Q2 2024 Innergex Renewable Energy Inc Earnings Call

Operator: Good morning, ladies and gentlemen. Thank you for sitting down.

Good morning, ladies and gentlemen, thank you for attending by welcome to Jack.

Operator: Welcome to Innergex Renewable Energy's 2024 second quarter conference call and webcast. Bienvenue à la conférence téléphonique et à la webdiffusion des résultats du deuxième trimestre de l'exercice 2024 d'Innergex Renewable Energy. At this time, all participants on the phone and the Internet are in a listen-only mode. Following the presentation, we'll conduct a question-and-answer session for analysts and institutional investors, and instructions will be provided at that time for you to queue up for questions.

Speaker Change: Nrg's 2024 second quarter conference call and webcast.

Speaker Change: Sydney.

Speaker Change: Sure.

Speaker Change: Mr. Nick Justice did it venkat.

Speaker Change: Thank you.

Speaker Change: A new fab.

Speaker Change: At this time, all participants on the phone and Internet are in a listen only mode.

Speaker Change: Following the presentation, we will conduct a question and answer session for analysts and institutional investors and instructions will be provided at that time for you to queue up for questions.

Operator: If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded. I would now like to turn the conference over to Naji Baydoun, Director of Investor Relations. Please go ahead. Thank you.

Has any difficulties hearing the conference. Please press star followed by zero.

Speaker Change: And assistance at any time.

Speaker Change: I'd like to remind everyone that this conference call is being recorded.

Speaker Change: Like to turn the conference over to <unk>.

Speaker Change: Director of Investor Relations. Please go ahead.

Naji Baydoun: Hello everyone, and thank you for joining us today. I'd like to specify that this conference will be held in English. Members of the media are invited to ask their questions by phone after this call. A presentation supporting today's discussion is available as we speak on the homepage of our website at www.innergex.com. This call contains forward-looking statements within the meaning of applicable securities laws. Although the Corporation believes that the expectations and assumptions on which forward-looking statements are based are reasonable under the current circumstances, listeners are cautioned not to rely unduly on these forward-looking statements as no assurance can be given that they will prove to be correct.

Speaker Change: Hello, everyone and thank you for joining us today I'd like to specify that this conference will be held in English members of the media are invited to ask their questions by phone after this call.

Speaker Change: A presentation supporting today's discussion is available as we speak on the homepage of our website at Www Dot <unk> Dot com.

Naji Baydoun: Forward-looking information contained herein is made as of the date of this call, and the corporation does not undertake any obligation to update or revise any forward-looking information, whether as a result of events or circumstances occurring after the date hereof, unless so required by law. During this call, we will refer to financial measures that are not recognized according to international financial reporting standards. Please refer to the non-IFRS measure section of the MD&A for more information.

Speaker Change: This call contains forward looking statements within the meaning of applicable securities laws, Although the corporation believes that the expectations and assumptions on which forward looking statements are based are reasonable under the current circumstances listeners are cautioned not to rely unduly on these forward looking statements as no assurance can be given that it will prove to be correct.

Speaker Change: Forward looking information contained herein is made as at the date of this call and the corporation does not undertake any obligation to update or revise any forward looking information whether as a result of events or circumstances occurring after the date hereof, unless so required by law.

Speaker Change: During this call we will refer to financial measures that are not recognized according to international financial reporting standards. Please refer to the non <unk> measures section of the MD&A for more information.

Naji Baydoun: On today's call, we will discuss highlights for the quarter, growth and development updates, our Q2 2024 results and highlights, and our 2024 guidance and financial outcomes. Our speakers will be Michel Letellier, President and Chief Executive Officer, and Jean Trudel, Chief Financial Officer. I will now turn the conference over to Michel Letellier.

John <unk>: On today's call, we will discuss highlights for the quarter growth and development updates our Q2, 'twenty 'twenty four results and highlights and our 2020 for guidance and financial outlook. Our speakers will be Michel Letellier, President and Chief Executive Officer, John <unk>, Chief Financial Officer.

Speaker Change: I'll now turn the conference over to Michele.

Michel Letellier: Thank you, Naji. Good morning, everybody.

Michele: Thank you Angie good morning, everybody.

Speaker Change: Thank you for joining us.

Speaker Change: We had a little bit of a week.

Michel Letellier: Thank you for joining us. We had a little bit of a weak quarter regarding resources, but we are concentrating ourselves on what we can control. And on that, I'm happy to report that our team did a great job in maintaining the availability of the assets at over 96% on a portfolio basis. So, thanks to them, this is what we can do, making sure that we can produce what comes to us.

Speaker Change: Water regarding the resources, but.

Michele: We are concentrating ourself in what we can control and on data I'm happy to report that our team did a great job in maintaining the availability of the assets over 96% on a portfolio basis. So.

Speaker Change: Dan. This is what we can do making sure that we can produce what comes to us and resources as we always said we wanted to make sure that we have a diversified portfolio.

Michel Letellier: And resources, as we always said, we want to make sure that we have a diversified portfolio, both in terms of geography and technology, and our development effort is making sure that we are growing that diversification. In terms of maintaining our focus on discipline and sustaining our growth strategy, as you all know, we're working hard on building our prospective portfolio and entering RFPs, but we will stay focused and disciplined in pricing. As an example, we did participate in the last Chilean Disco RFP, but we didn't win anything.

Speaker Change: In terms of <unk> and technology and our effort that development is making sure that we are growing that.

Speaker Change: Diversification.

Speaker Change: In terms of maintaining our focus on disciplined and sustaining growth strategy as you all know we're working hard on building our.

Speaker Change: Prospective portfolio and answering RF rfps, but we will.

Michele: Stay focused and disciplined in the pricing as an example, we did participate in the last Chilean this RFP.

Speaker Change: We then win anything Theres, one big winner there that when I think too aggressive in the pricing anyway.

Michel Letellier: There's one big winner there that went, I think, too aggressive in the pricing anyway, below what we had won recently in the Codelco RFP, so we will be maintaining our discipline, and we have plenty of opportunity for RFPs. We are building our portfolio of prospective partners to give us some flexibility in that case, so we'll remain disciplined in those great opportunities that we are focusing on and that we are seeing. Also, we are very focused on continuing to execute on our priorities. A good example is the closing of the transaction in Texas.

Michele: Below what we had one.

Michele: Recently in the Codelco RFP, so we will be maintaining our discipline and we have plenty of opportunity of RFP. We are building our portfolio off perspective to give us some flexibility in that case. So we will remain disciplined.

Michele: And those are great opportunity that we are focusing we are seeing.

Michele: Also very focused on continuing executing on our priorities are good example is the closing of the transaction in Texas.

Michel Letellier: Jean is going to give you a little bit more detail about it, but we're very happy to have de-risked the portfolio in Texas. As you all know, we had the power edge there. Our last power edge is now gone, so pretty happy about this transaction. It's providing us more flexibility and has enhanced a little bit our liquidity, so a good outcome on this one. Next slide.

Michele: John is going to give you a little bit more detail about it but very happy.

John: Happy to have de risked.

John: The portfolio in Texas that you all know we had the.

John: Power edge there in our last power edge is now gone so pretty happy on this transaction is providing us more flexibility and enhanced a little bit our liquidity. So good.

John: Good outcome on this one.

John: Thanks.

John: Next slide.

John: Recent achievement in terms of.

Michel Letellier: Recent achievement in terms of the quarter on the operation, very pleased to have commissioned the St. André's Best project in Chile. Also, in this world, it's good news to have been able to have $5 million in their budget, so this is how we like them, and obviously, we'll try to focus on this going forward. So far, the operation in Salvador and St. Andre's, in terms of upper cash, is doing great. The batteries are doing what they were supposed to do, and we're pleased with that investment in the operation of the batteries in Chile.

John: Quarter.

John: On the operation very pleased to have commissioned the Santander.

John: Best project in Chile.

John: Also in this world. It's good news to have been able to add $5 million under budget. So this is how we like that.

John: And obviously, we will try to focus on.

John: Is that going forward so.

John: So far the operation in.

Speaker Change: It sounds I don't want to pin down today is in terms of arbitrage is doing great.

John: The battery are doing what they were supposed to do and we're pleased with that investment in the <unk>.

John: Operation of the batteries in Chile.

John: Non construction, we're at we are advancing very well Colin Boswell, we have now more than 60 turbine erected over 90.

Michel Letellier: Development in construction; we are advancing very well on Boswell. We have now more than 60 turbines erected, and more than 90 are planned. Very happy with the execution, even though it's kind of sad because we had a lot of wind this spring, which slowed down a little bit the erection of turbines, but that gives you a good idea that if we had been in operation in this area this summer or early spring, it would have contributed to diversification.

John: Very happy on the on the execution, even though.

Speaker Change: It's kind of sad because we had a lot of win.

John: This spring that has slowed down a little bit.

John: Erection of turbines, but that gives you a good idea that if we would have when if we would have been in operation.

John: In this area this summer or early spring you would have country viewed it to the diversification. So that's what I mean, when we want to be more diversified in terms of geographic and technology.

Michel Letellier: So that's what I mean when we want to be more diversified in terms of geography and technology. So it's a good segue towards saying that we want this project to be in service by the end of the year, and everything is working towards that goal. Working hard also on Alecoy, a smaller project, but nonetheless important for us to make sure that we put that in commissioning by the end of the year. It might be tight there, but we're getting very close to commissioning that project as well. Working hard on the 80, 182 megawatts of projects in development. You know that some of those projects are already having some BPA.

John: So it's a good it's a.

John: Good segue to words, saying that.

John: We want this.

Speaker Change: Project to be in service by the end of the year and everything is working towards that.

John: Joel.

Speaker Change: Working hard also on Alec OE is smaller project Nonetheless important for us to make sure that we.

Speaker Change: Put that in commissioning by the end of the year.

Speaker Change: Might be tight there, but we're getting very close to the commissioning of that place of that project as well.

Speaker Change: Working hard on the 882 megawatt of project in development.

Speaker Change: You know that some of those projects are already.

Speaker Change: Having some PPA. So we're working hard to create value there in advancing these projects to make sure that they are becoming under construction in the next.

Michel Letellier: So we're working hard to create value there and advancing these projects to make sure that they become under construction in the next few months and quarters. 2024 will be very busy in terms of RFPs and BPAs. You all saw that we signed the 400 megawatt project in Quebec. Both Project Labigny and Pichou-Napéo were signed, so a great contract, 30 years. Remember that this contract also has CPI built into them, so we like this type of contract.

Speaker Change: A few months and quarters.

Speaker Change: 2024 will be very busy busy in terms of RFP and DPA as you all.

Speaker Change: So that we signed 400 megawatt project.

Speaker Change: Quebec.

Speaker Change: Both.

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Speaker Change: Yeah.

Speaker Change: And b tissue that Vale.

Speaker Change: Sign so great contract 30 years remember that these contract is also CPI built into them. So we like these type of contract happy also to have the.

Michel Letellier: I'm also happy to have re-extended or renegotiated the 25-year BPA for our partner hydro facility with Hydro-Québec with full CPI, so that's a good segue for Jean, who is going to give you some color on our initiative to refinance these three hydro facilities. We also have, as we said, portfolio management. We just talked about Texas. I think it's a good example of what we can do to improve our portfolio both in providing more flexibility in financing and also de-risking, when it's possible, our portfolio to enhance the total portfolio risk profile. Next slide.

Speaker Change: <unk>.

Speaker Change: Extended or.

Speaker Change: Renegotiated the 25 years PPA for our partner Hydro facility with hydro, Quebec with full CPI.

Speaker Change: So that's a good good segue for us.

Speaker Change: John's going to give you some some.

John <unk>: The color on our initiatives to refinance these three hydro facilities.

Speaker Change: We also have as we said the portfolio management, we just talk about Texas I think it's a good example of what we can do to improve our portfolio both in providing more flexibility in financing and also derisking when it's possible.

Speaker Change: Our portfolio to enhance the total portfolio.

Speaker Change: <unk>.

Speaker Change: Profile.

Speaker Change: Next.

Speaker Change: Slide.

Michel Letellier: The visible growth on our SECURE project, we just saw that the operating asset has gone up by 35 megawatts, this is Saint-Andrès being now in operation, working as we just said on Boswell and Nalicoé for the 390 megawatts of projects under construction to be done by the end of the year, and we have the high-visibility project of 882 megawatts. I'd like to perhaps stress the Palomino in this, this is a 200-megawatt solar project. If you remember, in Ohio, we are still waiting for the final interconnection study and timing, but this apparently is getting to the end. We hope to have it by the end of September or beginning of October, so that we can now secure the schedule for the contractor and the supply agreement.

Speaker Change: The visible growth on <unk>.

Speaker Change: Our <unk> project.

Speaker Change: We just saw that the operating asset has gone up by <unk> <unk> five megawatt business and then as being now in operation.

Speaker Change: Working at.

Speaker Change: We just said on Boswell and Natalie Kuwait for the 390 megawatt of project under construction to be done by the end of the year and we have the high visible daily project of 882 megawatt.

Speaker Change: Two perhaps trask.

Speaker Change: Stress the palomino.

Speaker Change: This is a 200 megawatt solar project, if you remember in Ohio.

Speaker Change: We are still waiting for the final interconnection study and timing, but is that currently is getting to the end we hope to have it by the end of September beginning of October.

Speaker Change: We can now secure.

Speaker Change: The schedule for the contractor and the.

Speaker Change: Supply agreement happy to report that PJM capacity auction was much higher than that we haven't stated and the early discussion that we are having with the offtake for palomino.

Michel Letellier: I'm happy to report that the PGM capacity auction was much higher than we had anticipated, and the early discussions that we're having with the offtake for Palomino are very, very positive. The price for electricity in PGM is going up for renewable energy, so that looks very promising for Palomino, so we cannot wait to have this final study at the end and be able to go forward with Palomino. MU2 is entering the last negotiation with the contractor and the supplier; this project should be going forward in 2026 with our partner, the Mi'kmaq community of the Gaspé Peninsula.

Speaker Change: Very very positive.

Speaker Change: Price for electricity in PGM is growing up for renewable energy so that looks very promising for palomino. So we cannot wait to have final study and.

Speaker Change: And being able to go forward with palomino.

Speaker Change: And Youtube is entering in the last negotiation with the contractor into supplier. This.

Mike: This project should be going forward in 2004 2026 with our partner then make Mike.

Speaker Change: Community of guests be peninsula.

Michel Letellier: Also, I just mentioned that we have signed both the Pichinapao and Labignac projects in Quebec and are working hard, of course, to build projects in the next RFP we're getting to talk about next slide. We have a large and diversified portfolio of prospective projects. As I said, we want to make sure that this portfolio is giving us flexibility and optionality for us to bid in different markets. We want to bid on and be prepared to participate in RFPs in all our markets. And the idea is to have optionality to make sure that we have the luxury of selecting the projects we want to bid on and making sure that these bids will be profitable for the future.

Speaker Change: Also just mentioned that we have signed both.

Speaker Change: This unit.

Speaker Change: And loving our project in Quebec, and working hard of course to build project in <unk>.

Speaker Change: We're getting.

Speaker Change: To talk about it next slide.

Speaker Change: Yes.

Speaker Change: We have a large and diversified portfolio of <unk> project as I said, we want to make sure that.

Speaker Change: This portfolio is giving us flexibility.

Speaker Change: And optionality for us to bid in different market, we want to bid and be prepared to participate in RFP in all our market and the idea is to have.

Speaker Change: Chanel at ease to make sure that we have.

Speaker Change: The luxury to select the projects, we want a bit and make sure that these bid will be profit both for the for the future.

Michel Letellier: To give you a little bit of a comment on the more than 9,000 gigawatts of projects we have in the development stage, when we say early, mid, and advanced, that doesn't mean that early projects cannot be bid in RFPs, especially in Canada. Early projects, just a reminder, we all have, when we enter this project in this category, we all have land secured and usually also some good visibility on the resources. That doesn't mean that we cannot have an early project being bid in Canada; as an example, Quebec could be, also BC.

Speaker Change: To give you a little bit of a.

Speaker Change: Yes.

Speaker Change: Just to I would say a comment on the nine more than 9000 gigawatt project, we have on the development stage when.

Speaker Change: When we say early mid in advance.

Speaker Change: That doesn't mean that early project cannot be bid in RFP, especially in Canada.

