REG - Ecofin US Renewables - Net Asset Value(s)

Ecofin US Renewables Infrastructure TrustAnnouncement

07/08/2023 07:00

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RNS Number : 4133I  Ecofin US Renewables Infrastr.Trust  07 August 2023

7 August 2023

 

ECOFIN U.S. RENEWABLES INFRASTRUCTURE TRUST PLC

(the "Company")

 

Quarterly Operational and Net Asset Value Update

 

 

Quarterly Operational Highlights

 

·    The portfolio generated 156.6 GWh of clean electricity, equivalent to
powering c.29,400 households, during the first six months of 2023 from a
fully-contracted portfolio of diversified solar and wind assets with
investment-grade equivalent off-takers and a weighted average PPA term
remaining of 14.5 years (18.8 years excluding Whirlwind)

 

·    The Company amended and extended by 12 months its $65 million
revolving credit facility ("RCF") with KeyBank on competitive terms:

 

o  $50 million tranche extended to October 2024 at SOFR + 2.00% to 18 October
2023 and SOFR + 2.125% thereafter

 

o  $15 million tranche extended to October 2025 at SOFR + 2.25% to 18 October
2023 and SOFR + 2.375% thereafter

 

·    Progress continues in completing construction and financing of the
Echo Solar Portfolio, a 36.0 MWdc commercial solar portfolio in Minnesota,
Virginia and Delaware, including the completion of several tax equity
milestone fundings during the quarter and nearing completion of a
back-leverage debt facility. Currently, two projects have achieved commercial
operation, and the four remaining projects are mechanically complete and are
being commissioned for commercial operation during Q3 2023.

·    As announced on 27 July 2023, the Investment Manager continues to
work closely with Whirlwind's asset and operations managers, AEP (the owner of
the Matador substation) and The Electric Reliability Council of Texas (ERCOT)
authorities to resume operations at its 59.8 MW Whirlwind asset which has been
out of service since a tornado on 21 June 2023 destroyed the Matador
substation through which it transmits electricity. A temporary interconnection
is expected to be established during the fourth quarter of 2023 through an
alternative route, which will allow the project to operate at up to 50 MW of
capacity during an approximate 18-month period during which AEP will rebuild
the Matador substation. The estimated impact of these arrangements has been
reflected in the Company's unaudited Net Asset Value ("NAV") as at 30 June
2023.

 

Quarterly NAV Drivers

 

The Company announces its unaudited NAV as at 30 June 2023 on a cum-income
basis was $0.9180 per Ordinary Share (31 March 2023: $0.9394) or $126.8
million (31 March 2023: $129.7 million).

 

The key contributors to the changes in NAV were:

 

·   a $2.0 million increase ($0.0142 per Ordinary Share) due to the
transition to holding the Echo Solar portfolio at Fair Market Value ("FMV")
versus previously accounted for at cost as the projects are completing
construction and being commissioned for commercial operation;

 

·   a $0.8 million increase ($0.0056 per Ordinary Share) due to a 25 bps
decrease in the discount rates used to value the SED Solar Portfolio and
Delran Solar to bring the discount rates applied to those investments in line
with the broader solar portfolio, and updates to merchant curve power prices
on Beacon Solar 2 & 5;

 

·   a $0.6 million increase ($0.0047 per Ordinary Share) due to a decrease
in the deferred tax accrual, largely driven by the decrease to FMV of
investments;

 

·   a $2.1 million decrease ($0.0152 per Ordinary Share) in cash and
accrued financial assets, primarily driven by lower-than-expected energy
production principally due to historically low wind resource during the
quarter at Whirlwind, a phenomenon that was experienced across the U.S.. This
was further compounded by the tornado at Whirlwind's substation on 21 June,
temporarily low availability due to downtime and corrective maintenance
interruptions at two solar projects, fund expenses and interest expenses from
the Company's drawn balance on its RCF;

 

·   a $3.1 million decrease ($0.0227 per Ordinary Share) principally due to
adjusted forecast assumptions related to expected operational downtime at
Whirlwind as announced on 27 July 2023, partially mitigated by business
interruption insurance, alongside partial downtime at one of the solar assets
for extended corrective maintenance, which is expected to be remediated during
Q3 2023; and

 

·   a $1.1 million decrease ($0.0081 per Ordinary Share) in FMV of
investments due in part to the expected quarterly roll-off of distributable
cash flows in the forward-looking discounted cash flow models, partially
offset by equity value build up from debt amortisation at Beacon Solar 2 &
5.

 

The pre-tax discount rates, which were provided by the Company's independent
valuer and used to determine the FMV of investments, decreased slightly this
quarter, on an unlevered weighted average basis, to 7.3% primarily due to
modifications to the discount rates applied to the SED Solar Portfolio and
Delran Solar, as well as the incorporation of the discount rates used to hold
the Echo Solar Portfolio at FMV. Based on market conditions in the U.S., the
Company's independent valuer did not recommend increasing discount rates for
any asset.

 

 

For further information, please contact:

 

 Ecofin Advisors, LLC (Investment Manager)             +1 913 981 1020

 Edward Russell

 Eileen Fargis

 Jason Benson

 Michael Hart

 Peel Hunt LLP (Joint Corporate Broker)                +44 20 7418 8900

 Liz Yong

 Luke Simpson

 Huw Jeremy

 Stifel (Joint Corporate Broker)                       +44 20 7710 7600

 Edward Gibson-Watt

 Rajpal Padam

 Madison Kominski

 Apex Listed Companies Services (UK) Limited (Company  +44 20 3327 9720
 Secretary)

 Martin Darragh

 Maria Matheou
 FTI Consulting (Financial PR)                         +44 79 7607 5797

 Matthew O'Keeffe

 Mitch Barltrop

 Vee Montebello

Further information on the Company can be found on its website
at https://uk.ecofininvest.com/funds/us-renewables-infrastructure-trust-plc/
(https://uk.ecofininvest.com/funds/us-renewables-infrastructure-trust-plc/) .

 

The Company's LEI is 2138004JUQUL9VKQWD21.

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