Q1 2021 Brookfield Renewable Corp Earnings Call

May 4, 2021

Connor Teskey: platforms and strong development capabilities. This will position us to participate in the accelerating build-out of renewables. Our power marketing expertise allows us to provide green power to businesses across all sectors of the economy. Further, due to our size and expertise across all major renewables technologies, we are increasingly seeing attractive, large-scale opportunities to help businesses transition existing generation to cleaner forms of electricity production as utilities and power producers begin a multi-decade decarbonization process. Looking forward, we remain focused on participating in growth from both the continued build-out of wind and solar, as well as the increasing demand for decarbonization and energy transition solutions. We will now go through a few of the key highlights for the quarter.

Platforms and strong development capabilities.

This will position us to participate in the accelerating build out of renewables.

Our power marketing expertise allows us to provide green power to businesses across all sectors of the economy.

And further due to our size and expertise across all major renewables technologies, we are increasingly seeing attractive large scale opportunities 12 businesses transition existing generation to cleaner forms of electricity production as utilities and power producers begin a multi decade.

Decarbonization process.

Looking forward.

We remain focused on participating in growth from both the continued buildout of wind and solar.

As well as the increasing demand for decarbonization and energy transmission solutions.

We will now go through a few of the key highlights for the quarter.

We generated <unk> of $242 million or <unk> 38 per unit at 21% increase on a normalized per unit basis over the same period in the prior year.

Connor Teskey: We generated FFO of $242 million, or $0.38 per unit, a 21% increase on a normalized per unit basis over the same period in the prior year. We progressed approximately 6,000 megawatts through construction and advanced stage permitting and added nearly 4,500 megawatts to our development pipeline. We invested or agreed to invest $1.6 billion, or nearly $410 million net to Brookfield Renewable, of equity across a range of transactions, including onshore wind, offshore wind, utility-scale solar, and distributed generation in the United States, Europe, and India. We also issued a $350 million perpetual green subordinated note at a fixed rate of 4 5/8%, and our balance sheet remains robust, with $3.4 billion of available liquidity and no meaningful near-term maturities.

We progressed approximately 6000 megawatts through construction and advanced stage permitting and added nearly 4500 megawatts to our development pipeline.

We invested.

Or agreed to invest $1 6 billion.

We're nearly $410 million net to Brookfield renewable of equity across a range of transactions, including onshore wind offshore wind utility scale solar and distributed generation in the United States Europe and India.

We also issued a $350 million perpetual green subordinated note at a fixed rate of four and five eights.

And our balance sheet remains robust with $3 4 billion of available liquidity and no meaningful near term maturities.

And finally.

Connor Teskey: Finally, we raised over $850 million, or approximately $410 million net to Brookfield Renewable, from asset recycling initiatives, including the sale of mature onshore wind portfolios in Ireland and the United States at attractive values, returning approximately 2x our invested capital. Next, we'd like to spend a few minutes walking through recent growth and corporate contracting initiatives. As the opportunity to invest in renewables and decarbonization expands, we continue to exercise a value-oriented approach to growing our business. We remain disciplined in focusing on opportunities that play to our strengths, where we can invest for value, then leverage our operating capabilities to increase cash flow, as well as deploy incremental capital at attractive returns to grow our existing businesses over time. Recently, we executed on a number of transactions that highlight this approach.

We raised over $850 million or approximately $410 million net to Brookfield renewable from asset recycling initiatives, including the sale of mature onshore wind portfolios in Ireland, and the United States at attractive values, returning approximately two times our invested capital.

Next week.

We'd like to spend a few minutes walking through recent growth and corporate contracting initiatives.

As the opportunity to invest in renewables and decarbonization expands we continue to exercise a value oriented approach to growing our business.

We remain disciplined and focusing on the opportunities that play to our strengths.

Where we can invest for value.

Then leverage our operating capability to increase cash flow.

As well as deploy incremental capital at attractive returns to grow our existing businesses over time.

Recently, we executed on a number of transactions that highlight this approach.

For the past several years, we have monitored the offshore wind sector, while not investing.

Connor Teskey: For the past several years, we have monitored the offshore wind sector while not investing. As the technology has grown and matured, we have become more comfortable. In this quarter, we closed our first investment in offshore wind. It included a pipeline to build 3GW of capacity, supported by attractive contract structures over the next several years. Similarly, in India, one of the largest and fastest-growing renewable markets globally, we have continued to grow our business following our initial investment in 2017. Having expanded our capabilities in the region, we are now seeing a steady pipeline of opportunities to incrementally add to our platform at attractive returns. Recently, we signed or closed a few transactions we would like to highlight.

But as the technology has grown and matured we have become more comfortable.

And this quarter, we closed our first investment in offshore wind.

Getting it included a pipeline to build three gigawatts of capacity supported by attractive contract structures over the next several years.

Similarly in India, one of the largest and fastest growing renewable markets globally. We.

We have continued to grow our business following our initial investment in 2017.

Having expanded our capabilities in the region. We are now seeing a steady pipeline of opportunities to incrementally add to our platform at attractive returns.

Recently, we signed or closed a few transactions, we would like to highlight.

The first is shepherds flat, which is an 845 megawatt wind farm in Oregon that includes one of the largest repowering opportunities in the world.

Connor Teskey: The first is Shepherds Flat, which is an 845 MW wind farm in Oregon that includes one of the largest repowering opportunities in the world. Once completed, we expect total generation to increase by approximately 25%. We are making good progress on the repowering and are also advancing a 400 MW new build development project that was included as part of that transaction. We also made an investment in Polenergia, a scale renewable business in Europe, with an interest in a 3 GW offshore wind development pipeline. We believe Polenergia has tremendous growth prospects, and we are well-positioned as both a supportive operating partner and a capital provider to that business. Further, we acquired Exelon Distributed Generation, a DG business comprising of 360 MW of operating capacity, with an additional over 700 MW under development.

Once completed we expect total generation to increase by approximately 25%.

We are making good progress on the Repowering and are also advancing a 400 megawatt Newbuild development project that was included as part of that transaction.

We also made an investment in pole Energia, a scale renewable business in Europe with an interest in a three gigawatt offshore wind development pipeline.

We believe <unk> has tremendous growth prospects and we are well positioned as both a supportive operating partner and a capital provider to that business.

Further we acquired Exelon distributed generation of DG business comprising of 360 megawatts of operating capacity with an additional over 700 megawatts under development.

Connor Teskey: We now own one of the leading DG businesses in the United States, with deep operating, development, and origination capabilities, and an almost 2,000-megawatt portfolio that generates high-quality contracted cash flows that are diversified by both geography and by customer. Lastly, on the back of a relationship established through our acquisition of a portfolio of loans from a non-bank financial company near the end of 2020, we signed an agreement which gives us the right to acquire a 450-megawatt shovel-ready solar project from one of the largest developers in India. The project is expected to be commissioned by the end of the year and is backed by a 25-year power purchase agreement with a high-quality state utility. We expect to invest $70 million or $20 million net to Brookfield Renewable of equity in the project and are targeting 20%-plus return.

We now own one of the leading DG businesses in the United States with deep operating development and origination capabilities and an almost 2000 megawatt portfolio that generates high quality contracted cash flows that are diversified by both geography and by customer.

And lastly on the back of a relationship established through our acquisition of a portfolio of loans from a non bank financial company near the end of 2020, we signed an agreement which gives us the right to acquire a 450 megawatt shovel ready solar project for one of the largest developers in India.

The project is expected to be commissioned by the end of the year and is backed by a 25 year power purchase agreement with a high quality state utility.

We expect to invest $70 million or $20 million net to Brookfield renewable of equity in the project and are targeting 20% plus return.

Looking ahead.

Connor Teskey: Looking ahead, we believe the global trends towards decarbonization will continue to accelerate and impact all industries. This will lead to increased adoption of renewable technologies, the electrification of industry and transport, and the conversion of carbon-intensive processes to cleaner methods of production. The dramatic increase in demand for green power has shifted industry dynamics in favor of businesses that can provide differentiated solutions, and the ability to meet customers' large-scale, 24/7 green power or unique load shaping requirements. Our diversification across geographies and technologies, including baseload dispatchable power, positions us well to capitalize on this trend. Further, our corporate contracting expertise allows us to acquire development projects that are not yet fully contracted at attractive returns with less competition.

We believe the global trends towards Decarbonization will continue to accelerate and impact all industry.

This will lead to increased adoption of renewable technologies.

The electrification of industry and transport.

And the conversion of carbon intensive processes to cleaner methods of production.

The dramatic increase in demand for Green power has shifted injured industry dynamics in favor of businesses that can provide differentiated solutions.

And the ability to meet customers' large scale $24, seven green power or unique low chafing requirement.

Our diversification across geographies and technologies, including base load dispatch will power positions us well to capitalize on this trend.

Further.

Our corporate contracting expertise allows us to acquire development projects that are not yet fully contracted.

At attractive returns with less competition.

We have the ability the ability to then utilize our global contracting capabilities to source long term contracts with high quality counterparties, both enhancing and Derisking a project future revenues, and then allowing us to generate attractive returns on our capital with strong downside protection.

Connor Teskey: We have the ability, the ability to then utilize our global contracting capabilities to source long-term contracts with high-quality counterparties, both enhancing and de-risking a project's future revenues and allowing us to generate attractive returns on our capital with strong downside protection. As a result, we are seeing an opportunity to accelerate the build-out of our 27,000 megawatt development pipeline. Leveraging our deep customer relationships, we dispatch clean energy to over 700 creditworthy customers globally. In the last quarter, we signed 29 agreements for approximately 2,300 gigawatt hours of renewable generation with corporate off-takers across all major industries, including many of the largest counterparties by market capitalization in the world. Let us walk you through a few recent examples of our contracting activities.

As a result, we are seeing an opportunity to accelerate the build out of our 27000 megawatt development pipeline.

Leveraging our deep customer relationships, we dispatch clean energy to over 700 creditworthy customers globally.

In the last quarter, we signed 29 agreements for approximately 2300 gigawatt hours of renewable generation with corporate off takers across all major industries.

Including many of the largest counterparties by market capitalization in the world.

Let us walk you through a few recent examples of our contracting activities.

First we leveraged our global platform and relationships with a number of leading global technology companies, including signing an agreement to support the development of almost 100 megawatts of solar capacity to power data centers in the U S northeast.

Connor Teskey: First, we leveraged our global platform and relationships with a number of leading global technology companies, including signing an agreement to support the development of almost 100 MW of solar capacity to power data centers in the US Northeast. We also signed agreements to provide green electricity to leading industrial companies and manufacturers, including a tailored solution for a large US manufacturer that bundles both a long-term PPA from a new build development with a zero-carbon retail agreement. In addition, we signed agreements to provide green electricity to several global energy players, including the Super Majors, as well as with a hydrogen company for their planned industrial-scale green hydrogen production plant, the first of its kind in North America.

We also signed agreements to provide green electricity to a leading industrial two leading industrial companies and manufacturers, including a tailored solution for a large U S manufacturer that bundles, both a long term PPA from a newbuild development with a zero carbon retail agreement.

In addition, we signed agreements to provide green electricity to several global energy players, including the Super majors as well as with our hydrogen company for their planned industrial scale Green hydrogen production plant. The first of its kind in North America.

We also signed Ppas to provide global utilities with carbon free generation, including with a Spanish utility to support the build out of 150 megawatts of solar capacity in that region.

Connor Teskey: We also signed PPAs to provide global utilities with carbon-free generation, including with a Spanish utility, to support the build-out of 150 MW of solar capacity in that region. Finally, we signed an energy agreement with JPMorgan Chase to supply clean, renewable electricity to over 500 of their real estate operations in New York State from our hydroelectric facilities in the region. With that, I'll turn the call over to Wyatt to discuss our operating results and financial position.

And finally, we signed an energy agreement with J P. Morgan Chase to supply clean renewable electricity to over 500 of their real estate operations in New York State from our hydro electric facilities in the region.