Speaker Change: Early project just a reminder, we all have when we Hansard. These project in these category. We all have land secured and usually also some some good visibility on the resources so that doesn't mean that.

Speaker Change: We cannot have an early project.

Speaker Change: Being bid in in Canada, as an example could be could be Quebec would be also b C. So we have a lot of project.

Michel Letellier: We have a lot of projects in Canada, particularly in Quebec, to be able to use for bidding in Canada. We're happy also to say that Canada, as we mentioned, is prone, or I guess we see this possibility, to see the Canadian opportunity in the next decade to almost double the size of renewable energy. So we will be very focused on all the markets in Canada, except Alberta, for you know that we have some restrictions in our strategy in Alberta.

Speaker Change: In Canada.

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Innergex Renewable Energy's 2024 second quarter conference call and webcast.

Speaker Change: Particularly.

Speaker Change: To be able to use for bidding in.

Speaker Change: Canada, We're happy also to say that Canada, as we mentioned is prone or.

Operator: Bienvenue à la Conférence téléphonique et à la web de fusion des résultats du 2e primaire de l'exercice de l'Adventcate de NRG Renouvelab. At this time, all participants on the phone and internet are in a listen only mode. Following the presentation, we'll conduct a question and answer session for analysts and institutional investors. And instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please best start followed by zero for all per order assistance at any time. I would like to mind everyone that this conference call is being courted.

Speaker Change: That we see this this possibility.

Speaker Change: You see the Canadian.

Speaker Change: Our opportunity in the next decade to almost double the size of renewables NRG. So we will be very focused on all the market in Canada, except Alberta.

Speaker Change: For you know that.

Speaker Change: We have some some restriction.

Speaker Change: Our strategy in Alberta, but for the rest of Canada.

Speaker Change: We will be very busy, Ontario will be a great market as well so we are.

Naji Baydoun: I would like to spend a conference over to Naji Baydoun, Director and Vester Relations. Please go ahead.

Speaker Change: Improving and then getting ready more and more on ground to make sure that we have a lot of prospective project also in all the different market in Canada.

Naji Baydoun: Hello everyone and thank you for joining us today. I'd like to specify that this conference will be held in English. Members of the media are invited to ask their questions by phone after the call. A presentation supporting today's discussion is available as we speak on the homepage of our website at www.energex.com. This call contains forward-looking statements within the meaning of applicable securities laws. Although the corporation believes that the expectations and assumptions on which forward-looking statements are based are reasonable under the current circumstances, listeners are cautioned not to rely on Uli on these forward-looking statements as no assurance can be given that it will prove to be correct.

Michel Letellier: But for the rest of Canada, we will be very busy. Ontario will be a great market as well. So we are improving and getting ready more and more on the ground to make sure that we have a lot of prospective projects also in all the different markets in Canada. Now, I will pass a presentation on the operation's highlights to Jean. Thank you, Michel. Good morning, everyone.

Speaker Change: Well I, just now I'll pass to John.

John <unk>: A presentation on the operating highlights.

John <unk>: You, Michelle and good morning, everyone.

Naji Baydoun: Forward-looking information contained herein is made as at the date of this call and the corporation does not undertake any obligations, updates or revise any forward-looking information, whether as a result of events or circumstances occurring after the date, hereafter unless so required by law. During this call, we will refer to financial measures that are not recognized according to international financial reporting standards. Please refer to the non-IFRS measure section at the NBNA for more information. On today's call, we will discuss highlights for the quarter, growth and development updates, our Q224 results and highlights, and our 2024 guidance and financial outlook.

Jean Trudel: So, starting with the operational highlights for the quarter, production in the quarter was 91% of LTA, similar to results in Q2 2023. In the quarter, generation was primarily impacted by below-average wind regimes in most of our market, as well as lower irradiance and economic curtailment in the U.S. and Chile, and lower water flows in B.C. These elements were partially upset by strong hydro generation in our Quebec and Chilean portfolios as well as higher wind production in the U.S. and Chile.

John <unk>: Starting with the operational highlights for the quarter production in the quarter was 91% of <unk>.

Speaker Change: <unk> similar to results in Q2 2023 in the quarter generation was primarily impacted by below average wind regimes in most of our markets as well as lower irradiance and economic curtailment in the U S and Chile and lower water flows at NBC.

John <unk>: These elements were partially offset by strong hydro generation, and our Quebec, and Chilean portfolios as well as higher wind productions in the U S and Chile.

Jean Trudel: As Michel mentioned, we remain extremely focused on controllable factors, such as maintaining high asset availability. To this effect, we are pleased with the 96% overall asset availability in the quarter. We remain committed to our portfolio diversification strategy, which we believe will help us mitigate overall resource risk over time.

John <unk>: As Michel mentioned, we remain extremely focused on controllable factors, such as maintaining a high asset availability to.

Michel: To this effect, we are pleased with the 96% overall asset availability in the quarter.

John <unk>: We remain committed to our portfolio diversification strategy, which we believe will help us mitigate overall resource risk overtime.

John <unk>: And looking at our financial performance in the quarter, we reported adjusted EBITDA proportionate of $184 million, approximately 8% lower year over year, although generation at 91% of LTA was similar to Q2 2023 performance our financial results were impacted by generation.

Jean Trudel: Looking at our financial performance in the quarter, we reported adjusted EBDA proportionate of $184 million, approximately 8% lower year-over-year. Although generation at 91% of LTA was similar to Q2 2023 performance, our financial results were impacted by generation mix as some of our higher-priced portfolios, such as the Quebec and France wind assets and the BC hydro assets generated lower production year-over-year. Our solar portfolio was also impacted by lower irradiance and curtailments in Chile and the U.S.

Operator: Our speakers will be Michelle Letelier, President and Chief Executive Officer, and Jean Trudeau, Chief Financial Officer.

Naji Baydoun: I will answer the conference over to Michelle Letelier. Thank you, Energy.

Michel Letellier: Good morning, everybody. Thank you for joining us. We had a little bit of a week quarter regarding the resources, but we are concentrating ourself in what we can control, and on that I'm happy to report that our team did a great job in maintaining the availability of the assets over 96 percent on a portfolio basis. So thanks to them, this is what we can do, making sure that we can produce what comes to us.

John <unk>: Mix as some of our higher price portfolios, such as the cubic's in France wind assets and the BC hydro assets generated lower production year over year. Our silver portfolio was also impacted by lower irradiance and curtailments in Chile, and the U S. This was partially offset by better generation it.

Jean Trudel: This was partially offset by better generation at our Chilean and Quebec hydro facilities, which were above LTA for the quarter, as well as improved production from our U.S. and Chilean wind portfolios. Our corporate expenses have increased year over year, mainly due to our increased investment in greenfield activities, which we believe will translate into profitable growth over time. We remain focused on maintaining cost discipline within the overall business and will prudently deploy our resources to generate accretive investments.

John <unk>: Our Chilean and Quebec, hydro facilities, which were above LTA for the quarter as well as improved production from our U S and Chilean wind portfolios.

Michel Letellier: And resources, as we always said, we want to make sure that we have a diversified portfolio, both in terms of geography and technology, and our effort of development is making sure that we are growing that diversification. In terms of maintaining our focus on discipline and sustaining growth strategy, as you all know, we're working hard on building our prospective portfolio and entering RFPs, but we will stay focused and discipline in the pricing.

John <unk>: Our corporate expenses increased year over year, mainly due to our increased investment in greenfield activities, which we believe will translate into profitable growth over time.

John <unk>: We remain focused on maintaining cost discipline within the overall business and we will prudently deploy our resources to generate accretive investments.

Jean Trudel: Free cash flow during the quarter was $51.8M or $0.26 per share compared to $0.09 per share in Q2 2023. The main drivers of the year-over-year change in free cash flow are the gain on disposition of non-controlling interests from the Texas transaction, as well as lower finance costs paid mostly due to the timing of debt payments, partially offset by the same items that impacted EBITDA year-over-year. As of the end of Q2, the total debt amounted to $6.4 billion, down from $6.5 billion in Q1 2024.

John <unk>: Free cash flow during the quarter was $51 8 million or 26 cents per share compared to <unk> <unk> per share in Q2 2023.

Michel Letellier: As an example, we did participate in the last Chilean disco RFP. We didn't win anything. There's one big winner there that, when I think to aggressive in the pricing, anyway, below what we had won recently in the Cadelco RFP, so we will be maintaining our discipline, and we have plenty of opportunity of RFPs. We are building our portfolio of prospective to give us some flexibility in that case. So we'll remain disciplined in those great opportunities that we are focusing on.

John <unk>: The main drivers of the year over year change in free cash flow are the gain on disposition of noncontrolling interests from the Texas transaction as well as lower finance cost paid mostly due to the timing of debt payments, partially upset by the same items that impacted EBITDA year over year.

John <unk>: As of the end of Q2, the total debt amounted to $6 4 billion down from $6 5 million in Q1 2020 for the quarter over quarter decrease is primarily due to the deleveraging of our Texas assets concurrent with the sale of minority interest in our portfolio in the states.

Jean Trudel: The quarterly-over-quarter decrease is primarily due to the deleveraging of our Texas assets, concurrent with the sale of minority interest in our portfolio in the States. Overall, our debt profile remains highly fixed or hedged with minimal overall exposure to floating rates. With most of our debts being at the project level, we will continue to prioritize non-recourse debt as the primary funding tool for new project development. We remain comfortable with our self-amortizing project debt structure, with all of our existing project debts expected to be fully paid off in line with our remaining PPA terms. This is well below our estimated remaining portfolio use for life, as you know, so it's providing Innergex with important refinancing and recontracting.

John <unk>: Overall, our debt profile remains highly fixed or hedged with minimal overall exposure to floating rates with most of our debt being at the project level. We will continue to prioritize nonrecourse debt as the primary funding tool for new project development.

Michel Letellier: We are seeing also very focused on continuing, executing on our priorities. A good example is the closing of the transaction in Texas. John is going to give you a little bit more detail about it, but very happy to have the risk of the portfolio in Texas. As you all know, we had the power edge there. Our last power edge is now gone. So pretty happy on this transaction is providing us more flexibility, and enhance a little bit our liquidity. So good outcome on this one.

John <unk>: We remain comfortable with our self amortizing project debt structure with all of our existing project that is expected to be fully paid off in line with our remaining PPA storms.

John <unk>: This is well below our estimated remaining portfolio useful life as you know so it's providing interject with important refinancing and re contracting optionality.

Jean Trudel: From a liquidity standpoint, we continue to maintain adequate levels of available capital to fund our growth initiatives. In Q2 2024, we repurchased $2.5 million worth of shares under our NCIB. Going forward, the magnitude and timing of share buybacks will remain dependent on several key variables, including our funding needs, the future success of our portfolio management initiatives, and the trading level of our shares.

John <unk>: From a liquidity standpoint, we continue to maintain adequate levels of available capital to fund our growth initiatives.

Michel Letellier: Next slide. The recent achievement in terms of quarter on the operation, very pleased to have commissioned the Centandra's Best Project in Chile. Also, in this world, it's a good news to have been able to have about $5 million on their budget. So this is how we like them, and obviously we'll try to focus on this going forward. So far, the operation in San Lado and Centandra is in terms of opportunities doing great.

John <unk>: In Q2, 2024, we repurchased two $5 million worth of shares under our CIB.

John <unk>: Forward, the magnitude and timing of share buybacks will remain dependent on several key variables, including our funding needs to future success on portfolio management initiatives and the trading level of our shares.

Jean Trudel: Looking ahead of the rest of the year, we remain focused on executing on additional portfolio management activities to further strengthen our financial flexibility and increase liquidity. As mentioned, we recently signed a 25-year full inflation index BPA for the Parneuf Hydro portfolio in Quebec. And with this important milestone now achieved, we are advancing with our second hydro refinancing initiative, and we expect to complete this by year-end with a target to obtain an incremental liquidity of around $80 million.

John <unk>: Looking ahead of the rest of the year, we remain focused on executing on additional portfolio management activities to further strengthen our financial flexibility and increased liquidity.

Michel Letellier: The battery are doing what they were supposed to do, and we're pleased with that investment and the operation of the batteries in Chile. The development on construction, we are advancing very well on Boswell. We have now more than 60 turbine erected over 90, very happy on the execution even though it's kind of sad because we had a lot of wind this spring that has slowed down a little bit the direction of turbines, but that's give you a good idea that if we would have wind, if we would have wind, or early spring, it would have contributed to the diversification.

John <unk>: As mentioned, we recently signed a 25 year full inflation index BPA for the partner hydro portfolio in Quebec.

John <unk>: And with this important milestone now achieved we are advancing with our second hydro refinancing initiative and we expect to complete this by year end with a target to obtain an incremental liquidity of around $80 million.

Jean Trudel: We are also encouraged about the recent passing of legislation in Canada that implements a new 30% ITC, or Investment Tax Credit, for clean power projects. We believe this program will provide significant benefits for renewable energy development, helping to accelerate the deployment of clean energy power capacity in Canada. As for our existing projects, we believe that our three Quebec wind projects under development, namely MU2, Le Binière, and Pechunapu, all stand to benefit from this program.

John <unk>: We are also encouraged about the recent passing of legislation in Canada that implement a new 30% ITC or investment tax credit for clean power projects.

John <unk>: We believe this program will provide significant benefits for renewable energy development, helping to accelerate the deployment of clean energy power capacity in Canada.

John <unk>: As for our existing projects, we believe that our three Quebec wind projects under development, namely <unk> <unk> and <unk> all stand to benefit from this program. This represents a total of 502 megawatt of capacity that could see upside from the ITC program. As these projects were all bid without.

Michel Letellier: So that's what I mean when we want to be more diversified in terms of geography and technology. So it's a good segue towards saying that we want this project to be in service by the end of the year and everything is working towards that goal. Working hard also on Alicoy, a smaller project, and the last important for us to make sure that we put that in commissioning by the end of the year.

Jean Trudel: This represents a total of 502 MW of capacity that could see upside from the ITC program as these projects were all bid without this benefit. For the remainder of 2024, our CAPEX budget is fully funded from construction loans in place and or our available liquidity, and there are no material changes to our full-year CAPEX outlook.

John <unk>: This benefit.

John <unk>: For the remainder of 2024, our Capex budget is fully funded from construction loans in place and or.

John <unk>: Our available liquidity.

John <unk>: And there are no material changes to our full year Capex outlook.

Michel Letellier: It might be tight there, but we're getting very close to the commissioning of that place, of that project as well. Working hard on the 1882 megawatt of project in the development, you know that some of those projects are already having some PPA. So we're working hard to create value there and advancing this project to make sure that they're becoming on the construction in the next few months and quarters.

Jean Trudel: We remain committed to managing our corporate leverage and to our self-funded organic growth business model. Therefore, given our performance so far this year and the outlook for the second half of 2024, we are today reaffirming our full-year guidance for 2024. As previously discussed, we expect adjusted EBITDA proportionate to be in the range of $725 to $775 million and free cash flow per share before prospective expenses to be in the range of $0.70 to $0.85 per share.

John <unk>: We remain committed to managing our corporate leverage and to our self funded organic growth business model.

John <unk>: So given our performance so far this year and the outlook for the second half of 'twenty 'twenty four we are today reaffirming our full year guidance for 2024.

John <unk>: As previously discussed we expected we expect adjusted EBITDA proportionate to be in the range of $725 million to $775 million.

John <unk>: And free cash flow per share before perspective expenses to be in the range of 70 to 85 cents per share.

Michel Letellier: 2024 will be very busy in terms of RFP and DPAs. You all saw that we signed the 400 megawatt project in Quebec, both project Labinier and Pichounapeo were signed. So great contract, 30 years. Remember that this contract has also CPI built in in to them. So we like these type of contract. Happy also to have re-extended or renegotiated the 25 years PPA for our partner Fibro facility with Hyper Quebec with full CPI.

Jean Trudel: Despite production in Q2 being below our expectations, we remain confident in our ability to achieve our guidance and will continue to update the market on how we are tracking each quarter. As new projects come online in 2024, we expect to deliver more growth in 2025. Further success and development will also be a key driver of our longer-term success. I'll now give the floor back to Michel for an update on our 2024 corporate priorities and closing remarks. Thank you. Thank you, Jean.

John <unk>: Despite production in Q2 being below our expectations, we remain confident in our ability to achieve our guidance and we will continue to update the market on how we are tracking each quarter.

