Q2 2023 Boralex Inc Earnings Call
I appreciate that. And then just finally, you repatriated a service contract in a quarter, and you've historically had a pretty balanced approach of using OEMs or third parties and then doing some work yourselves. What motivated the decision on the 200 megs of solar to repatriate that in-house? The
Yeah, since the beginning we are doing that to reduce the margin of the suppliers in the OEM. In this case and specifically in the solar business in the US there was not only one there was at least two because there was...
in the supply chain of the service, there was two parties. So when we take over this kind of project, we're reducing cost definitely. And also we will hopefully, and this is the target, we will improve the availability of the project and increaseaning the approvals andahan correctly and
when you have too much suppliers sometimes difficult to you know
Bonjour mesdames et messieurs et bienvenue à la conference telephonic portant for les resultants financier du 2nd trimesse de 2013 de Boralex.
Typically for inverters they are not building the right spare parts inventories and we can do that easily and that's what we have done in wind and in solar in France so we would do that in the US and I'm confident that this will reduce the cost and improve the availability of the assets
Vous hénoté que tout les lignes sont un beaux découtes als mains.
At the end of the presentation, there is a period of questions and reports regarding which financial analysts, actioners and investors will be invited to answer their questions.
Okay, thank you very much.
Okay, thank you very much. Thank you
If you have any questions, please email us at etoile.com
Thank you. We will now take our next question.
For your questions, you can ask them on the phone at 1am.
Please stand by.
You will find a message that will automatically inform you of your question.
Our next question comes from the line of Najee Badoon from IA Capital Market. Your line is open please go ahead.
Do you have a question about this conference?
Hi, good morning. I just want to start in the US and get your thoughts on key learnings in some of the markets that you're focusing on, whether it be New York or other jurisdictions in the past couple of years. Any thoughts about maybe a path that you see to accelerating development in some of those markets?
For participants in the web decision, you can also ask questions during the conference. If you have any questions, please post them in the chat box.
Infant et reposentants des médias qui ont des questions sont avuité à contacté directement camille aventure concier à sur public et communication externes chez-borellex, ou coordinate indicer à la fin du communique primistriel.
But our approach is always the same. We look at the supply and demand on the market where we are developing. In the state of New York I am very happy of the decision we took four or five years ago to go there.
I will now pass the floor to Stefan Milos, Vice President of Relations with the Board of Governors.
Good morning ladies and gentlemen and welcome to Borrelec's second quarter of 2023 Financial Results Conference call. Note that all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session in which financial analysts, shareholders and investors will be invited to ask their questions.
they all confirm that they want to go for net zero when they are, which is not far away, which is 2040. So this means a lot of power, a lot of demand for our product. So in between there is some difficulties, but that's our job to manage them.
To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 again.
That's the reason why we have decided to start developing in Illinois and Pennsylvania. When you look to this market, there is a lack of supply in some years, so there would be demand for our product and that's the way we're doing that. And the last point, which is very important...
Also note that the call is being recorded.
For webcast participants, you can also ask your questions during the conference, but they will be answered by email after the call.
Finally, media representatives are invited to contact Camille Aventur, advisor, public affairs and external communications at Boralex. Her contact information is provided at the end of the quarterly press release.
is the ability to find a reasonably long-term contract because it's important for us to be contracted.
to sell our electricity.
I would now like to turn the conference over to Stefan Mihnol, Vice President Investor Relations for Borrelax. Please go ahead.
And maybe just on France, I know it's been delayed a bit, but any expectations or updated views on the PPE that we're waiting for?
Well thank you operator and good morning everyone so welcome to Baralex second quarter Resolve conference call. Joining me today on the call Patrick De Kost our president and chief executive officer, Bruno Guillemette our executive vice president and chief financial officer and other members of our management and finance teams.
Thank you.
the use of
Dexvy's
the new multi-annual... There is lots of demand on PPAs in France because you know...
Mr. Dacas will begin with comments about market conditions and the highlights of the quarter. Afterwards, Mr. Guilmette will carry on with financial highlights and then will be available to answer your questions. As you know, during this call we will discuss historical as well as forward-looking information.
