Untitled

EAM Solar ASA

ANNUAL REPORT 2022

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

EAM Solar in brief

Directors’ report

ESG report

Financial statements

Consolidated financial statements

Parent company financial statements

Power production

Power plant capacity

Responsibility statement

Auditor’s report

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EAM Solar annual report 2022

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EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

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DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

EAM SOLAR ASA

IN BRIEF

Strategic review and outlook

Litigation activities

Business development activities

Litigation activity review

Criminal proceedings in Oslo

Criminal proceedings in Milan

New criminal investigation for subsidy fraud in Italy

Arbitration

New Arbitration in Milan

Civil Court Italy; Aveleos

Civil Court Italy; UBI

Civil Court Luxembourg

Administrative Court Italy – ENFO 25

The 2022 annual report

EAM Solar annual report 2022

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EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

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ESG REPORT

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EAM Solar in briefEAM Solar in brief EAM Solar in brief

EAM SOLAR ASA

IN BRIEF

Energeia AS established EAM on 5 January 2011. The

Company was established with the purpose of owning

Solar PV power plants under long-term electricity sales

contracts and distributing dividends on a regular basis to

its shareholders. The Company was listed on the Oslo Stock

Exchange under the ticker EAM in March 2013, becoming

the world’s first publicly listed pure solar PV “YieldCo”.

EAM has no employees and is managed by Energeia AS. Energeia AS

conducts all administrative and technical tasks with own employees

and subcontractors. The annual general meeting of EAM elects the

Company’s board of directors, who make all material investments,

divestments and contractual decisions.

EAM acquired the first power plant in Italy in 2011. At the end of 2022

EAM owned and operated 4 power plants with a combined capacity

of 4.0 MW generating an average annual production of 5.4 GWh

annually (P50 production).

EAM entered into a Share Purchase Agreement with Aveleos S.A. in

July 2014 to acquire 31 PV power plants in Italy, for a total consid-

eration of EUR 115 million. One week after the transfer of 21 of the

31 power plants, it appeared that 27 of 31 power plants comprised

by the Share Purchase Agreement, and two directors of the sellers,

were already the targets of a criminal investigation conducted by the

Prosecutor’s Office of Milan.

Based on the criminal proceedings, the companies contractual coun-

terparty for purchase of electricity, the state-owned utility company

Gestore dei Servizi Energetici (GSE), firstly suspended and then

terminated the long-term electricity sales contract for 17 of the 21

PV power plants transferred to EAM in July 2014. The Administrative

Court of Lazio legalized GSE’s decision to terminate in June 2016.

EAM’s calculated loss of revenues due to terminated FIT contracts

and permanent closure of power plants because of lacking technical

certification, amounts to an amount in excess of EUR 300 million. This

has resulted in the bankruptcy of the SPVs affected by the criminal

proceedings in 2016.

The annual accounts of 2022 have identified a profit after tax of minus

EUR 2 206 thousand, the negative result is stemming mainly from

extensive legal costs.

On the basis of the fundamental breach of contract and contractual guar-

antees in the Share Purchase Agreement, resulting in losses now suffered

by EAM, and the lack of willingness from the seller to remedy the flawed

sale, EAM has been forced to initiate legal proceedings against the sellers

to recover losses and damages in excess of EUR 300 million. This situation

has effectively changed EAM from a YieldCo to a large listed lawsuit.

VALUATION

(EUR million)

24 Mar

2023

8 Aug

2022

18 Nov

2021

2 Mar

2021

19 Jun

2020

30 Sep

2019

14 Jan

2019

9 Apr

2018

4 Jul

2017

11 Oct

2016

27 Jan

2016

15 May

2015

25 Aug

2014

2 Dec

2013

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EAM Solar in briefEAM Solar in brief EAM Solar in brief

As a consequence of the fraud, EAM’s market valuation dropped

to EUR 10 million in the beginning of 2016, 80 per cent below the

invested equity capital of EUR 55 million. During 2016, 2017 and 2018

the market value increased to EUR 27 million. In 2019 the market

value decreased to EUR 8 million. In 2020 the market value further

decreased to EUR 6 million, where it remained in 2021 with a further

decrease to EUR 3-4 million in 2022.