With that I will turn the call over to Wyatt to discuss our operating results and financial position.

Thank you Connor.

[Company Representative] (Brookfield Renewable): Thank you, Connor. During Q1, we generated FFO of $242 million, or $0.38 per unit, reflecting solid performance as our operations benefited from strong asset availability, growth, and efficiency initiatives. On a normalized basis, our per-unit results were up 21% year-over-year. With an increasingly diversified portfolio of operating assets, limited concentration risk with counterparties, and a long-term contract profile, our cash flows are highly resilient. While generation for the quarter was marginally below the long-term average, driven largely by drier conditions in New York, we expect this variability and therefore manage our business for the long term. Further, we are continuously diversifying the business. This increasingly mitigates exposure to any single resource, market, or counterparty, and our variability becomes less and less every year. During the quarter, our hydroelectric segment delivered FFO of $170 million.

Wyatt Hartley: Thank you, Connor. During Q1, we generated FFO of $242 million, or $0.38 per unit, reflecting solid performance as our operations benefited from strong asset availability, growth, and efficiency initiatives. On a normalized basis, our per-unit results were up 21% year-over-year. With an increasingly diversified portfolio of operating assets, limited concentration risk with counterparties, and a long-term contract profile, our cash flows are highly resilient. While generation for the quarter was marginally below the long-term average, driven largely by drier conditions in New York, we expect this variability and therefore manage our business for the long term. Further, we are continuously diversifying the business. This increasingly mitigates exposure to any single resource, market, or counterparty, and our variability becomes less and less every year. During the quarter, our hydroelectric segment delivered FFO of $170 million.

During the first quarter, we generated <unk> of $242 million or.

Or <unk> 38 per unit, reflecting solid performance as our operations benefited from strong asset availability growth and efficiency initiatives.

On a normalized basis, our per unit results were up 21% year over year.

With an increasingly diversified portfolio of operating assets.

<unk> concentration risk with Counterparties and a long term contract profile our cash flows are highly resilient.

While generation for the quarter was marginally below the long term average driven largely by dry conditions in New York, We expect this variability and therefore manage our business for the long term.

Further we are continuously diversifying the business.

This increasingly mitigates exposure to any single resource market or counterparty and our variability becomes less and less every year.

During the quarter, our hydro electric segment delivered <unk> of $170 million.

[Company Representative] (Brookfield Renewable): Across this portfolio, we continue to focus on securing contracts that value the uniqueness of our fleet as a generator of dispatchable, clean electricity and ancillary services. Our wind and solar segments generated a combined $158 million of FFO. We continue to generate stable revenues from these assets and benefit from the diversification of our fleet and highly contracted cash flows with long-duration power, power purchase agreements. There was severe winter weather in the quarter, in particular in Texas. The conditions did not have a material impact on our financial results due to our operating and power marketing capabilities, which reacted to mitigate risk. We are proud of how our teams performed during these difficult times, keeping our employees safe and our operations running. Our energy transition segment generated $33 million of FFO during the quarter.

Wyatt Hartley: Across this portfolio, we continue to focus on securing contracts that value the uniqueness of our fleet as a generator of dispatchable, clean electricity and ancillary services. Our wind and solar segments generated a combined $158 million of FFO. We continue to generate stable revenues from these assets and benefit from the diversification of our fleet and highly contracted cash flows with long-duration power, power purchase agreements. There was severe winter weather in the quarter, in particular in Texas. The conditions did not have a material impact on our financial results due to our operating and power marketing capabilities, which reacted to mitigate risk. We are proud of how our teams performed during these difficult times, keeping our employees safe and our operations running. Our energy transition segment generated $33 million of FFO during the quarter.

Across this portfolio, we continue to focus on securing contracts the value of the uniqueness of our fleet as a generator of dispatch Vo clean electricity and then Phyllary services.

Our wind and solar segments generated a combined $158 million of <unk>.

We continue to generate stable revenues from these assets and benefit from the diversification of our fleet and highly contracted cash flows with long duration Power's power purchase agreements.

There was severe winter weather in the quarter in particular in Texas.

The conditions did not have a material impact on our financial results due to our operated and power marketing capabilities, which reacted to mitigate risk.

We are proud of how our teams performed during these difficult times, keeping our employees safe and our operations running.

Our energy transition segment generated $33 million of <unk> during the quarter.

[Company Representative] (Brookfield Renewable): Our portfolio continues to grow as we assist commercial and industrial partners achieve their decarbonization goals and provide critical grid-stabilizing ancillary services and backup capacity required to address the increasing intermittency of greener electricity grids. Our financial position continues to be strong. We have approximately $3.4 billion of available liquidity, and our investment-grade balance sheet has no meaningful near-term maturities, and approximately 90% of our financings are non-recourse to Brookfield Renewable. We continued to take advantage of the low interest rate environment and executed on $3.1 billion of investment-grade financings, including a $350 million, 4 and 5/8 fixed-rate, green, perpetual subordinated note offering. The notes have the same accounting and rated treatment as our preferred LP units.

Wyatt Hartley: Our portfolio continues to grow as we assist commercial and industrial partners achieve their decarbonization goals and provide critical grid-stabilizing ancillary services and backup capacity required to address the increasing intermittency of greener electricity grids. Our financial position continues to be strong. We have approximately $3.4 billion of available liquidity, and our investment-grade balance sheet has no meaningful near-term maturities, and approximately 90% of our financings are non-recourse to Brookfield Renewable. We continued to take advantage of the low interest rate environment and executed on $3.1 billion of investment-grade financings, including a $350 million, 4 and 5/8 fixed-rate, green, perpetual subordinated note offering. The notes have the same accounting and rated treatment as our preferred LP units.

Our portfolio continues to grow as we assist commercial and industrial partners achieve their de carbonization goals and provide critical grid stabilizing ancillary service.

And backup capacity required to address the increasing intermittency of greener electricity grids.

Our financial position continues to be strong we have approximately $3 4 billion of available liquidity.

And our investment grade balance sheet has no meaningful material near term maturities and approximately 90% of our finances are nonrecourse to Brookfield renewable.

We continued to take advantage of the low interest rate environment and executed on $3 1 billion of investment grade financings, including a $350 million four and five eights fixed rate green perpetual subordinated subordinated note offering.

The notes have the same accounting and rated treatment as our preferred LP units.

We also continue to execute on our capital recycling strategy of selling mature de risked or noncore assets to lower cost of capital buyers, while redeploying the proceeds into higher yielding opportunities.

[Company Representative] (Brookfield Renewable): We also continued to execute on our capital recycling strategy of selling mature, de-risked, or non-core assets to lower cost of capital buyers, while redeploying the proceeds into higher-yielding opportunities. The proceeds from these transactions will be used to fund growth opportunities executed in the quarter, as well as our robust future growth pipeline. In April, we agreed to sell our remaining 360 MW of operating assets and development pipeline in Ireland, and approximately 270 MW of ready-to-build wind assets in Scotland, for an aggregate equity value of approximately $450 million. We entered the European renewable market in 2014, with the acquisition of Bord Gáis's wind portfolio in Ireland. When we acquired this business, it was part of a state-owned utility with approximately 300 MW of operating wind capacity.

Wyatt Hartley: We also continued to execute on our capital recycling strategy of selling mature, de-risked, or non-core assets to lower cost of capital buyers, while redeploying the proceeds into higher-yielding opportunities. The proceeds from these transactions will be used to fund growth opportunities executed in the quarter, as well as our robust future growth pipeline. In April, we agreed to sell our remaining 360 MW of operating assets and development pipeline in Ireland, and approximately 270 MW of ready-to-build wind assets in Scotland, for an aggregate equity value of approximately $450 million. We entered the European renewable market in 2014, with the acquisition of Bord Gáis's wind portfolio in Ireland. When we acquired this business, it was part of a state-owned utility with approximately 300 MW of operating wind capacity.

The proceeds from these transactions will be used to fund growth opportunities executed in the quarter as well as a robust future growth pipeline.

In April we agreed to sell our remaining 360 megawatts of operating assets and development pipeline in Ireland, and approximately 270 megawatts of ready to build wind assets in Scotland for an aggregate equity value of approximately $450 million.

We entered the European renewable market in 2014 with the acquisition of Board Gosh as wind portfolio in Ireland.

When we acquired this business. It was part of a state owned utility with approximately 300 megawatts of operating wind capacity.

[Company Representative] (Brookfield Renewable): Under our ownership, we grew the business to over 700 megawatts of total operating assets by building out the development portfolio, and we expanded the development pipeline to approximately 1,000 megawatts. Consistent with our strategy when we enter new markets, we use this investment as a stepping stone to grow our business across Europe, including the acquisition of our development pipeline in Scotland in 2015. Today, across Europe, we have expanded our capabilities to become a fully integrated platform with extensive corporate contracting, operating, and growth capabilities. Following the completion of these sales, we will have more than 300 employees and over 10,000 megawatts of operating and development assets in the region. With this sale, we will have fully exited our initial investment in Ireland, having previously sold 375 megawatts of operating assets.

Wyatt Hartley: Under our ownership, we grew the business to over 700 megawatts of total operating assets by building out the development portfolio, and we expanded the development pipeline to approximately 1,000 megawatts. Consistent with our strategy when we enter new markets, we use this investment as a stepping stone to grow our business across Europe, including the acquisition of our development pipeline in Scotland in 2015. Today, across Europe, we have expanded our capabilities to become a fully integrated platform with extensive corporate contracting, operating, and growth capabilities. Following the completion of these sales, we will have more than 300 employees and over 10,000 megawatts of operating and development assets in the region. With this sale, we will have fully exited our initial investment in Ireland, having previously sold 375 megawatts of operating assets.

Under our ownership we grew the business to over 700 megawatts of total operating assets by building out the development portfolio and we expanded the development pipeline to approximately 1000 megawatts.

Consistent with our strategy when we enter new markets. We use this investment as a stepping stone to grow our business across Europe, including the acquisition of our development pipeline in Scotland in 2015.

Today across Europe, we have expanded our capabilities to become a fully integrated platform with extensive corporate contracting operating and growth capabilities.

Following the completion of these sales we will have more than 300 employees and over 10000 megawatts of operating and development assets in the region.

With this sale, we will have fully exited our initial investment in Ireland have you previously sold 375 megawatts of operating assets.

[Company Representative] (Brookfield Renewable): In aggregate, we generated more than 15% compound annual returns on this investment. These sales are expected to close in Q2. We also signed an agreement to sell 390 MW of wind assets, primarily in California, for a total equity value of approximately $370 million, generating returns of approximately 2x our invested capital. Under our ownership, the facilities were substantially de-risked by completing our business plan, which included developing several of the assets, establishing long-term revenue certainty, reducing operating and maintenance costs, and optimizing the capital structure. This sale is expected to close in Q3. Looking ahead, we continue to focus on growing our business and executing on our key operational priorities, including maintaining a robust balance sheet and access to diverse sources of capital, and surfacing value through enhancing cash flows from our existing portfolio.

Wyatt Hartley: In aggregate, we generated more than 15% compound annual returns on this investment. These sales are expected to close in Q2. We also signed an agreement to sell 390 MW of wind assets, primarily in California, for a total equity value of approximately $370 million, generating returns of approximately 2x our invested capital. Under our ownership, the facilities were substantially de-risked by completing our business plan, which included developing several of the assets, establishing long-term revenue certainty, reducing operating and maintenance costs, and optimizing the capital structure. This sale is expected to close in Q3. Looking ahead, we continue to focus on growing our business and executing on our key operational priorities, including maintaining a robust balance sheet and access to diverse sources of capital, and surfacing value through enhancing cash flows from our existing portfolio.

In aggregate, we generated more than 15% compound annual returns on this investment.

These sales are expected to close in the second quarter.

We also signed an agreement to sell 390 megawatts of wind assets, primarily in California for a total equity value of approximately $370 million generated returns of approximately two times our invested capital.

