LCA Low Carbon Acc.

 

TIDMLCA 
 
RNS Number : 5919K 
Low Carbon Accelerator Limited 
22 April 2010 
 

Low Carbon Accelerator: 28 February 2010 NAV 
 
Net Asset Value ("NAV") 
The unaudited NAV of Low Carbon Accelerator Limited ("the Company" or "LCA") as 
at 
 28 February 2010 was GBP44.22m, equivalent to 51.4 pence per Ordinary 
Share. This equates to a 2.2% increase on the 30 November 2009 audited NAV of 
50.3 pence per Ordinary Share. 
Investment Manager's commentary: 
We are pleased to announce the third consecutive quarter of NAV growth for LCA. 
Whilst the increase this quarter has almost entirely been due to an appreciation 
in the US$ and CN$ against the GBP, the portfolio continues to demonstrate its 
strength through the slow economic recovery and the Investment Manager will 
continue its strategy of supporting its strongest performers during this period. 
Changes to the portfolio 
During the quarter, two further investments were made into existing portfolio 
companies. 
US$533,333 was invested into LUMEnergi Inc. as an extension to an existing 
convertible loan note previously announced in August 2009. This extension was 
part of an overall funding round of US$1,000,000 with existing co-investor 
Noventi Ventures. 
LCA also invested a further GBP750,000 into QuantaSol Limited. This investment 
has been made as part of an overall GBP1,500,000 convertible loan investment 
from existing shareholders. 
After the quarter end, the Company invested a further US$400,000 into LUMEnergi 
Inc. in the form of an additional convertible loan note and it continues 
discussions with potential investors as part of a Series B funding round. 
GBP150,000 was also invested into Vykson Limited, forming part of an overall 
funding round of GBP500,000 that attracted two new investors in the company. 
The Investment Manager was also pleased to announce a new addition to the 
portfolio during the period. To take advantage of this transformational 
opportunity in the UK renewable energy economy, the Company has made a 
GBP500,000 investment into Vigor Renewables Limited ("Vigor"), a UK renewable 
energy project developer that is developing small scale renewable projects that 
will qualify for FITs. 
The introduction of UK feed-in tariffs (FITs), which came into effect on 1 April 
2010, marks one of the most significant recent changes to UK renewable energy 
regulation. The tariffs set an inflation linked tariff for each kilowatt hour of 
energy generated from renewable energy projects, payable to the generator for 20 
years in the case of wind developments and 25 years for solar, in addition to 
the power export and off-take arrangements.  The scheme has been designed to 
give investors in qualifying renewable technologies an attractive return on 
their investment, meaning that for electricity users that have the capital 
available, electricity will generate them money in the future rather than being 
a cost.  Investors in FIT qualifying technologies will also have a reduced 
exposure to future increases in energy prices and to security of supply risks in 
the event that the UK is unable to meet its electricity demands from 2016 as 
some government scenarios forecast. 
Vigor aims to partner with land-owners and commercial property owners and 
managers, to build, own and operate wind and solar power generating assets on 
sites across the UK. 
With the UK general election only weeks away, the Investment Manager is pleased 
that all three major political parties intend to keep the FITs structure intact, 
with only minor amendments or extensions announced. 
As well as offering attractive returns to the investors in the generating 
equipment, the launch of FITs in the UK is expected to be a significant stimulus 
for companies operating within the FITs supply chain, such as Proven Energy, 
LCA's largest holding.  Proven has already seen this in the increased enquiries 
and orders being made for its turbines during the quarter. 
Share performance 
Over the three months ended 28 February 2010, the Company's closing mid-market 
share price fell by 21%, closing at 29.5 pence, a 42.6% discount to the NAV per 
share at 28 February 2010. As at 21 April 2010 the closing mid-market share 
price was 30.5 pence. 
Management Changes: 
The Investment Manager announces that Mark Shorrock, the founder and former CEO 
of Low Carbon Investors Limited ("LCI"), LCA's investment manager, has left LCI 
to pursue other opportunities. He retains a significant minority shareholding in 
LCI but will have no ongoing executive role in LCI or in the management of the 
Company. 
The Board of LCA and the management team of Low Carbon Investors wish to thank 
Mark for his role in establishing the Company and his work in developing the 
