## US SOLAR FUND PLC US Solar Fund PLC Annual report and financial statements 2024 ## ANNUAL REPORT AND ## FINANCIAL STATEMENTS ## FOR THE YEAR ENDED 31 DECEMBER 2024 ## RENEWABLE ENERGY ## SUSTAINABLE INVESTMENTS ## US SOLAR FUND PLC (USF OR THE COMPANY) IS A RENEWABLE ENERGY ## FUND THAT AIMS TO PROVIDE INVESTORS WITH ATTRACTIVE AND ## SUSTAINABLE 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. ### The Company develops, acquires or constructs solar power assets that ### are expected to have an asset life of at least 30 years and generate ### stable cash flows by selling electricity to creditworthy offtakers under ### long-term power purchase agreements. The Company’s portfolio ### currently consists of 41 operational solar projects with a total capacity ### of 443MW DC , all located in the United States. OVER VIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS 1 ## Company facts | The Company is a | The Company was | The total number of | | --- | --- | --- | | closed-end investment | admitted to the premium | Ordinary Shares in issue | | trust incorporated under the | listing segment of the | is 307,833,387 which are | | laws of England (company | Official List of the FCA and | denominated in both | | number 11761009). | to trading on the main | US Dollars (ticker ‘USF’) and | | | market of the London Stock | Sterling (ticker ‘USFP’). | ### Exchange on 16 April 2019. | The Company’s current | Since 1 December 2023, the | $194.2 million | | --- | --- | --- | | portfolio comprises of 41 | Company has been managed | Net Asset Value | | assets located in California, | by Amber Infrastructure | | ### $132.4 market ### North Carolina, Oregon and Investment Advisor, LLC ### capitalisation ### Utah with a total capacity of (AIIA or the Investment ### 443MW DC . Manager), part of the Amber ### Infrastructure Group (Amber). ## Contents 1 OVERVIEW 54 CORPORATE GOVERNANCE *APMS Certain words and terms used throughout this 2 2024 highlights 54 Summary of Investment Policy Annual Report and Financial Statements are defined 55 Board of Directors from page 98. Where alternative performance 4 STRATEGIC REPORT measures (APMs) are used, these are identified by 56 Directors’ Report being marked with an *. In accordance with ESMA 4 Chair’s Statement 58 Corporate Governance Report Guidelines on APMs, the Board has considered 8 Why Invest? what APMs are included in the Annual Report and 64 Audit Committee Report financial statements which require further 9 Market Outlook 67 Directors’ Remuneration Report clarification. An APM is defined as a financial 10 Objectives measure of historical or future financial performance, 69 Directors’ Responsibilities Statement financial position, or cash flows, other than a 12 Portfolio Overview financial measure defined or specified in the 18 Operating Review applicable financial reporting framework. 70 FINANCIAL STATEMENTS 31 Responsible Investment APMs included in the Annual Report and financial 70 Independent Auditor’s Report statements are identified as non-GAAP measures 42 Risk and Risk Management 78 Financial Statements (Audited) and are defined within the APM Section and 52 Section 172 Glossary. 82 Notes to the Financial Statements (Audited) COVER IMAGES Front cover: Milford 127.8MW DC (Utah) Photo credit: US Solar Fund plc 97 ALTERNATIVE PERFORMANCE Inside cover: Freemont (Heelstone Portfolio) MEASURES* 6.4MW DC (North Carolina) 98 GLOSSARY* Photo credit: US Solar Fund plc 101 KEY CONTACTS 102 NOTICE OF AGM Visit our Company website 1 Figures as at 31 December 2024 unless otherwise specified. https://www.ussolarfund.co.uk/ US Solar Fund plc 1 Annual Report and Financial Statements 2024 ## 2024 HIGHLIGHTS ## Financial highlights ## $194.2m $0.63 (13.4%) 2 Net Asset Value (NAV) NAV per share* NAV total return * 2023: $258.2m 2023: $0.78 2023: (1.7%) | $28.9m | | 1.10x | | $(34.8m) | | | --- | --- | --- | --- | --- | --- | | | 3 | | 4 | | 5 | | Distributions to shareholders | * | Operational Dividend cover | * | IFRS loss for the year | | | 2023: $18.7m | | 2023: 0.50x | | 2023: $(43.1m) loss | | | (44.3%) | | $0.43 | (31.8%) | | | --- | --- | --- | --- | --- | | | 6 | | | 7 | | Total Shareholder Return (TSR) | * | Share price as at 31 December 2024 | Discount to NAV | * | | 2023: (34.4%) | | 2023: $0.54 | 2023: (30.8%) | | 2 NAV total return is based on dividends paid throughout the period and NAV per share movement since inception. 3 Distributions to shareholders includes dividends related to the FY (includes $18.6m returned by way of tender offer for 2024). Distributions to shareholders excluding the tender offer distributions total to $10.3m. 4 Operational dividend cover. See pages 24 to 25 for further dividend cover analysis. 5 Includes unrealised losses on the portfolio fair value for the year ended 31 December 2024. 6 Total return to shareholders is based on dividends paid and reinvested (at ex-dividend date) throughout the period, and share price movement since the issue price of $1.00. This figure excludes distributions returned to shareholders via tender offers. 7 The percentage by which the closing share price on comparable dates exceeds/(falls short of) the NAV per share. US Solar Fund plc 2 Annual Report and Financial Statements 2024 OVER VIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS  South Robeson (Granite Portfolio) 6.3MW DC (North Carolina) 10 11 ## Operational highlights Environmental highlights ## 41 443MW 448,600t ## DC Operating solar assets Total capacity tCO 2 emissions avoided 2023: 41 2023: 443MW DC 2023: 480,900t ## 698GWh (9.0%) 64,600 Total electricity generation Generation against forecast Equivalent US homes powered 8 2023: 816GWh 2023: (7.2%) 2023: 83,100 ## 106,800 | 10.9 years | | BBB+ | | | --- | --- | --- | --- | | | 9 | | Equivalent US cars removed | | Weighted average PPA term remaining | | Average offtaker credit rating | | | 2023: 11.9 years | | | from the road | 2023: BBB+ 2023: 104,500 8 The total electricity generation data includes Mount Signal 2 (MS2) for the first six months of 2023. 9 Remaining PPA term from 31 December 2024. 10 Environmental figures use actual generation figures for the period. US CO 2 emissions displacement is calculated using data from the US Environmental Protection Agency’s ‘Avoided Emissions and geneRation Tool’ (AVERT), Equivalent US homes and cars removed figures are based on CO 2 emissions displaced and data from the US Environmental Protection Agency and US Energy Information Administration. 11 Based on the total electricity generation data includes MS2 for the first six months of 2023 for 2023 figures. US Solar Fund plc 3 Annual Report and Financial Statements 2024 ## CHAIR’S STATEMENT ## Dear Shareholders, On behalf of the Board, I present the Company’s Annual Report and Financial ## 2024 has been a challenging year for Statements for the period from 1 January to 31 December 2024. ## the Company and investment 2024 has been a challenging year for the Company and investment companies more ## companies more widely, with tough widely, with tough market conditions continuing to impact trading activity and ## market conditions continuing to valuations. Across the sector, discounts to underlying net asset value have widened during the period, and various ## impact trading activity and macroeconomic and market-specific events have had a negative impact on overall ## valuations. The Company has valuations. Throughout 2024, the Company’s shares ## remained proactive in addressing traded at a sustained discount to NAV, and over the period to 31 December 2024, the ## issues within its control. Company’s audited NAV decreased to $194.2 million. GILL NOTT The primary reason for this decrease is an CHAIR increase in discount rate assumptions. This is partially attributable to movements in base rates, but predominantly due to the widening of equity risk premiums applicable to US renewable energy assets (solar). The results of the US federal election in November 2024 and statements made by the incoming administration during the period influenced market dynamics and increased discount rates relevant to the Company’s valuation. 4 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS | The Company has remained proactive in | | FINANCIAL PERFORMANCE | Notable areas of uncertainty include the | | --- | --- | --- | --- | | addressing issues within its control and | | Over the period to 31 December 2024, | extent to which the new administration will | | during the period has: | | the Company’s audited NAV decreased to | modify existing federal programs (such as | | | | $194.2 million (31 December 2023: $258.2 | those established under the IRA) aimed at | | – delivered on its commitment to return | | million) and NAV per share to $0.63 | supporting renewables development in the | | | capital to shareholders, which was | (31 December 2023: $0.78). | US. This uncertainty created headwinds | | | achieved via a tender offer that | | impacting confidence in near-term | | | concluded in June 2024, returning | The primary reason for this decrease was | renewables development including | | | $18.6 million to participating | an increase in discount rates to reflect US | (i) potentially longer development timelines | | | shareholders; | market conditions. In addition, during the | for early-stage projects placing pressure on | | | | period, approximately $18.6 million was | near-term cashflows and (ii) lack of capital | – progressed a detailed analysis of options returned to shareholders. A detailed sources to fund development pipelines. available to the Company to refinance its explanation of NAV movements during the Among other consequences, this could lead existing senior debt facilities and as a period is included on page 26 of this report. to US renewables developers and owners result of such analysis, is taking steps to pursuing strategies to recycle their own conclude a refinancing expected to be INCREASE IN DISCOUNT RATES capital, including selling off operational completed by the end of April 2025; The increase in discount rate assumptions is assets adding to the supply of projects for achieving multiple key objectives as the result of market dynamics which have sale and depressing prices for operational detailed below; negatively impacted asset valuations within assets during 2025. Proposed tariffs – initiated other strategies consistent with the US renewables sector. This fall in wider potentially impacting the supply chain for the Company’s disciplined approach to asset valuations has been driven by multiple renewable components also increased capital management, including resizing factors. Incentives and stimulus provided in uncertainty. the Company’s revolving credit facility the Inflation Reduction Act (IRA) enacted in (RCF) and reducing the target dividend 2022 accelerated the development of new Collectively, the outcome is that higher on an interim basis to ensure the solar projects in the US. Anecdotally, this discount rate assumptions have been robustness of the Company's inflated the valuation of development assets applied by the Company’s independent balance sheet; | | | and large-scale development platforms, to | valuer, having an overall negative impact | | --- | --- | --- | --- | | – instigated multiple asset management | | the detriment of smaller platforms and | on the Company’s 31 December 2024 | | | related activities intended to support | portfolios focused on operational assets. | valuation. The Board is of the view that | | | operational efficiencies and portfolio | | the decreased NAV resulting from the | | | performance, including replacing | Statements made by the President-elect | movement in discount rates during the | | | underperforming operations and | during his campaign for the November 2024 | period does not reflect the fundamental | | | maintenance subcontractors and | US federal election, and subsequently, | long-term value of the Company’s assets. | | | developing a master diagnostic and | which contained anti-clean energy and | | | | remediation plan to strategically and | anti-IRA sentiments, have created near-term | | | | methodically address technical issues | uncertainties in the US renewable energy | | | | impacting overall portfolio performance; | market due to the wide array of potential | | 12 – continued to enhance the quality of policy outcomes . reporting and disclosures as well as providing shareholders with regular updates in order to increase communication and transparency; and – in furtherance of the Board’s succession plan, and in direct response to shareholder feedback, concluded a recruitment process to select a new Board member following the resignation of Rachael Nutter, leading to the appointment of US-based Mark Lerdal as an independent Non-Executive Director. 12 An Executive Order entitled 'Unleashing American Energy' issued on the date of inauguration, 20 January 2025, followed up on statements made by the President-elect prior to and after the US federal election November 2024, creating policy objectives which continue to create uncertainty within the US renewable market and more broadly. https://www.whitehouse.gov/ presidential-actions/2025/01/unleashing-american-energy/ US Solar Fund plc 5 Annual Report and Financial Statements 2024 ## CHAIR’S STATEMENT CONTINUED ## The Board and I maintain an optimistic outlook for the ## Company because of its robust operational portfolio with ## assets located in states which continue to support ## renewable generation. | PORTFOLIO PERFORMANCE | Continuing to implement the diagnostic | RETURN OF CAPITAL AND DIVIDENDS | | --- | --- | --- | | Portfolio performance during the period | andremediation plan is an ongoing priority. | Over the period, the Board delivered on its | | trailed expectations, with total portfolio | The Investment Manager is confident in a | previously stated commitment to return | | generation 9.0% below budget, due in part | positive outlook for portfolio performance | capital to shareholders, which was achieved | | to below forecast solar irradiance but | as the diagnostic and remediation plan | via a tender offer which concluded in June | | predominantly due to technical (non-weather) | continues to be implemented and expects | 2024. The Company acquired approximately | | related issues. | that the asset management initiatives | 7% of its issued share capital at a significant | | | progressed during 2024 will result in | premium to the prevailing market price, | | Performance during the first quarter of 2024 | improved performance in 2025 and beyond. | returning $18.6 million to participating | | was materially impacted by below forecast | | shareholders. | | solar irradiance particularly impacting Milford | CAPITAL MANAGEMENT | | | (the Company’s largest asset). Performance | ANDREFINANCING | Alongside the tender offer and consistent | | during the second, third, and fourth quarters | During the period, the Board reduced the | with its objective to improve operational cash | | of 2024 were materially impacted by | RCF from $40 million to $20 million. The | dividend coverage, the Board determined it | | non-weather factors including losses due to | updated facility size reduced costs whilst | was prudent to reduce the target dividend | | unscheduled outages and unscheduled | maintaining a smaller facility to support the | on an interim basis to 2.25 cents per share. | | maintenance, and lower than forecast | Company’s operational/ongoing liquidity | During the period, the Company approved | | inverter availability, resulting in lost | requirements, particularly given the | $10.3 million in dividends, in line with its | | generation at key sites. | Company does not intend to make further | interim annual dividend target. As previously | | | investments. During the period, and | stated, the Board intends to revisit the | | Among other objectives, the diagnostic and | currently, the RCF remained undrawn. The | interim dividend target once the proposed | | remediation plan that has been developed | Board will continue to assess the ongoing | refinancing is concluded and the extent of | | by the Investment Manager’s asset | need of the RCF. | improvements to coverage are determined. | management team during the period, | focuses on reducing the time taken to | The Board announced in April 2024 its | | --- | --- | | identify individual outages, improving the | intention to carry out a potential refinancing | | availability of replacement parts, and | of existing debt facilities through the | | reducing lead times for repair crews to | long-dated financing available in the US | | mobilise to site and complete repairs. | private debt markets. Based on subsequent | | The plan also prioritises the analysis of more | analysis, the Board determined a bank | | substantive initiatives such as re-powering | refinancing to be a more attractive option | | at some of the Portfolio’s older sites. | for the Company because of the greater | | In addition, steps taken to enhance data | flexibility of refinancing terms. The proposed | | collection, including in-housing of data | refinancing will proactively address the near | | analytics, will continue to enable earlier | and medium-term refinancings required in | | detection and remediation of issues. | connection with the Euryalus, Heelstone and | Milford portfolios, as well as improving near-term distributable cashflow and optimising the Company’s capital structure. The Board expects the proposed refinancing to conclude by the end of April 2025. US Solar Fund plc 6 Annual Report and Financial Statements 2024 STRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS | GOVERNANCE | DISCONTINUATION VOTE | In respect of matters within our control, | | --- | --- | --- | | Mark Lerdal was appointed as an | Because the Company has traded at an | we are confident that the long-standing | | independent Non-Executive Director | average discount to NAV in excess of 10% | financial and technical expertise that resides | | effective as of 1 October 2024. Mark is | over the course of 2024, the Company’s | within the Investment Manager and its asset | | based in the US and has over thirty years of | Articles require that a special resolution be | management team will deliver shareholder | | experience in the energy and renewables | proposed at the Company’s forthcoming | value through proactive management of | | sectors with a long-standing track record of | Annual General Meeting (AGM) on 20 May | the portfolio and disciplined capital | | realising value in the US solar market. The | 2025, for shareholders to vote to wind up or | management of the Company. | | Board now has two US-based directors with | otherwise reconstruct the Company. If a | | | extensive experience in the solar sector, | discontinuation resolution is passed, the | The Board continues to believe that the | | which has been invaluable during the recent | Company’s Articles provide the Board with | current discount to NAV, driven by prevailing | | consideration of refinancing options and the | four months to put forward a proposal to | market conditions, does not reflect the | | ongoing strategic exercise to maximise | shareholders. Given worsening US market | underlying long-term value of the Company | | shareholder value. Further information on the | conditions, the Board believes it would be | and remains committed to preserving | | recruitment process for Mark Lerdal and the | very difficult to achieve a realisation of the | shareholder value. The Board and | | composition of the Board can be found on | Company’s assets other than at a distressed | Investment Manager will continue to monitor | | page 55. | price, and does not recommend a | the market for comparable sales of | | | discontinuation. | performing operational portfolios, with a | | We have undertaken and continue to | | view to realising value from the Company’s | | engage in shareholder meetings to | OUTLOOK | assets when the time is right. The current | | understand views and reflect on options | In spite of the uncertainties created by | volatile and uncertain market conditions | | available to the Company to maximise value | the breadth of the Unleashing American | means that now is not the right time to | | for our shareholders. | Energy Executive Order, the long-term | attempt a sale of the Company’s portfolio. | | | outlook for renewable energy in the US | For this reason, the Board recommends | | We have also closely monitored the activities | remains strong on the back of state-level | that shareholders vote against the | | of the Company’s peers to ensure relevant | mandates and the overall cost | discontinuation of the Company at the | | benchmarks are considered. We have | competitiveness of renewable energy. | forthcoming AGM. | carefully reviewed recent trends within the | sector to change management fee | The Board and I maintain an optimistic | Thank you for your continued patience | | --- | --- | --- | | arrangements. Given the recent | outlook for the Company because of its | and support. | | appointment of the Investment Manager as | robust operational portfolio with assets | | | of 1 December 2023, on terms which were | located in states which continue to support | | | presented at a general meeting of | renewable generation. For existing | | | shareholders in November 2023, the scale of | operational projects (such as the Company’s | | | the Company, and its immediate objectives, | portfolio), these are less likely to be impacted | | | we do not consider that it would serve the | by the new administration's policy objectives, | GILL NOTT | | interests of the Company to change the | which appear to focus on development | CHAIR | | current management fees at this time. | assets rather than assets in their operational | 9 April 2025 | phase. Trading conditions are likely to remain positive for the Company, particularly if the development of new renewable resources fails to meet expected rising demand, leading to price increases. Visit our Company website https://www.ussolarfund.co.uk/ US Solar Fund plc 7 Annual Report and Financial Statements 2024 ## WHY INVEST?  Freemont (Heelstone Portfolio) 6.4MW DC (North Carolina) ## The Company’s investment objective is to provide investors ## with attractive and sustainable dividends with an element of ## capital growth by investing in a diversified portfolio of solar ## power assets in North America and other Organisation for ## Economic Co-operation and Development (OECD) countries ## in the Americas. ## MARKET OPPORTUNITY INVESTMENT OPPORTUNITY ### Opportunity to invest in – Stable cash flow profile ### the renewable energy underpinned by long-term ## 80% ### market in the US power purchase Over the next ten years, ### approximately 80% of forecast agreements (PPAs) with ### – Portfolio of 41 operational ### revenue will be generated investment grade offtakers ### assets located in states that from contracted sources | | | are committed to policies | – Highly diversified portfolio | | | --- | --- | --- | --- | --- | | | | supportive of renewable | | across locations and | | | | energy generation | | counterparties | | | – Long-term demand for | | – Conservative capital | | | 40 | | power supported by | | structure and mature | | | | increasing demand for | | portfolio that is not reliant | of 41 assets within the Company’s ### portfolio are certified as electricity on federal tax incentives Qualifying Facilities, and are ### – The impact of potential therefore eligible for favourable ### changes in US federal treatment for revenue recontracting ### energy policy arising from ### the November 2024 US ### federal election may benefit ### existing operational solar ### assets such as the US ## 41% Solar portfolio As at 31 December 2024, the Group’s Gearing*, calculated as total debt outstanding to GAV, was approximately 41% US Solar Fund plc 8 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## MARKET OUTLOOK ## Solar generation continued to grow strongly during 2024. ## New installations of solar generation assets of circa 50GW DC , 13, 14 ## represented a 21% increase from 2023 . The US renewables ## market continues to be supported by; – State and local mandates for renewable Demand for renewable energy remains 2023 levels, albeit well below the levels 17 | energy generation. Mandated reductions | strong. However, new development activity | experienced in 2021–2022 | . While some | | --- | --- | --- | --- | | in carbon emissions from regional | continues to face headwinds created by | market analysts expect US renewable | | | electricity supply systems create binding | several factors including bottlenecks in | energy M&A transaction volumes to increase | | | renewable procurement requirements for | connecting to the grid, trade policy and | again in 2025 versus 2024, the near-term | | 18 local utilities and energy suppliers. tariffs increasing the costs of imported outlook remains “complex” for all market equipment, long order lead times for participants given the current uncertainties – Corporate sustainability objectives create key equipment, and resistance to new relating to US energy policy and renewable additional demand for renewable energy. development in urban and other energy tax credits. – Federal tax credits and other long populated areas. standing government incentives, Average solar PPA prices rose across the continue to provide funding support for | | | | Additionally, recent executive orders and | | US in 2024, according to data from LevelTen | | | --- | --- | --- | --- | --- | --- | --- | | | new projects. | | | | | 19 | | | | | policy statements issued by the new federal | | Energy | . Powerprices remain robust and | | – New technology such as battery storage | | | | 16 | | | | | | | administration | have introduced new | have consistently remained higher than the | | | | capacity allows system operators to | | uncertainties to the US renewable energy | | historical lows experienced in 2019 over the | | | | better manage and mitigate intermittent | | industry relating to potential changes to | | last 5 years. | | | | renewable generation. | | federal energy policy and to renewable | | | | | – Forecast load growth from the projected | | | energy tax credits, which could impact | | The states in which the Company’s assets | | | | build-out of data centres and growing | | new development activity. | | are located, and its primary offtake | | | | domestic investment in the onshoring | | | | counterparties, continue to provide a | | | | and reshoring of manufacturing capacity | | M&A transaction volumes in the US | | supportive backdrop for renewable | | | | | 15 | renewable energy market achieved a | | generation. | | | | in critical industries | . | | | | | modest improvement in 2024 compared to State MW State mandates Utility targets 20 DC | North Carolina 168 Net-zero emissions | | Duke Energy: corporate target of 50% reduction in CO | 2 emissions by 2030. | | --- | --- | --- | --- | | | electricity by 2050 | In Carolinas, aiming to reach 15GW of solar by 2038 | | | Oregon 140 Net-zero emissions | | Portland General Electric: corporate target of 80% carbon reduction by 2030 | | electricity by 2040 Utah 128 Voluntary goal of 20% PacifiCorp: corporate target of ~70% reduction in system-wide carbon renewable by 2025 emissions from 2005 level by 2030, and net-zero by 2050 California 7 60% renewable energy by California Public Utility Commission: has identified a need for 57.5GW 2030, and net-zero emissions ofnew solar capacity by 2045 to achieve stated emissions reduction targets electricity by 2045 13 SEIA/Wood Mackenize Power & Renewables U.S. Solar Market Insight 2024 Year in Review. (Solar Market Insight Report 2024 Year in Review – SEIA). 14 Energy Information Administration Short-Term Energy Outlook, March 2025 (Short-Term Energy Outlook – U.S. Energy Information Administration (EIA)). 15 Grid Strategies (National-Load-Growth-Report-2023.pdf (gridstrategiesllc.com)). 16 See White House Executive Order “Unleashing American Energy” 20 January 2025. 17 LevelTen Energy, Renewable M&A State of the Market Report – H2 2024. 18 FTI Consulting, U.S. Renewable Energy M&A: Review of 2024 and Outlook for 2025. 19 LevelTen Energy, Q4 2024 North America PPA Price Index, (LevelTen Energy Q4 2024 PPA Index). 20 Sources: Duke Energy 2023 Carolinas Resource Plan (https://duke-energy.com); Portland General Electric: PGE 2023 Environmental, Social and Governance Report (https://portlandgeneral.com/); PacifiCorp 2023 Integrated Resource Plan (https://pacificorp.com); CPUC 2023 Preferred System Plan (https://www.cpuc.ca.gov/). US Solar Fund plc 9 Annual Report and Financial Statements 2024 ## OBJECTIVES | The Company’s financial, operational and | The Board believes that, during the period, | | --- | --- | | environmental highlights are set out on | prevailing market conditions were not | | pages 2 to 3. | conducive to the Company completing a | ## REPORTING AND sale of the assets or the Company and a ## AIIA’s objective as Investment Manager of such did not initiate a process to further DISCLOSURE the Company is to provide ongoing advice realise the value of the portfolio of assets. ### to the Board and shareholders on actionable Improving the general options to maximise shareholder value. The Board and Investment Manager will ### approach to disclosure One such option is the sale of the continue to closely monitor changes to ### and providing information Company’s portfolio. market conditions that might suggest a ### favourable environment capable of delivering to shareholders allowing On an ongoing basis, the Investment value to shareholders. Relevant market ### comparison across the Manager evaluates (i) opportunities to indicators may include evidence of ### peer group. enhance the attractiveness of the Company comparable portfolios transacting at and (ii) prevailing market conditions and the appropriate valuations, a constructive likely impact of such conditions on realising market dynamic for sellers of operational Under the Investment Manager’s the value of the Company’s assets, in each assets (i.e.. supply exceeds demand), strong guidance, USF has improved case to ensure that the Company is in the trading volumes, a stable policy outlook, and disclosures and provided additional best position to access and transact upon a more favourable interest rate environment. information in its reports for the benefit options that maximise shareholder value. of existing and prospective In the meantime, the Investment Manager shareholders. During the period, the Investment Manager will continue to act as a responsible steward focused on (i), introducing asset of the Company and its assets, and remain As part of increased transparency in management initiatives to improve portfolio focused on taking steps to optimise, reporting, an operational dividend cover performance and (ii) capital management enhance and position the Company for a has been included in addition to the strategies to enhance the robustness of the future liquidity event which delivers value total dividend cover as previously Company’s balance sheet. toshareholders. reported. A more detailed explanation of the buildup of NAV and portfolio movement bridge, enhancements to the portfolio’s forecast cash generation disclosures along with clear disclosure on the fixed elements of the revenue streams are also included. US Solar Fund plc 10 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS  Cotten Farm (Heelstone Portfolio) 6.8MW DC (North Carolina) ## ASSET ## MANAGEMENT ### Disciplined approach to ### asset management ### focused on decreasing ### unplanned outages. A diagnostic and remediation plan has ## COMMUNICATION CAPITAL been developed by the Investment Manager’s asset management team ## STRUCTURE and is now being implemented which focuses on: ### AIIA and the Board are The Investment Manager ### focused on improving and the Board are seeking – Reducing the time taken to identifyindividual outages ### shareholder communication to optimise the current – Improving the availability of ### and will seek to address capital structure to align replacement parts ### issues that are taking up with the Company's stated – Reducing lead times for repair crews to mobilise to site and ### time and attention for objectives of ensuring the complete repairs ### each shareholder. balance sheet remains – Prioritising analysis of more ### robust in the current substantive initiatives such as Both the Investment Manager and the re-powering at some of the ### macroeconomic Board are committed to providing portfolio’s older sites ### environment. regular and transparent communications Ongoing improvements to enhance to the Company’s shareholders. data collection, including in-housing The Board and the Investment ofdata analytics, will continue to be Manager have reduced the RCF from pursued to enable earlier detection $40 million to $20 million and will and remediation of issues. continue to assess the ongoing need for the RCF. The Board and Investment Manager have taken a pro-active approach to The Board announced its intention making changes aimed at improving tocarry out a potential refinancing in the asset management and asset April 2024. Following analysis, a bank performance during the year. It is refinancing was determined to be believed that the improvements the more attractive option and is made through 2024 should result expected to conclude by the end in improved performance in of April 2025. 2025 and beyond. US Solar Fund plc 11 Annual Report and Financial Statements 2024 ## PORTFOLIO OVERVIEW ## As at 31 December 2024 the ## Company owned 41 utility scale ## solar projects, totalling 443MW DC . ## All assets in the Company’s portfolio ## are operational and are generating ## revenue for the Company. 34 38 33 32 39 40 30 29 41 ## Oregon 31 The Company owns ten solar assets located in Oregon with a collective capacity of 140MW DC . These assets comprise the Euryalus portfolio (four assets acquired by the Company in 2020 pre-COD) and a portion of the 1 Heelstone portfolio (six assets acquired by the Company as operational assets in 2020). ## 10 27 Assets 28 ## 140MW Capacity ## 41 Assets | California | | Utah | | | --- | --- | --- | --- | | The Company owns two solar | | The Milford asset is the Company’s | | | assets located in southern | | single largest asset with a capacity | | | California with a collective capacity | | of 128MW | DC . Milford was the | | of 7MW | DC . These assets comprise | Company’s first investment | | ## 4 a portion of the Heelstone portfolio acquired in 2019, pre-construction, States acquired by the Company as and achieved commercial operational assets in 2020. operations in November 2020. ## 2 7MW 1 128MW ## 443MW Assets Capacity Asset Capacity ## DC Total capacity US Solar Fund plc 12 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS 22 37 35 3 6 23 15 5 24 21 10 25 9 11 | | | | 20 | | 2 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 8 | 4 | | 19 | 17 | | | | | | | | | | | 12 | | | | 7 | | 16 | 18 | 26 | | 13 | 36 | | | 14 ## North Carolina The Company owns 28 solar assets located in North Carolina with a collective capacity of 168MW DC . These assets comprise the Granite (eight assets acquired USF as operational assets in late 2019/ early 2020) and the Olympos portfolio (six assets acquired by the Company in late 2019, pre-COD) portfolios as well as a portion of the Heelstone portfolio (14 assets acquired by the Company as operational assets in 2020). ## 28 168MW Assets Capacity ## Assets by portfolio MILFORD OLYMPOS GRANITE HEELSTONE EURYALUS ## 1 6 8 22 4 Asset Assets Assets Assets Assets | 128MW | | 39MW | | 39MW | | 176MW | | 61MW | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | DC | | DC | | DC | | DC | | DC | | Capacity | | Capacity | | Capacity | | Capacity | | Capacity | | US Solar Fund plc 13 Annual Report and Financial Statements 2024 ## PORTFOLIO OVERVIEW CONTINUED 41 PROJECTS ACROSS 4 STATES # Portfolio Asset Capacity (MWDC) Location Commercial operation date Acquisition date 1 Milford Milford 127.8 UT November 2020 September 2019 2 Olympos Benson 5.7 NC August 2020 December 2019 3 Olympos Eagle Solar 5.6 NC August 2020 December 2019 Olympos Lane II 7.5 NC July 2020 December 2019 5 Olympos Pilot Mountain 7.5 NC September 2020 December 2019 Olympos Tate 6.5 NC August 2020 December 2019 | 7 | Olympos Willard 6.0 NC October 2020 December 2019 | | --- | --- | | 8 | Granite Faison 2.3 NC June 2015 December 2019 | | 9 | Granite Four Oaks 6.5 NC October 2015 December 2019 | | 10 | Granite Nitro 6.2 NC July 2015 December 2019 | Granite Princeton 6.5 NC October 2015 December 2019 12 Granite Progress Solar 1 2.5 NC April 2012 January 2020 Granite Progress Solar 2 2.5 NC April 2013 January 2020 | 14 | Granite S. Robeson 6.3 NC July 2012 January 2020 | | --- | --- | | 15 | Granite Sarah 6.3 NC June 2015 December 2019 | | 16 | Heelstone IX County Home 2.6 NC September 2016 March 2020 | Heelstone IX Mariposa 6.4 NC September 2016 March 2020 | 18 | Heelstone IX Freemont 6.4 NC December 2016 March 2020 | | --- | --- | | 19 | Heelstone IX Sonne Two 7.0 NC December 2016 March 2020 | | 20 | Heelstone X Sedberry 6.2 NC December 2016 March 2020 | | 21 | Heelstone X Siler 421 6.9 NC December 2016 March 2020 | | 22 | Heelstone X Schell 6.9 NC December 2016 March 2020 | | 23 | Heelstone X Red Oak 6.9 NC December 2016 March 2020 | | 24 | Heelstone X Tiburon 6.7 NC December 2016 March 2020 | | 25 | Heelstone X Cotten Farm 6.8 NC November 2016 March 2020 | | 26 | Heelstone X Monroe Moore 6.6 NC December 2016 March 2020 | | 27 | Heelstone XI Granger 3.9 CA September 2016 March 2020 | | 28 | Heelstone XI Valley Center 3.0 CA December 2016 March 2020 | | 29 | Heelstone XII Turkey Hill 13.2 OR December 2017 March 2020 | | 30 | Heelstone XII Merrill 10.5 OR January 2018 March 2020 | | 31 | Heelstone XII Lakeview 13.7 OR December 2017 March 2020 | | 32 | Heelstone XII Dairy 14.0 OR March 2018 March 2020 | | 33 | Heelstone XII Chiloquin 14.0 OR January 2018 March 2020 | | 34 | Heelstone XII Tumbleweed 14.0 OR December 2017 March 2020 | | 35 | Heelstone XIII Davis Lane 7.0 NC December 2017 March 2020 | | 36 | Heelstone XIII Gauss 7.0 NC October 2018 March 2020 | | 37 | Heelstone XIII Jersey 7.0 NC December 2017 March 2020 | | 38 | Euryalus Alkali 15.1 OR June 2020 June 2020 | | 39 | Euryalus Rock Garden 14.9 OR June 2020 June 2020 | | 40 | Euryalus Suntex 15.3 OR June 2020 July 2020 | | 41 | Euryalus West Hines 15.3 OR June 2020 June 2020 | Milford is the only asset within the Company’s portfolio that is not a qualifying facility (QF), as defined under the Public Utility Regulatory Policies Act (PURPA). QFs are a special class of generating facility defined by law and categorised as either a cogeneration facility or small power production facility. In the case of the Company’s portfolio, its assets (other than Milford) are eligible small power production facilities, being generating facilities with a production capacity of less than 80MW whose primary energy source is renewable. Among other benefits, being a QF affords the asset owner certain rights to sell energy or capacity to a utility, the right to purchase certain services from utilities such as back-up power at a reasonable rate, and relief from certain regulatory obligations. US Solar Fund plc 14 Annual Report and Financial Statements 2024 13 17 6 4 11 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## Milford Milford 127.8MW DC (Utah)  ## 127.8MW DC CAPACITY 1 ## 278,781MWh ANNUAL PRODUCTION (P50) Portfolio details ## NOV 2020 USF Acquisition September 2019 (from Longroad Energy Partners, LLC) COD PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term: 19 21.4 years | Unbundled 21 REC Agreement Investment grade offtaker | MW Weighted Avg. Remaining Term: 21.4 years 22 QF Eligible No ## 1 Site Control Long-term lease # OF PLANTS 21 Debt Mini-perm term loan + LC facility | Legal maturity 2027 | Outstanding balance $46.5m Tax Equit y Yes. Scheduled buyout 2028. ## Olympos Willard (Olympos Portfolio) 6.0MW DC (North Carolina) 3 ## 39MW  DC 6 CAPACITY 5 4 2 7 ## 60,518MWh ANNUAL PRODUCTION (P50) Portfolio details ## JUL–OCT 2020 USF Acquisition December 2019 (from Cypress Creek Renewables) COD PPA Investment grade offtakers | Busbar PPA | MW Weighted Avg. Remaining Term: 21 9.3 years | Unbundled 21 REC Unrated offtakers | Remaining term of 2.5 years QF Eligible Yes ## 6 Site Control Long-term leases # OF PLANTS Debt None Tax Equit y Yes. Scheduled buyout 2025. 21 As at 31 December 2024. 22 Milford is the only asset within the Company’s portfolio that is not a qualifying facility (QF), as defined under the Public Utility Regulatory Policies Act (PURPA). QFs are a special class of generating facility defined by law and categorised as either a cogeneration facility or small power production facility. In the case of the Company’s portfolio, its assets (other than Milford) are eligible small power production facilities, being generating facilities with a production capacity of less than 80MW whose primary energy source is renewable. Among other benefits, being a QF affords the asset owner certain rights to sell energy or capacity to a utility, the right to purchase certain services from utilities such as back-up power at a reasonable rate, and relief from certain regulatory obligations. US Solar Fund plc 15 Annual Report and Financial Statements 2024 ## PORTFOLIO OVERVIEW CONTINUED ## Granite Four Oaks (Granite Portfolio) 6.5MW DC (North Carolina) ## 39MW  DC 15 CAPACITY 10 9 8 12 16 13 ## 14 46,279MWh ANNUAL PRODUCTION (P50) Portfolio details 2012 (Progress Solar 1; South Robeson) USF Acquisition January 2020 (from Greenbacker Renewable Energy) 2013 (Progress Solar 2) PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term: 2015 (Faison; Four Oaks; Nitro; 21 5.5 years | Unbundled Princeton; Sarah) 21 COD REC Agreement Rated and unrated offtakers | Remaining term of 6 years QF Eligible Yes Site Control Long-term leases Debt None ## 8 Tax Equit y None (buyout completed 2020). # OF PLANTS ## Euryalus Suntex (Euryalus Portfolio) 15.2MW DC (Oregon) ##  61MW DC CAPACITY 38 ## 39 105,333MW 40 DC 41 ANNUAL PRODUCTION (P50) Portfolio details ## JUNE 2020 USF Acquisition May 2020 (from Southern Current) COD PPA Investment grade offtaker | Busbar PPA | MW Weighted Avg. Remaining Term: 12 7.1 ye ar s | Bundled QF Eligible Yes Site Control Long-term lease ## 21 4 Debt Mini-perm term loan + LC facility | Legal maturity 2026 | Outstanding balance $34.3m # OF PLANTS Tax Equit y Yes. Scheduled buyout 2025. 21 As at 31 December 2024. US Solar Fund plc 16 Annual Report and Financial Statements 2024 11 STRATEGIC REPORTOVERVIEW CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## Heelstone ## Oregon California ## 177MW DC CAPACITY ## 45% ## 4% ## 294,772MWh ANNUAL PRODUCTION (P50) ## 2016–2018 COD 38 39 40 41 ## 22 # OF PLANTS 27 28 Granger (Heelstone Portfolio) ## North Carolina 3.9MW DC (California)  ## 51% 22 37 35 23 24 21 19 17 20 18 16 36 Portfolio details USF Acquisition March 2020 (from Heelstone Renewable Energy) 21 PPA Investment grade offtaker | Busbar PPAs | MW Weighted Avg. Remaining Term: 7.4 years | Bundled 21 REC Agreement Investment grade and unrated offtakers | MW Weighted Avg. Remaining Term: 6.7 years QF Eligible Yes Site Control Long-term leases 21 Debt Mini-perm term loan + LC facility | Legal maturity 2028 | Outstanding balance $63.9m Tax Equit y None (buyout completed 2023). 