John <unk>: As new projects come online in 2024, we expect to deliver more growth in 2025.

John <unk>: Further success in development would also be a key driver of our longer term success.

John <unk>: We'll now give the floor back to Michelle for an update on our 2020 for corporate priorities and for closing remarks. Thank you. Thank you.

Michelle: So <unk>.

Michel Letellier: Of course, we will be focusing on construction activities. The two last projects, as I mentioned, are paramount for us to make sure that our team is delivering these projects on budget and on time. We are working hard on this. Development is definitely a big portion of our activities in 2024 and in the future. We said that we wanted to bid on at least 500 megawatts in upcoming RFPs, and we want to win 400 megawatts.

Michelle: Of course, we will be focusing on construction activities. The two last project as I mentioned is paramount for us to make sure that our team are delivering these projects on budget and on on timing So working hard on this.

Michel Letellier: So that's a good segue for Jean's going to give you some color on our initiative to refinance these three hydrofaciliters. We also have, as we said, a portfolio management. We just talk about Texas.

Michelle: Development is definitively big portion of our activities.

John <unk>: In 2024 and in the future.

John <unk>: We said that we wanted to bid. Please 500 megawatt in upcoming Rfps and we want to win 400 megawatt that ratio seems to be high but on the other end I think that we.

Michel Letellier: I think it's a good example of what we can do to improve our portfolio, both in providing more flexibility in financing and also de-risking when it's possible our portfolio to enhance the total portfolio risk profile. As a slide, the visible growth on our secure project, we just saw that the operating asset has gone up by 35 megawatts. This is intense as being now in operation, working as we just said on Boswell and Nallik away for the 390 megawatts of project under construction to be done by the end of the year. We have the high-visilability project of 882 megawatts.

Michel Letellier: That ratio seems to be high, but on the other end, I think that we wanted to be just a little bit conservative in the numbers of megawatts that we are going to bid. We never like to say how many bids we put in RFPs, particularly RFPs, in terms of being a little bit cautious of competition. We have already bid on two RFPs in Chile, as you know. We won on Codelco, roughly 125 megawatts.

John <unk>: We wanted to be just a little bit conservative in the numbers of megawatts and we're going to bid we never like to say, how many bids we put in in Rfps.

John <unk>: Fees in terms of.

John <unk>: We're a little bit cautious of.

John <unk>: Competition, but we already.

John <unk>: Bid to two Rfps in Chile as you know we won on Codelco roughly 125 megawatt.

John <unk>: We have been also in Saskatchewan and solar.

Michel Letellier: We have also bid in Saskatchewan for solar. Our intention is to be a big participant in the upcoming RFP for BC and, obviously, always on the lookout to participate in Quebec. I think that Quebec this year will be tied to have a new RFP, given the fact that Hydro-Quebec has also talked about being a very proactive developer on big projects. I think that we're very well positioned because of our experience and our knowledge of the market in Quebec.

John <unk>: We are our intention is to be big parts of it has been in the upcoming.

John <unk>: RFP for BC, and obviously always on the lookout to participate in in Quebec, I think that Quebec. This year will be tied to have a new RFP.

Michel Letellier: I'd like to perhaps stress the Palomino in this. This is a 200 megawatts solar project if you remember in Ohio. We are still waiting for the final interconnection study and timing. But this apparently is getting to the end. We hope to have it by the end of September, beginning of October, so that we can now secure all the scheduled for the contractor and the supply agreement. Happy to report that PGM capacity auction was much higher than we had anticipated.

John <unk>: Given the fact that hydro Quebec has also.

John <unk>: Talked about being.

John <unk>: Very proactive lopper on Big project.

John <unk>: I think that we're very well positioned throughout with our experience and knowledge of the.

John <unk>: Market in Quebec.

Michel Letellier: Very good experience, as you all know, with First Nations participation, and we think that all these things will be considered in being a potential partner with Hydro-Quebec and First Nations for these megaprojects. I think that we're going to be there in terms of a potential partner for all these big projects in Quebec, and we see that as a good opportunity. I think that Hydro-Quebec, by demonstrating its willingness to have these big projects, is committed to having more wins in the Quebec portfolio and is willing also to interconnect these big mega-projects on high-voltage lines that were not available in the past.

John <unk>: Very good experience as you all know with first nations participation.

John <unk>: And we think that all of these things will be considered.

Patel: <unk> Patel.

John <unk>: Potential partner with Hydro, Quebec, and first nations for visa Mega project.

Michel Letellier: The early discussion that we're having with the off-take for Palomino are very positive. The price for electricity in PGM is going up for renewable energy, so that looks promising for Palomino. So we cannot wait to have this final study at the end and being able to go forward with Palomino. NU2 is entering in the last negotiation with the contractor and the supplier.

John <unk>: We're going to be there in in terms of potential partner for all these big project in Quebec, and we see that as a grid a good opportunity I think that hydro Quebec.

John <unk>: Demonstrating their willingness to have these big project.

John <unk>: Our committed to have more win in in Quebec portfolio and are willing also to interconnect. These big Mega project on high voltage.

Michel Letellier: This project should be going forward in 42026 with our partner, the MIGMAC community of the Gaspé Peninsula. Also just mentioned that we have signed both the Pichinapau and Lubinap project in Quebec and working hard, of course, to the project in the next RFB we're getting to talk about it next slide. We have a large and diversified portfolio of prosthetic project. As I said, we want to make sure that this portfolio is giving us flexibility and optionality for us to bid in different markets.

John <unk>: Line that we're actually we're not <unk> in the past so I think that it's a commitment of hydro Quebec to make sure that there will be more win in Quebec, and it's all good for us It makes more opportunity for us in the future for Quebec, I mentioned also that the remaining part of Canada.

Michel Letellier: So, I think that it's a commitment of Hydro-Quebec to make sure that there will be more wins in Quebec, and it's all good for us. It creates more opportunities for us in the future. I mentioned also that the remaining part of Canada is, for us, a great focus. We want to be participating in all the markets that we have. We have the U.S., we have France, we have Chile, but we have a little bit of a focus on Canada because, as we all mentioned, it's a big opportunity in the RFP, and we think we can be competitive there.

John <unk>: Is for us a great focus we want to be also participating in all the market that we have we had the U S. We have friends we have Chile.

Speaker Change: But we have a little bit of a focus on Canada, because as we all mentioned.

Speaker Change: There are big opportunities in RFP, and we think we can be competitive there.

Michel Letellier: We want to bid and be prepared to participate in RFB in all our market and the idea is to have opportunities to make sure that we have the luxury to select the project we want to bid and make sure that these bid will be profitable for the future. I would say a comment on the more than 9,000 gigawatts of a project we have on the development stage. When we say early, mid and advanced, that doesn't mean that an early project cannot be bid in RFB especially in Canada.

Michel Letellier: Financing, as Jean is saying, we're advancing well. We're positioning ourselves to refinance on hydro. The transaction in Texas is also providing some flexibility and some de-risking of the portfolio. So, we're striving to enhance our portfolio profile both in terms of flexibility, risk, and reward. Just as a, maybe as a little bit of an editorial this morning, I was reading the Lafayette this morning, and a very interesting article about July 2024 was basically breaking 13 months of record-breaking heat in the last 13 months, and July came and broke that record just being shy of July 2023.

Speaker Change: Our financing as Johnny is saying, we are advancing well, we're positioning ourself to refinance some hydro.

Johnny: Transaction in Texas is also providing some flexibility and some derisking of the portfolio. So we were striving to enhance our portfolio profile, both in terms of flexibility risk and reward.

Johnny: <unk>.

John <unk>: Just.

Speaker Change: Maybe as a little bit of a natatorial that this morning I was reading.

Speaker Change: This morning in <unk>.

John <unk>: Very interesting article about July 2024.

John <unk>: <unk> was vacated.

Michel Letellier: Early project, just a reminder, we all have, when we enter these projects in these category, we all have land secure and usually also some good visibility on the resources. That doesn't mean that we cannot have an early project being bid in Canada. As an example, Quebec could be also BC. We have a lot of project in Canada, particularly to be able to use for bidding in Canada. We are happy also to say that Canada, as we mentioned, is prone or I guess that we see this possibility to see the Canadian opportunity in the next decade to almost double the size of renewable energy.

John <unk>: Basically breaking 13th month of record breaking.

Rickard: Rickard and eat.

John <unk>: Last 13 months than July came and broke that record.

John <unk>: Just being shy of July 2023, so that makes me reflects a little bit on our.

Michel Letellier: So that makes me reflect a little bit on our mission, which is building a better world with renewable energy and decarbonization, helping decarbonize the economy in terms of helping the planet, making sure that we are providing some good value for our shareholders, but always respecting the tree, the planet, the people, and sharing the prosperity both with our shareholders and our stakeholders. So we are striving at Innergex to make sure that we're positioning ourselves for that growth and making sure that we'll be part of the solution to decarbonize the economy.

John <unk>: Mission, which is building a better world with renewable energy and Decarbonising El pen Decarbonising the economy in terms of helping the planet.

John <unk>: Sure that we are providing some good value for our shareholder but always respecting the tripi.

John <unk>: The planet people and sharing the prosperity, both with our shareholders and our stakeholders. So.

John <unk>: We are striving at <unk> to make sure that we're positioning ourselves for that growth and making sure that will be part of the solution to decarbonize the economy.

Michel Letellier: We will be very focused on all the market in Canada except Alberta. We have some restriction in our strategy in Alberta. For the rest of Canada, we will be very busy Ontario. We will be a great market as well. We are improving and getting ready more and more on ground to make sure that we have a lot of prospective project also in all the different markets in Canada.

Michel Letellier: I think that the demand for renewable energy is growing. I think that eventually, all governments will be focusing on having more and more opportunities to have more renewable energy in our different markets. So, very, very positive about our future.

John <unk>: The demand for renewable energy is growing I think that eventually all the government will be focusing on having more and more.

John <unk>: Opportunity do you have more renewable energy and they are different markets. So very very positive toward our future. So on this I will open the floor for questions.

Michel Letellier: So, on this, I will open the floor for questions. Thank you, ladies and gentlemen. If you have a question, please press this star followed by 1.

Operator: Thank you, ladies and gentlemen. If you have a question, please press the star followed by 1 on your touchtone phone. You will hear a tone acknowledging your request. Your questions will be answered in the order they are received. Please ensure you lift the handset if you are using a speakerphone before pressing any keys.

Speaker Change: Thank you ladies and gentlemen.

Speaker Change: If you have a question. Please press the star followed by one on your Touchtone phone you will hear with Donlin acknowledging your request.

Speaker Change: Questions will be posed in the order they are received.

Olivia: Olivia headset, if youre using a speakerphone pressing any keys.

Operator: Next.

Sean Steuart: Your first question comes from Sean Steuart from TD Cohen. Please go ahead.

Speaker Change: Your first question comes from Sean Stewart from TD Cowen. Please go ahead.

Jean Trudel: Well, I just now I'll pass to Jean presentation on the offer is in highlight. All right. Thank you, Michel.

Sean Stewart: Good morning, everyone.

Sean Stewart: Good morning.

Sean Stewart: <unk>.

Sean Stewart: The important us re contracting we couldnt find it on the hydro Quebec site can you give us a sense of price terms for the for the new contract.

Jean Trudel: Good morning, everyone. So starting with the operational highlights for the quarter production in the quarter was 91% of LTA similar to results in Q2, 2020. In the quarter generation was primarily impacted by below average wind regimes. In most of our markets as well as lower irradiance and economic curtailment in the U.S, and Chile and lower water flows in BC. These elements were partially upset by strong hydro generation in our Quebec and Chilean portfolios as well as higher wind productions in the U.S, and Chile.

Michel Letellier: What do you mean by the terms? The price? Well, they're not going to provide the price for this renewal of the contract, especially at the timing of the RFP, but it's in line with what we have already shown in our last three years. If you remember, we had that contract ending in 2021, and we have been applying that rate in its fullness. What has been changed is the amount of megawatts. We have been able to tweak our equipment to increase the capacity by about 10% more capacity on the output, so we will be receiving a little bit more production out of this, and as Jean is mentioning, this contract has been part of the renewal of a portfolio that was put back into the early 1990s, and they are now with 100% of CPI also in there.

Speaker Change: You mean, the terms the price we will we.

Speaker Change: They're not going to provide the price of these the renewal of our contract, especially in the timing of.

Speaker Change: But.

Jean Trudel: As Michel mentioned, we remain extremely focused on controllable factors such as maintaining a high asset availability. To this effect, we are pleased with the 96% overall asset availability in the quarter. We remain committed to our portfolio diversification strategy, which we believe will help us mitigate overall resource risk over time. Looking at our financial performance in the quarter, we reported adjusted the BDA proportionate of $184 million approximately 8% lower year over year.

Speaker Change: It's it's in line with what we have already shown in our last three years. If you remember we had that contract ending in 2021.

Speaker Change: And we have been applying that rate in the.

Speaker Change: The poll on this what has been changed is the amount of megawatts, we have been able to tweak our equipment to increase.

Speaker Change: The capacity by about 15%.

Speaker Change: 10% more capacity on on the outputs of we will be.

Jean Trudel: Although generation at 91% of LTA was similar to Q2, 2023 performance, our financial results were impacted by generation mix as some of our higher price portfolios, such as the Quebec and France wind assets and the BC hydro assets, generated lower production year over year. Our solar portfolio was also impacted by lower irradiance and curtailments in Chile and the U.S. This was partially upset by better generation at our Chilean and Quebec hydro facilities, which were above LTA for the quarter, as well as improved production from our U.S, and Chilean wind portfolios.

Speaker Change: <unk>, a little bit more production out of this and as.

Shai: Shai is mentioning these contract has been part of the renewal.

Shai: Hum.

Speaker Change: The portfolio that we are.

Speaker Change: <unk> put back into the early 1990 and the.

Speaker Change: They are now with 100% of CPI also.

Speaker Change: Indexed.

Michel Letellier: And it's 25 years. And it's 25 years.

Michel Letellier: And it's 25 years. And it's 25 years, yeah. 25 years, yeah. And the prosperity also, Sean, is that the Parnef River has been diverted, so we receive virtual...

Speaker Change: And it's 25 years and is 25, yes.

Speaker Change: Yes $20 billion.

Michel Letellier: And the particularity also, Sean, is that the Parneuf River has been diverted, so we receive virtual revenue, virtual payment from Hendo Quebec for 15, 20% of the water that should have run into that river. So it's a particular feature of that facility, so it brings a lot of stability to that watershed, I guess, to that revenue line. Thanks for that context.

Speaker Change: And then <unk> also Sean is that.

Speaker Change: <unk> has been diverted until we receive virtual.

Speaker Change: Revenue virtual payment from hydro, Quebec for 15%, 20% of the water.

Jean Trudel: Our corporate expenses have increased year over year, mainly due to our increased investment in green field activities, which we believe will translate into profitable growth over time. We remain focused on maintaining cost discipline within the overall business and will prudently deploy our resources to generate accretive investments. Free cash flow during the quarter was $51.8 million or 26 cents per share compared to 9 cents per share in Q2, 2023. The main drivers of the year over year change in free cash flow are the gain undisposition of non-controlling interests from the Texas transaction, as well as lower finance cost paid, mostly due to the timing of debt payments, partially upset by the same items that impacted EBDA year over year.

Speaker Change: That should have run into that reversed with particular facilities.

Speaker Change: Facilities with brings a lot of stability to the to that watershed I guess to that revenue line.

Speaker Change: Okay. Thanks for that context.

Speaker Change: You gave us an update on palomino interconnection can you give us a sense for the rest of your U S prospective pipeline.

Speaker Change: Behind Palomino.

Speaker Change: How things sit in interconnection queues for.

Speaker Change: The other projects you would you would hope to advance.

Michel Letellier: That's probably the biggest challenge we're facing in the U.S. It's tough.

Speaker Change: That's probably the biggest challenge we are facing in the U S.

Speaker Change: The.

Michel Letellier: It's tough to interconnect in the U.S., but we're working hard on finding some areas where we can accelerate these interconnections. We're working, as an example, on Watoma, which is a 400-megawatt plant on the northwest side. We have bid that project in a few places, trying to find ways where it would be more competitive to interconnect, but the U.S. is always a little bit of a big question mark on interconnection. Mind you that in the U.S., we're working on big projects, and in our long-term forecast or goals in order to win a megawatt in the U.S., we don't need that many projects to meet the So we're selective.