fund and the investment manager. 
Andrew Affleck was appointed as Chief Executive Officer of LCI on 1 January 2010 
in addition to his role as Chairman. The executive management team now comprises 
Mr Affleck, Dr Steve Mahon (Chief Investment Officer) and Andrew Newman (Chief 
Financial Officer). 
As announced on 23 December 2009, Gerald Raymond Davis resigned as a 
non-executive Director of the LCA Board and Alan Mark Tanguy was appointed as an 
independent non-executive Director. It was further announced on 26 January 2010 
that Christopher John Le Tissier resigned as an independent non-executive 
Director of the LCA Board. 
Portfolio review: 
Proven Energy Limited ("Proven") 
Proven remains the UK's market leader for small scale wind turbines.  With the 
introduction of FITs in 2010, this industry is expecting a period of rapid 
growth. As mentioned above, during the quarter, Proven saw a significant 
expansion in its order book ahead of the introduction of FITs in the UK on 1 
April 2010 and has continued to focus on product development in preparation for 
this growth. 
The Investment Manager continues to believe that 2010 will prove a pivotal year 
for Proven, which will depend on its ability to deliver its larger products, 
capable of generating 35,000kWh per year, to the market. This turbine is in the 
final stages field trial assessment. 
Sterling Planet Inc. ("Sterling Planet") 
The commitment by the US Federal Government to purchasing green power through 
Renewable Energy Certificates ("RECs"), as well as by the US States that have 
introduced Renewable Portfolio Standards, has continued to drive demand for 
Sterling Planet, which had its first profitable year in 2009. 
As well as continued growth in the existing business in 2010, Sterling Planet 
expects the commercial launch of two other business streams: White Tags (a 
federally registered trademark owned by Sterling Planet Inc.); and its renewable 
energy project business, Sterling Energy Assets (SEA). 
White Tags are tradable energy efficiency certificates that can be sold into 
both the voluntary and compliance marketplace. Three states in the US have 
enacted energy efficiency portfolio standards and several other states have set 
energy efficiency goals. 
SEA, a wholly owned subsidiary of Sterling Planet, currently has four projects 
in various stages of planning or financing.  Once developed, the projects will 
in total amount to 130 MW of power generating assets.  SEA expects a 2010 
financial closing for its first such project, which is a 24MW biomass power 
generating facility in Carnesville, Georgia. 
ResponsiveLoad Limited ("RLtec") 
Having agreed the contractual terms under which RLtec will provide its cost 
effective grid balancing services to the National Grid in the UK, RLtec 
continues to work on the delivery of load balancing for the National Grid. 
The Carbon Emissions Reduction Target (CERT) programme with npower continues 
and, as part of the delivery of this programme, RLtec has signed a licence for 
its technology with Indesit, who are the leading manufacturer of fridges in the 
UK, and who have now joined the RLtec-led consortium in Europe's largest 
residential trial of dynamic demand technology. 
LUMEnergi Inc. ("LUMEnergi") 
LUMEnergi continues to be in late stage discussions with several funding groups 
and the additional investments by LCA and its co-investor in the form of 
convertible loans, highlighted previously, have been made to provide the company 
with resources to finalise its expansion capital requirements. 
QuantaSol Limited ("QuantaSol") 
Activity in the Concentrating PhotoVoltaic ("CPV") market, into which 
QuantaSol's cells are targeted, has continued this quarter having begun to show 
some traction in 2009. Although much of the information is anecdotal, the market 
for CPV does appear to be emerging, particularly for high sun regions like the 
Middle-East and Asia. The Investment Manager expects interest in the market to 
continue from parties whose core focus, at present, lies outside the CPV market. 
For example, during the quarter the Soitec Group, a substrate provider, expanded 
into the CPV market through the acquisition of Concentrix Solar GmbH, a provider 
of CPV systems. 
Having conclusively proven the efficacy of its quantum well technology, 
QuantaSol's focus has continued to be towards the launch of its first commercial 
product at the end of 2010, which the company's management are confident will 
have a clear competitive advantage over rival solar cells. 
Vykson Limited ("Vykson") 
The Investment Manager was pleased to announce the completion of the GBP500,000 
funding round in April 2010. Dr. Ramnath Nandakumar and a representative of 
