Integrated annual report 2024

About this annual report

This is the integrated annual report of Aquafin NV, with registered offices at Dijkstraat 8 – 2630 Aartselaar.

Aquafin has two subsidiaries: Aquaplus that valorises the expertise of the organisation for industrial clients and on the private market, and Aqcelerator that focuses on technological and infrastructural innovation. The figures for Aquaplus and Aqcelerator have been consolidated in this annual report.

SCOPE

This annual report contains the main financial figures for the 2024 financial year and notes on these, an overview of business activities, the corporate governance report and comprehensive reporting on sustainability initiatives within our corporate sustainability policy. The sustainability statement is an initial trial report that was not audited.

The financial report was audited by BDO. Reporting period: 01 January 2024 – 31 December 2024.

Publication date: 15 April 2025

Foreword

In December, I became the new chairman of Aquafin, a decision I did not have to think long about. Over the past few years, as chairman of De Vlaamse Waterweg, I visited a lot of projects connected with the Sigma Plan. Projects of crucial importance to protect us against the flooding of the Scheldt and its tributaries. The extreme showers – veritable water bombs even – that we are now also seeing in Flanders are proof that the threat is real. While at the same time, the availability of potable water in the same Flanders may even become a problem in the long term. So if I can be of any significance to a company that makes it its mission to create a living environment in harmony with water, then I consider it an obvious choice.

Climate change also has a major impact on the cost of water treatment. 2024, the wettest year on record in Belgium, brought a record volume of incoming sewage water to treatment plants: no less than 1 billion m³ or a quarter more than in an average year. Despite this huge challenge, we ended 2024 with a commendable 97.26% of waste water treatment plants meeting all applicable standards.

A large flow due to dilution caused by an extremely high volume of rainwater not only means more pump capacity and therefore energy. It also makes itself felt in higher sludge processing costs and more chemicals in order to comply with treatment standards which are stricter in Flanders than the ones imposed in Europe. This new context not only makes you think about the real added value of these stricter standards but also about the formula of the current remuneration model.

What matters is that our streams and rivers become healthy again. Good quality treated waste water is essential for that but there is still work to be done to further expand and optimise the sewer system. Through the projects that we delivered in 2024 for the Flemish Region, we reduced nitrogen emissions into the watercourse by 615 tons per annum and phosphorus emissions by 138 tons per annum. In the meantime, we have also been helping towns, cities and municipalities realise their reduction objectives and carrying out research and innovation in order to find the most sustainable solutions for maximising our positive impact and reducing our ecological footprint.

In that context, the permits that Aquafin acquired last year for the construction of two new sludge dryers that run on residual heat and a sludge mono-processor with recovery of energy and raw materials represent a real milestone. You can read all about it in this annual report which, for the first time, also includes a comprehensive sustainability report.

Koen Anciaux Chairman of the Board of Directors

About Aquafin

Who we are

In all probability, the waste water that you discharge at home via your shower, toilet, washing machine, etc. will travel through the municipal sewers and end up in Aquafin’s collector sewers. From there, it will be transported to a waste water treatment plant (WWTP) where it will be treated until it is clean enough to be discharged into the surface water. Currently, around 87,6% of all the domestic waste water in Flanders finds its way to an Aquafin WWTP.

Aquafin is not only responsible for collecting and treating domestic waste water, we also build, maintain and finance the supra-municipal infrastructure required for the Flemish Region.

Besides this contract set by decree, we also offer our expertise for use in connection with the expansion and management of the municipal waste water and rainwater infrastructure. Aquafin serves more than half of all Flemish cities, towns and municipalities, mostly via a structural partnership that we have with drinking water companies water-link, Pidpa and De Watergroep (Riopact). Our ambition for the future is to set up the same type of partnership with all the other sewer operators too. Because the municipal and supra-municipal sewer infrastructures are interwoven to such a large extent, central management can deliver significant efficiency gains on an ecological, economic and organisational level, for example.

In accordance with the provisions in our cooperation agreement with the Flemish Region, Aquafin strictly monitors the separation of charges and income relating to activities for the Flemish Region and local authorities.

Our vision

"Clean watercourses for future generations and a living environment in harmony with water"

We will take care of the treatment of domestic waste water in Flanders and look for space for water. To do that, we will build and manage a transport network forwaste water, waste water treatment plants, infiltration and buffer elements for rainwater. With smart infrastructure, we can strengthen climate resilience in Flanders and help create a pleasant and healthy living environment for people and nature.

We consider the careful use of water and raw materials essential to that vision of the future. Therefore we are not only helping keep the water cycle intact, we are also making our own operations sustainable.

Strategy, developments and challenges

"Simplification and standardisation to counteract increasing complexity"

IIn 2024 – an electoral year – Aquafin was able to convince the new Flemish Government to further increase the pace of investment in water treatment infrastructure and to improve the alignment of municipal and supra-municipal investments in the process. A crucial strategy for healthy watercourses, according to CEO Jan Goossens. At the same time, he sees that there are a few other hurdles that will need to be overcome.

WHAT DEVELOPMENTS STAND OUT WHEN WE LOOK BACK AT THE PAST YEAR?

"We have seen it for a number of years and it was confirmed once again last year: the context we work in is becoming more and more complex. Take new laws and legislation such as the revised EU Urban Waste Water Treatment Directive which has imposed a lot of new or stricter measures. And the Water Framework Directive is also expected to be revised. We have also established that it is now much more difficult to obtain permits than it used to be. And I am talking about both permits for our standard activities such as sewer projects and the three large industrial sludge processing plants which we got the green light for in 2024 after a long and intensive process."

HOW IS THE COMPANY COPING WITH THAT INCREASING COMPLEXITY?

"By looking for simplification and standardisation in that more complex context. What I mean by simplification is primarily counteracting fragmentation in the sector. The mandate granted to us by the Flemish Region a few years ago to align municipal and supra-municipal investments helps achieve results quicker with the same resources. The infrastructures of the two policy levels have such a strong influence on each other that it is absurd not to look at them together. But synergy gains will become even greater if management is also carried out under one roof. Then it will also become possible to make savings on the execution of projects, for example. That is why we are looking to set up structural partnerships with all Flemish sewer operators. We already have them with water-link, De Watergroep and since 2023 with Pidpa too with whom we expanded collaboration last year. We are also already collaborating with Farys on a project basis and it would be great if we could develop this arrangement into a structural partnership too."

"We are striving for more uniformity within the sector at the same time. For instance, in 2024 we brought drinking water companies and the Flemish Environment Agency together at an initial Blue Summit in order to consider digitalisation and automation together with us as well as the exchanging of data between the different water companies in order to enable the further integration of the Flemish water sector. We are all facing the same challenges, so we prefer to look beyond our own organisational boundaries."

LAST YEAR, WE ALSO SAW NEW ACTIVITIES SUCH AS SEWER THERMAL ENERGY TAKE OFF. WHERE DID THAT ACCELERATION COME FROM?

"Over the past few years, we have focused on broadening and deepening our activities for the purpose of responding to social challenges such as the energy transition and water shortages in long periods of drought. Examples include sewer thermal energy and the reuse of effluent, including opening up the availability of these via the new digital platform AquaMarkt. These new activities have brought us into contact with a type of client and stakeholder that is completely new to us. In the process, we also brought about some additional complexity ourselves, not least because even the legal framework is often still lacking for innovative partnerships of this type. Last year, we carried out truly pioneering work in order to get the procedures right and connect parties. It has paid off and interest in projects of this type is growing rapidly."

WHAT ARE YOU LOOKING FORWARD TO IN 2025?

"I can think of a lot of exciting topics coming our way this year but one of the big ones is surely the start-up of our first full-scale quaternary treatment at our Aartselaar WWTP. The initial plans date back at least five years to a time when we were already anticipating the future obligation to remove micropollutants such as certain drug residues from waste water. Our plants are not currently equipped for this and at the moment, there is no statutory requirement for us to do so either. However, these substances have an impact on the aquatic environment even in small quantities. And therefore Europe wants to see them removed in the future, hence the revised Urban Waste Water Treatment Directive."

"Moreover, Europe has placed the financial responsibility for this on the producers via whose products these substances end up in waste water. We have already entered into a dialogue with them about how we can tackle this together."

"We are finding that our social playing field is getting wider and wider and we – literally and figuratively – are connecting to completely new sectors. For instance, our new sludge processing plants are being built on industrial sites where the residual heat produced will be both used by us and supplied to industrial plants such as the steel industry, for example. Incidentally, focus is increasingly being directed towards surface water quality, partly because of the 'water ruling' that has already led to a number of permits being refused. As a result, completely new stakeholders are constantly emerging for us. A challenging but interesting prospect."

Jan Goossens

What we do

PROJECTS FOR THE FLEMISH REGION

DEVELOPING AND OPTIMISING THE SUPRA-MUNICIPAL INFRASTRUCTURE

Aquafin is responsible for the development, financing and management of the regional infrastructure for the collection, transport and treatment of domestic waste water in Flanders. Towns, cities and municipalities have to take care of the development and maintenance of the municipal sewer network to which residents connect their waste water. Both Aquafin and the local authorities were given targets – so-called reduction targets – by Flanders for reducing the nitrogen and phosphorus they discharge into watercourses. For excessive quantities of these substances in the water lead to strong growth of algae, which in turn reduces the oxygen content. These targets are in line with the European Water Framework Directive which stipulates that all bodies of water must be in a 'good state' by 2027.

Because the municipal and supra-municipal networks are seamlessly connected, there is strong interaction between them. Since 2024, Aquafin has taken on the role of matchmaker in order to improve the coordination of municipal and supra-municipal (regional) investments. This will enable the available resources to be deployed in the most efficient manner in order to achieve ecological objectives. Together with towns, cities and municipalities, we are therefore on the lookout for possible combinations of municipal and supra-municipal projects which will have the quickest effect on reduction targets and consequently on water quality.

Prioritising projects according to their impact

Aquafin drew up a plan of approach for each body of water outlining the supra-municipal projects that needed to be carried out in order to achieve the reduction targets. However, a budget analysis shows that the current supra-municipal delivery budgets planned are not sufficient for this purpose. So in 2024, we devised a method of prioritisation that takes into account the reduction contribution of projects and specific deadlines as well as any other opportunities such as resolving flooding problems. Prioritisation was also applied to all ongoing projects which resulted in the updating of the project portfolio.

Further refinement of the methodology is on the agenda for 2025. Each project is currently linked to the body of water it impacts most while that impact may be wider. The correct distribution of that impact will help us prioritise projects even better. In addition, we are also working on a dashboard for tracking progress in respect of meeting reduction targets as well as on a simulator that will allow us to compare scenarios with each other.

For extra domestic waste water connections to the sewer system are only one way to achieve reduction targets. Two other routes are the reduction of overflow operation and the removal of even more nutrients from the treatment process.

The graphs below show the reduction contributions of our investment and optimisation projects for nitrogen (N) and phosphorus (P) up to and including 2024, categorised by prioritisation class of the watercourses.

P-REDUCTION (KG/YEAR)

Agreed project volume realised

In 2024, we managed once again to realise the whole planned delivery budget of 174 million euros for investment and optimisation projects. That is a major challenge in the current volatile context we are working in. We therefore monitor the status of projects continuously and proactively make adjustments in order to ensure that we can deliver the agreed budget on time. In the coming years, the Flemish Region foresees a gradual increase in delivery budgets. The target for 2025 is 180 million euros.

In 2024, we also put a total of 334 million euros worth of new projects out to tender. That is well above the target of 260 million euros.

Innovative site approach

The climate impact of building materials and the increasingly complex context in which infrastructure works are being carried out has prompted us to think about taking a different innovative approach. In an initial project to be launched in 2025, we will be testing concepts for optimising communication with the neighbourhood and safety on and around the site. A second project will serve as a testing ground for organising site activities in a more environmentally-conscious way and for the more sustainable use of materials. We collected numerous concepts for the two projects via our internal platform for innovative ideas and we will investigate and develop those concepts further with our technical partners. As one of the major clients for infrastructure works in Flanders, we can therefore take on a pioneering role in order to make infrastructure (works) more environmentally-friendly.

COLLECTING AND TREATING WASTE WATER

The path to clean water

Our large collector sewers collect domestic waste water from the municipal sewers and transport it to one of the 330 waste water treatment plants that Aquafin had in service on 31 December 2024. There it undergoes a mechanical treatment process followed by a biological treatment process in order to comply with Flemish and European standards so that it can then be discharged into surface water. This is still carried out almost everywhere. But it can also be upgraded for any application, even to drinking water quality. Drinking water company Aquaduin has been producing drinking water from the treated waste water or effluent from our WWTP in Koksijde for more than 20 years. Interest in effluent as a basis for industrial applications such as cooling water or process water has increased over the past few years. Several major reuse projects that are currently under development are due to be launched in the coming years.

Good treatment results despite wettest year on record

The treated waste water is assessed based on 3 to 5 parameters, depending on the capacity of the WWTP (see box). For most parameters, there are both concentration limits as well as removal percentages to be attained according to Flemish standards. Concentration limits indicate how many milligrams per litre of a substance can be present in the treated waste water. Removal percentages specify how many percent of that substance we have to remove annually.

The vast majority of sewers in Flanders transport both waste water and rainwater to the WWTPs. When it rains a lot, the waste water is therefore highly diluted with rainwater and the infiltration of groundwater into the sewers also results in dilution. Therefore the concentration of substances to be removed in the incoming sewage water is sometimes lower than the concentration limit that applies to discharging into the watercourse. In that case, and in order to achieve the removal percentage, it is necessary to add extra chemicals. In the evaluation of the treatment results in respect of removal percentages, influent samples that are too highly diluted are not included, by agreement with the Flemish Environment Agency.

In 2024, 320 of the 329 WWTPs1 evaluated complied with all the standards. Of the other 9 WWTPs, 8 achieved all the concentration limits as well as 4 of the 5 removal percentages. Only 1 WWTP failed to achieve 1 of the 5 concentration limits due to sludge leaching but did meet all the removal percentages. As 2024 was the wettest year on record in Belgium according to the RMI, these are excellent treatment results.

In the meantime, at more than 50 WWTPs we are already removing more phosphorus than the standard imposed to reduce the phosphorus burden on the watercourses we discharge into. Our goal is to realise this for all plants that treat waste water from more than 10,000 residents by the start of 2027.

1 Only WWTPs that were operational on 30 June have been included in the evaluation. In 2024, Aquafin put a 330th WWTP into service during the second half of the year.

PARAMETERS FOR CLEAN WATER

> BOD: biological oxygen demand – the amount of oxygen required to break down the pollution biologically.

> COD: chemical oxygen demand – the amount of oxygen required to break down the pollution via a chemical process.

> Suspended solids: all undissolved substances in a volume of waste water.

> Nitrogen & phosphorus: nutrients present in domestic waste water. Excessive quantities of these in the watercourse lead to strong algae growth which reduces the oxygen content.

Challenging year for sludge processing

The micro-organisms that absorb the dissolved impurities in the biological treatment process grow continuously. We have various processing routes for the excess sludge produced as a result. After thickening at the WWTP, half of the biomass goes to one of our 13 digestion plants. We convert the biogas into green electricity and heat by means of cogeneration (CHP) and currently into biomethane at one location. In 2025, we will be replacing cogeneration with biomethane production at 3 additional WWTPs.

During the next stage, as much water as possible is extracted from the digested sludge and the undigested sludge so that the volume shrinks further. In the final processing phase, two thirds is incinerated and one third of the dewatered sludge goes to one of our three current sludge dryers. Here it ends up as pellets with a high calorific value which are used as a renewable energy source.

The larger the flow of sewer water we process at our WWTPs, the more sludge we produce. But the increased removal of phosphorus in the treatment process of 50 WWTPs also leads to more sludge. We ended 2024 with no less than 9% more dewatered sludge than the previous year, which already was extremely wet. This shows in the much higher costs for chemicals for thickening and dewatering the sludge, for transportation and for sales. We even got close to our capacity limits for final processing in Flanders which meant we had to start looking for extra capacity abroad. With the start-up of two new sludge dryers that run on residual heat and a sludge mono-processor (see 'Sludge processing of the future under construction') from 2027, the final processing of our sludge in Flanders over the coming decades is guaranteed.

MAINTAINING HIGH-PERFORMING INFRASTRUCTURE

Taking current prices into account, the reinvestment value of the infrastructure that Aquafin manages for the Flemish Region currently stands at around 10 billion euros. Huge investments that must continue to pay off. Due to the ageing of the infrastructure, there is logically an increasing need for maintenance, renovations and replacements in order to continue to guarantee proper functioning. But new legislation and improvements in efficiency can also prompt optimisations.

State of every asset is known

We determine which investments are most urgent based on the state and age of the various assets (asset health index) and draw up a programme for replacement. Having previously carried out this exercise for pumping stations and the sewer system, we did the same for WWTPs in 2024. So now we have a clear picture of the state of health of more than 30,000 individual assets. That picture is based partly on inspections such as camera images of sewers and partly on the theoretical expected lifespan. In the coming years, we will further enhance it with findings made during visual inspections. However, the picture that we currently have already shows that here too, the budgets planned for the next few years will not be sufficient and an investment backlog is building up that will only continue to grow. This is due to the big wave of investments from the '90s onwards. Those assets are now increasingly in need of renovation or replacement. We have also seen significant increases in the prices of such projects in recent years. In 2024, we delivered asset management projects for the whole planned amount of 54.3 million euros. In the coming years, it will become increasingly difficult to keep the infrastructure at the current level of reliability with the investment funds available for maintenance and replacement.

Energy savings for infrastructure

The water treatment process requires a lot of energy for pumping and the biological process of breaking down the pollution in the waste water by means of aeration, for example. We constantly optimise our energy consumption through our continuous focus on the energy efficiency of process settings and the close monitoring of consumption. We can also use funds from the Energy Fund to improve the energy performances of the infrastructure every year. The fund is fed by the payback effects of previous investments in energy efficiency or production of green electricity. These investments bring an annual saving of 20 GWh of electricity and provide an additional 17 GWh of green electricity production. In 2024, we invested just under 6 million euros in projects with that objective, a significant proportion of which went into the construction of PV installations and energy-efficient controls for aeration at WWTPs. Energy figures: see sustainability report

Action plan for mitigating overflow operations

Untreated waste water can escape into the watercourse via emergency outlets from the sewer system – so-called overflows –and cause ecological damage. In total, Flanders has more than 8,000 overflows in both municipal and supra-municipal sewers. An overflow starts to work when the sewer overflows. This may be due to an excessively high flow volume caused by heavy rain but it can also happen in dry weather if the flow of water is impeded by a blockage, for example.

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At the beginning of 2025, Aquafin completed the installation of 1,600 overflow gauges. These provide information on the frequency, duration and flow in respect of overflow operation. On the one hand, they will enable us to detect a blockage in the system much quicker so that we can take action and thus limit the environmental impact. But overflow measurements reveal nothing about the exact impact on the watercourse. With the help of Cockle, a calculation tool that we have developed in-house, we can estimate the actual waste load emitted properly. In 2024, we carried out an initial, large-scale analysis on 4,000 overflows into watercourses which should comply with the Water Framework Directive the soonest. This has shown that 15% of those overflows require priority action and a small minority are truly problematic. Lack of storage capacity and overflow sills that are too low are often the cause. Cockle helps us compare different remedial measures which could involve expanding storage capacity, disconnecting rainwater and canals that are connected to the sewerage system, smart sewer water control or the aftertreatment of overflow water. We are currently testing various after-treatment technologies in trial projects.

Sludge processing of the future under construction

From 2027, the final processing of our sewage sludge will be completely fossil-free. Last year we started the construction of two new sludge dryers that will run on residual heat from waste processing. They will replace the current sludge dryers in Deurne, Leuven and Houthalen which are coming to the end of their service life and still run on natural gas to a large extent. The new dryers are being installed in Beringen, with residual heat from Biostoom Beringen, and in Roeselare where we will connect to Mirom’s heat network.

The dried sludge will be used in our new sludge mono-processor to help produce high-pressure steam. This plant has also been under construction since the end of 2024, at the Arcelor Mittal site in Ghent. Here, two thirds of all the sludge will be incinerated and energy and steam will be recovered, with the latter being supplied to the steel producer’s steam network for use in the production of 'green steel'. With the construction of the sludge mono-processor, we can be sure of the guaranteed sale of two thirds of all the sludge in Flanders, at least until 2046 when the DBFMO contract (design, build, finance, maintenance and operations) with our partner FOSTER comes to an end. That is an important guarantee given the limited final processing capacity in Flanders and even beyond.

In the meantime, we have also been investigating how we can recover phosphorus from fly ash from incineration in a subsequent process. Phosphorus ends up in waste water via human urine which accounts for its presence in sludge. It is used in artificial fertiliser in the form of phosphate.

BETTER SLUDGE DIGESTION WITH THERMAL HYDROLYSIS

This spring, we will be commissioning a new thermal hydrolysis plant at our Deurne WWTP for the sludge after digestion. When subjected to high pressure and high temperatures, the sludge 'cracks' and releases the easily degradable material in the cells. That material goes back into fermentation for further digestion and consequently also provides more biogas. Another benefit is that hydrolysis enables the sludge to be dewatered more efficiently, increasing the dry matter after dewatering to 40% compared to just 27% without hydrolysis. That in turns leads to fewer transport operations for further processing and thus to reduced costs as well as reduced CO2 emissions.

CONNECTOR IN THE WATER AND UTILITY SECTOR

COLLABORATING ON MUNICIPAL SEWER MANAGEMENT

Structural partner of sewer operators

The efficiency gains from the better alignment of municipal and supra-municipal investments become even greater if they are also managed together. That is, for example, when coordinated project management becomes possible. Those efficiency gains are quite evident in Aquafin’s structural partnerships with drinking water companies water-link, De Watergroep (Riopact) and - since 2024with Pidpa as well. The principle is that each party within that partnership takes on the tasks in which it is the strongest or the obvious service provider. For instance, it is the drinking water company that will always make contact with citizens while vision development for the network and project management will usually be up to Aquafin.

Last year, we formed a consortium with Farys for the second time for managing a city’s sewers. Following in the footsteps of Aalst, Dendermonde has now also entrusted the management of its sewers to the Farys-Aquafin partnership. Aquafin’s ambition for the future is to set up a structural partnership with all the municipal sewer operators.

Platforms for a clear view of the state of the sewers

By 2027, the Flemish Government wants to have a clear picture of the state of the Flemish sewers. Aquafin worked with the sector to devise standards and minimum requirements for sewer inspections. In 2023, we developed the digital platform statustool.aquafin.be: a dashboard with an overview for each municipality showing the state of the system and the progress of the inspection programme scheduled for completion by 2027.

Municipalities who partner with us for their asset management can also use the digital platform ROSI which gives them a transparent view of the schedule for and performance of inspections on their sewer system. Here, they can also find proposed measures, including timing and budget. We are currently offering this support to half of all Flemish municipalities, towns and cities. We are planning to develop ROSI further in 2025 by adding functionalities that go a lot further than sewer inspections, such as data from our overflow measurement matrix, for example. That way, we can respond to the needs of cities and municipalities even more efficiently.

ROSI is also of interest to other organisations that manage a pipe network. Port of Antwerp Bruges and the Agency for Roads and Traffic are currently carrying out a test project to investigate application in connection with the pipe networks they manage.

DIGITALISATION OF THE WATER SECTOR

The fluid exchange of water data

If we are to improve water management in Flanders and maximise the potential of the sewerage infrastructure even more, we need to look beyond organisational boundaries. Together with other actors in the water sector, we are working on a Flemish Water Data Space in which all the partners’ data can be exchanged smoothly and securely. In data spaces, each partner retains control over their own data, bute makes it available in a decentralized manner. Users of the data space can then combine and process data in order to create prediction models, for example.

One platform for sewer management

When dealing with the same type of data, there is room to improve efficiency. Pidpa and Aquafin are jointly responsible for managing the sewers of 50 municipalities within Pidpa’s working area. But naturally, each organisation has its own digital structures. Within our structural partnership, we are currently working on a digital platform for combining our data. Not only will this make collaboration simpler, it will also enable challenges such as cyber security and energy consumption to be tackled more efficiently. We have also invited other sewer operators to be involved in this.