21 As at 31 December 2024. US Solar Fund plc 17 Annual Report and Financial Statements 2024 25 ## OPERATING REVIEW: ## ACTIVE ASSET MANAGEMENT PORTFOLIO As at 31 December 2024, the Company has a portfolio with a total operational capacity of 443MW DC (31 December 2023: 329MW AC ) comprised of 41 solar assets across four states. PORTFOLIO GEOGRAPHY (BY MW DC ) ASSET SIZE IN MW (BY NUMBER) REMAINING ENERGY PPA TERM (BY MWDC) North Carolina 168 Utah 128 <5MW 6 10–20MW 10 <5 years 22 10–15 years 7 Oregon 140 California 7 5–10MW 24 >20MW 1 5–10 years 286 >15 years 128 As at 31 December 2023 Note: includes energy offtake agreements only (excludes standalone Renewable Energy Contract (REC) Agreements) ENERGY PPA OFFTAKERS (BY MW DC ) SOLAR MODULES MANUFACTURER INVERTERS BY MANUFACTURER (% MW DC ) (% MW DC ) | A- 7 | First Solar 35.8% | Solar Frontier 3.2% | TMEIC 43.3% | Huawei 4.5% | | --- | --- | --- | --- | --- | | BBB+ 436 | Trina 10.6% | CSUN 3.2% | SMA 22.9% | Advanced Energy 1.6% | | | Seraphim 9.5% | Hanwha Qcells 3.1% | Sungrow 20.0% | Schneider 1.6% | Note: includes energy offtake agreements only | (excludes standalone Renewable Energy Contract | Astronergy 7.4% | Talesun 3.0% | Eaton 5.8% | | --- | --- | --- | --- | | (REC) Agreements) | Boviet 6.9% | ET Solar 1.6% | | | | Adani 6.8% | BYD 1.6% | | | | SolarWorld 3.5% | Canadian Solar 0.6% | | Hyundai 3.4% All near-term PPA expiries within the Company’s portfolio relate to assets that are QF under PURPA. At the appropriate time in advance ofthese expiry dates, recontracting efforts will focus on outreach to existing utility offtakers to seek new offtake contract offers in accordance with PURPA requirements as implemented in each applicable state. The Company’s next PPA expiries are scheduled in 2027. All RECs in high value jurisdictions (California and Oregon) are bundled with existing long-term PPAs. The Company will seek opportunistic recontracting of RECs in other markets as existing agreements expire. US Solar Fund plc 18 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS PORTFOLIO PERFORMANCE Total generation by the Company’s portfolio QUARTERLY GENERATION VARIANCE (FY24) was 698GWh (versus 715GWh in 2023 excluding MS2). The overall generation of 800 768 the Company’s portfolio was 9.0% below 746 budget (versus 7.2% below budget in 2023), 698 700 with 2.9% attributable to below forecast solar irradiance (versus 2.0% in 2023), and 600 6.1% attributable to unscheduled outages and other non-irradiance related factors (versus 5.2% in 2023), such as utility 500 grid outages. 400 Uncontrollable factors such as solar irradiance and utility grid outages both contributed to the higher levels of 300 underperformance in 2024 versus 2023. 244 244 234 240 234 212 | Frequent, low impact unscheduled | 200 | | | | | | | --- | --- | --- | --- | --- | --- | --- | | outages, failures of inverters and other | | 148 | | | | | | | | | 135 | 131 | 136 | 132 | 121 electrical components were a key cause of 100 lost generation in 2024. Initiatives to improve production and reduce the length of unscheduled outages have been 0 enacted during the year. GWh Q1 Q2 Q3 Q4 FY24 ‘Forecast’ means the generation forecast Forecast Weather-Adjusted Actual per the base case (P50) generation forecasts prepared for each project by third-party technical advisors and inclusive of assumptions relating to solar irradiance, Note: Figures may not sum due to rounding module efficiency and degradation, scheduled downtime for maintenance activities, and performance degradation PORTFOLIO GENERATION VARIANCE (FY24) due to grid outages, and weather events (e.g. snow), measured in gigawatt hours 300 282 (GWh). 277 271 260 255 ‘Weather-Adjusted’ means the project base 246 250 case forecasts adjusted for actual solar irradiance experienced at each project during the applicable period, measured 200 in GWh. ‘Actual’ means actual measured production 150 in GWh. 102 99 99 100 59 59 54 53 50 50 45 0 GWh Heelstone Milford Euryalus Olympos Granite Forecast Weather-Adjusted Actual US Solar Fund plc 19 Annual Report and Financial Statements 2024 ## OPERATING REVIEW: ## ACTIVE ASSET MANAGEMENT CONTINUED 23 The following chart shows the historical trend of generation performance related to weather conditions since IPO PORTFOLIO GENERATION VARIANCE FROM FORECAST DUE TO WEATHER (QUARTERLY) 10.0 5.0 0.0 Average ## -1.5% -5.0 % Variance to Forecast -10.0 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2020 | 2020 | 2020 | 2021 | 2021 | 2021 | 2021 | 2022 | 2022 | 2022 | 2022 | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | | | Generation variance due to weather | | | | | | Average generation variance due to weather | | | | | | | | | | | | Factors including actual irradiance, ambient temperatures, and performance specifications of solar modules contribute to variances in the weather-adjusted generation of the portfolio in each period. The portfolio was impacted by unfavourable weather during the period, particularly during the first quarter of 2024. Data provided by the USNational Oceanic and Atmospheric Administration indicates that during 2024 Oregon, California and North Carolina experienced above average precipitation, with “record warmest” average temperatures recorded across the United States. 23 The following chart shows the historical trend of generation performance related to technical and non-weather factors since IPO . PORTFOLIO GENERATION VARIANCE FROM FORECAST DUE TO NON-WEATHER (QUARTERLY) 20.0 0.0 Average ## -3.2% % Variance from Forecast | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2020 | 2020 | 2020 | 2021 | 2021 | 2021 | 2021 | 2022 | 2022 | 2022 | 2022 | 2023 | 2023 | 2023 | 2023 | 2024 | 2024 | 2024 | 2024 | | | Generation variance due to technical & non-weather | | | | | | | | Average generation variance due to technical & non-weather | | | | | | | | | | NON-WEATHER RELATED PORTFOLIO PERFORMANCE – Heelstone: Portfolio generation was approximately 11% below the weather-adjusted forecast, with the largest individual losses attributable to multiple short-term utility grid outages at Dairy, which had been resolved by the end of the period, and intermittent feeder line outages at Chiloquin within the portfolio’s Oregon sites. Site tracker failures, transformer outages, and inverter outages at Granger and Valley Center within the portfolio’s California sites, and utility site communications issues in North Carolina affected Gauss. Assessment of potential corrective actions for Chiloquin and Gauss remained ongoing at the end of the period, and certain inverter repair work at Granger and Valley Center remained outstanding at the end of the period due to unavailability of spare parts – Milford: Portfolio generation was approximately 2% below the weather-adjusted forecast due to slow supplier response times for inverter outages – Euryalus: Portfolio generation was in-line with expectations during 2024, with generation less than 1% below the weather-adjusted forecast – Olympos: Portfolio generation was approximately 10% below the weather-adjusted forecast, attributable to inverter outages across the portfolio 23 Generation variances for Q1 2021 to Q4 2024 reflects the current 41 asset portfolio. Weather variances for 2020 reflect partial results given the Granite portfolio was acquired in Q1 2020, theHeelstone portfolio was acquired in Q2 2020, the Euryalus assets commenced operations in Q2 and Q3 2020, and Milford commenced operations in November 2020. US Solar Fund plc 20 Annual Report and Financial Statements 2024 -20.0 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS | – Granite: Portfolio generation was | | Current priorities for the Investment Manager | REVENUE | | --- | --- | --- | --- | | | approximately 9% below the weather- | in 2025 include: | In accordance with the Company’s | | | adjusted forecast, attributable to | | investment policy, a high level of revenue | – continuing to enhance data collection, premature module failures at two sites contracting is maintained across the analytics and reporting of production (that remain under ongoing warranty Company’s portfolio. Over the next ten data across the Company’s portfolio to claims with applicable module suppliers), years, approximately 80% of forecast enable accurate monitoring of intermittent inverter outages at various revenue will be generated from contracted performance against forecasts and sites, and inverter part availability sources. While the energy offtake inform prioritisation of O&M activities lead times agreements in place for all of the Company’s and resources; assets have fixed pricing with no escalation, ACTIVE ASSET MANAGEMENT AND – strengthen spare parts management as is common in the US market, these PORTFOLIO OPTIMISATION across the Company’s portfolio including contracts provide substantial protection During the year, the Investment Manager, increasing the inventory of long-lead time against merchant price fluctuations over the ledby its internal asset management team, and high failure parts, to support near-to-medium term. continued to implement various initiatives maintenance effectiveness and initiatives targeted at reducing unscheduled outages to reduce outage times; Contracted revenue contribution over the and generally improving the operating next ten years is illustrated in the chart – progress detailed assessments of site performance of the portfolio. Examples below. repowering at selected sites within the ofsuch initiatives progressed during the Company’s portfolio in California and As at 31 December 2024, existing offtake yearincluded: North Carolina; and contracting has a capacity-weighted average | – Completion of an in-depth review of | | – continue with O&M subcontractor | | remaining life of 10.9 years (down from 11.9 | | --- | --- | --- | --- | --- | | | Operations and Maintenance (O&M) | | performance reviews at Milford | years as at 31 December 2023 due to the | | | subcontractor performance across the | | and Olympos. | passage of time). The Company expects to | | | Company’s portfolio, including in relation | | | seek recontracting opportunities for all | | | to the quality of maintenance | | | assets at the appropriate time closer to the | | | organisations, responsiveness to | | | expiration of existing offtake agreements. | unscheduled outages, and reporting quality. This review resulted in the replacement of the O&M subcontractor for the Granite and Heelstone portfolios, CONTRACTED REVENUE PROPORTION (US$’000S) and progressing recontracting with the $60,000 existing O&M subcontractor for the Euryalus portfolio – Continued enhancement of data $50,000 collection, data analysis, and management tools to improve the $40,000 collection of and insights gained from data from the Company’s portfolio. During the period, the internal asset $30,000 management team completed the migration of data collection and tracking to internal systems, and a software pilot $20,000 to improve remote site monitoring, both of which are intended to improve the $10,000 oversight of third-party subcontractors and strengthen internal reporting – Commenced the analysis of projects 0 needing inverter replacements or other 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F capital expenditure projects that will Contracted Revenue Uncontracted Revenue reduce outages and improve generation – Initiated a refreshed Spare Parts Strategy to limit unscheduled outages and increase inverter reliability US Solar Fund plc 21 Annual Report and Financial Statements 2024 ## ACTIVE ASSET MANAGEMENT CONTINUED | Market | Number of assets | Capacity (MWDC) | Share of total capacity (%) | Average PPA term remaining years | | --- | --- | --- | --- | --- | | North Carolina | 28 | 168 | 38.0% | 6.8 | | Oregon | 10 | 140 | 31.6% | 6.7 | | California | 2 | 7 | 1.6% | 11.8 | | Utah | 1 | 128 | 28.8% | 20.9 | | **Total** | **41** | **443** | **100%** | **10.9 (average)** | North Carolina has the largest capacity by market, accounting for 38% of the total portfolio. Oregon and Utah account for 32% and 29% of the portfolio capacity respectively. Most of the solar assets in North Carolina and Oregon are expected to be recontracted in the next ten years. The assets in California have longer durations on existing PPAs and would be recontracted in the mid-2030s. Milford, the solar asset in Utah is expected to be recontracted in the mid-2040s. Further market information is included on page 9. ### PORTFOLIO FINANCING Tax equity was raised to support the construction of all assets within the Company's portfolio. As at 31 December 2024, tax equity partnerships and obligations relating to the Granite and Heelstone portfolios have been fully bought out in accordance with original payment schedules (the Granite portfolio tax equity buy out completed in 2020 and the Heelstone portfolio tax equity buy out completed in December 2023). As at 31 December 2024, tax equity obligations remain active for the Milford, Euryalus and Olympos portfolios. The Company expects buyout amounts in the order of approximately $2.6 million in 2025 and $3.5 million in 2028, which are considered in projected cash flows. ![img-0.jpeg](img-0.jpeg) | US$'000s | 2025F | 2026F | 2027F | 2028F | | --- | --- | --- | --- | --- | | Forecast cash distributions | $4,200 | $3,000 | $3,000 | $1,900 | | Forecast buyouts | $2,600 | – | – | $3,500 | Non-recourse, portfolio-level debt is currently in place for the Milford, Euryalus and Heelstone portfolios, which collectively represent approximately 82% of total portfolio capacity. Each of these facilities include amortising loans, and associated letter of credit facilities to support collateral posting requirements. Both Olympos and Granite portfolios are unlevered, although provide collateral support to the corporate revolving credit facility. 22 US Solar Fund plc Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Outstanding portfolio-level debt is summarised in the table below: Portfolio Loan type Outstanding loan balance LCs on issue Legal maturity Amortisation profile | | Mini-perm term loan + | | 2027 | 2020–2045 | | --- | --- | --- | --- | --- | | Milford | | $46.1m $12.2m | | | | | LC facility | | (7yr term) | (25yr profile) | Olympos None – – – – Granite None – – – – | | Mini-perm term loan + | | 2028 | 2021–2037 | | --- | --- | --- | --- | --- | | Heelstone | | $58.6m $6.8m | | | | | LC facility | | (7yr term) | (16yr profile) | | | Mini-perm term loan + | | 2026 | 2020–2031 | | Euryalus | | $31.8m $4.5m | | | | | LC facility | | (6yr term) | (11yr profile) | Total $136.0m $23.5m A ‘mini-perm term loan’ is a loan where the amortisation period and the legal tenor of the loan are different. For example, the Company’s portfolio-level facilities have longer amortisation periods aligned with the term of existing PPAs (see ‘Amortisation Profile’ in the above table), whereas the legal tenors are for shorter periods (see ‘Legal Maturity’ in the above table). ‘LC’ means letter of credit, used to satisfy collateral posting requirements under the Milford PPA and to support debt service reserve account requirements. The amortisation schedule for the Milford, Heelstone and Euryalus debt is shown below. GEARING As at 31 December 2024, the Group's DEBT AMORTISATION BY PROJECT ($’000S) Gearing, calculated as total debt 18,000 outstanding to GAV, was approximately 41% (31 December 2023: 36%). 16,000 14,000 12,000 10,000 $,000s 8,000 6,000 4,000 2,000 0 | | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | 2036 | 2037 | 2038 | 2039 | 2040 | 2041 | 2042 | 2043 | 2044 | 2045 | 2046 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Milford | | | Heelstone | | | Euryalus | | | | | | | | | | | Euryalus | 2,499 3,269 3,933 4,375 4,758 5,240 5,509 4,754 – – – – – – – – – – – – – – – | | | | | | | | | | | | | | | | | | | | | | | Heelstone | 6,430 7, 2 8 0 7,5 3 5 7,777 7, 9 0 5 8,051 8,310 8,336 1,4 6 2 617 422 42 0 432 65 – – – – – – – – – | | | | | | | | | | | | | | | | | | | | | | | Milford | 537 491 433 439 384 1,421 2,377 2,365 2,393 2,401 2,471 2,540 2,562 2,623 2,705 2,795 2,864 2,889 2,931 2,972 3,003 3,062 – | | | | | | | | | | | | | | | | | | | | | | US Solar Fund plc 23 Annual Report and Financial Statements 2024 ## OPERATING REVIEW: ## FINANCIAL MANAGEMENT  Progress Solar 1 (Granite Portfolio) 2.5MW DC (North Carolina) | APPROACH | | – The Company has now fully utilised | | DIVIDENDS | | | --- | --- | --- | --- | --- | --- | | The Company looks to maintain an efficient | | | $53.2million MS2 proceeds as follows: | – Dividends of 2.25 cents per share, | | | balance sheet, as well as identifying | | | full repayment of the revolving credit | | totalling $6.9 million have been achieved | | opportunities to optimise the capital structure | | | facility in 2023 ($4.5 million), tax equity | | for the financial year 2024 (December | | of the portfolio to maximise returns. | | | buyouts completed in 2023 ($3.2 million), | | 2023 $18.8 million). During the period, | | | | | 2023 dividend ($11.2 million), cash | | it was announced that dividends would | | OPERATIONAL PERFORMANCE | | | collateral to comply with the rating | | be rebased in order to be fully covered | | – During 2024, the portfolio generated | | | requirements of an offtaker ($10.4 million), | | by operational cash flows, with a target | | | $44.9million of project revenues* | | REC termination costs ($3.0 million), | | dividend of 2.25 cents per share for the | | | | | Company operating costs ($2.1 million) | | financial year 2024. The 2024 dividend | – International Financial Reporting and the concluded tender offer target is forecast to be fully covered by Standards (IFRS) loss for the year was ($18.9million) cash generated from operations $34.8 million (31 December 2023: Loss of $43.1 million). The loss was primarily the – Operational dividend cover for the CORPORATE DEBT FACILITY POSITION result of the reduction in the overall period was 1.10x (December 2023: 0.50x). – The Company has access through USF unrealised fair value of the Company’s Dividend cover is calculated as Avon LLC (a wholly owned subsidiary assets due to factors including increased net operating cash generation* divided of the Company) to a $20.0 million RCF. discount rates (driven largely by the by dividends paid in the year. The RCF provides liquidity for capital increase in risk premium used as part of The operational dividend cover ratio expenditures, working capital and general the valuation process) and changes to seeks to reflect the sustainability of the corporate purposes underlying asset cash flow forecasts. level of dividends paid by looking at – The Company’s RCF was extended for underlying cash generation from the – During the year c.$18.9 million was two years on 30 August 2023, and has a portfolio, excluding one off items not distributed on account of the tender offer maturity date of 22 September 2025 expected to be recurring in nature. that concluded in June 2024 ($18.6 million – The facility was undrawn as at Total dividend cover*, which returned to shareholders and $0.3 million 31December 2024 includes one off cash flows not of costs incurred by the Company in expected to be recurring, was 0.57x administering the tender offer). This utilised (December20230.95x) the remaining proceeds from the sale of the Company’s interest in the MS2 asset which closed in June2023 US Solar Fund plc 24 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS # SUMMARY OF PORTFOLIO CASH GENERATION | $'m | Year ended 31 December 2024 | Year ended 31 December 2023 | | --- | --- | --- | | Project revenue | 44.9 | 46.7 | | Project operating expenses | (13.3) | (13.7) | | Payments to tax equity | (4.5) | (7.1) | | Portfolio debt expenses | (13.8) | (11.5) | | **Project cash flows after debt service** | **13.3** | **14.4** | | Management fees | (2.5) | (3.0) | | Corporate operating expenses | (3.1) | (1.7) | | Revolver interest and fees | (0.1) | (0.3) | | **Net operating cash generation (A)** | **7.6** | **9.4** | | One off cash flow adjustments (related to the strategic review, REC resolution, gains on sale and carried forward reserves) | (3.7) | 8.4 | | **Total cash generation (B)** | **3.9** | **17.8** | | **Dividends payable for the year (C)** | **(6.9)** | **(18.8)** | | Total dividend cover (B)/(C) | 0.57x | 0.95x | | Operational dividend cover (A)/(C) | **1.10x** | **0.50x** | # ONGOING CHARGES The ongoing charges ratio for the Company on recurring costs were 1.54% for 2024 (December 2023: 1.39%). Whilst the costs have decreased in the year, this increased percentage reflects the impact of the decline in average NAV over the year to 31 December 2024 on the costs base of the Company. The ratio has been calculated using the Association of Investment Companies (AIC) recommended methodology and is set out in the table below. | $'m | Year ended 31 December 2024 | Year ended 31 December 2023 | | --- | --- | --- | | Total administrative expenses per financial statements | (3.8) | (7.1) | | Adjust for non-recurring costs | (0.2) | (3.1) | | **Total** | **(3.6)** | **(4.0)** | | Average NAV | 233.9 | 287.5 | | **Ongoing charges ratio** | **1.54%** | **1.39%** | US Solar Fund plc Annual Report and Financial Statements 2024 25 ## OPERATING REVIEW: ## INVESTOR RETURNS NET ASSET VALUATION MOVEMENTS (US$m) 300 258.2 250 21.3 (18.9) (10.3) 0.7 (15.9) 7.2 194.2 200 (48.2) US$m 150 100 50 0 | NAV at | Tender | Dividends | Changes in | Changes in | Changes in | Changes in | NAV return | NAV at | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 31 December | Offer | Paid | Operating and | macroeconomic | Merchant Curve | Discount Rates | (Loss) | 31 December | | 2023 | | | Corrective | assumptions | | | | 2023 | Maintenance Assumptions Note: Figures may not sum due to rounding | PERFORMANCE | VALUATIONS | | – Changes in the merchant curves | | | --- | --- | --- | --- | --- | | Net Asset Value as at 31 December 2024 | NAV BRIDGE | | | contributed an uplift of $21.3 million | | was $194.2 million (NAV per share $0.63), | – During the period $18.9 million was | | | to NAV | | representing a decrease compared to the | | incurred in the tender offer that | | | – The risk free rate used in the discount December 2023 NAV of $258.2 million (NAV concluded in June 2024: c.$18.6 million rate for portfolio valuations is the US 20 per share $0.78). Several factors contributed was returned to shareholders and costs year treasury yield has increased from to this overall decrease. Shareholder of c.$0.3 million were incurred by the 4.2% to 4.9% over the course of the year. distributions totalled $28.9 million, which Company in administering the tender This increase resulted in a $19.7 million includes $10.3 million of dividends offer. This utilised the remaining proceeds reduction in FV. The remaining difference recognised in the period and the $18.9 from the sale of MS2 is due to the widening of equity risk million (less $0.3 million costs) tender offer – Distributions of $10.3 million were paid premiums as a result of current market which concluded in June 2024. toshareholders in the year conditions for small operational solar assets and the uncertainty arising from – The changes in operating assumptions Underlying asset valuations were impacted policy announcements that allude to reflect the valuation impact of the by an increase in risk free rates and the risk 10 anti-clean energy and IRA sentiments . revisions made to revenue and cash flow premiums in the year, which resulted in an The weighted average discount rate assumptions. This category includes the increase in the discount rates used in the usedis 10.8% (December 2023: 8.8%), change the cash flow assumptions for valuation of the assets. There were also the discount rates are presented on a expected revenue arising from the REC changes in underlying asset forecasts pre-tax basis contracts related to the Heelstone including changes in merchant curves and Oregon assets which were entered into in – The NAV return of $7.2 million reflects the operating cost assumptions. Further analysis November 2023 under the direction of valuation impacts of cash distributions of the NAV movement is provided above. the Company’s previous investment from the underlying assets, RCF manager. In isolation, these cash flows reduction, timing impact of moving TOTAL SHAREHOLDER RETURN AND amount to approximately $8 million. forward the valuation date to 31 NAV TOTAL RETURN Over the period, the Company has December 2024, net working capital and The Company’s annualised TSR since increased its forecast spending on other adjustments (including the payment inception to 31 December 2024 was (44.3%) corrective maintenance and management to be made as a result of the termination (31 December 2023 total loss of (34.4%)). of spare parts of the Heelstone Oregon REC contracts) The NAV total return from inception to 31 December 2024 was (13.4%) (31 December – Macroeconomic assumptions including 2023: (1.7%)). changes to inflation and depositary rates contributed to an uplift of $0.7 million to NAV US Solar Fund plc 26 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ![img-1.jpeg](img-1.jpeg) ### PROJECTS CASH FLOWS The chart forecasts the operating cash flow receipts as at 31 December 2024 based on the current portfolio financial models. The projections are provided on a post-tax basis. The projections include project debt service, tax equity buyouts, operating costs, holding company costs, and estimated state and federal tax payable based on the current capital structure (i.e. prior to any refinancing). The projections exclude investment management fees. This chart is not intended to provide profit guidance and actual outcomes may vary from those presented. ### PROJECTED CASH FLOWS FROM USF'S OPERATING PORTFOLIO ![img-2.jpeg](img-2.jpeg) US Solar Fund plc Annual Report and Financial Statements 2024 27 ## OPERATING REVIEW: ## VALUATION METHODOLOGY | VALUATION PROCESS | A broad range of assumptions are used in | DISCOUNT RATE | | --- | --- | --- | | The NAV approved by the USF Board takes | valuation models. Where possible, | Discount rates used in the valuation of the | | into account the overall valuations of | assumptions are based on observable | portfolio are derived from long term | | portfolio assets assessed by the | long-term historical market or market | government bond yields, plus an investment | | Independent Valuer on a semi-annual basis | observations. The budgeted operational | specific risk premium, reflecting the risk of | | as at 30 June and 31 December 2024. | costs are based on technical data and the | investing in that particular investment. | | These valuations form part of the NAV | implicit financing costs for leveraged | The discount rate also reflects the | | calculation of the Company, which is subject | investments are based on market data. | Independent Valuer’s view of the | | to review/audit respectively. | The Company also engages technical | transactional activity in the relevant market | | | experts to provide a long-term electricity | along with implied execution discount rates. | | The Company engaged KPMG as the | price forecast which is a critical datapoint | | | Independent Valuer to calculate the fair value | used to forecast revenues. | As at 31 December 2024, the weighted | | of its assets. KPMG is one of the largest | | average discount rate was 10.8% | | valuation firms in the US with significant | VALUATION ASSUMPTIONS | (December 2023: 8.8%). The discount rates | | experience in estimating the fair value of | AND SENSITIVITIES | are presented on a pre-tax basis. | | solar and other renewable energy assets. | The key assumptions the Directors believe | | | In line with USF policy, all of its operating | would have a material impact upon the fair | The sensitivity demonstrates the impact of a | | assets were externally valued at | value of the investments are set out below. | change in the discount rate applied to the | | 31 December 2024. | | pre-tax, cash flows from all of the | | | A sensitivity analysis is used to assess the | Company’s assets as at 31 December 2024. | | The Administrator, in conjunction with the | impact of changes in key assumptions on | A range of +/- 1.0% has been considered to | | Investment Manager, calculates the NAV and | the fair value of the Company’s investments. | determine the resultant impact on the | | the NAV per Ordinary Share, based on the | The sensitivities shown assume the relevant | Company’s NAV per share and the fair value | | valuation range provided by the Independent | input is changed over the entire useful life of | of its assets. A sensitivity of +/-1.0% is in line | | Valuer. This is submitted to the Board for its | each of the assets, while all other variables | with discount rate sensitivities utilised by the | | approval. The valuation has been calculated | remain constant. All sensitivities have been | Company’s peers. | | in accordance with Uniform Standards of | calculated independently of each other. | | Professional Appraisal Practice (USPAP) as applied to PV electricity generation systems in the US. Fair value for operational solar assets is derived from a discounted cash flow (DCF) CHANGES IN CENTS PER SHARE methodology using pre-tax cash flows and a pre-tax discount rate. In a DCF analysis, the Electricity production (10.26) 9.29 14.74%(16.27)% fair value of the assets is the present value of (P90/P10) the asset’s expected future cash flows, based on a range of operating assumptions Discount rate (+/- 1.0%) (10.17)% (6.41) 7.6 7 12.16% for revenues and costs and an appropriate discount rate range. Inflation rate (-/+ 1.0%) (7. 84)% (4.94) 6.38 10.11% The Independent Valuer has reviewed a Electricity prices (-/+ 10%) (10.18)% (6.42) 5.92 9.39% range of sources in determining the fair Operating expenses market valuation of the solar assets, (+/- 10%) (7. 99 )% (5.04) 5.55 8.80% including but not limited to: Operating expense (6.87)% (4.33) 3.98 6.30% Inflation rate – discount rates publicly disclosed by the (+/- 1.0%) Company’s global peers; Useful life (-/+ 3 years) (3.40)% (2.14) 1.89 3.00% – discount rates applicable to comparable infrastructure asset classes; Tax rate (+/- 5%) (2.09)% 2.08% (1.32) 1.31 – quality of cash flow forecasts in terms of operations; – the level of gearing at each investment level; and – capital asset price model outputs and implied risk premium over relevant risk-free rates. US Solar Fund plc 28 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS  South Robeson (Granite Portfolio) 6.3MW DC (North Carolina) | ELECTRICITY PRODUCTION | In determining the proxy P10 generation | assumptions; to mitigate potential forecaster | | --- | --- | --- | | The Company’s assets are valued based | estimate, the Board has assumed that the | errors in a particular period; and to reduce | | upon a forecast P50 solar energy generation | relationship between a P50 generation | the timing risk inherent in valuing the | | profile (being a 50% probability that this | estimate and a P10 generation estimate is | portfolio shortly before curve updates are | | generation estimate will be met or | the same as that between a P50 generation | released. The Independent Valuer assesses | | exceeded). A technical adviser has derived | estimate and a P90 generation estimate in | these forecast prices for reasonableness | | this generation estimate considering a range | absolute terms. Therefore a one year P10 | against their own internal forecasts and | | of irradiation datasets, satellite and ground- | generation estimate by this methodology | others in the marketplace. | | based measurements, and site-specific loss | would be 107.5% (i.e. 100% + 7.5%) of the | | | factors including module performance | asset’s P50 generation estimate. | The sensitivities show the impact of an | | degradation, module mismatch and inverter | | increase/decrease in power prices for each | | losses. These items are then considered in | MERCHANT PERIOD | year of the power price curve over the | | deriving the anticipated production of the | ELECTRICITY PRICES | remaining economic life after the conclusion | | individual solar asset (MWh per annum) | Each of the Company’s assets have | of the existing PPAs. A flat 10% increase/ | | based upon a 50% probability of | long-term PPAs in place with creditworthy | decrease in market electricity prices from | | exceedance. | offtakers. PPA prices are not impacted by | forecasted levels over the remaining asset | | | energy price changes. For the post-PPA | life of all plants has been used in the | | This sensitivity estimates the impact on the | period of each asset, the Board uses | sensitivity analysis. | | fair value of the assets and NAV per share of | long-term electricity price forecasts that have | | | a change of production estimates to P90 | been prepared by market consultants in their | | | (90% probability of being exceeded) and a | determination of the fair value of the | | | P10 generation estimate (10% probability of | Company’s assets. These forecasts from | | | being exceeded). | market consultants take into consideration | | climate change related factors when pricing As P10 generation estimates were not the electricity price forecasts. independently obtained for each solar asset | around the time of the asset acquisition, the | Long-term electricity price forecasts are | | --- | --- | | Board has determined a proxy P10 estimate | obtained every six months from two leading | | for those assets by assessing the | independent power price forecasting firms | | relationship between the independently | for each jurisdiction in which the solar assets | | determined P50 and P90 generation | are located. The two most recent electricity | | estimates for each of the assets in the | price forecasts from each firm are averaged | | Operating Portfolio (e.g. a one year P90 | and provided to the Independent Valuer to | | generation estimate might be 92.5% of a one | project the prices at which existing PPAs will | | year P50 generation estimate, implying that it | be recontracted. The averaging of curves | | is 7.5% lower than the P50 generation | and providers is used to prevent the | | estimate). | valuation of the portfolio being unduly | influenced by one forecaster’s set of US Solar Fund plc 29 Annual Report and Financial Statements 2024 ## OPERATING REVIEW: ## VALUATION METHODOLOGY CONTINUED | OPERATING EXPENSES | TAX | INTEREST RATE ON DEBT FACILITIES | | --- | --- | --- | | The operating costs of the Company’s assets | The US imposes a tax on profits of US | Base interest rates on the Company’s drawn | | include annual O&M, asset management, | resident corporations at a rate of 21%. | amortising debt facilities are fully hedged for | | insurance expenses, land lease expenses, | The sensitivity assumes the US corporate | the amortisation period of the relevant loan | | major maintenance, and general | tax rate increases/decreases by 5% (to | which includes the initial term and one or | | administration expenses. O&M and AM costs | 26%/16%) and shows the resultant impact | more subsequent refinancings. In general, | | are mostly contracted for periods of up to five | on the Company’s fair value of investments | the amortisation period on term loans | | years; the costs of operations, maintenance | and NAV per share. | matches the PPA term. | and asset management activities for the | assets covered by these contracts are | OTHER VALUATION INPUTS | SHARE PRICE PERFORMANCE | | | --- | --- | --- | --- | | subject to change upon recontracting. | INFLATION | AND DIVIDENDS | | | | USF considers inflation in terms of potential | In line with the broader renewable energy | | | The Investment Manager carried out a | | | 24 | | | impact on cash flows from the existing | infrastructure sector | , and in the wake of | review of the operating costs in the portfolio and NAV. Following a period of higher widespread macroeconomic volatility, further underlying financial models where the costs inflation, there has been a gradual downward compounded by the uncertainty created by were aligned with the most recent budgets trend which is expected to continue. the Company’s strategic review and the approved by the relevant asset management departure of the USF’s previous Investment teams. Costs that are not contractual have Higher inflation generally has a positive Manager, the Company’s share price traded been escalated at the Investment Manager’s impact on the Company’s NAV through at a sustained discount to NAV. The share long term inflation forecasts. increased merchant pricing expectations, price based on closing price as at but would be expected to negatively impact The sensitivity above assumes a 10% 31 December 2024 was $0.43 representing the Company’s short to medium term increase/decrease in annual operating costs a 31.8% discount to the 31 December 2024 portfolio cash flows. This is a result of for all underlying assets and the resultant NAV (December 2023: 30.8% discount). increased costs, including insurance, wages, impact on the Company’s fair value of Dividends of $10.3 million were paid to equipment and other costs which may investments and NAV per share. investors over 2024 (December 2023 materialise on expiry of short-term O&M and $18.7million). AM contracts versus the more stable OPERATING LIFE revenue from USF’s long-term PPAs. The graph below represents the Company’s The useful operating life of a solar asset is performance over the reporting periods generally accepted by Independent Valuers OPERATING EXPENSE INFLATION RATE since the Company’s Ordinary Shares were to be the lesser of the lease term for the Where there are uncontracted operating first listed on the London Stock Exchange, asset site and the independent engineer’s costs, the Investment Manager has and shows share price total return and net assessment of the asset’s useful life. assumed these costs will be recontracted at asset value total return performance. The The useful life assumption for each asset existing price levels, escalated in accordance share price total return exhibits share price is typically 35–40 years. with long term inflation assumptions. The movement plus dividends assumed to be sensitivity above assumes a 10% increase/ reinvested since IPO. The NAV total return is The sensitivity above assumes a three year decrease in inflation rates applied to long based on the NAV movement plus dividends increase/decrease in the useful operating life term operating costs for all underlying assets paid since the IPO. of the Company’s solar assets, and the and the resultant impact on the Company’s resultant impact on the Company’s fair value All series are rebased to 100 at 16 April 2019, fair value of investments and NAV per share. of investments and NAV per share. being the date the Company’s shares were listed. SHARE PRICE AND NAV TOTAL RETURN 130 120 110 100 Index 90 80 70 60 50 140 6/28/2019 12/31/2019 6/30/2020 12/31/2020 6/30/2021 12/31/2021 6/30/2022 12/30/2022 6/30/2023 12/29/2023 6/28/2024 12/31/2024 Share Price total return NAV total return FTSE All-Share Index total return 24 -33.1% (weighted average) and -39.6% (simple average). (Morningstar, 28 February 2025). US Solar Fund plc 30 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT ## APPROACH TO RESPONSIBLE INVESTMENT DISCLOSURES APPROACH SUSTAINABLE FINANCE PARTNERSHIP FOR CARBON USF was established to contribute to global DISCLOSURE REGULATION ACCOUNTING FINANCIALS efforts to address the impacts of climate The Company is not required to report The Partnership for Carbon Accounting change and better manage the world’s through the Sustainable Financial Disclosure Financials (PCAF) is a global initiative that resources for present and future Regulation (SFDR) framework, and is not encourages transparency within the financial generations. The Company is focused on currently aligned with full SFDR disclosures. industry. The Company’s financed emissions sustainability, both in its driving purpose as However, the Board and Investment have been quantified in accordance with the 25 | an investor in solar generation capacity, and | Manager recognise the value of the | PCAF Financed Emissions Standard | , | | --- | --- | --- | --- | | also in the way the Company is managed. | framework broadly and the specific | which aligns with GHG disclosures set out | | | In addition to USF’s sustainable | relevance to EU based shareholders. | in the SFDR Principal Adverse Impacts as | | | fundamentals, the Company seeks to | | well as the TCFD’s recommended metrics | | | conduct its business in a sustainable way, | Since its 2019 IPO, USF has consistently | for asset managers. This includes the | | | to ensure that its impact is positive and that | reported on ESG and sustainability | disclosure of investments-level Scope 1 | | | the risk of potential adverse impacts is | considerations throughout its interim and | and 2 Emissions, and this year, material | | | reduced or removed entirely. To do this, the | annual reports. In February 2022, the | Scope 3 Emissions. | | | Company draws on several benchmarks | Company published its first annual | | | | and frameworks to guide its approach to | Sustainability Report covering 2021. | OTHER ESG FRAMEWORKS | | | Environmental, Social and Governance | In March 2024, the Company published its | The Company will continue to monitor other | | | (ESG) risk and opportunity management. | second Sustainability Report covering 2023. | developing ESG frameworks closely, such as | | | | These reports represent meaningful | the EU sustainability reporting standards | | | APPLICATION OF SUSTAINABILITY | alignment with the European Union SFDR by | drafted by the European Financial Reporting | | | FRAMEWORKS | providing Principal Adverse Impact (PAI) | Advisory Group (EFRAG) as part of the | | | Part of the process for data selection | data in the format prescribed in Annex 1 of | Corporate Sustainability Reporting Directive | | | involves using international sustainability | the Delegated Regulation (EU) 2022/1288 | (CSRD). The Company will also closely | | | frameworks and reporting standards as | (the ‘Delegated Act’). | follow the developments of the International | | | guidance. There are several frameworks | | Financial Reporting Standards Foundation’s | | | withwhich the Company aligns partially | SUSTAINABILITY DISCLOSURE | International Sustainability Standards Board | | | (using the framework as a starting point | REQUIREMENT | (ISSB) in their aim of establishing global | | | fromwhich to develop accounting practices) | USF is not required to report in line with the | sustainability disclosure standards as well as | | | or fully (complying with the framework | UK Sustainability Disclosure Requirements. | the Taskforce on Nature-related Financial | | | requirements). These are summarised below. | Notwithstanding that the rules do not directly | Disclosures (TNFD), which is a developing | | | | apply to the Company, the Board has a | framework for assessing nature-related | | | SUSTAINABLE DEVELOPMENT | strong commitment to clear and transparent | risks. The Company aims to provide | | | GOALS (SDGS) | disclosures for investors and, working with | shareholders with disclosures required for | | | The Company supports the 2030 Agenda | the Investment Manager, aims to comply | their own reporting purposes. | | | for Sustainable Development adopted by the | with the anti-greenwashing rule and | | | | UN Member States in 2015. Alignment with | associated guidance. | | | the SDGs is a key part of the Company’s | approach to ESG integration. The Company | TASKFORCE ON CLIMATE-RELATED | | --- | --- | | contributes towards the SDGs in two main | FINANCIAL DISCLOSURES (TCFD) | | ways: the positive environmental and social | The Company is required to provide TCFD | | characteristics of its investments and its | disclosures in line with UKLR 9.8.6R of the | | approach to active asset management. | FCA Handbook. The disclosures on the | following pages summarise USF’s position against all 11 of the TCFD recommendations. The Company commenced reporting against the TCFD framework in the 2021 Annual Report to further assist shareholders and other market participants to review and understand the Company’s consideration of, and approach to, ESG and sustainability risks and opportunities. 