Strategic review and outlook

The company is in its ninth year of litigation activity following the P31

fraud. Consequently, the company have lost out on opportunities

within its initial core business activity in renewable energy.

Following the decision by the Criminal Appeal Court of Milan in

January 2021, where the appeal court decided to revoke the first

instance judgement of the Criminal Court of Milan, the Board and

management of the company deemed it appropriate to conduct a

strategic review of the litigation activities and its initial core business

activities. The decision in the appeal court was later overturned by

the supreme court, see more details below.

Litigation activities

Although criminal complaints have been lodged in relevant juris-

dictions against the involved parties in the P31 fraud, the various

national police authorities seem to have a challenge in pursuing and

investigating cross-border economic crime.

As of today, to our knowledge, no police authority has conducted an

appropriate investigation of the fraud of EAM Solar ASA. Therefore,

the Board and management has over a period been evaluating the

alternative legal measures to be taken to hold the joint venture

partners Enovos, state utility company of Luxembourg, and Renova/

Avelar, the investment company of the Russian oligarch Viktor

Vekselberg, et.al. responsible for the P31 fraud. As a result of this eval-

uation the Company has decided to file a private criminal proceeding

against the company Enovos Luxembourg SA in Oslo District Court.

On Friday 28 May 2021, EAM Solar ASA filed a private criminal

proceeding for the crime of serious fraud against the company

Enovos Luxembourg SA in Oslo District Court. The private crim-

inal proceeding is initiated in accordance with section 402 of the

Norwegian Criminal Procedure Act.

The criminal proceedings are formally initiated by the Oslo District

Court. Originally a hearing was set for 31 January and 1 February

2022, but it was later postponed due to illness at the court. A new

hearing date was set for 21 April and 22 April 2022.

The hearing took place as scheduled and Oslo District Court will,

following the hearing, decide if the fraud charges shall go to main trial

proceedings or be rejected.

On 1 July 2022 Oslo District Court, by Judge Flaterud, dismissed EAM

Solar ASA’s request for a Private Criminal Proceeding against Enovos

Luxembourg SA. On 15 July 2022 the Company filed an appeal of the

decision by the Oslo District Court to the Borgarting Appellate Court.

On 21 October 2022 Borgarting Court of Appeal rejected EAM Solar

ASA’s appeal against Oslo District Court’s decision to reject the start

of a private criminal proceedings against Enovos Luxembourg S.A.

Business development activities

EAM Solar ASA was established by Energeia AS in 2011 and the

development of the company EAM Solar ASA and the Energeia group

have been inseparably linked since that time.

As Energeia’s shareholders are well aware, the fraud EAM Solar ASA

was exposed to in 2014, and which is still subject to prosecution, has

had a strictly negative effect on the business development of the

Energeia group since that time.

Now that the Energeia Group, through the investments and the work

carried out in parallel with the management of EAM Solar ASA, will

develop its business within the same business areas that originally

and naturally was within the scope EAM Solar ASA, the board in the

two companies and the administration are of the opinion that for

the sake of the Energeia Group’s reputation, and also based on the

moral values and obligations that are the basis for the operations

in Energeia, it is desirable to offer EAM Solar ASA’s shareholders

the opportunity to participate in the business development of the

Energeia Group independently of the business in EAM Solar ASA.

Over time, talks have been held between the board of Energeia AS

and the board of EAM Solar ASA about how the companies can jointly

ensure that the shareholders of EAM Solar ASA can take part in the

future value creation in the Energeia group without creating legal bind-

ings and preventing the normal business development of Energeia AS.

Based on these discussions, the following solution was proposed and

executed:

The Company decided on 15 August 2022 to participate in a private

placement whereby EAM Solar ASA at the nominal price of NOK 0.02 per

share for a total consideration of NOK 137 044.20, subscribed for

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EAM Solar in briefEAM Solar in brief EAM Solar in brief

6 852 210 new shares in Energeia AS. This number of shares corre-

sponds to the total number of outstanding shares in the Company.

