US Solar Fund Plc · LSE:USF
US Solar Fund — Investor Presentation (May 2024)
36 slides from US Solar Fund's investor presentation, May 2024
Slide 1: US Solar Fund plc Shareholder Presentation May 2024
US Solar Fund plc SHAREHOLDER PRESENTATION MAY 2024 Milford, Utah
Slide 2: Disclaimer
Disclaimer The information in this document has been prepared at the direction of US Solar Fund PLC (“USF” or the "Company") solely for use as an information presentation about USF. USF is a closed-ended investment company incorporated in United Kingdom. The Company’s ordinary shares are listed on
Slide 3: Contents
Contents Background 3 Aims & 2024 Plan 4-5 Fixed Price Tender Offer 6 Refinancing 7 Diagnostic, Remediation & Repowering Plan 8-11 AGM / Discontinuation Vote 12 Appendices Including Results Presentation 13-35 Suntex (Euryalus Portfolio), Oregon 2
Slide 4: Background
Background Amber was appointed as the Company's Investment Manager on 1 December 2023 ♦ US Solar Fund plc is managed by Amber Infrastructure Investment The Investment Manager aims to act as a responsible Advisor LLC (AIIA), a member of the Amber Infrastructure Group steward for the Company and its a
Slide 5: Share buyback via fixed-price tender offer
Share buyback via fixed-price tender offer Fixed price tender offer Maximum tender value of $19m On publication of its 2023 Annual Results the Company announced This upper limit of $19 million represents the balance of the Mount that it was analysing options available to it to return capital to Sign
Slide 6: Aims & 2024 Plan
Aims & 2024 Plan Consistent with Amber’s stated objectives for USF, the Investment Manager’s team are working to optimise, enhance and position the Company to maximise Shareholder value. USF options to maximise Actions taken / being taken shareholder value Future liquidity event Creation of a full d
Slide 7: 2024 Plan
2024 Plan Activity April May June July August September October November Investor Roadshow Ongoing Outreach & Announcements Investor Roadshow Reporting ♦ Post results update ♦ Interaction with Shareholders to gauge ♦ Post interim results update ♦ Plan for 2024 feedback on aspects of the plan as deli
Slide 8: Refinancing Proposal
Refinancing Proposal To improve operational cash dividend coverage and financial returns to shareholders by reducing near term debt amortisation, the Board has undertaken an exercise to explore likely terms for a refinancing of the senior debt facilities. Based on the indicative terms received from
Slide 9: Diagnostic and Remediation Plan
Diagnostic and Remediation Plan Demonstrating a route to improved operating performance or repowering could enhance portfolio value. Operational performance improvement priorities ♦ Integration of production data across the Company’s portfolio to enable accurate monitoring of performance against for
Slide 10: Diagnostic Work / Plan
Diagnostic Work / Plan Detailed diagnostic planning underpins the remediation plan. Site Visit Photos Diagnostic Testing & Plan; Actions ♦ Site visits ♦ Performance data tracking ♦ Amber review of O&M records / direct interface with providers ♦ Technical review of diagnostic data where Jersey Solar
Slide 11: Remediation Plan
Remediation Plan Demonstrating a route to improved operating performance or repowering could enhance portfolio value. Remediation Plan Reactive ♦ Replacement of some O&M providers ♦ Strategies for progressing warranty claims leveraging our wider relationships with key component providers ♦ Identifyi
Slide 12: Enhancement Plan
Enhancement Plan As part of remediation plan sites are being actively assessed for enhancement opportunities. Enhancement Plan ♦ Methodical assessment of all portfolio assets, starting with underperforming sites, with a view to replacing components or amending generation capabilities to enhance perf
Slide 13: Upcoming meetings: General Meeting & AGM
Upcoming meetings: General Meeting & AGM General Meeting ♦ A General Meeting is scheduled on 21 May 2024 at 2:50pm to approve the Tender Offer. Forms of Proxy to be returned by 2:50pm on 17 May 2024 Special Resolution ♦ For the Tender Offer to become unconditional, the Resolution must be passed by S
Slide 14: Results Presentation
Results Presentation USF SOLAR FUND PLC 2023 ANNUAL RESULTS PRESENTATION 25 MARCH 2024 Progress Solar I (Granite Portfolio), North Carolina
Slide 15: 2023 Performance: Financial highlights
2023 Performance Financial highlights $258.2m $177m $0.78 (1.7%) Net Asset Value (NAV) Market capitalisation NAV per share NAV total return3 2022: $320.0m 2022: $279m 2022: $0.96 2022: $9.98 $18.7m 0.95X 5.66 cents 9.54% Dividends paid1 Total dividend cover2 Dividend per share Yield 2022: $18.4m 202
Slide 16: 2023 Performance continued: Operational and environmental highlights
2023 Performance continued Operational highlights Environmental highlights 5,6 41 443MWDC 480,900 Operating solar assets Total capacity tCO2 emissions displaced 2022: 42 2022: 543MWDC 2022: 618,000t 816GWh 11.9years 83,100 Total electricity generated7 Weighted average PPA term remaining8 Equivalent
Slide 17: Key messages
Key messages 1 Changes to NAV and risk premium NAV has reduced from $320m as at 31 December 2022 ($0.96/share) to $258.2m ($0.78/share) as 31 December 2023. 4 Use of balance sheet cash A refinancing exercise is underway that is intended to delay the amortisation profile of the current debt Additiona
Slide 18: Discount rates