Under our ownership the facilities were substantially derisked by completing our business plan, which included developing several of the assets, establishing long term revenue certainty, reducing operating and maintenance costs and optimizing the capital structure.

This sale is expected to close in the third quarter.

Looking ahead, we continue to focus on growing our business and executing on our key operational priorities, including maintaining a robust balance sheet and access to diverse sources of capital and surfacing value through enhancing cash flows from our existing portfolio.

We believe that with our scale track record in global capabilities, we are well situated to partner with governments and businesses to help them achieve their goal of greening the global electricity grid.

[Company Representative] (Brookfield Renewable): We believe that with our scale, track record, and global capabilities, we are well-situated to partner with governments and businesses to help them achieve their goal of greening the global electricity grids. We believe the prospects for growth of our business are better than they ever have been, and we look forward to further opportunities to provide capital and solutions to drive decarbonization. As always, we remain focused on delivering on our long-term total return targets. That concludes our formal remarks for today's call. Thank you for joining us this morning. With that, I'll pass it back to our operator for questions.

Wyatt Hartley: We believe that with our scale, track record, and global capabilities, we are well-situated to partner with governments and businesses to help them achieve their goal of greening the global electricity grids. We believe the prospects for growth of our business are better than they ever have been, and we look forward to further opportunities to provide capital and solutions to drive decarbonization. As always, we remain focused on delivering on our long-term total return targets. That concludes our formal remarks for today's call. Thank you for joining us this morning. With that, I'll pass it back to our operator for questions.

We believe the prospects for growth of our business are better than they ever have been and we look forward to further opportunities to provide capital and solutions to drive decarbonization.

As always we remain focused on delivering on our long term total return targets.

That concludes our formal remarks for today's call. Thank you for joining us this morning with that I'll pass it back to our operator for questions.

Thank you as.

Operator: Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from the line of Rob Hope with Scotiabank.

As a reminder to ask a question you will need to press star one on your telephone.

So withdraw your question press the penalty.

And your first question comes from the line of Rob Hope with Scotiabank.

Yes, good morning, everyone.

Rob Hope: Yep. Morning, everyone. First question is on the Baltic project. We see that, you know, in your, in your project development backlog, you do have some onshore stuff with Poland. What do you think about the timing in terms of the Baltic offshore projects there, as well as, you know, how do you see your ownership in Polenergia, kind of trending over time?

First question is on the Baltic projects, So we see that.

In your in your project development backlog, you do have some onshore staff with Poland.

But what are you thinking about the timing in terms of the Baltic offshore projects, there as well as how do you see your ownership.

And Paul energy kind of trending over time.

Thanks, Rob Great question so.

[Company Representative] (Brookfield Renewable): Thanks, Rob. Great question. We made an investment in Polenergia this last quarter, and the structure of our investment is together with our partner, we own 75% of the company, while Brookfield owns 23%. The reason why we like this opportunity is the tremendous growth prospects for Polenergia. Our thesis of making this investment is we see ourselves as both an operating partner and a capital provider to that business as it looks to build out its development pipeline.

Wyatt Hartley: Thanks, Rob. Great question. We made an investment in Polenergia this last quarter, and the structure of our investment is together with our partner, we own 75% of the company, while Brookfield owns 23%. The reason why we like this opportunity is the tremendous growth prospects for Polenergia. Our thesis of making this investment is we see ourselves as both an operating partner and a capital provider to that business as it looks to build out its development pipeline.

We made an investment in pull Energia this last quarter.

The structure of our investment is together with our partner.

We owned 75% of the company.

While Brookfield.

Owns 23%.

The reason why we like this opportunity is the tremendous growth prospects for <unk> energia.

Our thesis of making this investment as we see ourselves as both.

An operating partner and a capital provider to that business as it looks to build out its development pipeline and Rob you made a great point. There there are two components to that development pipeline. There is the very large.

Connor Teskey: Rob, you, you made a great point there. There are two components to that development pipeline. There is the very large offshore development pipeline, 3 GW across three large projects. We are hopeful to receive positive feedback from the government on CFDs in the coming months, at which point, we will look to start to see those projects advanced and built out over the next couple years. What shouldn't be overlooked within Polenergia is their onshore development and growth prospects as well. They have construction and development pipeline across both wind and solar, and have been very active participants in the recent auctions in the country. In the last auction, in fact, they bid three projects, and all three projects were awarded subsidies under the new feed-in tariff.

Offshore development pipeline three gigawatts across three large projects.

We are hopeful to receive positive feedback from the government on <unk> in the coming months.

At which point, we will look to start to see those projects advanced and built out.

Over the next couple of years.

But what shouldn't be overlooked within <unk>.

Is there onshore development and growth prospects as well.

They have.

Construction and development pipeline across both.

Wind and solar and have been very active participants in the recent auctions.

In the country and in the last auction in fact, they bid three projects in all three projects were awarded.

Subsidies under the new feed in tariffs. So we are very very encouraged about the growth prospects for that business and we very much intend to be a capital provider.

Connor Teskey: We are very, very encouraged about the growth prospects for that business, and we very much intend to be a capital provider to that company to fund that growth going forward. Alongside our partner, we would expect our ownership interest to creep up over time.

To that company to fund that growth going forward.

Alongside our partner.

We would expect our ownership interest to creep up over time.

Alright Thats helpful.

Rob Hope: All right. That's helpful. Okay, other side of the world, you know, just want to get some perspective on how you're looking at opportunities in India. You've had boots on the ground for a number of years there. It seems like you're, you're, you're, you're in the early days of starting to put capital to work there. You know, where in your mind are we in kind of that investment cycle? Are you fully confident in that jurisdiction that you could put some larger capital to work?

And then other side of the World just wanted to get some perspective on how youre looking at opportunities NBA <unk> had boots on the ground for a number of years there it.

It seems like Youre your.

Early days are starting to put capital to work there where in your mind are we in kind of that investment cycle are you fully confident in that jurisdiction that you could put some larger capital to work.

Certainly and it's a great question.

Connor Teskey: Certainly, and it's a great question. It's important right now to separate, call it, our long-term strategy in India versus what's happening on the ground right now. Right now, our focus is just about keeping our people and our operations safe as that jurisdiction works through the peak of COVID. From a longer-term perspective, we entered the Indian market in 2017, and this is one of the largest and fastest-growing renewables markets in the region. What we've done in India is very similar to what we do whenever we enter a new region. We spend some time building out our capabilities, our boots-on-the-ground operations, such that we have tremendous flexibility to invest across the opportunity set in that region.

It is important right now to two separate call. It the our long term strategy in India versus what's happening on the ground right now right now our focus is just about keeping our people and our operations safe is as that jurisdiction works through the peak of COVID-19.

<unk>.

From a longer term perspective, we entered the Indian market in 2017, and this is one of the largest and fastest growing renewables markets in the region and what we've done in India is very similar to what we do whenever we enter a new region we.

Spent some time building out our capabilities our boots on the ground.

Operations, such that we have tremendous flexibility to invest across the opportunity set in that region.

Connor Teskey: What we are seeing now is a very steady pipeline of opportunities where we think we can incrementally add to our portfolio at very attractive risk-adjusted returns. I would say, we do recognize it, it is a country that is developing, and therefore, we do not intend to deploy a very meaningful portion of Brookfield Renewable's capital in that jurisdiction. We do absolutely intend to grow our platform on a continuous basis, and our pipeline in the region remains very strong. I think I'll leave it there.

And what we are seeing now is a very steady pipeline of opportunities, where we think we can incrementally add to our portfolio at very attractive risk adjusted returns.

I would say.

We do recognize it is a country.

That is developing and therefore, we do not extend and intend to deploy a V.

Very meaningful portion of Brookfield renewables capital in that jurisdiction, but we do absolutely intend to grow our platform on a continuous basis and our pipeline in the region remain remains very strong.

<unk>.

I think I'll leave it there.

Rob Hope: All right. I appreciate the color. Thank you.

Alright, I appreciate the color. Thank you.

Thank you. Your next question comes from the line of Mark Strouse with JP Morgan.

Operator: Thank you. Your next question comes from the line of Mark Strouse with J.P. Morgan.

Yes. Good morning, Thank you very much for taking our question.

Mark Strouse: Yeah, good morning. Thank you very much for taking our question. Just curious, in the grand scheme of things, you know, longer term, I, I, I think the, the supply chain issues ultimately resolve themselves. But just kind of curious, you know, how you are managing, you know, rising input costs as you're looking at, at new projects. Are you, are you locking in some of those pricing now, or are you looking to, to kind of float and, and maybe lock in pricing in the future? Maybe talk about the, the, the pricing environment, and the, the spreads that you're seeing, kind of the, the return on, return on equity, return on investments, whatever the, the best way of looking at it is. Are you seeing any squeeze there? Thank you.

Just curious in the Grand scheme of things longer term.

The supply chain issues ultimately resolve themselves.

But just kind of curious how you are managing rising input costs as youre looking at.

New projects are you are you locking in some of those pricing now or are you looking to kind of float and maybe lock in pricing in the future.

And maybe talk about the.

The pricing environment.

The spreads that you're seeing kind of the return on return on equity return on investments whatever the best way of looking at it is are you seeing any squeeze there. Thank you.

Connor Teskey: Certainly. Thanks, Mark. Appreciate the question. Maybe to start with procurement, perhaps it's helpful to explain how we look to procure equipment for our global construction and development activities. One thing we've spent a lot of time on over the last several years is centralizing our procurement functions around the world, such that whenever we are looking to acquire equipment or services to support any of our projects, we're not looking to procure those products and services on a project-by-project basis, but we rather do it with the economies of scale of the entire Brookfield Renewable platform. We've spent some time internally dedicating people to procurement of certain products, whether it be wind turbines or solar panels.

Certainly thanks, Mark appreciate the question.

Maybe to start with procurement.

<unk>.

Perhaps it's helpful to explain how we look at.

To procure equipment for our global construction and development activities and one thing we've spent a lot of time on over the last several years.

Centralizing our procurement functions.

Around the world such that whenever we are looking to acquire.

Equipment or services to support any of our projects were not looking to procure.

Those products and services on a project by project basis, but we'd rather do it with the economies of scale of the entire Brookfield renewable platform.

We've spent some time internally at dedicating people to procurement.

Certain.

Products, whether it would be wind turbines or solar panels and through that process. We are ensuring that one we would like to think we are getting some of the best prices around the world because we're always leveraging our economies of scale to get full discounts and then two we are increasingly <unk>.

Connor Teskey: Through that process, we are ensuring that, 1, we would like to think we are getting some of the best prices around the world because we're always leveraging our economies of scale to get bulk discounts. 2, we are increasingly building these very strong relationships with both equipment suppliers and service providers, and within service providers, I include O&M providers, EPC providers. We're always ensuring that we're getting the best terms on the contracts that support those services. As a result of that, when there are things like some of the short-term supply shortages that the industry has seen over the last few months. We often find that the suppliers work with us very collaboratively and view us as a, call it, tier 1 partner and somebody they want to support and not disrupt our operations.

<unk> these very strong relationships with both equipment suppliers and service providers and within service providers I include O&M providers EPC providers, we're always ensuring that we're getting the best terms on the contracts that support those services and as a result of that when there are things.

Like some of the short term supply shortages that the industry has seen over the last few months.

We often find that the suppliers work with us very collaboratively and view us as a call it tier one partner and somebody they want to support and not disrupt our operations. So I would say the centralization of our procurement is really what we used to ensure that we are one getting the best prices, but also.

Connor Teskey: I would say the centralization of our procurement is really what we use to, to ensure that we are, one, getting the best prices, but also ensuring that our business isn't interrupted by any short-term disturbances in the supply chain. The second part of your question was around returns. I, I think are, are we seeing any returns compression? The answer to that is, are we seeing returns compression in certain types of assets, in certain types of sales process, processes within the renewable power space around the world? The answer is absolutely yes. But those aren't the investments that Brookfield Renewable has ever targeted in the past or is looking to target today.