INCREASING IMPACT WITH OUR CLIENTS

CLIMATE-PROOF PUBLIC SPACES

Latest stormwater plan completed

By the end of 2024, towns, cities and municipalities had to have a stormwater plan in place in order to still be eligible for waterrelated subsidies. Flanders imposed this obligation in 2020 although Aquafin started drawing up its initial plans back in 2015. It was at that time that we first saw signs of a changing weather pattern and a number of municipalities then also followed our vision. By the end of 2024, we had completed more than 100 stormwater plans in total. These plans will have to be updated at least every six years based on new insights and indicators. For Aquafin, since the structural partnership with Pidpa was set up, they also include the plans made by the drinking water company for 50 municipalities.

Climate-adaptive design in practice

Due to long periods of drought and extreme rainfall combined with too many paved surfaces, the approach to rainwater needs to be adjusted. To this end, Aquafin has firmly opted for 'blue green' solutions: more space for water, preferably combined with softening and ample greenery. That is because this formula offers a lot of opportunities for linking, among others things, to biodiversity, recreation and both physical and mental health. Not only do we share this vision in our rainwater and drought plans for municipalities, we also publicise it as much as possible via other channels such as the Blauwgroenvlaanderen.be website (see box) and initiatives such as De Zevende Gevel and Green Deals Tuinstraten and Klimaatbestendige Omgeving

Via specific services such as our water and environmental advice, the implementation and maintenance of small-scale blue green measures and the realisation of a garden street, we are turning that vision into practice for municipalities but also for companies and organisations.

In 2024, we provided 36 water and environmental recommendations.

FLEMISH GOVERNMENT JOINS BLAUWGROENVLAANDEREN.BE

In 2020, Aquafin and sewerage knowledge centre VLARIO created the Blauwgroenvlaanderen.be website with measures for and examples of the climate-resilient design of public space, school environments and private plots. In 2024, the Flemish government linked the website to the Atlas Green Blue Solutions, a database containing all relevant projects and expertise. The database also serves as a basis for research around nature-based solutions in and around the built environment. The website is the window to that database.

Sewer thermal energy projects in Sint-Niklaas and Mechelen Sewer thermal energy is the technology for recovering energy from waste water either in underground sewers or in the pipes via which the treated waste water is discharged into the watercourse. A heat exchanger in the pipe uses a conductive liquid to transfer the residual heat from the water from showers, washing machines, etc. to a heat pump that is used to heat or cool buildings. It is a constant, reliable source of energy recognised by the Flemish Energy and Climate Agency (VEKA) as a renewable energy source. Interesting for local authorities as it allows them to use sewer thermal energy to shape their heat plan for the Local Energy and Climate Pact (LECP) with the Flemish government.

After initial implementation at our own offices, we carried out our first sewer thermal energy projects in public locations in 2024. In Sint-Niklaas, we installed sewer thermal energy for the new swimming pool under construction and for the municipal pavilion at the same sports venue. In Mechelen, a completely new urban district with residential, office and commercial units will be heated and cooled by sewer thermal energy supplemented by geothermal energy. It is the first time that the two techniques have been used together on this scale in Europe.

Also in 2024, we brought all the Flemish sewer operators together in order to visualise the sewer thermal energy potential of the sewers under their management, using the digital platform AquaMarkt. If the estimated 400 eligible projects are also carried out, that will mean an annual reduction in CO2 emissions of 40,000 tons per annum for Flanders. We currently have active dossiers of our own for the development of sewer thermal energy in four cities.

FACILITATING REUSE OF TREATED WASTE WATER AND RAINWATER

First project for reusing effluent this year operational

The treated waste water from our WWTPs (effluent) is of constant quality and always available. That makes it an excellent alternative water source for any application as long as appropriate further treatment is carried out.

Just like sewer thermal energy and rainwater, we regard it as a common good which is owned by no-one and everyone at the same time. To encourage industrial reuse of effluent as a circular solution in water stress-susceptible Flanders, we unlocked its potential via the digital platform AquaMarkt. Parties interested in making use of it can submit a request via the website and we then issue a call (final call). We then go through an objective and transparent allocation procedure before allocating the effluent to a party. Thirteen concrete projects have been allocated to date, the majority of which are in the permit phase. We have established that questions around the discharge of the residual flow after further treatment (concentrate) and the need for our effluent for the ecological balance in the watercourse (e-flows) can make the process complex. That is why we take these e-flows into account in our offering via AquaMarkt

However, the Deeper Blue project at our Aalst WWTP is already well advanced and is expected to be completed in summer 2025. From then on, drinking water companies Farys and De Watergroep will further treat the effluent from the WWTP at the site themselves to produce drinking water. They will then store it deep underground so that it can be pumped up for use at a later date. The system will serve as a winter-summer battery for drinking water and thus help guarantee that there is sufficient drinking water on the coast in summer.

Residual water for agriculture and horticulture

We were tasked by the Flemish Region with making 'residual water' such as rainwater in buffer basins available for agriculture and horticulture. With smart controls or minor intervention at the basin, we can guarantee a good balance between the functions of a buffer basin: storing rainwater to prevent flooding and to enable beneficial reuse. Aquafin covers the investment cost of the basins and any construction work involved in building a compact pipe network and/or drain point. Operating costs such as the maintenance of the basins, the pipes and smart controls are borne by the customer(s).

We mapped the potential of more than 30 basins based on water quality, water availability and interest. If there is sufficient potential, we draw up a project plan as the first step towards design, contracting and implementation. At the end of 2024, project plans had been drawn up for three basins, ready for an agreement with the customers. An initial concrete project went into production in Sint-Niklaas at the start of 2025, and we are expecting to be able to start using it by the end of this year.

SERVICES FOR INDUSTRIAL CLIENTS

Aquaplus is a wholly-owned subsidiary of Aquafin that provides advice and support to companies with a water-related query, problem or challenge. This may take the form of concrete services such as the development of a process optimisation or the operation and maintenance of the treatment plant where everything is taken care of for the client. But the whole process from design to realisation of a water treatment plant is equally possible.

Sewer management for industrial clients is a specialisation which enables Aquaplus to stand out within the market. More and more companies are recognising the importance of having a properly functioning waste water and rainwater pipe system at their site. And the starting point for that is having a clear picture of its current state since cracks or corrosion can lead to sinkholes, for example. These can then cause unsafe situations and put operation at risk.

Aquaplus has clients in a wide range of sectors including food and beverage, chemicals and recreation as well as in the pharmaceutical industry.

Research and innovation

At Aquafin, research can be part of an innovation process but it can also be purely focused on building knowledge for the purpose of advising on the policy for applying new European legislation such as the Urban Waste Water Treatment Directive revised in 2024, for example. In any case, our research and our innovations are aimed at creating added value for people and the environment. Thanks to our broad heritage and our practical knowledge, we are a prized partner in the world of research for the long-term testing of new technology on a large scale and subsequent implementation.

RESEARCH IN RELATION TO WATER QUALITY

The new EU Urban Waste Water Treatment Directive (UWWTD) imposes the obligation for member states to remove a list of additional micropollutants in the future that are not stopped by current treatment technology, for example. In 2024, Aquafin finalised the construction of a first full-scale quaternary treatment plant for removing micropollutants using a combination of two technologies: ozonisation and activated carbon filtration. The plant will be in operation in spring 2025 so that we can then gain experience of this comprehensive extra stage of treatment that we will also have to install at other large WWTPs in the next few years. We will be able to share our expertise with other research partners in Flanders and the Netherlands through our participation in the European Interreg project Clean Watercourses through O3G.

Besides centralised treatment technologies, we are also investigating the possibilities of decentralised technologies for treating not only waste water but also rainwater and overflow water. To do that, we’re setting up measurement campaigns and are testing pilot or demo setups while focusing on nature-based solutions.

CLIMATE MITIGATION AND ADAPTATION

We map greenhouse gas emissions in both the treatment process and the sewer system by means of research and measurement campaigns. Initial calculations already provide a good indication of the right strategic choices to make for mitigation. However, they can still be further refined. In future, we want to use the calculations to apply them even more in the purchasing process and thus make our infrastructure more sustainable.

Our climate adaptation research focuses on water quantity with the modelling of sewer systems, including the use of precipitation data and forecasts, and the impact of overflow operation and possible source measures.

RECOVERY OF RAW MATERIALS

There are other raw materials that can be recovered from waste water treatment besides treated waste water. In fact, the new UWWTD will impose the recovery of nitrogen and phosphorus in the future. Aquafin has been investigating the possibilities for removing these and other substances from the process for a long time. The biggest challenge usually lies in making the circular concept cost-effective by finding the right sales market for the recovered product. For instance, we are currently exploring the possibility of selling recovered phosphorus for use in the production of artificial fertilisers.

We can also remove activated carbon which we use ourselves in our quaternary treatment (see above) from the sewage sludge. In an ongoing innovation project, we are aiming to build a pyrolysis plant to process the sludge under extreme heat with thermal energy to produce biochar, a type of charcoal that can take on the function of activated carbon. We are hoping to have more clarity regarding the financing of this by the end of 2025. In the meantime, we have been collaborating with external partners and testing the valorisation of biochar from sewage sludge as a sustainable element for concrete production and as an adsorption material in the treatment process. Also, the advantage with the pyrolysis process is that CO2 is captured in the biochar rather than released.

We are investigating another form of carbon capture in the European project Fuelphoria. A pilot plant for turning the CO2 from the biomethane process into acetic acid via fermentation will be installed at our Antwerpen-Zuid WWTP in 2025. Acetic acid can serve as a source of carbon in the water treatment process or after further fermentation to form fatty acids, it can be used as the basis for biodiesel production.

INNOVATIONS MAKE OUR INFRASTRUCTURE EVEN MORE EFFICIENT

Currently, apart from a limited budget for basic research, Flanders has not earmarked any funds for innovation that Aquafin can access. In 2024, we therefore invested 1.4 million euros of the profit on our municipal activities in financing innovation projects. Those innovations may lead to new business but often also increase the efficiency of our infrastructure for Flanders. Innovation Manager Maarten Raemdonck gives AquaMarkt as an example: "Treated waste water, rainwater, heat from sewers: all goods that lend themselves perfectly to reuse and that we are currently still allowing to drain out of Flanders far too much. We wanted to give that circularity a boost by bringing all of these together on a single digital platform and mainly also by devising a clear procedure that gives everyone equal access to these common goods. And it works, as with 500 unique visitors per month on average, in 2024 AquaMarkt brought no less than 17 new leads for reusing common goods since its launch in March.

Aquafin also wants to encourage innovation within the sector by collaborating on the development of new technologies for sewer inspections and investing in them via Aqcelerator, for example. For the classic method with a moving camera, the sewer has to be emptied first, which makes inspection expensive and time-consuming. The high demand for inspections due to the Flemish obligation has put pressure on market capacity. Screenings using drones, hovercrafts or robust carts for which the sewer does not need to be emptied, can provide an initial reliable picture of the state of the sewer. This can limit the number of thorough inspections for which the sewer does need to be emptied. To advance the development of new technologies as well as new sustainable materials, we will open up our infrastructure as a testing ground.

"In any case, innovation is not something that is kept under wraps at Aquafin," says Maarten. "We actively encourage our employees to have an open mind and offer training and support to enable the further development of creative ideas. It doesn’t always have to be big new things; improving efficiency in your day-to-day work has just as much impact."

Our sustainability policy

Aquafin is an impact-driven organisation whose ambition is to create 'clean watercourses and a living environment in harmony with water'. Our core activities and our strategy have led us to this inspiring vision of the future. With an open mind and a sustainability policy based on the results of our double materiality analysis, we want to maximise our positive impact on the environment, on our employees and on those of our partner companies and on society.

Three domains for a broad impact:

Act green

> climate mitigation

> climate adaptation

> water quality

Make people flourish

> our own employees

> project partners

At one with our environment

> environmental management

> in connection with society

Our sustainability ambitions, objectives and realisations can be found in the Sustainability statement section.

Key figures 2024

Infrastructure managed on behalf of the Flemish Region as at 31/12/2024

330

2,090

7,429

Projects in portfolio for the Flemish Region as at 31 December 2024

Employees (numbers)

Sustainability scores

ACT GREEN

• Energy efficiency compared to model consumption: 14.07% (target for 2030: 20% compared to 2010)

• Own production of renewable power from biogas and solar energy: 25.4 GWh

• Own production of biomethane: 4.6 GWh

MAKE PEOPLE FLOURISH

• Average number of training days per FTE: 6.85 days

• Number of new employees: 105

• Number of internal movements: 38

AT ONE WITH OUR ENVIRONMENT

• Number of admissible complaints: 360

• Admissible complaints dealt with within a week: 97% (target: 90%)

Corporate Governance

Aquafin is committed to a transparent and effective corporate governance policy that represents the interests of all stakeholders while helping with sustainable value creation. Aquafin’s Corporate Governance Charter defines the rules and principles on which corporate governance within the company is based. Aquafin follows the Belgian Corporate Governance Code 2020 and has updated its Corporate Governance Charter in line with the latest version of that Code. The Charter explains the main aspects of the corporate governance policy and is publicly available for consultation on Aquafin’s website. The Charter is constantly updated in line with relevant developments. The most recent version is dated 20 September 2022. Changes in the policy and significant events after the start of the previous financial year are further explained in the corporate governance statement. It is recommended to consult this section together with the Charter for a complete overview.

DEVIATIONS FROM THE CORPORATE GOVERNANCE CODE

The Corporate Governance Code is based on a "comply or explain" approach. This means that Aquafin complies with the provisions of the Code but that in certain cases, they may be deviated from due to the specific requirements or characteristics that are inherent to the company.

All the Aquafin shares are held by Participatiemaatschappij Vlaanderen (PMV). Because of its shareholder structure, Aquafin falls under the application of certain provisions of the Governance Decree. For those reasons, provisions 5.6, 7.6, 7.9, 8.7, 8.8 and 8.9 of the Belgian Corporate Governance Code do not apply to Aquafin.

The governance model

Aquafin’s governance model promotes the principles of transparency, accountability and effectiveness. The model is designed to ensure effective and balanced governance which respects the interests of all stakeholders and focuses on sustainable value creation from Aquafin’s mission.

The company chose a monistic structure where governance is exercised by the Board of Directors. That Board of Directors is Aquafin’s highest decision-making body and is authorised to perform all actions required in order to achieve the company’s objectives, with the exception of those actions that are reserved for the General Meeting by law or according to the articles of association.

Two committees were set up to support the Board of Directors: the Audit Committee and the Appointments and Remuneration Committee. These committees advise the Board on specific areas of policy and decision-making.

THE BOARD OF DIRECTORS

COMPOSITION

Aquafin’s Board of Directors comprises nine members. All directors are non-executive directors and are independent in the sense of Article 7:87 of the Companies and Associations Code (WVV). The Board of Directors hereby complies with the requirements of provision 3.4 of the Corporate Governance Code 2020 which states that at least three members of the Board should be independent (this relates to the independence criteria as defined in the Companies and Associations Code and not the criteria from the Administrative Decree).

At the end of the reporting period, the composition of the Board of Directors is as follows:

AUDIT COMMITTEE

COMPOSITION

The Audit Committee is made up of four independent, nonexecutive directors. On the reporting date, the Audit Committee comprises Mr Jochen Bultinck (Chairman), Mrs Katrien Desomer, Mrs Nathalie Heremans and Mr Kris Peeters.

The committee has a balanced composition as a whole and possesses the necessary independence, competencies, knowledge and experience to perform its tasks effectively.

NUMBER OF MEETINGS

During the 2024 financial year, the Audit Committee met five times. The average attendance was 92%. The individual attendances of the members of the Audit Committee are shown under the section 'attendances at the meetings of the Board of Directors and committees'.

POWERS AND OPERATION

Koen Anciaux M 2029

Jochen Bultinck M l 2029

Caroline Craenhals F l 2029

Katrien Desomer F l 2029

Renaat De Sutter M l 2029

Nathalie Heremans F l 2029

Dirk Lybaert M l 2029

Kris Peeters M l 2029

Jozef Wittouck M l 2029

APPOINTMENTS AND CHANGES

The mandate of Mr Alain Bernard, Mr Koen Helsen and Mrs Marleen Evenepoel was ended. Mr Koen Anciaux and Mr Kris Peeters were appointed as new directors. Annelies Keirsmaekers, Head of Legal Affairs, was appointed company secretary.

ADVISORY COMMITTEES

The Board of Directors has set up two specialised committees: the Audit Committee and the Appointments and Remuneration Committee. The members of these committees are appointed by the Board of Directors. The operation and responsibilities of the committees are described in detail in their internal regulations that are included in the Corporate Governance Charter. Both committees have an advisory role. Strategic decision-making remains the responsibility of the Board of Directors as a whole.

The main activity of the Audit Committee is the supervision of financial reporting, accounting matters, the audit process, internal controls and risk management. The Audit Committee is the main link between the Board of Directors, the internal auditor and the statutory auditor.

The Chairman of the Audit Committee reports systematically at the next meeting of the Board of Directors, and recommendations are made regarding the decisions that must be taken by the Board of Directors.

During the 2024 financial year, the Audit Committee focused on the following points in particular:

• the quarterly financial reporting

• debt management, the financing plan and the results of interest rate risk management and compliance with hedging policy

• the statutory annual accounts and financial reporting, the statutory audit of the annual accounts including the recommendations made by the statutory auditor

• the half-yearly results and the findings made by the statutory auditor and recommendations of the interim audit

• non-audit services provided by the statutory auditor and the evaluation of independence

• the effectiveness of the internal control and risk management systems

• the approval of the internal audit plan, the internal audit reports and monitoring of the KPIs relating to the functioning of internal audit and follow-up by the management of the recommendations made by internal audit Member Member End of term

APPOINTMENTS AND REMUNERATION COMMITTEE

COMPOSITION

The Appointments and Remuneration Committee is made up of Mr Dirk Lybaert (Chairman), Mr Renaat De Sutter, Mr Jozef Wittouck and Mrs Caroline Craenhals.

NUMBER OF MEETINGS

During the 2024 financial year, the Appointments and Remuneration Committee met three times. The average attendance was 93%. The individual attendances of the members of the Appointments and Remuneration Committee are shown under the section 'attendances at the meetings of the Board of Directors and committees'.

POWERS AND OPERATION

The main task of the Appointments and Remuneration Committee (ARC) is to help the Board of Directors establish the outline of the Company’s remuneration policy. The committee also contributes to the objective and professional functioning of the process for appointing and re-appointing directors as well as the annual evaluation of the performance of the management team. However, in recent years the ARC has increasingly been used as a sounding board for broader HR matters, a development recommended by Guberna at the start of 2024.

In addition to the evaluation of the functioning of the management team and the determination of the directors’ remuneration (see later on), various other topics were discussed during the meetings that took place in the last financial year. In line with the Corporate Governance Charter, a formal evaluation was carried out of the effectiveness and efficiency of the Appointments and Remuneration Committee. Guberna was called upon to do this.

The committee also advised the Board of Directors on the selection of new directors. Advice was also provided on the new corporate sustainability policy and the ambitions, goals and multi-year plans arising from it.

ATTENDANCE AT THE MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES

In 2024, the Board of Directors held five meetings, with an average attendance of 92%. The Audit Committee met five times and the Appointments and Remuneration Committee met three times. The individual attendance of the directors is shown in the table below:

Name BoD AC ARC (5 meetings) (5 meetings) (3 meetings)

Koen Anciaux2 2/2 1/1

Alain Bernard3 2/2

Jochen Bultinck 5/5 5/5

Caroline Craenhals 5/5 3/4 1/1

Katrien Desomer 5/5 5/5

Renaat De Sutter 5/5 3/3

Marleen Evenepoel4 3/4 1/2

Koen Helsen5 4/4 3/4

Nathalie Heremans 4/5 5/5

Dirk Lybaert 5/5 3/3 3/3

Kris Peeters6 1/2 1/1

Jozef Wittouck 5/5 3/3

2 Appointed on 9 October 2024

3 End of term of office on 16 April

4 End of term of office on 9 October 2024

5 End of term of office on 9 October 2024

6 Appointed on 9 October 2024

EVALUATION PROCESS OF THE BOARD OF DIRECTORS AND THE COMMITTEES

The members of the Board of Directors evaluate the size, composition and functioning of the management body on a regular basis and at least every three years. This involves comparing the current composition with the desired composition, as well as the relationship and interaction with the management team.

The following aspects are assessed as part of the evaluation of the Audit Committee: internal regulations, the composition and appointment of members, meetings, training options for members and available resources, the integrity reporting procedure and relations with the Board of Directors. The Audit Committee evaluates its effectiveness and efficiency at least once every three years. To support this evaluation, an individual questionnaire is issued to the members of the Audit Committee and then the results are discussed at a meeting of the committee and presented to the Board of Directors. The most recent evaluation of the Audit Committee took place in 2024.

In 2024, an evaluation of the Appointments and Remuneration Committee was carried out under the supervision of Guberna. This resulted in a number of recommendations which have since been implemented in the functioning of the committee.

MANAGEMENT TEAM COMPOSITION

Following the adaptation of the articles of association to bring them into line with the new Companies and Associations Code, the Board of Directors has established an executive body, the management team. The management team consists of the CEO, who leads the management team, and all other directors of the Company at a given time.

The composition of the management team on 31/12/2024 is as set out below:

Name Function Gender

Jan Goossens CEO M

Danny Baeten Project Management M

Hans Bruynooghe Operations M

Sabine Schellens HR & Organisational Development F

Bart Van Eygen Asset management M

Glenn Van Olmen Finance & Procurement M

Marjolein Weemaes Business Development & Innovatie F

POWERS AND FUNCTIONING OF THE MANAGEMENT TEAM

The management team exercises the powers relating to day-today management and all transferable powers except for those powers reserved for the Board of Directors according to the statutory provisions, the company’s articles of association and the provisions in the internal regulations of the Board of Directors, including the formal authority.

EXPERTISE AND SKILLS IN SUSTAINABILITY MATTERS

Aquafin ensures that its management has the necessary skills to monitor sustainability. A core team was set up around the topics within E, S and G, with one board member being ultimately responsible for each one. Aquafin also consults external expert groups in order to broaden insight and thus strengthen sustainability expertise.

The management team meets on a weekly basis.

Activities report of the Board of Directors

In 2024, the Board of Directors addressed the central topics that are key to the realisation of Aquafin’s mission, vision and strategy. These topics were all checked against Aquafin’s sustainability strategy and are characterised by their focus on environment-driven value creation in the long term.

Aquafin has integrated sustainability in its general strategy as established by the Board of Directors on the proposal of the management committee. Sustainability is regarded as a matter for the whole Board of Directors (strategy) and that is why a specific sustainability committee has not been set up within the Board.

The Board of Directors defines and oversees the organisation’s strategy and sustainability matters, including risks relating to sustainability, based on proposals by the management team. The Board approves the non-financial reports. Currently, at least one board member has extensive experience and expertise in ESG/sustainability.

The management committee functions as a strategic link between the Board and the business and monitors the implementation of strategy – including sustainability matters – approved by the Board.

Aquafin set up a Sustainability team at management level that reports directly to the HR and Organisational Development director.

CONFLICTS OF INTEREST

No conflicts of interest were reported.

FINANCIAL MANAGEMENT

The Board of Directors closely monitored financial management through periodic reporting on all aspects of operations. Financial management is monitored in various ways. On the one hand, there is a general KPI dashboard where it forms part of the various KPIs as part of the supra-municipal remit which Aquafin reports on to its supervisor (VMM), while on the other hand, the quarterly figures are explained in detail and measured against the budgeted results.

SUSTAINABILITY AND INNOVATION

Aquafin is driven by innovation to continuously make its core activity and tasks more sustainable and more efficient. The various reuse projects around effluent, sewer thermal energy and biomethane production were a fixed topic from this drive.

The broad sludge strategy as formulated several years ago, translated last year into the permit for the sludge mono-processor while the construction of two new dryers was started as part of the same sludge strategy.

In order to also broaden the contribution to innovative initiatives beyond Aquafin’s core activities, the Board of Directors approved the expansion of the mandate of Aqcelerator, a subsidiary focused on technological and infrastructural innovation.

In addition, the Boost offering was introduced in 2024, a programme aimed at high potentials within the organisation. This growth path is designed to provide them with maximum opportunities for development, thus making them even more valuable to the organisation. We rolled out the programme within various parts of the organisation, stimulating innovative thinking in all sections.