When talking about the future, there are a variety of risk factors that have been listed in our different filings with securities regulators, which can materially change our estimated results.
So these documents are all available for consultation at CIDRplus.ca. In our webcast presentation document, the disclosed results are presented both on a consolidated basis and on a combined basis. When talking about the results, we generally refer to combined numbers and when referring to cash flow and balance sheet, we generally refer to...
Accordingly, combined may not be comparable to similarly named measures used by other companies. In detail, see the Non-IFRS and Other Financial Measures section in DMDN.
The press release, the MD&A, the consolidated financial statements and a copy of today's presentations are all posted on the Balaix website at Balaix.com under the investor section.
If you wish to receive a copy of this document, please contact me.
Thank you, Stéphane, and good morning, everyone. It's a pleasure for me to present our results and achievements for the second quarter. Before going over the highlights of the quarter, I would like to reiterate our strong confidence in the future of our sector.
There has been a lot of negative press in the past few months about some parts of our industry, notably the offshore wind sector.
Many projects were stopped in this sector because of the important issues with selling price and supply chain.
As an integrated developer and operator of onshore, wind, solar, hydro and storage technologies, we're not going through some of these issues in the SIG magnitude. We experience very limited impact on our operations and development activities.
Yes, we are facing some challenge, but we have been able, through our agility and innovative approach to overcome them.
All our projects under construction are delivering the expected returns and we expect the same for upcoming projects. We will continue to develop our business and be a strong contributor to the energy transition.
We are more than ever confident we will execute our plan with discipline in markets we know well and are able to adapt rapidly.
Going back to the highlights.
In the second quarter, our teams continued to make significant progress in our growth and diversification strategy while pursuing our financial discipline.
Our balance sheet remains strong with over $300 million in cash resources and authorized financing facilities providing significant flexibility to fund our growth.
369 MW of projects were added to our pipeline in the quarter, now representing over 6.2 GW of capacity.
We were also selected for 380 MW of storage projects under the Ontario RFP and for 40 MW of wind projects in the France latest wind RFP.
Total production increased by 28% in the second quarter compared to 2022, as we benefited from contributions from the integration of wind farms we acquired in the US, the commissioning of assets and comparable production in France.
This helped offset the impact of unfavorable weather conditions in North America in June .
Our business continues to perform well, generating an ABDA of 143 million, up to 10 million or 7% over 2022, reflecting the contribution from the US acquisition and commissioning of assets in France.
which more than compensated the decrease relating to lower production of our Canadian wind farms. Please note that the comparable figure in the second quarter of 2022 included a 14 million positive effect coming from certain feed-in premium contracts in France.
which was taken out in the third quarter of 2022 after the enactment of the supplementary budget act.
In general, demand for renewable energy in our markets remains high, creating a positive environment for the operation and the development of our activities.
Favourable programs are being discussed or put in place, in particular the ITC in Canada, which is similar to the IRA in the US. Legislative measures were recently published and we are expecting the new law to be released
to come into effect by the end of the year.
Also, many requests for proposals are planned in the next six months. Hydro Quebec RFP for 1.5 gigawatt, Ontario's second request for proposal for energy storage and capacity, and a nicer desalination in the state of New York.
In France, a 500 MW technology neutral tender and two 925 MW onshore wind tenders are also expected.
UK also restart their RFP program for wind solar.
I will now rapidly review the main variances in our portfolio of projects and growth paths.
The change in the early stage was mainly due to three factors. First, the addition of two new wind projects, seven new solar projects and one storage project in Europe , and one wind project and one storage project in the UK.
in North America for a total of 369 megawatts. Second, the progression of two storage energy projects that were selected in the Ontario RSP to the secure stage.
for a reduction of 380 MW, and lastly the progression of two wind projects, two solar projects and one storage project in Europe to the mid-stage phase for a reduction of 64 MW.
In the mid-stage, the progression of the 64 MW of project were offset by the change in the expected capacity of one wind project in Europe for a decrease of 10 MW and the progression of one wind project in Europe to the advanced stage.
phase for a reduction of 52 megawatt. In total, our pipeline now comprises project totaling 5.3 gigawatt of wind, solar, and storage project. In the growth path, the secured stage increase
with the progression of two energy storage projects selected in the Ontario RFP, totaling 380 megawatts.