Ensuring that our business isn't interrupted by any short term.

Disturbances in the supply chain.

The second part of your question.

<unk> was around.

<unk>.

Returns and I think are we seeing any returns compression.

The answer to that is are we seeing returns compression in certain types of assets in certain types of sales processes processes within the renewable power space around the world. The answer is absolutely yes.

But those arent the investments that Brookfield renewable has ever targeted in the past or is looking to target today, we look for unique situations, where we can bring something to the table, we can differentiate ourselves using something other than cost of capital that can be.

Connor Teskey: We look for unique situations where we can bring something to the table, we can differentiate ourselves using something other than cost of capital. That can be our, our repowering or development capabilities, that can be our corporate contracting capabilities, that can be our size, that can be our global reach. When it comes to identifying and sourcing opportunities where we can differentiate ourselves, we're not seeing any returns compression from that perspective. We're very much committed to the same 12% to 15% return targets we've had for many years at this point, and, and see no reason to adjust those return targets in the current market environment.

Our repowering our development capabilities that can be our corporate contracting capabilities that can be our size that can be our global reach and when it comes to identifying and sourcing opportunities, where we can differentiate ourselves.

Not seeing any returns compression from that perspective.

We're very much committed to the same 12% to 15% return targets. We've had for many years at this point and see no reason to adjust those return targets in the current market environment.

Makes sense that's it for me Thanks Connor.

Nelson Ng: Makes sense. That's it for me. Thanks, Connor.

Mark Strouse: Makes sense. That's it for me. Thanks, Connor.

Operator: Thank you. Our next question comes from the line of Mark Jarvi with CIBC Capital Markets.

Thank you and our next question comes from a line of Mark Jarvi with CIBC capital markets.

Thanks, Good morning, everyone.

Mark Jarvi: Thanks. Good morning, everyone. Just want to touch on the asset sales announced over the last couple of months in terms of, you know, the buyers being strategics and not necessarily new to the always viewed as the lowest cost of capital players you've talked about in the past. Maybe just walk us through in terms of maybe your views on post PPA value that you don't see where they might see something? And do you think that buyers in the market are taking more bullish views on long-term fundamentals? Maybe just sort of your differentiated view in terms of why it was ready to sell those assets today.

I wanted to touch on the asset sales announced or a couple months in terms of.

The buyers being strategic and not necessarily new units.

<unk> is the lowest cost of capital players he talked about the past.

Maybe.

I'll walk us through in terms of maybe your views on post PPA volume that you don't see where they might see some data and do you think that buyers in the market are taking more bullish news on the long term fundamentals, maybe just through your differentiated in terms of why it or you sell those assets today.

Thanks Mark.

Connor Teskey: Thanks, Mark. We might perhaps see the situation a little bit differently. It was interesting to us that both of our significant asset sales in the last quarter went to strategics. What we would say is we ran robust sales processes in both these scenarios, and those strategics outbid those low cost of capital financial buyers that have been the winning bidders for these types of assets quite regularly over the last couple of years. I think what we were seeing there is the assets that we were selling, in both cases, fit a strategic goal of those counterparties, where they saw significant strategic value in the assets that maybe we did not see.

We might perhaps.

I see the situation a little bit differently.

<unk>.

It was.

Interesting to us that both of our significant asset sales in the last quarter went to strategic but what we would say is we ran robust sales processes in both these scenarios and those strategic outbid those low cost of capital financial buyers that have been.

The winning bidders for these types of assets quite regularly over the last couple of years.

I think what we were seeing there is the assets that we were selling in both cases fit a strategic goal of those counterparties, where they saw significant strategic value in the asset.

It may be we did not see.

Connor Teskey: That allowed them to not only acquire the assets at a value that is greater than, than what we viewed, we could earn by holding the assets, that's always our threshold for selling, but it also allowed them to pay a value that was greater than some of the more recent competition from those low cost of capital buyers. I would say that, that it was more the strategic benefit of both those portfolios that drove those buyers to pay the price that made them the winner.

And that allowed them to not only.

<unk> acquired the assets of the value that is greater than then what we viewed we could earn by holding the assets that's always our threshold for selling but it also allowed them to pay a value that was greater than.

Some of the more recent competition from those low cost of capital buyers. So I would say that that.

It was more of the strategic benefit of both those portfolios.

That drove.

Those buyers to pay the price that made them the winter.

Mark Jarvi: Got it. Based on those comments, you don't anticipate seeing a material shift in terms of who is typically showing up in the processes and, and who is likely to be buyers of your assets when you recycle going forward?

Got it so based on those comments you anticipate seeing a material shift in terms of who is typically is showing up on our processes.

Who is likely to be buyers of your assets.

Sure.

Not particularly it's certainly not as a result of these two discrete sales.

Connor Teskey: Not particularly. Certainly not as a result of these 2 discrete sales. We, we, we don't see any meaningful trend there at this point.

We don't see any meaningful trend there at this point.

Mark Jarvi: Okay. Wyatt, in one of your sort of last comments, you made a remark about providing capital and solutions to help decarbonize. Maybe just pick up the word on provide capital as opposed to invest capital. Was there anything to be read through there in terms of, you're looking at different ways to help other companies or if it's like the TransAlta type investment? If you can just help us see whether or not there's that sort of foreshadowing, certain types of investments going forward.

Okay.

And what are your sort of last comments you made.

A remarkable providing capital solutions help decarbonize.

Speaking of a word on provide capital as opposed to invest capital was there anything to read through there in terms of what youre looking at different ways to help other companies or if it's like the transalta type investment.

Just help us if you will and others, that's sort of foreshadowing sometimes investments going forward.

Okay.

[Company Representative] (Brookfield Renewable): Yeah, look, Mark, I think, I think you hit on it exactly with the TA transaction, where in effect, what we did through that transaction was on a structured basis, we acquired a piece of the hydro that allowed, you know, TA to use that capital to execute a coal to gas conversion, which meaningfully is decarbonizing their business. You know, what our focus has always been as a deployer of capital for value is, you know, working with partners and being flexible around how we work with them to provide them with the solution that best works for their needs.

Wyatt Hartley: Yeah, look, Mark, I think, I think you hit on it exactly with the TA transaction, where in effect, what we did through that transaction was on a structured basis, we acquired a piece of the hydro that allowed, you know, TA to use that capital to execute a coal to gas conversion, which meaningfully is decarbonizing their business. You know, what our focus has always been as a deployer of capital for value is, you know, working with partners and being flexible around how we work with them to provide them with the solution that best works for their needs.

Yeah look Mark I think I think you hit on it exactly with the trend the Ta transaction, where in effect. What we did through that transaction was on a structured basis, we acquired a piece of the hydro.

That allowed to use that capital to execute a coal to gas conversion, which meaningfully is decarbonising their business. So.

What our focus has always been.

Ah.

Deploy capital for value is working with partners.

And being flexible around how we work with them to provide them with a solution that best works for.

For their needs and so that can come in various ways and one of those is through transactions like the tier one where we in effect. We are a provider of capital as I mentioned to help with the de carbonization trend and we expect looking forward.

[Company Representative] (Brookfield Renewable): That can come in various ways, and one of those is through transactions like the TA one, where we, in effect, we're a provider of capital, as I mentioned, to help with the decarbonization trend. We expect, you know, looking forward, that the number of transactions we do in this space will increase, and our flexibility to do that will be one of the things that allows us to deploy capital for value.

Wyatt Hartley: That can come in various ways, and one of those is through transactions like the TA one, where we, in effect, we're a provider of capital, as I mentioned, to help with the decarbonization trend. We expect, you know, looking forward, that the number of transactions we do in this space will increase, and our flexibility to do that will be one of the things that allows us to deploy capital for value.

The number of transactions we do.

In this space will increase and our flexibility to do that will be one of the things that allows us to deploy capital for value.

And are you seeing opportunities today, I think we're working on things like that.

Mark Jarvi: Are, are you seeing opportunities today? Like, are you working on things like that? Without, you know, trying to get too far ahead of it, but is that something that we'll see more in the near term, or is that something that you think is gonna play out over the next couple of years?

It's too far ahead of it but is that something that we will see more in the near term or is that something that he thinks that can play out over the next couple of years.

Connor Teskey: Well, we certainly see this as a very broad, long-term trend that we think is gonna drive significant growth in our business for the next several years. Really, what we're focusing on here is if you look at, call it, the power generation stacks of utilities or independent power producers, over the next 5, 10, 15, 20 years, there needs to be a very large transition away from carbon-intensive forms of power production to cleaner forms of power production. You know, on the clean side, that is primarily renewable. Many of those independent power producers or utilities, through no fault of their own, don't necessarily have the expertise or renewables development capabilities or the capital to make those transitions on their own, and therefore, are looking for a sponsor or a capital provider or an operating partner.

Well, we certainly see this as a very broad long term trends that.

We think it is going to drive significant growth in our business.

For the next several years.

Really what we're focusing on here is.

If you look at call. It the power generation stacks of utilities are independent power producers over the next 510 15 20 years there needs to be.

Very large transition away from carbon intensive forms of power production to cleaner forms of power production.

On the clean side that is primarily renewables and many of those.

Independent power producers or utilities through no fault of their own don't necessarily have the expertise or renewables development capability or the capital to make those transitions on their own and therefore are looking for a sponsor or a capital provider or an operating partner and.

Connor Teskey: We view ourselves as being very well-positioned to participate in that transition. We think it's both, Mark, to answer your question, we think it's both a near term, a medium term, and a long-term opportunity.

We view ourselves as being very well positioned.

To participate in that transition.

We think it's both Mark to answer your question. We think it is both a near term or medium term and a long term opportunity.

Mark Jarvi: Makes sense. Thanks for all the details. Appreciate it.

Makes sense, thanks for all the details ticket.

Thank you.

Operator: Thank you. Our next question comes from the line of Nelson Ng with RBC Capital Markets.

Your next question comes from the line of Nelson <unk> with RBC capital markets.

Great. Thanks, and good morning, everyone.

Nelson Ng: Great. Thanks, and good morning, everyone. My first question relates to Colombia. You have a small 32-megawatt wind project there. I think you've been in Colombia for, I think, just over 5 years, and I don't think you've been that active on the development side in that market in the past. Are things changing over there? Like, are you seeing more opportunities on the wind and solar side?

So my first question relates to Columbia, you have a small 32 megawatt wind project. There I think you've been in Colombia for I think just over five years and.

I don't think you've been active on the development side in that market in the past, but are things changing over there and like are you seeing more opportunities on the.

So it looks like.

Certainly and maybe it's a great question Nelson and maybe just to take a step back.

Connor Teskey: Certainly, maybe it's a great question, Nelson. Maybe just to take a step back, not even specific to wind or solar, we're just seeing more growth opportunities. You know, when we bought Isagen, you would have heard us for many years talk about our key objectives were to reduce costs in that business and extend the contract profile of that very large hydro portfolio. The team's done a tremendous job of doing that and continues to execute on those initiatives. Over the last couple of years, we've increasingly looked for more growth opportunities around that Colombian portfolio. There's the wind ones you've mentioned.

Not even specific to the wind or solar we're just seeing more growth opportunity.

When we bought it for him.

You would have heard us for many years to talk about our key objectives were to reduce cost in that business and extend the contract profile of that very large hydro portfolio and the team has done a tremendous job of doing that and continues to execute on those initiatives, but over the last couple of years.

We've increasingly look for more growth opportunities around that and not Columbian portfolio.

Theres the wind ones you've mentioned, we're also pursuing some solar opportunities in the region and in the last quarter. We closed on the bolt on of a couple of small hydro into the portfolio. So I would say it's more broadly we are now seeing more growth opportunity, even broaden the spectrum of asset classes.

Connor Teskey: We're also pursuing some solar opportunities in the region, and in the last quarter, we closed on the bolt-on of a couple of small hydros to the portfolio. I would say it's more broadly, we are now seeing more growth opportunities across the spectrum of asset classes to bolt on to that portfolio.