Discount rates The discount rate applied to the forecast cashflows of the Company is determined by the independent valuer based on market observations. In the current period it has increased from 7.8% to 8.8% Valuation Process Variable 31 December 2023 31 December 2023 30 June 2023 31 December 2022
Slide 19: NAV movements (US$m)
NAV movements (US$m) Base rates Distributions Macroeconomic assumptions Updated REC Other cost updates The base rate (risk free rate) used for Distributions of Macroeconomic assumptions contract Includes operational portfolio valuations is the US 20-year $18.7m were paid to including changes to infl
Slide 20: Impact of inflation on operational cashflows and NAV
Impact on inflation on operational cashflows and NAV Inflation negatively impacts operational cashflows during the term of the power purchase agreements. Overall inflation has a net positive impact on NAV Impact on Impact on Impact of inflation on the USF portfolio Inflation rate impact Increase NAV
Slide 21: Refinancing Proposal
Refinancing Proposal The refinancing exercise is aimed at smoothing amortisation of the current debt facilities into later periods. Total forecast debt service in each period is shown in the chart and table below 18,000 Current gearing10 36% ($146m) 16,000 Maximum permitted gearing as per the USF In
Slide 22: Dividend cover
Dividend cover Dividends of $18.7m were paid to investors in 2023. Dividend coverage guidance will be issued following completion of the refinancing exercise. $’m Year ended Year ended 31 December 2023 31 December 2022 ♦ Dividends of $18.7m were paid to investors over 2023 (December Project revenue
Slide 23: Future energy price assumptions
Future energy price assumptions Energy curves have increased in the current period. Future forecasts of revenue from the portfolio remain below total levels received under the current contracted offtake agreements Indicative forecast revenue composition (US$’000s) ♦ Future energy prices are provided
Slide 24: Operational Performance
Operational Performance USF SOLAR FUND PLC 2023 ANNUAL RESULTS PRESENTATION 25 MARCH 2024 Progress Solar I (Granite Portfolio), North Carolina
Slide 25: Portfolio performance
Portfolio performance Overall generation of the Company’s portfolio (excl. MS2) was 7.2% below forecast in 2023; with (2.0%) attributable to weather and (5.2%) attributable to technical (non-weather) factors ♦ Portfolio performance for the year FY23 overall generation variance (GWh) (excluding MS2)
Slide 26: Portfolio performance
Portfolio performance Over 80% of technical (non-weather) underperformance was due to unplanned outages impacting inverters, transformers and other plant equipment -7.2% Portfolio Performance Commentary Total generation variance (FY2023) Heelstone Milford Euryalus Olympos Granite Heelstone North Car
Slide 27: Portfolio performance: Next Steps
Portfolio performance: Next Steps Operational performance was 5.2% below the weather-adjusted forecast for 2023 for both generation and revenue Portfolio performance summary – non-weather lost generation Asset Size (MWDC) State Portfolio Non-weather loss (% total) Outage causes Status Suntex 15.3 OR
Slide 28: Sustainable investment
Sustainable investment USF SOLAR FUND PLC 2023 ANNUAL RESULTS PRESENTATION 25 MARCH 2024 Milford, Utah
Slide 29: Sustainable investment
Sustainable investment The Company is focused on sustainability, both in its driving purpose as an investor in solar generation capacity and in the way it manages its investments Overview ♦ The Company draws on the SDGs to demonstrate the positive environmental and social characteristics of its inve
Slide 30: Looking forward
Looking forward USF SOLAR FUND PLC 2023 ANNUAL RESULTS PRESENTATION 25 MARCH 2024 Red Oak (Heelstone Portfolio), North Carolina
Slide 31: Market update
Market update NORTH CAROLINA (Average contract renewal ~2032) Favourable state policy and RPS obligations OREGON ♦ North Carolina increased its target for renewable energy in 2021 (Average contract renewal ♦ 100% of electricity sales from carbon neutral sources by 2050 ~2032) ♦ Interim target of 70%
Slide 32: Appendices
Appendices USF SOLAR FUND PLC 2023 ANNUAL RESULTS PRESENTATION 25 MARCH 2024 Valley Center (Heelstone Portfolio) California
Slide 33: About Amber
About Amber 13 ESTABLISHED TEAM INTERNATIONAL PRESENCE SPECIALISED FUND MANAGER ~180 professionals including specialist investment, personnel and offices across 12 countries including with 8 funds under management or advisement investing asset and fund management Europe, Australia and North America
Slide 34: NAV sensitivity analysis
NAV sensitivity analysis The key assumptions the Directors believe would have a material impact on the fair value of the investments are set out below Electricity production (P90/P10) (12.4%) (9.65) 9.77 12.6% Discount rate (+/- 1.0%) (9.5%) (7.35) 8.93 11.5% Inflation rate (-/+ 1.0%) (8.5%) (6.59)
Slide 35: Historic NAV
34 0.7 0.8 0.9 1 0.75 0.85 0.95 0.972p 31 Dec 19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Historic NAV Jul-20 Aug-20 Sep-20 NAV14 PER SHARE ($) SINCE INCEPTION Oct-20 Nov-20 0.970p 31 Dec 20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 0.975p 31 Dec 21
Slide 36: Contacts
Contacts INVESTMENT MANAGER Amber Infrastructure Investment Advisor, LLC | 1330 Avenue of the Americas, New York, NY 10019 | info@ussolarfund.co.uk Investor Relations: Meredith Frost | Telephone: +44 207 939 0550 | Meredith.Frost@amberinfrastructure.com CORPORATE BROKER Cavendish Securities Plc | On