25 PCAF (2022). The Global GHG Accounting and Reporting Standard Part A: Financed Emissions. Second Edition. US Solar Fund plc 31 31 Annual Report and Financial Statements 2024 ## RESPONSIBLE INVESTMENT CONTINUED ## CONTRIBUTION TO THE SUSTAINABLE DEVELOPMENT GOALS ## Portfolio alignment The Company draws on the SDGs to demonstrate the positive environmental and social ## to the SDGs characteristics of its investments. This page highlights the primary SDGs that are supported by the Company’s investments, alongside alignment of the full portfolio by fair value. AFFORDABLE AND CLEAN ENERGY The 41 solar power projects in USF’s portfolio had a combined capacity of 443MW DC during 2024. This power replaces fossil-fuel ## 41 | | generated power, thereby displacing CO | | 2 e emissions. USF’s | | --- | --- | --- | --- | | Solar powered plants in | 41 assets were responsible for displacing the equivalent of 448,600 | | | | the United States | tonnes of CO | 2 e in 2024, equivalent to powering 64,600 US homes | | or removing 106,800 equivalent US cars from the road. DECENT WORK AND ECONOMIC GROWTH Solar farms create employment opportunities throughout their lifecycle, from construction and installation to operation and ## 443MWDC maintenance. These projects stimulate economic growth by Total portfolio capacity attracting investment, fostering innovation in the renewable energy sector, and supporting local businesses involved in supply chains. INDUSTRY, INNOVATION AND INFRASTRUCTURE Solar farms drive innovation in technology and infrastructure related ## c.1.3m to solar energy generation, such as photovoltaic cell efficiency, Solar panels generating energy storage solutions, and smart grid technologies. emissions-free electricity They contribute to the development of sustainable infrastructure by expanding the renewable energy infrastructure and enhancing energy access and reliability. CLIMATE ACTION Solar farms play a crucial role in combating climate change by ## 698GWh reducing reliance on fossil fuels and decreasing carbon emissions. Electricity produced By generating clean energy, they help to mitigate the impacts of year to date 2024 climate change, such as extreme weather events, sea-level rise, and disruptions to ecosystems and communities. Solar energy also contributes to building climate resilience by diversifying energy sources and increasing energy security. ## 64,600 US equivalent homes powered The statistics show the positive contributions the Company’s investments are making in support of the SDGs described above. ## 104,500 Equivalent US cars displaced ## 480,900t Tonnes of CO 2 displaced annually US Solar Fund plc 32 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT CONTINUED ## FINANCED GHG EMISSIONS | APPROACH | PORTFOLIO EMISSIONS | | --- | --- | | The Company seeks to monitor GHG | As described on the following page, the | | emissions across its portfolio and support | Company has applied the PCAF guidance to | | decarbonisation initiatives where possible. | calculate its total attributed GHG emissions | | In current carbon accounting models, | (the Company’s Scope 3 category 15 | | ownership of GHGs associated with | investment emissions). This includes the | | investments and lending activities is | Scope 1, 2 and material Scope 3 Emissions | | considered part of a financial institution’s | of each investment, attributed to the | | carbon footprint. Specifically, GHG protocol | Company based on its proportional share of | | accounting standards define these GHGs as | the equity and debt in each investment. | Scope 3 Category 15 investment emissions or ‘financed emissions’. The carbon footprint metric aligns with PCAF’s ‘economic emission intensity’ and is Quantifying the financed emissions of the the Company’s total attributed emissions, investment portfolio is important for the normalised by the total equity and debt the Company to help develop decarbonisation Company invests across the portfolio. strategies and to better understand its own For the GHG intensity of investments metric climate-related Transition Risks. the Company has applied the TCFD recommended approach for calculating a The Company has self-assessed the data Weighted Average Carbon Intensity (WACI). quality of its financed emissions, in line with | the PCAF approach, and has quantified a | As shown in the figures below, the | | --- | --- | | weighted data quality score of 4.0 for its | Company’s financed emissions are | | portfolio GHG emissions (High Quality = 1 | significantly lower than the emissions | | Low Quality = 5). Data is a combination of | avoided due to financing solar installations. | primary data and estimated primary data to inform greenhouse gas emissions for the portfolio. | | | | | 31 December | | 31 December | | | --- | --- | --- | --- | --- | --- | --- | --- | | Scope 3 Financed emissions indicator Scope | | | | | 2024 | | 2023 | | Total attributed GHG emissions (tCO | | 2 e) | Scope 1 of investments | | 108 147 | | | | | | | Scope 2 of investments | | 0 0 | | | | | | | Scope 3 of investments | | 292 190 | | | | | | | Total Scope 1, 2 and 3 | | 400 337 | | | | Carbon footprint (tCO | 2 e/£m invested) | | Total | | 0.89 0.62 | | | | GHG intensity of investments (tCO | | 2 e/£m revenue) | Total | | 12.99 12.20 | | | 26 GHG emissions avoided (tCO 2 e) Total 448,600 480,903 26 Emissions avoided have been calculated using the US Environment Protection Agency AVERT. US Solar Fund plc 33 Annual Report and Financial Statements 2024 ## RESPONSIBLE INVESTMENT CONTINUED ## SUSTAINABLE FINANCE DISCLOSURE REGULATION | PRINCIPAL ADVERSE | in the Company’s portfolio and are in line | not required to consider alignment with the | | --- | --- | --- | | IMPACT INDICATORS | with the definitions of the 14 core indicators | EU Taxonomy, it recognises the potential | | The Company aims to minimise any negative | listed in Annex 1 of the Delegated Act, which | benefit that Taxonomy disclosures could | | impacts that may arise from its investments. | include nine environmental disclosures and | provide to the Company’s shareholders. | | In support of this aim, the Company has | five social indicators. | As such, during 2025 the Company will | | expanded its data collection process to | | continue to explore the benefit of working | | include SFDR Principal Adverse Impact | Data covering the 2024 reporting period are | towards developing disclosures that may | | indicators from 2022. | displayed quantitatively on the following | support assessing whether the Company’s | | | page. The definitions of these indicators and | investments are aligned with the EU | | Although the Company does not follow the | calculation methodologies are in the | Taxonomy. | | format prescribed within the SFDR | Appendix of the Sustainability Report. | | | Regulatory Technical Standards (RTS) for | | PAI indicators for the Company’s | | considering Principal Adverse Impacts, it is | EU TAXONOMY | investments covering the year are displayed | | drawing on data collected to inform its | The Company and its investments do not fall | in a quantitative form below. | | approach to asset management. These | within the EU Taxonomy regulation, either by | | | disclosures apply to most of the investments | location or threshold. Whilst the Company is | |  Milford 127.8 MW DC (Utah) US Solar Fund plc 34 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT CONTINUED | Sustainability linked | | | | 31 December | | | 31 December | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | indicator Metric Unit | | | | | 2024 | 27 | | 2023 | | Investment | Scope 1 GHG emissions | tCO | 2 e 108 147 | | | | | | GHG Scope 2 GHG emissions tCO 2 e 0 0 28,29 emissions | Scope 3 GHG emissions | tCO | 2 e 292 190 | | --- | --- | --- | | Total GHG emissions | tCO | 2 e 400 337 | | Carbon footprint | tCO | 2 e/£m invested 0.89 0.62 | | GHG intensity of investee companies | tCO | 2 e/£m revenue 12.99 12.20 | | Share of investments in companies active in the fossil | % 0 0 | | fuelsector % Share of non-renewable energy consumption and non- % 0% 0% renewable energy production of investee companies from (production) (production) non-renewable energy sources compared to renewable energy sources, expressed as a percentage of total energy 100% 100% sources (consumption) (consumption) 29 Biodiversity Share of investments in investee companies with sites/ % 0 0 operations located in or near to biodiversity-sensitive areas where activities of those investee companies negatively affect those areas 29 Water Tonnes of emissions to water generated by investee Tonnes/£m 0 0 companies per million GBP invested, expressed as a weighted average 29 Waste Tonnes of hazardous waste and radioactive waste generated Tonnes/£m 0 0 by investee companies per million GBP invested, expressed as a weighted average Social and Share of investments in investee companies that have been % 0 0 employee involved in violations of the UN Global Compact (UNGC) 30 matters principles or OECD Guidelines for Multinational Enterprises Share of investments in investee companies without policies % 0 0 to monitor compliance with the UNGC principles or OECD Guidelines for Multinational Enterprises or grievance/ complaints handling mechanisms to address violations of the UNGC principles or OECD Guidelines for Multinational Enterprises Average unadjusted gender pay gap of investee companies % N/A N/A Average ratio of female to male board members in investee % 25 20 companies, expressed as a percentage of all board members Share of investments in investee companies involved in the % 0 0 manufacture or selling of controversial weapons 27 PAI indicators cover 100% of the Company’s investments. 28 GHG emissions calculations are based on primary source data for 70% of the portfolio on a Fair Value basis, with estimates used for the remaining 30%. Where source data was not available, theCompany will work with its supply chain over time to improve its data collection processes. 29 Attributed based on the Company’s share of each investments’ total equity and debt. 30 Share of investments based on Fair Value. US Solar Fund plc 35 Annual Report and Financial Statements 2024 ## RESPONSIBLE INVESTMENT CONTINUED ## TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES Climate change presents both transitional and physical risks to the Company’s investments. As such, it continues to be a high priority for the Company. USF commenced reporting against the TCFD framework in the 2021 Annual Report to further assist investors and other market participants to review and understand USF’s approach and consideration of ESG and Sustainability risks and opportunities. The disclosures on the following pages were prepared in line with the recommendations of TCFD. USF has complied with UKLR 9.8.6R by including climate- related financial disclosures consistent with 8 of the 11 Recommended Disclosures, explaining against Strategy (a, b and c). The Company has not yet performed climate-related risk scenarios analysis which it recognises is needed to be compliant with Strategy (a, b and c). To address these shortfalls, the Company will work with its Investment Manager to continue to explore its internal capabilities by drawing on specialised expertise, data analytics tools, and scenario modelling frameworks dedicated to assessing climate-related risks and opportunities across our investment portfolio where economically viable. Additionally, the Company will explore engaging with industry experts, stakeholders, and relevant regulatory bodies to ensure alignment with best practices and regulatory expectations. GOVERNANCE Disclose the organisation’s governance around climate-related risks and opportunities. a) Describe the Board’s The USF Board has overall responsibility and oversight of risks and opportunities, which includes climate change. oversight of climate- The Board consists of four independent Directors with diverse backgrounds, experience in various industries and related risks and investment trusts, and demonstrated governance and stewardship skills. A summary of their skills and experience is set opportunities out in the Corporate Governance section of the Annual Report. The experience of the USF Board, particularly around governance, sustainability and clean energy, supports USF’s environmental credentials derived from its core business as an investor and owner of utility-scale solar energy assets. The Company’s policies, including those pertaining to sustainability, are reviewed by the Board and monitored on an ongoing basis as needed. The Board and Investment Manager discuss risks related to climate change twice a year and have ultimate oversight of the Company’s risk management framework. Climate change is also considered within the Company’s risk register at each Board meeting. The Board considers the impacts of climate-related events through its discussions with the Investment Manager, notably with respect to opportunities through the Company’s annual strategy reviews and risks through the Company’s risk management framework. USF’s Board has an Audit Committee whose function is to ensure that the Company maintains standards of integrity, financial reporting, internal control and risk management systems and corporate governance. One of the main duties of the Audit Committee is reviewing the risks facing the Company and monitoring the risk register. These include climate- related risks. Meeting at least semi-annually, the Audit Committee is required to report formally to the Board on its findings after each meeting on all matters within its duties and responsibilities. The Board monitors and reviews performance of the portfolio on a quarterly basis and updates on climate-related data on an annual basis. US Solar Fund plc 36 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT CONTINUED GOVERNANCE b) Describe management’s The Investment Manager monitors climate-related legal and regulatory developments in the US and globally and notes role in assessing and the changing dynamics of weather patterns and local climates that may impact the day-to-day production of USF’s solar managing climate-related projects. This data informs the investment and operating decisions of the Investment Manager who reports to the Board at risks and opportunities. least quarterly on generation performance and any critical changes. Amber’s Executive Committee is responsible for the stewardship of its business and affairs. The Executive Committee discharges its sustainability responsibilities directly through its internal Risk Committee, ESG Steering Committee and Corporate Social Responsibility Sub-Committee. The ESG Steering Committee is chaired by its Chief Operating Officer. The Committee’s primary role is to integrate and strengthen its ESG considerations within investment and asset management activities at a corporate level. The Investment Manager is supported by a dedicated ESG team, where the Head of ESG was appointed in 2018. Amber’s ESG Committee will engage with USF Audit Committee and Management Engagement Committee on climate change issues where relevant. BOARD INVESTMENT MANAGER The Board Amber’s Executive Committee, the has overall MANAGEMENT The Company’s Management majority of whom sit on the Board responsibility ENGAGEMENT Engagement Committee reviews the of Amber, is responsible for the for ESG COMMITTEE effectiveness of ESG integration by the stewardship of Amber and oversees considerations Investment Manager. the management of its business and ensuring and affairs, including the integration that they are fully of ESG. Amber has an established integrated into ESG Steering Committee which is all aspects of AUDIT The Company’s Audit and Risk Committee chaired by its Chief Operating Officer. the investment COMMITTEE supports the Company’s approach to ESG The Committee’s primary role is to and asset disclosures and ensures all risk management integrate and strengthen its ESG management frameworks consider material ESG risks, considerations within investment and strategies. such as climate change. asset management activities, and at a corporate level. STRATEGY Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material. a) Describe the climate- All of the Company’s investments are exposed to physical climate hazards of varying types and severity. Flood, extreme related risks and wind and heat (leading to wildfire) and significant changes in insolation and precipitation are the most important hazards opportunities the for the Company’s portfolio. There is a risk that changing weather patterns due to climate change will impact electricity organisation has production. For some investments, there is a risk that climate change and extreme weather may damage physical assets, identified over the short, cause business interruption and create additional costs for maintenance and upgrades. medium and long-term. The Company recognises that the key climate-related opportunity impacting its business is the positive impact and demand for renewable energy. USF was established to meet this demand and recognises that the pace of transition to clean energy and the associated government policies in the US will impact the size of the Company’s investmentopportunity. However, the Company acknowledges that it is currently unable to provide a comprehensive disclosure of climate-related risks and opportunities over the short, medium, and long term. The disclosure that has not been addressed pertains to the detailed analysis and quantification of specific physical climate-related risks and opportunities over various time horizons using scenario analysis. This shortfall in disclosure arises due to several factors. Firstly, the complexity and evolving nature of climate-related risks and opportunities require robust data collection, analysis, and scenario modelling, which necessitates additional time and resources beyond what is currently available. Secondly, while the Company has initiated efforts to assess climate- related risks and opportunities, we acknowledge that our methodologies and frameworks are still in development and refinementstages. US Solar Fund plc 37 Annual Report and Financial Statements 2024 ## RESPONSIBLE INVESTMENT CONTINUED ## TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED STRATEGY b) Describe the impact of The Company was established to take advantage of efforts to increase the share of renewable or clean energy in the climate-related risks US. This is core to all business activities of the Company. The Company considers risks from climate change to be a and opportunities on principal risk. The Company manages the impact of climate-related risk on both the production of its assets and the the organisation’s stability of its cash flows, primarily through geographic diversification and by securing long-term PPAs to mitigate pricing businesses, strategy and volatility risk. USF has a portfolio of 41 solar projects across four states in the US, using geographic diversification to financial planning. reduce the portfolio’s exposure to any one extreme weather or environmental event (i.e. wildfires, heavy rainfall, extreme heat, heavy snowfall). The Company aims to minimise the impacts of medium-term climate-related risks including generation performance of solar assets, ongoing maintenance costs and forecast merchant power prices on revenue. This is actioned by undertaking sensitivity analysis, policy monitoring, engaging O&M contractors to respond to physical risks (e.g. additional panel cleaning, vegetation management for fire risk reduction), improved grid monitoring, having a geographic mix of asset locations and acquiring operating assets that have long-term PPAs in place (with a minimum target PPA term of 10 years for each project or portfolio acquisition and a weighted average remaining PPA term of 10.9 years for the Company’s entire portfolio). Medium-term contracts are also entered into with O&M providers to provide stability to maintenance costs. In line with the disclosure listed above, the Company is unable to comprehensively describe the physical impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning. The impact has not been fully assessed as the Company is still in the process of establishing how to consider the potential impacts of scenario analysis. To address this shortfall, the Company will work with its Investment Manager to enhance the Company’s capabilities by drawing on specialised expertise, data analytics tools, and scenario modelling frameworks dedicated to assessing climate-related risks and opportunities across our investment portfolio. Additionally, the Company will explore engaging with industry experts, stakeholders, and relevant regulatory bodies to ensure alignment with best practices and regulatory expectations. However, the Company notes its stated ambition to realise value over the short term, and this will inform its approach to considering climate to that strategy. c) Describe the resilience In 2022, USF used a sensitivity analysis to determine the impact of changes in key assumptions on the fair value of of the organisation’s the Company’s investments. Many of the key assumptions used are impacted by climate-related risks, particularly strategy, taking into electricity production and electricity prices which may be impacted by major environmental or weather events. Based consideration different on the analysis, the Directors consider the changes in inputs to be within a reasonable expected range based on their climate-related understanding of market transactions and current industry and insurer views on longer-term climate volatility. scenarios, including a High physical risk scenarios, considered over the useful life of the portfolio, associated with a 3–4ºC increase 2°C or lower scenario. intemperatures, included: – Reduction in availability of assets due to severe weather events and flooding, wildfires linked to higher temperatures. – Reduced operating life of assets resulting from climate-related risks. To mitigate these risks, USF’s near-term cash flows are insulated from volatility in wholesale power prices because of its long-term contracted cash flows. USF’s revenues from electricity sales are 100% contracted through the PPA period. USF’s exposure to power price fluctuation is only after the PPA period, at which point the Company may choose to recontract at the prevailing price. Equally, geographical diversification is essential for limiting physical climate change risks for solar investments by enhancing resilience, mitigating weather-related disruptions, optimising resource utilisation, and leveraging diverse market opportunities across different regions. The Company’s climate-related risks and opportunities matrix recognises climate/weather risk, and this risk is assessed relative to the whole suite of financial, operational, legal and regulatory risks faced by USF. In line with the disclosure provided, the Company acknowledges its current inability to comprehensively describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. This limitation stems from the ongoing process of establishing how to consider the potential impacts of scenario analysis. Specifically, the Company is exploring options to enhance its capabilities to assess the resilience of its strategy in various climate-related scenarios, including a 2°C or lower scenario. US Solar Fund plc 38 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT CONTINUED RISK MANAGEMENT Disclose how the organisation identifies, assesses and manages climate-related risks a) Describe the The Board is ultimately responsible for the oversight and effectiveness of the Company’s system of internal controls and organisation’s processes for setting the risk appetite of the Company. The Board defines the level and type of risk that the Company considers for identifying and appropriate in accordance with the Company’s investment objective and investment policy. assessing climate- As an externally managed investment company, the Company has contractually delegated day-to-day management of related risks. the Company’s portfolio and risk monitoring to the Investment Manager. This means the Company is also reliant upon the internal systems and controls of the Investment Manager and its other service providers to manage risk effectively. The Investment Manager has designed an extensive risk management framework to identify, assess and manage principal and emerging risks, which are reviewed with the Company’s Audit Committee semi-annually. This includes assessing both the probability of occurrence and impact along with key mitigants. In the case of new or emerging risks and changes to existing risks, assessment occurs as needed outside this semi-annual cycle in response to such new or emerging risks or changes. The identification, assessment and management of risk are fundamental to the Investment Manager’s role of managing the Company’s portfolio on a day-to-day basis. USF’s Board and Investment Manager review and update the risk register twice a year, including assessing climate risks as relevant based on legal and regulatory developments, industry reports and research and data gathered from its own portfolio of assets. USF’s Sustainability Report is a valuable practice for the Board and Investment Manager to engage with climate-related risks and opportunities, noting that USF was created to take advantage of investment opportunities in the US arising from the decarbonisation of energy generation and usage. The Company considers existing and emerging regulatory requirements. This includes UK Sustainability Disclosure Requirements but also the proliferating regulatory environment in the US. The Company notes the potential rollback of climate-related reporting at the federal level within the US being in juxtaposition to state-led climate disclosure regulation in states such as California, Illinois, Colorado and New York. The Board will explore approaches to assessing the physical risks of climate change, including adopting scenario analysis methodologies. This proactive stance will enable USF to better understand and prepare for various potential climate- related impacts on its assets and operations. By incorporating scenario analysis into its risk assessment framework, USF aims to enhance its resilience and responsiveness to evolving climate dynamics, thereby safeguarding its investments and contributing to long-term sustainability goals. This forward-looking approach underscores USF's commitment to prudent risk management and responsible stewardship in the face of climate uncertainty. However, this should be balanced by the potential cost of undertaking such analysis and how that aligns with investor requirements. In addition, the Board will explore how to evolve its approach to managing climate risks at the asset level. Currently, environmental site assessments are completed for all assets during due diligence including certification that all projects comply with applicable local, state or federal law. Vegetation clearance is maintained at or below county regulations and in accordance with insurance requirements. b) Describe the The Investment Manager’s asset management team is responsible for reviewing asset performance, operations and organisation’s processes maintenance and external asset management providers to ensure project-level environmental and climate risks are being for managing climate- managed and mitigated at the project level, including design loading, geographic diversity, insurance, snow clearing and related risks. panel cleaning. Further disclosure is included in the Principal Risks and Uncertainties section, including mitigants noted for operational and climate related risks. Materiality assessment is based on informed judgment taking account of both the probability of occurrence and the potential impact of risks. The Company considers factors such as financial significance, stakeholder expectations, and operational impacts when evaluating risks and opportunities. The Company's approach involves careful analysis and consultation with stakeholders to determine the significance of issues to its solar investment portfolio. c) Describe how processes The Investment Manager maintains an enterprise-wide risk register and updates are presented to the Board semi-annually for identifying, assessing for review and updating. Climate-related risks are included in this framework with risk assessed in terms of likelihood of and managing climate- occurrence, and potential impact. The USF Board and the Investment Manager are acutely aware of the significance of related risks are climate-related risks in terms of the performance of individual assets, and the extent to which correlated events may have integrated into the an overall effect on the performance of the portfolio. organisation’s overall risk management US Solar Fund plc 39 Annual Report and Financial Statements 2024 ## RESPONSIBLE INVESTMENT CONTINUED ## TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES CONTINUED METRICS Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. a) Disclose the metrics The Company invests in and sells energy generated by its solar assets to energy offtakers, directly contributing to used by the organisation renewable energy infrastructure and renewable power generation. The Company uses a variety of metrics to monitor to assess climate-related the contribution to mitigating climate change, including GWh of renewable energy generation, tonnes of carbon dioxide 31 risks and opportunities emissions displaced and number of homes powered by clean energy . The Company and Investment Manager considers in line with its strategy several metrics that relate to climate related risks and opportunities. At this stage, the metrics are used to manage a pool and risk management of climate-related risks, rather than specific metrics for specific risks, including: process. – Proportion of asset life and revenues with fixed price off-take agreements, which influences the extent to which changes 32 in merchant prices affects forecast cash flows and the portfolio valuation – Generation performance to expectations, where variances are examined for root causes, including longitudinal climate- 33 related impacts on potential asset availability – Regional diversification is a critical aspect of USF’s climate risk management with budget generation, revenue and NAV spread across 41 projects and four states. Performance metrics for 2024 as follows: | State | | | | | | | % of Weather- | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | % of Actual | | | % of Budget | | | Adjusted Budget | | | | | | | | Generation | | | Generation | | | Generation | | | | | | | | | MWh | 34 | | MWh | 34 | | MWh | 34 | % of Revenue | 34 | % of NAV | 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 North Carolina 30.7% 27.3% 31.5% 27.6% 30.7% 28.0% 33.1% 32.3% 51.8% 53.0% Oregon 31.6% 27.1% 31.3% 27.4% 31.6% 27.0% 47.0% 35.8% 36.4% 34.9% Utah 36.4% 31.9% 35.4% 30.8% 36.4% 30.4% 17.7% 18.4% 9.3% 10.0% California 1.3% 13.7% 1.8% 14.2% 1.3% 14.5% 2.2% 13.5% 2.5% 2.1% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% The Company does not use an internal carbon price. As the Company has no employees, performance metrics are not incorporated into remuneration policies. Board remuneration is fixed. Details of the fees paid to Directors in the period are set out in the Directors’ Remuneration Report on pages 67 to 68. b) Disclose Scope 1, Scope Due to the nature of its business, the Company has no Scope 1 or Scope 2 greenhouse gas emissions. The Company’s 2 and, if appropriate, Scope 3 emissions primarily relate to the emissions of its investments (total of investment Scope 1, 2 and 3 emissions). Scope 3 GHG emissions, The Company seeks to monitor its Scope 3 investment emissions (financed emissions) across its portfolio and support and the related risks. decarbonisation initiatives where possible. However, due to the nature of the Company’s investments, emissions associated with the operation of its investments are considered a low risk. During 2024, the Company’s Investment Manager undertook a data collection exercise to capture a complete set of Scope 1, 2 and material Scope 3 emissions data for all of its investments. The Company requested Scope 1 and 2 emissions as a minimum from all of its investments, along with Scope 3 emissions where available. Amber collected comprehensive GHG activity data (e.g. mobile fuel usage), which was used to quantify Scope 1, 2 and 3 emissions using its bespoke carbon tool. 35 The Company’s financed emissions were quantified, on an operational control basis , in accordance with the PCAF Financed Emissions Standard, which aligns with GHG disclosures set out in the SFDR PAIs as well as the TCFD’s recommended metrics for asset managers. This approach included the attribution of financed emissions to the Company using a ratio of the value of the Company’s investment in relation to the total equity and debt of an investment, as set out in the PCAF standard. Further information on this approach can be found in the Appendix. 31 Data disclosed on Page 32 of this report. 32 Data is for internal purposes and not disclosed due to potential market sensitivities. 33 Please refer to portfolio performance section of the Annual Report for more information. 34 Portfolio generation data includes the second tranche of MS2 from 1 January 2023 to 20 June 2023. As the divestment closed in late June 2023, it is excluded in from the NAV split at31December 2023 but has been included in performance data through the transaction date. 35 A control approach can be subclassified as either financial control or operational control, and companies using the control approach must pick between these two options for reporting. Using the operational control approach, an organisation shall account for 100% of emissions from operations over which it or one of its subsidiaries has control and the authority to introduce and implement operational policies. US Solar Fund plc 40 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## RESPONSIBLE INVESTMENT CONTINUED METRICS b) Disclose Scope 1, Scope USF SCOPE 3 FINANCED EMISSIONS INDICATOR Scope 31 December 2024 31 December 2023 2 and, if appropriate, Scope 3 GHG emissions, Total attributed GHG emissions Scope 1 of investments 108 147 and the related risks. tCO 2 e Scope 2 of investments 0 0 continued | | | | Scope 3 of investments | 292 190 | | --- | --- | --- | --- | --- | | | | | Total | 400 337 | | Carbon footprint (tCO | | 2 e/£m invested) | Total | 0.89 0.62 | | GHG intensity of investments | | | Total | 12.99 12.20 | | (tCO | 2 e/£m revenue) | | | | 36 Emissions avoided (tCO 2 e) Total emissions avoided 448,600 480,903 | c) Describe the targets | As the Company’s core business is generating clean energy, the core performance metric is the amount (in GWh) of | | | | | | | --- | --- | --- | --- | --- | --- | --- | | used by the organisation | electricity generated from its portfolio of utility scale solar projects. In addition, the following secondary performance | | | | | | | to manage climate- | metrics are monitored to track the levels of CO | | | 2 generated by the business, and the net CO | | 2 avoided by the renewable | | related risks and | power generated by the portfolio: | | | | | | | opportunities and | | | | | 37 | | | | – tracking weather-adjusted performance of each plant | | | | ; | | | performance against | | | | 37 | | | | | – tracking plant and grid outages and causes | | | ; and | | | | targets. | | | 38 | | | | | | – CO | 2 emissions displaced | . | | | | USF’s portfolio comprises 41 operational solar plants and the portfolio was responsible for displacing an estimated 448,600 tonnes of CO 2 e emissions during 2024. As the business’s whole operations are to invest in the generation of renewable energy, targets such as emissions reductions are not deemed applicable at this point. 36 Emissions avoided have been calculated using the US Environment Protection Agency AVERT. 37 Please refer to portfolio performance section of the Annual Report for more information. 38 Disclosed on page 32. US Solar Fund plc 41 Annual Report and Financial Statements 2024 ## RISK AND RISK MANAGEMENT ## The Company is exposed to a broad range of events which have the potential to ## disrupt the Company’s business model and/or adversely impact the Company’s ## reputation, financial or operational performance. Utilising a well developed risk ## management framework can mitigate the likelihood of occurrence and the ## impact of such events. | The Board is ultimately responsible for the | RISK CATEGORISATION | Set out on pages 44 to 50 is a summary of | | --- | --- | --- | | oversight and effectiveness of the | The Board and Investment Manager have | the principal and emerging risks along with | | Company’s system of internal controls and | categorised the most relevant risks to the | mitigants, which the Company considers the | | for setting the risk appetite of the Company. | Company into the following five key | most relevant given the nature of its | | The Board defines the level and type of risk | categories: | business. These risks are a subset of a | | that the Company considers appropriate in | | broader set of risks which are reviewed and | (a) legal, regulatory and compliance risks; accordance with the Company’s investment assessed on an ongoing basis at an asset, objective and investment policy. (b) political risks; portfolio and corporate level. (c) macroeconomic and market risks; As an externally managed investment Each risk has been assessed as either company, the Company has contractually (d) operational risks; and remaining the same, increasing or delegated day-to-day management of the decreasing over the period since (e) climate-related risks (refer to disclosures Company’s portfolio and risk monitoring to 31December 2023. made in the Responsible Investment the Investment Manager. This means the section. Company is also reliant upon the internal systems and controls of the Investment These key risk categories have not changed Manager and its other service providers to during the period. manage risk effectively. There have been no significant changes in The Investment Manager has designed an the nature or assessment of the principal extensive risk management framework to and emerging risks identified in the 2023 identify, assess and manage principal and Annual Report. emerging risks, which are reviewed with the Company’s Audit Committee semi-annually. During the period, the geopolitical In the case of new or emerging risks and environment (including the continued changes to existing risks, assessment existence of major conflicts and territorial occurs as needed outside this semi-annual tensions) continued to impact global cycle in response to such new or emerging structures and relationships. The outcome of risk or change. The identification, the US federal election in November 2024, assessment and management of risk are and subsequent initiatives of the new federal fundamental to the Investment Manager’s administration, have introduced significant role of managing the Company’s portfolio global uncertainty, impacting the stability of on a day-to-day basis. financial markets generally and the US renewable market specifically. While these Ongoing risk management at the asset and factors likely contribute to the ongoing Company level reduces both the likelihood trading discount of the Company’s shares, and impact of the principal risks that the these factors have not directly impacted Company is exposed to. The Board performance of the Company’s portfolio. maintains a risk register that is subject to annual review under the risk management framework, with a focus on ensuring appropriate controls are maintained and implemented. US Solar Fund plc 42 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS PRINCIPAL RISKSRISK HEAT MAP The diagram is a visual representation of the principal and emerging risks summarised on pages 44 to 50 mapped alongside their probability of occurrence and impact. 2 5 12 3 4 8 6 1 15 9 Medium High PROBABILITY 11 14 10 7 13 Low Low Medium High IMPACT | 1 Changes in laws or regulations | 9 Supply chain procurement risk | | --- | --- | | 2 Political and geopolitical risk | 10 Counterparty credit risk | | 3 Long-term power price fluctuations | 11 Underperformance of the Solar Assets | | 4 Interest rate risk | 12 Unfavourable weather conditions | | 5 Inflation risk | 13 Climate change or climate-related events | | 6 Valuation of assets | 14 Cyber risk | | 7 Operational fraud | 15 Physical Asset | | 8 Access to capital from debt providers | | andcompliance with existing debt and taxequity obligations A detailed analysis of each risk identified above is displayed overleaf in the ‘Summary of key principal and emerging risks and mitigants’. US Solar Fund plc 43 Annual Report and Financial Statements 2024 ## RISK AND RISK MANAGEMENT CONTINUED MOVEMENT:  Increase  No change  Decrease Summary of key principal and emerging risks and mitigants a) LEGAL, REGULATORY AND COMPLIANCE RISKS Risk Impact on Company Key mitigants Movement 1. Changes in laws or Regulation changes may adversely – The Company and Investment Manager closely  regulations affect the business and performance monitor changes in legislation at both a federal of the Company. This includes state level and in the states where the Company’s and federal laws and regulations assets are located. The Company and Investment relating to the operation of renewable Manager also consult with tax, legal and regulatory energy and energy generation assets experts as required. within the four US states where the – State legislation in each of California, North Company’s assets are located. Carolina, Oregon and Utah remains supportive of renewable generation which is not expected to change in the short or medium term. The Company is sensitive to tax | changes for example, including but | – Potential changes to federal legislation | | --- | --- | | not limited to income tax, investment | (including existing investment tax credit regimes) | | tax credits and tax restrictions on | foreshadowed in statements made by the | | renewables. An adverse change in tax | incoming administration prior to and after the US | | legislation may impact the Company’s | federal election in 2024, were targeted at assets | | overall returns. | which are in development, pre-construction or | under construction. As the Company’s assets are all operational, it is not expected that changes to The Company is reliant on the these tax regimes would have a material impact to ongoing compliance by its Investment the portfolio. There is a high likelihood of changes Manager with regulations governing in policy initiatives under the new administration its operations. Non-compliance by the but the nature of such changes and subsequent Investment Manager, or changes to impacts on the business and performance of the regulations that adversely affect the Company remains uncertain. operations of the Investment Manager – As a registered investment advisor regulated by the may disrupt the Company’s business. US Securities and Exchange Commission (SEC), the Investment Manager is subject to a suite of regulatory and compliance obligations applicable to its role as Investment Manager to the Company. Amber has a comprehensive framework to monitor internal compliance, which provides comfort and protection to the Company that the risk of non- compliance is well mitigated. b) POLITICAL RISK 2. Political and Political risks often translate to – The Company’s assets are located within host  geopolitical risk elevated political uncertainties and states that remain committed to net-zero targets have detrimental effects on investment and progressive policies compatible with and currency markets. renewable generation. State based policies are unlikely to materially change regardless of potential Broader geopolitical risks influence changes to federal legislation or policies. investment decisions and market dynamics, having the potential to – Trade restrictions between the US and China and undermine investor confidence other countries targeted by US Federal tariff and generally, and adversely affect the trade policies and stated initiatives are being Company’s investor base and share monitored for potential impacts to the Company’s price. Broader geopolitical risks may supply chain in order to mitigate the risk of a supply also affect the Company’s ability to shortage for key operating components and procure certain spare parts which are cost increases. manufactured overseas, including in China or by Chinese-owned companies. US Solar Fund plc 44 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS c) MACROECONOMIC AND MARKET RISKS Risk Impact on Company Mitigant Movement 3. Long-term power PPA terms are generally shorter than The Company secures revenue by acquiring assets  | price fluctuations | the expected useful life of solar assets | that have long-term PPAs in place (with a minimum | | --- | --- | --- | | | so price forecasts are used to estimate | PPA term of 10 years for each project or portfolio | | | the value of cash flows between PPA | acquisition and a target weighted average PPA term | | | expiry and the end of the asset’s useful | of approximately 15 years for the Company’s entire | | | life. Lower or higher wholesale electricity | portfolio at acquisition). | price forecasts can reduce or increase The Company continues to monitor changes in energy the revenue that the solar assets are price forecasts and ensures these are appropriately expected to generate after PPA expiry, factored into asset valuations. The Company averages thereby impacting asset valuations. forecasted price curves from two reputable providers over their most recent two periods (i.e., four curves in total) to mitigate the impact on asset values from any one forecaster changing views. As of 31 December 2024, approximately 36% oftheNAV is attributable to contracted cashflows, withthe remaining balance attributable to uncontracted cashflows, demonstrating the substantial value provided by existing revenue contracting within the portfolio, that is not exposed topower price fluctuations. 