US Solar Fund : Annual financial and audit reports

US Solar Fund

US Solar Fund PLC

(Company Registration Number 11761009)

ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS

for the year ended 31 December 2022

Renewable energy. Sustainable investments.

US Solar Fund PLC

INVESTMENT POLICY

US Solar Fund plc (USF or the Company) is listed on the premium segment of the London Stock Exchange and aims to provide investors with attractive and progressive dividends with an element of capital growth by investing in a diversified portfolio of solar power assets in North America and other OECD countries in the Americas.

OBJECTIVES

The Company acquires or constructs, owns and operates solar power assets that are expected to have an asset life of at least 30 years and generate stable and uncorrelated cash flows by selling electricity to creditworthy offtakers under long-term power purchase agreements (PPAs).

INVESTMENT MANAGER

USF is managed by New Energy Solar Manager, (NESM). NESM was established in 2015 and has committed a total of $1.3 billion to 57 utility-scale solar assets, 55 of which are in the US, totalling 1.2 gigawatts (GWDC).

HISTORY OF THE COMPANY

The Company's initial public offering (IPO) in April 2019 raised $200 million; the funds were all committed or invested by December 2020 and the solar power assets were fully operational by that date. In May 2021 the Company raised an additional $132 million as part of a 12-month Placing Program. In October 2022, the Company announced it had entered a Strategic Review and Formal Sale Process (Strategic Review). Since the Strategic Review commenced the Board and its advisors have engaged with a significant number of parties and, following receipt of indicative proposals, have shortlisted several parties who have proceeded to the next phase of the Strategic Review process.

PORTFOLIO

USF's portfolio consists of 42 projects across four US states with a combined capacity of 543 megawatts (MWDC). Its assets are fully operational, generating 9041 gigawatt-hours (GWh) over the twelve-month period to 31 December 20222, compared to 851GWh in the prior year. Power offtake agreements are in place for 100% of generation with creditworthy counterparties with a weighted average remaining life of 13.8 years3, providing a resilient income stream, uncorrelated to spot energy prices.

TARGET RETURN USF aims to deliver an annual dividend of 5.5 cents per Ordinary Share, growing at 1.5 to 2% per annum, for each financial year from and including 2021. The target annual dividend for 2023 is 5.66 cents per Ordinary Share, a 1.5% increase over the prior year's annual dividend of 5.58 cents per Ordinary Share.

• 1. Portfolio generation data includes the second tranche of MS2 from the end of May, which is when the transaction reached financial close. Prior to the end of May, portfolio generation data included only the first tranche of MS2, for a portfolio capacity of 493MWDC.

• 2. Includes reimbursed curtailment.

• 3. Remaining PPA term from 31 December 2022.

US SOLAR FUND PLC

Annual Report and Audited Financial Statements

CONTENTS

Strategic Report

• 1. Highlights ........................................................................................................................................................................... 1

• 2. Chair's Statement ........................................................................................................................................................... 3

• 3. Investment Manager's Report ................................................................................................................................. 7

• 4. Environmental, Social and Governance ............................................................................................................ 21

• 5. Principal Risk and Uncertainties .......................................................................................................................... 29

• 6. Board of Directors ...................................................................................................................................................... 39

Directors' Report

7. Directors' Report ........................................................................................................................................................ 43

8. Directors' Responsibility Statement .................................................................................................................. 49

9. Corporate Governance Report ............................................................................................................................ 51

10. Audit Committee's Report ...................................................................................................................................... 67

11. Directors' Remuneration Report ......................................................................................................................... 73

12. Management Engagement Committee's Report ......................................................................................... 77

Financial Statements

• 13. Independent Auditor's Report .............................................................................................................................. 81

• 14. Statement of Profit and Loss and Other Comprehensive Income ...................................................... 89

• 15. Statement of Financial Position ............................................................................................................................ 90

• 16. Statement of Changes in Equity ........................................................................................................................... 91

• 17. Statement of Cash Flows ......................................................................................................................................... 92

• 18. Notes to the Financial Statements ...................................................................................................................... 93

• 19. Directors and Advisers .......................................................................................................................................... 111

• 20. Notice of the Annual General Meeting of US Solar Fund PLC ........................................................... 113

• 21. Alternative Performance Measures (APM's) Glossary ......................................................................... 119

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