2023 were published, including a revised
assumption for electricity prices for the years 2023, 2024 and 2025.

Useful
Life 2023

Remuneration
on Investment
2023-2025
(Euros /MW)

Remuneration
on Operation
2024
(Euros/MW)

Adjustment
Rate

Maximum
Hours

Minimum
Hours 2024-
2025

Operating
Threshold
2024-2025

Solaben 2

Solaben 3

Solacor 1

Solacor 2

PS 10

PS 20

25 years

Helioenergy 1

25 years

Helioenergy 2

25 years

Helios 1

Helios 2

Solnova 1

Solnova 3

Solnova 4

Solaben 1

Solaben 6

Seville PV

25 years

30 years

378,506

533,115

393,001

372,549

387,136

392,031

384,318

677,855

0.9854

0.9948

0.9942

0.9845

0.9857

0.9849

0.9860

0.9809

2,004

1,837

2,004

2,030

1,202

1,102

1,202

1,218

701

643

701

711

19.798

14.044

Strategic Review

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 maximise shareholder value.
The Company believes it has attractive growth and other opportunities in front of it and is
committed to ensuring it is best positioned to take advantage of those opportunities. The decision
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. As of the date of this annual report, the strategic review is ongoing. 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. Please refer to the section: “Principal Risk and
Uncertainties”.

Main ESG Actions during the year

Investing in and developing new sustainable infrastructure projects are 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:

Improved our Health and Safety Metrics: 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 2023, all our key health and safety indicators met
annual targets, improved with respect to 2022 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. Reduced our GHG emissions: We have reduced our Scope 1 and 2 GHG emissions per KWh
of energy generated and our Scope 3 GHG emissions per KWh of energy generated for the
fourth consecutive year. We refer to the “Environment” section for further detail on our
environmental performance in 2023.

3. Offset our GHG emissions: Global warming is a challenge that requires the active
participation of public and private organisations. In 2023, as part of our commitment to
sustainability, we continued mitigating our GHG emissions. We encourage you to read our
GHG emissions section for detailed information on our mechanism to offset GHG emissions.

Invested 97% of our capex in activities aligned with EU Taxonomy: 100% of our
economic activities are eligible following the EU Taxonomy and 97% of our CapEx investment
is aligned to the EU Taxonomy. 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).

5. Reduced water consumption: We continue to reduce water consumption at our power
generation assets. In 2023 water consumption decreased by 5% compared to 2022 mainly
due to higher production efficiency at our solar assets in Spain and the U.S. (more recycled
water in cooling towers). We refer to the “Environment” section for further detail on our
environmental performance in 2023.

6. Reduced hazardous waste: Third consecutive year reducing our hazardous waste. In 2023,
we reduced total hazardous waste by 27% compared to previous year. This reduction was
mainly driven by an innovative water treatment system installed at one of our solar assets in
Spain. We refer to the “Environment” section for further detail on our environmental
performance in 2023.

Improved our Ethics and Corporate Governance culture: In December 2023, the Board
approved our Water Policy and updated the following documents:

✓ Stakeholder Policy

✓ Biodiversity Policy

✓ Environmental Policy

✓ Health and Safety Policy

These policies are available on our website.

8. 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 2023 we did two green project refinancings:

(1)

(2)

In March 2023 we refinanced Solaben 2&3 for €198.0 million. The new project debt
replaced the previous project loans. We refer to “Project Debt Refinancing” under
“Events During the Period” section.

In June 2023 we extended the maturity of the debt of Logrosan Solar Inversiones, S.A.U.,
the sub-holding company of Solaben 1&6 and Solaben 2&3. The Green Project Finance
was extended from April 2025 to December 2028 and the initial nominal amount was
€140 million.

Improved our environment and social awareness: In 2023, we actively posted ESG content
on social media to increase ESG awareness among our stakeholders.

10. Action Declaration on climate policy engagement: In November 2022, Atlantica endorsed
the “Action Declaration on climate policy engagement” activities, an initiative from Corporate
Knights and the Global 100 Council. This declaration intends to close the say-do gap on
countries’ emission reductions by:

- supporting climate action aligned with the Paris Agreement when engaging with trade

associations;

- working with major trade associations to advance alignment with the Paris Agreement;

and

- monitoring and disclosing climate policy alignment for our trade association.

In 2023 we have assessed the trade associations with whom we collaborate. We refer to
section “Trade Associations” under the “Governance” section for further detail.

V E R Y G O O D P R O G R E S S O N

O U R E S G C R E D E N T I A L S

Included for the
3rd consecutive year in CDP’s Climate Change “A List”
and for the 1st year in Water Security “A List”

Included for the 3rd 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

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

Contribution to the Sustainable Development Goals

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.

The table below summarises Atlantica’s contribution to achieving 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 plan to reduce our water consumption at our generating assets that use cycled water in
the turbine circuit and in refrigeration processes. In 2023, we recycled 17% more water, which
mainly contributed to a 4% decrease in our overall water consumption.

In addition, we have a target approved by the Board of Directors to reduce our water
consumption per unit of energy generated (KWh) by 50% by 2035, from a 2020 base year. In
2023, our water consumption per unit of energy generated decreased by 5% compared to
2022.

We invest in water desalination plants that generate drinking water for local communities
and industries through the desalination of sea water. In 2023, these assets generated purified
seawater to meet the water needs of approximately 3 million people in regions with limited
access to fresh water.
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 2023, our renewable sector accounted for 73% of our revenue, with solar energy
representing 63%. We intend to grow our business through the development and
construction of projects including expansion and repowering opportunities, as well as
greenfield developments, third-party acquisitions and the optimisation of our portfolio.
During 2023, four assets that were under construction entered into operation:

- Albisu, the 10 MW PV asset reached COD in January 2023.
- La Tolua and Tierra Linda, two PV assets with a combined capacity of 30 MW both reached

COD in the first quarter of 2023.

- Honda 1, a 10 MW PV asset reached COD in December 2023.

In addition, we have 3 PV projects, 2 storage projects and 2 transmission lines that are
currently under construction.

We currently have a pipeline of assets under development of approximately 2.2 GW of
renewable energy and 6.0 GWh of storage. We are also in the process of selling our 30%
stake in one of our efficient natural gas assets. We encourage you to read section “Growth
visibility” for further details on affordable and clean energy investments.

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 2023 targets,
improved with respect to 2022 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 2023, 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 2023.

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. In addition,
we support local economic growth by choosing to buy from local businesses. In 2023, more
than 90% of our total purchases in the geographies where we have assets were made to local
suppliers.

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.

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.

Following our long-term commitment to sustainability, we have set an ambitious plan to
reduce:

1. Our GHG emissions. We target to:

(i) reduce our Scopes 1 and 2 GHG emissions per kWh of energy generated by 70% by
2035 from a 2020 base year12. This target has been approved by the Science Based
Targets initiative (SBTi)

(ii) reduce Scope 3 GHG emissions per kWh of energy generated by 70% by 2035 from a

2020 base year, and

(iii) achieve 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 addition, we have a goal to maintain over 85% of our adjusted EBITDA generated from
low carbon footprint assets including renewable energy, storage, transmission infrastructure
and water assets.

In 2023, we reduced (i) our Scopes 1 and 2 GHG emissions per kWh of energy generated by
14% compared to 2020 and (ii) our Scope 3 GHG emissions per kWh of energy generated by
20% compared to 2020.

In addition, we helped avoid up to 7.0 million tonnes of equivalent CO2 compared to a 100%
fossil fuel-based generation plant.

Please read our Environmental Sustainability section for further details on our climate change
related activities.

12 The target boundary includes steam generation.

Atlantica also supports other SDGs, as outlined below:

We promote equal opportunities for our employees and stakeholders. Atlantica’s Diversity and
Inclusion Policy was approved by the Board of Directors in May 2020 and was last amended in
December 2021

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 aim to perform a human capital analysis every 4 years at certain locations. The objective of
this analysis is to guarantee equal opportunities to our employees and to promote a culture of
diversity and inclusion.

We analyse gender pay gap, for the year ended December 31, 2023 the total overall pay gap
decreased and was 5%.

We encourage you to read the Social and Governance sections for further details on gender
equality.

We work to protect flora and fauna in and around our assets. We are committed to achieving “no
net loss” of biodiversity and “no net deforestation” in the areas where we operate and in all project
phases through the application of the Mitigation Hierarchy.

In 2023, we continued to: (i) monitor the impact of spinning blades on local species of birds at our
wind farms in Uruguay, and (ii) collaborate with local administrations and other key stakeholders
to protect species settled close to our assets in the U.S. and Spain.

We have set a target to reduce our hazardous and non-hazardous waste per unit of energy
generated by 30% and 40%, respectively, by 2035 from a 2023 base year.

In addition, in 2023 we continued to deliver on our reforestation programme in Spain, where we
invested approximately $445 thousand in reforesting a new 48-hectare area and maintaining
previously reforested areas.

We encourage you to read the Environmental Sustainability section for further details on our
biodiversity initiatives.

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 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’ economic prosperity through local purchasing and by hiring local employees.

In 2023, four PV assets that were under construction reached COD in Uruguay and Colombia. In
addition, as of December 31, 2023, we have 2 battery storage projects in the U.S., 1 PV project in
Chile, 2 transmission lines in Peru and 2 additional PV projects in Colombia that are under
construction and that we expect will reach COD during 2024-2025. We also have a pipeline of
assets under development of approximately 2.2 GW of renewable energy and 6.0 GWh of storage.

To ensure reliability of our assets we: (1) own 22 patents and technology licences, as well as 4
patents currently in approval process, 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, (2) have an operations department to identify potential measures to 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.

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.

T R A N S M I S S I O N L I N E S

1,229 Miles

7 ASSETS

Key in Transition Towards Green Generation

Key Performance Indicators

Financial KPIs

$ in millions
Revenue

Operating Profit
Adjusted EBITDA

Cash Available for Distribution (CAFD)

Cash Available for Distribution (CAFD) per share (in USD)

Total dividends paid

2023

2022

2021

1,100

1,102

1,212

342

795

236

2.03

207

278

797

238

2.07

203

354

824

226

2.03

190

Renewable energy
MW in operation13
GWh produced14
Efficient natural gas
MW in operation15
GWh produced16
Electric Availability (%)
Electric transmission lines
Miles in operation
Availability (%)
Water
Mft3 in operation16
Availability (%)

Operational KPIs

2023

2,171
5,458

398
2,549
99.6%

1,229
100.0%

17.5
99.7%

2022

2,121
5,319

398
2,501
98.9%

1,229
100.0%

17.5
102.3%

2021

2,044
4,655

398
2,292
100.6%

1,166
100.0%

17.5
97.9%

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.

13 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.
14 Includes 49% of Vento II wind portfolio production since its acquisition. Includes curtailment in wind assets for which
we receive compensation.
15 Includes 43 MW corresponding to our 30% share in Monterrey and 55 MWt corresponding to Calgary District Heating.
16 GWh produced includes 30% of the production from Monterrey.

E N E R G Y S T O R A G E A N D

E F F I C I E N T N A T U R A L G A S

Dispatchable Solutions

Key in Transition Towards Green Generation

Selected Environmental Metrics

Maintain over 85% 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 Generated

Scope 1
Scope 2
Scope 3
Total

GHG Emissions Avoided

thousand
tonnes of
CO2e

gCO2/kWh

million
tonnes of
CO2e

Water
Management in
Power
Generation

Waste
Management

Withdrawal

Discharges

m3 per MWh

Hazardous waste
Non-hazardous
waste

tonnes of
waste

2023

89%

1,395

250

799

2,444

380

1,775
250
799
2,824

162

7.0

1.46

0.17

1,402

25,993

2022

89%

1,524

249

814

2,587

320

1,844
249
814
2,907

168

6.9

1.54

0.18

1,908

23,142

2021

88%

1,535

237

798

2,570

260

1,795
237
798
2,830

185

5.9

1.64

0.22

2,576

22,212

Notes:
1. 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).

2. 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

Selected Social Metrics

Health and Safety

Employees

Percentage of
Women
Gender Pay Gap3

Total Recordable Frequency Index
Lost Time Frequency Index
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

2023
4.3
1.9
1,714
7.6%
10.7%

17%
17%
5%

2022
5.2
3.1
1,246
12.8%
16.8%

23%
20%
13%

2021
6.4
2.4
1,623
11.0%
15.9%

23%
25%
26%

Investments focused on improving infrastructure
and supporting education

Notes:
1.

Turnover rates calculated based on the average number of employees in each year excluding temporary employees
and employees hired to replace sick or leaves.

2. Health and safety industry benchmarks provided in the Health and Safety section. job function, level, education,

performance, location, or exchange rate differences. Overtime has not been included.

3. Data includes fixed salary, short-term bonus and long-term incentive plans without adjusting for factors such as

CEO has been excluded from the analysis as we believe that including his compensation would distort the results.
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.
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

A Fair Review of the Business

Factors that Affect Comparability of our Results of Operations

▪

Investments

The results of operations of Chile TL4, Italy PV 4 and Chile PV 3 have been fully consolidated
since January 2022, April 2022 and September 2022, respectively and the results of Albisu,
Tierra Linda and La Tolua have been fully consolidated since these assets entered into
operation in the first quarter of 2023. For the full year 2023, these investments represented
revenues and Adjusted EBITDA of $14.1 million and $10.5 million respectively, which
represents an increase of $7.9 million in revenue and $7.6 million in Adjusted EBITDA for the
year ended December 31, 2023 with respect to 2022.

▪

Impairment

In 2023, considering that expected electricity prices in Chile over the remaining useful life of
Chile PV1 have decreased, 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 $16.1 million in 2023 in the line “Depreciation, amortisation,
and impairment charges”. In 2022, we also recorded an impairment loss of $20.4 million in
Chile PV1 and Chile PV2. Our equity interest in Chile PV 1 and Chile PV 2 is 35%. As a result,
the impact of the impairment charges in “Profit / (loss) for the year attributable to the parent
company” after non-controlling interest was $5.6 million in 2023 and $7.1 million in 2022.

During 2022 we recorded an impairment loss of $41.2 million in Solana with no corresponding
triggering event and impairment in 2023.

In addition, IFRS 9 requires impairment provisions to be based on expected credit losses on
financial assets rather than on actual credit losses, which affects the concessional assets
accounted for as financial assets. For the year 2023 we recorded a decrease in the expected
credit loss impairment provision of $13.2 million reflected in the line item “Depreciation,
amortisation, and impairment charges” and was primarily related to ACT ($10.9 million). In
2022 we recorded an increase in the expected credit loss impairment provision of $6.7 million,
also primarily related to ACT ($4.0 million).

▪

Electricity market prices

Total revenues in Spain were stable in 2023 compared to the previous year. In addition to
regulated revenue, our solar assets in Spain receive revenue from the sale of electricity at
market prices. The average electricity market price captured by our assets was approximately
€69.9 per MWh during 2023 compared to approximately €145.3 per MWh during 2022.
Revenue from the sale of electricity at current market prices represented $84.3 million during
2023, compared to $142.9 million in 2022. 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 and as a result, we record a provision. We
decreased our provision by $3.5 million in 2023, with no cash impact, compared to an increase
of $25.3 million in the previous year.

In 2023, we have calculated the provision assuming that the average market price must be
corrected using the solar time of day adjustment factor (“coeficiente de apuntamiento”), as it
was stated in the regulations published since 2020. This factor, which is 90% for 2023, aims to
capture the difference between the daily (24 hours) average market price and the price
captured by solar assets. Although the factor is not mentioned in the regulation for 2023, we
believe the last order includes a clerical error that we expect is going to be corrected.

On May 12, 2022, remuneration parameters in Spain for the year 2022 were published and
became final on December 14, 2022, with a decrease in regulated revenue. In addition, on

June 30, 2023, the new parameters were published, including a revised assumption on
electricity prices for the years 2023, 2024 and 2025. Revenue from the sale of electricity at
market prices net of the incremental market price provision was $84.0 million for the full year
2023, compared to $117.6 million for the full year 2022. This decrease was offset by higher
production in 2023.

Additionally, 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, however revenue
for the year ended December 31, 2022 was recorded in accordance with the new parameters
that became final on December 14, 2022, which were lower. Collections were regularised in
the first quarter of 2023.

▪

Exchange rates

We refer to “Exchange rates” below.

Significant Trends Affecting Results of Operations

▪

Investments and acquisitions

If the recently built assets and the recently closed acquisitions perform as anticipated, we
expect these assets to positively impact our results of operations in 2024 and upcoming years.

▪

Solar, wind and geothermal resources

The availability of solar, wind and geothermal resources affects the financial performance of
our renewable assets, which may impact our overall financial performance. Due to the variable
nature of solar, wind and geothermal resources, we cannot predict future availabilities or
potential variances from expected performance levels from quarter to quarter. Based on the
extent to which the solar, wind and geothermal resources are not available at expected levels,
this could have a negative impact on our results of operations.

▪ Capital markets conditions

The capital markets in general are subject to volatility that is unrelated to the operating
performance of companies. Our growth strategy depends on our ability to close acquisitions,
which often requires access to debt and equity financing to complete these acquisitions.
Fluctuations in capital markets may affect our ability to access this capital through debt or
equity financings.

▪

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 U.S. dollars. 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, Honda 1, our solar plants in Colombia, have their revenue and
expenses denominated in Colombian pesos and Albisu, our solar plant in Uruguay, has its
revenue denominated in Uruguayan pesos, with a maximum and a minimum price in U.S.
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 constant currency information provides
valuable supplemental information 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 meant to substitute
recorded amounts presented in conformity with IFRS as issued by the IASB, 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, 2023, approximately 92% of our
project debt and close to 94% 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 or SOFR.

▪

Trends on 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. 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 1% of our portfolio in terms
of Adjusted EBITDA. At Lone Star II we are analysing, together with our partner, the option to
repower or recontract the asset in the context of the IRA, at a point in time to be determined.

Due to low electricity prices in Chile, the project debts of Chile PV 1 and 2 are under an event
of default as of December 31, 2023 and as of the date of this report. Chile PV 1 was not able
to maintain the minimum required cash in its debt service reserve account as of December
31, 2023 and did not make its debt service payment in January. In addition, in October 2023,
Chile PV 2 did not make its debt service payment. This asset obtained additional financing

from the banks and made the debt service payment in December, although it was not able to
fund its debt service reserve account subsequently. As a result, although we do not expect an
acceleration of the debt to be declared by the credit entities, as of December 31, 2023 Chile
PV 1 and 2 did not have an unconditional right to defer the settlement of the debt for at least
twelve months and the project debt was classified as current in our Annual Consolidated
Financial Statements. We are in conversations with the banks, together with our partner,
regarding a potential waiver. Impairments were recorded in these assets in 2023 and 2022.
The value of the net assets contributed by Chile PV 1 and 2 to the Annual Consolidated
Financial Statements, excluding non-controlling interest, was close to zero as of December
31, 2023.

H E A L T H A N D S A F E T Y :

OUR NUMBER 1 PRIORITY

IMPROVED ALL OUR HEALTH AND SAFETY INDICATORS

Financial Review

Renewable energy

2023

2022

2021

2,044
4,655

2,121
5,319

2,171
5,458

MW in operation1
GWh produced2
Efficient natural gas
MW in operation3
GWh produced4
Electric Availability (%)
Electric transmission lines
Miles in operation
Availability (%)
Water
Mft3 in operation
Availability (%)
Note:
(1) Represents total installed capacity in assets owned or consolidated at the end of the year, regardless of our percentage

398
2,292
100.6%

398
2,549
99.6%

398
2,501
98.9%

17.5
102.3%

1,229
100.0%

1,166
100.0%

17.5
99.7%

17.5
97.9%

1,229
100%

of ownership in each of the assets except for Vento II for which we have included our 49% interest.

(2) Includes 49% of Vento II wind portfolio production since its acquisition. Includes curtailment in wind assets for which

we receive compensation.

(3) Includes 43 MW corresponding to our 30% share in Monterrey and 55MWt corresponding to Calgary District Heating.
(4) GWh produced includes 30% of the production from Monterrey.

Production in the renewable business sector increased by 2.6% in 2023, compared to 2022. The
increase was largely due to an increase in production in our solar assets in Spain and to the
contribution from the assets recently consolidated or which have entered into operation recently,
including Chile PV 3, La Tolua, Tierra Linda, Albisu and Italy PV 4, bringing approximately 147.9
MWh of additional electricity generation during the year 2023.

•

In our solar assets in the U.S., production increased by 7.4% in 2023 compared to 2022,
in spite of lower solar radiation in average during the year. The increase was mainly due
to greater availability of the storage system in Solana. On the other hand, production
decreased by 9.8% in our wind assets in the U.S., due to lower wind resource in 2023
compared to 2022. Production also decreased at Coso mostly due to scheduled
maintenance stops and to lower availability of the transmission line due to the snow storm
in California in the first quarter of 2023.

In Chile, production at our Chile PV 1 and Chile PV 2 assets decreased by 11.5% in 2023
compared to 2022 mainly because of higher curtailments. At our wind assets in South
America, production increased by 6.6% due to better wind resource.

In Spain, production at our solar assets increased by 17.5% in 2023 mostly due to better
solar radiation compared to 2022, with good performance of the assets.

• At Kaxu, production decreased by 48.6% in 2023 compared to 2022 mostly due to an
outage of the plant. In the third quarter, a scheduled turbine major overhaul was carried
out by Siemens, the original equipment manufacturer and took approximately 30 days
longer than expected. After restarting production, at the end of September, a problem
was found in the turbine, likely related to the major overhaul. The plant restarted
operations in mid-February. Part of the damage and the business interruption is covered
by our insurance property policy, after a 60-day deductible.

Our efficient natural gas and heat assets, our water assets and our transmission lines, for which
revenue is based on availability, continued at very high levels during 2023.

Results of Operations

The table below details our results of operations for the years ended December 31, 2023, and
2022.

$ in millions
Revenue
Year ended December 31,
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, net1

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

Year ended December 31,

2023

2022

1,099.9

101.1

(104.1)

(418.3)

(336.6)

342.0

25.0
(323.7)

(2.5)

(16.6)

(318.0)

13.2

37.2

(0.8)
36.5

6.9

43.4

1,102.0

80.8

(80.2)

(473.6)

(351.3)

277.7

10.1
(330.4)

10.3

(0.9)

(310.9)

21.4

(11.8)

9.7
(2.1)

(3.3)

(5.4)

Notes:
(1) Classification within Financial income and financial expense has been revised to show a more meaningful
classification of financial income and expense following the increase in interest rates. Prior period classification has
been revised accordingly.

Revenue

Revenue decreased to $1,099.9 million for the year 2023 compared to $1,102.0 million for 2022.
Revenue decreased primarily due to the decrease in production at Kaxu resulting from the
unscheduled outage and the maintenance stop previously explained. Revenue at Kaxu decreased
by $45.8 million. Part of the damage and the business interruption is covered by our insurance
property policy, after deductibles, and as such we have recorded a $15.3 million insurance income
in Other operating income.

These effects were partially offset by higher revenues at our solar assets in the U.S. due to higher
electricity production especially in Solana, as previously explained. Revenue also increased at our
transmission lines in 2023 compared to 2022 mostly as a result of inflation adjustments to tariffs,
including a positive tariff adjustment in Chile TL 3 corresponding to previous years, which was
published in the second quarter of 2023. In addition, the Company generated additional revenue
from assets recently consolidated and assets that entered into operation recently, which together
represented a total of $14.1 million of revenue in 2023 compared to $6.2 million in 2022. Revenue
remained stable at our solar assets in Spain, since higher production during the period was offset
by lower electricity prices, net of its corresponding accounting provision (due to the factors
described under “—Factors that Affect Comparability of our Results of Operations — Electricity
Market prices”).

Other Operating Income

The following table details our other operating income for the years ended December 31, 2023,
and 2022:

$ in millions
Grants
Insurance proceeds and other
Year ended December 31,
Income from subcontracted construction services for our assets
and concessions

Total

Year ended December 31,

2023

2022

58.7
35.8

6.6

59.1
21.7

101.1

80.8

“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 during 2023,
compared to 2022.

“Insurance proceeds and other” increased by $14.1 million in 2023 compared to 2022. In 2023,
“Insurance proceeds and other” included $15.3 million of insurance proceeds related to the Kaxu
unscheduled outage, as previously explained. In addition, it included $4.6 million income from the
sale of part of our equity interest in our development company in Colombia to a partner who now
holds a 50% equity interest, with joint control. Finally, it includes $4.8 million related to
improvements in our Calgary district heating asset which are re-invoiced to the municipality, with
the corresponding cost recorded in “Other operating expenses”. In 2022, “Insurance proceeds and
other” included an insurance income of $9.5 million.

“Income from construction services for our assets and concessions” is related to the construction
of ATS Expansion 1 and ATN Expansion 3. Since these assets are accounted for under IFRIC 12, we
are required to account for income from construction services as “Other operating income”, with
the corresponding construction cost recorded within “Other operating expenses, Construction
costs”.

Employee Benefit Expenses

Employee benefit expenses increased by 29.7% to $104.1 million for 2023, compared to $80.2
million in 2022 mainly due to the internalisation of the O&M services at Kaxu in 2022 and at our
solar assets in Spain in 2022 and 2023.

Depreciation, Amortisation, and Impairment Charges

Depreciation, amortisation, and impairment charges decreased by 11.7% to $418.3 million for the
year ended December 31, 2023, compared to $473.6 million for the year ended December 31,
2022. The decrease was mainly due to the $41 million impairment loss recorded at Solana in 2022,
with no corresponding amount in 2023. The decrease was also due to a decrease of the expected
credit loss impairment provision 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 a
decrease in the credit loss impairment provision of $10.9 million in 2023, while in 2022, it recorded
an increase in the credit loss impairment provision of $4.0 million. In Chile, we recorded an
impairment of $16.1 million related to Chile PV1. In 2022 we also recorded an impairment of $20.4
million at Chile PV 1 and Chile PV 2. On the other hand, these effects on depreciation, amortisation
and impairment were partially offset by increased charges due to the consolidation of assets
recently acquired or which entered in operation recently.

Other Operating Expenses

The following table details our other operating expenses for the years ended December 31, 2023,
and 2022:

Other operating expenses
Raw materials
Leases and fees
Operation and maintenance
Independent professional
Supplies
services
Insurance
Levies and duties
Other expenses
Construction costs
Total

Year ended December 31,

2023

2022

$ in millions
35.4
14.4
130.4
30.7
37.8
41.1
15.0
25.2
6.6
336.6

% of revenue $ in millions
19.7
3.2%
11.5
1.3%
140.4
11.9%
38.9
2.8%
59.3
3.4%
45.8
3.7%
19.8
1.4%
16.0
2.3%
0.6%
-
351.3
30.6%

% of revenue
1.8%
1.0%
12.7%
3.6%
5.4%
4.2%
1.8%
1.3%
-
31.8%

Other operating expenses decreased by 4.2% to $336.6 million for the year ended December 31,
2023, compared to $351.3 million for the year ended December 31, 2022 mainly due to lower cost
of "Supplies” and lower “Operation and maintenance” costs.

Cost of supplies decreased mostly due to lower price of electricity in our assets in Spain. In
addition, our operation and maintenance costs decreased during 2023, compared to 2022 mainly
due to lower O&M costs in Spain, where these services have been internalised and are now
provided by employees of Atlantica, with the cost classified in “Employee benefit” expenses.

On the other hand, the cost of “Raw Materials” increased in the subsidiaries which are now
performing the operation and maintenance which was previously subcontracted, as these costs
are now assumed directly by subsidiaries of Atlantica. “Other expenses” include costs related to
improvements in our Calgary district heating asset which are re-invoiced to the municipality, as
previously discussed.

“Construction costs” refers to the cost of construction of ATS Expansion 1 and ATN Expansion 3.

Operating Profit

As a result of the previously above-mentioned factors, operating profit increased by 23.2% to
$342.0 million for the year ended December 31, 2023, compared with $277.7 million for the year
ended December 31, 2022.

Financial Income and Financial Expense17

Year ended December 31, 2023
$ in millions
Financial income
Financial expense
Net exchange differences
Other financial income/(loss), net
Financial expense, net

25.0
(323.8)
(2.5)
(16.7)
(318.0)

2022

2023

10.1
(330.4)
10.3
(0.9)
(310.9)

Financial Income

The following table details our financial income for the years ended December 31, 2023, and
2022:

17 Classification within Financial income and financial expense has been revised to show a more meaningful classification
of financial income and expense following the increase in interest rates. Prior period classification has been revised
accordingly.

$ in millions

Interest income on deposits and current accounts
Interest on loans and credits
Interest rates losses derivatives: cash flow hedges
Total

Year ended December 31, 2023

2023

2022

21.7
2.9
0.4
25.0

7.7
1.3
1.1
10.1

Financial income increased from $10.1 million in 2022 to $25.0 million 2023 mostly due to
higher remuneration of deposits resulting from higher interest rates.

Financial Expense

The following table details our financial expense for the years ended December 31, 2023, and
2022:

$ in millions

Interest on loans and notes
Interest rates gains / losses derivatives: cash flow
hedges
Total

Year ended December 31, 2023

2023

2022

(350.4)
26.6

(292.0)
(38.4)

(323.8)

(330.4)

Financial expense decreased to $323.8 million in 2023 compared to $330.4 million in 2022. Interest
rates have been higher in 2023 than in 2022, causing an increase in interest on loans and notes,
which has been more than offset by the impact in our income statement of the derivatives hedging
our loans. The decrease is due to a $26.6 million gain in “Interest rate gains/losses on derivatives:
cash flow hedges”, where we record transfers from equity to the income statement when the
hedged item impacts profit and loss compared to a $38.4 million loss in 2022, due to the increase
in the reference rates in 2023, compared to 2022. Considering interest gains on hedge instruments
of such loans and notes, total interest decreased in 2023 as in 2022, which is primarily due to the
repayment of project and corporate debt in accordance with the financing arrangements.

Net Exchange Differences

Net exchange differences decreased to a $2.5 million loss in 2023 compared to a $10.3 million
income in 2022. The decrease was mainly due to the change in fair value of caps hedging our
net cash flows in Euros, which was largely stable in 2023 while it increased in 2022.

Other Financial Income/(Expense), Net

$ in millions

Other financial income/(expenses)

Other financial income
Other financial expense

Total

Year ended December 31,
2022
2023

8.8
(25.5)

(16.7)

20.5
(21.4)

(0.9)

Other financial income/(expense), net increased to a net expense of $16.7 million in 2023,
compared to a net expense of $0.9 million in 2022.

Other financial income in 2023, primarily includes an income of $3.9 million corresponding to the
change in the fair value of the conversion option of the Green Exchangeable Notes in the period,
(compared to $12.0 million in 2022). Other financial income also includes a non-monetary change
to the fair value of derivatives of Kaxu for which hedge accounting is not applied for $0.1 million
(compared to $6.2 million in the 2022) and a one-time income related to the extension in the
maturity of the Green Project Finance, which qualifies as a refinancing from an accounting
perspective.

Other financial expense increased in 2023, 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. Other financial expense also includes expenses for
guarantees and letters of credit, wire transfers, other bank fees and other minor financial expenses.

Share of Profit of Associates Carried Under the Equity Method

Share of profit of associates carried under the equity method decreased to $13.2 million in the
year ended December 31, 2023, compared to $21.4 million in the year ended December 31, 2022
primarily due to a lower profit at Vento II, resulting from lower production and a lower price at
Lone Star II after its PPA expired in January 2023.

Profit/(loss) Before Income Tax

As a result of the previously mentioned factors, we reported a profit before income tax of $37.2
million for the year ended December 31, 2023, compared to a loss before income tax of $11.8
million for the year ended December 31, 2022.

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, 2023 and 2022, is as follows:

Consolidated profit/(loss) 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

2023

$ in millions

37.2
25%
(9.3)
3.3
(4.3)
(11.1)
17.5
3.1

(0.8)

(11.8)
25%
2.9
5.4
(4.3)
(10.9)
4.0
12.7

9.7

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, 2023 the overall effective tax rate was different than the
statutory rate of 25% primarily due to permanent differences, most of which relate to exchange
rate differences in Mexico, where taxes are calculated in local currency, which was partially offset
by unrecognized tax credits in several jurisdictions.

Loss/(profit) Attributable to Non-Controlling Interests

Loss attributable to non-controlling interests was $6.9 million for the year ended December 31,
2023 compared to $3.4 million profit for the year ended December 31, 2022. Loss /(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 loss in profit attributable to non-controlling interest in
2023 was mainly due to the loss reported in Kaxu resulting from lower production as previously
explained.

Profit / (Loss) Attributable to the Parent Company

As a result of the previously mentioned factors, profit attributable to the parent company was
$43.4 million for the year ended December 31, 2023, compared to a loss of $5.4 million for the
year ended December 31, 2022.

Comparison of the Years Ended December 31, 2022 and 2021

The significant variances or variances of the significant components of the results of operations
between the years ended December 31, 2021 and December 31, 2021, are discussed in the 2022
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, Efficient natural gas and
heat, Transmission lines and Water. We report our results in accordance with both criteria.

Year ended December 31,

2023

2022

Revenue by geography
North America
South America
EMEA

Total revenue

$ in millions

% of revenue

$ in millions

% of revenue

424.9
188.1
486.9

1,099.9

38.6%
17.1%
44.3%

100.0%

405.1
166.4
530.5

1,102.0

36.8%
15.1%
48.1%

100.0%

Year ended December 31,

2023

2022

Adjusted EBITDA by geography

$ in millions

% of Adjusted
EBITDA

$ in millions % of Adjusted

North America

South America

EMEA

Adjusted EBITDA1

319.3 40.1%

146.7 18.5%

328.9 41.4%

794.9 100.0%

310.0

126.5

360.6

797.1

EBITDA

38.9%

15.9%

45.2%

100.0%

Note:
(1) 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 produced/availability

Volume/ availability by geography
North America (GWh)1
North America availability2
South America (GWh)3
South America availability2
EMEA (GWh)
EMEA availability

Year ended December 31,

2023

2022

5,749
99.6%
957
99.9%
1,301
99.7%

5,743
98.9%
799
99.9%
1,278
102.3%

Note:
(1) GWh produced includes 30% of the production from Monterrey and our 49% of Vento II wind portfolio production

since its acquisition.

(2) Availability includes only those assets that have revenue based on availability.
(3)

Includes curtailment production in wind assets for which we receive compensation.

North America

Revenue increased by 4.9% to $424.9 million for the year ended December 31, 2023, compared
to $405.1 million for the year ended December 31, 2022, while Adjusted EBITDA increased by 3.0%
to $319.3 million for the year ended December 31, 2023, compared to $310.0 million for 2022.
The increase in revenue was mainly due to higher electricity production in our solar assets in the
U.S. as previously discussed, together with higher revenue at ACT (see “Efficient natural gas &
heat” below), which was partially offset by lower revenue at Coso due to lower production.
Adjusted EBITDA increased mainly due to the increase in revenue and lower costs in our solar
assets in the US, mostly caused by lower insurance costs and lower O&M costs at Mojave. These
effects were partially offset by lower EBITDA at Vento II, caused by lower production and lower
prices at Lone Star II after the end of its PPA.

South America

Revenue increased by 13.0% to $188.1 million for the year ended December 31, 2023, compared
to $166.4 million for the year ended December 31, 2022. The increase was mainly due to
indexation to inflation in our revenue in transmission lines, including a positive tariff adjustment
in Chile TL 3 corresponding to previous years which was published in the second quarter of 2023,
and in wind assets in South America. Revenue also increased due to assets recently consolidated
and assets which entered in operation recently. This increase was partially offset by lower revenue
at our PV assets in Chile, where production decreased mostly due to lower electricity prices and,
to a lower extent, curtailments. Adjusted EBITDA increased by 15.9% to $146.7 million for the year
ended December 31, 2023, compared to $126.5 million for the year ended December 31, 2022,
mostly due to the increase in revenue and to a $4.6 million gain from the sale of part of our equity
interest in our development company in Colombia to a partner in the first quarter of 2023.

EMEA

Revenue decreased to $486.9 million for the year ended December 31, 2023, which represents a
decrease of 8.2% compared to $530.5 million for the year ended December 31, 2022. The decrease
was mainly due to lower revenue at Kaxu by $45.8 million, mostly due to an unscheduled outage
coupled with a prolonged maintenance stop, as previously explained. Revenue at our solar assets
in Spain remained stable.

Adjusted EBITDA decreased to $328.9 million for the year ended December 31, 2023, which
represents a decrease of 8.8% compared to $360.6 million for the year ended December 31, 2022.
Adjusted EBITDA decreased mainly due to the outage at Kaxu causing a $26.6 million decrease in
EBITDA. The impact in Adjusted EBITDA was lower as a result of insurance income.

Revenue by business sector

Renewable energy
Efficient natural gas & heat
Transmission lines
Water

Total revenue

$ in
millions

802.8
118.4
123.5
55.2

1,099.9

Year ended December 31,

2023

2022

% of revenue

$ in millions % of revenue

73.0%
10.8%
11.2%
5.0%

821.4
113.6
113.2
53.8

100.0%

1,102.0

74.5%
10.3%
10.3%
4.9%

100.0%

Adjusted EBITDA by business
sector
Renewable energy
Efficient natural gas & heat
Transmission lines
Water
Adjusted EBITDA1

Year ended December 31,

2023

2022

$ in
millions

575.7
87.4
96.0
35.8

794.9

% of
Adjusted EBITDA
72.4%
11.0%
12.1%
4.5%

100.0%

$ in
millions

588.0
84.6
88.0
36.5

797.1

% of
Adjusted EBITDA
73.8%
10.6%
11.0%
4.6%

100.0%

Note:
(1) 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 produced/availability

Volume by business sector
Renewable energy (GWh)1
Efficient natural gas & Heat (GWh)2
Efficient natural gas & Heat availability
Transmission lines availability
Water availability

Year ended December 31,

2023

2022

5,458
2,549
99.6%
100.0%
99.7%

5,319
2,501
98.9%
100.0%
102.3%

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 $802.8 million for the year ended December 31, 2023, which represents a
decrease of 2.3% compared to $821.4 million for the year ended December 31, 2022. The decrease
in revenue was primarily due to lower revenue at Kaxu as previously discussed. On the other hand,
revenue increased at our solar assets in the U.S. due to higher electricity production as previously
explained and at our wind assets in South America due to higher production and price indexation
to inflation, together with the contribution of assets recently consolidated. As previously
explained, revenue at our solar assets in Spain remained stable.

Adjusted EBITDA decreased to $575.7 million for the year ended December 31, 2023, which
represents a decrease of 2.1% compared to $588.0 million for the year ended December 31, 2022.
The decrease in Adjusted EBITDA was mainly due to the decrease in revenue and to lower EBITDA
at Vento II, as previously explained.

Efficient Natural Gas and Heat

Revenue increased by 4.2% to $118.4 million for the year ended December 31, 2023, compared
to $113.6 million for the year ended December 31, 2022, while Adjusted EBITDA increased by 3.3%
to $87.4 million for the year ended December 31, 2023, compared to $84.6 million for the year
ended December 31, 2022. Revenue and Adjusted EBITDA increased at ACT with Adjusted EBITDA
increasing by less mainly due to higher O&M costs, since there is a portion of revenue related to
O&M services plus a margin.

Transmission Lines

Revenue increased by 9.0% to $123.5 million for the year ended December 31, 2023, compared
to $113.2 million for year ended December 31, 2022, while Adjusted EBITDA increased by 9.1% to
$96.0 million for the year ended December 31, 2023 compared to $88.0 million for the year ended
December 31, 2022. The increase in revenue and Adjusted EBITDA was mainly due to tariff

indexation to inflation including a positive tariff adjustment in Chile TL 3 corresponding to
previous years.

Water

Revenue increased to $55.2 million for the year ended December 31, 2023, which represents a
2.6% increase compared to $53.8 million for the year ended December 31, 2022. Adjusted EBITDA
decreased to $35.7 million for the year ended December 31, 2023, which represents a 1.9%
decrease compared to $36.5 million for year ended December 31, 2022. Adjusted EBITDA
decreased while Revenue increased because of higher O&M costs, which are indexed to inflation.

Comparison of the Years Ended December 31, 2022 and 2021

The significant variances in the revenue and volume, by geographic region and business sector,
between the years ended December 31, 2022 and December 31, 2021, are discussed in the Form
20-F filed with the SEC on February 28, 2023.

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 liquidity1

Liquidity at project companies
Restricted cash
Non-restricted cash

Total cash at project companies

Year ended December 31,
2023

2022

($ in millions)

33.0

378.1

411.1

177.0
238.3

415.3

60.8

385.1

445.9

207.6
332.6

540.2

Note:
(1) Corporate liquidity means cash and cash equivalents held at Atlantica Sustainable Infrastructure plc as of

December 31, 2023, and available revolver capacity as of December 31, 2023.

Cash at the project level includes $177.0 million and $207.6 million restricted cash balances as of
December 31, 2023 and 2022, 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, 2023, $16.9 million of letters of credit were outstanding under the Revolving
Credit Facility and we had $55 million of borrowings. As a result, as of December 31, 2023, $378.1
million was available under the Revolving Credit Facility. As of December 31, 2022, we had $30
million of borrowings and $34.9 million of letters of credit outstanding and $385.1 million was
available under our Revolving Credit Facility.

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.

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, 2023. 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

2023

2022

Revolving Credit Facility
Other Facilities1
Green Exchangeable Notes
2020 Green Private Placement
Note Issuance Facility 2020
Green Senior Notes
Total Corporate Debt2
Total Project Debt

Note:

2025
2024-2028
2025
2026
2027
2028

$ in millions
54.4
53.3
110.0
318.7
152.4
396.0
1,084.8
4,319.3

29.4
30.1
107.1
308.4
147.2
395.1
1,017.2
4,553.1

(1) Other facilities include the commercial paper programme, accrued interest payable and other debts.
(2) Accounting amounts may differ from notional amounts.

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 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, the Green Exchangeable Notes and the credit line with Export Development
Canada.

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 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, the Green Senior Notes, and the credit line with Export
Development Canada.

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 as purchasers of
the notes issued thereunder for a total amount of €140 million ($155 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 three-month EURIBOR plus a margin
of 5.25% with a floor of 0% for the EURIBOR. We had a cap at 0% for the EURIBOR with 3.5 years

maturity and in December 2023, we entered into a cap at 4% to hedge the variable interest rate
risk with maturity on December 31, 2024.

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, the Green Senior Notes, and the credit line with Export
Development Canada. 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 ($320 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, the
Green Senior Notes and the credit line with Export Development Canada. 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 30, 2023, the maturity of the Revolving Credit Facility was extended to December
31, 2025. 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
Eurodollar 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 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, the Green Senior Notes and the credit line with Export
Development Canada. 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.

Credit Line with Export Development Canada

In June 2023 we entered into a senior unsecured $50 million line of credit with Export
Development Canada with a 3 year maturity. The purpose of the credit line is to finance the
construction of sustainable projects. The interest is at a rate per annum equal to Term SOFR plus
a percentage determined by reference to our leverage ratio, ranging between 2.46% and 3.11%,
with a floor of 0% for the Term SOFR. The facility matures on May 25, 2026 and was fully available
as of December 31, 2023.

Our obligations under this credit line are equal in right of payment with our outstanding
obligations under the 2020 Green Private Placement, the Note Issuance Facility 2020, the Green
Exchangeable Notes, the Green Senior Notes, the Revolving Credit Facility. Our payment
obligations under this line 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, and are 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 ($11.0 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 three-month EURIBOR or SOFR, plus a margin of 2%, with a floor of 0% for the
EURIBOR or SOFR. On August 7, 2023 the limit was increased to €15 million ($16.6 million) and
the maturity was extended until July 2025. As of December 31, 2023, €9.0 million ($9.9 million)
where drawn from this credit line.

In December 2020 and January 2022, we also entered into two different loans with banks for €5
million ($5.5 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. Furthermore, in February 2023, we entered into a loan with a bank for €7 million ($7.7
million) with maturity in February 2028 accrues interest at a rate per annum equal to 4.2%.

Commercial Paper Programme

On November 21, 2023, we filed a euro commercial paper programme with the Alternative Fixed
Income Market (MARF) in Spain. The programme has a maturity of twelve months. The
programme allows Atlantica to issue short term notes for up to €100 million, with such notes
having a tenor of up to two years. As of December 31, 2023, we had €23.3 million ($25.7 million)
issued and outstanding under the Commercial Paper Programme at an average cost of 5.23%
maturing on or before June 2024.

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 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. During the year 2023, we did not issue and sell any ordinary shares
under the programme.

C) Project debt refinancing

In March 2023 we refinanced Solaben 2&3. We entered into two green senior euro-denominated
loan agreements for the two assets with a syndicate of banks for a total amount of €198.0 million.
The new project debt replaced the previous project loans and maturity was extended from
December 2030 to June 2037. The interest on the loans accrues at a rate per annum equal to the
sum of six-month EURIBOR plus a margin of 1.50% between 2023 and June 2028, 1.60% between
June 2028 and June 2033 and 1.70% from June 2033 onwards. The principal is 90% hedged for
the life of the loan through a combination of the following instruments:

•

a pre-existing cap with a 1.0% strike with notional of €115.1 million starting in March 2023
and decreasing over time until December 2025,

a swap with a 3.16% strike with initial notional of €64.9 million starting in March 2023. The
notional increases progressively until June 2026 and decreases progressively thereafter until
maturity to ensure that the principal hedged stays at 90% over the life of the loan

The financing agreement also includes 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.

The total outstanding balance of these loans as of December 31, 2023 was $202.9 million for both
Solaben 2 and Solaben 3. The financing arrangements permit cash distributions to shareholders
twice per year if the debt service coverage ratio is at least 1.10x.

In addition, on April 8, 2020, Logrosan Solar Inversiones, S.A, the subsidiary-holding company of
Solaben 2 & 3 and Solaben 1 & 6 entered into the Green Project Finance with ING Bank, B.V. and
Banco Santander S.A. The facility is a green project financing euro-denominated agreement. The
Green Project Finance is guaranteed by the shares of Logrosan and its lenders have no recourse
to Atlantica corporate level.

In June 2023 we extended the maturity of the debt from April 2025 to December 2028. The facility
had an initial notional of €140 million of which approximately 37% is amortised between the
signing date and maturity. The outstanding balance of this facility as of December 31, 2023, was
$118.2 million, of which €23.2 million is progressively amortised with a two-year grace period and
the remaining €87.8 million is expected to be refinanced at maturity.

The interest on the loans accrues at a rate per annum equal to the sum of six-month EURIBOR
plus a margin of 3.25%. The principal is 100% hedged for the life of the loan through a
combination of the following instruments:

•

a pre-existing cap with a 0% strike with notional of €115.9 million starting by June 2023 and
decreasing over time until December 2025.

a cap with a 3.5% strike with initial notional of €2.5 million starting in June 2023. The notional
increases progressively until June 2025 up to €110.9 million and decreases progressively
thereafter until maturity to ensure that the principal hedged stays at 100% over the life of
the loan.

The Green Project Finance permits cash distribution to shareholders twice per year if Logrosan
sub-holding company debt service coverage ratio is at least 1.20x and the debt service coverage
ratio of the sub-consolidated group of Logrosan and the Solaben 1 & 6 and Solaben 2 & 3 assets
is at least 1.075x.

Use of Liquidity and Capital Requirements

A) Debt service

Principal payments on debt as of December 31, 2023, are due in the following periods according
to their contracted maturities:

$ in millions

Project Debt1,2

Corporate Debt

Total Debt
Note:
(1)

2024

2025

2026

2027

2028

Subsequent
Years

Total

320.3

34.0

354.3

325.3

179.1

504.4

352.5

321.0

673.5

500.0

154.0

654.0

464.6

396.8

861.4

2,356.5

4,319.2

1,048.8

2,356.5

5,404.0

(2)

Includes the outstanding amount of the Project Finance from Coso. Of which, on July 15, 2021 the notional amount
was $233 million. From that amount, $93 million is progressively repaid following a theoretical 2036 maturity, with a
legal maturity in 2027. The remaining $140 million are expected to be refinanced on or before 2027.
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.

$ in millions

Total

Up to one
year

Between one
and three years

Between three and
five years

Subsequent
years

Purchase commitments

713.8

81.9

Accrued interest estimate
during useful life of loans

1,717.8

264.2

100.0

481.4

97.0

359.4

434.6

612.8

Purchase obligations include agreements for the purchase of goods or services that are
enforceable and legally binding and that specify all significant terms.

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, on an annual
basis.
We intend to distribute a quarterly dividend to shareholders. Our board of directors may, by
resolution, amend the cash dividend policy at any time (See “Directors Report”).

D) Investments and Acquisitions

The investments and the assets under construction detailed in “Significant events in 2023” have
been part of the use of our liquidity in 2023. In addition, we have made investments in assets
which are currently under development or construction.

We intend to grow our business through the development and construction of our project
pipeline including expansion and repowering opportunities, as well as greenfield developments,
third-party acquisitions and the optimisation of our existing portfolio. We currently have a pipeline
of assets under development of approximately 2.2 GW of renewable energy and 6.0 GWh of
storage. Approximately 47% of the projects are PV, 41% storage, 11% wind and 1% other projects,
while 22% are expected to reach ready-to-build (“RTB”) in 2024-2025, 28% are in an advanced
development stage and 50% are in early stage. Also, 20% are expansion or repowering
opportunities of existing assets and 80% greenfield developments.

E) Capital Expenditures

In 2023, we invested $27.9 million in maintenance capital expenditures in our assets. In 2022, we
invested $39.1 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.

W I L D L I F E A N D V E G E T A T I O N

P R O T E C T I O N

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 risk management system is based on risk identification, assessment, prioritisation, mitigation
and monitoring processes, which are continually evaluated, improved and enhanced in line with
best practice. Considerations regarding climate change are fully integrated within our risk
management system.

Understanding and mitigating our risks is critical to our future success. We are therefore
committed to an effective, robust system of risk identification and an effective response to such
risks, in order to support the achievement of our objectives.

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 are strongly committed to complying with all rules and regulations. We continuously

strive for the highest standards of business conduct, safety and professionalism.

• We aim to deliver sustainable and consistent returns for shareholders in line with a

conservative risk appetite and strong risk management capability.

• 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 of operational assets 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.

•

Grow our business through the development and construction of assets

• We intend to grow our business maintaining renewable energy as our main segment with a

primary focus on North America and Europe

• Our development asset identification is supported by rigorous analysis and industry

knowledge and experience.

• We follow a disciplined approach to capital allocation and required returns for development

projects and acquisitions.

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.

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

potential 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 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.

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
•
• Approves the Risk Management Policies

Is the owner of principal risks

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.

Principal risks
The Company and its underlying assets are subject to a number of risks. The processes and
systems implemented have been designed to mitigate those risks to the extent possible.
At the end of 2022, we included the potential impacts of dependence on certain key personnel
because employee turnover increased in 2022 as one of our risks. During 2023, turnover has
decreased and the relevance of this risk in our risk map has also decreased. In addition, in 2023,
we included as one of our significant risks the potential delays and extra costs in projects under
construction, as our development and construction activities continued increasing as planned.
During the year 2023, we have also considered the potential increase in long-term interest rates
as one of or significant risks.

We include the following table as a summary of some of those risks and action plans carried out
to mitigate them:

Risk / Impact

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

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.

Low

The ownership, construction and operation of
our assets often put our employees and
others, including those of our subcontractors,
in close proximity with large pieces of
mechanised equipment, moving vehicles,
manufacturing or
industrial processes,
electrical equipment, batteries, heat or liquids
stored under pressure or
at high
temperatures and highly regulated materials.
On most assets and at most facilities, we, in
some cases together with the operation and
maintenance suppliers or the construction
company, are
safety.
Accordingly, we must
implement safe
practices and safety procedures, which are
also applicable to on-site subcontractors.

responsible

for

If we or a supplier or the construction
company fail to design and implement such
practices and procedures or if the practices
and procedures are ineffective or if our
operation and maintenance service providers
or
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.

the contractors

in charge of

We are also subject to regulations dealing

has

As our construction activity
increases, our exposure to
accidents
also
increased, since accident
performance indicators are
in
typically
activities
construction
compared
to operation
and maintenance.

higher

In 2023 all our key health
and safety indicators met
and
annual
targets
remained below
sector
average. LTFI (Lost Time
Frequency Index18) was 1.9
and improved with respect
to 3,1 in 2022. TRFI (Total
Recordable
Frequency
Index19) was 4.3 and also
improved compared to 5.2
in 2022 (see “Occupational
Health and Safety”). After
an increase in 2022 in LTFI
caused by our construction
activities, and following our
efforts, the KPI improved in
to
2023. We continue
all
closely
accidents and incidents. As
the construction activity of
new projects increases in
the
2023

monitor

2024,

and

- 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 based on lessons learned in
other assets, as well as from peers,
contractors and suppliers.

