New fund plans USD-250m London IPO ahead of US investments

Solar panels in USA. Author: Pete Jelliffe. License: Creative Commons. Attribution-NoDerivs 2.0 Generic.

February 27 (Renewables Now) - US Solar Fund Plc (USF), a newly-formed investment firm targeting the US solar power market, plans to raise USD 250 million (EUR 219.6m) through an initial public offering (IPO) in London.

The UK-based company is managed by New Energy Solar Manager (NESM), as is also Australia-listed New Energy Solar Ltd (ASX:NEW). NESM has identified a pipeline of opportunities in the US with a total value of more than USD 4.8 billion. More specifically, there are 14 opportunities made up of over 60 projects located across 13 US states, each having a power purchase agreement (PPA) in place with predominantly investment grade off-takers. The average PPA term is estimated at 15.2 years, ranging from 11 years to 25 years.

USF plans to commit to, or invest in, some of these assets shortly after its shares are admitted to trading on the premium segment of the London Stock Exchange's main market, which is expected to happen on or around March 20, 2019.

The fund said in a statement that it expects to invest or commit the initial proceeds within six to nine months of admission, while the solar power plants are seen to enter into service within the following 12 months.

The investment vehicle noted that the initial annual dividend yield will be between 2% and 3% until all solar assets become fully operational, while the target annual dividend after that amounts to 5.5% with an average growth rate of 1.5% to 2% per year.

"With an anticipated target return of over 7.5%, USF offers investors long-term, stable, risk-adjusted returns along with positive social impact," stated Gill Nott, chair of the board of USF.

Fidante Capital serves as sponsor, global coordinator and sole bookrunner of the IPO.

(USD 1.0 = EUR 0.879)

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