Speaker Change: It's tough.

Speaker Change: It's tough due to interconnect in the U S.

Speaker Change: Working hard on finding some some area, where we can accelerate these these interconnection or working as.

Jean Trudel: As of the end of Q2, the total debt amounted to $6.4 billion down from $6.5 billion in Q1, 2024. The quarter over quarter decrease is primarily due to the deteriorating of our Texas assets, concurrent with the sale of minority interest in our portfolio in states. Overall, our debt profile remains highly fixed or hedged, with minimal overall exposure to floating rates. With most of our debts being at the project level, we will continue to prioritize non-recourse debts as the primary funding tool for new project development.

Speaker Change: As an example on one.

Speaker Change: <unk>, which is a 400 megawatt.

Speaker Change: The north West side.

Speaker Change: We have.

Speaker Change: Bid that project in a few places trying to find ways, where you would be more competitive to two entry panache, but the U S is always a little bit of a big.

Mark: Big question, Mark on interconnection mind, you that.

Mark: In the U S. So we're working on big projects and in our long term well an hour.

Jean Trudel: We remain comfortable with our self-amortizing project depth structure, with all of our existing project depth expected to be fully paid off in line with our remaining PPA's terms. This is well below our estimated remaining portfolio useful life, as you know, so it's providing innergex with important refinancing and re-contracting optionality. From a liquidity standpoint, we continue to maintain adequate levels of available capital to fund our growth initiatives. In Q2 2024, we re-purchase $2.5 million worth of shares under our NCIB.

Speaker Change: Forecast or goals in order to win.

Speaker Change: <unk> in the West we don't need that many project.

Speaker Change: To meet the criteria that we need to build out our growth portfolio. So we're selective we don't want we don't want to make.

Michel Letellier: We don't want to make crazy assumptions or be too aggressive in the U.S. We're waiting. We're patient. We're building our flexibility and optionality. We also have some opportunities in Wyoming close to Boswell to expand, and we have the Wind Dancer project, which is in the range of 300 megawatts along the Boswell interconnection line. So, we have a few big projects working also in the Midwest to build out some portfolio as well. And, potentially, also looking into smaller projects in the U.S. where we could probably interconnect on distribution voltage that could somehow free it up and be quicker to interconnect. But interconnection in the U.S. is something that we're struggling with. I think everybody is struggling a little bit to find the best way to interconnect in the U.S.

Speaker Change: Crazy Crazy assumption or are being too aggressive in the U S. We're waiting we're patient we're building our hour.

Speaker Change: Flexibility Optionality, we have also some <unk>.

Speaker Change: Some opportunity in Wyoming close too.

Speaker Change: Boswell to expand and we have also wind answered project, which is in a range of 300 megawatt along the Boswell interconnection line. So we have a few big project working also.

Jean Trudel: Going forward, the magnitude and timing of share buybacks will remain dependent on several key variables including our funding needs, the future success on portfolio management initiatives, and the trading level of our shares. Looking ahead of the rest of the year, we remain focused on executing on additional portfolio management activities to further strengthen our financial flexibility and increase liquidity. As mentioned, we recently signed a 25-year full inflation index PPA for the partner of Hydro Portfolio in Quebec, and with this important milestone now achieved, we are advancing with our second Hydro Refinancing Initiative, and we expect to complete this by year end, with a target to obtain an incremental liquidity of around $80 million.

Speaker Change: The mid the Midwest, who built out some portfolio as well looking into potentially also.

Speaker Change: Looking into smaller project in the U S, where we could probably interconnect on distribution.

Speaker Change: Voltage that could somehow.

Speaker Change: Freed up and be quicker to interconnect, but.

Speaker Change: Interconnection the U S.

Speaker Change: Something that we.

Speaker Change: We're striving.

Speaker Change: Thank everybody is struggling a little bit to find the best way to interconnect in the U S.

Speaker Change: Thanks for that child that has all of that.

Rupert Merer: Your next question comes from Rupert Merer from National Bank.

Jean Trudel: We are also encouraged about the recent passing of legislation in Canada that implements a new 30% ITC or investment tax credit for clean power projects. We believe this program will provide significant benefits for renewable energy development, helping to accelerate the deployment of clean energy power capacity in Canada. As for our existing projects, we believe that our three Quebec wind projects under development, namely MU2, Lubin-F, and Pechou-Napou, all stand to benefit from this program.

Speaker Change: Your next question comes from.

Speaker Change: From National Bank. Please go ahead.

Rupert Merer: Hello, Rupert. Hello, good morning.

Speaker Change: Hello repaired.

Speaker Change: Hello, and good morning.

Rupert Merer: I'd like to start with Boswell. You mentioned that the construction is on track. Can you talk about the milestones that remain to complete that project? I know there's some pending transmission work that needs to be done. How much visibility do you have on getting that done by the end of the year? What's your confidence level? You'll hit COD by year.

Speaker Change: I'd like to start with Boswell you mentioned that the construction is on track can you can you talk about the milestones that remain to complete that project.

Speaker Change: No. There are some pending transmission work that needs to be done how much how much visibility do you have on getting that done by the end of the year, what's your confidence level, you'll you'll hit CRD by year end getting better.

Michel Letellier: Getting better, Rupert, there's one substation that has to be finalized by Pacific Corp. It's not us who are building it, so it's a little bit more difficult for us to accelerate, but it was supposed to be done by July. Now, the latest update that we have, and apparently they're very confident that they'll be able to deliver, in very early October. We, if you remember, said that in order to be more proactive in our ability to commission the wind farm, we ordered some equipment banks of resistance to be able to commission with the generator and these equipment, the wind turbine, so that we would not slow down in our commissioning process.

Jean Trudel: This represents a total of 502 megawatt of capacity that could see upside from the ITC program as these projects were all bid without this benefit. For the remainder of 2024, our Capix budget is fully funded from construction loans in place and or our available liquidity, and there are no material changes to our full-year Capix outlook. We remain committed to managing our corporate leverage into our self-funded organic growth business model.

Speaker Change: There is one substation that has to be finalized by Pacific Corp. Its not US who is building and so its a little bit more difficult for us to accelerate or but it was supposed to be done by July now at the latest.

Speaker Change: The update that we have in the permanently they're very confident that it will.

Speaker Change: There'll be able to deliver is very early October.

Speaker Change: If you remember said that we in order to be more.

Speaker Change: Proactive and our ability to commission the wind farm, we have order some.

Jean Trudel: So given our performance so far this year and the outlook for the second half of 2024, we are today reaffirming our full-year guidance for 2024. As previously discussed, we expected we expected adjusted EBDA proportionate to be in the range of $725 to $775 million, and free cash for per share before prospective expenses to be in the range of 70 to 85 cents per share. Despite production in Q2 being below our expectations, we remain confident in our ability to achieve our guidance and will continue to update the market on how we are tracking each quarter. As new projects come online in 2024, we expect to deliver more growth in 2025. Further success and development will also be a key driver of our longer-term success.

Speaker Change: Equipment resist in the bank.

Speaker Change: Bank of resistant to be able to be able to commission with generator and these equipment.

Speaker Change: The wind turbines, so that we would be.

Speaker Change: <unk> slow down in our commissioning.

Speaker Change: Yes.

Michel Letellier: So everything under our control, we're putting forward to make sure that we will be in service by December on Boswell. We also have made all the provision with our contractor to meet the, how do we say the payment? The approval. Thank you.

Speaker Change: So everything we under our control.

Speaker Change: Putting forward to make sure that we.

Speaker Change: We will be in service by December on on Boswell. We also have made all the.

Speaker Change: The provision with the <unk>.

Speaker Change: Our contractor.

Speaker Change: To meet the.

Speaker Change: How do we see that the payments of the prevailing rate.

Speaker Change: Sure.

Michel Letellier: So we have paid a little bit of extra to our supplier to make sure that we would be meeting this if we ever go beyond 2024 to make sure that we are fully compatible with the PTC requirement. So, I mean, we're very positive. We think we'll get there as long as Pacific Corp. gets us the interconnection works so that we can interconnect. But on our part, we're doing everything under control to be there, and we'll be there in terms of being ready.

Speaker Change: So we have paid a little bit of extra two hour.

Speaker Change: Supplier to make sure that we would be meeting this if ever we we go beyond 2024 to make sure that we are.

Michel Letellier: We'll now give the floor back to Michel for an update on our 2024 corporate priorities and foreclosing remarks. Thank you. So, of course, we will be focusing on construction activities. The two last project, as I mentioned, is paramount for us to make sure that our team are delivering these projects on budget and on timing, so working hard on this. The development is definitely a big portion of our activities in 2024 and in the future.

Speaker Change: Fully compatible with the PTC.

Speaker Change: Sure.

Speaker Change: Requirement. So I mean, we're very positive we are where we think we'll get there as long as the past week Corp gets.

Speaker Change: The interconnection.

Speaker Change: Worse, so that we can interconnect but.

Speaker Change: From our part we're doing everything under control too to be there and it will be there in terms of being ready to interconnect.

Michel Letellier: We said that we wanted to bid at least 500 megawatts in upcoming RFPs and we want to win 400 megawatts. That ratio seems to be high, but on the other end, I think that we wanted to be just a little bit conservative in the numbers of megawatts and we're going to bid. We never like to say how many bids we put in in our RFPs. We're a little bit cautious of competition, but we already bid to our fees in Chile.

Michel Letellier: Yeah, by year-end. By year-end. Yeah, yeah, yeah, yeah.

Speaker Change: By year end by year end here, yes, yes, yes, yes.

Rupert Merer: All right, great. And then on Portneuf, you gave us a little color on that process. How does that inform your view on the recontracting of Portneuf? How does that inform your view on the upcoming negotiations you'll have for recontracting your wind farms in Quebec over the next few years? And what's your view on the next stage of the life of those wind farms? Will it be recontracting for a number of years or the potential for repowering in those projects? Any thoughts you have on that process? Yeah.

Speaker Change: Alright, great and then on the important of who gave us a little color on that process. How does that inform your view the re contracting important how does that inform your view on.

Speaker Change: The upcoming negotiations you'll have for re contracting your wind farm in Quebec over the next few years and what's your view on the next stage of the life of those wind farms will it be re contracting for a number of years or is there potential for for Repowering in those projects.

Michel Letellier: Yeah, I mean, we are, and I don't want to get to too much detail because we are starting negotiating with Hydro-Québec in order to find a better solution. If Innergex would have its own way, I would prefer to be able to have a long-term renegotiation on this facility because, you know, of course, we can have a five years or a ten years extension on this equipment, but I would rather, if it's possible, to have a longer 40 years PPA type so that we can plan the decommissioning of some of the old equipment with the repowering of this wind farm and, hopefully, that would be almost seamless in terms of production.

Michel Letellier: As you know, we won on Cadelco, roughly 125 megawatts. We have bid also in Saskatchewan in solar. Our intention is to be a big participant in the upcoming RFP for DC and obviously always on the local two parts space in Quebec. I think that Quebec, this year, will be tied to have a new RFP, giving the fact that Hydro Quebec has also talked about being a very proactive developer on big projects.

Speaker Change: Any thoughts you have on that process, yes.

Speaker Change: We are and I don't want to get to too much detail because we are starting negotiating with hydro, Quebec and other too fine.

Speaker Change: A better solution.

Speaker Change: If you.

Speaker Change: <unk> would have its own way.

Speaker Change: I would prefer to be able to have a long term renegotiation on upon this facility.

Speaker Change: Of course, we cannot have a five years or 10 years extension on these equipment, but I would rather if it's possible to have a longer 40 years PPA type so that we can plan.

Michel Letellier: I think that we're very well positioned throughout our experience and the knowledge of the market in Quebec. Very good experience, as you all know, with First Nation participation. And we think that all these things will be considered in being a potential partner with Hydro Quebec and First Nation for these mega projects. I think that we're going to be there in terms of a potential partner for all these big projects in Quebec.

Speaker Change: Decommissioning of some of the old equipment will be with the Repowering of these wind farm.

Speaker Change: And all fully that would be seen almost seamless in terms of.

Speaker Change: Of production I think that the hydro Quebec once the long term view also you all heard them, saying that the need more power in Quebec, I think that these.

Michel Letellier: I think that Hydro-Québec wants the long-term view also. You all heard them saying that they need more power in Quebec. I think that these projects are already embedded in the distribution system and the transportation system, so I'm hopeful that we'll be finding a way to have this transition and be in a position to have a long-term view on all these projects. I'm very positive that Hydro-Québec needs this power. It's always a negotiation in terms of pricing, but they need that power.

Speaker Change: Project costs are already embedded in the in the distribution system and transportation system. So.

Michel Letellier: And we see that as a good opportunity. I think that Hydro Quebec by demonstrating their willingness to have these big projects are committed to have more win in Quebec portfolio. I mention also that the remaining part of Canada is for us a great focus. We want to be also participating in all the market that we have. We have the US, we have friends, we have Chile, but we have a little bit of a focus on Canada because as we all mentioned, they're a big opportunity in RFP and we think we can be competitive there.

Speaker Change: I'm hopeful that we'll be finding a way.

Speaker Change: To have this transition and be in a position to have a long term view on all of these these project.

Speaker Change: I'm very positive that.

Speaker Change: I do go back needs this power.

Speaker Change: It's always a negotiation in terms of pricing.

Speaker Change: But they need that powered.

Michel Letellier: I mean, Hydro-Québec, if you've heard, is very concerned about making sure that they have enough supply to meet all the industrial and local demands. And since this project has been in operation for the last 20 years, I think that we'll find a way to create value for everybody and have a win-win.

Speaker Change: Hydro, Quebec. If you heard is is very concerned and making sure that they have enough supply to meet all the industrial and local demand.

Speaker Change: And since these projects has been the operation for the last 20 years I think that.

Speaker Change: We will find a way to create value for everybody and have a win win.

Michel Letellier: If you get to a point where you have a longer-term agreement like 40 years that contemplates some repowering, is there an opportunity to expand the capacity as well as to grow the output?

Speaker Change: If you do get to a point, where you have a longer term agreement like 40 years that contemplate some repowering is there an opportunity to <unk>.

Speaker Change: Expand the capacity as well too.

Speaker Change: Right.

Michel Letellier: Yes, the capacity will always be limited also because of the interconnection capability in the Gaspé Peninsula, but we were pleased to hear that the Minister of Energy said that they were positive or supportive of having a new transmission line to help get more megawatts out of the eastern part of Quebec, the Gaspé Peninsula, and the Basse-Saint-Laurent area. We think that this would help us in the future to have more power coming out of the Gaspé-Péninsule.

Speaker Change: Yes.

Speaker Change: The capacity will always be.

Michel Letellier: Financing, as Jean is saying, we're advancing well. We're positioning ourselves to refinance on Hydro. The transaction in Texas is also providing some flexibility and some de-risking of the portfolio. So we're striving to enhance our portfolio profile both in terms of flexibility, risk, and reward memory.

Speaker Change: Limited also on the interconnection capability and the guests peninsula, but we were pleased to hear about the.

Speaker Change: The minister of energy.

Speaker Change: Said that.

Speaker Change: They were positive or supportive do you have a new transmission line too.

Speaker Change: To help.

Speaker Change: Get more megawatts out of the eastern part of Quebec, the guests the peninsula and the.

Michel Letellier: Just as maybe as a little bit of a mid-ditorial this morning, I was reading the La Paz this morning and very interesting article about July 2024 was basically breaking 13th month of record breaking record in heat the last 13 months in July came and broke that record just being shy of July 2023. So that makes me reflect so a bit on our mission which is building a better world with Renewable Energy and decarbonizing, helping decarbonizing the economy in terms of helping the planet making sure that we are providing some good value for our shoulder but always respecting the tree tree, the planet, the people and sharing the prosperity both with our shoulders and our stakeholders.

Speaker Change: Buffet.

Speaker Change:

Speaker Change: Are we saying that this would help us in the future do you have more power.

Speaker Change: Out of the guests picked in let us remember that that area East of Quebec is probably one of the windiest area and produce very good.

Michel Letellier: Remember that that area, the east of Quebec, is probably one of the windiest areas and produces very good wind power. So I think that over time, it might not be tomorrow, but we are anticipating a new upgrade on the transmission by 2032-2033.