4. Interest rate risk Corporate Debt Facility – The base interest rate for all amortising debt (namely  the debt facilities at Milford, Euryalus and Heelstone The Company has debt facilities as described on page 23) are fully hedged for with both fixed and floating interest the term of the relevant loan, providing resilience rates. The Company is also exposed in the portfolio’s cash flows against movements in to interest rate risk through holding interest rates variable rate bank deposits. As such, | changes in interest rates may have | – The $20 million revolving credit facility has a floating | | --- | --- | | a positive or negative impact directly | interest rate which is not hedged. The RCF is | | on the Company's net income and | available through September 2025 and remained | | consequently the profits of | undrawn during 2024. The RCF is currently undrawn | the Company. – The Company does not bear interest rate risk on its loan to USF Holding Corp. as the loan rate is fixed Valuation Discount Rate for the duration of the loan facility Changes in interest rates may also Future increases in market interest rates could affect the discount rates used in the also lead to increases in discount rates used in the valuation of the assets. valuation of the assets, and a resultant reduction in NAV. Please refer to the interest rate sensitivities Movements in headline Central Bank provided on page 28 for further detail on this interest rates and the resulting effects exposure. on government bond yields may directly impact the discount rate used to value the Company’s investments. US Solar Fund plc 45 Annual Report and Financial Statements 2024 ## RISK AND RISK MANAGEMENT CONTINUED c) MACROECONOMIC AND MARKET RISKS CONTINUED Risk Impact on Company Mitigant Movement 5. Inflation risk Increases in inflation may result in – In the current elevated inflation environment, there  higher: is greater uncertainty around how long high inflation – operating and maintenance costs; will last. In the US, there has been a gradual downward trend since June 2022 which is expected – revenues from higher spot and PPA to continue. Informed by existing inflation, past electricity prices; inflationary trends and the medium and long-term – interest rates for servicing debt (refer inflation targets articulated by the Federal Reserve, above); and the Company has adopted what it considers to | – discount rates for valuing equity in | be prudent assumptions for 2024, 2025 and 2026 | | --- | --- | | existing projects. | onwards. Detailed sensitivity analysis is carried out | | The net impact of inflation on the | to test the impact on NAV of variations to these | | Company’s portfolio is uncertain | assumptions (for further details see page 28) | | given such impact is determined by | – The Company has existing O&M contracts in place | | multiple factors (including changes to | which are partially or fully fixed fee contracts subject | | post-PPA revenue, O&M contractual | to fixed annual escalators, which partially mitigates | | arrangements, prevailing O&M costs, | the impact of increased O&M costs based on | | debt service costs and valuation effects | increases in inflation above current forecasts. While | | from higher discount rates). | these contracts typically have two-five year terms, | which is a shorter term than for existing project PPAs, the recontracting market for O&M services is robust and is expected to provide the Company with flexibility to recontract O&M on comparable and competitive terms – As presented in Valuation Methodology section the portfolio valuation (NAV) has a positive correlation with inflation. While USF’s existing long-term PPAs provide price stability, these contracts are not indexed with inflation and as such the Company will not potentially benefit from increases in power prices until these contracts come up for re-contracting, albeit the overall impact on theportfolio remains positive over the useful life of the portfolio Please refer to the inflation sensitivities provided on page 28 for further detail on this exposure. US Solar Fund plc 46 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS d) OPERATIONAL RISKS Risk Impact on Company Mitigant Movement 6. Valuation of assets Valuations of the Company’s assets may – The Company’s assets are valued on a quarterly  be under or overstated. basis. The Company appoints an independent valuation firm to undertake valuations of its solar assets twice a year (valued as at 30 June and 31 December) and such valuations are rolled forward by the Investment Manager (as at 31 March and 30 September) – Valuations presented by the Investment Manager are supported by comparative analysis of other market transactions and confirmed by long term discounted cashflow models. The valuations are reviewed and challenged by the Board on a quarterly basis – The Company publishes sensitivities showing how the performance or valuation portfolio may be affected by changes in various underlying assumptions. Please refer to page 28 for further detail on these sensitivities 7. Operational fraud The Company is potentially exposed to – The Investment Manager maintains and adheres  financial losses from fraudulent activities topolicies, processes and controls designed to related to receipts from counterparties prevent and detect fraud and other irregularities in or wholesale markets, or payments payment processes made to vendors and suppliers. – In addition, all of the Company’s assets are operational and the majority of payments to service providers are repeat payments flowing from existing contractual arrangements with known counterparties, further mitigating the risk of large one-off payments to unfamiliar parties (such as may exist during the construction phase of an asset’s life) US Solar Fund plc 47 Annual Report and Financial Statements 2024 ## RISK AND RISK MANAGEMENT CONTINUED d) OPERATIONAL RISKS CONTINUED Risk Impact on Company Mitigant Movement 8. Access to capital The Company may not be able to source – Three of the Company’s five portfolios have  | from debt providers | funding from suitable debt providers at | amortising debt facilities – Milford, Heelstone and | | --- | --- | --- | | and compliance with | competitive terms and costs which will | Euryalus. While these facilities were all sized on | | existing debt and tax | introduce uncertainty and potentially | the basis of the long-term contracted cash flows | | equity obligations | higher capital costs for the Company | of each portfolio, these facilities will need to be | | | when refinancing existing | refinanced between 2026 and 2028. Risks relating | | | debt arrangements. | to future refinancings are reduced by the good | operational track record of the Company’s portfolio, The Company may be exposed to risks and conservative gearing across the overall portfolio from its contractual relationships in (both Olympos and Granite portfolios are presently relation to tax equity financing with any unlevered). The Investment Manager is actively tax equity partner. pursuing a bank debt financing of these facilities, which will proactively address near and medium-term refinancing requirements – While tax equity financings were raised to support the construction of all five of the Company’s portfolios, subsequently tax equity partners for both the Granite and Heelstone portfolios have been fully bought out as expected. As of 31 December 2024, active tax equity investments remain in place for the Olympos, Euryalus and Milford portfolios, with scheduled tax equity buyout dates between 2025 and 2028 respectively. The Company continues to carefully monitor compliance for active tax equity financingprovisions – The Company’s $20 million USF Avon LLC corporate revolving credit facility remained undrawn as of 31December 2024 9. Supply chain The Company may inadvertently acquire In response to risks relating to procuring parts or  procurement risk equipment that has been manufactured equipment impacted by forced labour or other factors with input from forced labour, modern contrary to the Company’s sustainability policies, the slavery, or other behaviours contrary to Company has adopted heightened due diligence the Company’s sustainability policy. procedures for new counterparties/suppliers or where material concerns arise. Supply chain disruptions can also delay scheduled maintenance and In response to procurement delay risks, where feasible, extend outages during unscheduled the Investment Manager works with O&M contractors maintenance events, resulting in to hold adequate inventories of spare parts. In addition, lost revenues. industry connections are maintained with component manufacturers, engineering advisors and other industry participants to enable the early identification of potential supply chain issues. US Solar Fund plc 48 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS d) OPERATIONAL RISKS CONTINUED Risk Impact on Company Mitigant Movement 10. Counterparty There is the potential for losses to be The Company and the Investment Manager  credit risk incurred due to defaults by material diversify credit risk across multiple investment-grade contract counterparties counterparties. No financial transactions are permitted with counterparties with a credit rating of less than BBB- from Standard & Poor’s or Baa3 from Moody’s unless specifically approved by the Board. The Investment Manager will continue to monitor credit market conditions, including as they apply to PPA counterparties. There have been no material changes to the creditworthiness of any of the USF counterparties since 31 December 2023. 11. Under-performance The underperformance of solar – Production forecasts utilised in the Company’s  of the Solar Assets assets may lead to reductions in budgeting process were prepared by reputable energy generated and thereby a third-party advisory firms, to provide assurance that reduction in revenue that the asset reasonable generation assumptions are utilised. would be expected to produce. These production forecasts are subject to review if Underperformance can be caused prolonged, uncharacterised losses of a sufficiently by both factors within the Company’s material level occurs at any of the Company’s assets control and influence (for example – The Company’s portfolio benefits from diversification maintenance plans and procedures), of geography (the assets are located across multiple and those entirely outside of the regions within the US impacted by different weather Company’s control (for example patterns); technology; equipment manufacturers, weather, and actions taken by revenue streams and offtakers, meaning no transmission and distribution utilities). one single issue should itself compromise the performance resilience of the Company’s portfolio – The Company has engaged capable O&M subcontractors to operate and manage the performance of Company’s portfolio, overseen bythe Company’s asset management resources. The effectiveness of the asset management oversight is further supported by ongoing investment in data capture and analysis tools to more effectively and quickly identify and address performance issues that arise Please refer to the generation sensitivities provided on page 28 for further detail on this exposure. 12. Unfavourable The Company may be exposed to a – The Company’s portfolio is diversified across a  weather conditions lower-than-expected volume of revenue variety of geographies, which provides a degree of generation produced by the solar assets protection against location-specific weather systems caused directly by unfavourable weather and low solar irradiance conditions (such as low solar irradiation) – Project-specific generation forecasts are calibrated and indirectly via the risk of damage to the historical and expected weather conditions at to the Company’s assets or power each specific site transmission infrastructure caused by – The sensitivity of the Company’s NAV to deviations extreme weather events. from energy generation expectations is provided on page 28 US Solar Fund plc 49 Annual Report and Financial Statements 2024 ## RISK AND RISK MANAGEMENT CONTINUED d) OPERATIONAL RISKS CONTINUED Risk Impact on Company Mitigant Movement 13. Climate change The Company may be exposed to lower – The Company’s portfolio is diversified across a  or climate-related than expected revenue generation variety of geographies, which provides a degree of events caused indirectly via the risk of damage protection against the occurrence and impact of to the Company’s assets or power climate related events transmission infrastructure caused – The Company’s exposure is mitigated through by climate change of climate related appropriate insurance arrangements including events. property insurance and business interruption insurance. The Investment Manager works closely with the Company’s insurer to ensure coverage is appropriate to properly manage climate-related events having regard to the location and other asset specific factors. Identified climate-related risks, which are evaluated by the Company’s insurer annually on a per asset basis, and scored according to proprietary climate modelling tools, include flood, earthquake, wildfire, earth movement and tornado/hail 14. Cyber risk The Company may be exposed The Company relies on those of its service providers,  disruption to its operations caused principally the Investment Manager and Administrator, by a cyber attack (via a hacker or which have procedures in place to prevent and detect virus) which may attempt to access cyber attacks and have robust business continuity the IT systems of the Company, the plans in place. Investment Manager, the Administrator or one of the project companies and attempt to destroy or use asset or Company data for malicious purposes, as part of a targeted or random act. 15. Physical asset The Company may be exposed to – The Company’s exposure is mitigated through  disruptions in operations, reductions appropriate insurance arrangements including in generation and/or financial penalties property insurance and business interruption resulting from physical damage to the insurance. The Investment Manager works Company’s assets or if the Company’s closely with the Company’s insurer to ensure assets cause damage or harm to its coverage is appropriate to properly manage users in some way. physical risks faced by the Company’s assets, and compliance with insurance requirements set by the Company’s offtakers, grid operators and other key counterparties – All assets within the Company’s portfolio maintain documented site security and controlled access protocols, with O&M scopes including responsibility for administering site access and maintaining the integrity of site fencing and access controls – Asset designs include circuit breakers and safety switches that will isolate and disconnect a section of an asset or an entire facility in the event of electrical and/or system faults – O&M and asset management subcontractors maintain training requirements and health and safety protocols for all on-site staff US Solar Fund plc 50 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## LONGER TERM VIABILITY | The Board is responsible for financial | After assessing these risks, and reviewing | The Company has access through USF | | --- | --- | --- | | reporting and controls, including the | the Company’s liquidity position, together | Avon LLC (a wholly owned subsidiary of the | | approval of the Annual Report and | with the Company’s commitments, available | Company) to a $20.0 million RCF. The RCF | | Accounts, the dividend policy, any significant | but undrawn credit facilities, and forecasts of | provides liquidity for capital expenditures, | | changes in accounting policies or practices, | future performance under various scenarios, | working capital and general corporate | | and treasury policies including the use of | the Board has a reasonable expectation that | purposes until September 2025. The facility | | derivative financial instruments. | the Company is well positioned to continue | is currently undrawn with no forecast | | | to operate and meet its liabilities over the | drawings expected. Whilst an ongoing | | The Board of the Company is also required | short term and the five year outlook period. | refinancing exercise continues across the | | to assess the long-term prospects of the | While the Board has no reason to believe | portfolio which is expected to replace the | | Company according to the AIC Code. | that the Company will not be viable beyond | facility (see page 6), as the current facility | | The Board has assessed the principal risks | the specified outlook period, it is aware that | expires in September 2025, for prudency | | facing the Company set out above over a | it is difficult to foresee the viability of any | this has not been assumed to be available in | | five year period, which it considers | business, including the potential impacts of | the viability assessment. The proposed | | appropriate given the long-term nature of the | climate related risks, over a longer period | refinancing will proactively address the near | | Company’s investments and its long-term | given the inherent uncertainty involved. | medium term refinancings required between | | planning horizon. The Board considers a five | As noted in the going concern statement in | 2026 to 2028 with the first debt expiring for | | year timeframe to be reasonable on the | the Directors’ Report the Directors have | Euryalus in June 2026. The proposed | | basis that the Company is in the initial stage | considered the upcoming discontinuation | refinancing is expected to conclude by | | of operating assets. The key risks facing the | vote expected at the Company’s AGM | the end of April 2025. | | Company have been individually assessed | on 20 May 2025 in this assessment. | | | by the Board. The likelihood and impact of | The current uncertain and volatile conditions | It is important to note that the risks | | each risk on the Company prior to and after | following the US election are not conducive | associated with investments within the solar | | specific risk mitigation controls have taken | to the Company realising the value of its | infrastructure sector, including elevated | | place have been evaluated. | assets and the Directors unanimously | inflation and climate related risks resulting in | | | recommend that shareholders vote against | unfavourable weather conditions for | | The Company owns a portfolio of solar | it. The Board and Investment Manager will | extended periods, could result in a material | | assets in the US that are fully constructed, | continue to monitor the market for similar | adverse effect on the Company’s | | operational and generating renewable | assets as those held by the Company, with | performance and value of Ordinary Shares. | | electricity. As a result, it benefits from | a view to the realisation of value from the | When required, experts will be employed to | | substantially predictable and reliable | Company’s assets when the time is right. | gather information, including tax advisers, | | long-term cash flows and is subject to a set | That time is not now based on prevailing | legal advisers, and environmental advisers. | | of risks that can be identified and assessed. | market conditions described in the Chair’s | | | Each solar asset is supported by a detailed | Statement which are not conducive to a sale | | | financial model at acquisition and | for value. | | incorporated into the Company’s valuation | model for quarterly valuations, which are | Reflecting this view and initial feedback from | | | --- | --- | --- | | independently reviewed every half year. | some shareholders (and considering the | GILL NOTT | | The Board believes the geographical | 75% threshold required) the discontinuation | CHAIR | | diversification within the Company’s portfolio | vote is not expected to be passed. Should | 9 April 2025 | | of solar assets helps to withstand and | the discontinuation vote be passed the | | | mitigate many of the emerging and principal | Directors would be required to put forward | | | climate, regulatory and operational risks the | proposals to shareholders at a general | | | Company is likely to face. The Company’s | meeting of the Company, to be held within | | | revenues from investments provide | four months of the Discontinuation | | | substantial cover to the operating expenses | Resolution being passed, to wind up or | | | of the SPVs, USF Holding Corp., and the | otherwise reconstruct the Company, having | | | Company and any other costs likely to be | regard to the illiquid nature of the Company’s | | | faced by any of them over the viability | underlying assets. Any such process given | | | assessment period. The Investment | the past strategic review, and to ensure | | | Manager also prepares a rolling detailed | appropriate value is returned to | | | monthly two year short term cash flow | shareholders, would be expected to | | | forecast to address and specifically consider | ultimately conclude more than 12 months | | | the sustainability of the dividends. | after the balance sheet date but would | | conclude within the viability period. The assumption used in the Viability Statement is that the vote will not be passed. US Solar Fund plc 51 Annual Report and Financial Statements 2024 ## SECTION 172 | Section 172 of the Companies Act 2006 | 2. LENDERS | 4. GOVERNANCE | | --- | --- | --- | | recognises that Directors are responsible for | The Company relies on Lenders in | The Board regularly considers how it meets | | acting fairly as between members and in a | connection with existing debt facilities. | regulatory and statutory obligations and | | way that they consider, in good faith, is the | TheCompany reduced its corporate RCF | follows voluntary and best-practice | | most likely to promote the success of the | during the period. The Company through | guidance, including how any governance | | Company for the benefit of its shareholders | itsInvestment Manager works in close | decisions it makes impact its stakeholders | | as a whole. In doing so, they are also | coordination with Lenders and provides | both in the short and long term. The AIC | | required to consider the broader implications | project-level performance reports as well as | shapes the influence of the growing listed | | of their decisions and operations on other | ad hoc reporting of major announcements | investment company segment in the London | | key stakeholders and their impact on the | as required by the relevant financing | market, and the Company seeks to apply | | wider community and the environment. | arrangements. This maintains a constructive | AIC guidelines where relevant to its | | Keydecisions are those that are either | relationship with Lenders. | operations, including the 2019 AIC Code of | | material to the Company or are significant | | Corporate Governance. | | toany of the Company’s key stakeholders. | 3. SERVICE PROVIDERS | | | The Company’s engagement with key | The Company works with a number of key | 5. PPA OFFTAKERS | | stakeholders and the key decisions that | corporate service providers, including the | The offtakers for the Company’s assets | | were made or approved by the Directors | Investment Manager, Administrator, Registrar | provide the main source of revenue received | | during the year are described below: | and Independent Auditor, who provide | by the Company, and the Company requires | | | services to ensure the smooth operation of | offtake agreements be entered into with | | 1. SHAREHOLDERS | the Company, including in the case of the | credit-worthy counterparties as part of its | | The Board is accountable to the | Independent Auditor, periodic independent | investment mandate. The Company through | | shareholders for running the business of the | review of financial statements. The Board | its Investment Manager maintains regular | | Company, making key strategic decisions | meets once a year to discuss and review the | contact with the PPA offtakers, including | | and all key service provider appointments. | performance of the key service providers. | through project-level performance and ad | | As covered in the Corporate Governance | The Board has regular contact with the two | hoc reporting. No offtaker is a related party | | Report (pages 58 to 62), the Board | main service providers: the Investment | of the Board or Investment Manager. | | communicates with shareholders and | Manager and Administrator through quarterly | | | solicits their views where it considers it is | Board meetings. The Independent Auditor | 6. LOCAL COMMUNITIES | | appropriate to do so including throughout | typically attends a number of the Audit | The local communities within which the | | the strategic review process. The Board is | Committee meetings scheduled throughout | Company’s projects are based provide local | | non-executive and independent and | the year, to present their reports on the | support as well as human resources to work | | delegates certain key activities, including the | interim review and annual audit. | on the project sites. The Company works | | day-to-day investment management and | The Company’s underlying project | with landholders and city councils through | | asset management to the Investment | companies also have project suppliers, | the Investment Manager, to resolve matters | | Manager, and administration and company | including O&M and external asset managers | including egress and access, erosion, and | | secretarial functions to the Administrator. | While there are currently no projects under | land management issues. | | The Board works closely with the Investment | construction, the Investment Manager’s | | | Manager, Company Secretary and its | asset management team maintains | Complaint handling procedures are in place | | Corporate Brokers, to ensure it is aware of | relationships with all project suppliers, | at all sites, with one minor complaint | | shareholders’ needs or concerns. | including landowners for leased sites, and | received during the year. This was in relation | | The Investment Manager liaises with | grid operators. The Company has no | to access road re-grading at Chiloquin, part | | shareholders through specified reporting | employees, however the Board reviews | of the Heelstone portfolio, which is | | of Company performance, strategy and | health and safety metrics from external | scheduled to be addressed when the | | outlook at set dates in the calendar, as | O&M service providers at each quarterly | weather allows in 2025. | | well as ad hoc reporting of major | Board meeting. | | announcements, and sessions organised by the Company’s brokers. In addition, shareholders have the opportunity to meet the Board at the AGM. The Board also endeavours to respond to any written queries made by shareholders during the course of the period, or to meet with major shareholders if so requested. In addition to the formal business of the AGM, representatives of the Investment Manager and the Board are available to answer specific questions a shareholder may have from time to time. US Solar Fund plc 52 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Section 172(1) Statement Area Comments and References The issues, factors and At each quarterly meeting, the Board receives a comprehensive report from the Investment Manager, stakeholders the Directors serving as the primary information source regarding subsections (a)-(f). Additionally, the Investment consider relevant in complying with Manager provides updates on specific customer, supplier, and contractor matters, including any section 172(1)(a)-(f) and how they disputes. Corporate brokers also furnish updates at alternating quarterly meetings to ensure have formed that opinion. awareness of existing and prospective shareholder concerns and an on ad-hoc basis raise any material concerns. The Company’s risk register and reporting mechanisms facilitate the identification of items pertinent to the Board’s Section 172(1) statement, and the Board actively engages the Investment Manager in dialogue concerning stakeholder concerns and the optimal strategies for addressing them to maintain positive engagement. (a) The likely consequences of any The Board considers the likely long-term impacts of its decisions on key stakeholders given the decisions in the long term. long-term nature of its investments. Refer to pages 58 to 62 – Corporate Governance Report. (b) The interests of the Company’s The Company has no employees. employees. (c) The need to foster the Specific risks regarding the Investment Manager, Administrator and Lenders are set out above. Company’s business Please also refer to pages 58 to 62 – Corporate Governance Report and pages 44 to 50 – Risk and relationships with suppliers, Risk Management. customers and others. (d) The impact of the Company’s The impact of the Company’s operations on the local communities is set out above (refer to Principal operations on the community Risks and Uncertainties). Please also refer to Responsible Investment – pages 31 to 41. and environment. (e) The desirability of the Company The Board aims to demonstrate excellence in stewardship and governance, and the independent maintaining a reputation for Non-Executive Directors set the tone for maintaining and enhancing the Company’s reputation. high standards of business This includes maintaining ethical behaviour and respecting the environment. The Audit Committee conduct. complements the Board to ensure the highest standards of conduct, integrity, financial reporting, internal control and risk management systems, and corporate governance. Refer to pages 58 to 62 – Corporate Governance Report and pages 64 to 66 – Audit Committee’s Report (f) The need to act fairly as The Company has a single class of Ordinary Shares and welcomes the views of shareholders. between members of the The Company produces a complete set of results documents twice a year which are available on its Company. website, and senior members of the Investment Manager make themselves available to meet with principal shareholders as soon as it is reasonably practicable to do so following a request. The Board is kept fully informed of all relevant market commentary on the Company by the Company’s public relations agency, as well as receiving relevant updates from the Investment Manager and Corporate brokers. The Company reports formally to shareholders twice a year and will hold an AGM in London on 20 May 2025 which shareholders will be able to attend, and members of the Board will be available to answer questions from shareholders. The Company Secretary and Company Registrar monitor voting at the AGM, and the results of voting at the AGM are announced by the Company promptly, and other notices and information are provided to shareholders on an ongoing basis through RNS announcements and on the Company’s website. Shareholders may contact the Board through the Company Secretary, whose contact details are found on page 101 – Key Contacts. Please also refer to pages 58 to 62 – Corporate Governance Report US Solar Fund plc 53 Annual Report and Financial Statements 2024 ## SUMMARY OF INVESTMENT POLICY  Rock Garden (Euryalus Portfolio) 14.9MW (Oregon) DC OVERVIEW To the extent attractive opportunities to expand the portfolio arise, The Company invests predominantly in utility-scale solar power the Company may acquire, directly or indirectly, develop and/or plants primarily in the United States, but it may also invest in other construct and operate solar power assets. OECD countries in the Americas. The inclusion of development stage assets will allow for greater The Company targets development, construction ready, in diversification of investments and facilitate opportunities for future construction, or operational solar power assets that are designed accretive growth of the Company. The Company will only target and constructed to have an asset life of at least 30 years and are late-stage development assets which, at a minimum, have secured expected to generate stable electricity output and revenue over the grid connection, planning approvals and appropriate revenue lifespan of the asset. arrangements, which minimises exposure to development risks but maximises the Company’s competitive advantage compared The Company’s Investment Policy was changed by ordinary to mature asset acquisitions. resolution of the shareholders in accordance with the UK Listing Rules on 17 November 2023. The changes were principally The Company expects that construction-ready or in-construction clarificatory in nature, bringing the Company’s Investment Policy solar power assets will be operational within 12 months from into line with the market and its peer group as well as expressly commitment. As some offtakers execute PPAs more than including late-stage development investments in scope for the 12 months in advance of the required commencement date, the Company. The Investment Policy is summarised below and Company may commit to acquire assets which will be operational available in full here: https://www.ussolarfund.co.uk/sites/default/ more than 12 months from the time of commitment but seeks to files/267093_us_solar_fund_circular_web.pdf limit capital commitments before construction commences. INVESTMENT PARAMETERS INVESTMENT RESTRICTIONS Maintaining the performance of the existing portfolio is the In order to spread its investment risk, the Company has adopted Company’s key focus. certain investment restrictions, in each case to be measured at the time of the relevant investment, including: Revenue exposure to merchant power prices is managed by – the Company may invest up to 30% of total assets in a the Company with the appropriate use of PPAs, REC Agreements, single asset; capacity contracts or other similar revenue contracts with – the Company may invest up to 15% of total assets in creditworthy (predominantly investment grade) private and public development stage assets; sector offtakers. PPAs may be structured as physical electricity – the aggregate value of the Company’s investment in assets contracts, contracts for difference, or other hedge-based under contract to any single offtaker will not exceed 40% of arrangements. total assets; and – Solar assets in the US will represent at least 85% of total assets. To the extent that a solar power asset generates electricity in addition to volumes required under a PPA, such excess may be As a London Stock Exchange listed company, the Company is also sold into a wholesale market if available or the Company may subject to certain restrictions pursuant to the UKLA Listing Rules. seek to sell such electricity to another offtaker under a short or long-term contract. US Solar Fund plc 54 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS # BOARD OF DIRECTORS The Directors are responsible for the determination of the Company's investment objective and policy and its investment strategy and have overall responsibility for the Company's activities, including the review of investment activity and performance and the supervision and control of the Investment Manager. The Directors have delegated responsibility for managing the assets comprising the portfolio to the Investment Manager. Further information on the Board is provided at www.ussolarfund.co.uk. ![img-3.jpeg](img-3.jpeg) **GILL NOTT** NON-EXECUTIVE CHAIR **DATE OF APPOINTMENT:** 15 February 2019 ## BACKGROUND AND EXPERIENCE Gill has spent the majority of her career working in the energy sector, including positions with BP. In 1994 she became CEO of ProShare, a not-for-profit organisation promoting financial education, savings and investment, and employee share ownership. She was a Non-Executive Director of the Financial Services Authority from 1998 until 2004. Subsequently she has held numerous board roles, including being a Non-Executive Director of Liverpool Victoria Friendly Society, a leading insurer, and deputy chair of the Association of Investment Companies. Gill has served as both a Non-Executive Director and chair of a number of venture capital trusts and investment trusts. She is currently chair of Premier Milton Global Renewables Trust plc, PMGR Securities 2025 plc and Gresham House Renewable Energy VCT 1 plc. ## ROLE: Chair | Member of the Audit Committee, Remuneration and Nomination Committee and Management Engagement Committee ![img-4.jpeg](img-4.jpeg) **THOMAS PLAGEMANN** NON-EXECUTIVE DIRECTOR **DATE OF APPOINTMENT:** 29 June 2020 ## BACKGROUND AND EXPERIENCE Thomas has almost 30 years of experience originating and executing financings and investments in energy and infrastructure assets. Currently, Thomas is the Chief Executive Officer of ClearLight Solar LLC, a residential solar platform backed by Blackstone Credit and Insurance. Thomas previously served as the chief financial officer for PosiGen Inc., a New Orleans based residential solar and energy efficiency company focused on energy efficiency upgrades and installation of solar on homes in low-income communities. Prior to that, Thomas was the chief commercial officer at Vivint Solar, a leading residential solar business in the US and held senior positions at Santander Global Banking and Markets, First Solar and GE Capital. Thomas is an elected director on the board of the Solar Energy Industry Association, a non-profit trade association of the solar-energy industry in the US. ## ROLE: Member of the Audit Committee, the Remuneration and Nomination Committee and Management Engagement Committee ![img-5.jpeg](img-5.jpeg) **JAMIE RICHARDS** NON-EXECUTIVE DIRECTOR **DATE OF APPOINTMENT:** 15 February 2019 ## BACKGROUND AND EXPERIENCE Jamie is a chartered accountant and has 30 years' experience in fund management, banking and corporate recovery with a focus on the infrastructure and solar sector. Jamie was previously a partner at Foresight Group having joined in 2000. Between 2007 and 2018 he had overall responsibility from inception for the group's infrastructure and solar business in the UK, Australia, Italy, Spain and the US. As a member of the investment committee, he oversaw more than 100 solar projects representing the group's approximately £1.5 billion solar portfolio at the time and led the IPO of Foresight Solar Fund Limited. Prior to Foresight, Jamie worked at PwC, Citibank and Macquarie. ## ROLE: Chair of the Audit Committee | Chair of the Remuneration and Nomination Committee | Member of the Management Engagement Committee ![img-6.jpeg](img-6.jpeg) **MARK LERDAL** NON-EXECUTIVE DIRECTOR **DATE OF APPOINTMENT:** 1 October 2024 ## BACKGROUND AND EXPERIENCE Mark is based in San Francisco, and is an experienced board director with over thirty years' experience in the energy and renewables sectors. He began his career working with developers, including as CEO of Kenetech, a large wind and alternative energy developer, constructor and operator. Mark has held several other senior renewables roles including Executive Chair at Leaf Clean Energy, a renewable energy and sustainable technology investment firm formerly listed on the AIM division of the London Stock Exchange. Mark has a number of board/advisory roles including as an adviser to Adaptive Renewables and a board member of BluePath Finance. ## ROLE: Chair of the Management Engagement Committee | Member of the Audit Committee and the Remuneration and Nomination Committee US Solar Fund plc Annual Report and Financial Statements 2024 55 # DIRECTORS' REPORT ## PRINCIPAL ACTIVITY AND STATUS US Solar Fund plc was incorporated as a Public Company, limited by shares, in England and Wales on 10 January 2019 with registered number 11761009. The registered office of the Company is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF. Its share capital is denominated in US dollars (USD or $) and currently consists of Ordinary Shares. The Company's principal activity is to invest in a diversified portfolio of solar power assets located in North America and other countries forming part of the OECD in the Americas. ## DIRECTORS All Directors are Non-Executive Directors. The Company maintains £20 million of directors' and officers' liability insurance coverage which was in place throughout the period, and which continues in effect at the date of this report. As at the date of this report, and in so far as each Director is aware, there is no relevant audit information of which the Company's Auditors are unaware; and each Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's Auditors are aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. Details of the fees paid to Directors in the period are set out in the Directors' Remuneration Report on pages 67 to 68. In accordance with UKLR 6.6.6(1)R, Directors' interest in the shares of the Company (in respect of which transactions are notifiable to the Company under FCA Disclosure and Transparency Rule 3.1.2(R)) as at 31 December 2024 are shown below: | Director | Ordinary Shares | % of issued share capital | | --- | --- | --- | | **Gill Nott** | 126,000 | 0.04% | | **Jamie Richards** | 185,112 | 0.06% | | **Mark Lerdal** | – | – | | **Thomas Plagemann** | – | – | ## SIGNIFICANT SHAREHOLDING As at 31 December 2023, the Company was aware of or had received notification in accordance with the Financial Conduct Authority's Disclosure and Transparency Rule 5 of the following interests in 3% or more of USF's shares to which voting rights are attached: | Shareholder | Ordinary Shares | % of total voting rights | | --- | --- | --- | | **Weiss Asset Management LP** | 29,090,857 | 21.21%^{39} | | **CCLA Investment Management** | 23,087,540 | 7.50% | | **Baillie Gifford** | 20,790,604 | 6.75% | | **Sarasin & Partners LLP** | 19,828,810 | 6.44% | | **Cantor Fitzgerald Asset Management Europe** | 15,519,047 | 5.04% | | **Almitas Capital LLC** | 8,609,579 | 4.27%^{40} | | **Gravis Advisory Ltd** | 11,931,066 | 3.88% | | **Privium Fund Management BV** | 11,205,386 | 3.64% | | **Hargreaves Landsdown Asset Management** | 11,173,441 | 3.63% | | **Metage Capital Ltd** | 9,710,944 | 3.15% | Since the year end, the Company has been notified of the following changes in holding of voting rights in the Company: | Shareholder | Date threshold crossed or reached | Total % of voting rights | | | --- | --- | --- | --- | | | | Position of previous notification | Resulting situation on date threshold was crossed or reached | | **Weiss Asset Management LP** | 9 January 2025 | 21.56% | 22.21%^{41} | There have been no other changes notified to the Company in respect of the above holdings, and no other new holdings notified, since year end. $^{39}$ This comprises of 9.45% voting rights attached to Ordinary Shares and 12.11% voting rights through financial instruments. $^{40}$ This comprises of 2.8% voting rights attached to Ordinary Shares and 1.47% voting rights through financial instruments. $^{41}$ This comprises of 9.66% voting rights attached to Ordinary Shares and 12.55% voting rights through financial instruments. 