The private placement was conditional upon the board of EAM Solar

ASA calling for an extraordinary general meeting of the Company,

where the Board suggested that the received shares in Energeia AS

would be distributed as dividends to the shareholders of the Company.

In the extraordinary general meeting that took place on 6 September

2022 it was resolved that all shareholders in EAM Solar ASA received

1 share in Energeia AS for each share they own in EAM Solar ASA.

As a result of the share issuance, Energeia’s outstanding number of

shares increased from 38 049 000 to 44 901 210, corresponding to an

increase of 14.42 per cent held by the shareholders of EAM Solar ASA

at the time of issuance.

The shares in the Company went ex dividend on 7 September 2022

and were transferred to each shareholder on 3 October 2022.

Litigation activity review

The P31 Acquisition fraud transformed EAM from an operational Solar

PV YieldCo to a company where a significant part of the activity and

future value is dependent on various litigation processes.

In July 2014 EAM Solar ASA transferred EUR 30 million to Aveleos SA,

a Joint Venture investment vehicle owned by the Enovos group in

Luxembourg (59 per cent) and Renova/Avelar group in Switzerland/

Cyprus (41 per cent).

The cash transfer was the initial payment in a EUR 114 million

transaction of 31 Solar PV power plants constructed by Aveleos et.al

in 2010 and 2011, operational since 2011 with long-term subsidised

electricity contracts with the State of Italy.

In July 2014 ownership of shares in companies with 21 of the 31

power plants was transferred to EAM Solar ASA, with the remaining 10

power plants to be transferred by December 2014. This transfer was

never conducted.

In August 2014, the State of Italy suspended payment of electricity

delivered under the long-term subsidy contracts for 17 of the 21 trans-

ferred power plants. In June 2016 the competent Italian court ruled

that it was a final legal fact that the 17 power plants did not have valid

subsidized “feed in tariff” contracts and as such lost all its value.

During the criminal proceedings commencing in 2016, EAM received

evidence that the Prosecutors office of Milan already in 2012 had

initiated a broad investigation into Aveleos et.al. for fraud against the

state of Italy in relation to subsidized electricity contracts. This fact

was known to the directors of Aveleos prior to negotiating a sale of

the power plants to EAM Solar ASA.

The Enovos/Renova/Aveleos group has failed to honour their

contractual obligations and has as such has dragged EAM Solar ASA

into a prolonged and costly process of losses, litigations and lawsuits.

EAM Solar ASA filed criminal complaints for fraud to the national police

authorities in Italy in 2014, Luxembourg 2016 and in Norway 2018/2019.

Criminal proceedings in Oslo

On Friday 28 May 2021, EAM Solar ASA filed a private criminal

proceeding for the crime of serious fraud against the company

Enovos Luxembourg SA in Oslo District Court. The private crim-

inal proceeding is initiated in accordance with section 402 of the

Norwegian Criminal Procedure Act.

The criminal proceedings are formally initiated by the Oslo District

Court. The parties filed their arguments in briefs to the Court.

The Oslo District Court has decided to conduct a court hearing in the

fraud case against Enovos Luxembourg SA. The hearing was expected

to take place in Oslo District Court on 31 January and 1 February 2022.

On 28 January 2022 EAM Solar ASA was informed by the Oslo District

Court administration that the hearing in the private criminal proceed-

ings against Enovos Luxembourg SA in Oslo District Court scheduled

for Monday 31 January and Tuesday 1 February 2022 had been post-

poned due to sickness. A new hearing date was set for 21 April and

22 April 2022.

The hearing took place as scheduled and Oslo District Court will,

following the hearing, decide if the fraud charges shall go to main trial

proceedings or be rejected.

On 1 July 2022 Oslo District Court, by Judge Flaterud, dismissed EAM

Solar ASA’s request for a Private Criminal Proceeding against Enovos

Luxembourg SA.

