REG - Atrato Onsite Energy - Company Update

Atrato Onsite EnergyAnnouncement

25/10/2023 07:15

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RNS Number : 1603R  Atrato Onsite Energy PLC  25 October 2023

25 October 2023

LEI: 213800IE1PPREDIIZB62

 

 
 
Atrato Onsite Energy plc
(the "Company")

 

COMPANY UPDATE
 

Atrato Onsite Energy plc (LSE: ROOF), the investment company focusing on clean
energy generation, today announces a number of portfolio and business updates.

Completion of acquisition

The Company is pleased to confirm that the acquisition of the fully
operational, 34MW rooftop solar portfolio (the "ASG Portfolio"), previously
announced on 13 September 2023, has now completed.

·    The ASG Portfolio, with a total value of £77.3 million, benefits
from payments pursuant to the government's feed-in-tariff ("FIT") scheme,
which provides the Company with highly attractive revenue streams underpinned
by government-backed income with annual uncapped RPI uplifts

·    The projected return profile will make it the highest yielding
project in the Company's portfolio

Portfolio update

In the period from 1 April 2023 to date, the Company has invested £121
million(1), which will increase the Company's solar PV capacity by 91MW.

The portfolio now comprises:

·    182MW of solar PV capacity, of which 64%(2) are operational assets
and 36% are installation assets. Full energisation of the installation assets
is expected by March 2024

·    94% of revenue contracted under PPA or subsidy and 93% subject to
annual inflation or fixed uplifts; 48% of revenue benefits from uncapped RPI
or CPI uplifts

·    Once fully operational, the 12-month forward looking dividend cover
is expected to be in excess of 1.3x(3)

·    Once fully operational, the portfolio is expected to generate c.
173GWh of clean energy annually, providing 37,000 tonnes of CO2 emissions
savings, equivalent to powering 64,000 homes or planting 1,500,000 new trees

Installation asset update

We are pleased to announce that:

·    Our 20MW Nissan project was energised in early October and is now
fully operational

·    Our Thetford project with Tesco (0.4MW) was energised in the first
week of October, representing the Company's first rooftop solar project under
the Tesco framework agreement

·    London Road solar farm (28MW) is nearing completion, with
energisation expected in Q4 2023, in-line with expectations

·    Mobilisation commenced at Skeeby solar farm (55MW) in mid-August.
Installation continues in-line with the project timeline, with energisation
scheduled for the end of March 2024

A full breakdown of the portfolio is detailed in the table below.

Financing and pipeline update

The Company's £30.0 million Revolving Credit Facility ("RCF") with NatWest
Bank is now substantially committed. Together with the £38.7 million of
existing fixed rate project finance, acquired as part of the ASG Portfolio
acquisition, the Company's LTV is 33%(4).

The pipeline of acquisition opportunities has continued to grow as a result of
ongoing corporate demand for the Company's sustainable energy solutions. The
current pipeline comprises:

·    £410 million across 80 projects

·    Average unexpired PPA term of 15-20 years

·    87% installation assets and 13% operational

Investment Policy

The Company has made two non-material amendments to its Investment Policy.
Full details are included at the end of this announcement.

Gurpreet Gujral, Managing Director of Atrato Partners, the Investment Adviser
to the Company said:

 

"The Company has made good progress on its investment objectives in 2023 to
become one of the largest owners of C&I solar in the UK. We look forward
to providing a full update on the Company's performance in the full year
results for the year ended 30 September 2023 in January 2024."

Portfolio overview

 Operational Portfolio
 Offtaker               Asset type  Status                          Remaining contract (years)(5)  Capacity (MWp)(5)
 Amazon                 Rooftop     Operational                     18                             12
 Anglian Water          Ground      Operational                     22                             14
 Gardner Group          Rooftop     Operational                     24                             1
 Marks & Spencer        Rooftop     Operational                     12                             6
 Nissan                 Ground      Operational                     20                             20
 Recipharm              Rooftop     Operational                     25                             1
 ASG Portfolio          Rooftop     Operational                     12                             34
 Tesco                  Rooftop     Operational                     18                             7
 Sub-total                                                          14 years(6)                    96MWp
 Installation Portfolio
 Britvic (London Road)  Ground      Energisation expected CY Q4 23  10                             28
 OVO Energy (Skeeby)    Ground      Energisation expected CY Q1 24  3                              55
 Huntapac               Rooftop     Energisation expected CY Q4 23  15                             1
 Total                                                              11 years(6)                    182MWp

 

 

For further information, please contact:

 

 Atrato Partners           +44 (0)77 959 75560

 Gurpreet Gujral

 Christopher Fearon

 Berenberg                 +44 (0)20 3207 7800

 Gillian Martin

 Ben Wright

 Dan Gee-Summons

 Kaso Legg Communications  atrato@kl-communications.com

 Charles Gorman            +44 (0)20 3995 6673

 Charlotte Francis

Notes to Editors

Atrato Onsite Energy plc (LSE: ROOF) is an investment company specialising in
clean energy generation with 100% carbon traceability. The Company focuses on
UK solar, helping its clients achieve net zero and reduce their energy bills.

 

The Company aims to provide investors with attractive capital growth and long
dated, index-linked income, targeting a 5% dividend yield and a NAV total
return of 8 - 10%((7)). Its shares were admitted to trading on the premium
segment of the Main Market of the London Stock Exchange on 23 November 2021.
Atrato Partners Limited is the Company's Investment Adviser.

 

Further information is available on the Company's website, www.atratoroof.com
(http://www.atratoroof.com) .