- We have defined a plan to reinforce
our health and safety procedures
during the construction phase and to
involve the construction companies.

to ensure a

- We have different initiatives in our
assets
safe work
environment, such as the SafeStart
and the Dupont-Bradley programmes
(we refer to our “Occupational Health
and Safety section on Page 123)

- To integrate recently acquired assets
we have performed specific external
and internal audits, issued new safety
campaigns and bulletins, performed
safety inspections, procedures and
training, and extended health and
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 our
management
includes Health and
Safety targets.

18 Lost Time Frequency Index represents the total number of lost-time accidents recorded, including major injuries (defined
as death or serious accidents), in the last 12 months per 1,000,000 hours worked. Differs from the metric generally used
in the U.S. which is calculated per 200,000 hours worked.
19 Total Recordable Frequency Index TRFI represents the total number of recordable accidents with and without lost-time
recorded in the last 12 months per 1,000,000 hours worked. Differs from the metric generally used in the U.S. which is
calculated per 200,000 hours worked.

Risk / Impact

Risk
Appetite

Risk
Trend

with occupational health and safety and
environmental work procedures throughout
our organisation. The failure to comply with
such
to
reputational damage and/or liability.

regulations could subject us

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
utilities, industrial or commercial end-users or
governmental entities, with a weighted
average remaining duration of approximately
13 years as of December 31, 2023.

If any of our clients are unable or unwilling to
fulfil their contractual obligations or if they
delay payments, our business,
financial
condition, results of operations and cash flow
may be materially adversely affected.

Pemex’s credit rating is currently BBB, B3 and
B+ from S&P Global Rating (“S&P”), Moody’s
Investor Service Inc. (“Moody’s”) and Fitch
Ratings Inc. (“Fitch”), respectively. We have
experienced delays in collections from Pemex
in the past, especially since the second half of
2019, which have been significant in certain
quarters, including the fourth quarter of 2023.

In addition, Eskom is the off-taker of our Kaxu
solar plant, a state-owned, limited liability
company, wholly owned by the Republic of
South Africa. The credit rating of Eskom has
weakened in the last few years and is
currently B from S&P, B2 from Moody’s and B
from Fitch .

Poor performance of assets

If our assets perform worse than expected, we
can 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,
limited to,
degradation of equipment in excess of our
expectations, system failures and outages
and more operational costs or maintenance
capital expenditures than initially expected.

including, but not

In addition, Atlantica relies on third parties for
the supply of services and equipment,
complex
technologically
including
software, and certain
equipment and
to
operation and maintenance services

Medium

Low

Assessment of Change
in Risk
Year-on-Year
exposure to this risk is
expected to increase.

have

There was a downgrade of
Pemex credit rating by
Fitch in 2023. In the past,
experienced
we
delays in collections and
periods when such delays
were
reduced. As of
December 2023, delays in
collections were higher
than usual.

In the case of Eskom, the
credit rating of S&P has
improved during 2023 and
we have never experienced
delays in collections.

During 2023, our assets
have generally performed
fairly
with
expectations.

line

However, at Solana, we
have been working on
repairs and replacements
in the storage system since
2021 until the first half of
2023. During this period,
availability in the storage
lower than
system was
expected. We
cannot
guarantee that the repairs
will be effective,
that
Solana will reach expected
production
that
additional repairs will not
be required.

Mitigation of Risk

- See section “Occupational Health and
comprehensive
a

Safety”
description of our initiatives.

for

In the case of Pemex, during 2023 we
have maintained
a pro-active
approach including fluid dialogue
with our client and we have increased
the number of meetings with them.
We are currently working with them
on a plan to reduce the amount due
in the upcoming months.

In the case of Kaxu, Eskom’s payment
guarantees to our Kaxu solar plant
are underwritten by the South African
Department of Energy, under the
terms
implementation
agreement. The credit ratings of the
Republic of South Africa as of the
date of this report are BB-/Ba2/BB-
by S&P, Moody’s
Fitch,
respectively and all these ratings
have remained stable during 2023.

and

- Dedicated

supervisory

and
management teams in place at our
assets.

- Reporting and monitoring systems in

place.

- Asset managers are responsible for
completing checklists designed to
identify operational, maintenance and
engineering, risks, improve efficiency
and reduce costs at asset level.

regular

- Our corporate operations

team
performs
operational,
maintenance and engineering audits
to
implement and
follow-up on mitigation plans and
best practices and share
insights
gained from other assets.

identify risks,

- Risk-related

training courses are
regularly provided to our employees
and subcontractors to improve their

In addition, in 2023 an
outage
unscheduled

Risk / Impact

Risk
Appetite

Risk
Trend

Low

operate our assets.

Equipment may not last as long as expected
and we may need to replace it earlier than
planned.

Damages to our equipment may not be
covered by insurance in place. Our property
damage and business interruption policies
have significant deductibles and exclusions
with respect to some key equipment which, if
damaged, could result in financial losses and
business interruption. In some cases, the
replacement of damaged equipment can take
a long period of time, which can cause our
plants to curtail or cease operations during
that time.

Dependence on key personnel and risk of
work stoppages

In some of our geographies, competition for
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 may face
high turnover, requiring us to dedicate time
and resources
train new
employees. The 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 our current personnel, this could
adversely impact the performance of our
assets, our business and future growth
prospects and our ability to compete.

find and

Assessment of Change
in Risk
Year-on-Year
occurred at Kaxu when a
problem was found in the
turbine, a few weeks after a
scheduled turbine major
overhaul was carried out by
original
the
Siemens,
equipment manufacturer.
restarted
The
operations
mid-
February.

plant

Mitigation of Risk

skills, identify new risk management
practices and
to
management.

report

them

- Operation and maintenance can be
either carried out
in-house or
contracted with specialists. We have
internalised
and
maintenance services in some of our
assets. We have also tracked down
and
alternative
maintenance opportunities
in the
market.

operation

- On-going analysis of

insurance
alternatives in the market and on-
insurance
going dialogue with
companies present in our programme
as well as alternative insurers.

- With respect to the outage at Kaxu,
part of the damage and the business
interruption
is covered by our
insurance property policy, after a 60-
day deductible.

- The

local

Department
Department
managing this risk.

the Operations
teams,
and
Insurance
the
take ownership of

In 2023, our turnover has
decreased, in particular in
the United States.

- Remuneration packages attractive to
employee, taking into account the
specific geography.

In addition, in March 2023,
we completed the process
of transitioning in-house
the O&M services for our
assets in Spain. In July 2023
we also internalised the
O&M services for ATN.
Currently, we perform
O&M services with our
own personnel for assets
representing
approximately 74% of our
consolidated revenue for
the year ended December
31, 2023.

- Identification of employees with high
potential and who are more difficult
to replace.

- The local teams and the People and
Culture Department take ownership
of managing this risk.

- We believe that having the O&M
services performed by our own
personnel provides a better control of
the process and permits a direct
dialogue with employees in charge of
these activities, which can help to
decrease
these
employees, who have experienced
traditionally a higher turnover rate.

turnover

for

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 covered by
collective bargaining agreements. A dispute
with a union or employees represented by a
union could result in production interruptions
caused by work stoppages. If our employees
or our operators’ employees were to initiate
a work stoppage, we may not be able to reach
an agreement with them in a timely fashion.
If a strike or work stoppage or disruption

Risk / Impact

to occur, our business,

financial
were
conditions, results of operations and cash
flows may be materially adversely affected.

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

Climate change

No significant change

Low

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. In addition,
climate change may cause transition risks,
related to existing and emerging regulation
related to climate change. These risks include:

- Acute physical. Severe and extreme
weather events include severe winds and
rains, hail, hurricanes, cyclones, droughts,
as well as the risk of fire and flooding. In
particular:

(1) Severe floods could damage our solar
generation assets or our water facilities.
Floods can also cause landslides which may
affect our transmission lines.
(2) If our transmission assets caused a fire,
we could be found liable if the fire
damaged third parties.
(3) 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 2023, a
winter storm affected a transmission line in
our geothermal asset Coso in California
and affected production for several days.
Also, natural gas assets and battery
systems could face operational
issues
caused by freezing or very cold conditions.
• Rising temperatures and droughts could
cause wildfires like the ones that have
affected California in recent years. In
California wildfires have been especially
catastrophic, causing human fatalities and
significant material losses. Although our
assets in California are located in areas
without trees and vegetation, wildfires
affected PG&E, one of our clients in 2018
and 2019. Severe winds could cause
damage the solar fields at our solar assets.

Furthermore, components of our equipment
and systems, such as structures, mirrors,
absorber tubes, blades, batteries, PV panels
or transformers are susceptible to being
damaged by severe weather, including for
example by hail or lightning.

- Chronic

increase

physical. An

in
temperatures can reduce efficiency and
increase operating costs at our plants. The
main
temperatures
include: lower efficiency in battery systems

impacts of

rising

(1) Lower turbine efficiency in our efficient

natural gas asset.

Acute physical:
Our geographic VPs and our
corporate operations team monitor
weather conditions in-real time at
each of the assets to adopt the
required protection measures. For
example, if high winds are forecasted,
our solar fields are placed in a defence
mode. In addition, we also have:
covering:

(i)
physical damage and (ii) l business
interruption.

- Insurance policies

- A crisis management procedure
defining specific action plans for all
our assets.

- An automatic alert system using
information
from U.S. National
Agencies and from local weather
forecast agencies.

- A specific procedure for extreme

weather.

- Furthermore, Atlantica does not have
in the U.S. any hedge contract in place
with an obligation to deliver electricity
with the potential risk of having to
purchase it at market price.

Chronic physical:

- Our corporate operations department
closely monitors the performance of
each of our assets
identify
measures that improve efficiency.
- In addition, Atlantica has historically
only withdrawn approximately 50% of
the total regulatory limit of water
permitted at our solar assets. Even if
the water limits were to be reduced,
we believe
to
withdraw enough water to keep our
plants working properly. Our local
teams
management
asset
systematically
track and monitor
water availability as a key asset KPI.

to have margin

Regulation:

contractual

- Current regulation: asset managers
are responsible for monitoring asset
activities in line with local regulation
and
requirements
(environmental, permits, servitudes,
etc.). Local compliance managers are
responsible for managing and solving
their
compliance
issues
their
geographies
under
including
responsibility,
the
supervision of
compliance with
current regulation. At the Corporate

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

level, the ESG team tracks and applies
all the reporting requirements.

Risk / Impact

(2) Reduced efficiency at our
photovoltaic generation assets.

solar

(3) Lower air density at our wind facilities.
(4) Lower efficiency in battery systems.

reduction

restrictions

of mean
Furthermore,
precipitation may result in a reduction of
availability of water from aquifers and could
also modify the main water properties at our
generation facilities. Droughts could result in
that may affect our
water
operations, and which may force us to stop
generation at some of our facilities. A
deterioration of the quality of the water
would also have a negative impact on
chemical costs in our water treatment plants
at our generating facilities.

- Current Regulation. Atlantica is directly
affected by environmental regulation at all
our assets. This includes climate-related
risks driven by laws, regulation, taxation,
disclosure of emissions and other practices

- Emerging

Changes

regulation.

in
regulation could have a negative impact on
Atlantica's growth or cause an increase in
cost.

- Reputation. While a significant part of our
business consists of renewable energy
assets, we also own assets that can be
considered less environmentally friendly,
currently consisting of a 300 MW efficient
natural gas plant and a non-controlling
stake in a gas engines facility which uses
natural gas, both
If our
reputation worsened, our cost of capital
could increase and our access to capital
may become more difficult. In addition,
some potential employees, clients, and /or
suppliers could perceive Atlantica as a less
appealing company due to a deterioration
in our reputation.

in Mexico.

- Downstream. Some of our clients are large
utilities or industrial corporations. These
are also exposed to significant climate
change related risks, including current and
emerging regulation, acute and chronic
physical risks. If our clients are affected by
climate related risks, this could impact their
credit quality and affect their ability to
comply with the existing contract.

Risks Related to Our Relationship with
Algonquin

Algonquin is our largest shareholder and
exercises substantial influence over us.

Not
Relevant

Currently, Algonquin beneficially owns 42.2%
of our ordinary shares and is entitled to vote
on approximately 41.5% of our ordinary

2023,

In
Algonquin
strategic
conducted a
review which concluded in
August
the
announcement that they
will pursue the sale of its
energy
renewable
their
business

with

and

developments

- Emerging regulation: Various internal
working groups and management
regularly review risks arising from new
and
regulatory
potential impacts. At the Corporate
level, the ESG team analyses the
applicability
reporting
requirements and conveys them to
the appropriate departments.

new

Reputation:

- We refer to the Environment, Social
this

and Governance section
Report.

- Atlantica has developed a risk analysis
methodology based on the ISO 31000
and on common market practices.
- We use a multidisciplinary approach
to identify risks in different areas and
develop appropriate mitigation plans.
- Management, local teams and the
corporate operations department
take ownership of managing this risk.

- Any transaction between us and
Liberty GES or Algonquin (including
the acquisition of any ROFO assets or
any co-investment with Liberty GES or
Algonquin or any investment in an
Algonquin asset) is subject to our
related party
transactions policy,
which requires prior approval of such
transactions by the Related Party

Assessment of Change
in Risk
Year-on-Year
intention focus on their
regulated business. This
announcement did not
include
Algonquin’s
ownership in Atlantica. It
is possible that in the
future Algonquin may
have interest in selling
part or all of its equity
Atlantica.
in
interest
about
Uncertainty
Algonquin’s
or
strategy with respect to
the holding or disposition
of all or any portion of its
equity interest in Atlantica
and such uncertainty may
negatively
the
for our
market price
shares and our ability to
raise capital by offering
equity or equity-related
securities.

affect

plans

Mitigation of Risk

Transactions Committee, which
composed of independent directors.

- Algonquin has to comply with our
Related
Transaction
Parties
Committee and Terms of Reference

- Algonquin has the right to appoint
directors proportionally
their
ownership but in any event no more
than (i) such number of directors as
corresponds to 41.5% of our voting
securities; and (ii) 50% of our Board
less one.

- Furthermore, Algonquin’s

voting
rights are limited to 41.5% and the
additional shares
(the difference
between the actual shares beneficially
owned by Algonquin and shares
representing 41.5% of voting rights)
votes
replicating non-Algonquin’s
shareholders vote.

- The Board of Directors

takes

ownership of managing this risk.

Risk / Impact

Risk
Appetite

Risk
Trend

shares. As a result of this ownership,
Algonquin has substantial influence over our
affairs and their ownership interest and
voting power
significant
percentage of the shares eligible to vote on
any matter requiring the approval of our
shareholders.

constitute a

Liberty GES and Algonquin are related parties
and may have interests that differ from our
interests, including with respect to growth
appetite, the types of investments made, the
timing and amount of the dividends paid by
us, the reinvestment of returns generated by
our operations, the use of leverage when
making investments and the appointment of
outside advisors and service providers.

In addition, our reputation is closely related
to that of Algonquin. Any damage to the
public image or reputation of Algonquin
could have a material adverse effect on our
business,
results of
financial condition,
operations and cash flows.

the market

Furthermore, dispositions of substantial
amounts of the shares, or the anticipation or
perception by
such
dispositions could occur, could adversely
affect prevailing trading prices of the shares
and could impair our ability to raise capital
through future offerings of equity or equity-
related securities

that

Additionally, if any 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 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, 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. 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 (see risks related
to Taxation below).

Risk / Impact

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

Low

The financing agreements of our project
subsidiaries

These are primarily loan agreements which
provide that the repayment of the loans (and
interest thereon) is secured solely by the
shares, physical assets, contracts and the cash
flow of that project company.

Our project finance 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
the
applicable lender could declare the full
amount of the relevant project debt to be
immediately due and payable and could
foreclose on any assets pledged as collateral.

covenants,

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 subject to the
compliance with covenants and other
conditions under our project
finance
agreements

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 our corporate financing
arrangements.

- Failing to meet the required or desired
financing for acquisitions and for the
successfully refinancing of Company’s
project and corporate indebtedness.

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

low electricity
Due
prices in Chile, the project
debts of Chile PV 1 and 2
are under an event of
default as of December
31, 2023. Chile PV 1 was
not able to maintain the
minimum required cash in
its debt service reserve
account as of December
31, 2023 and did not make
its debt service payment
in January. In addition, in
October 2023, Chile PV 2
did not make its debt
service payment. This
asset obtained additional
financing from the banks
and made the debt service
payment
in December
2023, although it was not
able to sufficiently fund its
reserve
debt
account subsequently. We
do
an
acceleration of the debt to
be declared by the credit
entities.

service

expect

not

particularly

Capital markets have been
experiencing high volatility
during 2022 and 2023 both
in the United States and
Europe. High
inflation,
interest rate increases, war
in Ukraine, energy crisis in
Europe, high electricity
prices
in
Europe, tensions between
the U.S., Russia and China,
the availability and cost of
credit, and the economic
conditions and concerns of
a global recession have
exacerbated
and
contributed to increased
volatility in capital markets
and worsened expectations
for the economy. During
the
the
renewable
valuations of
ETFs
renewable
companies in the United
States and Europe have
generally decreased.

2023,

year

and

- With respect to Chile PV1 and Chile
PV2, we are in conversations with the
banks, together with our partner,
regarding a potential waiver. The
value of the net assets contributed by
Chile PV 1 and 2 to our Annual
Consolidated Financial Statements,
excluding non-controlling
interest,
was close to zero as of December 31,
2023.

- In general, to monitor this risk we have

the following measures:

• Reporting and monitoring of

covenants in each contract.

• Forecasts by local teams, reviewed
by our corporate departments to
monitor the main covenants and
future
any potential
identify
restriction to take measures
in
advance.

• Management
compliance
and
constantly tracking any change.

specialised
teams

legal

and

• The local teams take ownership of

managing this risk.

• A quarterly report is provided to the
Internal

Audit Committee
Audit on covenant compliance.

from

• 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
us to
finance projects through
project debt and thereby insulate
the rest of our assets from such
credit exposure. We incur project
finance debt on a project-by-project
basis or by groups of projects. The
repayment profile of each project is
established based on the projected
cash
the
flow generation of
business. This ensures that sufficient
to meet
is available
financing
deadlines and maturities, which
mitigates
In
addition, we maintain a periodic
communication with our lenders
and regular monitoring of debt
covenants and minimum ratios.

liquidity

risk.

the

- Appropriate cash management to
ensure appropriate levels of cash: as
of December 31, 2023, we had
$411.1 million
the
corporate level, comprised of $33.0
million of cash on hand at the

liquidity at

Risk / Impact

Risk
Appetite

Risk
Trend

volatility in the global capital and credit
markets may limit our access to additional
capital required to refinance our debt on
satisfactory terms or at all, may limit our
ability to replace,
in a timely manner,
maturing liabilities, and may limit our access
to new debt and equity capital to make
further 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.

Assessment of Change
in Risk
Year-on-Year
In addition, our high pay-
out ratio may hamper our
ability to manage liquidity
in
when
accessing capital markets
more
becomes
challenging.

moments

Mitigation of Risk

corporate level and $378.1 million
available under our Revolving Credit
Facility.

- Managing debt maturities and
refinancing our corporate debt
when the markets are favourable.
- 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.

- 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 Board of Directors may change
our dividend policy at any point in
time
the
if required, or modify
dividend for specific quarters taking
into consideration
the prevailing
conditions.

- The Finance Committee and the Board
take ownership of

of Directors
managing this risk.

Interest rate risk

Some of our indebtedness (including project-
level indebtedness) bears interest at variable
rates, generally linked to market benchmarks
such as EURIBOR and SOFR. Increases in
interest
finance
expenses at project companies or corporate
level.

rates would

raise our

Low

During 2023,
the U.S.
Federal Reserve increased
the reference interest rates
in the United States from a
targeted range between
4.25% and 4.50% to a
range between 5.25% to
5.50%.
the
European Central Bank
increased
reference
the
interest rates in the Euro
zone from 2% up to 4.5% in
2023.

Similarly,

As of December 31, 2023, approximately
92% of our project debt
and
approximately 94% 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. CFO¿?

increase

Any
interest
rates would increase our
finance expenses relating
to our un-hedged variable
and
indebtedness
rate
increase
costs of
the
refinancing our existing
indebtedness and issuing
new debt.

Foreign currency exchange rate

Revenue and expenses of our solar assets in
Europe, South Africa, Colombia and Uruguay
are denominated in euros, South African
Rands, Colombian pesos and Uruguayan
pesos (with a maximum and minimum price
in U.S. dollars in the case of Uruguayan
pesos), respectively. Depreciation in the value
of these currencies against the U.S. dollar may

Low

During the year 2023, the
euro remained stable and
the South African rand
depreciated against
the
U.S. dollar.

The main cash flows in our subsidiaries
are cash collections arising from long-
term contracts with clients and debt
payments arising from project finance
repayment. Project financing is typically
denominated in the same currency as
revenue
that of
agreement, which limits our exposure to
foreign exchange risk. In addition, we

contracted

the

Risk / Impact

have a negative impact on our operating
results and our cash available for distribution.

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

maintain part of our corporate general
and administrative expenses and part of
our corporate debt in euros which
creates a natural hedge
the
distributions we receive from our assets
in Europe.

for

To further mitigate this exposure, our
strategy is to hedge cash distributions
from our assets in Europe. Through
currency options, we have hedged 100%
of our net 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.

local
The Finance Committee and
management teams take ownership of
managing this risk.

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.

Medium

for

successfully

Our growth strategy depends on our ability
to
identify and evaluate
investment opportunities, develop and build
new assets and consummate acquisitions on
favourable terms. The number of investment
opportunities may be
limited. We are
competing with other local and international
developers
the development and
construction 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 secure
interconnection access or
transmission
agreements, to secure land rights to secure
PPAs or similar schemes and to obtain
licences and permits and we cannot
that we will be successful
guarantee
obtaining them. Similarly, we are competing
with local and international companies for
acquisition opportunities from 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 investments
and acquisitions may also depend on our
ability to obtain any required government or
regulatory approvals. If we are unable to
identify 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.

recent

longer

In 2023, following the trend
years,
of
to develop
competition
and acquire
renewable
assets remained high. In
and
development
our
construction activities
in
some geographies we have
seen
periods
required to obtain permits
and
interconnections.
Some of our competitors
for investments were ready
to bid for PPAs at lower
prices or were ready to pay
more for investments and
acquisitions,
especially
during the first part of the
year.

In addition, in 2023 we
continued to increase our
investments
assets
under development and
construction, in assets with
revenue denominated
in
local currency and assets
with exposure to electricity
prices.

We have a proven track record of closing
in
acquisitions
development and construction, and we
have diversified sources of growth:

investments

and

We intend to develop new projects and,
in some cases, to invest in assets under
development or construction with a
focus on renewable energy and storage.
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 will assist us
in
achieving our growth plans.

intend

We
to grow our business
organically 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
technologies
other
including storage, particularly in our
renewable
and
transmission lines.

complementary

energy

assets

Additionally, we expect to complement
our development and construction
growth through the acquisition of assets
from third parties leveraging the local
in
presence and network we have
geographies and sectors in which we
operate.

We intend to maintain a portfolio where
a majority of the assets have stable and
predictable cash flows. Every time we
make an investment decision, we always

Mitigation of Risk

the

the potential
impact
consider
investment will have on the overall
portfolio, in order to preserve its low risk
profile.

The Investment Committee and the
Board of Directors take ownership of
managing this risk.

Risk / Impact

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

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. In addition, we may consider investing
more in assets which are not contracted or
not fully contracted, for 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”
hedge
agreements
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 consider investing in new
technologies where we do not have for the
moment a long historical track record as
proven as our current assets, such as storage,
district heating, geothermal, offshore wind,
distributed
hydrogen.
Furthermore, we may consider investing in
assets in new markets or with revenues not
denominated in U.S. dollars or euros, which
would
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.

increase our exposure

generation

Our investments may not perform as
expected
and
construction activities are subject to
specific risks

development

and

Our investments are subject to substantial
risks,
including unknown or contingent
liabilities, the failure to identify material
problems during due diligence, the risk of
over-paying for assets and the ability to retain
customers.

accurately measuring

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;
resource
availability; the ability to secure new or
renewed approvals, licences and permits; the
acceptance of local communities; the ability
to
interconnection
access or agreements; the ability to acquire
suitable labour, equipment and construction
services on acceptable terms; the ability to
attract project financing; and the ability to
secure PPAs or other sales contracts on

transmission

secure

Low

- We have

in-house development
capabilities and partnerships with
third parties
to co-develop new
projects.

- The identificaction of new projects to
supported by
is
be developed
rigorous analysis and deeply rooted
industry knowledge and experience.

- We follow a disciplined approach to
make capital allocation decisions and
we have strict minimum required
returns for development projects and
acquisitions
update
that
frequently.

- Detailed due diligences both for
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.

In 2023 we continued to
increase our investments in
development
and
construction with partners
or on our own. During the
fully
four assets
year,
developed
in-house
entered in operation. In
addition, as of December
31, 2023 we had seven
assets under construction,
including PV and battery
storage assets as well as
our
of
expansions
transmission lines.

In addition, we currently
have a pipeline of assets
development,
under
including both repowering
or expansion opportunities
of existing assets and
greenfield development, of
approximately 2.2 GW of
renewable energy and 6.0
GWh of storage. As we

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year

Mitigation of Risk

get

increasing our
continue
as our
and
pipeline
projects
to
construction phase, our
construction
is
expected to continue to
increase.

risk

Risk / Impact

reasonable terms. Failure to achieve any one
of
the
these elements may prevent
development and construction of a project. If
any of the foregoing were to occur, we may
lose all of our investment in development
expenditures and may be required to write-
off project development assets.

the

addition,

construction

In
and
development of new projects is subject to
environmental, engineering and construction
risks that could result in cost-overruns, delays
and reduced performance. A delay in the
projected completion of a project can result
in total project
in a material
construction costs through higher capitalised
interest charges, additional labour and other
expenses, and a delay in the commencement
of cash flow.

increase

International operations
emerging markets.

including

Medium

No significant change.

locations,

to, adapting

We operate our activities in a range of
international
including North
America (Canada, the United States and
Mexico), South America (Peru, Chile, Uruguay
Italy,
and Colombia), and EMEA (Spain,
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
investing 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
the regulatory
limited
requirements of such countries, compliance
regulations
with changes
applicable
the
to
uncertainty of judicial processes, and the
absence, loss or non-renewal of favourable
treaties, or similar agreements, with local
authorities, or political, social and economic
all of which
instability,
can place
our
demands
disproportionate
management, as well as significant demands
on our operational and financial personnel.
As a result, we can provide no assurance that
international operations and
our
investments will remain profitable.

in
foreign corporations,

laws and

future

We intend to grow our portfolio mainly
in countries that we consider stable in
North America, South America and
Europe. North America represents 52%
of our total pipeline in renewables and
67% of our pipeline in storage.

We expect that investments in countries
with a higher risk profile such as Algeria
and South Africa will always represent a
small portion of our portfolio.

that

We also have a political risk insurance
policy in place with the Multinational
Investment Guarantee Agency for Kaxu.
The insurance provides protection for
breach of contract up to $47.0 million in
the event
the South African
Department of Energy does not comply
with its obligations as guarantor. We lso
have a political insurance for two of our
assets in Algeria up to $35.8 million,
including 2 years dividend coverage.
This insurance policy does not cover
credit risk.

local presence

in each region
Our
provides us with good knowledge and
expertise to operate in these regions.

The geographic VPs together with the
local teams and support from the
compliance department take ownership
of managing this risk.

to Regulation:

legal,
Risks Related
environmental and general compliance of
each asset

Low

We are subject to extensive regulation of our
business in the countries in which we operate.
Such laws and regulations require licences,
permits and other approvals to be obtained

In 2022 electricity market
prices increased in Spain,
which resulted in higher
cash collections in 2022.
Since our renewable assets
in Spain have the right to
receive a “reasonable rate
of return”, higher electricity

- An

to-day

local
individual responsible for
compliance has been appointed in each
geography where we are present to
issues. These
solve day
employees
the General
Counsel. We have local legal teams in
each geography
that are usually
assisted by local external lawyers. Our
local internal and external lawyers are

report

the

refer

Assessment of Change
in Risk
Year-on-Year
prices caused a reduction
of
regulated
remuneration component
to
in 2023
(we
“Regulation
Spain”
under “Events during the
period” section). During
2023, electricity market
prices have been
lower
than the price expected by
the regulation. If electricity
market prices continue to
be lower than the market
the
price assumed
regulation
the
regulated parameters are
not revised until 2026, we
may have an adverse effect
on revenues, results of
operations and cash flows
in 2024 and 2025, which we
be
expect
in
compensated starting
2026 in accordance with
the regulation in place.

and

will

Risk / Impact

Risk
Appetite

Risk
Trend

in connection with the operations of our
activities. This regulatory framework imposes
significant actual, day-to-day compliance
burdens, costs and risks on us. In addition, we
need to adapt to the regulatory requirements
of the different countries where we operate.

to any

Uncertainty or changes
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.

are

also

We
significant
subject
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 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,
environmental incidents can also significantly
harm our reputation.

price

components.

In addition, in several of the jurisdictions in
which we operate including Spain and Chile,
we are exposed to remuneration schemes
which contain both regulated incentives and
such
market
jurisdictions, the regulated incentive or the
contracted component may not compensate
the market price
for
total
component,
remuneration may be volatile. Our assets in
Spain receive a remuneration based on a
“reasonable rate of return”.

consequently,

fluctuations

and,

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 an accelerated tax
to
depreciation schedule, and subject
potential tax audits, which may result in
income, sales, use or other tax obligations, we
do not expect to pay significant taxes in the
upcoming years in most of our assets.

Although we expect that these NOLs will be
available as a future benefit, in the event that

Low

Changes in tax regulation
have been announced in
some countries where we
operate. We currently do
not expect any material
impact
these
from
changes.

reform

Around
countries
140
agreed to implement the
“Two Pillars Solution”, an
OECD/
Inclusive
G20
Framework initiative, which
aims
the
taxation
international
policies and ensure that
multinational
companies
pay taxes wherever they
and generate
operate
profits. “Pillar Two” of this
generally
initiative

Mitigation of Risk

in close contact with the regulation and
potential regulation changes in each
geography. These, together with the
asset managers, proactively track and
monitor any potential
regulatory
change.

- We have a corporate Compliance team
supervising the activity of our different
geographies.

- We have a Quality, Environmental, and
Health and Safety 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
performs annual internal audits on our
assets to ensure compliance with
regulation and our best practices and
to promote continuous improvement.

Geographic VPS and local teams take
ownership of managing this risk, with
the Compliance
support of
the
Management Committee.

- Management and specialised teams
with broad experience monitor these
developments.

- Engagement with local authorities on

tax matters.

- Support of reputable external tax
consultants with proven expertise in
each jurisdiction.

- The Corporate Tax Department (under
the CFO supervision) and local teams
take ownership of managing this risk.

Risk / Impact

Risk
Appetite

Risk
Trend

they are not generated as expected, or are
successfully challenged by the local tax
authorities, or are
future
limitations, our ability to realise these benefits
may be limited.

subject

Some countries where we operate could
implement changes to regulations regarding
tax loss, the content of which are largely
uncertain at this time.

Mitigation of Risk

tax

The

on
basis,

Assessment of Change
in Risk
Year-on-Year
provides for an effective
global minimum corporate
tax rate of 15% on profits
generated by multinational
companies
with
consolidated revenues of
at
least €750 million,
calculated on a country-by
basis.
country
This
tax will be
minimum
applied on profits in any
jurisdiction wherever the
rate,
effective
a
determined
jurisdictional
is
below 15%. Any additional
tax liability resulting from
the application of
this
minimum tax will generally
be payable by the parent
entity of the multinational
group to the tax authority
in such parent’s country of
residence.
new
legislation related to Pillar
Two has been enacted or
in
substantially enacted
certain
in
jurisdictions
which Atlantica operates,
including the U.K. The new
legislation will be effective
financial
for Atlantica’s
years beginning on or after
December 31, 2023. We
have
a
preliminary assessment of
the potential exposure to
Pillar Two top-up taxes.
The assessment is based on
the most recent country-
by-country tax reporting
and financial statements
available
the
constituent entities of the
the
group. Based on
assessment performed, the
tax
Pillar Two effective
the
rates
in most of
in which
jurisdictions
Atlantica operates
are
above 15% and in all of
them
the
meet
requirements to apply the
relevant transitional “safe
harbors” as defined by
OECD, with the exception
of one jurisdiction, whose
is not material.
impact
Therefore, we currently do
not expect a material

performed

for

Risk / Impact

Risk
Appetite

Risk
Trend

Assessment of Change
in Risk
Year-on-Year
impact on our business,
financial condition, results
of operations and cash
flows.

Mitigation of Risk

IRC

In addition, our NOL
carryforwards and certain
recognised built-in losses
may be limited by Section
382 of the
if we
experience an “ownership
change.”
In general, an
“ownership change” occurs
if 5% shareholders of our
their
increase
stock
collective ownership of the
aggregate amount of the
outstanding shares of our
company by more than 50
points,
percentage
generally over a three-year
testing period. In addition,
issued
the
IRS
proposed
regulations
concerning the calculation
of built-in gains and losses
under Section 382 which, if
finalised, may significantly
limit our annual use of pre-
ownership
change U.S.
NOLs in the event that a
new ownership change
occurs after the new rule is
in place.

has

approved

In 2022, the government of South
Africa
tax
limitations on deductions
for tax years ending on or
after March 31, 2023. The
net interest expense has
been limited to 30% of the
EBITDA and any NOLs
carried forward may only
be applied to offset 80% of
taxable
a corporation’s
income.
new
limitations may have a
negative impact on our
cash flows.

These

Low

The number of cyber-
attacks to companies has
been increasing in the last
few years. Many of these
attacks have focused on
critical infrastructure.

have

industry

been
There
the
cyberattacks within
on
energy
electricity
infrastructure
such as substations and
related assets in the past
and there may be such

- We have implemented prevention,
threat-detection
and
international
following

monitoring
measures
standards including ISO 27000.

- Internal and external audits to ensure
that our cybersecurity controls are
effective,
including simulated and
targeted cyberattacks to our servers
and employees accounts.

- Employees training to detect, monitor

and prevent threats.

- Our information systems that support

Cybersecurity risk

information
We are dependent upon
technology systems to run our operations.
Our information technology systems are
subject to disruption, damage or failure from
including, without
a variety of sources,
limitation,
security
viruses,
computer
breaches, cyber-attacks, ransomware attacks,
malicious or destructive code, phishing
attacks, natural disasters, design defects,
denial-of-service attacks or information or
fraud or other security breaches.

Given the unpredictability of the timing,

Risk / Impact

Risk
Appetite

Risk
Trend

subject

nature and scope of information technology
to
disruptions, we could be
production stops, unavailability
in our
transmission lines, operational delays, the
compromising of confidential or otherwise
information, destruction or
protected
corruption of data, security breaches, other
manipulation or improper use of our systems
and networks or
from
remedial actions, any of which could have a
material adverse effect on our financial
condition, results of operations or cash flows.

financial

losses

Assessment of Change
in Risk
Year-on-Year
attacks in the future. Our
assets,
generation
facilities,
transmission
facilities,
storage
information
technology
other
systems
infrastructure facilities and
systems could be direct
targets of, or otherwise be
adversely
materially
affected by such activities.

and

Mitigation of Risk

business processes are certified under
the ISO 27001 standard and are
audited annually by an external third
party.

- We have a cyber-security insurance

policy.

- 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.

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.

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
Quarterly Earnings
Presentations

Roadshows4

Intranet1

Employee Climate
Survey4

Training1





































(1) Regular or on an as-needed basis; (2) On an annual basis; (3) Always available; (4) At least every three years.

ESG Materiality Assessment

Our materiality assessment is based on international sustainability standards GRI and SASB, and
ESG rating entity assessments.

We have performed a double materiality assessment where 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 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.

The materiality assessment process consists of five steps, as shown in the table below:

Step 1.
Identify 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 or significant impacts.

Identify material impacts on our society (i.e., economic, environment and people)
across Atlantica’s activities and business relationships.

Identify material impacts on our business and its financial impacts as risks and
opportunities.

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

Step 1: In previous years we gained input from 50 internal and external stakeholders, these inputs
helped us to identify the most significant impacts that Atlantica had on society. Considering that
we engage with our stakeholders on a continuous basis, we believe to have an up-to-date
understanding of themes that our stakeholders consider material. To assess significant impacts
on our business, we have considered the company’s strategy, risk reports, taxonomy and policies.

We identified 4 main categories: Climate Change, Occupational Health and Safety, Human Rights,
Ethics and Integrity and Environmental Impacts.

Steps 2 - 5: Prioritise topics based on their impact on society and on our business, set a response
and an implementation plan and disclose ESG related information:

Climate Change

Occupational
Health and Safety

Human Rights, Ethics
and Integrity

Environmental Impacts

Potential negative
impact: Incidents
could harm (i) our
employees, (ii) those
of our contractors
working at our assets
and (iii) close-by local
communities.

Impact on
Society

Positive impact: 89%
of our 2023 adjusted
EBITDA was from low
carbon footprint
assets. With our
renewable energy
production, in 2023
we avoided the
emission of 7.0 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 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).

Potential negative
impacts: Health and
safety incidents at our
premises could
generate potential
financial losses, civil
and criminal liabilities,
damaging our
reputation.

Potential negative impact:
If we do not ensure that
human rights are
respected across our
operations, supply chains,
and communities, we risk
severe regulatory and
reputational damage to
our business.

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. In
addition, we currently
have several projects
under construction in
different geographies.
These activities also
generate GHG emissions,
non-hazardous and
hazardous waste.

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
perform Environmental
Impact Assessments at all
our assets before starting
the construction process.
In those assets in
operation, we have
reforestation
programmes and
targeted biodiversity
programmes.

Potential negative
impacts: Incidents or
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.

Climate Change

Occupational
Health and Safety

Human Rights, Ethics
and Integrity

Environmental Impacts

✓ Human rights policies,

✓ Environment and

biodiversity policy,
processes and
procedures

✓ ISO 14001 compliant
✓ Regular monitoring of
environmental KPIs
✓ 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

processes and
procedures

✓ Human rights matters
reviewed as part of the
internal compliance
annual due diligence
activities

✓ Compliance with 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

Our
Response

✓ 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

✓ The LTIP included

in the
Remuneration
Policy proposed for
approval in 2024
includes the
objective of
improving by 10%
on key Health and
Safety KPIs
(TRIR,LTIR). This
LTIP would apply to
the CEO and
Executives.

✓ We intend to

continue investing
in renewable
energy assets
✓ Approved SBTi

intensity target to
reduce Scopes 1
and 2 per unit of
energy generated
✓ 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
✓ The LTIP included

in the
Remuneration
Policy proposed for
approval in 2024
that would apply to
the CEO and
Executives includes
the following
strategic objectives:
- Increase installed
capacity under
construction by
25% over a three-
year period

- Increase

development
pipeline by 20%
over a three-year
period

- Reduce Scope 1

GHG emission per
unit of energy
generated

- Maintain CDP and
Sustainalytics
ratings among
the top quartile of
peers
We refer to the table below “Material Topics” and “References”.

Reference

We have identified 10 material topics based on the significant impacts 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.

Significant changes compared to previous year:

- Supplier Management – The growing relevance of the topic for business and society is due to
the increased importance given to environmental criteria in the supply chain, namely the
reduction of CO2 emissions in the context of decarbonisation, in light of global goals. Supply
chain transparency has emerged as a critical component of sustainable business practices.

- Cybersecurity: There’s growing pressure for businesses to exhibit transparency regarding their
corporate commitment to cybersecurity. Cybersecurity has garnered increased attention from
regulators, who now demand prompt and comprehensive incident notification, as well as
disclosure of an organisation's cybersecurity control maturity.

Material Topics

Occupational Health and
Safety

Climate Change

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

Reference

- 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 Indicators;

Environmental Sustainability and TCFD (Strategic Report)

- 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 2023’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.

In 2024, we will look into how we can further strengthen our double materiality assessment.

Environment Sustainability

Task Force on Climate-Related Financial Disclosures (TCFD)

We have reported climate-related financial disclosures consistent with Listing Rule 9.8.6R(8) and
the 2017 Annex to the TCFD Recommendations and Recommended Disclosures. We have
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.

TCFD
Elements

Recommended Disclosure

Cross Reference

Current Status

Future Priorities

1) Governance a) Describe the Board’s

oversight of climate related
risks and opportunities

b) Describe management’s
role in assessing and
managing climate related risks
and opportunities

Sustainability
Governance
(Business ethics
section) P. 167
and section 1
below
Sustainability
Governance
(Business ethics
section) P. 167
and section 1
below

- Board

and Management
Committees review risks and
opportunities as part of their
areas of responsibility

- Climate related risks and
opportunities are integrated
into
and
our
business model

strategy

- Climate

change

and
environmental sustainability
is a major consideration of
our business at all levels

- Climate change and ESG-
related training provided to
employees
(including
management)

Section 2 below

- Screened

potential
for
climate-related
risks and
opportunities and conducted
climate-related
scenario
analysis to determine and
assess Atlantica’s 2030 and
2050
and
risk
key
opportunity impacts

- ESG and climate change
financial

into

integrated
planning

Section 2 below

2) Strategy

a) Describe the climate related
risks and opportunities the
organisation has
identified
over the short, medium and
long term
impact of
b) Describe the
risks and
climate
related
on
the
opportunities
organisation’s
businesses,
strategy and financial planning
c) Describe the resilience of the
organisation’s strategy, taking

- At

Board

and

continue
ESG
related
initiatives,
opportunities

level:
supervising
climate-
matters,
risks and

- At Management level:
different
maintain
committees
to
efficiently address ESG
and
climate-related
matters

- Increased

linkages
between sustainability
performance
and
remuneration P 204
from the Rem report
the LTIP included in the
Remuneration Policy
proposed for approval
in 2024 that would
apply to the CEO and
Executives
includes
additional ESG related
objectives.

- Continue

screening
and analysing potential
climate-related
risks
and opportunities

- Continue investing in
are

assets
that
environmentally
sustainable
managing
sustainably

and
them

TCFD
Elements

Recommended Disclosure

Cross Reference

Current Status

Future Priorities

into consideration different
scenarios,
climate
including a 2C or
lower
scenario

3) Risk
Management

a) Describe the organisation’s
processes for identifying and
assessing climate related risks

4) Metrics and
Targets

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
to assess
the organisation
climate
risks and
related
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

Principal Risks and
Uncertainties
section P. 56 and
section 3 below

Environmental
Sustainability P. 91
and
4
below

section

- ISO 31000 aligned

risk
framework
climate-

management
incorporating
related risks

- Climate

change

is
considered a strategic risk,
hence
continually
reviewed across at business
and corporate level

- Transition and physical risks
evaluated through scenario
analysis

- Climate-related

risks

included in our Risk Map

- Scopes 1 and 2 reported
since 2015 and Scope 3 since
2019

- Externally reviewed 100% of
Scopes 1, 2 and 3 since 2020

- Continue developing
our risk assessment
processes to better
emerging
identify
climate-related
risks
to manage
and
climate-related
risks
effectively

analysing
implementing

- Continue
and
climate-related
reporting
practices

best

Environmental
Sustainability P91
and section 4
below

- Approved SBTi

intensity
target to reduce Scopes 1
and 2 per unit of energy
generated

- Measure progress to
reach targets

Environmental
Sustainability P.
91 and section 4
below

- Internal targets to: (1) reduce
Scope 3 emissions and
achieve Net Zero GHG
emissions, (2) reduce non-
GHG emissions, (3) reduce
water
at
generating assets and (4)
reduce our hazardous and
non-hazardous waste.

consumption

- Internal carbon price of $20-
$35 per ton of CO2 to
evaluate
investment
opportunities1

- Process

to offset GHG

emissions

1 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 2023 and 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.

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

We have 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.

Due to the nature of climate risks and opportunities we are monitoring them across a number of
time horizons. 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. As of December 31, 2023, Atlantica’s
portfolio of assets have 13 years of weighted average contract life remaining2. We expect to
progressively repower our assets, hybridize them with other technologies, include storage in
certain cases and replace our existing fleet with newer renewable and storage assets. In any case,
long term risks and opportunities have a very low impact on our current portfolio of assets.

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 Risks3

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.

2 Calculated as weighted average years remaining as of December 31, 2023 based on CAFD estimates for the 2024-2027
period, including assets that have reached COD before March 1, 2024.
3 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.

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 requiring repair work.
Flooding of solar PV fields may prevent access to the site or destroy
components.
Severe winds can damage solar fields and destroy 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.

Assessment of the current and short-term exposure to potential impacts of physical climate
risks:

Risk

Type of Risk

Evaluation

Changing wind
patterns

The design of our plants is appropriate considering the current
prevailing wind direction.

Chronic Physical

Increase in mean
temperatures

Droughts/water
scarcity

Increasing mean
water
temperatures

Landslides caused
by heavy
precipitation

Acute Physical

Severe winds/wind
gusts

Wildfires

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 after the
customary deductibles, thus the remaining risk is currently not
considered material.
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 after the customary deductibles, 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 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 utility company
in California, filed for bankruptcy 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 after
the customary deductibles, 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.

Severe winter
weather and hail

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 the RCP 8.5 scenario.

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:

Potential Physical Climate Risks Impacts

Risk
Changing wind patterns
in wind assets

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.

Increase in mean
temperatures in solar
and wind assets

Droughts/water scarcity
in solar assets

Landslides caused by
heavy precipitation in
transmission
infrastructure

Notes:

implemented, a maximum annual revenue

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
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.

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 2023 CDP’s
Climate Change questionnaire (section C2 Risks and Opportunities) available on our website.
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 and long-term assets’ financial
performance (i.e., revenues, costs) and financial position (i.e., asset, liabilities) is expected to be
immaterial4. 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.

4 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.

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 reporting. In
addition, our U.S. solar plants are for example,
subject to permits under the Clean Air Act.

Changes in regulation could have a negative
impact on Atlantica’s future growth or profitability.
On January 5, 2023, the European Union Corporate
Sustainability Reporting Directive (“CSRD”) entered
into force. Among other things, the CSRD expands the
number of companies required to publicly report
sustainability and ESG-related information on their
management report to understand how sustainability
matters affect their own development, performance
and position, and defines the related information that
companies are required to report in accordance with
European Sustainability Reporting Standards (“ESRS”).
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, clients, and /or suppliers could perceive
Atlantica as a less appealing company as a result of
a deterioration in our reputation.

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 local
regulations and contractual requirements
(environmental,
Local
compliance managers are responsible for
managing and resolving compliance issues
their
in
the
responsibility,
ensuring
compliance with current regulations.

geographies

including

permits,

under

etc.).

- Various

internal working groups and
management regularly review risks that arise
from new regulatory developments and its
potential impacts.

- GHG reduction objective on Scope 1 and 2
emissions approved by the Science Based
Targets initiative (SBTi).

- We target to maintaining over 85% of our
adjusted EBITDA generated from low carbon
footprint assets.

- We have set internal targets to reduce: (1)
Scope 3, (2) non-GHG emissions and (3)
water consumption

- We have an internal target to achieve Net

Zero GHG emissions.

- In 2023 we set a new target to reduce our

waste.

- Large utilities and 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 2023 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).

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

IEA Stated Policies
Scenario (STEPS)

- Full alignment with the Paris Agreement
- Global average temperature increase is limited to below 2°C by the end of the century
- 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

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.

STEPS

SDS

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.
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 member states, including Spain. This scenario
assumes a strengthening of national energy transition plans with a particular
focus on offshore wind targets and increased electrification of the economy,
particularly in transport. These developments could further de-risk 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.

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

SDS

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 through renewable energy 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 Agreement. The
changes in the government 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.

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 (BNEF), the next three decades will require between
$46 trillion and $131 trillion of investment which translates into an annual range of $1.5-$4.4
trillion. BNEF projects an annual investment of $1.2-$3.9 trillion in low-carbon energy sources,
including renewables, surpassing the $1 trillion invested in 20225 . Furthermore, clean energy is
on track to set new records. Global installation of wind, solar and storage is expected to exceed
680 GW in 2024, up 22% from 2023. Solar is anticipated to lead the way in 2024 with over 500 GW
expected to be installed, which will likely make it the largest source of new capacity and new
generation worldwide. Onshore wind follows as the second-highest, with close to 100 GW
projected to be installed in 2024, followed by storage capacity, of which around 50 GW is expected
to be installed6.

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.

We have a majority of our business in renewable energy assets. In addition, we are developing
new projects in most of our core geographies. We currently have a pipeline of assets under
development of approximately 2.2 GW7 of renewable energy and 6.0 GWh7 of storage. We believe
that our diversification by business sector and geography (including the U.S. and the European
Union), our know-how in project development 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
will assist us in benefiting from the expected transition towards a green energy 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 2023 CDP’s Climate Change questionnaire (section C2) for additional details

5 BNEF Theme: Energy Investment and Climate Scenarios
6 Where Energy Markets and Climate Policy Are Headed in 2024: BNEF
7 Only includes projects estimated to be ready to build before or in 2030 of approximately 3.7 GW, 2.2 GW of renewable
energy and 1.5 GW of storage (equivalent to 6.0 GWh). Capacity measured by multiplying the size of each project by
Atlantica’s ownership. Potential expansions of transmission lines not included.

on transition climate-related opportunities.

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 Management8. 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

We use a number of key metrics and targets to assess and manage climate risks and opportunities

We refer to the Annual Integrated Report and Atlantica’s 2023 CDP’s Climate Change
questionnaire, sections C2 and C3, for additional metrics on climate-related risks and
opportunities, and on our climate strategy, respectively.

a) Disclose the metrics used
by the organization to
assess climate-related risks
and opportunities in line
with its strategy and risk
management process.

Atlantica has considered the key metrics following the guidance of Tables A1.1 and
A1.2 as well as the metrics consistent with the cross-industry, climate-related metric
categories described in Table A2.1
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”
and “Waste management”.

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 organization to
manage climate related
risks and opportunities
and performance against
targets.

GHG Emissions Breakdown by Scope Including Offset GHG Emissions Page 94
GHG Emissions Breakdown by Scope P 95
Scopes 1 and 2 GHG Emissions Rate per Unit of Energy Generated P 94-95

-
-
-
- % of Reviewed GHG Emissions in 2022, 2021 and 2020 P 92
Additionally, we refer to Atlantica’s 2023 CDP’s Climate Change questionnaire sections
C5 and C6, for additional breakdowns on GHG emissions.
Our targets are:
-

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.
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 base year.
Reduce our water consumption per kWh of energy generated by 50% by 2035
from a 2020 base year.
Reduce our hazardous and non-hazardous waste per unit of energy generated by
30% and 40%, respectively, by 2035 from a 2023 base year.
The performance against our targets can be found on pages 93.

-
-

8 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.

Greenhouse Gas Emissions

GHG emissions reduction targets:

✓ Reduce Scope 1 and 2 GHG emissions per kWh of energy produced by
70% by 2035 from a 2020 base year. Approved by Science Based Target
✓ Reduce Scope 3 GHG emissions per kWh of energy produced by 70% by

2035 from a 2020-year base.

✓ Achieve net zero GHG emissions by 2040.

Key facts

✓ Scope 1 and 2 GHG emission rate per unit of energy generated continue

decreasing year-over-year

✓ Scope 3 GHG emission rate per unit of energy generated continue

decreasing year-over-year

✓ Increased CO2e emissions avoided vs. 2022
✓ Offset 380 thousand tons of Scope 1 GHG emissions (▲ 19% vs. 2022)

Information on our Reporting

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.

In 2023 we have followed the financial control approach to calculate our GHG emissions. 2022
and 2021 GHG emissions have been revised following the new approach. Under the financial
control approach, a company accounts for 100% of the GHG emissions from operations over
which it has financial control. Emissions from joint ventures where partners have joint financial
control are accounted for based on the equity share approach. We are accounting for proportional
Scope 1 and Scope 2 emissions of equity investments in Scope 3, category 15 (Investments).