SUSTAINABILITY AND ENERGY POLICY

The long-term strategy around the greening of the energy mix was presented to the Board of Directors so that Aquafin could respond flexibly to future opportunities for the procurement of renewable energy.

In the context of the renewable energy policy, the further electrification of the vehicle fleet was also discussed as part of a strategic option.

The broader energy policy also includes the sludge strategy and the construction of two new sludge dryers, with which we aim to achieve maximum circularity, efficient energy consumption and the reduction of transport costs.

COMPLIANCE, RISK MANAGEMENT AND SAFETY

A new compliance policy was implemented, including tighter internal audit procedures and improved risk management strategies. It included a framework for employees’ other activities among other things. The impact of purchase invoice fraud was also discussed and additional measures were taken to counter phishing and other fraudulent activities.

Physical safety is a constant focus within Aquafin. At the level of the Board of Directors, this translates into a comprehensive explanation of different types of accidents that the organisation is faced with, ongoing preventive and reactive campaigns and measures and the screening of possible new initiatives.

STRATEGY AND PARTNERSHIPS

The development of existing and more recent partnerships within the sector was monitored from the Board of Directors. According to the strategy, potential new partnerships within the sector are actively monitored and evaluated.

Collaboration with consultancy firms: Aquafin implemented a new evaluation system focused on quality score and a B2B consultation structure.

The content of the memorandum and the consultations before and after the elections of the new Flemish government were actively followed.

The Board of Directors approved Aquafin’s business plan and laid the foundation for the long-term goals and multi-year plans based on the corporate sustainability policy and the seven ambitions contained within it.

Internal controls and risk management system

GENERAL

Aquafin strives for sustainable entrepreneurship with the aim of creating clean watercourses and a living environment in harmony with water. This translates into the organisation’s strategic and operational objectives whereby it develops reliable waste water and rainwater management tailored to the needs of its customers, with respect for the surrounding area and the environment. Aquafin’s activities are exposed to internal and external risks that could hamper the realisation of the company’s objectives.

Aquafin believes that risk management is inextricably linked to organisational culture. Employees are encouraged to recognise risks and deal with them in an open and transparent manner.

ELEMENTS OF THE INTERNAL CONTROLS AND RISK MANAGEMENT SYSTEMS

The key features of the internal controls and risk management systems are described below.

MANAGEMENT AND CONTROL

The Board of Directors is responsible for monitoring risks and ensuring that appropriate internal control mechanisms and risk management systems are in place. The Audit Committee assists the Board of Directors with risk management and is tasked with assessing the effectiveness of the risk management and internal control processes.

The members of the management committee are responsible for the day-to-day risk management within their respective departments. Through collaboration with their teams, they identify key and emerging risks and take care of the internal monitoring and control of those risks.

RISK MANAGEMENT PROCESS

The management team is aware of the importance of effective risk management. Risk-related matters are systematically treated as a permanent item on the agenda at the weekly meetings.

In addition, Aquafin has an internal control system based on the three lines model of the Institute of Internal Auditors (IAA) to systematically embed risk management and internal control in its functioning. The three lines model is based on three-layer control. Risk management is the responsibility of all layers of the organisation, with specific tasks and responsibilities on each level.

The three levels of control within the organisation:

• first line: all departments and services are responsible for risk management and compliance themselves. They develop and maintain the structures and processes required in order to manage their activities (objectives) and risks effectively. They also carry out an initial internal control on their own activities and the extent of compliance with the relevant laws and legislation.

• second line: Aquafin opted for decentralised organisation of the second line function. This means that the second line of control is carried out within specific departments which, besides supporting the core activities, are also responsible for monitoring and control relating to the domains identified by the management.

• third line: internal audit

Aquafin also ensures that through a specific steering group, new or amended legislation is continuously monitored and communicated to the relevant departments, and where necessary implementation processes are set up and actively monitored. For instance, processes and procedures are updated where necessary in order to guarantee that they remain in line with applicable legislation and internal risk management requirements. This continuous evaluation and adjustment of internal control systems helps maintain the integrity and effectiveness of risk management within the organisation.

THE CONTROL ENVIRONMENT

The control environment within Aquafin is heavily influenced by the corporate culture that forms the basis for risk management and internal control systems. That culture is rooted in the core values of the organisation which guide the actions of employees and the achievement of objectives. Besides the six core values – expertise, environment, take action, innovate, connect and empathetic – transparency and integrity are deeply rooted in Aquafin's DNA. These values not only play a central role in day-today work but are also crucial to the approach to risk management and setting up a robust internal control system.

The management at Aquafin encourages open communication, the setting of clear objectives and responsible decision-making which ensures that risks are identified promptly and addressed appropriately. Aquafin also attaches great importance to ethical conduct and integrity.

MANAGEMENT MEASURES

Various management measures are implemented within all Aquafin’s departments to ensure effective risk management. These measures include established policy rules, procedures and signing authorities as well as segregation of duties and built-in early warning indicators for potential risks, for example. In addition, management reports are drawn up in order to monitor the progress of processes, with the budget and actual expenditure being regularly updated and analysed.

Specific risks associated with projects or new initiatives are evaluated and operational mitigating measures are implemented.

Regarding the supra-municipal remit, Aquafin is under the supervision of the Flanders Environment Agency (VMM) and reports on set KPIs. These critical performance indicators were defined and intended as a measuring instrument but are also used as a reporting system.

INFORMATION AND COMMUNICATION

Within Aquafin, various tools are used to disseminate information in a structured and systematic manner, from management level to operational level.

Financial information is shared between Aquafin’s financial management team and the management team. Besides the monthly reports and analyses that are prepared by the financial department, the management team enters into dialogue on performance management with the various operational departments.

A clear division of responsibilities and good coordination between the relevant departments ensures an effective and timely process for communicating periodic financial information.

Financial information is shared with the Board of Directors on a quarterly, half-yearly and annual basis. Prior to this, financial information is subject to (i) a comprehensive internal validation process, (ii) review by the Audit Committee.

SUPERVISION AND MONITORING

Board of Directors and Audit Committee

The role and responsibilities of the Board of Directors and the various committees are clearly established in Aquafin’s Corporate Governance Charter, which ensures an effective risk management system and internal controls. The Audit Committee has a crucial role in supervising the functioning of the internal control system, paying special attention to the financial reporting process.

This committee is responsible for ensuring the integrity of financial information and for evaluating the internal controls and risk management systems. This is in order to ensure that significant risks, including the risks related to compliance with laws and legislation, are suitably identified, managed and communicated.

In addition, the Audit Committee oversees the activities of the internal audit function and monitors the effectiveness and performance of that function. The committee also monitors the statutory audit of the annual accounts, including the follow-up of recommendations formulated by the statutory auditor. It also oversees the accounting team that is responsible for recording costs and revenues in the accounts and preparing the financial reports. It also monitors the controlling team that focuses on monitoring and declaring fluctuations in the financial data, both in terms of time and with respect to the budget. Together with the accounting team, the Finance management team is responsible for the final review of the financial information and the preparation and presentation of the financial statements.

Internal Audit

Aquafin has an Internal Audit department that works according to the standards of the Institute of Internal Auditors and was the subject of an external quality evaluation in 2024. Internal Audit provides independent analyses, evaluations, recommendations, advice and information for both the Audit Committee and Aquafin’s management. The audit activities that are carried out provide a reasonable guarantee of the effectiveness of internal controls in the various processes and activities examined. Internal Audit reports directly to the Chairman of the Audit Committee, thus ensuring the independence and transparency of the function.

Statutory auditor

BDO Auditors was appointed by the General Meeting as statutory auditor for the auditing of Aquafin. The statutory auditor provides an independent opinion on the statutory annual accounts for the whole financial year, and carries out a limited audit on the halfyearly interim condensed financial accounts. They also review significant changes to accounting principles and evaluate key internal controls in respect of the processes used to prepare the financial accounts.

Remuneration Report

GENERAL

Based on the advice of the Appointments and Remuneration Committee, the Board of Directors determines the remuneration policy for the executive management team. The aim of this policy is to attract, retain and motivate knowledgeable people. The amount of the remuneration shall take into account the individual tasks and responsibilities of the members of the management team.

KEY FEATURES OF INCENTIVE SCHEMES

The remuneration of board members and members of the Audit Committee and Appointments and Remuneration Committee is linked to their attendance at meetings. The remuneration for board members consists of a fixed and variable part. As far as the variable part is concerned, the Board of Directors analyses the performances of the management team.

INTEGRATION OF SUSTAINABILITY INDICATORS IN REMUNERATION POLICY

Sustainability objectives and key performance indicators (KPIs) are integrated in the company objectives and annual objectives of Aquafin. Aquafin’s internal control system ensures transparent and clear reporting on performance in respect of sustainability-related targets set by the Flemish government. This system follows the three-line model for effective monitoring and reporting of performance statistics.

EVALUATION OF THE MANAGEMENT TEAM

The performance of the management team is evaluated once a year in the presence of the CEO. The appraisal of the CEO takes place in his absence. The Appointments and Remuneration Committee follows the whole procedure closely.

As usual, the variable remuneration was determined by analysing management functioning based on a scorecard on the one hand and 5 collective objectives on the other hand. The scorecard consists of a fixed set of KPIs relating to operational functioning (e.g. treatment results), the financial results, safety, innovation and business development. The collective objectives are redefined every year (e.g. prepare implementation of SAP).

The distribution of the total amount of variable remuneration between the board members is based on a general discretionary appraisal of each board member. General performance, internal and external impact and the governance of their own management are important for this.

NON-EXECUTIVE DIRECTORS

Aquafin applies the following remuneration model for directors: On the one hand, there is an annual flat fee for attending meetings of the Board of Directors. This flat fee stands at 6,500 euros for directors and 13,000 euros for the chairman. Payment of the fee is conditional on attending at least two thirds of the total number of meetings, barring force majeure. In addition, a fee is paid per meeting of the Audit Committee and the Appointments and Remuneration Committee amounting to 380 euros for the chairmen and 320 euros for the members of these committees.

Name

Koen Anciaux (C)

Alain Bernard (C)

Jochen Bultinck (C)

Caroline Craenhals

Katrien Desomer

Renaat De Sutter

Marleen Evenepoel (C)

Helsen 6,103

Nathalie Heremans 8,100

Dirk Lybaert 12,659

Kris Peeters 1,677

Jozef Wittouck (C) 7,460

((C) = Chairman)

MANAGEMENT TEAM

The total gross remuneration paid for 2024 to the members of the management team amounts to:

• basic salary: 1,550,069.02 euros

• variable part: 267,300 euros

• pension entitlements: 305,261.38 euros

• other remuneration components: 195,730.12 euros

The variable remuneration for the 2024 financial year will be added to the group insurance in 2025.

Conclusion

The above foundations give Aquafin a robust control environment that enables the organisation to realise its objectives, comply with laws and legislation and operate efficiently and responsibly. The combination of a strong corporate culture, focus on integrity, clear governance structures and sound risk management forms the basis for risk management and Aquafin’s internal control systems.

This report reflects Aquafin’s constant efforts to operate a solid and responsible corporate governance policy, in line with the expectations of its stakeholders and the social task it carries out, driven by an intrinsically sustainable mission and task.

Financial report

General information

HISTORY

In Belgium, waste water treatment is a regional matter. Aquafin was established by the Flemish Region in 1990 in order to comply with the EU Urban Waste Water Treatment Directive in Flanders. Aquafin became responsible for developing, managing and financing the supra-municipal waste water treatment infrastructure. The company was established in accordance with the law of 26 March 1971 under the section Law on the protection of surface waters against pollution (Wet op de bescherming van de oppervlaktewateren tegen verontreiniging) which was converted in 2018 into the Decree on Integrated Water Policy of 18 July 2003, coordinated on 15 June 2018.

Since 2023, Aquafin has had a new cooperation agreement with the Flemish Government in which it was also assigned a coordinating role for the purpose of matching supra-municipal investments to those of towns, cities and municipalities.

Besides the contract for Flanders, Aquafin also offers its expertise to Flemish towns, cities and municipalities, either directly or via a structural partnership with drinking water companies water-link, De Watergroep and Pidpa. We also facilitate the beneficial (re)use of flows that are linked to our infrastructure such as treated waste water, heat from sewer water or waste water and rainwater. We are always on the lookout for opportunities to create even more value for Flanders through our activities via innovation. We see it as a catalyst for realising our ambitions. In 2024, we set up a venturing company called Aqcelerator as a subsidiary of Aquafin in order to be able to invest in innovations of third parties that will help us achieve our objectives independently from our supra-municipal remit.

Aquafin applies the principles of separate accounting in order to separate commercial activities from activities commissioned within the regional (supra-municipal) remit.

SUPERVISION

As the regulator, the Flemish Environment Agency (VMM) supervises the activities that Aquafin carries out for the Flemish Region. In addition, Aquafin is a private joint stock company with an autonomous Board of Directors, Audit Committee, auditor, etc.

According to the new cooperation agreement (CA), control of Aquafin’s operations will be result-oriented and directed by the objectives set by the Flemish Region. Aquafin is evaluated based on critical performance indicators.

Aquafin developed an internal control system that allows clear and transparent reporting within the framework of this result-oriented control. The control system is based on the basic concepts of the 3-line model:

1ST LINE CONTROL

On this level, the business carries out controls itself. By means of collaboration with Deloitte, we defined 114 control actions for this purpose to ensure that good results are achieved in respect of the 23 KPIs. These include, for example, the use of checklists, the drawing up of reports and the taking of samples.

2ND LINE CONTROL

On this level, the business is controlled by means of operational audits organised by the Portfolio Management department. Suggestions are also made as to how processes could be improved. In addition, the Portfolio Management department is also responsible for external reporting on the 23 KPIs.

3RD LINE CONTROL

This control is carried out by the Internal Audit department through the performance of assurance audits. During these audits, checks are carried out in order to establish whether the 114 control actions have been performed correctly and documented accurately. It is also checked as to whether these control actions are actually effective, in other words whether they make a correct and satisfactory contribution to the realisation of the 23 KPIs. The Internal Audit department is also responsible for external reporting on the effectiveness of these control activities.

As provided for in the cooperation agreement, VMM will monitor the proper and adequate functioning of the internal control system.

FINANCE AND INVOICING

Since the launch of the new Cooperation Agreement, Aquafin itself has been responsible for selecting supra-municipal investment projects which it puts on the agenda in order to achieve the objectives set. Before projects on supra-municipal budgets are carried out, the Flemish Environment Agency assesses the supramunicipal character of the project. After delivery by the contractor, the Flemish Environment Agency can carry out random checks on projects for up to two quarters thereafter. After that, the costs incurred are finally approved and Aquafin has a contractual right to their repayment, spread over a maximum period of 30 years. On the other hand, Aquafin also draws up an asset management programme for the existing plants, based on LCP analyses (life cycle plans). The water companies are obliged by decree to treat the water they supply. They enter into an agreement for this with Aquafin, which assumes the task of treatment for them. Aquafin invoices the water companies for the investment costs over the specified term, along with the company’s operating costs. The drinking water companies pay part of Aquafin’s invoices via a grant from the MINA fund among other things. They pass on the remainder, currently around two thirds of the total bill, to drinking water consumers according to the principle of “the polluter pays”.

In this formula, the budget for operating costs, excluding financing costs, under the Management Agreement is related to factors including the pollution load treated, the assets managed, the flows handled and the investment budgets. A series of fixed packages are added to this. The budget calculated is a total operating budget for Aquafin, based on what is known as the performance budget formula. This gives Aquafin the freedom to focus on the areas it considers important and to allocate the performance budget internally according to these areas. A cumulative annual efficiency gain is assigned to several packages from the performance budget each year.

The Flemish Region is a co-debtor in the invoice flow between Aquafin and the water companies. The turnover invoiced is spread between the various Flemish water companies, based on an allocation formula annually updated by Aquaflanders and approved by the Flemish Environment Agency. As Aquafin’s investment expenditure is repaid spread over a period of time, the company has to raise financing for this.

Long-term financing for a project is not possible until it has been delivered internally and is in the invoice stream to the water companies. These long-term investments therefore involve no construction risk for the financiers. Aquafin covers short-term funding during the projects’ construction phase with equity capital, commercial paper, lines of credit and general corporate purpose financing.

COOPERATION AGREEMENT AND ALLOCATION AGREEMENT

Aquafin’s tasks are set out in a Management Agreement entered into between the company and the Flemish Region. This is a 20-year rolling agreement which specifies that, besides developing, managing and operating the treatment infrastructure, Aquafin is also responsible for financing this. The latest update to the agreement was made on 1 January 2023.

An allocation agreement exists between the Flemish Region, Aquafin, the European Investment Bank and Belfius Bank, with Belfius Bank acting as agent. The agreement stipulates that, should Aquafin find itself in financial difficulties, the water companies will no longer have to pay Aquafin for the treatment of the drinking water supplied by them, but Belfius Bank. As the agent for the allocation agreement, Belfius Bank will then pass on the sums to the financiers on the (interim) maturity dates of the financing agreements. According to the allocation agreement, the outstanding credit balance Aquafin has with the water companies must always be greater than the debt under the allocation agreement (the allocation ratio). The statutory auditor checks this ratio after each disbursement of financing under the agreement and confirms this to Belfius Bank. In turn, this bank communicates this allocation ratio to the financiers. It is also important for them to know that, according to the allocation agreement, any changes to specified articles from the Management Agreement with a financial impact must first be submitted to them for approval.

In order to participate in the allocation agreement, the financier first signs an agency agreement with Aquafin and Belfius Bank.

Risks and opportunities

"We are ready to invest in innovations that further increase our impact"

The wettest year on record in Belgium is reflected in substantially higher operating costs at Aquafin. Finance & Procurement Director Glenn Van Olmen observes that innovation is necessary to tackle not only the material risks but also the financial risks of climate change.

AQUAFIN’S OPERATING BUDGET IS UNDER INCREASING PRESSURE. WHY IS THAT?

"The shortfall in the operating budget in 2024 is a direct result of the exceptional weather conditions. A high level of precipitation leads to larger flows of sewer water that need to be handled. This in turn leads to larger volumes of sludge to process and more chemicals that are required to achieve the double standards in Flanders. Fortunately, not every year is so wet and in the past, the budgetary impact of a wet year was generally compensated for by a subsequent dry year. Only we have seen that in recent years, that compensation has no longer been in proportion. The last really dry year is once more already behind us. We can assume that extremes like the ones we saw again last year will become the new normal.

Add to that the fact that our assets are ageing and therefore are only going to need more maintenance. In addition, increasingly strict standards and new legislation are also forcing us to use more additives. All factors that make water treatment more expensive and which we cannot easily control despite close monitoring."

WHAT ROLE CAN INNOVATION PLAY IN KEEPING EVERYTHING FEASIBLE AND AFFORDABLE?

"There is certainly a key role for innovation but unfortunately, Aquafin does not currently have a specific innovation budget. We do have a budget for fundamental research but innovation is necessary for the further development of research results. And that will certainly be necessary to comply with European directives.

We currently use the profit from our commercial activities outside our supra-municipal remit to finance innovation. And last year that amounted to a fantastic 2.8 million euros, including both income from our activities for municipalities and from newly developed services. We have also noticed that innovation can really advance our supra-municipal activities. For instance, our business case around the production of biomethane from sludge digestion helped in the permit process of certain WWTPs, for example. That way, our innovations also pay off for the Flemish Region.

Of course, we also see a lot of innovations that support our vision emerging outside Aquafin. We want to literally speed them up by giving them a nudge through our new subsidiary Aqcelerator."

HOW CAN AQCELERATOR SERVE AS A LEVER TO BOOST AQUAFIN’S IMPACT?

"We set up Aqcelerator with two objectives in mind. On the one hand, parties that have been allocated common goods such as effluent can then approach Aqcelerator to see how financial participation in the project could be of interest. On the other hand, we also want to stimulate innovations in the market that will help us realise our ambition. And that could be participations in start-ups, for example. I also want to stress here that Aqcelerator is completely separate from our contract set by decree where our own Board of Directors monitors market conformity."

WHAT OPPORTUNITIES DO AQUAFIN’S CHALLENGES PRESENT FOR INVESTORS OVER THE NEXT FEW YEARS?

"Given the expectations from Europe, the number of projects that we will realise over the coming decades will only continue to grow. The Flemish Region foresees a gradual increase in investment budgets for this purpose. That will create opportunities for our financing partners as we prefinance all projects for the region. We also want to engage our investors more again, because financing is and will remain a core activity. Differentiation of our sources of financing is therefore much needed."

WON'T THE VISIBLY SHIFTING FOCUS ON DEFENCE DUE TO GEOPOLITICAL DEVELOPMENTS BE AT THE EXPENSE OF INVESTMENTS IN SUSTAINABLE COMPANIES?

"I don’t expect that development to pose immediate risks for Aquafin in any way with regard to getting our projects financed. We have noticed that investors are increasingly looking to make their portfolios greener. Europe has expressed clear ambitions with the Green Deal, and the intrinsically green value of our projects fits in perfectly with this. Incidentally, increasing digitalisation and cyber threats will require us to invest in the digital security of our infrastructure even more. Waste water infrastructure is regarded as highly critical in NIS 2. Therefore, we do everything we can to keep risks under control and ensure that the impact of our work is always guaranteed.

Our allocation agreement also gives financiers the necessary guarantees and our excellent Moody’s rating of Aa3 boosts confidence even more."

Glenn Van Olmen

Report of the Board of Directors

BALANCE SHEET AND INCOME STATEMENT

BALANCE SHEET (IN THOUSANDS OF EUROS)

3,965,178

SHEET (IN THOUSANDS OF EUROS)

2,836,667 2,097,231 2,096,963 484,083 1,612,879 269 686,527 245,249 53,101 53,101 129,700 129,700 232,290 21,980 4,349 17,630 4,207 52,909 3,965,178

INCOME STATEMENT (IN THOUSANDS OF EUROS)

MAIN RISKS AND UNCERTAINTIES

There are no substantial risks and uncertainties with regard to the financial year.

MAIN EVENTS DURING THE FINANCIAL YEAR

RIOPACT BECOMES A PARTNERSHIP

Until June 2024, the collaboration with De Watergroep was in the form of a silent partnership called Riopact. This form of trading was changed to a partnership. A partnership does not file annual figures with De Nationale Bank itself. As a result, Riopact’s figures have to be included in Aquafin for the portion of its share in Riopact and all transactions between them are eliminated (consolidated). The purpose of this is to remove duplicate transactions in the balance sheet and P&L.

FURTHER EXPANSION OF STRUCTURAL COOPERATION WITH DRINKING WATER COMPANY PIDPA

In June 2023, Aquafin and drinking water company Pidpa signed a cooperation agreement for municipal sewer management. At that time, we were already working together in four municipalities where Pidpa is the sewer operator. On 1 January 2024, the 41 other municipalities where Pidpa is already the sewer operator also came on board. In the future, only the structural form of cooperation will also be offered within the Pidpa’s operating area, as is also the case with the other two drinking water companies with which we have a structural partnership: water-link and De Watergroep. This cooperation was expanded further in 2024.

MOODY’S CONFIRMS CREDIT RATING

Following its annual screening in 2024, rating agency Moody’s confirmed the long-term rating of Aquafin as Aa3. The outlook went down to negative outlook on account of the outlook adjustment for Flanders. The short-term rating remains unchanged at P-1. Aquafin’s credit rating tracks the maximum rating of the Flemish Region.

AUDITING OF THE COMPANY

In 2023, BDO was appointed as statutory auditor by the General Meeting – based on nomination by the Board of Directors – for a period of three years, specifically for the 2023, 2024 and 2025 financial years.

The fees paid to BDO amount to (excluding VAT, excluding the usual charges):

SHAREHOLDER STRUCTURE AND CROSS-SHAREHOLDINGS

Participatiemaatschappij Vlaanderen (PMV) holds all the Aquafin shares. There are no cross-shareholdings.

BRANCH OFFICES

There are no branch offices.

EVENTS AFTER THE BALANCE SHEET DATE

There were no events with a material impact after the balance sheet date.

CONFLICTS OF INTEREST

There were no events where a conflict of interests under property law was established in respect of the directors in accordance with article 7:96 of the Companies Code.

NOTES TO THE BALANCE SHEET

INTANGIBLE FIXED ASSETS

In 2023, software was shown under tangible fixed assets. From 2024, software will be shown under intangible fixed assets.