Moving on to that portfolio.

Okay. Thanks, that's great color and then just a quick modeling question.

Nelson Ng: Okay, thanks. That's great color. Just a quick modeling question. I, maybe it's for Wyatt. This quarter, you recognized some gains for the Scottish developments. I'm just wondering, will you be recognizing gains for the rest of the UK assets or for the sale of the US wind assets in a future quarter? I just wasn't too sure which asset sales would result in gains that are included in EBITDA or your CAFD calculation. Thanks.

Maybe it's for why it so this quarter you recognized some gains for the Scottish developments.

I'm just wondering will you be recognizing gains for the rest of the UK assets or for the sale of the <unk>.

U S wind assets in the future quarter, but I just want to sure.

Which asset sales would result in gains that are included in EBITDA or your Caf II calculation.

Yes.

[Company Representative] (Brookfield Renewable): Yeah, no, that's a good question, Nelson. You know, what was reflected there is the gain on our development assets. Really, the reason we're including those into FFO is that really, you know, we've owned those development assets since 2015, as I mentioned. Over the last 6 years, we've been working to bring those, you know, to contract them, to get them permitted, et cetera. You know, once we've done that, you know, we had a low-cost capital buyer who came in and was willing to buy them and take construction risks. The value that we created in terms of that portfolio through doing those activities was really done around, you know, bringing those development assets forward.

Wyatt Hartley: Yeah, no, that's a good question, Nelson. You know, what was reflected there is the gain on our development assets. Really, the reason we're including those into FFO is that really, you know, we've owned those development assets since 2015, as I mentioned. Over the last 6 years, we've been working to bring those, you know, to contract them, to get them permitted, et cetera. You know, once we've done that, you know, we had a low-cost capital buyer who came in and was willing to buy them and take construction risks. The value that we created in terms of that portfolio through doing those activities was really done around, you know, bringing those development assets forward.

A good question Nelson and so what was reflected there the gain on our development.

Really.

The reason, we're including those.

Is that really we've owned those development.

2015, as I mentioned and over the last six years, we've been working.

Those contracts.

Get them permitted et cetera, and then.

I don't know.

Hey, Matt.

If I am.

So the value to them.

<unk>.

Portfolio through doing those activities.

It was really done around.

Bringing.

Yeah.

In Florida so.

[Company Representative] (Brookfield Renewable): As a result, you know, we include the value that we created in our FFO, because if we didn't, none of that value we created would ever impact our cash flows. You'll see, if you look back in, you know, in the prior year, in a similar type, quantum, we recognized gains on some of our development assets, in our solar developer, X-Elio, et cetera. You know, for us, it's really the inclusion into FFO is focused on those development assets, and it's something that, you know, we expect to kind of routinely more do.

Wyatt Hartley: As a result, you know, we include the value that we created in our FFO, because if we didn't, none of that value we created would ever impact our cash flows. You'll see, if you look back in, you know, in the prior year, in a similar type, quantum, we recognized gains on some of our development assets, in our solar developer, X-Elio, et cetera. You know, for us, it's really the inclusion into FFO is focused on those development assets, and it's something that, you know, we expect to kind of routinely more do.

As a result.

We.

The value that we're creating and around the globe.

We did it none of that related or whatever and impacted our cash flow and you'll see if you look back in the prior year.

And similar tightened on ones and we recognized gains on.

All of our development assets or so.

The developer and <unk> et cetera, so for us, it's really the inclusion of <unk>.

And those in development.

And it's something that we.

We expect them to kind of finally more assuming it may be lumpy by quarter, but on an annual basis.

[Company Representative] (Brookfield Renewable): It may be lumpy by quarter, but on an annual basis, we do expect to, when it makes sense, to monetize those types of development assets, and as a result, recognize them into our FFO.

Wyatt Hartley: It may be lumpy by quarter, but on an annual basis, we do expect to, when it makes sense, to monetize those types of development assets, and as a result, recognize them into our FFO.

Back to when it makes sense to monetize development.

Development.

And as a result recognized than anywhere else.

Okay, and if you sell operating assets they wont be recognized no similar to our normal course, and we don't include those.

Nelson Ng: Okay. If you sell operating assets, they won't be recognized in-

[Company Representative] (Brookfield Renewable): No.

Wyatt Hartley: No.

Nelson Ng: Yeah.

[Company Representative] (Brookfield Renewable): Similar to our, our normal course, we don't include those in FFO.

Wyatt Hartley: Similar to our, our normal course, we don't include those in FFO.

Okay. Thanks, I'll get back in the queue.

Nelson Ng: Perfect, thanks. I'll get back in the queue.

Okay.

Thank you and our next question comes from the line of Sean Stewart with TD Securities.

Operator: Thank you. Our next question comes from the line of Sean Steuart with TD Securities.

Thanks, Good morning, a couple of questions Conor I wanted to circle back on corporate contract opportunities.

Connor Teskey: Thanks. Good morning. A couple of questions. Connor, I wanted to circle back on corporate contract opportunities and wondering if you can comment on the regions where you're seeing the best opportunities to sign corporate PPAs and how that opportunity set aligns with-

Sean Steuart: Thanks. Good morning. A couple of questions. Connor, I wanted to circle back on corporate contract opportunities and wondering if you can comment on the regions where you're seeing the best opportunities to sign corporate PPAs and how that opportunity set aligns with- ... where your uncontracted generation is expected to rise in your existing portfolio over the next few years, can you speak to the alignment between those two things?

Wondering if you can comment on the regions, where youre seeing the best opportunities to sign corporate Ppas and how that aligns that opportunity set aligns with.

Sean Steuart: ... where your uncontracted generation is expected to rise in your existing portfolio over the next few years, can you speak to the alignment between those two things?

Where you are on contracted generation is expected to rise in your existing portfolio over the next few years.

Can you speak to the alignment between those two things.

Yes, certainly.

Connor Teskey: Yeah, certainly. Sean, it's perhaps a helpful opportunity to talk about a, a much broader trend that, that we've seen. You know, it's not that long ago, maybe two or three years ago, that we were really focused on building out our, our power contracting, corporate contracting capabilities around the world. You know, two or three years ago, we, we celebrated every PPA that we got because it really seemed that there were a large number of development projects chasing a, a smaller number of, of corporate PPAs. In, you know, 18 or 24 months, we've seen a, a massive shift in the industry. The, the pace of that shift is different by markets.

<unk>.

Sean.

It's perhaps a helpful opportunity to talk about a much broader trend that we've seen.

It's not that long ago, maybe two or three years ago that we were really focused on building out our power contracting corporate contracting capabilities around the world.

Two years or three years ago, we celebrated every PPA that we got because it really seems that there were a large number of development projects chasing a smaller number of corporate ppas.

In.

18, or 24 months, we've seen a massive shift.

In the industry the pace of that shift is different by markets, but now we are really seeing a large amount of <unk>.

Connor Teskey: Now we are really seeing a large amount of corporate PPAs available, and if you have, you know, high quality, ready-to-build assets, those are now the scarce components of that equation. And therefore, we are seeing a dramatic increase in that corporate contracting, and we think it really all speaks to increasing decarbonization trends, increasing demand for corporates to procure green power as part of their own, call it, ESG or decarbonization initiatives. Where we are seeing the greatest amount of activity within our portfolio is certainly in the United States, Europe, and Brazil. Those are the three markets where we are seeing a tremendous acceleration in the amount of contracting we've done.

Corporate Ppas available and if you have.

High quality ready to build assets. Those are now this scarce component of that equation.

And therefore, we are seeing a dramatic increase in that corporate contracting and we think it really all speaks to increasing decarbonization trends increasing demand for corporates to procure green power as part of their own call. It in.

ESG, our decarbonization initiatives, where we are seeing the greatest amount of activity with our within our portfolio.

Certainly in the United States, Europe, and Brazil, those are the three markets.

Where we are seeing.

A tremendous acceleration in the amount of contracting we've done.

Connor Teskey: You know, to give an anecdote, over the last 18 months, we've acquired 4 ready-to-build projects in Brazil, in Brazil. At this point, 3 of those projects are fully contracted now, with the only 1 not fully contracted being the 1 we acquired just last quarter. We think this speaks to the increasing demand of corporates, and it's a trend we don't think is going to slow down. As a result, we're looking to pull forward more of our development pipeline as fast as possible to satisfy this increasing demand, in particular, in North America and Europe.

To give an anecdote.

Over the last 18 months, we've acquired four ready to build projects in Brazil in Brazil and at this 0.3 of those projects are fully contracted now with the only one not fully contracted being the one we acquired just last quarter. So.

We think this speaks to the increasing demand of corporate and it's a trend. We don't think is going to slow down and as a result, we're looking to pull forward more of our development pipeline as fast as possible to satisfy this increasing demand in particular in North America and Europe.

Thanks for that detail.

Sean Steuart: Thanks for that detail. One follow-up question on India. There were press reports a couple of months ago that Brookfield was negotiating a potential acquisition of a solar portfolio in India. I think it was about 1.2 GW. Any context on that deal specifically? You, you touched on the pandemic and, and how that affects your, your short-term aspirations in India, but can you just speak more broadly to how this potentially affects your ability to conduct due diligence on growth initiatives in the country?

One follow up question on India.

We're press reports a couple months ago that Brookfield was.

Negotiating a potential acquisition is.

Solar portfolio in India, I think it was about one two gigawatts.

Any context on that deal specifically.

And.

You touched on the pandemic and how that affects your short term.

Aspirations in India, but can you just speak more broadly to.

How this potentially affects your ability to conduct due diligence on growth initiatives in the country.

Yes, certainly so.

Connor Teskey: Yeah, certainly. We won't speak to any specific transactions individually, but what we would say is we have a domestic team in India, fully integrated, that conducts all our due diligence whenever we pursue acquisitions in that market. Up until the recent ramp up, the recent escalation of COVID in that region, that team was actively doing due diligence and pursuing opportunities in that space. We would very much expect them to restart those activities when they can be done on a safe basis. What I would say is, when it comes to us and our capital deployment strategies, we take a long-term view. These are long-term investments. These are long-term assets.

Yeah.

We won't speak to any specific transaction.

Individually, but what we would say is we have a domestic team in India fully integrated that conducts all our due diligence whenever we pursue acquisitions in that market and up until.

The.

Recent ramp up.

Recent escalation of COVID-19.

In that region that team was actively doing due diligence and pursuing opportunities in that space and we would very much expect them to re.

To restart those activities when they can be done on a phased basis.

What I would say is when it comes to us in our capital deployment strategies, we take a long term view. These are long term investments. These are long term assets.

Connor Teskey: Any disruption by COVID is not going to change our long-term view of the attractiveness of that market, but rather, is only going to change our timelines, because our priority in a situation like this one is the safety of our people. I would say the current COVID situation is not gonna change our long-term ambitions in the country.

The any disruption by COVID-19.

<unk> is not going to change our long term view of the attractiveness of that market, but rather is only going to change.

Our timelines because our priority in a situation like this one is the safety of our people, but I would say the current COVID-19 situation is not going to change our long term ambitions in the country.

Thank you for the detail that's all I have.

Sean Steuart: Thank you for that detail. That's all I have.

Thank you.

Operator: Thank you. Your next question comes from the line of Frederic Bastien with Raymond James.

Your next question comes from the line of Richard <unk> with Raymond James.

Hi, good morning.

Frederic Bastien: Good morning. Evidently, based on the several investments you closed or advanced in the quarter, you have a lot of irons in the fire. Assuming you could invest in any technology at exactly the same returns, wondering which ones you would, would rank highest on your wish list?

Emily based on the several investments you closed or advance in the quarter you have a lot of irons in the fire.

Assuming you could invest in any technology at exactly the same returns wondering which ones you would rank highest on your wish list.

Yes, certainly so.