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 equivalents9. CH4 and N2O emissions represent 0.53% and 0.04%, respectively,
of our total Scope 1 GHG emissions.

We calculated Scopes 1 and 2 emissions using the GHG inventories conversion factors indicated
by the organisations listed below:

9 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.

Intergovernmental Panel on Climate Change (“IPCC”).
-
- United States Environmental Protection Agency (“EPA”).
- 2023 GHG National Inventory from the Ministry of Ecological Transition in Spain.

As previously explained, independent third parties have been engaged to verify our reported
Scope 1, 2 and 3 GHG emissions under a reasonable level of assurance.

% of Reviewed GHG Emissions in 2023, 2022 and 2021

Scopes 1, 2 and 3 Reviewed Emissions

2023
100%

2022
100%

2021
100%

Highlights

As of December 31, 2023, and 2022, approximately 89% of our Adjusted EBITDA comes from low
carbon footprint assets (renewable energy, transmission lines and water assets) complying with
our goal of having over 85% of our Adjusted EBITDA generated from low carbon footprint assets.
The remaining 11% of our Adjusted EBITDA refers to ACT and Monterrey, two efficient natural
gas-fired power generation assets in Mexico, and one district heating plant in Canada. Our partner
in Monterrey initiated a process to sell its 70% stake in the asset. Such process is well advanced
and, as part of it, we intend to sell our interest as well under the same terms.

Adjusted EBITDA as of December 31, 2023

Efficient natural gas and heat
11%

Low carbon
footprint
assets 89%

Note: Adjusted EBITDA from Low carbon footprint assets includes
renewable energy assets, transmission lines and water assets

ACT is located in a natural 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 under a tolling Agreement 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 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.

GHG Emissions Avoided by Power Generation Assets

In million tonnes
Scopes 1, 2 and 3 GHG Emissions
Avoided

2023

7.0

2022

6.9

2021

5.9

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 2023, the GHG emissions avoided increased compared to 2022 largely due to the increase in
production at our solar assets in Spain where solar radiation was higher in 2023 compared to 2022
with good performance of the assets.

Emissions Reduction Targets

(1) Atlantica targets to reduce Scope 1 and 2 GHG emissions per kWh of energy produced by
70% by 2035 from a 2020 base year, approved by the Science Based Targets initiative (SBTi).

This objective is particularly ambitious for a company like Atlantica, where approximately
74% of our 2023 revenues consists of renewable energy production, an activity which already
has a very low rate of emissions per unit of energy produced. In 2023, Atlantica’s Scope 1
and 2 GHG emissions rate per unit of energy generated decreased compared to 2022
demonstrating our commitment to achieve our target.

Scope 1 and 2 GHG Emissions rate per unit of energy generated

188

185

168 162

h
W
K
/
e
2
O
C
g

200

160

120

'20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35

Scope 1+2 per unit of energy generated

Source: In-house

(2)

In addition, following our commitment to achieve Net Zero GHG emissions by 2040, we set
another target to reduce our Scope 3 GHG emissions per kWh of energy generated by 70%
by 2035 from a 2020 base year.

Scope 3 GHG Emissions rate per unit of energy generated

65 64

h
W
K
/
e
2
O
C
g

'20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35

Scope 3 per unit of energy generated

Source: In-house

(3) Atlantica has also set a goal to maintain over 85% of our adjusted EBITDA generated from
including renewable energy, storage, transmission

low carbon footprint assets
infrastructure and water assets.

Scopes 1, 2 and 3 absolute emissions

In 2023, approximately 70% of the Scopes 1 and 3 GHG emissions generated came from our
efficient natural gas plant in Mexico and 80% of the Scope 2 GHG emissions generated came from
our water assets.

Scope 1, 2 and 3 GHG Emissions by Technology

2023

2022

2021

30%
Others

29%
Others

70% Efficient
Natural Gas

71% Efficient
Natural Gas

25%
Others

75% Efficient
Natural Gas

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 2023 and 2022.

In 2023, as part of our commitment to sustainability, we offset 380 thousand tonnes of Scope 1
CO2 emissions through Certified Emissions Reduction (CERs) credits, compared to 320 thousand
tonnes of Scope 1 CO2 offset emissions in 2022.

GHG Emissions Breakdown by Scope Including Offset GHG Emissions

e
2
O
C
f
o
s
n
o
t

s
'
0
0
0

3,500

3,000

2,500

2,000

1,500

1,000

500

2,569

2,587

2,444

1,535

1,524

1,395

798

814

799

237

249

250

Scope 1

Scope 2

Scope 3

Total

2021

2022

2023

Note: Scope 2 market-based figure

The GHG emissions offsetting mechanism reduced our total GHG emissions by 13% and our Scope
1 GHG emissions by 21%, compared to 11% and 17%, respectively, in 2022, and 9% and 14%,
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 2021, 2022 and 2023 (without offsets):

Scope 1, 2 and 3 GHG emission as of December 31, 2023, 2022 and 2021

2,829

2,907

2,824

1,795

1,844

1,775

e
2
O
C
f
o
s
n
o
t

s
'
0
0
0

3,500

3,000

2,500

2,000

1,500

1,000

500

798

814

799

237

249

250

Scope 1

Scope 2

Scope 3

Total

2021

2022

2023

Note: Scope 2 market-based figure

In 2023, our Scopes 1 and 3 emissions decreased mainly due to lower availability at our efficient
natural gas asset, ACT, due to the scheduled major overhaul performed in the turbines. Natural
gas consumption decreased and consequently emissions were lower. Scope 2 emissions remained
stable in 2023 compared to 2022.

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).

Coso is our geothermal asset located in California. 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.

Scope 3 GHG emissions average for the years ended as of December 31, 2023, 2022 and
2021

Other Categories
1%

Cat 15
Investments
12%

Cat 1 Purchased
Goods and
Services
12%

ACT
84%

Desalination
Assets
9%

Other Assets
7%

Cat 3 Fuel-and-
energy-related-
activities
75%

We have identified the following Scope 3 categories as relevant for Atlantica:

- Category 3. Fuel-and-energy-related-activities (not included in Scope 1 or 2): This
category is the most relevant for Atlantica and represents 75% of total Scope 3 GHG
emissions for the three-year average. It includes upstream emissions of purchased fuels
and electricity (well-to-tank), and transmission and distribution (T&D) losses. For the
three-year average, 84% of this category is related to ACT, our efficient natural gas asset.

- Category 1. Purchased goods and services: this category includes all upstream (i.e.,
cradle-to-gate) emissions from the production of products purchased or acquired by the
reporting company in the reporting year. Products include both goods (tangible products)
and services (intangible products).

- Category 15. Investments: We are accounting for Scopes 1 and 2 emissions generated
by the assets in which we do not have financial control. This category corresponds to our
investments in our efficient natural gas plant, Monterrey, and one water asset, Honaine.

Other categories: the rest of our Scope 3 emissions, which in total represent 1%, correspond to
Upstream transportation and distribution, Waste generated in operations, Business travel,
Employee commuting, Upstream leased assets and Downstream transportation and distribution.

Non-Greenhouse Gas Emissions

Non GHG emissions reduction target:
✓ Reduce non- GHG emissions per kWh of energy generated by 50% by 2035

from a 2020-year base.

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, 2023, 2022 and 2021

2023

2022

2021

NOx

SO2

NOx

SO2

NOx

SO2

430.4

15.0

6.8

1.8

0.0

0.6

0.3

0.0

317.6

485.5

5.8

2.7

7.5

15.1

6.5

1.6

0.0

0.6

0.3

0.0

319.1

438.9

5.9

2.5

9.5

15.4

8.4

1.2

0.0

0.6

0.4

0.0

315.5

6.0

3.3

7.3

Tonnes

Mexico

Spain

Algeria

Canada

Total

454.0

0.9

333.6

508.7

0.9

337.0

464.0

1.0

332.0

NOx and CO emissions decreased mainly due to lower production at ACT, which resulted in lower
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).

Following our long-term commitment to sustainability, in 2022 we set a non-GHG emissions
reduction target. We target to reduce our non-GHG emissions10 per kWh of energy generated by

10 Non-GHG emissions including nitrogen oxide (NOx), sulfur dioxide (SO2) and carbon monoxide (CO).

50% by 2035 from a 2020-year base. In 2023, we reduced our NOx, SO2 and CO emissions per
kWh of energy generated by 25%, 20% and 27%, respectively, compared to 2020.

Energy Management

In 2023 and 2022 approximately 97% of fuel consumption was related to ACT, our efficient natural
gas asset. In 2023, ACT had lower production, resulting in lower fuel consumption. This is the main
reason for the decrease in Atlantica’s energy consumption in 2023 compared to 2022.

Energy Consumption and Generation in 2023, 2022 and 2021

In GWh

2023

2022

2021

7,073
564
482
8,118
7,106
4,516
11,622
(3,504)
Does not include curtailment in wind assets for which we receive compensation.
If negative, energy generation is higher than energy consumption.

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
2
Note: We have revised 2022 and 2021 figures following the new perimeter of consolidation.

7,436
569
474
8,479
6,874
4,616
11,490
(3,012)

7,591
537
296
8,424
6,444
4,092
10,536
(2,112)

Following U.K. energy consumption regulation disclosure, energy consumption in the U.K. was
less than 0.001% in both 2023 and 2022.

Reporting our activities under the European Union Taxonomy

Key facts:

✓ 100% of our activities are EU taxonomy eligible
✓ 97% of CapEx invested in sustainable activities according to EU Taxonomy

The EU taxonomy regulation describes a framework to classify “green” or “sustainable” economic
activities. The EU taxonomy regulation creates a clear framework for the concept of sustainability,
exactly defining when a company or enterprise is operating sustainably or environmentally
friendly. Compared to their competitors, these companies stand out positively and thus should
benefit from higher investments. Thereby, the legislation aims to reward and promote
environmentally friendly business practices and technologies. The focus lays on the following six
environmental objectives:

1. Climate change mitigation
2. Climate change adaptation
3. Sustainable use and protection of water and marine resources
4. Transition to a circular economy
5. Pollution prevention and control
6. Protection and restoration of biodiversity and ecosystems

To be classified as a sustainable economic activity according to the EU taxonomy regulation, a
company must not only contribute to at least one environmental objective but also must not
violate the remaining ones. For example, an activity aiming to mitigate the climate but at the same
time also negatively affecting biodiversity cannot be classified as sustainable. The classification of
an economic activity in terms of sustainability is based on the following four criteria, which are
based on the previously mentioned environmental objectives:

1. The economic activity contributes to one of the six environmental objectives.
2. The economic activity does ‘no significant harm’ (DNSH) to any of the six environmental

objectives.

3. The economic activity meets ‘minimum safeguards’ such as the UN Guiding Principles on

Business and Human Rights to not have a negative social impact.

4. The economic activity complies with the technical screening criteria developed by the EU

Technical Expert Group.

Reporting is not mandatory for Atlantica, but the company voluntarily discloses Revenue, Adjusted
EBITDA and CapEx information from our business activities. All our assets are eligible following
the EU Taxonomy principles. Activities related to our renewable energy assets (wind and solar),
storage assets and transmission lines, representing 78% of our revenue and 97% of our CapEx,
are aligned with the EU Taxonomy objectives.

The following assets do not meet the EU Taxonomy thresholds to be considered as aligned
activities:

- Coso: our geothermal asset lifecycle GHG emissions were not proven to be below the
threshold established by the Taxonomy (100 gCO2e per kWh generated). 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, we are
accelerating this process of release of already existing CO2.

- Calgary district heating: although district heating is recognized as a key measure for cities to
reduce emissions according to UN Environment Program, our asset in Canada does not
comply with the EU Taxonomy criterion since its emissions are above 100 gCO2e per kWh of
heat generated. We are analysing potential initiatives to reduce emissions.

- ACT: its GHG emissions are over the life-cycle emissions threshold established by the EU

Taxonomy (100 gCO2e per kWh of heat generated).

- Water assets: these assets do not comply with the GHG emissions threshold established by
the Taxonomy for this activity (1,080 gCO2e/m3 of freshwater produced) due to the electricity
consumption, which generates Scope 2 emissions. The assets are located in Algeria, a country
where most of the electricity is generated with fossil fuels, which implies a high factor for the
calculation of Scope 2 emissions.

As described above, 100% of our Revenue, Adjusted EBITDA and CapEx as of December 31, 2023,
2022 and 2021 is eligible following the EU Taxonomy. The table below summarises the amount of
U.S. Dollars that are considered Eligible and Aligned to the European Union Taxonomy and the %
of aligned activities:

2023

20221

20211

Revenue
Adjusted EBITDA
CapEx2
Revenue
Adjusted EBITDA
CapEx2
Revenue
Adjusted EBITDA
CapEx2

Eligible Activities
$ in Millions

Aligned Activities
$ in Millions

Aligned Activities
%

1,099.9
794.3
113.5
1,102.0
797.1
126.4
1,211.8
824.4
409.2

856.4
643.1
110.5
862.0
645.0
122.8
976.8
659.1
262.7

78%
81%
97%
78%
81%
97%
81%
80%
64%

1 We have revised 2022 and 2021 figures following the updated 2023 classification.
2 We are considering investing activities as per disclosed in the Cash Flow statement for years ended December 31, 2023,
2022 and 2021, respectively. We refer to our Annual Report on form 20-F filed with the SEC on March 1, 2024 (Notes 5,
6 and 7 from the Financial Statements).

Water Management

Water Consumption Target:
✓ Reduce our water consumption per kWh of energy generated by 50% by

2035 from a 2020 base year.

Key facts:
✓ 5th consecutive year withdrawing less than 60% of water available under

existing permits

✓ Reduced our water consumption by 4% at our assets in operation in 2023 vs. 2022

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.

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 to comply with total water withdrawal requirements permitted
under the existing regulatory limits.

Water Used in Power Generation Assets

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 economic 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.

Efficient Natural Gas Plant

ACT is an efficient natural gas cogeneration facility which produces electricity and steam, with a
rated capacity of approximately 300 MW and between 550 and 800 metric tonnes per hour of
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 2021, 2022
and 2023:

100

Power Generation assets water management

Water Withdrawal Breakdown by Sources of
Water

Water Discharges

11.8

11.9

11.5

5.5

5.8

5.5

a
w
a
r
d
h
t
i

r
e
t
a
w
3

f
o

s
n
o

i
l
l
i

14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

s
e
g
r
a
h
c
s
i
d
r
e
t
a
w
3

f
o

s
n
o

i
l
l
i

5.0

4.0

3.0

2.0

1.0

0.0

2.3

2.1

2.0

2021

2022

2023

Ground Water

Surface Water

2021

2022

2023

Water Withdrawal and Discharges per MWh

Water Withdrawal vs. % of Water Available
Under Water Permits

1.64

1.54

1.46

h
W
M

r
e
p
3
m

2.00

1.50

1.00

0.50

0.00

0.22

0.18

0.17

a
w
a
r
d
h
t
i

r
e
t
a
w
3

f
o

s
n
o

i
l
l
i

60%

43%

44%

46%

50%

17.3

17.7

17.0

40%

30%

20%

10%

Withdrawal

Discharge

2021

2022

2023

2021

2022

2023

Percentage of available water not used

Note: We have revised 2022 and 2021 figures following the new perimeter of consolidation.

101

Water Consumption per MWh

1.29

1.36

1.42

1.36

2023

2022

2021

2020

0.00

0.50

1.00

1.50

2.00

Water Withdrawal and Discharges in millions of m3

m3 per MWh

2.0

2.1

2.3

Discharge

2023

2022

2021

Withdrawal

Renewable
Energy
Assets

11.6

12.1

12.4

0.0

2.0

4.0

6.0
8.0
millions of m3

10.0

12.0

14.0

In 2023, water withdrawals decreased primarily due to higher production efficiency at
our solar assets in Spain and the U.S. These assets recycled more water in the cooling
towers as compared to 2022.

0.0

Discharge

2023

2022

2021

Withdrawal

Efficient
Natural Gas
Plant (ACT)

5.4

5.6

4.9

0.0

2.0

millions of m3

4.0

6.0

At ACT, water received is transformed to high pressure steam through heat recovery
steam generators and delivered back to our client. In 2023, water withdrawn was 0.2
million cubic metres lower because of lower production.

In 2023 we had seven 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.
Mojave and Coso, our solar and geothermal plants located in California, were also located in high
baseline water stress areas in 2022 and 2021. In 2023, following the World Resources Institute’s

102

(WRI) Aqueduct Water Risk Atlas Tool, these assets’ locations were classified as “arid and low water
use”, therefore, they are no longer classified as assets located in high or extremely high baseline
water stress areas.

Extremely High or High Baseline Water Stress Areas of our Generating Assets

Generating Asset

Technology

Geography

Helioenergy
Helios
PS
Solacor
Solnova
Solaben
Solana

Solar
Solar
Solar
Solar
Solar
Solar
Solar

EMEA
EMEA
EMEA
EMEA
EMEA
EMEA
North America

Baseline Water Stress
Areas
Extremely High
Extremely High
Extremely High
Extremely High
Extremely High
High
High

Note: we have excluded solar PV assets as these consume minimum amounts of water.

Withdrawal by Water Source in 2023, 2022 and 2021- Power generation assets

2023

2022

2021

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

6.1
4.8
1.3
5.5

0.2
5.3

5.4

5.4
-

-
-

Water
stress
areas1
6.0
4.7
1.3
3.6

0.2
3.4

-
-

All areas

6.3
5.1
1.2
5.8

0.2
5.6

5.6

5.6
-

-
-

Water
stress
areas
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

-
-

17.0

9.6

17.7

12.0

17.3

12.3

1 High or extremely high water stress areas according to the 2023 Aqueduct Water Risk Atlas classification.
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.

After use in cooling and other auxiliary processes, approximately 29% of the water withdrawn at
our solar facilities is returned. 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.

103

Discharge by Water Source in 2023, 2022 and 2021- Power generation assets

2023

2022

2021

In millions of m3

All areas

Water
stress
areas1
1.8
1.1
0.7
0.2

-
0.2

-
-

All areas

1.9
1.5
0.4
0.2

-
0.2

-
-

Water
stress
areas
1.8
1.4
0.4
0.2

-
0.2

-
-

All areas

2.1
1.7
0.4
0.2

-
0.2

-
-

Water
stress
areas
2.1
1.7
0.4
0.2

-
0.2

-
-

2.0

2.1

2.0

2.3

1 High or extremely high water stress areas according to the 2023 Aqueduct Water Risk Atlas classification.

The water is treated in accordance with our water permits and then returned to its original source
without.

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 2023, 2022 and 2021 - Power generation assets

2023

2022

2021

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

1.8
1.1
0.7
0.2

-
0.2

-
-

4.3
3.7
0.6
5.3

0.2
5.1

5.4

5.4
-

-
-

Water
stress
areas1
4.2
3.6
0.6
3.4

0.2
3.2

-
-

All areas

4.4
3.6
0.8
5.6

0.2
5.4

5.6

5.6
-

-
-

Water
stress
areas
4.4
3.6
0.8
5.6

0.2
5.4

-
-

All areas

4.7
4.0
0.7
5.4

0.1
5.3

4.9

4.9
-

-
-

Water
stress
areas
4.7
4.0
0.7
5.4

0.1
5.3

-
-

15.0

7.6

15.6

10.0

15.0

10.1

1 High or extremely high water stress areas according to the 2023 Aqueduct Water Risk Atlas classification.

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-independent source of drinking
water.

104

We withdraw sea water for desalination as specified in the agreements for our investments in our
desalination plants.

In 2023, we withdrew 234.8 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 2023, we produced
102.3 million cubic metres of desalinated water and returned 132.5 million cubic metres (56%)
back to the sea.

Extremely High or High Baseline Water Stress1 Areas of our Water Desalination Assets

Water Desalination
Asset

Technology

Geography

Tenes
Skikda

EMEA
EMEA
1 Water stress areas classification according to 2023 Aqueduct Water Risk Atlas.

Water desalination
Water desalination

Baseline Water Stress
Areas
Extremely high
Medium-High

Water Withdrawal, Desalinated Potable Water Production and Discharges in 2023, 2022
and 2021

In millions of cubic metres

Water (seawater) withdrawal
Desalinated potable water production
Water discharges (returned to the sea)

2023
234.8
102.3
132.5

2022
240.4
105.2
135.2

2021
244.5
98.0
146.5

Note: We have revised 2022 and 2021 figures following the new perimeter of consolidation.

100% of the water withdrawn in 2023, 2022 and 2021 is seawater that does not affect water stress
areas.

105

Waste Management

Waste management Target:

Reduce our hazardous and non-hazardous waste per unit of energy generated
by 30% and 40%, respectively, by 2035 from a 2023 base year

✓ .
Key facts:
✓ Hazardous Waste reduction: we reduced 27% our Hazardous Waste in 2023

vs. 2022

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 2023, 95% of the waste generated was non-hazardous. Hazardous waste
decreased from to 5% from 8% compared to 2022. We continue analysing and implementing
new initiatives to reduce our waste.

% of type of waste as of December 31, 2023, 2022 and 2021

2023

2022

2021

10%

95%

92%

90%

Hazardous Non-hazardous

Hazardous Waste

Hazardous Waste Reused, Recycled or Disposed in 2021, 2022 and 2023

1,803

1,189

558

773

719

843

2,576

1,908

1,402

3,000

2,500

e
t
s
a
W

f
o
s
n
o
T

2,000

1,500

1,000

500

Diverted from Disposal

Directed to Disposal

Total

2021

2022

2023

Note 1: Diverted from disposal refers to reused or recycled waste, and directed to disposal refers to waste disposed.
Note 2: We have revised 2022 and 2021 figures following the new perimeter of consolidation.

106

In 2023 we reduced our total hazardous waste by 27% compared to 2022. This reduction was
mainly driven by an innovative water treatment system installed at one of our solar assets in Spain.
The system uses cutting-edge technology to continuously measure water pollutants. Once a
predetermined threshold is reached, it filters the water through activated carbon, separating the
contaminated fraction from the water. The remaining water is then treated in accordance with our
water permits and returned to its source.

The increase in hazardous waste directed to disposal in 2023 is mainly explained by the removal
of the remaining contaminated soil related to an environmental accident that occurred in 2019 at
one of our solar assets in Spain. The removal was carried out by a specialised company in
accordance with local environmental regulations.

Non-Hazardous Waste

Non-hazardous waste corresponds primarily to the wastewater11 from treatment plants and the
reuse of wastewater before discharge. This type of waste does not contain substances that are
potentially harmful to human health or the environment. The increase in non-hazardous waste in
2023 is mainly due to higher production at our solar assets in Spain, which resulted in higher
wastewater volumes.

Non-Hazardous Waste Reused, Recycled or Disposed in 2021, 2022 and 2023

25,993

23,142

22,212

15,993

15,858

14,811

10,135

8,331

6,219

e
t
s
a
W

f
o
s
n
o
T

28,000

24,000

20,000

16,000

12,000

8,000

4,000

Diverted from Disposal

Directed to Disposal

Total

2021

2022

2023

Note 1: Diverted from disposal refers to reused or recycled waste, and directed to disposal refers to waste
disposed.
Note 2: We have revised 2022 and 2021 figures following the new perimeter of consolidation.

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 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.

11 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.

107

In 2023, we had two instances of non-compliance that were resolved with a non-material sanction
($6 thousand). In 2022, we had one instance of non-compliance that was resolved with a non-
material sanction ($800). In 2021, we had one instance of non-compliance that was resolved
without sanction and two that were resolved with non-immaterial sanction ($7 thousand).

Number of Accidents by
Category
2023 2022 2021

Severity

Total Volume of Spills

Fines and Penalties

Litres

2023

2022

2021

USD ‘000s

2023 2022 2021

Moderate

High

Volume
of spills

2,829

4,146

2,829

Fines and
penalties2

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.

In 2023, we had 7 moderate accidents related to one paint spill at one of Rioglass factories, four
spills at one of our solar plants in the U.S. and two spills at our solar plant in South Africa. All spills
were managed as hazardous waste by certified third parties and are included in our waste KPIs.

We consider all environmental fines and penalties over the period 2021-2023 to be non-material.

108

Biodiversity

Key facts:

✓ Proactive approach to protect flora and fauna in proximity to our assets
✓ 339 hectares reforested with native tree and shrub species

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 interact with various ecosystems, landscapes and species. The
Company therefore commits to promoting biodiversity, allowing balanced co-existence, and
conserving, protecting and promoting the natural ecosystem.

Atlantica’s strategy for biodiversity conservation aligns with the Kunming-Montreal global
biodiversity framework, embracing the mission of taking urgent action to halt and reverse
biodiversity loss by 2030.

In particular12, we are committed to:

⚫

⚫ Achieving “no net loss” of biodiversity and “no net deforestation” in the areas where we
operate in all project phases through the application of the Mitigation Hierarchy13.
Seeking to avoid operational activities in close proximity to World Heritage areas and
IUCN Category I-IV protected areas.
Including biodiversity in the analysis, management and reporting of risks.

⚫
⚫ Minimising potential indirect impacts throughout our supply chain by including

biodiversity-related risks in the sustainability assessment of our suppliers.

⚫ Respecting the rights of Indigenous peoples and local communities and acknowledging

their contribution to biodiversity conservation.

In addition, 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.

⚫ Atlantica’s Geographic Committees are held once a month between Geographic VPs and

heads of several corporate functions to update and discuss key asset matters.

12 For more information, please refer to our Biodiversity Policy, available at https://www.atlantica.com/.
13 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.

109

Assets under construction

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 2023 most of our assets were in operation and as of December 31,
2023 we had seven projects under construction. In these projects, in addition of complying with
permitting, laws and regulations in-place, we have implemented several measures to minimise
potential impacts on biodiversity. These include:

✓ Perform thorough biodiversity impact assessments to ensure all potential risks and

impacts are adequately evaluated.

✓ Analyse alternatives to avoid placing new infrastructure in protected areas or areas with

a high biodiversity value.

✓ Minimise potential impacts on biodiversity.
✓ In the case of biodiversity residual impacts, implement compensatory works according

to the commitment of “No Net Loss” of biodiversity and “No Net Deforestation”.

✓ Respect the rights of Indigenous peoples and local communities and acknowledge their

contribution to biodiversity conservation.

Assets in operation

Some of our solar plants are close to protected areas, while two of our transmission lines cross
some areas that are also considered protected. These assets comply with all applicable regulations
and are managed in accordance with our commitment to protecting biodiversity and respecting
the rights of Indigenous peoples and local communities. Our strategy includes:
✓ Working to meet or exceed laws and regulations related to biodiversity.
✓ Applying a preventive approach to minimize impacts.
✓ Performing environmental risk audits to identify and evaluate potential environmental

risks that may arise from our activities.

✓ Identifying and implementing best practices appropriately.
✓ Collaborating with governments, local communities, civil organizations and other
biodiversity stakeholders in biodiversity conservation, awareness and research, when
appropriate.

✓ Transparently disclosing potential impacts and reporting key measures taken on

biodiversity.

Asset

Location

Helios 1 & 2

Solnovas 1 & 3
& 4 and
Solaben 2 & 3,
1 & 6

ATN

Palmucho

Near a protected area: “Tablas
de Daimiel”

Technolog
y

Solar
Generation

Size

Type of
Biodiversity

Protection Status

2x50MW

Wetland

National Park

Near zones of special
protection for birds

Solar
Generation

3x50MW
4x50MW

Birds

Zones of Special
Protection of birds
as per Spanish
Administration

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

110

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 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

Shut down 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
Algeria

2023 key biodiversity initiatives by technology and geography were:

111

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.

Two evaporation ponds are currently netted and the netting of the remaining two ponds is
underway and scheduled for completion in April 2024. 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 nearby.

Bull Durham Wash

Evaporation pond net

Tortoise guard on Harper Lake Road

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.

112

Spain

In 2023, we continued to deliver on our reforestation programme in Spain. The main initiatives
include:
⚫ Reforestation of approximately 48 hectares with 8,800 holm oaks, 4,500 quercus coccifera

and small plants. Total investment amounted to $238 thousand.

⚫ We invested $207 thousand in the maintenance of all the areas reforested in previous
years, covering a total surface of 339 hectares. Maintenance includes irrigation,
straightening, cleaning of tree pits and replacement of damaged trees.

Area reforested in 2023

Planting and maintenance of holm oaks

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 $89 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.

113

Italy

Monitoring of steppe birds

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
including the black-chested buzzard-eagle
mortality and monitor the protected birds,

114

(Geranoaetus melanoleucus), the
dominicanus), and the straight-billed reedhaunter (limnoctites rectirostris).

loica pampeana, the black-and-white monjita (xolmis

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 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

Red

Orange

Yellow

Green

Black-chested buzzard-eagle at risk
Black-chested buzzard-eagle flying <300 metres from
wind turbines.
Black-chested buzzard-eagle flying between 300 and 500
metres from wind turbines.
Black-chested buzzard-eagle flying >500 metres from
wind turbines and within the wind farm perimeter.
Black-chested buzzard-eagle is no longer at risk. It is >500
metres from wind turbines and outside the wind farm
perimeter.

Procedure
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 2023, 2022 and 2021, we did not record any black-chested buzzard-eagle mortal event caused
by collisions with wind turbines.

On a yearly basis, Atlantica’s wind assets in Uruguay develop an Environmental Operation
Management Plan (PGAO) that identifies all potential impacts and mitigation measures related to
biodiversity protection.

In addition, each asset prepares monthly and annual reports on the measures taken and the
progress made to protect animals living in and around the facilities. The report is then sent to the
National Department of Quality and Environmental Assessment (DINACEA), which verifies that all
procedures have been carried out in accordance with applicable environmental regulations.

Moorish Eagle

Moorish Eagle and Pampas Loica

115

Water Desalination Assets

In August 2023, together with local associations and authorities, we organised the clean-up of a
beach located approximately 20 miles from one of our assets. The beach is close to a Ramsar site.
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

116

Social Sustainability

Human Rights

At Atlantica, we respect internationally recognised human rights, as set out in the International
Bill of Human Rights and 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. 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. In
our Human Rights Policy, we state that Atlantica’s principles are:

✓ Rejecting forced labour and child labour,
✓ Rejecting discrimination,
✓ Providing just, favourable and safe working conditions
✓ Freedom of association and right to collective bargaining
✓ Equal remuneration
✓ Respecting rights of local communities
✓ Rejecting human trafficking

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 might be linked to our operations, products or services and by our business
relationships.

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
seek to provide a climate of confidence where employees can raise issues. Any behaviour which
is not acceptable must be reported through the Ethic Channels 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.

Measures to prevent human rights misconduct

Atlantica’s management has implemented different measures to identify, assess and mitigate
potential human rights-related risks. These include:

Human Rights due diligence:

The Internal Compliance team 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

117

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 available on our website and in the Supply Chain
Management Section, part of the Strategic Report.

The Investment Committee 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.

In addition , we perform the following activities across different areas of the Company to prevent
any misconduct related with human rights:

- Risk management: The Head of Risk Management 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.

- Health and Safety: The Corporate Operations team 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.

- Rights of local communities: Our Geographic VPs and local asset managers lead community
relations, including monitoring community matters and their development. Additional
information on local communities is disclosed in the Local Communities section.

Supply Chain: An internal and/or external evaluation of our vendors before being hired and
a regular review thereafter. Additional information is disclosed in the Supply Chain
Management section.

- Data Protection: 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.

We have also established communication pathways with our stakeholders. The Ethic Channels
include the whistleblower channel and the compliance channel and we encourage their use.
Additional information on our communication channels is disclosed in the Business Ethics section.

Additional Information

− Partners - We have partners at some of our assets. In the assets where we do not have control,
to the extent possible, considering Atlantica’s ownership interest, we try to introduce our
business ethics practices, including our human rights-related practices.

− Incidents - We confirm that no human rights incidents were reported or identified during 2023,
2022 or 2021. Atlantica has zero tolerance for modern slavery, and we confirm that no incidents
of modern slavery were reported or identified during 2023, 2022 or 2021.

− Training - Training was provided in 2023, 2022 and 2021 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. This includes the Anti-Corruption Policy, Anti-Money
Laundering Policy, Equality, Harassment Prevention and specific content related to human and
labour rights, in order to promote the Human Rights Policy throughout our organisation and
FCPA We refer to the Governance Section, Business Ethics, for more detail of the trainings
provided to our employees in 2023.

118

− Policies acknowledgement by employees - All our employees must annually read, understand,

and commit to following our Code of Conduct and all our policies.

We plan to continue analysing, implementing and reporting initiatives to improve our human
rights procedures going forward.

In May 2023, 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.

Supply Chain Management

Supplier Code of Conduct

Atlantica’s Suppliers Code of Conduct, which is part of the corporate governance documents, was
approved by the Board of Directors in 2017 and was last amended in February 2022. The Supplier
Code of Conduct is publicly available at our website, and we expect that all suppliers meet the
requirements herein included. Atlantica’s Board is responsible for the effective oversight of the
Company’s strategy and performance, including ESG and climate-related risks and opportunities.
Therefore, the Board is the highest accountable decision-making body for the oversight and
implementation of the supplier ESG program.

In 2023 and 2022 ~100% of our suppliers adhered to our Supplier Code of Conduct.

Our Supply Chain Strategy

Atlantica has a Purchasing and General and Administrative Expenses Policy that was last amended
in 2023. This policy applies to the management and operation of assets as well as to general
expenses of Atlantica. It contains the guidelines to ensure that the purchase of all goods, supplies,
external professional services and works are handled according to international purchasing best
practices.

Supply Chain Management Strategy
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.
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 while 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.

We provide annual compliance-trainings 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.

Supplier screening and assessment:

Atlantica has implemented a procedure to screen and assess new suppliers. The procedure
describes the “Supplier Qualification Process”, a five-step process that has to be applied to all new

119

suppliers. The Requesting, Risk, Purchasing and Compliance departments participate in this
process.

➢ Initial Evaluation

Adhesion to
Supplier Code
of Conduct

Supplier’s technical
evaluation

Simultaneous
evaluations

Compliance valuation

Financial Solvency

ESG Assessment

➢ Periodic reassessment every 3 years

Our initial evaluation is intended to determine the eligibility of a potential new supplier. We
analyze the suppliers’ potential risks such as: country, sector, commodity, spending, business
relevance, financial situation and solvency or any reputational issues that could potentially affect
Atlantica (negative ESG perceptions or risks). The process consists of the following steps:

Initial Supplier Evaluation Form: In the first step the supplier has to explicitly agree to adhere
to Atlantica’s supplier code of conduct.

2. The supplier’s technical evaluation is a qualitative assessment in aspects such as the position
of the company in the market, management systems in place ISO 9001, 14001, commercial
references in the last 5 years as well as other relevant and specific questions from the
requesting departments (Operations, Asset Manager, IT etc.).

3. This step incorporates analysis that are performed simultaneously: (i) the compliance
department conducts the compliance due diligence assessment following the terms of the
Compliance Due Diligence Protocol, (ii) the Risk Department perform the financial solvency
check and (iii) suppliers are assessed based on their ESG performance.

The assessment of their ESG performance is usually made by an external consultant via desk
assessment. We invite the supplier to join Achilles, a third party management tool to evaluate
suppliers based on ESG criteria. In certain cases, this evaluation can be replaced by a publicly
available rating from international recognized ESG rating agencies, such as S&P Corporate
Sustainability Assessment or Ecovadis.

Achilles is a global platform that allows us to evaluate and monitor suppliers based on
environment, labor and human rights, ethics and supply chain. This methodology is built on
ESG Standards, including GRI, UNGC, ISO 2600. This assessment will provide Atlantica with a
rating in each of the four areas.

a. Environment (energy consumption, water, pollution, etc.)
b. Labor and human rights (employee health & safety, working conditions, child

labor, discrimination and harassment, etc.)

c. Ethics

(corruption,

anticompetitive practices,

responsible

information

management)

d. Supply Chain (sub-supplier environmental and social practices)

120

Ratings range from A+ “Platinum” to D “Low”. Suppliers with a D rating will be monitored
annually and the evolution of their ESG rating will be checked every year. If the rating “D” is
maintained for 3 consecutive years, the purchasing department will search for an alternative
supplier as long as this does not jeopardize the operations of the company.

SAP Registration: Atlantica uses SAP, an ERP system, to track suppliers’ general information,
purchase orders and payments. As of December 31, 2023, SAP is used at all our assets, with
the exception of Italy, some assets in Chile and in our water assets. In 2023 and 2022,
companies without SAP represented less than 7% of our total revenue. We believe having
one single database of suppliers and a single process for the entire organisation helps to
prevent supply chain risk.

This supplier qualification process is performed for every new potential supplier. In 2023, 2022
and 2021 a 100% of our new Tier 1 suppliers were assessed through the supplier qualification
process. In addition, every three years we reassess all our suppliers.

Our suppliers:

Total Number of suppliers
Total Number of critical Tier 1 Suppliers
% total spend on critical Tier 1 suppliers
Total number of suppliers assessed via desk
assessment in ESG
% of total spend of assessed suppliers in ESG
% of critical Tier 1 suppliers assessed in ESG
% of total spend of critical Tier 1 suppliers
assessed in ESG

2023
3,197
231
80%

346

~60%
53%

~68%

2022
2,860
120
70%

168

~45%
36%

~65%

2021
2,570
117
60%

117

~51%
43%

~89%

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.

The increase in the number of suppliers in 2023 compared to 2022 was mainly due to the: (i) the
internalisation of the operation and maintenance services at our solar assets in Spain and at Kaxu,
in 2023 and in 2022 and (ii) the increase of the construction activity.

During 2023 we had forty-four assets in operation and eight 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.

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)

Status
✓

On-track

121

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 2023 and 2022, 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, heat and water
desalination capacity. Our customers are mainly comprised of electric utilities and corporations,
with which we typically have entered into PPAs. 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.

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), but in those cases, we have relationship with regulators, administrators and the
transmission and distribution systems to which we are connected. 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.

Customer Satisfaction

As of December 31, 2023, we have a small number of customers. As explained above, in some
cases, our customer is the national electricity system. We evaluate internally our customer
relationships based on a rating scale from 0-10, where 0 is ‘very poor’ and 10 is ‘excellent’.

Summary internal results by geography

Geography

2023

North America
South America
EMEA
Average

122

9
8
9
8.6

Occupational Health and Safety

Key facts:

✓ Improved all our health and safety indicators vs. 2022

✓ LTFI decreased ~40% in 2023 vs. 2022

✓ Maintained health and safety KPIs below sector average

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 all 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 across our 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 May 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.

Best Practices Implementation

- Health and Safety Best Practices The Company’s health and safety best practices
programme is a key management tool to standardize safety at all of our assets. It has been
in place since 2017 and we regularly update it to include insights gained from our peers,
contractors and suppliers. During 2023, we continued to implement new best practices as
well as incorporate our best practices at newly acquired assets.

- Stop Work Policy: This policy was approved in June 2023 by the Health and Safety, ESG and
Operations Committee. Under this Policy, our employees and subcontractors have the
responsibility and the authority to stop works whenever there is a hazardous condition or
behaviour that may cause potential harm to the integrity of people, properties and/or the
environment, without any retaliation. Following this policy, if the safety of the employees
and/ or subcontractors’ employees is determined to be at risk, no work will be carried out
until the hazardous event has been resolved.

- Hard hat stickers: In 2023, we launched a program to reinforce our safety programs,
trainings and our employees and contractors’ commitment to safety using stickers with safety
messages on their hard hats.

123

Hazard identification and risk assessment

We have established different mechanisms to identify occupational health and safety hazards,
which include the evaluation and prevention of occupational risks, at all our assets. Atlantica has
implemented a zero-accident culture and is firmly committed to maintaining it. To do so, Atlantica
has integrated health and safety management across all hierarchical levels of the company. Below
we detail Atlantica’s initiatives to ensure a safe and healthy work environment:

- Stop and Scan: In 2023 we implemented a new procedure to improve hazard identification
and injury prevention at all our assets. By putting this new procedure in place, we encourage
our employees and subcontractors to proactively participate in their own safety and we
promote mutual care between our employees. We aim to expand on the philosophy of
stopping and reviewing safety risks that the employee may encounter before engaging in
any activity.

- Accident awareness sign boards: We have identified specific locations at our assets where
hazards are more likely to occur. In those specific places we have installed accident
prevention sign boards indicating the identified hazard. The aim is to warn employees and
subcontractors of hazards that have occurred in the past, increase risk perception and
prevent complacency.

- SafeStart programme: In 2023 we continued to implement of the “SafeStart” initiative at
our assets in the U.S. and Spain. SafeStart promotes a 24/7 approach. It leverages employees’
natural motivation and provides techniques to reduce injuries at work, at home and on the
road. The result is a positive shift in safety attitudes, it increases participation in workplace
training and fosters a more robust safety culture. SafeStart is an add-on to our existing health
and safety policy, process, and procedures.

We plan to continue its implementation during 2024 and 2025.

Integration of actions to prepare for and respond to emergency situations:

Emergency procedures are implemented at all our assets. These procedures guarantee a rapid
and coordinated response to prevent any harmful situation for our employees and subcontractors.
We regularly perform emergency drills at our assets and work centres. In 2023 we also approved
and implemented the Stop Work Policy.

Emergency Drills: In 2023 we performed several emergency drills at our work centres across
the different geographies where we operate in and 145 emergency drills at our assets and
projects under construction.

124

Emergency drill performed at one of our solar assets in Spain, Solaben

Health and Safety Culture and Engagement with our employees

We have also implemented different initiatives to promote health and safety among our
employees and subcontractors:

- Moving forward in safety culture (Dupont-Bradley): In 2023 we started a new program
to assess and improve the safety culture in our Company. By following the Dupont-Bradley
Curve we aim to create a culture amongst our employees and subcontractors that
encourages them to take care of themselves and their colleagues.

This Curve defines four stages in safety culture, the starting point is a Reactive phase where
organizations do not have a safety system in place, and they act on instinct. The Curve moves
to higher levels in organizations that believe that Safety is an important value for the
Company.

Our goal is to reach the fourth stage of curve the coming years. This is called the
Interdependent Stage which occurs when employees collaborate and support one another,
fostering a strong safety culture. This stage is characterized by teamwork and mutual care
among employees which leads to the highest level of safety culture within the organization.
There is a shared vision, trust, and collaboration when it comes to safety.

- Safety awards: We continue to 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: This is event is organised annually at all of our assets. In 2023 over 900
Atlantica’s employees and subcontractor employees took part. We honoured 80 Atlantica
and subcontractor employees with awards for their commitment to safety.

- Why do I work Safe?: In May 2023 we launched an activity at all our assets to increase
employees' commitment for their own safety and their co-worker’s safety. We encouraged
our employees to explain the reason why they needed to work safely and prevent them from
getting injured. Reasons could be either professional or personal reasons. Answers were
shared with colleagues during the Safety Days. It was a good experience that helped our
employees understand why employees need to establish safety as their main priority at work.

We requested their collaboration to answer the question “Why do I work safe?”, using a
specific template that was posted on boards in their work centre. This activity was completed
during our annual Safety Days, with all the answers being shared between the attendees,
which demonstrated the personal reasonings of each person that lead them to make Safety
a priority.

125

2023 Safety Day Pictures

- Safety App: We have a mobile safety app for our employees and subcontractor employees
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”) when carried out
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.

The app also serves as a tool to promote risk awareness and improve safety knowledge. Every
month, we use a quiz module to ask questions related to related to “how much do you know
about safety?” Atlantica provides monthly awards to quiz winners.

126

Health and Safety Performance Indicators

During 2023 we had forty-four assets in operation and eight projects under construction or ready
to start construction. We intend to increase our construction activities in the upcoming years.
Accordingly, and following international best practices, we disclosed our Lost Time Frequency
Index (LTFI) and Total Recordable Frequency Index (TRFI) for both assets in operation and assets
under-construction. We have revised 2022 and 2021 figures following the new perimeter of
consolidation for Health and Safety indicators. (see section “About this report”).

LTFI represents the total number of lost-time accidents recorded, including major injuries (defined
as death or serious accidents1), in the last 12 months per 1,000,000 hours worked.

Lost Time Frequency Index (LTFI) in 2021, 2022 and 20231
Total
Subcontractors

Total

Employees

1.9

1.7

1.0

2021

2022

2023

Employees

1.9

1.8

0.5

4.7

2.6

2.2

2021

2022

2023

Assets in Operation
Subcontractors

2.6

2.4

1.5

5
4
3
2
1
0

3.1

2.4

1.9

2021

2022

2023

Total

2.4

1.5

1.7

2021

2022

2023

2021

2022

2023

2021

2022

2023

Employees

8.0

0.0

Assets under Construction
Subcontractors

14.5

5.2

0.0

2021

2022

2023

2021

2022

2023

Total

13.1

0.0

3.9

2021

2022

2023

(1) Lost Time Frequency Index (LTFI) represents the total number of lost-time accidents recorded in the last 12 months
per 1,000,000 hours worked. Differs from the KPI generally used in the U.S. which is 200,000 hours worked.

The decrease in LTFI in 2023 was mainly due to a decrease in the number of accidents with lost-
time at our assets under construction. Following the increase in 2022, we increased our efforts at
our assets under construction by implementing new construction policies, processes, procedures
and best practices, as well as performing internal audits to ensure compliance with our existing
best practices, promoting continuous improvement and sharing lessons learned between assets.
This increase was mainly due to the operation and maintenance employees becoming in-house
employees at our assets in Spain and at Kaxu. This move implied switching safety KPIs from the
subcontractors to the employee category. The increase is offset by the decrease in the number of
accidents by our subcontractors.

1 Serious accidents include severe burns, amputation, paraplegia, tetraplegia, major surgery and state of coma.

127

Atlantica’s LTFI for the last three years remains below the sector average.

LTFI Below Sector Average2 in 2023, 2022 and 2021

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

3.3

2.4

4.3

3.1

6.7

1.9

2021

2022

2023

Atlantica

Sector Average

In addition, TRFI represents the total number of recordable accidents with and without lost-time
recorded in the last 12 months per 1,000,000 hours worked.

Total Recordable Frequency Index (TRFI) in 2021, 2022 and 2023
Total
Subcontractors

Employees

Total

6.0

4.0

2.0

0.0

10.0

5.0

0.0

5.6

5.0

3.0

6.7

7.0

3.4

6.4

5.2

4.3

2021

2022

2023

-2

2021

2022

2023

2021

2022

2023

Employees

5.6

5.3

2.7

Assets in Operation

Subcontractors

6.7

5.3

3.1

Total

6.4

4.0

4.3

2021

2022

2023

-2

2021

2022

2023

2021

2022

2023

Employees

8.0

0.0

Assets under Construction
Subcontractors

14.5

5.2

14
12
10
8
6
4
2
0

0.0

Total

13.1

3.9

0.0

14
12
10
8
6
4
2
0

2021

2022

2023

2021

2022

2023

2021

2022

2023

Note: Total Recordable Frequency Index (TRFI) represents the total number of accidents, with our without lost time,
recorded in the last 12 months per 1,000,000 hours worked. Differs from the KPI generally used in the U.S. which is 200,000
hours worked.

2 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 (2022) and Canada Government (2020); Mexico: Secretaria del Trabajo y Prevision Social
(2021); Spain: Instituto Nacional de Estadisticas (2022); Peru, Chile and Colombia: Superintendencia Seguridad Social Chile (2022), Oficina General
de Estadística y Tecnologías de la Información y Comunicaciones (2022) and Ministerio de Salud y Protección Social (2022); Uruguay: Banco del
Seguros del Estado (2021). For each year, we have taken into consideration the most recent available public information.

128

The decrease in the TRFI in 2023 was mainly due to the same reasons that explain the decrease in
the LTFI previously described.

Atlantica’s TRFI also remained below the sector average.

TRFI Below Sector Average3 in 2021, 2022 and 2023

15.0

10.0

5.0

0.0

10.7

10.9

7.5

6.4

5.2

4.3

2021

2022

2023

Atlantica

Sector Average

In 2023 we continued to work on the integration of acquired assets and assets that entered in
operation recently in order to implement our safety culture in all locations. 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 granted health and safety bonuses to certain employees to improve supervision.

The fatality performance indicator at our sites or facilities has been zero.

We also monitor near-misses and unsafe acts and unsafe conditions through our Total Recordable
Deviation Index (TRDI). This index represents the number of near-misses, unsafe acts and unsafe
conditions and first aids recorded over 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.

Total Recordable Deviations Index in 2021, 2022 and 2023

1,623

1,714

1,245

2,000.0

1,500.0

1,000.0

500.0

0.0

2021

2022

2023

Note: We have revised 2021 and 2022 figures to account for the final
number of near-misses and unsafe acts and conditions, and first aids.

In 2023 our TRDI improved, increasing compared to the previous year. Although identifying near
misses and acts and unsafe conditions becomes more difficult year-over-year, in 2023 we were

3 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 (2022) and Canada Government (2020); Mexico: Secretaria del Trabajo y
Prevision Social (2021); Spain, South Africa and Algeria: Instituto Nacional de Estadisticas (2022); Peru, Chile and Colombia:
Superintendencia Seguridad Social Chile (2022), Oficina General de Estadística y Tecnologías de la Información y Comunicaciones (2022)
and Ministerio de Salud y Protección Social (2022); Uruguay: Banco del Seguros del Estado (2021). For each year, we have taken into
consideration the most recent available public information.

129

able to increase risk identification thanks to enhanced risk identification processes and
communication initiatives at our assets. Our preventive reporting programme, mainly through
Walk and Talk, has progressed alongside our other measures to manage and mitigate risks. We
believe in the health and safety processes and procedures we have put in place; hence we expect
Total Recordable Deviations to remain relatively stable in the future.

We also have a Health and Safety Committee with employee representatives at those assets where
the operation and maintenance activities are performed in-house, which represent 74% of our
consolidated revenue for the year ended December 31, 2023. At the rest of our assets, our
operation and maintenance subcontractors have a Health and Safety Committee run in
collaboration with their employees’ representatives. As asset owners, we are regularly informed
of the results and findings of these committees.

in the line with GRI requirements, the Occupational Disease Performance indicator, caused by
occupational activities that have a high incidence or high risk of specific diseases, stands at zero
both for our employees and for our subcontractors’ employees.

People and Culture

Key facts:

✓  41% total workforce in 2023 compared to 2022
✓  14% total hours of training per employee in 2023 compared to 2022

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.

Initiatives and Recognitions

⚫

⚫ 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 compliance with South Africa’s Broad-Based Black Economic Empowerment Program, we
targeted our recruitment to local Black citizens. For instance, in 2023 and 2022 over 70% of
the employees hired by the O&M supplier of Kaxu were Black citizens, thus exceeding the
requirements defined by the Program. We refer to section “Local Communities” for more
details.

⚫ We aim to perform a human capital analysis every 4 years at certain locations. The objective
of this analysis is to guarantee equal opportunities to our employees and to promote a
culture of diversity and inclusion:
-
- 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.

Preventing any kind of gender discrimination, either direct or indirect.

130

Promoting effective equality measures among men and women and guaranteeing the
same opportunities when 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’s Human Capital

Number of Employees per Geography as of December 31, 2021, 2022 and 2023

s
e
e
y
o
p
m
E

f
o
r
e
b
m
u
N

1600

1400

1200

1000

800

600

400

200

1366

978

558

796

443

308

312

331

115

130

142

North America

South America

EMEA

Corporate

Total

2021

2022

2023

Our corporate employees support our assets in roles including Operations, Health and Safety,
Environment and other certain corporate areas including Corporate Development, Finance,
Accounting and Consolidation, Administration, Tax, Internal Audit, People and Culture, Business
transformation, Insurance and Legal.

Employees from companies where we do not have financial control are not considered in our total
workforce.

Number of Employees by Category as of December 31, 2021, 2022 and 2023

s
e
e
y
o
p
m
E

f
o

r
e
b
m
u
N

1600

1400

1200

1000

800

600

400

200

861

519

245

Asset
Operation
Employees

1,366

978

558

298

264

178

133

121

Assistants and
Professionals

Engineers and
Graduates

Middle
Management

Management

Total

2021

2022

2023

(1) Asset Operations mainly consists of employees who perform directly the operation and maintenance activities

of our assets in operation and under construction. This category does not include O&M managers.

(2) Assistant and professional employees mainly consist of qualified workers that do not have a university degree

and that provide support to different departments such as: purchasing, accounting or IT.