On 4 July 2022 the Company decided to appeal the decision by the

Oslo District Court to the Borgarting Appellate Court. EAM Solar ASA

and its legal counsel deem that the reasons for an appeal are substan-

tiated in both factual errors as well as wrongful interpretation of the

law in the decision made by the Oslo District Court on 1 July 2022.

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On 15 July 2022, the Company filed an appeal of the decision by the

Oslo District Court to the Borgarting Appellate Court. The Company

and its legal counsel deem that the decision by the Oslo District court

dated 1 July is incorrect in both facts as well as law.

On 21 October 2022 Borgarting Court of Appeal rejected EAM Solar

ASA’s appeal against Oslo District Court’s decision to reject the start

of a private criminal proceedings against Enovos Luxembourg S.A.

According to the Borgarting Court of Appeal, the fraud against EAM

Solar ASA should not be brought before a Norwegian court in a private

criminal proceedings since this is not in the public interest. The Court

of Appeal concludes that the fraud case falls under the jurisdiction of

the Norwegian Criminal Code, and writes in its ruling that:

“The evidence and evidentiary arguments that EAM has shown points

overall to the fact that Enovos’ representatives on the board of

Aveleos had so much information about the suspicion and the inves-

tigation related to false documents about the country of origin, which

in turn had an impact on the right to subsidies, that it meant that EAM

was misled by Enovos in connection with the purchase.”

The Borgarting Court of Appeal, however, concludes in its assessment

of the case’s evidence “at a more general level” that there is “reason-

able doubt as to whether EAM will be able to provide sufficient

evidence of criminal guilt”.

The Company has made a provision for the coverage of legal costs for

the counterpart.

Criminal proceedings in Milan

In January 2015 the prosecutor’s Office of Milan filed a request for

trial to the Criminal Court of Milan against 9 individuals for fraud

against the State of Italy in conjunction with subsidized electricity

sales contracts.

The Criminal Court proceedings in Milan involved only the two Avelar

appointed directors of Aveleos that was involved in the fraud against

EAM. The four Enovos appointed directors active in negotiating with

EAM has so far not been subject to any investigation or indictment.

In March 2016 the Criminal Court of Milan accepted the request for

trial and decided that EAM Solar ASA should be included as a victim in

the criminal proceedings.

The criminal proceedings commenced in June 2016, and on 18 April

2019 the Criminal Court of Milan published its decision. The Criminal

Court of Milan found it evidenced in 2019 that the indicted Aveleos

directors, Mr Giorgi and Mr Akhmerov, was guilty of criminal contrac-

tual fraud against EAM Solar ASA in conjunction with the sale of the

P31 portfolio and sentenced them to prison terms and provisional

damages of EUR 5 million. Aveleos S.A., as civil liable party, was

condemned to be financially responsible for the same provisional

damage. The Criminal Court of Milan published a 300-page long

detailed reason for their ruling on 15 October 2019.

The ruling by the Criminal Court of Milan was appealed by several

parties, and the appeal procedure in the Criminal Court of Appeal of

Milan commenced with one hearing in October 2020 and two hear-

ings in December 2020.

On 20 January 2021, the Criminal Appeal Court of Milan decided to

revoke the first instance judgement of the Criminal Court of Milan.

Consequently, Akhmerov and Giorgi were acquitted by the Court for

all points of indictment related to fraud against the State of Italy and

EAM Solar ASA, including the ruling to hold Aveleos financially liable

for the acts conducted by Akhmerov and Giorgi.

The Appeal Court’s decision was a two-page notice identifying the

decisions without presenting arguments or explanations for the

revocation of the Criminal Court of Milan decision of April 2019. The

arguments and evidence base for the decision by the Criminal Appeal

Court was made available to the parties on 20 April 2021, 90 days

from the date of the decision.

Following the reception of the full judgement from the Milan Criminal

Court of Appeal, EAM Solar ASA decided to join with the Prosecutor’s

Office in Milan in appealing to the Italian Supreme Court of Cassation. The

appeal was submitted on 1 June 2021 to the Supreme Court of Cassation.

EAM Solar ASA seeks to reinstate the convictions of Igor Akhmerov

and Marco Giorgi for the crime of fraud against EAM.