Connor Teskey: Yeah, certainly. All things being equal, we, we target the ones that are the easiest and, and simplest to operate. Right now, all things being equal, solar has a lot of benefits. It's modular, it's easy to fix, it doesn't require working at heights. The pieces can be transported very easily in containers as opposed to, you know, unique trucks and, and ships. That being said, we are agnostic across technology, and we'll go wherever we see the best risk-adjusted returns, because we are very comfortable owning, operating, developing, acquiring any of the major technologies. The flexibility of our platform and the ability to invest across technologies has been a differentiating factor, and we think it'll continue to be in, in the future.

All things being equal we target the ones that are the easiest and simplest to offering and right now all things being equal.

Solar has a lot of benefits and it's.

It's modular it's easy to fix it doesn't require working at height.

The pieces can be transported very easily and containers as opposed to unique trucks and ships.

But.

That being said, we are agnostic across technology, and we will go wherever we see the best risk adjusted returns because we are very comfortable.

Owning operating and developing acquiring any of the major technologies.

<unk>.

The flexibility of our platform and the ability to two.

Invest across technologies has been a differentiating factor and we think they'll continue to be in the future. So we don't generally.

Connor Teskey: We, we don't generally, you know, pick favorites when it comes to technology.

<unk> favorites when it comes to technology.

[Company Representative] (Brookfield Renewable): Yeah, Frederic, I would actually add, we are focused on being diversified, because as Connor mentioned, as an example, corporate contracting is becoming more abundant, and one of the things that being diversified does is it allows us to tailor solutions to be a preferred partner in those instances. So that the ability to bring a, you know, a multi-technology, a multi-region solution to those partners is viewed very valuably. So, our focus is actually, you know, to remain diversified the way we are.

Wyatt Hartley: Yeah, Frederic, I would actually add, we are focused on being diversified, because as Connor mentioned, as an example, corporate contracting is becoming more abundant, and one of the things that being diversified does is it allows us to tailor solutions to be a preferred partner in those instances. So that the ability to bring a, you know, a multi-technology, a multi-region solution to those partners is viewed very valuably. So, our focus is actually, you know, to remain diversified the way we are.

Fredrik I would actually add we are focused on being diversified.

As Conor mentioned.

As an example, corporate contracted is becoming more abundant and one of the things that <unk> diversified does is it allows us to tailor solutions to.

To be a preferred partner in those instances and so the ability to bring a multi technology a multi region solution.

Those partners is viewed very valuably. So so our focus is actually.

To remain diversified the way we are.

Frederic Bastien: Okay. Just a quick follow-up on solar. How far off do you believe you are from becoming, so I wouldn't say mature, but at scale? I mean, obviously, in North America, hydro, you're pretty dominant, but wondering how much more runway there is for your solar business?

Okay. Just a quick follow up on solar all far off do you believe you are from becoming.

So wouldn't say mature, but at scale I mean, obviously in North America I draw your pretty dominant but.

Wondering how much more runway there is for for your solar business.

Okay tremendous.

Connor Teskey: Tremendous. You know, we would certainly suggest that we are already at scale. On a global basis, our solar portfolio certainly puts us in the top tier of owners and operators of solar globally. Given the rapid growth in renewables, more broadly, but the fastest technology being solar, we see no limitations to the amount of growth that we could pursue in that technology. We expect to participate in that growth very materially in the coming years.

We would certainly suggest that we are.

Already at scale.

On a global basis, our solar portfolio, certainly puts us in the top tier of owners and operators of solar globally, but given the rapid growth in renewables.

More broadly.

The fastest technology.

Solar we see no limitations to the amount of growth that we could pursue in that technology, we expect to participate in that growth very materially.

In the coming years.

Frederic Bastien: Great. Thank you very much.

Okay. Thank you very much.

Okay.

Operator: Thank you. Our next question comes from the line of Rupert Merer with National Bank.

Thank you and our next question comes from the line to Rupert Mirror with National Bank.

Good morning.

Rupert Merer: Good morning. Connor, in the Q, you agreed to invest $410 million net to BEP. I believe that's faster than your target run rate. This morning, you, you highlighted the acceleration of the renewable energy market, the plans to pull forward developments. With that, it sounds like you could increase your, your target investment rate. Question is, how much do you think you could invest this year? What run rate of investment do you think you, you could sustain in the future, or maybe you would, you would need to sustain in the future to keep up with the market?

In the quarter, you agreed to invest $410 million net to alter that I believe that that's faster than your target run rate in the smart.

You highlighted the acceleration of the renewable energy market plans to pull forward development. So with that it sounds like you could increase your target investment rate. So question is how much do you think you could invest this year.

And what run rate of investment do you think you.

You could sustain in the future or maybe you would need to sustain in the future to to keep up with the market.

It's a great question and maybe if we think more large scale for the last several years, we've been incrementally increasing our equity growth deployment targets.

Connor Teskey: It's a great question, maybe if we think more large scale, for the last several years, we've been incrementally increasing our equity growth deployment targets. It would probably be incorrect for us to look at any one quarter and run rate it as a proxy. You know, some of the large scale transactions we do are somewhat lumpy in nature, and we were very active in the latter part of 2020, a number of those closed in Q1. I would say we remain highly committed to our current guidance, which is $800 to $1 billion of equity deployment net to BEP per year.

It would probably be incorrect for us to look at any one quarter and run rate it as a.

A proxy.

Some of the large scale transactions, we do are somewhat lumpy in nature and we were very active in the latter part of 2020 and a number of those closed in Q1 I would say we remain highly committed to our current guidance, which is 800 to a $1 billion of equity.

Deployment net to Beth.

Per year and if the <unk>.

Connor Teskey: If the growth rate in the industry continues the way we expect, I think we'll, we'll probably continue to incrementally increase that year-on-year going forward.

Growth rate in the industry continues the way we expect I think we'll probably continue to incrementally increase that year on year going forward.

Okay, great Thanks and on.

Rupert Merer: Okay, great, thanks. On recycling initiatives, you've announced a couple recently. Do you have the capital you need now for the foreseeable future, or are there any other processes underway to recycle capital? As part of this question, how do you see the relative cost of new capital from recycling versus new equity issuance?

Recycling initiatives, you've announced a couple recently.

Do you have the capital you need now for the foreseeable future or are there any other processes underway to to recycle capital as part of this question how do you see the relative cost of.

New capital.

From recycling versus new equity issuance.

Yes.

[Company Representative] (Brookfield Renewable): Yeah, Rupert, I'll take that one. Look, we, as we've been discussing for a number of years now, capital recycling is something that we very routinely do. It is very much value-driven in the sense that, you know, as we identify businesses that have been de-risked, that are mature, that are gonna be valued by, you know, very highly by a low-cost capital buyer, for us, it makes a lot of sense to monetize that and redeploy that into growth.

Wyatt Hartley: Yeah, Rupert, I'll take that one. Look, we, as we've been discussing for a number of years now, capital recycling is something that we very routinely do. It is very much value-driven in the sense that, you know, as we identify businesses that have been de-risked, that are mature, that are gonna be valued by, you know, very highly by a low-cost capital buyer, for us, it makes a lot of sense to monetize that and redeploy that into growth.

Yes, I'll take that one so look we as we've been discussing for a number of years now capital recycling is something that we very routinely do it is very much value driven in the sense that.

As we identify.

Businesses that have been de risked that are mature that are going to be valued by very highly by our low cost of capital a buyer for us. It makes a lot of sense to monetize that and redeploy that into growth.

[Company Representative] (Brookfield Renewable): fundamentally, you know, we have, as Connor just mentioned, our outlook for growth is, is, is very strong. You know, for every capital that we, we, we sell or that the proceeds we get from selling an asset, we, we, we definitely think that we will be able to deploy that into growth. We also have another number of other funding levers that we spoke about in, in the past. We, we, you know, to the extent we maintain a strong investment-grade rating at the BEP level, we can issue either corporate debt or preferred equity. You, you would have heard me mention in my prepared comments that in April, we issued $350 million of four and five-eighths fixed-rate perpetual money.

Wyatt Hartley: fundamentally, you know, we have, as Connor just mentioned, our outlook for growth is, is, is very strong. You know, for every capital that we, we, we sell or that the proceeds we get from selling an asset, we, we, we definitely think that we will be able to deploy that into growth. We also have another number of other funding levers that we spoke about in, in the past. We, we, you know, to the extent we maintain a strong investment-grade rating at the BEP level, we can issue either corporate debt or preferred equity. You, you would have heard me mention in my prepared comments that in April, we issued $350 million of four and five-eighths fixed-rate perpetual money.

<unk>, we have as Conor just mentioned our outlook for growth is very strong and so.

For every capital that we sell.

<unk>, we get from selling an asset.

We definitely think that we will be able to deploy that into growth. We also have another.

A number of other funding levers that we spoke about in the past.

To the extent.

We maintain a strong investment grade rating that the bep level, we can issue either corporate debt or preferred equity.

You would have heard me mentioned in my prepared comments.

Pro we issued $350 million of four and five eights.

Fixed rate perpetual money.

[Company Representative] (Brookfield Renewable): That's a very attractive source of capital for us. You know, to the extent we can issue more than that while maintaining our, our strong investment grade, we'll do that. Then incrementally from a balance sheet perspective, we have a number of assets where we can, you know, as a result of contracting initiatives or other things that are going on, there's, there's plenty of capital that we can raise at an investment-grade basis and, and redeploy those proceeds into growth. From, from a funding perspective, you know, we're feeling like we're in a very good position. Fundamentally for us, you know, our equity, our, our shares, our, our units are, are our most expensive source of capital.

That's a very attractive source of capital for us so to the extent we.

Wyatt Hartley: That's a very attractive source of capital for us. You know, to the extent we can issue more than that while maintaining our, our strong investment grade, we'll do that. Then incrementally from a balance sheet perspective, we have a number of assets where we can, you know, as a result of contracting initiatives or other things that are going on, there's, there's plenty of capital that we can raise at an investment-grade basis and, and redeploy those proceeds into growth. From, from a funding perspective, you know, we're feeling like we're in a very good position. Fundamentally for us, you know, our equity, our, our shares, our, our units are, are our most expensive source of capital.

Can issue more not while maintaining our strong investment grade we will do that and then incrementally from a.

From a balance sheet perspective, we have a number of assets where we can.

As a result of contracting initiatives or other things that are going on there is plenty of capital that we can raise that in investment grade.

<unk> and redeploy those proceeds into growth so from from a funding perspective.

Feeling like we're in a very good position.

Fundamentally for us our equity our.

Shares or units are.

Our most expensive source of capital, we're going to prudently sourced the cheapest source of capital, we have and it's going to be those those other.

[Company Representative] (Brookfield Renewable): We're gonna prudently source to the cheapest source of capital we have, and it's gonna be those, those other buckets that I mentioned. Really for us, you know, given that abundance of funding sources, we really think about our equity more to use on a strategic basis, similar to the TerraForm Power transaction we completed in the prior year.

Wyatt Hartley: We're gonna prudently source to the cheapest source of capital we have, and it's gonna be those, those other buckets that I mentioned. Really for us, you know, given that abundance of funding sources, we really think about our equity more to use on a strategic basis, similar to the TerraForm Power transaction we completed in the prior year.

Buckets that I mentioned and really for us.

Given that abundance of funding sources, we really think about our equity more to use on a strategic basis similar to the terraform power transaction, we completed in the prior year.

Great. Thanks for the color.

Mark Jarvi: Great. Thanks for the color.

Rupert Merer: Great. Thanks for the color.

Thank you and our next question comes from the line of Anthony <unk> with Mizuho.

Operator: Thank you. Our next question comes from the line of Anthony Crowdle with Mizuho.

Anthony Crowdle: Hey, hey, good morning, Connor. Just hopefully two, two quick ones. You talked about how the strategy is maybe looking at a stepping stone, putting your foot in the water or toe in the water, and then building out from there. You spoke about in India. What do you think is the next stepping stone for Brookfield?

Hey, good morning, Conor just hopefully two quick ones you talked about how the strategy is maybe.