(3) Engineers and graduate employees mainly consist of workers with a university degree. These employees work

in different areas such as people and culture, research and development, finance or health and safety.

(4) Middle Management mainly consists of employees who manage a specific area, supervise a group of employees,

or are considered key personnel within the organisation.

131

In 2023, the number of employees in Atlantica increased by 41% with respect to the previous year.
The increase was mostly due to the internalisation of the operation and maintenance services at
part of our solar assets in Spain.

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

2023
320
91

752

141

1,304

2023
12
125

287

815

1,304

2023
1,081

223

1,304

2022
306
87

360

121

874

2022
13
132

234

449

874

2022
696

178

874

2021
296
61

109

527

2021
13
85

162

240

527

2021
396

131

527

Communication and engagement with our employees

We use several platforms for people and culture management. These platforms are accessible to
all Atlantica employees and allow employees to access and manage their development,
performance reviews, benefits, compensation, work-time planning, etc. In 2023 we started the
process to implement a single platform globally. In addition:

- Our CEO updates Atlantica’s employees on key priorities in open sessions with Q&A at least

twice a year.

- We intend to hold Strategic Sessions every two or three years. In these sessions our CEO, CFO
and key senior management present Atlantica’s milestones at the corporate and geographic
level, key priorities going forward, and highlight the importance of our values, compliance,
risk and purchasing process and procedures. The last Strategic Session was held in 2022.
In 2023, we held a specific Strategic Session where our U.S. and Canadian senior managers
analysed key priorities in the geographies 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 refer to the Governance section for more details on the management
model trainings.

- We periodically publish Atlantica-related news via our internal intranet and LinkedIn.
- 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. The last climate survey was carried out in October 2022. Approximately 78%

132

of employees took part and the general engagement with the Company was 68%. 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 was informed of the results of
the survey and of the action plans taken by management.

Employee’s remuneration and Support Programs

We offer a remuneration package that includes monetary and non-monetary compensation. In
2023, 2022 and 2021 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 most of our employees. Asset operations employees who
joined the Company recently as a result of the internalization of the O&M activities in some
of our assets have not been included in the annual performance process yet, we plan to
include them in 2024.

- Variable compensation based on Company objectives, department and individual objectives.
-

Long-term incentive plan for certain employees.

As of December 31, 2023 and 2022 mean and median compensation for our employees excluding
the CEO and the ratio total annual compensation of the CEO to employee’s remuneration was:

Employees Remuneration
(U.S. Dollars)
Ratio total annual
compensation CEO to
employee’s remuneration

2023

2022

Mean

Median

Mean

Median

54,781

35,882

62,869

40,959

32.4

49.4

26.4

40.5

The ratio of the total annual compensation CEO to employee’s remuneration increased in 2023
compared to 2022 mainly due to the internalisation of the operation and maintenance services at
some of our solar assets in Spain. The new employees are mainly asset operation employees who
have lower salaries than Atlantica’s average.

We believe that operating our assets with our own employees allows us to have a closer
relationship and direct dialogue with these employees, ensuring that their working and health and
safety conditions meet Atlantica’s standard and best practices.

In 2023, approximately 61% of our employees with variable remuneration had targets linked to
ESG performance, compared to 59% in 2022 and 58% in 2021.

Our People and Culture Department receives remuneration data from two separate external
consultants for certain positions based on position and location.

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 represents tax advantages
for some employees;

- under current local regulations, we offer 401(k) retirement plans in the U.S;
-

financing a portion of our employees’ health insurance costs and their immediate family
in most of the countries where we are based;
financing of our employees’ sport and wellbeing activities;

133

lactations facilities and
some family benefits such as childcare contributions,
breastfeeding leaves in certain locations. As of December 31, 2023 more than 60% of our
workforce can benefit from a breastfeeding leave of approximately 3 weeks;
paid parental leave for the primary and secondary caregiver in most of the locations
where we are based. As of December 31, 2023, approximately 60% of our workforce
benefits from 16 weeks of paternity leave for both caregivers;

In addition, 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. We also
offer part-time working options for employees who request this option.

The table below shows the number of employees that took parental leave in 2023, 2022 and 2021
by gender.

Parental Leave in 2023, 2022 and 2021

2023

2022

2021

Male

Female

Total Male

Female

Total Male

Female

Total

Parental
leave

All employees returned to work in 2023, 2022 and 2021 after parental leave. 95% of those
employees were still employed 12 months after returning to work in 2023. The remaining 5%
voluntarily left the Company due to personal reasons. In addition to what is included in the law,
management encourages employees to take parental leave.

Diversity and Inclusion Policy

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.

Atlantica’s Diversity and Inclusion Policy was approved by the Board of Directors in May 2020 and
was last amended in December 2021. In 2023, 2022 and 2021, we were not notified of any
incidents relating to potential situations of discrimination. Corrective or disciplinary action would
be taken in case of discriminatory behaviour or harassment.

We refer to section “Environmental, Social and other key performance indicators” for more detail
on Atlantica’s employee’s breakdown per gender, nationality, ethnic self-identification and age.

As of December 31, 2023, approximately 14% of the executives at Atlantica have compensations
linked to diversity, equity and inclusion.

134

Freedom of Association

The percentage of employees that are covered by company specific collective bargaining
agreements was 9% in 2023, 11% in 2022 and 8% in 2021.

If we include sector collective bargaining agreements, the percentage of employees that are
covered by collective bargaining agreements is 69% in 2023, 60% in 2022, and 40% in 2021.

Development and Training

Part of our supervisors’ mission is to collaborate with each of their team members to evaluate
performance through the Annual Performance Appraisal (APA). As part of the individual appraisal
process, the supervisor evaluates the performance during the period in nine standardised areas.
Atlantica’s employee APA integrates our code of conduct. 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 gathered,
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 team. The goal is to consider employees for internal transfers to other positions,
functions or geographies within the organisation. In 2023, we continued to strengthen our
organisational structure. We bolstered our employees’ capabilities by designating new plant
managers and other key 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.

Employees Promoted by Gender in 2023, 2022 and 2021

2023

2022

2021

Male

Female

Total Male

Female

Total Male

Female

Total

Number of
promotions

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:

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 negotiation, team-
working, team-building, decision-making, leadership and communication, among other skills.
- Technical knowledge courses. Our training plans also include technical knowledge courses

specific to different technical fields.

135

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.

Each employee agrees on the definitive training programme with their manager and, the People
and Culture Department.

Training Hours in 2023, 2022 and 2021

Total Hours of Training

2023

168

5,163

2022

321

3,724

2021

170

2,689

13,701

10,740

9,281

2,049

1,189

413

21,883

11,548

6,846

42,964

27,521

19,399

Management
Middle Management
Engineers and
Graduates
Assistants and
Professionals
Asset Operations
Employees
Total Average

Total Average Hours of
Training per Employee

2023

2022

2021

Management

Middle Management

Engineers and
Graduates
Assistants and
Professionals
Asset Operations
Employees
Total

In 2023, the employees completed 33 hours of training on average compared to 29 in 2022. The
increase was mainly due to: (i) an increase in the number of trainings performed by our asset
operation employees and engineers and graduates in 2023 compared to 2022. In 2022, asset
operation employees who had recently joined Atlantica following the internalisation of the O&M
received trainings only for part of the year (since they joined the Company). In 2023 all these
employees performed all the trainings corresponding to a complete year; and (ii) in 2023
engineers and graduates and middle management performed a specific training on soft skills that
they had not been performed in previous years.

Workforce Breakdown

Employees by Gender as of December 31, 2023, 2022 and 2021

17%

20%

25%

2023

83%

Men

Women

2022

80%

Men

Women

2021

75%

Men

Women

Women on the Board of Directors
Women at Management Level
Women in non-managerial positions
Women at Atlantica

2023
22%
17%
17%
17%

2022
22%
23%
20%
20%

2021
25%
23%
25%
25%

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.

136

As of December 31, 2023, 236 out of 1,366 employees were women, representing 17% of the
Company’s personnel. In 2022, 193 out of 978 employees were women, or 20% of the total
headcount. The decrease of women at Atlantica during 2023 as a percentage of total employees
was mostly due to the internalisation of the operation and maintenance services at our solar assets
in Spain. These activities added 340 new employees to our workforce in EMEA, of which
approximately 92% were men. Without considering Asset Operation Employees 187 out of 505
employees were women, representing 37% of the Company’s personnel compared to 35% in 2022
(160 out of 459 employees were women in 2022).

Employees by gender excl. asset operation employees as of Dec. 31, 2023, 2022 and 2021

37%

2023
63%

Men

Women

35%

2022
65%

Men

Women

41%

2021

Men

59%

Women

Women by Geography and by Category as of December 31, 2021, 2022 and 2023

50%

45%

40%

35%

30%

25%

20%

15%

10%

44%

43%

41%

40%

17%

13%

31%

25%

22%

16%

14%

13%

North
America

South
America

EMEA

Corporate

2021

2022

2023

90%

80%

70%

60%

50%

40%

30%

20%

10%

76%

71%

69%

43%

38%

37%

26%

18%

17%

23%

17%

Asset
Operation
Employees

Assistants and
Professionals

Engineers and
Graduates

Middle
Management

Management

2021

2022

2023

The relative decrease of women in the EMEA region during 2023 was mostly due to the
internalisation of the operation and maintenance services as explained above. Most of the new
employees are asset operation employees, who in this sector are generally men.

Employees by age as of December 31, 2021, 2022 and 2023

2023

2022

Male Female Total Male Female Total Male

2021
Female

Total

145

408

369

208

193

495

451

227

117

321

217

130

785

152

403

277

146

193

978

158

111

417

141

217

154

558

Age

< 30

31-40

41-50

>51

Total Employees

1,130

236 1,366

The average age of our workforce in 2023, 2022 and 2021 was 41 years old.

137

Employees by type of employment Category as of December 31, 2021, 2022 and 2023

2023

2022

2021

Male

Female Total Male

Female

Total

By
employment
type

By type of
contract

Full-time1

1,130

236

1,366

785

193

978

417

141

558

Part-time

Total

1,130

236

1,366

785

Indefinite

1,066

215

1,281

743

Temporary

193

182

978

925

417

399

141

132

Total

1,130

236

1,366

785

193

978

417

141

558

531

558

1 Voluntary working time reductions have been included under full-time employment contracts.

Employees in 2023, 2022 and 2021 year-end by contract type and by geography were:

2023

2022

North
America
331
0
331

South
America
48
49
97

EMEA Corporate Total

761
35
796

141
1
142

1,281
85
1,366

Indefinite
Temporary
Total

North
America
311
1
312

South
America
60
33
93

429
14
443

125
5
130

925
53
978

EMEA Corporate Total

North
America
308
-
308

South
America
51
17
68

2021

EMEA

63
4
67

Corporate Total

109
6
115

531
27
558

Employees Hired and Turnover Rates

Employees Hired in 2023, 2022 and 2021 by Age and Gender

2023

2022

2021

Male

Female

Total Male

Female

Total Male

Female

Total

< 30

31-40

41-50

>51

Total Employees

222

274

166

204

106

Employees Hired in 2023, 2022 and 2021 by Geography and Gender

North America

South America

EMEA

Corporate

Total Employees

2023

2022

2021

Male

Female

Total Male

Female

Total Male

Female

Total

137

222

158

274

166

204

106

In 2023, we hired 274 employees. These hires do not include the internalisation of the asset
operations activities. The number of employees hired in 2023 increased by 34% compared to 2022,
mainly driven by an increase in the number of employees hired in EMEA. Approximately 50% of
total employees hired in EMEA in 2023 corresponded to temporary employees and employees
hired to replace sick or maternity leaves.

138

Average Employee Turnover Rate in 2023, 2022 and 2021

Employee voluntary turnover rate

Employee voluntary turnover rate
without U.S. activities

Employee involuntary turnover rate

Employee total turnover rate

2023

7.6%

6.8%

3.5%

10.7%

2022

12.8%

9.7%

3.8%

16.8%

2021

11.0%

5.9%

5.6%

15.9%

Note 1: Turnover rates calculated based on the average number of employees during the year excluding temporary
employees and employees hired to replace sick or leaves.
Note 2: Employee turnover rate includes dismissals, retirement and others.
Note 3: We have revised 2022 and 2021 employee involuntary and total turnover rate to exclude the temporary employees
and employees hired to replace sick or leaves.

Employee Turnover in 2023, 2022 and 2021 by Age and Gender

2023
Female

Male

Total

Male

2022
Female

Total

Male

2021
Female

Total

< 30

31-40

41-50

>51

Total Employees

177

202

165

194

Employee Turnover in 2023, 2022 and 2021 by Geography and Gender

Male

2023
Female

Total

Male

2022
Female

Total

Male

2021
Female

Total

North America

South America

EMEA

Corporate

Total Employees

115

177

131

202

165

194

Total employee turnover in 2023 increased by 4% compared to previous year. The increase was
mainly driven by an increase in the number of turnovers in the employees from EMEA.
Approximately 50% of total employees turnover in EMEA corresponded to the finalisation of
temporary contracts.

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.

Gender Pay Gap Analysis

Atlantica guarantees respect for salary equality rights. Monitoring pay equality is one of the key
factors to ensure 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.

139

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.

2023, 2022 and 2021 Pay Gap by Category

Management
Middle management
Senior engineers and graduates
Engineers and graduates
Assistants and professionals
Asset operation employees
Average Salary by Gender

2023
2%
6%
6%
0%
(9%)
24%
5%

2022
18%
16%
7%
10%
(14%)
29%
13%

2021
18%
29%
15%
8%
(8%)
10%
26%

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: Management consists of the members of the Management Committee.
Note 3: Middle management consists of certain employees who manage a specific area, supervise a group of employees,
or are considered key personnel within the organisation.

Below you may find 2023 Gender Pay Gap by Category including the CEO.

2023, 2022 and 2021 Pay Gap by Category including CEO

Management
Middle management
Senior engineers and graduates
Engineers and graduates
Assistants and professionals
Asset operation employees
Average Salary by Gender

2023
35%
6%
6%
0%
(9%)
24%
9%

2022
47%
16%
7%
10%
(14%)
29%
20%

2021
48%
29%
15%
8%
(8%)
10%
33%

The overall pay gap decreased in 2023 compared to 2022 mainly due to the internalisation of the
operation and maintenance services at our solar assets in Spain. Most of these new employees
are asset operation employees, who are approximately 92% men and, on average, have lower
remuneration than Atlantica’s average salary.

The pay gap also decreased in the middle management and engineers categories due to the
internalization of O&M activities. 11% of the employees who joined the Company in this process
in 2023 are engineers and middle management. These employees are based in Spain and have
lower remuneration than the average.

In spite of the reduction, we continue to have an overall gap in the Company. The main reason is
a 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 employees to fulfil future management

positions.

- Promote STEM careers among female students.
- Always consider female candidates when hiring new employees.

140

Key Management for 2023

We have a key management team with extensive experience in developing, financing, managing
and operating contracted sustainable infrastructure assets. Our key management in 2023, 2022
and 2021 includes:

Name

Position

Year of Birth

Javier Albarracín

David Esteban

Emiliano Garcia

Head of Development and Investment and CIO

VP EMEA

VP North America

Irene M. Hernandez

General Counsel and Chief of Compliance

Francisco Martinez-Davis

Antonio Merino

Chief Financial Officer

VP South America

1971

1979

1968

1980

1963

1967

Santiago Seage
Note: Stevens C. Moore resigned from his position as VP Corporate Development on June 29, 2023.

Chief Executive Officer and Director

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, 2023, the average age of our key management team was 52 years old.

The biographies of the key management team are:

Javier Albarracin,
Head of Development and Investment and CIO

Mr. Albarracin has more than 20 years of experience in the development and financing of
infrastructure projects in North and South America, Europe, and Africa. He previously served as
Head of Finance for Atlantica since 2016. He holds a Business Administration Degree and a Master
in Finance and Financial Markets.

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 Development department for two years. Before that,
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)).

141

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.

Key management compensation, excluding the Chief Executive Officer, in 2023, 2022 and 2021:

In USD thousands
Short-Term Employee Benefits
-

Fixed and variable remuneration1

LTIP Awards
- Options vested under LTIP2
- Restricted Stock Units vested under the

LTIP

One-offs
- One-off plan3

Post-employment benefits
Other long-term benefits
Termination benefits
Total

2023

2022

2021

2,568
2,568
845
-

845

-
-
-

-
3,413

2,294
2,294
2,176
733

1,443

684
684
-
-
-
5,154

2,365
2,365
839
839

653
653
-
-
-
3,857

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.

(1) Stevens C. Moore and Javier Albarracin ‘s 2023 fees were prorated for the year 2023. Stevens C. Moore resigned from
his position as VP Corporate Development on June 29, 2023 and Javier Albarracin was appointed as Head of
Investments and Finance and CIO in in June, 2023.

(2) Options under the LTIP 2020 and 2021 vested in 2023 but were not exercised because they were underwater at the

vesting date.

(3) The One-off plan RSUs were fully vested as of December 2022.

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 units vested in 2023. In addition, “One-off Awards” included share
units that were fully vested in 2022. The vested options and share units have been included in the
remuneration table above using the share price at the vesting date.

142

Fixed remuneration for the Key Management excluding the CEO for the year 2023 was $1,815.4
thousand. As of December 31, 2023, these executives excluding the CEO owned 202,674 shares
of Atlantica, including unvested shares units as of that date (100,031 shares and 101,454 restricted
share units, convertible into shares in the future). Considering a share price of $21.50 as of
December 31, 2023, Key Management excluding the CEO owned shares representing 2.4 times
their base salary. Excluding restricted share units and considering a share price of $21.50 as of
December 31, 2023, Key Management excluding the CEO owned shares representing 1.2 times
their base salary.

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 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.

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 will be 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 to 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

143

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 2023 we had forty-four
assets in operation and eight projects under construction. We expect our development and
construction activities to continue increasing 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.

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 will
be addressed and followed-up in our regular communications with them. In 2023, 2022 and 2021
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 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 community’s needs:

Medium / Long-Term

Infrastructure1

-




-

-

Education / Skill
Development

-

-
-




U.S.

Peru

Chile

Colombia

Uruguay

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 include food and clothes donations.

In 2023, we invested approximately $1.5 million in local communities, compared to $1.5 million
and $1.3 million in 2022 and 2021, respectively.

In Peru, Colombia, Chile, South Africa and Algeria we have several employees who visit the areas
close to our assets. 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
Atlantica’s Geographic Committee if deemed necessary.

144

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 2023, we invested approximately $515 thousand in different initiatives that benefited local
communities located near our transmission lines and our mini-hydroelectric power plant. In 2022
and 2021 we invested approximately $294 thousand and $289 thousand, respectively.

2023 investments mainly relate to:

✓ 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 2023, we invested approximately $150 thousand in initiatives that benefited (i) 6 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) 64 students who received support to pay education tuition fees and purchase
school supplies.

Colombia

In 2023, we invested approximately $59 thousand in initiatives that benefited local communities,
mostly Indigenous people, close to our solar PV plants, including among others, Christmas
presents and school kits for children, and furniture for local schools.

Donation of Christmas presents and school kits to children

145

Uruguay

In 2023, we donated furniture, air conditioning systems and educational materials worth
approximately $6 thousand to a local school near one of our wind assets.

Algeria

During 2022, we donated approximately $35 thousand to the local communities near the water
desalination plants. We also donated approximately $30 thousand in 2022 and 2021.

Skikda

Donations benefited needy families in the Skikda community. These included school supplies kits
and bags for 367 schoolchildren and 200 food baskets.

Donation of school supplies

Donation of food baskets

Honaine

Donations benefited needy families in the Honaine community. These included school supplies
kits and bags for 400 schoolchildren and 300 food baskets.

Donation of school supplies

Donation of food

Tenes

Donations benefited needy families in the Tenes community. These included school supplies kits
and bags for 116 schoolchildren and 90 food baskets.

146

South Africa

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% 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 2023, Kaxu invested approximately $592 thousand in community activities:

• 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: $125 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: $141
thousand.

• Teachers Support Programme: We provided local schools with additional teachers to assist

with overcrowded classrooms. Investment: $68 thousand.

• Schools Infrastructure Support: solar PV systems for administration buildings at all six schools

in the municipality area. Investment: $65 thousand.

As part of our obligations, we also help create jobs to empower Black citizens from local
communities. During 2023 and 2022, 79% and 72%, respectively, of the employees hired by the
subsidiary performing the O&M at Kaxu were Black citizens, exceeding the requirements defined
by the project. Furthermore, approximately 30% of employees working at the plant in 2023 and
2022, 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 persons from various different regions in South Africa. As of December 31, 2023 approximately
94% of the employees were South African citizens, and the remaining 6% were support staff from
different countries.

147

Teachers Support Programme

PV system installed at a school

Spain

Classroom built at Feetjieland

In Spain, we signed collaboration agreements with six universities as part of an internship
programme for recently graduated students.

Canada

In 2023, we donated $5 thousand to the Calgary Alpha House Society. This organization was
established in 1981 to support a marginalized population of men and women addicted to alcohol
or drugs and living on the streets of Calgary. The scope of their work is at the direct intersection

148

of homelessness, addictions and mental and physical health issues, with programmes designed
to help improve the lives of vulnerable individuals, while having a positive impact on the wider
community through dedicated responses to social issues.

United States

Solana

In 2023, Solana donated $8 thousand to the town of Gila Bend Recreation department for the
2023 “Santa in the Park” event and $5 thousand to the town of Gila Bend Unified School District
West-MEC Program.

Donation to the Town of Gila Bend Unified School
District West-MEC Program

Mojave

In 2023, 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 $500 to the Transition Habitat Conservancy, a non-profit organisation that protects
transition zone and wildlife corridor ecosystems and their scenic, agricultural, and cultural
resource values in the West Mojave Desert.

Coso

In 2023, we provided cash donations of $98 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.

149

Asset Management

10th Annual Lone Pine Tribal Earth Day Celebration

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 the management of
health and safety, environmental matters, compliance, financial, economic and other practices.

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 procedures, 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.

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
financial statements
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.

150

Asset Management Approach

Atlantica’s asset management objectives and targets are set on an annual basis. These are
discussed and agreed at Atlantica’s Health and Safety, ESG and Operations Committee. The Board
of Directors approves the 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 things.

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 20244. 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.

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
once 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 2023, we
had 13 of our assets audited by the Operations team, which resulted in recommendations for 225
improvement actions (vs. 273 in 2022). A high percentage of these improvement actions relate to
non-material findings corresponding to operation and maintenance, health and safety, and
environmental internal standards.

4 The renewal process will start before the certifications expire.

151

Number of Assets Audited and Improvement Actions in 2023, 2022 and 2021

Number of assets audited
Number of identified
improvement actions

2023
13

225

2022
13

273

2021
7

Note 1: Approximately 51% of the identified improvement actions in 2023 have been implemented. The rest (improvement
actions mainly identified in Q3 and Q4 2022 audits) are expected to be implemented during 2024.
Note 2: All improvement actions identified in 2022 were implemented during 2022 and 2023.

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 2023, 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-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.

152

Summarised Key Asset Management ESG-Related Responsibilities

Environment

Social

Compliance

- Identify environmental risks,

- Implement a zero-accident

- Compliance with all internal

improve efficiency and reduce
overall costs.

culture at all assets.

- Identify health and safety risks,

- Implement environmental

perform walk & talks.

and external rules,
regulations, processes, and
procedures.

audit findings
recommendations.

- Share lessons-learnt and
implement operational,
environmental, and quality
best practices.

- Maintain environmental and
quality management system
certifications.

- Measure, monitor, and report

key GHG and non-GHG
emissions, waste and water
indicators. Implement actions
to reduce their impact.
- Implement biodiversity

initiatives.

- Implement health and safety

- 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.

audit findings
recommendations.

- Share lessons-learnt and

implement health and safety
best practices.

- Maintain health and safety

management system
certifications.

- Measure, monitor, and 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, 2023, our assets had a weighted average remaining contract life of
approximately 13 years5. 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 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. The ATN and ATS transmission lines 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 land to its original condition. In most of the assets, the process would consist of
taking equipment apart. We do not expect any environmental or landscaping 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 2023 financial
statements available in this report.

5Calculated as weighted average years remaining as of December 31, 2023 based on CAFD estimates for the
2024-2027 period, including assets that have reached COD before March 1, 2024.

153

In USD million
Dismantling provision

2023
155

2022
141

2021
125

The dismantling provision increased mainly due to dismantling obligations from our transmission
line ATN 2. Following requirements from an environmental impact assessment performed at ATN
2, we have increased the provision corresponding to this asset. The provision also increased due
to dismantling obligation from assets recently incorporated in our portfolio.

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.

As of December 31, 2023, we own 22 patents and technology licenses 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 3 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. The advanced analytics team focuses on data analytics, visual 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.

We 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 2023, we continued (1) strengthening our capabilities related to visual analytics, data analytics,
modelling and artificial intelligence, and (2) moving forward on our digitalisation roadmap to
cover a broader scope of key components and the range of failure mechanisms. Specifically, we
have performed periodic aerial inspections with drones at our assets to collect both high-
resolution images and thermal images and we are developing image-driven diagnosis capabilities.
In addition, we have (i) continued to deploy sensors and tools on key equipment at our assets (ii)
expanded our portfolio of machine learning models, physical models and data-driven diagnosis
capabilities (iii) signed new and increased the scope of existing collaboration agreements with
equipment manufacturers and (iv) integrated new data driven digital solutions. All these
innovations initiatives have allowed us to improve our capabilities 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, in 2023 we have developed intelligent controllers of key components in our assets
that have allowed us to improve energy efficiency and we continued improving the remote
monitoring capabilities of our assets from our centralised monitoring centre, including the
development of new operational tools and the automatisation of reports and alarms.

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

154

failures in: (1) transformers (2) turbines, (3) generators (4) power electronics (5) solar trackers(6)
pumps and (7) motors.

We expect that our efforts in innovation will continue, over time, to reduce costs, to improve asset
performance, maximizing energy production and minimizing risks, and to extend 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.

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 assets. In 2023,
we continued investing time and effort in strengthening prevention, monitoring and threat-
detection measures in line with international standards. We engage an external security firm as
advisors and certify our information security management system (ISMS) through a recognized
audit firm in accordance with is ISO 27001. 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 on-site and remote
workforce, keeping them in operation to ensure uninterrupted service to our customers. These
measures range from software improvements, tailored communications to raise security
awareness among our workforce, and implementing mandatory IT security training aimed at
detecting, monitoring and preventing threats. In addition, we perform annual red team exercise
conducted by experienced cybersecurity specialists from a third party. 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

155

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.

To protect Atlantica’s information systems from cybersecurity threats, the Company uses various
security tools that help the Company identify, escalate, investigate, resolve and recover from
security incidents in a timely manner. 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.

Incidents are unwanted or unexpected malicious security events, or a series of such events,
impacting an information system or the information residing in the system, which have a
significant probability of compromising business operations. An incident always affects the
security of the system and requires an immediate response as it directly impacts the availability,
integrity, or confidentiality of system data. Incidents may result in service disruption or data theft
among other consequences.

Cybersecurity-Related Incidents in 2023, 2022 and 2021

Number of cybersecurity incidents

Cybersecurity governance

2023
0

2022
0

2021
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 Audit Committee of the Board oversees the
Company’s risk management program, which focuses on the most significant risks the Company
faces in the short-, intermediate-, and long-term timeframes. Audit Committee meetings include
discussions of specific risk areas throughout the year, including, among others, those relating to
cybersecurity, and reports from the Head of Risk Management on the Company’s enterprise risk
profile on an annual basis. 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.

The design and implementation of Atlantica’s company-wide cybersecurity strategic, policy,
standards, architecture, and processes are the responsibility of our IT team, which includes our
Head of IT, with approximately 25 years of experience in information security, and a dedicated IT
Security Manager with more than 10 years of experience in information security. 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.

Our IT Security Committee is chaired by the Head of IT and also includes our IT Security Manager,
and other IT managers relevant for this purpose. This committee meets weekly to review and
update potential threats, the most recent trends in cyber-attacks, the progress in implementing
action plans, and the evaluation of possible opportunities for further improvement.

Atlantica has business continuity, contingency plans and incident response procedures in place.
We intend to test these plans and procedures on a yearly basis.

156

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. Atlantica’s employees approve the Code of Conduct on a yearly
basis.

• 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 addressed 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:

the nature of the information captured,
the use of the collected information,

(i)
(ii)
(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.

157

We have a zero-tolerance approach to privacy and data breaches. In 2023, 2022 and 2021 we did
not identify any substantiated complaints regarding leaks, thefts, or losses of stakeholder data.

Number of substantiated complaints
- From regulatory entities
- From other sources
Total substantiated complaints

Incidents Relating to Data Protection and Privacy in 2023, 2022 and 2021
2021
0
0
0

2022
0
0
0

2023
0
0
0

Tax Management

Tax Strategy

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:

- Attitude towards tax planning

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.

158

- 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 implications.

- Analyse potential growth opportunities considering tax implications.

- Responsible for analysing and implementing the Company’s most significant
accounting policies, including those related to tax accounting and decide on
the appropriate disclosure of tax effects.

Key tax-related departments and responsibilities include:

Corporate tax
Department

Local tax and
administration
departments

Geographic VPs
and country
managers
Consolidation
Department

Internal audit
Department

- Under the CFO´s supervision, is responsible for the design, development,
implementation and coordination of the tax function following our Tax
Strategy.

- Meetings with Geographic VPs, country managers and tax advisors among

others, are held to evaluate 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 compliance in

the countries under their responsibility.

- Responsible for the accounting policies, including the tax accounting 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.

159

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, 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
includes questions about job satisfaction and purpose, happiness and potential stress levels. The
process 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

160

immediate manager/supervisor. This survey helped us to identify certain areas for improvement.
Management prepared action plans for those areas. The Board was informed of the results of the
survey and of the action plans taken by management.

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)6
Lost Time Frequency Index (LTFI)7
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

2023
4.3
1.9

1,714

0
7.6%
10.7%

17%
17%

2022
5.2
3.1

1,246

0
12.8%
16.8%

23%
20%

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 are 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:

- 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 2023 include:

-
144 meetings with existing and potential investors.
- Attendance at 19 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.

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.

161

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.

Following our long-term commitment to sustainability, we have set targets to reduce our:

1. GHG emissions. We target to:

(i) reduce Scope 1 and 2 GHG emissions per kWh of energy generated by 70% by 2035 from
a 2020 base year8. This target has been approved by the Science Based Targets initiative
(SBTi)

(ii) reduce our Scope 3 GHG emissions per kWh of energy generated by 70% by 2035 from

a 2020 base year, and

(iii) achieve Net Zero GHG emissions by 2040.

2. Non-GHG emissions. We target to reduce our non-GHG emissions9 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.

In addition, we have a goal to maintain over 85% of our adjusted EBITDA generated from low
carbon footprint assets including renewable energy, storage, transmission infrastructure and
water assets.

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 85% of Adjusted EBITDA coming from
low carbon footprint assets

GHG Emissions

Scope 1

Scope 2

Scope 3

Total

thousand tonnes of
CO2
thousand tonnes of
CO2
thousand tonnes of
CO2
thousand tonnes of
CO2

2023

89%

2022

89%

1,775

1,844

250

799

249

814

2,824

2,907

8 The target boundary includes steam generation.
9 Non-GHG emissions including nitrogen oxide (NOx), sulfur dioxide (SO2) and carbon monoxide (CO).

162

Scopes 1 and 2 GHG
Emission Rate per Unit of
Energy Generated

tonnes of gCO2/kWh

162

168

Water
Management in
Power Generation

Offsets

thousand tonnes of
CO2

Withdrawal

m3 per MWh

Discharges

m3 per MWh

380

1.46

0.17

320

1.54

0.18

Waste
Management

Hazardous waste
Non-hazardous waste

tonnes of waste
tonnes of waste

1,402
25,993

1,908
23,142

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.

In 2023 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, we have control over the asset.
In other cases, we do not manage the projects’ day-to-day operations. 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 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

2023
~100%
100%
~60%

2022
~100%
100%
~45%

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.

163

Strategic Decisions

In 2023, the main decisions relate to our strategy going forward, the development and
construction of new projects and the investment in new assets.

Investments

Our Board analyses and approves, if deemed appropriate, investment and acquisition
opportunities and development and construction projects 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 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
investments 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 2023
investments approved by the Board.

Dividends

In 2023, the Board decided to pay total dividends of $1.78 per share to our shareholders in
quarterly dividends. 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
2023 dividends.

Strategic Review Process

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 Board believes the Company has attractive growth and other opportunities in front of it and
is committed to ensuring it is best positioned to take advantage of those opportunities. The
decision has the support of the Company’s largest shareholder, Algonquin. During the year 2023,
the Board discussed different strategic alternatives. As of December 31, 2023, the strategic review
was ongoing.

164

Non-Financial and Sustainability Information Statement

The table below sets out where the information required by sections 414CA and 414CB of the
Companies Act 2006 (as applicable to Atlantica) can be found in this Annual Report.

Climate Related Financial Disclosures

Reference in the IAR

Atlantica’s governance arrangements in relation to assessing and managing
climate-related risks and opportunities

TCFD “Governance” section

Identification, assessment, and management of climate-related risks and
opportunities

TCFD “Strategy” section

Integration of climate-related risk management processes into Atlantica’s
overall risk management process

TCFD “Risk Management” section

Principal climate-related risks and opportunities arising in connection with
Atlantica’s operations

TCFD “Strategy” section

Time periods by reference to which those risks and opportunities are assessed

TCFD “Metrics and Targets” section

We also voluntarily disclose additional information required by sections 414CA and 414CB of the
Companies Act 2006. The table below shows where this information can be found in this Annual
Report and the corresponding policies Atlantica has in place.

Requirement

Reference in the IAR

Environmental
Matters

Employees

Social Matters

Human Rights

Anti-Bribery and
Corruption

We refer to the “Environment” section

We refer to the “Social Sustainability” section:
Occupational Health and Safety
People and Culture

-
-

We refer to the “Social Sustainability” section:

-
-

Local Communities
Supply Chain management

We refer to the “Social Sustainability” section:

-
-

Human Rights
Section 172 Statement
We refer to “Governance” section:

- Business Ethics

We refer to the “Social Sustainability” section:

-
-

Human Rights
Section 172 Statement
We refer to “Governance” section:

Business Ethics

Policy

- Environmental Policy
- Biodiversity Policy
- Water Policy

- Code of Conduct
- Health and Safety Policy
- Diversity and Inclusion Policy

- Community development and

Involvement Policy
- Stakeholder Policy
- Supplier Code of Conduct

- Human Rights Policy
- UK Modern Slavery Act

- Anti-Bribery

and Corruption

Policy

- Code of Conduct
- Supplier Code of Conduct

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, 2025. 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.

165

Approval

This Strategic Report was approved by the Board of Directors on February 29, 2024 and signed
on its behalf by Santiago Seage, Director and Chief Executive Officer.

Director and Chief Executive Officer

Santiago Seage

February 29, 2024

166

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 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 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 2023, 2022 and 2021. 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.

- Compliance channel: Email to (i) communicate any potential irregularities or (ii) request
advice. Additional information is provided in the Compliance Management Committee
section.

In 2023 and 2022 we did not identify any breach to our Anti-Money Laundering policy or our
Insider Trading policy. In addition, we did not identify any potential breach regarding our policies
on Conflicts of Interest.

167

Code of Conduct

Atlantica has in place 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 under its control. In those, non-controlled companies in which
Atlantica has interest, we encourage to our partners to apply similar principles and values. 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. If the business partner
does not have its own code of conduct, they must adhere to Atlantica’s Code of Conduct or adopt
one.

In 2023 and 2022, two Code of Conduct incidents were identified respectively. All incidents were
investigated following our internal process and procedures. Investigations have been carried out
by local teams with the collaboration and supervision of Compliance, Risks and Internal Audit
Teams to clarify the facts. As a result, among other actions, the employment of those employees
involved did not continue and comprehensive anti-bribery and corruption training was provided
to local employees. In 2021 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, in line with the Donations, Social Contributions and Sponsorships
Policy, prohibits political involvement of any kind on behalf or as a representative of the Company.
Donations, Social Contributions and Sponsorships are subject to internal review and approval.

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 formulating, reviewing,
monitoring and implementing the Company’s Compliance Program, policies and procedures. The
Compliance Management Committee receives regular reports from local managers in each of our
geographies where we are present on compliance-related matters.

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 Corruption Policy

We have an anti-bribery and corruption 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 on behalf or as a representative of the Company are forbidden.
Donations, Social Contributions and Sponsorships are subject to internal review and approval.

168

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. An internal approval is needed to give or receive any donations, gifts,
sponsorships or similar activities with an economic value equal or above $90 considered in a
calendar year.

- 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 Corruption Policy is available on our website.

Criminal Risk Assessment Policy

Atlantica has a Criminal Risk Assessment Policy that was approved by the Board of Directors in
2018 and was last amended in December 2023. The main purpose of this Policy is to identify and
mitigate the criminal risks towards Atlantica arising from its business activities.

Criminal offences for which legal entities may be liable vary across the different jurisdictions where
Atlantica is present. Therefore, each geography has a specific criminal risk map that includes: (i)
Type of offense, (ii) an internal assessment of the risk level (low, medium and high), (iii) prevention
mechanisms, (iv) control mechanisms and (v) action plans.

In 2023, local external lawyers reviewed our criminal risk map of each geography and made the
correspondent updates were deemed necessary. Some of the risks identified were: financial
offences, money laundering, corruption, bribery, and illicit trade crimes.

All risks identified in the risk map were assessed by Atlantica. Most of the criminal risks were
classified as low risks for Atlantica. For those risks identified as medium or high level risk, Atlantica
has stablished prevention mechanisms and control procedures that mitigate the identified risk.

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 policies and 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 2023, no communications were received through the Whistleblower Channel. In 2022, we
received one communication. The matter was analysed following our internal process and
procedures. We concluded that the communication was unrelated to the Company and its
businesses. In 2021 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
instructions on how to use it, providing two languages to report misconducts. We provided these
explanations through our internal online compliance training and in-person training. Our ethics
mailboxes are included in many of our publicly available reports.

169

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, Anti-Money Laundering Policy, Equality, Harassment Prevention and
Human Rights and FCPA. 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 2023, 2022 and 2021, 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 2023, compliance-related training was provided to employees through our online training
platform, in-person training, and real-time video conferencing. Below we disclose the trainings
provided and the number of participants that took part in each training during 2023.

170

Summarised Compliance Training

Training

Goals

Code of Conduct
awareness1

Anti-Bribery and
Corruption1

Anti-Money
Laundering2

Environment,
Social and
Governance
(ESG), Human
Rights,
Unconscious
Bias, Gender
Equality and
Sexual
Harassment3
Equality,
Harassment
Prevention and
Human Rights2

Sexual
Harassment and
Discrimination4

Compliance
Training on
Labour
Regulation

Atlantica
Management
Model5

employees with

employees with
identifying

Acquaint
the
importance of the Code of Conduct
through real-life cases.
the
Acquaint
importance of
and
avoiding situations that could involve
corruption or conflicts of interest
through real-life cases.
Acquaint
the
mechanisms or procedures aimed at
giving the appearance of legitimacy
or legality to goods or assets of
criminal origin.
Acquaint employees with key ESG,
rights unconscious bias,
human
inclusion principles,
diversity and
gender
sexual
harassment measures, regulations
and policies.

equality

and

employees
gender

with
Acquaint
equality,
understanding
inclusion principles,
diversity and
unconscious bias, inclusive language,
harassment prevention and Human
Rights principles.
Acquaint employees with sexual
discrimination
harassment
prevention

and

Acquaint managers and supervisors
on managing requests submitted by
employees under the Family and
Medical Leave Act, which is a United
States labor law requiring covered
employers to provide employees
with job-protected, unpaid leave for
qualified medical and family reasons.
Acquaint office
employees on
Atlantica’s (1) long-term strategy,
business model, recent milestones,
and growth
(2)
Compliance. Average training time:
(50% on Compliance
3.5 hours
matters).

strategy, and

Type

Online
platform

Minutes per
Employee
8

Participants

603

503

154

332

Online
platform

292

483

165

In-person
and real-
time video
conferencing

1. All Atlantica employees receive compliance training. The difference between our total workforce as of December 31,
2023, and the Participants to the compliance-related training is mainly due to: (i) new hirings and (ii) internalisation of
the operation and maintenance employees at our solar assets in Spain and at Kaxu. We are still in the process of fully
integrating these employees to our policies, processes and procedures. The employees who were not part of our
workforce at the time of the training will receive compliance-related training in the sessions scheduled for 2024.

171

2. These trainings were launched in December 2023 and ended at the beginning of 2024, we report employees who did

the training in 2023.

3. This training was launched in December 2022 and ended at the beginning of 2023, we report employees who did the

training in 2023.

4. Specific local training following local requirements and US regulation.
5. Participants of this training were only office employees of certain geographies and employees hired in 2023 in some

of the geographies where we operate.

In 2023, Atlantica employees received a total of ~994 hours of compliance-related training,
compared to ~1,025 hours in 2022. On average, each Atlantica employee received ~0.76 hours
(~46 minutes) compliance training in 2023, compared to 1.15 hours (~70 minutes) in 2022.

Trade Associations

In 2023, Atlantica contributed $271.6 thousand to associations or organisations related to power
generation, transmission, clean energy, and sustainability.

Trade Associations Costs in 2023, 2022 and 2021

In thousands of U.S. dollars
Trade associations contributions1

2023
246.2

2022
180.7

2021
109.5

(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).

We aim to create transparency around our engagement with trade associations to report on how
they align with the Paris Agreement.

In 2023, Atlantica signed the Action Declaration on climate policy engagement. Following this
declaration we assessed the trade associations with whom we collaborate to assess their
alignment with the Paris Agreement. Industry and trade associations play a formative role in the
development of public policy, and their constructive support is an important enabling condition
for sound climate policy.

Categories of assessment:

Explicitly aligned: Alignment with the Paris Agreement is explicitly stated.

Implicitly aligned: Alignment with the Paris Agreement is not explicitly stated but implied through
explicit alignment with other relevant climate change categories.

Not aligned: While the association may work to advance climate change and/or renewable energy
goals, it is not explicitly or implicitly aligned with the Paris Agreement and may maintain policy
positions that are not consistent with these goals.

Not relevant: No assessment is conducted as the category is not relevant for the association
assessed. This does not mean the association is ‘not aligned’.

No position: No assessment is conducted as the category could not be assessed. The association
does not have a position on the category. This does not mean the association is ‘not aligned’.

172

Trade Associations

Country

2023

2022

2021

In thousands of USD

Geothermal Rising

U.S.

3.3

American Council on Renewable Energy

U.S.

17.5

12.5

Independent Energy Producers Association

U.S.

75.0

30.0

Canadian Renewable Energy Association

Canada

2.2

Alignment
with Paris
Agreement
Implicitly
aligned
Implicitly
aligned
Implicitly
aligned

Implicitly
aligned

Mexican Electricity Association (AME)

Mexico

18.7

17.4

17.3

Not aligned

Association for Cogeneration (COGENERA)

Mexico

2.5

2.0

No position

Spanish Chamber of Commerce

Mexico

1.7

1.0

No position

Association for Transmission Lines (ATX)

Chile

46.7

44.5

Association for Renewable Energy (ACERA)

Association for Desalination

Association for Renewable Energy (SPR)

Energy Association (SNMPE)

Chile

Peru

2.3

0.9

9.0

1.7

2.2

7.9

7.7

15.4

16.3

17.7

Association for Electric Energy Generation (AUGPEE)

Uruguay

4.0

3.4

2.9

Explicitly
aligned
Implicitly
aligned
Implicitly
aligned
Implicitly
aligned
Not aligned
Implicitly
aligned

Export Union of Uruguay

Uruguay

0.8

No position

Spanish Association of Energy Storage (ASEALEN)

Spain

4.4

3.7

5.3

Association for the CSP sector (Protermosolar)

Spain

24.1

24.9

25.7

Andalusian Hydrogen Association

Spain

3.0

Spanish Hydrogen Association

Spain

3.6

Spanish Confederation of Business Organisations
(CEOE)

Spain

13.1

12.6

11.9

Total

246.2

180.7

109.5

Implicitly
aligned
Implicitly
aligned
Implicitly
aligned
Implicitly
aligned
Implicitly
aligned

Note: We have revised 2022 and 2021 numbers to account for our contributions to trade associations, excluding
contributions already accounted for as donations to local communities, such as Bishop, Lone Pine and Ridgecrest Chamber
of Commerce

Conclusion

Implicitly or Explicitly Aligned

% of total spent in 2023
85%

No position

Not aligned

14%

173

Atlantica engages with trade associations or organizations that have the same goals as Atlantica
in terms of power generation, transmission, clean energy, and sustainability. After conducting our
assessment, we concluded that the only associations that may not be aligned with the Paris
Agreement are those that support investments in gas generation plants, mining and fossil fuels.
Our contribution to these associations represents less than 15% of the total amount contributed
to trade associations. While a significant part of our business consists of renewable energy assets,
we also own a 300 MW efficient natural gas plant and a non-controlling stake in a gas-fired engine
facility which uses natural gas (Monterrey). In 2023, our partner in Monterrey initiated a process
to sell its 70% stake in the asset. Such process is well advanced and, as part of it, we intend to sell
our interest as well under the same terms. The transaction is subject to certain conditions
precedent and final transaction closing.

Sustainability Governance

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.

Sustainability Governance Structure

Board of Directors

Nominating and Corporate Governance
Committee

Audit Committee

Compensation Committee

Related Party Transactions Committee

Management Committees

Business Committee

Management Committee

Geographic Committees

Compliance Management
Committee

Risk Management Committee

Health and Safety, ESG and
Operations Committee
Accounting and Disclosure
Committee

Internal Audit Committee

Investment
Committee

Finance
Committee

Corporate and Business Areas

174

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:

Topic

Frequency

Potential ESG and climate-related risks and mitigation
plans

Quarterly or on an as-needed basis.

For example, in 2023 the Board was informed (i) on
the conclusions of the climate scenario analysis
performed in 2022 and beginning of 2023 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

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.

175

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.

Frequency

Weekly

Business Committee

Key ESG-
related
functions

- 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 investments, including how they affect to our long-term targets on
emissions.

Key committee
member*
responsibilities

General
Counsel

Head of
Development
and
Investment
and CIO

(*) Other employees attend meetings by invitation.

Frequency

Monthly

Health and Safety, ESG and Operations Committee

Key functions

- 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.

Key
committee
member
responsibilities

CEO
Geographic
VPs and
country
managers
Head of
Business
Transformation

Head of
Operations

Head of IR &
ESG

Leads Health and Safety, ESG and Operations Committees.

Responsible for the assets they manage, including ESG and climate change-related
matters.

Leads the implementation of improvement programs to enhance operational
processes and ways of working, optimize electricity production and avoid CO2
emissions across all assets
Responsible for all health and safety, environmental and operations aspects across
all assets, 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.

176

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

Frequency
Key ESG-
related
functions

Key committee
member*
responsibilities

General
Counsel

Head of Risk
Management
Head of IT and
Administration

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.
Oversees risk management processes, procedures and tools implemented by the
Company, including the risk map.
Oversees IT (including cybersecurity matters), and personal data protection
processes and procedures.

Investment Committee

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.
Head of
Development
and Investment
and CIO
Head of Risk
Management
Head of IR &
ESG

Responsible for identifying and evaluating risks for potential investments,
including ESG and climate change risks.
Responsible for ensuring that investment opportunities are aligned with our
long-term emissions and environmental goals and aligned with our policies.

Responsible for identifying, analysing, and presenting potential growth
opportunities to the Investment Committee. Oversees all due diligence
processes.

(*) The Head of Finance and CIO leads 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, Reporting & ESG, the Head of Accounting and Consolidation and the Head
of Financial Control. 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.

- Financing Committee: The financing committee is comprised by the Chief Financial Officer, the
Head of Development and Investment and CIO and the Head of Investor Relations, Reporting &
ESG. The financing committee helps to maintain the “green finance framework” used to issue
green finance instruments, to finance or refinance renewable energy infrastructure, as well as
transmission lines. The financing committee also helps to maintain and update the green finance

177

report. Both documents are available at Atlantica’s webpage. The committee also decides on
whether to issue green financings.

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, 2023.

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 dividend, 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. In 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, as well as 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.”

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

178

inherent in our business and may be changed at any time as a result of certain restrictions and
uncertainties, including the following:

The amount of our quarterly cash available for distribution could be impacted by restrictions
on cash distributions contained in our project-level 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 financial incurrence and maintenance covenants, as
applicable.

- 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
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.

179

- 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 through the development and construction of projects including
expansion and repowering opportunities, as well as greenfield development, third-party
acquisitions and the optimisation of the existing portfolio. 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.

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,

180

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, 2023, Algonquin owned 48,962,925 ordinary shares, representing a 42.2% of
the issued and outstanding ordinary shares.

In addition, as of December 31, 2023, there was no treasury stock and there have been no
transactions with treasury stock during the period then ended.

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. The project debt of two assets, with a principal amount of
approximately $42 million, would also require a waiver in the event of a change of control. 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. In addition, the PPAs of our assets in Uruguay would require
a waiver in the event of a change of control and some of our PPAs and project financing
agreements would require a notification. Additionally, in the event of a change of control we could

181

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 $9 million to $11 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, which could have a negative impact on the
Company.

In addition, if there is a change of control, all awards granted under the Long Term Incentive Plans
after the approval of the amendments to the Remuneration 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. 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.

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.

Directors

Our Board is comprised of nine directors.

All the directors meet the U.S. securities or NASDAQ’s qualifications for independence except our
CEO. Atlantica's Board has determined that Mr. Banskota and Mr. Farquhar are not independent
based on their relationship with Algonquin, which is currently Atlantica’s largest shareholder with
a 42.2% ownership. Mr. Banskota was the Chief Executive Officer of Algonquin until August 2023,
while Mr. Farquhar is the current Senior Vice President, Corporate and Business Development at
Algonquin. Mr. Farquhar has been a director of Atlantica since he was appointed on August 30,
2023, by Algonquin. Mr. Farquhar replaced Mr. George Trisic, who was appointed by Algonquin
on October 9, 2020, and who resigned from his position as director of the Company on August
30, 2023. 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.

182

Name, Primary Occupation

Independent

Other Public
Company
Boards

William Aziz
President and Chief Executive Officer of
BlueTree Advisors Inc.
Arun Banskota
Former President and Chief Executive
Officer of Algonquin
Debora Del Favero
Co-Founder of CMC Capital Limited
Brenda Eprile
Director and Chair of the HR Committee of
Westport Fuel Systems Inc.
Ryan Farquhar1
Senior Vice President, Corporate and
Business Development at Algonquin
Michael Forsayeth
Former Chief Executive Officer and
Director of Granite Real Estate Investment
Trust
Edward C. Hall
Chairman of Cypress Creek Renewables,
and Vice Chairman of Japan Wind
Development
Santiago Seage
Chief Executive Officer of the Company
Michael Woollcombe
Partner of Voorheis & Co. LLP and
Executive Vice-President of VC & Co. Inc.

Yes

Committee
Memberships(*)

A N&CG C RPT

✓

★ ✓

★

✓

★

✓

★

✓

(*) A = Audit Committee; N&CG = Nominating and Corporate Governance Committee C = Compensation
Committee;

RPT = Related Parties Transactions Committee

(1) Ryan Farquhar was appointed in 2023

★ Chair ✓ Member

The Board decided to limit to 4 the number of other external directorships in publicly listed
companies held by board members.

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.

The Board’s responsibilities include setting our strategy and policies, overseeing risk and
corporate governance, and monitoring progress towards meeting our objectives and annual
plans. It is accountable to our shareholders for the proper conduct of the business and our long-
term success, and seeks to represent the interests of all stakeholders.

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.

183

All directors are expected to spend the time and effort necessary to properly discharge their
responsibilities.

The Board intends to carry out annual self-assessments beginning in 2024.

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.

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 regularly.
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 whistle-blower management.

Compensation Committee. Responsible for setting the remuneration for directors and
recommending and monitoring remuneration for the Company’s 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 governance-
related documents following corporate governance rules and policies, developments and
best practices.

Related Parties Transactions Committee. Responsible for overseeing the implementation
of a system for identifying, monitoring and reporting related-parties’ transactions.

184

The directors who served throughout 2023 and to the date of this report were as follows:

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.

