Ecofin US Renewables Infrastructure Trust – Storm damage reparable

Ecofin US Renewables (RNEW) has been impacted by tornado damage to a substation in Texas, which is going to act as a constraint on cash flows generated by its local windfarm investment. As discussed on page 3, the manager expects insurance to cover much of the loss. Nevertheless, the board has reduced the company’s dividend for the third and fourth quarter of 2023.

This appears to have impacted on the company’s efforts to narrow its excessive discount. However, solutions have already been identified to address much of the revenue shortfall and, once RNEW has put this behind it, there may be opportunities to boost income meaningfully by repowering the windfarm.