Option Agreement for MS2

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO US PERSONS OR INTO OR WITHIN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION WHERE, OR TO ANY OTHER PERSON TO WHOM, TO DO SO WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, ANY INVESTMENTS IN ANY JURISDICTION.

22 August 2022

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

OPTION AGREEMENT FOR MS2

US Solar Fund Plc (LON:USF (USD) / USFP (GBP)) is pleased to announce it has sold a purchase option (Option) over its 50% interest in its 200MW_DC Mount Signal 2 (MS2) to MN8 Energy LLC (MN8), a renewable energy business formerly known as Goldman Sachs Renewable Power LLC.

Under the terms of the Option, MN8 will pay a USF a non-refundable option fee of US$1 million and will have the option, for an initial term of six months extendable for a further three months by mutual agreement, to acquire USF's 50% interest in MS2 for an additional US$52.2 million excluding working capital. The total proceeds of $53.2 million that USF will receive if MN8 exercises the Option are consistent with the net asset value at which USF holds MS2 at 31 March 2022 and the sale would imply a gross return of 11% per annum[1] since USF announced the agreement to acquire up to 50% of MS2 from New Energy Solar (NEW) in December 2020.

MS2 is the only jointly-owned asset in the USF portfolio[2]. With NEW announcing the sale of its US portfolio to MN8 on 22 August 2022[3], including its 50% interest in MS2, the Board and Investment Manager believe this is an attractive opportunity for USF to realise the value in the MS2 investment. The Option structure allows MN8 to complete the acquisition of USF's 50% interest after their acquisition of NEW's 50% while providing price certainty to USF.

Liam Thomas, CEO of USF's Investment Manager, said "We're pleased to agree this option with a high-profile renewable energy business like MN8, and we believe it is a win-win for USF. If exercised, it will monetise a significant existing asset at its current carrying value. If not exercised, it delivers an incremental $1 million of value in the current financial year."

Should the sale proceed, USF will use the proceeds for new investments, working capital, and/or future capital management. A further announcement will be made at the point when the Option is exercised or expires.

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 $310 million at 31 March 2022. 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 543MW_DC, 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 1.2GW_DC.

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.