Ryan Farquhar

Director

Appointed on August 30, 2023.

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.

George Trisic

Director

Appointed on October 9, 2020. Resigned on August
30, 2023.

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
current Board of Directors listed above and their duties to Atlantica, except in the case of Mr.
Banskota, who served as President and Chief Executive Officer at Algonquin until August 2023,
and Mr. Farquhar who is the current Senior Vice President, Corporate and Business Development
at Algonquin.

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 2023, Mr.
Trisic resigned as director and the Board of Directors approved the appointment of Mr. Farquhar
replacing Mr. Trisic as a non-executive director, according to the terms of the Shareholders’
Agreement

As of December 31, 2023, the Board of Directors’ average tenure is less than 4 years, and the
Board members average age is 61 years old.

Board member profiles:

185

186

187

188

189

190

l
a
t
o
T

z
i
z
A
m
a
i
l
l
i

a
t
o
k
s
n
a
B
n
u
r
A

l
e
D
a
r
o
b
e
D

o
r
e
v
a
F

e
l
i
r
p
E

a
d
n
e
r
B

r
a
h
u
q
r
a
F
n
a
y
R

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

e
g
a
e
S
o
g
a
i
t
n
a
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

6 ✓ ✓ ✓

✓ ✓ ✓

5 ✓ ✓ ✓ ✓ ✓ ✓

8 ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓

8 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

5 ✓ ✓ ✓ ✓ ✓ ✓

8 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

9 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

9 ✓ ✓ ✓ ✓

✓ ✓ ✓ ✓ ✓

9 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

9 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Independent (in accordance
with the Board of Directors’
determination1)
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

191

Board Diversity Matrix as of December 31, 2023 and 2022

Total Number of Directors

2023
9

2022
9

Female

Male

Non-Binary

Did Not
Disclose
Gender

2023 2022 2023 2022 2023 2022 2023

2022

-
-
-
-
-
2
-
-
-

-
-
1
1
-
5
-
-
-

-
-
-
-
-
-
-
-
-

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

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.

1 Atlantica's Board has determined that Mr. Banskota, Mr. Farquhar 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.

192

Membership and Attendance

A total of 15 Board of Directors meetings were convened in 2023 with an average attendance of
99.3%. In addition, the Board passed five written resolutions.

Director

From

Membership

William Aziz

May 2020

Arun Banskota

April 2020

Debora Del Favero

May 2020

Brenda Eprile

May 2020

Ryan Farquhar

August 2023

Michael Forsayeth

May 2020

Edward C. Hall

Aug’ 2022

Santiago Seage

Dec' 2018

n/a

Role

Attendance /
Eligible to attend

Director, Independent

14/15

Director

15/15

Director, Independent

15/15

Director, Independent

15/15

Director

6/61

Director, Independent

15/15

Director, Independent

15/15

Director and Chief
Executive Officer

15/15

9/92

15/15

George Trisic

Oct’ 2020

August 2023

Director

Michael
Woollcombe

May 2020

n/a

Director, Independent
and Chair of the Board

1. Mr. Farquhar was appointed as Director of the Company on August 30, 2023.
2. Mr. Trisic resigned from his position as Director of the Company on August 30, 2023.

Senior management attend meetings by invitation of the Board.

2023 Key Activities

Major areas of focus of the Board during 2023 have been as follows:

- Review of health and safety issues;
- Review environmental, social and governance (ESG) matters;
- Review and approval of corporate policies and internal regulations;
- Review and approval of the strategy of the Company: growth plan, key priorities and risks;
- Review of assets’ performance and main technical issues;
- Review and approval 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 materials to
the directors provided sufficient notes and time for review.

193

Nominating and Corporate Governance Committee

Membership and Attendance

A total of three Nominating and Corporate Governance Committee meetings were convened in
2023, with an average attendance of 100%.

Director

Membership

From

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

2023 Key Activities

Major areas of focus of the Nominating and Corporate Governance Committee during 2023 have
been as follows:

- Review the structure, size and composition of the board.
- Update and review key corporate governance documents and policies including amongst
others, the Document Management and Retention, Criminal Risk Assessment, Conflict of
Interests, Donations, Social Contributions and Sponsorship, Personal Data Protection and
Water Policy

- Review of governance principles, procedures and practices.

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.

194

Membership and Attendance

In 2023, the Related Parties Transactions Committee held one meeting with an average
attendance of 100%.

Director

Michael
Forsayeth

Membership

From

May 2020

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

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
interest in any proposed or existing transaction or arrangement. In accordance with our Policy, all
transactions with related parties over $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

195

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.

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 2023, 2022 nor 2021.

Research and Development

As of December 31, 2023, we own 22 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 4 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.

196

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.

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 Annual General Meeting held in May 2022 approved the re-appointment of Ernst & Young
LLP and Ernst & Young S.L. as the Company’s auditors until December 31, 2023 and the Annual
General Meeting held in April 2023 approved the re-appointment of Ernst & Young LLP and Ernst
& Young S.L. as the Company’s auditors until December 31, 2024.

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 29, 2024, our Board of Directors approved a dividend of $0.445 per share which is
expected to be paid on March 22, 2024, to shareholders of record on March 12, 2024.

This report was approved by the Board of Directors on February 29, 2024, and signed on its behalf
by Santiago Seage, Director and Chief Executive Officer.

Director and Chief Executive Officer
Santiago Seage
February 29, 2024

197

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 and non-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 2023

- 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 disclosures related
to ESG, climate-change matters, cybersecurity and other non-financial information 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 and non-financial reporting or other issues and for those
matters to be investigated.

Meetings and attendance

There were 4 committee meetings in 2023. 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.

Director

Membership

From

Role

Attendance
/ Eligible to
Attend

Brenda Eprile

May 2020

William Aziz
Michael Forsayeth

May 2020
May 2020

n/a

n/a
n/a

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

198

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.

2023 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 2023 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.

Particular attention was paid to the following significant judgements and estimates in the 2023
financial reporting.

Estimates:

• Recoverability of contracted concessional, PP&E and other intangible assets.

• Recoverability of deferred tax assets.

• Fair value of derivative financial instruments.

• Fair value of identifiable assets and liabilities arising from a business combination.

Judgements:

• Assessment of assets agreements.

• Assessment of control.

199

Non-Financial Reporting

The principal risks allocated to the Audit Committee for monitoring in 2023 included those
associated with:

• Counterparty risk.

• Compliance with policies and regulation.

• Financial liquidity.

• Tax risk.

• Climate change, cybersecurity and other ESG related risks and reporting requirements.

We discussed management’s ongoing approach to these risk areas during our quarterly
committee meetings.

In addition, during the year, the committee reviewed the non-financial information included in
the 2022 Integrated Annual Report, focusing on the clarity and consistency of the disclosure, prior
to Board approval.

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 2023. 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 2023 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.

200

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 $2.4 million (2022 $2.6 million). Non-audit fees were
$0.3 million (2022 $0.5 million), which was 17% 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.

➢ 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 2023 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.

201

➢ 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).

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
2023 have been approved by the committee.

Other Auditors

Total

In thousand USD

Audit Fees

Audit-Related Fees

Tax Fees

Total

1,954

344

2,368

105

2,059
70
344

2,473

“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
2023 and 2022 related to comfort letters and consents required for capital market transactions of our major
shareholder are also included in this category ($25 thousand and $204 thousand in 2023 and 2022
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.

202

Internal Audit

The committee reviewed and approved the 2023 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.

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.

203

Remuneration Report

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, 2023. 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 "Regulations”).

The Directors’ Remuneration 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 2024. The Remuneration Policy was last
approved by shareholders at the Annual General Meeting in 2021 (and amendments were
approved at the Annual General Meeting in 2023). Shareholders will be asked to approve a new
remuneration policy at the Annual General Meeting to be held in April 2024.

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 2023. 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.

For the year 2024, shareholders will be asked to approve the new Remuneration Policy. The
Company has received advice from Hugessen Consulting (our remuneration consultants) in
relation to the Remuneration of Directors including the CEO. The changes to the current
Remuneration Policy consist of (1) amending the Clawback Policy to comply with the requirements
of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the
relevant Nasdaq Stock Market rules, (2) amending the maximum value of awards granted to the
CEO under the Long Term Incentive Plan (“the LTIP”) from 70% to up to 105% of the CEO’s target
annual remuneration (including fixed salary + target annual bonus) for the year closed before the
date upon which the LTIP award is granted, (3) introducing new conditions for LTIP awards, as we
describe in more detail below and (4) establishing additional fees for all non-executive directors
who are chair of a board committee, eliminating the exception for the chair of the related-party
committee.

204

In 2023, the Compensation Committee re-evaluated the operation of the Long-Term Incentive
Plan for the Chief Executive Officer (the “CEO”) and for the rest of the Executives to include new
conditions for the long-term compensation. We believe the new targets better align senior
management objectives with shareholders by focusing on sustained delivery of high-performance
results over the long-term. We have maintained Total Shareholder Return (“TSR”) as one of the
conditions, as we believe this is an important measure for shareholders. We have complemented
it with financial objectives (for example Adjusted EBITDA and CAFD), which we believe are key to
measure the Company’s performance. We have also included strategic objectives including ESG
objectives (for example, growth in renewables and storage) as well as other strategic objectives in
line with the Company’s long-term strategy, such as emissions reduction targets. These are main
areas of focus for the Board of Directors and are fully aligned with the long-term strategy of the
Company.

Regarding the activity of the Committee during the year 2023, a total of three Compensation
Committee meetings were convened in 2023. All Committee members attended each meeting
that they were eligible to attend.

The Compensation Committee focused its activities on the following objectives:

✓ Periodically reviewing the CEO’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 2023, 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
104.0% of the target variable compensation, which will be payable in 2024.

To finalise, I would like to thank our shareholders for their strong vote in favour of approving the
2022 Directors’ Remuneration Report and amendments to the 2021 Remuneration Policy 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)

In 2023, each independent non-executive Director was entitled to receive an annual fee of $150.0
thousand. The Chair of the Board and Chairs of the committees of the Board were entitled to
receive additional compensation as detailed in the table below.

Non-independent non-executive directors were entitled to be compensated on the same terms
as independent non-executive directors. From April 2020 until August 2023, Mr. Banskota declined
compensation. Since August 2023 (when he resigned as CEO of Algonquin) Mr. Banskota has

205

received compensation from the Company for his role as non-executive director. In 2023, Mr.
Farquhar declined compensation. From April 2022 (when he retired from a senior executive role
at Algonquin Power Utilities Corp) until August 30, 2023 (when he resigned from his position of
Director of the Company) Mr. Trisic received compensation as a non-independent non-executive
director.

The following table sets out the fee schedule for 2023 and 2022:

In thousands of U.S. Dollars
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

2023

2022

150.0

75.0
15.0

10.0

75.0
15.0

10.0

The table below summarises the total annual compensation of the executive and non-executive
directors who received remuneration during 2023 and 2022.

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

Total

Name1

2023

2022

2023

2022

2023

2022

2023

2022

2023 2022

2023

2022

2023

2022

2023

2022

William Aziz

Arun Banskota8

Debora Del Favero

Brenda Eprile

Michael Forsayeth

Edward C Hall5

Santiago Seage6

George Trisic7

Michael Woollcombe

160.0

58.8

112.0

165.0

75.0

150.0

798.6

160.0

112.0

165.0

75.0

62.5

727.2

48.0

75.0

48.0

75.0

975.6

931.3

1,023.2

2,992.4

5.7

9.0

2.5

4.0

160.0

58.8

165.7

162.5

165.0

159.0

154.0

150.0

62.5

160.0

58.8

165.7

165.0

159.0

150.0

162.5

165.0

154.0

62.5

798.6

727.2

1,998.8

3,923.7

2,797.4

4,651.0

100.0

225.0

110.0

225.0

10.6

26.9

1.6

11.9

110.6

111.6

251.9

236.9

110.6

251.9

111.6

236.9

Total

448.0

458.0 975.6

931.3 1,023.2 2,992.4

1,519.4 1,301.7
1 None of the Directors received any pension entitlement and/or taxable benefits in 2023 or 2022.
2 Non-executive directors receive 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 fees payable to them by the Company from May 31, 2021,
would be irrevocably substituted for the grant of DRSUs. The Company also determined and Mr. Trisic agreed that 100%
of the annual fees payable to him by the Company would be irrevocably substituted for the grant of DRSUs for the
period when he received remuneration.

52.2

20.0 2,019.5 1,779.7 1,998.8 3,923.7 4,018.3 5,703.5

3 In 2022 Long-term Incentive Awards vested under both the (LTIP) and the One-Off Plan calculating amounts using the
share price at vesting date. In 2022, from the $2,992.4 thousand worth of awards that vested, $1,490.1 corresponded to
share price appreciation. In 2023 Long-term Incentive Awards vested under the LTIP calculating amounts using the
share price at vesting date. There was no share price appreciation between the grant date and the vesting date for the
LTIP awards that vested in 2023.

4 Dividend equivalent rights accumulated on the DRSUs corresponding to the dividends paid for one share in the period
between the DRSU grant date and December 31, 2023, and 2022, respectively, multiplied by the number of DRSUs held
on that date. Such rights were 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. Salary and Fees have been converted to U.S. dollars for reporting
purposes, at the average exchange rate of each year, which was 1.08€/$ in 2023 and 1.05 €/$ in 2022. Annual bonus
amounts have been converted to U.S. dollars for reporting purposes, at the exchange rate of December 31, 2023, which
was 1.10€/$ and at the exchange rate of December 31, 2022, which was 1.07 €/$ in 2022.

206

- In 2023, the CEO’s total pay amounted to €2,594.4 thousand ($2,797.4 thousand). Fixed salary amounted to €738.3
thousand ($798.6 thousand), annual bonus to €883.8 thousand ($975.6 thousand) and long-term incentive awards to
€972.3 thousand ($1,023.2 thousand).

- 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).

7 Mr. Trisic, non-independent non-executive director, has received compensation since April 6, 2022, until August 30,
2023 when he resigned from his position of Director of the Company. Mr. Trisic’s 2022 and 2023 fees were prorated for
each year based on the annual directors’ retainer. The Company determined and Mr. Trisic agreed that 100% of his fees
were irrevocably substituted for the grant of DRSUs.

8 Mr. Banskota, non-independent, non-executive director, has received compensation since August 2023, (when he

resigned as CEO of Algonquin).

The Directors’ 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 2023
or 2022. 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 decrease in the remuneration of the CEO in 2023 was mainly due to a decrease in the amount
of share options exercised in 2023 compared to 2022. Share options awarded in 2020 and 2021
under the LTIP that vested in 2023 were underwater and were not exercised. In addition, the
number of share units that vested in 2023 under the 2020 LTIP was lower than the number share
units that vested in 2022 and the price and the stock price on the vesting date of 2023 was also
lower than in 2022. Finally, the One-off plan had fully vested in 2022, as explained below.

Chief Executive Officer Long Term Incentives awards vested

1) Restricted Stock Units vested under the LTIP

In January 2023 and June 2022 RSUs awarded in 2020 and 2019 respectively under the LTIP vested
and shares were transferred to the CEO in accordance with the terms of the plan. 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

RSU
Vesting Date

Number of
Restricted Stock
Units Vesting
33,641
46,987
1 33,641 RSUs (granted in under the 2020 LTIP) vested in 2023 plus dividend equivalent rights corresponding to the
dividends paid on one share between the 2020 LTIP grant date and the date on which the RSU vested ($5.15 per share).
46,987 RSUs (granted under the 2019 LTIP) vested in 2022 plus dividend equivalent rights corresponding to dividends
paid on one share between the 2019 LTIP grant date and the date on which the RSU vested ($5.07 per share).

Share Price on
Vesting Date
(USD)
25.27
31.10

RSUs Value at
Vesting Date
(000’s USD)1, 2
1,023.2
1,708.7

2020
2019

2023
2022

2 The RSUs that vested in 2023 were subject to (i) the CEO remaining employed with the Group and (ii) a minimum

average 5% average annual TSR (both of which were achieved).

2) Options vested under the LTIP

One-third of each of the CEO’s share options awarded in 2020 and 2021 under the LTIP vested
during 2023. These were underwater on the vesting date and were not exercised.

The share options value has been included in the Single Total Figure of Remuneration table above
in their vesting period.

207

LTIP
Share
Option
Grant
Date1

2021

2020

2019

Share
Option
Vesting
Date

2023
2022
2023
2022
2022

Number of
Share Options
Vesting

Share Price on
Vesting Date
(USD)

Exercise Price
per Share
Option (USD)

Share Options
Value at Vesting
Date (000’s USD)2

24,948
24,948
34,494
34,494
40,693

28.17
32.53
25.27
34.48
31.30

37.98
37.98
26.39
26.39
19.60

-
-
-
279.1
476.1

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).

3 There were no performance measures related to these options.

3) One off-plan

An award in the form of restricted stock units (RSUs) was granted under the One-off plan to the
CEO in 2019. In June 2022 the third and final tranche vested, and shares were transferred to the
CEO in accordance with the terms of the plan. The One-off plan RSUs were fully vested in 2022,
and therefore no One-Off Plan RSUs vested in 2023.

The value of the shares transferred have been included in the Single Total Figure of Remuneration
table above in their vesting period.

One-Off Plan

One-Off Plan
Vesting

Number of
Restricted Stock
Units
-
14,535
1 On each vesting date, one third of the RSUs vested (14,535 RSUs) plus dividend equivalent rights corresponding to the
dividends paid on one share in the period between the One-off plan grant date and the date on which the RSU vest
($5.07 per share for 2022), multiplied by the number of RSUs vesting on that date.

Share Price on
Vesting Date
(USD)
-
31.30

RSUs Value at
Vesting Date
(000’s USD)1
-
528.6

June 2023
June 20222

2019

2 In June 2022, the final tranche of RSUs vested. As a result, since then there have been no other awards outstanding

under this plan.

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%

Achievement

97.5%

99%

110%

120%

90%

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.

208

In 2023, Mr. Seage was awarded $975.6 thousand as a bonus payment in accordance with his
service agreement, payable in 2024. In 2022, Mr. Seage was awarded $931.3 as thousand as a
bonus payment in accordance with his service agreement, which was paid in 2023. 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 Chief Executive Officer’s maximum potential bonus is 120% of such bonus, which is
approximately $1,126 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 2023:

Name

Total Remuneration

Deferred Restricted Stock Units (DRSU)

(000’s USD)

Remuneration in

Remuneration in DRSUs

Total Remuneration in Cash and/or

2023

2022

2023

2022

2023

2022

2023

2022

Cash (000’s USD)

DRSUs (000’s USD) Number of DRSUs (#)4

William Aziz

Arun Banskota5

Debora Del Favero1

Brenda Eprile

Michael Forsayeth1

Edward C. Hall2

George Trisic3

Michael Woollcombe1

160.0

58.8

160.0

165.0

150.0

100.0

225.0

160.0

165.0

150.0

62.5

110.0

225.0

160.0

58.8

112.0

165.0

75.0

150.0

160.0

112.0

165.0

75.0

62.5

48.0

75.0

100.0

225.0

48.0

75.0

110.0

225.0

2,102

1,619

3,284

2,530

4,003

9,852

3,901

7,589

1,168.8

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 fees payable to them by the Company
from May 31, 2021, would be irrevocably substituted for the grant of DRSUs.

1,032.5

19,240

15,638

574.5

720.8

458.0

448.0

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, received compensation from April 6, 2022, until August 30, 2023.
Mr. Trisic’s 2022 and 2023 fees were prorated based on the annual directors’ retainer. The Company determined and
Mr. Trisic agreed that 100% of his fee would 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.

5 Mr. Banskota resigned as Chief Executive Officer of Algonquin on August 11, 2023. Since then, he has received

compensation from the Company. His fees for 2023 were prorated.

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.

209

Scheme Interests Awarded During 2023

LTIP

Number of
Restricted
Stock Units

Price per RSU at
the grant date
(USD)

Restricted
Stock Units
Face Value1
(000’s USD)

Performance Criteria

2023

44,9502

25.77

1,158.5

- 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.

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 (January 6th, 2023). 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.

For 67% of the award, if the total shareholder return (“TSR”) performance condition has not been
met during the vesting period, the participant's Restricted Stock Units will lapse on the vesting
date.

The value of the RSUs granted to the CEO was equal to 70% of the previous year target annual
remuneration (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.

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 TSR since June 2014, the date of our Initial Public Offering
(“IPO”), until the end of 2023 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.

210

100%
100%

96%

74%

116%

76%

149%

121%

133%

119%

87%

85%

204%

183%

178%

190%

117%

162%

134%

250%

225%

200%

175%

150%

125%

100%

75%

50%

25%

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

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

Year

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

Total Pay1

(000’s USD)

2,797.4

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

Percentage of

Target

104.0%

102.4%

105.0%

102.7%

100.7%

101.8%

96.3%

100.0%

Amount of
Bonus2

(000’s USD)

Percentage of

Value

Maximum

(000’s USD)

975.6

931.3

1,056.3

996.4

957.7

992.2

924.2

940.5

100.0%

22.0%

1,023.2

2,992.4

1,879.8

770.9

751.1

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 € 2,594.4 in 2023, €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.

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.

211

Directors’, Chief Executive Officer’s and Employee’s Pay

The table below sets out the percentage change between 2023 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.

2023 (% Change from

2022 (% Change from

2021 (% Change from

2022 to 2023)

2021 to 2022)

2020 to 2021)

Fixed

Salary and

Fees (Cash

and DRSU)

Bonus

Fixed Salary

and Fees

(Cash and
DRSU)1

Bonus

and Fees

(Cash and

DRSU)

Bonus

7%6

2%6

0%6

-3%6

4%6

2%6

Non-executive directors

William Aziz

Arun Banskota4

Debora Del Favero

Brenda Eprile

Michael Forsayeth

Edward C. Hall2

George Trisic3

Michael Woollcombe

Executive director

Santiago Seage (CEO)

Employees (excluding CEO)5

Notes:
None of the non-executive directors received any bonus, and/or taxable benefits in 2023, 2022 or 2021.

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 Fees payable to them by the Company
from May 31, 2021, would be irrevocably substituted for the grant of DRSUs.

2 Mr. Hall was appointed to the Board on August 2, 2022, as an independent non-executive Director.
3 Mr. Trisic, non-independent non-executive director, has received compensation from April 6, 2022, until August 30,
2023, when he resigned from his position as Director of the Company. The Company determined and Mr. Trisic agreed
that 100% of his fee would be irrevocably substituted for the grant of DRSUs.

4 Mr. Banskota, non-independent non-executive director, has received compensation since August 12, 2023, when he

resigned as CEO of Algonquin.

5 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 2023, 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.

6 For 2023, the Compensation Committee approved (i) fixed remuneration of €738.3 thousand for the Chief Executive
Officer (in 2022, the CEO’s fixed remuneration was €690 thousand), representing a 7% increase in Euros on a year-to-
year basis, and (ii) variable remuneration of €883.8 thousand compared to €870.0 thousand for 2022, representing a
2% increase in Euros on a year-to-year basis. For 2022, the Compensation Committee approved (i) fixed remuneration
of €690 thousand for the Chief Executive Officer (in 2021, the CEO’s fixed remuneration was also €690 thousand), and
(ii) variable remuneration of €870.0 thousand compared to €893 thousand for 2021, representing a 3% decrease 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.

212

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

2023

2022

Difference

104.1
4.0

108.1

206.8

80.2
5.6

85.9

203.1

23.9
-1.6

22.3

3.7

The Company has not made any share repurchases during 2023 or 2022.

The average number of employees in 2023 in Atlantica was 1,304 employees, compared to 874
employees in 2022. The $23.9 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. We refer to section “People and Culture” under “Social Sustainability.”

2. Directors’ Shareholdings (Audited)

The following table includes information with respect to beneficial ownership of our ordinary
shares as of December 31, 2023, 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.

213

Name1

Number

of Shares

Number of

Deferred

Number of
Share Units3

Restricted

subject to

Share
Units2

performanc

e measures

Investment

Value
($000’s)4

William Aziz

2,500

Arun Banskota

Debora Del

Favero

4,973

Brenda Eprile

13,000

Michael

Forsayeth

2,500

7,770

Edward Hall

1,500

117,491

Santiago

Seage

Michael

Woollcombe

107

280

221

105,868

4,802

5,000

23,311

609

Minimum

Ownership

Requirement

3 times annual

compensation

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

Number of

Number

Compliance

of Share

With
Policy5

Options

Vested
Unexercised6

Not
Vested7

On track

On track

On track

On track



84,389

24,948

1 Mr. Farquhar, 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 dividends paid for
one share in the period between the DRSU grant date and December 31, 2023, multiplied by the number of DRSU on
that date and divided by the share price of $21.50 as of December 31, 2023. 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 Unvested share units as of December 31, 2023. LTIP share units subject to performance conditions.
4 Assuming a share price of $21.50 as of December 31, 2023.
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 has a 5-year window starting in August 2022 and Mr. Banskota has a 5-year
window starting in August 2023.

6 Share options granted in 2021 (49,895) and share options granted in 2020 (34,494) were underwater as of December 31,

2023.

7 Share options awarded in 2021 under the LTIP (24,948). These share options have not vested as of December 31, 2023.

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 grant of 2024 awards under
the LTIP.

Under the LTIP, the CEO holds as of December 31, 2023, 105,868 restricted share units, convertible
into shares in the future subject to certain vesting periods and conditions, 84,389 unexercised
vested share options which were underwater at 2023 year-end and 24,948 unvested share options.
As of December 31, 2022, the CEO held 94,559 restricted share units, convertible into shares in
the future, 24,948 unexercised vested share options which were underwater at 2022 year-end and
84,389 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 from May 2021, 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:

214

- 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.

Payments for Loss of Office (Audited)

Mr. Trisic resigned as non-executive Director of the Company on August 30, 2023.

DRSUs granted to Mr. Trisic, (in lieu of fees), together with the dividend equivalents accumulated
with respect to these DRSUs from April 6, 2022 until vesting were fully settled on August 30, 2023.
The settlement of the dividend equivalents was made on the basis of a price per share of $22.87
corresponding to the average price of the 5 days prior to August 30, 2023, the date of resignment.
In total (for his DRSUs and dividend equivalent rights), Mr. Trisic received 8,435 shares from the
Company before taxes ($192,903.7).

Apart from this, no other termination payments were made to the Chief Executive Officer or any
other director in 2023 nor 2022. The policy for termination payments is detailed under the section
“Policy on payments for loss of office” of this report.

3. Statement of Implementation of Policy in 2024

The current Remuneration Policy was approved at our 2021 Annual General Meeting, and
amendments were approved at the 2023 Annual General Meeting held in April 2023. A new
Remuneration Policy is being put to shareholder vote at the 2024 Annual General Meeting- the
only key changes (compared to the current Remuneration Policy) relate to (i) the clawback policy,
(ii) the maximum value of LTIP awards granted to executive directors, (iii) the conditions for the
LTIP and (iv) establishing additional fees for all non-executive directors who are chair of a board
committee, eliminating the exception for chair of the related party committee.

Non-independent non-executive directors are entitled to be compensated on the same terms as
independent non-executive directors.

The main terms of the LTIP included in the Remuneration Policy proposed for approval in 2024
that would apply to awards granted to the CEO and Executives are as follows:

Main terms of the LTIP for awards granted to all Executives as – Restricted Stock Units

Value at grant
date

The value of the RSUs granted to the CEO is up to 105% of the previous year target annual
remuneration (fixed + target annual bonus) at the grant date.

Exercisability
and Vesting
Period

The value of the RSUs granted to an executive other than the CEO is equal to between 50% and
70% (with the exact percentage to be determined by the Compensation Committee at grant) of
the previous year target annual remuneration (fixed + target annual bonus) at the grant date.
33% of the RSUs will vest on the third anniversary of the grant date (provided the participant
remains employed with the Group) and 67% of the RSUs will vest on the third anniversary of the
grant date only if the conditions described below are met over such 3-year period. Each of the
below conditions must be considered individually and each of the conditions weigh individually
in considering the two thirds of the RSU. It is not necessary that all of them together are met for
the vesting of the two-thirds of the total number of RSUs.
The Company will decide at vesting if vested RSUs will be settled in cash or shares.

215

Ownership
and Dividends

The participant will be entitled to receive, for each RSU held, a payment equivalent in value to any
dividend or distribution paid on each share between the grant date and the date on which the
RSU vests.

1.
2.

Includes storage.
Includes floors and caps when measuring compliance (i.e. floor of 70% and cap of 130% when measuring performance versus
financial objectives)
Percentage weights are calculated as a fraction of the percentage weight assigned to each section or subsection, based on a 100%
basis. The values are rounded to the nearest tenth.

For 2024, the bonus measures for the remuneration of the Chief Executive Officer, will focus on
four areas: financial targets, capital allocation management, ESG including health and safety and
continued executive talent development.

216

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 2024 the bonus objectives are:

CAFD – Equal or higher than the CAFD budgeted in the 2024 budget
Adjusted EBITDA – Equal or higher than the Adjusted EBITDA budgeted in the 2024
budget
Capital allocation management
Achievement of ESG metrics including health and safety targets – (Frequency with
Leave / Lost Time Index below 3.0 and General Frequency Index below 6.8)
Continued executive talent development

Percentage
Weight
35%x

15%

30%

10%

4. 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 2023, the Compensation Committee focused its activities on the following key remuneration
topics:

- 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, 2023, all members of the Compensation Committee were independent, non-
executive directors. A total of three Compensation Committee meetings were convened in 2023,
with an average attendance of 100%.

Membership

Director

From

William Aziz

May 2020

Debora Del Favero May 2020

n/a

Role

Attendance /
Eligible to Attend

Director, Independent and Chair
of the Compensation Committee

Director, Independent

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.

During 2023, no third party provided material advice or services to the Compensation Committee.
In 2024 the Board of Directors engaged Hugessen Consulting, a consultancy company to review
the remuneration of directors, including the CEO. The consultants were appointed by the
Compensation Committee, their advice was independent, and the fees paid for these services were
approximately $28.0 thousand Canadian dollar ($21 thousand U.S. dollar).

217

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.

2023 Key Activities

In 2023, the Compensation Committee proposed to the Board of Directors, and the Board
approved, the Chief Executive Officer’s 2022 bonus achievement and his 2023 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 under review, amendments to which were approved in the 2023 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.

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

Since May 2021, LTIP awards have been granted as RSUs. Approximately 13 executives and the
Chief Executive Officer are eligible to participate in the LTIP.

The Company is seeking approval of a new Remuneration Policy The new proposed Remuneration
Policy will include some changes compared to the existing Remuneration Policy, including (i)
amending the clawback policy to comply with recent regulatory changes, (ii) amending the
maximum value of LTIP awards granted to executive directors, (iii) introducing new performance
measures in the LTIP, as we describe in further detail in the Remuneration Policy section below
and (iv) establishing additional fees for all non-executive directors who are chair of a board
committee, eliminating the exception for chair of the related party committee. Shareholders will
be asked to approve amendments to the remuneration policy at our 2024 Annual General Meeting
to be held in April 2024.

218

Voting at the 2023 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 2023 Annual General Meeting, the remuneration-related votes were as follows:

Directors’ Remuneration Report:

For

Against

Withheld*

Number of votes

84,261,484

3,632,565

99,872

95.8%

4.1%

* 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

Remuneration Policy:

For

Against

Withheld*

Number of votes

68,193,080

19,669,827

131,014

77.5%

22.4%

Please refer to the Shareholder Engagement section for additional resolutions voted at the Annual
General Meeting.

Remuneration Policy

The current Remuneration Policy was approved at our 2021 Annual General Meeting, and
amendments were approved at our 2023 Annual General Meeting. Shareholders will be asked to
approve a new Remuneration Policy at our 2024 Annual General Meeting to be held in April 2024.
The new Remuneration Policy is intended to take effect immediately following the 2024 Annual
General Meeting (subject to shareholder approval).

The only changes that will apply to the new proposed Remuneration Policy (compared to the
current policy) consist of (1) amending the Clawback Policy to comply with the requirements of
Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the relevant
Nasdaq Stock Market rules, (2) amending the maximum value of LTIP awards granted to executive
directors, (3) introducing new conditions for LTIP awards, as we describe in more detail below.
and (4) establishing additional fees for all non-executive directors who are chair of a board
committee, eliminating the exception for chair of the related-party committee.

Executive Directors:

The policy for executive directors, only applicable to the Chief Executive Officer as the only
executive director, is as follows:

219

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?

Salary/fees

Benefits

Annual
Bonus

Strategic
Review
Bonus

Long Term
Incentive
Awards

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.

RSUs subject to
certain vesting
periods and
conditions.

Maximum amount
€800 thousand
(approximately
$850 thousand),
may be increased
by 5% per year.

Salary levels for
peers are
considered.

200% of base
salary.

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.

Helps retain executive
directors who are relevant
for the success of the
strategic review process.

Align executive directors
and shareholders
interests.

110% of 2023
target annual
remuneration
(including fixed
salary + target
annual bonus).

Up to 105% of
target annual
remuneration
(including fixed
salary + target
annual bonus).

Framework used to assess
performance

Not applicable.

No retention or clawback.

25%-50% of CAFD.

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.

RSUs will be subject to

- Continuing employment for 33% of the

award and

- Continuing employment and achievement
of three year objectives for 67% of the
award. Out of this 67%, the objectives
consist of:
▪ One third based on the Company
reaching a minimum 5% average annual
TSR target.

▪ One third based on the Company
reaching appropriate financial targets
(for example Adjusted EBITDA and CAFD)
▪ One third based on strategic objectives:
for example ESG targets, (for example
growth in renewables and storage) and
other strategic objectives in line with the
Company’s long term strategy.

Granted in the form of RSUs.

Subject to the Company’s Clawback policy.

TSR, CAFD, Adjusted EBITDA are considered standard indicators of financial performance in our
sector. In addition, the LTIP is subject to strategic objectives that the Board believes are aligned
with the Company’s strategy and long-term targets.

Restricted Stock Units granted prior to the approval of the new 2024 Remuneration Policy and
after the approval to the amendments to the Remuneration Policy in 2023 are subject to:

220

- Continuing employment for 33% of the award and
- Continuing employment and achievement of a minimum 5% average annual TSR for 67% of the
award. If the TSR performance condition has not been met during the vesting period, the
participant's Restricted Stock Units subject to minimum annual TSR condition will lapse on the
vesting date, save that the 2024 grant of Restricted Stock Units may be subject to the vesting
conditions set out in the table above, if the Board so decides, provided the new Remuneration
Policy is approved by shareholders at the 2024 Annual General Meeting.

Restricted Stock Units granted prior to the approval of the amendments to the Remuneration
Policy in 2023 are subject to continuing employment and achievement of a minimum 5% average
annual TSR for 100% of the award.

Clawback Policy

The Company has operated an incentive compensation recoupment or clawback policy since 2021
and in 2023 has adopted provisions to comply with the requirements of Section 954 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act and the relevant Nasdaq Stock Market
rules.

The policy is aimed at allowing the Company to recover performance-based compensation during
the lookback period, which is generally three years after short-term variable compensation and/or
long-term compensation awards are granted. In the case of a restatement, the lookback period is
three completed fiscal years immediately preceding the date on which the Company is required
to prepare a restatement for a given reporting period.

The policy is applicable to all executives who participate in long term incentive arrangements
including current and former executive officers (as defined in Nasdaq Rule 5608(d)).

The policy is applicable in the event of the occurrence of either of the following triggering events:
(1) a restatement, whether or not as a result of misconduct, as described in subsection 1 below or
(2) fraud, embezzlement or other serious misconduct that is materially detrimental to the
Company, as described in subsection 2 below.

In the event that the Company is required to prepare a restatement (as defined in Nasdaq
Rule 5608(b)(1)), executives covered by the policy shall be required to repay to the Company
the amount of any covered compensation (as defined below) granted, vested or paid to such
executive during the lookback period that exceeds the amount of the covered compensation
that otherwise would have been granted, vested or paid to such executive had such amount
been determined based on the restatement, computed on a pre-tax basis.

For the purposes of this subsection 1, “covered compensation” means any incentive-based
compensation (as defined in Nasdaq Rule 5608(d)) granted, vested or paid to a person who
served as an executive officer at any time during the performance period for the incentive-
based compensation and that was received (within the meaning of Nasdaq Rule 5608(d)): (i)
on or after October 2, 2023, (ii) after the person became an executive officer and (iii) at a time
that the Company had a class of securities listed on a national securities exchange or a
national securities association.

For covered compensation based on the Company’s stock price or total shareholder return,
where the amount of the erroneously-awarded covered compensation is not subject to
in the restatement, the
mathematical recalculation directly from the
Compensation Committee shall determine the amount to be repaid, if any, based on a

information

221

reasonable estimate of the effect of the restatement on the stock price or total shareholder
return.

The Compensation Committee must reasonably promptly pursue (and shall not have the
discretion to waive) the repayment of any erroneously-awarded covered compensation,
except where a determination has been made in accordance with Nasdaq Rule 5608(b)(1)(iv)
that recovery would be impracticable. The Company is prohibited from indemnifying any
current or former executive officer against the repayment of any erroneously-awarded
covered compensation under the policy.

This subsection 1 is intended to satisfy the requirements of Section 954 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and any related rules or regulations
promulgated by the U.S. Securities and Exchange Commission or the Nasdaq, including the
Nasdaq rules and any additional or new requirements that become effective after the
adoption of the policy, which upon effectiveness shall be deemed to automatically amend
this subsection 1 to the extent necessary to comply with such requirements.

If the Company is required to prepare a material restatement 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 if 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, then, in addition to any
remedies set forth in subsection 1 above, the Company may require the executive (or the
executive’s beneficiary) to reimburse the Company for, or forfeit, all or any portion of any
short or long term variable compensation awards.

The Compensation Committee shall retain discretion regarding application of this subsection
2.

The clawback policy is incremental to other remedies that are available to the Company.

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

222

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.

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 (“RSUs”) to the
executive team of the Company (the “Executives”). The LTIP currently applies to approximately 13
Executives and the Chief Executive Officer.

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 RSUs will be equal to between 50% and 70% of the Executives’ (other than the
CEO) target annual remuneration (including fixed salary + target annual bonus) for the year closed
before the date upon which an RSU is granted and, in the case of the Chief Executive Officer, it
will be up to105% of the previous year target annual remuneration (including fixed salary + target
annual bonus) at the grant date. The award will be granted in Restricted Stock Units.

Main terms of the LTIP included in the Remuneration Policy proposed for approval in 2024:

Main terms of the LTIP for awards granted to all Executives – Restricted Stock Units

Nature

Restricted Stock Units will be subject to:

-
-

Continuing employment for 33% of the award) and
Continuing employment and achievement of three year objectives for 67% of the award. Out of
this 67%, the objectives consist of:
• One third based on the Company meeting a minimum 5% average annual TSR.
• One third based on the Company meeting appropriate financial targets (for example

Adjusted EBITDA and CAFD)

• One third based on strategic objectives: for example ESG, including growth in renewables

and storage and other strategic objectives in line with the Company’s long term strategy
Appropriate targets for each measure will be considered and set by the Compensation
Committee at the start of each financial year and disclosed in the annual report of the
relevant financial year accordingly, in accordance with the Regulations.

Exercisability
and Vesting
Period

Ownership
and Dividends

33% of the shares will vest on the third anniversary of the grant date(subject to continued employment) and
67% of the shares will vest on the third anniversary of the grant date only if the conditions described above
are met over such 3-year period. Each of the above conditions must be considered individually and each of
the conditions weigh individually in considering the two thirds of the RSU. It is not necessary that all of them
together are met for the vesting of the two-thirds of the total number of RSUs.
The Company will decide at vesting if vested RSUs will be settled in cash or shares.
The participant will be entitled to receive, for each Restricted Stock Unit held, a payment equivalent in value
to any dividend or distribution paid on each share between the grant date and the date on which the
Restricted Stock Unit vests.

223

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 Remuneration 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.

Delisting

If the Company is delisted, all outstanding Awards granted under the LTIP after the approval of
the amendments to the Remuneration 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.

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 was approved at the Shareholders Annual General Meeting held in April
2023.

Pension

The CEO (being the only executive director) does not receive any pension contributions.

None of the non-executive directors receive bonuses, long-term incentive awards, pension
contributions 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.

224

Chief Executive Officer Remuneration Policy

The Compensation Committee approved a fixed remuneration of €738.3 thousand ($815.0
thousand converted to U.S. dollars at the December 31, 2023 exchange rate, which is 1.10 $/€)
and a variable target remuneration of €850.0 thousand for the Chief Executive Officer for 2024
($935.0 thousand converted to U.S. dollars at the December 31, 2023 exchange rate, which is 1.10
$/€). In 2023, the CEO’s fixed remuneration also was €738.3 thousand.

Total remuneration of the only executive director for a minimum, target and maximum
performance in 2024 is presented in the chart below.

In thousands of USD

$1,085

$469

$815

Target

$815

Minimum

$1,085

$1,126

$815

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 2024
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 2024 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 2024 including vesting long-term awards would be approximately
$3,880 thousand. If we assume a 50% appreciation of the share price with respect to the December
31, 2023 share price, maximum remuneration for 2024 including vesting long-term awards would
be approximately $2,215 thousand. In this scenario, the minimum annual TSR of at least a 5%
yearly average over the 3-year period would not be met and share options awarded in 2021 under
the LTIP would be underwater, therefore share options vesting in 2024 would not be exercised.
Only 33% of the RSU’s would vest under the LTIP.

For 2024, the bonus measures for the remuneration of the Chief Executive Officer, will focus on
four areas: financial targets, capital allocation management , ESG including health and safety, and
continued executive talent development.

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.

225

The CEO’s 2024 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%.

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.

226

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 April 2023.

Summary of Policy for 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 determines, and the
directors shall agreed, that a percentage of their fees, starting on May 31, 2021, that would 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
contributions or other benefits in respect of their services to the Company.

227

Name of
component

Fees
and/or
Deferred
Restricted
Share Units
(DRSU)

How does the
component support
the company’s
objective?

Operation

Maximum

Annual total compensation
for
non-executive
directors, in any case, the
fees or DRSUs will not
exceed two million dollars.

retain
and
Attract
high-performing non-
executive directors.

the
annually
Reviewed
Compensation Committee and
Board.

Align interests of non-
directors
executive
with
of
shareholders.

interests

The chair of the Board and the
chair of each committee receive
additional fees.

shall

agree

DRSUs: the Company and the
the
Directors
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
annual
times
compensation.

their

Benefits

travel
Reasonable
expenses
the
Company’s registered
office or venues for
meetings.

Customary control procedures.

Real costs of travel with a
maximum of one million
dollars for all directors.

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

228

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 Directors’ Remuneration Report will be submitted to a vote of shareholders at the Annual
General Meeting in April 2024.

Approval

This Directors’ Remuneration Report was approved by the Board of Directors on February 29, 2024
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 29, 2024

229

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.

230

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 29, 2024 and is
signed on its behalf by:

By order of the Board

Director and Chief Executive Officer

Chief Financial Officer

Santiago Seage

February 29, 2024

Francisco Martinez-Davis

February 29, 2024

231

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

2023
75.8%

2022
75.1%

2021
74.6%

Proxy Item
Integrated Annual Report
-
- Directors’ remuneration report
- Directors’ remuneration policy
- Amendment to the Directors’ remuneration policy
- Election of directors (average)
- Appointment of independent auditor
- Redemption of share premium account
- Audit committee to determine auditors’ remuneration
- Authorise the Board of Directors to issue shares
- 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
to
approximately a 10% of the aggregate nominal value
of the issued share capital of the Company

rights up

- Authorise the Board of Directors to issue equity
securities without pre-emptive
to
approximately a 12% of the aggregate nominal value
of the issued share capital of the Company for general
purposes

rights up

- Authorise the Board of Directors to issue equity
securities without pre-emptive
to
approximately a 12% of the aggregate nominal value
of the issued share capital of the Company in
connection with an acquisition or specified capital
investment
Reduction of the Company’s share premium account
by U.S.$250,000,000,
Purchase of the Company’s own shares

Percentage Vote “For”2
2022
100.0%
98.8%
-
-
99.3%
99.9%
-
99.8%
98.8%

2021
100.0%
96.7%
96.6%
-
99.8%
99.9%
99.8%
99.9%
98.1%

2023
100.0%
95.9%
-
77.6%
97.9%
99.9%
-
99.9%
98.1%

98.1%

97.5%

99.8%

98.4%

78.7%

80.1%

97.4%

99.8%

2 Defined as For/(For+Against), expressed as a percentage. Non-voters are not included in the calculation

232

Other Information

233

Other Information

Asset Portfolio

The following table provides an overview of our current assets as of December 31, 2023:

Assets

Type

Ownership Location

Currency
(9)

Capacity
(Gross)

Counterparty
Credit Ratings(10)

COD*

Contract
Years Remaining(17)

Solana

Renewable (Solar)

100%

Mojave

Renewable (Solar)

100%

Coso

Elkhorn Valley(16)

Prairie Star(16)

Twin Groves II(16)

Lone Star II(16)

Renewable
(Geothermal)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)

100%

49%

Arizona
(USA)
California
(USA)
California
(USA)
Oregon
(USA)
Minnesota
(USA)
Illinois
(USA)

USD

280 MW

BBB+/A3/ BBB+ 2013

USD

280 MW

BB/Ba1/BB+

2014

USD

135 MW

Investment grade
(11)

1987/
1989

USD

101 MW

BBB/Baa1/--

2007

USD

101 MW

--/A3/A-

2007

USD

198 MW

BBB+/Baa2/--

2008

Chile PV 1

Renewable (Solar)

35%(1)

Chile

USD

55 MW

49%

Texas (USA) USD

196 MW

N/A

2008

2016

Chile PV 2

Renewable (Solar)

35%(1)

Chile

USD

40 MW

Not rated

2017

Chile PV 3

Renewable (Solar)

35%(1)

Chile

USD

73 MW

N/A

2014

La Sierpe

Renewable (Solar)

100%

Colombia

COP

20 MW

Not rated

2021

La Tolua

Tierra Linda

Honda 1

Albisu

Palmatir

Cadonal

Melowind

Mini-Hydro

Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Hydraulic)

100%

Colombia

COP

20MW

Not rated

2023

100%

Colombia

COP

10MW

Not rated

2023

50%

Colombia

COP

10MW

BBB-/--/BBB

2023

100%

Uruguay

UYU

10MW

Not rated

2023

100%

Uruguay

USD

50 MW

100%

Uruguay

USD

50 MW

100%

Uruguay

USD

50 MW

BBB+/Baa2/
BBB(12)
BBB+/Baa2/
BBB(12)
BBB+/Baa2/
BBB(12)

2014

2015

100%

Peru

USD

4 MW

BBB/ Baa1/BBB

2012

N/A

Solaben 2 & 3

Renewable (Solar)

70%(2)

Spain

Euro

2x50 MW

A/Baa1/A-

2012

14/14

Solacor 1 & 2

Renewable (Solar)

87%(3)

Spain

Euro

2x50 MW

A/Baa1/A-

2012

13/13

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%

Solnova 1, 3 & 4 Renewable (Solar)

100%

Solaben 1 & 6

Renewable (Solar)

100%

Seville PV

Renewable (Solar)

80%(4)

Spain

Euro

2x50 MW

A/Baa1/A-

3x50 MW

A/Baa1/A-

2x50 MW

A/Baa1/A-

1 MW

A/Baa1/A-

2012

2010

2013

2006

Italy PV 1

Renewable (Solar)

100%

Italy

Euro

1.6 MW

BBB/Baa3/BBB

2010

8/10

13/13

13/14

11/11/12

15/15

234

Assets

Type

Ownership Location

Currency
(9)

Capacity
(Gross)

Counterparty
Credit Ratings(10)

COD*

Contract
Years Remaining(17)

Italy PV 2

Renewable (Solar)

100%

Italy

Euro

2.1 MW

BBB/Baa3/BBB

2011

Italy PV 3

Renewable (Solar)

100%

Italy

Euro

2.5 MW

BBB/Baa3/BBB

2012

Italy PV 4

Renewable (Solar)

100%

Italy

Euro

3.6 MW

BBB/Baa3/BBB

2011

Kaxu

Renewable (Solar)

51%(5)

South
Africa

Rand

100 MW

Calgary

ACT

Monterrey(18)

Efficient natural
gas & Heat
Efficient natural
gas & Heat
Efficient natural
gas & Heat

100%

Canada

CAD

55 MWt

100%

Mexico

USD

300 MW

30%

Mexico

USD

142 MW

Not rated

2018

BB-/Ba2/
BB-(13)
~60% AA- or
higher(14)
BBB/ B1/
BB-

2015

2010

2013

ATN (15)

Transmission line

100%

Peru

USD

379 miles

BBB/ Baa1/BBB

2011

ATS

ATN 2

Transmission line

100%

Transmission line

100%

Peru

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

BBB/-/
BBB+

2013 &
2014

11/11

2007

Palmucho

Chile TL3

Chile TL4

Skikda

Honaine

Tenes

Transmission
line
Transmission
line
Transmission
line

Water

100%

Chile

USD

50 miles

A/A2/A-

1993

N/A

100%

Chile

USD

63 miles

Not rated

2016

34.2%(6)

Algeria

USD

3.5 M ft3/day

Not rated

25.5%(7)
51%(8)

Algeria

USD

7 M ft3/ day
7 M ft3/day

Not rated

2009

2012

2015

Notes:
(1)

(2)
(3)
(4)
(5)

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%).

(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.
Certain contracts denominated in U.S. dollars are payable in local currency.

(9)
(10) Reflects the counterparty’s credit ratings issued by S&P, Moody’s, and 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. The third off-taker Southern California Public Power Authority 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.

Including ATN Expansion 1 & 2.

(14) Refers to the credit rating of a diversified mix of 22 high credit quality clients (~60% AA- rating or higher).
(15)
(16) Part of Vento II portfolio.
(17) As of December 31, 2023.
(18) Accounted for as held for sale as of December 31, 2023.
(*)

Commercial Operation Date.

235

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 $320
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, 2023 and 2022, 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;

references to “ATS” refer to Atlantica Transmision Sur S.A.;

236

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 “AYES Canada” refer to Atlantica Sustainable Infrastructure Energy Solutions
Canada Inc., a vehicle formed by Atlantica and Algonquin to channel co-investment
opportunities;

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), including proceeds from the sale
of assets;

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 “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 “DTC” refer to The Depository Trust Company;

references to “EMEA” refer to Europe, Middle East and Africa;

references to “EPA” refer to United States Environmental Protection Agency;

references to “EPC” refer to engineering, procurement and construction;

references to “ESG” refer to environmental, social and corporate governance;

237

-
-
-

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 “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 “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;

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, 2023, 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. Farquhar were considered
non-independent based on their relationship with Algonquin, which is currently Atlantica’s
largest shareholder. Mr. Banskota was the Chief Executive Officer of Algonquin until August
2023 when he resigned from his position, while Mr. Farquhar is the current Senior Vice

238

President, International Development at Algonquin;

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 “Lost time injury rate” refer to the total number of recordable accidents with
leave (lost time injury) recorded in the last 12 months per two hundred thousand worked hours;

references to “LTIP” refer to the long-term incentive plans approved by the Board of Directors;

references to “Mft3” 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;

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 “MWt” refer to thermal megawatts;

references to “Moody’s” refer to Moody’s Investor Service Inc.;

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 “NOL” refer to net operating loss;

references to “NEPA” refer to the National Environment Policy Act;

references to “NOL” refer to net operating loss;

239

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 $155 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 “OECD” refer to the Organization for economic Co-operation and Development;

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 “PV” refer to photovoltaic power;

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, May 5, 2022 and May 30, 2023,
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;

references to “RRRE” refer to the Specific Remuneration System Register in Spain;

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 “SEC” refer to the U.S. Securities and Exchange Commission;

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;

240

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 “Vento II” refer to the wind portfolio in the U.S. in which we acquired a 49%
interest in June 2021;

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.

241

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)

For the year ended December 31,

Profit/(loss) for the period attributable to the Company

Profit/(loss) attributable to non-controlling interest

Income tax

2023

2022

$ 43,380
(6,932)

790

$ (5,443)

3,356

(9,689)

Depreciation and amortisation, financial expense and

income tax expense of unconsolidated affiliates (pro rata of

20,789

24,304

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

Change in non-restricted cash at project level

Dividends paid to non-controlling interests

Debt principal repayment

Cash Available For Distribution

317,974
418,271
$ 794,922

310,934

473,638

$ 797,100

(34,647)

(45,769)

(3,119)

(3,494)

58,892

(58,516)
-

(27,929)
34,329
(272,709)

(92,738)
47,617

126,324

(31,433)
(304,880)
$ 235,740

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

1 “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.