The cumulative investment per category is shown below at book value:

In 2024, 2.3 million euros were invested in software and 1.2 million euros were depreciated. In addition, 6.2 million euros were invested in software development. This relates to software that is not yet operational. Capitalisation will not take place and depreciation will not start until it is put into use.

TANGIBLE FIXED ASSETS

The cumulative investment per category is shown below at book value:

As stipulated in the Management Agreement, Aquafin collects domestic waste water in Flanders in collectors and transports it to treatment plants where it is treated. Firstly, Aquafin develops the necessary supra-municipal infrastructure: collector sewers for waste water, pumping stations and waste water treatment plants. Secondly, Aquafin carries out the projects assigned by the Flemish Region under the Local Pact with the municipalities. These Local Pact projects follow the same procedures as the supra-municipal projects.

The increase in tangible assets is due to a net growth of investments in the water treatment infrastructure, carried out on the instructions of the Flemish Region. Water treatment infrastructure includes the aforementioned collector sewers for waste water, pumping stations and waste water treatment plants. This relates to all investment projects already delivered from the first delivery in 1992 to the end of the last financial year. Aquafin delivered 226 million euros’ worth of new projects in 2024. This year, 190 million euros’ worth of depreciation was also recorded and 2.5 million euros were invested in land.

Projects not yet delivered, including land, comprises all costs incurred for supra-municipal projects in progress. It covers projects in the design phase, contracted projects or projects already awarded where the costs incurred mostly relate to accounting category 27 – assets under construction and advance payments –but also partly under accounting category 22 – land and buildings –for the land element. Assets under construction are not depreciated.

Projects not yet delivered in category 27 increased by 21.76% in 2024 to 549 million euros. There was an increase of 21.35% in calls for tenders for development projects. This increase is partly due to the increase in the completion budget and partly due to price increases. Contracting costs remain at a high level due to factors such as constantly high material prices, wage indexations, etc.

In addition, the cost price of projects has risen significantly due to additional requirements imposed by new regulations and also by licensing authorities such as stricter requirements relating to infiltration, buffering and discharge of rainwater, additional requirements relating to groundwater and PFAS among other things.

In 2024, 54.1 million euros’ worth of asset management was delivered and 69 million euros’ worth were added to assets under construction. In 2024, 5.7 million worth of energy fund projects were delivered and 6.3 million euros’ worth were added to assets under construction.

In 1994, under the Management Agreement, Aquafin acquired the right to use plants built in the period preceding Aquafin’s establishment and owned by the Flemish Environment Agency. In subsequent years, these plants were not only operated by Aquafin, but also extended and renovated. Since the management of the same assets by both Aquafin and the Flemish Environment Agency is inefficient, the Flemish Government decided to allow Aquafin to buy out the plants and associated land. These purchases took place from 2010 onwards and are recognised under tangible fixed assets as Flemish Environment Agency assets purchased. In 2024, €15 million in depreciation was recorded on these assets.

Investments in head office and operations relate to investments in hardware, software, lab equipment, furniture, materials and equipment required for the operation of the main office and umbrella operational activities which are not intended for one specific plant.

In 2024, 0.5 million euros were invested in the renovation of buildings managed and 1.0 million euros were depreciated on existing buildings. Of this, 0.9 million euros relates to the Campus.

In 2024, a further 1.2 million euros were invested in hardware, 1.3 million euros in materials and equipment and laboratory equipment and 0.06 million euros in furniture and in total, 3.4 million euros were depreciated on these items.

Hydronaut studies are studies that are carried out in order to ensure the correct design of the related supra-municipal investment project and are consequently capitalised. These studies are also carried out in relation to the management of existing infrastructure. In 2024, 2.1 million euros were invested on the one hand and 3.4 million euros were also depreciated on the other.

In the context of the role of Asset Manager of Flanders, Aquafin’s task package was expanded with the takeover of the overflow measurement matrix from VMM among other things. In 2024, overflow measurement devices worth 1.4 million euros were purchased and installed, of which 0.5 million euros were depreciated.

As well as supra-municipal infrastructure, a small part of Aquafin’s assets is made up of municipal infrastructure. Under the contracts with the municipalities, Aquafin may assume responsibility for so-called transport services. Under these contracts, Aquafin provides the necessary investment and the company offers the municipality or intermunicipal cooperative society the opportunity to transport waste water via these sewers for the duration of the contract (15 years), after which the assets will be transferred to the municipality or intermunicipal cooperative society.

In 2024, 2.5 million euros of depreciation were recorded on municipal infrastructure on the one hand. On the other hand, new projects were capitalised for the municipalities of Ranst and Hove (3.8 million euros). In addition, the LT financing of the project for the municipality of Kapellen (7.1 million euros) came to an end. As a result, this project was removed from Aquafin’s fixed assets without financial impact.

FINANCIAL FIXED ASSETS

The financial fixed assets mainly consist of Aquafin’s majority stake in Aquaplus and Aqcelerator.

Aquafin has held all the shares in Aquaplus since 2022. Previous downward value adjustments have been reversed to the extent of Aquaplus’s result.

Aqcelerator was set up on 8 February 2024. Aqcelerator is a venturing company whose participations focus on two topics: stimulating relevant innovations that contribute direct or indirectly to Aquafin’s vision on the one hand and facilitating projects relating to common goods on the other hand. The latter relate to projects linked to the application of treated waste water but never to produce drinking water. It is important to mention here that Aqcelerator will only consider participation after the objective process for allocating the common good has been completed and only on the initiative of the private party.

Aquafin holds 14.29% of the shares in Synductis and is shown under Companies with which there is a participatory relationship.

The shares held by Aquafin in RioP are included in Other participating interests.

In 2022, as part of Call Groene Stroom, Aquafin received a subsidy for the support of medium-sized installations based on solar energy and small and medium-sized wind turbines. In return, Aquafin had to deposit a guarantee in the amount of 7.5% of the support granted and at least 2 thousand euros. In 2024, a guarantee of 5 thousand euros was repaid from the deposit and consignment office in connection with Call Groene Stroom and a new guarantee of 15 thousand euros was deposited in connection with a public tender for a project in Dendermonde.

STOCKS AND CONTRACTS IN PROGRESS

Apart from the tasks on behalf of the Flemish Region (which make up 84% of our activities) assigned via the Management Agreement, towns, cities and municipalities can outsource sewerage tasks to Aquafin, which has developed a specific offer for this purpose. They can either enter into a concession arrangement directly with Aquafin or use Aquafin’s services indirectly via one of the partnerships which Aquafin has formed with water-link, De Watergroep or Pidpa.

Works in this context which have been started but not yet completed are included under contracts in progress. In 2024, 115 projects were delivered worth 81.9 million euros.

The increase in contracts in progress is due to the relatively constant refilling of the order book and the sharp increase in contracting costs. Contracting costs remain at a high level due to factors such as constantly high material prices, wage indexations, etc.

Until June 2024, the collaboration with De Watergroep was in the form of a silent partnership called Riopact. This form of trading was changed to a partnership. A partnership does not file annual figures with De Nationale Bank itself. As a result, Riopact’s figures have to be included in Aquafin for the portion of its share in Riopact and all transactions between them are eliminated (consolidated). That is the reason why Riopact’s position in 2024 is lower compared to 2023.

AMOUNTS RECEIVABLE WITHIN ONE YEAR

Amounts receivable within one year comprise trade debtors and other receivables.

The balance for Trade debtors is determined by the timing of invoicing of our customers and the time of payment by our customers. As at the end of 2024, trade receivables increased from 34.1 million euros to 60.3 million euros.

The increase of 26.2 million euros (including VAT) for customers is mainly due to the extra invoicing in December 2024 (36.9 million euros) compared with 18.2 million euros in December 2023. That includes the City of Antwerp (4.5 million euros), Pidpa (2.7 million euros) and Riopact (13 million euros). Due to the incorporation of Riopact, an additional 8.4 million euros has been added to trade debtors outside "ordinary operations".

Other amounts receivable comprises recoverable VAT, recoverable taxes and an amount receivable from De Watergroep as a result of the consolidation with Riopact (1.8 million euros). These decreased from 16 million euros in 2023 to 8.6 million euros in 2024.

IN THOUSANDS OF EUROS

The main reason for this is the drop in the amount of recoverable VAT. In 2023, recoverable VAT amounted to 12.7 million euros whereas in 2024, it was 5.9 million euros. This was due to the sales invoicing that was 18.7 million higher in December 2024 than it was in December 2023.

SHORT-TERM INVESTMENTS AND CASH

Aquafin actively manages its liquidity. Minimal cash surpluses are aimed for and invested if necessary, taking account of the liquidity and proceeds from the investment as well as the creditworthiness of the other party.

The item Short-term investments and cash increased by 3.1 million euros from 4.9 million euros to 8 million euros. This amount is in line with the policy for cash surpluses.

DEFERRED CHARGES AND ACCRUED INCOME

The item purchases of Flemish Environment Agency assets with equity covers the component of the receivable arising from assets acquired by Aquafin from the Flemish Environment Agency since 2010 (for more information on this, see under Tangible fixed assets – purchases of Flemish Environment Agency assets). Aquafin finances these purchases partially with external funds and partially with equity. Purchases using equity are not invoiced to the water companies, but will be invoiced all at once should the Management Agreement - entered into on a rolling basis for 20 years - come to an end. The resulting receivable is increased annually by 1/20th of the acquisition price of the assets and recorded under accrued income and deferred charges.

Other costs to be transferred are costs incurred by Aquafin in 2024 but relating wholly or in part to 2025. These mainly relate to maintenance contracts, licence fees or prepaid rent or interest.

Interest charges to be transferred are primarily due to the issue of commercial paper in which the interest compensation for the whole term is paid at the time of issue.

Under the contracts with the municipalities, Aquafin assumes responsibility for transport services (cf. Tangible assets – municipal activities) for which a payment system can be designed at the request of the municipalities. The municipal projects item reflects the positive difference between depreciation on municipal projects and the repayment part of the underlying loans invoiced to the municipalities. This balances out charges and income in the interim.

Aquafin uses interest rate hedging contracts to hedge the interest rate risk on certain loans, in line with the policy approved by the Board of Directors. In order to enable the results of the hedging to be measured, a benchmark is set for each hedging strategy. Where the interest charges for the benchmark are lower than the total of the interest charges for the underlying loan and the fixing of the associated hedging instruments, this difference is recorded as a financial charge. Since the interest rate is fixed six months before the payment date, so that the deviation from the benchmark is also known and recorded, pro-rata entry takes place at the time of arrangement under accrued interest - management of interest rate risk. Thanks to optimisations of a large number of our hedges in past years, the interest management results are positive and do not lead to financial charges that have to be recorded on a pro rata basis under accrued interest - management of interest rate risk. The financial charges, which represent the difference between the benchmark and the interest charges for the loan and are recorded in the result as an interest correction for the management of the interest rate risk, are also recorded on a pro rata basis under deferred charges and accrued income. The interest rates on loans consist of a Euribor interest rate plus a margin. In 2024, the 6-month Euribor interest rate dropped from approximately 3.8% in January to approximately 2.6% and the benchmark interest rate of many hedges was higher than the loan rate. That meant that as of the end of 2024, there is accrued interest on the asset side in respect of interest rate risk management.

Accrued revenue includes the 2024 profit under a partnership for municipal sewerage activities between Aquafin and De Watergroep called Riopact. In this, both parties cede 50% of their result to each other. Aquafin ended the financial year with a profit of 2.5 million euros and De Watergroep achieved a result of 441 thousand euros. Profit distribution is processed as a credit note for 1.2 million euros to be prepared and payment of 0.7 million euros to be received. In addition, half of the partnership is consolidated at account level in the figures for Aquafin, after elimination of the intercompany items.

EQUITY

Aquafin’s capital currently stands at 298 million euros. The capital consists of 1,001,613 shares, which are unlisted, and is fully paid-up.

The reserves consist of the legal reserve and the available reserves.

The legal reserve is topped-up annually until it reaches a level equal to 10% of the capital. In accordance with Article 7:211 of the Companies Code, 5% of the after-tax profit is added to the reserve annually.

If the General Meeting accepts the proposed appropriation of profits for the 2024 financial year, the legal reserve will be increased by 222 thousand euros to 16,566 thousand euros and the remaining profit of 6.3 thousand euros added to profit carried forward.

Following the revaluation of Dijkstraat and Ingberthoeveweg, a revaluation surplus of 1.8 million euros was recorded in 2021.

INVESTMENT GRANTS

In 1992, Aquafin received a notice from the Belgian Accounting Standards Board granting permission to interpret the investment grants item differently from the usual interpretation. This item reflects the difference between the repayment and depreciation periods for delivered supra-municipal projects. Since the rate of repayment for these projects does not always correspond exactly to the rate of depreciation, a mismatch arises between charges and related income. In other words, it relates to prepaid depreciation.

The land acquired by Aquafin is not depreciated and is repaid immediately.

We note that almost all items have increased, with construction engineering and other as the main exception. Up to 2008, construction engineering was invoiced over 15 years and depreciated at 33 years. As of 2009, the construction engineering category is invoiced over 30 years and the repayment term for the outstanding amounts adjusted, halving the annual invoice amount. This means that in time, more and more projects will be invoiced in full and only depreciated so that the amount of investment grants reduces again.

Up to 2024, the amount received but not yet used for the sludge mono-processor plant was presented under accrued charges and deferred income. From 2024, this will be recorded under investment grants sludge mono-processor (13.6 million euros).

Until 2024, insurance and related Asset Management and Energy Fund costs were booked to Other. These costs are charged and written off over one year and were therefore transferred in 2024 (- 4.2 million euros). In future, these costs will no longer be recorded under investment grants.

PROVISIONS FOR LIABILITIES AND CHARGES

The main changes in the provisions for liabilities and charges can be broken down into those for supra-municipal project costs, possibly rejected operating costs and personnel-related provisions.

The provision for supra-municipal project costs (2,442 thousand euros) relates firstly to risks for works in progress and projects that cannot be delivered due to delayed/postponed execution of municipal projects because they would generate an insufficient return as yet (1,959 thousand euros). Secondly, provisions are made in relation to the deduction of project costs recorded after delivery, known as subsequent costs (483 thousand euros). The reduction of the provision can primarily be attributed to the delivery of project 22.490 Herne, in 2024, worth 706 thousand euros.

Provision is made for legal disputes based on a reasonable estimate of the claim where it is probable that Aquafin may lose the case. As at 31 December 2024, the provision for legal disputes amounted to 442 thousand euros for 62 disputes. In 2024, we recorded 19 new cases and 24 files could be closed.

As advised by the accounting standards, every year, provision is made for the processing costs of the sludge in the buffers. These are the provisions for sludge buffers.

Provision for bridging pensions has decreased by 14 thousand euros. This is partly because fewer employees qualify for this scheme due to stricter government regulations, and partly because the gap between SWT (bridging pension) and actual pension narrows each year for those who remain eligible for this.

Possibly rejected operating costs are operating costs where there is a possibility of them not being reimbursed according to the management agreement. On the one hand, the provision is reduced by 475 thousand euros because the costs provided for in previous years relating to financial years 2018-2021 were finally settled by means of a decision of the Flemish Government. In addition, a new provision of 96 thousand euros was made for operating costs that might not be accepted such as endogenous growth, TZPE and TZPA extraction at Borgloon WWTP and the Water Framework Directive on phosphorus.

The provision for insurance claims is 11 thousand euros. On the one hand, the provision of 8 thousand euros for the KLIP Turnhout insurance claim was retained and on the other hand, a new provision of 3 thousand euros was made for the Lieven Gevaertstraat 15 Kapellen – sewer claim. Both provisions are equal to the exemption value from the professional liability insurance policy.

Other mainly contains the provision in connection with the shutdown plan for sludge processing for Bruges at the end of 2024.

AMOUNTS PAYABLE AFTER MORE THAN ONE YEAR, INCLUDING THE CURRENT PORTION

An additional sum of 210 million euros was allocated in 2024 to finance our supra-municipal investment expenditure, whose repayment by the drinking water companies is spread. The resulting allocation ratio, in which the remaining claims against the drinking water companies are set against financial debt under the allocation agreement, stands at 1.14 (this must always be greater than one) at the end of the 2024 financial year.

For our day-to-day business operations, Aquafin relies firstly on medium-term finance so as to limit interest rate movements, and secondly on short-term loans and commercial paper so as to be able to respond to fluctuations in work in progress for investment projects. The amount of these general-purpose bank borrowings increased due to new disbursements in the amount of 103 million euros and repayments by 125.6 million euros as provided for in the repayment schedule.

At the request of the municipalities, a payment system can be designed with regard to our municipal activities. 2 new long-term financing agreements in the amount of 3,830,000 euros together were taken up in this respect in 2024.

The short-term financing was used primarily to fund work in progress before delivery. Within the commercial paper programme worth 500 million euros, of which 347 million euros are available for short-term finance, 145.5 million euros of debt security were outstanding as at 31 December 2024 The outstanding balance depends on various factors and is only a snapshot. The increase can be largely attributed to the increase in assets under construction that need to be prefinanced.

For the purpose of the management of the interest rate risk, fixing always takes place six months before the payment date. During this period, the balance of debts and receivables resulting from these fixings is recorded as a short-term financial debt. A drop in the short-term interest rate in 2024 means that Aquafin will receive less interest on the floating leg. Aquafin pays the fixed leg, the long-term interest rate. Across all swap contracts, Aquafin’s receivables decreased from 4.6 million euros to 0.5 million euros.

As at 31 December 2024, under the existing credit lines worth 465 million euros – including the syndicated credit – a straight loan for 5.1 million euros was in place to finance municipal work in progress.

TRADE DEBTS

The item supplier debts decreased by 13 million euros compared with the previous year. This mainly relates to energy supplier VEB. At the end of 2024, the November invoices and the advance invoices for the month of December had been processed and paid (outstanding balance at the end of 2024 5.8 million euros). At the end of 2023, the October and November invoices had been processed but not paid yet (outstanding balance at the end of 2023 19.8 million euros).

Invoices to be received includes estimates for goods and services already provided, the invoice for which has not been received or processed yet. The difference of 6 million euros between the two financial years is mainly due to the fact that the provision for electricity & gas decreased by 2.8 million.

The item credit notes to be prepared - water companies reflects the difference between the budget estimates for operating costs – estimates on which the advance invoices to the water companies are based – and Aquafin’s final invoice, based on services actually performed and settlement of the remuneration model for operating costs. In 2024, the final settlement of accounts for the 2023 remuneration model resulted in a credit note of 21.2 million

where a provision for the credit note to be prepared of 32.0 million euros was made for 2024. The remaining balance (2.2 million euros) comprises a reserve set up by Aquafin to carry out the restructurings of the interest rate management programme.

The other item includes firstly a reclassification between assets and liabilities of customers with a credit balance and suppliers with a balance owing to Aquafin (3.2 million euros). Secondly, this includes a provision for credit notes to be prepared for the Flemish Region and De Watergroep among others regarding the settlement of profits within Riopact (2.3 million euros combined).

ADVANCES RECEIVED ON CONTRACTS IN PROGRESS

The services provided and invoiced by Aquafin for municipal customers which are not yet completed are included under the heading of advances received on contracts in progress and evolve along the same lines as contracts in progress. As at the end of 2024, this balance sheet item increased by 3.6 million euros to 235.9 million euros.

DEBTS RELATING TO TAXES, REMUNERATION AND SOCIAL SECURITY

Outstanding liabilities with respect to taxes relate to payable corporate tax, regional, provincial and municipal taxes and levies.

The item Taxes, remuneration and social security increased by 22.0 million euros to 25.1 million euros.

In 2024, when making the provision for holiday pay, the indexation for 2025 was taken into account. That is because holiday pay was accrued in 2024 and will be paid in 2025. An additional provision of 1 million euros was also made in 2024 for holiday not taken in 2024 but carried over to 2025, mainly due to the holiday savings plan introduced.

Regional, provincial and municipal taxes and levies increased by 0.6 million euros. These debts fluctuate 0.6 million euros on account of actual costs coming in on the one hand and as a result of indexation on the other hand.

The outstanding corporate tax relates to the tax audit on the financial year 2022.

OTHER DEBTS

Includes the debt in respect of Aqcelerator with regard to cash pooling (1 million euros) and unpaid capital (3 million euros) and debt in respect of Riopact (3.2 million euros).

The dividend payable is also recognised here.

If the General Meeting approves the proposed appropriation of profits, a gross dividend of 4,207 thousand euros will be paid to PMV on 15 April 2025. This amount is the same as the dividend paid for the financial year 2023.

Accrued interest on loans includes interest on both short and longterm finance which is allocated to the relevant financial year on a pro rata basis at the time of arrangement. These only increased slightly due to a rise in interest rates.

Transactions relating to the hedging of interest rate risks for the future period are also recorded under accrued charges and deferred income.

Aquafin uses hedging instruments in particular to hedge the interest rate risk on certain loans. In order to enable the results of the hedging to be measured, a benchmark is set for each hedging strategy. If the interest charges for the benchmark are higher than the total of the interest charges for the underlying loan and the fixing of the associated hedging instruments, this difference is recorded in a revenue account. Since the interest rate is fixed six months before the payment date, so that the deviation from the benchmark is known and recorded, pro-rata entry takes place at the time of arrangement via accrued interest - management of interest rate risk. Because the short-term interest rate dropped again in 2024, we will receive fewer euros on the floating legs of the swaps and the difference compared with the benchmark has therefore narrowed again.

Other accrued charges include 29.8 million euros of revenue to be carried forward. Since 2021, this item also includes budgets already received but not yet allocated for the roll-out of the digitalisation programme Digital4Us and for performing the role of Asset Manager for Flanders. In 2024, these were cumulated to give 20.6 million euros and 3.1 million euros respectively.

Since 2023, additional budgets were received for financing the construction of a sludge mono-processor, investing in making residual water available for use in agriculture and horticulture and investing in a platform for digital transport documents, the use of which became mandatory as of 1 January 2023 in connection with the transportation of waste substances. The whole budget for digital transport documents was used in 2024. The balance not yet used for residual water amounts to 4.8 million. From 2024, the amount received but not yet used for the sludge mono-processor (13.6 million euros) will be shown as investment grants.

This income will be recorded as turnover in proportion to the related costs. The other elements are shown in the table above.

Other contains a provision for municipal projects not yet completed. Based on the list of projects showing a negative balance as of the end of 2024, a provision was made driven by the principle of prudence.

Bank charges just include a commitment fee of 110 thousand euros.

NOTES TO THE INCOME STATEMENT

The cooperation agreement with the Flemish Region which contains provisions regarding Aquafin’s supra-municipal activities stipulates that Aquafin’s remuneration for supra-municipal activities is based on the rebilling of all reasonable costs, plus remuneration for the shareholder(s) based on the contribution to the company’s equity. This means that charges and income for these activities broadly mirror one another.

The resources available for financing the operating costs – excluding financing costs and excluding fluctuations in energy prices – is determined based on the so-called performance budget formula where Aquafin’s operating resources budget is dependent on a number of parameters including assets and the pollution load treated and specific indices.

The difference between the result according to the performance budget formula on the one hand and the actual charges recorded for this financial year on the other has a negative impact of 2.3 million euros on the accounting result as at 31 December 2024. This is mainly due to the wet weather that has resulted in a substantial increase in the costs of chemicals and sludge processing.

OPERATING INCOME

Turnover

Aquafin realises the majority of its turnover from supra-municipal activities under the cooperation agreement with the Flemish Region. Within this remuneration, a distinction can be made between payments relating to construction activities (investment costs) and payments relating to operational functioning (operating costs), which, in view of the constantly growing activities, evolve along the same lines.

Payments for operating costs concern invoicing for the budget set by the performance budget formula. The change in operating costs is due to the rise in the output parameters and indices for the remuneration model. This budget has increased due to an increase in activities: including the future delivery volume, the increase in assets and the pollution load treated. The evolution of energy prices is another important factor here.

The staggered invoicing of investment costs concern repayment for the sewage treatment infrastructure delivered. The repayment terms for this infrastructure take the expected life of the underlying assets into account.

The settlement of interest charges relates to the rebilling of the interest charges which are due to Aquafin’s prefinancing role.

The remuneration for equity – equity remuneration – is designed, with due regard for the risks taken, to ensure a minimum acceptable return after tax for the shareholder(s). In 2022, the Flemish Region reduced the rate of return expected on equity capital from 3.5% to 1.95%. The difference of 1.6 million euros relates to the adjustment of estimated tax for the 2023 financial year.

