NextEnergy Solar Fund (LSE:NESF) — Capital Recycling Programme

0:01 Good morning. Welcome to the NEXTENERGY SOLAR FUND Limited update relating today's announced capital recycling program. Throughout the recorded meeting, investors will be in listen only mode. Company will not be responding to questions during the live meeting today due to the nature of today's subject matter and review all questions submitted today and publish responses where appropriate to do so. Before

0:25 we begin, we'd like to submit the following poll. I'd now like to hand you over to Ross Greer, Managing Director. Good morning. Good morning. Thank you. Really pleased you could all join us today in advance of a Maybank holiday where the forecast suggests unusually that it's not going to rain for the entire weekend. So combining that with our RNS, there are lots of reasons to be positive today. Given the importance of the announcement for us today, we wanted to share the details with you on a call as we appreciate it's better to hear things from the management team than to try and read between the lines of of the RNS. So hopefully, you'll find today's session useful. On the call today, you have myself. I'm managing director of NEXTENERGY Capital in The UK. I'm also pleased to be joined by Steven Rosser, who is investment director and in house legal counsel for us in The UK, and he is our investment team lead on the NESF platform.

1:18 We remain really proud of how NESF is performing. It has strong operational asset base of 99 operating solar assets with eight sixty five megawatts of capacity. This portfolio continues to operate in line with our expectations and is benefiting well from the current macro dynamics in the market around inflation and energy prices. As we've previously said, we've therefore seen a strengthening of our dividend cover in the current year and projections remain strong for future years. So the portfolio continues to outperform operationally, technically and financially. We also continue to work on the long term evolution of the platform as well, which is something you've you've heard me talk around a lot before. This ensures that it remains fit for the energy ecosystem in which it's operating.

2:07 We've been doing this in a number of key ways and and through bringing a combination of new assets to life from post subsidy solar through international solar acquisitions as well as through our joint venture with with... Through... In battery storage with with Eel Power. The future remains really exciting for NESF, and today's announcement allows us to continue to position the platform for success over the coming years, which is key in today's market. So today, we've announced a capital recycling program. We have a portfolio of five post subsidy solar assets, which we've identified for sale. This will allow us to quickly pay down our revolving credit facilities and in so doing reduce gearing. In our optimized capital structure, the revolving credit facilities we have are the only component of our debt that is not long term interest rate hedged. And therefore, it makes a huge amount of sense to reduce this in today's current market and effectively reload the gun for future growth opportunities as we continue to see the platform go from strength to strength.

3:15 Alongside this, we have established a share buyback program to enable us to buy back shares in the event that our shares continue to trade at a discount and as part of a really disciplined allocation of capital, which you've seen from us in the past and we continue to deploy as a business as we're looking at the attractive opportunities we've already secured for the growth of NESF in... And thinking in totality around how we deliver the very best returns for our investors over the short, medium, and long term. We've selected this particular portfolio of of assets because we believe it is not adequately valued in today's market,

3:53 and we've seen active interests from other asset gatherers for this particular type of asset class. And we've also secured higher returning opportunities, which again, I've spoken about previously in all of those growth pockets, both internationally, in battery storage, and also in future solar in The UK, which will help us to continue to evolve the platform and build resilience, and will continue to drive the NESF platform forward into its continued success and integration with that evolving energy ecosystem around it. So really excited to put today's announcement out there. I think it's a very important step for for the NEXTENERGY SOLAR FUND. I'll hand over to Stephen for a little bit more detail on on exactly what we're doing today.

4:42 Stephen, over to you. Thank you, Ross. Yes. A small amount of additional detail. So as Ross has mentioned, a portfolio of five, solar assets, from, from within the the post subsidy part of our portfolio.

4:58 They comprise of three operational assets at the moment, two of which both 50 megawatt assets are on a long term corporate PPA. A third 50 megawatt asset, which is... Which trades on a merchant basis. We have a 36 megawatt asset, which is very near to being operational, which benefits from a CFD. And, also, finally, a 50 megawatt ready to build asset, which also benefits from a from a CFD. The CFD, of course, being a price stabilization mechanism rather than rather than a subsidy in in the way that we used to see things many years ago. As Ross has mentioned, the the proceeds immediately from from the cap titling will be used to pay down against the RCF.

5:50 We have 39,000,000 of deployable headroom in the RCF at the moment. We suspect we expect that this transaction will significantly increase the capacity available under that, as Ross has has already said, to to pursue the value accretive opportunities that we have already secured and and also see in the market. Ross, back to you. Great. Thank you, Steven. So that's that's really all we wanted to cover off today. As we've said, this is a really important step for NESF. We're really excited to put this news out today. We're very happy to take any Q and A in follow-up. And on the basis of that, I hope everybody has a great bank holiday weekend, and I'll hand back over to you, Paul. Thank you.

6:39 That's fantastic Ross, Stephen. Thank you for updating investors today. Can I please ask investors not to close the sessions? We automatically redirect it to provide your feedback in order the management team can better understand your views and expectations. This will only take a few minutes to complete and those are greatly valued by the company. And of course, as said, any questions submitted today will get responded to and we'll publish those response on the investor meet company platform. On behalf of the management team of NEXTENERGY SOLAR FUND LIMITED, we'd like to thank you for attending today's update. Good morning to you all.