242

- 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

Non-monetary items and other

Atlantica’s pro-rata share of EBITDA from

unconsolidated affiliates

Adjusted EBITDA

- Reconciliation of CAFD to CAFD per share

2023
$ 388,048
272,709
95,843
3,674

34,648

2022

$ 586,322

277,284

(78,805)

(33,470)

45,769

$ 794,922

$ 797,100

CAFD (in thousands of U.S. dollars)

Weighted Number of Shares (basic) for the period

(in thousands)

CAFD per share (in U.S. dollars)

For the year ended December 31

2023
$ 235,740

116,152

$ 2.0296

2022

$ 237,872

114,695

$ 2.0740

243

Global Reporting Initiative (GRI) Content Index

Atlantica Sustainable Infrastructure Plc has reported in accordance with the GRI
Standards for the period January 1, 2023 and December 31, 2023.

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

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, 2023 to December 31, 2023.
Frequency of reporting: Annual
Contact points: Leire Perez; Irene Rodriguez
Email addresses: ESG@atlantica.com, or ir@atlantica.com
Integrated Annual Report Information (About this report)
2022 and 2021 ESG-related disclosure restatements have been performed to ensure
consistency and enable comparability of information between reporting periods.
We have revised 2022 and 2021 figures following the new perimeter of consolidation.
According to the new perimeter, ESG data reported corresponds to all consolidated
subsidiaries. For Companies where Atlantica has joint financial control, we are
consolidating the percentage of equity ownership for each of the ESG KPIs reported.
Green House Gas emissions are accounted for following the financial control approach
from the GHG Protocol. Emissions from joint ventures where partners have joint
financial control are accounted for based on the equity share approach. We are
accounting for proportional scope 1 and scope 2 emissions of equity investments in
scope 3, category 15 (Investments).
The revised KPIs are mainly related to the environmental and health and safety
dimensions:
-

GHG emissions, non-GHG emissions, energy management, water
management and waste management (Strategic Report; Environmental
Sustainability).
Health and Safety KPIs (Strategic Report; Occupational Health and Safety).

2-5 External assurance

In addition, we have also restated 2022 and 2021 turnover rates (Strategic Report, Social
Sustainability) to show the new measurement methodology.
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
All reviews were performed by independent third parties.

244

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

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
2-21 Annual total
compensation ratio

Key management (Strategic Report; Social Sustainability; People and Culture)
Directors’ report and directors’ remuneration report (Governance Section)
People and Culture (Strategic Report; Social Sustainability)
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)

245

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

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 2023, 2022
and 2021.
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 2023, no significant changes were made to the list of material topics compared to
the previous reporting period.
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.

246

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, 2023, 2022 and 2021:

$ in Millions

2023

2022

2021

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

1,226
1,100
101
25

(944)
(441)
(475)
(26)
(1.5)
282

1,193
1,102
81
10

(925)
(433)
(475)
(15)
(1.5)
268

1,290
1,212
75
3

(1,030)
(493)
(484)
(52)
(1.3)
260

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 2023 annual report: U.S. Securities Exchange
Commission Form 20-F available on our website

Task Force on Climate-Related Financial Disclosures (Strategic Report; Environmental
Sustainability)
Principal risks and uncertainties (Strategic Report)
2023 CDP’s Climate Change questionnaire at www.atlantica.com
Sustainability governance (Governance section)
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.
2023 Consolidated Financial Statements (Other Information)

201-2 Financial implications
and other risks and
opportunities due to
climate change

201-3 Defined benefit plan
obligations and other
retirement plans
201-4 Financial assistance
received from government

GRI 204: Procurement Practices
3-3 Management of
material topics
204-1
of
spending on local suppliers

Proportion

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.

247

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)
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 2023, no Code of Conduct incidents were identified.

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

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

No legal actions or anti-competitive behaviour, anti-trust,
or monopoly practices have been taken in 2023, 2022 and 2021.
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

ESG Materiality Analysis (Strategic Report)
Environmental Sustainability (Strategic Report)
We have decided to voluntarily apply GRI 302 requirements
Energy Management (Strategic Report; Environmental Sustainability)
2023 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.
2023 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

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)

248

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

Environmental Policy available on our website
Water Management (Strategic Report; Environmental Sustainability)

Water Management (Strategic Report; Environmental Sustainability)
2023 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
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

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)

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)
2023 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2023 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2023 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability): GHG
Emission Rate per Unit of Energy Generated
2023 CDP Climate Change questionnaire (available at www.atlantica.com)
Greenhouse Gas Emissions (Strategic Report; Environmental Sustainability)
2023 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

249

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

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
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.

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)

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)

Occupational Health and Safety (Strategic Report; Social Sustainability)

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.

250

403-10 Work-related ill
health

Atlantica does not have any workplaces 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)

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
People and Culture (Strategic Report; Social Sustainability)
Annual performance appraisal for 100% of our employees.

404-1 Average hours of
training per year per
employee
404-2 Programmes for
upgrading employee skills
and transition
assistance programmes

404-3 Percentage of
employees receiving
regular performance
and career development
reviews

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 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)

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 2023, 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

251

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
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 incidents of violations involving the rights of Indigenous people have been
registered in 2023, 2022 and 2021.

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 2023, 2022 and 2021 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 2023, 2022 nor
2021.

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)

252

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

1)
Power Generation (Version 2018 – 10)

Topic

SASB code

Accounting metric

Section

IF-EU-
110a.1

(1) Gross global Scope 1 emissions,
percentage covered under (2)
emissions-limiting regulations, and
(3) emissions-reporting regulations

IF-EU-
110a.2

Greenhouse gas (GHG) emissions
associated with power deliveries

IF-EU-
110a.3

IF-EU-
110a.4

IF-EU-
120a.1

IF-EU-
140a.1

IF-EU-
140a.2

IF-EU-
140a.3

IF-EU-
150a.1

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

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

Greenhouse
emissions and
energy resource
planning

Air quality

Water
management

Coal ash
management

253

Topic

SASB code

Accounting metric

Section

IF-EU-
150a.2

IF-EU-
240a.1

IF-EU-
240a.2

IF-EU-
240a.3

IF-EU-
240a.4

IF-EU-
320a.1

IF-EU-
420a.1

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
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)

Percentage of electric utility revenue
from rate structures that (1) are
decoupled and (2) contain a lost
revenue adjustment mechanism
(LRAM)

Energy
affordability

Workforce
health and
safety

End-use
efficiency and
demand

IF-EU-
420a.2

Percentage of electric load served by
smart grid technology

IF-EU-
420a.3

Customer electricity savings from
efficiency measures, by market

Nuclear safety
and emergency
management

Grid Resiliency

IF-EU-
540a.1

IF-EU-
520a.2

IF-EU-
550a.1

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

254

Not applicable. Atlantica does
not use coal in its operations

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

Topic

SASB code

Accounting metric

Section

IF-EU-
550a.2

(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

Not applicable

Activity Metrics of the Electric Utilities and Power Generation.

Activity metric

SASB code

Section

Number of: (1) residential, (2)
commercial, and (3) industrial
customers served

IF-EU-000.A

We have a total of 51 offtakers

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)

Total electricity delivered to: (1)
residential, (2) commercial, (3)
industrial, (4) all other retail
customers, and (5) wholesale
customers

A Fair Review of the Business (Strategic
Report)

Greenhouse Gas Emissions (Strategic
Report; Environmental Sustainability):
Energy management

Atlantica in Two Minutes (Strategic Report)

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

Length of transmission and
distribution lines

IF-EU-000.C

Total electricity generated,
percentage by major energy
source, percentage in regulated
markets

IF-EU-000.D

Total wholesale electricity
purchased

IF-EU-000.E

Not Applicable

255

Applicable Sustainability Disclosure Topics and Accounting Metrics from

3)
Solar Technology Developers (Version 2018-10).

Topic

SASB code

Water
Management in
Manufacturing

RR-ST-140a.1

RR-ST-140a.2

Accounting metric
(1) Total water withdrawn, (2) total water
consumed, percentage of each in regions
with High or Extremely High Baseline
Water Stress
Description of water management risks
and discussion of strategies and practices
to
mitigate those risks

Hazardous
Waste
Management

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)

256

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

162

168

185

Electricity-related emissions factor
(AVERT)

gCO2/kWh

709

Portfolio

Targets

Key Performance Indicators

Renewable Energy

Efficient natural gas

District heating

Transmission lines

Water desalination

Number of assets

Units
MW

MWt

miles

M ft3

GHG reduction objective approved by the Science
Based Target (SBTi)(1)

Maintain over 85% 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

amount in
dollars

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

Scope 3 - Category 1

Purchased goods and services

Scope 3 - Category 2

Capital goods

257

%
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
000´s
tonnes of
tonnes of
CO2e

2023
2,171

343

1,229

17.5



2022
2,121

343

1,229

17.5





2021
2,044

343

1,166

17.5





1,100

1,102

1,212

795

236

1.78

85%

15%

7.0

797

238

824

226

1.77

1.72

84%

16%

6.9

84%

16%

5.9

709

71%

29%

709

75%

25%

70%

30%

1,395

1,524

1,535

250

249

237

799

814

798

2,444

2,587

2,569

1,775

1,844

1,795

250

249

237

799

814

798

2,824

2,907

2,829

161

Scope 3 - Category 3

Scope 3 - Category 4

Fuel- and energy-related
activities not included in Scope
1 or Scope 2

Upstream transportation and
distribution

Scope 3 - Category 5

Waste generated in operations

Scope 3 - Category 6

Business travel

Scope 3 - Category 7

Employee commuting

Scope 3 - Category 8

Upstream leased assets

Scope 3 - Category 9

Downstream transportation and
distribution

Scope 3 - Category 10

Processing of sold products

Scope 3 - Category 11

Use of sold products

Scope 3 - Category 12

End of life treatment of sold
products

Scope 3 - Category 13

Downstream leased assets

Scope 3 - Category 14

Franchises

Scope 3 - Category 15

Investments

ISO 14064-1 Category 3
GHG Protocol Category 3, 4, 6, 7 and
9
ISO 14064-1 Category 4
GHG Protocol Category 1, 2, 5, 8 and
12
ISO 14064-1 Category 5
GHG Protocol Category 15

Total

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

GHG Scope 1 Emissions by Gas:

Fuel Consumption (Stationary)

Fuel Consumption (Mobile)

Fugitive Emissions

Geothermal

Total

CO2

CH4

N2O

CO2e

CO2

CH4

N2O

CO2e

CO2

CH4

N2O

CO2e

CO2

CH4

N2O

258

Units
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
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

Tonnes

2023

2022

2021

526

634

635

Not relevant Not relevant

Not relevant

Not relevant Not relevant

Not relevant

Not relevant Not relevant

Not relevant

Not relevant Not relevant

Not relevant

Not relevant Not relevant

100

799

814

798

532

636

167

100

799

814

798

1,426,854

1,428,243

2,851

2,928

312

8,724

335,114

1,500,873

27
3
1,502,347

1,532,246

1,533,739

2,351

0.1

0.2

2,407

308

1,692

0.1

1,725

312

8,637

330,779

8,742

250,530

GHG Emissions Scope 1 (Tonnes)
CO2e)

GHG Scope 2 Emissions by Gas
Electricity Consumption

Volatile Organic Compounds (VOC),
Hazardous Air Pollutants (HAP),
Particulate Matter (PM)

NOx, SO2 and CO Emissions

Energy Consumption and
Generation

CO2e

CO2

CH4

N2O

CO2e
CO2

CH4

N2O

CO2e

VOC

HAP

Mexico NOx

Spain NOx

Algeria NOx

Canada NOx

Total NOx

Mexico SO2

Spain SO2

Algeria NOx

Canada SO2

Total SO2

Mexico CO

Spain CO

Algeria NOx

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

Total energy consumption within
the organisation

Energy Intensity Ratio

Withdrawal by Water Source

Discharge by Water Source (power
Generation Assets)

Surface water

Groundwater

Third-party water

Produced water

Total

Surface water

Groundwater

Third-party water

Produced water

Total

Surface water

259

Units
Tonnes

Tonnes

Tonnes
Tonnes

Tonnes

GWh

2023
335,114

2022
330,779

2021
250,530

1,764,819

1,834,003

1,784,467

337

335

9,512

758

1,775,010
249,733

1,844,170
249,228

1,794,737
236,711

249,733

249,228

236,711

192.0

52.0

3.8

430.4

15.0

6.8

1.8

454.0

0.6

0.3

0.9

192.0

50.3

4.1

485.5

15.1

6.5

1.6

508.7

0.6

0.3

0.9

192.0

50.4

3.4

438.9

15.4

8.4

1.2

464.0

0.6

0.4

1.0

317.6

319.1

315.5

5.8

2.7

7.5

333.6

7,073

564

482

8,118

7,106

4,516

5.9

2.5

9.5

337.0

7,436

569

474

8,479

6,874

4,616

6.0

3.3

7.3

332.0

7,591

537

296

8,424

6,444

4,092

11,622

11,490

10,536

(3,504)

(3,012)

(2,112)

25,461,919

26,768,797

27,327,284

2,029,259

2,047,646

1,934,588

1,733,979

1,706,458

1,065,636

29,225,158

30,522,901

30,327,507

25,582,192

24,747,366

23,197,112

16,256,192

16,617,490

14,732,304

41,838,384

41,364,856

37,929,415

(12,613,226)

(10,841,956)

(7,601,908)

million m3

million
m3

million m3

million
m3

million m3

0.3

6.1

5.5

5.4

0.3

6.3

5.8

5.6

0.2

6.9

5.5

4.9

17.0

17.7

17.3

1.8

0.2

2.0

4.3

1.9

0.2

2.1

4.4

2.1

0.2

2.3

4.7

Consumption by Water Source
(Power Generation Assets)

Available Water Not Used

Water Withdrawal, Discharge and
Consumption per MWh

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

Number of accidents by category,
severity

Number of Spills

Fines and Penalties

Supply Chain Management

Suppliers Assessments

People And Culture

Number of Employees per
Geography

Groundwater

Third-party water

Produced water

Total

Withdrawal

Discharge

Consumption

Water (seawater) withdrawal

Desalinated potable water
production

Water discharges (returned to the
sea)

Units
million m3

million m3

million
m3

m3 / MWh

million m3

2023
5.3

5.4

15.0

46%

1.46

0.17

1.29

234.8

102.3

2022
5.6

5.6

15.6

44%

1.54

0.18

1.36

240.4

105.2

2021
5.4

4.9

15.0

43%

1.64

0.22

1.42

244.5

98.0

million m3

132.5

135.2

146.5

Non-Hazardous Waste

Hazardous Waste

Reused or recycled

Disposed of

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

Moderate

High

Internal pre-screening evaluation of
new suppliers

External supplier evaluation as a
percentage of total annual
operating expenses

North America

South America

EMEA

Corporate

Total

Full-Time

260

Tonnes

Litres

USD ‘000S

#
#

Male

25,993

1,402

23,142

1,908

22,212

2,576

40%

60%

111

133

314

558

234

593

843

1,185

217

1,402

61%

39%

431

1,906

13,521

15,858

9,951

184

10,135

24,816

1,177

25,993

2,829

62%

38%

101

131

935

1,189

251

479

719

1,647

261

1,908

64%

36%

2,678

1,475

10,721

14,811

7,837

431

8,331

22,306

836

23,142

4,146

70%

30%

718

1,803

349

1,515

7733

2,156

508

2,664

72%

28%

2,769

2,266

11,005

15,993

6,124

6,219

20,469

1,768

22,237

2,829

100

~60

~45

~51

331

796

142

1,366

1,130

312

446

127

978

785

308

115

558

417

2022
193

978

2021
141

558

Employees by Employment Type
and by Contract Type2

Part-time

Indefinite

Temporary

Indefinite

Temporary

Number of Employees by Level

Management

Number of Employees by Age

% in total workforce

% in total management positions

Middle Management

Engineers and Graduates

Assistants and professionals

Asset Operations Employees

Total

Less than 30

31-40

41-50

Over 51

Total
Asian

Black or African American
Hispanic or Latino
White
White
Indigenous or Native

Other

Total

Asian

Black or African American

Hispanic or Latino

White
Indigenous or Native

Other

Total

Average number of employees by
geography

North America

South America

EMEA

Corporate

Total

Average number of employees by
category

Management

Middle Management

2 Corporate employees included in EMEA in 2020.

261

Units
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

#
%

%
%

#
#

2023
236

1,366

1,066

215

1,281

331

761

141

1,281

121

298

861

1,366

145

408

369

208

1,366

17%

73%

100%

14%

74%

743

182

925

311

429

125

925

133

264

519

978

117

321

217

130

978
4%

21%

66%

4%
100%

12%

73%

100%

320

752

141

1,304

125

306

360

121

874

132

399

132

531

308

109

531

178

34
245

558

158

111

558

N/A

296

109

527

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

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 Turnover

Employee voluntary turnover rate

Employee turnover rate without U.S.

Employee involuntary turnover rate

Employee total turnover rate

<30

31-40

41-50

>51

Total

North America

South America

262

Units
#

Male

Female

Male

Female

Male

Female

2023
287

815

1,304

1081

223

1,304

17%

16%

22%

13%

43%

69%

38%

17%

2022
234

2021
162

449

874

696

178

874

20%

13%

25%

17%

41%

71%

37%

18%

23%

240

527

396

131

527

25%

14%

31%

40%

44%

76%

43%

26%

23%

17%

18%

26%

15%

17%

29%

48%

0.6%

7.6%

6.8%

44%

24%

58%

26%

0.3%

0.4%

12.8%

11.0%

9.7%

5.9%

3.5%

10.7%

3.8%

5.6%

16.8%

15.9%

Male

Female

Male

Female

Male

Female

Male

Female

Male

Female

Male

Female

Male

177

119

% Turnover rate

Employees hired

% of employees hired

EMEA

Corporate

Total

Asset operation employees

Assistant and professionals

Engineers and graduates

Middle management

Management

Total

Asian

Black or African American

Hispanic or Latino

White

Indigenous or Native

Other

Total

<30

31-40

41-50

>51

Total

North America

South America

EMEA

Corporate

Total

Asset operation employees

Assistant and professionals

Engineers and graduates

Middle management

Total

Asian

Black or African American

Hispanic or Latino

White

Indigenous or Latino

Other

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

263

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

Hours

2022
7

2021
2

2023
2

115

177

71%

17%

119

68%

18%

100%

62%

27%

19%

27%

53%

100%

222

137

222

183

274

10%

35%

100%

25%

168

5,163

13,701

2,049

21,883

42,964

13
42

166

117

204

29%

46%

19%

100%

28%

321

3,724

10,740

1,189

11,548

27,521

N/A
N/A

N/A

N/A
N/A

N/A

25%

170

2,689

9,281

413

6,846

19,399

Asset Operations Employees

Total

Average amount spent per employee on training and development

Units
Hours

Hours
In
thousands
of USD

% Hours of training

>30

31-40

>51

Total

Asian

Black or African American

Hispanic or Latino

White

Indigenous or Native

Other

Total

Male

Female

Total

Management

Middle Management

Senior Engineers and Graduates

Gender Pay Gap

Engineers and Graduates

Type of Philanthropic Activities

Philanthropic Contributions

Assistants and Professionals

Asset Operation Employees

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

264

% 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

2023
27

0.6

18%

71%

11%

2022
23

0.4

14%

76%

10%

2021
29

0.9

N/A

100%

N/A

26%

66%

25%

68%

N/A

100%

N/A

81%

19%

77%

23%

100%

(9%)

24%

11%

89%

18%

16%

10%

(14%)

29%

13%

97%

N/A

18%

29%

15%

(8%)

10%

26%

98%

100%

0.6

0.9

1.1

0.4

1.0

0.3

1.5

1.3

1.7

1.0

1.9

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

Subcontractors

Total

Lost Time Injury Rate (LTIR) from
our Assets under Construction

Employees

Subcontractors

Total

Lost Time Frequency Index (LTIR)
sector average vs. Atlantica

Sector Average

Atlantica

Total Recordable Frequency Index
(TRFI)

Employees

Subcontractors

Total

265

Units
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
per million
of hours
worked
per million
of hours
worked
per million
of hours
worked
per
million of
hours
worked

2023

2022

2021

2.2

4.7

2.6

1.9

3.1

2.4

1.8

1.5

0.5

2.4

1.9

2.6

1.7

1.5

2.4

0.0

5.2

8.0

14.5

0.0

3.9

13.1

0.0

0.3

0.4

0.3

0.0

1.0

0.8

6.7

1.9

5.0

3.4

0.2

0.9

0.4

0.5

0.6

0.5

0.1

0.5

0.4

0.5

0.3

0.5

1.6

2.9

0.0

2.6

0.0

4.3

3.1

3.0

7.0

3.3

2.4

5.6

6.7

4.3

5.2

6.4

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

Total Recordable Deviations Index
(TRDI)

Lost-day rate (LDR)

Atlantica

Employees

Subcontractors

Total

Lost-day rate (LDR)
From our assets in operations

Employees

Subcontractors

266

Units
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
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

2023

2022

2021

5.3

3.1

2.7

5.3

5.6

6.7

4.3

4.0

6.4

0.0

5.2

8.0

14.5

0.0

3.9

13.1

0.0

1.0

0.7

0.6

1.4

1.1

1.3

0.9

1.0

1.3

1.0

0.6

0.5

1.1

1.3

0.9

0.8

1.3

0.0

1.0

1.6

2.9

0.0

0.8

2.6

0.0

10.9

10.7

4.3

5.2

7.5

6.4

1,714.0

1,245.7

1,623.3

9.2

6.6

14.1

4.1

25.7

21.0

7.9

20.6

16.2

9.7

7.3

14.6

4.1

23.7

21.0

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)

Units
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked
per 200k
hours
worked

2023

2022

2021

8.6

19.4

16.2

0.0

3.1

8.0

34.3

0.0

2.4

28.9

0.0



267

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 strategy, including
the development and construction of new assets, expected trends and outlook, electricity prices,
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 favorable terms, ability to capture growth opportunities, organic growth, 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, 2024 (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;

• our plans relating to our financings, including refinancing plans;
•

the ability of our assets to serve our project debt and comply with financial or other covenants
on their terms, including but not limited to our projects debts in Chile, and our ability to serve
our corporate debt;
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;

• changes in tax laws and regulations, including the new legislation on restrictions to tax

deductibility in Spain;

• risks relating to our activities in areas subject to economic, social and political uncertainties;
• global recession risks, volatility in the financial markets, an inflationary environment, increases
in interest rates and supply chain issues, and the related increases in prices of materials, labor,
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 favorable terms;

268

• our ability to distribute a significant percentage of our cash for distribution as cash dividends,

intention to increase such dividends over time;

• 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 suppliers, including financial or technical uncertainties of

original equipment manufacturer (OEM) suppliers, among others;

• risks related to disagreements and disputes with our employees, unions and employees

represented by unions;

• 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 labor 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, including litigation risk;

• performing the O&M services directly and the successful integration of the O&M employees

where the services thereunder have been recently replaced and internalized;

• 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;
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 potential pandemics 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 the sale or disposition of assets, including the sale of our equity interest

in Monterrey;

• risks related to Russian military actions in Ukraine, to military actions in the Middle East, or to

the potential escalation of any of the foregoing global geopolitical tensions; and

• other factors discussed in “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.

269

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 2023 and of the Group’s profit
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 2023 which comprise:

Group

Parent company

Consolidated statements of financial position balance sheet as of 31
December 2023

Consolidated Statement of profit or loss for the year then ended

Company Balance sheet as of 31 December 2023

Company Statement of Changes in Equity for the
year then ended

Consolidated Statement of Other Comprehensive Income for the year
then ended

Consolidated Statement of Changes in Equity for the year then ended

Consolidated Cash Flows Statement for the year then ended

Related notes 1 to 28 to the financial statements, including material
accounting policy information.

Related notes 1 to 10 to the financial statements
including material accounting policy information.

The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and UK adopted international accounting standards. The financial
reporting framework that has been applied in the preparation of the Parent company financial
statements is applicable law and United Kingdom Accounting Standards, including FRS 101
“Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report. We are
independent of the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.

270

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the managements’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the managements’ assessment of the group and parent company’s ability to
continue to adopt the going concern basis of accounting included:

• We performed a walkthrough of the Group’s financial close process to confirm our
understanding of management’s going concern assessment process. From this walkthrough,
we obtained an understanding of management’s financing structure that splits the group into
corporate level financing and project level financing. The finance secured by the projects is
non-recourse to the Group.

o The corporate level forecast incorporates the cash flows from the Parent and all holding
and investment entities within the Group, as well as cash forecast to be received from the
operating subsidiaries.

o At the project level cash available for distribution is forecast after the servicing of project

level debt and the maintenance of restricted cash required under these facilities.

• We performed an independent risk assessment on going concern to identify potential risks to
the liquidity of the Group in order to determine whether management’s process had identified
all the appropriate risks.

• We obtained management’s going concern assessment, which includes the forecast of
corporate level cashflows, including the servicing of corporate level debt, and forecast cash
available for distribution from the projects over the going concern period which covers the 13
month period to 31 March 2025.

• We assessed the adequacy of the going concern assessment period to 31 March 2025,
considering whether any events or conditions foreseeable after the period indicated a longer
review period would be appropriate.

• We confirmed the appropriateness of the method used in management’s forecasts supporting

the going concern assessment and checked its clerical accuracy.

• We have reviewed the procedures performed by the component teams over the forecasts at a

project level.

• We have performed the following procedures over the corporate level forecast:

o We agreed the debt maturity profiles for corporate debt, including the upcoming
repayment profiles, to the terms of signed agreements and we also obtained confirmation
from debtholders on the amounts due.

o We recalculated the forecasted covenant ratios of the corporate debt in the going concern
period to ensure that covenant testing had been performed correctly in accordance with
the relevant agreements with debtholders.

o We assessed the corporate cash flow forecast and considered the appropriateness of the
key assumptions used to calculate it, including the forecast distributions from the Group’s
projects, as above.

• We assessed the Board’s conclusion that the Company’s downside scenario was highly unlikely.
We considered this in the context of the predictability and stability of project level cash flow
generation, the amount of restricted cash held by the projects to satisfy the customary
requirements under related debt, and the ringfenced nature of the project level debt facilities.
• We performed reverse stress testing to determine the minimum level of EBITDA required to
allow the level of cash distribution required to meet the corporate debt covenants, whilst
fulfilling the Group’s financial commitments during the going concern period. We assessed
whether the probability of the Group being unable to achieve such minimum level of EBITDA

271

was remote considering the nature of the Group’s cash flow generation, historical performance
and diversification of the Group’s assets.

 We considered the nature and extent of mitigating actions within the Board’s control that
could be implemented to prevent or mitigate any cash shortfall during the going concern
period.

 We read the Group’s going concern disclosures included in the annual report to assess whether

the disclosures were appropriate and in conformity with the reporting standards.

Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the Group
and parent company’s ability to continue as a going concern for a period of 13 months from when
the financial statements are authorised for issue. In forming our conclusion, we noted the
significant nature of the Group’s cashflows as being substantially stable and regulated, the
diversification by geography and business sector of the Group’s projects and the non-recourse
nature of project level financing.

Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee as to the group’s ability to continue
as a going concern.

Overview of our audit approach

Audit scope



 We performed an audit of the complete financial information of 22 components
and audit procedures on specific balances for a further 17 components (8 specific
scope components and 9 components to perform specified procedures).
The components where we performed full or specific audit procedures accounted
for 89% of the Group’s Earnings before interest, taxes, depreciation and
amortisation (EBITDA), 85% of the Group’s Revenue and 83% of the Group’s Total
assets.

Key audit
matters

Materiality



Recoverability assessment of contracted concessional, property, plant and
equipment (“PP&E”) and other intangible assets.

Group materiality of $21 million which represents 2.75% of the Group’s EBITDA.

An overview of the scope of the parent and group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance
materiality determine our audit scope for each company within the Group. Taken together, this
enables us to form an opinion on the consolidated financial statements. We take into account
size, risk profile, the organisation of the group and effectiveness of group-wide controls, the
potential impact of climate change and changes in the business environment and other factors
such as recent Internal audit results when assessing the level of work to be performed.

In assessing the risk of material misstatement to the Group financial statements, and to ensure
we had adequate quantitative coverage of significant accounts in the financial statements, of the
119 reporting components of the Group, we selected 30 components covering entities within
Spain, Mexico, USA, Peru, South Africa, Chile, Colombia, UK, and Luxembourg, which represent
the principal business units within the Group.

Of the 39 components selected, we performed an audit of the complete financial information of
22 component (“full scope components”) which were selected based on their size or risk
characteristics. For the remaining 8 components (“specific scope components”), we performed
audit procedures on specific accounts within that component that we considered had the

236

audit procedures on specific accounts within that component that we considered had the
potential for the greatest impact on the significant accounts in the financial statements either
because of the size of these accounts or their risk profile.

The reporting components where we performed audit procedures accounted for 89% (2022: 89%)
of the Group’s EBITDA, 85% (2022: 85%) of the Group’s Revenue and 87% (2022: 84%) of the
Group’s Total assets. For the current year, the full scope components contributed 97% (2022: 97%)
of the Group’s EBITDA, 84% (2022: 85%) of the Group’s Revenue and 81% (2022: 82%) of the
Group’s Total assets. The specific scope components contributed to -8% (2022: -8%) of the
Group’s EBITDA, 1% (2022: 0%) of the Group’s Revenue and 2% (2022: 2%) of the Group’s Total
assets. The audit scope of these components may not have included testing of all significant
accounts of the component but will have contributed to the coverage of significant accounts
tested for the Group. We also instructed 9 other components to perform specified procedures
designed by the Group audit team in response to specific risk factors and in order to ensure that,
at the overall Group level, we reduced and appropriately covered the residual risk of error.

Of the remaining 80 components that together represent 11% of the Group’s EBITDA, none are
individually greater than 2.75% of the Group’s EBITDA. For these components, we performed other
procedures, including analytical review, testing of cash balances, testing of consolidation journals
and intercompany eliminations and foreign currency translation recalculations to respond to any
potential risks of material misstatement to the Group financial statements.

The charts below illustrate the coverage obtained from the work performed by our audit teams.

Changes from the prior year

In the current year audit, no changes in the full scope components, added 2 specific scopes, and
removed 1 component and added 3 components for the specified scope procedures.

Involvement with component teams

In establishing our overall approach to the Group audit, we determined the type of work that
needed to be undertaken at each of the components by us, EY Ireland, as the primary audit
engagement team, or by component auditor from other EY global network firms operating under
our instruction. For all components we determined the appropriate level of involvement to enable

273

us to determine that sufficient audit evidence had been obtained as a basis for our opinion on
the group as a whole.

The Group audit team continued to follow a programme of planned visits that has been designed
to ensure that the Senior Statutory Auditor visits key locations. During the current year’s audit
cycle, physical visits were undertaken by the primary audit team to the component team in Spain.
These visits involved discussing the audit approach with the component team and any issues
arising from their work, meeting with local and group management, visiting key assets, attending
planning and closing meetings and reviewing relevant audit working papers on risk areas. The
primary team interacted regularly with the component teams where appropriate during various
stages of the audit, reviewed relevant working papers and were responsible for the scope and
direction of the audit process. Additionally, the primary team attended component closing
meetings for the US, Mexico, South Africa and Peru. This, together with the additional procedures
performed at Group level, gave us appropriate evidence for our opinion on the Group financial
statements.

Climate change

Stakeholders are increasingly interested in how climate change will impact entities similar to the
group. The Group has determined that the most significant future impacts from climate change
on their strategy and operations will be from changes in weather patterns and consequential
damage to physical assets as a result of failing to respond to these risks. These are explained on
pages 80 to 90 in the Task Force for Climate related Financial Disclosures (TCFD) and on page 56
to 74 in the principal risks and uncertainties. All of these disclosures form part of the “Other
information,” rather than the audited financial statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering whether they are materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit or otherwise appear
to be materially misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the
Group’s business and any consequential material impact on its financial statements.

As explained in Note 2 to the Consolidated Financial Statements and the TCFD, the operational
responses to climate change risks are still developing, and consequently financial statements
cannot capture all possible future outcomes as these are not yet known. The degree of certainty
of these changes may also mean that they cannot be taken into account when determining asset
and liability valuations and the timing of future cash flows under the requirements of UK adopted
international accounting standards.

Our audit effort in considering the impact of climate change on the financial statements was
focused on evaluating management’s assessment of the impact of climate risk, physical and
transition, their climate commitments, and on ensuring that the effects of material climate risks
disclosed on page 56 to 74 have been appropriately considered when assessing whether assets
and liabilities were susceptible to material changes in measurement as a result of climate risks and
opportunities.

Based on our work we have not identified the impact of climate change on the financial statements
to be a key audit matter or to impact a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period and include the most significant

274

assessed risks of material misstatement (whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these matters.

Risk

Our response to the risk

Key observations
communicated to the
Audit Committee

Recoverability assessment of contracted
concessional, PP&E and other intangible
assets ($7,204 million value of risk, PY
comparative $7,483 million)

Refer to the Audit Committee Report (page
198); Accounting policies (Note 2 of the
Consolidated Financial Statements page 293);
and Note 6 of the Consolidated Financial
Statements (page 321).

As described in Note 6 to the consolidated
financial statements, the Group has recorded
“contracted concessional, PP&E and other
intangible assets” of $7,204 million at
December 31, 2023. Revenue derived from
the Group's contracted concessional, PP&E
and other intangible assets are primarily
governed by power purchase agreements
(“PPAs”) with the Group's customers or by the
applicable energy
regulations of each
country, mainly in Spain and Chile.

for

intangible assets

As described in Note 2 to the consolidated
financial statements, the Group reviews its
contracted concessional assets, PP&E and
impairment
other
indicators whenever events or changes in
circumstances
indicate that the carrying
amounts of the assets or group of assets may
not be recoverable, or previous impairment
losses are no longer adequate. As discussed
in Note 6, management identified triggering
events at the two Chilean assets (Chile PV1
and Chile PV2) and as a result, a $16 million
impairment charge was recorded in 2023
(2022: $61 million, which includes impairment
loss recognized in Solana).

the

assets

Group’s

intangible

indicator existed and,

Auditing
recoverability
assessment of contracted concessional, PP&E
and other
involves
significant judgment in determining whether
impairment
if an
indicator exists, in the assumptions used by
management in the determination of whether
an
impairment should be recorded or
reversed. The main inputs considered when
evaluating for impairment indicators include
the performance of the assets versus budget,
changes
regulations and
estimates of future electricity prices. The
required
significant assumptions which

in applicable

the

Based
audit
procedures performed, we
conclude that the review of
the
indicators
assessment performed by
management is appropriate.

impairment

For the two Chilean assets,
impairment charges of $16
million were identified by
management and recorded .
the evidence
Based on
obtained and
the audit
procedures performed, we
consider that the impairment
charge is fairly stated.

We conclude that the related
disclosures as per IAS 36 and
IAS 1 are appropriately
presented in the financial
statements.

assets

We obtained an understanding,
evaluated the design, and tested the
operating effectiveness of controls
over
contracted
Group’s
the
and other
concessional, PP&E
intangible
recoverability
assessment process. Among others,
over
we
tested
management’s
of
potential impairment indicators, as
the
controls
well
determination
significant
of
assumptions used in the impairment
calculation, including, the discount
rates and underlying projections used
in
impairment
Group’s
assessment.

controls
identification

over

the

test

assets,

the Group’s

impairment
To
indicators assessment for contracted
and other
concessional, PP&E
intangible
audit
our
procedures included, among others,
comparing actual energy production
for each asset,
versus budget
assessing
future
electricity prices versus prior year
future estimates and determining
in
whether
applicable
would
negatively impact the Group’s assets’
future cash flows.

the estimated

regulation

identified

changes

assessed

As part of our impairment test audit
procedures, we
the
appropriateness of the main inputs
including estimated performance of
the assets, prices and costs used in
the cash ﬂow projections, by, for
example, comparing
future price
estimates versus prior year future
estimates. For the discount rate, we
involved our valuation specialists to
assist
and
developing a range of discount rates,
which we compared to those used by
the Group.

calculating

We assessed the adequacy of the
related disclosures
in the Group
financial statements, including the
sensitivity analyses on electricity
prices and discount rate assumptions.

275

substantial judgement or estimation used in
management’s impairment calculation are
discount rates and projections considering
real data based on contract terms and
projected changes in both selling prices and
costs.

The above audit procedures over this
risk area, covering 100% of the
amount at risk, were performed by
the group audit team.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect
of identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could
reasonably be expected to influence the economic decisions of the users of the financial
statements. Materiality provides a basis for determining the nature and extent of our audit
procedures.

We determined materiality for the group to be $21 million (2022: $21 million), which is 2.75%
(2022: 2.75%) of EBITDA. We believe that EBITDA provides us with measurement of materiality as
EBITDA is an earnings-based measure that is significant to users of the financial statements. This
is considered to be a critical measure for users of the financial statements, given the focus on this
metric by the Group’s shareholders, investors and external lenders.

We determined materiality for the Parent Company to be $21 million (2022: $20 million), which is
0.80% (2022: 1.75% of equity) of the total assets. We consider total assets to be an appropriate
basis for materiality for a holding company, as the users of the financial statements focus on the
entity’s financial position measure. We have determined that the total assets would provide a
comprehensive measure of the company’s resources both financed by equity holders and lenders.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control
environment, our judgement was that performance materiality was 75% (2022: 75%) of our
planning materiality, namely $16m (2022: $16m). We have set performance materiality at this
percentage due to the nature, the number and the impact of audit differences communicated
during the 2022 audit as well as the overall control environment.

Audit work at component locations for the purpose of obtaining audit coverage over significant
financial statement accounts is undertaken based on a percentage of total performance
materiality. The performance materiality set for each component is based on the relative scale and
risk of the component to the Group as a whole and our assessment of the risk of misstatement at

276

that component. In the current year, the range of performance materiality allocated to
components was $2m to $6m (2022: $2m to $6m).

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit
differences in excess of $1m (2022: $1m), which is set at 5% of planning materiality, as well as
differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality
discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in this report, we do not express any form of assurance
conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of the other information,
we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and directors’ report have been prepared in accordance with applicable
legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its
environment obtained in the course of the audit, we have not identified material misstatements
in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate

•

for our audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report to
be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit

277

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 230, the
directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and
parent company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities,
including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect irregularities,
including fraud. The risk of not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below. However, the
primary responsibility for the prevention and detection of fraud rests with both those charged
with governance of the company and management.

Our approach was as follows:

• We obtained an understanding of the legal and regulatory frameworks that are applicable to
the group and determined that the most significant are those that relate to the reporting
framework (UK adopted international accounting standards, FRS 101 and the Companies Act
2006), the relevant tax compliance regulations in the jurisdictions in which the Group operates,
Anti-Money Laundering Regulation and General Data Protection Regulation. In addition, the
Group is subject to the laws and regulations set forth by both the Securities and Exchange
Commission (“SEC”) and the National Association of Securities Automated Quotations
(“NASDAQ”). Also, the Group operates in a number of regulated markets; it is subject to
extensive regulations from the national regulatory authorities in the jurisdictions it operates
in, as well as additional regulations at a state, regional and local level in certain countries,
including Spain, Mexico, USA, Peru, South Africa, Uruguay and Luxembourg.

• We understood how Atlantica Sustainable Infrastructure plc is complying with those
frameworks by making enquiries of management, internal audit and those responsible for legal
and compliance procedures. We corroborated our enquiries through our review of Board
minutes, papers provided to the Audit Committee and correspondence received from
regulatory or licensing authorities. We noted that there was no contradictory evidence.

278

 We assessed the susceptibility of the group’s financial statements to material misstatement,
including how fraud might occur by meeting with management within various parts of the
business to understand where they considered there was susceptibility to fraud. We also
considered performance targets and their influence on efforts made by management to
manage earnings or influence the perceptions of analysts. Where the risk was considered to
be higher, we performed audit procedures to address each identified as a fraud risk. These
procedures included performing substantive testing procedures over revenue recognition,
testing manual journals and involving our internal specialists to review key management
estimates (such as the recoverability assessment of contracted concessional, PP&E and other
intangible assets and fair value estimates). These procedures were designed to provide
reasonable assurance that the financial statements were free from fraud or error.

 Based on this understanding we designed our audit procedures to identify non-compliance
with such laws and regulations. Our procedures involved a review of board minutes to identify
any non-compliance, a review of reporting to the Audit Committee on compliance with
regulations and enquiries with management, internal audit and the legal and compliance
department.

 The Group owns and manages renewable energy, efficient natural gas, transmission and
transportation infrastructure and water assets which operate in a regulated environment. We
have obtained an understanding of the regulations and the potential impact of these on the
Group. In assessing the control environment, we have considered the compliance of the Group
with these regulations as part of our audit procedures, which included a review of
correspondence received from the regulators where this was received. In addition, revenues
derived from the Group’s contracted concessional assets are governed by power purchase
agreements (“PPAs”) with the Group’s customers or with regulators. We have agreed the
conditions and prices applied per the contracts to the revenues.

A further description of our responsibilities for the audit of the financial statements is located on
the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.

Ian Venner (Senior statutory auditor)
for and on behalf of Ernst & Young Chartered Accountants, Statutory Auditor
Cork, Ireland
4 March 2024

243

Consolidated Financial Statements

Consolidated Statement of profit or loss

Amounts in thousands of U.S. dollars

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 loss, net

Note (1)

For the year ended December 31,

4
22
21
6
22

23
23
23
23

2023
1,099,894
101,087
(104,083)
(418,271)
(336,622)

2022

1,102,029
80,782
(80,232)
(473,638)
(351,248)

342,005

277,693

25,007
(323,749)
(2,549)
(16,683)

10,149
(330,445)
10,257
(895)

Financial expense, net

(317,974)

(310,934)

Share of profit of entities carried under the equity method

13,207

21,465

Profit/(loss) before income tax

37,238

(11,776)

Income tax (expense)/income

(790)

9,689

Profit/(loss) for the year

36,448

(2,087)

(Profit)/loss attributable to non-controlling interest

6,932

(3,356)

Profit/(loss) for the year attributable to owners of the
Company

43,380

(5,443)

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) (*)

24
24

116,152

114,695

119,720

118,865

0.37
0.37

(0.05)
(0.09)

(*) Antidilutive effect applied, where applicable (see Note 24)

(1) Notes 1 to 28 are an integral part of the Consolidated Financial Statements

280

Consolidated Statement of Other Comprehensive Income

Amounts in thousands of U.S. dollars

Note
(1)

Year

Ended
December
31, 2023

Ended
December
31, 2022

Profit/(loss) for the year

36,448

(2,087)

Items that may be reclassified subsequently to profit or
loss:

Change in fair value of cash flow hedges
Less: reclassification adjustments for (gains)/losses
transferred to profit or loss

(22,437)

(27,115)

218,737

38,187

Exchange differences on translation of foreign operations

24,584

(33,704)

Income tax relating to items that may be reclassified
subsequently to profit or loss

8,037

(63,952)

Other comprehensive income/(loss) for the year net of
tax

(16,931)

159,268

Total comprehensive income for the year

19,517

157,181

Total comprehensive income attributable to:

Owners of the Company
Non-controlling interest

27,688
(8,171)

142,568
14,613

(1) Notes 1 to 28 are an integral part of the Consolidated Financial Statements

281

Consolidated statements of financial position

Amounts in thousands of U.S. dollars

Note
(1)

As of
December
31, 2023

As of
December
31, 2022

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

Assets held for sale

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 interest

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

9
19

14
14
14
10
14
14
14

15
16
17
10
19

7,204,267

230,307

79,875

56,707

136,582
160,995

7,483,259

260,031

86,431

89,806

176,237
149,656

7,732,151

8,069,183

29,870
286,483

188,886

448,301

953,540

28,642

34,511
200,334

195,893

600,990

1,031,728

982,182

1,031,728

8,714,333

9,100,911

11,616
736,594
858,220
308,002
(139,434)
(351,521)
1,423,477

165,332
1,588,809

1,050,816
3,931,873
1,233,808
29,957
271,288
6,517,742

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

282

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

15
16
18

34,022
387,387
141,713
44,660
607,782

16,697
326,534
140,230
35,541
519,002

8,714,333

9,100,911

(1) Notes 1 to 28 are an integral part of the Consolidated Financial Statement

The Consolidated Financial Statements of Atlantica Sustainable Infrastructure plc, company registration no.
08818211, were approved by the board of directors and authorized for issue on 29 February 2024.

They were signed on its behalf by:

Director and Chief Executive Officer

Chief Financial Officer

Santiago Seage

February 29, 2024

Francisco Martinez-Davis

February 29, 2024

283

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)

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

Capital contribution
(Note 14)

366

114,583

(1,970)

112,979

14,300

5,031

(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

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 profit
and loss statement

Currency
translation
differences

Tax effect

Other
comprehensive
income

Total
comprehensive
income

Business
Combinations
(Note 5)

Share-based
compensation
(Note 14)

Distributions (Note
14)

Balance as of
December 31,
2022

Notes 1 to 28 are an integral part of the Consolidated Financial Statements

284

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

11,606

986,594

814,951

345,567

(161,307)

(397,540)

1,599,871

189,176 1,789,047

Balance as of
January 1, 2023

Profit/(Loss) for
the year after taxes

Change in fair
value of cash flow
hedges net of
transfer to profit
and loss statement

Currency
translation
differences

Tax effect

Other
comprehensive
income

Total
comprehensive
income

Divestments (Note
7)

Reduction of share
premium (Note
14)

Share-based
compensation
(Note 14)

Capital
contribution (Note
14)

Distributions (Note
14)

Balance as of
December 31,
2023

(44,335)

43,380

(6,932)

36,448

(44,335)

(5,217)

(49,552)

21,873

6,770

(37,565)

21,873

2,711

24,584

6,770

1,267

8,037

(15,692)

(1,239)

(16,931)

(37,565)

21,873

43,380

27,688

(8,171)

19,517

(250,000)

250,000

2,639

(2,817)

2,639

19,467

19,502

(206,756)

(32,323)

(239,079)

11,616

736,594

858,220

308,002

(139,434)

(351,521)

1,423,477

165,332

1,588,809

Notes 1 to 28 are an integral part of the Consolidated Financial Statements

285

Consolidated Cash Flow Statement

For the year ended

Amounts in thousands of U.S. dollars

Profit/(loss) for the year

Note (1)

2023

2022

36,448

(2,087)

Non-monetary adjustments

Depreciation, amortization and impairment charges
Financial expense
Fair value gains on derivative financial instruments
Shares of profits from entities carried under the equity method
Income tax
Other non-monetary items

6
23
23
7
19

418,271
319,286
(1,869)
(13,207)
790
(3,119)

473,638
335,546
(19,138)
(21,465)
(9,689)
27,996

Profit/(loss) for the year adjusted by non-monetary items

756,600

784,801

Changes in working capital

Inventories
Trade and other receivables
Trade payables and other current liabilities
Other current assets/liabilities

12
18

Changes in working capital

Income tax paid
Interest received
Interest paid

Net cash provided by operating activities

Business combinations and investments in entities under the equity
method
Investments in operating concessional assets
Investments in assets under development or construction
Distribution from entities under the equity method
Net divestment in other non-current financial assets

5&7

6
6
7

(6,285)
(107,201)
(415)
18,057

(6,955)
99,249
(6,158)
(7,331)

(95,844)

78,805

(26,020)
21,668
(268,356)

(14,730)
9,178
(271,732)

388,048

586,322

(29,259)
(27,929)
(56,280)
34,329
27,505

(50,507)
(39,107)
(36,784)
67,695
1,265

Net cash used in investing activities

(51,634)

(57,438)

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
Non-controlling interest capital contribution
Capital contribution

16
15
16
15
14
14
14
14

213,232
161,498
(531,837)
(115,891)
(206,755)
(31,433)
19,823
-

-
101,140
(426,396)
(80,519)
(203,106)
(39,209)
-
113,072

Net cash used in financing activities

(491,363)

(535,018)

Net decrease in cash and cash equivalents

(154,949)

(6,134)

286

Cash and cash equivalents at beginning of the year

Translation differences cash and cash equivalents

600,990
2,260

622,689
(15,565)

Cash and cash equivalents at the end of the year

448,301

600,990

(1) Notes 1 to 28 are an integral part of the Consolidated Financial Statements. Reference to such notes is indicated here to
provide with additional information on the nature of some of the lines of the Consolidated cash flow statement.

287

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). Its registered address is Great West House, GW1 Great West Road Brentford
TW8 9DF, London (United Kingdom).

Atlantica’s shares trade on the NASDAQ Global Select Market under the symbol “AY”.

In March 2023, the Company completed the process of transitioning O&M services for the assets in
Spain where Abengoa was still the supplier to an Atlantica’ subsidiary (Note 5). Currently, Atlantica
performs the O&M services with its own personnel for assets representing approximately 74% of the
consolidated revenue for the year ended December 31, 2023.

The following four assets that the Company had under construction during 2022, finished
construction and reached Commercial Operation Date (“COD”) in 2023:

Albisu, a 10 MW solar PV asset wholly owned by the Company. 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 wholly owned solar PV assets in Colombia with a combined
capacity of 30 MW both of which reached COD in the first quarter of 2023. Each plant has a
10-year PPA in local currency indexed to local inflation with Coenersa, the largest
independent electricity wholesaler in Colombia. Each PPA provides for the sale of electricity
at fixed base price indexed to local CPI.

Honda 1, a 10 MW solar PV asset in Colombia where the Company has a 50% ownership, and
which reached COD in December 2023. The asset has a 7-year PPA with Enel Colombia, a
major electricity company in the country. The PPA is denominated in local currency, with fixed
base price, indexed to the local CPI.

During the year 2022, the Company completed the following investments:

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 2024, which would represent an
additional investment of approximately $8 million. The asset has fully contracted revenues in
U.S. dollars, with inflation escalation and a 50-year remaining contract life. The off-takers are

288

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 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
under 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 is expected to be progressive in 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.