56 **US Solar Fund plc** Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## GOING CONCERN The Board has reviewed a set of financial projections of the cash flow and distribution profile of the Company prepared by the Investment Manager. The Board has assessed the prospects of the Group by reviewing its short-term cash flow forecast which covers a two-year period and completed a detailed assessment to support the going concern conclusion for the 12 months following the signing of the Annual Report. After assessing these risks, and reviewing the Company's liquidity position, together with forecasts of the Company's future performance under various scenarios, the Board has a reasonable expectation that the Company will continue to meet its obligations as they fall due for at least the next 12 months. The Company has access through USF Avon LLC (a wholly owned subsidiary of the Company) to a $20.0 million RCF. The RCF provides liquidity for capital expenditures, working capital and general corporate purposes until September 2025. The facility is currently undrawn with no forecast drawings expected. Whilst an ongoing refinancing exercise continues across the portfolio which is expected to replace the facility (see page 6), as the current facility expires in September 2025, for prudence this has not been assumed to be available in the going concern assessment. The proposed refinancing will proactively address the near medium term refinancings required between 2026 to 2028 with the first debt expiring for Euryalus in June 2026. The proposed refinancing is expected to conclude by the end of April 2025. Because the Company has traded at an average discount to NAV in excess of 10% over the course of 2024, the Company's Articles require that a special resolution be proposed at the Company's forthcoming AGM, for shareholders to vote to wind up or otherwise reconstruct the Company. If a discontinuation resolution is passed (requiring the approval of at least 75% of the votes cast in respect of it), the Company's Articles provide the Board with four months to put forward a proposal to shareholders. The Directors have considered the upcoming discontinuation vote expected at the Company's AGM in their assessment of going concern. Given current uncertainties in the US market, the Board believes it would be very difficult to achieve a realisation of the Company's assets currently other than at a distressed price, and does not recommend a discontinuation. The Directors' assessment of going concern included reflection of this view and feedback from shareholders has been supportive of realising value from the Company's assets when market conditions are conducive to a sale for value. Additionally, the discontinuation vote proposed at the 2024 AGM was not passed. Should the discontinuation vote be passed the Directors would be required to put forward proposals to Shareholders at a general meeting of the Company, to be held within four months of the Discontinuation Resolution being passed, to wind up or otherwise reconstruct the Company, having regard to the illiquid nature of the Company's underlying assets, and implementation of any such proposal would be expected to extend beyond the current going concern period. As such, and reflecting the Company's strong liquidity position noted above, the Board concluded that it is appropriate to adopt the going concern basis of preparation in preparing these financial statements. For further details on going concern please see note 2 of the Financial Statements. ## 2024 ANNUAL GENERAL MEETING Shareholders are invited to attend the Company's AGM to be held at the offices of JTC, The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF on Tuesday, 20 May 2025 at 3:00 p.m. The AGM notice and explanatory notes are set out from page 102. Those shareholders who are unable to attend the AGM in person are encouraged to raise any questions in advance with the Company Secretary at USSolarFund-CompanySecretary@jtcgroup.com (please include 'USF AGM' in the subject heading and include your name and shareholder reference number, which can be found on your share certificate, proxy form or email broadcast from the Company). To the extent that it is appropriate to do so, we will respond to any questions received in a Q&A which will be posted on the Company's website, in advance of the AGM. Please note all questions should be submitted by close of business on Tuesday, 13 May 2025. If you are unable to locate your reference number, please contact the Company's Registrar, Computershare Investor Services PLC on 0370 703 6253. You may not use any electronic address provided in this section to communicate with the Company for any purposes other than those expressly stated. Further, the Investment Manager will make available a presentation to shareholders in advance of the AGM. The presentation is expected to be available on the Company's website (https://www.ussolarfund.co.uk/) on Monday 12 May 2024. ## RESOLUTIONS TO BE PROPOSED AT THE AGM There are 14 resolutions being proposed at the forthcoming AGM, 10 as ordinary resolutions, including approval of the Annual Report and Audited Financial Statements for the year ended 31 December 2024, as well as approving the Directors Remuneration Report contained within the 2024 Annual Report (Resolution 1 and 2). Ordinary Resolutions require 50% of the votes cast, whereas the four Special Resolutions require 75% of the votes cast to be in favour of the relevant resolution, for that resolution to carry. Resolution 14 a Special Resolution, is a Discontinuation resolution, for which the Board unanimously recommends to vote AGAINST. Further information on these resolutions as well as voting recommendations is given in the Notice of AGM and explanatory notes from page 102. ## POLITICAL CONTRIBUTIONS The Company made no political contributions during the period. Signed by order of the Board **GILL NOTT** CHAIR 9 April 2025 US Solar Fund plc Annual Report and Financial Statements 2024 57 ## CORPORATE GOVERNANCE REPORT The AIC Code is available on the AIC website ## The Board reports against the Principles (https://www.theaic.co.uk/aic-code-of- corporate-governance). ## and Provisions of the AIC Code of The Company has complied with the AIC Code during the year under review, except as ## Corporate Governance (AIC Code). disclosed below: ## The AIC Code, which has been endorsed Provision 14: Due to the size of the Board a Senior Independent Director has not been ## by the Financial Reporting Council, appointed. The Chair and Investment Manager maintain appropriate communication with shareholders. If required, the other Directors ## addresses provisions set out in the UK are available to shareholders. As the Board is small, any issues are discussed and dealt with ## Corporate Governance Code (the UK by the Board as a whole. In the circumstance that there would be any issues with the Chair, ## Code), as well as including additional the remaining Directors would deal with these. There is a joint Remuneration and Nomination ## provisions that are of specific relevance Committee, where any evaluation of the Board Chair’s performance, re-election, or the recruitment of their successor is discussed. ## to the Company. THE BOARD The Board currently comprises of Gill Nott (Chair), Jamie Richards, Thomas Plageman and Mark Lerdal. All Directors are deemed independent of the Investment Manager and biographical details of all Board members are included on page 55. The conditions of appointment of Directors are available to shareholders upon request and are also available on the Company’s website. In accordance with the AIC Code, Gill Nott, Jamie Richards and Thomas Plagemann will retire at the forthcoming AGM and being eligible will offer themselves for re-election. Mark Lerdal will stand for election to the Board. Full Board meetings take place quarterly and the Board meets or communicates more regularly on an ad hoc basis to address specific issues. The Board has a formal schedule of matters specifically reserved for its decision, which includes but is not limited to: considering recommendations from the Investment Manager, ensuring the Company is delivering on its strategy and monitoring performance against the Company’s strategic objectives. US Solar Fund plc 58 Annual Report and Financial Statements 2024 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSOVERVIEW The Board has also established procedures whereby Directors This Committee meets as required to consider, amongst other wishing to do so in the furtherance of their duties may take things, the following: independent professional advice at the Company’s expense. – in conjunction with the Chair, setting the Directors’ remuneration All Directors have access to the advice and services of the levels; Company Secretary. The Company Secretary provides the Board – considering the need to appoint external remuneration with full information on the Company’s assets and liabilities and consultants; other relevant information requested by the Chair, in advance of – the process for appointments; each Board meeting. – ensuring plans are in place for orderly succession to the Board; and BOARD COMPOSITION DURING THE YEAR – the development of a diverse pipeline for succession. During the year the composition of the Board changed. At the start of the reporting period the Board comprised of RECRUITMENT OF NEW DIRECTOR Gill Nott (Chair), Jamie Richards, Rachael Nutter, and Thomas As referenced in the Board Composition section of this report, Plagemann. However, Rachael Nutter stepped down as a Rachael Nutter stepped down as a Director on 21 May 2024. Non-Executive Director, following the conclusion of the Company’s AGM on 21May 2024. Upon Rachael Nutter’s resignation, Jamie Richards assumed the positions of chair of the Remuneration and Nomination Committee As a result of this, a recruitment process was carried out and and Management Engagement Committee. Mark Lerdal was appointed as a new Non-Executive Director on 1 October 2024. Details regarding the recruitment process The Remuneration and Nomination Committee engaged in can be found in the below Remuneration and Nomination an extensive recruitment campaign to find and appoint a new Committeesection. Non-Executive Director. This involved establishing a detailed specification for the role; various meetings and discussions BOARD COMMITTEES with the recruitment consultant appointed for the search, Trust The Board has delegated a number of areas of responsibility to Associates; review of a long list of potential candidates, reducing it its three committees: the Audit Committee, the Remuneration to a short list of interviewees; and the interviewing of candidates. and Nomination Committee and the Management Engagement Detailed examination was conducted for the specific skills and Committee. Each committee has defined terms of reference and experience required for a solar and renewable energy investment duties, which are available on the Company’s website. company. The Committee evaluated the balance of skills, knowledge and experience, considering all candidates on merit, THE AUDIT COMMITTEE against objective criteria, and with due regard for the benefits The Audit Committee consists of the full Board and is chaired by of diversity on the Board. Following the interview stage, the Jamie Richards. Jamie is a chartered accountant and has recent Committee unanimously agreed to recommend Mark Lerdal to and relevant financial experience. the Board as the most qualified candidate. The Audit Committee typically normally meets at least three times Mark Lerdal was appointed as an independent Non-Executive a year. Director on 1 October 2024. He is based in San Francisco, US and is an experienced board director with over thirty years’ A full list of matters reserved for the Audit Committee is included experience in the energy and renewable sectors. Upon his within the Audit Committee Report on pages 64 to 66. appointment, Mark assumed the role of chair of the Management Engagement Committee. THE REMUNERATION AND NOMINATION COMMITTEE The Remuneration and Nomination Committee is comprised of the DIVERSITY whole Board and is chaired by Jamie Richards. The Remuneration and Nomination Committee is aware of the Hampton Alexander Review on board gender diversity, the Parker In accordance with the Committee’s terms of reference, no Director Review on ethnic diversity and the requirements of the FCA’s policy is involved in any decisions with respect to their own remuneration. statement on diversity and inclusion on company boards and executive management. The Company’s Remuneration policy was approved at the Company’s AGM held on 24 May 2023 as part of the regulatory The Board is chaired by Gill Nott, the Audit and Remuneration and three year approval process. Full details on this policy can be found Nomination Committees are chaired by Jamie Richards and the in the Remuneration Report on pages 67 to 68. Management Engagement Committee is chaired by Mark Lerdal. The Company has no employees beyond its Non-Executive Board, with executive management provided by its Investment Manager. US Solar Fund plc 59 Annual Report and Financial Statements 2024 ## CORPORATE GOVERNANCE REPORT CONTINUED GENDER IDENTITY AND ETHNIC BACKGROUND REPORTING AS OF 31 DECEMBER 2024 Percentage of Number of Percentage of Number of committee Number in executive executive management Board members USF Board chair positions management at Amber at Amber Gender identity Women 1 25% 0 9 45% Men 3 75% 3 11 55% Ethnic background White British or other white (including minority-white groups) 4 100% 3 18 90% Mixed/multiple ethnic groups 0 0% 0 1 5% Asian/Asian British 0 0% 0 1 5% Black/African/Caribbean/Black British 0 0% 0 0 0% Other ethnic group, including Arab 0 0% 0 0 0% The Board currently comprises four members each serving their initial terms. The Company does not currently meet the diversity targets set out in UKLR 9.8.6(9)R, in relation to the requirements that at least 40% of the individuals on the Board are women and at least one individual on its Board be from a minority ethnic background. However, the gender diversity target was met during the period from 1 January 2024 to 21 May 2024 as the Board comprised of two female Non-Executive Directors and two male Non-Executive Directors. The Board is aware of the importance and benefits of diversity including gender and ethnicity, as well as the increased focus on this area. When recruiting new directors the Remuneration and Nomination Committee will consider a diverse list of candidates, and will continue to prioritise diversity in future appointments, while ensuring any appointee is also the best candidate for the role and has a strong fit with the rest of the Board and the Investment Manager. Following the recruitment process, Mark Lerdal was selected as the best candidate for the role with over thirty years of experience in the energy and renewables sector. DIVERSITY POLICY Details of the fees paid to the Directors during 2024 and the fees to In reviewing Board composition, the Committee considers the be paid in 2025 are set out in the Directors’ Remuneration Report | benefits of all aspects of diversity including, but not limited to, | on pages 67 to 68. | | | | --- | --- | --- | --- | | differences in knowledge and understanding of relevant diverse | | Annual fee | Annual fee | | geographies, peoples and their backgrounds including race | | to be paid | received | | | | in 2025 | during 2024 | or ethnic origin, sexual orientation, gender, age, disability or Director (£) (£) religion and national origin. Diversity also includes differences in Gillian Nott 68,040 68,040 backgrounds, experiences, physical abilities, socio-economic (Director and Chair) backgrounds, perspectives, thoughts, interests and ideas, in order to maintain an appropriate range and balance of skills, experience Jamie Richards 55,125 55,125 and background on the Board. (Director and Audit Committee Chair) 42 Rachael Nutter – 17, 25 5 REVIEW OF BOARD REMUNERATION | During the year, the Remuneration and Nomination Committee | Thomas Plagemann 44,10 0 44,10 0 | | | | --- | --- | --- | --- | | carried out a review of the Directors’ fees. This review was | | 43 | | | | Mark Lerdal | | 44,10 0 11,025 | supported by a peer group fee analysis report prepared by the Company Secretary. Noting that, the Chair’s remuneration was increased by 8% and the remaining Directors remuneration was increased by 5% from 1 December 2023; the Committee concluded that the current remuneration remained appropriate and in line with the average remuneration paid by the Company’s peergroup. 42 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024. 43 Mark Lerdal was appointed on 1 October 2024. US Solar Fund plc 60 Annual Report and Financial Statements 2024 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSOVERVIEW BOARD EVALUATION ACTIVITIES DURING THE YEAR During the year, the Board undertook a formal internal annual The Committee met once during the year to review the service evaluation of its own performance by way of a questionnaire levels and the fees for the key service providers to the Company. which was completed by each Director. The assessment was led The Committee has recommended retention of the existing service by the Chair of the Remuneration and Nomination Committee, providers to the Company, having challenged fee and service levels Jamie Richards and along with the Chair of the Board, the results as appropriate. Key services providers will continue to be reviewed, were then discussed with the remaining Board members. It was at least, annually. concluded that under the leadership of the Company’s Chair, the Board performed well and worked effectively together to APPOINTMENT OF NEW LEGAL ADVISER achieve objectives in the best interests of the Company and its Following a review during the period, the Board appointed Hogan shareholders. Each Director made a positive contribution, and the Lovells International LLP as the Company’s legal advisor, effective Board was considered well balanced with no weaknesses in the in April 2024, replacing Herbert Smith Freehills. Board’s capabilities being identified. INVESTMENT MANAGER AND AIFM EVALUATION OF THE CHAIR A robust evaluation of the performance of the Investment Manager The evaluation of the Chair was led by the Chair of the and Alternative Investment Fund Manager (AIFM) was conducted Remuneration and Nomination Committee with contributions from by the Committee taking into consideration the activities that the other Directors. The Directors’ feedback showed that the Chair had occurred throughout the year. It was concluded that the effectively promoted a culture of openness and debate, facilitated Investment Manager had complied with the terms of their constructive Board relations and ensured all Board members Investment Management Agreement (IMA) and had met their contributed effectively. obligations to the Company as Investment Manager and AIFM during the period under review. The fees paid to the Investment TENURE OF CHAIR AND SUCCESSION POLICY Manager and the AIFM were reviewed by the Committee and it The Board has adopted a policy on chair tenure and succession was concluded that these are reasonable. planning. In line with this policy, the Chair should be in place for a maximum of nine years. As stated in the AIC Code, the chairs of BOARD AND COMMITTEE MEETINGS investment companies differ to chairs of other companies which The following table sets out the Directors’ attendance at the Board means that the maximum tenure of nine years provided in the AIC and Committee meetings during the period: Code does not necessarily apply. However, to address the need for diversity, the Board’s policy adopts a maximum nine year tenure | | | | Remuneration | Management | | --- | --- | --- | --- | --- | | for the chair position. | | Audit | and Nomination | Engagement | | | Director Board | Committee | Committee | Committee | | The Board’s policy for succession planning is that there should | Gillian Nott 4/4 4/4 1/1 1/1 | | | | be forward-looking and detailed succession and refreshment 44 Rachael Nutter 2/4 1/4 0/1 0/1 plans when proposing re-election of long-serving members. Any member of the Board who has served for nine years will be Jamie Richards 4/4 4/4 1/1 1/1 subject to a particularly rigorous review and evaluation process Thomas Plagemann 4/4 4/4 0/1 1/1 to determine whether they remain independent and should 45 continue in their position. Each Board member is subject to annual Mark Lerdal 1/4 1/4 1/1 1/1 re-election at each AGM. To date, no Director has been on the 44 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024. Board for nine years or more. Due consideration will be given to 45 Mark Lerdal was appointed on 1 October 2024. tenure and succession in respect of Gill Nott and Jamie Richards who joined the Board at the same time. ADDITIONAL AD HOC MEETINGS In addition to the above quarterly meetings, there are also THE MANAGEMENT ENGAGEMENT COMMITTEE additional ad hoc meetings; these are generally called to approve The Management Engagement Committee is comprised of the trading updates, specific announcements on portfolio activity and entire Board and is chaired by Mark Lerdal. other general corporate matters and frequently involve a quorate subcommittee of the Board, appointed as necessary. During This Committee meets as required to consider, amongst other the current period, additional meetings were held to discuss the things, the appointment and terms of engagement of the tender offer and refinancing. The Board undertook an exercise to Company’s service providers including the Investment Manager explore likely terms for a refinancing of the senior debt facilities. and AIFM, and the performance of all key service providers. Following conclusion of the exercise, the Board determined a The Independent Auditor is not included in this review as its bank refinancing to be an attractive option for the Company. appointment and evaluation falls under the remit of the Representatives of JTC (UK) Limited attend all scheduled meetings Audit Committee. as Secretary to the Board. In addition, representatives of the Investment Manager, the Independent Auditor and other advisers, are invited to attend as required. US Solar Fund plc 61 Annual Report and Financial Statements 2024 ## CORPORATE GOVERNANCE REPORT CONTINUED THE BOARD AGENDA INTERNAL CONTROL AND RISK MANAGEMENT At quarterly meetings, the Board follows a formal agenda which Although the Board is ultimately responsible for safeguarding the generally includes: assets of the Company, the Board has delegated, through written agreements, the day-to-day operation of the Company – the Investment Manager’s Report for the period, including (including the financial reporting process) to the Investment strategic performance, a review of the performance of the Manager (Amber Infrastructure Investment Advisor LLC) and investments and market conditions; Administrator (JTC (UK) Limited). – financial results against budget and cash flow forecasts, including dividends declared and forecast; The Audit Committee keeps under review the internal financial – reports and updates on shareholder and investor controls and internal control and risk management, ensuring that communications; the procedures to be followed by the advisers and themselves are – the corporate governance and secretary’s report, with a review in place. of policies and procedures, a compliance report and an update on legislative/regulatory obligations as appropriate; and The Board then reviews the effectiveness of the internal controls – recommendations and updates from Board committees system, based on the report from the Audit Committee, on an as appropriate. annual basis to ensure that the controls remain relevant and were in operation throughout the year. KEY ACTIVITIES OF THE BOARD DURING 2024 In the first half of the year, the Board prioritised returning The Board conducted its annual review of the Financial Position approximately $18 million to participating shareholders via a tender and Prospectus Procedures (FPPP) Board memorandum which offer, which concluded in June 2024. was prepared by the Investment Manager, Company Secretary, and Administrator. This sets out the procedures operating to In light of this return of capital, and in order to improve identify the information needed to monitor the business and operational cash dividend coverage during the remainder of manage risk so as to make proper judgements on its financial the year, the Board decided it was prudent to reduce the target position and prospects. In addition, it sets out the procedures to dividend. TheBoard will revise the dividend target in light of any identify, assess and document the risk factors likely to impact on improvement in the coverage as a result of successfully completing the Company’s financial position, prospects and any changes and the proposed refinancing. on the preparation and communication to the Directors of related information. Succession planning was a key focus in the latter half of the year. Following Rachael’s departure in May 2024, the Nomination As part of its regular risk assessment procedures, the Board Committee initiated a formal recruitment process, leading to the takes account of the significance of environmental, social and appointment of Mark Lerdal as a Non-Executive Director, effective governance matters to the business of the Company. The Board 1October 2024. has identified and assessed the significant ESG risks to the Company’s short and long-term value, as well as the opportunities The Company communicates with shareholders and solicits their to enhance value that may arise from an appropriate response. views where it considers it is appropriate to do so. Shareholders The Company relies on the ESG policy of the Investment Manager, are invited to attend the AGM where they have the opportunity which is updated from time to time in line with industry standards. to ask questions of the Directors. The Board also makes itself Further information on the Company’s approach to ESG can be available to respond to written queries made by shareholders or to found on page 31. meet with major shareholders if so requested. During the period, the Board has communicated and met with shareholders on ANTI-BRIBERY POLICY several occasions. The Company operates an anti-bribery policy to ensure that it meets its responsibilities arising from the Bribery Act 2010. In relation to the conduct of the Company’s 2025 AGM, voting on all resolutions will be conducted by way of poll rather than a show of hands. This is considered a more transparent method of voting as member votes are counted according to the number of shares held. As soon as practicable following the meeting the results of the voting and number of proxy votes cast for and against and GILL NOTT the number of votes actively withheld in respect of each of the CHAIR resolutions will be announced via a regulatory information service 9 April 2025 and also placed on the Company’s website. US Solar Fund plc 62 Annual Report and Financial Statements 2024 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSOVERVIEW  Sonne Two (Heelstone) 7.0MW DC (North Carolina) US Solar Fund plc US Solar Fund plc 63 Annual Report and Financial Statements 2024 Annual Report and Financial Statements 2024 ## AUDIT COMMITTEE REPORT The terms of reference were reviewed during the year under review and were updated to enhance the ## The Audit Committee (the Committee) Committee’s scope to consider key risks facing the Company. The Board is satisfied that the Committee is ## is chaired by Jamie Richards and properly constituted with one member of the Committee who is a chartered accountant with recent and relevant ## comprises all the independent financial experience. The Committee meets three times a year, and at ## Directors set out on page 55. such other times as the Committee shall require. Representatives of the Administrator and the Investment ## The Committee operates within Manager may be invited to attend meetings as and when deemed appropriate. ## clearly defined terms of reference ROLE AND RESPONSIBILITIES OF THE AUDIT ## and includes all matters indicated COMMITTEE The function of the Committee is to ensure that the Company maintains the highest standards of integrity, ## by Rule 7.1 of the UK FCA’s DTRs and financial reporting, internal and risk management systems and corporate governance. The main duties of the Audit ## the AIC Code. Committee are: – monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance and reviewing significant financial reporting judgements contained inthem; – review and challenge of the critical estimates and key judgements within the financial statements such as the assumptions supporting the valuation of the Company’s investments, including discount rates and forecast merchant power prices, which are determined by the Investment Manager and Independent Valuer; – reporting to the Board on the appropriateness of the Company’s accounting policies and practices including critical judgement areas; – reviewing the valuation of the Company’s investments prepared by the Investment Manager, and making a recommendation to the Board on the valuation of the Company’s investments; – meeting regularly with the Auditor to review their proposed audit plan and the subsequent audit report and assess the effectiveness of the audit process and the levels of fees paid in respect of both audit and non-audit work; – making recommendations to the Board in relation to the appointment, reappointment or removal of the Auditor and approving their remuneration and the terms of their engagement; – monitoring and reviewing annually the Auditor’s independence, objectivity, expertise, resources, qualification and non-audit work; – reviewing the effectiveness of the accounting and internal control systems of the Company and considering annually whether there is a need for the Company to have its own internal audit function; – reviewing and considering the UK Code, the AIC Code, the FRC Guidance on Audit Committees and the Company’s institutional investors’ commitment to the UK Stewardship code; US Solar Fund plc 64 Annual Report and Financial Statements 2024 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSOVERVIEW – monitoring the progress of the Company’s strategic review MEETINGS and determining the impact on the Annual Report and financial During the year covered by this report, the Committee met formally statements; and on four occasions. The Committee considered and discussed the – reviewing the risks facing the Company and monitoring the following matters: risk matrix. – consideration of the terms of reference of the Audit Committee; The Audit Committee is required to report formally to the Board – review of the Company’s risk register; on its findings after each meeting on all matters within its duties – review of the internal controls of the Investment Manager and and responsibilities. The Company’s risk assessment process is Administrator; a risk based approach to internal control through a matrix which – review and approval of the audit plan of the Auditor and identifies key risks undertaken by the Investment Manager and timetable for the interim and annual financial statements; and Administrator, the risks associated with each activity and the – detailed review of the interim financial statements and Annual controls employed to minimise risks. Report including active consideration of the judgements associated with the investment held at fair value and Based on the results the Audit Committee establishes the discussions with the Company’s Independent Valuer. Company’s risk appetite against which the Investment Manager Valuation of investments is discussed in more detail below reports three times a year. The Board and the Investment Manager given its significance. have clearly defined investment criteria, return targets, risk appetite and counterparty exposure limits. Reports on these performance VALUATION OF INVESTMENTS measures, combined with cash projections and quarterly As outlined in note 10 to the financial statements, the total carrying investment valuations are submitted to the Board for review at value of the investments at fair value as at 31 December 2024 was each quarterly meeting. $193.3 million (2023: $254.7 million). Market quotations are not available for these financial assets, and as such, their valuation FINANCIAL REPORTING is undertaken using a discounted cash flow methodology. This The primary role of the Committee in relation to financial reporting requires a series of material judgements to be made, as further is to review with the Investment Manager, the Administrator and explained in note 3 to the financial statements. the Auditor the appropriateness of the half-year report and Annual Report and financial statements, concentrating on, amongst The valuation process and methodology were discussed by the other matters: Audit Committee with the Investment Manager at the time of the interim review, prior to the year-end valuation process, and again – the quality and acceptability of accounting policies and in March/April 2025 as part of the year-end sign-off process. practices; The Independent Valuer, KPMG, carries out a valuation semi- – the clarity of the disclosures and compliance with financial annually, including a review of the valuation discount rates as at reporting standards and relevant financial and governance 31 December 2024. In September 2024, the Investment Manager reporting requirements; provided a report to the Audit Committee that supported the – amendments to legislation and corporate governance reporting valuation of the portfolio at 30 June 2024. The Independent Valuer requirements and accounting treatment of new transactions in also provided a report to the Audit Committee in March/April 2025 the year; confirming that the discount rates adopted as at 31 December – the impact of new and amended accounting standards on the 2024 were reasonable. Company’s financial statements; – whether the Audit Committee believes that proper and KEY FORECAST ASSUMPTIONS appropriate processes and procedures have been followed in The Audit Committee considered in detail those assumptions the preparation of the half year report and Annual Report and that are subject to judgement that have a material impact on the financial statements; valuation. A significant proportion of the solar projects’ income – whether the Annual Report and financial statements, taken as streams are power income under long-term PPAs; some of which a whole, is fair, balanced, and understandable and provides have fixed price mechanisms. However, over time the proportion of the information necessary for shareholders to assess the power income that is fixed reduces and the proportion where the Company’s performance, business model and strategy; Company has exposure to wholesale electricity prices increases. – material areas in which significant judgements and estimates The Investment Manager considers the forecasts provided by two have been applied or there has been discussion with the expert energy advisers and adopts a profile of assumed future Auditor; and power prices by location of the solar assets. – any correspondence from regulators in relation to the Company’s financial reporting. The Investment Manager’s valuation methodology is set out on pages 28 to 30 and other key macroeconomic, asset life and cost assumptions and sensitivities considered by the Audit Committee are included in note 10 to the Financial Statements. US Solar Fund plc 65 Annual Report and Financial Statements 2024 ## AUDIT COMMITTEE REPORT CONTINUED AUDITOR INTERACTION NON-AUDIT SERVICES The Independent Auditor explained the results of their review of Details of audit and non-audit fees paid to the Independent Auditor the valuation, including their consideration of the Company’s Deloitte LLP during the year are disclosed in note 7 to the financial underlying cash flow projections, the macroeconomic assumptions statements. The Committee approved these fees after a review of and discount rates to the Audit Committee. Based on their audit the level and nature of work to be performed and are satisfied that work there were no adjustments proposed that were material they are appropriate for the scope of the work required. in the context of the 31 December 2024 financial statements aspresented. The objectivity of the Auditor is reviewed by the Committee which also reviews the terms under which the Independent Auditor INTERNAL AUDIT may be appointed to perform non audit services. The Committee The Committee considers at least once a year whether there is a reviews the scope and results of the audit, its cost effectiveness need for an internal audit function. Currently it does not consider and the independence and objectivity of the Auditor, with regard there to be a need for an internal audit function, given that there to any non-audit work that the Auditor may undertake. In order to are no employees in the Company and all outsourced functions are safeguard Auditor independence and objectivity, the Committee with parties who have their own internal controls and procedures. ensures that any other advisory and/or consulting services provided by the Independent Auditor do not conflict with its EXTERNAL AUDIT statutory audit responsibilities. Advisory and/or consulting services Deloitte LLP has performed the role of Independent Auditor since will generally only cover reviews of interim financial statements, the Company’s inception and was retained by the Board during the specific and relevant assurance engagements and reporting year as the Independent Auditor. accountant related work. Any non-audit services conducted by the Auditor outside of these areas will require detailed consideration EFFECTIVENESS OF THE AUDIT PROCESS and the consent of the Committee before being initiated. To fulfil its responsibility regarding the independence of the Auditor, the Committee has considered: INDEPENDENCE The Committee is required to consider the independence of the – Discussions with or reports from the Auditor describing its Independent Auditor. In fulfilling this requirement, the Committee arrangements to identify, report and manage any conflicts has considered a report from Deloitte describing its arrangements ofinterest to identify, report and manage any conflict of interest and the – The extent of non-audit services provided by the Auditor and extent of non-audit services provided by them. The Committee has arrangements for ensuring the independence and objectivity concluded that it considers Deloitte to be independent of the and robustness and perceptiveness of the Auditor and their Company and that the provision of the non-audit services handling of key accounting and audit judgements described above is not a threat to the objectivity and independence of the conduct of the audit. To assess the effectiveness of the Auditor, the Committee has reviewed and challenged: AUDITOR’S TENURE – The Auditor’s fulfilment of the agreed audit plan and variations The Auditor is required to rotate the audit partner every five years. from it A new audit partner was engaged for the 2024 financial year, – Discussions or reports highlighting the major issues that arose following the previous audit partner reaching his fifth year of tenure during the course of the audit having been engaged on an uninterrupted basis since 30 June – Feedback from other service providers evaluating the 2019. There are no contractual obligations restricting the choice of performance of the audit team external auditor and the Company will consider putting the audit – Arrangements for ensuring independence and objectivity services contract out to tender at least every ten years. In line – Robustness of the Auditor in handling key accounting and with the FRC’s recommendations on audit tendering, this will be auditjudgements considered further when the audit partner rotates every five years. Under the Companies Law, the reappointment of the Independent The Committee is satisfied with Deloitte’s effectiveness and Auditor is subject to shareholder approval at the AGM. independence as Auditor, having considered the degree of diligence and professional scepticism demonstrated by them. Having carried out the review described above and having satisfied itself that the Auditor remains independent and effective, the FAIR, BALANCED AND UNDERSTANDABLE Audit Committee has recommended to the Board that Deloitte be As a result of its review of the Annual Report and accounts, reappointed as Auditor for the year ending 31 December 2025. underpinned by its discussions with operating and finance management regarding the Strategic Report, and with the finance AGM team regarding the financial statements, the Committee advised The Chair of the Committee will be present at the Company’s AGM the Board that, in the Committee’s view, the Annual Report and to answer questions on the Audit Committee’s activity and matters accounts, taken as a whole, is fair, balanced and understandable within the scope of the Audit Committee’s responsibilities. and provides the information necessary for shareholders to assess the Company’s position and performance, business model JAMIE RICHARDS andstrategy. CHAIR OF THE AUDIT COMMITTEE 9 April 2025 US Solar Fund plc 66 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS # DIRECTORS' REMUNERATION REPORT The Board has prepared this report in line with the AIC Code as well as the requirements of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI2008/410) and the Companies Act 2006. Under the requirements of Section 497 of the Companies Act 2006, the Company's Auditor is required to audit certain disclosures contained within the report. These disclosures have been highlighted and the audit opinion thereon is contained within the Auditor's Report on pages 70 to 77. ## CONSIDERATION BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS' REMUNERATION The Remuneration and Nomination Committee comprises the entire Board with Jamie Richards as Chair. This is considered appropriate as all the Board members are independent Non-Executive Directors. The Committee has responsibility for reviewing the remuneration of the Directors, specifically reflecting the time commitment and responsibilities of the role and meets at least annually. The Committee also undertakes external comparisons and reviews to ensure that the levels of remuneration paid are broadly in line with industry standards and members have access to independent advice where they consider it appropriate. During the year neither the Board nor the Committee has been provided with external advice or services by any person, but has received industry comparison information from the Company Secretary in respect of the Directors' remuneration. The remuneration policy set by the Board is described below. Individual remuneration packages are determined by the Remuneration and Nomination Committee within the framework of this policy. The Directors are not involved in deciding their own individual remuneration with each Director abstaining from voting on their own remuneration. ## REMUNERATION POLICY The Company's remuneration policy is detailed below. This was initially adopted on 19 November 2019 and approved by shareholders at the 2020 AGM. The policy was subsequently approved at the AGM held on 24 May 2023 as part of the regulatory three yearly approval process. The Company has followed the Remuneration Policy during 2024 and, having reviewed it at the Remuneration and Nomination Committee 2024 meeting, concluded that it remains appropriate. ## POLICY The Company's policy is that the remuneration of Non-Executive Directors should be determined with due regard to the experience of the Board as a whole, the time commitment required and to be fair and comparable to that of other Non-Executive Directors of similar companies. The Company may also periodically choose to benchmark Directors' fees with an independent review, to ensure they remain competitive, fair and reasonable. The fees for the Directors are determined within the limits set out in the Company's Articles of Association which states that the Directors' remuneration for their services in the office of director shall, in the aggregate, not exceed £500,000 per annum or such higher figure as the Company, by ordinary resolution, determines. The Directors may elect to apply the cash amount equal to their annual fee to subscribe for or to purchase Ordinary Shares. Directors' fees will be reviewed at least annually. The Directors are entitled only to their annual fee and to be reimbursed for any expenses properly and reasonably incurred by them respectively in and about the business of the Company or in the discharge of his or her duties as a Director. Any Director who performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a director, may be paid such reasonable additional remuneration to be determined by the Directors or any committee appointed by the Directors and such additional remuneration shall be in addition to any remuneration provided for by way of their annual fee and their reasonable expenses. No element of the Directors' remuneration is performance related, nor does any Director have any entitlement to pensions, share options or any long-term incentive plans from the Company. The Directors hold their office in accordance with the Articles and their appointment letters. No Director has a service contract with the Company, nor is any such contract proposed. The Directors' appointments can be terminated in accordance with the Articles and without compensation. ## RETIREMENT BY ROTATION In accordance with the Articles of Association, the requirements of the AIC Code and the Board's policy, all the Directors will retire annually and, being eligible, will offer themselves for re-election. Gill Nott, Jamie Richards and Thomas Plagemann will offer themselves up for re-election whilst Mark Lerdal will stand for election. Biographical notes on the Directors are given on page 55. The Board believes that each Director's skills, experience and knowledge continue to complement each other and add value to the Company and recommends the election and re-election of all the Directors who will stand for election and re-election to the Board. ## DETAILS OF DIRECTORS' REMUNERATION (AUDITED) The emoluments in respect of qualifying services of each person who served as a Director during the period are shown below. For the period from 1 January 2024 to 31 December 2024 the Directors were paid a base annual fee of £44,100. In addition to this fee, Gill Nott was paid an additional £23,490 per annum for her role as Chair of the Board. Jamie Richards was paid an additional £11,025 per annum for serving as Chair of the Audit committee. No Director has waived or agreed to waive any emoluments from the Company in the current year. No other remuneration was paid or payable by the Company during the current period nor were any expenses claimed by or paid to them other than for expenses incurred wholly, necessarily and exclusively in furtherance of their duties as Directors of the Company. US Solar Fund plc Annual Report and Financial Statements 2024 67 ## DIRECTORS’ REMUNERATION REPORT CONTINUED 46 DIRECTORS’ REMUNERATION 2025 REMUNERATION The remuneration levels for the forthcoming year for the Directors Fees paid Fees paid Fees paid of US Solar Fund plc are shown in the Current Annual Fee column from 1 Jan from 1 Jan from 1 Jan in the above table. | | Current | | – 31 Dec | | – 31 Dec | | – 31 Dec | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | annual fee | | | 2024 | | 2023 | | 2022 | | | Director | | (£) | | (£) | | (£) | | (£) | In setting the Directors’ remuneration, consideration is given to | the performance of the Company. The Company’s performance Gillian Nott 68,040 *68,040 63,420 63,000 over the reporting periods since the Company’s Ordinary Shares Jamie Richards 55,125 * *55,125 52,719 52,500 were first listed on the London Stock Exchange, and shows share 47 price total return and net asset value total return performance on a Rachael Nutter – 17, 24 4 42,175 42,000 dividends reinvested basis can be found in the performance graph Thomas Plagemann 4 4,10 0 44,10 0 42,175 42,000 contained in the Operating Review on page 30. 