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

Ecofin US Renewables Infrastructure TrustAnnouncement

02/11/2023 10:15

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RNS Number : 2050S  Ecofin US Renewables Infrastr.Trust  02 November 2023

2 November 2023

 

ECOFIN U.S. RENEWABLES INFRASTRUCTURE TRUST PLC

 

(the "Company")

 

Q3 2023 Operational Update and Net Asset Value

 

Ecofin U.S. Renewables Infrastructure Trust PLC today announces an update on
portfolio operations and its unaudited net asset value ("NAV") as at 30
September 2023.

 

Quarterly Operational Update

 

·    The Company's portfolio generated 52.1 GWh of clean electricity,
equivalent to powering c.19,300 households, during the three months of Q3 2023
from a fully-contracted portfolio of diversified assets with investment-grade
equivalent off-takers and a weighted average remaining PPA term of 13.9 years
(18.6 years excluding Whirlwind).

 

·    Progress continues in completing commissioning 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 the close of a back-leverage debt
facility with Fifth Third Bank on 31 October 2023. Currently, three projects
have achieved commercial operation, and the three remaining projects are
mechanically complete and are being commissioned for commercial operation
during Q4 2023.

·    As announced on 27 July and 2 August 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.

 

o  An updated interconnection agreement has been executed with AEP, which
allows the project to operate and dispatch power through an alternative
substation in Paducah, TX at up to 50 MW of capacity during which time AEP
will rebuild the Matador substation;

o  The Company expects the temporary interconnection through Paducah to be
established by the end of November 2023;

o  The Company has actively pursued business interruption insurance in order
to recoup lost revenue during the downtime since the 21 June 2023 incident and
tentatively expects proceeds to be paid before the end of Q4 2023;

o  The estimated impact of these arrangements has been reflected in the
Company's unaudited NAV as at 30 September 2023.

 

Q3 2023 NAV

 

The Company announces that its unaudited NAV as at 30 September 2023 on a
cum-income basis was $0.8910 per Ordinary Share (30 June 2023: $0.9180) or
$123.0 million (30 June 2023: $126.8 million).

 

The key contributors to the changes in NAV were:

 

·   a $6.1 million increase ($0.0442 per Ordinary Share) due to updates to
various assumptions including the useful life of certain projects (Beacon 2
& 5 and the SED Solar portfolio) and O&M and insurance expenses across
the portfolio;

 

·   a $2.7 million decrease ($0.0198 per Ordinary Share) due to the
conversion to a third-party consultant's merchant energy price forecast (from
EIA);

 

·   a $6.2 million decrease ($0.0446 per Ordinary Share) due to an increase
of approximately 34 bps in the portfolio's weighted average unlevered pre-tax
discount rate to 7.4% as at 30 September, as advised by the Company's
independent third-party valuation services provider, Marshall & Stevens;

 

 

·   a $1.6 million decrease ($0.0151 per Ordinary Share) in cash and
accrued financial assets as quarterly income did not cover operating expenses,
financing costs and dividend payments, primarily driven by lack of revenue at
Whirlwind and high corrective O&M costs at several solar sites, and
increased insurance premiums across the portfolio; and

 

 

·   a $0.6 million increase ($0.0042 per Ordinary Share) due to a decrease
in the deferred tax accrual, largely driven by the decrease to FMV of
investments.

 

 

As part of the Strategic Review announced on 8 September 2023, the Company has
engaged several third-party consultants and independent engineers to evaluate
potential value-enhancing capital opportunities. Subsequent to the reporting
period, the Company received preliminary findings from a congestion study of
the ERCOT zone, which is anticipated to positively impact the future valuation
of the Whirlwind project based on an outlook of reduced curtailment events
impacting the project. This outlook is largely driven by significant expected
load increases in the ERCOT west zone from crypto-mining and oil & gas
drilling activity, limited new wind projects expected to come into the market
in the ERCOT west zone, and a large volume of production tax credits (PTCs)
existing wind projects between 2024 and 2029.

 

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

                                                        +44 20 3327 9720

 Apex Listed Companies Services (UK) Limited (Company
 Secretary)

 Martin Darragh

 Maria Matheou

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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