The following table provides an overview of the main operating assets the Company owned or had
an interest in as of December 31, 2023:

Assets

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

Type
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Geothermal)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)
Renewable
(Wind)

Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable

USD

100%

Ownership Location Currency(9)
Arizona
(USA)
California
(USA)
California
(USA)
Oregon
(USA)
Minnesota
(USA)

100%

USD

49%

Capacity
(Gross)

280 MW

Counterparty
Credit
Ratings(10)
BBB+/A3/BBB
+

280 MW BB/ Ba1/BB+
Investment
Grade(11)

135 MW

Contract
Years
Remainin
g(17)

COD*

2013

2014

1987-1989

101 MW BBB/Baa1/--

2007

101 MW

--/A3/A-

2007

49%

Illinois (USA)

USD

198 MW BB+/Baa2/--

2008

49%

Texas (USA)

USD

196 MW

N/A

2008

N/A

35%(1)

Chile

USD

55 MW

N/A

2016

N/A

35%(1)

Chile

USD

40 MW

Not rated

2017

35%(1)
100%

Chile
Colombia

USD
COP

73 MW
20 MW

N/A
Not rated

2014
2021

N/A
12

289

Assets

La Tolua

Tierra Linda

Honda 1

Albisu

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

Type
(Solar)
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)

Seville PV

Italy PV 1

Italy PV 2

Italy PV 3

Italy PV 4

Kaxu

Cargary

ACT

Monterrey
(18)

ATN (15)

Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Renewable
(Solar)
Efficient
natural gas
&heat
Efficient
natural gas &
heat
Efficient
natural gas
&heat
Transmission
line

Ownership Location Currency(9)

Capacity
(Gross)

Counterparty
Credit
Ratings(10)

COD*

Contract
Years
Remainin
g(17)

100%

Colombia

COP

20 MW

Not rated

2023

100%

Colombia

COP

10 MW

Not rated

2023

50%

Colombia

COP

10 MW

BBB-/-/BBB

2023

100%

Uruguay

UYU

10 MW

100%

Uruguay

USD

50 MW

100%

Uruguay

USD

50 MW

100%

Uruguay

USD

50 MW

100%

Peru

USD

4 MW

Not rated
BBB+/Baa2/B
BB(12)
BBB+/Baa2/B
BB(12)
BBB+/Baa2/B
BB(12)
BBB/Baa1/BB
B

2023

2014

2015

2012

70%(2)

Spain

Euro

2x50 MW A/Baa1/A-

2012

14/14

87%(3)

Spain

Euro

2x50 MW A/Baa1/A-

2012

13/13

100%

Spain

Euro

31 MW

A/Baa1/A- 2007&2009

8/10

100%

Spain

Euro

2x50 MW A/Baa1/A-

2011

13/13

100%

Spain

Euro

2x50 MW A/Baa1/A-

2012

13/14

100%

Spain

Euro

3x50 MW A/Baa1/A-

2010

11/11/12

100%

Spain

Euro

2x50 MW

A/Baa1/A-

2013

15/15

80%(4)

Spain

Euro

1 MW

100%

Italy

Euro

1.6 MW

100%

Italy

Euro

2.1 MW

100%

Italy

Euro

2.5 MW

100%

Italy

Euro

3.6 MW

51%(5)

South Africa

Rand

100 MW

A/Baa1/A-
BBB/Baa3/BB
B
BBB/Baa3/BB
B
BBB/Baa3/BB
B
BBB/Baa3/BB
B
BB-/Ba2/BB-
(13)

2006

2010

2011

2012

2011

2015

100%

Canada

CAD

55 MWt

~60% AA- or
higher(14)

2010

100%

Mexico

USD

300 MW

BBB/B3/B+

2013

30%

Mexico

USD

142 MW

100%

Peru

USD

379 miles

Not rated
BBB/Baa1/BB
B

2018

2011

290

Ownership Location Currency(9)

Capacity
(Gross)

100%

Peru

USD

569 miles

Counterparty
Credit
Ratings(10)
BBB/Baa1/BB
B

COD*

2014

100%

Peru

100%

Chile

USD

81 miles
49 miles/32
miles

Not rated

2015

Not rated

2014

11/11

100%

Chile

USD

6 miles BBB/ -- /BBB+

2007

100%

Chile

USD

50 miles

A/A2/A-

1993

N/A

Contract
Years
Remainin
g(17)

100%

Chile

Not rated

2016

USD

USD
USD
USD

63 miles
3.5 M
ft3/day

Not rated
7 M ft3/day Not rated
7 M ft3/day Not rated

2009
2012
2015

10
14
16

Water
Water
Water

34.20%(6)
25.50%(7)
51%(8)

Algeria
Algeria
Algeria

Type
Transmission
line
Transmission
line
Transmission
line
Transmission
line
Transmission
line
Transmission
line

Assets

ATS

ATN 2
Quadra 1 &
2

Palmucho

Chile TL3

Chile TL4

Skikda
Honaine
Tenes

(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.

(2)

Itochu Corporation holds 30% of the shares in each of Solaben 2 and Solaben 3.

(3)

JGC holds 13% of the shares in each of Solacor 1 and Solacor 2.

(4) Instituto para la Diversificación y Ahorro de la Energía (“Idae”) holds 20% of the shares in Seville PV.

(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%.

(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 (~60% AA- rating or higher, the rest is

unrated).

(15)

Including ATN Expansion 1 & 2.

(16) Part of Vento II Portfolio.

(17) As of December 31, 2023.

291

(18) Accounted for as held for sale as of December 31, 2023

(*)

Commercial Operation Date.

Additionally, Atlantica currently has the following assets under construction or ready to start
construction in the short term:

Expected

Capacity

Expected

Investment2

Asset

Type

Location

(gross) 1

COD

($ million)

Off-taker

Coso Batteries 1

Battery Storage

California, US

100 MWh

2025

40-50

Coso Batteries 2

Battery Storage

California, US

80 MWh

2025

35-45

Investment grade
utility

Chile PMGD

Solar PV

ATN Expansion 3

Transmission Line

Chile

Peru

80 MW

2024-2025

2.4miles
220kV

2024

Regulated

Conelsur

ATS Expansion 1

Transmission Line

Peru

n.a.
(substation)

2025

Republic of Peru

Honda 23

Apulo 13

Solar PV

Colombia

10 MW

2024

Solar PV

Colombia

10 MW

2024

5.5

Enel Colombia

(1)

(2)

(3)

Includes nominal capacity on a 100% basis, not considering Atlantica’s ownership

Corresponds to the expected investment by Atlantica

Atlantica owns 50% of the shares in Honda 2 and Apulo 1

In October 2023, the Company entered into two 15-year tolling agreements (PPAs) with an
investment grade utility for Coso Batteries 1 and Coso Batteries 2. Under each of the tolling
agreements, Coso Batteries 1 and 2 will receive fixed monthly payments adjusted by the financial
settlement of CAISO’s (California Independent System Operator) Day-Ahead market. In addition, the
Company expects to obtain revenue from ancillary services in each of the assets.

Coso Batteries 1 is a standalone battery storage project of 100 MWh (4 hours) capacity, located inside
Coso, its geothermal asset in California. Additionally, Coso Batteries 2 is a standalone battery storage
project with 80 MWh (4 hours) capacity also located inside Coso. The investment is expected to be
in the range of $40 million to $50 million for Coso Batteries 1, and in the range of $35 to $45 million
for Coso Batteries 2. Both projects were fully developed in-house and are now under construction.
Atlantica has closed a contract with Tesla for the procurement of the batteries. COD is expected in
2025 for both projects.

In July 2022 the Company closed a 17-year transmission service agreement denominated in U.S.
dollars that allows to build a substation and a 2.4-miles transmission line connected to ATN
transmission line serving a new mine in Peru (ATN Expansion 3). The substation is expected to enter

292

in operation in 2024 and the investment is expected to be approximately $12 million.

In July 2023, as part of the New Transmission Plan Update in Peru, the Ministry of Energy and Mines
published the Ministerial Resolution that enables to start construction of ATS Expansion 1 project,
consisting in the reinforcement of two existing substations with new equipment. The expansion will
be part of the existing concession contract, a 30-year contract with a fixed-price tariff base
denominated in U.S. dollars adjusted annually in accordance with the U.S. Finished Goods Less Foods
and Energy Index as published by the U.S. Department of Labor. Given that the concession ends in
2044, Atlantica will be compensated with a one-time payment for the remaining 9 years of
concession. The expansion is expected to enter in operation in 2025 and the investment is expected
to be approximately $30 million.

In May 2022, the Company agreed to develop and construct Honda 1 and 2, two PV assets in
Colombia with a combined capacity of 20 MW, where it has a 50% ownership. Each plant has a 7-
year PPA with Enel Colombia. Honda 1, as it is stated above, reached COD in December 2023. Honda
2 is expected to enter into operation in the second quarter of 2024. The investment is expected to
be $5.5 million for each plant.

Chile PV 1 and PV2 events of default

Due to low electricity prices in Chile, the project debts of Chile PV 1 and PV2, where the Company
owns a 35% equity interest, are under an event of default as of December 31, 2023. Chile PV 1 was
not able to maintain the minimum required cash in its debt service reserve account as of December
31, 2023 and did not make its debt service payment in January 2024. In addition, in October 2023,
Chile PV 2 did not make its debt service payment. This asset obtained additional financing from the
banks and made the debt service payment in December 2023, although it was not able to fund its
debts service reserve account. As a result, although the Company does not expect an acceleration of
the debts to be declared by the credit entities, Chile PV 1 and Chile PV2, did not have an unconditional
right to defer the settlement of the debts for at least twelve months and the project debts, which
amount to $71 million as of December 31, 2023 (Note 16), were classified as current in these
Consolidated Financial Statements in accordance with International Accounting Standards 1 (“IAS 1”),
“Presentation of Financial Statements”. The Company is, together with the partner, in conversations
with the banks regarding a potential waiver.

2. Material 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.

293

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 date, the
Company believes there is no material impact on the carrying values of assets or liabilities.

Application of new accounting standards

a) Standards, interpretations and amendments effective from January 1, 2023 under IFRS-IASB,

applied by the Company in the preparation of these Consolidated Financial Statements:

The applications of these amendments have not had any material impact on these financial
statements.

In addition, the IASB published in May 2023 an amendment to IAS 12, “Income taxes”, to clarify
the application of this standard arising from tax legislation enacted or substantively enacted in
each country to implement the Pillar Two model rules in which it provides:

a temporary exception to the accounting for deferred taxes in connection with the
implementation of Pillar Two.

qualitative and quantitative disclosures to enable users to understand the entities’
exposure to taxes that may arise from the Pillar Two model rules and/or the entity’s
progress in its implementation.

Global minimum taxation (Pillar Two OECD/G20 BEPS 2.0 top-up taxes as agreed by the Inclusive
Framework) legislation has been enacted or substantially enacted in certain jurisdictions in
which the Atlantica operates. The new legislation will be effective for the Company´s financial
years beginning January 1, 2024. Atlantica is in scope of the enacted or substantially enacted
legislation and has performed an assessment of the Company´s potential exposure to Pillar Two
top-up taxes.

The assessment is based on the country-by-country reporting and financial statements for the
constituent entities of Atlantica. Based on the assessment performed, the Pillar Two effective tax
rates in most of the jurisdictions in which Atlantica operates are above 15% and in all of them
meet the requirements to apply the relevant transitional safe harbors, with the exception of one
jurisdiction, whose impact is not material. Therefore, Atlantica does not expect a material
exposure to Pillar Two income taxes for accounting periods commencing on or after December
31, 2023.

b) Standards, interpretations and amendments published by the IASB that will be effective for

periods beginning on or after January 1, 2024:

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, 2024, 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.

294

Going concern

In assessing going concern for the Group and Company, the Directors have considered the period
up to March 31, 2025. 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 $388.0 million of cash from operating activities, used $51.6
million in investing activities and $491.4 million in financing activities. All of these resulted in a $155.0
million net decrease on its cash position by year-end, with a closing cash position of $448.3 million
(Note 13). The Group´s cash includes $415.3 million held at the project level, of which $177.0 million
are held to satisfy the customary requirements of certain non-recourse debt agreements (Note
16). The remaining $33.0 million is held at the corporate level.

As at 31 December 2023 total debt was $5,404.1 million, of which $421.4 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 $1,084.8 million as at 31 December 2023, of which $34.0 million
is current (Note 15). In addition, it had $378.1 million undrawn and available under its revolving credit
facility, which, in aggregate with cash of $33.0 million, results in total available liquidity at this level
of $411.1 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.

Aggregate project level debt was $4,319.3 million as at 31 December 2023, of which $387.4 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 16).

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 54% of the Group’s revenue in 2023 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

295

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
approximately 10 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 and debt covenants perspective, the Directors have identified mitigations that are
within the Board’s control including but not limited to further use of the undrawn element of the
corporate facilities, increase in non-recourse financing for new projects under construction,
divestments, 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 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.

296

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.

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, storage assets,
transmission lines, efficient natural gas and heat assets and water plants.

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. If the
operator performs more than one service (i.e. construction or upgrade services and operation
services) under a single contract or arrangement, consideration received or receivable shall be
allocated by reference to the relative fair values of the services delivered, when the amounts are
separately identifiable.

Consequently, even though construction is subcontracted and it is not performed by Atlantica, in
accordance with the provisions of IFRIC 12, the Company recognizes and measures revenue and costs
for providing construction services during the period of construction of the infrastructure in
accordance with IFRS 15. Construction revenue is recorded within “Other operating income” and
Construction cost, which is fully contracted, is recorded within “Other operating expenses”. This
applies in the same way to the two models.

The useful life of these assets is approximately the same as the length of the concession arrangement.

297

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 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.

298

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.

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 2.12). 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.

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.

299

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
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.

Asset impairment

Atlantica reviews its contracted concessional, PP&E and other intangible 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

300

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 located.

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 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 profit and loss 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 profit and loss 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 27.

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

301

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 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 as financial income within
the consolidated statement of profit or loss

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 profit and loss statement as it
occurs.

When interest rate options are designated as hedging instruments, the time value is excluded from

302

the hedging instrument as permitted by IFRS 9. Changes in the effective portion of the intrinsic are
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 profit and loss 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 profit and loss statement.

Any change in fair value of derivatives instruments to which hedge accounting is not applied is
directly recorded in the profit and loss 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 profit and loss statement.

Atlantica derivatives correspond primarily to the interest rate swaps designated as cash flow hedges,
which are classified as Level 2.

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

303

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.

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 cash 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.

304

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. Assets held for sale

The Company classifies non-current assets and disposal groups as held for sale if their carrying
amounts will be recovered principally through a sale transaction rather than through continuing use.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group), excluding finance costs and income tax
expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable,
and the asset or disposal group is available for immediate sale in its present condition. Actions
required to complete the sale should indicate that it is unlikely that significant changes to the sale
will be made or that the decision to sell will be withdrawn. Management must be committed to the
plan to sell the asset and the sale expected to be completed within one year from the date of the
classification.

Property, plant and equipment and intangible assets are not depreciated or amortised once classified
as held for sale.

Assets and liabilities classified as held for sale are presented separately as current items in the
statement of financial position.

2.11. 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 profit and loss statement based on the
period necessary to match them with the costs they intend to compensate.

In addition, as described in Note 2.12 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.

2.12. 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 profit and loss 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

305

different (the net present value of the modified cash flows, including any fees paid to net of any fees
received from the lenders, 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 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 profit and loss 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.

2.13. 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 profit and loss 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 profit and
loss 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.

2.14. 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 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

306

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.

2.15. 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”.

2.16. 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 profit and loss 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.

2.17. 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.

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 2006.

Non-controlling interest represents interest of other partners in subsidiaries included in these

307

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.

2.18. 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 recognized 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.

2.19. Earnings per share

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.

2.20. 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

308

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 19).

Fair value of derivative financial instruments

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 (Note 10).

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

309

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, 2023, 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 profit and loss 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
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 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, 2023, approximately 92% of the Project debt of the Company and
approximately 94% 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 15).

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

310

EURIBOR and SOFR, which represent the reference interest rate for most of the debt of the
Company. In the event that EURIBOR and SOFR had risen by 25 basis points as of December
31, 2023, with the rest of the variables remaining constant, the effect in the consolidated
profit and loss statement would have been a loss of $0.7 million (a loss of $1.3 million in
2022) and a gain in hedging reserves of $17.6 million ($18.4 million in 2022). 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, 2023 and 2022, is provided
in Note 10.

- 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
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 profit and loss 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

311

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 15 and 16, 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 15 and 16 after deducting cash and bank balances disclosed in Note 13) 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:

Debt
Cash and cash equivalents

Net Debt

Equity

Balance as of
December 31, 2023
$’000

Balance as of
December 31, 2022
$’000

5,404,098
448,301

5,570,252
600,990

4,955,797

4,969,262

1,588,809

1,789,047

Net debt to equity ratio

312%

278%

Corporate and Project debt repayment schedules are disclosed in Note 15 and 16, 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, 2023, 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).

312

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, 2023, Atlantica had four customers with revenues representing more
than 10% of total revenue, three in the renewable energy and one in the efficient natural gas and
heat business sectors. In the year ended December 31, 2022, Atlantica had three customers with
revenues representing more than 10% of the total revenue, two in the renewable energy and one in
the efficient natural gas and heat business sectors.

a) The following tables show Revenues and Adjusted EBITDA by operating segments and

business sectors for the years 2023 and 2022:

Revenue
$’000

Adjusted EBITDA
$’000

For the year ended December 31,

Geography

North America

South America

EMEA

2023

2022

2023

2022

424,888

188,127

486,879

405,047

166,441

530,541

319,264

146,722

328,936

309,988

126,551

360,561

Total

1,099,894

1,102,029

794,922

797,100

Revenue
$’000

For the year ended
December 31,

2023

802,756

118,417

123,476

55,245

Adjusted EBITDA
$’000

For the year ended December 31,

2022

821,377

113,591

113,273

53,788

2023

575,704

87,393

96,043

35,782

2022

588,016

84,560

88,010

36,514

1,099,894

1,102,029

794,922

797,100

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:

313

Profit/(loss) attributable to the Company
Profit/(loss) 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,

2023
$’000

43,380
(6,932)
790
317,974
418,271

2022
$’000

(5,443)
3,356
(9,689)
310,934
473,638

21,439

24,304

Total segment Adjusted EBITDA

794,922

797,100

b) The assets and liabilities by geography and business sector at the end of 2023 and 2022 are

as follows:

Assets and liabilities by geography as of December 31, 2023:

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)

Assets held for sale

Subtotal allocated

Unallocated assets

Other non-current assets

Other current assets (including cash and cash
equivalents at holding company level)

Subtotal unallocated

Total assets

North
America

South
America

EMEA

$’000

Balance as of
December 31,
2023
$’000

3,063,019

1,184,599

2,956,649

7,204,267

177,260

110,016

137,480

28,642

9,178

30,803

43,869

48,067

121,945

155,551

230,307

188,886

414,976

28,642

3,516,417

1,346,525

3,204,136

8,067,078

297,577

349,678

647,255

8,714,333

314

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

South
America

EMEA

$’000

Balance as of
December 31,
2023
$’000

1,629,278

945,888

808,481

36,307

1,881,501

251,613

2,575,166

844,788

2,133,114

4,319,260

1,233,808

5,553,068

1,084,838

301,245

186,373

1,572,456

7,125,524

1,588,809

3,161,265

8,714,333

Assets and liabilities by geography as of December 31, 2022:

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

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

315

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

1,713,125

994,874

2,707,999

841,906

25,031

866,937

1,998,021

232,608

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

Assets and liabilities by business sectors as of December 31, 2023:

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)
Assets held for sale

Subtotal allocated

Unallocated assets

Other non-current assets

Other current assets (including cash
and cash equivalents at holding
company level)
Subtotal unallocated

Total assets

Renewable
energy

Efficient
natural gas
& heat

$’000

Transmission

lines

$’000

Water

Balance as of
December 31,
2023

$’000

5,798,818

460,766

777,360

167,323

7,204,267

189,672

40,635

230,307

10,866

299,987

6,299,343

103,907

35,098

28,642

628,413

30,746

58,004

43,367

21,887

188,886

414,976

28,642

866,110

273,212

8,067,078

297,577

349,678

647,255

8,714,333

316

Renewable
energy

$’000

Efficient
natural
gas &
heat
$’000

Transmission
lines

Water

Balance as of
December 31,
2023

$’000

3,280,618

401,460

560,906

76,276

4,319,260

1,185,487

32,916

4,466,105

434,376

12,884

573,790

2,521

78,797

1,233,808

5,553,068

1,084,838

301,245
186,373

1,572,456

7,125,524

1,588,809

3,161,265

8,714,333

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

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
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

Efficient
natural gas
& heat
$’000

Transmission
lines

Water

$’000

Balance as of
December
31, 2022
$’000

6,035,091

485,431

800,067

162,670

7,483,259

207,870

10,034

42,128

260,031

6,706
392,577

116,366
73,673

30,582
48,073

42,240
25,498

195,893
539,822

6,642,244

685,504

878,722

272,536

8,479,005

325,893
296,013

621,906

9,100,911

317

Renewable
energy

$’000

Efficient
natural
gas & heat
$’000

Transmission
lines

Water

Balance as of
December 31,
2022

$’000

3,442,625

1,211,878

4,654,503

440,999

32,138

473,137

582,689

6,040

588,729

86,739

2,457

89,196

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

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

c) The amount of depreciation, amortization and impairment charges recognized for the years

ended December 31, 2023 and 2022 are as follows:

Depreciation, amortization and impairment by
geography

North America

South America

EMEA

Total

For the year ended December 31,

$’000

2023

2022

(125,725)

(77,855)

(214,691)

(418,271)

(182,159)

(80,039)

(211,440)

(473,638)

For the year ended December 31,

$’000

Depreciation, amortization and impairment by
business sectors

2023

2022

Renewable energy

Efficient natural gas & heat

Transmission lines

Water

Total

(398,394)

9,365

(29,331)

(434,042)

(5,430)

(32,466)

(1,700)

(418,271)

(473,638)

318

5. Business Combinations

For the year ended December 31, 2023

On March 1, 2023, the Company completed the process of transitioning the O&M services for the
assets in Spain where Abengoa was still the supplier to an Atlantica’ subsidiary. This acquisition has
been accounted for in these Consolidated Financial Statements in accordance with IFRS 3, Business
Combinations. The O&M services are 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 the
following table:

Business combinations for the year ended
December 31, 2023
$’000

Property, plant and equipment under IAS 16 (Note 6)
Intangible assets under IAS 38 (Note 6)
Inventories
Other current and non-current liabilities
Total net assets acquired at fair value
Asset acquisition – purchase price

Net result of business combinations

1,565
4,486
1,646
(5,494 )
2,203
(2,203 )

The purchase price equals the fair value of the net assets acquired.

The allocation of the purchase price is provisional as of December 31, 2023, 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, 2023. The measurement period will not exceed one year
from the acquisition date.

The amount of revenue contributed by the acquisitions during 2023 to the Consolidated Financial
Statements of the Company is nil, and the amount of loss after tax is $0.8 million. Had the acquisitions
been consolidated from January 1, 2023, the consolidated statement of comprehensive income
would not have included any additional revenue and additional loss after tax of $0.2 million.

For the year ended December 31, 2022

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 had 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 had 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.

319

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 had 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
aggregate on the basis that they are individually not significant in the following table:

Business combinations for the year ended
December 31, 2023
$’000

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 16)
Current Project debt (Note 16)
Other current and non-current liabilities
Non-controlling interests
Total net assets acquired at fair value
Asset acquisition – purchase price

Net result of business combinations

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 amount of revenue contributed by the acquisitions performed during 2022 to the Consolidated
Financial Statements of the Company for the year 2022 was $6.2 million, and the amount of profit
after tax was $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.

In January, April and September 2023, the provisional period for the purchase price allocation of Chile
TL 4, Italy PV 4 and Chile PV 3, respectively, closed, and did not result in significant adjustments to the
initial amounts recognized.

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 27.

The following table shows the movements of assets included in the heading “Contracted

Concessional, PP&E and other intangible assets” for 2023:

320

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

Land

Technical
installations

Total assets

818,170

2,787

8,845,151

120,308 137,767

938,799

10,862,982

-
-

27,531
-

4,409
(644)

4,486

62
-

50,805
(5,487)

82,807
(6,131)

1,565

6,051

5,025

(132)

84,060

4,756

1,515

19,847

115,071

(38,016)

348

17,632

(11,537)

(31,573)

785,179

2,655 8,957,090

150,947 139,344

993,992 11,029,207

Cost

Total as of
January 1,
2023
Additions
Subtractions
Business
combinations
(Note 5)
Currency
translation
differences
Reclassification
and other
movements

Total Cost as
of December
31, 2023

Depreciation,
amortization and
impairment

Total as of
January 1, 2023
Additions
Impairment
charges
Reversal of
impairment
Currency
translation
differences
Reclassifications
and other
movements

Total
depreciation,
amortization and
impairment as of
December 31,
2023

Total net book
value as of
December 31,
2023

Financial
assets
under
IFRIC 12

(69,557)

13,378

(199)

Financial
assets
under
IFRS 16
(Lessor)

Intangible
assets under
IFRIC 12

(3,088,778)

(358,602)

Right of use
assets under IFRS
16 (Lessee) and
intangible assets
under IAS 38

(26,783)

(11,869)

(32,084)

(533)

372

Property, plant and
equipment under IAS 16

Land

Technical
installations

Total assets

(194,605)

(3,379,723)

(41,924)

(412,395)

(16,079)

13,378

(4,511)

(37,327)

6,834

7,206

(56,378)

(3,479,464)

(38,813)

(250,285)

(3,824,940)

728,801

2,655

5,477,626

112,134 139,344

743,707

7,204,267

321

The increase in the contracted concessional assets cost is primarily due to the higher value of the
Euro denominated assets since the exchange rate of the Euro increased against the U.S. dollar since
December 31, 2022 and to the investments for the year in operating concessional assets and assets
under development and construction. The increase in accumulated depreciation, amortization and
impairment is primarily due to the amortization charge for the year and the impairment registered in
Chile PV1 (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.

The following table shows the movements of assets included in the heading “Contracted

Concessional, PP&E and other intangible assets” for 2022:

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

Land

Technical
installations

Total assets

874,525

2,843

9,068,646

100,109

137,037

835,975

11,019,135

-
-

-
(57)

32,941
(499)

5,637
(1,510)

3,532
-

75,182
(8,495)

117,292
(10,561)

16,993

58,002

74,995

1,760

(258,735)

(4,446)

(2,802)

(21,090)

(285,312)

(58,115)

2,798

3,525

(775)

(52,567)

818,170

2,787 8,845,151

120,308

137,767

938,799

10,862,982

Cost

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

322

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

Property, plant and
equipment under IAS 16

Land

Technical
installations

Total assets

Total as of
January 1, 2022
Additions
Impairment
charges
Reversal of
impairment
Currency
translation
differences

Total
depreciation,
amortization
and
impairment as
of December
31, 2022

Total net book
value as of
December 31,
2022

(62,889)

(6,560)

(108)

(2,769,345)

(21,578)

(357,401)

(6,865)

(41,238)

79,206

859

801

(143,755)

(2,997,567)

(43,414)

(414,240)

(20,446)

(61,684)

7,643

8,502

5,367

85,266

(69,557)

(3,088,778)

(26,783)

(194,605)

(3,379,723)

748,613

2,787

5,756,373

93,525 137,767

744,194

7,483,259

The decrease in the contracted concessional assets cost was 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 offset the increase resulting from business combinations and the
additions for the year that primarily corresponded to investments in operating concessional assets
and assets under development or construction. The increase in accumulated depreciation,
amortization and impairment was 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” 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 was 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 as of December 31, 2022, in
accordance with IAS 36, Impairment of assets. As a result, an impairment test was performed using
historical level of output (generation), which resulted in the recording of an impairment loss of $41
million in 2022.

The impairment was recorded within the line “Depreciation, amortization and impairment charges”

323

of the consolidated profit and loss 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 was the value in use and amounted to $881 million for Solana, as of December
31, 2022.

No triggering event of impairment was identified in Solana as of December 31, 2023.

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 further decreased in 2023, the Company identified an impairment triggering event as of
December 31, 2023, 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 $16 million for Chile
PV1 ($8 million in 2022) and no impairment for Chile PV2 ($12 million in 2022).

The impairment has been recorded within the line “Depreciation, amortization and impairment
charges” of the consolidated profit and loss 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 $40 million for
Chile PV1 and $22 million for Chile PV2, as of December 31, 2023 ($58 million and $22 million
respectively 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 7.7% and 8.7% for Chile PV1 and 7.7% and 9.8% for Chile
PV2 (between 7.5% and 8.4% for Chile PV1 and 7.5% and 8.3% for Chile PV2).

The value of the net assets contributed by Chile PV1 and PV2 to these Consolidated Financial
Statements, excluding non-controlling interest, is close to nil as of December 31, 2023

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 $3 million. An increase of 50 basis points in the discount rate would lead to an
additional total impairment of approximately $2 million.

The Company did not identify any other triggering event of impairment of its contracted concessional
assets as of December 31, 2023 and 2022.

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, decreased by $13 million in the
year ended December 31, 2023, primarily in ACT following an improvement of its client’s credit risk
metrics (increased by $7 million in the year ended December 31, 2022, 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 2023 and 2022:

324

Investments in associates and joint ventures

Initial balance
Share of profit
Distributions
New entities carried under the equity method
Investment in associates classified as held for sale during the year (Note 8)

Others (incl. currency translation differences)

Final balance

2023
$‘000

260,031
13,207
(38,780 )
4,439
(10,194)
1,604
230,307

2022
$‘000

294,581
21,465
(57,537)
4,901
-
(3,379)
260,031

On October 30, 2023, the conditions to classify the investment in Pemcorp as held for sale were
met. As a consequence, the book value of the equity investment held by Atlantica in Pemcorp of
US$ 10.2 million is classified as held for sale in these Consolidated Financial Statements from that
date (Note 8).

Other variations in investments carried under the equity method in 2023 are primarily due to:

Distributions:

In 2023, the Company received distributions from Amherst Island Partnership for $17.3
million ($20.9 million in 2022), distributions from Vento II for $16.1 million ($32.6 million in
2022) and distributions from Honaine for $5.4 million ($4.0 million in 2022). A significant
portion of the distributions received from Amherst Island Partnership are distributed by the
Company to Algonquin Power Co. (Note 14).

New entities carried under the equity method

On March 1, 2023, Atlantica sold part of its equity interest in the Colombian portfolio of
renewable energy entities to a partner, which now holds a 50% equity interest. The
Colombian portfolio of renewable energy entities includes the following entities: Atlantica –
HIC Renovables S.A.S., SJ Renovables Sun 1 S.A.S., AC Renovables Sol 1 S.A.S., SJ Renovables
Wind 1 S.A.S., PA Renovables Sol 1 S.A.S. and Atlantica Hidro Colombia S.A.S. Atlantica and
the partner hold 50% of the shares each and have joint control over these entities in
accordance with IFRS 11, Joint arrangements. As a result, the subsidiaries, which were
previously fully consolidated showing 30% of non-controlling interest, are now recorded as
an investment in joint ventures under the equity method in these Consolidated Financial
Statements in accordance with IAS 28, Investments in Associates and Joint Ventures. The
carrying amount of the non-controlling interests in these entities were derecognized at the
date control was lost by Atlantica. Further to the sale of part of its equity interest, Atlantica
recorded a gain of $4.6 million as Other operating income in the year 2023 (Note 22).

Share of profit

The profit decreases in 2023 compared to 2022 primarily due to a lower profit at Vento II
resulting from lower production and a lower price at Lone Star II after its PPA expired in
January 2023.

In November 2022, Atlantica closed the acquisition of a 49% interest, with joint control, in Chile
PMGD, an 80 MW portfolio of solar PV assets in Chile, which is currently under construction (Note 1).
Chile PMGD is accounted for in these Consolidated Financial Statements using the equity method as
per IAS 28 – Investments in Associates and Joint ventures.

325

The tables below show a breakdown of stand-alone amounts of assets, revenues and profit and loss
as well as other information of interest for the years 2023 and 2022 for the entities carried under the
equity method:

%
Shares of
the
Company

Non-
current
assets

49.00 411,099

Company
2007 Vento II, LLC (1)

Other
non-
current
liabilitie
s
- 56,508

Current
assets
25,777

Project
debt

Other
current
liabilities Revenue
11,285 82,849

Operating
profit/
(loss)

Net
profit/
(loss)
21,024 19,752

Investment
under the
equity
method

175,351

Windlectric Inc (2)

30.00 284,618

30,884

- 159,406

77,389 21,514

8,515 (2,157)

1,910

Myah Bahr Honaine,

S.P.A.(3)

Akuo Atlantica PMGD
Holding S.P.A. (4)

Colombian portfolio

of renewable
energy entities

Pectonex, R.F.

Proprietary Limited

Evacuación

Valdecaballeros, S.L.

25.50 155,338

63,451 35,569 20,240

4,653 56,172

34,576 27,084

40,635

49.00

56,214

7,210 24,214 18,090

13,739

192

(75)

(83)

4,409

50.00

9,092

4,970

9,872

956

(587) 1,920

4,754

50.00

1,749

(149)

1,337

57.16

15,839

1,005

- 13,538

159

878

(59)

(91)

807

(46)

(68)

(1)

(18)

(1)

(15)

653

229

222

230,307

Atlantica SailH2, S.L.

50.00

499

333

165

40.02

2,218

1,308

181

Evacuación Villanueva

del Rey, S.L.

Liberty

Infraestructuras S.L.

20.00

357

Fontanil Solar, S.L.U.

25.00

328

Murum Solar, S.L.U.

25.00

266

As of December 31,

2023

354

314

326

%
Shares
of the
Company

Non-
current
assets

Current
assets

Project
debt

Other
non-
current
liabilities

Other
current
liabilities

Revenu
e

Operatin
g
profit/
(loss)

Net
profit/
(loss)

Investment
under the
equity
method

49.00

30.00

435,02
9

278,50
4

25.50

150,62
3

14,198

57,596 11,515 103,362 42,662

40,992 181,735

3,338

167,519 43,227 24,996 10,560

(15)

18,935

66,246 43,579

18,902

4,257 55,267 33,374

26,768

42,128

49.00 14,814

2,828

8,755

326

(348)

4,450

30.00 138,931 112,352 159,382

90,474

4,328 45,625 1,680

(17,747) 10,034

50.00 2,045

- (168)

(168 )

1,411

57.16 15,551

1,020

13,635

232

860

(60)

(89 )

858

40.02 2,317

1,386

111

20.00

283

25.00

117

25.00

228

(22 )

(1)

(2)

229

180

(1)

(5)

222

260,031

Company
2007 Vento II,

LLC (1)

Windlectric
Inc (2)

Myah Bahr
Honaine,
S.P.A.(3)

Akuo Atlantica

PMGD Holding
S.P.A. (4)

Pemcorp SAPI de

CV (5)

Pectonex, R.F.
Proprietary
Limited

Evacuacion

Valdecaballeros,
S.L.

Evacuacion

Villanueva del
Rey, S.L

Liberty

Infraestructuras
S.L.

Fontanil Solar,

S.L.U.

Murum Solar,

S.L.U.

As of December 31,

2022

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. Share of
profit of 2007 Vento II, LLC. included in these Consolidated Financial Statements amounts to $9.7 million in 2023 and
$20.1 million in 2022.

327

(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 $6.9 million in 2023 and
$6.8 million in 2022.

(4) Akuo Atlantica PMGD Holding S.P.A. is the holding company of a 80 MW portfolio of solar PV assets in Chile, which
is currently under construction, 49% owned by Atlantica, with joint control since November 2022 and accounted for under
the equity method in these Consolidated Financial Statements.

(5) Pemcorp SAPI de CV, Monterrey´s project entity, is 100% owned by Arroyo Netherlands II B.V., which was accounted
for under the equity method in the Consolidated Financial Statements as of December 31, 2022. Arroyo Netherlands II
B.V. is 30% owned by Atlantica. The investment held by Atlantica in Pemcorp has been classified as held for sale in these
Consolidated Financial (Note 8). Share of profit of Pemcorp SAPI de CV included in these Consolidated Financial
Statements amounts to a $0.2 million profit in 2023 and a $5.3 million loss in 2022.

8. Assets held for sale

In 2023, the Atlantica´s partner in Monterrey initiated a process to sell its 70% stake in the asset. Such
process is well advanced and, as part of it, Atlantica intends to sell its interest as well under the same
terms. The net proceeds to Atlantica are expected to be in the range of $45 to $52 million, after tax.
The transaction is subject to certain conditions precedent and final transaction closing and is
expected to be completed in 2024. On October 30, 2023, the conditions to classify the loan granted
by Atlantica to Arroyo II and the investment in Pemcorp as held for sale were met. As a consequence,
the book value of the equity investment held by Atlantica in Pemcorp of $10.2 million (Note 7) and
the loan granted by Atlantica to Arroyo II of $18.5 million (Note 11) as of December 31, 2023, were
classified as held for sale in these Consolidated Financial Statements since that date.

Share of profit in Pemcorp is not reflected since October 30, 2023, in these Consolidated Financial
Statements according to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The
loan granted by Atlantica to Arroyo II, shall continue to be measured in accordance with IFRS 9, at
amortized cost, and the interests accrued classified as financial income in the profit and loss
statement until closing of the sale occurs.

9. 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, 2023 and 2022 are as follows:

328

Fair value
through Other
Comprehensive
Income
$´000

Amortized
Cost
$’000

-
-

177,407

286,483
448,301
74,645
986,836

1,084,838

4,319,260
82,366

141,713
-

5,628,177

-
11,719

-
-
-
11,719

-
-

Fair value
through Other
Comprehensive
Income
$´000

Amortized
Cost
$’000

-
-

186,841

200,334
600,990
71,949
1,060,114

1,017,200

4,553,052
63,076

140,230
-

5,773,558

-
15,959

-
-
-
15,959

-
-

Fair value
through
profit or loss
$’000

Balance as of
12.31.23
$’000

61,697
-

61,697
11,719

177,407

-
-
-
61,697

286,483
448,301
74,645
1,060,252

1,084,838

4,319,260
82,366

-
29,957

141,713
29,957

29,957

5,658,134

Fair value
through
profit or loss
$’000

Balance as of
12.31.22
$’000

97,381
-

97,381
15,959

186,841

-
-
-
97,381

200,334
600,990
71,949
1,173,454

1,017,200

4,553,052
63,076

-
16,847

140,230
16,847

16,847

5,790,405

Notes
10

12
13

16
17

18
10

Notes
10

12
13

16
17

18
10

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 (**)

liabilities

Project debt (**)
Lease
portion)
Trade and other current liabilities
Derivative liabilities

(non-current

Total financial liabilities

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 (**)

liabilities

Project debt (**)
Lease
portion)
Trade and other current liabilities
Derivative liabilities

(non-current

Total financial liabilities

(*) 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 94% and 92% respectively as of December 31,
2023 (96% and 92% respectively as of December 31, 2022).

329

Other financial assets as of December 31, 2023 and December 31, 2022, include, among others, loans
to entities accounted for under the equity method in these Consolidated Financial Statements (Note
11) 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.

10. Derivative Financial Instruments

The breakdowns of the fair value amount of the derivative financial instruments as of December 31,
2023 and 2022 are as follows:

Interest rate cash flow hedge

Foreign exchange derivatives instruments

Notes conversion option (Note 15)

Total

Balance as of 12.31.23

Balance as of 12.31.22

Assets
$’000

Liabilities
$’000

Assets
$’000

Liabilities
$’000

60,102

1,595

29,163

794

94,192

3,189

61,697

29,957

97,381

12,159

4,688

16,847

The derivatives are primarily interest rate cash-flow hedges. Almost all of them 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, 2023,
approximately 92% of the Project debt and 94% of the Corporate debt of the Company either has
fixed interest rates or has been hedged with swaps or caps (92% and 96%, respectively, as of
December 31, 2022).

The table below shows a breakdown of the maturities of notional amounts of interest rate cash flow
hedge derivatives as of December 31, 2023 and 2022.

330

Notionals

Up to 1 year
Between 1 and 2 years
Between 2 and 3 years
Subsequent years

Balance as of 12.31.23
$’000

Balance as of 12.31.22
$’000

Assets

Liabilities

Assets

Liabilities

248,898
279,215
314,644
523,564

43,013
95,701
104,848
264,563

245,147
310,393
217,498
659,186

47,029
102,476
112,855
280,016

Total

1,366,321

508,125

1,432,224

542,376

The table below shows a breakdown of the maturity of the fair values of interest rate cash flow hedge
derivative as of December 31, 2023 and 2022.

Fair value

Up to 1 year
Between 1 and 2 years

Between 2 and 3 years

Subsequent years

Total

Balance as of 12.31.23
$’000

Balance as of 12.31.22
$’000

Assets

Liabilities

Assets

Liabilities

3,957

10,124

12,070
33,951

(1,740)

(5,347)

(5,848)
(16,228)

10,868

17,860

12,257
53,207

(991)

(2,189)

(2,851)
(6,128)

60,102

(29,163)

94,192

(12,159)

The net amount of the fair value of interest rate derivatives designated as cash flow hedges
transferred to the consolidated profit and loss statement in 2023 is a profit of $27.1 million (loss of
$38.2 million in 2022).

The after-tax result accumulated in equity in connection with derivatives designated as cash flow
hedges at the years ended December 31, 2023 and 2022, amounts to a $308.0 million gain and a
$345.6 million 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 profit and loss statement.

Finally, the conversion option of the Green Exchangeable Notes issued in July 2020 (Note 15) is
recorded as a derivative with a fair value (liability) of $0.8 million as of December 31, 2023 ($4.7
million as of December 31, 2022).

11. Related Party Transactions

The related parties of the Company are primarily Algonquin and its subsidiaries, non-controlling

331

interests (Note 14), entities accounted for under the equity method (Note 7) as well as the Directors
and the Senior Management of the Company.

Details of balances with related parties as of December 31, 2023 and 2022 are as follows:

As of
December
31,

Receivables
(current)

Receivables
(non-
current)

Payables
(current)

Payables
(non-
current)

Investments carried under the
equity method:

Arroyo Netherland II B.V (Note 8)

Amherst Island Partnership

Akuo Atlantica PMGD Holding

Colombian assets portfolio

Other

Non controlling interest:

Algonquin

JGC Corporation

Other

Other related parties:

Atlantica´s partner in Colombia

Total

2023
2022
2023
2022
2023
2022
2023
2022
2023
2022

2023
2022
2023
2022
2023
2022

2023
2022

18,448
1,097
5,817
-
-
-
-
-
21
127

-
-
-
-
-
-

918
-

25,204
1,224

-
17,006
-
-
16,677
504
13,578
-
148
-

-
-
-
-
-
-

-
-

30,403
17,510

-
-
-
-
-
-
-
-
-
-

5,683
4,762
-
-
2,314
1,311

-
-

8,031
6,073

-
-
-
-
-
-
-
-
-
-

-
-
4,612
6,088
27
-

-
-

4,639
6,088

Receivables with Arroyo Netherland II B.V, the holding company of Pemcorp SAPI de CV, Monterrey´s
project entity, correspond to the loan that was granted at acquisition date of the project and accrues
an interest of SOFR plus 6.31% with maturity date on November 25, 2027. As of December 31, 2023,
the loan is classified as current receivable as it is accounted for as assets held for sale in these
Consolidated Financial Statements (Note 8).

Current receivables with Amherst Island Partnership as of December 31, 2023 include a dividend to
be collected by AYES Canada for $5.8 million.

Non-current receivables include a loan that accrues a fixed interest of 8.75% with Akuo Atlantica
PMGD Holding S.P.A and a loan with the Colombian portfolio of renewable energy entities in which
the Company has a 50% equity interest, which accrues a fixed interest of 8%.

Current payables primarily include the dividend to be paid by AYES Canada to Algonquin.

Non-current payables with JGC Corporation 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.

332

Current receivables with the partner of the Company in Colombia include Atlantica´s pending
purchase price payment to be received for the partial sale of its investment in the Colombian portfolio
of renewable energy entities (Note 7).

The transactions carried out by entities included in these Consolidated Financial Statements with
related parties for the years ended December 31, 2023 and 2022 have been as follows:

Investments carried under the equity
method:

Arroyo Netherland II B.V

Akuo Atlantica PMGD Holding

Colombian assets portfolio

Other

Non controlling interests:

Other

Total

Financial
income

Financial
expense

Operating
income

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

2023

2022

1,845

1,275

607

588

3,040

1,298

(471)

(153)

(471)

(153)

316

325

The total amount of the remuneration received by the Board of Directors of the Company, including
the CEO, amounts to $4.0 million in 2023 ($5.7 million in 2022), including $0.9 million of annual bonus
($0.9 million in 2022) and $1.0 million of long-term award vested in 2023 ($3.0 million in 2022). The
decrease of the total remuneration in 2023 is mainly due to a decrease in the amount of share options
exercised in 2023 compared to 2022, and to the decrease of Atlantica’s share price from the date of
such awards being granted. Share options awarded in 2020 and 2021 under the incentive plans that
vested in 2023 were underwater and thus not exercised. None of the directors received any pension
remuneration in 2023 nor 2022.

12. Trade and Other Receivables

Trade and other receivables as of December 31, 2023 and 2022, consist of the following:

Trade receivables

Tax receivables

Prepayments

Other accounts receivable

Total

Balance as of December
31, 2023
$’000

Balance as of December
31, 2022
$’000

213,345

37,134

12,717

23,287

286,483

125,437

45,680

11,827

17,390

200,334

333

The increase in trade receivables is primarily due to collections pending from the Spanish state-owner
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. The Company experienced delays in collections from
Pemex, especially since the second half of 2019, which have been significant in certain quarters,
including in the fourth quarter of 2023.

During the year 2022, in the assets in Spain, the Company collected revenue in line with the parameters
corresponding to the regulation in place at the beginning of the year 2022, as the new parameters,
reflecting lower revenue, became final on December 14, 2022. As a result, as of December 31, 2022,
trade receivables in the assets in Spain were lower than usual. During the year 2023, collections at
these assets in Spain were regularized.

As of December 31, 2023, and December 31, 2022, the fair value of trade and other receivables
accounts does not differ significantly from its carrying amount.

Trade receivables in foreign currency as of December 31, 2023 and 2022, are as follows:

Euro

South African Rand

Chilean Peso

Mexican peso

Other

Total

Balance as of
December 31, 2023
$’000

Balance as of December
31, 2022
$’000

53,012

4,431

4,557

4,376

66,376

4,088

23,416

5,037

1,298

2,676

36,515

The increase in trade receivables in Euro is primarily due to collections pending from the CNMC. Trade
receivables in South African Rand decreased due to the unscheduled outage in Kaxu since the end of
September 2023 (Note 22).

13. Cash and Cash Equivalents

The following table shows the detail of Cash and cash equivalents as of December 31, 2023 and 2022:

Cash at bank and on hand - non-restricted
Cash at bank and on hand - restricted

2023
$’000

271,329
176,972

2022
$’000

393,430
207,560

Total

448,301

600,990

Cash includes funds held to satisfy the customary requirements of certain non-recourse debt
agreements within the Company´s projects (Note 16) amounting to $177 million as of December 31,
2023 ($208 million as of December 31, 2022).

The following breakdown shows the main currencies in which cash and cash equivalent balances are
denominated:

334

US Dollar
Euro
South African Rand
Mexican Peso
Algerian Dinar
Others

2023
$’000

2022
$’000

266,200
102,820
30,908
13,455
21,168
13,750

309,756
217,675
36,137
4,010
24,727
8,685

448,301

600,990

14. Equity

As of December 31, 2023, the share capital of the Company amounts to $11,615,905 ($11,605,513 as
of December 31, 2022) represented by 116,159,054 ordinary shares (116,055,126 shares as of
December 31, 2022) 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, 2023. 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.

The Company accounts for its existing long-term incentive plans granted to employees as equity-
settled in accordance with IFRS 2, Share-based Payment when incentives are being settled in shares.
During the year 2023, the Company issued 103,928 new shares (228,560 new shares during the year
2022) to its employees to settle a portion of these plans.

On February 28, 2022, the Company established a new “at-the-market program” which replaced its
previous 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. During the year 2023, the Company did not sell any shares
under this program. During the year 2022, the Company sold 3,423,593 shares at an average market
price of $33.57 pursuant to its distribution agreement, representing net proceeds of $114 million.

Atlantica´s reserves as of December 31, 2023 are made up of share premium account and capital
reserves. The share premium account reduction by $250 million during the year 2023, increasing
capital reserves by the same amount, was made effective upon the confirmation received on June 26,
2023 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 interest fully relate to interest 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

335

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.

Additional information of subsidiaries including material non-controlling interest as of December 31,
2023, and 2022, is disclosed in Appendix IV.

Dividends declared during the year 2023 and the first quarter of 2024 by the Board of Directors of
the Company were as follows:

Declared

Payable

February 29, 2024
November 7, 2023
July 31, 2023
May 4, 2023
February 28, 2023

March 22, 2024
December 15, 2023
September 15, 2023
June 15, 2023
March 25, 2023

Amount ($) per
share

0.445
0.445
0.445
0.445
0.445

Dividends declared during the year 2022 by the Board of Directors of the Company were as follows:

Declared

Payable

Amount ($) per
share

November 8, 2022
August 2, 2022
May 5, 2022
February 25, 2022

December 15, 2022
September 15, 2022
June 15, 2022
March 25, 2022

0.445
0.445
0.44
0.44

In addition, the Company declared dividends and distributions in 2023 to non-controlling interest
primarily to Algonquin (interest in Amherst through AYES Canada, see Note 7) for $16.6 million ($20.4
million in 2022), Itochu Corporation for $6.9 million ($3.5 million in 2022), Algerian Energy Company
for $6.7 million ($5.4 million in 2022) and IDC and Kaxu Community Trust for $1.2 million ($5.8 million
in 2022).

In 2023, Chile PV 3 received a capital contribution of $19.5 million from the financial partners (Non-
controlling interest) through the renewable energy platform of the Company in Chile to install
batteries in the asset (Note 1).

As of December 31, 2023 and December 31, 2022, there was no treasury stock and there have been
no transactions with treasury stock during the years then ended.

15. Corporate Debt

The breakdown of the corporate debt as of December 31, 2023 and 2022 is as follows:

Non-current

Current

Total Non-current

Balance as of
December 31, 2023
$’000

Balance as of
December 31, 2022
$’000

1,050,816

34,022

1,084,838

1,000,503

16,697

1,017,200

336

On July 20, 2017, the Company signed a credit facility (the “2017 Credit Facility”) for up to €10.0 million
($11.0 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 SOFR plus 2%, depending on the currency, with a floor of
0% on the EURIBOR and SOFR. As of December 31, 2023, $9.9 million has been drawn down ($6.4
million as of December 31, 2022). As of December 31, 2022, the credit facility maturity was July 1,
2024. On August 7, 2023, the available amount under the 2017 Credit Facility has been increased to
€15.0 million ($16.6 million) and the maturity extended to July 1, 2025.

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. Since then, the amount of the Revolving Credit Facility
increased to $450 million. On May 30, 2023, the maturity was extended to December 31, 2025. On
December 31, 2023, $55 million were drawn down ($30 million as of December 31, 2022). On
December 31, 2023, the Company issued letters of credit for $17 million ($35 million as of December
31, 2022). As of December 31, 2023, therefore, $378 million of the Revolving Credit Facility were
available ($385 million as of December 31, 2022).

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 was extended for annual periods until October 2023. The program allowed
Atlantica to issue short term notes over the next twelve months for up to €50 million ($55 million),
with such notes having a tenor of up to two years. On November 21, 2023, the Company filed a new
program that allows Atlantica to issue short term notes for up to €100 million, with such notes having
a tenor of up to two years and the program maturity has been extended twelve months. As of
December 31, 2023, the Company had €23.3 million ($25.7 million) issued and outstanding under the
program at an average cost of 5.23% (€9.3 million, or $10.1 million, as of December 31, 2022).

On April 1, 2020, the Company closed the secured 2020 Green Private Placement for €290 million
($320 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 $155 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 initially entered into
a cap at 0% for the EURIBOR with 3.5 years maturity and in December 2023, into a cap at 4% to hedge
the variable interest rate risk with maturity on December 31, 2024.

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

337

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.
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 10). 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.
This instrument is classified as Level 2 in the fair value hierarchy (Note 2.7) based on the observable
inputs used for the calculation of its fair value. The valuation technique used is a Monte Carlo which
uses regressions to estimate, given a stock price level, the continuation value of the instrument. 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 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 May 10, 2023, the Company entered into a senior unsecured $50 million line of credit with Export
Development Canada with a 3-year maturity. Loan under the credit line accrues interest at a rate per
annum equal to Term SOFR plus a percentage determined by reference to the leverage ratio of the
Company, ranging between 2.46% and 3.11%, with a floor of 0.00% for the Term SOFR. The facility
matures on May 25, 2026, and was fully available as of December 31, 2023.

Since 2020, the Company entered into loans with different banks as follows:

- a €5 million ($5.5 million) loan on December 4, 2020, which accrues interest at a rate per year
equal to 2.50%. The maturity date is December 4, 2025.

- a €5 million ($5.5 million) loan on January 31, 2022, which accrues interest at a rate per year
equal to 1.90%. The maturity date is January 31, 2026.

- a €7 million ($7.7 million) loan on February 24, 2023, which accrues interest at a rate per year
equal to 4.21%. The maturity date is February 24, 2028.

