Dividend, Quarterly Trading & NAV Update

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21 November 2022

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

DIVIDEND, QUARTERLY TRADING AND NAV UPDATE

US Solar Fund plc (LON: USF (USD)/USFP (GBP)) is pleased to announce that its unaudited NAV at 30 September 2022 was $322.2 million or $0.970 per ordinary share, a 0.3% increase from the 30 June 2022 NAV of $321.2 million or $0.967 per ordinary share.

USF is also pleased to declare an Interim Dividend of 1.52 cents per Ordinary Share for the quarter ended 30 September 2022. The Interim Dividend will be paid in line with the timetable below:

Of this dividend, 1.52 cents are declared as dividend income with no portion treated as qualifying interest income. The Company confirms its target 5.58 cents per Ordinary Share annual cash-covered dividend target for FY2022.

Highlights for the quarter to 30 September 2022:

•       USF's unaudited NAV at 30 September 2022 was $322.2 million or $0.970 per share, an increase from the 30 June 2022 NAV of $321.2 million or $0.967 per share. An increase in working capital and cash balances drove the increase in fair value of the portfolio's underlying solar investments. Discount rates and other macro assumptions were held steady for this period, as is typically done for USF outside of year-end and interim results. They will be reviewed at 31 December and included in NAV.  

•        During the period, the portfolio produced 281GWh (including reimbursed curtailment). Year-to-date generation remains within the expected range of annual variance and USF expects to continue to cash cover the dividend.  

•     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 14.0 years as of 30 September 2022, and all PPA counterparties are investment-grade (S&P rated A to BBB).

•       The Company paid its Q2 2022 dividend of 1.27 cents per ordinary share on 21 October 2022. The dividend is consistent with the Company's target full year dividend of 5.58 cents per ordinary share. USF expects to continue covering dividends paid in 2022 with cashflow from portfolio operations.

•      Reflecting the normal seasonality of cash flows, dividend cover for the nine months to 30 September was 1.46x.

•      In August, USF announced it has sold a purchase option (Option) over its 50% interest in its 200MWDC 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 paid USF a non-refundable option fee of US$1 million and has 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. If executed, the proceeds would be consistent with the net asset value at which USF held 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. A further announcement will be made in due course.

Highlights post period end:

•    The USF Board has announced that it is undertaking a strategic review of the options available to the Company to maximise value for shareholders. Although USF has successfully executed its strategy of delivering a sustainable dividend for shareholders, structural challenges in the US solar sector alongside a recent sustained discount of the share price to its net asset value have impeded the Company's ability to grow its asset base. The Board will consider all options available to the Company, including, but not limited to, a sale of the entire issued, and to be issued, share capital of the Company which is being conducted under the framework of a "formal sale process" in accordance with the Takeover Code, selling the Company's portfolio and returning funds to shareholders or changing the investment management arrangements of the Company. There is no certainty that any changes will result from the Strategic Review. The Board will make further announcements in due course.

The NAV update and the Company's factsheet for Q3 2022 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.

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. 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 543 MW_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.