Speaker Change: Very good.

Speaker Change: <unk> powers, so I think that.

Speaker Change: Over time, it might not be tomorrow, but we anticipating and you up.

Speaker Change: Upgrade on the transmission by 2030 to 2033.

Michel Letellier: And Rupert, also just the new machines themselves with the same wind regime would produce 25% to 30% more energy. And so it's an energy that's quite attractive also for hydrocarbons.

Rupert: And Rupert also just.

Speaker Change: The new machines themselves with the same wind regime would produce a 25% to 30% more energy.

Speaker Change: And so it's an early that's quite attractive also for hydro Quebec.

Speaker Change: Yeah.

Speaker Change: Great I'll leave it there thanks for the color.

Rupert Merer: Great. I'll leave it there. Thanks for the call.

Rupert: Great.

Nelson Ng: Your next question comes from Nelson Ng from RBC Capital Markets. Please go ahead.

Speaker Change: Your next question comes from Nelson <unk> from RBC capital markets. Please go ahead.

Michel Letellier: So we are striving at Innergex to make sure that we're positioning ourselves for that growth and making sure that we'll be part of the solution to decarbonize the economy. I think that the demand for Renewable Energy is growing. I think that eventually all the government will be focusing on having more and more opportunity to have more Renewable Energy in our different markets so very, very positive toward our future.

Jean Trudel: Great, thanks, and good morning everyone. My first question just relates to funding. I know in the past you guys had a roughly $80 million tranche of hydro debt that you were just kind of waiting to pull the trigger on and waiting for rates to go down further. With the, I guess, recontracting of St. Paul Inn, could you easily add that to that group of assets and increase the size of your

Nelson: Great. Thanks, and good morning, everyone.

Speaker Change: Great question.

Nelson <unk>: First question just relates to.

Nelson: Funding I know in the past you guys had a <unk>.

Speaker Change: $80 million roughly $80 million tranche of hydro that that you were just kind of waiting for.

Nelson: Waiting to kind of pull the trigger on waiting for rates to go down further.

Speaker Change: With the re contracting of St. Paul in could you easily add that into.

Operator: So on this I will open the floor for questions. Thank you ladies and gentlemen. If you have a question, please press the star followed by one on your touch-tone phone. You will hear a tone acknowledging your request. Your questions will be pulled in the order they're received. Please ensure you live your headset. If you're using a speaker phone, do you forward pressing any keys?

Speaker Change: Those group of assets and increase the size of your.

Speaker Change: Refinancing.

Jean Trudel: Well, what we mentioned is the $80 million target was especially for those three partner facilities that we were waiting for the PPA. So, now that we have the PPA in place, I'm keeping my target at $80 million, but we hope to beat it, so obviously rates going down help provide more capacity because we can put more leverage, but also, the quality of the contract is good, and as Michel mentioned, we upgraded our equipment so that we have a bit more capacity, so we can produce a bit more energy, so all this translates into more revenue, which allows for greater financing And... So, we should conclude this by the end of the year. We'll have more for you in the coming quarters.

Nelson: With <unk>.

Nelson: Mentioned is the $80 million target was.

Nelson: Actually on that on those three partners facilities that we were waiting for the PPA. So now that we have the PPA in place.

Nelson: It's it's.

Nelson: We keep them keep.

Nelson: Keeping my target at $80 million, but we hope to beat it. So obviously rates going down helps it helps provide more and more capacity because we can put more leverage.

Sean Steuart: Your first question comes from Sean Stewart from TD Cohen. Please go ahead. Hello, Sean. Good morning, everyone. Good morning. A few questions. The report notes are re-contracting. We couldn't find it on the hydrocobex site.

Nelson: But also the quality of the contract is good and as Michel mentioned we are.

Michel Letellier: Can you give us a sense of price terms for the new contract? What do you mean the terms of the price? Well, they're not going to provide the price of these, the renewal of the contract, especially in the timing of RFP. But it's in line with what we have already shown in our last three years. If you remember, we had that contract ending in 2021 and we have been applying that rate in the Paulness.

Michel: Upgraded our equipment, so that we are a bit more capacity.

Michel: So we can produce a bit more energy. So all this translate into more revenue, which which allows for greater financing conditions. So.

Nelson: Hopefully, we'll do better.

Nelson:

Speaker Change: So we'll see we should conclude this by the end of the year. So.

Nelson: We will have more.

Nelson: For you in the coming quarters.

Nelson Ng: Okay, and then just staying on the financing topic, so you have some debt maturities maturing next year. I think you're a convert. I think $148 million or so, but you also have like $150 million of unsecured sub-debt due in February. What's your plan in terms of, I guess, financing, refinancing, or repaying?

Speaker Change: Okay, and then just staying on the financing topic. So you have some debt maturities maturing next year I think your converts I think 148 million or so but you also have like 150 melanoma.

Michel Letellier: What has been changed is the amount of megawatt we have been able to tweak our equipment to increase the capacity by about 15%. 10% more capacity on the outputs. We will be receiving a little bit more production out of this. As Sean is mentioning, this contract has been part of the renewal of a portfolio that were put back into the early 1990s. And they are now with 100% of CPI also in there.

Speaker Change: Secured sub debt.

Speaker Change: February what's your what's your plan in terms of.

Speaker Change: I guess financing or refi.

Speaker Change: Refinancing or repaying.

Speaker Change: Yes.

Speaker Change: So we have as you said this $150 million sub debt that comes first.

Jean Trudel: So we have, as you said, this 150 million sub-debt that comes first. It's not a big puzzle.

Speaker Change: It's it's not a big.

Speaker Change: Puzzle, we could just repaid this sub debt with the <unk>.

Jean Trudel: We could just repay this sub-debt with the revolving capacity that we have. In the meantime, I mean, so there's no urgency, but we started discussions with lenders to see what the options are to refinance the sub-debt at the corporate level. So that's ongoing.

Speaker Change: Revolving capacity that we have.

Speaker Change: In the meantime, I mean, so there is no urgency, but we started the discussions with lenders to see what are the options to refinance the sub debt.

Speaker Change: Corporate level.

Michel Letellier: And it's 25 years. And it's 25 years, 25 years, 25 years. And the port clarity also, Sean, is that the Parnev River has been diverted to, we receive virtual revenue, virtual payment from Eindhoven for no 15-20% of the water that should have run into that river. So it's particular of that facility, so it brings a lot of stability to that watershed, I guess, to that revenue line.

Nelson: So thats ongoing and then for the converts I mean, we have to converts we have.

Nelson Ng: And then for the converts. I mean, we have two converts. We have two converts coming one after the other. So we're also, we started also, but it's a bit early, but we started to kick off some discussions to get a better understanding of the market conditions for renewing converts. But, I mean, it's a bit early again, so we'll get to that probably closer earlier in 2025 or 2025, to see how we go about with these two converts.

Nelson: To Congress coming one after the other so we're also we started also a bit it's a bit early but we started to kick off some discussions to get a better understanding of the market conditions were poor renewing converts.

Nelson: But I mean, it's a bit early again, so so we'll we'll get to that probably closer earlier in 2025 to two.

Sean Steuart: Thanks for that context.

Nelson: To see how we.

Speaker Change: We go about with these two these two converts.

Sean Steuart: Use an update on Palomino Interconnection. Can you give us a sense for the rest of your US perspective pipeline behind Palomino? How things sit in interconnection cues for other projects you would hope to advance?

Michel Letellier: Okay, and then just switching to..., to Texas. So in Texas, now that you have a bit more merchant exposure, like from your perspective, is the plan to keep them merchants, or do you have an opportunity to look for a PPA-like contracts for those assets?

Speaker Change: Okay and then just.

Speaker Change: Switching to.

Speaker Change: To Texas, So in Texas.

Speaker Change: Now that you have a bit more merchant exposure like from your perspective.

Speaker Change: Is the plan to keep the Merck trends or do you have an opportunity to look for PPA like.

Michel Letellier: That's probably the biggest challenge we're facing in the US. It's tough to interconnect in the US. Working hard on finding some area where we can accelerate these interconnection, we're working as an example on Watoma, which is a 400 megawatt in the north west side. We have bid that project in a few places trying to find ways where it would be more competitive to interconnect. But the US is always a little bit of a big question on interconnection.

Speaker Change: Contracts for those assets.

Michel Letellier: I think it fixing it out of every place is probably the best way to play the merchandise. We have now our partners. We have only 50% of Griffin and Phoebe. Remember also that our PowerEdge was limiting our ability to have the upside but was limited in the downside. So, we're very happy to have gotten rid of PowerEdge. Never again at Innergex would we end up having this type of contract. So, we're happy for the time being to see how the market is going.

Speaker Change: I think that fixes.

Speaker Change: Every place.

Speaker Change: Is it plays if you have an asset that don't have that.

Speaker Change: Is probably the best way is to play the merchant.

Speaker Change: We have now our partners, we have only 50% of Griffin and Phoebe remembered also that.

Speaker Change: Power power edge was limiting our ability to have the upside but with limited in the downside. So we're very happy to have got rid of that power hedge never never again, I think interjects, we would end up having these type of contract.

Michel Letellier: Mind you that in the US, we're working on big projects and in our long-term, well, in our forecast or goals in order to win a megawatt in the west, we don't need that many project to meet the criteria that we need to build out our growth portfolio. So we're selected, we don't want to make crazy assumption or being too aggressive in the US. We're waiting, we're patient, we're building our flexibility optionality.

Speaker Change: So we're happy for the time being to see how the market is growing I was surprised to read about the future potential demand in ERCOT is just crazy we've seen some data center being <unk>.

Michel Letellier: I was surprised to read about the future potential demand for ERCOT, which is crazy. We've seen some data centers being implemented in the Houston area, and some reports are saying that in the next 10 years, ERCOT could double from 75,000 megawatts of demand to something around 150.

Speaker Change: <unk> implemented in the Houston area.

Speaker Change: And some some reports are saying that in the next 10 years, Eric Kotkin can double from 75 785000 megawatt.

Michel Letellier: We have also some opportunity in Wyoming close to Boswell to expand, and we have also a Windsor project, which is in a range of 300 megawatt along the Boswell interconnection line. So we have a few big projects working also in the mid-west to build out some portfolio as well. Looking into potentially also looking into smaller project in the US where we could probably interconnect on distribution voltage that could somehow freed up and be quicker to interconnect. But interconnection in the US is something that we were struggling. I think everybody is struggling a little bit to find the best way to interconnect in the US.

Speaker Change: Demand to something around 150, so I think that we're happy to be there and have the ability to take advantage of the volatility.

Michel Letellier: So, I think that we're happy to be there and have the ability to take advantage of the volatility. We have no basis risk on those merchants, either. Basis risk is a big issue also in ERCOT. However, we don't have basis risk anymore. So, Matt, for the time being, I think we're happy with what we have in Texas. Never say never if we have a great opportunity to sign a PP in the future, but it would be hash produced with no basis exposure. So if ever we have those opportunities, we might consider them, but we don't want to have this fixed obligation, and we don't want to have any basis risk exposure in the future.

Speaker Change: We have no basis risk on those merchant neider basis risks.

Speaker Change: Big issue also in our.

Speaker Change: We don't have basis risk anymore. So Matt.

Speaker Change: At the time being I think we're happy with what we have in Texas.

Speaker Change: Never say.

Speaker Change: Never if we have a great opportunity to sign a PPA in the future, but it would be hard to produce.

Speaker Change: And no basis exposure, so if ever we have those opportunity we might consider it but we don't want to have this fixed.

Speaker Change: Fixed obligation and we don't want to have basis risk exposure in the future.

Michel Letellier: Thanks for that, Michelle.

Rupert Merer: That's all that. Here are the next questions from some of the Ruapers Marrow from National Bank.

Speaker Change: Okay. Great. Thanks. So just one last question in terms of the BC hydro assets during the quarter I think O&M costs were higher year over year.

Nelson Ng: Great. Thanks, Michel.

Rupert Merer: Please go ahead. Hello Ruapers. Hello.

Jean Trudel: Just one last question. In terms of the BC hydroassets, I know during the quarter, O&M costs were higher year-over-year, and I think... Can you just give a bit more color in terms of whether the higher O&M costs are kind of one-time in nature, or do you expect... The biggest one is Opera-Lilouette.

Rupert Merer: I'd like to start with Boswell. You mentioned that the construction is on track. Can you talk about the milestones that remain to complete that project? I know there's some pending transmission work that needs to be done. How much visibility do you have on getting that done by the end of the year? What's your confidence level? You'll hit COD by your end. Getting better, Rupert. There's one substation that has to be found lies by pacific corporates.

Speaker Change: I think.

Speaker Change: Can you just give a bit more color in terms of whether the higher O&M costs are onetime in nature or do you expect.

Speaker Change: The biggest one is offer alone with I think that we have.

Michel Letellier: I think that we have...we're trying to find the best solution for having our turbine be more erosion-friendly. We're also working on a potential solution to reduce the erosion or the sand getting into the tunnel. This is a little bit of a challenge. There's a lot of erosion that somehow, somewhere, we were hoping to get rid of, but there's all kinds of metal surfacing that we can do on the turbine. The team has been trying to find the best scenario.

Speaker Change: We're trying to find the best solution for having our turbine being more.

Speaker Change: Erosion.

Rupert Merer: It's not us who's building it, so it's a little bit more difficult for us to accelerate. But it was supposed to be done by July. The latest update that we have, and apparently they're very confident that they will be able to deliver is very early October. We, if you remember, said that we, in order to be more proactive in our ability to commission the wind farm, we have ordered some equipment resistant to be able to be able to commission with generator and these equipment, the wind turbines, so that we would be not slow down in our commissioning process.

Speaker Change: Our friendly.

Speaker Change: We have and we're working also on potential solution to reduce the.

Speaker Change: The.

Speaker Change: Erosion or to send to get into the <unk>.

Speaker Change: The tunnel this is a little bit of a challenge there is a lot of the erosion that somehow somewhere.

Speaker Change: We were hoping to get rid of but.

Speaker Change: There's all kinds of.

Speaker Change: Yes.

Speaker Change: Metal surfacing that we can do on the turbines. So the team has been trying to find the best.

Speaker Change: Scenario and in this case instead of capitalizing one unit.

Michel Letellier: In this case, instead of capitalizing one unit last year or one set of units, we expense it. That's why you were saying a little bit of a peak on these CAPEX for BC. In general, we don't see a big difference. It's only Opera-Lilouette that has a little bit more of an erosion challenge, and we're trying to find a long-term fix for it. Thank you.

Speaker Change: Last year, one set of unit we expense it so thats why youre seeing a little bit of a peak on.

Rupert Merer: So everything we, under our control, we're putting forward to make sure that we will be in service by December on Boswell. We also have made all the provision with our contractor to meet the, how do we see the payments of the... So we have paid a little bit of extra to our supplier to make sure that we would be meeting this. If ever, we go beyond 2024 to make sure that we are fully compatible with the PDC requirement.

Speaker Change: These capex for.

Speaker Change: For BC, but in general we don't see a big difference.

Speaker Change: It's only operate a little bit that has a little bit more challenged.

Speaker Change: <unk> erosion.

Speaker Change: And we're trying to find a long term fix for it.

Speaker Change: Okay. Thanks, I'll leave it there.

Speaker Change: Your next question comes from Rob Hope from Scotiabank. Please go ahead.

Rob Hope: Your next question comes from Rob Hope from Scotiabank. Please go ahead.

Rob Hope: Good morning, everyone. I wanted to circle back on your commentary on Hydro-Quebec's renewed focus on development. That change in their strategy was announced about 2 months ago. How have you interacted with Hydro-Quebec, and have there been any initial discussions on how you could support them on these 1000 megawatt mega projects? And how would you envision supporting them? Would that be potentially investing in land from your development pipeline or supporting the construction process? Yeah,

Rob Hope: Hi, Good morning, everyone I wanted to circle back on your commentary on on the.

Speaker Change: Hydro Quebec.

Speaker Change: Renewed focus on development that change in their strategy was announced about two months ago. How have you interacted with hydro, Quebec and have there been any initial discussions on how you can support them on these 1000 megawatt megaprojects and how would you envision supporting them would that be potentially vending.