The repayment schedule for the Corporate debt at the end of 2023 is as follows:

338

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

2024

2025

2026

2027

2028

Total

13
261
25,691
174
-
2,108
963
4,812
34,022

9,876
54,427
-
-
-
110,020
-
4,736
179,059

-
-
-
318,668
-
-
-
2,288
320,956

-
-
-
-
152,356
-
-
1,642
153,998

-
-
-
-
-
-
395,964
839
396,803

9,889
54,688
25,691
318,842
152,356
112,128
396,927
14,317
1,084,838

The repayment schedule for the Corporate debt at the end of 2022 was as follows:

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

2023

2024

2025

2026

2027

Subsequent
years

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

-
-
-
-
147,257
-
-
-

147,257

-
-
-
-
-
-
395,060
-
395,060

Total

6,431
29,499
9,937
308,812
147,257
109,162
396,024
10,078
1,017,200

The following table details the movement in corporate debt for the year 2023:

Balance as of December 31, 2022
Nominal increase
Nominal repayment
Interest payment
Total cash changes
Interest accrued
Currency translation differences
Other non-cash changes
Reclassifications
Total non-cash changes
Balance as of December 31, 2023

Corporate debt -
long term
$’000

Corporate debt -
short term
$’000

Total
$’000

1,000,503
35,648
-
-
35,648
-
15,037
5,055
(5,427)
14,665
1,050,816

16,697 1,017,200
126,537 162,185
(115,891) (115,891)
(40,573)
(40,573)
(29,927)
5,721
40,570
40,570
1,255
16,292
-
5,055
5,427
-
61,917
47,252
34,022 1,084,838

The following table details the movement in corporate debt for the year 2022:

339

Balance as of December 31, 2021
Nominal increase
Nominal repayment
Interest payment
Total cash changes
Interest accrued
Currency translation differences
Other non-cash changes
Reclassifications
Total non-cash changes
Balance as of December 31, 2022

16. Project debt

Corporate debt -
long term
$’000

Corporate debt -
short term
$’000

Total
$’000

995,190
35,574
(1,323)
-
34,251
-
(29,419)
4,146
(3,665)
(28,938)
1,000,503

27,881 1,023,071
101,140
65,566
(80,519)
(79,196)
(38,117)
(38,117)
(17,496)
(51,747)
38,321
38,321
(30,842)
(1,423)
4,146
-
3,665
-
11,625
40,563
16,697 1,017,200

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 (Note 13) for an
amount of $177 million as of December 31, 2023 ($208 million as of December 31, 2022).

The variations in 2023 of project debt have been the following:

Project debt -
long term
$’000

Project debt -
short term
$’000

Total
$’000

4,226,518
213,232
(4,768)
-
208,464
-
28,808
35,024
(566,941)
(503,109)
3,931,873

326,534
-
(513,576)
(227,145)
(740,721)
227,418
7,150
65
566,941
801,574
387,387

4,553,052
213,232
(518,344)
(227,145)
(532,257)
227,418
35,958
35,089
-
298,465
4,319,260

The decrease in total project debt as of December 31, 2023, is primarily due to the repayment of
project debt for the period in accordance with the financing arrangements.

The Company refinanced the Solaben 2&3 assets in March 2023, entering into two green senior euro-
denominated loan agreements for the two assets with a syndicate of banks for a total amount of

340

€198.0 million. The new project debt replaced the previous project loans for a similar amount and
maturity was extended from December 2030 to June 2037.

Chile PV 1 and Chile PV 2, where the Company owns a 35% equity interest, were not able to maintain
the minimum required cash in its debt service reserve account during the year 2023 due to low
electricity prices, which represents an event of default as of December 31, 2023. As a result, although
the Companies do not expect an acceleration of the debts to be declared by the credit entities, Chile
PV 1 and Chile PV 2 did not have an unconditional right to defer the settlement of the debt for at least
twelve months and the project debts, which amount to $50 million and $21 million as of December
31, 2023, respectively, were classified as current in these Consolidated Financial Statements in
accordance with International Accounting Standards 1 (“IAS 1”), “Presentation of Financial
Statements”.

The variations in 2022 of project debt have been the following:

Project debt -
long term
$’000

Project debt -
short term
$’000

Total
$’000

Balance as of December 31, 2021
Nominal repayment
Interest payment
Total cash changes
Interest accrued
Business combination (Note 5)
Currency translation differences
Other non-cash changes
Reclassifications
Total non-cash changes
Balance as of December 31, 2022

4,387,674
(73,478)
-
(73,478)
-
1,301
(119,068)
39,161
(9,072)
(87,678)
4,226,518

648,519 5,036,193
(310,629) (384,107)
(232,855) (232,855)
(543,484) (616,962)
230,237 230,237
1,449
(18,040) (137,108)
39,243
-
221,499 133,821
326,534 4,553,052

82
9,072

148

The decrease in total project debt as of December 31, 2022 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, 2021.

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 was reclassified as non-current in accordance with the financing agreements.

The repayment schedule for project debt in accordance with the financing arrangements as of
December 31, 2023, and assuming there would be no acceleration at the Chile PV 1 and Chile PV 2
debts as of December 31, 2023, is as follows and is consistent with the projected cash flows of the
related projects:

341

2024
Interest
Payment
15,215

Nominal
repayment
305,087

2025

2026

2027

2028

Subsequent
years

Total

325,303

352,495

499,968

464,648

2,356,544

4,319,260

The repayment schedule for project debt in accordance with the financing arrangements was as
follows and was 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 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, 2023
$’000

Balance as of December 31, 2022
$’000

1,571,369
233,854
76,277

1,881,500

1,633,790
277,492
86,739

1,998,021

All of the Company’s financing agreements have a carrying amount close to its fair value.

17. Grants and Other Liabilities

Balances as of
December 31, 2023
$’000

Balances as of
December 31, 2022
$’000

Grants
Other liabilities and provisions
Dismantling provision
Lease liabilities
Accruals on Spanish market prices
differences
Other

852,854
380,954
155,279
82,366

98,820
44,489

911,593
340,920
140,595
63,076

91,884
45,365

Grant and other non-current liabilities

1,233,808

1,252,513

As of December 31, 2023, 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 $578
million ($610 million as of December 31, 2022), 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 $273 million ($299 million as of December 31,

342

2022). 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
$58.6 million for the years ended December 31, 2023 and 2022, respectively (Note 22).

The increase in Other liabilities and provisions in 2023 is primarily due to the accretion expense
recognized in the year when updating the present value of these liabilities.

The “Accruals on Spanish market prices differences” corresponds to the differences that occur in each
financial year between revenue from the sale of energy at the estimated price determined by the
Administration in Spain in accordance with the reasonable profitability scheme determined by law,
and the revenue from the sale of energy at the actual average market price in the year. These market
price differences are regularized through the compensation and adjustment of the parameters which
serve as a basis for calculating the regulated revenue compensation to be received from the
Administration in Spain over the remaining regulatory life of the solar assets of the Company to
obtain the guaranteed profitability for each solar asset. Current portion amounts to $12.5 million as
of December 31, 2023 and $11.9 million as of December 31, 2022 (Note 18).

The maturity of Other liabilities and provisions as of December 31, 2023 and 2022 is as follows:

As of December 31,
2023
Other liabilities and
provisions

Total

As of December 31,
2022
Other liabilities and
provisions

Total

2024

2025

2026

2027

2028

Subsequent

380,954

26,503

21,714

22,975

22,367

287,395

26,503

21,714

22,975

22,367

287,395

Total

2023

2024

2025

2026

2027

Subsequent

340,920

26,393

20,096

20,561

20,867

253,003

26,393

20,096

20,561

20,867

253,003

18. Trade Payables and Other Current Liabilities

Item

Trade accounts payables
Accruals on Spanish market prices
differences (Note 17)
Down payments from clients and
other deferred income
Other accounts payables

Total

Balance as of December 31, 2023
$’000

Balance as of December 31, 2022
$’000

77,266
12,475

16,905

35,067

141,713

84,465
11,936

11,169

32,660

140,230

Trade accounts payables mainly relate to the operation and maintenance of the plants owned by the
Company.

343

Nominal values of trade payables and other current liabilities are considered to approximately equal
fair values and the effect of discounting them is not significant.

19. 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 ent 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 profit and loss 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, 2023, and 2023, the analysis of deferred tax assets and deferred tax liabilities is as
follows:

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

2023

2022

478,179
158,201
6,855
20,800

442,415
134,328
3,461
5,895

664,035

586,099

Balance as of December 31,
$’000

2023

2022

589,111
154,875
12,989
17,353

524,363
186,536
19,034
2,991

Total deferred tax liabilities

774,328

732,924

After offsetting deferred tax assets and deferred tax liabilities, where applicable, the resulting net
amounts presented on the consolidated statement of financial position are as follows:

344

Consolidated statement of financial
position classifications

Balance as of December 31,
$’000

Deferred tax assets

Deferred tax liabilities

Net deferred tax liabilities

2023

2022

160,995
271,288

149,656
296,481

110,293

146,825

Most of the NOL´s recognized as deferred tax assets correspond to the entities in the U.S. for $310
million, South Africa for $46 million, Peru for $46 million, Chile for $38 million and Spain for $33
million as of December 31, 2023 ($278 million, $53 million, $46 million, $35 million and $28 million
as of December 31, 2022, respectively).

As of December 31, 2023, 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 $93 million and in the U.S. assets for $49 million ($94 million and $25 million as of December 31,
2022, respectively).

As of December 31, 2023, deferred tax liabilities for accelerated tax amortization are primarily in the
U.S. assets for $339 million, the solar plants in Spain for $173 million and Kaxu for $55 million ($274
million, $173 million and $63 million as of December 31, 2022, respectively).

Deferred tax liabilities for other temporary differences between the tax and book value of contracted
concessional assets relate primarily to the U.S. entities for $43 million, the Peruvian entities for $39
million, ACT for $34 million and the Chilean entities for $27 million as of December 31, 2023 ($51
million, $37 million, $56 million, and $27 million as of December 31, 2022, 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 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 utilized. Unrecognized deferred tax
assets are re-assessed at each annual closing date and are recognized 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 $448 million of unrecognized net operating loss carryforwards as of
December 31, 2023 ($477 million as of December 31, 2022), 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, 2023 and
2022 were as follows:

345

Deferred tax assets

As of December 31, 2021
Increase/(decrease) through the consolidated profit and loss statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Currency translation differences and other

As of December 31, 2022

Increase/(decrease) through the consolidated profit and loss statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Currency translation differences and other

As of December 31, 2023

Deferred tax liabilities

As of December 31, 2021
Increase/(decrease) through the consolidated profit and loss statement
Business combinations (Note 5)
Currency translation differences and other

As of December 31, 2022

Increase/(decrease) through the consolidated profit and loss statement
Increase/(decrease) through other consolidated comprehensive income (equity)
Currency translation differences and other

As of December 31, 2023

Details of income tax for the years ended December 31, 2023 and 2023 are as follows:

Amount

172,268
29,197
(46,344)
(5,465)

149,656

7,327
2,207
1,805

160,995

Amount

308,859
(19,864)
17,608
(10,122)

296,481

(27,055)
(5,830)
7,692

271,288

Current tax
Deferred tax

Year ended 2023
$’000

Year ended 2022
$’000

(35,172)
34,382

)
)

(39,372)
49,061

relating to the origination and reversal of temporary
differences

Total income tax (expense)/income

34,382
(790)

49,061
9,689

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
profit and loss statements for the years ended December 31, 2023 and 2023, are as follows:

346

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
Permanent differences
Other adjustments to taxable income and expense

Year ended 2023
$’000

Year ended 2022
$’000

37,238
25%
(9,310)
3,302
(4,270)
(11,070)
17,493

3,065

(11,776)
25%
2,944
5,366
(4,296)
(10,944)
3,957

12,662

Corporate income tax

(790)

9,689

Uncertain tax positions as of December 31, 2023 and 2022 have been analyzed 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.

20. 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, 2023 and 2022:

2023
$’000

Corporate debt
(Note 15)
Loans with credit
institutions (project
debt) (Note 16)
Notes and bonds
(project debt) (Note
16)
Purchase
commitments (*)
Accrued interest
estimate during the
useful life of loans

Total

2024

2025

2026

2027

2028

Subsequent

1,084,838

34,022

179,059

320,956

153,998

396,803

3,393,767

265,649

273,015

298,527

443,503

406,282

1,706,791

925,493

54,653

52,288

53,968

56,465

58,366

649,753

713,509

81,868

52,814

47,164

51,768

45,243

434,652

1,717,831

264,223

257,379

224,032

198,073

161,346

612,778

347

2022
$’000

Total

2023

2024

2025

2026

2027

Subsequent

1,017,200

16,697

38,932

110,179

309,075

147,257

395,060

3,595,671

273,556

275,105

391,770

305,616

449,653

1,899,971

957,381

52,978

48,626

51,150

52,828

55,301

696,498

823,856

96,847

99,597

54,747

51,058

56,852

464,755

1,821,915

264,626

248,794

229,142

203,961

179,386

696,006

* Purchase commitments include lease commitments for lease arrangements accounted for under IFRS 16 for $135.1 million as
of December 31, 2023 ($112.0 million as of December 31, 2022), of which $9.4 million is due within one year and $125.7 million
thereafter as of December 31, 2023 ($7.9 million due within one year and $104.1 million thereafter as of December 31, 2022).

Third-party guarantees

As of December 31, 2023, 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 $83.2 million ($88.0 million as of December 31, 2022). In addition, Atlantica Sustainable
Infrastructure plc or other holding entities on its behalf, had outstanding guarantees amounting to
$239.8 million as of December 31, 2022 ($216.9 million as of December 31, 2022), 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.

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.

348

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 2, 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.

21. Staff Costs

The average number of employees (including executive directors) was:

Executives

Middle Managers

Engineers and Graduates

Assistants and Professionals

Plant technicians

Their aggregate remuneration comprised:

Wages and salaries

Social security costs

Other staff costs

2023

2022

Number

123

287

815

1,304

132

234

449

874

Year ended 2023
$000

Year ended 2022
$000

(84,150)

(13,453)

(6,480)

(67,453)

(7,841)

(4,938)

(104,083)

(80,232)

The increase in employee benefit expenses in 2023 and 2022 is primarily due to the internalization
of operation and maintenance services in the solar assets in Spain during 2022 and 2023, 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 $7.3 million
in 2023 ($10.8 million in 2022), including $1.9 million (2022: $5.8 million) of long-term awards
received. Furthermore, information about the remuneration of individual directors’ is provided in the
audited part of the Directors' Remuneration Report.

349

22. Other Operating Income and Expenses

The table below shows the detail of Other operating income and expenses for the years ended
December 31, 2023, and 2022:

Other Operating income

Grants

Income from various services and insurance proceeds

Income from construction services for contracted
concessional assets of the Company accounted for
under IFRIC 12

For the year ended
December 31, 2023
$’000

For the year ended
December 31, 2022
$’000

58,742

35,731

6,614

59,056

21,726

Total

101,087

80,782

Other Operating Expenses
Raw materials and consumables used
Leases and fees
Operation and maintenance
Independent professional services
Supplies
Insurance
Levies and duties
Other expenses
Construction costs from construction services for
contracted concessional assets of the Company
accounted for under IFRIC 12

For the year ended
December 31, 2023
$’000

For the year ended
December 31, 2022
$’000

(35,380)
(14,403)
(130,442)
(30,656)
(37,822)
(41,087)
(15,031)
(25,187)

(6,614)

(19,639)
(11,512)
(140,382)
(38,894)
(59,336)
(45,756)
(19,764)
(15,965)

Total

(336,622)

(351,248)

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 17).

Insurance proceeds and other includes $15.3 million of insurance income in 2023 related to an
unscheduled outage in Kaxu further to a problem found in the turbine. The Company expects to
receive compensation from the insurance company to cover part of the damage and business
interruption of the plant. In addition, it includes a gain of $4.6 million related to the sale of part of
Atlantica´s equity interest in the Colombian portfolio of renewable energy entities (Note 7).

Income and costs from construction services correspond to the projects ATN Expansion 3 and ATS
Expansion 1, which are currently under construction. Given that these projects are included within
the scope of IFRIC 12 (intangible assets), the Company has recorded the income and the cost of
construction in the consolidated statement of profit or loss (Note 2.3).

350

The decrease in other operating expenses in 2023 is primarily due to:

the internalization of the O&M services in the solar assets in Spain during 2022 and 2023.
These services are now provided by employees of Atlantica, whose cost is classified within
the line “Employee benefit expenses” of the profit and loss statement; and
the lower cost of supplies due to lower prices of electricity in the solar assets in Spain in
2023.

23. Financial Expense, net

The following table sets forth financial income and expenses for the years ended December 31, 2023
and 2022:

Financial income

Interest income on deposits and current accounts

Interest income from loans and credits

Interest rates gains on derivatives: cash flow hedges

TOTAL

Financial expense

Interest on loans and notes

Interest rates gains/(losses) on derivatives: cash flow hedges

TOTAL

For the year ended
December 31, 2023
$’000

For the year
ended December
31, 2022
$’000

21,715

2,942

350

25,007

7,740

1,299

1,110

10,149

For the year ended
December 31, 2023
$’000

For the year
ended December
31, 2022
$’000

(350,347)

26,598

(292,043)

(38,402)

(323,749)

(330,445)

Interest income on deposits and current accounts increased in 2023 mostly due to higher
remuneration of deposits resulting from higher interest rates.

Interest expense on loans and notes primarily include interest on corporate and project debt which
increase in 2023 is primarily due to the increase in variable spot interest rates. Considering interest
gains on hedge instruments of such loans and notes, total interest decreased in 2023, which is
primarily due to the repayment of project and corporate debt in accordance with the financing
arrangements.

Gains and losses from interest rate derivatives designated as cash flow hedges primarily correspond
to transfers from equity to financial income or expense when the hedged item impacts the
consolidated profit and loss statement. The decrease on losses and increase of gains in 2023 compared
to 2022 is due to an increase in the spot interest rates in 2023 compared to 2022, which implies lower
interest payments or higher payments received from the derivatives instruments contracted.

351

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
and to the change in fair value of caps hedging the net cash flows in Euros of the Company, which
was largely stable in 2023 while it accounted for an income in 2022.

Other financial income/(expenses), net

The following table sets out Other financial income/(expenses), net for the years 2023 and 2022:

Other financial income / (expense), net

Other financial income

Other financial losses

TOTAL

For the year ended
December 31, 2023
$’000

For the year ended
December 31, 2022
$’000

8,863

(25,546)

(16,683)

20,539

(21,434)

(895)

Other financial income in 2023 primarily include $3.9 million of income further to the change in the
fair value of the conversion option of the Green Exchangeable Notes (Note 15) since December 2022,
and $0.1 million of income for non-monetary change to the fair value of derivatives of Kaxu for which
hedge accounting is not applied ($12.0 million and $6.2 million of income in 2022, respectively).

Other financial losses primarily include guarantees and letters of credit, other bank fees and non-
monetary interest expenses for updating the present value of provisions and other long-term
liabilities reflecting the passage of time.

24. 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.

Average number of outstanding diluted shares for the year 2023 have been calculated considering
the potential issuance of 3,347,305 shares (3,347,305 shares as of December 31, 2022) on the
settlement of the Green Exchangeable Notes (Note 15) and the potential issuance of 217,418 shares
(226,032 as of December 31, 2022) under the long-term incentive plans granted to employees. It also
included the potential issuance of 596,681 shares to Algonquin for the year 2022 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 14).

352

Item

For the year
ended December
31, 2023

For the year
ended December
31, 2022

Profit/(loss) attributable to Atlantica

43,380

(5,443)

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 (*)

116,152

114,695

119,720

118,865

0.37

(0.05)

(0.09)

(*) The potential ordinary shares related to the Green Exchangeable Notes and the long-term incentive plans granted to
employees have not been considered in the calculation of diluted earnings per share for the year ended December 31, 2023,
as they have an antidilutive effect. For the year ended December 31, 2022, the potential ordinary shares related to the long-
term incentive plans granted to employees and the ATM program have not been considered in the calculation of diluted
earnings per share as they have an antidilutive effect.

25. 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
2023
$000

Year ended
2022
$000

738

611

1,216

1,954

344

414

2,368

1,032

1,643

422

502

924

2,567

“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.

“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 2023 and 2022 related to comfort letters and consents
required for capital market transactions of the major shareholder are also included in this category

353

($25 thousand and $204 thousand in 2023 and 2022 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.

26. Subsequent Events

On February 29, 2024, the Board of Directors of the Company approved a dividend of 0.445 per share,
which is expected to be paid on March 22, 2024.

27. 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 pays a fixed-price tariff per MWh under the PPA, which is denominated in U.S.
dollars and is partially adjusted in January of each year according to a formula based on inflation.

354

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 each. 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. dollars exchange
rate.

Solaben 2 & Solaben 3

The Solaben 2 and Solaben 3 are two 50 MW Solar Power facilities and reached COD in 2012. 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
offer 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 & Solacor 2

The Solacor 1 and Solacor 2 are two 50 MW Solar Power facilities and reached COD in 2012. 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, and reached COD in 2012. The
plants have 50 MW each.

355

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.

Solaben 1 & 6

The Solaben 1&6 are two 50 MW solar plants located in the municipality of Logrosán, Spain and
reached COD in 2013.

Kaxu

Kaxu Solar One, or Kaxu, is a 100 MW solar Conventional Parabolic Trough Project located in Paulputs
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 owns 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 in 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 an
approximately 52 mile and 115-kilowatt 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 (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 (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 is 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.

356

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. In July 2023, the Company started construction of ATS
Expansion 1 project, consisting in the reinforcement of two existing substation with new equipment.
The expansion will be part of the existing concession contract and is expected to enter in operation
in 2025.

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. In July 2022 the Company closed a transmission service agreement that allows to build
a substation and a 2.4-miles transmission line connected to ATN transmission line serving a new mine
in Peru (ATN Expansion 3), which is expected to enter in operation in 2024.

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.

357

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 Expansion 3 has a 17-year transmission service
agreement denominated in U.S. dollars.

ATN 2

ATN 2, is an 81 miles transmission line located in Peru wholly owned by the Company, which is part
of the Complementary Transmission System. ATN 2 reached COD in June 2015.

The Client is Las Bambas Mining Company.

The ATN 2 Project has a 18-year contract period, after that, ATN 2 assets will remain as property of
the SPV allowing ATN 2 to potentially sign a new contract. The ATN 2 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 receipt of the
tariff base is independent from the effective utilization of the transmission lines and substations
related to the ATN 2 Project. The tariff base is intended to provide the ATN 2 Project with consistent
and predictable monthly revenues sufficient to cover the ATN 2 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 ATN 2 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.

As part of the SING, Quadra 1 and Quadra 2 and the service they provide are regulated by several
regulatory bodies, in particular: the Superintendent’s office of Electricity and Fuels (SEC), the
Economic Local Dispatch Center (CDEC), the National Board of Energy (CNE) and the National
Environmental Board (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.

358

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
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 seven M ft3 per day of desalinated water and it is under operation since
July 2012.

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 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 Ténès
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.

359

Assets subject to the application of IFRIC 12 interpretation based on the concession of services as
of December 31, 2023:
Status
(1)

Arrangement
Terms (price)

Accumulated
Amortization

Financial/
Intangible (3)

Assets/
Investment

Off-
taker(7)

Country

Description of the
Arrangement

Project name

% of
nominal
Share(2)

Period of
Concession
(4)(5)

Operating
Profit/
(Loss)(8)

Renewable energy:

Solana

USA

(O)

100.0

30 Years

APS

(I)

1,904,464

(718,410)

32,723

Mojave

USA

(O)

100.0

25 Years

PG&E

(I)

1,581,518

(559,300)

50,164

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

Spain

(O)

100.0

25 Years

Helioenergy 2

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

Kingdom
of Spain

Kingdom of
Spain

147,934

(71,074)

5,454

122,013

(55,724)

3,272

136,089

(51,197)

5,141

307,766

(114,598)

5,534

306,228

(115,252)

5,555

310,841

(122,549)

3,970

324,096

(126,518)

3,028

310,660

(142,585)

6,267

290,380

(129,102)

7,914

271,494

(120,218)

8,141

315,215

(118,604)

3,645

307,195

(113,976)

3,417

300,569

(117,465)

7,826

301,317

(115,295)

7,556

305,396

(104,265)

6,581

302,681

(103,057)

6,984

(I)

360

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)

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

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

Kaxu

South
Africa

(O)

51.0

20 Years

Eskom

(I)

464,692

(188,089)

23,414

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)

477,650

98,468

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)

534,332

(175,380)

34,602

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

(I)

366,654

(142,906)

13,186

(F)

74,423

11,957

(F)

35,852

7,255

(F)

49,483

6,258

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

30-year Concession
Agreement with the
Peruvian Government

18 years purchase
agreement

21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superintendencia de
Electricidad, among
others
21-year Concession
Contract with Sierra
Gorda regulated by
CDEC and the
Superintendencia de
Electricidad, among
others

361

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

(F)

73,581

11,533

(F)

N/A(9)

101,144

17,462

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

(1) In operation (O), Construction (C) as of December 31, 2023.
(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, 2023.

(9) Recorded under the equity method.

Assets subject to the application of IFRIC 12 interpretation based on the concession of services as
of December 31, 2022:

Project name

Country

Renewable energy:

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

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

UTE,
Uruguay
Administ
ration

Kingdom
of Spain

Solaben 3

Spain

(O)

70.0

25 Years

Kingdom of
Spain

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

(I)

362

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

Regulated revenue
established by
different laws and
rulings in Spain
Regulated revenue
established by
different laws and
rulings in Spain

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

Spain

(O)

100.0

25 Years

Helioenergy 2

Spain

(O)

100.0

25 Years

Solaben 1

Spain

(O)

100.0

25 Years

Solaben 6

Spain

(O)

100.0

25 Years

Kingdom of
Spain

(I)

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

Kaxu

South
Africa

(O)

51.0

20 Years

Eskom

(I)

455,517

(179,417)

44,487

Regulated
revenue
base(6)

Regulated
revenue base(6)

Regulated
revenue base(6)
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

363

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

(I)

360,412

(130,364)

10,988

(F)

71,966

10,673

(F)

37,423

5,847

(F)

51,552

4,845

Fixed price in
USD with
annual
adjustments
indexed mainly
to US CPI

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

(F)

71,007

13,121

(F)

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

(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.

December 31, 2022.

(9) Recorded under the equity method.

364

28. Additional information of subsidiaries including material non-controlling interest

As of December 31, 2023:

Non-
controlling
interest
name

% of
non-
controlling
interest
held

Distributions
paid to
non-
controlling
interest

Subsidiary
name

Non-
controlling
interest
in
Atlantica
consolidated
equity as
of
December
31,
2023

Profit/(Loss)
of non-
controlling
interest
in
Atlantica
consolidated
net result
2023

Non-
current
assets*

Non-
current
liabilities*

Current
Assets*

Current
liabilities*

Net
Profit
/(Loss)*

Total
Comprehensive
income*

Aguas de
Skikda
S.P.A.

Chile PV 3

Algerian
Energy
Company
S.P.A.

Financial
partners

Solaben

Electricidad
Dos S.A.

Solaben

Electricidad
Tres S.A.

Ténès Lilmiyah

SPA

Itochu
Europe Plc

Algerian
Energy
Company
S.P.A.

49 %**

3,072

6,164

51,145

71,400 27,290

10,151

4,325

9,363

65 %

(2,189)

30,526

31,371 30,374

11,791

1,273 (3,368)

30 %

3,684

(202)

20,580

192,089 9,989 125,455

8,957

(992)

30 %

3,259

(245)

20,261

191,585 10,059 125,165

9,679 (1,133)

(6,412)

(6,378)

49 %

3,581

7,123

29,963

97,105 41,208

66,175

10,989 14,701

* Stand-alone figures as of December 31, 2023.

** 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.

365

As of December 31, 2022:

Subsidiary

name

Non-
controlling
interest
name

% of
non-
controlling
interest
held

Distributions
paid to
non-
controlling
interest

Profit/(Loss)
of non-
controlling
interest
in
Atlantica
consolidated
net result
2022

Non-
controlling
interest
in
Atlantica
consolidated
equity as
of
December 31,
2022

Non-
current
assets*

Current
Assets*

Non-
current
liabilities*

Current
liabilities*

Net profit/
(loss)*

Total
Comprehensive
income*

Aguas de
Skikda
S.P.A.

Algerian
Energy
Company
S.P.A.

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.

49%**

2,849

7,060

47,509

68,655

29,293

12,470

6,788

10,725

30%

1,913

402

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

* Stand-alone figures as of December 31, 2022.

366

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
Derivative assets
Other financial 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

367

Notes (1)

As of
December 31,
2023

As of
December 31,
2022

3
4
6

4
6
9

7
4
5

5
4
6

51
1,572,733
991,391
781
599

114
1,661,909
930,188
279
-

2,565,555

2,592,490

1,085
20,471
837
32,982

628
34,495
7,558
60,833

55,375

103,514

2,620,930

2,696,004

3,178
9,170
27,102

6,377
3,792
11,442

39,450

21,611

15,925

81,903

2,581,480

2,674,393

931,290
461,498
794
17,849

886,515
379,892
4,688
16,684

1,411,431

1,287,779

1,450,881

1,309,390

1,170,049

1,386,614

Capital and Reserves
Share capital
Share premium account
Capital reserves
Other reserves
Accumulated deficit

Shareholders’ funds

8
8
8
8
8

11,616
736,594
858,220
30
(436,411)

11,606
986,594
814,951
4,638
(431,175)

1,170,049

1,386,614

(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 7.9 million for the period ended
31 December 2023 (2022: loss after tax of $43.1 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 29 February 2024. They were signed on its
behalf by:

_______________________________

Director and Chief Executive Officer

Chief Financial Officer

Santiago Seage

February 29, 2024

Francisco Martinez-Davis

February 29, 2024

368

Company Statement of Changes in Equity

Amounts in thousands of U.S. dollars

Balance at 1 January
2022

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

Capital increase
Loss 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 2023

Share
capital

Share
premium
account

Capital
reserves

Other
reserves

Accumulated
deficit

Total
Shareholder´s
funds

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

4,727

11,606

986,594

814,951

4,638

(431,175)

1,386,614

-
-
-

10
-
-

25
-
(206,756)

-
-
-

-
(7,875)
-

35
(7,875)
(206,756)

(4,608)

2,639

(250,000)

250,000

11,616

736,594

858,220

(436,411)

1,170,049

369

Notes to the Company Financial Statements

1. Material 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 to the “going concern basis” in note 2.1 of the consolidated financial
statements.

Disclosures of the impact of Global minimum taxation legislation (Pillar Two) is included 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.

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.

370

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:

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.

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 2023 of $7.9 million (2022: loss of $43.1 million).

The employee cost recorded in the profit and loss account of the Company for the year 2023
amounts to $7.4 million (2022: $10.4 million).

371

The average number of employees was:

Executives

Engineers and Graduates

Assistants and Professionals

Their aggregate remuneration comprised:

Wages and salaries

Social security costs

Other staff costs

2023

2022

Number

Year ended 2023
$000

Year ended 2022
$000

(7,393)

(10,403)

(13)

(2)

(8)

(2)

(7,408)

(10,413)

The auditor’s remuneration for audit and other services is disclosed in note 25 to the
consolidated financial statements.

372

3. Investments in Subsidiaries

Details of the Company’s subsidiaries at 31 December 2023 are as follows:

Name

Place of
incorporation
and principal
place of
business

Proportion
of
ownership
interest

Proportion
of voting
power held

Registered office

A&F PV Solar SAPI de C.V.

Mexico

70.00%

ACT Energy Mexico, S. de R.L. de C.V. Mexico

99.99%

ACT Holdings, S.A. de C.V.

Mexico

99.99%

Agrisun, S.R.L.

Italy

100.00%

Aguas de Skikda, S.P.A.

Algeria

51.00%

Alcalá Sviluppo Solare S.r.l.

Italy

100.00%

Arizona Solar One, LLC (USA)

USA

100.00%

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)

ASHUSA Inc

ASI Operations, LLC

USA

100.00%

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

ASO Holdings Company, LLC

USA

100.00%

ASUSHI Inc.

USA

100.00%

Atlantica Canada, Inc

Canada

100.00%

Atlantica Chile, S.P.A.

Chile

100.00%

Atlantica Colombia S.A.S. E.S.P.

Colombia

100.00%

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

435 9 Ave Se, T2G 2J6, Calgary,
Canada.
Avda. Apoquindo, 3600, Piso 5,
Oficina 517, Las Condes,
Santiago de Chile
Carrera 7, 71 – 21 Torre B, piso
15,Bogota

373

Atlantica Corporate Resources, S.L.

Spain

100.00%

Atlantica DCR, LLC.

Atlantica Energía Sostenible España
S.L.

Atlantica Energia Sostenible Italia,
S.r.l

Atlantica Holdings USA, LLC

Atlantica Hystone, S.L. U.

Atlantica Infraestructura Sostenible,
S.L.U.

Atlantica Investments Ltd

Atlantica Newco, Ltd

USA

Spain

Italy

USA

Spain

100.00%

Atlantica North America, LLC.

USA

100.00%

Atlantica Peru, S.A.

Peru

100.00%

Atlantica Renewable Power Mexico
de R.L. de C.V

Mexico

100.00%

Atlantica Solutions LLC

USA

100.00%

Atlantica South Africa (Pty) Ltd

South Africa

100.00%

Atlantica South Africa Operations
Proprietary Limited Ltd

Atlantica Sustainable Infrastructure
Jersey Ltd.

South Africa

92.00%

Jersey

100.00%

Atlantica Transmision Sur, S.A.

Peru

100.00%

Atlantica y Quartux Almacenamiento
de Energía S.A.P.I. de C.V.

Mexico

88.00%

60.00%

Atlantica Yield Energy Solutions
Canada Inc.

Canada

10.00%

66.66%

ATN 2, S.A.

Peru

100.00%

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

Via de la Mercede, 11, 00187,
Roma (Italy)

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

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 Sucro 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)

47 Esplanade, St Helier, Jersey
JE1 0BD UK

Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608
Santiago de Sucro Lima (Peru).

Avda. Jaime Balmes, 11, Piso 10,
Torre C, Fraccion C, Oficina
1001, Col. Los Morales Polanco,
11510, Ciudad de Mexico

354 Davis Road Suite 100
Oakville On L5J 2X1

Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608
Santiago de Sucro Lima (Peru).

374

ATN 4, S.A.

Peru

100.00%

ATN, S.A.

Peru

99.99%

AY Holding Uruguay S.A.

Uruguay

100.00%

AYES International UK Ltd.

100.00%

Banitod, S.A.

Uruguay

100.00%

Befesa Agua Tenes, S.L.U.

Spain

100.00%

BPC US Wind Corporation, Inc.

USA

100.00%

Cadonal, S.A.

Uruguay

100.00%

Calgary District Heating Inc.

Canada

100.00%

Carpio Solar Inversiones, S.A.

Spain

100.00%

CGP Holding Finance, LLC

USA

100.00%

Chile PV I

Chile

35.00%

66.66%

Chile PV II

Chile

35.00%

66.66%

Chile PV III

Chile

35.00%

66.66%

Coropuna Transmisión, S.A

Peru

100.00%

Day Ahead Solar LLC

Diamond FV, S.r.l.

USA

Italy

100.00%

Ecija Solar Inversiones, S.A.

Spain

100.00%

Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608
Santiago de Sucro Lima (Peru).

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.

C/ Energia Solar 1 41014, Sevilla
(Spain)

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)

251 Little Falls Drive,
Wilmington, New Castle,
Delaware, 19808 (USA)

Avenida Los Militares 5885, piso
7, departamento 701, Las
Condes, Santiago de Chile.

Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608
Santiago de Sucro Lima (Peru).

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

Via Maurizio Bufalini, 8 Roma
00161, Italy

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

375

Energía Renovable Dalia 1 SA de CV Mexico

51.00%

Energía Renovable Dalia 2 SA de CV Mexico

51.00%

Energía Renovable Dalia 3 SA de CV Mexico

51.00%

Estrellada S.A.

Uruguay

100.00%

Extremadura Equity Investment
S.a.r.l.

Luxembourg

100.00%

Fabroen Seconda, Srl.

Italy

85.00%

Fotovoltaica Solar Sevilla, S.A.

Spain

80.00%

Geida Skikda, S.L.

Spain

67.00%

Global Solar Participations Sarl

Luxembourg

100.00%

Gold FV S.r.l.

Italy

100.00%

Helioenergy Electricidad Uno, S.A.

Spain

100.00%

Helioenergy Electricidad, Dos, S.A.

Spain

100.00%

Helios 2, S.R.L.

Helios I Hyperion Energy
Investments, S.L.

Helios II Hyperion Energy
Investments, S.L.

Italy

Spain

100.00%

Hidrocañete, S.A.

Peru

100.00%

Hornero ST Dos, S.L.

Hornero ST, S.L.

Spain

100.00%

Hypesol Energy Holding, S.L.

Spain

100.00%

Hypesol Solar Inversiones S.A.U

Spain

100.00%

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, rue Eugène RuppertL-2453
Luxembourg

Via Maurizio Bufalini, 8 Roma
00161, Italy

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

Paseo de la Castellana 83-85,
28046 Madrid (Spain)

6, rue Eugène RuppertL-2453
Luxembourg

Via Maurizio Bufalini, 8 Roma
00161, Italy.

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

Melissano (LE) Via Monte Rosa
19 Roma (Italy)

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

Av. El Derby 55, Edificio Cronos,
Torre 3, Piso 6; oficina 608
Santiago de Sucro Lima (Peru).

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)
C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

376

Kaxu Solar One (Pty) Ltd

South Africa

51.00%

Logrosan Equity Investment S.a.r.l.

Luxembourg

100.00%

Logrosan Solar Inversiones Dos, S.L. Spain

100.00%

Logrosan Solar Inversiones, S.A.

Spain

100.00%

Menhir Solar, S.L.U.

Spain

100.00%

Mojave Solar Holdings, Llc

Mojave Solar, Llc

Montesejo Carda, S.r.l.

Montesejo Pggio, S.r.l.

Montesejo Piano, S.r.l.

Mordor ES1 LLC

Mordor ES2 LLC

USA

Italy

USA

100.00%

Nesyla, S.A.

Uruguay

100.00%

Overnight Solar LLC

USA

100.00%

Palmatir, S.A

Uruguay

100.00%

Palmucho, S.A. Chile

100.00%

Parque Fotovoltaico La Tolua S.A.S

Colombia

100.00%

Parque Solar Tierra Linda, S.A.S

Colombia

100.00%

Raitan ST1, S.,L.

Re Sole, S.R.L.

Spain

Italy

100.00%

Rilados, S.A.

Uruguay

100.00%

Office 103 Ancorley Building; 45
Scott Street Upington 8801
(South Africa)

6, rue Eugène RuppertL-2453
Luxembourg

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

1553 West Todd Dr., Suite 204
Tempe, AZ 85283 (USA)

Via Maurizio Bufalini, 8 Roma
00161, Italy.

Via XX Settembre 1 cap 00187,
Roma.

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)

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

MZ D CA 23 Urb. Bosques de
Varsovia, Ibague, Tolima,
Colombia.

CC Arkacentro Mod T OF A 07
Sec. Arkacentro, Ibague, Tolima,
Colombia.

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

Via de la Mercede, 11, 00187,
Roma (Italy)

Luis Alberto de Herrera 1248,
WTC, Torre 2, Piso 15, Oficina
1505, Montevideo, Uruguay

377

Rioglass Services North America, LLC United States

100.00%

Rioglass Servicios, S.L.U.

Spain

100.00%

Rioglass Solar Chile, Spa

Chile

100.00%

Rioglass Solar Holding, S.A.

Spain

100.00%

Rioglass Solar Internacional, S.A.

Luxembourg

100.00%

Rioglass Solar, S.A.U.

Spain

100.00%

Rioglass Solar SCH, S.L.

Spain

100.00%

Rioglass Solar Systems

Israel

100.00%

Rioglass South Africa Pty Ltd

South Africa

100.00%

Rio-Huan (Inner Mongolia) Solar Co.,
Ltd

Inner
Mongolia
(China)

55.00%

Rising Solar, Inc

Canada

100.00%

RRHH Servicios Corporativos S. de
R.L. de C.V.

Mexico

100.00%

Sanlucar Solar, S.A.

Spain

100.00%

Solaben Electricidad Dos, S.A.

Spain

70.00%

Solaben Electricidad Seis, S.A.

Spain

100.00%

Solaben Electricidad Tres, S.A.

Spain

70.00%

Solaben Electricidad Uno, S.A.

Spain

100.00%

Solaben Luxembourg S.A.

Luxembourg

100.00%

Solacor Electricidad Dos, S.A.

Spain

87.00%

1209 Orange Street, City of
Wilmington, County of New
Castle, State of Delaware (USA)

Ctra. Aznalcollar-Gerena, Km 1,
Aznalcollar, Sevilla, Spain.

C/ Baquedano 239 oficina 322,
Antofagasta, Chile.

Poligono Industrial de Sevilla,
Santa Cruz de Mieres, Mieres,
Asturias, Spain.

Avenue Grandchamp, 148. 1150.
Woluwe-Saint-Pierre, Belgique

Poligono Industrial de Sevilla,
Santa Cruz de Mieres, Mieres,
Asturias, Spain.

Ctra. Aznalcollar-Gerena, Km 1,
Aznalcollar, Sevilla, Spain.

Adi Braunstain at "Gil Hirschman
law office" Berkovitch st 4 Tel
Aviv, Israel.
20 Van Coppenhagen Street,
Uppinton, Northern Cape, 8801,
South Africa
Baolir Street, Jinqiao Economic
Development Zone, Hohhot,
Inner Mongolia.

435 9 Ave Se, T2G 2J6, Calgary,
Canada.

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)

Plataforma Solar Extremadura,
Carretera EX-116 PK 17,560,
10120 Logrosan (Caceres, Spain)

6, rue Eugène RuppertL-2453
Luxembourg

C/ Albert Einstein, s/n 41092,
Sevilla (Spain)

378

Solacor Electricidad Uno, S.A.

Spain

87.00%

Solar Processes, S.A.

Spain

100.00%

Solnova Electricidad Cuatro, S.A.

Spain

100.00%

Solnova Electricidad Tres, S.A.

Spain

100.00%

Solnova Electricidad Uno, S.A.

Spain

100.00%

Solnova Solar Inversiones, S.A.

Spain

100.00%

Tenes Lilmiyah SPA

Algeria

51.00%

Transmisora Baquedano, S.A.

Chile

100.00%

Transmisora Mejillones, S.A.

Chile

100.00%

Transmisora Melipeuco, S.A.

Chile

100.00%

Vernay, S.A.

Uruguay

100.00%

White Rock Insurance (Europe) PPC
Limited

Malta

100.00%

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

World Trade Center 1248 Torre
1 Of. 1001, Montevideo,
Uruguay

Central Business District.
CBD1070, Birkirkara (Malta)

379

The investments in subsidiaries are all stated at cost. Information on the investments made in the
year is disclosed in Note 5 of the consolidated financial statements. As of 31 December 2023 and
2022, the carrying amount of the investments held directly by the Company were as follows:

ACT Holdings, S.A. de C.V.
Atlantica Corporate Resources, S.L.
Atlantica Infraestructura Sostenible, S.L.U.
Atlantica Investments Ltd.
Atlantica Newco, Ltd.
Atlantica North America, LLC.
Atlantica Peru, S.A.
Atlantica Renewable Power Mexico, S. de R.L. de C.V.
Atlantica Sustainable Infrastructure Jersey Ltd.
Atlantica Transmision Sur, S.A. (*)
ATN 2, S.A.
ATN, S.A. (*)
AYES International UK Ltd.
Palmucho, S.A.
Transmisora Baquedano, S.A.
Transmisora Mejillones, S.A.
Transmisora Melipeuco, S.A.
White Rock Insurance (Europe) PCC Limited

Cost
2023
$’000

Accumulated
Impairment
2023
$’000

Net
2023
$’000

98,543
11,358
889,539
56,998
-
736,484
261,920
1,800
-
11,882
15,896
14,470
4,854
-
-
-
98
1,036

-
(2,404)
-
-
-
(528,698)
-
(7)
-
-
-
-
-
-
-
-
-
(1,036)

98,543
8,954
889,539
56,998
-
207,786
261,920
1,793
-
11,882
15,896
14,470
4,854
-
-
-
98
-

Total investments in subsidiaries

2,104,878

(532,145) 1,572,733

380

AYES International UK Ltd.
CKA1 Holding S. de R.L. de C.V.
Palmucho, S.A.
Transmisora Baquedano, S.A.
Transmisora Mejillones, S.A.
Transmisora Melipeuco, S.A.

Cost
2022
$’000

Accumulated
Impairment
2022
$’000

Net
2022
$’000

98,543
11,358
889,236
56,998
-
730,200
261,920
-
11,847
15,896
13,988

4,854
7
-
-
-
98

-
(2,404)
-
-
-
(428,449)
-
-
-
(2,176)
-

-
(7)
-
-
-
-

98,543
8,954
889,236
56,998
-

301,751
261,920

-
11,847
13,720
13,988

4,854
-
-
-
-
98

Total investments in subsidiaries

2,094,945

(433,036)

1,661,909

(*) 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.

381

Movements in the carrying value of investments during the years 2023 and 2022 were as follows:

As at 1 January 2023
Increase
Impairment

As at 31 December 2023

As at 1 January 2022
Increase
Impairment

As at 31 December 2022

$ ´000

1,661,909
9,933
(99,109)

1,572,733

$ ´000

1,779,817
635
(118,543)

1,661,909

The increase in 2023 mainly relates to capital increase in the U.S. entities.

The impairment for $99.1 million in 2023 and for $118.5 million in 2022 correspond 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 an increase in the discount rate used to discount
future cash flow projections to obtain the recoverable amount of the investment, dividends
received recorded as income in the profit or loss of the Company reducing equity value of the
subsidiaries and to the impairment recorded in Solana in 2022 (see Note 6 to the consolidated
financial statements). The impairment loss was obtained by comparing the recoverable amount of
the investment against its carrying amount. The recoverable amount of the investment was
assessed based on a value in use method.

4. Amounts Owed by/to Group Undertakings

Non-current receivables from group companies
Current receivables from group undertakings

2023
$’000

2022
$’000

991,391
20,471

930,188
34,495

Total amounts owed by group undertakings

1,011,862

964,683

Current amounts owed to group undertakings
Non-Current amounts owed to group undertakings
Total amounts owed to group undertakings

9,170
461,498
470,668

3,792
379,892
383,684

382

As of 31 December 2023 and 2022, the details of non-current amounts owed by group
undertakings were as follows:

ATN, 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.
Atlantica y Quartux Almacenamiento de Energía,
S.A.P.I.
Atlantica Renewable Power Mexico de R.L. de C.V

Other

2023
$’000

3,937

4,884

2022
$’000

10,548

1,321

65,465

62,847

178,089

142,657

1,647

3,103

4,187

4,443

465,709

438,695

14,572

101,648

76,451

34,924

5,119

5,400

9,731

9,528

3,245

7,939

14,723

99,248

70,788

31,327

14,714

14,170

12,955

7,565

Amounts owed by group undertakings

991,391 930,188

The principal features of the most significant loans to subsidiary undertakings are as follows:

ATN, 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.
Atlantica y Quartux Almacenamiento
de Energía, S.A.P.I.
Solnova Electricidad, S.A.
Solnova Electricidad Tres, S.A.
Solnova Electricidad Cuatro, S.A.

Interest Rate

0% (**)
Not applicable
8.0% (*)
8.0% (*)
8.0% (*)
8.0% (*)
8.0% (*)
8.0% (*)
8.0% (*)

Maturity

Not applicable
Not applicable
31 December 2030
31 December 2030
31 December 2030
31 December 2030
31 December 2030
31 December 2030
31 December 2030

9.0%

31 December 2032

2.5% plus Euribor 12 months
2.5% plus Euribor 12 months
2.5% plus Euribor 12 months

20 July 2035
20 July 2035
20 July 2035

(*) Fixed interest rate has been increased with effective date January 1, 2023 as a result of increased market
interest rates

(**) Loan accounted for at amortized cost using an effective interest rate of 5%

383

As at 31 December 2023, the amounts owed to group undertakings primarily relate to ACT Energy
Mexico, S.A. de C.V. for $163.0 million ($162.8 million as of 31 December 2022), to Atlantica
Sustainable Infrastructure Jersey Ltd for $110.5 million ($107.9 million as of 31 December 2022)
and to Atlantica Infraestructura Sostenible, S.L.U. for $180.3 million ($98.9 million as of 31
December 2022).

5. Borrowings

As of 31 December 2023 and 2022, 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

2023
$’000

2022
$’000

25,692
932,700

9,937
888,020

958,392

897,957

27,102

11,442

931,290

886,515

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 €10.0
million ($11.0 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 SOFR plus 2%, depending on the currency,
with a floor of 0% on the EURIBOR and SOFR. As of December 31, 2023, $9.9 million has been
drawn down ($6.4 million as of December 31, 2022). As of December 31, 2022, the credit facility
maturity was July 1, 2024. On August 7, 2023, the available amount under the 2017 Credit Facility
has been increased to €15.0 million ($16.6 million) and the maturity extended to July 1, 2025.

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. Since then, the
amount of the Revolving Credit Facility increased to $450 million. On May 30, 2023, the maturity
was extended to December 31, 2025. On December 31, 2023, $55 million were drawn down ($30
million as of December 31, 2022). On December 31, 2023, the Company issued letters of credit for
$17 million ($35 million as of December 31, 2022). As of December 31, 2023, therefore, $378
million of the Revolving Credit Facility were available ($385 million as of December 31, 2022).

384

allowed Atlantica to issue short term notes over the next twelve months for up to €50 million ($55
million), with such notes having a tenor of up to two years. On November 21, 2023, the Company
filed a new program that allows Atlantica to issue short term notes for up to €100 million, with
such notes having a tenor of up to two years and the program maturity has been extended twelve
months. As of December 31, 2023, the Company had €23.3 million ($25.7 million) issued and
outstanding under the program at an average cost of 5.27% (€9.3 million, or $10.1 million, as of
December 31, 2022).

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 $155 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
has 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.

On May 10, 2023, the Company entered into a senior unsecured $50 million line of credit with
Export Development Canada with a 3-year maturity. Loan under the credit line accrues interest at
a rate per annum equal to Term SOFR plus a percentage determined by reference to the leverage
ratio of the Company, ranging between 2.46% and 3.11%, with a floor of 0.00% for the Term SOFR.
The facility matures on May 25, 2026, and was fully available as of December 31, 2023.

385

6. Derivative assets and liabilities

The breakdowns of the fair value amount of the derivative financial instruments as
of December 31, 2023 and 2022 are as follows:

Balance as of December 31, 2023 Balance as of December 31, 2022

Assets

Liabilities

Assets

Liabilities

Foreign exchange derivatives

instruments

Notes conversion option

Interest rate cash flow hedge

Total

1,594

3,189

794

4,688

4,648

1,618

794

7,837

4,688

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 euro-denominated interest
payments and euro-denominated general and 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,
2023, the fair value is a liability of $0.8 million (a liability of $4.7 million as of December 31, 2022).
The prospective changes to its fair value are accounted for directly through the income statement.
This instrument is classified as Level 2 in the fair value hierarchy (see Note 2.7 of the consolidated

386

financial statements) based on the observable inputs used for the calculation of its fair value. The
valuation technique used is a Monte Carlo which uses regressions to estimate, given a stock price
level, the continuation value of the instrument.

7. Trade and Other Payables

As of 31 December 2023, and 2022, Trade and other payables primarily relate to independent
professional services.

8. Equity

As of December 31, 2023, the share capital of the Company amounts to $11,615,905 ($11,605,513
as of December 31, 2022) represented by 116,159,054 ordinary shares (116,055,126 shares as of
December 31, 2022) 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.

The Company accounts for its existing long-term incentive plans granted to employees as equity-
settled in accordance with IFRS 2, Share-based Payment when incentives are being settled in
shares. During the year 2023, the Company issued 103,928 new shares (228,560 new shares during
the year 2022) to its employees to settle a portion of these plans.

On February 28, 2022, the Company established a new “at-the-market program” which replaced
its previous 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. During the year 2023, the Company did not sell
any shares under this program. During the year 2022, the Company sold 3,423,593 shares at an
average market price of $33.57 pursuant to its distribution agreement, representing net proceeds
of $114 million.

Atlantica´s reserves as of December 31, 2023 are made up of share premium account and capital
reserves. The share premium account reduction by $250 million during the year 2023, increasing
capital reserves by the same amount, was made effective upon the confirmation received on June
26, 2023 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 instruments, net of
tax.

Accumulated deficit primarily includes the results of the Company.

Dividends declared by the Company in 2023 and 2022 are disclosed in note 14 to the consolidated
financial statements of the Company.

9. Cash and cash equivalents

Cash and cash equivalents as of December 31, 2023, include $33.0 million of cash at bank and on
hand ($60.8 million as of December 31, 2022).

387

10. Third-party guarantees

The Company, or other holding entities on its behalf, issued guarantees on behalf of subsidiaries
amounting to $238.3 million as of December 31, 2023 ($216.9 million as of December 31, 2022),
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.

388