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Low Carbon Accelerator NAV down 1.9 per cent in 2009

Low Carbon Accelerator’s consolidated net asset value was GBP43.28m or 50.3 pence per ordinary share at 30 November 2009, down 1.9 per cent on the pro forma 30 November 2008 NAV of 51.3 pence per ordinary share.

The first half of the year presented difficult economic conditions and the group made a loss of GBP6.2m as it took a disciplined approach to resource allocation, supporting only the strongest companies in the existing portfolio.

The effectiveness of this strategy has been shown in the financial performance during the second half of the year which has delivered two consecutive quarters of NAV growth, following a successful fund raising in June 2009.

This institutional placing raised GBP10.0m (net of placing costs), enabling the group to capture and protect value in the existing portfolio, thereby improving the potential return for shareholders.

The only investments made in the period were follow-on investments, totalling GBP7.3m, into five portfolio companies.

A further GBP3.4 million has been invested in tranches into Proven Energy during the period, resulting in LCA taking a majority stake in its largest investment. LCA is working with Proven Energy to deliver its new products to the market and take advantage of the favourable feed-in tariff structure that is being introduced in the UK in 2010.

Subject to final completion of legal documents, the group will also make one new investment of GBP500,000 into Vigor Renewables, which aims to develop a range of small renewable projects that qualify for feed-in tariffs.

The investments into QuantaSol and LUMEnergi of GBP1.3m and GBP0.5m respectively in the period, and GBP0.75m and GBP0.33mrespectively following the year-end, were made in recognition of the technical progress these businesses have made and provide both companies with some balance sheet strength whilst they seek additional capital in 2010 from third parties.

RLtec successfully closed a GBP5.8m investment from a syndicate of institutional investors in September 2009 that resulted in the 54 per cent uplift in LCA’s carrying value in the company. As part of this syndicate LCA has committed to invest GBP1.0m, out of which it invested the first tranche of GBP0.4m in September 2009.

Andrew Affleck, executive chairman of Low Carbon Investors, LCA’s investment manager, says: "The management team has been very pleased with the performance of the fund and the underlying value of the portfolio companies during 2009. To deliver sustained growth during some of the worst economic conditions in living memory is testament to the decisive action taken in late 2008, to focus on the core performers in the portfolio and grow value within them. The NAV growth during this period demonstrates how this practical action is paying off."

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