Rupert Merer: So, I mean, we're very positive. We think we'll get there, as long as the Pacific Corp gets us the interconnection work so that we can interconnect. But from our part, we're doing everything under control to be there and we'll be there in terms of being ready to interconnect. 5-year-end. Yeah, yeah, yeah, yeah. All right, great.

Speaker Change: Land from your development pipeline or supporting the construction process.

Michel Letellier: Yes, I think that the public announcement was more focused on Hydro-Québec being the initial developer or maître d'oeuvre with the First Nation and local community. I think that they're trying to make sure that they have a good sense of the social acceptability of these projects, so they want to make sure that they are leading the discussion with the communities and making sure also that they can feel comfortable that these big projects could be interconnected, because if they start to work on the big substation of the 735 Kiwi line, they want to make sure that the project will happen and the size of the project will be sufficient in order to sustain and amortize the expense to build new substation on these big voltage lines.

Speaker Change: Yes, I think that the.

Speaker Change: Public announcement was more focused on the hydro Quebec being the initial.

Speaker Change: Laufer or metro Dove in.

Rupert Merer: And then on Port Nouf, who gave us a little color on that process, how does that inform your view, the re-contracting important? How does that inform your view on the upcoming negotiations you'll have for re-contracting your wind farms in Quebec over the next few years? And what's your view on the next stage of the life of those wind farms? Will it be re-contracting for a number of years or their potential for re-powering in those projects?

Speaker Change: With the first nation and local community.

Speaker Change: They're trying to make sure that we have a good sense of the social.

Speaker Change: Except that the ability of these projects are they want to make sure that they are.

Speaker Change: Leading the discussion with the communities and making sure also that they can feel comfortable that these big project could be.

Speaker Change: They're connected because if they start to work on the big substation of the 735 kv line.

Rupert Merer: Any thoughts you have on that process? Yeah, I mean, we are, and I don't want to get too much detail because we are starting negotiating with Harukuebeck in order to find a better solution. If interjects would have his own way, how would prefer to be able to have a long-term re-negotiation on these facilities? Of course, we can have five years or ten years of extension on these equipment, but I would rather, if it's possible, to have a longer 40 years PPA type so that we can plan the decommissioning of some of the old equipment with the re-powering of these wind farms.

Speaker Change: They want to make sure that the project will happen and the size of the project will be sufficient in order to sustain and amortized.

Speaker Change: The expense to build new substation on on these big voltage line. So.

Michel Letellier: So I understand that they will be discussing with the communities and local stakeholders to make sure that they understand the lay of the land well, and they will then, together with their partner, go out and have some kind of an RFP to secure an IPP like us to help them develop. Criteria, from what I gather, will also be based on the knowledge of the land, the ability to build experience in building in Québec and with First Nations.

Speaker Change: I understand that they will be.

Speaker Change: Discussing with the communities and local stakeholder to make sure that they understand well the lay of the land and they will be there.

Rupert Merer: And, hopefully, that would be almost seen in terms of production. I think that Harukuebeck wants the long-term view also. You all heard them saying that they need more power in Quebec. I think that these projects are already embedded in the distribution system and the transportation system. So, I'm hopeful that we'll be finding a way to have this transition and be in a position to have a long-term view on all these projects.

Speaker Change: Then together with their partner.

Speaker Change: Go out and have some kind of an RFP to secure an IPP like cost to help them the law.

Speaker Change: Criteria.

Speaker Change: From what I gather will be base also on the knowledge of the of the land and the ability to build experience on building in Quebec and with first nation.

Rob Hope: So all these criteria fit very well with our ability, and that's why I think that we'll be a serious potential partner with these mega projects. No guarantee that we'll be there, but we have. We know the land. We have some resource data on most of the projects that they have already spoken about. So we'll definitely be a very, very important and serious contender to be a partner. We're talking about looking for 30%, 33% partners in these megatransactions, so it is very, very important for us to be talking with the local community, making sure that we are a good partner also for First Nations, not only for Hydro-Québec, and we have open discussions with the different communities in these areas.

Speaker Change: All of these criteria fits very well in our ability.

Speaker Change: And that's why I think that will be a serious.

Speaker Change: Potential partner with with these Mega project cannot.

Speaker Change: Guarantee that we will be there, but we.

Speaker Change: <unk>.

Speaker Change: We have known the land we have some some risk.

Speaker Change: <unk>.

Speaker Change: Data on most of the.

Rupert Merer: I'm very positive that Harukuebeck needs this power. It's always a negotiation in terms of pricing, but they need that power. I mean, Harukuebeck, if you heard, is very concerned in making sure that they have enough supply to meet all the industrial and local demand. And since this project has been the operation for the last one years, I think that we'll find a way to create value for everybody and have a win-win.

Speaker Change: Project that they have already.

Speaker Change: Poke about so we'll definitely be a very very important and serious contender to be partner and they are talking about looking for it.

Speaker Change: Tony percent or 83% partners in in these mega Mega transactions. So.

Speaker Change: Very very important for us to be talking with local community, making sure that we.

Speaker Change: Our good partner also for first nation, not only for hydro Quebec.

Speaker Change: We have open discussion with.

Rupert Merer: If you get to a point where you have a longer term agreement like 40 years that contemplates some repowering, is there an opportunity to expand the capacity as well to grow the output? Yes. The capacity will always be limited also on the inter-connection capability in the Guest Bay Peninsula, but we were pleased to hear about the, you know, the Minister of Energy. I said that they were positive or supportive, to have a new transmission line to help get more megawatt out of the eastern part of Quebec, the Guest Bay Peninsula and Barcelona.

Speaker Change: With different community in these area.

Speaker Change: I appreciate that.

Michel Letellier: On another topic, just in terms of portfolio management, that was highlighted as a priority for 2024. Is that just referring to the Hydro-Op financings, or as you're taking a look at either your development pipeline or your operating assets, do you see opportunities to further increase surface value?

Speaker Change: And then on another topic just in terms of portfolio management that was highlighted as a priority for 2024 is that just referring to the hydro up financings or as Youre, taking a look at it either your development pipeline or your operating assets do you see opportunities to further surface value.

Speaker Change: Yeah.

Speaker Change: Well.

Michel Letellier: Well, the market in general is not that great. So, I think it's improving. Obviously, we've seen some good numbers on inflation. We've seen some volatility on interest rates going up and down lately.

Speaker Change: The market in general is not that great. So I think it is improving with.

Speaker Change: Obviously, we've seen.

Speaker Change: Some good good numbers on the inflation, we've seen some volatility on interest rate going up and down lately.

Michel Letellier: But I think that, in general, the cost of capital for infrastructure is going down, and I think that if things are going the same way, we are hopeful that the interest rate will go down. I think that this is good timing for us to start thinking about is there something that we can partner with people always open to the idea to lower our cost of capital, giving us a little bit more flexibility.

Speaker Change: But I think that in general.

Rupert Merer: Barcelona, we think that this would help us in the future to have more power getting out of the Guest Bay Peninsula. Remember that that area, the east of Quebec is probably one of the windiest area and produce very good wind powers. So I think that over time, it might not be tomorrow, but we anticipating a new upgrade on the transmission by 2032-2033. And Rupert also, just the new machines themselves with the same wind regime would produce 25-30% more energy. And so it's energy that's quite attractive also for Hydro-Covid.

Speaker Change: The cost of capital for infrastructure is going down in general and I think that.

Speaker Change: If things are are going the same way we are hopeful that the interest rate.

Speaker Change: We will get down.

Speaker Change: I think that.

Speaker Change: This is a good.

Speaker Change: Good timing for us to start thinking is there something that we can partner with people always open to <unk> to lower our cost of capital, giving us a little bit more flexibility.

Speaker Change: Of course, we are mindful that it has to create value.

Michel Letellier: But of course, we're mindful that it has to create value. We're not in a rush. I think that the dividend reallocation has provided us with some flexibility, and, of course, when you have a little bit more time to study and to take advantage of different opportunities, it creates, in my mind, more value. We're not in a rush to do anything. So, this is what is important.

Speaker Change: We're not in a rush I think thats, what the dividend reallocation.

Speaker Change: <unk>, providing us some flexibility.

Speaker Change: And of course, when you have a little bit more time too.

Rupert Merer: Great, I'll leave it there. Thanks for color. Thank you.

Speaker Change: To study and to take advantage of different opportunity.

Nelson Ng: Your next question comes from Nelson Aings from RBC Capital Markets. Please go ahead. Great. Thanks, and good morning, everyone. First question just relates to funding. I know in the past you guys had a $80 million, roughly $80 million, trying to hydrobed that you were just kind of waiting for, waiting to kind of pull the trigger on and waiting for rates to go down further. With the, I guess, re-contracting of St. Paul in part, could you easily add that into those group of assets and increase the size of your refinancing?

Speaker Change: Creates in my mind more value.

Speaker Change: We're not in a rush to do some things. So this is.

Speaker Change: What is important but we said that the U S. When we have 100% of our project in the U S either on.

Rob Hope: But we said that the U.S., when we have 100% of a project in the U.S., either in development, late development, or early COD, we have always been open to the idea of creating value. Hawaii is not a secret that we only have one project in Hawaii. We want to make sure that we are getting focused to put in on COD, but if there's an opportunity to create value for us in that particular project in Hawaii, we would certainly be open to the idea.

Speaker Change: They've lockman lately luffman or early <unk>, we have always been open to the idea of.

Speaker Change: Creating value.

Speaker Change: Why is not as another secret that we only have one project in Hawaii, we want to make sure that we are getting.

Speaker Change: Focus to put it on <unk>, but if there is an important indeed to create value for us.

Nelson Ng: Well, what we mentioned is the $80 million target was especially on those three Paul net facilities that we were willing for the PPA. So now that we have the PPA in place, I'm keeping my target at $80 million, but we hope to beat it. Obviously, rates going down helps provide more capacity because we can put more leverage, but also the quality of the contract is good. And as Michel mentioned, we upgraded our equipment so that we have a bit more capacity so we can produce a bit more energy. So all this translates into more revenue, which allows for greater financing conditions, so I'm hopeful we'll do better.

Speaker Change: In that particular project in Hawaii, we would certainly be open to to the IV.

Speaker Change: Thank you.

Nick Boychuk: Your next question comes from Nick Boychuk from Carmark. Please go ahead.

Speaker Change: Your next question comes from Nick Wojciech <unk> from Carnegie. Please go ahead.

Nick Wojciech: Hello, Thanks, Good morning, guys, Hey, good morning.

Michel Letellier: Coming back to the BC opportunity, can you guys walk us through some of the projects that you are looking to develop, the steps you're taking now to get them RFP ready, and timelines for when we should start to expect to hear some updates on that specific area?

Speaker Change: Coming back to the DC opportunity can you guys kind of walk us through some of the projects that you are looking to develop the steps youre taking out again.

Speaker Change: RFP ready and timelines for when we should start to expect to hear some updates on that specific area.

Michel Letellier: I'm sorry to disappoint you, but we never comment on projects that we're going to put right into the RFP. What I can say is that we'll have a large volume of projects that we will be ready to put forward by September 15, but I hate to give too much information. It's an RFP, and there's a lot of competition.

Speaker Change: I'm, sorry to disappoint, you, but we never.

Speaker Change: Comment on project that we're going to put right into the the RFP, but I can say is that we'll have a large volume of project that we will be ready to put by September 15.

Speaker Change: But I hate.

Nelson Ng: We'll have more for you in the coming quarters.

Speaker Change: To give too much information.

Nelson Ng: Okay, and then just staying on the financing topic. So you have some debt materities that I'm maturing next year. I think there are converts. I think 148 million or so, but you also have like 150 million of unsecured sub debt. What's your plan in terms of I guess financing or refinancing or repaying? Yeah, so we have, as you said, this 150 million sub debt that comes first. It's not a big puzzle.

Speaker Change: It's.

Speaker Change: It's it's an art.

Speaker Change: <unk> and Theres a lot of competition so for us we're very.

Michel Letellier: So for us, we're very encouraged with the result that we have. We already have a lot of interconnection studies coming in, and we're positive. We're happy with what we received in many cases. All the team will be ready to have the project ready to be submitted, but I'm sorry. It's not that I don't want to give you some good potential for the future, but it's important for us to keep that information a little bit of a secret before we bid.

Speaker Change: I encourage with the result that we have we already had a lot of.

Speaker Change: Interconnection study coming in and were positive we're happy with what we received and in many cases.

Speaker Change: All of the team will be ready to eat they have to.

Speaker Change: Do you have the project.

Speaker Change: Ready to be submitted but im sorry.

Speaker Change: It's not that I don't want to give you some some good.

Nelson Ng: We could just repay this sub debt with the revolving capacity that we have in the meantime. I mean, it's so there's no urgency, but we started the discussions with lenders to see what are the options to refinance this sub debt at the corporate level. So that's ongoing. And then for the converts, I mean, we have two converts. We have two converts coming one after the other. So we're also, we started also, but it's a bit early, but we started to get some discussions to get a better understanding of the market conditions for renewing converts. But I mean, it's a bit early again. So we'll get to that probably closer earlier in 2025 to see how we go about with these two converts.

Speaker Change: Central for the future but.

Speaker Change: It is important for us to keep.

Speaker Change: That information loop.

Speaker Change: A little bit of secret before we bid.

Nick Boychuk: If we're thinking about the growth of that portfolio or any other areas within Canada, you mentioned that obviously some of the project development costs and operational costs are going to rise a little bit. Is the current run rate something that we should be expecting going forward? Do you have to add any people, any capabilities, any teams throughout the country in order to execute on that growth?

Speaker Change: Okay.

Speaker Change: We're thinking about the growth of that portfolio or any other areas within Canada, you mentioned that obviously some of that.

Speaker Change: Project development costs operational costs are going to rise a little bit.

Speaker Change: The current run rate is something that we should be expecting going forward or do you have to add any people and capabilities any teams throughout the country in order to execute on that growth.

Michel Letellier: We, I think we have a good, as you know, we have a good team in Vancouver. We have an, well, we have an, I wouldn't say head office, but it's definitely an important office in Vancouver.

Speaker Change: We I think we have a good as you know we have a good.

Speaker Change: Team in in Vancouver, we have and while we haven't had I wouldn't say at head office.

Speaker Change: And important to office.

Speaker Change: <unk> Hoover's, though.

Michel Letellier: So we didn't have to beef up the office too much for the benefit of that bid, but obviously, if we win projects, those projects, if you remember, the earliest you could deliver is 2028. So if we win projects, we might have to beef up a little bit the construction ability as we grow. But early stage and early development, environmental studies, and relationships with communities, we have a strong base in BC that we have taken advantage of.

Speaker Change: We didn't have to beef up too much debt.

Nelson Ng: Okay, and then just switching to Texas. So in Texas, now that you have a bit more market exposure, like from your perspective, is it planned to keep the merchants or do you have an opportunity to look for a PPA like contracts for those assets? What I think that fixes out of every place is a place if you have an asset that don't have debt is probably the best way is to play the merchant. We have now our partners. We have only 50% of Griffin and CB remembered also that our power edge was limiting our ability to have the upside, but was still limited in the downside.

Speaker Change: <unk>.

Speaker Change: That office for the benefit of that bid, but obviously, if we win projects.

Speaker Change: Those project if you remember the earliest you could deliver is 2028. So if we wind project we might have to.

Speaker Change: Beef up a little bit the construction ability.

Speaker Change: As we as we grow but early stage in early development.

Speaker Change: And from mental studies in relationship with communities, we have a strong base in BC that we have taken advantage of.

Speaker Change: Yes.

Nick Boychuk: Outside of BC, can you comment on what you're expecting for project expenses and other G&A costs as you try to organically expand the portfolio?

Speaker Change: And then sorry outside of BC can you comment on what Youre expecting for projects prospective project expenses and other G&A costs as you try and organically expanded portfolio.

Michel Letellier: Sure. Saskatchewan is becoming more and more important for us. We've been bidding in Saskatchewan twice over the years, and now it's the third time. I think that we're getting to know quite a bit about Saskatchewan.

Scott: Sure Scott.

Scott: Saskatchewan is becoming more and more important for us we've been there for.

Scott: We've been bidding and Saskatchewan twice over the years and now its deterred time I think.

Nelson Ng: So we're very happy to have got rid of that power hedge, never, never again, I think we would end up having these type of contracts. So we're happy for the time being to see how the market is going. I was surprised to read about the future potential demand in IRCOT. It's just crazy. We've seen some data fans are being implemented in the US, in areas. And some reports are saying that in the next 10 years, IRCOT can double from 75,000 megawatt demand to something around 150.