The appeal was based on several cases of misinterpretation of facts

in the grounds for judgment by the Milan Criminal Court of Appeal.

The Supreme Court of Italy held a hearing on 6 October 2021 on the

appeal of the acquittal sentence decided by the Milan Criminal Court

of Appeal issued 20 January 2021.

On 7 October 2021, the Company was informed that the Supreme Court

of Italy decided to annul the 20 January 2021 judgment of acquittal by

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the Milan Criminal Court of Appeal in the subsidy fraud case against the

State of Italy and contractual fraud against EAM Solar ASA.

Late November 2021 the Supreme Court issued its full decision for the

annulment of the acquittal ruling. The short summary of the reason for

the Supreme Court to annul the Milan Appeal Court acquittal decision

in its entirety is that the Supreme Court found that the Milan Appeal

Court did not fulfil its obligation to conduct a correct and comprehen-

sive review of the factual evidence in the criminal case, resulting in an

erroneous evaluation of the evidence with the effect that the acquittal

decision was based on obvious inconsistent and illogical arguments.

The Supreme Court is sending the criminal case back to a different

chamber of the Milan Appeal Court for a new proceeding in the

criminal case with the requirement that the new court proceedings

must proceed with a complete review of the evidence, making correct

application of the principles of law and the rules of logic as formu-

lated in the Supreme Court decision.

On the fraud of EAM, the Supreme Court concludes that the

evidenced withholding of essential information during the contrac-

tual negotiations in itself constitute a contractual fraud.

There has still not been a date set for any further appeals following

the decision of the Italian court of Cassation.

New criminal investigation for subsidy fraud in Italy

On 28 October 2020, EAM Solar ASA was informed that the Prosecutor

of the Criminal Court of Bolzano had ordered Guardia Di Finanza

(the financial police) to perform a “search and seizure” of documents

from 57 Italian companies owning 58 Solar PV power plants with

subsidized electricity sales contracts towards the State of Italy (GSE).

The search and seizure were conducted in relation to an ongoing

investigation into subsidy fraud against the State of Italy.

The Milan office of EAM Solar ASA’s Italian subsidiaries (ENS Solar One

Srl, Energia Fotovoltaica 25 Srl and EAM Solar Italy Holding Srl) were

visited by officers of Guardia Di Finanza who retrieved documentation

related to the above-mentioned companies. In addition, the search

and seizure order also identified Energia Fotovoltaica 14 Srl, which

already is part of the criminal proceedings in Milan and was sent into

bankruptcy in 2016.

The search and seizure order issued by the Prosecutor identified 79

individuals as persons of interest to the public prosecutor. Viktor E

Jakobsen, CEO of EAM Solar ASA, holds the position as Sole Managing

Director in ENS Solar One Srl, ENFO 14 Srl and ENFO 25 Srl, and is

consequently named as one of the 79 individuals.

With this new investigation, and the existing criminal proceedings in

Milan, all power plants sold to EAM Solar ASA by Enovos and Avelar

through their Joint Venture Aveleos SA, are subject to criminal proceed-

ings or under investigation for subsidy fraud against the state of Italy.

In January 2021, EAM Solar ASA learned that the Bolzano Public

Prosecutor requested the Norwegian National Authority for

Investigation and Prosecution of Economic and Environmental Crime

(“Økokrim”) to search the offices of EAM Solar ASA in relation to the

above-mentioned investigation.

EAM Solar ASA has been in a continuous dialogue with Økokrim since

2017 in relation to the fraud conducted against the company in 2014.

Following the request from Bolzano, Økokrim was invited to EAM

Solar ASA’s offices for voluntary transfer of relevant documents. This

was conducted on 21 January 2021. EAM Solar ASA will continue to

support the investigation to the extent requested by Økokrim and the

Prosecutors office of Bolzano.

EAM Solar ASA was informed on 3 March 2021 that the Criminal Court

of Bolzano, on the request of the Public Prosecutor, has decided that

the Company’s CEO, Viktor E Jakobsen, no longer is considered as a

“person of interest” (suspect) in the ongoing investigation.