In the US, we continue to work on the optimization of our solar project and are expecting feedback from NYSERDA in the coming months. In France, the capacity of projects under construction decreased by 32 MW due to the commissioning of two wind farms and a storage unit.
I won't cover in detail the progress made in our growth and diversification strategic direction as I already talked about the major highlights.
On the customer strategic direction, we continue to have discussions with numerous corporations in France as the demand for renewable energy contracted at attractive price remains high.
In terms of optimization, we internalize the service and maintenance of six US solar power stations with a total installed capacity of 200 megawatts.
This completes my part. I will now let Bruno cover the financial portion in more detail and we'll be back later for the question period. Bruno? Thank you, Patrick. Good morning, everyone.
I will start with a review of the progress made in light of our 2025 corporate objectives.
As mentioned earlier by Patrick, our balance sheet remains solid with more than $300 million in available cash and authorized financing.
We continue to make good progress on the EBITDA and EFFO when taking into account the $14 million effect mentioned by Patrick earlier.
The reinvestment ratio is in line with our target at 53%.
About RCSR strategy, we continued our efforts on the environment, social and governance rounds as presented on slide 16.
Among the highlights of the quarter, Borilex was recently awarded an IKOVEDIS Gold Medal for the second year in a row.
For more detailed information, including data on CO2 emissions and work done in relation to climate change and the TCFD initiative, I invite you to read our third CSR report which was published in February .
I will now cover the financial results for the second quarter, starting with production.
Good conditions in April and May did not compensate completely for unfavorable conditions in June , especially in North America. Total production for the hydro sector was 3 percent lower than last year and 8 percent lower than anticipated. Both markets, Canada and the U.S., had unfavorable weather conditions. Finally, production from solar assets was 12 percent lower than the same quarter last year and 18 percent lower than anticipated, mainly due to our current element request on the Five Point Solar Farm in California.
In summary, total production for the quarter was 28% higher than last year and 8% lower than anticipated.
Second quarter combined revenues were up.
28% compared to last year, mostly due to the integration of our acquisition in the US.
the commissioning of assets in France, as well as high prices of electricity in France.
EBITD increased by 7% in the second quarter and operating income increased by 6%.
Please note that the $6 million increase in corporate and general expenses is related to an increase in the workforce related to the growth of the corporation.
AFFO was 3 million compared to 13 million in the same quarter last year.
As mentioned by Patrick, the second quarter of 2022 included a positive 14 million effect related to feed-in premium contracts.
excluding this amount.
the FFO this quarter would have increased.
quarter would have increased quarter over quarter by 4 million.
Our financial position is solid with our net debt to total market capital ratio of 40% in line with the total market capital ratio of 40%
ratio at the end of 2022.
In conclusion, we continued the disciplined execution of our strategic plan in the second quarter of 2023.
We made good progress along our four strategic orientations. We continue to grow and diversify by adding 369 MW of wind to the
solar and storage projects to our pipeline, which reached over 6.2 gigawatt of capacity.
The market environment continues to be highly favorable.
to development activities with several requests for proposals ongoing in our markets.
EBITDA and operating income increased compared to the second quarter of 2022. And finally, we maintain a solid financial position with more than $300 million in available cash and authorized financing.
Thank you very much for your attention.
We're now ready to take your questions.
Thank you. Thank you.
If you have any questions, you can call the email address on your phone and on the phone on our website. To answer your question, you can call the email address on your phone.
As a reminder to ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
To withdraw your question please press star 1 and 1 again. Please stand by while we compile the Q&A roster.
And our first question comes from the line of Sean Stewart from TD Securities. Please go ahead so your line is open.
Sean.
Sorry about that.
I want to start with.
question on your balance sheets. I'm wondering if you can qualify the comfort with your existing available liquidity.
given the growth path going forward and if you can go through options to bolster balance sheet flexibility going forward between asset recycling or other financing options.
Thank you Sean. So qualifying our balance sheet position is solid.
in a good position to continue to fund our growth. We have options as we've had in the past, we generate cash, we have additional leverage possible on different fronts, either corporately or at the project level.
