PORTFOLIO, CONSTRUCTION, AND DIVIDEND UPDATE

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23 April 2020

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

PORTFOLIO, CONSTRUCTION, AND DIVIDEND UPDATE

US Solar Fund plc (LON: USF (USD)/USFP (GBP)) is pleased to share an update on the progress of its portfolio and assets in construction. A presentation has now been uploaded to the Company's website (https://www.ussolarfund.co.uk/investor-centre/key-documents-and-disclosure). Highlights from the update include:

Summary:

·      USF's long-term PPAs provide long-term price, volume, and cashflow stability and the Company does not expect COVID-19 to materially impact construction timelines or operating cashflows.

·      USF's acquired portfolio consists of 37 projects with total capacity of 383 MW_DC. A further four projects totaling 61 MW_DC are under exclusivity. All are on target to be operating by the end of 2020.

·      More than 55% (by MW_DC) of the acquired portfolio is fully operational and construction of the remainder is progressing to the expected timeline.

·      All debt and tax equity financing required for construction and operations of the acquired 383 MW_DC is in-place, and USF's acquisition of the further 61 MW_DC is subject to debt and tax equity financing being in place.

·      The Company is in a strong position to commence the full 5.5% (annualized) dividend from Q1 2021 in line with the target set out at IPO.

·      The Company and New Energy Solar Manager (the Investment Manager) are working together to protect the welfare of employees, contractors, and other stakeholders while ensuring operational and construction milestones are met.

Operating Projects:

·      After almost a full quarter operating under USF ownership, the operating projects acquired as Acquisition Three are performing at 100% of weather-adjusted expectations.

·      Acquisition Four was acquired at the end of Q1 2020 and plant availability since acquisition is meeting expectations. Full performance data will be available once the plants have been part of USF's portfolio for a full calendar month.

Construction:

·      Seven projects totaling 167 MW_DC are currently in-construction (Acquisition One in Utah and Acquisition Two in North Carolina). These seven projects are expected to be completed before the end of 2020, consistent with announced target completion dates, with limited or no COVID-19 disruptions.

·      USF has a fifth portfolio under exclusivity (Potential Acquisition Five) which comprises four projects totaling 61 MW_DC in Oregon. These projects are expected to be acquired at or near construction completion during Q2 2020, with USF's acquisition subject to tax equity and debt financing being in place.

Cashflow Stability and Dividend:

·      The USF portfolio has fixed price PPAs for 100% of electricity generated for a weighted average PPA term of 15 years (including Potential Acquisition Five), and all PPA counterparties are investment grade (S&P rated A to BBB+).

·      USF's PPA prices are fixed at the time of execution so the resulting steady, contracted cashflows put the Company in a strong position to consistently deliver dividends despite electricity and broader market volatility. There are no mechanisms for PPA prices to be reduced.

·      USF does not expect to be impacted by reductions in electricity demand because of COVID-19. Although COVID-19 measures in the US have reduced electricity demand, utilities are expected to reduce generation from other forms of generation, including their own assets, before curtailing USF's assets

·      USF expects to fully cash cover the remaining ramp-up dividend of 2-3% (relating to the remainder of this financial year to 31 December 2020) with cashflows from operating projects.

·      The Company is in a strong position to commence the full 5.5% (annualized) dividend from Q1 2021 in line with the targets set out at IPO.

Health and Safety Considerations:

·      The Investment Manager team has been working remotely since late March 2020 using existing remote working and monitoring systems.

·      Portfolio Management team members are still able to visit US construction sites on a limited basis or conduct inspections and meetings virtually.

·      The Investment Manager is working with all contractors and other stakeholders to ensure that operational and construction targets can be met whilst ensuring safety on site and meeting relevant COVID-19 requirements or restrictions.

For further information, please contact:

About US Solar Fund plc 

US Solar Fund plc listed on the premium segment of the London Stock Exchange in April 2019, following its successful US$200m IPO. The Company's investment objective is to provide investors with attractive and sustainable dividends with an element of capital growth by investing in a diversified portfolio of solar power assets in North America and other OECD countries in the Americas. 

The Company acquires or constructs, owns and operates solar power assets that 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). 

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 which has committed over US$900m to US and Australian solar plants since late 2015. 

NESM is owned by Walsh & Company, the funds management division of Evans Dixon, an ASX-listed company (ASX: ED1) with over A$20 billion of funds under advice and management.