Turnover also includes the rebilling of charges made for the clean-up of cross-regional waste water by the Brussels Region via Hydria.

Services rendered by Aquafin to towns, cities and municipalities not covered by the cooperation agreement resulted in a turnover of 103 million euros for 2024.

Due to a timing difference between the depreciation and rebilling of supra-municipal investments – as explained under the investment grants item – a correction is made to the result via netting of invoicing of investment costs after depreciation in order to bring the depreciation into line with the related turnover.

Changes in contracts in progress

This item reflects the change in the item 'stocks and contracts in progress' on the asset side of the balance sheet, current period versus previous period.

Under the completed contract valuation method, a project is not recognised on the income statement until the project is fully completed. This heading reflects the growth of purchases linked to commercial projects not yet delivered. The increase is due to the relatively constant refilling of the order book and the sharp increase in contracting costs.

Because Riopact changed from a silent partnership to a partnership in 2024, the opening balance is included in Aquafin’s figures. The opening balance of 12.8 million euros reflects the position from previous financial years and therefore has no impact on the result for 2024.

Own construction capitalised

Own construction capitalised contains capitalised costs of research and development produced by Aquafin employees. In 2023, these were deducted from personnel costs and shown under Remuneration, social security costs and pensions. These costs are in line with 2023 (1.4 million euros).

Other operating income

Other operating income was down 1.7 million euros year on year.

This was mainly due to the lower cost recovery for discharges via emergency outlets which dropped by 1.3 million euros. These costs were exceptionally high in 2023 due to the passing on of costs to Limelco and Alpro (1.3 million euros combined).

Other operating income also includes primarily the recovery of costs that cannot be booked as regular turnover. The main decreases relate to subsidies for solar panels (382 thousand euros) and green energy certificates (665 thousand euros).

In addition, another negative income of 0.8 million euros was recognised for Riopact in 2023, which is neutralised in 2024 as a result of consolidation.

OPERATING CHARGES

Raw materials, consumables and goods for resale Within Energy costs, electricity costs (accounting for 93% of the total) fell sharply in 2024 on account of price declines in both the fixed part based on forward contracts (-58%) and price declines on the spot market (-26%). Turning to natural gas, the average price paid decreased by 36%. The improvement in market conditions and more favourable forward contracts caused the lower energy costs in 2024. The total reduction amounted to 40.7 million euros.

Costs of removal of sludge, sand and screenings rose by 5.5 million euros. 2024 was an extremely wet year, causing a record volume of sludge to be processed (34k tons of dewatered sludge more than in 2023). The transport costs for the removal of liquid, dewatered and dried sludge increased by 14% compared with 2023 (or +1.3 million euros) due to the increased quantities. Sales costs including environmental tax also increased by 22% (+4.2 million euros) since the extra tons of sludge sold were processed via the most expensive sales route as necessary.

Costs of chemicals dropped by 0.1 million euros in 2024. In the water line (+0.7 million euros), higher consumptions due to extreme weather conditions are only partially compensated for by the price reductions on phosphorus removal products. In the sludge line (-0.8 million euros), we mainly note the effect of the lower quantities used on account of more efficient operation.

The main items under this heading are shown below.

In the case of Mechanical, electrical and architectural maintenance (+0.4 million euros), the inflationary pressure on the price of spare parts and the impact of ageing assets resulted in higher maintenance costs.

The item Other (-0.9 million euros) shows the effect of the savings operation on the other budgets in response to the higher than expected costs for sludge/chemicals. We note lower costs in respect of various items (improvement operations -0.3 million euros, routine maintenance -0.2 million euros, special emptying operations and emptying for preventive inspections -0.3 million euros). In respect of the item Operation by third parties, costs decreased by 0.1 million euros.

Services and miscellaneous goods

The increase of 17.8 million euros is the result of an increase of 2.2 million euros relating to supra-municipal activities and an increase of 15.6 million euros with regard to municipal activities.

Costs relating to municipal activities increased by 15.6 million euros compared with 2023. These costs have a limited impact on the result. This is because they are neutralised via contracts in progress on the balance sheet and are not recognised on the income statement until the project or service is fully completed.

This increase is primarily due to contracting costs which remain at a high level as a result of factors such as constantly high material prices, wage indexations, etc.

In the case of supra-municipal activities, we mainly see an increase in costs relating to external employees, agency workers and laboratory analyses.

Remuneration, social security costs and pensions

The increase in personnel costs reflects the increase in the workforce from 1,146 to 1,201 FTEs. This increase is in line with the growth of the infrastructure operated and developed by Aquafin, at both municipal and supra-municipal level.

The slight increase of 1 million euros in respect of Salaries and direct social benefits is due to the consolidation with Riopact, as a result of which personnel costs have decreased by 4.5 million. If we disregard this reduction, we see an increase of 5.6 million euros in salaries and direct social benefits. This is the result of a wage indexation in 2024 and the adjustment of wages within the framework of growth. In addition, an additional provision of 1 million euros was made in 2024 for holiday not taken in 2024 and carried over to 2025, mainly due to the holiday savings plan introduced. In 2023, this provision stood at 2.9 million euros.

Depreciation and other amounts written off on formation expenses, intangible and tangible fixed assets

Depreciation can be subdivided into the three headings below.

Given the steady expansion of Aquafin’s assets – the value of Aquafin’s assets continues to increase year on year – the depreciation on Plant, machinery & equipment also increased.

The decrease of 0.9 million euros in respect of buildings is the result of a reduction in one-off compensation payments for land. The decrease in one-off compensation payments for land is due to the adjustment made to the way that rebilling is carried out. As of the end of 2022, the delivery from the 4th quarter was recorded in the 1st quarter of the following year.

According to the previous way of rebilling, that would be added to the 1st quarter of 2024. However, since the financial year 2023, it has been added to the financial year itself. This means that by way of exception, 2023 has 5 quarters compared with 2024 which has 4 quarters again.

Amounts written down on stocks, contracts in progress and trade debtors – provisions for liabilities and charges

The table on the following page shows the connection with changes to the related balance sheet accounts. A new provision was made for one customer in 2024. Bankruptcy proceedings were opened for this company, making the possibility of collecting the outstanding debt uncertain.

Provisions for liabilities and charges have already been discussed in relation to the balance sheet position concerned.

Other operating charges

This heading mainly covers direct taxation and taxes levied on Aquafin’s installations. This mainly comprises property tax and regional, provincial, municipal and environmental taxes which together amount to 5.4 million euros.

In 2024, the adjustment of VAT on own contributions was recorded for the 2022, 2023 and 2024 financial years, totalling 0.4 million euros.

The residual balances relating to invoices to be prepared for operating costs last year and the final closure of performance budget 2018-2021 was recorded in 2024 as turnover.

In 2019, a provision of 555k euros was made for the relocation of a pipeline to D’Herbouvillekaai as part of the Nieuw-Zuid Antwerpen project. Since these costs could not be passed on to the Flemish Region, a provision was made. At the start of 2023, Aquafin was notified by the project developer that the pumping station would not be relocated, leading to the provision being reversed.

Other costs mainly includes non-deductible VAT on vehicle costs (475 thousand euros).

Financial charges and income

This heading covers interest charges on short- and long-term financing, charges and income relating to active interest rate management and the interest received on Aquafin’s current and savings accounts.

The net result of interest rate management (charges and income) has risen from 500 thousand euros to 704 thousand euros.

The interest charges on financing are higher as the result of an increase in the outstanding debt to enable pre-financing of the work in progress and additional deliveries.

In addition, Aquafin receives 700 thousand euros more interest compared with 2023 due to active treasury management as well as the increase in interest rates.

Non-recurring financial income and charges

This comprises the adjustment of the loss recorded for the participating interest in Aquaplus. The valuation in Aquafin’s books is adjusted annually based on Aquaplus’ equity. In 2024, Aquaplus achieved a positive result of 290 thousand euros. As a result, a reversal of 290 thousand euros on the write-down for the participating interest was recognised in Aquafin. This adjustment will continue only as long as the previously recorded write-down can be reversed.

Income taxes

Corporation tax on the result amounts to 3.0 million euros. Specifically 2.7 million euros for tax owed for the 2024 financial year and an adjustment of 0.3 million euros for the 2022 and 2023 financial years.

Proposal to the General Meeting

Taking into account the profit after taxes, the profit available for appropriation amounts to 4,434,787.73 euros:

• transfer to the legal reserve: 221,739.39 euros

• transfer to the other reserve: 0 euros

• dividends: 4,206,774.60 euros

• profit carried forward: 6,273.74 euros

If the General Meeting approves the proposed appropriation of profits, a gross dividend of 4.2 euros per share will be paid to PMV on 15 April 2025.

Extra information

HEDGE ACCOUNTING

In view of the level and the term of Aquafin’s long-term debt, in 2006, the Board of Directors agreed to manage the interest rate risk actively. The framework stipulates that the interest rate risk associated with borrowings may be hedged as follows:

a) Long-term debt (initial maturity of more than 10 years)

• a maximum of 10% of the long-term debt may have an unlimited floating rate;

• a maximum of 35% of the long-term debt may be floating, but with interest costs being limited (via caps).

• a minimum of 65% of the long-term debt must have a fixed rate.

b) Medium-term debt (initial maturity of 1-10 years)

• A maximum of 50% may be hedged

c) Short-term debt

• not hedged

d) Budgeted long-term debt

• 50% may be hedged (maximum 5 years forward)

Each hedging transaction is fully documented on conclusion and linked to a (budgeted) underlying loan.

The table below shows the distribution of the outstanding debt for long and medium-term loans based on the type of rate, hedged or otherwise.

The proportion of financing with a fixed interest rate has increased. That is due to a number of hedging contracts that were concluded in previous years and through which the interest rates for a number of financing agreements in 2024 were locked in on the one hand.

On the other hand, almost all other new financing from 2024 was recorded with a fixed interest rate. Only 9.5 million euros of new financing was recorded with a floating interest rate that was not hedged. However, the percentage of financing with a floating or limited floating interest rate decreased on account of the repayment capital for this financing recorded before 2024.

The market value of the instruments used to hedge the interest rate risk amounted to -25.2 million euros as at 31 December 2024, a reduction of 17.8 million euros compared with a year ago. This is mainly due to a drop in the long-term interest rate as of 31 December 2024 compared with 31 December 2023.

Cash flows relating to interest rate hedging instruments form part of the interest cost in accordance with the provisions of the cooperation agreement.

PENSION LIABILITIES

There are two types of pension plans within the company.

Employees joining before 1 January 2007 have a defined benefit plan. Employees joining after 1 January 2007 have a defined contribution plan.

These ‘life and death in service plans’ are managed by AG Insurance NV. They are underwritten in the form of a group insurance scheme managed for each individual member.

Every employee with a temporary or permanent contract is signed up for the ‘survival’ and ‘death’ cover immediately upon joining the company.

For the current population of employees, the upper age limit of the plan is 65 years (the first day of the month following the 65th birthday). If a member remains in the employer’s service after the specified end date, this is postponed for successive periods of one year.

All of the contributions are at the expense of the employer.

No problem of underfunding arises for the group insurance. For both plans, the balance of the financing fund is considerably larger than the shortfall on the contract for active members and ‘sleepers’ (former employees who have left the amount of their supplementary pension in the plan).

CASH FLOWS

The table below shows the cash flows for 2024 compared with 2023.

The cash flow table shows significant changes in operating activities.

There is an increase in net outgoing operating and investment cash flow of 114.5 million euros. This is mainly due to the decrease in revenue from customers and payments to suppliers and increase in investments

The balance for revenue from customers is determined by the timing of invoicing of our customers and the time of payment by our customers among other things.

In 2023, the amount for revenue from customers was higher, mainly due to the payment received in 2023 as a result of the extra rebilling at the end of 2022 of 54.7 million euros of operating costs relating to 2022 and the invoicing of the settlement of operating expenses relating to 2021 for 12.6 million euros.

Payments to suppliers increased due to the drop in energy prices among other things.

In the case of Investments, we mainly see an increase in assets under construction.

In the case of the net financing cash flow, we primarily see an increase with regard to new disbursements & repayment of debt

New disbursements & repayment of debt: this item relates to financial debts.

The increase is mainly in short-term financing which is used primarily to fund work in progress before delivery. Within the commercial paper programme worth 500 million euros, of which 347 million euros are available for short-term financing, 145.5 million euros of debt security were outstanding as at 31 December 2024. The outstanding balance depends on various factors and is only a snapshot. The increase can be largely attributed to the increase in assets under construction that need to be prefinanced.

Green Finance Framework report on 31/12/2024

In April 2020, Aquafin published a new Green Finance Framework. In this way, we offer investors structured information about the ecological impact of our projects. The Green Finance Framework is available to view at www.aquafin.be. The annual reporting can also be found on the website, but is also contained in this section of the annual report.

IMPACT

5.2.

Metric 6 Technical performance of the WWTPs 6.1

6.3

Clarification of the metrics

Metric Definition

1 Total flow rate of waste water entering all WWTPs and SWTPs in operation on 31/12. IWWTPs and commercially operated WWTPs have not been included. The figures are based on an extrapolation of sampling days.

2 Total sludge production sold without digestion + total amount of sludge supplied to own digestion plants.

3 Total amount of sludge sent for digestion

4 * Up to and including 2021, official figures of VMM; from 2022, Aquafin’s own calculation subject to reservation due to lack of updates by VMM

5.1 Total electricity consumption of WWTPs (mechanical and biological treatment) and Total electricity consumption (metric 5.1) translated into treated m³ of waste water

5.2 Own production of renewable energy from various sources

6.1 Annual average removal percentage of nitrogen across all WWTPs assessed (in operation on 30/6)

6.2 Annual average removal percentage of phosphorus across all WWTPs assessed (in operation on 30/6)

6.3 Percentage of the number of WWTPs assessed (in service on 30/6) that comply with all standards

Sustainability statement

"A test year gives us the chance to familiarise ourselves with sustainability reporting"

Although it is not yet a statutory requirement, Aquafin is filing its first CSRD report this year on the 2024 financial year. Even for a company that, by definition, is working towards a sustainable future, the whole process was a challenging and intensive exercise. HR & Organisational Development Director Sabine Schellens looks back at the path travelled that will undoubtedly lead to new insights in 2025.

WHAT DOES SUSTAINABILITY MEAN FOR AQUAFIN?

"Aside from our basic task of collecting and treating domestic waste water and working on creative solutions to water surpluses or shortages, doing business sustainably is nothing new for Aquafin. For a long time, our policy has been to make the way in which we realise our ambition sustainable too. However, our main focus has always been on the environment – our energy consumption, green mobility, biodiversity – while also paying attention to our employees and the neighbourhood we work in. The ESG approach has helped us think outside these obvious boxes too. For instance, we now also have ambitions to deepen our relationship with our project partners, deal with regulations in a mature way and support transitions with a positive impact on a broad social scale. And I am very happy about that as it not only increases our relevance in Flanders, it also makes our employees proud. Which in turn has a positive effect on our image as an employer."

HOW IS CORPORATE SUSTAINABILITY EMBEDDED IN THE ORGANISATION?

"Ask 100 of our employees why they chose to work for Aquafin and at least 80% will say it was because of our purpose. Working for a company like Aquafin definitely makes you feel that you can make your own contribution – however small – towards creating a healthier environment and climate. But naturally, recognition for what we do is not enough to get us there. Internally, we have defined roles and responsibilities to lay the foundations for both E, S and G. Long-term objectives have made our ambitions concrete and were translated into action plans that we then integrated in our organisational objectives with annual targets. So we can be sure that doing business sustainably is not empty words."

WHY A CSRD REPORT ALREADY?

"We knew what was coming and also that it was going to be a tough marathon. That is why we have been preparing ourselves early. Normally, we would not have to file a report until the 2025 financial year onwards, but we decided to provide insight into our impact early and thus further increase confidence in Aquafin.

So we see this as an initial test year which we have also learned a lot from, not only in terms of the content of the report itself but also in terms of organisation. We have found that it means quite a lot of extra work. After an initial benchmark and feedback from our auditor, we may be able to assess where we can make improvements and what that requires. In any case, we are promoting a pragmatic approach."

WHAT CHALLENGES ARE YOU STILL FACING WITH REGARD TO REPORTING?

"We have found the CSRD to be very generalistic and primarily aimed at production companies. For instance, at first glance the topics 'Water and marine resources' and 'Circular economy' are obvious topics for Aquafin. But when we look closer at the reporting requirements, we notice that a lot of data points do not apply to us because of the type of activities we carry out. However, we have a lot to say on those topics and therefore we will need to create company-specific data points for them. Because we want the CSRD report to help create a meaningful framework for tracking our sustainability performance and the Corporate Sustainability ambitions that we have defined. Defining the right KPIs for this and assigning targets to them is certainly another major step that we will have to take. Collecting the required information from our value chain – certainly from the smaller enterprises – will also be a challenge. With regard to this too, first and foremost we want reporting to be meaningful and not to fail in its purpose."

Sabine Schellens

General disclosures – ESRS 2

GENERAL BASIS FOR PREPARATION OF THE SUSTAINABILITY STATEMENT (ESRS 2 – BP-1).

For the financial year ending 31 December 2024, Aquafin is reporting its sustainability information for the first time in line with the provisions from the Corporate Sustainability Reporting Directive (CSRD). This also includes complying with the proces for identifying the reported information in the sustainability statement, as described in the section 'Aquafin’s double materiality analysis'. The materiality assessment focused on ESRS E1, E2, E3, E4, E5, S1, S2 and G1, with these being identified as material topics.

Aquafin’s sustainability statement is drawn up on a consolidated basis. The information is consolidated based on the same principles as the financial reporting and therefore also include the subsidiary Aquaplus.

Although the report does not yet meet all requirements, various elements have already been integrated in order to provide the basis for future compliance. The content of this sustainability statement has not yet been subject to review by the auditor.

VALUE CHAIN

This sustainability statement covers the upstream and downstream value chain to a limited extent. However, impacts, risks and opportunities were also taken into consideration for the double materiality analysis.

A description of the double materiality process can be found in the section 'Aquafin’s Double Materiality Analysis.'

REPORTING ON SPECIFIC CIRCUMSTANCES (ESRS 2 – BP-2)

ESTIMATES AND UNCERTAINTIES

If estimates are used or if there are uncertainties regarding the outcomes of the quantitative data presented in this declaration, this is indicated for the respective data.

To the extent possible, the data and assumptions used to prepare the sustainability statement are consistent with the associated financial data and assumptions used in Aquafin’s financial statements, with the following exception:

• the calculation to determine scope 3 greenhouse gas (GHG) emissions is based on assumptions and estimates.

In the coming years, Aquafin will be working with partners such as VLARIO and Aquaflanders on a more detailed and uniform estimation of value chain data.

We are aware that the data in this report is not yet complete, and are actively working on both the quantity and quality of data for future reports. We remain committed to continuous improvement in the way relevant topics are measured and reported and will continue to integrate these in our framework for sustainable results.

INCORPORATION OF INFORMATION BY REFERENCE

If information is included in other parts of the annual report, we have applied the principle of reference by incorporation. Relevant cross-references have been added where necessary.

GOVERNANCE RELATING TO SUSTAINABILITY (ESRS 2 – GOV-1)

We chose to include certain disclosure requirements from the umbrella standard ESRS 2 in our corporate governance statement because we believe that this information is best read in conjunction with our corporate governance strategy. Detailed information on our management structures and an overview of management and supervisory bodies and their role relating to sustainability as well as internal controls and risk management can be found in the corporate governance section of this integrated annual report.

Aquafin has set up a governance framework to anchor sustainability-related topics in its corporate strategy. The CEO passes on responsibility to the Board of Directors. Ultimate responsibility for E, S and G matters is then entrusted to the directors concerned in each case.

We also have a core team for Corporate Sustainability, with a responsible member of the core team appointed for each topic, that outlines the policy and links objectives and targets to it together with the business and by means of consultation with the director concerned. Long-term objectives are then translated into annual objectives every year and fully integrated in the strategy as a result.

ROLES AND RESPONSIBILITIES IN THE SUPERVISION OF IMPACTS, RISKS AND OPPORTUNITIES

Aquafin’s Board of Directors is responsible for strategic direction, putting together the leadership team and monitoring performances to ensure sustainable value creation. The Audit Committee serves as the main link between the Board and the internal and external auditors, and ensures transparency and accountability in financial reporting, internal controls and risk management. The management team, led by CEO Jan Goossens, manages the day-to-day operations and strategic initiatives, with weekly meetings to ensure effective risk management and control measures.

EXPERTISE AND SKILLS IN SUSTAINABILITY MATTERS

Aquafin ensures that its management has the necessary skills to monitor sustainability. Besides the above-mentioned core team, Aquafin also consults external expert groups in order to broaden insight and thus strengthen sustainability expertise.

INFORMATION PROVIDED TO MANAGEMENT BODIES (ESRS 2 – GOV-2)

The Audit Committee is the main link between the Board of Directors, internal auditors and external auditors and provides regular updates on financial reporting, internal controls, risk management and audit processes. The Audit Committee plays a crucial role in the supervision of the internal control system and the financial reporting process, and evaluates the internal control and risk management systems. The Audit Committee will also take on this role for sustainability reporting.

INTEGRATION OF SUSTAINABILITY-RELATED PERFORMANCE IN INCENTIVE SCHEMES (ESRS 2 – GOV-3)

The remuneration of board members and members of the Audit Committee and Appointments and Remuneration Committee is linked to their attendance at meetings. The remuneration for board members consists of a fixed and variable part. For the variable part, the Board of Directors analyses the performance of the management team based on collective objectives relating to operational functioning (e.g. treatment results), financial results, safety, innovation and business development. In addition, there are also individual objectives for each director. There are no specific sustainability targets linked to remuneration.

DUE DILIGENCE STATEMENT (ESRS 2 – GOV-4)

DOUBLE MATERIALITY APPROACH AND IMPACT PRIORITISATION

We apply a double materiality approach in this sustainability statement. This approach helps prioritise significant impact domains and results in the DMA matrix.

CONSULTATIONS WITH STAKEHOLDERS AND DEVELOPMENT OF THE MATERIALITY INDEX

To prepare for the obligation to comply with the CSRD, Aquafin held consultations with stakeholders for the purpose of developing a materiality index and determining ESG ambitions.

RISK MANAGEMENT AND INTERNAL CONTROLS (ESRS 2 – GOV-5)

The Board of Directors is responsible for monitoring risks and ensuring that appropriate internal control mechanisms and risk management systems are in place. The Audit Committee assists the Board of Directors with risk management and is tasked with assessing the effectiveness of the risk management and internal control processes.

The members of the management committee are responsible for the day-to-day risk management within their respective departments. Through collaboration with their teams, they identify key and emerging risks and take care of the internal monitoring and control of those risks.

MAIN RISKS IDENTIFIED AND MITIGATION STRATEGIES IN THE DMA ANALYSIS

• Physical risks to our infrastructure due to climate change (flooding, heat). Mitigation: identify locations with the greatest risk and formulate appropriate actions (planned in 2025).

• Climate mitigation: price of CO2 emissions of raw materials passed on in our projects. Mitigation: encourage and support sector in the development of sustainable materials, incentives for sustainable materials and products in the procurement process.

• Additional investments for the removal of substances of concern through new legislation. Mitigation: dialogue with manufacturers and application of the 'polluter pays' principle.

• Attraction of talent, both internally and for the implementation of our projects. Mitigation: commit to employer branding and invest in the partnerships with our technical partners.

STRATEGY, BUSINESS MODEL AND VALUE CHAIN (ESRS 2 – SBM-1)

SUSTAINABILITY STRATEGY

Despite the undeniably positive impact of our main task – the collecting and treatment of domestic waste water – the infrastructure and treatment process have a significant ecological footprint. In addition, factors such as climate change, new polluting substances in waste water, population growth, etc. are putting more and more pressure on the water quality of streams and rivers. To us, working on solutions to these challenges means having to Act green

In an extremely volatile world where technologies are also developing rapidly, Aquafin wants to take care of people, not just as an employer but also as a client in its collaboration with project partners. We will do our utmost to create a safe, ethical working environment where close attention is paid to well-being. We want to Let people grow by sharing knowledge and encouraging selfdevelopment.

As an organisation, we are At one with our environment and we are aware of the impact that we (can) have on it. We keep the nuisance caused by our infrastructure works to a minimum and we focus our activities on enabling positive social transitions.