And we're in a good position for the next year to continue to fund our growth without an equity raise. So, notwithstanding not taking into account large M&E, obviously, as I always put as a qualifier. Any thoughts to further.
If valuations aren't cooperating, can you speak to?
potential for further asset sales? As you know, we've looked at the past as either selling assets, but also and most often or more often partnering with people like other investors, other financial investors as we did.
as potential partnerships with other investors. We have good assets, good valuations, but we're looking for the right conditions, size, and right valuations to enter into a transaction.
It's not lack of demand, but it's mostly our option when we feel it's the right time.
But that's a possibility, an additional possibility on the financing front, yes.
Okay, thanks Bruno. Next question, New York Solar Projects, can you give us a
An idea of what is being done there to advance those projects, discussions with respect to, I guess, PPA amendments, what's the path forward for those projects?
Yeah. Hi Sean, it's Patrick.
The Alliance for Clean Energy has put a request in front of the Public Service Commission to provide an inflation adjustment from the time of the award to the time of, I think, the sellout in COD
And no, it's expected that in their October session, the PSC will come back with their decision on that, which is to my understanding supported by NYSERDA, but it's a PSC decision.
This is where we are in the same time what we are doing is we are working with suppliers to optimize as much as possible the project that we have and to be ready to take the decision when the planets will align.
Understood. Okay, thanks very much, Patrick. That's all I have.
Okay, thanks very much Patrick, that's all I have. Thank you, Shun.
Thank you. We will now take our next question.
Please stand by.
Your next question comes from the line of Nelson Engy from RBC Capital Markets. Please go ahead.
Great, thanks and congrats on a pretty good quarter. So just a big picture question on your 2025 target of hitting 4.4 gigawatts of capacity and about, call it 250 million of discretionary cash flows. Like obviously you can hit the numbers by simply doing M&A, but from an organic growth perspective, you can hit the numbers by doing M&A.
M&A versus development and also, I guess, the importance of hitting your 2025 target.
Yeah, we are, thank you, sorry, Nelson and Patrick, we are executing our plan. We are focusing specifically on the project that will create
cash flow in 2025 and
So all the team is concentrated on that. And I think we are also concentrating on expenses and all the things to achieve this target. The M&A market today, yes, it seems that it's becoming more buyer's markets, but it's not where...
we wanted yet, so we will continue to execute and Yeah, nothing more to say today Okay, thanks. You mentioned focus on the cost side so on the on G&A I think you were about at 32 million this quarter
That's about 23% higher than last year. So do you expect your G&A to continue to trend a bit higher or are you trying to manage G&A lower in the coming year? Obviously you have a number of upcoming bids to focus on, but can you just talk about G&A?
about your G&A trend and whether that's something you're trying to...
manage lower or not.
On the G&A front, we had a bump which we considered temporary and we're working towards getting this in terms of percentage, relative percentage getting this back in line.
So we don't expect continuing growth in percentage.
We don't expect continuing growth in percentage. Okay, got it. Thanks. I'll leave it there.
Thank you.
We will now take our next question.
to the next question. Please stand by.
I think it's the best market. There is a lot of opportunity in the UK and we have a significant pipeline in France producing projects, I would say, every quarter. So you have also seen that the price, the average price of the last tender in France was north of 85 euro, a megawatt hour. So it's also a good signal. It's 42% higher than it was in 2020. So this is good for the inflation of the cost. So we continue in days two market presently.
Understood, thanks. And speaking about the UK opportunity, can you comment at all on what you're seeing in the local market right now from a supply chain standpoint to get the Macillan developed on time and within budget and what that might mean for future growth in the market?
Sorry, could you just repeat your question? Patrick did not get all the questions.
Yeah we are we are we have ordered our turbine for lime kiln by the end of last year and I'm happy when I'm seeing the increase of of cost from the suppliers so this is going in the right direction on the balance of plant or good good you know we are almost almost finalizing the contract for the balance of plant of the project
be authorized in the next six months probably, and then we will say continue probably to work with the same bunch of suppliers. And I think – I do not expect a problem in the next project in the UK presently. Excellent. Thank you. And then if I can just – And maybe another comment on the UK. You have seen all the questions from the offshore wind that was one of my comments at the beginning. There is roughly 7.4 gigawatts of project that is –
got a price of 37 pounder megawatt hour at the last RFP in the UK they are all All not all except one. I think 800 megawatt stopped presently and frozen and will have to rebid in new tender so this open
many opportunities for new onshore projects. And that shows also to the government that being diversified is not only good for IPPs, but it's also good for systems and government.