48 Mark Lerdal 44,10 0 11,025 STATEMENT OF VOTING AT AGM Total 211,365 195,534 200,489 199,500 Shareholders considered and approved the Company’s * This includes £23,940 per annum in respect of serving as Chair of the Board during the remuneration policy at the AGM on 24 May 2024. At the AGM period 1 January – 31 December 2024. on 24 May 2024, the resolution to approve the Director’s ** This includes £11,025 per annum in respect of serving as Chair of the Audit Committee during the period 1 January – 31 December 2024. Remuneration Report received 95.78% of votes in favour respectively. At the 2023 AGM, when the Remuneration Policy was DIRECTORS’ SHAREHOLDINGS last put to a shareholder vote, 99.93% voted for the resolution, The Directors who held office during the year and their interests in showing significant shareholder support. the issued shares of 1c each of the Company were as follows: APPROVAL OF THE REMUNERATION REPORT Director Ordinary Shares An ordinary resolution for the approval of this Directors’ Remuneration Report will be put to shareholders at the Gill Nott 126,000 forthcoming Annual General Meeting. Jamie Richards 18 5,112 COMPANY-WIDE CONSIDERATIONS Thomas Plagemann – There are no executive directors, nor are there any employees Mark Lerdal – of the Company, so there are no statements to make on any consultations, comparisons or pay and employment conditions Total 311,112 within the Company. All of the Directors’ share interests shown above were held beneficially. STATEMENT OF CONSIDERATION OF SHAREHOLDER VIEWS RELATIVE IMPORTANCE OF SPEND ON PAY No comments were received in meetings held with shareholders The difference in actual spend between 31 December 2024 and in 2024 in relation to Directors’ fees. Following publication of the 31 December 2023 on Directors’ remuneration in comparison to 2024 Annual Report and prior to the AGM, the Company will offer distributions (dividends and share buybacks) are set out in the to meet virtually with shareholders to discuss the Company’s chart below. performance and prospects and give shareholders the opportunity to ask questions about the Remuneration Policy and levels Payments made Payments made ofremuneration. | from 1 Jan | | from 1 Jan | | | | --- | --- | --- | --- | --- | | – 31 Dec 2024 | | – 31 Dec 2023 | | | | | ($) | | ($) % Change | This Directors’ Remuneration Report was approved by the | Board on 9 April 2025 and is signed on its behalf by Jamie | Directors’ total | | 300,777 236,724 27 | | | --- | --- | --- | --- | | | 46 | | Richard (Director and Chair of the Remuneration and Nomination | | remuneration | * | | | Committee). Dividends declared 10,287,263 18,735,649 (45%) | Buyback of | 18,960,256 0 N/A | JAMIE RICHARDS | | --- | --- | --- | | Ordinary Shares | | CHAIR OF THE REMUNERATION & NOMINATION COMMITTEE | | via tender offer | | 9 April 2025 | * Directors’ remuneration is paid in Great Britain Pounds (GBP), however for comparison purposes the Directors’ total remuneration in this table is shown in US dollars, converted atthe exchange rate applicable at the date of payment. 46 Payments including to HMRC were made in January 2024 relating to fees for the prior year. These are included in the Directors’ Remuneration. 47 Rachael Nutter resigned following the Company’s 2024 AGM on 21 May 2024. 48 Mark Lerdal was appointed on 1 October 2024. US Solar Fund plc 68 Annual Report and Financial Statements 2024 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTSOVERVIEW ## DIRECTOR’S RESPONSIBILITY STATEMENT The Directors are responsible for preparing the Annual Report The Directors are also responsible for preparing the Annual Report and financial statements in accordance with applicable law and and financial statements and the Directors confirm that they regulations. consider that, taken as a whole, the Annual Report and financial statements are fair, balanced and understandable and provide the As a Company listed on the London Stock Exchange, US Solar information necessary for shareholders to assess the Company’s Fund plc is subject to the UK Listing Rules and Disclosure performance, business model and strategy. In accordance with the and Transparency Rules, as well as to all applicable laws and FCA’s Disclosure and Transparency Rules, the Directors confirm to regulations in England and Wales where it is registered. the best of their knowledge that: – the financial statements, prepared in accordance with The financial statements have been prepared in accordance applicable accounting standards, give a true and fair view of with UK-adopted international accounting standards. Under the the assets, liabilities, financial position and profit or loss of the UK Companies Act 2006, the Directors must not approve the Company taken as a whole; financial statements unless they are satisfied they give a true and – the Annual Report and accounts include a fair view of important fair view of the state of affairs of the Company and of the profit or events that have occurred during the financial period; and loss for the period. In preparing these financial statements, the – the Annual Report and accounts include the related parties’ Directorsshould: transactions that have taken place in the financial period – select suitable accounting policies and then apply them and that have materially affected the financial position or the consistently; performance of the enterprise during that period. – make judgements and estimates that are reasonable; The Directors have acknowledged their responsibilities in relation – specify which generally accepted accounting principles have to the financial statements for the period to 31 December 2024. been adopted in their preparation; and – prepare the financial statements on the going concern basis, Signed by order of the Board, unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping proper accounting records which are sufficient to show and explain the Company’s transactions and are to disclose with reasonable accuracy at any time the financial position of the Company and enable them to GILL NOTT ensure that the financial statements comply with the requirements CHAIR of the Companies Act 2006. They are also responsible for 9 April 2025 safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. US Solar Fund plc 69 Annual Report and Financial Statements 2024 ## INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ## OF US SOLAR FUND PLC ## Report on the audit of the financial statements 1. OPINION In our opinion the financial statements of US Solar Fund plc (the ‘Company’): – give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its loss for the year then ended; – have been properly prepared in accordance with United Kingdom adopted international accounting standards; and – have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements which comprise: – the statement of profit and loss and other comprehensive income; – the statement of financial position; – the statement of changes in equity; – the statement of cash flows; and – the related notes 1 to 18. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted international accounting standards. 2. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services provided to the company for the year are disclosed in note 7 to the financial statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the company. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3. SUMMARY OF OUR AUDIT APPROACH Key audit matters The key audit matters that we identified in the current year was: – Fair value of investments – Judgements associated with going concern Within this report, key audit matters are identified as follows: Newly identified Similar level of risk Materiality The materiality that we used in the current year was $2.9m which was determined on the basis of 1.5% of total shareholders’ equity. Scoping As the Company is required to measure its subsidiaries at fair value rather than consolidate on a line-by-line basis, the Company has been treated as having only one component. Significant changes There have been no significant changes to our audit approach in the current year. However, we have identified in our approach judgements associated with going concern as a new key audit matter in the current year due to increased audit effort as a result of the requirement for a discontinuation vote combined with the ongoing debt refinancing exercise. 4. CONCLUSIONS RELATING TO GOING CONCERN In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting is discussed in section 5.2. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the reporting on how the company has applied the Association of Investment Companies Code of Corporate Governance (the “AIC code”), we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. US Solar Fund plc 70 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE 5. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, andwe do not provide a separate opinion on these matters. 5.1. FAIR VALUE OF INVESTMENTS Key audit matter The Company’s investments, held at fair value as required by IFRS 10, comprise of investments in an description intermediate holding company, USF Holding Corp., and its associated debt interest. The subsidiary entity holds investments in solar power assets. The Company holds five investments via this subsidiary entity as at 31 December 2024 (2023: five). The total value of investments, including loan receivables, recognised at fair value as at the reporting date is $193.3m (2023: $254.7m). The valuation of investments in line with the requirements of IFRS 13 requires significant judgements given there is no liquid or quoted price information available for the investments made, in particular in relation to merchant price forecasts and discount rates used to derive fair value. Other key assumptions include inflation rates, forecast electricity production, and economic life of operational assets applied to future cashflows, as well as the potential impact of climate change. Due to the inherent risks described above we have identified a risk of error and a potential fraud risk relating to the possibility that investments may be valued inappropriately. Additional consideration has been given to the operational performance of the underlying assets, evidence arising as a result of the current market capitalisation of the Company continuing to be at a substantial discount to the net asset value in the financial statements including consideration of other market evidence, and the continued impact of changes in macro- economic factors including interest rates and energy prices. The Audit Committee have set out their consideration of the risk on page 65 and it is disclosed as a key source of estimation uncertainty in note 3 of the financial statements. A breakdown of the investments and the assumptions applied to the valuation are described in note 10 of the financial statements. Detail of the accounting policy applied by the Company is set out in note 5 with details in respect of the valuation approach and methodology set out in note 10. How the scope of our We challenged the assumptions made by the Directors and the valuation recognised through the following audit responded procedures: to the key audit matter – obtaining an understanding of and tested the relevant controls related to the valuation process at 31December 2024; – assessing the methodology applied in determining fair value and challenge of key assumptions through the use of benchmarking against third party sources or evidence of market practice; – involving valuation specialists and utilising other sources of evidence to assess and evaluate the valuation methodology applied, the financial models prepared by the Directors, and key assumptions adopted including discount rates, merchant price assumptions, electricity production assumptions, inflation rates, and useful economic life assumptions; – in conjunction with our valuation specialists, reviewing and challenging management’s benchmarking of the net asset value of the Fund against market capitalisation with other market evidence and benchmarks, including analysis of the share price discount to net asset value of peer companies, and relevant market transactional data; – using macroeconomic data and observable market data to challenge key assumptions including interest rates and energy prices, and the consideration of the impact of climate change on the future demand for renewable energy; – assessing the arithmetic accuracy of the models prepared by management; – assessing the incorporation of the assumptions into the valuation and the correct application of the selected discount rates; – assessing the sensitivity analysis over key assumptions performed by management to assess the impact of a reasonably possible change on the fair value of investments recognised; and – evaluating the adequacy of the disclosures made in the financial statements. Key observations Based on the audit procedures performed we have concluded that the valuation of investments and relevant disclosures are appropriate. US Solar Fund plc 71 Annual Report and Financial Statements 2024 ## INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ## OF US SOLAR FUND PLC CONTINUED ## Report on the audit of the financial statements 5.2. JUDGEMENTS ASSOCIATED WITH GOING CONCERN Key audit matter The Directors have performed an assessment of going concern for the Company are set out in the directors’ description report on page 57 and note 2 to the financial statements respectively, and concluded that the continued adoption of the going concern assumption is appropriate. In performing this assessment, the key areas of judgement include the ongoing debt refinancing and related impact on available liquidity, and the requirement for a discontinuation vote. As required by the Company’s Articles, due to the Company’s market capitalisation trading at an average discount to net asset value (NAV) in excess of 10% over the course of 2024, a special resolution will be proposed at the AGM on 20 May 2025 for the shareholders to vote for discontinuation, which would result in the need to wind up or otherwise reconstruct the Company. To pass, 75% of shareholders would need to vote for the resolution, therefore if more than 25% of shareholders vote against discontinuation, the vote would not pass. The Board also announced in April 2024 its intention to carry out a potential refinancing of existing debt facilities through bank debt financing. The proposed refinancing will proactively address the medium term project company refinancings required between 2026 to 2028 with the first debt expiring for Euryalus in June 2026. The proposed refinancing is expected to conclude by the end of April 2025. We have identified a risk in relation to going concern, with a particular focus on the assumption that the debt refinancing will be successful and the discontinuation vote will not pass. As such, this required increased audit effort and senior involvement and has led to the audit of the going concern assumption being identified as a key audit matter. How the scope of our We challenged the assumptions made by the Directors and the adoption of the going concern assumption, audit responded in particular the likelihood of debt refinancing and the judgement as to whether the discontinuation vote may to the key audit matter pass, through the following procedures: – obtaining and reviewing the Company’s facility agreements to understand terms associated with those agreements, and comparing to facilities assumed in the forecasts; – evaluating the Company’s liquidity requirements, and forecast cash flows over the assessment period, including assessment of financing requirements of underlying project companies and the refinancing requirements; – assessing the assumptions used in the forecast cash flows, including performing sensitivity analysis in relation to key assumptions and assessing headroom in the forecasts; – evaluating the directors’ judgement with respect to the renewal of debt facilities including the quality of the assets held, status of current negotiations and covenant compliance over the forecast period; – assessing the likely outcome of the discontinuance vote on the ongoing viability of the Company by reviewing shareholder analysis and holding discussions with the Board, the Company’s investment manager and the Company’s broker; and – assessing the appropriateness of the disclosures in the financial statements relating to going concern. Key observations Based on the procedures performed we are satisfied the Company’s assumptions and disclosures regarding the preparation of the financial statements on a going concern are appropriate. US Solar Fund plc 72 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## 6. OUR APPLICATION OF MATERIALITY ### 6.1. MATERIALITY We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | Materiality | $2.9m (2023: $3.8m) | | --- | --- | | Basis for determining materiality | 1.5% of total shareholders' equity (2023: 1.5% of total shareholders' equity) | | Rationale for the benchmark applied | We consider total shareholders' equity to be the key benchmark used by members of the Company in assessing financial performance. Net asset value is a key metric communicated to shareholders and investors and, due to the nature of the Company as an investment entity, reflects both the performance and position of the Company. | A lower materiality threshold of $0.19m based upon 5% of expenses (2023: $0.35m based on 5% of expenses) has also been applied to all administrative expenses and trade and other payables recognised within the statement of financial position at the reporting date. The use of a lower materiality threshold reflects the nature of these transactions being primarily from related parties. ![img-7.jpeg](img-7.jpeg) ### 6.2. PERFORMANCE MATERIALITY We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 70% of materiality for the 2024 audit (2023: 70%). In determining performance materiality, we considered the following factors: - our understanding of the control environment relevant to the financial reporting process; - no significant changes in the business during the year against the expected business plan and strategy; - historically low level of identified uncorrected misstatements; and - relative complexity of operations and stage of investment lifecycle in the current year. ### 6.3. ERROR REPORTING THRESHOLD We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $0.15m (2023: $0.19m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. US Solar Fund plc Annual Report and Financial Statements 2024 73 ## INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ## OF US SOLAR FUND PLC CONTINUED ## Report on the audit of the financial statements 7. AN OVERVIEW OF THE SCOPE OF OUR AUDIT 7.1. SCOPING Our audit was scoped by obtaining an understanding of the entity and its environment, including internal control, and assessing the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed directly by the audit engagementteam. As the Company is required to measure its subsidiaries at fair value rather than consolidate on a line-by-line basis, the Company has been treated as having only one component and thus all of the work was carried out by one audit team. 7.2. OUR CONSIDERATION OF THE CONTROL ENVIRONMENT Reflecting the limited segregation of duties and timing of control activities, the audit plan was developed and executed on the basis of a non-controls reliance strategy. However, we obtained an understanding of relevant controls over the fair value of investments business cycle and the financial reporting process as part of our audit procedures in these areas. 7.3. OUR CONSIDERATION OF CLIMATE-RELATED RISKS Management has considered transition and physical risks when factoring in climate change as part of their risk assessment process when considering the principal risks and uncertainties facing the Company. This is set out in the strategic report on pages 1 to 53 and the principal risks set out on pages 42 to 50. From the financial statements’ perspective, these risks have been focused on the valuation of investments. This is consistent with our evaluation of the climate-related risks facing the Company and is linked to the key audit matter as highlighted in section 5.1 above. In planning our audit, we have considered the potential impact of climate change on the Company’s business and its financial statements. In addition, we have: – assessed the key financial statement line items and estimates which are more likely to be materially impacted by climate change risks given the more notable impacts of climate change on the business are expected to arise in the medium to long term; – challenged how the Directors considered climate change in their assessment of going concern based on our understanding of the business environment and by benchmarking relevant assumptions with market data; – with the involvement of our Environmental Social and Governance (ESG) specialist we have assessed the Task Force for Climate related Financial Disclosures (TCFD) on pages 36 to 41 against the recommendations of the TCFD framework; and – read the climate risk disclosures included throughout the strategic report section of the annual report to consider whether they are materially consistent with the financial statements and our knowledge obtained in the audit. 8. OTHER INFORMATION The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9. RESPONSIBILITIES OF DIRECTORS As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. US Solar Fund plc 74 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE 10. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 11. EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 11.1. IDENTIFYING AND ASSESSING POTENTIAL RISKS RELATED TO IRREGULARITIES In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: – the nature of the industry and sector, control environment and business performance including the design of the company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; – results of our enquiries of management, the directors and the Audit Committee about their own identification and assessment of the risks of irregularities, including those that are specific to the company’s sector; – any matters we identified having obtained and reviewed the company’s documentation of their policies and procedures relating to: – identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; – detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; – the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; – the matters discussed among the audit engagement team and relevant internal specialists, including valuations and ESG specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the fair value of investments. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, Listing Rules, and tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. This includes the Alternative Investment Fund Managers (AIFM) Directive and Non-Mainstream Pooled Investments regulations. 11.2. AUDIT RESPONSE TO RISKS IDENTIFIED As a result of performing the above, we identified the fair value of investments as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter. In addition to the above, our procedures to respond to risks identified included the following: – reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; – enquiring of management and the Audit Committee concerning actual and potential litigation and claims; – performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; – reading minutes of meetings of those charged with governance; and – in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. US Solar Fund plc 75 Annual Report and Financial Statements 2024 ## INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS ## OF US SOLAR FUND PLC CONTINUED ## Report on other legal and regulatory requirements 12. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: – the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and – the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report. 13. CORPORATE GOVERNANCE STATEMENT The UK Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the company’s compliance with the provisions of the AIC Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: – the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 57; – the directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate set out on page 51; – the directors’ statement on fair, balanced and understandable set out on page 69; – the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 51; – the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 42; and – the section describing the work of the audit committee set out on page 64 to 66. US Solar Fund plc 76 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS #### 14. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION ##### 14.1. ADEQUACY OF EXPLANATIONS RECEIVED AND ACCOUNTING RECORDS Under the Companies Act 2006 we are required to report to you if, in our opinion: - we have not received all the information and explanations we require for our audit; or - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. ##### 14.2. DIRECTORS' REMUNERATION Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors' remuneration have not been made or the part of the directors' remuneration report to be audited is not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. #### 15. OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS ##### 15.1. AUDITOR TENURE Following the recommendation of the Audit Committee, we were appointed by Directors on 30 June 2019 to audit the financial statements for the year ending 31 December 2019 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is six years, covering the years ending 31 December 2019 to 31 December 2024. ##### 15.2. CONSISTENCY OF THE AUDIT REPORT WITH THE ADDITIONAL REPORT TO THE AUDIT COMMITTEE Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK). #### 16. USE OF OUR REPORT This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. **WILLIAM BROOKS FCA** SENIOR STATUTORY AUDITOR For and on behalf of Deloitte LLP Statutory Auditor London, United Kingdom 9 April 2025 US Solar Fund plc Annual Report and Financial Statements 2024 77 ## STATEMENT OF PROFIT AND LOSS AND ## OTHER COMPREHENSIVE INCOME ## For the year ended 31 December 2024 For the year ended 31 December 2024 For the year ended 31 December 2023 | | Revenue | | Capital | | Total | Revenue | | Capital | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | USD | | USD | USD | | USD | USD | USD | | Notes | | ‘000 | | ‘000 | ‘000 | | ’000 | ’000 | ‘000 | Net loss on investments at fair value throughprofit and loss – (42,472) (42,472) – (62,911) (62,911) MSA fee income 3,655 – 3,655 6,421 – 6,421 Dividends received 5,714 – 5,714 18,325 – 18,325 Intercompany interest income 1,994 – 1,994 1,989 – 1,989 Interest income 6 – – – 217 – 217 Total income 11,363 (42,472) (31,109) 26,952 (62,911) (35,959) Expenditure Administrative and other expenses 7 (3,761) – (3,761) ( 7,0 6 4) – ( 7,0 6 4) Operating (loss)/profit for the year 7,602 (42,472) (34,870) 19,888 (62 ,911) (43,023) Loss on foreign exchange – (12) (12) – (33) (33) (Loss)/profit before taxation 7,602 (42,484) (34,882) 19,888 (62,944) (43,056) Taxation 8 – – – (Loss)/profit and total comprehensive income fortheyear 7,602 (42,484) (34,882) 19,888 (62,944) (43,056) Earnings per share (basic and diluted) – cents/share 9 2.39 (13.33) (10.94) 5.99 (18.95) (12.96) All items dealt with in arriving at the result for the year relate to continuing operations. The total column of this statement represents the Company’s profit and loss account. The financial statements have been prepared in accordance with UK-adopted international accounting standards. The supplementary revenue and capital columns are presented for information purposes, in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies, as further explained in note 2. US Solar Fund plc 78 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE ## STATEMENT OF FINANCIAL POSITION ## As at 31 December 2024 | | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | --- | | | | USD | | USD | | Notes | | ’000 | | ’000 | Non-current assets Investment held at fair value 10 193,251 254,723 193,251 254,723 Current assets Trade and other receivables 11 846 3,088 Cash and cash equivalents 10 890 1,554 1,736 4,642 Total assets 194,987 259,365 Current liabilities Trade and other payables 12 835 1,135 835 1,135 Net current assets 902 3,507 Total net assets 194,152 258,230 Shareholders equity Share capital 13 3,322 3,322 Share premium 14 128,036 128,036 Capital reduction reserve 14 156,099 175,0 08 Capital reserve 14 (96,957) (54,473) Retained earnings 14 3,652 6,337 Total shareholders equity 194,152 258,230 Net asset value per share 15 0.63 0.78 The financial statements of US Solar Fund plc (registered number 11761009) were approved by the Board of Directors and authorised for issue on 9 April 2025. They were signed on its behalf by: GILL NOTT DIRECTOR 9 April 2025 US Solar Fund plc 79 Annual Report and Financial Statements 2024 ## STATEMENT OF CHANGES IN EQUITY ## For the year ended 31 December 2024 Capital | | Share | Share | reduction | | Capital | | Retained | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | capital | premium | reserve | | reserve | | earnings | | equity | | | USD | USD | | USD | | USD | | USD | USD | | Notes | ’000 | ‘000 | | ‘000 | | ‘000 | | ‘000 | ‘000 | Balance at 1 January 2024 3,322 128,036 175,008 (54,473) 6,337 258,230 Dividends 14 – – – – (10,287) (10,287) Return of capital 14 – – (18,578) – (18,578) Share transaction costs – – (331) – (331) (Loss)/profit & total comprehensive income for the year – – – (42,484) 7,602 (34,882) Balance at 31 December 2024 3,322 128,036 156,099 (96,957) 3,652 194,152 ## For the year ended 31 December 2023 Capital | | Share | Share | reduction | | Capital | Retained | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | capital | premium | reserve | | reserve | earnings | | equity | | | USD | USD | | USD | USD | | USD | USD | | Notes | ’000 | ‘000 | | ‘000 | ‘000 | | ‘000 | ‘000 | Balance at 1 January 2023 3,322 128,036 175,008 8,471 5,185 320,022 Dividends 14 – – – – (18,736) (18,736) (Loss)/profit & total comprehensive income fortheyear – – – (62,944) 19,888 (43,056) Balance at 31 December 2023 3,322 128,036 175,008 (54,473) 6,337 258,230 The notes on pages 82 to 96 form an integral part of these financial statements. US Solar Fund plc 80 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE ## STATEMENT OF CASH FLOWS ## For the year ended 31 December 2024 | | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | --- | | | 31 December 2024 | | | 31 December 2023 | | | | | | | USD | | | USD | | Notes | | | ‘000 | | | ‘000 | Cash flows from operating activities Profit for the year (34,882) (43,056) Adjustments for: Net (gain)/loss on investments at fair value through profit and loss 10 42,472 62,911 Loss on foreign exchange 12 33 Operating cash flows before movements in working capital 7,602 19,888 Increase in trade and other receivables 2,242 (1,873) (Decrease)/increase in trade and other payables (300) 31 Net cash generated from operating activities 9,544 18,046 Cash flows used in investing activities Return of capital from investments 10 19,000 – Net cash inflow from investing activities 19,000 – Cash flows generated from/(used in) financing activities Cash paid on the repurchase of shares 14 (18,909) 49 Dividends paid (10,287) (23,785) Net cash outflow from financing activities (29,19 6) (23,785) Net decrease in cash and cash equivalents for the year (652) (5,739) Effect of foreign exchange rate movements (12) (33) Cash and cash equivalents at the beginning of the year 1,554 7,3 2 6 Cash and cash equivalents at the end of the year 890 1,554 The notes on pages 82 to 96 form an integral part of these financial statements. IAS 7 Statement of Cash Flows requires additional disclosures about changes in an entity’s financing liabilities, arising from both cash flow and non-cash flow items. As at 31 December 2024 the Company has no financing liabilities and therefore no further disclosure is required. 49 This includes the Q3 2023 dividend paid to shareholders of $5.1 million, which was transferred in advance of the year end to the registrar to facilitate payment to shareholders. US Solar Fund plc 81 Annual Report and Financial Statements 2024 # NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2024 ## 1. GENERAL INFORMATION US Solar Fund plc (the Company) was incorporated as a Public Company, limited by shares, in England and Wales on 10 January 2019 with registered number 11761009. The registered office of the Company is The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF. Its share capital is denominated in US Dollars and currently consists of Ordinary Shares. The Company's principal activity is to invest in a diversified portfolio of solar power assets located in North America and other countries forming part of the OECD in the Americas. ## 2. BASIS OF PREPARATION The financial statements have been prepared using accounting policies consistent with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', issued by the Association of Investment Companies, (the AIC SORP) in July 2022. The financial statements have been prepared on a historical cost basis, except for the investment portfolio at fair value through the profit and loss. The principal accounting policies are set out in note 5. In terms of the AIC SORP, the Company presents a Statement of Profit and Loss and Other Comprehensive Income, which shows amounts split between those which are revenue and capital in nature. The determination of the revenue or capital nature of a transaction is determined by giving consideration to the underlying elements of the transaction and is carried out in accordance with the recommendations and principles as set out in the AIC SORP. Capital transactions are considered to be those arising as a result of the appreciation or depreciation in the value of assets, whether due to the retranslation of assets held in foreign currency or fair value movements on investments held at fair value through profit and loss. Revenue transactions are all transactions, other than those which have been identified as capital in nature. ## FUNCTIONAL AND PRESENTATION CURRENCY The currency of the primary economic environment in which the Company operates (the functional currency) is US Dollar ($ or USD), which is also the presentation currency. ## GOING CONCERN In assessing the going concern basis of accounting the Directors have had regard to the latest guidance issued by the Financial Reporting Council in February 2025. In addition, note 10 to the financial statements includes the policies and processes for managing its capital, its financial risk management, details of its financial instruments and its exposure to credit risk and liquidity risk. The Directors have reviewed cash flow forecasts prepared by management. Based on those forecasts, consideration of the operating costs and obligations as well as capital commitments, it has been considered appropriate to prepare these financial statements on a going concern basis. The Company generated a loss after tax of $34.9 million and operating cash flows of $9.6 million for the year. As at 31 December 2024, the Company is in a net current asset position of $1.0 million and has available cash of $0.9 million. As of the same date, the Company's subsidiary, USF Holding Corp., has available cash of $1.6 million, which is available to meet the obligations of the Company. The Company has access through USF Avon LLC (a wholly owned subsidiary of the Company) to a $20.0 million RCF. The RCF provides liquidity for capital expenditures, working capital and general corporate purposes until September 2025. The facility is currently undrawn with no forecast drawings expected. Whilst an ongoing refinancing exercise continues across the portfolio which is expected to replace the facility (see page 6), as the current facility expires in September 2025, for prudence this has not been assumed to be available in the going concern assessment. The proposed refinancing will proactively address the near medium term refinancings required between 2026 to 2028 with the first debt expiring for Euryalus in June 2026. The proposed refinancing is expected to conclude by the end of April 2025. The Board has reviewed a set of financial projections of the cash flow and distribution profile of the Company prepared by the Investment Manager. The Board has assessed the prospects of the Group by reviewing its short-term cash flow forecast which covers a two-year period and completed a detailed assessment to support the going concern conclusion for the 12 months following the signing of the Annual Report. After assessing these risks, and reviewing the Company's liquidity position, together with forecasts of the Company's future performance under various scenarios, the Company is forecast to have sufficient cash resources to continue its operations for a period of at least 12 months from the date of approval of the accounts and the Board has a reasonable expectation that the Company will continue to meet its obligations as they fall due for at least the next 12 months. Because the Company has traded at an average discount to NAV in excess of 10% over the course of 2024, the Company's Articles require that a special resolution be proposed at the Company's forthcoming AGM, for shareholders to vote to wind up or otherwise reconstruct the Company. If a discontinuation resolution is passed (requiring the approval of at least 75% of the votes cast in respect of it), the Company's Articles provide the Board with four months to put forward a proposal to shareholders. The Directors have considered the upcoming discontinuation vote expected at the Company's AGM in their assessment of going concern. Given current uncertainties in the US market, the Board believes it would be very difficult to achieve a realisation of the Company's assets currently other than at a distressed price, and does not recommend a discontinuation. 