Scott: We're getting to know quite a bit Saskatchewan.

Michel Letellier: There's still a couple of thousand megawatts to be bid in the near future, so Saskatchewan is becoming a good market for us. We have some rumors that Manitoba will also be an interesting market, so these two provinces are getting more and more on our radar. So far, we don't have a regional office in this area, but we may end up having a little bit more permanent staff in those two provinces if we have a little bit more success.

Speaker Change: There are still a couple of thousand.

Speaker Change: Megawatt to be bid in the near future. So Saskatchewan is becoming a good a good market for us.

Speaker Change: We have some rumors that <unk> will be also an interesting market. So these two province are getting more and more.

Scott: On our radar.

Scott: So far we don't have a regional office in these area, but we may end up having.

Scott: Having a little bit more permanent.

Scott: People in those two provinces.

Scott: We have a little bit more success.

Michel Letellier: The other big market I would say, other than BC and Quebec, is Ontario. You've heard me talking about Ontario a lot. We're putting a lot of effort in Ontario. We understand that wind in the south might not be that well-received in terms of social acceptability, so we're working hard on land and interconnection and getting good relations with First Nations to develop the wind in the north, but there's still opportunity to do solar and battery projects in the south.

Nelson Ng: So I think that we're happy to be there and have the ability to take advantage of volatility. We have no basis risk on those merchant neater basis risk is a big issue also in IRCOT. We don't have basis risk anymore. So Matt, for the time being, I think we're happy with what we have in Texas.

Scott: The other big market that would say other than BC in Quebec, as Ontario, you heard me talking about Ontario, a lot.

Scott: We're putting a lot of effort in Ontario.

Scott: We understand that when in the south might not be that.

Scott: That will recede in term of social exit the daily the diesel we're working hard on.

Scott: Land and interconnection and getting.

Scott: With good relation with first nations to develop the wind in the north.

Nelson Ng: Never say, never, if we have a great opportunity to find a BP in the future, but it would be has produced and no basis exposure. So if ever we have those opportunity, we might consider it, but we don't want to have this fixed obligation and we don't want to have basis risk exposure in the future.

Scott: But there's still opportunity to do solar and battery project into solid. So we think that Ontario is going to be a good market as well and we are strengthening our hour.

Nelson Ng: So, just one last question.

Michel Letellier: So we think that Ontario is going to be a good market as well, and we're strengthening our team in that area. And then New Brunswick, we're seeing a little bit of activity here and there, but I think that we can cover New Brunswick from Quebec. We have a few folks that are working for us on a full-time basis in New Brunswick as well. We're going to obviously beef up the construction capacity as we're getting closer to the project that we have to deliver.

Scott: Team.

Scott: In that area.

Scott: And then new Brunswick, we're seeing a little bit of activities here and there, but I think that we can cover new Brunswick form Quebec, we have a few folks that are working for us on.

Michel Letellier: In terms of the BC hydro assets during the quarter, I think O&M costs were higher year-rear, and I think, can you just give a bit more color in terms of whether the higher O&M costs are one-time nature or do you expect? The biggest one is offer a little wet, I think that we have. We're trying to find the best solution for having our turbine being more erosion friendly. We're working also on potential solution to reduce the erosion or the sand to get into the tunnel.

Scott: Full time basis in Brooklyn, and project cost well, but.

Scott: We're going to obviously beef up the construction ability as we're getting closer to the project that we have to deliver.

Nick Boychuk: Thank you.

Speaker Change: Okay understood. Thank you.

Speaker Change: Your next question comes from Ben Pham from BMO. Please go ahead.

Ben Pham: Your next question comes from Ben Pham from BMO. Please go ahead, Rupert Merer. Thank you. Thank you. Thank you. I had a question on slide nine about when you break up your development project. Can you..., remind us?

Ben Pham: Hi, good morning.

Ben Pham: I had a question on slide nine when you break up your development.

Ben Pham: Projects can you.

Speaker Change: Remind us.

Ben Pham: No.

Jean Trudel: What does it take to move a project from mid to advanced?

Speaker Change: What does it take to move up projects.

Ted Van: Ted Van.

Speaker Change: And how often do you actually go through the process.

Ben Pham: And how often do you actually go through the process of? I asked it from the perspective that one of your peers recently re-looked at how to define advanced stage projects.

Michel Letellier: This is a little bit of a challenge. There's a lot of erosion that somehow somewhere we were hoping to get rid of, but there's all kinds of metal surfacing that we can do on the turbine. So, the team has been trying to find the best scenario, and in this case, instead of capitalizing one unit, last year or one set of unit, we expense it. So, that's why you're saying a little bit of a peak on these catbecks for BC. But in general, we don't see a big difference. It's only offer a little wet that has a little bit more challenged on erosion, and we're trying to find a long-term fix for it.

Speaker Change: At <unk>.

Nelson Ng: Okay, thanks, I'll leave it there.

Speaker Change: Redefining those buckets and I I ask it from that perspective, one of your peers recently.

Speaker Change: So we looked at how to define an advanced stage projects.

Jean Trudel: We're a little bit optimistic, though. I'll let Jean... So, the way we... it's a full process, a full, comprehensive process that we have. So, when we identify a project, we screen it. Then, we have a screening committee to accept it as a prospective project. So, it needs to have a certain number of criteria at the forefront to be called a prospective project. For example, you need to have land rights or access to land and interconnection capacity.

Speaker Change: They were a little bit optimistic.

John <unk>: I'll, let John.

John <unk>: So the way we.

John <unk>: It's a full process full comprehensive process that we have so when we identify a project we screen. It. So we have a screening <unk> two accepted as a prospective projects that it needs to have a certain number of criteria.

Ben Pham: At the forefront to be called the prospective projects. For example, you need to have Dan rights or an access to NAND and interconnection.

Ben Pham: Interconnection capacity so.

Jean Trudel: And then it becomes a prospective project, and we build out the maturity table for each of our projects. So, we understand, obviously, very well all the steps that are required to bring this project to NTP.

Ben Pham: And then it becomes a prospective projects and we build out our maturity maturity table of each of our projects. So we understand obviously very well all the steps that are required to bring this project to NTP. So we so we qualify each project from a <unk> point of view. So that gives you an idea of the maturity of its early.

Rob Hope: Your next question comes from Rob Hope from School of Tobacco. Please go ahead.

Jean Trudel: So, we qualify each project from a maturity point of view. That gives you an idea of the maturity level if it's early, mid, or advanced. But then we also apply a probability of success, to become a project under development or to gain a PPA. In some instances, you have a project that's very well mature in terms of its development but in a market where there's no RFP, for example. You could have a project that's quite advanced in terms of tasks to be done.

Rob Hope: Good morning, everyone. One of the circle back on your commentary on the Hydra Quebec renewed focus on development. That change in their strategy was announced about two months ago. How have you interacted with Hydra Quebec, and have there been any initial discussions on how you could support them on these 1000 megawatt megaprojects, and how would you envision supporting them with that be potentially vending in land from your development pipeline or supporting the construction process?

Ben Pham: Mid or items, but then we apply also a probability of success to to become a project under development or to gain a PPA and so in some instances you have a project thats very well mature in terms of is it.

Ben Pham: Allotment, but in a market where there's no RFP. For example, so you could have a project thats quite advanced in terms of tasks to be done.

Jean Trudel: But with a low probability, so it would fall back into an early or mid stage, and you could also have an early stage project that is quickly bid into an RFP and skips the mid and advanced stages and goes straight to PUD.

Ben Pham: But with the low probability so it would fall back into it in early or mid.

Ben Pham: Amid the ste.

Ben Pham: Stage, but if you could also have an early stage project.

Rob Hope: Yeah, I think that the public announcement was more focused on the Hydra Quebec being the initial developer or metadata with the First Nation and local community. I think that they're trying to make sure that they have a good sense of the social-accepted ability of these projects, so they want to make sure that they are leading the discussion with the communities, and making sure also that they can feel comfortable that these big projects could be interconnected.

Ben Pham: That is quickly bid into an RFP and and skipped the amid an advanced stage and go straight to <unk> and in the example for this is the two projects we had in Quebec, we develop the projects they became prospective projects we bid them in the RFP as a early stage projects and we were awarded the Ppas would they became.

Jean Trudel: And an example of this is the two projects we had in Quebec. We developed the projects, and they became prospective projects. We bid them in the RFP as early stage projects, and we were awarded a PPA, so they became projects under development, so they came out of the... the prospective project buckets, if you want. So, we apply, I guess, a sort of mathematics to it. We revise this every quarter. So, each project manager has his own development projects or prospective projects, and they revisit this every quarter.

Ben Pham: They became projects under development, where they came out of the.

Ben Pham: The prospective project.

Speaker Change: If you want so it's it's mathematics.

Speaker Change: We apply as I guess as sort of mathematically it.

Rob Hope: Because if they start to work on the big substation of the 735 Kiwi line, they want to make sure that the project will happen, and the size of the project will be sufficient in order to sustain and advertise the expense to build a new substation on these big voltage lines. So I understand that they will be discussing with the communities and local stakeholders to make sure that they understand well the lay of the land, and they will be then together with their partner, go out and have some kind of an RFP to secure an IPP-like cost to help them develop.

Ben Pham: We.

Ben Pham: Revise this every quarter so each project manager as its own development projects.

Jean Trudel: So, when we issue the table in the MD&A, it has been freshly looked at every quarter, and that's how you see the evolution of the prospective projects from early, to mid, to advanced, and eventually to the next stage, which is POD, and obviously, then after that, under construction. So, it's a well-thought-through process that is actually helping. And not only internally but externally, to explain where we're at to qualify the prospective nature of our business. Is that helpful? Yeah,

Ben Pham: Prospective projects and they reviewed the revisit this every quarter. So when we issued the table in the MD&A it's fresh.

Ben Pham: It hasn't been freshly looked at every quarter and that's how you see the evolution of the prospective projects from early to mid to advance and eventually to the next stage, which is <unk> and obviously then after that under construction. So it's.

Ben Pham: It's a well.

Ben Pham: Dr through process that is actually helping.

Ben Pham: And not only internally, but externally to explain where we're at with the.

Ben Pham: To quantify the prospective nature of our business.

Ben Pham: Does that is that helpful.

Ben Pham: Yeah, it doesn't. Can you, can you also talk about, uh, did that, uh... That weighted average probability, did it change post that 2020-2021 boom? development?

Speaker Change: It doesn't can you can you also talk.

Ben Pham: Talk about.

Rob Hope: Criteria, from what I gather, will be based also on the knowledge of the land, the ability to build experience on building in Quebec and with First Nation. So all these criteria fit very well in our ability, and that's why I think that will be a serious potential partner with these mega-project cannot guarantee that we'll be there, but we have known the land. And we have some resource data on most of the project that they have already spoke about, so we'll definitely be a very, very important and serious contender to be a partner.

Speaker Change: At that time.

Speaker Change: That weighted average probability of that change post that 'twenty 2021 gum and.

Ben Pham: Development.

Speaker Change: Alright, you have you're always on point this method.

Jean Trudel: No, this method changed. We started in Q2 2019. Really, that's when we started to apply this methodology internally, and then in the MDNA. I suppose it might have been a few quarters after that we started to bring this evolution to our MDNA.

Speaker Change: This method change.

Ben Pham: We started in Q2 2019 really that's when we started to apply this methodology to.

Ben Pham: To enter into <unk> and then in the MD&A I suppose it might have been a few quarters. After that we started to two two.

Ben Pham: To bring this evolution to our MD&A.

Speaker Change: Okay. Thank you very much youre welcome.

Ben Pham: Okay, thank you very much. You're welcome.

Mark Jarvi: Ladies and gentlemen, if there are any additional questions at this time, please press the star followed by the 1. As a reminder, if you're using a speakerphone, please leave the handset before pressing any keys. Your next question comes from Mark Jarvi from CIBC. Please go ahead.

Ben Pham: Ladies and gentlemen.

Speaker Change: Any additional questions at this time. Please press the star followed by the one as a reminder, if youre using a speaker phone. Please lift the handset before pressing any keys.

Rob Hope: They're talking about looking for a... 30% or 3% partners in these mega-transactions. So, very, very important for us to be talking with local community, making sure that we are a good partner also for First Nation, not only for how to go back. And we have open discussion with the different community in these areas.

Ben Pham: Next question comes from Mark Jarvi from CIBC. Please go ahead.

Rob Hope: Appreciate that.

Jean Trudel: On the investment tax credits here in Canada, can you clarify that you should get 100% for MU2? Thank you.

Mark Jarvi: Hey, good morning, Thanks for fitting me in.

Mark Jarvi: Hey, good morning.

Speaker Change: The investment tax credits here in Canada can you clarify in MD&A you guys mentioned that you should get 100% for him you too can you clarify if that's.

Speaker Change: 100% back to interject and what that would be and then maybe going forward on the other projects how you think about.

Mark Jarvi: You know, the ITCs, I assume you share that a lot with the off-taker, but how that factors into the financing plans and upfront development financing costs.

Speaker Change: The ITC is I assume you're sure that a lot with the off taker.

Rob Hope: And then on another topic, just in terms of portfolio management, that was highlighted as a priority for 2024. Is that just referring to the, you know, the Hydro-opt financing's, or as you're taking a look at either your development pipeline or your operating assets, you know, do you see opportunities to further surface value? Well, the market in general is not that great. So, I think it's improving with, obviously, we've seen some good numbers on the inflation.

Speaker Change: But how that factors into the financing plan that upfront development financing costs.

Jean Trudel: Yeah, so on MU2, what we had was the confirmation that us and our partners would actually keep 100% of the ITC. So that brings me, I think it's about..., to remember the number.

Speaker Change: So <unk> to what we had is the confirmation that the.

Speaker Change: US and our partners with actually keep 100% of the ITC.

Speaker Change: So that brings I think it's about <unk>.

Speaker Change: Thank.

Speaker Change: Remember the number.

Jean Trudel: But essentially, we will get 30%. It's about $300 million in CAPEX. And so, roughly $90, but you don't get all the eligible costs, so there's a factoring in this.

Speaker Change: But.

Speaker Change: Essentially we would get 30%, it's about $300 million.

Speaker Change: Capex.

Speaker Change: So roughly 90, but you don't get all of the eligible cost. So there is a factoring in this or maybe it's a bit below $90 million of.

Rob Hope: We've seen some volatility on interest rate going up and down lately. But I think that in general, the cost of capital for infrastructure is going down in general. And I think that if things are going the same way, we are hopeful that interest rate will get down. I think that this is a good timing for us to start thinking, is there something that we can partner with? People always open to the idea to lower our cost of capital, giving us a little bit more flexibility.

Jean Trudel: So, maybe it's a bit below $90 million in ITC for both partners for MU2. And then the other two projects that we have, for which we have one NPP, were not bid with the ITC, so it's still uncertain how much of it we would capture. Right now, we assume that it could be 100% of ITC coming towards Innergex and our partners. So, you know, again, if you want to use a rule of thumb at 3 million megawatts. These projects were 400 megawatts in total, so it gives you an idea of how much ITC we could benefit from in our activities.

Speaker Change #100: Of ITC Forebode partners Fordham Youtube.

Speaker Change: And then the other two projects that we that we have for which we have one at <unk>, we're not bid with the ITC. So.

Speaker Change: It's still.

Mark Jarvi: Uncertain, how much of it that we would capture.

Mark Jarvi: Right now, we assume that it could be a 100%.

Mark Jarvi: Of ITC coming towards towards interjects in our partners.

Mark Jarvi: Sure.

Mark Jarvi: Again. These if you want to use a rule of thumb at $3 million a megawatt.

Mark Jarvi: These these projects were 400 megawatts in total.

Rob Hope: But of course, we're mindful that it has to create value. We're not in a rush. I think that's what the dividend relocation has providing us some flexibility. And of course, when you have a little bit more time to study and to take advantage of different opportunities, it creates, in my mind, more value. We're not in a rush to do something. So, this is what is important. But we said that the U.S., when we have 100 percent of a project in the U.S., either on the development, late development, or early CUD, we have always been open to the idea of creating value.

Mark Jarvi: So.

Mark Jarvi: It gives you an idea of are much ITC, we could benefit from R&R activity.

