Ecofin US Renewables has published its first set of results which cover the period from when it was incorporated on 12 August 2020 through its listing on 22 December 2020 and up to the end of December 2021. Since IPO, the trust has returned 2.8% in NAV terms and 0.8% in share price terms. The trust’s total profit before tax was $3.4m and earnings per share were 3.7 cents. Dividends totalling 3.2 cents have been declared – more than the 2-3 cents targeted at IPO.
All of the IPO proceeds have been invested. The portfolio had 61 renewable energy assets capable of generating 155MWh at 31 December 2021. Of the total 61 closed assets, 59 assets were in operation and 2 assets were under construction and scheduled to become operational.
169.2GW has been generated since IPO, avoiding the production of the equivalent of 89,458 tonnes of CO2. At 31 December 2021, the energy generated had been sold on long-term contracts stretching out 16.7 years on average. Total energy production was 1.9% ahead of budget. Of the total, the solar assets generated 130.2 GWh, 3.6% lower than budget and the wind asset Whirlwind generated 39.0 GWh, 25.7% higher than budget.
The NAV as at 31 December 2021 was originally announced as 100.4 cents per share. This was updated to 98.9 cents on 11 March 2022 to reflect an accrual for deferred tax in the US on assets acquired shortly after the IPO. The valuation of the portfolio at 31 December 2021 was supported by an independent valuation firm, Marshall & Stevens, and reflects an underlying blended weighted average pre-tax discount rate of 7.2%.
At 31 December 2021, the company had $45m of unlevered equity commitments ($4.5m for closed construction assets and a committed pipeline of 10 solar assets of 48 MW in the Echo Solar Portfolio in Virginia/Delaware totalling ~$40.0m) and $62m of additional opportunities in exclusivity. In addition, the near-term pipeline of potential investment opportunities remained very healthy and totalled $3.0bn across 55 deals. That suggests to us that the company could grow significantly from here.
On 31 December 2021, the company had a gross asset value of $172.7m and total recourse and non-recourse debt of $52.1m, resulting in total leverage of 30.2%. Within that, US subsidiaries had debt balances of $47.1m and $5m had been drawn on the company’s $65m revolving credit facility (provided by KeyBank, one of the premier lenders to the US renewable energy industry).
The revolving credit facility comprises a $50m, two-year tranche priced at LIBOR plus 1.75% and a $15m, three-year tranche priced at LIBOR plus 2.00%.
In addition, on 7 January 2022, a wholly-owned US subsidiary of the company – Westside Solar Partners, LLC (i.e. “Echo Solar – MN”) – entered in a $15.9m non-recourse construction loan related to and secured by the 13.7 MW Minnesota commercial solar asset within the Echo Solar Portfolio.
RNEW : Ecofin US Renewables well placed for expansion