We formulated ambitions and objectives within these three domains:

ACT GREEN

• Topic: Climate mitigation

• Ambition: Achieve climate neutrality across all processes, from raw materials to customer

We want to achieve this ambition with our 'road to zero carbon' plan that is based on three pillars:

Pillar 1: Reduction of greenhouse gas emissions from scope 1 and 2 by 48% by 2030.

Objectives:

• Reduce greenhouse gas emissions in the sewer system and water treatment.

• Fossil-free operation by 2030.

• Increase the energy efficiency of our treatment processes by at least 1% per annum during the period 2010-2030 (i.e. 20% in total).

• Increase the share of renewable energy in our electricity mix to at least 40% by 2030.

Pillar 2: We will work proactively towards the integration of climate-neutral products and services in partnerships with our suppliers.

Objectives:

• Our projects have a minimal ecological footprint which we use to inspire the sector.

• We engage in dialogue with our partners and incorporate incentives for a lower CO2 footprint in practice via our procurement processes.

Pillar 3: Actively develop opportunities to connect as a function of renewable energy developments.

Objectives:

• We look for market-ready solutions that can be applied within our organisation.

• We want to be the driver for developments in which we can play a key role.

• Topic: Climate adaptation

• Ambition: To be the lynchpin in the transition to a resilient, climate-proof living environment

Objectives:

• Develop a vision for our approach to the relevant process domains (by 2027).

• Use innovation for innovative solutions/technologies and share our vision and knowledge to shape policy.

• Challenge our clients to carry out projects in a climate-resilient way based on our impact scan.

• Topic: Water quality

• Ambition: Deployment of expertise and innovation for good water quality

Objectives:

• Map potential environmental impact caused by additives.

• Investigate the potential of nature-based water treatment solutions (overflows, rainwater and waste water).

• Optimise the management of WWTPs and the sewer system by means of digital solutions (smart control, digital twins, etc.)

• Investigate and devise the best possible solutions in order to comply with the EU Urban Waste Water Treatment Directive (UWWTD).

MAKE PEOPLE FLOURISH

• Topic: Our employees

• Ambition: Offer our employees meaningful jobs within a caring, safe and healthy environment that invites development

Objectives:

• Aquafin is an inclusive workplace.

• All our employees have meaningful jobs that fascinate them.

• There is a learning culture that leads to deployment based on the required skillset and self-reliance in a society that is constantly evolving.

• We stimulate good physical and mental health and everyone returns home safely in the evening.

• Topic: Project partners

• Ambition: We and our partners work safely and with integrity and invest in workable work together

Objectives:

• We work together with our technical construction partners based on equality.

• Everyone who works for us returns home safely at the end of the day.

• We work out a simple qualitative project flow.

AT ONE WITH OUR ENVIRONMENT

• Topic : Society

• Ambition: Assume an inspiring role in transitions with positive social impact

Objectives:

• Aquafin is in connection with society and responds to opportunities where we can play a substantial positive role.

• We are inspirers in the field of environmental management.

BUSINESS MODEL AND CORE ACTIVITIES

Aquafin is responsible for the construction, management, maintenance and financing of the supra-municipal infrastructure for waste water treatment in Flanders. We manage 330 waste water treatment plants (WWTPs) which treat domestic waste water according to Flemish and European standards.

Our core activities:

• Transporting and treating waste water

• Project management of the construction and optimisation of waste water treatment infrastructure

• Financing the projects for the Flemish Region

• Asset management for efficient operation of the infrastructure

• Climate adaptation and development of a future compass for arming the public domain against the consequences of climate change

We also create services and optimisations in response to new challenges in society through research and innovation. Examples include: sewer thermal energy (heat recovery from waste water), biomethane production from sludge digestion, recovery of raw materials from sewage sludge, facilitation of the reuse of treated waste water, etc.

For more details, see ‘About Aquafin’

VALUE CHAIN AND IMPORTANT RELATIONSHIPS

Aquafin works for the Flemish Region and collaborates with Flemish towns, cities and municipalities and drinking water companies such as water-link, De Watergroep and Pidpa on municipal sewer management. In this way, we manage the sewer systems for around half of the towns, cities and municipalities in Flanders. We collaborate with consultancy firms and contractors for the purpose of carrying out our projects. We buy in products and services for the treatment process and the maintenance of our infrastructure. And naturally, our employees are also an important link in our value chain.

At the output end, we ensure that rainwater can be used to top up the water table through infiltration or can be reused through buffering. The waste water that we have treated goes into a watercourse or is further upgraded to process water for industry or drinking water. The latter is carried out by business customers themselves or via a partnership with specialised companies.

Energy that we recover via sewer thermal energy from sewer water or from treated waste water is used to cool and heat buildings with the help of a heat pump. We collaborate with parties such as ESCOs, project developers or municipalities on this. Sludge, a by-product of the treatment process, is also a source for recovering energy in the form of green electricity and green gas and raw materials such as phosphorus and carbon (both still in the research and innovation phase).

OUR VALUE CREATION MODEL

MAIN PRODUCTS, SERVICES AND MARKETS

Aquafin’s main service is the collection and treatment of domestic waste water which fundamentally helps improve the water quality in streams and rivers. We only operate in Flanders and focus on the management of infrastructure for collecting and treating domestic waste water and for managing rainwater for the Flemish Region and more than half of the towns, cities and municipalities in Flanders. We extend our expertise to industrial clients and the private market via our subsidiary Aquaplus, which provides water management expertise to sectors such as the food and beverage industry, the chemical and pharmaceutical industries and the recreation sector. Aquaplus offers services ranging from renovation and process optimisation through sewer management to the design and operation of water treatment infrastructure.

INTERESTS AND VIEWS OF STAKEHOLDERS (ESRS 2 – SBM-2)

Even before the CSRD topics were known, we surveyed our stakeholders regarding the positive and negative impact they believe we have – or could have – as a company. We involved both internal employees and external stakeholders such as technical partners, local authorities, partner companies and government bodies. The organisation of the dialogue was structured, with a quantitative survey conducted using an online questionnaire and several deep dive discussions.

At the time, we used the Sustainable Development Goals (SDGs) as a basis. Later, we will convert the topics from the stakeholder survey into the topics of the guidelines in the CSRD (ESRS: European Sustainability Reporting Standards). At the start of 2024, we carried out the double materiality analysis (DMA) based on an assessment of the material risks and opportunities by a limited representation of the core Corporate Sustainability team and the Finance & Procurement director. This exercise resulted in the materiality matrix shown below.

Although all the topics are important to Aquafin, we decided to limit ourselves to material topics E1, E2 (with the exception of air pollution which is not material), E3, E4, E5, S1, S2 (limited to our technical partners) and G1 in the sustainability report.

Climate Change E2: Pollution of water

E4: Biodiversity & Ecosystems

E5: Circular Economy

PROCESSES FOR IDENTIFYING AND ANALYSING MATERIAL IMPACTS, RISKS AND OPPORTUNITIES (ESRS 2 – IRO-1)

In both the quantitative survey and the qualitative survey, we asked our stakeholders about the impacts, risks and opportunities of the various ESG topics for Aquafin. At the time, they were still linked to the SDGs, afterwards we linked them to the ESRS topica result. In the quantitative survey, we asked them to score the impact (inside-out) on a scale of 0 to 10. We delved deeper into risks and opportunities by asking open questions and holding deep dive discussions.

CONSULTATION OF STAKEHOLDERS AND INVOLVEMENT OF EXTERNAL EXPERTS

The stakeholders that we consulted for our DMA were determined by means of mapping. A total of 317 respondents answered the survey, a result we consider representative. 30 stakeholders then took part in a deep dive discussion during which we went deeper into the results of the survey and potential risks and opportunities. We then consulted another 8 external experts to get an understanding of broader environmental and social impacts and gain new insights into potential opportunities to increase our positive impact.

PRIORITISATION OF NEGATIVE AND POSITIVE IMPACTS

Negative impacts are prioritised based on severity and probability. Positive impacts are prioritised based on scale, scope and probability.

CHANGES AND FUTURE REVIEWS OF THE MATERIALITY ASSESSMENT PROCESS

In September 2022, Aquafin carried out a materiality assessment by means of collaboration with Route 2030. In February 2024, a review of the materiality matrix was carried out by means of collaboration with BDO, which primarily resulted in the adjustment of risks and opportunities. We are aware that impacts, risks and opportunities can evolve over time and need to be critically reviewed at least once a year.

DISCLOSURE REQUIREMENTS COVERED IN THIS SUSTAINABILITY STATEMENT (ESRS 2 – IRO-2)

PRIORITISATION OF ESRS TOPICS

For the 2024 financial year, Aquafin gave priority to ESRS E1, focusing on climate change, ESRS S1 relating to own employees, and ESRS G1. For the other material environmental topics, we have restricted ourselves to information that is relevant and available given our specific operating activities. With regard to ESRS S2, employees in the value chain, we have restricted ourselves to those employees who work directly at and on our infrastructure in this report.

Environment

• ESRS E1 Climate change

• ESRS E2 Pollution

• ESRS E3 Water and marine resources

• ESRS E4 Biodiversity and ecosystems

• ESRS E5 Resource use and circular economy

ESRS E-1 - CLIMATE CHANGE

OUR APPROACH: ROAD TO ZERO CARBON (E1-1)

The aim of our Road to zero carbon strategy is to achieve climate neutrality across all processes, from raw materials to client. The strategy is based on 3 pillars:

Pillar 1: Reduction of greenhouse gas emissions from scope 1 and 2 by 48% by 2030.

Our aim is to achieve a 48% reduction in Scope 1 and Scope 2 emissions by 2030, taking 2013 as the reference year. Aquafin has identified various levers for decarbonisation, including the electrification of the whole vehicle fleet, including trucks, and the switch to fossil-free heating systems in buildings. Gas-fired dryers will be replaced by dryers that run on residual heat. In addition, there is a new sludge processing plant under construction in Ghent that will process two thirds of the sludge and reduce emissions significantly. We are also working on converting 75% of the biogas produced into biomethane and exploring pilot projects with green concrete and site batteries for reducing infrastructure project emissions.

We are also aiming to improve energy efficiency by at least 1% per annum and we want to expand the proportion of our own renewable energy in our electricity mix to 40%. Renewable energy projects at our own sites will take preference but we have also developed a Power Purchase Agreement strategy to support local renewable energy initiatives.

INNOVATING WITH ENERGY PROJECTS

Wind turbine projects had been on the table at Aquafin for some time but received a boost in 2024. Energy manager Jeroen Deurinck: "We arranged feasibility studies for 4 possible sites and this turned out to be the right approach. It created the confidence needed to realise the projects and we also learned a lot for future projects. To be specific, we are now moving forward with 2 positively evaluated sites. In the meantime, we have signed an initial Power Purchase Agreement (PPA) with Luminus for an annual offtake of 21,300 MWh energy from two new wind turbines near to our Oud-Turnhout WWTP. With a contract term of 20 years, Luminus is assured of a profitable investment, while Aquafin can increase the share of dark green energy in its energy mix."

On our way to fossil-free operations, we are thinking as broadly as possible and trying to create maximum added value. In the summer of 2024, we were given the green light for a European subsidy of 1 million euros for the installation of a large-scale battery energy storage system (BESS) at Merksem WWTP. The battery will replace the current emergency diesel generator that only operates during a power outage. Jeroen: "The advantage of the BESS is that thanks to a smart control system, it can also help stabilise fluctuations within the electricity grid. When supply is high and the price of electricity is low, the battery will be charged. If there is a shortage and high energy prices, it will release the power stored back to the grid and we will be compensated for it." The project will be put out to contract in 2025 for commissioning a year later.

Pillar 2: We will work proactively towards the integration of climateneutral products and services in partnerships with our suppliers. In the past, we built ad hoc sustainability criteria into a lot of purchase dossiers which also led to more sustainable procurement in practice. From 2025, we will start to gradually implement a structural sustainable purchasing strategy where greenhouse gas emissions are included as a criterion in procurement procedures. Joint strategies have been developed with partners and incentives are included in purchase dossiers to promote emission-reducing measures. The investments and financing for the implementation of the transition plan are aimed at supporting the transition to a sustainable economy. Because we have currently not set any hard targets for Scope 3 emissions, we cannot guarantee that our strategy is fully in line with the Paris Agreement. However, the Road to zero carbon strategy that we endorsed in 2024 is promising for achieving our goal for scope 3 emissions because it focuses on the key emissions identified in the comprehensive study carried out by our R&D department in 2024. The publication of this report was the beginning of a company-wide approach focused on the actions necessary in order to work towards limiting global warming to 1.5 °C.

Pillar 3: Actively develop opportunities to connect as a function of renewable energy developments.

We look for market-ready solutions that can be applied within our organisation such as biomethane, wind turbines, flexible controls, batteries, etc. At the same time, we want to be a driver ourselves for developments in which we can play a key role, such as drying/heating using residual heat, sewer thermal energy and heating grids, etc. By doing that, we want to make a positive social contribution to the achievement of climate targets in Flanders.

The progress we make on our road to zero carbon will be reported annually as part of our sustainability report, and every three years we will revise the strategy in order to adjust to the changing challenges of the energy transition and climate mitigation.

At this moment in time, we have not yet linked our economic activities to the Taxonomy Regulation.

IDENTIFICATION OF MATERIAL IMPACTS, RISKS AND OPPORTUNITIES (E1 IRO-1)

We draw up a comprehensive greenhouse gas inventory with the help of the Greenhouse Gas Protocol and Carbon+Alt+Delete software, focusing on quantifying process impacts and identifying high-impact zones. We have expanded our emission measurement programme to provide a uniform estimate of emissions within the sewage sector. In our inventory, we calculate emissions based on both activities and costs. In the impact scan tool that we are currently developing is a module for scoring projects on greenhouse gas emissions so that we can work on reduction strategies together with partners.

In the future, we want to engage in the selection of products, materials and services that reduce indirect greenhouse gas emissions even more in procurement procedures through active market consultation and partnerships. For we prefer impactful measures to carbon offsets.

No scenario analyses have been carried out yet with regard to physical risks to our infrastructure due to climate change. We are planning to do this in 2025.

POLICY RELATED TO CLIMATE MITIGATION AND CLIMATE ADAPTATION (E1-2)

Our road to zero carbon as described in E1-1 is our transition plan and our policy relating to climate mitigation at the same time. This strategy will be re-evaluated and updated every three years in order to stay in line with evolving challenges and respond to any new opportunities. With the road to zero carbon, there is no specific target date for achieving absolute or net climate neutrality but it has set a time horizon for achieving concrete reduction targets by 2030, with broader actions defined for reductions beyond 2030.

Within Aquafin’s Corporate Sustainability framework is a special steering group that is working on climate neutrality, with the company’s Energy manager being responsible for its activities. The Energy manager collaborates closely with other departments such as Project Management and Procurement in order to engage in dialogue with partners, incorporate incentives in procurement processes and set up pilot projects for reducing emissions. A specific working group consisting of experts from different departments continuously updates the approach to Aquafin’s CO2 footprint.

A climate adaptation policy for our own infrastructure will be formulated based on the risk analysis to be carried out.

ACTIONS AND RESOURCES RELATING TO CLIMATE CHANGE POLICY, INCL. TARGETS (E1-3 AND E1-4)

Reduction of greenhouse gas emissions

Aquafin’s aim is to achieve a 48% reduction in greenhouse gas emissions by 2030, taking 2013 as the reference year. The ultimate aim is to be fossil-free by 2030. Aquafin is focusing on impactful measures rather than setting a specific date for absolute climate neutrality.

For Scope 1 emissions, we are focusing on eliminating fossil fuels within our processes. For Scope 2 emissions, Aquafin’s aim is to increase energy efficiency and the production of renewable energy, by reducing indirect emissions of electricity and heat purchased in particular. For scope 3 emissions, we are collaborating with partners and applying proactive strategies within the value chain.

Levers for decarbonisation and technological innovations

We are working on the electrification of our vehicle fleet and the switch to fossil-free heating systems in our buildings. In 2025 and 2026, we are planning to expand biomethane production to 75% of the biogas produced from sludge digestion which will contribute to a reduction of 4 kton CO2e. In addition, gas-fired sludge dryers will be replaced by dryers that will run on residual heat from waste processing. Improved process insight and innovative technologies will help us reduce methane and nitrous oxide emissions from waste water treatment. In addition, we promote renewable energy developments within our operational ecosystem.

Methodologies and tools for measuring emissions and reporting

We follow the GHG protocol for our greenhouse gas emission inventory and use Carbon+Alt+Delete software to measure the impact of emission reduction initiatives. The company uses both activity-based and expenditure-based assessments to quantify emissions across all scopes. We are currently focusing on the switch from secondary to primary emission factors and to a more activity-based inventory.

The inventory of greenhouse gas emissions includes direct measurements and assessments of the fossil carbon content in waste water. Emissions are reported annually. We are constantly carrying out research in order to refine methodologies and adapt them in line with changing emission factors and standards. We avoid the most favourable assumptions in our transparent and comprehensive reporting. The company has opted for a locationbased assessment of Scope 2 emissions and breaks down CO2 and CH4 emissions from biological processes into biogenic and non-biogenic fractions.

Energy efficiency and renewable energy targets

Since 2010, we have managed to improve the energy efficiency of waste water treatment plants by at least 1% on average per annum. Since 2018, the company has installed 17,392 kWp of solar energy capacity at 46 waste water treatment plants. Almost all available spaces for solar panels have been utilised in the meantime. In the coming years, we will develop a further 2,000 kWp of capacity at our own site. We are also looking at possibilities for connecting solar panels to the grid outside our plots. When combined with more than 12,000 MWh of electricity produced from CHP plants that run on biogas, approximately 8% of the electricity requirement will be generated using our own renewable energy.

Meanwhile, we have been investigating the potential for wind energy at various sites. This has led to short-term possibilities at our Bruges WWTP and medium-term possibilities at our Lichtaart and Aalst WWTPs. In 2024, Aquafin signed a power procurement contract with Luminus which has added 21,000 MWh of locally produced wind energy per annum to the mix. As a result, from 2026 onwards up to 15% of the electricity consumed will be of indigenous renewable origin.

Fossil-free operation

Our goal is to phase out fossil fuels by 2030. Fossil-free operation comprises three main components for our company. Firstly, all our own vehicles – from company cars to vans and maintenance trucks – need to make the switch. Currently, all new service vehicles and company cars and vans are battery electric vehicles. In 2023, the first maintenance truck that runs on green gas was put into operation. We are planning to replace a quarter of our fleet of trucks with fully electric vehicles by 2026.

In addition, the heating and cooling of our buildings need to be disconnected from fossil fuels. Since its renovation in 2021, our head office has been heated and cooled solely using energy recovered from waste water (sewer thermal energy). A renovation plan is underway for service buildings, providing for fossil-free operation.

Finally, and accounting for more than 90% of the fossil fuel consumption, the switch to sludge drying using residual heat was initiated. In November 2024, the building works started for two new sludge dryers to replace three gas-fired installations.

GROSS SCOPE 1, 2 AND 3 EMISSIONS AND TOTAL GREENHOUSE GAS EMISSIONS (E1-6)

Methodology used

Aquafin uses the GHG Protocol to calculate and measure greenhouse gas emissions (GHG) in order to ensure consistency and transparency in emission reporting. The methodology used is regularly updated in order to incorporate new insights and changes in emission factors and standards. We use Carbon+Alt+Delete software for the process of inventarising GHG emissions. Both primary and secondary emission factors are used for calculations. Secondary emission factors come from sources such as the IPCC guidelines for national GHG inventories, EcoInvent, the European Energy Agency (for electricity) and ExioBase (for expenditure-based calculations). Emissions are expressed in global warming potential over 100 years relative to CO2 (GWP100, CO2e), with metrics from the latest IPCC assessment report (AR6).

• Scope 1 GHG Emissions

The reporting of Scope 1 GHG emissions covers Aquafin’s direct impact on climate change and the share of the total GHG emissions that falls under emissions trading systems. Emissions are expressed in metric tons CO2eq.

• Scope 2 GHG Emissions

Aquafin has explicitly opted for a location-based assessment of Scope 2 emissions despite the purchase of electricity under Guarantees of Origin since 2018. Aquafin’s total electricity consumption is covered by these guarantees. The reporting of Scope 2 emissions provides insight into the indirect impact on climate change caused by the energy consumed, whether purchased externally or not.

• Scope 3 GHG Emissions

The reporting of Scope 3 emissions covers both downstream and upstream indirect emissions across the value chain. Emissions of partner companies, joint ventures and nonconsolidated subsidiaries are excluded on account of their intangible financial and carbon impact. Reporting covers all supra-municipal activities in order to ensure comprehensive coverage of indirect emissions within their greenhouse gas inventory. Aquafin uses both activity-based and expenditurebased methods to estimate Scope 3 emissions. Activity-based calculations are based on specific data such as the mass of chemicals purchased and sludge transport contracted out. Expenditure-based calculations are based on financial expenditure on goods or services. Aquafin is in the process of switching to more activity-based methods in order to improve the accuracy of emissions reporting and is working on increasing the use of primary emission factors in order to improve the precision of their emissions data.

GHG emissions per scope in ton CO2e

• Total GHG Emissions

Aquafin’s total GHG emissions are the sum of Scope 1, 2 and 3 GHG emissions. This report provides general insight into the company’s GHG emissions and whether they arise from own activities or the upstream and downstream value chain.

• GHG Emissions Intensity

The net turnover that is used to determine the energy intensity and GHG emissions intensity for Aquafin is calculated from the turnover (code 70) minus raw materials, consumables and goods for resale (code 60). Only supra-municipal activities are included in Aquafin’s report. GHG emissions intensity is calculated as the total GHG emissions per net turnover.

GREENHOUSE GAS REMOVAL AND MITIGATION PROJECTS FINANCED THROUGH CARBON CREDITS (E1-7)

Aquafin does not make use of carbon removals or carbon credits. We prefer direct reduction strategies rather than compensation methods so that we actually reduce emissions.

INTERNAL CARBON PRICING (E1-8)

In a research and innovation context, we explored the possibilities of carbon pricing for future projects, but we also already applied the principle in several procurement procedures and investment projects. We refer to this methodology internally as TCO2 – or Total Cost of Ownership – with an offset of 100 euros/ton CO2eq as a reference unit cost. Although the policy is not yet generally applied, we are increasingly using this methodology. One example of that use is the procurement of carbon source that we dose in the biological treatment process. We found significant variations in nitrous oxide emissions when using different products and therefore applied TCO2 in the procurement procedure. Future ETS2 carbon pricing was also an important factor when making the decision to switch to sludge dryers that run on residual heat rather than natural gas.

Biogenic

from incineration or bio-degradation of biomass that take place within the

(total

IMPACT SCAN GETS THE MOST OUT OF PUBLIC SPACE (COMPANY-SPECIFIC OBJECTIVE)

In 2024, we devised the concept of an impact scan for our projects. Because we want to get an idea of the total impact, we do not limit ourselves to nitrogen and phosphorus emissions avoided; we also include CO2 emissions, climate adaptation and social aspects such as mobility and perception. The result for the various pillars is combined to produce a single score. This score is useful for comparing designs but also for justifying certain choices to consultancies and licensing authorities. At the moment, we apply the impact scan to projects already designed. In the future, we want to use the score as a criterion when deciding whether or not to carry out a project. That is because we want every project to have a positive impact in order to get the best return on investments by Flanders.

ESRS E2 - POLLUTION

Aquafin’s main task is to collect domestic waste water in Flanders and treat it until it is clean enough to be discharged into the surface water and therefore specifically to prevent the pollution of streams and rivers. To do this, we use mechanical and biological processes that do not pollute the atmosphere. However, we do consider the topic of pollution as material for Aquafin. That is because on the one hand, our waste water treatment plants are not designed to remove micropollutants too, something that the new EU Urban Waste Water Treatment Directive will make obligatory for very large plants in the future. (Aquafin decided to build its first quaternary treatment plant in Aartselaar some years ago, for instance). On the other hand, it is because surface water can become polluted during the transport of waste water by overflow operation or illegal discharges by third parties, for example. During the construction of the infrastructure required to transport and treat waste water, it is necessary to carry out earthworks, which can have an impact on the soil. In this report, we have therefore limited ourselves to the relevant data points relating to water and soil.