E-Synergy, two new investors in the round, will be valuable additional members 
of the Board of Vykson. Vykson has been demonstrating the operation of its first 
commercial scale engine at a UK landfill site of a major UK waste company, and 
the additional funding will provide Vykson with working capital to deliver its 
first units to market. 
Vaperma Inc ("Vaperma") 
Vaperma has continued to face a tough environment in which to sell its ethanol 
refining membrane. Vaperma retains enough cash to operate until at least the end 
of 2010 and management continues to work closely with investors on a recovery 
plan to capture value for shareholders. 
Eco-Solids International Limited ("Eco-Solids") 
2010 marks the start of a new five year cycle in the UK water industry, which is 
expected to provide a stimulus to the capital equipment spend in the water 
industry.  Eco-Solids is anticipating sales growth over the next few years as a 
result of this. 
Eco-Solids has signed a licence for its technology to be deployed in mainland 
China, which is expected to deliver first revenues in 2010, and a repeat order 
for their landfill leachate treatment technology has been received from the 
Philippines. A contract with Yorkshire Water has also been signed which, subject 
to strict performance criteria, should deliver revenue from the end of 2010. The 
challenge for the business remains to be able to secure its working capital 
needs through to a position where they will have an installed base that enables 
the company to be cashflow positive. 
EnergyMixx AG ("EnergyMixx") 
EnergyMixx is a Swiss renewable energy company which is listed on the Open 
Market of the Frankfurt Stock Exchange. Based on the mid-market closing price of 
EUR0.06 on 16 April 2010, the value of LCA's shareholding is approximately 
GBP221,000. This represents an increase of GBP33,000 compared with the carrying 
value of this investment included in the Company's NAV as at 28 February 2010. 
About Low Carbon Accelerator: www.lowcarbon.gg 
Low Carbon Accelerator Limited is a closed ended investment company created to 
invest in a portfolio of fast-growing low carbon businesses. The Company listed 
on the AIM Market of the London Stock Exchange on 11 October 2006, raising 
GBP44.5 million. On 26 June 2009, the Company announced that it had raised a 
further GBP10 million, net of expenses, following the successful placing of a 
further 41.6 million shares. 
The Company's investment objective is to provide shareholders with an attractive 
return on their investment primarily through significant minority (predominantly 
25% and above) holdings in a diverse portfolio of unquoted private companies 
providing low carbon products and services. 
The Company invests principally in companies which provide low carbon products 
and services across the following sectors: 
·     Buildings (sustainable building materials, heating, lighting, clean air 
and water technologies for industrial, commercial and/or residential use) 
·     Fuels (bio-fuels, low carbon fuels, catalysts and additives) 
·     Energy efficiency (reductions in energy inputs at source, improved 
conversion and reductions at point of use) 
·     Energy generation (sustainable and clean energy, micro and distributed 
generation) 
The Company's investment strategy is to target trading businesses with 
patentable technologies and products with a clear commercial application and the 
opportunity to gain a large market share of a new or expanding market. The 
Company focuses on businesses with experienced management teams who have 
developed commercially viable products providing easily adoptable solutions 
which deliver immediate reductions in carbon dioxide emissions. 
Enquiries: 
+------------------------+------------------+--------------------+ 
| Low Carbon Investors   | Steve Mahon, CIO | Tel: +44 (0)20     | 
| Limited                | Andrew Affleck,  | 7631 2631          | 
|                        | Chairman         |                    | 
+------------------------+------------------+--------------------+ 
|                        |                  |                    | 
+------------------------+------------------+--------------------+ 
| Grant Thornton         | Philip Secrett   | Tel: +44 (0) 20    | 
| Corporate Finance      | Colin Aaronson   | 7383 5100          | 
+------------------------+------------------+--------------------+ 
| Carbon International   | David Hopkins    | Tel: +44 (0) 20    | 
| PR                     |                  | 7483 3343          | 
+------------------------+------------------+--------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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