The Norwegian National Authority for Investigation and Prosecution

of Economic and Environmental Crime (“Økokrim”) is fully informed

of the change in status of the Company’s CEO.

No provisions are made in the accounts on this matter.

Arbitration

Following the final legal ruling by the Administrative Court of Lazio

in June 2016 that the 17 terminated FIT contracts were invalid, the

Company summoned Aveleos S.A. in September 2016 to the Milan

Chamber of Arbitration requesting the Share Purchase Agreement

between the parties to be declared null and void based on funda-

mental breach of contract.

On 2 April 2019 a final award was made by the Arbitral Tribunal of

the Milan Chamber of Arbitration. The Arbitration decision was not

unanimous, with one of three arbitrators dissenting to dismissing

the claims brought by EAM Solar ASA. The dissenting opinion was

published together as an integrated part of the of the arbitration

ruling.

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The majority of the Tribunal decided to dismiss EAM’s claims for

the annulment and termination of the SPA. However, the Tribunal

declared the right of the Company to be compensated for losses

suffered in connection with the breach of the Representation and

Warranties under the SPA within the limits of the liability cap of

approximately EUR 3.7 million as defined in the SPA.

On 4 July 2019 EAM Solar ASA filed an appeal against the Arbitration

Tribunal decision. The appeal was filed in the civil Court of Appeal of

Milan. EAM Solar ASA asks the Civil Court of Appeal of Milan to annul the

arbitration award of 2 April 2019 based on 12 different accounts of breach

of Italian law in its conclusions and the basis for the arbitration award.

The first hearing in the appeal proceedings was held in January

2020, and the Appeal Court accepted the request for appeal. The

first hearing of the appeal process was scheduled to take place in

February 2021, but the Appeal Court decided that the hearing would

be replaced by submission of briefs by the parties.

On 23 June 2021 the Civil Court of Appeal of Milan decided to dismiss

the request for the annulment of the Arbitration award from 2019.

The Arbitration decision of 2019 is still not final since EAM decided

to appeal the dismissal by the Civil Appeal Court in Milan to the

Supreme Court in Italy within the deadline on 22 September 2021.

New Arbitration in Milan

On 5 October 2020, the Arbitration Chamber of Milan notified EAM

Solar ASA and its subsidiary EAM Solar Italy Holding Srl that Aveleos

SA had filed for two new arbitration proceedings in relation to the P31

SPA with reference to shareholder loans and corporate guarantees.

The two proceedings have later been merged into one proceeding.

Each party has appointed an arbitrator that together has appointed

a chairman. A first hearing after the formation of the arbitration panel

has been conducted. The proceedings were originally scheduled

by the court to end on or about the first quarter 2022. This was later

extended by 6 months until the end of September 2022.

The proceedings have been delayed compared to what was origi-

nally anticipated. The Arbitration Tribunal has appointed a 3

party

financial evaluator to assess the amounts claimed under this second

arbitration, and a final report is expected to be submitted to the

Tribunal on or about 28 February 2023.

Further hearings are expected to be scheduled following the

submittal of the final report of the evaluator.

No provisions are made in the accounts on this matter.

Civil Court Italy; Aveleos

EAM Solar Italy Holding Srl was on 10 December 2020 notified that

Aveleos had filed a petition, without EAM’s knowledge, to the Civil

Court in Milano claiming payment of shareholder loans in the amount

of EUR 12 683 721 under the Sale and Purchase Agreement of the P31

transaction.

EAM Solar ASA and its subsidiary is of the opinion that such claim

does not exist and have third party expert opinions supporting this

fact. The fact is that Aveleos SA owes EAM Solar ASA money following

the SPA due to the non-transfer of 10 power plants.

EAM Solar Italy Holding Srl contested the decision in January 2021

and enrolled the case to Court. A hearing was expected to take place

in June 2021 but ended up being scheduled for 7 September 2021. In

the meantime, Aveleos adhered to our objection that an arbitration

was already pending on the same issue, and accordingly decided to

drop the case. This will bring the proceedings to an end.