DESCRIPTION OF PROCESSES FOR MAPPING AND ANALYSING MATERIAL POLLUTION-RELATED IMPACTS, RISKS AND OPPORTUNITIES (E2-IRO-1)

Screening and assessment

We carry out screenings of our sites and operating activities, particularly of our infrastructure such as waste water treatment plants and pumping stations. We check for both internal and external pollution factors, categorising incidents based on their origin. We also carry out environmental impact assessments for the construction and operation of (waste) water treatment infrastructure in order to address potential impacts proactively.

Pollution monitoring and detection

We monitor the incoming waste water and carry out research to identify sources of pollution. Our detection infrastructure is subject to 24-hour monitoring to guarantee prompt identification of pollution-related incidents. We use a range of pollution assessment instruments including routine monitoring, infrastructure maintenance, advanced alarm systems and regular inspections.

We also monitor the keeping of the waste register and compliance with the reporting obligation. The waste notification is drawn up by the Waste & Logistics department within Operations management. They also manage the database of any waste disposal and processing and analysis results for septic material and sewage sludge. The sludge team draws up an annual overview of the planned frequency for sampling sludge and external septic material that is brought in for processing. The environmental coordinator has access to the database at all times and monitors the data within it.

Since 2023, the intake and disposal of waste by waste processing plants (section 2) have been reported to OVAM on a quarterly basis via MATIS (Flemish Materials Information System).

Risk classification and evaluation

The risk classification system evaluates environmental impact and categorises risks from Class 0 (no risk) to Class 3 (very serious risk). This system helps with the task of assessing the severity and probability of impact on the environment and human health.

POLICY RELATED TO POLLUTION (E2-1)

We react quickly and take remedial measures if pollution-related incidents are identified, particularly in infrastructure equipped with alarms. Alarms are strategically placed to guarantee efficient detection. Incidents which trigger alarms should be identified within 24 hours. If there is no alarm installed, we use the date of the most recent inspection as a reference for incident detection. In that case, we apply a worst-case scenario management approach.

Aquafin investigates the causes of incidents in order to prevent recurrence and assesses the possibility of similar incidents, defining actions if necessary. In the event of external pollution incidents, we take samples of the incoming sewer water (influent) at waste water treatment plants and examine the collectors. Incidents involving external power outages are resolved within 4 hours of eliminating the cause.

Collaboration with and consultation of stakeholders

Aquafin collaborates with responsible parties if pollution problems arise from infrastructure managed by other entities. We report pollution incidents detected to the authorities and provide detailed documentation to enable a fast and effective response. If pollution is detected, we take remedial action immediately and cooperate with local authorities.

Cost recovery and legal steps

We strive to recover costs from polluters identified via settlements or legal steps based on the principle "the polluter pays". Settlements can be financial or material such as the repairing of pipes. Legal steps are taken if the damage amounts to more than 2,500 euros and no settlement is reached. In serious cases, we cooperate with enforcement bodies in order to ensure that appropriate legal actions are taken.

ACTIONS AND RESOURCES (E2-2)

Aquafin reacts quickly to pollution incidents affecting the supramunicipal treatment infrastructure. We ensure that the disruption to our infrastructure and the surrounding area is kept to a minimum during such incidents. In the case of suspected external discharges, we proactively take samples of incoming waste water and contact any companies potentially affected. We collaborate with municipal authorities and operators and with the Flemish Environment Agency (VMM) to identify potential sources of pollution. We have access to emission monitoring data to facilitate preventive measures against pollution.

Prevention and raising of awareness

To prevent (new) pollution incidents and increase awareness, we implement preventive measures and inform companies connected to the sewer system of pollution risks and responsibilities.

TARGETS (E2-3)

We want to prevent water and soil pollution by detecting, reporting and tackling discharges promptly and we want to identify and deal with substances of concern.

Prevention and swift detection

Through effective maintenance, we want to prevent incidents caused internally and deal with any incidents swiftly. We investigate whether incidents are due to infrastructure under warranty and take the necessary measures to prevent recurrence.

Reporting and following up on incidents

Incidents are required to be reported by telephone immediately within 3.5 hours of detection, followed by a digital report within two working days. For less urgent incidents, digital reports must be submitted within one or two working days or during the next month.

Risk classification and response

The aim is to classify incidents based on their potential risk and to ensure that there are appropriate response times. Incidents are categorised from Class 0 (no risk) to Class 3 (very serious risk).

DEPLOYMENT OF EXPERTISE AND INNOVATION FOR GOOD WATER QUALITY (COMPANY-SPECIFIC OBJECTIVE)

We have noticed an increasing focus on pollution of rainwater runoff from motorways and car parks, for example, and pollution via overflow operation. Aquafin wants to help increase knowledge and expertise relating to this through research and innovation. We defined the following objectives for this purpose:

• Map potential environmental impact caused by additives.

• Investigate the potential of nature-based water treatment solutions (overflows, rainwater and waste water).

• Optimise the management of WWTPs and the sewer system by means of digital solutions (smart control, digital twins, etc.)

• Investigate and devise the best possible solutions in order to comply with the EU Urban Waste Water Treatment Directive (UWWTD).

Aquafin is a partner in the European StopUP project to investigate the impact of surface water pollution with rainwater runoff from roads, car parks, etc. In 2024, we carried out tests using absorption and adsorption materials for treating rainwater. It is also our ambition to equip 4 municipal overflow locations with naturebased systems for treating overflow water in 2025.

The revised UWWTD officially came into force on 1 January 2025. Aquafin followed the entire revision process closely and provided input to the EU, via both the Flemish Environment Agency and EurEau. Member states now have until 31 July 2027 to turn the directive into national – in our case Flemish – legislation. Aquafin will also play an active part in this. In addition, the EU Commission will soon start drawing up so-called implementation decrees and delegated actions to further implement certain matters in the revised directive, with our active participation.

This year, we will also launch our first quaternary treatment plant which was installed at Aartselaar WWTP. A combination of two technologies (ozonisation and activated carbon filtration) will remove a range of micropollutants that still get through the classic treatment process. The expertise and knowledge that we gain from this will be used for other locations where it is mandatory to do so according to the UWWTD, and will be shared internationally via the Interreg project 'Schone waterlopen' (Clean watercourses).

ESRS E3 - WATER AND MARINE RESOURCES

As water is the essence of our business, it is only logical for us to consider this topic as material for Aquafin. Because none of our production processes use water, our water consumption is limited to normal quantities for sanitary and cleaning purposes. For specific operating processes such as polyelectrolyte mixing in sludge processing, emptying works at the plants and in collectors, we and the partners we collaborate with on this use treated waste water instead of mains water or groundwater. However, we do discharge large quantities of treated waste water into surface water that would otherwise end up directly in nature untreated. In addition, smart rainwater management is an integral part of our business strategy.

DESCRIPTION OF THE PROCESSES TO IDENTIFY AND ANALYSE MATERIAL MATERIAL WATER AND MARINE RESOURCES-RELATED IMPACTS, RISKS AND OPPORTUNITIES (E3 – IRO-1)

Treatment of domestic waste water

The collection and treatment of domestic waste water also implicitly includes discharge after treatment. As of the end of 2024, we were managing 330 waste water treatment plants. As the majority of the sewers in Flanders also collect rainwater, the flow rate handled depends on the amount of precipitation to a large extent. In 2024, this resulted in a total flow rate handled of 1.1 billion m³ of sewer water, which is well above average.

Our WWTPs have to comply with European and Flemish standards for 5 parameters: COD, BOD, suspended solids, nitrogen and phosphorus. At 50 plants, we are already removing more phosphorus than stipulated by standards. By 2027, we will expand this to all plants that treat the waste water of more than 10,000 residents.

POLICIES RELATED TO WATER AND MARINE RESOURCES (E3-1)

We prefer to keep rainwater on site as much as possible for infiltration or buffering for reuse. When it goes into a sewer and is transported to one of our waste water treatment plants along with waste water, it unnecessarily also goes through the treatment process. It then ends up in surface water and we lose this valuable flow.

Infiltration of rainwater

In our own projects and in the advice we provide to local authorities, we give preference to above-ground infiltration of rainwater. This fits in with the blue green design approach to public space, where we provide space for water and give rainwater the chance to soak into the soil and replenish the water table. If above-ground infiltration is not possible due to a lack of space, for example, then underground infiltration is also possible via various systems. Rainwater infiltration increases the climate resilience of public space. We drew up a vision paper in which we pragmatically aim to restore the soil’s function as a sponge as much as possible, taking account of the needs and characteristics of the environment.

Buffering for reuse

Collecting rainwater locally and possibly treating it for reuse takes advantage of variations in water availability. The smart control of buffer basins enables them to be used both for buffering when there is a high level of rainfall and for reuse in dry periods.

Drainage water during infrastructure works

Infrastructure works often require the water table to be lowered temporarily. To limit the impact, four steps must be followed according to Flemish legislation that Aquafin also respects in its infrastructure works:

1. Limit the net volume of drainage water (duration, level, use of return options)

2. Reuse drainage water if possible

3. Discharge into a watercourse or rainwater drain

4. Discharge into a sewer system

Aquafin complies with Flemish legislation relating to drainage water. But we are also part of the step-by-step plan. If discharge into a watercourse or rainwater pipe is not possible, the builder must ask Aquafin for permission to discharge into the sewer system. In that case, we will first carry out our own check to establish whether discharge into a nearby watercourse or canal is possible.

ACTIONS AND RESOURCES (E3-2)

Infiltration strategy for rainwater management

The aim is to improve water management by maximising infiltration in order to manage rainwater effectively, reduce peak discharges and prevent sewer overflow operation. This aligns with the objectives for sustainable urban water management, reducing water runoff and improving the replenishment of groundwater. Above-ground infiltration is preferred on account of its costeffectiveness, ease of maintenance and opportunities to link to other functions of the public space. But underground systems are also possible. In our vision paper on infiltration, we encourage innovative thinking. For instance, we developed a new technology with promising results: infiltrating sub-foundations and gullies. We have also tested other technologies and rolled them out systematically such as infiltration sewers and gravel basins in urban areas. When choosing systems, difference in soil permeability and available space are taken into account. We apply this strategy in projects for the Flemish Region and in the rainwater and drought plans and water and environmental recommendations that we provide for Flemish towns, cities and municipalities.

TARGETS (E3-3)

Climate-resilient public space

To us, 'a living environment in harmony with water' means sustainable and climate-resilient public space. The aim of our projects and advice is to strengthen the resilience of urban areas against the impact of climate change such as more intense rainfall and periods of drought.

WATER CONSUMPTION (E3-4)

We consider our water consumption as not material. Given our specific task, there is no significant impact, risk or opportunity related to water consumption within the organisation.

ESRS E4 - BIODIVERSITY AND ECOSYSTEMS

MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND THE BUSINESS MODEL (E4 – SBM-3)

Material locations and activities that influence biodiversitysensitive areas

Aquafin manages 330 waste water treatment plants (WWTPs) spread across Flanders. In addition to the normal mechanical and biological treatment process, we also have sludge digesters at 13 WWTPs. However, these processes do not have a negative impact on biodiversity.

We manage approximately 4,000 overflows throughout Flanders, emergency outlets from the sewer system via which untreated waste water can escape into the watercourse if the system overflows. The purpose of these is to prevent the streets from flooding.

We carry out sewage works in the public domain on the instructions of the Flemish Region and towns, cities and municipalities that call on our services for this purpose.

Temporary negative impact on biodiversity

Overflow operation can temporarily have a negative impact on aquatic life due to untreated sewer water, albeit highly diluted by rainwater, ending up in the watercourse.

Infrastructure works can have a temporary negative impact on biodiversity. This can happen during the construction or maintenance of the infrastructure, for example.

DESCRIPTION OF PROCESSES TO IDENTIFY AND ANALYSE MATERIAL IMPACTS, RISKS AND OPPORTUNITIES (E4-IRO-1)

For projects for which we have to apply for an environmental permit, we usually draw up an impact discussion screening note which includes the (possible) impact on biodiversity.

POLICIES RELATED TO BIODIVERSITY AND ECOSYSTEMS (E4-2)

The protection of biodiversity and ecosystems is an intrinsic part of our vision. To do this, we take action at various levels:

Design and landscape management for our WWTPs

All plants are designed with a green buffer for which we use local greenery and woven branch boundary fencing. Where spatially possible, we put maximum effort into using designs that promote biodiversity such as flower meadows, fruit trees, nesting sites, beehives, amphibian pools, etc. We also opt for ecological mowing management to protect biodiversity.

Tree management and conservation efforts during infrastructure projects

We want the design and implementation of infrastructure projects to pay attention to the protection and preservation of existing trees along the route. We use the 'tree test' to anchor that attention in the design process, by requiring that it must be included in the preliminary design concept and the permit application.

We also developed a practical tool – the 'tree decision-making tree' – which ensures that the felling of trees is avoided as much as possible, that damage to trees during the performance of works is avoided and that if it is necessary to fell trees, replanting is maximised. In the case of the latter, this should be carried out in the first instance in the same place and if that is not possible, within the same municipality, with replanting in a different location being the last resort.

More forest for Flanders

As part of a broad call by the previous Environment Minister in 2019, we committed to the project 'More forest for Flanders' that aimed to extend forest resources by 4,000 ha by 2024. As of the end of 2024, Aquafin had created 8.5 ha of new forest on residual space on our plots. Where possible, we make the extra forest accessible to third parties so that the neighbourhood can enjoy the green space too.

Limiting the impact of overflow operation

Aquafin has rolled out a measurement matrix for 1,600 overflows with gauges that provide information on overflow activation and are connected to our monitoring systems. This means that hydraulic optimisations can be carried out based on trends that will lead to a reduction in the activation of overflows. It also enables blockages in the sewer system to be detected quickly (overflow operation in dry weather is the indicator) and resolved. We can also map the environmental impact of the different overflows using a tool developed in-house and prioritise where measures need to be taken first based on water quality.

At the same time, we are working on solutions to limit the impact of overflows. These include providing more storage capacity in the system, making better use of the existing storage capacity with the help of real time control (slide valves and gates that are actuated automatically) and the after-treatment of overflow water, for example. We are currently investigating the possibilities of nature-based solutions (NBSs) for the latter.

Blue green design for infrastructure works

In the projects we carry out for the Flemish Region and assignments for towns, cities and municipalities, we focus on above-ground infiltration of rainwater, thus creating new opportunities for biodiversity. We also put forward blue green solutions as much as possible in our advice to towns, cities and municipalities. We have a team of 'ecological ambassadors' who provide targeted advice based on planting species for the site.

Sometimes the only solution for preventing problems with rainwater runoff is to create buffering. In the first instance, we look at open canal systems or meandering watercourses for this purpose. However, sometimes it is necessary to install a buffer basin. To mitigate the ecological impact of such a basin, we have our own guideline for ecological buffer basin design:

• If possible, we look to link up with other plots with nature development (potential or under construction) and seek the proximity of pools or trees and the availability of sunlight.

• An organic and irregular shape ensures greater variety in the abiotic environment and therefore more opportunity for diverse fauna and flora than a rectangular shape.

• Different depth gradients for greater variety.

• Nature-friendly, gently sloping banks for a gradual transition from bank to water and variation in riparian vegetation.

TARGETS (E4-4)

Currently, we have not proposed any quantitative targets with regard to biodiversity and ecosystems that we want to achieve by means of the above measures. We are still looking for a good way to measure profit or loss in terms of biodiversity.

Biodiversity is one of the aspects that we want to map with the impact scan for our projects that is currently under development. In the biodiversity scan, we use a simple method to measure the difference and the diversity in the green offering before and after the project. We measure the difference in low/medium/high planting and award a higher score if the project fundamentally helps enhance biodiversity. We already use local planting and seed mixtures for flowers that are adapted to the type of soil in our projects.

ESRS E5 - RESOURCE USE AND CIRCULAR ECONOMY

Because Aquafin does not produce any goods, reporting on this topic is limited. However, we do use materials in the construction of our treatment infrastructure and we use products in the treatment process for the purpose of achieving the applicable standards of treatment. We build incentives for products with a lower CO2 impact into our procurement process and we encourage manufacturers to develop sustainable materials.

The treatment process itself is also a source for recovering energy and raw materials and we put maximum effort into exploring and exploiting the opportunities that this provides. For that reason, we have identified this topic as material.

POLICIES AND RESOURCES RELATED TO RESOURCE USE AND CIRCULAR ECONOMY

(E5-2)

Recycling of treated waste water

To improve the availability of water resources, we provide treated waste water as an alternative water source for reuse subject to further treatment. With this treated waste water from our waste water treatment plants (WWTPs), flow rate is not required to guarantee the ecological balance in the watercourse (e-flows). The potential is estimated at approximately 1/8 of the total flow of domestic waste water handled.

There are currently a number of companies that use treated waste water as cooling or process water and one drinking water company uses it to produce drinking water. In 2025, a second project for drinking water production will be put into operation. There are also several project proposals in the research or permit phase.

We unlock the potential via our digital platform AquaMarkt. If interest is shown in a certain site, we launch a final call to give everyone an equal chance to use the effluent from that WWTP.

Recovery of phosphorus

Phosphorus enters waste water via human excrement and is a vital link in the food chain. Recovery from the water treatment process will make Flanders less dependent on ores mined outside Europe and help create a circular economy. After years of laboratory research and pilot-scale testing, we are planning to start largescale recovery tests in 2025 together with an industrial partner. The aim is to recover phosphorus from the fly ash from sludge mono-incineration for use in the production of artificial fertiliser. This should be possible with the new sludge mono-processor we are currently building at the Arcelor Mittal site in Ghent. This plant will be put into operation in 2027. No timeline has been defined yet for the start of phosphorus recovery.

Innovation in treatment technologies

Aquafin is actively involved in research projects for turning raw materials recovered from waste water treatment into valuable materials and has also initiated its own innovation projects to do this. We are developing and implementing future-proof treatment technologies and concepts supporting the principles of the circular economy. In this we are collaborating with research and innovation partners. For instance, we are currently researching sludge pyrolysis with the aim of using it to generate biochar.

RESOURCE INFLOWS (E5-4)

Circular products for water treatment

Sometimes it is necessary to add extra carbon to the waste water for treatment to produce waste water of a sufficiently high quality. That source of carbon is obtained from valorisable residual flows from industry – such as residual flows from sugar factories – as much as possible.

RESOURCE OUTFLOWS (E5-5)

Phosphorus for reuse in artificial fertiliser

Our ambition is to recover phosphorus from waste water treatment on a large scale in the long term. Phosphorus is an essential component in the food cycle and one of the three basic components of artificial fertiliser. Stocks currently come from phosphorus mining outside Europe. However, it also ends up in the sewage sludge from our WWTPs via human excrement. Recovery from the treatment process will not only close the loop, it will also make us more geopolitically independent.

Phosphorus is extracted by means of mono-incineration and struvite precipitation. This recovery will prevent waste and support the circular economy. Aquafin is researching new technologies and conducting research together with an industrial partner into phosphorus recovery on a large scale from the fly ash from sludge mono-incineration.

Reuse of treated waste water

The treated waste water from our WWTPs is of constant quality and quantity. As a rule, we discharge it into surface water yet it is actually an excellent alternative water source for any application, as long as further treatment is carried out. In the past, there was not much interest in reuse despite its great potential. After a number of dry years and driven by an increase in sustainability awareness, demand has grown in recent years. Aquafin has facilitated reuse by unlocking potential via the digital platform AquaMarkt.be and creating a level playing field for reuse.

Products based on circular principles

We can obtain even more useful raw materials from the sewage sludge from our WWTPs. In an ongoing innovation project, we are planning to build a pyrolysis plant to process the sludge under extreme heat with thermal energy to produce biochar, a type of charcoal that can take on the function of activated carbon. We have been collaborating with external partners and testing the valorisation of biochar from sewage sludge as a sustainable element for concrete production or as a soil improver and as an adsorption material in the treatment process. Also, the advantage with the pyrolysis process is that CO2 is captured in the biochar rather than released.

Green electricity and green gas

Aquafin digests some of the sewage sludge to produce biogas. We convert that biogas into green electricity and heat by means of cogeneration (CHP) and currently by means of biomethane production into green gas at one of our WWTPs. Because no energy is lost during the production of biomethane, we will be replacing the CHP units with biomethane units at 4 additional WWTPs in 2025 and 2026.

Social

• ESRS S1 Own workforce

• ESRS S2 Employees in the value chain

ESRS S1 - OWN

WORKFORCE

MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL (S1-SBM-3)

Composition of the workforce

Aquafin has created a job classification system in which jobs with similar expertise/field and purpose are bundled into so-called families. There are families for (management and non-management): Administration, Compliance, Finance, HR and Organisation, ICT, Customer and Reputation, Technology and Context, Technology and Maintenance and Technology and Consultancy/Advice. We also use temporary agency workers and external employees (who may or may not be self-employed) who provide specialised skills in all job families, including management roles. These employees can also be deployed to cope with peaks in workload or replace absent employees. The diverse composition of our workforce, including different types of employees and nonemployees, is essential for the performance of activities and achievement of strategic objectives.

Interaction with strategy

Aquafin’s activities bring stable employment. New jobs arise, modelled on broadening and deepening activities and focused on socially relevant challenges. The company gives employees every opportunity to develop and build a future-proof skillset. Further automation and digitalisation can have a major impact on future developments with shifts in task packages.

Health and safety

Working on waste water treatment infrastructure involves exposure to certain risks associated with working on electricity, descending into infrastructure, biological agents, operating machinery, etc. Clear rules on working safely and the use of personal protective equipment, the necessary training and the STOP principle that mandates everyone to stop the work if it cannot be carried out safely must ensure a safe working environment.

In addition to physical health and safety, the mental well-being of our employees is also high on the agenda of our well-being policy. The numerous digital and other developments require great agility and resilience for which training in different forms of learning and the stimulation of feedback culture are helpful.

Human rights and ethical conduct

Aquafin is only operational in Flanders, with no significant risk of forced labour, compulsory labour or child labour. We have mechanisms that detect human rights violations and unethical conduct: an integrity policy, a whistleblowing procedure and confidential advisers.

Learning, development and building resilience

Aquafin is committed to continuous learning through training, workshops, self-study and mentoring aimed at the jobs of today and the labour market of tomorrow. Talent development and growth is one of the pillars of our well-being policy.

POLICIES RELATED TO OWN WORKFORCE (S1-1)

In a dynamic world, it is essential that the organisation is resilient and able to adapt to new challenges in order to remain relevant. That is why we focus on ensuring the sustainable deployment of our employees by consciously investing in their personal and professional growth. We believe that physical, mental and social well-being are crucial for performance and motivation, and are working towards an inclusive organisational culture where everyone feels respected, accepted and encouraged, is given the same opportunities and experiences equality.

Our well-being vision with 4 pillars forms the basis of our HR policy:

• Connection: We encourage the creation of connections beyond the beaten path, both within the company and in society, and provide a caring and inspiring environment.

• Workable work: we provide high-quality work that is both meaningful and challenging, with sufficient autonomy, variation and opportunities for development. It is important for capacity and workload to be in proportion, and we raise awareness in respect of disconnection and a healthy work-life balance.

• Talent development & growth: We invest in a positive learning culture where employees are not afraid to experiment and are allowed to make mistakes. Employees are encouraged to develop their talents and take control of their careers.

• Health and safety: Aquafin is committed to providing a safe and healthy working environment so that everyone returns home safe and sound at the end of their working day.

Levers for realising our well-being vision are: impactful leadership, a future-proof skillset, an interview cycle for continuous dialogue, a caring network, a learning culture and stimulating HR policy.

We link concrete objectives to both the pillars of the well-being vision and the levers.

PROCESSES FOR ENGAGING WITH OUR OWN EMPLOYEES AND THEIR REPRESENTATIVES (S1-2)

We use various channels to engage with employees and promote a culture of continuous feedback and dialogue. Besides two formal interviews within the interview cycle between an employee and their manager, there are informal check-ins to discuss employees’ well-being and (job) challenges. We regularly organise well-being surveys to monitor the effectiveness of the well-being vision.

We also have a healthy, structured monthly consultation with the employee representative body via the Works Council, the Committee for Prevention and Protection at Work and the Trade Union Delegation. In between times, there is also room for informal discussion.

PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND CHANNELS FOR EXPRESSING CONCERNS (S1-3)

Our information on mechanisms for voicing complaints and concerns can be found under ESRS G1 – Business conduct.