Got it. That's some excellent color. Thanks, Patrick. The last, if I can sneak one in, is just on the corporate PPA market. It seems as though...
you're seeing a lot of opportunities there to get attractive pricing from corporates. Is that going to become a much more prevalent use of recent answers and also new contracts for assets that are under development?
Yeah, there is some opportunity for sure in the UK. There is opportunity in France. We have signed some in France that will be announced in the fall.
specifically for marketing question of our customers but it's interesting price for us and it's a good return for the project that will be built with that or when it's renewed it's interesting price. In the UK we're less known than in France so we're starting with that but we have had some negotiation conversation with.
with different potential counterparties and there is also the option as I mentioned there is a new RFP presently in the UK so I'm not comments but it's another option for our project to get an interesting price because
The RFP for wind has been reopened for onshore wind. So that's also something interesting for our project.
for wind that's been reopened for onshore wind. That's also something interesting for our project.
Thank you. We will now take our next question.
Thank you. We will now take our next question. Please stand by.
Next question comes from the line of Rupert Mera from National Bank. Please go ahead, your line is open. All right, thank you.
Hi, good morning everyone.
On your U.S. wind assets, you've had those for a couple of quarters now. How are they performing relative to your expectations and with what you've learned, what are your thoughts on expanding that platform?
I'm sorry Rupert, we had difficulties to hear you, you sounded weak. Can you just repeat the question? Rupert sorry. The resource was lower.
The wind resource in Texas for our assets was lower during the quarter and the price was also lower on the two projects which are merchants there. So we have been affected by the...
You cannot draw any conclusion on the long term. We're still confident with the assets we bought and the projection that we have there.
And we're seeing in Texas right now very strong power prices this month in particular. I know you have some uncontracted exposure there, some spot exposure. How do you manage that asset? Are you selling spot or you selling in the day ahead markets? Are you seeing all the upside, capturing the upside we're seeing in that spot market?
Yeah, we are exposed on two assets, but essentially one is, you have to remind that before the flip date of these assets with the tax equity, we are not really affected upwards or downwards...
because of the tax equity contract that we have on these assets. So not going into detail presently but I think it's another sign that it's you know all the markets where we are the price are going in the right direction on the long term.
But I think before 2025 on these assets, essentially the cash flow is up or down is going to mainly to the tax equity.
I see, so given all that, you know, about this market and the experience you've had so far, what are your thoughts on organic growth in that market or future? Basically any, any opportunity to grow that platform.
Not presently because as I answered to Nelson we are really focused on the main project that will deliver cash flow for 2025 in the jurisdiction that we know. So France, UK, New York, Quebec and Ontario.
So we will not start something there. I know that there is lots of things moving specifically in storage there, but it's not the same storage in Ontario. In Ontario we have up to 22 years contract for capacity. You cannot find that in Texas. In terms of risk reward, yes you can.
get long-term contract then in New York it's still interesting then in Texas and start something.
I'll get back in the queue. Thank you.
I'll get back in the queue. Thank you. Thank you.
Thank you.
We will now take our next question. Please stand by. And the next question comes from the line of David Quezada from Raymond James. Please go ahead your line is open.
Thanks. Morning everyone. Maybe first question here, just going back to France.
I know that it's kind of been a long-running source of speculation when things could get sped up from a permitting perspective. Have you seen any progress on that? I guess maybe on a related note.
Do you think that the number of new projects coming online in France is sufficiently slow that it's creating a shortfall and does that cause you to expect pricing to continue to trend higher there?
Yeah, I think there is a thank you, David, there is a clear
Mindset from the government, there is a law of acceleration and we see some changes locally because as I mentioned many times in the past it's good to have a framework from the government. It's important to have something locally because the administration who is permitting the project is local.