Looking at our steppingstone, putting your foot in the water or tone on water and then building out from there you spoke about in India. What do you think has been next stepping stone for Brookfield.

Yeah, Great question I think.

Connor Teskey: Yeah, great question. I think, you know, our entry into offshore is an example of an entry into a space where we think we can expand going forward. That's not so much a regional entry point, but rather a technological one. The other thing that you'll see across our portfolio is, we're always preparing ourselves to ensure that we're positioned for whatever the largest and most attractive growth opportunities are in the future. You know, increasingly, we're seeing more opportunities in storage throughout our portfolio. You know, storage still has a little bit of a ways to go before it can be cost-effective on a widespread basis. As the cost curve is coming down, we're seeing more opportunities to deploy storage within our portfolio at attractive returns.

Our entry into offshore is an example of an entry into a space, where we think we can expand going forward.

Not so much a regional.

Entry point, but rather a technological one.

And the other thing that.

You'll see across our portfolio, we're always preparing ourselves to ensure that we're positioned for whatever the largest and most attractive growth opportunities are in the future.

Increasingly we're seeing more opportunities in storage throughout our portfolio.

Storage still has a little bit of a ways to go before it can be cost effective on a widespread basis, but as the cost curve is coming down we're seeing more opportunities to deploy storage within our portfolio at attractive returns. So we see that becoming a potentially large and attractive.

Connor Teskey: We see that becoming a potentially large and attractive, investable space in, in, call it, the short to medium term. Perhaps longer out, green hydrogen. We continue to stay close to that space right now through our power contracting initiatives, as opposed to actually investing in green hydrogen production. We'll continue to monitor that space such that when it does become commercially viable on a wide-scale basis, we can be a meaningful player in that sector.

Investable space in call. It the short to medium term and then perhaps longer out and green hydrogen.

And we continue to stay close to that space right now through our power contracting initiatives as opposed to actually investing in green hydrogen production, but will continue to monitor that space such that when it does become commercially viable on a wide scale basis, we can be a meaningful player in that sector.

Oh, Great and then just lastly, and I apologize if I mischaracterized. This when you were talking about India.

Anthony Crowdle: Oh, great. Then just lastly, I apologize if I mischaracterize this. When you were talking about India, you spoke about the company is putting capital there, putting to work, but you're not throwing like a deluge of capital. You're being very, I guess, constrained with it, given it's a developing country. Do you view all the developing countries in one, or you're willing to spread, you're willing to have more leverage to developing countries as long as you're spread out? I don't know if I'm clear in the way I'm asking that question.

You spoke about the company is putting capital there putting to work but you.

You are not throwing like.

Deluge of capital Youre being very.

I guess constrained with it given it's a developing country.

Do you view all of the developing countries in one or you are willing to spread.

You wont have more leverage to developing countries as long as you are spread out I don't know if I'm clear on why I'm asking that question.

Connor Teskey: No, no, it, it's helpful, and, and it perhaps gives me an opportunity to clarify my earlier remarks. Today, our business, and traditionally our business, has been, call it 75, 75% plus, developed countries, and we very much expect that proportion to remain approximately consistent. On a relative basis, the vast majority of our existing asset base and the vast majority of our growth capital, we expect to go into developed countries. Now, that being said, given the size of our business, that does allow for very meaningful amounts of capital to be deployed into countries, like India, and we will pursue those opportunities when we think we are getting attractive returns and strong downside protection.

No.

It is helpful and it perhaps gives me an opportunity to clarify my earlier remark.

They are business and traditionally our business has been call it $75, 75% plus developed countries and we very much expect that.

Proportion to remain approximately consistent so on a relative basis, the vast majority of our existing asset base and the vast majority of our growth capital. We expect to go into developed countries now that being said given the size of our business that does.

Allow for very meaningful amounts of capital to be deployed into countries like India, and we will pursue those opportunities. When we think we're getting attractive returns and strong downside protection.

Connor Teskey: We would very willingly deploy meaningful dollars in India, but I think the comment we were trying to make before is, still see the vast majority of our business and the vast majority of our growth continuing to be in developed countries and developed regions.

We would very willingly deploy meaningful dollars in India, but I think the comment we were trying to make before is still see the vast majority of our business and the vast majority of our growth continuing to be in developed developed countries in developed regions.

[Company Representative] (Brookfield Renewable): Yeah, Anthony, maybe to add to that, as Connor mentioned, you know, 25% or less of our business is in the emerging markets. It's historically been in that, and looking forward, it will stay that way. One of the things we're incrementally doing with that piece of the pie is diversifying it. When we were first formed as BEP, it was around 25% of our business was emerging markets, but it was entirely Brazil. We're across multiple countries that form emerging markets, and we think that the benefit of further diversification of that piece of the pie is really beneficial.

Wyatt Hartley: Yeah, Anthony, maybe to add to that, as Connor mentioned, you know, 25% or less of our business is in the emerging markets. It's historically been in that, and looking forward, it will stay that way. One of the things we're incrementally doing with that piece of the pie is diversifying it. When we were first formed as BEP, it was around 25% of our business was emerging markets, but it was entirely Brazil. We're across multiple countries that form emerging markets, and we think that the benefit of further diversification of that piece of the pie is really beneficial.

Anthony maybe to add to that.

Hunter mentioned, 25% or less of our business is in the emerging markets. It's historically been in that and looking forward. It will stay that way, but one of the things we're incrementally doing without that piece of the pie is diversifying it. So when we were first formed as BP. It was around 25% of our business with emerging markets, but it was in.

Tightly Brazil now works across multiple countries.

Countries that farm emerging markets, and we think that the benefit of further diversification of that piece of the pie is.

It's really beneficial.

Great. Thanks for taking my questions.

Anthony Crowdle: Great! Connor White, thanks for taking my questions.

Thank you and our next question comes from the line of nausea, They do with <unk> capital markets.

Operator: Thank you. Our next question comes from the line of Naji Beydoun with iA Capital Markets.

Hi, good morning.

Naji Beydoun: Hi, good morning. I wanted to go back to the comments you made on offshore wind. It's an area of the market, similar to your comments on solar, that is expected to grow quite rapidly. Can you just give us your thoughts on sort of the next target markets for you for offshore wind? What are some of the opportunities that you're seeing in that technology?

I wanted to go back to the comments you made on offshore in the scenario of the market.

There to your comments on solar that is expected to grow quite rapidly can you just give us your thoughts on sort of next target markets for you for offshore wind what are some of the opportunities that youre seeing.

And that technology.

Certainly.

Connor Teskey: Certainly, offshore wind, the most mature and the deepest market around the world, is Europe, and that's obviously where we've focused for our first investment. Now, that being said, we made a comment that we've been monitoring offshore wind for several years now. We have been looking at opportunities all around the world, you know, in Europe, in Asia Pac, more recently in the United States. I would say we use the same approach when assessing those opportunities that we do anywhere else. Can we get a contract profile that we like? Can we bring something to the transaction that allows us to be differentiated, such that we don't need to compete on cost of capital?

Offshore wind.

The most mature in the deepest market around the world is Europe, and Thats, obviously, where we've focused for our first investment now that being said.

We made a comment that we've been monitoring offshore wind for several years now and we have been looking at opportunities all around the world.

In Europe, and Asia Pac more recently in the United States.

I would say we use the same approach when assessing those opportunities that we do anywhere else.

Can we get a contract profile that we like can we bring something to the transaction.

That allows us to be differentiated such that we don't need to compete on cost of capital.

Connor Teskey: If we find those situations in any of our core markets, we'd look to deploy capital into the offshore wind technology. I would say we don't have a specific region in mind. I think some of the more recent announcements about decarbonization are gonna drive tremendous growth in this space, both in Europe and in the United States. We'll look at those opportunities and see if we can find situations where we think we can execute successfully.

And if we find those situations in any of our core markets. We would look to deploy capital into the offshore wind technology. So I would say, we don't have a specific region in mind I think some of the more recent announcements about decarbonization are going to drive tremendous growth in this space.

Both in Europe, and in the United States.

We will look at those opportunities and see if we can find situations, where we think we can execute successfully.

Okay. So all of the above approach.

Naji Beydoun: Okay. Okay. All of the above approach. Just one last question from me. You also talked about accelerated build-out of your, of your development pipeline. At the same time, it seems like you're filling the top end of that tunnel quite rapidly as well. I'm just wondering if you can provide us, provide us, more details on the 4.5 GW of new capacity that you added to the development pipeline this quarter. What markets that capacity is in, and maybe some timelines related to that development?

Just one last question for me you also talked about accelerated the build out of your of your development pipeline.

At the same time, it seems like you're filling the top end of that's all quite rapidly as well I'm. Just wondering if you can provide.

Provide us more details on the.

Four five gigawatts of new capacity that you added to the development pipeline this quarter.

But capacity than maybe some timelines.

Related to that development.

Connor Teskey: Sure. Maybe what I'll do is I'll talk about some of the strategy behind it, and then Wyatt can give you some of the breakdown of the additions we made to the pipeline. We've talked about how we've been enhancing and increasing our development capabilities in all of our target markets around the world. You know, there's multiple components of that. There's the ability to take an existing development project and bring it through construction and through to operations, which we have the capability to do in all of our major markets. The other part of development is actually generating new development pipeline. You know, working on the ground to secure land, to secure permits, to fill that top end of the funnel.

Sure. So maybe what I'll do is I'll talk about some of the strategy behind it and then why I can give you some of the breakdown of the additions we made to the pipeline and we've talked about how we've been enhancing and increasing our development capabilities in all of our target markets around the world.

You know there's multiple components of that there is the ability to take an existing development project and bring it through construction and through to operations.

We have the capability to do in all of our major markets, but the other.

Part of development is actually generating new development pipeline working on the ground to secure land to secure permits.

Fill that top end of the funnel and well.

Connor Teskey: While, you know, some of our more recent activities and some of our more recent successes have been in, in pulling through existing development pipeline through construction and through operations, what you're seeing now is our development capabilities really firing on all cylinders and growing organically their own development pipeline. On top of this, we are looking to secure development pipeline where we can, given the significant increase in corporate contracting on the other side, that we can use to pull those projects through to operations. Maybe I'll hand to Wyatt to walk through where the increments came from.

Some of our more recent activities in some of our more recent successes have been in pulling through existing development pipeline through construction and through operations. What Youre seeing now is our development capabilities really firing on all cylinders.

And growing organically their own development pipeline.

On top of this we are looking to secure development pipeline, where we can given the significant increase in corporate contracting.

On the other side that we can use to pull those projects through the operations, but maybe I'll hand to Wyatt to walk through where the increments came from yes.

[Company Representative] (Brookfield Renewable): Yeah. Naji, what I would broadly say is there's probably no business in the world where we're not incrementally adding to that development pipeline. The largest drivers of the increase would be one, in the US wind we recently acquired in Oregon, that came with a 400 MW development pipeline. That was added in incrementally on the distributed generation business that we closed in Q1, that we acquired from Exelon. That came with another around 700 MW of a development pipeline. Additionally, as Connor mentioned previously, you know, one area where we're seeing a lot of opportunity for growth within Polenergia, not so much...

Wyatt Hartley: Yeah. Naji, what I would broadly say is there's probably no business in the world where we're not incrementally adding to that development pipeline. The largest drivers of the increase would be one, in the US wind we recently acquired in Oregon, that came with a 400 MW development pipeline. That was added in incrementally on the distributed generation business that we closed in Q1, that we acquired from Exelon. That came with another around 700 MW of a development pipeline. Additionally, as Connor mentioned previously, you know, one area where we're seeing a lot of opportunity for growth within Polenergia, not so much...

So Nigel what I would broadly say theres, probably there is probably no business in the world, where we're not incrementally add into that development pipeline, but the largest drivers of the increase would be one in.

The U S. When we recently acquired in Oregon that came with a 400 megawatt development pipeline.