ACTIONS TO ADDRESS MATERIAL IMPACTS, MANAGING MATERIAL RISKS AND PURSUING OPPORTUNITIES (S1-4)

Health and safety

Aquafin has a well-being vision based on 4 pillars: connection, talent development and growth, workable work and health. Through this, the company prioritises the mental and physical health and safety of employees, and prepares people for a future job market that is constantly changing. There is a safety policy with clear safety rules and training on how to implement them in order to prevent accidents. Occupational accidents are discussed on a weekly basis within the management team as well as regularly within teams and on a monthly basis within the Committee for Prevention and Protection at Work (CPBW). Employees are encouraged to use the "STOP" principle which enables them to stop the work being carried out if unsafe situations arise.

There is a broad range of initiatives to support the other pillars of the well-being policy ranging from training, raising awareness and building in flexibility to endorsing CLAs in the context of disconnection, for example. The initiatives not only focus on prevention, they also reflect on appropriate reintegration policy for employees who have been incapacitated.

Diversity, Inclusion and Equal Opportunities

We ensure equal opportunities and create a working environment where there is no intimidation. We believe that a heterogeneous composition can only make a team stronger. We apply techniques to rule out bias as much as possible in our selection and recruitment process. In 2024, we organised workshops with the aim of defining what an inclusive workplace means to Aquafin. We are working further on this vision in order to roll out a charter and a code of conduct in 2025.

In addition, we launched pilot programmes in 2024 with external partners around inclusion for specific target groups:

• Unlimited student worker: young people with a disability or chronic illness looking for a student job.

• Specialised Mediation Team (GTB): jobseekers with a disability or health problem.

• Automatic: jobseekers with an Autism Spectrum Disorder (ASD).

• Care network: provide a better framework for caregivers among our employees.

The purpose of the pilot programmes is to broaden and gradually grow our knowledge of working with people from these target groups.

TARGETS (S1-5)

Mitigate negative impact

Safety-related initiatives such as the STOP principle mandate employees to halt unsafe situations and thus prevent accidents. We also carry out psychosocial risk assessments in order to identify stress factors and other workplace risks. We are increasingly using data-driven HR information to analyse trends in well-being, absenteeism, accidents, training and staff turnover. This helps expose aspects that deserve extra attention and enables targeted interventions to be made.

Promote positive impact

We promote a positive working environment by focusing closely on health and safety and setting up a policy around inclusion and diversity. We also encourage employees to take control of their careers and develop their skills. We encourage open communication between employees, management and external partners, while promoting a culture of mutual feedback and continuous improvement. Our corporate culture provides opportunities for learning and growth, allowing teams to experiment and learn from mistakes.

Determine and monitor objectives

Corporate objectives are translated down to team level. There is also the interview cycle between an employee and their manager. The feedback system includes two formal interviews a year: a future interview at the beginning of the year and an interim interview halfway through the year. Informal "check-ins" during the year are encouraged for spontaneous feedback.

EMPLOYEE CHARACTERISTICS (S1-6)

CHARACTERISTICS OF NON-EMPLOYEES IN THE WORKFORCE (S1-7)

Aquafin uses temporary agency workers and external employees (who may or may not be self-employed) who provide specialised skills in all job families, including management roles. These employees can also be deployed to cope with peaks in workload or replace absent employees. The diverse composition of our workforce, including different types of employees and non-employees, is essential for the performance of activities and achievement of strategic objectives.

The relationship between non-employees and Aquafin is contractually laid down in agreements that specify the workload, term and responsibilities.

Number of non-employees in the workforce 163

CLA COVERAGE AND SOCIAL DIALOGUE (S1-8)

Aquafin has a constructive social consultation with a Works Council, a Committee for Prevention and Protection at Work and a Trade Union Delegation. Collective labour agreements are concluded within the latter forum. The employee representative body is chosen via social elections. The last time these elections took place was in 2024.

Percentage of employees that fall under collective labour agreements: 81% on average. The CLA on working independently of a fixed location in particular is not applicable to every employee and depends on the type of job done.

DIVERSITY METRICS (S1-9)

Gender and age distribution among senior management

Age distribution among employees

ADEQUATE WAGES (S1-10)

Aquafin has a CLA relating to basic salary which is based on external market conformity ensured via external party Hudson and internal consistency across positions. Jobs are assigned to a certain job category to which a wage progression that is the same for all employees in that job category is linked, based on objectively determined parameters via external party Hudson and by means of consultation with external trade union classification experts. A difference in development in wage progression is determined by means of an overall assessment based on work-related parameters. The way in which a job is carried out therefore has an impact on an individual’s wage development. Employees can gain insight into their own wage progression, while new employees learn their wage information when applying for a job.

Wage benchmark: criteria and calculation

For the benchmarking of the basic salary for which a CLA was set up, Aquafin takes all Belgian companies of the same size and in all sectors as a basis:

That definition is worded as follows:

• organisations with a turnover of >250 million EUR and >500 employees;

• organisations with a turnover of 50-250 million EUR and >100 employees

All employees are thus guaranteed the applicable norm for adequate wages.

SOCIAL PROTECTION (S1-11)

All employees in Aquafin’s own workforce as well as temporary agency workers are covered by social protection against loss of income due to illness, unemployment, occupational accidents and acquired disabilities. This protection is provided via legislation and also via company benefits.

PERSONS WITH DISABILITIES (S1-12)

We do not currently keep records of persons with disabilities in our workforce.

TRAINING AND SKILLS DEVELOPMENT (S1-13)

Career development

There is an interview cycle for all Aquafin employees which involves a formal interview being held twice a year. During these interviews, company objectives and personal topics such as wellbeing and career development are discussed, along with training goals. Every year, each employee also receives an overall assessment that determines their position in respect of wage progression and therefore wage development. The overall assessment takes numerous job-related aspects and the employee’s potential into account.

In 2025, we will start collecting and reporting data on the number of formal interviews conducted in order to support employees’ career goals better.

100% of our employees took part in regular evaluations of performance and career development in 2024.

Training hours and development of skills

Aquafin uses two systems to record training hours: the Learning Management System (LMS) and a code assigned within the time recording system. Training hours are not recorded for nonemployees who take part in Aquafin’s programmes.

Aantal opleidingsuren

HEALTH AND SAFETY STATISTICS (S1-14)

Proportion of employees covered by a health and safety management system based on statutory requirements and(/or) recognised standards or directives 100%

Number of fatalities among employees as a result of work-related injuries and work-related health problems 0

Number of fatalities as a result of work-related injuries and work-related health problems among other employees working at the company’s sites 0

Number of recordable work-related accidents involving

13

Number of cases of recordable work-related health problems among employees 0

Number of days lost due to work-related accidents and employees’ health problems 305 Number of cases of recordable work-related health problems among non-employees 0

We do not keep a record ourselves of the number of days lost due to work-related injuries and health problems among non-employees as otherwise these would be counted twice in national figures.

WORK-LIFE BALANCE STATISTICS (S1-15)

All employees of the company are entitled to family leave based on legislation and/or company-specific agreements. That includes maternity leave, paternity leave, parental leave and filial leave.

Number of employees who took family leave

COMPENSATION STATISTICS (S1-16)

In 2024, there was no reporting on the pay gap. This will be provided for again in 2025.

INCIDENTS, COMPLAINTS AND SEVERE

HUMAN RIGHTS

IMPACTS (S1-17)

No incidents with these characteristics were reported.

ESRS S2 - EMPLOYEES IN THE VALUE CHAIN

In this report, we limit ourselves to employees of our technical partners (contractors and engineering firms) who carry out work on our infrastructure and who work on our behalf on the construction of domestic waste water treatment infrastructure. They are most intensively involved in our organisation and may be most exposed to direct risks. We also focus primarily on safety risks because they are a top priority.

MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL (S2 – SBM-3)

Safety-related risks and measures

There are significant safety-related risks associated with working on Aquafin’s infrastructure, particularly at plants and construction sites. For example, working in confined spaces brings challenges relating to access, rescue and atmospheric conditions; when working in trenches, there is a risk of the trench caving in or collapsing, working on electricity requires the necessary certification, etc.

Health risks and protective measures for contractors’ employees Working on waste water infrastructure involves exposure to biological agents present in waste water which poses risks to health. To limit these risks, Aquafin implements measures such as vaccination against tetanus and hepatitis A, the use of suitable PPE and the provision of hygiene facilities for thorough cleaning and disinfection. Aquafin ensures that employees are adequately protected against and prepared for emergency situations by means of training and safety measures.

Sustainable cooperation and working relationships in the value chain

Aquafin’s aim is to transform the relationship with its technical partners into sustainable cooperation based on equality. We signed a charter for Binding Collaboration with the engineering firms we work with, containing guiding principles in which connection, trust and inspiration are key and attention is paid to the well-being and development of project team members. In 2024, a training programme was linked to this. Employees of Aquafin and the engineering firms followed a course of soft skills training together, with the aim of improving collaboration and communication within a project team and enhancing relational intelligence. More than 320 people took part, including 240 from 26 different engineering firms. In addition, the Partner Academy was also set up, with technical training provided and followed by our own employees and those of the engineering firms. In addition, consultation with the sector federations resulted in a new multilateral agreement which combines various forms of collaboration and payment systems in order to respond better to today’s context.

We are also aiming for a different, more connected way of collaborating with contractors by appreciating and encouraging their efforts with regard to sustainability through the awarding of projects. For instance, in 2024 we introduced the CO2 performance ladder in 5 projects and started a competitive procedure with negotiation for 3 projects.

POLICIES RELATED TO EMPLOYEES IN THE VALUE CHAIN

(S2-1)

Safety guidelines and protocols for employees in the value chain Aquafin applies extensive safety guidelines to all activities at its plants and construction sites. These guidelines are detailed in the "General safety regulations for contracts in the name and on behalf of Aquafin" and are accessible to the public. Specific exceptions are made for personal protective equipment (PPE) based on task-specific risks. For each risk, there are clear safety instructions (AIC cards) which describe the necessary protective measures. These safety instructions are accessible via Aquafin’s website and external documentation systems. We also produced 16 Life Saving Rules and a safety introduction film on how to handle risks. Both are available in 11 languages and were actively distributed to contractors for use on site. In future, we want the safety introduction film to be used as a gate instruction. Only those who have watched the whole film and answered a number of questions correctly will be allowed access to the site.

Certification and training requirements for contractors VCA* or VCA** certification is a selection requirement for new contracts for the main contractor for:

• Infrastructure works on Aquafin’s infrastructure (WWTP, pumping station, sedimentation basin) relating to engineering and electromechanics.

• Infrastructure works on the public domain (road and sewerage works), also for class <5

• Framework contracts and individual assignments of more than 120,000 euros for works or technical services with a high level of risk (level 1) according to Aquafin’s VCA activities list.

• Individual assignments with a high level of risk (level 1) between 30,000 and 120,000 euros, outside a framework contract.

If the main contractor uses subcontractors, VCA** or VCA-P is required.

If the main contractor does not use subcontractors, a VCA* certificate is required.

Monitoring and compliance mechanisms

Aquafin reserves the right to check the performance of works in order to ensure compliance with safety standards. Contractors are held responsible for complying with safety regulations, with the right to inspect sites and stop works if standards are not complied with. Our appointed safety coordinators coordinate safety at our sites between the different parties: contractors, subcontractors, engineering firm, site management, other employers, local residents, passers-by, etc.

Incident reporting and investigation procedures

We have a structured process for reporting safety incidents and accidents at work whereby serious accidents must be reported to the Prevention Department immediately. In the case of serious accidents at work, we require an investigation by the employer of the injured worker. Documentation of incidents, identification of the causes and implementation of corrective measures are mandatory. Significant changes in the condition of the injured employee must be reported to Aquafin’s designated contact person.

Risk management and corrective measures

Aquafin may take corrective measures at the contractor’s expense if safety obligations are not complied with. In cases of serious or repeated violation, Aquafin requires contractors to draw up action plans in order to address safety-related problems, with the possibility of the contract in question being terminated in the event of non-compliance.

PROCESSES FOR ENGAGING WITH EMPLOYEES IN THE VALUE CHAIN ABOUT IMPACTS (S2-2)

Forms of involvement and frequency

Engagement with the technical partners for infrastructure works with whom we collaborate most often takes place at three levels with both the contractors and engineering firms: project level, B2B level and sector level:

• Project level: ad hoc, between the members of the project team, regarding project-related concerns and issues.

• B2B level: at least twice a year, between the management at Aquafin and the management of the technical partner, regarding targets and general collaboration.

• Sector level: three to four times a year, between the management at Aquafin and the sector federations, regarding general topics such as safety, compensation settlements, workload, etc.

Risk assessment and reporting

Contractors who work with Aquafin are obliged to carry out risk analyses and report accidents at work. Aquafin has procedures for reporting and investigating workplace incidents. It is mandatory for work-related accidents that result in more than one day’s work being lost to be reported.

Communication and exchange of information

Contractors must provide Aquafin with technical details relating to materials, equipment and machinery. Significant changes such as the starting up or shutting down of structures need to be discussed at least ten working days in advance during site meetings.

We also share knowledge and information with our technical partners via digital newsletters and training. In 2024, we set up a Partner Academy with engineering firms with technical training and a series of soft skills training courses to improve collaboration as a project team and mutual communication as well as to strengthen relational intelligence.

PROCESSES TO REMEDIATE NEGATIVE IMPACTS AND CHANNELS FOR EXPRESSING CONCERNS (S2-3)

General approach to remediation and compliance with safety regulations

We want everyone who works for us to be able to return home safely in the evening. That is why we operate a strict safety policy, focusing strongly on safety awareness. We also want everyone who carries out activities for us to be trained in safety practices. In addition, we comply with statutory frameworks such as the "Well-being Act" and the "Code on well-being at work" in order to guarantee a safe working environment.

Channels for expressing concerns and reporting procedures

Aquafin has an immediate reporting protocol for accidents at work involving employees in the value chain such as contractors or subcontractors. The STOP and STOP+/++/+++ procedures are an essential part of Aquafin’s safety framework which enable employees, contractors and third parties to stop the work if unsafe conditions are identified. Aquafin’s whistleblowing procedure also applies to employees in the value chain, so that safety and other concerns can be reported without fear of negative consequences.

Monitoring, tracking and continuous improvement

All STOP reports are recorded and analysed. The aim is not to reprimand individuals but rather to learn from what has happened. Accidents and safety incidents involving external parties are discussed by the management team on a weekly basis. In the event of serious or repeated safety violations, this will be escalated to a STOP+/++/+++ report, where the contractor’s management will be asked for a plan of action to prevent recurrence in the future.

TAKING ACTION ON MATERIAL

IMPACTS ON EMPLOYEES IN THE VALUE CHAIN AND APPROACHES TO MANAGING MATERIAL RISKS AND PURSUING OPPORTUNITIES (S2-4)

Safety regulations and personal protective equipment

Aquafin has an extensive safety framework to protect employees in the value chain which focuses on plants and construction sites. This framework is in line with important statutory standards including the "Well-being Act" and the "Royal Decree on Temporary or Mobile Construction Sites." We make it compulsory to use personal protective equipment (PPE) including safety footwear, helmets and gas detection equipment, with exceptions for administrative buildings.

Contractors who are involved in high-risk activities must hold VCA certification which guarantees that they are trained in safety practices.

STOP and STOP+/++/+++ procedures for unsafe conditions

Aquafin’s STOP and STOP+/++/+++ procedures enable employees and contractors to stop the work if unsafe conditions are identified. The STOP+/++/+++ procedure requires a detailed plan of action for recurring safety problems, with possible management interventions.

Monitoring and enforcement of safety practices

Aquafin reserves the right to monitor and control contractors’ safety practices and to stop the work if conditions are unsafe. Compliance with safety guidelines is enforced, with the possibility of the contract in question being terminated in the event of non-compliance.

Integration of safety procedures in risk management

Aquafin’s safety procedures are integrated in broader risk management processes which focus on safety in project planning and implementation.

TARGETS (S2-5)

Safety objective

The aim with regard to safety must always be zero accidents. In practice, with more than 100 sites in operation at any one time, that is particularly challenging. 25 lost time accidents were reported to contractors in 2024. We are aware that not all accidents may have been reported. We therefore remain strongly committed to increasing safety awareness among our contractors and incorporating follow-up checks.

Objective with regard to collaboration

Our aim is for collaboration with our technical partners based on equality. They should feel involved in and be committed to the common goal we want to achieve: clean watercourses and a living environment in harmony with water.

That is why we build sustainable relationships in which trust, recognition of each other’s expertise and communication are central and invest jointly in workable work for greater job satisfaction. For we consider it important for knowledge and expertise to remain within the sector so that we can realise our ambition.

Governance

ESRS G1 - BUSINESS CONDUCT

Our approach to business conduct is based on integrity, one of our main guiding principles. We are committed to transparent and ethical practices throughout our organisation and operate in accordance with laws and legislation, thus promoting trust and respect among our employees and other stakeholders.

ASPECTS OF BUSINESS CONDUCT AND CORPORATE CULTURE (G1-1)

Integrity and ethical conduct are central to Aquafin’s business operations. A solid and transparent integrity policy is essential for maintaining stakeholders’ trust and helps with sustainable value creation in the long term. The policy is designed to ensure that all employees, directors and partners adhere to the highest standards of business and socially responsible conduct. This helps create a culture of responsibility, respect and transparency within our organisation.

The key elements of the integrity policy and codes of conduct are explained below. The guidelines and values that steer Aquafin’s daily actions, as well as the mechanisms that ensure compliance with these standards, are explained in more detail. These principles form the basis for an ethical company policy aimed at transparency, fairness and compliance with laws and legislation. By establishing and enforcing these rules of conduct, our aim is to create a culture in which integrity is not just promoted but also actively adhered to.

Integrity policy

Integrity is a fundamental part of corporate social responsibility within Aquafin.

The company’s integrity policy was laid down by the Board of Directors and underlines who Aquafin is and what the organisation wants to achieve. This policy clearly describes the responsibilities and the conduct expected of employees, management, directors and partners and forms the guideline for all actions within the organisation.

Preventing conflicts of interest

Aquafin operates a strict policy for preventing conflicts of interest and ensuring transparency within the organisation. All employees are obliged to make business decisions in a fair, objective and impartial manner, while always putting Aquafin’s interests first.

Employees are expected to report a potential conflict of interest to their manager or the Internal Audit department immediately. In case of doubt or if an employee has any questions, they should seek advice from their manager.

To create a clear framework around potential conflicts of interest in the context of employees’ other activities, an explicit policy was formulated and approved by the organisation’s various bodies. This policy will be rolled out in the coming years.

Preventing market abuse

Aquafin is obliged to apply public procurement legislation and will also avoid any influence on an ethical level. When Aquafin turns to the market as a provider as part of its commercial activities or innovative projects, it will apply the same ethical framework and respect the integrity thereof in order to respect the level playing field among other things.

Integrity training programme

At Aquafin, employees are actively encouraged to commit to ethical standards and integrate these values in their daily work. To further reinforce the existing culture of integrity, Aquafin has launched an obligatory annual training programme. This programme will focus on important topics such as integrity, compliance, data protection and cyber security. The aim is to provide all employees with the knowledge and tools they need in order to act in a responsible and ethical manner and thereby help ensure integrity and security within the organisation.

Whistleblower scheme

To ensure a culture of openness and responsibility, Aquafin implemented a whistleblower scheme. This scheme provides employees, stakeholders and other parties concerned with a safe and confidential way of reporting (possible) irregularities or unethical behaviour within the organisation.

All whistleblower reports are made via an independent internal channel and are carefully investigated, with respect for the privacy and confidentiality of the person who made the report.

The scheme also provides protection against sanctions for those who report irregularities in good faith which helps create confidence in the scheme and willingness to flag potential risks and unlawful, unethical or abusive practices promptly.

This whistleblower scheme supports the organisation’s commitment to transparency, ethical behaviour and compliance with laws and legislation. Through this scheme, Aquafin remains a responsible and reliable organisation committed to the interests of its employees and stakeholders.

In 2024, no reports were received via the whistleblower scheme.

MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS (G1-2)

Sustainable and responsible supplier relationships

Aquafin actively seeks to develop and maintain responsible and sustainable relationships with suppliers while focusing on ethical and sustainability criteria but also sets up alternative methods of collaboration and consultation based on trust and mutual respect.

Environmental and environmentally-friendly practices

Aquafin integrates environmentally-friendly practices in every phase of infrastructure projects, from design to demolition. The company strives to create a cleaner living environment through initiatives that promote sustainable procurement and environmentally-friendly practices. Aquafin makes specific choices to ensure the least possible negative environmental impact throughout the life cycle, even if costs are increased as a result.

Social and ethical criteria for supplier selection

Aquafin integrates sustainability criteria in the contracting and selection process for all its suppliers. The company takes corporate codes of ethics into account in its procurement process and avoids partnerships with entities involved in labour exploitation.

Compliance and risk management in the supply chain

Aquafin ensures maximum compliance with all applicable legislation and takes a proactive approach to cases of noncompliance. The company focuses on minimising operational disruptions and energy consumption which indicates its strong sustainability ethos.

Innovation and digitalisation in procurement

Aquafin focuses on innovative procurement possibilities to enable more sustainable solutions. The company promotes digitalisation to reduce environmental impact.

Supplier evaluation and performance monitoring

Aquafin uses its buying power and influence to improve the social and environmental performance of the whole product chain. The company defines a custom action plan with specific assessment criteria for every contracting procedure.

PREVENTION AND DETECTION OF CORRUPTION OR BRIBERY (G1-3)

Fraud, corruption and money laundering could undermine Aquafin’s sustainability on both a financial and non-financial level.

Corruption and bribery constitute a serious threat to both business activities and society in general. That is why Aquafin operates a strict zero tolerance policy in respect of any behaviour that contravenes the highest standards of ethics.

Aquafin also actively prevents money laundering. Employees should be alert to suspicious or unusual transactions that may indicate attempts to launder money. Every employee is expected to identify an irregularity in payment methods or financial transactions and report it immediately.

Aquafin has clear guidelines and internal controls to guarantee compliance with these principles. Employees and external partners are regularly made aware of ethical conduct and the integrity policy contains clear guidelines relating to the acceptance of gifts and invitations. A channel is also provided for the confidential reporting of suspicions of corruption, bribery or money laundering.

INCIDENTS AND CORRUPTION (G1-4)

INCIDENTS AND CORRUPTION (G1-4)

PPOLITICAL INFLUENCE AND LOBBYING ACTIVITIES (G1-5)

Aquafin does not take part in any form of lobbying activities. All collaborations and interactions with government bodies and other stakeholders are conducted transparently and within the legal and ethical framework.

Aquafin is committed to providing objective and independent information on its activities and policy, without influencing political decision-making in any way.

CORRECT PAYMENT PRACTICES (G1-6)

Digital invoicing

Aquafin attaches great importance to effective cash flow management and to promoting resilient partnerships with suppliers. Aquafin is bound by public procurement legislation and will aim for a sustainable relationship with its suppliers within this framework.

This commitment has been translated into a correct payment policy which is currently being developed into a fully digital invoicing system. From 1 May 2023, invoices have had to be sent in a structured XML format via the European Peppol network. From 1 November 2023, Aquafin has only accepted Peppol invoices. Each invoice must contain details such as the order number and, if applicable, the project number.

Number of convictions for violating anti-corruption and anti-bribery laws

Amount of penalties for violating anti-corruption and anti-bribery laws

Number of confirmed incidents involving corruption or bribery

Number of confirmed incidents where own employees were dismissed or disciplined due to corruptionor bribery-related incidents 0

Number of confirmed incidents relating to contracts with business partners that were terminated or not renewed on account of violations relating to corruption or briberyg 0

DIGITAL INVOICING

Average number of days to pay invoice from the date on which calculation of the contractual or statutory term of payment starts 60 days

Percentage of payments in accordance with standard terms of payment

Number of current legal proceedings for late payments

AQUAFIN NV

Colophon

Publisher: Jan Goossens, Dijkstraat 8 - 2630 Aartselaar

Graphic design: altera

Photography: Nicolas Herbots, Frederik Beyens, Studio Fossiel and Aquafin NV

The 2024 annual report is also available in Dutch.

Aquafin NV, Dijkstraat 8, B-2630 Aartselaar tel. 03 450 45 11 l e-mail: info@aquafin.be www.aquafin.be