So we see some changes there, but when I'm looking to the fact that there would be two tender for 925 MW in September and one in December , just for wind, and another neutral tender for wind and solar in October , it's probably a little bit too much for the number of authorizations available in France.
Good news also, the last tender was, we will be able to give you the exact figures, but it was oversubscribed.
tender was we will be able to give you the exact figures but it was it was over subscribed but
over allocated to, so the power expected by the government, the award more contract than they asked at the beginning. So it's, again, it's showing that,
the system needs more electricity in France. And so I think there is an interesting equilibrium there between the fact that there is a lot of demand, there will be more authorization, and this will certainly create more value from our organic pipeline in France.
Okay, excellent. Thanks for that, Patrick. That's a great color. And then maybe just one more for me. I'm just curious if you have any thoughts or a view on negotiations around the renewable energy directive in Europe . I understand some of those discussions are playing out now.
Could you be more precise on what you're referring to? But the point on European framework is there is no country, no electric system in Europe who is oversupplied in this country.
So I think again that's two good news for us. And there is no
other competition from nuclear would be
12 years, 15 years, I don't know. There is no, so there is a lot of opportunity coming from this and when you see, for example, the big tender in Germany when the big oil and gas company are betting to put 12 to 13 billion on the table just to be authorized.
their expectations is high price for the long term in Europe . So I think that's good news. Appreciate the color. Thanks, I'll turn it over.
Thank you. Thank you.
Thank you. We'll now take our next question.
Please stand by.
And next question comes from the line of Mark Javi from CIBC. Please go ahead, your line is open.
Thanks. Good morning everyone.
Bruno, you mentioned earlier you do have other options for...
funding beyond, you know, retain cash and leverage including partnerships and sell downs. How would you say valuations compare between us, a partial?
stake sale like you did last year in France versus outright sale portfolio assets. Is there a meaningful difference in valuations on those types of transactions right now?
You mean between a minority position and a control or full? Yeah, exactly.
Well, as you know, we tend to concentrate a little bit more on partnerships, so selling minority positions, but if I look at the valuation we got in France, it was certainly well-valued, even though it was a minority position. So I think there's a lot of
There are some types of partners that value what we can bring as an operator, as a manager of the asset, and therefore they're willing to pay a fairly sizable minority position.
types of partners that value what we can bring as an operator, as a manager of the asset and therefore they are willing to pay a fairly sizable minority position valuation.
In general, when we look as a buyer, as potential M&A transactions, we see valuations tend to be slowly reducing as a potential buyer. So I think we'll...
We'll continue to apply our disciplined approach to see if it's a better time for us to buy or to sell. But again, on the sell-down, if we are interested in selling down partnerships, then we'll wait for the right time and the right assets for us.
if it's not the right valuation and on the buy side it potentially offers a bit more opportunities today than it did a year ago. It's a fine portfolio of the way of commercializing our energy so it could be you know we did the Indeed.
I'd say 1.4 gigawatt of bilateral in Quebec. So probably in the future there will be opportunity. There will certainly be tender. There was one in September . It seems that another one would be announced by the end of the year for next year. But we are always looking to all the opportunity and it depends on the customers and the government.
There's nothing that prohibits you from trying to negotiate while at the same time putting up a project into an RFP.
Not to my knowledge. What's your updated views in terms of the price caps in France? We saw the European Union look to stop those, but what's your expectation in France in terms of how long the price cap stays and whether or not they would renew it for 2024?
Yeah, there is a, there is a, the European Union seems to be clear. Germany, as to my knowledge, extend a little bit to the end of the next winter, because the winter is the more important part and there are still...
government is discussing. To my knowledge there is no discussion today but you never know in the finance law what could happen. We are not
We're not doing our budget on this base because We think it's the way to be disciplined, but we will see what happens Okay, thanks Patrick. Thanks Bruno.
Thank you. We will now take our next question. Please stand by. Your next question comes from the line of Ben from BMO. Please go ahead, your line is open. Hey, good morning. On your expected returns, can you remind us what those are? Is that 8% to 10%? Yeah, in terms of our expected returns, we've certainly seen a creep up in the market into cost of equity and we have adjusted accordingly our returns. So I say that we are at the higher end of our bracket, so we're around 10% ish on.