Jean Trudel: So, it's a decent chunk of cash. Can you build that into your debt financing, construction financing, and get lenders to sort of advance that and then pay them out after the receipt of that tax credit?

Mark Jarvi: It's a decent chunk of cash can you build that into your debt financing construction financing.

Mark Jarvi: Lenders to sort of advance that and then pay them out after the receipt of that tax credit.

Jean Trudel: Absolutely, that's what we're looking into now at this moment. It's going to certainly be part of our structure, our financing structures. Because, as you know, we get this ITC once we file the returns and we ascribe CapEx to the right class in our tax returns, right, the 43rd class, class 43. So, once you get that, you get the actual credit. So, and it needs to be COD as well. So, the time difference would certainly be something financeable.

Speaker Change: Absolutely Thats what were going to looking into now at this moment is going to.

Speaker Change: The part of our structure, our financing structures because as you know we get this.

Speaker Change: Once we file the returns and we ascribe capex to the class the right class.

Mark Jarvi: Tax returns rate to <unk> 43, <unk> 43, so once you get that you get the actual credit.

Mark Jarvi: So.

Speaker Change: You need to be CBD as well so the time difference would be certainly something financial.

Mark Jarvi: Okay, and then Jean, you made some comments about the criteria for the buyback. One of them was the share price. Is it at a level right now where you see yourself potentially being active given maybe you don't have a lot of big equity investment needs here, you've got some opportunities for portfolio optimization with the debt financing in the Portneuil facilities, could you put a bit more capital into the buyback right now?

Mark Jarvi: Okay, and then John you made some comments about the criteria for the buyback one of it was at the share price.

Rob Hope: AY is not a secret that we only have one project in a Y. We want to make sure that we are getting focused to put it on CUD. But if there's an opportunity to create value for us in that particular project in a Y, we would certainly be open to the ID.

Rob Hope: Thank you. Your next question.

John <unk>: Is that a level right now where you see yourself potentially being active given maybe don't have a lot of big equity investment needs here, you've got some opportunities on portfolio optimization.

Speaker Change: The debt financing and the partner facilities could you put a bit more capital to work on the buyback right now.

Jean Trudel: Well, I'm trying to be very conservative here because we've had below-expectations results in the first two quarters, so we need to manage the liquidities carefully, and we have a lot of growth ahead of us. So, at the same time, I'm conscious that we have liquidity needs to fund all our growth prospects. So, that's the comment I wanted to make. And I said the same comment, I think, into one that we would act very carefully. So, we bought back $2.4 million in this quarter and $5 million in the first quarter.

Speaker Change: I'm trying to be very conservative here, because we have had like below expectations results in the first two quarters. So we need to manage carefully the liquidities and we have a lot of growth ahead of us so at the same time.

Nick Boychuk: I'm from Nick Boychock from Carmark. Please go ahead. Hello, and thanks.

Nick Boychuk: Good morning, guys. Hey, good morning.

Michel Letellier: Coming back to the BC opportunity, can you guys walk us through some of the projects that you are looking to develop, the steps you're taking out to get some RFP ready and timelines for when we should start to expect to hear some updates on that specific area? I'm sorry to disappoint you, but we never comment on project that we're going to put right into the RFP. But I can say that we'll have a large volume of project that we will be ready to put by September 15.

Mark Jarvi: Conscious that we have liquidity needs.

Mark Jarvi: The funds to fund all our our growth.

Mark Jarvi: <unk> prospect so.

Mark Jarvi: So that's the comment I wanted to make it.

Mark Jarvi: And I said the same comment I think in Q1 that we would act very carefully so we bought back $2 4 million in this quarter.

Mark Jarvi: <unk> 5 million in the first quarter.

Mark Jarvi: We'll see how the quarters go and be potentially active. It's obviously very nice to have this tool and to be able to act on it, but I think one needs to be careful about it as well. So, that's what I'll do. It makes sense.

Mark Jarvi: See how it.

Mark Jarvi: Quarters.

Mark Jarvi: <unk> and <unk>.

Mark Jarvi: And b potentially active.

Mark Jarvi: Obviously very nice to have this tool and to be able to enact to act on it but I.

Michel Letellier: But I hate to give too much information. It's, you know, it's... It's an RFP and there's a lot of competition. So for us, we're very encouraged with the result that we have. We already had a lot of interconnection study coming in and we're positive. We're happy with what we received in many cases. All the team will be ready to have the project ready to be submitted. I'm sorry, it's not that I don't want to give you some good potential for the future but it's important for us to keep that information a little bit of secret before we bid.

Mark Jarvi: I think one needs to be careful about it as well so that's okay.

Jean Trudel: Makes sense. And with canceling the power hedge in Texas... Thank you.

Mark Jarvi: Makes sense and with canceling the power hedge in Texas.

Mark Jarvi: Hum.

Michel Letellier: Is adding storage to one or more assets in Texas making sense at this point now, given your merchant exposure?

Mark Jarvi: And just on the price dislocation congestion is adding storage to one or more assets in Texas makes sense at this point now, giving your merchant exposure.

Michel Letellier: Well, it's a very difficult market. We love Chile's capacity payment. Remember that in Chile you get to have roughly $7 per kilowatt per month. That represents almost 45% of the total revenue you need to support your battery. In Texas, there's no capacity payment. There's potentially some auxiliary reward payment, but it's very complicated. So you rely on high volatility, and it's hard to base a case on this in Texas. I know that there are some people that are dystopic enough to do it and put batteries in Texas.

Mark Jarvi: Very difficult market.

Speaker Change: We love.

Mark Jarvi: Chile.

Pam: <unk>, Pam and remember that in Chile, you get to ask seven roughly $7 per.

Mark Jarvi: Per kilowatt per month.

Mark Jarvi: Represent almost 45% of the total revenue you need to support to your battery in Texas, There's no capacity payment there is potentially some jewelry.

Mark Jarvi: Reward payment.

Mark Jarvi: Very complicated so you rely on high volatility.

Michel Letellier: If we're thinking about the growth of that portfolio or any other areas within Canada, you mentioned that obviously some of the project development costs, operational costs are going to rise a little bit. Is the current run rate something that we should be expecting going forward? Do you have to add any people, any capabilities, any teams throughout the country in order to execute on that growth? I think we have a good, as you know, we have a good team in Vancouver.

Mark Jarvi: And it's hard to base case on on this in fact, Texas I hope that there are some people that this topic to do it and put battery.

Mark Jarvi: Yes.

Michel Letellier: But we don't like that type of risk reward in Texas. We prefer to have a better long-term capacity payment. So, we have looked at it, but we couldn't come to a financial structure that would support that type of investment in our company. I'm not saying that others won't, but for us...

Speaker Change #104: But we.

Mark Jarvi: We don't want to like that type of risk reward in Texas, we preferred to have.

Mark Jarvi: Better long term.

Michel Letellier: We haven't, well, we haven't, I wouldn't say head office but it's definitely an important office in Vancouver. So we didn't have to beef off too much that office for the benefit of that bid but obviously if we win projects, those projects if you remember the earliest you could deliver is 2028. So if we win project, we might have to beef up a little bit the construction ability as we grow. But early stage and early development and environmental studies and relationship with communities, we have a strong base in BC that we have taken advantage of.

Mark Jarvi: Capacity payment.

Mark Jarvi:

Mark Jarvi: So we have looked at it.

Speaker Change #103: We couldnt.

Mark Jarvi: Come to a financial structure that would support that type of investment and in ERCOT.

Speaker Change: I'm, not saying that there won't but for us.

Speaker Change: Don't like it that much.

Speaker Change: Understood. Okay. Thanks for the time today I appreciate it. Thank you. Thank you Mark.

Mark Jarvi: Okay. Thanks for your time today. I appreciate it. Thank you.

Naji Baydoun: Mr. Baydoun, there are no further questions at this time.

Mr. <unk>: Mr. <unk> there are no further questions at this time.

Naji Baydoun: Thank you for joining us today and for your interest in Innergex, and we will look forward to updating you on our progress again next quarter. Thank you. Thank you so much. Thank you very much. Ladies and gentlemen, you may now disconnect your lines.

Speaker Change #103: Thank you for joining us today and for your interest in <unk> and we will look forward to updating you on our progress again next quarter. Thank you. Thank you. So much. Thank you very much.

Operator: Ladies and gentlemen, you may now disconnect your lines. Thank you.

Speaker Change #100: Ladies and gentlemen, you may now disconnect your lines. Thank you.

Speaker Change #100: [music].

Michel Letellier: And sorry, outside of BC, can you comment on what you're expecting for projects, prospective project expenses and other G&A costs as you try and organically expand the portfolio? Sure, Saskatchewan is becoming more and more important for us. We've been there for, we've been bidding in Saskatchewan twice over the years and now it's deterred time. I think that we're getting to know quite a bit of Saskatchewan. There are still a couple of thousand megawatt to be bid in the near future.

Michel Letellier: So Saskatchewan is becoming a good market for us. We have some rumors that many to go will be also an interesting market. So these two province are getting more and more on our radar. So far, we don't have a regional office in this area, but we may end up having a little bit more permanent people in those two provinces if we have a little bit more success.

Michel Letellier: The other big market that would say other than BC and Quebec is Ontario, you heard me talking about Ontario a lot. We're putting a lot of effort in Ontario. We understand that wind in the south might not be that well received in terms of social acceptability. So we're working hard on land and interconnection and getting with good relation with First Nation to develop the wind in the north. But there's still opportunity to do solar and battery project in the south. So we think that Ontario is going to be a good market as well. And we're strengthening our team in that area.

Michel Letellier: And then New Brunswick, we're seeing a little bit of activities here and there, but I think that we can cover New Brunswick from Quebec. We have a few folks that are working for us on full-time basis in New Brunswick as well. We're going to, obviously, beef up the construction ability as we're getting closer to the project that we have to deliver. Thank you.

Benjamin Pham: Your next question from Ben Pham, from the panel. Please go ahead. A little bit.

Jean Trudel: I had a question on slide nine when you break up your development project. Can you remind us what does it take to move a project from mid to advanced and how often do you actually go through the process of redefining those buckets? I asked from a perspective that one of your peers recently to relook at how to define advanced stage projects. Yeah, they were a little bit optimistic though. So the way we, it's a full process, full comprehensive process that we have.

Jean Trudel: So when we identify a project, we screen it so we have a screening committee to accept it as a prospective project that needs to have a certain number of criteria. At the forefront to be called a prospective project. For example, you need to have them rights or an access to them and interconnection, interconnection capacity. So, and then it becomes a prospective project. And we build out a maturity, the maturity table of each of our projects.

Jean Trudel: So we understand obviously very well all the steps that are required to bring these projects to NTP. So we, so we qualify each project from a maturity point of view. So that gives you an idea of the maturity of its early mid or advanced. But then we apply also a probability of success to, to become a project under development or to gain a PPA. And so in some instances you have a project that's very well mature in terms of its development.

Jean Trudel: But in a market where there's no RFP for example. So you could have a project that's quite advanced in terms of task to be done. But with a low probability, so it would fall back into a nerdy or mid stage. And you could also have an early stage project that is quickly bid into an RFP and skip the mid and advanced stage and go straight to PUD. And in the example for this is the two projects we had in Quebec.

Jean Trudel: We developed the projects. They became prospective projects. We bid them in the RFP as an early stage project and we were awarded a PPA. So they became, they became a project under development. So they came out of the prospective project buckets if you want. So it's a, it's a, it's a, it's a, we apply as, I guess, a sort of mathematics to it. We, we revised this every quarter. So each project manager has its own development projects or prospective projects and they revisit this every quarter.

Jean Trudel: So when we shoot a table in the MDNA, it's fresh, it has been freshly looked at every quarter. And that's how you see the evolution of the prospective projects from early to mid to advanced and eventually to the next stage which is PUD. And obviously then after that under construction. So it's a, it's a, it's a well, you know, thought through process that is actually helping not only internally but externally to explain where we're at with, with the, to qualify the prospective nature of our business.

Jean Trudel: Does that help? Yeah, it doesn't. Can you also talk about that, that weighted average probability? Did that change post that 2021 boom in development? Have you always employed this method? No, this method changed. We started in two 2019, really, that's when we started to apply this methodology to internally, they can then end the MDNA, I suppose it might have been a few quarters after that we started to bring this evolution to our MDNA.

Jean Trudel: Okay, thank you very much. You're welcome.

Operator: Ladies and gentlemen, if there are any additional questions at this time, please press the star followed by the one. As a reminder, if you're using a speaker film, please leave the handset before pressing any keys.

Mark Jarvi: Your next question, from Mark Jarvi, from CIBC, please go ahead. Good morning, thanks for fitting me in. Good morning. On the investment tax credit here in Canada, can you clarify an MDNA, you guys mentioned that you should get 100% for MU2. Can you clarify if that's 100% back to Innergex and what that would be? Maybe going forward on the other projects, how you think about the ITCs, I assume you share that a lot with the off-taker, but how that factors into the financing plans and upfront development financing costs.

Mark Jarvi: Yeah, so on MU2, what we had is the confirmation that us and our partners would actually keep 100% of the ITCs. So that brings, I think it's about trying to remember the number, but essentially we would get 30%, and it's about $300 million of CAPEX, but you don't get all the eligible costs, so there's a factoring in this. So maybe it's a bit below $90 million of ITC for both partners for MU2.

Mark Jarvi: And then the other two projects that we have for which we have one at TTA were not bid with the ITC, so it's still uncertain how much of it we would capture. Right now, we assume that it could be 100% of ITC coming towards Innergex and our partners. So again, if you want to use a rule of thumb at $3 million a megawatts, these projects were $400 megawatts in total, so it gives you an idea of how much ITC was good benefit from our ITC.

Mark Jarvi: So it's a decent chunk of cash. Can you build that into your debt financing, construction financing, and get lenders to sort of advance that and then pay them out after the receipt of that tax credit? Absolutely, that's what we're looking into now at this moment. It's going to certainly be part of our structure, our financing structures. But as you know, we'll get this ITC once we file the returns and we ascribe capex to the right class and our tax returns, right, the 43 class 43. So once you get that, you get the actual credit. So, and it need to be COD as well. So, the time difference would be sort of something financeable.

Jean Trudel: Okay, and then, John, you made some comments about the criteria for the buyback. One of it was at the share price. Is that at a level right now where you see yourself potentially being active given? Maybe you don't have a lot of big equity investment needs here. You've got some opportunities on portfolio optimization with the debt financing and the partner facilities. Could you put a bit more capital work on the buyback right now?

Jean Trudel: Well, I'm trying to be very conservative here because we've had the low expectations results in the first two quarters. So, we need to manage carefully the liquidities and we have a lot of growth ahead of us. So, at the same time, I'm conscious that we have liquidity needs to fund all our growth prospects. So, that's the comment I wanted to make. I said the same comment, I think, into one that we would act very carefully.

Jean Trudel: So, we bought back 2.4 million in this quarter, 5 million in the first quarter. We'll see how the quarters go and be potentially active. It's obviously very nice to have this tool and to be able to enact, to act on it. But I think one needs to be careful about it as well. Okay. Make sense.

Mark Jarvi: And with canceling the power hedge in Texas into some of the price dislocation congestion. Is adding storage to want or more assets in Texas make sense at this point now giving your merchant exposure? Well, it's very difficult to market. We love chili capacity payment. Remember that in chili, you get to have roughly $7 per kilowatt per month. That will present almost 45% of the total revenue you need to support your battery in Texas.

Mark Jarvi: There's no capacity payment. There's potentially some auxiliary reward payment, but it's very complicated. So, you rely on high volatility. And it's hard to base a case on this in Texas. I know that there are some people that have the stomach to do it and then put battery in Texas. But we don't like that type of risk reward in Texas. We prefer to have a better long-term capacity payment. So we have looked at it, but we couldn't come to a financial structure that would support that type of investment in our cost. I'm not saying that the other won't, but for us don't like it that much. Understood. Okay. Thanks for the time today. Appreciate it. Thank you. Thank you, Mark.

Operator: Mr. Bedouins, they know for the questions at this time. Thank you for joining up today and for your interested in interjects. And we will look forward to updating you on our progress again next quarter.

Operator: Thank you. Thank you so much. Thank you very much.

Operator: Bye.

Operator: Ladies and gentlemen, you may now disconnect your lines.

Operator: Thank you.