So that was added in incrementally on the distributed generation business that we closed in Q1 that we acquired from Exelon that came with another around 700 megawatts of.

Development pipeline. Additionally.

Additionally, as Conor mentioned previously one area where receipt.

A lot of opportunity for growth was in <unk> energia not so much what we do see the value on the offshore but incrementally what was added in the quarter.

[Company Representative] (Brookfield Renewable): Well, we do see the value on, on the offshore, but incrementally, what was added in the quarter, was on the some of the onshore stuff, PV solar and onshore wind. Then finally on X-Elio, our, our JV solar developer, global solar developer, where, as Connor mentioned, we're just incrementally being able to secure part projects, a lot of those being in the US, that are bolstering that development pipeline.

Wyatt Hartley: Well, we do see the value on, on the offshore, but incrementally, what was added in the quarter, was on the some of the onshore stuff, PV solar and onshore wind. Then finally on X-Elio, our, our JV solar developer, global solar developer, where, as Connor mentioned, we're just incrementally being able to secure part projects, a lot of those being in the US, that are bolstering that development pipeline.

On the some of the onshore stuff PV solar and onshore wind and then finally on exactly our JV.

Solar developer of global solar developer, where as Conor mentioned, we're just incrementally.

<unk>.

Projects a lot of those being in the U S that are that are bolstering that development pipeline.

Okay. Thank you that's great color on the sourcing and the.

Naji Beydoun: Okay, thank you. That's great color on the sourcing and the 4.5GW. That's all for me.

Four and a half that Google cellphone.

Thank you. Your next question comes from the line of Matthew Taylor with Tudor Pickering Holt. Your line is now open.

Operator: Thank you. Our next question comes from the line of Matthew Taylor with Tudor, Pickering, Holt & Co. Your line is now open.

Yeah. Thanks here just one question if I may thanks for squeezing me in here I just wanted to go back to the corporate Ppas and so clearly there's massive interests.

Matthew Taylor: Yeah, thanks. Here, just one question, if I may. Thanks for squeezing me in here. I just wanted to go back to the corporate PPAs. Clearly, there's massive interest, which you're talking about potentially accelerating your development pipeline. I think there's also two other pieces that are interesting that I wanted you to provide more color on, is the potential cash flow accretion and then terms. What I mean by the cash flow accretion side is, it seems like when these assets are reaching the end of their original PPAs, the debt is generally paid off. Layering on a corporate PPA could actually be cash flow positive. If you have any comments on that, and then can you speak to the term of the contracts you're seeing versus the original government-backed agreements across sectors?

They're talking about potentially accelerating the development pipeline pipelines, but.

Also two other pieces that are interesting that I wanted to you to provide more color on it.

Central cash flow accretion and then turns what I mean by the cash flow accretion side is it seems like when these assets are reaching the end of the original PPA is the data is generally paid off so layering on a corporate PPA could actually be cash flow positive. So if you have any comments on that and then can you speak to the term of the contracts Youre seeing.

The original government backed agreements across sectors.

Yes.

Connor Teskey: Sure. Thanks, Matt. Maybe to break that into 2 pieces. The vast majority of the contracting we are doing, you're absolutely correct, is for new assets, to pull new development, new projects out of the ground. We are also seeing opportunities to use corporate contracting to extend the contract life of assets that are coming to the end of, call it their, initial contract, which, as you rightly pointed out, in many cases, is a government feed-in tariff. The decision we always make at that point is a risk-return decision. What price can we secure that contract at? The benefit of taking what would become a merchant cash flow and turning it into a contracted cash flow, is that cash flow often then becomes readily financiable as well.

Sure. Thanks, Matt.

So maybe to break that into two pieces.

The vast majority of the contracting we are doing you're absolutely correct. This for new assets to pull new development new projects out of the ground, but we are also seeing opportunities to use corporate contracting to extend the contract life of assets that are coming to the end of call. It there.

The initial contract, which as you rightly pointed out in many cases as a government feed in tariff.

The decision we always make at that point is a risk return decision.

What price can we secure that contract that and the benefit of them.

Taking what would become a merchant cash flow and turning it into a contracted cash flow as that cash flow, often then becomes readily financeable as well and as a result.

Connor Teskey: As a result, we often do look to contract our assets when they come to the end of that initial contracted life, because of the financing impact it has. That can be very accretive to the broader investment returns of an individual project or an individual investment. I think the second part of your question was just around the term of some of the contracts we're seeing. We often hear almost a concern in some of the questions that, you know, government feed-in tariffs were long-term, 15 or 20 years, and corporate contracts are short-term.

We often do look to contract our assets when they come to the end of that initial.

Initial <unk>.

<unk> life because of the financing impact it has that.

Can be very accretive to the broader investment returns.

Of an individual project or an individual investment.

I think the second part of your question was just around the term of some of the contracts we're seeing in it.

We often hear.

Most of concern.

In some of the questions that government feed in tariffs were a long term 15, or 20 years and corporate contracts are short term.

Connor Teskey: We haven't seen that too much in our business, and if anything, over the last few years, government tariffs have actually, in general, been shortening, and corporate contracting has been lengthening in terms of contract. The vast majority of the corporate contracting we do is double-digit year tenors. In fact, I would say, of the contracts we signed in the quarter, of the major material ones, I'd expect almost all of them were double-digit years in tenor. You know, if you look at some of our largest contracting initiatives, for example, the contracting of the ready-to-build assets that we've acquired in Brazil over the last 12 to 18 months, the terms on those contracts were 15 to 20 years.

We haven't seen that too much in our business and if anything over the last few years government tariffs have actually in general been shortening and corporate contracting has been lengthening in terms of contract.

The vast majority of the corporate contracting we do is double digit year tenors.

In fact, I would say of the contracts, we signed in the quarter of the major material ones I'd expect almost all of them were double digit years in tenure.

And.

If you look at some of our largest contracting initiatives for.

For example, the contracting of the ready to build assets that we've acquired in Brazil over the last.

At 12 months to 18 months the terms on those contracts were 15 to 20 years. So we haven't really seen.

Connor Teskey: We haven't really seen a shortening of contract tenors as a result of the switch from feed-in tariffs to corporate contracts. We stay on top of that because, obviously, term is very beneficial, just in terms of giving us visibility on our future cash flows, but also the same financing component, we referenced, that longer term allows for more attractive and accretive financing.

A shortening of contract Tenors as a result of the switch from feed in tariffs to corporate contracts, we stay on top of that because obviously term is very beneficial.

In terms of giving us visibility on our future cash flows, but also the same financing component.

We referenced that longer term allows for more attractive and accretive financing.

[Company Representative] (Brookfield Renewable): Yeah, I'll just add 2 quick points to what Connor said on your point, Matt. Is, one, you're exactly right, where, you know, we've been talking about this for a while. When we talk about some of the funding sources we have for our growth, we have, you know, just given the wind and solar projects or even our hydro projects, you come off. Wind and solar, when they come off contract or hydros, to the extent they're merchant, and we provide a contract, that creates a lot of potential for up financings, because that cash flow becomes that much more financiable. You know, in regard to that, being using that as a funding source, we have a tremendous amount of potential within our business.

Wyatt Hartley: Yeah, I'll just add 2 quick points to what Connor said on your point, Matt. Is, one, you're exactly right, where, you know, we've been talking about this for a while. When we talk about some of the funding sources we have for our growth, we have, you know, just given the wind and solar projects or even our hydro projects, you come off. Wind and solar, when they come off contract or hydros, to the extent they're merchant, and we provide a contract, that creates a lot of potential for up financings, because that cash flow becomes that much more financiable. You know, in regard to that, being using that as a funding source, we have a tremendous amount of potential within our business.

Yes, and I'll just add two quick points to a corner said on your point, Matt is one.

Xactly right where.

We've been talking about this for a while.

And when we talk about some of the funding sources, we have for our growth is that we have.

Just given the.

Wind and solar projects or even our hydro projects.

You would come off in the wind and solar when they come off contract or in hydro's to.

Merchant and we provide a contract that create a lot of potential for financing because that cash flow becomes that much more financeable and so.

In regard to that be using that as a funding source, we have a tremendous amount of potential within our business.

[Company Representative] (Brookfield Renewable): Incrementally, what I'd say is, you know, one thing we are focused on in every financing we do, is we're getting part of the benefit of that post-contract cash flow in our current financings. Where, you know, 5, 10 years ago, when you were financing wind and solar assets, it was effectively fully amortized over the contract life. You know, we did this with our hydro business, you know, starting in 15, 20 years ago. Getting a recognition for a value beyond that contract period, that just enhances your, the, the, the financing structure, and optimizes financing structure quite meaningfully.

Wyatt Hartley: Incrementally, what I'd say is, you know, one thing we are focused on in every financing we do, is we're getting part of the benefit of that post-contract cash flow in our current financings. Where, you know, 5, 10 years ago, when you were financing wind and solar assets, it was effectively fully amortized over the contract life. You know, we did this with our hydro business, you know, starting in 15, 20 years ago. Getting a recognition for a value beyond that contract period, that just enhances your, the, the, the financing structure, and optimizes financing structure quite meaningfully.

Incrementally what I'd say is one thing we are focused on.

Refinancing would do is.

Part of the benefit of that post contract cash flow.

Our current financing fees were 510 years ago. When you were financing wind and solar assets. It was effectively fully amortized over the contract life. What we did this with our hydro business starting to 15 to 20 years ago, but getting a recognitions for our value beyond that contract period.

It enhances your the the financing structure and optimize the finance financing structure quite meaningfully and so increasingly we're getting 20%, 30% bullet at the back end of our contract life on wind and solar and we will continue to try to increase that and just enhance the optimization of our financing structures.

[Company Representative] (Brookfield Renewable): Increasingly, we're getting, you know, 20%, 30% bullets at, at the back end of our contract life on wind and solar, and we'll continue to try and increase that, and just enhance the optimization of, of our financing structures, which will, you know, drive value over the long term. We think your point is exactly right, where there, there is a lot of value, both within our existing business, but as, as we look forward in, in, having our financing structures reflect the, the, the, the enhanced corporate contracting, framework.

Wyatt Hartley: Increasingly, we're getting, you know, 20%, 30% bullets at, at the back end of our contract life on wind and solar, and we'll continue to try and increase that, and just enhance the optimization of, of our financing structures, which will, you know, drive value over the long term. We think your point is exactly right, where there, there is a lot of value, both within our existing business, but as, as we look forward in, in, having our financing structures reflect the, the, the, the enhanced corporate contracting, framework.

Each will drive value over the long term. So we think to your point is exactly right, where the there is a lot of value both within our existing business, but as we look forward.

Having our financing structures reflects the enhanced corporate contracting framework.

Great. Thanks for the color really helpful I'll leave it there.

Connor Teskey: Great. Thanks for the color. Really helpful. I'll leave it there.

Thank you.

Operator: Thank you. Now, I'll turn the call back over to CEO, Connor Teskey, for any closing remarks.

Now I'll turn the call back over to CEO Conor.

<unk> for any closing remarks.

Okay, great and as always we want to thank everyone for their support.

Connor Teskey: Okay, great. As always, we want to thank everyone for their support. We look forward to updating you at the end of next quarter, with our Q2 results. Have a good day. Goodbye.

Look forward to updating you at the end of next quarter.

With our Q2 results.

Have a good day goodbye.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

[music].

Yes.

Sure.

[music].

Yes.

[music].

Yes.

[music].

Sure.

[music].

At the moment.

[music].

Okay.

[music].

Sure.

[music].

Yes.

Yeah.

[music].

Okay.

[music].

Yes.

[music].

No.

[music].

Yeah.

Yes.

[music].

Okay.

[music].

Okay.

Yes.

[music].

Sure.

Yes.

[music].

Yes.

[music].

Yes.

Okay.

[music].

Yeah.

Yes.

Sure.

[music].

Q1 2021 Brookfield Renewable Corp Earnings Call

Request a DemoDemo

BEP

Brookfield

Earnings