82 US Solar Fund plc Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE The Directors’ assessment of going concern included reflection of this view and feedback from shareholders has been supportive of realising value from the Company’s assets when market conditions are conducive to a sale for value. Additionally, the discontinuation vote proposed at the 2024 AGM was not passed. Should the discontinuation vote be passed the Directors would be required to put forward proposals to Shareholders at a general meeting of the Company, to be held within four months of the Discontinuation Resolution being passed, to wind up or otherwise reconstruct the Company, having regard to the illiquid nature of the Company’s underlying assets, and implementation of any such proposal would be expected to extend beyond the current going concern period. The Directors believe that the Company will continue into the foreseeable future and have adopted the going concern basis of preparation in preparing these financial statements. 3. CRITICAL JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. During the year, the Directors considered the following significant judgements, estimates and assumptions: JUDGEMENTS Assessment as an investment entity Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them unless they provided investment related services to the Company. To determine that the Company continues to meet the definition of an investment entity, the Company is required to satisfy the following three criteria: 1. the Company obtains funds from one or more investors for the purpose of providing those investors with investment management services; 2. the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and 3. the Company measures and evaluates the performance of substantially all of its investments on a fair value basis. The Company meets the criteria as follows: – the Company provides investment management services and has several investors who pool their funds to gain access to infrastructure related investment opportunities that they might not have had access to individually; – the stated strategy of the Company is to deliver stable returns to shareholders through investing in a diversified portfolio of utility-scale solar power plants and associated infrastructure, which may include transmission and storage (e.g. batteries) assets which will typically be co-located with the solar power plant (together, solar power assets) located in North America and other OECD countries in the Americas; and – the Company measures and evaluates the performance of all of its investments on a fair value basis. The fair value method is used to represent the Company’s performance in its communication to the market, including investor presentations. In addition, the Company reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance. The Directors are of the opinion that the Company has all the typical characteristics of an investment entity and continues to meet the definition in the standard. This conclusion will be reassessed on an annual basis. In respect of the second criterion the Company’s purpose is to invest funds for returns from capital appreciation and investment income. In respect of the requirement that investments should not be held indefinitely but should have an exit strategy for their realisation the Company may hold these assets until the end of their expected useful lives, unless there is an opportunity in the market to dispose of the investments at a price that is considered appropriate. There continues to be an active secondary market for renewables projects in the countries in which we operate. As at 31 December 2024, the Company only had one direct subsidiary, USF Holding Corp. Being an investment entity, it is measured at fair value as opposed to being consolidated on a line-by-line basis, meaning its cash, debt and working capital balances are included in the fair value of investments rather than the Group’s current assets. ESTIMATES Valuation of investment in subsidiary The fair valuation of investments is the most significant estimate in the Company’s financial statements. This estimate is determined by discounting expected cash flows at a discount rate appropriate to the risk profile of each investment. Refer to note 10 for further detail on the fair value measurement as at 31 December 2024 and detail on the sensitivity analysis on inputs including discount rate, electricity production, electricity prices and operational expenses. US Solar Fund plc 83 Annual Report and Financial Statements 2024 # NOTES TO THE FINANCIAL STATEMENTS CONTINUED For the year ended 31 December 2024 ## 4. NEW AND REVISED STANDARDS AND INTERPRETATIONS APPLICATION OF NEW AND REVISED STANDARDS The accounting policies adopted in the preparation of the Annual Report and Audited Financial Statements for the year ended 31 December 2024 are consistent with those of the previous financial year. The adoption of new standards, interpretations and amendments in the current year has not had a material impact. The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective at 31 December 2024. ### NEW AND REVISED STANDARDS IN ISSUE BUT NOT YET EFFECTIVE The following standards have been issued but are not effective for this accounting period and have not been adopted early: - IFRS 18: Presentation and Disclosure in Financial Statements – effective from 1 January 2027 - Amendment to IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments – effective from 1 January 2026 - IFRS 7: Financial Instruments: Disclosures – effective from 1 January 2026 Adoption of the new or amended standards and relevant interpretations in future periods is not expected to have a material impact on the financial statements of the Company. ## 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies used in the preparation of the financial statements have been consistently applied during the year ended 31 December 2024 as well as the prior year. The principal accounting policies applied in the preparation of the financial statements are set out below: ### SEGMENTAL INFORMATION The Board is of the opinion that the Group is engaged in a single segment business, being the investment in solar power assets located in North America and other countries forming part of the OECD in the Americas. ### INCOME Income comprises interest income (bank interest and loan interest), Management Services Agreement (MSA) fee and dividend income. Interest income is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Loan interest income is accrued by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. Dividend income is recognised in profit or loss on the date on which the Group's right to receive payment is established. No income is earned from contracts with customers and as such IFRS 15 has not been applied. ### EXPENSES Operating expenses are the Company's costs incurred in connection with the on-going management of the Company's investments and administrative costs. Operating expenses are accounted for on an accruals basis. The Company's management and administration fees, finance costs and all other expenses are charged through the Statement of Profit and Loss and Other Comprehensive Income. Directly attributable acquisition costs of assets are capitalised on purchase of assets. Costs directly relating to the issue of Ordinary Shares are charged to share premium. ### NET GAIN OR LOSS ON INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS The Company recognises movements in the fair value of investments in subsidiaries through profit and loss. ### TAXATION The Company is approved as an Investment Trust Company under sections 1158 and 1159 of the Corporation Tax Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/2999 for accounting periods commencing on or after 25 May 2018. The approval is subject to the Company continuing to meet the eligibility conditions of the Corporation Tax Act 2010 and the Statutory Instrument 2011/2999. The Company intends to ensure that it complies with the Investment Trust Company regulations on an ongoing basis and regularly monitors the conditions required to maintain Investment Trust Company status. 84 US Solar Fund plc Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED The main rate of corporation tax rate is 25%. Tax is recognised in the Statement of Profit and Loss and Other Comprehensive Income except to the extent that it relates to the items recognised as direct movements in equity, in which case it is similarly recognised as a direct movement in equity. Current tax is the expected tax payable on any taxable income for the period, using tax rates enacted or substantively enacted at the end of the relevant period. INVESTMENT IN SUBSIDIARIES Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the subsidiary entity and has the ability to affect those returns through its power over the subsidiary entity. In accordance with the exception under IFRS 10 Consolidated financial statements, an investment entity is not required to consolidate its subsidiaries where certain conditions are met. The Company does not have any subsidiaries that provide investment management services and are not themselves investment entities. As a result, the Company, being an investment entity, does not consolidate any of its subsidiaries. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash at bank and deposits held with the bank. TRADE AND OTHER RECEIVABLES Trade and other receivables are recognised initially at fair value and subsequently stated at amortised cost less loss allowance which is calculated using the provision matrix of the expected credit loss model, the effect of which is considered immaterial. TRADE AND OTHER PAYABLES Trade and other payables are recognised initially at fair value and subsequently stated at amortised cost. EQUITY Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of directly attributable issue costs. Costs not directly attributable to the issue are immediately expensed in the Statement of Profit and Loss and Other Comprehensive Income. The Company’s capital is represented by the Ordinary Shares, Share Premium (until cancellation), Accumulated losses and Capital Reduction Reserve. Treasury shares The Company recognises the purchase of its own equity instruments in treasury shares, which are deducted from the capital reduction reserve. No gain or loss is recognised in the Statement of Comprehensive Income on the purchase, sale, issue or cancellation of the Company’s own equity instruments. FINANCIAL INSTRUMENTS In accordance with IFRS 9, the Company classifies its financial assets and financial liabilities at initial recognition into the categories of amortised cost or fair value through profit or loss. None of the financial instruments are classified as fair value through other comprehensive income. FINANCIAL ASSETS The Company classifies its financial assets at amortised cost or fair value through profit or loss on the basis of both: – The entity’s business model for managing the financial assets – The contractual cash flow characteristics of the financial asset FINANCIAL ASSETS MEASURED AT AMORTISED COST A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company includes in this category short-term non-financing receivables including cash and financial instruments classified as trade and other receivables. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT LOSS A financial asset is measured at fair value through profit or loss if: a) its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI) on the principal amount outstanding; or b) it is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell; or c) it is classified as held for trading (derivative contracts in an asset position). US Solar Fund plc 85 Annual Report and Financial Statements 2024 ## NOTES TO THE FINANCIAL STATEMENTS CONTINUED ## For the year ended 31 December 2024 5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED The Company’s investment in subsidiaries (which comprises both debt and equity) is held at fair value through profit or loss under IFRS 9 as the equity portion of the investment does not meet the SPPI test nor will the Company elect to designate the investments at fair value through other comprehensive income. The debt investment forms part of a group of assets that are managed and the performance evaluated on a fair value basis. The Company includes in this category equity instruments including investments in subsidiaries (which comprises both debt and equity). There are no consolidated subsidiaries. FINANCIAL LIABILITIES MEASURED AT AMORTISED COST This category includes all financial liabilities, other than those measured at fair value through profit or loss, including short-term payables. RECOGNITION AND DERECOGNITION Financial assets are recognised on trade date, the date on which the Company commits to purchase or sell an asset. A financial asset is derecognised where the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired. IMPAIRMENT OF FINANCIAL ASSETS While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, there has been no impairment loss identified. Investment held at fair value through profit or loss is not subject to IFRS 9 impairment requirements. The Company holds trade receivables with no financing component and which have maturities of less than 12 months at amortised cost and, as such has chosen to apply an approach similar to the simplified approach for expected credit losses (ECL) under IFRS 9 to all of its trade receivables. Interest receivable on cash balances, fall within the scope of IFRS 9. The Company has completed some high-level analysis and forward looking qualitative and quantitative information, the Directors consider the interest receivable to be low credit risk as the deposits are held with reputable financial institutions. For interest receivable that is low credit risk, IFRS 9 allows a 12-month expected credit loss to be recognised. The Directors have concluded that any ECL on the interest receivable would be immaterial to the Annual Financial Statements and therefore no impairment adjustments were accounted for. FAIR VALUE MEASUREMENT AND HIERARCHY Fair value is the price that would be received on the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market. It is based on the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. A fair value measurement of a non-financial asset takes into account the best and highest value use for that asset. The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose significance of the inputs is assessed against the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs or any other significant unobservable inputs, that measurement is a Level 3 measurement. The fair value hierarchy to be applied under IFRS 13 is as follows: 1. Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities. 2. Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. 3. Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are carried at fair value and which will be recorded in the financial information on a recurring basis, the Company will determine whether transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period. US Solar Fund plc 86 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE 6. INTEREST INCOME | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Bank interest – 217 – 217 7. ADMINISTRATIVE AND OTHER EXPENSES | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Administrative fees 187 195 Director & officer insurance 85 90 Directors’ fees 301 259 Fees payable to the Company’s Auditor for the audit of the Company’s financial statements 244 199 50 Fees payable to the Company’s Auditor for non-audit services 23 22 Investment management expenses – 1,290 Investment management fees 2,276 2,920 Legal and professional fees 217 1,626 Regulatory fees 19 40 Sundry expenses 409 423 3,761 7,064 The Company has no employees and therefore no employee related costs have been incurred 50 The non-audit services provided relate to the review of the interim financial statements. US Solar Fund plc 87 Annual Report and Financial Statements 2024 ## NOTES TO THE FINANCIAL STATEMENTS CONTINUED ## For the year ended 31 December 2024 8. TAXATION The Company is approved as an Investment Trust Company with effect as of 16 April 2019 and is subject to tax at the UK corporation tax rate of 25%. An Investment Trust Company can claim a corporation tax deduction for dividends designated as interest distributions that are derived from net interest income. Therefore, no UK corporation tax charge has been recognised by the Company for the period ended 31 December 2024. | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | a. Tax charge in profit or loss: – UK corporation tax – – | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | b. Reconciliation of the tax charge for the year Loss before tax (34,882) (43,056) Tax at UK main rate of 25% (2023: 25%) (8,720) (10,127 ) Tax effect of: Fair value losses on investments not taxable 10,618 14,797 Foreign exchange gain and loss not taxable 3 8 Non-deductible expenditure 3 70 Deferred tax not recognised on expenses not utilised 22 80 Non-taxable dividend income (1,428) 4,310) Dividends designated as interest distributions (498) (518) Tax charge for the year – – The tax credit of $498,000 (2023: $518,000) arose as a result of dividends payable in respect of the year being designated as interest distributions in accordance with UK tax legislation specific to Investment Trust Companies. Investment trust companies which have been approved by HM Revenue & Customs are exempt from UK corporation tax on their capital gains. Due to the Company’s status as an approved investment trust company, and the intention to continue meeting the conditions required to maintain that approval for the foreseeable future, the Company has not provided for deferred tax in respect of any gains or losses arising on the revaluation of its investments. The Company has an unrecognised deferred tax asset of $99,721 (2023: $107,000) in respect of tax losses which are available to be carried forward and offset against future taxable profits. A deferred tax asset has not been recognised as it is considered unlikely that the Company will generate taxable profits in excess of deductible expenses in future periods. The unrecognised deferred tax asset has been calculated using a corporation tax rate of 25% (2023: 25%). 9. EARNINGS PER SHARE Earnings per share amounts are calculated by dividing the profit or loss for the year attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue during the year. As there are no dilutive instruments outstanding, basic and diluted earnings per share are identical. | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Net loss attributable to ordinary shareholders (34,882) (43,056) Weighted average number of Ordinary Shares for the year 318,682 332,192 Earnings per share – Basic and diluted (cents per share) (10.94) (12.96) US Solar Fund plc 88 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE 10. FINANCIAL INSTRUMENTS 10.1 FINANCIAL ASSETS | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Financial asset Financial assets at fair value through profit and loss: Investment in subsidiary 193,251 254,723 Financial assets at amortised cost: Trade and other receivables 846 3,088 Cash at bank 890 1,554 Total financial assets 194,141 256,277 10.2 FINANCIAL LIABILITIES | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Financial liabilities Financial liabilities at amortised cost: Trade and other payables 835 1,135 Total financial liabilities 835 1,135 At the balance sheet date, all financial assets and liabilities were measured at amortised cost except for the investment in subsidiary which is measured at fair value. 10.3 FINANCIAL RISK MANAGEMENT The Company is exposed to certain risks through the ordinary course of business and the Company’s financial risk management objective is to minimise the effect of these risks. The management of risks is performed by the Directors of the Company and the exposure to each financial risk considered potentially material to the Company, how it arises and the policy for managing it is summarised below. Credit risk The Company is exposed to third-party credit risk in several instances and the possibility that counterparties with which the Company and its subsidiaries, together the Group, contracts may fail to perform their obligations in the manner anticipated by the Group. Counterparty credit risk exposure limits are determined based on the credit rating of the counterparty. Counterparties are assessed and monitored on the basis of their ratings from Standard & Poor’s and/or Moody’s. No financial transactions are permitted with counterparties with a credit rating of less than BBB- from Standard & Poor’s or Baa3 from Moody’s unless specifically approved by the Board. Cash and other assets that are required to be held in custody will be held at bank. Cash and other assets may not be treated as segregated assets and will therefore not be segregated from the bank’s own assets in the event of the insolvency of a custodian. Cash held with the bank will not be treated as client money subject to the rules of the FCA and may be used by the bank in the ordinary course of its own business. The Company will therefore be subject to the creditworthiness of the bank. In the event of the insolvency of the bank, the Company will rank as a general creditor in relation thereto and may not be able to recover such cash in full, or at all. Credit risk is mainly at subsidiary level where the capital commitments are being made and is managed by diversifying exposures among a portfolio of counterparties and through applying credit limits to those counterparties with lower credit standing. Credit exposures may also be managed using credit derivatives. No credit derivatives were in place as at 31 December 2024. Cash and bank deposits are held with major international financial institutions who each hold a Moody’s credit rating of A2 or higher. Liquidity risk The objective of liquidity management is to ensure that all commitments which are required to be funded can be met out of readily available and secure sources of funding. The Company’s only financial liabilities are trade and other payables. The Company intends to hold sufficient cash across the Company and Subsidiary’s operating accounts to meet the working capital needs over a horizon of at least the next six months. Cash held at subsidiary level is available to meet the obligations of the Company. As at 31 December 2024 USF Holding Corp. held free cash at bank of $1.647 million. Cash flow forecasts are prepared on a monthly basis for a rolling two-year period to assist in the ongoing analysis of short term cash flow. US Solar Fund plc 89 Annual Report and Financial Statements 2024 ## NOTES TO THE FINANCIAL STATEMENTS CONTINUED ## For the year ended 31 December 2024 10. FINANCIAL INSTRUMENTS CONTINUED The following table reflects the maturity analysis of financial liabilities. | | <1 year | | 1 to 2 years | | 2 to 5 years | | >5 years | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | USD | | USD | | USD | | USD | USD | | As at 31 December 2024 | | ‘000 | | ‘000 | | ‘000 | | ‘000 | ‘000 | Financial liabilities Financial liabilities at amortised cost: Trade and other payables 835 – – – 835 Total financial liabilities 835 – – – 835 | | <1 year | 1 to 2 years | | 2 to 5 years | | >5 years | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | USD | | USD | | USD | | USD | USD | | As at 31 December 2023 | ‘000 | | ‘000 | | ‘000 | | ‘000 | ‘000 | Financial liabilities Financial liabilities at amortised cost: Trade and other payables 1,135 – – – 1,135 Total financial liabilities 1,135 – – – 1,135 Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as changes in inflation, merchant power price curves, foreign exchange rates and interest rates. Inflation risk The Group cash flows are positively correlated to inflation over the useful life of the investment portfolio. However, as the Group’s revenue is fixed in the short to medium term through PPAs executed with credit worthy counterparties, the cash flows are negatively correlated to inflation over the short to medium terms. The Group manages exposure to this risk by carrying out detailed cash forecasting and holding sufficient cash reserves, thereby mitigating the cash flow impacts. Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows from underlying investments therefore impacting the value of investments at fair value through profit or loss. The Group has limited exposure to interest rate risk as the underlying borrowings within the unconsolidated investee entities are largely hedged through interest rate swap arrangements. The Group’s corporate debt facility is unhedged on the basis it is utilised as an investment bridging facility and therefore drawn for a relatively short period of time. The facility was undrawn at 31 December 2024. Foreign currency risk The Group has limited exposure to non USD transactions therefore the foreign currency risk is minimal. Capital risk management The capital structure of the Company at year-end consists of equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated loss. The Company has no return on capital benchmark, but the Board continues to monitor the balance of the overall capital structure so as to maintain investor and market confidence. The Company is not subject to any external capital requirements. US Solar Fund plc 90 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE 10. FINANCIAL INSTRUMENTS CONTINUED 10.4 FAIR VALUE MEASUREMENT The following table analyses within the fair value hierarchy the Company’s assets and liabilities measured at fair value at 31 December 2024: | Level 1 | Level 2 | Level 3 | | --- | --- | --- | | USD | USD | USD | | ‘000 | ‘000 | ‘000 | Investment in subsidiary – – 193,251 The following table analyses within the fair value hierarchy the Company’s assets and liabilities measured at fair value at 31 December 2023: | Level 1 | Level 2 | Level 3 | | --- | --- | --- | | USD | USD | USD | | ‘000 | ‘000 | ‘000 | Investment in subsidiary – – 254,723 The investments recognised at fair value through profit and loss are classified as Level 3 in the fair value hierarchy and the reconciliation in the movement of this Level 3 investment is presented below. No transfers between levels took place during the year. | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Opening balance 254,723 317,6 34 Less: Return of capital (19,000) – Total fair value movement through the profit or loss (capital) (42,472) (62,911) Closing balance 193,251 254,723 The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as of the date of the event or change in circumstances that caused the transfer. In accordance with the guidelines of the Company’s valuation policy, all assets held as at 31 December 2024 have been valued by an external valuation expert. Subsidiary information Place of Business Percentage Ownership USF Holding Corp Delaware, USA 100% | | | Equity acquisitions | | | | Loans: principal | | Net fair value movement | | | Closing balance: | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Opening balance | | | during the year | | advanced during the year | | | | during the year | | equity and loans | | | | USD | | | USD | | | USD | | | USD | | USD | | | ‘000 | | | ‘000 | | | ‘000 | | | ‘000 | | ‘000 | USF Holding Corp. 254,723 (19,000) – (42,472) 193,251 From establishment to 31 December 2024, the Company has funded USF Holding Corp. with equity and debt, with the total amount of debt funding based on several criteria, including an arm’s length gearing test satisfying thin capitalisation rules. Note 10 of these financial statements contains the components of the 31 December 2024 equity and loans balance. Fair value relates to USF's share of the underlying solar asset investment and cash flows only (i.e. balances exclude tax equity investment amounts) and expected returns and fair values are modelled after allowing for distributions to tax equity investors. Included in the total fair value movement of ($42.5 million) are dividends paid to USF from underlying US entities of $5.7 million. In the current period there was also a return of capital from underlying US entities of $19 million in order to facilitate the tender offer made by the Company in the year. US Solar Fund plc 91 Annual Report and Financial Statements 2024 # NOTES TO THE FINANCIAL STATEMENTS CONTINUED For the year ended 31 December 2024 ## 10. FINANCIAL INSTRUMENTS CONTINUED On 28 June 2019, the Company entered into a MSA with its subsidiary USF Holding Corp. The Board of the Company, with further assistance by delegation of its duties to the Investment Manager, provides strategic management services to USF Holding Corp relating to its current portfolio of US solar assets and potential acquisitions. A list of the significant investments in unconsolidated subsidiaries, including the name, country of incorporation and proportion of ownership is shown below: | Subsidiary information | Place of Business | Percentage Ownership | | --- | --- | --- | | USF Avon LLC | USA | 100% | | USF Bristol LLC | USA | 100% | | USF Surry LLC | USA | 100% | | USF Essex LLC | USA | 100% | | USF Cheshire LLC | USA | 100% | | USF Dorset Holding LLC | USA | 100% | ## VALUATION METHODOLOGY ### VALUATION PROCESS The NAV approved by the USF Board takes into account the overall valuations of portfolio assets assessed by the Independent Valuer on a semi-annual basis as at 30 June and 31 December 2024. These valuations form part of the NAV calculation of the Company, which is subject to review/audit. The Company engaged KPMG as the Independent Valuer to calculate the fair value of its assets. KPMG is one of the largest valuation firms in the US with significant experience in estimating the fair value of solar and other renewable energy assets. In line with USF policy, all of its operating assets were externally valued at 31 December 2024. Based on the valuation range provided by the Independent Valuer, the Administrator, in conjunction with the Investment Manager, calculates the NAV and the NAV per Ordinary Share, and submits the same to the Board for its approval. The valuation has been calculated in accordance with USPAP as applied to PV electricity generation systems in the US. Fair value for operational solar assets is derived from a DCF methodology using pre-tax cash flows and a pre-tax discount rate. In a DCF analysis, the fair value of the Solar Power Asset is the present value of the asset's expected future cash flows, based on a range of operating assumptions for revenues and costs and an appropriate discount rate range. The Independent Valuer has reviewed a range of sources in determining the fair market valuation of the solar assets, including but not limited to: - discount rates publicly disclosed by the Company's global peers; - discount rates applicable to comparable infrastructure asset classes; - quality of cash flow forecasts in terms of operations; - the level of gearing at each investment level; and - capital asset price model outputs and implied risk premium over relevant risk-free rates A broad range of assumptions are used in valuation models. Where possible, assumptions are based on observable long-term historical market or market observations. The budgeted operational costs are based on technical data and the implicit financing costs for leveraged investments are based on market data. The Company also engages technical experts to provide long-term electricity price forecast which is a critical datapoint used to forecast revenues. 92 US Solar Fund plc Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS ## 10. FINANCIAL INSTRUMENTS CONTINUED ### DISCOUNT RATES Discount rates used in the valuation of the portfolio are derived from long term government bond yields, plus an investment specific risk premium, reflecting the risk of investing in that particular investment. The discount rate also reflects the Independent Valuer's view of the transactional activity in the relevant market along with implied execution discount rates. As at 31 December 2024, the weighted average discount rate was 10.8% (December 2023: 8.8%). The discount rates are presented on a pre-tax basis. ### 10.5 SENSITIVITY ANALYSIS Set out below are the initial indications of the key assumptions the Directors believe would have a material impact upon the fair value of the investments should they change. In the absence of an operating business model for each underlying renewable energy asset, the sensitivities have been conducted on the acquisition models of these assets. The following sensitivities assume the relevant input is changed over the entire useful life of each of the underlying renewable energy assets, while all other variables remain constant. All sensitivities have been calculated independently of each other. The Directors consider the changes in inputs to be within a reasonable expected range based on their understanding of market transactions. This is not intended to imply that the likelihood of change or that possible changes in value would be restricted to this range. | | Change in input | Change in NAV USD (m) | Change in NAV per share USD (c) | | --- | --- | --- | --- | | Discount rate | +1% -1% | -19.74 +23.61 | -6.41 +7.67 | | Electricity production (change from P50) | P90 P10 | -31.59 +28.61 | -10.26 +9.29 | | Merchant period electricity prices | -10% +10% | -19.76 +18.23 | -6.42 +5.92 | | Operations and maintenance expenses | +10% -10% | -15.52 +17.09 | -5.04 +5.55 | | Operating life | -3 years +3 years | -6.60 +5.83 | -2.14 +1.89 | | Tax rate | +5% -5% | -4.05 +4.03 | -1.32 +1.31 | | Inflation rate | +1% -1% | +19.63 -15.21 | +6.38 -4.94 | | Operating expenses inflation rate | +1% -1% | -13.33 +12.24 | -4.33 +3.98 | US Solar Fund plc Annual Report and Financial Statements 2024 93 ## NOTES TO THE FINANCIAL STATEMENTS CONTINUED ## For the year ended 31 December 2024 11. TRADE AND OTHER RECEIVABLES | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Amounts receivable from subsidiary (note 16) 801 2,888 Prepayments 45 67 VAT receivable – 133 846 3,088 12. TRADE AND OTHER PAYABLES | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Creditors and operating accruals 345 916 Investment management fee accrual 488 219 VAT payable 2 – 835 1,135 13. SHARE CAPITAL | | | | | | | Capital | | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Ordinary | | Treasury | | Share | Share | reduction | share capital | | | | | shares | | shares | capital | premium | reserve | | reserves | | | NUMBER | | | USD | USD | USD | USD | | | USD | | | ‘000 | | ‘000 | ‘000 | ‘000 | ‘000 | | | ‘000 | As at 31 December 2023 332,192 – 3,322 128,036 175,008 306,366 Return of capital – – – – (18,578) (18,578) Share transaction costs – – – – (331) (331) Share buyback (24,359) 24,359 – – – – As at 31 December 2024 307,833 24,359 3,322 128,036 156,099 287,457 The Company has an authorised share capital of 500,000,000 Ordinary Shares. On incorporation the Company issued one Ordinary Share of $0.01 which was fully paid up. Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies, the Company was permitted to cancel a portion of its share premium account. This was effected on 21 June 2019 by a transfer of the balance of $194 million from the share premium account to the capital reduction reserve. The capital reduction reserve is classed as a distributable reserve and dividends to be paid by the Company are able to be offset against this reserve. On 3 May 2024 the Company announced the commencement of the Tender Offer to return up to $19 million to shareholders. On 11 June 2024 the Company announced that following the results of the Tender Offer, 24,358,974 shares would be repurchased under the Tender offer, at a price of $0.764 per share. These shares are held in Treasury. US Solar Fund plc 94 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE 14. RESERVES The nature and purpose of each of the reserves included within equity at 31 December 2024 are as follows: – Share premium reserve: represents the surplus of the gross proceeds of share issues over the nominal value of the shares, net of thedirect costs of equity issues and net of conversion amount. As at 31 December 2024 the share premium account has a balance of$128,036,000 (2023: $128,036,000) – Capital reduction reserve: represents a distributable reserve (which may be utilised in respect of dividend payouts) created following a court approved reduction in capital. As at 31 December 2024 the capital reduction reserve has a balance of $156,099,000 (2023: $175,008,000). – Capital reserve: represents cumulative net gains and losses, of a capital nature, recognised in the Statement of Profit and Loss and Other Comprehensive Income and associated tax allocations arising from the MSA fee income and interest distributions. As at 31 December 2024 the capital reserve reflects a loss of $(96,957,000) (2023: $(54,473,000)) – Retained earnings represent cumulative net gains and losses, of an income nature, recognised in the Statement of Profit and Loss and Other Comprehensive Income and associated tax allocations arising from the MSA fee income and interest distributions. As at 31 December 2024, retained earnings reflects a profit of $3,652,000 (2023: $6,337,000) – During the year, the Company declared dividends totalling $10,287,000 (31 December 2023: $18,736,000) of which $10,287,000 (31December 2023: $18,736,000) has been paid as at 31 December 2024 – During the period c.$18.9 million was distributed on account of the tender offer that concluded in June 2024 ($18.6 million returned toshareholders and $0.3 million of costs incurred by the Company in administering the tender offer) The only movements in these reserves during the year are disclosed in the statement of changes in equity. 15. NET ASSET VALUE PER SHARE Basic NAV per share is calculated by dividing the Company’s net assets as shown in the statement of financial position that are attributable to the ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic and diluted NAV per share are identical. | 31 December 2024 | | 31 December 2023 | | | --- | --- | --- | --- | | | USD | | USD | | | ‘000 | | ‘000 | Net assets per Statement of Financial Position 194,152 258,230 Ordinary Shares in issue as at 31 December 307,833 3 32,192 NAV per share – Basic and diluted 0.63 0.78 16. TRANSACTIONS WITH RELATED PARTIES The Company and the Directors are not aware of any person who, directly or indirectly, jointly or severally, exercises or could exercise control over the Company. The Company does not have an ultimate controlling party. Details of related parties are set out below: NON-EXECUTIVE DIRECTORS Directors are paid fees of £44,100 per annum. In addition to this, Gillian Nott receives £23,940 per annum in respect of serving as Chair of the Board and Jamie Richards receives £11,025 per annum in respect of serving as Chair of the Audit committee. Total Directors’ fees of $300,777 (2023: $237,000) were incurred in respect of the year with none being outstanding and payable at the year-end (2023: $nil). SUBSIDIARY The Company previously issued loans totalling $43 million to its subsidiary USF Holding Corp. The two loans were issued on 26 June 2019 and 31 December 2019 and are repayable seven years from issuance. The loans bear interest at rates of 4.75% and 4.10% respectively, payable semi-annually in arrears. US Solar Fund plc 95 Annual Report and Financial Statements 2024 # NOTES TO THE FINANCIAL STATEMENTS CONTINUED For the year ended 31 December 2024 ## 16. TRANSACTIONS WITH RELATED PARTIES CONTINUED INVESTMENT MANAGER The Investment Manager is entitled to management fees under the terms of the IMA. The Company shall pay to the Investment Manager an annual fee (exclusive of value added tax, which shall be added where applicable) payable quarterly in arrears calculated at the rate of: | Assets under management | Fee based on NAV | | --- | --- | | < $500 million | 1.0% per annum | | $500 million to $1 billion | 0.9% per annum | | > $1 billion | 0.8% per annum | Based on the Net Asset Value on the last Business Day of the relevant quarter. The Management Fee due in respect of each quarter shall be invoiced by the Manager to the Company as at the final Business Day of the relevant quarter, and shall be due and payable in the following manner: - a) no later than 10 Business Days after the Payment Date, 90% of the Management Fee shall be paid to the Manager in cash to such bank account as the Manager may nominate for this purpose; and - b) 10% of the Management Fee shall be paid to the Manager or an Associate (as directed by the Manager) in the form of Ordinary Shares in accordance with the provisions stated in the IMA. For the avoidance of doubt, where there are C Shares in issue, the advisory fee will be charged on the Net Asset Value attributable to the Ordinary Shares and C Shares respectively. On 10 November 2020, the Board approved a recommendation from the Investment Manager to have the Administrator arrange for 10% of its Management Fee to be applied to purchase Ordinary USF Shares in the secondary market. From that time, the Company ceased issuing shares to the Investment Manager. A management fee of $2.3 million (2023: $3.0 million) was incurred during the year, of which $488,000 (2023: $256,000) remained payable at 31 December 2024. In addition to the management fee, the Manager shall also be entitled to payment of the following: - a) a fee for any successful arrangement of debt services payable at a rate of 0.5% of the debt face value; and - b) a fee for any oversight of asset construction services payable at market rates, negotiated on an arms' length basis and subject to the approval of the Board. The Manager provides debt arranging services to the Fund, including contacting and liaising with capital providers, negotiating borrowing terms, obtaining credit ratings, implementing interest rate hedging strategies and executing documentation. The Manager was successful in securing debt, interest rate hedging and letter of credit facilities at competitive terms for the Fund, providing diversification to the Fund's capital sources. For this service, the Manager receives debt arranging fees of 0.5% of the face value of new third-party debt and letter of credit facilities. Debt arrangement fees totalling $nil were incurred during the year (2023 $nil). Asset management and construction services fees totalling $1.2 million ($0.3 million accrued; $0.9 million paid) were incurred during the year (2023: $0.3 million accrued, $0.8 million paid). ## 17. CAPITAL COMMITMENTS The Company had no contingencies and no other significant capital commitments at the reporting date. ## 18. POST BALANCE SHEET EVENTS On 9 April 2025, the Company declared a dividend of 0.57 cents per Ordinary Share for the period ending 31 December 2024. 96 US Solar Fund plc Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS # ALTERNATIVE PERFORMANCE MEASURES In accordance with ESMA Guidelines on Alternative Performance Measures (APMs) the Board has considered the APMs included in the Annual Report and financial statements which require further clarification. An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. APMs included in the Annual Report and financial statements are identified as non-GAAP measures and are defined within the Glossary | APM | | 31 Dec 2024 | 31 Dec 2023 | | --- | --- | --- | --- | | **Discount to NAV** | The percentage by which the closing share price on comparable dates exceeds/(falls short of) the NAV per share. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company's share price. | (31.8%) | (30.8%) | | **Distributions to shareholders** | Represents total distributions to shareholders including dividends paid and capital returned via tender offer, as disclosed in the financial statements. This measure provides information on the Company's total distributions to shareholders. Dividends paid and capital returned via tender offer can be found disclosed in the financial statements and notes to the financial statements. | $28.9m | $18.8m | | **Dividend per share** | Represents dividends paid per Ordinary Share issued, as disclosed in the financial statements. This measure provides information on the Company's dividend performance. Dividends paid and number of issued shares can be found disclosed in the financial statements and notes to the financial statements. | 2.25 cps | 5.66 cps | | **Gearing** | The face value of drawn debt as a percentage of the Gross Asset Value (GAV – calculated as NAV plus outstanding debt). This measure shows the portfolio's debt ratio. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. | 41% | 36% | | **NAV** | Net Asset Value. Represents the equity attributable to equity holders of the parent in the balance sheet. This terminology is used as it is common investment sector terminology and so is the most understandable to the users of the Annual Report. Components of NAV are further discussed throughout the Annual Report, including from page 26. | $194.2m | $258.2m | | **NAV per share** | This is a measure of Net Asset Value (or NAV) per Ordinary Share in the Company and is calculated as the NAV divided by the total number of shares in issue at the balance sheet date. Represents the equity attributable per share to equity holders of the parent in the Balance Sheet. This terminology is used as it is common investment sector terminology and so is the most understandable to the users of the Annual Report. | $0.63 | $0.78 | | **NAV total return** | This is a measure of Net Asset Value (or NAV) total return. NAV total return is based on dividends paid throughout the period and NAV movement since inception. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company's NAV. However a nearest comparison were this measure based on a figure in the financial statements is provided in the Strategic Report, Investor Relations, Total Shareholder Return and NAV total return paragraph. | (13.4%) | (1.7%) | | **Operational dividend cover** | Calculated as net operating cash generation divided by dividends paid in the year. Seeks to reflect the sustainability of the level of dividends paid by looking at the underlying cash generation from the portfolio and excludes certain components to reflect the coverage from operational revenue generation in the period. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. | 1.10x | 0.50x | | **Project revenue** | Defined as revenue derived from the Company's portfolio, excluding proceeds from the sale of Mount Signal 2. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. | $44.9m | $46.7m | | **Total dividend cover** | Total dividend cover is calculated as net portfolio cash generation divided by dividends paid in the year, with an adjustment for items such as cash flow reserves carried forward from operating cash flows generated in prior periods. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. | 0.57x | 0.95x | | **TSR** | Share price appreciation plus dividends assumed to be reinvested since IPO. The total return based on the NAV appreciation plus dividends paid since the IPO. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company's share price. However a nearest comparison were this measure based on a figure in the financial statements is provided in the Strategic Report, Investor Relations, Total Shareholder Return and NAV total return paragraph. | (44.3%) | (34.4%) | US Solar Fund plc Annual Report and Financial Statements 2024 97 ## GLOSSARY ## Including Alternative Performance Measures AGM The Company’s Annual General Meeting AIC Association of Investment Companies AIFM Alternative investment fund manager AIIA The Company’s Investment Manager, Amber Infrastructure Investment Advisor, LLC, a member of the Amber Infrastructure Group Amber Amber Infrastructure Group Amber Infrastructure Amber Infrastructure Group Holdings Limited and its subsidiaries Group APMs In accordance with ESMA Guidelines on Alternative Performance Measures (APMs) the Board has considered the APMs included in the Annual Report and financial statements which require further clarification. An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. APMs included in the Annual Report and financial statements are identified as non-GAAP measures and are defined within this glossary Articles The articles of association of the Company Average NAV Average of published NAVs for the relevant periods AVERT Avoided Emissions and geneRation Tool COD Commercial Operations Date Company US Solar Fund plc (USF) or “the Group” when referring to the Company and its investment portfolio subsidiaries. CSRD Corporate Sustainability Reporting Directive DCF Discounted cash flow Dividend paid Non-GAAP measure. Represents dividends paid, as disclosed in the financial statements. This measure provides information on the Company’s dividend performance. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. Dividend per share Non-GAAP measure. Represents dividends paid per Ordinary Share issued, as disclosed in the financial statements. This measure provides information on the Company’s dividend performance. Dividends paid and number of issued shares can be found disclosed in the financial statements and notes to the financial statements. ECL Expected credit losses ESG Environmental, Social and Governance EFRAG European Financial Reporting Advisory Group EU Taxonomy EU Taxonomy for Sustainable Activities FCA Financial Conduct Authority FPPP Financial Position and Prospectus Procedures FRC The Financial Reporting Council GAV Gross asset value Gearing Non-GAAP measure. The face value of drawn debt as a percentage of the Gross Asset Value (GAV – calculated as NAV plus outstanding debt). This measure shows the portfolio’s debt ratio. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. GWh Gigawatt hours GHG Greenhouse gas emissions IFRS International Financial Reporting Standards IMA Investment Management Agreement Investment Manager Amber Infrastructure Investment Advisor LLC, a member of the Amber Infrastructure Group appointed as the Company’s Investment Manager on 1 December 2023. Prior to 1 December 2023, the Company was managed by New Energy Solar Manager, Pty Ltd. IPO The Company’s initial public offering completed on 11 April 2019 made pursuant to a prospectus dated 26 February 2019 US Solar Fund plc 98 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE ## GLOSSARY CONTINUED ## Including Alternative Performance Measures IRA Inflation Reduction Act ISSB International Sustainability Standards Board MS2 Mount Signal 2 Project: a 200MW solar farm located in southern California. The Company sold its 50% interest in MS2 in June 2023. MSA Management Services Agreement (MSA) NAV Net Asset Value. Represents the equity attributable to equity holders of the parent in the balance sheet. This terminology is used as it is common investment sector terminology and so is the most understandable to the users of the Annual Report. Components of NAV are further discussed throughout the Annual Report, including from page 26. NAV per Share Non-GAAP measure. This is a measure of Net Asset Value (or NAV) per Ordinary Share in the Company and is calculated as the NAV divided by the total number of shares in issue at the balance sheet date. Represents the equity attributable per share to equity holders of the parent in the Balance Sheet. This terminology is used as it is common investment sector terminology and so is the most understandable to the users of the Annual Report. NAV total return Non-GAAP measure. This is a measure of Net Asset Value (or NAV) total return. NAV total return is based on dividends paid throughout the period and NAV movement since inception. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company’s NAV. However a nearest comparison were this measure based on a figure in the financial statements is provided in the Strategic Report, Investor Relations, Total Shareholder Return and NAV total return paragraph. Net-zero Net-zero refers to balancing the amount of emitted greenhouse gases with the equivalent emissions that are either offset or sequestered. This should primarily be achieved through a rapid reduction in carbon emissions, but where zero carbon cannot be achieved, offsetting through carbon credits or sequestration through rewilding or carbon capture and storage needs to be utilised O&M Operations and maintenance OECD Organisation for Economic Co-operation and Development Offtaker Purchaser of electricity and/or RECs under a PPA and/or a REC Agreement (as defined in Part XI (Glossary of Terms) of the Prospectus) Operational dividend cover Non-GAAP measure. Calculated as net operating cash generation divided by dividends paid in the year. Seeks to reflect the sustainability of the level of dividends paid by looking at the underlying cash generation from the portfolio and excludes certain components to reflect the coverage from operational revenue generation in the period. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. Ordinary Share Ordinary Shares with a nominal value of $0.01 each in the capital of the Company issued and designated as ‘Ordinary Shares’ of such class (denominated in such currency) as the Directors may determine in accordance with the Articles and having such rights and being subject to such restrictions as are contained in the Articles. PAI Principal Adverse Impact PCAF Partnership for Carbon Accounting Financials Portfolio cash flows Calculated as total project revenue after deducting project operating expenses, payments to tax equity and portfolio debt expenses as set out in the Operating Review: Financial Management section. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. PPA Power purchase agreement (as defined in Part XI (Glossary of Terms) of the Prospectus) Premium/(discount) to NAV Non-GAAP measure. The percentage by which the closing share price on comparable dates exceeds/ (falls short of) the NAV per share. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company’s share price. PRI The UN-backed Principles for Responsible Investment Project revenue Non-GAAP measure. Defined as revenue derived from the Company’s portfolio, excluding proceeds from the sale of Mount Signal 2. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. US Solar Fund plc 99 Annual Report and Financial Statements 2024 Prospectus US Solar Fund Prospectus dated April 2021 PURPA Public Utility Regulatory Policies Act QF Qualifying facility, as defined under PURPA. QFs are a special class of generating facility defined by law and categorised as either a cogeneration facility or small power production facility. RCF Revolving credit facility REC Renewable energy certificate (as defined in Part XI (Glossary of Terms) of the Prospectus) REC Agreement An agreement to purchase RECs (as defined in Part XI (Glossary of Terms) of the Prospectus) RNS Regulatory news service RTS EU Commission’s Regulatory Technical Standards relating to the SFDR Scope 1 Emissions Direct emissions from owned or controlled sources Scope 2 Emissions Indirect emissions from the generation of purchased energy Scope 3 Emissions All indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company, including both upstream and downstream emissions SDGs Sustainable Development Goals SDR The proposed UK Sustainability Disclosure Requirements SEC US Securities and Exchange Commission SFDR The EU Sustainable Finance Disclosure Regulation Solar power assets Utility-scale solar power plants and associated infrastructure, which may include transmission and co- located or remotely located energy storage systems such as batteries (as defined in Part XI (Glossary of Terms) of the Prospectus) SPPI Solely payments of principal and interest SPV Special Purpose Vehicle TCFD Taskforce on Climate-related Financial Disclosures Total dividend cover Non-GAAP measure. Total dividend cover is calculated as net portfolio cash generation divided by dividends paid in the year, with an adjustment for items such as cash flow reserves carried forward from operating cash flows generated in prior periods. As this measure is presented on a portfolio basis, there is no near comparable in the financial statements. Dividends paid can be found disclosed in the financial statements and notes to the financial statements. TNFD Taskforce on Nature-related Financial Disclosures TSR Total Shareholder Return. Non-GAAP measure. Share price appreciation plus dividends assumed to be reinvested since IPO. The total return based on the NAV appreciation plus dividends paid since the IPO. There is no direct reconciliation to the financial statements, being a calculation instead derived from the Company’s share price. However a nearest comparison were this measure based on a figure in the financial statements is provided in the Strategic Report, Investor Relations, Total Shareholder Return and NAV total return paragraph. Transition Risk Transition risks include policy changes, reputational impacts, and shifts in market preferences, norms and technology. Transition opportunities include those driven by resource efficiency and the development of new technologies, products and services, which could capture new markets and sources of funding. UNGC UN Global Compact USPAP Uniform Standards of Professional Appraisal Practice Utility Scale Solar Power Large-scale grid connected solar power plants, being solar photovoltaic generation power plants with Plants capacity of at least 1MW but typically in a range of 20MW to 200MW (as defined in Part XI (Glossary of Terms) of the Prospectus) WACI Weighted Average Carbon Intensity US Solar Fund plc 100 Annual Report and Financial Statements 2024 OVERVIEW STRATEGIC REPORT FINANCIAL STATEMENTSCORPORATE GOVERNANCE FINANCIAL STATEMENTSCORPORATE GOVERNANCE ## KEY CONTACTS | DIRECTORS | INDEPENDENT AUDITOR | | --- | --- | | Gill Nott | Deloitte LLP | | Jamie Richards | 2 New Street Square, London, EC4A 3BZ | Thomas Plagemann Mark Lerdal (appointed 1 October 2024) INDEPENDENT VALUER KPMG LLP INVESTMENT MANAGER Suite 1000, Amber Infrastructure Investment Advisor LLC 620 South Tryon Street, Charlotte, North Carolina, 28202-1842 1330 Avenue of the Americas, New York, NY 10019 LEGAL ADVISER REGISTERED OFFICE Hogan Lovells International LLP The Scalpel, 18th Floor Atlantic House, Holborn Viaduct, London, EC1A 2FG 52 Lime Street, London, EC3M 7AF CORPORATE BROKER ADMINISTRATOR AND Cavendish Capital Markets Limited COMPANY SECRETARY One Bartholomew Close, London, EC1A 7BL JTC (UK) Limited The Scalpel, 18th Floor PUBLIC RELATIONS 52 Lime Street, London, EC3M 7AF Kaso Legg Communications 40 Queen Street London, EC4R 1DD US Solar Fund plc 101 Annual Report and Financial Statements 2024 # NOTICE OF AGM **THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own independent financial advice from a stockbroker, bank manager, solicitor, accountant, or other financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if you are not resident in the United Kingdom, from another appropriately authorised independent financial adviser.** If you have sold or otherwise transferred all of your shares in US Solar Fund plc, please send this document, together with the accompanying documents, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. ## NOTICE OF THE ANNUAL GENERAL MEETING OF US SOLAR FUND PLC **NOTICE IS HEREBY GIVEN** that the Annual General Meeting of US Solar Fund plc (Company) will be held, at the offices of JTC, The Scalpel, 18th Floor, 52 Lime Street, London EC3M 7AF on Tuesday, 20 May 2025 at 3:00 p.m. **You will be asked to consider and vote on the resolutions below. Resolutions 1 to 10 will be proposed as ordinary resolutions and resolutions 11 to 14 will be proposed as special resolutions. The Board unanimously recommends that Shareholders vote in favour of all resolutions, except in the case of resolution 14, which the Board unanimously recommends that Shareholders vote AGAINST.** ### Ordinary Resolutions: 1. 1. THAT the Annual Report and Financial Statements for the year to 31 December 2024, together with the Directors' reports and Auditors' report on those accounts, be received. 2. 2. THAT the Directors' Remuneration Report (excluding the Director's Remuneration Policy), as set out on pages 67 to 68 of the Company's Annual Report and Financial Statements for the year to 31 December 2024 be approved. 3. 3. THAT Deloitte LLP be re-appointed as the Company's Auditor from the conclusion of this meeting until the conclusion of the next Annual General Meeting general meeting of the Company at which the accounts and reports of the Directors and Auditors are laid. 4. 4. THAT the Directors be authorised to determine the Auditor's remuneration. 5. 5. THAT Gillian Nott be re-elected as a Director of the Company. 6. 6. THAT Jamie Richards be re-elected as a Director of the Company. 7. 7. THAT Thomas Plagemann be re-elected as a Director of the Company. 8. 8. THAT Mark Lerdal be elected as a Director of the Company. 9. 9. THAT the Company's dividend policy be approved. 10. 10. THAT the Directors of the Company be and they are hereby generally and unconditionally authorised pursuant to Section 551 of the Companies Act 2006 (the 'Act'), and in substitution for all existing authorities, to exercise all the powers of the Company to allot Ordinary Shares in the Company up to a maximum aggregate nominal amount of US\$307,850 (representing approximately 10% of the Company's issued ordinary share capital as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice) or, if different, the number representing 10% of the aggregate nominal value of issued share capital (excluding treasury shares) as at the date of the passing of this resolution provided that this authority shall expire at the conclusion of the Company's next annual general meeting or, if earlier, the date occurring 15 months from the date on which this resolution is passed, unless renewed at a general meeting prior to such time, save that the Company may before such expiry make offers, agreements or arrangements which would or might require relevant securities to be allotted after such expiry and so that the Directors of the Company may allot relevant securities in pursuance of such offers, agreements or arrangements as if the authority conferred hereby had not expired. 102 **US Solar Fund PLC** Annual report and financial statements 2024 # **Special Resolutions:** 11. THAT, subject to the passing of resolution 10, set out above, the Directors of the Company be and they are hereby empowered pursuant to Section 570 and Section 573 of the Act to allot equity securities (within the meaning of Section 560 of the Act) pursuant to the authority conferred by resolution 10 and/or by way of sale of treasury shares as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities for cash at a price of not less than the net asset value per share up to an aggregate nominal amount of US$307,850 (representing approximately 10% of the Company's issued ordinary share capital as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice)) or, if different, the number representing 10% of the aggregate nominal value of issued share capital (excluding treasury shares) as at the date of the passing of this resolution and shall expire at the conclusion of the Company's next annual general meeting or, if earlier, the date occurring 15 months from the date on which this resolution is passed, unless renewed at a general meeting prior to such time, save that the Company may before such expiry make offers, agreements or arrangements which would or might require equity securities to be allotted after such expiry and so that the Directors of the Company may allot equity securities in pursuant of such offers, agreements or arrangements as if the power conferred hereby had not expired. 12. THAT the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Companies Act 2006 to make market purchases (within the meaning of section 693(4) of the Companies Act 2006) of Ordinary Shares of $0.01 each in the capital of the Company on such terms and in such manner as the Directors may from time to time determine, provided that: a) the maximum aggregate number of Ordinary Shares which may be purchased is 46,144,225 (being approximately) 14.99% of the issued ordinary share capital of the Company immediately prior to the passing of this resolution (excluding treasury shares) as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice); b) the minimum price (excluding expenses) which may be paid for each Ordinary Share or is $0.01; c) the maximum price (excluding expenses) which may be paid for each Ordinary Share is the higher of: a. an amount equal to 105% of the average of the middle market value of quotations for an Ordinary Share in the Company as derived from The London Stock Exchange Daily Official List for the five business days immediately before the day on which the purchase is made; and b. the higher of the price of the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share on the trading venues where the market purchases by the Company pursuant to the authority conferred by this resolution will be carried out; d) the authority conferred by this resolution shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the Company's next annual general meeting or, if earlier, on 20 August 2026, save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to purchase its Ordinary Shares which may be executed wholly or partly after the expiry of such authority. 13. THAT a general meeting, other than an annual general meeting, may be called on not less than 14 clear days' notice provided that this authority shall expire at the conclusion of the Company's next annual general meeting. 14. THAT the Company ceases to continue as an investment trust. By order of the Board **JTC (UK) LIMITED** COMPANY SECRETARY Registered office: The Scalpel, 18th Floor 52 Lime Street London EC3M 7AF Company number: 04301763 Date: 9 April 2025 US Solar Fund PLC Annual report and financial statements 2024 103 ## NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING (a) Any member of the Company entitled to attend and vote at the Annual General Meeting is also entitled to appoint one or more proxies to attend, speak and vote instead of that member. A member may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member. Aproxy may demand, or join in demanding, a poll. A proxy need not be a member of the Company but must attend the Annual General Meeting in order to represent his or her appointor. A member entitled to attend and vote at the Annual General Meeting may appoint the Chair of the meeting or another person as his or her proxy, although the Chair will not speak for the member. A member who wishes his or her proxy to speak for him or her should appoint his or her own choice of proxy (not the Chair of the meeting) and give instructions directly to that person. (b) A Form of Proxy which may be used to make this appointment and give proxy instructions accompanies this notice. Details of how to appoint a proxy are set out in the notes to the Form of Proxy. If you do not have a Form of Proxy and believe that you should have one, or if you require additional forms, please contact the Company’s Registrar, Computershare Investor Services PLC (“Computershare”) with the contact details found in note (e). As an alternative to completing a hard copy Form of Proxy, proxies maybe appointed electronically in accordance with note (e) below. (c) To be valid, a Form of Proxy and (if required) the power of attorney or other written authority, if any, under which it is signed or a certified copy of any such authority, must be delivered to the Company’s Registrar, Computershare at The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by 3:00 p.m. on 16 May 2025 or, if the Annual General Meeting is adjourned, not less than 48 hours (excluding any part of a day which is not a working day) prior to the adjourned meeting. To change your proxy instructions you may return a new proxy appointment as set out above. Where you have appointed a proxy using the hard copy Form of Proxy and would like to change the instructions using another hard copy Form of Proxy, please contact Computershare. The deadline for receipt of proxy appointments (see above) also applies in relation to amended instructions. Where two or more valid separate appointments of proxy are received in respect of the same share in respect of the same meeting, the one which is last received shall be treated as replacing and revoking the other or others. In order to revoke a proxy instruction a member will need to inform the Company by sending a signed hard copy notice clearly stating the intention to revoke the proxy appointment to Computershare at the address specified above. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The deadline for receipt of proxy appointments (see above) also applies in relation to a revocation notice. If a member attempts to revoke his or her proxy appointment but the revocation is received after the time specified, then subject to note (f) below, the proxy appointment will remain valid. (d) In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). (e) You may submit your proxy electronically at www.investorcentre.co.uk/eproxy. To do this, please register your proxy vote electronically by accessing our Registrar’s website www.investorcentre.co.uk/eproxy, using control number 920690, Shareholder Reference Number (SRN) and PIN, all of which are available on the front of your Form of Proxy or within the email received from Computershare (if applicable). If you need help with voting, please contact Computershare on +44 (0)370 703 6253. Calls from outside the United Kingdom will be charged at the applicable international rate. Computershare can be contacted by phone 8:30 am to 5:30 pm (UKtime), Monday to Friday (excluding public bank holidays in England and Wales) or via email at webqueries@computershare.co.uk. (f) If you are a person who has been nominated under section 146 of the Companies Act 2006 (the “Companies Act”) to enjoy information rights (“Nominated Person”), you do not have a right to appoint any proxies under the procedures set out in these notes. However: – you may have a right under an agreement between you and the member of the Company who has nominated you to have – information rights (“Relevant Member”) to be appointed or to have someone else appointed as a proxy for the Annual General Meeting; or – if you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights. Your main point of contact in terms of your investment in the Company remains the Relevant Member (or perhaps your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you. US Solar Fund PLC 104 Annual report and financial statements 2024 (g) CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST manual (available via www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s) who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (“CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & International Limited’s (“EUI”) specifications and must contain the information required for such instructions, as described in the CREST manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent Computershare Investor Services PLC (under CREST ID number 3RA50), no later than 3:00 pm on 16 May 2025, or, if the Annual General Meeting is adjourned, not less than 48 hours (excluding any part of a day which is not a working day) prior to the adjourned meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST applications host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST manual concerning practical limitations of the CREST system and timings. The Group may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001. (h) A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers asa member provided that no more than one corporate representative exercises powers over the same share. (i) Only those holders of the Company’s shares registered on the Register of Members of the Company as at 6:00 pm (UK time) on 16May 2025 or, in the event that the Annual General Meeting is adjourned, on the Register of Members 48 hours (excluding any part of a day which is not a working day) before the time of any adjourned meeting, shall be entitled to attend and vote at the Annual General Meeting. Changes to entries on the Register of Members after this time shall be disregarded in determining the right of any person to attend and vote at the Annual General Meeting. (j) Voting on resolutions 1 to 14 will be conducted by way of a poll. As soon as practicable following the Annual General Meeting, theresults of the voting will be announced via a regulatory information service and posted on the Company’s website. (k) A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, the proxy will vote or abstain from voting at his or her discretion. The proxy will vote (orabstain from voting) as he or she thinks fit in relation to any other matter which is put before the Annual General Meeting. (l) Under section 319A of the Companies Act, the Company must answer any question a member asks relating to the business being dealt with at the Annual General Meeting unless: – answering the question would interfere unduly with the preparation for the Annual General Meeting or involve the disclosure of confidential information; – the answer has already been given on a website in the form of an answer to a question; or – it is undesirable in the interests of the Company or the good order of the Annual General Meeting that the question be answered. (m) Except as provided above, members who have general queries about the Annual General Meeting should write to the Company Secretary at the registered office set out above. (n) As at 9 April 2025 (being the latest practicable date prior to the publication of this Notice), the Company’s issued share capital comprised 332,192,361 Ordinary Shares and the total number of voting rights in the Company was 307,833,387. Information regardingthe number of shares and voting rights and, if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the Company after the date of this Notice will be available on the Company’s website, http://www.ussolarfund.co.uk. US Solar Fund PLC 105 Annual report and financial statements 2024 ## NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING ## CONTINUED (o) Members may not use any electronic address provided either in this Notice of Annual General Meeting, or any related documents (including the Form of Proxy), to communicate with the Company for any purposes other than those expressly stated. (p) Under section 338 of the Companies Act, members meeting the threshold requirements set out in that section have the right to require the Company to give notice of a resolution which may properly be moved at the Annual General Meeting. Any such request, which must comply with section 338(4) of the Companies Act, must be received by the Company no later than six weeks before the date fixed for the Annual General Meeting. (q) Under section 338A of the Companies Act, members meeting the threshold requirements set out in that section have the right to require the Company to include a matter (other than a proposed resolution) in the business to be dealt with at the Annual General Meeting. Any such request, which must comply with section 338A(4) of the Companies Act, must be received by the Company no later than six weeks before the date fixed for the Annual General Meeting. (r) Members satisfying the thresholds in section 527 of the Companies Act can require the Company to publish a statement on its website setting out any matter relating to (a) the audit of the Company’s accounts (including the Auditor’s report and the conduct of the audit) that are to be laid before the Annual General Meeting; or (b) any circumstances connected with an auditor of the Company ceasing to hold office since the last annual general meeting, that the members propose to raise at this Annual General Meeting. The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company’s Auditor no later than the time it makes its statement available on the website. The business which may be dealt with at the Annual General Meeting includes any such statement that the Company has been required to publish on its website. US Solar Fund PLC 106 Annual report and financial statements 2024 # EXPLANATORY NOTES TO RESOLUTIONS ## ORDINARY RESOLUTIONS ### RESOLUTION 1: RECEIVE THE ANNUAL REPORT AND FINANCIAL STATEMENTS The Companies Act requires the Directors of a public company to lay before the Company in general meeting copies of the Annual Report, Directors' Reports and its Auditor's Report in respect of each financial year. These are contained in the Company's Annual Report and financial statements for the financial year ended 31 December 2024 (the "**2024 Annual Report**"). Accordingly, a resolution to receive the 2024 Annual Report is included as an ordinary resolution. ### RESOLUTION 2: APPROVE THE DIRECTORS' REMUNERATION REPORT The Directors' remuneration report can be found on pages 67 to 68 of the 2024 Annual Report and is subject to an advisory vote by Shareholders, which is proposed as an ordinary resolution. It details the payments that have been made to Directors during the year, in accordance with the current remuneration policy. The remuneration report will be presented to Shareholders on an annual basis. At the annual general meeting held in 2023, the Directors' remuneration policy was approved by Shareholders and is not therefore required to be approved at this year's Annual General Meeting. The policy will be put to Shareholders again no later than the Company's annual general meeting in 2026. ### RESOLUTIONS 3 AND 4: RE-APPOINTMENT OF AUDITOR AND AUDITOR'S REMUNERATION Resolution 3 relates to the re-appointment of Deloitte LLP as the Company's Auditor to hold office until the conclusion of the next general meeting of the Company at which the accounts and reports of the Directors and Auditor are laid. This resolution is recommended by the Company's Audit Committee and endorsed by the Board. Accordingly, it is proposed, as an ordinary resolution, to re-appoint Deloitte LLP as the Company's Auditor. Resolution 4 authorises the Directors, upon recommendation from the Company's Audit Committee, to fix the Auditor's remuneration. The Directors, having regard to the Audit Committee's recommendation, consider that the level of consultancy-related non-audit fees to audit fees paid to Deloitte LLP is appropriate for the advisory work required to be undertaken for the year to 31 December 2024 and that these do not create a conflict of interest on the part of the independent Auditor. ### RESOLUTIONS 5 TO 8: ELECTION AND RE-ELECTION OF DIRECTORS The Company's articles of association (the "**Articles**") specify that at each annual general meeting all of the Directors shall retire from office. Accordingly, each of the existing Directors will retire from office with effect from the conclusion of this Annual General Meeting and Gillian Nott, Jamie Richards and Thomas Plagemann will stand for re-election by the Shareholders. Mark Lerdal will stand for election by the Shareholders. Biographies of each member of the Board standing for election (or re-election) can be found on page 55 of the 2024 Annual Report. The Directors believe that the Board has an appropriate balance of skills, experience, independence and knowledge of the Company and the sector in which it operates to enable it to provide effective strategic leadership and proper guidance of the Company. The Board confirms that, following the evaluation process set out in the Corporate Governance Report on pages 58 to 62 of the 2024 Annual Report, the performance of each of the Directors is, and continues to be, effective and demonstrates their respective commitment to the role. The Board believes, therefore, that it is in the interests of Shareholders that Mark Lerdal be elected and Gillian Nott, Jamie Richards and Thomas Plagemann be re-elected. ### RESOLUTION 9: APPROVAL OF THE DIVIDEND POLICY Resolution 8 concerns the approval of the Company's dividend policy which is to pay interim quarterly dividends to the holders of Ordinary Shares, in US Dollars. ### RESOLUTION 10: AUTHORITY TO ALLOT SHARES This resolution deals with the Directors authority to allot Ordinary Shares generally and unconditionally in accordance with section 551 of the Companies Act up to an aggregate nominal value of US$307,850, or 10% of the Company's issued ordinary share capital. Resolution 10 along with Special Resolution 11 as described below, intends to authorise the Board to allot shares in the capital of the Company and to grant rights to subscribe to, or to convert any security into shares on a non pre-emptive basis. US Solar Fund PLC Annual report and financial statements 2024 107 # EXPLANATORY NOTES TO RESOLUTIONS CONTINUED ## SPECIAL RESOLUTIONS ### RESOLUTION 11: DISAPPLICATION OF STATUTORY PRE-EMPTION RIGHTS Resolution 11 will be proposed as a special resolution, which require a majority of at least 75% to be passed. The Resolution seeks to provide the Directors the authority to allot shares or sell shares held in treasury under Resolution 10, on a non-pre-emptive basis for cash up to an aggregate nominal amount of US$307,850, or 10% of the issued ordinary share capital (excluding treasury shares) as at the date the resolution would have passed. ### RESOLUTION 12: MARKET PURCHASES OF OWN SHARES This resolution seeks authority for the Company to make market purchases of its own Ordinary Shares and is proposed as a special resolution. If passed, the resolution gives authority for the Company to purchase up to 46,144,225 of its Ordinary Shares, being approximately 14.99% of the Company's issued ordinary share capital (excluding treasury shares) as at 9 April 2025 (being the latest practicable date prior to the publication of this Notice). The resolution specifies the minimum and maximum prices which may be paid for any Ordinary Shares purchased under this authority. The authority will expire on the earlier of 15 months from the passing of the resolution and the Company's next annual general meeting. The Directors believe that it is prudent to obtain the flexibility that this resolution provides; and will only exercise the authority to purchase Ordinary Shares where they consider that such purchases will be in the best interests of Shareholders generally and will result in an increase in earnings per Ordinary Share. The Company may either cancel any shares it purchases under this authority or transfer them into treasury (and subsequently sell or transfer them out of treasury or cancel them). The Directors currently intend to cancel all shares purchased under this authority. As at 9 April 2025, there are no outstanding options or warrants to subscribe for Ordinary Shares in the capital of the Company. ### RESOLUTION 13: NOTICE PERIOD FOR GENERAL MEETINGS Resolution 13 is to be proposed as a special resolution to allow the Company to hold general meetings (other than annual general meetings) on at least 14 clear days' notice. The minimum notice period for general meetings of listed companies is 21 days, but companies may reduce this period to 14 days (other than for annual general meetings) provided that two conditions are met. The first condition is that the Company offers a facility for Shareholders to vote by electronic means. This condition is met if the Company offers a facility, accessible to all Shareholders, to appoint a proxy by means of a website. The second condition is that there is an annual resolution of Shareholders approving the reduction of the minimum notice period from 21 days to 14 days. If approved, the resolution will be effective until the end of the Company's next annual general meeting, when it is intended that the approval be renewed. The Board will consider on a case-by-case basis whether the use of the flexibility offered by the shorter notice period is merited, taking into account the circumstances, including whether the business of the meeting is time sensitive. ### RESOLUTION 14: DISCONTINUATION RESOLUTION The Company's Articles require the Directors to propose to Shareholders a special resolution that the Company ceases to continue in its present form ("Discontinuation Resolution") if over the course of a complete financial year, the Ordinary Shares of the Company have, on average, traded at a discount in excess of 10 percent to the Net Asset Value per Ordinary Share. During the period, the Company's average price per Ordinary Share was 48.33 cents, trading at a 23.8% percent discount to the Company's average Net Asset Value as at 31 December 2024 (31 December 2023: 28.13 percent discount), triggering the requirement to propose the Discontinuation Resolution to Shareholders. Accordingly, the Discontinuation Resolution will be put to Shareholders at the upcoming Annual General Meeting. If the Discontinuation Resolution is passed, the Board will put forward proposals to Shareholders at a general meeting of the Company, to be held within four months of the Discontinuation Resolution being passed, to wind up or otherwise reconstruct the Company, having regard to the illiquid nature of the Company's underlying assets. Notwithstanding the obligation on the Board to propose the Discontinuation Resolution pursuant to the Company's Articles, the Board firmly believes that the passing of the Discontinuation Resolution would have a significant adverse impact on Shareholder value for the reasons set out below. The Board remains of the view that the current discount to NAV does not reflect the underlying value of the Company and remains committed to preserving shareholder value. The Board and Investment Manager will continue to monitor the market for similar assets as those held by the Company with a view to the realisation of value from the Company's assets when the time is right. That time is not now based on prevailing market conditions described in the Chair's Statement which are not conducive to a sale for value. 108 US Solar Fund PLC Annual report and financial statements 2024 As a reminder, the Company underwent an extensive strategic review process in 2023 to consider the options available to protect Shareholder value (the “Strategic Review”). As a result of the Strategic Review, the Company made amendments to its investment policy and appointed a new Investment Manager, Amber Infrastructure Investment Advisor, LLC (a member of the Amber Infrastructure Group) (“Amber”), with effect from 1 December 2023. The Strategic Review conducted throughout 2023, demonstrated that prevailing market conditions were not conducive to the Company realising the value of its assets. In June 2024, the Company delivered on its commitment to return capital to shareholders via a tender offer. The Company acquired approximately 7% of the issued share capital at a significant premium to the prevailing market price, returning $18.6 million plus costs to shareholders. The Board’s focus remains on taking steps to ensure the Company’s portfolio is robust, optimised and capable of being presented to the market for a future liquidity event in order to maximise shareholder value. In light of the severity of the possible consequences for Shareholder value, the Directors are unanimously recommending that Shareholders vote AGAINST the Discontinuation Resolution. US Solar Fund PLC 109 Annual report and financial statements 2024 US Solar Fund PLC 110 Annual report and financial statements 2024 Printed by a Carbon Neutral Operation (certified: CarbonQuota) under the PAS2060 standard. Printed on material from well-managed, FSC™ certified forests and other controlled sources. This publication was printed by an FSC™ certified printer that holds an ISO 14001 certification. 100% of the inks used are HP Indigo ElectroInk which complies with RoHS legislation and meets the chemical requirements of the Nordic Ecolabel (Nordic Swan) for printing companies, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy. The paper is Carbon Balanced with World Land Trust, an international conservation charity, who offset carbon emissions through the purchase and preservation of high conservation value land. Through protecting standing forests under threat of clearance, carbon is locked-in that would otherwise be released. CBP030203 US Solar Fund PLC Annual report and financial statements 2024 ### US Solar Fund PLC The Scalpel, 18th Floor 52 Lime Street, London EC3M 7AF www.ussolarfund.co.uk