ABOUT ECOFIN WATER & POWER OPPORTUNITIES PLC

Ecofin Water & Power Opportunities plc (EW&PO or the Company) is an authorised UK investment trust (a type of closed end fund) which has an unlimited life. The Company’s investment objectives are to achieve a high, secure dividend yield on its investment portfolio and to realise long-term growth in the capital value of its portfolio while taking care to preserve shareholders’ capital.  The Company’s accounts are prepared in UK pounds sterling and its Ordinary Shares, Subscription Shares, Convertible Unsecured Loan Stock (CULS) and its Zero Dividend Preference Shares (ZDP Shares) issued by EW&PO Finance plc, a subsidiary of the Company, are all denominated in sterling and listed on the London Stock Exchange.

The Company's assets are primarily invested in the equity and equity-related securities of utility, utility-related and energy companies worldwide.  The Company may also invest, to a limited extent, in the debt securities of such companies and may hold significant cash or cash equivalent positions from time to time.  Utility companies are those involved in the generation, transmission, distribution and supply of electric power; the abstraction, treatment and distribution of water; the treatment of waste water and waste; the distribution of natural gas; and the transmission of energy.  Utility-related companies are those that supply equipment, technology, fuel or services to utility companies or which enjoy natural monopolies in the provision of essential infrastructure services.

EW&PO takes advantage of the highly fragmented nature of the global utilities sector—in which most companies are local, regional or national, but not global, companies—to invest in a portfolio diversified with respect to country, sub-sector of the global utilities sector, company size and regulatory regime.  The company may, with the approval of the Directors, have an exposure to a single country of up to 50% of the Company's gross assets. No single investment by the Company will exceed 15% of its gross assets at the time of the most recent acquisition of shares in such an investment.

EW&PO invests principally in companies whose shares and equity-related securities are listed on recognised stock exchanges in the United Kingdom, Continental Europe, the United States, Canada and other OECD countries.  The Company may invest, however, up to 20% of its gross assets, as calculated at the time of its most recent investment in such securities, in the securities of companies quoted on recognised stock exchanges in non-OECD countries and up to 25% of its gross assets in unquoted securities.  The Company may also invest up to 15% of its gross assets in collective investment vehicles, including other investment trusts and funds managed by the Investment Manager.

The Company employs substantial levels of gearing to enable it to earn a high level of dividend income and to offer its Ordinary Shareholders a geared return on their investment. The level of gearing utilised by EW&PO is the responsibility of the Directors who have authorised the Investment Manager to employ gearing of up to 60%.  Gearing is the aggregate of any prime brokerage borrowings, the nominal amount of the CULS and the entitlement of the ZDP Shares, less cash, divided by Ordinary Shareholders’ funds.

The Company may make use of derivative instruments.  Although it does not hedge all foreign currency exposure back into Sterling, the Company does have a selective hedging policy to minimise the impact of fluctuations in exchange rates.

Risk

In the opinion of the Directors of the Company, an investment in the Ordinary Shares of the Company entails a greater than average degree of risk, in the context of the investment trust industry, principally because the Company employs substantial levels of gearing.  In the opinion of the Directors, an investment in the Subscription Shares of the Company also entails a greater than average degree of risk, principally because they are a highly geared security and may expire with no value.  In the opinion of the Directors, an investment in either the CULS of the Company or the ZDP Shares of EW&PO Finance plc entails less risk of a loss of capital than an investment in the Ordinary Shares or Subscription Shares of the Company.