The Renewables Infrastructure Group (TRIG)

The Renewables Infrastructure Group (TRIG) has a £2.9bn diversified portfolio of renewable energy infrastructure assets spread across five countries and four technologies. The UK is the largest single country exposure at 59%, along with four other European countries. TRIG develops, constructs, operates and optimises assets across onshore and offshore wind, solar PV and battery storage and, in taking on the whole value chain from development, can sustain and extend the asset life of its portfolio without having to periodically raise fresh equity. There is high visibility over revenues with 68% fixed and 56% inflation-linked over the next ten years.

TRIG currently yields 10% and the dividend is fully covered. TRIG’s dividend for the year ending 31/12/2026 is targeted to be held at the same level as for 2025. This follows discussions between the board and shareholders and is a recognition that the dividend is already at a very attractive level. Nevertheless, dividend cover is expected to rise over the coming years, with the long-term objective of normalising at 1.1 to 1.2×.

One factor in TRIG’s high yield is the 29% discount. TRIG and its peer group have traded at wide discounts from the outset of the higher interest rate era, but in the Dividend section we look at how wide the spread between TRIG’s yield and government bonds is, suggesting that while, yes, its share price is sensitive to interest rates, the spread over bond yields has been stretched to its widest point since TRIG’s 2013 IPO. As we see in the Portfolio section, TRIG’s NAV is much less sensitive to interest rates though.

TRIG has a comprehensive capital allocation approach in response to the discount, with a £150m share buyback programme and targeted capital recycling.