Gresham House Regulatory News (GRID)

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7 November 2019

Gresham House Energy Storage Fund PLC

Factsheet publication and quarterly NAV update

Gresham House Energy Storage Fund Plc (LSE: GRID) (the "Fund") announces that its NAV as at 30 September 2019 was 99.19 pence per share.

The factsheet for the period ended 30 September 2019 is available at:

http://newenergy.greshamhouse.com/esfplc/

Extracted text of the commentary is set out below:

NAV update & financial highlights

The Fund completed further placings during July (£15.3m) and October (£41.6m), adding significant firepower for the pipeline acquisitions, and the Fund has reached its IPO milestone of issuing at least 200m new shares. The NAV is slightly down on a total return basis for the quarter. This has been impacted by operational downtime while planned project upgrade works were underway. The upgrades are expected to deliver higher future revenues from trading and asset optimisation activities and are expected to be largely complete by year end.

There has been some very important news with the announcement of the reinstatement of EU State Aid approval for the UK Capacity Market regime on 24 October 2019. This was suspended in November 2018 following a successful judicial review claim in the European Court of Justice. The State Aid approval process has now been fully completed. This has obvious implications for the Fund, namely reducing the uncertainty associated with the valuation of our projects and securing long-term contracted revenues associated with these contracts. Our 15-year Capacity Market contracts have start dates between October 2019 and October 2021. Back payments should be made on existing contracts. The UK Government is expected to formalise this - the exact timescale is not known exactly.

Portfolio activity & market outlook

Our focus is rapidly turning to 2020 when we are targeting a higher dividend of 7p per share and rising thereafter. Contributing to our ability to meet this level of dividend is the timely deployment of the funds we have raised. The 49MW Red Scar project (acquisition announced 21 October 2019) is well progressed, and pipeline projects Wickham and Thurcroft (each 50MW) should begin pre-construction phases in the coming days, with the Fund expecting to enter into sale and purchase agreements in the near future.

A crucial factor that supports the case for, at one end, reducing downside risk and at the other creating the potential for outperformance, is the ability to acquire additional pipeline (including the projects named above) at improving valuations. We have, so far, acquired projects at an IRR of c.12%. However, looking forward, the scale of the Fund combined with fundamentals in the battery market is leading to falling project costs. This is leading to higher yielding projects which should also benefit from an NPV uplift if the Fund's projects' valuations are driven by a 12% discount rate.

Finally, as this is a merchant business model, we are pleased that the backdrop for energy storage continues to improve. We are increasingly confident in the ability of several parties to deliver improving trading returns, and the black-out of August 2019 appears to have led to a bottoming out of the FFR price which has now increased significantly since the lows seen earlier this year.

Current portfolio

Pipeline

(1) All pipeline projects are owned by Gresham House Group and exclusivity over the projects has been granted in favour of the Fund;

(2) Expected commissioning dates are indicative only and based on conversations with relevant Distribution Network Operators (DNOs); and

(3) Red Scar will be acquired once commissioned/operational.

(4) Remains subject to planning consent.

For further information, please contact:

Notes:

Gresham House Energy Storage Fund PLC (GRID or the "Fund") seeks to capitalise on the growing intraday supply and demand imbalances caused by Great Britain's ever-increasing reliance on renewable energy. The Fund aims to provide investors with an attractive and sustainable dividend by investing in a portfolio of utility-scale Energy Storage Systems ("ESS") located in Great Britain, which use batteries and sometimes generators to import and export power, accessing multiple revenue sources within the power market.

The Fund targets a Net Asset Value (NAV) total return of 8.0%+ per annum, once the Fund is fully invested, before leverage and net of Fund expenses, and a minimum target dividend of 7.0p per Ordinary Share (1),(2). Returns are not correlated to the absolute level of wholesale power prices and are not dependent on any subsidies.

(1). this is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Fund will make any distributions at all. This target return should not be taken as an indication of the Fund's expected or actual current or future results. The Fund's actual return will depend upon a number of factors, including but not limited to the Fund's net income and the Fund's ongoing charges figure. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Fund.

(2). 4.5p+ per Ordinary Share in the first year