Gresham House Regulatory News (GRID)

11 May 2020

Gresham House Energy Storage Fund plc

(the "GRID" or the "Fund")

Quarterly NAV, Dividend and Factsheet publication

Gresham House Energy Storage Fund Plc (LSE: GRID) (the "Fund") announces its NAV as at 31 March 2020 was 101.5 pence per share.

Dividend Declaration

The Board is pleased to announce a dividend of 1.75p per Ordinary Share for the period from 1 January 2020 to 31 March 2020. The dividend will be paid on 12 June 2020 to Shareholders on the register as at the close of business on 22 May 2020. The ex-dividend date is 21 May 2020.

The factsheet for the period ended 31 March 2020 is available at:

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

Extracted text of the commentary is set out below:

Financial highlights

During the quarter, the Fund delivered a share price total return of -13.6%. This was due to a combination of the dividend payment of 1.0 pence per share and a 14.4% drop in the share price to 92.0 pence at the end of March 2020. The decline in the share price is linked to market sentiment around COVID-19. Since the end of the quarter, the share price has recovered strongly and at close of business on 7 May 2020 was trading at 101.5p.

GRID has not encountered any obvious impact on trading activities due to COVID-19. However, as previously announced, we still foresee potential minor impacts on the commissioning dates of our next two 50MW projects, Thurcroft and Wickham. These are still scheduled for commissioning in H1 2020.

The NAV total return for the period was 1.7%. The NAV per share rose to 101.5 pence at the end of the quarter. The NAV increase was driven by the assets acquired in December being valued at fair market value offset in part by a more conservative set of forecasts driven by lower inflation assumptions, as well as, reflecting more cautious figures given that the current third party forecasts used were published some time before the lockdown.

Having met the 2019 dividend target of 4.5 pence per share, a Q1 2020 dividend of 1.75 pence per share will be paid in June, as announced. The Board is also pleased to reaffirm the Fund's dividend target of 7.0 pence per share.

The Fund successfully raised gross proceeds of £31.2 million, just ahead of the substantial public equity market dislocation, from the issuance of ordinary shares at a price of 104.0 pence per share, to complete the c.50MW "Potential Acquisition". This is an existing operational project and its acquisition is expected to close during Q2 2020, with further details to be announced.

Portfolio activity & market outlook

GRID had a busy start to 2020 completing both the integration of the projects acquired in December 2019 and the ramp up of the seed projects which we upgraded in H2 2019. This activity has more than doubled operational capacity to 174MW. Revenues have correspondingly stepped up, with an upward trend in revenues from Asset Optimisation.

This revenue increase will continue in line with portfolio growth expectations to around 364MW during 2020.

Outlook

Despite headlines about falling energy demand and low power prices, we have not seen a discernible impact on revenues at this time. Asset Optimisation revenues are driven by volatility in power prices rather than absolute power price levels.

We are encouraged by the trends for 2020 which include more renewables in the generation mix. In our view, these mark the beginning of the end for the excessively large, gas-fired power plant fleet. This fleet normally operates at a c.30% load factor in normal times but is currently operating at less than 20%. Both trends contribute to greater power price volatility.

In addition, there is a growing demand from National Grid for frequency and other services. This is allowing battery storage to compete effectively in wider areas of the market which either didn't exist before or were previously the domain of large-scale fossil-fuelled generators.

1) Expected commissioning dates are indicative and based on most recent conversations with relevant Distribution Network Operators (DNOs) and assume no major commissioning delays due to COVID-19 personnel availability.

2) This project has already been commissioned and this is the expected purchase date.

3) To be acquired subject to funding.

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