No provisions are made in the accounts on this matter.

Civil Court Italy; UBI

In November 2018 EAM Solar ASA was served with a notice that UBI

Leasing had requested the Court of Brescia for an injunction of EUR 6

million on EAM assets. The court of Brescia granted a preliminary

non-enforceable injunction.

EAM challenged the injunction, and the first hearing was scheduled in

May 2019. A summary hearing was held, and the case was postponed

until November 2019. In December 2019 EAM was informed that the

judge in the Civil Court of Brescia dismissed the petition by UBI Leasing

to have a provisionally enforceable injunction against the Company.

A further hearing was held in January 2020. In this hearing the

judge enabled the parties to submit further briefs in the period until

mid-April and the next hearing was set for May 2020. This hearing and

filing of briefs were postponed due to Covid-19.

Briefs were filed in May and June 2020 and a hearing was held in

September 2020. An order was issued in November 2020 where the

Judge accepted EAM Solar ASA’s request to examine witnesses. The

first witness hearing in this matter was held 1 June 2021. The court

set a second hearing to resume the examination of witnesses on

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10 November 2021, but this hearing was postponed and held on

31 March 2022. A third witness hearing was held on 12 July 2022. On

10 November 2022 the Judge decided that UBI must submit certain

documents on EAM’s request. A hearing was conducted on 30 March

2023 where UBI submitted more documents. The next hearing is

scheduled for December 2023.

No provisions are made in the accounts on this matter.

Civil Court Luxembourg

EAM Solar ASA filed a civil lawsuit in Luxembourg in July 2019 against

the Aveleos shareholder, Enovos, along with the four Enovos-

employed directors of Aveleos. This civil claim is subordinate to the

original criminal complaint with civil action filed in 2016.

A hearing had been scheduled for 12 May 2020 in the commercial

court of Luxembourg regarding the Standstill Agreement. However,

this hearing has been postponed several times since the Court has

decided to stay the proceedings awaiting the final outcome of the

Arbitration proceedings, and the arbitration appeal procedure.

Administrative Court Italy – ENFO 25

In September 2019, the Company received notice from GSE that they

had suspended payments of electricity delivered under the feed-in-tariff

contracts for ENFO 25. The Company appealed shortly thereafter the afore

mentioned order before the Administrative Court “TAR” in Lazio (Rome).

The hearing held before TAR Lazio in December 2019 was a precau-

tionary hearing in order to evaluate whether there are urgent reasons

for GSE to resume payments while waiting for the court hearing of the

merits. TAR Lazio denied the request for GSE to resume payments.

The Company consequently decided to appeal the TAR Ordinance

before the second instance Court (i.e. Consiglio di Stato) which

upheld the appeal.

The lawsuit was sent back to the TAR waiting the merit phase, and a

hearing was scheduled on 4 June 2021. In the meantime, in this case,

the GSE will not pay for electricity delivered until the merit phase

and ENFO 25 will not have to reimbursement any previously received

revenues from GSE.

The Administrative Court of Lazio (TAR) has decided in a court ruling on

12 July 2021 that the termination decision made by GSE on the FIT contract

for ENFO25 in September 2019 is invalid and consequently cancelled.

GSE has not paid the FIT tariff for the electricity delivered by ENFO 25

since July 2019, and currently owe approximately EUR 815 thousand

in unpaid electricity bills to ENFO 25. The Administrative Court also

ordered GSE to cover the legal costs of EAM Solar ASA.

How and when GSE will restore their contractual obligations is not yet

determined.

Due to the unwillingness by GSE to settle the outstanding amount

and resume payment of the Feed-In-Tariff in accordance with the

decision by the administrative court of Lazio (TAR), the Company

has decided to summon GSE to the higher administrative court

(Consiglio di Stato), asking the court to order GSE to immediately

resume payment of the Feed-In-Tarff and the outstanding amount.

No hearing date has yet been set.

