Us Solar Fund Regulatory News (USF)

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28 February 2022

US SOLAR FUND PLC (USF, the "Company")

Q4 2021 Unaudited NAV and Factsheet

US Solar Fund plc (LON: USF (USD)/USFP (GBP)) is pleased to announce its unaudited NAV at 31 December 2021 of $324 million or $0.975 per Ordinary Share (30 September 2021 NAV of $314.7 million or $0.947 per Ordinary Share).

Highlights for the period to 31 December 2021:

· The key drivers of the 3% increase from the 30 September 2021 NAV of $0.947 per Ordinary Share were useful life extensions for assets in the portfolio ($0.045) and an uplift in the initial valuation of the interest in and option over Mount Signal 2 (MS2) ($0.024); which more than offset a softer average long-term electricity price outlook, tax and working capital adjustments, and model roll forward (collectively -$0.041).

· In coordination with a leading independent engineer (IE), 30 of 42 assets in the portfolio were subject to useful life extensions up to a maximum of 40 years from commencement of commercial operations. The IE reviewed the geotechnical and structural design, historical operational performance, budgeted operating costs, and other key components to determine a recommended useful life and associated assumptions, including additional maintenance and capital expenditure. Assets that were considered for extensions have permits, contracts, and land control to support the term of useful life.

· Full-year production for 2021 was 3.9% below budget with 1.5% due to lower-than-expected irradiance and 2.4% due predominantly to the H1 contractually allowable and expected curtailment at MS2 in California, isolated performance issues, unplanned outages, snow, and other adverse weather impacts. All issues are now resolved or scheduled to be resolved in coming months.

· The dividend remained comfortably cash covered, at 1.82x for the twelve months ended 31 December 2021.

· USF's dividend for the quarter ended 30 September 2021 of 1.5 cents per Ordinary Share was paid on 7 January 2022. Including this third 2021 Interim Dividend, dividends paid and declared for the 2021 financial year thus far total 4.0 cents, in line with the Company's full year dividend target of 5.5 cents per Ordinary Share. The final 2021 dividend will be announced in March 2022 alongside the 2021 annual results.

· All assets in the portfolio have power purchase agreements (PPAs) with contracted prices for 100% of electricity generated. The portfolio weighted average PPA term is 14.4 years as of 31 December 2021, and all PPA counterparties are investment-grade (S&P rated A to BBB).

· As of 31 December 2021, the Investment Manager's pipeline included 1,940 MWDC of high-quality assets, with an aggregate value of approximately $2.2 billion in cash equity value and a weighted-average PPA term of 17.7 years.

In February 2022, after the end of the period, USF exercised its option to acquire a further 25% (50MWDC) of MS2, a 200MWDC project in California. Upon close, this will bring USF's total ownership of MS2 to 50% or 100 MWDC and the total USF portfolio to 543MWDC.

In February, USF released its inaugural Sustainability Report, available on the Company's website at: www.ussolarfund.co.uk/investor-centre/key-documents-and-disclosure. This report forms a core part of USF's commitment to support our investors with their own ESG-related obligations. While USF is not formally required to comply with the upcoming EU Sustainable Financial Disclosure Regulation, we intend to align reporting with a view to compliance with this regime.

The NAV update and the Company's factsheet for Q4 2021 are available on the Company's website at: www.ussolarfund.co.uk/investor-centre. A separate Solar Market Update can be found on the website at: www.ussolarfund.co.uk/media-and-insights.

Liam Thomas, CEO of New Energy Solar, US Solar Fund's investment manager, said

"The energy transition is progressing well in the United States, and we're pleased to report a stronger fourth quarter net asset value, rising 3% over the quarter This was driven by an improvement in the valuation of our Mount Signal 2 asset in California, coupled with useful life extensions in the portfolio which more than offset a marginally softer average long-term electricity price outlook.

The use of existing cash reserves to purchase a an additional 25%, or 50 MWDC of MS2, earlier this month increased the income generating portfolio, further supporting the dividend. We continue to target a 5.5 cent dividend for the year, equivalent to just over a 5.5% nominal yield."

For further information, please contact:

About US Solar Fund plc 

US Solar Fund plc, established in 2019, is listed on the premium segment of the London Stock Exchange in April 2019 with a market capitalisation of approximately $340m. The Company's investment objective is to provide investors with attractive and sustainable dividends with an element of capital growth by owning and operating solar power assets in North America and other OECD countries in the America.

The solar power assets that the Company acquires or constructs are expected to have an asset life of at least 30 years and generate stable and uncorrelated cashflows by selling electricity to creditworthy offtakers under long-term power purchase agreements (or PPAs). The Company's portfolio consists of 42 operational solar projects with a total capacity of 543MWDC, all located in the United States.

Further information on the Company can be found on its website at http://www.ussolarfund.co.uk.

About the Investment Manager 

USF is managed by New Energy Solar Manager (NESM). NESM also manages New Energy Solar, an Australian Securities Exchange (ASX)-listed fund. Combined, US Solar Fund and New Energy Solar have committed approximately US$1.3 billion to 57 projects totalling 1.2GWDC.

NESM is owned by E&P Funds, the funds management division of E&P Financial Group, an ASX listed company (ASX: EP1) with over A$20 billion of funds under advice.