 

 

 1  Gross value including £38.7 million existing project finance in the Sol
Portfolio

(2) Weighted on invested capital (including any existing project finance debt)

3 12-month forward looking dividend cover. Dividend cover calculation
inclusive of debt interest and repayment, as well as fund costs

(4) Based on portfolio valuation as at 31 March 2023 and includes new
acquisitions and capital expenditure at cost

(5) Figures have been rounded

(6) Weighted average unexpired contracted revenue stream; weighted on invested
capital (including any existing project finance debt)

(7) There is no certainty that these targets will be achieved

 

 

Revised Investment Policy

 

 

 

Investment Policy

Atrato Onsite Energy Plc (the Company) will seek to achieve its investment
objective by investing in behind-the-meter (private wire network) solar
photovoltaic generation systems and associated infrastructure (Onsite Solar
Assets) (for example, solar photovoltaic generation systems located on
rooftops). Each such system will be commercialised through one or more power
purchase agreements (PPAs)and/or other revenue agreements associated with the
system with a Contract Counterparty connectedin relation to the Onsite Solar
Asset via a private wire network. Any surplus electricity production will
typically be sold by the Company to the public power grid. The Company may
also make investments in solar photovoltaic generation systems and associated
infrastructure which are not located on the site of a Contract Counterparty or
connected to a Contract Counterparty via a private wire network, provided that
such systems are commercialised through arrangements which, in respect of
initial contract length and unit price certainty, are materially similar to
those PPAs through which an Onsite Solar Asset may be commercialised
(Long-Term Grid Assets).

The Company may also make investments in Other Clean Energy Technologies up to
a maximum of 30 per cent. of the Company's Gross Asset Value (calculated at
the time of investment).

Origination of new asset opportunities will be a key component of the
Company's investment strategy. The Company therefore intends as part of its
strategy alongside the holding of Operational Assets to pursue investment
opportunities in Installation Assets and some Pre-Installation Assets. It is
anticipated that the installation phase of an Onsite Solar Asset's lifecycle
will generally be a period of less than 4 months such that there is expected
to be a high turnover of such Installation Assets that will become Operational
Assets to be held by the Company. As the Company's portfolio grows it is
expected that the majority of the Company's underlying investments will be
represented by Operational Assets, notwithstanding that additional
Installation Assets and Pre-Installation Assets may be acquired.

For the purposes of the Company's investment policy:

Clean Energy Assets means Onsite Solar Assets, Long-Term Grid Assets and other
assets which qualify as Other Clean Energy Technologies;

Contract Counterparty means the entity which is primarily responsible for
paying for the use and benefitpayment of the main revenue derived from the
relevant PPAs associated with Clean Energy AssetAssets. Contract
Counterparties will be non-domestic entities for example occupiers of
industrial and commercial properties;

Installation Assets means Clean Energy Assets which have in place the required
suite of material agreements to carry out the asset installation, including,
as applicable, the property rights, permissions and revenue arrangements, but
which have not yet become Operational Assets;

Other Clean Energy Technologies means infrastructure assets which facilitate
the reduction of greenhouse gas emissions and which typically derive the
majority of their revenues through agreements with non-domestic customers.
Examples include but are not limited to electric vehicle charging
infrastructure, onsite energy storage and any energy generation asset (whether
or not connected to a public power grid) other than an Onsite Solar Asset or
Long-Term Grid Asset which does not emit carbon dioxide to the atmosphere at
the point of generation but excluding nuclear energy;

Operational Assets means Clean Energy Assets which have been installed,
commissioned and which are capable of generating revenues;

PPA means any power purchase agreement and/or any revenue agreement associated
with the Clean Energy Asset between two or more parties whether or not such
agreements are actually described on their face as a 'power purchase
agreement', 'PPA' or by some other name, description or title; and

Pre-Installation Assets means Clean Energy Assets which have not yet been
sufficiently progressed to be regarded as an Installation Asset.

The Company will invest in Clean Energy Assets predominantly located in the UK
and the Republic of Ireland. Subject to the investment restrictions set out
below, the Company may also make investments in Clean Energy Assets located in
other OECD countries.

Assets may be held in special purpose vehicles (SPVs) into which the Company
will invest via equity and/or shareholder loans.

The Company will typically seek sole ownership of such SPVs but may acquire a
mix of controlling and non-controlling interests in Clean Energy Assets and
may use a range of instruments in pursuit of its investment objective,
including but not limited to equity, mezzanine or debt instruments.

In circumstances where the Company does not hold a controlling interest in the
relevant investments, the Company will seek to secure its rights through
contractual and other arrangements to, inter alia, ensure that the Clean
Energy Asset is operated and managed in a manner that is consistent with the
Company's investment policy and that the Company has appropriate access to
information rights to enable it to comply with its continuing obligations
under the Listing Rules, the Disclosure Guidance and Transparency Rules and UK
MAR.

The Company may also agree to forward fund by way of secured loans the
pre-installation and/or installation costs of Clean Energy Assets where it
retains the right (but not the obligation) to acquire the relevant plant once
operational. Such forward funding shall be subject to the investment
restrictions below and will only be undertaken where supported by appropriate
security (which may include financial instruments as well as asset-backed
guarantees). Forward funding of any Pre-Installation Assets shall count
towards the limit on investment in Pre-Installation Assets.

Whilst the Company does not typically expect to provide forward funding, the
right to do so, subject to the above limitations, enables the Company to
retain flexibility in the event of changes in the asset pipeline over time.

 

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