Management has evaluated the situation of ENFO 25 and its net

receivable position against GSE at year end, concluding that it is

more likely than not, that the net receivable against GSE will not be

collected. Based on this conclusion the trade receivable against GSE

and the corresponding provision of payable is written down and the

net amount recognised as an operating cost, write down of trade

receivables amounts to EUR 569 thousand. Revenues recognition and

reporting of revenues for 2022 remains unchanged.

Please also see the Annual Report 2021 and previous years for further

information on the legal processes.

EAM Solar annual report 2022EAM Solar annual report 2022

1010

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

EAM Solar in briefEAM Solar in brief EAM Solar in brief

DIRECTORS’

REPORT

Strategic review and outlook

Operational review

Corporate status

Financial review

Going concern

Market overview

Events after the balance sheet date

Risk factors

Transactions with related parties

Health, safety and the environment

Presentation of the financial statements

EAM Solar annual report 2022

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

CONTENTS

EAM SOLAR IN BRIEF

DIRECTORS’ REPORT

ESG REPORT

FINANCIAL STATEMENTS

Directors’ reportDirectors’ report Directors’ report

DIRECTORS’

REPORT

The 2022 annual report

EAM Solar ASA (EAM or the Company) is a public limited liability

company, incorporated and domiciled in Norway, with registered

address at Bryggetorget 7, 0250 Oslo, Norway. Energeia AS estab-

lished EAM on 5 January 2011.

EAM Solar ASA (“EAM”, “EAM ASA”, or “the Company”) is a company

listed on the Oslo Stock Exchange under the ticker “EAM”. The

Company’s primary business is to own solar power plants and sell

electricity under long-term fixed price sales contracts, and to pursue

legal proceedings in order to restore company values. The Company

owns four power plants in Italy, which are located in the Puglia and

Basilicata regions in Southern Italy. Energeia AS manages EAM under

a long-term management agreement.

The geographical focus of EAM has since its inception been to acquire

power plants under long-term contracts in Europe. EAM acquired its

first power plant in Italy in 2011. Since then, EAM has acquired in total

25 power plants with a combined capacity of 27.1 MW generating 38.3

GWh annually, representing annual revenue of EUR 13.5 million.

At the beginning of 2015, EAM had EUR 110 million in capital

employed, EUR 180 million in contractual revenue reserve, EUR 50

million in future market price sales and an expected EBITDA from the

17-year contract period of EUR 200 million.

However, the period from 2014-2016 became very challenging for

EAM on the back of the flawed acquisition of 21 PV power plants from

Enovos Luxembourg S.A. and Avelar Energy Ltd. through their jointly

owned single purpose vehicle Aveleos S.A.

Seventeen of the 21 PV power plants transferred to EAM in July 2014

did not have valid long-term feed-in-tariff contracts (FIT) according to

the contractual counterparty Gestore dei Servizi Energetici GSE S.p.A,

owned by the State of Italy, as warranted by Enovos Luxembourg S.A.

and Avelar Energy Ltd under the Share Purchase Agreement.

In the fourth quarter 2015, GSE terminated the FIT contracts, which

had been suspended since August 2014, and demanded a repayment

of previously received FIT from 5 of the 7 companies acquired by EAM.

Due to Enovos Luxembourg S.A. and Avelar Energy Ltd lack of willing-

ness to assume what the Company believes is their contractual

obligation as owners of Aveleos S.A. and to remedy the situation, EAM

has been forced to initiate legal proceedings in Italy, Luxembourg and

Norway.

The events following the so-called “P31 acquisition” have effectively

transformed EAM from a dividend paying “YieldCo” to a large lawsuit.

Consequently, the share price of EAM Solar ASA on the Oslo Stock

Exchange has dropped considerably.

The board of directors and the management are directing all their

effort and attention to resolve this challenging situation in the

appropriate legal venues as fast as possible in order to restore the

value of the Company and return the outcome to the shareholders.

Information on Corporate Governance is presented in a separate

document below.

Strategic review and outlook

EAM’s strategy was in the outset to create value by acquiring oper-

ational power plants and, through an active ownership, to optimise

operations and achieve the best possible electricity yield, lowest

possible cost of operations, and highest possible dividend yield.