This adjustment is fair given the adjustment we've seen in the market. The projects that are going at the moment are meeting those guidelines.
And just as a side note, our projects in construction are seeing very little variance from their budgets. So it's important to note that as well.
And you're, um. I mean, it's good to hear them. Can you.
Maybe touch on you mentioned
Sean, you mentioned the returns have been.
the last few years, and it's been. Somewhat protected is that more. Function of the view locking in. ABC contract for the head of Inflation kicking
Yeah, there is many, many ways. The first is... including a visual, ways First and
roughly we are deploying 1.1 billion presently in all the construction that we have.
and the cost overrun is 11 million, so it's one person, so it's very, you know, in a context where everything is going up, so it answers your question. The second point is, on many projects, on the return part, we have been able to adapt
through the example of the 18 months in France, the example of the new tender. I mentioned the tender where the price is now 85, the average price of the last tender in France is 85.3 EUR a MWh, but it's indexed also, this price is indexed between the award.
north of the expectations of today. For Boralek, so said another way, if we have to take the decision today with all the figures we have today, with the same, with today's expected return, we would say yes again for all the project that are under construction.
Okay. And then on the storage projects you added in Ontario, the 380 megawatts, could you comment on potential catbacks?
for those projects and then is a timing simulator peers at 2025 in service?
Yeah, we will be in service in 2025. We are running because there is traditionally followed by Abraham, but unfortunately not we can't get the
The contract is end in 2047. And all the time we gained before 2025, we will get the same price so we can...
have a longer contract at the end. There is some bonus system in it. So and we're working with different suppliers and hopefully come to a final investment decision or at least a decision to freeze.
the price of the equipment by before the end of this year. So we are, that's why when Nelson asked his question, I said, okay, we concentrate really on some project to be sure that we deliver this project in terms of execution. And that's typically what we do in on Wednesday's Ontarian project.
And the news on the price are on the green side for us presently. So we continue to discuss with suppliers. There is lots of interest from suppliers. There is good competition and there is good industrialized country suppliers who are providing good offers.
Okay, so we'll get a tap back figure upon FID. Yeah, yeah, I will come back when everything will be settled with the suppliers and be more open on that probably.
Okay, and maybe just one last thing. Just maybe a little bit early on this process, but some of your peers at the storage on the tax credits that they're planning to benefit from, they're planning to include that in EBITDA and recash flow.
in the first year. Do you plan to do something similar with accounting those tax credits?
Ben, we're not there yet. We'll see when we get more details on the ITC from the government.
We're not there yet. We'll see when we get more details on the ITC from the government. Thank you.
Thank you. We will now take our next question. Do you stand by?
Our next question comes from the line of Andrew Cusker from Credit Suisse. Please go ahead, your line is open. Thanks, good morning. There's some commentary in the MD&A on your sales teams trying to tap into a wider customer base. Maybe if you could just give us some color on the positioning that they take with the corporate community.
to try to attract PPAs and just how they're distinct and the BoralEx position is distinct from say some of your competitors? Essentially we are
We have the assets. First of all, there is not so much assets available without contract ready to sell electricity in France. The second point is, as Bruno mentioned, we have the EcoVadis.
First, a silver medal and now two gold medals, which is important because it's well-renowned in France. And this was, we started that after we signed a contract in 2019 with Orange. So Orange is a big known company.
And so we have an internal team with that.
Some way we started in 2017, the first guy in this team was 2017 when I was in France and so in this team we have people who are chasing for corporate PPE, modeling all the price of electricity for the next months and working on the tender when we make a bid on an RFP.
starting contract or selling electricity or the early termination. So in the same team we have the intelligence to understand really what are our options. So I think on the pricing this is good and on the branding we have also just hire somebody to improve our
Branding, she will work in public affair and marketing, specifically based in France. There was a lot of experience doing that, so I think it's also a way to differentiate ourselves. Like every supplier, we have to listen to the needs of our customers. We just signed a contract for a customer who was...
asking for many projects and we say okay we have one wind project, another wind project and a solar project and they say okay we buy when they will be finally authorized we would buy all the electricity for 20 years from these three projects so we had a very interesting negotiation.